Briefing Paper


The University of Alaska has 6 million square feet of facilities and about 400 buildings throughout its system.  Every year UA spends up to $27 million from its operating budget for routine maintenance on those facilities.  This kind of maintenance, known as M&R (Maintenance and Repair), is a high priority for UA.  M&R includes work required to preserve the functionality of a building such as regular painting, carpet repair and replacement, new lighting, etc.  Annual expenditures for M&R are established as a formula based on the age and size of the facility inventory.  The Board of Regents and President have ensured that UA stays current with M&R expenditures. 

However, there is a category of maintenance that is not funded through the operating budget.  It is known as R&R (Renewal and Renovation), and money applied to UA’s R&R is only available when the legislature specifically appropriates money to it in the capital budget. R&R is best described as regularly scheduled major maintenance that extends the useful life of a facility.  R&R is usually associated with such things as roof replacement, mechanical and electrical systems upgrades, code compliance, etc.

When R&R is not funded a backlog of projects is created.  The existing backlog, i.e., the “deferred” R&R, is known as Deferred Maintenance.  Because the university needs about $50 million per year to properly fund R&R and the legislature only funds an average of about $12 million, the backlog has grown dramatically.  UA now has an accumulated backlog in deferred maintenance needs of more than $700 million.

Although UA’s facilities managers are taking heroic measures to keep up, the problem is becoming critical, with the backlog growing at the rate of $38 million per year over the past 10 years.

UA needs $50 million per year to stay current with R&R requirements and another $70 million to address the most pressing backlog of deferred maintenance projects.  It isn’t realistic to presume that the deferred maintenance will be fully funded in any one year, but the lack of adequate R&R funding has created a deferred maintenance problem that must be systematically reduced. 

Moreover, the state must create a mechanism to regularly fund R&R to avoid inappropriately large backlogs in the future and to ensure that the University isn’t taking one step forward and two back.

Board of Regents’ FY09 Capital Budget Request includes the following General Fund (GF) request:
   
                            Renovation & Repair (R&R)                    Deferred Maintenance
   
    UAA:                $11.0 m                                                             $18.0 m
    UAF:                $25.6 m                                                             $42.0 m
    UAS:                $10.6 m                                                             $  4.6 m
    SW:                   $    .8 m                                                             $  1.4 m
    SW Equip:        $  2.0 m                                                            $  4.0 m

         TOTAL:        $50.0 m                                                            $70.0 m

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For Information Contact:
Pete Kelly, Director, State Relations
450-8006/465-2382