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Deferred maintenance creates ‘perfect storm’ at colleges

A building boom took place on higher education campuses back in the 1950s, 60s and 70s. And another wave of new construction began after “The Great Recession.” Frankly, the expansion of capital investments in new facilities occurred at a fierce pace.  It is important to point out that part of the surge of new construction during that time period was driven by dramatic growth of new and existing campuses.

It is significant to understand that more than 50% of current campus facilities were developed after World War II, when enrollment grew 600 percent from 2.3 million students in 1950 to more than 20 million by 2016. And the number of higher education institutions grew from 1,800 to more than 4,000 during that same time period.

This exponential expansion of higher education institutions in the 20th century and a relentless pace of new facilities construction has resulted in a legacy of unmet capital needs for renewal and replacements. In other words, a perfect storm has developed to present higher education with a substantial amount of deferred maintenance. This deferred maintenance is a consequence of the normal aging of capital facilities and the subsequent need for periodic renewal of building and infrastructure subsystems.  An additional key element is the obsolescence of facilities that cannot meet the dynamic needs of the institution in areas like information technology and a more diverse student profile.

This perfect storm has impacts from the dramatic pace of expansion during this period. Financing demands for this scale of capital construction resulted in many new facilities not being built to be durable and adaptable for alternative uses. The majority of construction was for new facilities and, unfortunately, was done without strategic thinking and commitment to reinvestment for existing facilities.

Planning new facilities and the excitement of ribbon-cutting ceremonies overshadowed the obsolescence and decay of earlier campus buildings. Existing aging buildings were deteriorating while newer facilities started to enter their own cycle of deterioration. The consequences produced by ignoring older facilities during higher education’s post-World War II expansion have been exacerbated by:

  • Inadequate designs for institutional flexibility and durability.
  • Inadequate funding for capital project renewals and major maintenance.
  • Lower quality/non-durable construction materials and inferior construction techniques.
  • Increased costs due to government regulations.
  • Cuts to maintenance budgets because of overall budget tightening.

Hence, higher education institutions are in a perfect storm of deferred capital renewal and the accrual of backlogs for major repairs, replacements, and renovations to facilities and infrastructure. The magnitude of the storm is increasing because as many as 75% of campus facilities are between 30 to 40 years old and therefore past a first cycle of major renewal expenditures.

The term “deferred maintenance” came into the vernacular sometime around the early 1970s and was defined as major maintenance or capital projects that had gone unfunded in previous budget cycles. Deferred maintenance is now a universally adopted part of the vocabulary of higher education.

Leaders of higher education institutions are confronted with the reality of facilities audits that point out the needs and prospective costs of campus buildings and other infrastructure renewals and maintenance. The harsh reality is that many institutions and public systems have experienced rejection of unreasonably large funding requests even when presented as urgent need.

Another phenomenon that has occurred is the experience of the “ostrich syndrome” where professionals have been tempted to suppress bad news to limit exposure of liability risk due to unsafe conditions, or to avoid criticism and embarrassment about management failure—real or perceived. The term “deferred maintenance” can actually become an impediment in capital renewal communication.

So what lies ahead?

Backlogs of needed building maintenance are projected to increase as higher education institutions fail to generate the necessary funds to meet the largest demand for capital investment that higher education has ever seen.

Facility leadership must be successful in persuading the administration to commit more funds to repairs and modernization. The goal is to increase spending on the deferred maintenance backlog and set aside a dedicated dollar amount for renewing facilities so they can maintain their value.

Budget shortfalls will intensify the issue of deferred maintenance. The deferred maintenance issues affect other areas of the higher education campus. Unaddressed capital needs will have a direct impact on the ability to recruit students or attract star faculty critical to research excellence.

Capital renewal needs will continue to increase and higher education institutions must develop new strategies to fund these needs.

Most institutions will refer to a single dollar amount that represents their deferred maintenance backlog. This figure roughly approximates all projects a campus must complete to bring existing infrastructure components, such as roofs, windows, foundations, etc., and building systems, such as plumbing, electrical and HVAC, to like-new condition and compliant with various building-related codes.

Nearly all institutions will face declining revenues due to changes in enrollment, outside financial support, research funding, and debt capacity. Declining revenues will translate into tighter budgets and most likely will negatively impact facilities units the most. And this means the backlog of deferred maintenance will continue to grow.

1.5x average growth of deferred maintenance backlog compared to inflation

The “Perfect Storm” of deferred maintenance at higher education institutions is one of the single greatest challenges facing most campuses. If these institutions do not strategically address this challenge, they will not be sustainable.

Glenn Ebersole –

Glenn Ebersole is a professional engineer and is the Business Development Manager for CVM and CVMNEXT Construction in King of Prussia. He can be reached at gebersole@cvmnext.com or 610-964-2800, ext. 155.

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