How four colleges tackle deferred maintenance

'When buildings and systems begin to erode, so does morale and confidence on campus'

Deferred maintenance backlogs are rising on campuses across the country, and college administrators are struggling to find the money to fund the needed repairs, Marcia Layton Turner reports for University Business.

While construction of brand new buildings earns attention and donations, existing facilities need care as well. Since 2007, the number of deferred maintenance backlogs has grown 15% at private and 18% at public universities, according to a 2014 report from Sightlines.

Once these projects are put off, it is difficult to fit them into the budget later on, Turner writes. But four strategies can help administrators find the necessary funding.

In the summer of 2014, Colgate University personnel assessed required maintenance of campus. By considering safety codes, reliability and utility infrastructure, and modernization, they grouped projects into three timelines, within:

  • One to three years;
  • Four to seven years; or
  • Eight to 10 years.

Total cost came to about $151 million, but officials say they knew each $1 of deferred maintenance ignored would result in $4 of repairs later on.

"If you're constantly delaying, you'll have more emergencies," says Brian Hutzley, Colgate's VP of finance and administration.

The university borrowed, used donor funds, and dedicated operating budget money to chip away at the total cost. About 40% to 45% of the money will go toward deferred maintenance and the rest is dedicated to new construction.

Finding the money is one of the most important factors, says Oglethorpe University President Lawrence Schall. "If the money isn't there, it's not even a choice to defer. You just have to," he says.

10 criteria to consider in deferred maintenance decisions

In order to earn the money needed to tackle the backlog of necessary repairs on campus, the university drew up a facilities master plan to lease seven acres of campus.

The selected real estate development partner paid a lump sum of $12 million for 99 years of access to the land, on which it built a 375-unit mixed-use apartment complex—which also alleviated the school's need for more housing.

State governments provide much of the funding for deferred maintenance for public universities—but as those budgets shrink, so does the ability to repair older buildings.

Facing this problem, the University of Massachusetts issued its own bonds and invested its own operating funds in the issue.

The system will need to spend about $300 million a year for five to seven years to make progress on the backlog—or at least $130 million a year to maintain its facilities at the current level. Keeping up with maintenance will save money later, says the system's treasurer.

Other schools choose to go back to donors who had already given and ask if their gifts could be redirected.

At Centenary College of Louisiana, the idea originated when construction of a new science building halted during the Great Recession. Repairs on the older building were a less glamorous, if worthy, cause—but donors who had dedicated funds to the new facility agreed to let their money be used to update the older one.

Most schools "react and repair," says Centenary President David Rowe. "We adopted a new approach: catch up and stay ahead."

The school created a five-year plan to save cash dedicated for maintenance needs. That budgeting is now a top priority, says Rowe.

"When buildings and systems begin to erode, so does morale and confidence on campus," he says (Turner, University Business, 7/28).

Four deferred maintenance challenges—and how to solve them

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