Magazine article University Business

Budgeting for Building Upkeep: Strategies for Tackling Deferred Maintenance across Campus

Magazine article University Business

Budgeting for Building Upkeep: Strategies for Tackling Deferred Maintenance across Campus

Article excerpt

Outside the circle of higher ed facilities managers, it's the shiny new campus buildings that get all the glory. Yet what facilities insiders know all too well is that existing buildings are in dire need of attention.

Aging buildings, a recent economic downturn and pressure to invest in new construction has led to rising deferred maintenance backlogs on campuses nationwide. In fact, since 2007 these back logs increased 15 percent at private institutions and 18 percent at public universities. That's according to "The State of Facilities in Higher Education: Benchmarks, Best Practices and Trends," a 2014 report from Sightlines, a Connecticut company that helps colleges manage their facilities investments.

Deferred maintenance refers to the issue of colleges and universities not having the resources for building upkeep. It can include not being able to perform recommended servicing or upgrades to building systems, such as HVAC or electrical; to replace components that have outlived their useful life, such as roofing or flooring; or to address minor problems before they become bigger, such as plumbing.

It's a national issue showing no sign of subsiding. Eighty-six percent of administrators in another study indicated that funding for facilities--renovation and new construction--is a major need, according to the "2014 National Survey of Access and Finance Issues" published by the Education Policy Center at The University of Alabama.

Every campus has at least some deferred maintenance, explains Brian Hutzley, vice president of finance and administration at Colgate University in New York. After putting off past maintenance projects when the economy stalled, leaders at many institutions are finding it difficult to fit them back into the budget.

But there's good news: Realistic strategies for addressing deferred maintenance do exist. Here's how some forward-thinking colleges and universities are tackling the issue.

Prioritizing projects

Colgate is among the institutions that are making progress on deferred maintenance. "We're being very strategic about it," says Hutzley, whose school was named "America's most beautiful college campus" in 2014 by The Princeton Review--in part because of its historic stone buildings.

Colgate personnel spent the summer of 2014 assessing deferred maintenance at all of its buildings and determining that the total cost was in the neighborhood of $151 million. Safety codes, modernization, reliability and utility infrastructure were major factors in determining when each maintenance project would take place. Officials knew that $1 of maintenance deferred would likely cost in the neighborhood of $4 later, so they worked hard to prioritize the work. "If you're constantly delaying, you'll have more emergencies," says Hutzley.

Projects were identified and placed into one of three buckets based on condition: one to three years, four to seven years, or eight to 10 years. Roof work, window replacements, heating system renovation and mechanical system upgrades were among the needs. Colgate drew from its operating budget, borrowed money and tapped into donor funds to commit $150 million over the next five years. Forty to 45 percent of that amount will be devoted to deferred maintenance, with the remainder being invested in projects such as a new athletic facility, a Center for Art and Culture, and a new Career Services building.

It's an issue campuses will always have, says Hutzley. "You just want to make sure you're not going backwards."

Finding a new revenue stream

At 180 years old, Oglethorpe University in Atlanta is dotted with aging buildings and deferred maintenance. Money was put aside to tackle the most crucial projects but not enough to avoid a backlog of needed repairs. A decade ago, the university was operating in the red due to lower enrollment and was simply unable to invest significantly in its infrastructure, President Lawrence Schall says. …

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