Trustees hear update on proposed University capital plan

July 21, 2017

MIDDLETOWN, Pa. – Penn State’s Board of Trustees heard an informational update July 21 on a proposed five-year capital plan that advances critical investments into aging infrastructure and future needs across the institution. The plan, which if approved would go into effect beginning in July 2018, is intended to tackle the University’s large maintenance backlog, providing funding for upkeep of aging facilities and for critical improvements to instructional space. 

Trustees have been asked to consider two proposed paths for the capital plan over the coming months. 

“The capital plan proposals under review by the board represent critical and necessary investment in current and future students, faculty and staff,” said David Gray, senior vice president for Finance and Business. “On the University Park campus alone, 65 percent of education and general buildings are more than 25 years old, and 40 percent are more than 50 years old. Older buildings were not designed to accommodate 21st-century needs, and many of our aging buildings are overdue for maintenance and modernization.” 

Gray said that over the years, Penn State has deferred a great deal of maintenance, but is now at a point where buildings, systems and other vital infrastructure are in need of repair and replacement.  

The first proposal, dubbed Alternative A, advances a total of $4.7 billion in spending over five years. Of this total, $2.1 billion would be allocated from the University’s education and general fund, primarily for repairs, updates and construction on classroom and program space at University Park and campuses across the Commonwealth. Potential funding sources for education and general projects include state capital funds, tuition and fees, philanthropy and others. The guiding principles for the expenditure of these funds will focus on support of strong academic programs where investments are needed to ensure continued quality, and on programs with strategic importance, such as engineering, the physical sciences and anthropology. Funding for system renewals, such as outdated heating, ventilation and air-conditioning systems, will focus on correcting the worst conditions.  

The remainder of the spending, about $2.6 billion over five years, would be financed by Penn State Health and the College of Medicine, and other self-supporting units, including Auxiliary and Business Services, Intercollegiate Athletics and the Applied Research Laboratory, for projects within their areas. Tuition dollars would not be available as a funding source for these projects. 

The second option, dubbed Alternative B, proposes a total of $5 billion in spending over five years, with the same guiding principles driving $2.3 billion in education and general spending on critical improvements for the University’s classroom and program space. Funding for Penn State Health and the College of Medicine, and self-supporting units, would rise from $2.6 billion to $2.7 billion under this proposal, again for unit-specific projects. 

Both plans cover a variety of projects across the Commonwealth, such as replacement of roofs, floors, and heating, ventilation and air-conditioning systems; investment in information technology infrastructure; construction of new facilities; and renewal of existing buildings. 

“In order to remain competitive with peer institutions and to provide the up-to-date facilities that students and faculty expect, we must invest in our infrastructure and academic programs,” Gray said. “University leadership remains committed to keeping cost increases as low as possible while maintaining the world-class quality of a Penn State degree. The proposal under consideration by the board represents a critical investment in current and future generations of Penn Staters.”


Last Updated July 25, 2017