Board committee recommends approval of five-year capital plan

September 14, 2017

Update, 9-15-2017: The Penn State Board of Trustees voted to approve the five-year capital plan during its regular meeting on Sept. 15.

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UNIVERSITY PARK, Pa. -- The Penn State Board of Trustees’ Committee on Finance, Business and Capital Planning today (Sept. 14) recommended approval of the University’s five-year capital plan, which advances critical investments into aging infrastructure and future needs across the institution. The full board will vote on the recommendation at its meeting on Sept. 15. 

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 at campuses across Pennsylvania. Approval by the full board would represent an endorsement of the overall direction of the plan; the board still would be required to approve individual projects that fall under the plan in accordance with board of trustee bylaws.  

“The 2018-19 to 2022-23 capital plan proposal represents 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 proposal 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 funded by Penn State Health 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 plan covers 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.” 

If approved, University leadership will return to the board each year to provide a capital plan update. This marks the first time the board has approved a five-year capital plan in its entirety, a process improvement reflective of best practices in university governance. 

“We are pleased that the board has been part of the overall capital improvement process for the upcoming capital planning cycle, and are thankful for the significant time and effort contributed by our trustees as this plan has come together over many months,” said Gray. “Ultimately, this plan will provide our students, faculty and staff with the facilities necessary for continued success.”

 

Last Updated September 15, 2017