October 3rd, 2014 by TRT Blog
After 35 years of working in the education sector, we understand the juggling act that campus facilities can face around budgets and funding. Sometimes university management needs to innovate its approach when it comes to fund sourcing.
One unfolding story we’ve been keeping our eye on, for example, is the University of Minnesota’s attempts to secure state funding for building maintenance. The university needs to repair 37 buildings. And while no one is arguing about the need to fix and preserve these historic structures, the university’s approach — requesting additional funding from the Higher Education Asset Preservation and Renovation (HEAPR) fund — is a plan that has sparked debate.
The university has proposed an additional $5 million for two years, with the suggestion that the university will then lower its fund requests to HEAPR by the same amount for the following years.
The University of Minnesota has 29 million square feet split over its campuses in the Twin Cities, Duluth, Morris, Crookston and Rochester. A quarter of its buildings are more than 70 years old; the need for repairs is very real. One report from the university’s facilities and operations committee in fall 2014 found that almost a sixth of the buildings on campus are in “‘critical condition”. We know from the hundreds of client education projects we have had a hand in that many universities and colleges face increasing financial demands for building maintenance each and every year.
There’s an interesting political and legal backdrop to the discussion about what proportion of state funding should be given to education, and the ‘fairness’ of additional funding. Government funds are tight, and legislators need to ensure that they are representing a state’s interests outside education. The chair of the House Capital Investment Committee, Rep. Alice Hausman, acknowledged that passing bonding bills is challenging. These bills need to be passed to clear HEAPR funds. She also shared the need to balance spend across sectors: “Some people worry we have overbuilt higher education in the state,” she said, speaking to the Minnesota Daily.
The larger question: how will already-stretched university budgets be able to depend on government-based funding, such as HEAPR funds? Mike Berthelsen, associate vice president of facilities management for the University of Minnesota, noted that building maintenance, on the other hand, is constant: “While past HEAPR requests have been sporadic, the aging of facilities is predictable.”
We think the whole story of the University of Minnesota triggers a relevant discussion point around financial resources and how much universities can rely on government funds such as HEAPR. The other question — shared in Hausman’s interview — is how can states more efficiently use the buildings they have?
Both questions are important. Having completed hundreds of education and university projects, we know that budgets are challenging. We agree that buildings are not used efficiently; in fact, our recent analysis of government buildings included figures on that very topic.
Meanwhile, education administrators are under pressure to freeze or lower student fees in the face of rising costs. Government funding can be irregular, scattered. Yet we also see unnecessary budget spend and asset waste in education, and the need to change ideas and practices. We work with institutions such as California State, Duke, Cornell and Eastern Michigan universities and help them make the most of existing budgets by introducing best practices in furniture asset management — a substantial line item. We help universities establish a process to review existing furniture assets and view them as just that —assets — rather than disposable commodities. Our customers — university facility and operation managers — save an average of 80 percent on costs when compared to purchasing new furniture, allowing for re-allocation of that (much-needed) money within the budget. We know the preservation of assets is an important lesson for many universities.
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