Physical Plant | 1998-1999 Support Book 2 | Fiscal Year Budgets | Budget | CSU
CSU Budget Office

1998-1999 Support Book 2 Documentation

Physical Plant

Fiscal year 1998/99 represents the third year in which the CSU makes special recognition of Physical Plant need. CSU views the integrity of its physical plant as one of several key elements in maintaining and ensuring access to a quality higher education.

CSU has identified four major categories of needs assessment, based upon a Coopers and Lybrand study and refined for use by CSU, to gauge its needs in this area. The categories of assessment include:

  • Ongoing Maintenance - includes the routine upkeep and maintenance of buildings and facilities plus scheduled repair requirements of various mechanical systems and facility components.
  • Deferred Maintenance - reflects those items whose originally scheduled repair has been postponed due to lack of adequate resources.
  • Renovation - typically includes improvements to correct program deficiencies, and also may include correcting structural, health and safety code deficiencies in facilities by upgrading and renewing facility infrastructure.
  • Growth - Funds to eliminate instructional and support deficiencies, including new buildings, additions, land acquisitions, and site development.

Using these categories, CSU compared the level of support it is able to budget for the physical plant with certain funding standards. The comparison results are displayed in the table below.

Fiscal Year 1998/99 Physical Plant Requirements - (Dollars in Millions)

Category of Need Funding Standards 1997/98 Budget Need
On-Going Maintenance $236 $205 $-32
Deferred Maintenance 18 0 -18
Renovation 140 119 -21
Growth 31 31 0
Total $425 $355 $-71

Ongoing Maintenance

The CSU identifies its budget needs by comparing the dollars made available through state appropriations to dollars required in accordance with defined funding standards. Since 1996/97, the CSU has used the Association of Higher Education Facilities Officers Association's (also known as APPA) cost report to partially determine the funding standard for ongoing maintenance (this standard is also used to determine the funding standard for the support of new space). In addition to the APPA standard, ongoing maintenance uses a cost figure based on a Massachusetts Institute of Technology study for scheduled repairs. To arrive at the Plant funding standard or the amount needed to ensure CSU is adequately maintaining its facilities, CSU multiplied the APPA cost standard of $6.45 per square foot for maintenance by the 1998/99 custodial space total of 32,003,200 square feet. This equals $206 million. In addition to this, the MIT cost standard for scheduled repair of $0.93 per square foot (after adjusting for inflation) was multiplied by custodial square footage, which equals $30 million. Together, these standards identify a budget requirement of $236 million for ongoing maintenance. The current budget for ongoing maintenance at CSU is $205 million, $32 million below the funding standard.

Based on the on-going maintenance funding standards, CSU earmarked a total of $16.6 million for Ongoing Maintenance over fiscal years 1996/97 and 1997/98. The amounts budgeted for each fiscal year fell short of total maintenance requirements by $49 million and $38 million, respectively. The current budget for Ongoing Maintenance must be increased by $32 million to achieve the level of spending required by CSU funding standards. Only $1.7 million of this amount is available to be included in the 1998/99 CSU budget plan because of competing priorities for limited resources.

Because underfunding of on-going maintenance may directly affect the deferred maintenance backlog, CSU has recommended the state implement a comprehensive funding plan for ongoing maintenance to halt growth in its deferred maintenance backlog. Growth in the CSU deferred maintenance backlog puts the state's multi-billion dollar investment in CSU facilities at risk.

Age of CSU Buidlings

As further evidence of CSU's ongoing maintenance need, 73% of CSU's facilities are 18 years old or older. It is certain that as buildings age they require more, not less, maintenance and repair. Maintenance delays exacerbate repair problems and increase the cost building renovations and restorations.

Since 1996/97, the Legislative Analyst has recommended appropriation augmentations which would have helped fund CSU on-going maintenance need and halted growth in the reported CSU deferred maintenance backlog. The Legislature included a maintenance augmentation for fiscal year 1996/97, but it was vetoed by the Governor. In 1997/98, the budget act did not include additional funds for maintenance.

Deferred Maintenance/Renovation and Growth

In addition to Ongoing Maintenance, CSU's funding standards for deferred maintenance and renovation result in another $39 million of funding need. The funding proposal for deferred maintenance calls for additional General Fund support over a twenty-year period to address the state-recognized backlog. Earlier CSU estimates placed the backlog in excess of $325 million. After adjusting for inflation (using the California consumer price index for the last three years which averaged 2.6%), the revised estimate of the deferred maintenance backlog is $351 million.

The funding standard for renovation is based on the premise that facilities with a 50-year life cycle require renovations over time. CSU has estimated the value of its capital assets to be in excess of $7 billion. To keep up with the life cycle maintenance and upgrade of buildings and their components, the funding standard calls for renovating a minimum of two percent of assets annually. This requires a minimum expenditure of $140 million per year. During 1997/98, CSU used $119 million of the $150 million capital funding commitment included in the four-year compact for renovation purposes. However, nearly $2 million of that amount was explicitly used to equip building additions, leaving $117 million for correcting structural, health and safety code deficiencies, seismic upgrading, and infrastructure improvements.

The remainder of the $150 million in capital funding was used for growth need for a Technology Center and Health and Administrative Services Building at the CSU, Dominguez Hills campus ($31 million). It is important to note that the level of funding requested for growth over the past several years has largely been driven by existing surplus capacities at the campuses. The funding provided for growth during this period has been at smaller campuses with existing capacity deficiencies to help them meet their enrollment demand.

As CSU begins to absorb the added growth from Tidal Wave II, the need for increased growth funding will strain the balance of capital and support funding used to address the needs of the physical plant.