Service district addresses mineral lease scholarships
Last November's commission decision to proceed with a scholarship and endowment plan became a major topic of discussion at Monday's Carbon County Recreation and Transportation Special Service District meeting.
The preliminary plan, approved in a controversial 2-1 decision by the commission, basically calls for five percent of any quarterly revenues of mineral lease money over $750,000 to go into the scholarship program.
The proposal specifies that 40 percent of the money generated by mineral leases would go to the College of Eastern Utah for direct scholarships and 60 percent would go to an endowment fund. The fund would eventually be used to eliminate or lower the cost of attending CEU for county residents.
Carbon County's mineral lease payments come to the special service district and the board decides how the money is spent.
College officials estimate that the direct 40 percent of the revenues could be used to pay for scholarships for local residents and free up money for scholarships to attract out of area students into the county. CEU presently has about 200 open spots in the school's dormitories and the scholarships could be used to fill the slots.
On Jan. 5, the service district board decided to discuss the proposal since all members and CEU officials were in attendance at the meeting. CEU President Ryan Thomas indicated that the college viewed the plan as proposed to be as much a program to stimulate the local economy as to help the school grow.
"Students who come from other areas spend a lot of money here," said Thomas. "National statistics say that a student who comes for a school year to a town spends about $10,000 in that community."
Brad King, a CEU vice president in charge of scholarships, pointed out he was "more comfortable with saying they spend about $7,500 a year locally."
For every full-time equivalent student carrying 15 or more hours, the college gets between $3,000 and $5,200 in funding from the state, pointed out Thomas.
The amount varies depending on the program the student is enrolled in at CEU.
"Last year, the college gave out approximately 200 local scholarships," noted Thomas. "At about $1,400 a piece, that was a benefit to the community of about $280,000."
While CEU officials discussed scholarships, Carbon Commissioner Bill Krompel focused on the concept of the endowment fund. The commission represents the county on the special service district board
"We conceptualize this as a legacy for the county," stated Krompel, who sponsored and presented the measure to the commission. "We would have to have healthy mineral lease payments before this would kick in. But over time, it could amount to a substantial amount of money for the college to use for scholarships. The scholarships would be supplied only by the interest from the endowment money."
After CEU and Krompel completed the initial presentation, the special service district board voiced several concerns regarding the proposal.
"I am wondering if there should be some kind of cap on how much money could be in the endowment fund," said board member Tom Bruno. Board member Sam Quigley expressed a concern about controlling the proposed fund.
"The goal here would be to get funding for local scholarships and to get more people to come here from the outside," said Quigley. "But I think we need some real controls over this money. I am also concerned about how big this fund could get. We have to have assurances the fund will be used properly and in perpetuity."
Ideally, everyone in the county could get a scholarship if the fund gets large enough, pointed out Commissioner Steve Burge.
Revenues from the special service district would be handled like any money given to CEU for scholarships, noted King.
"We have many businesses and people who give us scholarship money and tell us exactly how we can use it,"said King. "We would do the same with you. You can determine how it would be used and who would get it."
Service district board member Dennis Christensen was uncomfortable about mineral lease revenues going to non-local students.
"I think we should just increase the amount of funds for local students and for those who don't receive scholarships, but want them," said Christensen.
Some board members questioned the definition of out of the area students, particularly when it came to Emery County residents.
King said Emery students were not considered out of the area for scholarship purposes. He also explained that out of state or out of country students will not receive any mineral lease revenues.
"But I want everyone to know that out of state and international students who come here really pull their weight," added King. "They spend more money here because they not only pay more for their education, but they buy more in the community. It's something everyone needs to remember when they have to deal with a student who doesn't speak English very well."
The college actively recruits students from rural areas like Box Elder County, Cedar City and Uintah Basin. But the college is also pleased to get Wasatch Front students.
CEU is "linked at the hip" with the local area and the college is "not dying to get out of the area students," explained Thomas. But out of area students are an important economic factor at CEU.
"We just want to stimulate the economy and provide local service as well," said Thomas.
High school student numbers in southeastern Utah are declining. Since the bulk of CEU's enrollment has traditionally come from southeastern Utah, the college has to focus on attracting students from other parts of the state to remain solvent.
Rather than making a long-term financial commitment to the scholarship plan, Quigley recommended that the special service district consider a trial program for a year or two.
Board member Richard Lee said the district should have a direct hand in managing the endowment money.
The special service district's purpose would have to be legally expanded in order for the board to approve any kind of scholarship contributions, indicated Nick Sampinos. The attorney acts as the district's legal counsel.
The only county lawmaker to vote against the proposal last November, Carbon Commissioner Mike Milovich offered input before the board made a decision on what direction to take.
"I think you need to be very careful about what you do with this," stressed Commissioner Mike Milovich. "I have talked with a number of people who are not happy about this situation. It could even affect some current donors to the college. It could prove to be counter productive."
But Krompel disagreed.
"I know there is a political risk for me in this," said Krompel. "But then, there have been many risks for things that turned out for the good over the years. I was involved in everything from the Helper parkway to the golf course. Some people didn't like those projects, either, but they have worked out well. Am I glad we did those despite the opposition? I sure am."
At the conclusion of the discussion, the special service district voted to form a sub-committee comprised of board members and CEU representatives to study the situation.
The sub-committee will work out the details and report back to the district board at a future meeting.