Trustees; Fiscal Report

   COLUMBUS -- The Ohio State University Board of Trustees heard the annual presentation on capital projects Friday (2/2), focusing on the major issues the university faces in the next five years and beyond, and the need to advance Ohio State’s efforts to become one of the nation’s top public universities.

“Our facilities must enable the academic enterprise to achieve the goal of teaching and research excellence,” Vice President for Business and Administration Janet Ashe said. “Therefore, a ‘life-cycle’ approach to our capital projects is required. This includes planning, design and construction, and operation and maintenance.”

The report, “Life Cycle Facility Planning and the Academic Plan,” also outlined an intense construction schedule and accompanying problems in the near future; a call for legislation that could make building more cost-efficient; and a deferred maintenance dilemma that will require renovation or replacement of 51 major buildings in the next 20 years.

University Architect Jill Morelli said the Academic Plan provides fundamental guidance for the physical planning process, particularly in the setting of priorities and the narrowing of options. Master and district planning, state capital requests and feasibility studies help weigh the critical needs of the academic units of the university with the little unencumbered space available, she said.

Morelli told trustees that significant campus construction congestion is just ahead, with 17 major projects in the central campus region alone (including roadway projects) anticipated for the years 2002 to 2004. Morelli said strategic plans for each project and for the campus should be developed to deal with the anticipated congestion.

Morelli also said that planning the most efficient and cost-effective way to build structures is not always possible. Legislative requirements imposed on public institutions -- some currently under review by the governor’s office -- add significant time and cost to capital projects, she said.

She said design and construction is a balance between budget, quality and on-time delivery, and said planners must focus on the university’s long-term investment strategy. “We must build our buildings to last decades, but they also must be easy to maintain in the 20-year life of the systems that support the programs within.”

Briefing trustees on building operations and maintenance, Associate Vice President for Physical Facilities Jim Stevens said building commissioning is a new tool the university is carefully evaluating to insure that buildings work as intended. Commissioning allows Physical Facilities to work with building tenants and designers to discuss operational and maintenance issues before they commit to a final design, thus greatly reducing the chances of system malfunctions in new buildings.

While commissioning occurs at the launching point, Stevens said the other end of the spectrum in a building’s life is deferred maintenance -- a result of constant aging, continued growth and limited budgets. He said building condition audits conducted for all the university’s major buildings on a five-year cycle identified $103 million in urgent maintenance projects. Additionally, the current combined deferred maintenance for both the systems repair projects and the overdue whole-building renewal is $240 million. Stevens estimates that 51 major buildings will require whole-building renovations or replacement in the next 20 years.

“The challenge the University faces is finding additional funds to meet our biennial need. We are running $12 million short each biennium,” Stevens said.

Stevens said that, working within the state capital budget, the university has the capability to renew the 12 deferred buildings scheduled over the next decade. However, he said the decade after that will be more challenging, with 30 buildings requiring renovation or replacement at a price of $428 million.

He said it is important that new buildings added to the campus come from funding sources outside the state capital process, and suggested establishing a separate endowment for system repair and eventual renewal.

Internal audit, mid-year budget

Trustees received an update from William J. Shkurti, senior vice president for business and finance, on the Department of Internal Audit work plan. The mid-year report is in response to a request by the fiscal committee to periodically review work plans and other activities involving internal audit functions.

Shkurti announced the appointment of Kevin Patton as interim director. Patton will replace Aletha Shipley, the current director, who is moving to Florida.

Trustees also heard a routine mid-year budget report. Reporting on general fund resources, Shkurti said that finances are stable for FY 2001. Enrollment and medical center figures continue to be monitored, as are the Department of Athletics and the Schottenstein Center, and benefit costs for faculty and staff. Shkurti said that while it appears there will be no cuts in higher education, the legislative outcome is more uncertain than in previous years.

In other business, the board

###

(LO)