U eyes alternative funding sources for upkeep costs

With $3.8 billion in maintenance costs, school officials are seeking funding outside the state legislature.

Kevin Beckman

The way the University of Minnesota lobbies the state Legislature has recently come under scrutiny from school officials.

As the University prepares to ask for $100 million for infrastructure fixes in the upcoming legislative session, some on the University’s Board of Regents — in a shift from previous stances — say the school needs to look to other sources than the Higher Education Asset Preservation and Renovation (HEAPR) fund, a state bonding process designed to fund small-scale infrastructure projects.

With no bonding bill passed last year, the school didn’t receive money from HEAPR, causing the University to fall further behind on repairing University buildings, a quarter of which are more than 70 years old.

“What I am opposed to is doing the same thing over and over again and expecting a different result,” said Regent Laura Brod. “It’s not a good partnership because it’s a one-way partnership that doesn’t work.”

The University currently has $3.8 billion in maintenance costs that it has put off.

“Even if they gave us $100 million this year, it’s a drop in the bucket,” said Regent Michael Hsu.

While Brod said she thinks the school should find different ways to fund projects, some University administrators say options are limited.

In the last two years, the University requested the state put recurring repair and renovation money into the school’s operating budget while steadily decreasing HEAPR funds.

“It was not a well-received idea,” said University President Eric Kaler. “It was viewed a little bit as double-dipping. You get HEAPR over here and the state appropriation over here, so you get twice as much money.”

Besides bonding and other state appropriations, the only other source of funds for building projects is tuition.

Last year, the school raised tuition as part of the University’s biennial budget — $3 million of the increase was used for capital repair or restoration projects.

“The reason that needed to be done was because we don’t have enough money for small projects,” Hsu said. “If we keep doing that, then tuition is going to skyrocket just because of the need for capital improvements.”

Legislators said the University’s HEAPR requests are large and occasionally used for large-scale building projects — something HEAPR was never meant for, they said.

Rep. Gene Pelowski, DFL-Winona, said HEAPR requests strained the state’s relationship with the University when the school used that money to pay for the renovation of Northrop Auditorium, an $88.2 million project.

“When you’re saying you’re literally going to gut a building and redo it, that’s not HEAPR,” Pelowski said. “HEAPR is replacing roofs, it’s replacing heating and ventilation systems, it’s doing asbestos.”

He said the University’s misinterpretation of the purpose of HEAPR has led the legislature to be more reluctant to fund the requests.

“It’s their own fault,” he said. “They think that they can use it for almost anything, and you can’t.”

Rep. Bud Nornes, R-Fergus Falls and chair of the House Higher Education Policy and Finance committee, said while he recognizes there is backlog of infrastructure projects, the state has to balance requests between the University and the Minnesota State system.

“[Minnesota State] has a lot more buildings to take care of than the University does,” he said. “[The University] may have $100 million in need, and they can maybe get about half of that from the Legislature. So projects that are pretty urgent often go unresolved.”

Board Chair Dean Johnson said the University plans to speak with lawmakers about the school’s urgent needs.

“We’re throwing mud at the wall to see what might stick,” he said. “We’re trying to figure out new ways of doing it.”

Still, Pelowski said, the University needs to decide where its priorities are.

“They want to have the best of all worlds,” he said. “They want to have a new building and then they want to have HEAPR replacement. Well, you don’t get everything you want. There are needs.”