UW, WSU agree on greater control over building funds

A Senate bill would give the top universities more authority over the accounts for maintenance and construction. But the House is letting the measure linger.

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University of Washington (2007)

A Senate bill would give the top universities more authority over the accounts for maintenance and construction. But the House is letting the measure linger.

In what may seem like a rare agreement between rival universities, the University of Washington and Washington State University have collaborated this legislative session to advance the authority of each college over its building accounts.

A bill that the universities support has passed the Senate, but it is lingering in the House Capital Budget Committee.

Prime sponsor Sen. Derek Kilmer, D-Gig Harbor and vice chair of the Senate Capital Budget Committee, said that this bill, SB 5576, would help University of Washington and Washington State University school officials gain more freedom and leeway along with some cost savings as well. There is an estimated savings of $21,000 a year in administrative costs of financial analysts and specialists the Office of Financial Management alone. But many agree this isn’t a key motive.

Both universities requested the bill, which would move about half of the 3 to 5 percent students pay in tuition, to each university's Building Account. The bill would allow the appropriated Building Account to receive the full 3 to 5 percent of tuition that currently funds furnishing, equipping, maintaining, altering, and constructing buildings. 

Kilmer explained that instead of going through the legislative process of dividing up leftover money for specific projects, the university could have more authority and would therefore save time in not having to wait for when the Legislature is in session to divvy up funds. If this bill is passed, the building accounts at both universities would take on the purpose of the state's existing Bond Retirement Fund, paying debt service bonds. In a related step, the bill would eliminate the Bond Retirement Fund of the University of Washington and Washington State University

School officials say the universities’ increased authority in managing funds to the maintenance and capital project purposes would provide some important benefits. The control "would allow the university to leverage those funds against its own debt capacity,” said Margaret Shepherd, director of the Office of State Relations at the University of Washington. “So, without impacting debt capacity, the university could plan for and potentially build capital projects for academic facilities on campus.”

Shepherd also added that it would allow them to plan and manage the Capital Maintenance Program more effectively, which would save money and time on capital projects.

Chris Mulick, director of the Office of State Relations for Washington State University said the bill would help the school operate more like a business. “It would provide some flexibility so that our downsized staff can help handle more of the workload we’re dealing with,” said Mulick.

Although Mulick said the purpose of the bill isn’t to allocate more money towards construction on major buildings, he did say it would allow the university to “act more swiftly on emergent needs” and capitalize on good bidding environments.

Shepherd also said the amount of money flowing in would not be affected in that resources, such as operating resources, would go to the university so that they could bond against that money.

The current version of the bill specifies that the money for minor works projects and deferred maintenance must amount to the level the biennial capital budget has specified. Amounts are adjusted annually to consider the rate of inflation. “There were some kind of belt and suspenders added into this bill last year,“ said Kilmer. “To make sure they continue to do the level of minor works and repair work that is necessary for the campus — that they’re not collecting funds to do something palatial.”

Shepherd explained that although the first priority of the funds is for maintenance projects — and the University of Washington has plenty — authority over where funds go allows school officials to look at a long-term capital construction approach. In conjunction with a 10-year capital plan, which was approved by the state, the Building Account resources could be used, according to Shepherd, to “finish out the rehabilitation of many of the core buildings on campus, like Denny Hall.”

Other projects that could result through long-term action include, “growth at the branch campuses of Bothell and Tacoma,” capital expansion in the University District and a potential “innovation district downtown.”

With the possibility of new projects, Shepherd said job creation in the construction industry may be in the future.

Although Senate bill 5576 was passed out of the Senate on Feb. 11 with a near unanimous vote, the bill had trouble getting passed by the House last year.

If the House does pass it, the act will take effect July 1 next year and expire on June 30, 2023.


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