New buildings a mixed blessing

Funds that made buildings possible won't cover costs of upkeep, utilities

Imagine getting a Christmas gift and having to pay for it for the rest of your life.

That’s basically the situation Kansas University administrators face this year, when they assume ownership of five new campus buildings paid for by private gifts and student fees.

The trouble is there’s no state money to pay the $941,000 a year it will cost to maintain and run the buildings, everything from custodians’ salaries to the electric bill. The university will have to piece together the maintenance money from other areas of its budget.

“It’s a double whammy,” Chancellor Robert Hemenway said. “The state isn’t providing money for new buildings, and it’s not providing money to maintain the new buildings built with private money.”

The influx of new buildings is due, in part, to the Kansas University Endowment Association’s $500 million “KU First” capital campaign, which has raised money for Eaton Hall, the Dole Institute of Politics and the Kansas Public Radio facility on the Lawrence campus, and Regnier Hall on the Edwards Campus in Overland Park. All of the buildings are open or will open by June 30, 2004.

The other building set to open this year is the Student Recreation Fitness Center on the Lawrence campus, which was funded with student fees.

Funding changes

Before 2001, the Legislature generally used a formula, based on a new building’s size and use, to figure how much the state should spend on its maintenance. But that year, the state began using a “block grant” approach — where the Legislature determines the amount given to a university, and the university determines how it’s spent. The maintenance formula was dropped.

While installing glass railing, Abdon Quezada, a Performance Glass employee from De Soto, grabs glue from a fellow worker in Eaton Hall. Maintenance and utilities for Kansas University's five new buildings are expected to cost just shy of million a year, all of which the university must pay. Quezada installed the glass on Tuesday.

Duane Goossen, the state’s budget director, said the new approach would work fine — if there was state money available to give to universities.

“The problem was the block grant was instituted right as money was getting tight,” Goossen said. “We haven’t been in a position to increase it much or at all.”

By the end of the 2004 fiscal year on June 30, KU will have added more than 464,000 square feet of space on all of its campuses since the state quit earmarking money for building maintenance.

That new space will cost about $1.77 million per year to maintain, said Theresa Klinkenberg, the university’s chief financial officer. The maintenance costs include $780,000 for custodial and janitorial salaries, $734,000 for utilities and $255,272 for other operating expenses.

Representatives from KU and the Board of Regents say those costs should be the state’s responsibility.

“We’re trying to keep that policy alive at the regents level,” Klinkenberg said. “When you look at the budget discussions, one thing we always calculate is the cost of buildings that will come online. We’re always on record for what the costs will be.”

That amount is then part of the operating-grant increase requested by regents before the legislative session. Next year, the amount requested is about $989,000 for the six state universities.

“We think it’s their obligation,” said Marvin Burris, director of fiscal affairs for the regents. “There’s a school of thought from our side of the fence that we’ve put the money together to build buildings for the state, so we’d like the state to find money to maintain them.”

Keeping up repairs

Dole Institute of Politics 28,000 square feet Construction cost: 1.3 million Annual maintenance: 07,360

Hemenway said proper maintenance of new buildings would prevent costlier repairs in the future. The regents office has compiled a list of $672 million in major repairs needed for state university buildings, including about $320 million at KU. Hemenway said keeping new buildings off the rehabilitation list would take investments now.

“There’s an expectation that the university and the state are going to maintain the buildings,” he said. “It’s a pretty frightening state for the economy if the state is adding buildings to the inventory but really can’t assure people that those buildings are going to be maintained.”

Sen. Stephen Morris, R-Hugoton, agreed that the state should pay for the building maintenance. But Morris — who chairs the Senate Ways and Means Committee and sits on the State Building Construction Committee — said the money simply hasn’t been available in recent years.

Morris said he wasn’t sure how to remedy the concern, other than to separate discussion of new building maintenance from the rest of university block grant proposals.

“It needs to be addressed,” he said. “It’s been an ongoing concern and a problem. You have privately built buildings, which is good because the state hasn’t paid for those. But once they become our property, the state has an obligation to pay for those.”

Regnier Hall (Edwards campus) 82,000 square feet Construction cost: 7.2 million Annual maintenance: 14,720

Student Recreation Fitness Center 100,000 square feet Construction cost: 7 million Annual maintenance: 71,280

Eaton Hall 80,000 square feet Construction cost: 5 million Annual maintenance: 21,656

Kansas Public Radio 8,750 square feet Construction cost: .2 million Annual maintenance: 5,900