COLUMBUS — Ohio University’s deferred maintenance bill, which has reached $355 million, could hit a “tipping point” by 2020.
At today’s meeting, the Board of Trustees discussed the urgency of the university’s maintenance backlog, but the university cannot enact a plan to chip away at the costs until the state drafts a capital budget.
“We haven’t heard anything yet (from the state),” OU President Roderick McDavis said. “We hope that there will be conversations about a capital bill, but at this time, we have not been informed that the conversation has been initiated.”
In 2008, the Ohio Board of Regents appointed a consulting firm called Sightlines LLC to analyze the ability of universities in Ohio to manage their facilities. Sightlines compared OU to 13 other universities in Ohio with similarities in size, region, geographic location or setting, according to a memo Stephen Golding, vice president for Finance and Administration, presented to the board.
The firm’s report for OU, which includes six years of data through fiscal year 2010, places OU’s deferred maintenance backlog for the main campus at $355 million.
This amounts to about $71 of deferred maintenance backlog per every square foot of asset at the time of the report — Golding estimated that number now has reached $78 per gross square foot.
This deferred maintenance was exacerbated by OU’s “low historical investment” and cuts to the facilities operating budget, according to the report.
However, a low manager-to-staff ratio in Facilities, efforts in preventative maintenance and lowered energy consumption have reduced the effects of deferred maintenance, according to the report.
Universities that reach a deferred maintenance backlog of $100 per square foot “experience a range of operational problems from costly emergency repairs to complete building shut downs,” according to Golding’s memo.
At its current investment levels, OU will reach this point, which Golding referred to as a “tipping point,” by 2020, trustee Sandra Anderson said.
By contrast, universities that maintain a deferred maintenance backlog of $40 to $50 per square foot can more easily maintain their campuses’ facilities. Golding suggested the university set a goal of reaching this level.
OU received a report from another company, PFM Group, estimating OU could take on between $245 million to $350 million in debt the next five years without a great risk to the university’s financial ratings.
Capital Campaign
McDavis updated the board on the Promise Lives fundraising campaign progress. The university has so far raised $345 million toward its goal of $450 million.
“We’re moving so nicely along in our campaign; we’re right at 75 percent of our goal, and we still have four years to go,” McDavis said.
He noted that OU might exceed its $450 million target.
Capital Projects
The trustees passed a resolution regarding three capital projects that would allow the university to move forward with developing construction plans, seeking bids and entering into construction contracts.
The first project would renovate the Athena Classroom with an approved budget of $930,000 from the university reserves, and the second would facilitate improvements to the Central Food Facility in fiscal year 2012 with a total budget of $5,100,000 from the Culinary Auxiliary reserves, according to the resolution.
The final project would create entry improvements for OU’s southern campus with a total budget of $780,000 — $580,000 from state appropriations and $200,000 from Ohio University Regional Higher Education Reserves, according to the resolution.
Debt policy and professor recognition
The trustees also passed a resolution adopting a debt policy that would organize and oversee OU’s use of funds and the university’s debt during the upcoming years.
The policy stems from the university’s desire to regulate “parameters and guidance for management’s use in planning, structuring, and ultimately issuing debt,” according to the resolution.
A final resolution awarded emerita status to Norma Pecora, who taught in the School of Media Arts and Studies.
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