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Thursday, September 12, 2013

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UT System Board of Regents approves funding plan for new Engineering Education and Research Center at UT Austin

The University of Texas System Board of Regents cleared the path today to allow UT Austin to move forward with construction of a new $310 million Engineering Education and Research Center.

The EERC is another example of the Regents commitment to helping UT Austin become a Top 10 school in national rankings. The funding for UT Austin’s Cockrell School of Engineering, together with the $300 million Regents will provide to support a new medical school at UT Austin, represent a more than $400 million investment that Regents believe will be a major catalyst for UT Austin to achieve the ranking and recognition it deserves.

The EERC will replace the current Engineering-Science Building and temporary facilities that are now located in the Computer Sciences Annex and the Academic Annex. Current facilities are inefficient and functionally obsolete and were built more than 50 years ago. The new facility will provide students with state-of-the-art laboratories and a modern, open-concept design.

Once the facility is complete, UT Austin has agreed to increase the number of undergraduate engineering students by 1,000 – the first significant increase in capacity for the highly respected Cockrell School of Engineering. Revenue generated from the growth in student population will fund an increase in faculty as well, without a recommended increase in tuition.

“The UT Board of Regents and I both agree that the field of engineering is incredibly important and enhances the economic vibrancy of Texas. It is paramount that our students have access to excellent facilities that will help them become competitive and provide Texas with the skill and expertise our state needs,” said UT System Chancellor Francisco G. Cigarroa. “The Engineering Education and Research Center will advance excellence across the mission of the University of Texas at Austin and also provide many interdisciplinary opportunities across departments.  Also, the synergies between the EERC and the Dell School of Medicine will be immeasurable in positioning Central Texas to become a hub for biotechnology, facilitating the translation of discoveries to the market aimed at improving our quality of life.”

Board action today allows UT Austin to borrow up to $150 million through the UT System’s Revenue Financing System (RFS), a cost-effective debt program secured by a system-wide pledge of all available revenues for debt issued on behalf of the 15 UT institutions and UT System administration. The action became necessary when tuition revenue bonds were not approved this year by the Texas Legislature. UT Austin had requested authorization for $95 million in construction bonds from the Legislature for the engineering center.

The Regents had previously approved spending $105 million in Permanent University Fund (PUF) bond proceeds to finance a third of the building’s cost. The university will provide $5 million in current funds and the remaining $50 million will be paid through philanthropic gifts.

Previously, the regents approved UT Austin’s plan to raise $105 million in gifts to match the PUF allocation for the facility’s construction. UT Austin will still be required to complete that philanthropic goal, but gifts can now be directed toward either the construction of the EERC or broad-based initiatives and goals for the Cockrell School of Engineering, including scholarships, as a result of today’s Board action. Future philanthropic funds aimed for construction could lower UT Austin's need for RFS funding by a corresponding amount. 

“This plan means we are one, important step closer to achieving the vision of the Cockrell School of Engineering to become a global center for technology innovation, engineering education and entrepreneurship,” said Regents Chairman Paul Foster. “UT Regents are clearly committed to UT Austin’s success, providing a third of the cost for the new facility. With UT Austin providing bond financing for a third and contributors to the Cockrell School making up the balance, this is truly a collaborative financial effort.”

UT Austin President Bill Powers expressed his appreciation to the Board of Regents for their action.

“The Cockrell School is one of the great schools of engineering in America. That it has accomplished so much with facilities that are 30 to 50 years old is astonishing,” Powers said. “This new center will propel UT Austin to the highest tier of engineering education and research and will serve our state well into the future. I’m grateful to the Board of Regents for its long-standing support of this effort.”

In 2012, then-Regents Chairman Gene Powell established the Task Force on Engineering Education for the 21st Century (PDF) to determine the current state of engineering degree programs in Texas, study current and future demand for engineers, and identify strategies for the Texas Legislature and higher education leaders that will foster student success in the field of engineering while at the same time supporting economic growth across the state.

The Task Force should finalize recommendations this fall.

About The University of Texas System

Educating students, providing care for patients, conducting groundbreaking research and serving the needs of Texans and the nation for more than 130 years, The University of Texas System is one of the largest public university systems in the United States, with nine academic universities, six health institutions and a fall 2012 enrollment of roughly 216,000. The UT System confers more than one-third of the state’s undergraduate degrees, educates two-thirds of the state’s health care professionals annually and accounts for almost 70 percent of all research funds awarded to public universities in Texas. The UT System has an annual operating budget of $13.9 billion (FY 2013) including $3.1 billion in sponsored programs funded by federal, state, local and private sources. With more than 87,000 employees, the UT System is one of the largest employers in the state.

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