Capital crunch Jack Dempsey, executive director of the Facilities & Services Division, recently notified campus units that F&S will not receive any capital appropriations this fiscal year. F&S, which has had a $6.5 million cumulative reduction in its operation and maintenance budget during the past few years, may have to delay some program-related repairs and renovations to fund repairs to leaky roofs and to take care of other immediate problems.
Photo by Kwame Ross
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With the university’s capital budget for the current fiscal year unfunded – and the governor’s proposed appropriations for FY06 falling short of the UI’s request – the UI is planning to borrow money to begin making critically needed repairs to deteriorating facilities across its three campuses.
The university has been waiting since last fall for the state to release its capital appropriations for the current fiscal year, including $10.7 million for general repairs and renovations and another $3 million for planning the Lincoln Hall remodeling. About $6.2 million of the funds were slated for seven projects at Urbana, including renovations to instructional and research labs at Turner Hall and exterior repairs to buildings around the Quad.
Jack Dempsey, executive director of Facilities & Services Division, recently notified campus units that the funds appropriated for FY05 will not be coming because of the state’s ongoing economic problems.
“Right now we have about $16.5 million of capital repair and renovation projects on hold that were appropriated in FY04 and earlier years that have gone unfunded because the state doesn’t have the money,” said Tim Zimmer, a mechanical engineering specialist in the Facilities & Services Division.
Because major repairs and renovations were not funded this fiscal year, staff members will have to choose which projects will take priority if the funds come through in FY06 and which will have to be postponed – again.
“The concern is that if we continue not to get the R&R funds it’s going to put increased pressure on the Maintenance budget to provide Band-Aid solutions for larger problems that need to be fixed,” said Jeff Oberg, director of shared administrative services in the Facilities & Services Division.
Carl Wiegel, director of maintenance, said the maintenance division on the Urbana campus has a budget of about $1.5 million for major, non-routine repairs and maintenance, “so the funds to provide unexpected major repairs are extremely limited, and if an air handler goes out, it may cost $60,000 to $70,000 to replace.”
Illinois Gov. Rod Blagojevich proposed a $10.7 million capital appropriation for major repairs and renovations at the three UI campuses next fiscal year. About $6.2 million of that would be for projects at the Urbana campus, including $1.2 million to convert a gym at Freer Hall into office space, $1.8 million to renovate instructional labs in the Art and Design Building, and $2 million to remodel the Natural Resources Building for occupancy by another campus unit when the Illinois Natural History Survey moves to the South Research Park in late summer or early fall.
As it did last fiscal year, the UI requested about $20 million in capital appropriations to begin reducing its backlog of deferred maintenance projects, which were identified in a facilities condition audit conducted during 2001 and 2002 by the consulting firm of Vanderweil Facility Advisers. Blagojevich did not include the deferred maintenance component in his proposed capital appropriations for next year.
At the time of the audit, it was estimated that the university had a backlog of more than $617 million in deficiencies and needed repairs and maintenance throughout its 800 buildings and structures, power plants and utilities. About $322 million of those projects were classified as Priority 1, meaning they were “currently critical” and in need of immediate attention, or as Priority 2, meaning they were “potentially critical” and ought to be completed within a year.
The audit also identified about $295 million of refurbishments classified as Priority 3, “necessary but not yet critical” deficiencies that would need to be corrected within two to five years.
The majority of the Priority 1, 2 and 3 deficiencies pertained to compromised building exteriors, electrical systems and obsolete heating, ventilation, and air-conditioning systems.
In 2003, the UI Board of Trustees approved a plan to begin reducing the backlog and to ensure adequate funding for deferred maintenance needs in the future that called for allocating an additional $2 million per year to deferred maintenance, raising the allocation from $18 million in FY02 to $75 million by FY22. However, the plan, which was to have begun in FY04, was derailed when the state’s economic crisis prompted a series of budgetary reductions and rescissions.
This spring, the board will likely give its final approval to sell bonds to finance the deferred maintenance program. At their Nov. 11 meeting, the trustees approved a proposal to “jump start” the program with sales of up to $110 million of Certificates of Participation, forms of municipal bonds that are repaid through leasing arrangements. The certificates would be issued in two phases of $55 million each, with the first phase issued in spring 2005 and the second phase within two to three years.
For refurbishments at the Urbana campus, Interim Chancellor Richard Herman also authorized an internal reallocation of $2 million per year for three years beginning this fiscal year.
“Over the past 147 years, the state and private donors have invested a great amount in this institution and these facilities. As good stewards of that investment, we must maintain these buildings in a manner that is consistent with the caliber of faculty and students who come here to study and learn,” Herman said.
During the initial phase of the deferred maintenance program, the university will renovate building enclosures, such as roofs, masonry, windows and exterior doors, to stop leakage, preclude collateral damage to building contents and ensure buildings are water-tight before other renovations are done, Zimmer said.
Also, beginning this fiscal year, facility reinspections will be conducted annually to update the audit.
“The plan is to inspect about 20 percent of the facilities on all three campuses every year so that none of the data will be more than five years old,” Zimmer said.
Vanderweil Facility Advisers recently completed its reinspection for this year and should provide an updated report within the next few weeks, which will include an estimate of the projected costs if a deferred maintenance program and adequate funding are not in place to contain and reduce the backlog.
The state is expected to have an economic deficit of $1.1 billion next fiscal year, which begins July 1. Therefore, several major capital projects for which the UI requested appropriations were not included in Blagojevich’s proposal and may have to be postponed until the state economy recovers. At the Urbana campus, that included requests for $31.2 million in matching funds to construct a business instructional building, $30 million in matching funds for an electrical and computer engineering building and $48 million to continue the South Farms renovations.
The governor proposed appropriating $3 million to continue planning the renovation of Lincoln Hall but not an additional $48.6 million that the UI had requested to proceed with the project.