Capital budget priorities set for next six years

COLUMBUS – The Ohio State University's preliminary capital budget recommendations for fiscal years 2007 through 2012 balance university academic and facility priorities with a lean state budget. More than 80 percent of the total cost of campus building construction and renovation projects for fiscal 2007 and 2008 reviewed at the university's Board of Trustees Friday (7/8) meeting are self-funded through user fees, cost recovery, or private fund raising.

William J. Shkurti, senior vice president for business and finance, presented a first reading of capital priorities for the next six years from all funding sources, and detailed recommendations covering the next two years. Trustees will be asked to adopt the recommendations at the September 23 board meeting.

Shkurti said the university continues to identify other sources besides state funding for its capital needs, including bonds, user fees, and development monies. Three significant university projects expected to be underway in the next six years -- the Cancer Program Expansion, the Ohio Union Replacement and the Student Services Building -- will depend on the raising of substantial non-state funds.

While the state has not yet announced allocations to each institution for the 2007-08 biennium, an estimate of $57 million for the Columbus campus was used for planning purposes, based on trends in the amount of state funds allocated to the university for major capital projects over the last eight years.

“Alignment of the objectives of each project with the goals of the Academic Plan was an overriding factor in the final recommendations,” Shkurti said.

“The combination of continued reductions in state support, limits on capacity to fund additional university-backed debt, and our need to address the obsolescence of facilities built in the 1960s and 1970s dictates that we set clear priorities and maximize scarce resources,” he said.

Shkurti said the proposed recommendations are consistent with guidelines on the use of bonds and other credit instruments approved by the Board of Trustees March 4, and envision a bond issue of no more than $400 million in mid-calendar 2005 and no more than $400 million to $500 million in calendar 2007.

Representatives from the offices of Academic Affairs, Business and Finance, Research, Health Services, Student Affairs and Development, and representatives of the Senate Fiscal Committee and the Senate Committee on the Physical Environment participated in preparing the recommendations. Each project was evaluated based on its relationship to the Academic Plan, physical need, and financial and physical feasibility.

Heading the list of recommendations for state capital funds in FY 2007- 08 is the anticipated $100 million rehabilitation of the Main Library — one of two projects mentioned specifically in the Academic Plan. The university is asking for $45 million in state funds for 2007-08, and $16 million for 2009-10. The design is expected to be completed this summer, and construction is expected to begin in the fall of 2006.

Four other projects are recommended for funding during 2007-08:

•Brown Hall, number three on Physical Facilities' list of deferred maintenance problems and identified as a priority in the 2005-06 capital process for planning funds, was postponed due to state budget cuts. The existing building is to be renovated or replaced to serve as the home of the Department of English, Digital Media Project, Writing Workshop, and Center for the Study of Teaching and Writing. The university is asking for $3.5 million in state funds for 2007-08, and $21 million for 2009-10.

•Also high on the deferred maintenance list is Hughes Hall. A feasibility study calls for a three-phase project that provides a state-funded renovation of Hughes Hall, while the College of Music raises money for the renovation of and addition to Weigel Hall. The recommendation is for $1.5 million in state funds for 2007-08, and $14 million for 2009-2010.

•At the Medical Center, the renovation of the Graves Hall basement is regarded as a cost-effective way of creating additional space while addressing a potential deferred maintenance problem. The recommendation is $6 million in 2007-08 state capital funds and $6 million for 2009-2010.

•A siting study is currently underway for an estimated $90 million Interdisciplinary Research Building, mentioned specifically in the Academic Plan as key to advancing interdisciplinary research. Of the $5 million needed for planning, the recommendation is for $2.5 million to come from the 2007-08 capital bill and matched from internal research sources.

“The five projects will require approximately $50 to $60 million in state capital funding in each of the next two biennia,” Shkurti said, “and represent the best return to the university on the use of limited state capital dollars.”

Additional projects identified as consistent with the Academic Plan, but unlikely to receive state capital funding in the next two biennia, are FAES Integrated Teaching and Research Facility; Koffolt Lab expansion/renovation; Postle Hall renovation or replacement; and a new Public Health building.