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CRDM: Capital Renewal/Deferred Maintenance

APPA took on the role of documenting the problem of deferred maintenance back in 1988 with the study, The Decaying American Campus: A Ticking Time Bomb. The study, conducted in cooperation with Coopers & Lybrand and the National Association of College and University Business Officers, was a landmark research effort documenting a growing problem for our nation's colleges and universities.

Key findings in the report:

• US higher education institutions would need to invest approximately $300 billion to reconstruct their facilities today.
• The capital renewal and replacement needs of US colleges and universities were estimated at $60 billion.
• Urgent need for priority repairs and renovations required an estimated $20.5 billion of the $60 billion estimate.
• Facility investment was not keeping pace with the need. Colleges and universities were deferring $4.00 of needed maintenance for every $1.00 spent in 1988.
• Since 1950, facility space at colleges and universities had more than quintrupled and represented more than 3 billion gross square feet.

Since 1988, there has been much attention focused on the issue. States produced facilities-funding models.  Institutions sought funds to reduce deferred maintenance, and therefore institutions continued to grow and expand their space. In addition, new forces have come into play requiring institutions to find funding for significant technology upgrades in order to compete. What effect has any of this had on deferred maintenance?

In 1995, APPA partnered with NACUBO and Sallie Mae to once again examine the climate in our higher education institutions.  The research results were published in A Foundation to Uphold. The estimates showed $26 billion in accumulated deferred maintenance, of which $5.7 billion are urgent needs. While many campuses have made significant progress in reducing and even eliminating deferred maintenance, the problem continues to plague our campuses.

In response to this condition, APPA continues to press for legislators, administrators, and others to address funding needs. We have also found those institutions who have been successful and written a case studies book, Successful Funding Strategies for Facilities Renewal, to help others find resources to address the accumulated deferred maintenance needs.

APPA Resources on CRDM:

• Capital Budgeting Practices in Higher Education by Derrick A. Manns and Stephen Katsinas
• A Foundation to Uphold by Harvey Kaiser and Jerry Davis. Results of the 1995 research study.
• Successful Funding Strategies for Facilities Renewal by Matthew Adams. Case studies of APPA member institutions.
  Institutions have employed at variety of strategies from public relations efforts, to strategic planning, to initiative policy board to examine the issue. This book looks at nine case studies and their approach to the problem. Each of these institutions has been able to grab the attention of their administration and find additional finding to invest in the renewal of their campuses.
• Managing the Facilities Portfolio by Applied Management Engineering and Sean C. Rush, Coopers & Lybrand. This book focuses on facilities portfolio management. Publication available from NACUBO.

Articles:

• Buildings: The Gifts That Keep on Taking by Rodney Rose, March/April 2007
• Capital Budgeting Practices in Public Higher Education by Derrick A. Manns and Stephen G. Katsinas, January/February 2006
• Reviewing the State of Deferred Maintenance by Harvey H. Kaiser, November/December 2004
• The Needs Index: The New and Improved FCI by David A. Cain, Ph.D. and Maggie Kinnaman, March/April 2004
• Performance Contracting: Meeting the Challenge of Deferred Maintenance by Terry E. Singer and Mary E. Johnson, January/February 2001