Aging Poorly: What Happens When Facility Renewal Needs Go Underfunded

College and university campuses across North America have buildings and systems that are well overdue for renewal. Unfortunately, many institutions don’t have the resources needed to overcome underinvestment into aging facilities. While time passes, facilities’ needs intensify and ongoing postponement of upkeep compounds the issue. The result is a substantial increase in deferred maintenance, making risk mitigation and long-term facilities planning and sustainment difficult to achieve.

These problems can be corrected. To start, one must understand the true cause and cost of deferred maintenance and its impact on operational performance. This context will help you effectively communicate needs and funding priorities to campus stakeholders for more actionable planning.

Facilities Funding is Stuck in the Past 

The three largest expenditures for colleges and universities are financial aid, compensation and facilities. Both financial aid and compensation account for a large percentage of a campus budget, often leaving facilities grossly underfunded. In fact, we found in our 2018 State of Facilities report that higher education facilities management and renewal funding have not fully rebounded from the Great Recession. For facilities managers, it might as well be autumn of 2009.

It has long been reported that students often make their final decisions on the school to attend based on the appeal of the physical campus. Yet in this age of fierce competition for students, colleges and universities are reticent to divert funding away from compensation or financial aid, given their role in sustaining reputation and attracting the best and brightest. All the curb appeal in the world won’t help if you can’t get potential students on campus.

Small colleges and large universities feel the pressure to provide world-class campus spaces to attract a shrinking number of students. But the focus is too often on building new spaces and not maintaining and revitalizing older ones. The demands for funding elsewhere in the budget result in less funding than needed for facilities managers to maintain what they have, let alone care for new and expanding space. This neglect adds to the deferred maintenance backlog and contributes to the issue of aging infrastructure.

The Problem of Deferred Maintenance 

Nearly every campus across North America suffers from a seemingly insurmountable deferred maintenance backlog. While the year-over-year list of renewal needs grows, the available capital does not. Every deferred project is a gamble; universities can only postpone the inevitable for so long. The real problem of the maintenance backlog is that deferred costs lead to more—and higher—costs. This is because less preventive maintenance results in a shorter lifespan for facilities’ systems and more emergency repairs, which are more costly than planned repairs. The combination of failing systems and frequent emergency repairs combine to create a hole that is difficult for facilities managers to climb out of.

Communication and performance-based metrics play key roles in mitigating deferred maintenance and getting out of that hole. Much of the legwork for facilities managers will come in the form of understanding past performance and strategically evaluating future renewal needs to become more informed advocates for resources. Facilities managers must take the lead and clearly present the problem using data and effectively communicating it to board members, trustees and decision makers. That’s a tall task, but there are tools out there to help.

Facilities Benchmarking & Analysis provides a data-driven, holistic view of your facilities performance that objectively helps facilities managers balance operational goals, capital renewal and deferred maintenance to counteract the effects of aging facilities.