To pay off $6.3 million in bank loans taken out by the UW-Oshkosh private foundation, the UW System will utilize federal funds, according to a statement Friday.
The UW System used money designated to administrative costs, meaning that no state taxpayer money was put towards the loans, according to UW System spokesperson, Heather LaRoi. This money comes from reimbursements for administrative spending by the system that came with federal grant activity.
Federal indirect funds can be used for these payments, meaning that now state or tuition funds will cover the original $6.8 million owed to the building projects. First Business Bank will pay the system $500,000, which brings the settlement down to $6.3 million.
"Federal funds are designated for administrative costs, among other things, for which the settlement is an appropriate use," the statement reads.
However, the funding did not come without backlash as concerns for the usage of taxpayer dollars still flew. Mike Mikalsen, an aide to Sec. Steve Nass, R-Whitewater, and critic of the UW System’s handling of the UW-Oshkosh funding, spoke about how despite promises by the UW System to not use taxpayer dollars, the details of the deal say otherwise.
“For them to state otherwise is simply an intentional distortion of the facts," Mikalsen said.
UW-Oshkosh will pay back the UW System $3.8 million in annual installments for 18 years, from January 2020 to July 2038, as detailed in the agreement. The payments will be made with the money produced from the Witzel biodigester, a system that converts organic waste into energy on UW-Oshkosh's campus.
The original agreement came in the final days of 2018, in lieu of rulings in the foundation’s favor from U.S. Bankruptcy Judge Susan Kelley. In the ruling, Kelley wrote that the UW System is accountable for the debt, since the foundation took out the loans in the interest of UW-Oshkosh.
