2008/09 Support Budget

Long Term Need: Deferred Maintenance

Deferred Maintenance, $6.5 million

CSU deferred maintenance remains an area of significant budgetary deficiency. Deferred maintenance occurs when scheduled repairs are delayed to subsequent years due to project cost, timing, and/or lack of available resources. Historically, the CSU has also used the deferred maintenance term to describe or include the delayed replacement of building systems that have exceeded their useful life as part of the funding deficiency.

Between the 1994/1995 and 1999/2000 fiscal years, the state and the CSU provided permanent base budget resources for ongoing maintenance support to address funding deficiencies. However, during the six-year period, the state supported only $61 million in one-time funds to address a deferred maintenance backlog that exceeded $350 million. In 2000/01, the CSU used long-term funding provided by the partnership agreement to reduce the backlog by $2.8 million on an annual basis. Unfortunately, no funds were available to further reduce the backlog in the next four fiscal years (2001/02 through 2004/05). Consequently, not only was further reduction of the backlog halted, but inflation and the continual aging of buildings has caused the long-term maintenance repair and replacement needs to increase. Between 2005/06 and 2006/07, $4 million was used to support further redirection of the backlog of deferred maintenance. The 2007/08 support budget adds another $2.5 million to this effort.

In 1999, the CSU commissioned a study to better define the annual funding needed to replace building components and systems that have exceeded their life cycle. In addition, the purpose was to confirm if the long-term funding sought by the CSU would halt growth in the deferred maintenance backlog consistent with the intent of the Partnership Agreement.

The results of the study indicate that due to the substantial amount of construction of facilities from the late 1950s to the mid-1960s, on average, $100 million per year is needed to replace mechanical, electrical, and plumbing systems that have now exceeded their useful life. The annual need varies around this average as the study model takes into account building age, life cycle of systems, and campus repairs or replacements performed in the building.

To address some of this funding deficiency for buildings and systems beyond their useful life, the CSU received approval by the Department of Finance to include renewal of capital as a component in the CSU Capital Outlay Program beginning in 2005/06. The capital renewal program is envisioned to range from $25 million to $50 million annually; $26 million was funded in 2005/06, and $50 million was funded in each of 2006/07 and 2007/08. A structured approach that utilizes capital outlay funding with support dollars will reduce deferred maintenance and improve the extended use of CSU capital assets.

The CSU is committed to sustaining and increasing its maintenance budgets in order to provide safe, functional, and efficiently operating buildings to serve its students, faculty, and staff. However, the ongoing maintenance rate of $9.10 per square foot funded in 2008/09 does not recognize scheduled maintenance need at an estimated cost of $1.46 per square foot. Campuses currently use productivity and efficient management of available resources to satisfy a portion of this unfunded need, but they most often have to delay scheduled repairs due to a lack of available funds, which increases the deferred maintenance backlog.

The table below shows the CSU budgeted deferred maintenance backlog from 1993/94 to current projections.

Budget Year Prior Year
CA-CPI % Change
Budget
Funding Offset
Backlog
1993/94 Base     $351,000,000
1994/95 1.8% $17,000,000 $340,318,000
1995/96 1.7% $24,000,000 $322,103,000
1996/97 1.4%   $326,612,000
1997/98 2.3%   $334,124,000
1998/99 2.0%   $340,806,000
1999/00 2.5% $20,000,000 $329,326,000
2000/01 3.2% $2,813,000 $337,051,000
2001/02 4.3%   $351,544,000
2002/03 2.9%   $361,739,000
2003/04 2.6%   $371,144,000
2004/05 1.9%   $378,196,000
2005/06 3.3% $1,500,000 $389,176,000
2006/07 4.2% $2,500,000 $403,021,000
2007/08 3.0% $2,500,000 $412,612,000
2008/09 2.6% $6,500,000 $416,694,000

 


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Last Updated: September 04, 2008