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Monday, June 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

Eyeing multibillion-dollar university upgrades, California auditor calls for plan

The University of California and California State University campuses face billions of dollars in costs to repair and replace crumbling academic facilities and infrastructure.

LOS ANGELES (CN) — California boasts some of the most famous public universities in the world, but a new report notes that its aging facilities are in dire need of necessary upgrades and there is no plan in place to fund the still-deteriorating problem.

Over the next 10 years, the University of California expects it will need $12 billion to replace roofs, heating systems and other crumbling building components at its campuses, while the California State University projects $3.1 billion in so-called capital renewal needs, according to a report issued Thursday by the Legislative Analyst's Office, a nonpartisan office that advices the state legislature.

These estimates come on top of the two university systems' current backlogs of deferred maintenance of about $7.3 billion at UC and $6.5 billion at CSU.

Analysts have blamed the lack of investment in the aging building for a host of existing problems, such as inadequate ventilation leading to overheated classrooms and frequent flooding within buildings affecting faculty research.

"These types of facility issues could affect the recruitment and retention of students, faculty, and staff," Thursday's report states. "Left unaddressed, these types of issues could also pose health and safety concerns."

To pay for capital renewal projects as the need for them grows stronger, the analysts found, universities are relying on an inadequate, piecemeal approach of funding from their annual budgets, bonds and reserves. From one budget year to the next, meanwhile, the state has been providing wildly different one-time funding grants for deferred maintenance.

The report says some campuses dedicate little if any ongoing funds in their base budgets for capital renewal. While this suggests that they rely heavily on one-time state funding, state funding for capital renewal projects has been episodic, with large amounts provided in years when the state budget has a surplus and no funds provided in other years.

"With such volatility, campuses have difficulty planning for capital renewal projects in advance and putting in place adequate staffing to implement those projects," the report states.

But even when California's budget has kicked in one-time funding — in the 2022-23 budget year, it provided $125 million each to UC and CSU for deferred maintenance, seismic upgrades and energy efficiency projects — the amounts pale with the amount of work that needs to be done on the campuses. The flagship UC campus in Berkeley alone will require $318 million a year to repair or replace its aging academic facilities and infrastructure, according to the report.

To start addressing the gap between the universities expected needs and their funding, the Legislative Analyst's Office recommended that California set an annual funding target for capital renewal projects at the two university systems based on 2% of the estimated cost of replacing any given facility or group of facilities today, calling this a common measure of the value of a campus’s physical assets.

"The main advantage of using a funding target linked to a percentage of CRV is the consistency it provides not only across the segments but also over time," the report states, abbreviating current replacement value. "Linking to a percentage of CRV also would better facilitate planning activities and could reduce volatility in capital renewal funding from year to year."

For the UC system and CSU system, respectively, that funding target would initially be $839 million and $474 million — numbers that will increase every year as inflation drives up construction costs. The plan would be for the funding target to be gradually phased in: only 20% of the target for 2023-24 budget year, 40% for the 2024-25 budget year and so forth until its fully incorporated in their budgets.

Since neither university system will be able to meet the funding target without help from the state, the analysis suggests that the Legislature provides 45% of UC's target and 60% of CSU's from the general fund. The university could rely on other funding, such as tuition increases or bonds, to cover their share of the funding target.

Analysts say California would also need to provide further one-time funding to eliminate the current backlog of capital improvements at the universities to an acceptable level, which would amount to an average annual cost of about $935 million for the UC campuses and $750 million for the CSU ones over the next 10 years. These costs may also need to be shared between the state and the universities.

“The California State University is appreciative of the partnership with the Governor and Legislature that has resulted in recent investments to support the university’s long-standing infrastructure needs," a California State University spokesperson said.

"Additional investment is still needed, and in the university’s most recent budget request, the CSU requested $50 million in ongoing funds and $1.3 billion in one-time funds to address the growing maintenance backlog of building and utility infrastructure systems that have passed their useful life across our 23 campuses. We are hopeful that additional funding for infrastructure will be part of the Governor’s upcoming budget proposal and in future years as well.”

Representatives of the UC system had no immediate comment on the report.

Follow @edpettersson
Categories / Education, Government, Regional

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