Regents mull how to raise funds for multimillion-dollar backlog of building maintenance issues

By Paul Takahashi

Friday, Sept. 6, 2013 | 5:28 p.m.

Nevada’s higher education leaders are considering raising student fees to address the growing cost of maintaining aging buildings at the state’s seven public colleges and universities.

Regents today asked Chancellor Dan Klaich to create a task force that would explore different financing solutions to alleviate the backlog of maintenance projects.

The Nevada System of Higher Education faces $333 million in facilities needs — and that’s just over the next two to three years.

Over the next decade, the cost of deferred maintenance is expected to top $1.3 billion, according to a presentation today before the Board of Regents.

The facility needs include upgrading, repairing or replacing electrical, HVAC, mechanical, plumbing and roofing systems. Earlier this week, an air conditioning outage cancelled classes for hundreds of students at UNLV.

“This is urgent stuff, things we should be doing right now,” said Vic Redding, vice chancellor of finance.

However, the state only provides $15 million each biennium for maintenance. That money, funded from a portion of slot tax receipts, is stretched over the seven institutions and one research facility.

According to industry standards, Nevada’s colleges and universities should be spending at least $60 million per year on maintenance. That’s eight times the amount currently being spent annually on maintenance.

The task force, which will be made up of fiscal and facility representatives from the eight institutions, will discuss several ways to raise more money to fund building repairs and modernizations.

Like the Washoe County School District, the Nevada System of Higher Education could lobby legislators for more state funding. In previous funding formulas, the state did not include maintenance in its cost estimates when building new college facilities.

The system also could shuffle money from its operating funds and ask institutions to dedicate a certain percentage of their budgets to maintenance issues.

Lastly, Nevada regents could raise student fees or approve existing fees to go toward tackling the backlog of maintenance projects. It’s a solution that Klaich does not recommend but remains on the table.

Asking students to pay for collegiate buildings is new territory for Nevada. In January, regents approved a $150-per-student-per-semester fee at Nevada State College to go toward construction of a student activities and administration building.

That precedent — to use student money for construction — may be expanded if regents approve student fees for maintenance, something that has long been the state’s responsibility to fund.

Individual colleges and universities could try to raise money from donors, but that has proven difficult, historically.

“Everyone gets a lot more excited about a new building,” Redding said. “There’s nothing sexy about raising funds for a new HVAC system. No one wants to put their name on a new roof.

“This (maintenance) is much more mundane.”

However, further delays in repairing and maintaining these systems could incur greater costs in the future.

Deferring maintenance is akin to skipping routine oil changes on a car, and later being slapped with a hefty price tag to replace a broken engine.

The growing cost of delaying maintenance not only leads to higher repair costs but potentially money being siphoned away from college classrooms.

And that’s something Nevada’s higher education leaders fear as they try to raise Nevada’s six-year graduation rates, which was 42 percent for UNLV's class of 2012, and even lower for community colleges.

“Every dollar we spend on this (maintenance) will have an opportunity cost,” Redding said.