Board Oversight
KSA 76-147 allows the The Kansas Board of Regents (Board) to acquire land for building or utility construction; however, there is no required notification to the Legislature in taking this action, nor is there a statute regarding the acquisition of buildings. The Board policy states that state universities may acquire real property necessary to properly maintain and carry on a state university or the business thereof.
The state university must submit a description of all properties they desire to purchase or acquire to the Board for approval. Such description must include:
- A legal description of the property;
- Anticipated use; and
- The estimated cost of purchase and any cost relating to the razing or renovating and maintaining the property.
In 2019, the Board directed the universities to survey the utilization of instructional spaces and offices and assess mission critical buildings. The Board defines “mission critical” as those buildings that are predominately used for the academic and research mission of the state universities and the infrastructure that directly supports these buildings. The 2020 Report on State University Building Inventory, Space Utilization, and Facilities Condition published by the Board notes that the estimated renewal costs to address deferred maintenance for mission critical buildings is approximately $1.2 billion.
Deferred Maintenance & EBF
The Board policy definition of “deferred maintenance” is annual maintenance and necessary renewal of facilities systems and components that have been postponed, delayed, or deferred to a future budget cycle or until funds are available.
Educational Building Fund
The Educational Building Fund (EBF) was established in 1941 primarily for the construction of new buildings at state universities. The EBF receives revenue from a mill levy on all tangible property in the state that is subject to ad valorem taxation.
Currently, the fund is primarily used for deferred maintenance projects at state universities. The Board calculates EBF appropriations using an adjusted square footage formula that considers the gross square footage, building age, and complexity of the physical plant.
During the 2023 Legislative Session, the Legislature approved $45 million in Educational building funds and $20 million from the State General Fund (SGF) for state capital renewal projects.
History of Deferred Maintenance at the State Universities
The Board prepared a report in 1994 indicating that the six universities needed $288.3 million for capital improvements that included federal Americans with Disabilities Act compliance, State Fire Code requirements, improving classrooms, major remodeling of existing buildings, and new construction. The 1996 Legislature authorized the issuance of $156.5 million in bonds. The initiative was referred to as the “Crumbling Classroom Initiative.”
Because the amount financed was less than what was needed for the projects, the Board reduced the amount that would be spent for rehabilitation and repair of university buildings. Since the majority of the EBF was being used to pay the bonds for the Crumbling Classroom projects, the balance of the EBF moneys was insufficient to keep up with the routine day-to-day maintenance projects. The bond payments were made through FY 2012.
In 2004, the Board prepared a new study for the Legislature stating that the State’s universities would need an additional $584.0 million to cover the deferred maintenance costs. The study assessed the condition of 537 academic and administrative buildings as well as utilities and infrastructure components on the campuses.
In July 2005, the Legislative Division of Post Audit conducted a performance audit titled: “Regents Institutions: Reviewing Proposals for Increased Maintenance Funding at the State’s Colleges and Universities” (https://www.kslpa.org/wp-content/uploads/2019/08/r-05-16.pdf). The conclusion of the audit found that the use of the EBF to pay for the Crumbling Classroom Initiative resulted in the increase of deferred maintenance projects over time.
In 2007, Sub. for Senate Sub. for HB 2237 was passed, which created the State Educational Institution Long-Term Infrastructure Maintenance Program. Beginning in FY 2008, the bill directed the State to make annual transfers to the Board to fund deferred maintenance projects at the state universities. The transfers would total $90.0 million, including $47.0 million from SGF. In addition, the universities were to transfer the retained interest from tuition, restricted fees, and sponsored research overhead to the State University Building Maintenance Fund. Each university maintains a deferred maintenance support fund, which receives the interest income from the three other funds. The bill also authorized new tax credits for tax years 2008-2012 for contributions earmarked for deferred maintenance at universities and certain projects at community colleges. The tax credit was to sunset after tax year 2012. Due to the recession that occurred in the United States, this program was never funded.
Kansas Board of Regents Policy
The Board approved a new policy in June 2021 for university building maintenance. Beginning in FY 2023, and each year thereafter, each university must calculate a maintenance assessment as a percentage of the professionally estimated replacement cost of mission critical buildings according to an assessment schedule, culminating in a sustainable 2.0 percent of current replacement value as approved by the Board on an annual basis.
Utilizing each university’s Deferred Maintenance Projects Fund, expenditures must be itemized using a standard template for the Board’s review annually. Each state university must identify and expend campus funds (excluding EBF allocations) annually for the purpose of addressing annual maintenance according to a prioritized assessment plan reviewed by the Board. Funding for the maintenance assessment may include contributions from university, state, federal, and philanthropic sources.
It is the stated intent of the Board to use the 2.0 percent of current replacement value funds to annually maintain the buildings in proper working order and focus the use of the Educational Building Funds on strategic projects to reduce the backlog of deferred maintenance. The Board voted to allow the universities a six-year escalator to ultimately arrive at the 2.0 percent current replacement value.
by Brianna Horton
Fiscal Analyst
785-296-6684