September 23, 2005

Purdue builds plan to address repair needs by 2012

WEST LAFAYETTE, Ind. – Purdue President Martin C. Jischke today (Friday, Sept. 23) rolled out a plan to address the university's repair and rehabilitation concerns over the next seven years.

The plan calls for combining university funds, reallocations, bonding, state formula repair and rehabilitation funding, private donations, and a dedicated student fee approved last spring to be paid by new students who enroll during and after the fall 2006 semester. The plan, outlined to the university's Board of Trustees, was presented 10 days earlier to the State Budget Committee. No official action has been taken on the proposal.

"The repair and rehabilitation backlog at Purdue – currently more than $413 million – must be addressed now," Jischke said. "Of that, $120 million represents deferred repairs, things that are broken and need fixing, such as leaky roofs. The rest represents deferred renewal, things that need to be upgraded to meet current program needs and building codes. A science lab constructed in the 1950s cannot meet the needs of 21st century learning and discovery. It also falls short of building codes that understandably have advanced over the years.

"If these situations aren't dealt with, they will not simply go away. In fact, they will certainly only become worse as the years go by and the condition of facilities further deteriorates."

The state has been able to meet the formula it created to fund repair and rehabilitation for its public colleges and universities only once in the past 10 years.

"We understand the extraordinary circumstances facing our state, and we know our state leadership has done all it can to help," Jischke said. "But in just the past four years, we've received less than $4 million rather than the anticipated $56 million."

To catch up, Jischke outlined a three-pronged plan.

• Set aside $15 million annually for ongoing repair and maintenance.

• Address $120 million in deferred repair.

• Address $293 million in deferred rehabilitation.

To pay for $15 million annually in ongoing repairs, Purdue would tap five sources:

• Allocate $1 million from the university's current general fund budget.

• Allocate a portion of the student repair and rehabilitation fee set last spring for new students only, beginning fall 2006. The revenue from this will grow as more new students enroll, contributing $800,000 in 2007 and increasing to $2.4 million in fiscal year 2012.

• Allocate half the growth in revenue from indirect cost reimbursements on research grants, estimated at as much as $5.2 million by fiscal year 2012.

• Use $7.3 million each year in state repair and rehabilitation funding, less than half of the current repair and rehabilitation formula.

• Make internal reallocations as needed for each fiscal year through 2008, while the new student fee phases in.

Purdue is asking the state for authority to issue bonds, to be paid off with university budget reallocations and revenue from the repair and rehabilitation student fee. Those two funding sources are expected to generate $1.2 million in fiscal year 2007, growing to $4.8 million for fiscal year 2012. The university also is asking the state to match that investment.

"This will allow Purdue to sell bonds to borrow $60 million, or one-half of the $120 million deferred repair backlog, over the next four years," Jischke said. "We are asking the state to match that with an equal investment to address the entire deferred repairs backlog."

Purdue proposes three revenue sources:

• The state would be asked to fund the full repair and rehabilitation formula, generating about an additional $7.3 million annually, based on current data.

• Purdue would supplement that through private fund raising specifically for this purpose as well as with unrestricted gifts to the university.

• The university would make specific requests to the state for special projects similar to the $43.6 million in strategic infrastructure projects funded in the 2005 legislative session.

"We will address deferred rehabilitation as these funds allow," Jischke said.

Purdue encompasses more than 400 buildings spread across 18,000 acres on four campuses. The West Lafayette campus alone represents a current replacement value of more than $4 billion.

"Through this proposal, we are not asking the state to foot the entire bill for the repair and rehabilitation backlog at Purdue," Jischke said. "Rather, we are asking the state to join us as partners in solving this problem together.

"In addition to the dedicated student fee and indirect cost reimbursement revenue from grants, Purdue will be reallocating approximately $13 million over the next four years as a part of this repair and rehabilitation funding plan. We also are requesting that the governor and the Legislature authorize the bonding authority, giving Purdue a tool necessary to help itself."

Writer: Jeanne Norberg, 765-491-1460, jnorberg@purdue.edu

Purdue News Service: (765) 494-2096; purduenews@purdue.edu

Related releases:
Trustees approve student repair and rehabilitation fee

Report: Repair backlog creating 'crisis' for Purdue facilities

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