The University’s Board of Regents got a preview of the second part of the school’s biennial request for state funding at its meeting in Duluth on Friday.
But regents and administrators also used the review session to address several concerns regarding past state bonding appropriations, the cleanliness of the University and a large number of renewal projects.
“The magnitude of investments that have to be made in this university is just beyond anyone’s imagination,” said Bob Kvavik, associate vice president for Academic Affairs.
Kvavik and newly appointed Associate Vice President for Facilities Management Eric Kruse presented the preliminary draft of the request, which will be reviewed by the Legislature next year.
This preliminary draft, which requests state bonding for capital improvements, will be voted on at the June regents meetings, where it is expected to pass easily. The request will then be presented to the Legislature in October for consideration in its 1998 session.
The Legislature is still deliberating in conference committee on the first part of the request, which allots funding to the University for business and state operations.
Although the initial draft for the capital improvements requests more than $172 million in state bonds, administrators fear the University could receive only half that amount, leaving several projects unfinished and increasing the University’s more than $1 billion deferred renewal deficit.
Making the request
Every even-numbered year, the legislature estimates how much funding it will have in the form of state bonding for capital improvements.
The University comes up with a list of capital improvement projects that would require state funding and submits a request to the Legislature.
Projects that would fall under this category are the acquisition of property and the construction or improvement of facilities.
A committee of University administrators, faculty members and student representatives then prioritizes the projects. Top administrators review and approve the list before presenting it to the regents, who forward the finalized list to the Legislature.
The Legislature then reviews the request and determines how much it will provide the University in bonding.
State bonding comes in two forms. One category is new building and planning funds, which requires the University to pay one-third of the debt costs, such as interest, during a period of time.
The other classification is for Higher Education Asset Preservation and Replacement funds that cover health and safety and renewal projects. The University does not have to pay debt costs with these types of projects.
Budget requests: Round II
This year’s $172.3 million request is slightly higher than the University’s last capital request.
The top priority in the request is $25 million to upgrade University buildings with health and safety code deficiencies. These include problems ranging from poor air quality to insufficient handicapped access.
“We have, as in the past, put life and safety issues at the top,” said University President Nils Hasselmo.
Two other top priorities include a $53.6 million renovation of Walter Library and the construction of a $22.3 million library in Duluth.
The University also would like to spend $11 million to renovate space currently used by the Carlson School of Management after it moves into its new building later this year.
Other priorities include improvements to the Morris and Crookston campuses, classroom renewal, architecture renewal and work on several agricultural experiment stations around the state.
“All of these are absolutely indispensable, so we have to move as aggressively as we can toward getting funding for these particular projects,” Hasselmo said.
However, Kruse said it is unlikely that the University will receive as much as it would like.
At the last request, the University received about $93 million, or 16 percent of all state money appropriated for capital projects. During the last decade, the institution has received an average of 19 percent of the state’s bonding pool. This year’s pool is expected to be about $500 to $700 million.
The University can expect to receive about $100 to $120 million, Kruse said, but Kvavik said that estimate won’t stop the school from asking for more.
“First of all, you can always hope,” he said. “Also, it represents a real need on the part of the University and gives the regents an opportunity to prioritize.”
Regent David Metzen suggested a direct approach to getting the funding.
“I think we should be very aggressive and open with the Legislature on what the University’s needs are,” he said.
Regent Julie Bleyhl stressed the importance of having these priorities clearly defined. “I feel we need the University in the absolute best position possible for next year’s bonding bill,” she said.
Deferred renewal
Regents and administrators were most concerned with the growing amount of deferred renewal projects and the continually low amount of funding for them. By definition, these are projects to upgrade or renew buildings and offices.
The regents have also emphasized deferred renewal as a top priority in past legislative requests.
Kvavik estimated the University would need about $1 billion dollars to take care of all renewal problems.
A strategic goal of the administration is to cut this number to $750 million by the year 2000. However, current funding projections don’t reach that number until 2003.
“We are not reaching those goals because the dollars haven’t been there,” Kvavik said.
He also said that one part of the problem has been a noticeable lack of funding dedicated to renewal projects.
“Even though people say renewal and renovation should be the highest priority, it is always a lot more tempting to (build) a new building,” he said.
Several regents spoke out in defense of renewal funding.
“I’m very concerned about renewal, but I’m also cognizant of the fact that renewal is not very popular in terms of funding,” said Regent William Hogan.
With the support of other regents, Hogan proposed working in a committee to find solutions to increase legislative awareness of the problems associated with deferred renewal.
“We need to get this to be more popular,” he said.
Campus cleanliness
Although regents said they were generally pleased with the first look at the request, some had issues they would like to see included with other top priorities.
One concern regents had, which has not been made an immediate priority, was the cleanliness of the Twin Cities campus.
Metzen said he’d like to see this become a future priority.
“I was very appalled when I started walking around campus and saw how it looked and the image it is getting,” Metzen said. “I think we have a responsibility to keep it clean and something we’re very proud of.”
Although Kvavik said some money is being set aside for campus beautification, other University priorities have overshadowed this problem.
Six-year plan
Administrators take a longer look to accurately gauge future priorities, such as campus cleanliness and deferred renewal through a six-year outlook plan.
The six-year rolling plan was presented at Friday’s meeting. The plan outlines future priorities and marks progress on accomplishing goals.
Also highlighted in the plan are projects in need of funding but not included in the request, such as parking and other renovation projects.
Kvavik said because of problems like deferred renewal, the plan might have to be extended. “What we have to do is look at ways to make the $1 billion look like an attainable number, which right now it is not,” Kvavik said. “A six-year capital plan is not good enough.”
Current projects
At the meeting, Kruse also asked regents to reauthorize projects currently under way or about to begin.
The regents will also vote on these in June. Some of the projects include renovating the Southeast Steam Plant and building a Library Access Center.
Regents will also vote on whether to approve a budget for the 1998 fiscal year. This budget includes 96 projects, which will cost a total of about $61 million. However, these are undertakings that already have confirmed funding. More than 50 percent of the projects up for reauthorization fall under the renewal category.
Funding for these projects comes from a variety of sources, such as internal loans and departmental funds.