In assembling the data for Pioneer’s UMass at a Crossroads series, which covers the improving academic profile of UMass students, the strategy of recruiting more out-of-state and international students to generate additional revenue, and the fiscal implications of UMass’ ambitious capital expansion, Pioneer identified inconsistencies in UMass’ reporting of deferred maintenance. Below is a brief overview of the disparate deferred maintenance numbers UMass has provided over the last several years, accompanied by discussion of the implications of these inconsistencies. (Note: endnotes/citations can be found in the papers, available here.)
Disparities in UMass’ reporting of deferred maintenance
Deferred maintenance refers to the postponement of maintenance of capital assets that are in need of replacement or renewal. It includes delayed repairs on infrastructure, machinery and other forms of property. Increasingly across the country, public higher education institutions have been inadequately addressing their capital renewal needs. A 2013 report from the consulting group Sightlines LLC points out that higher education project backlogs increased by 15 percent nationwide from 2007 to 2012.
The situation is especially troubling for state-funded universities in the commonwealth. According to an October 2014 report by the Higher Education Finance Commission, the 10-year deferred maintenance needs of the commonwealth’s 29 higher education campuses, state universities and community colleges—including UMass—is approximately $4.2 billion. UMass accounts for the vast majority of this total. In its 2015 Annual Indicators report, the university disclosed that its deferred maintenance backlog had grown to $3.33 billion.
As UMass’ facility renewal needs have grown, the university has been engaged in enormous capital expansion. Over the last decade, UMass added $3.8 billion in capital asset additions, increasing overall capital assets by approximately 38 percent. This expansion took place during a period in which enrollment grew by 27 percent at the university’s five campuses, a growth rate more than three times the national average during the same timeframe. The institution recently adopted an ambitious $6.98 billion FY2015-2019 Capital Plan that outlines significant additional expansion of the university’s five campuses.
It is important to ask whether this expansion has been undertaken at the expense of adequately maintaining existing facilities. As discussed below, the manner by which UMass reports existing facilities renewal needs makes this difficult to determine. The reporting appears to be inconsistent, making it a challenge to analyze capital conditions accurately.
How has UMass maintained its buildings during the construction boom of the last 10 years? A helpful metric to make such an assessment is the amount of capital assets in need of replacement or renewal by unit of space, or deferred maintenance per gross square foot (DM/GSF). UMass reports this metric in its Annual Indicators Reports to provide a progress summary. In its 2015 report, the university lists DM/GSF at $160/GSF in FY2015 and $172 in FY2010, indicating that DM/GSF had declined over this period.
A closer look at the figures provided in UMass’ reporting from FY2009 onwards, however, calls the accuracy of these numbers into question. A review of the numbers through all UMass’ Indicators reports going back to FY2009 shows that accurately assessing the university’s year-to-year progress is difficult because, since that year, the university has reported disparate numbers about the size of its prior year backlogs.
As the chart below reveals, the historic figures UMass provides in its annual reporting have been changing from year-to-year. The DM/GSF figure for FY2010, for instance, was reported in the 2011 Annual Indicators Report as $117.90/GSF — in the 2012 and 2013 Annual Indicators Reports, the FY2010 figure listed is $164.81/GSF. In UMass’ 2014 Annual Indicators Report, the FY2010 DM/GSF was listed as $132/GSF, while in the 2015 Annual Indicators Report it was reported as $172/GSF. These are four different numbers for the same year (FY2010). BY changing its prior year DM/GSF numbers, UMass gives the reader the impression that UMass has been making progress in addressing its deferred maintenance backlog.
The 2015 Annual Indicators Report mentioned above shows a decline in UMass’ deferred maintenance from $172/GSF in FY2010 to $160 in FY2014. This is at odds with statements made by UMass in its 2015-2019 Capital Plan, which states that over the preceding five years “the collective annual spending on stewardship and asset reinvestment for the UMass system has only been sufficient to sustain but not reduce the deferred maintenance backlog.”
What explains the variance in UMass’ reporting? If the university employed different methodologies in assessing the campuses’ capital renewal needs each year, it would make sense that UMass offer at least some clear explanation of why this is the case and what the university aimed to achieve by changing how it calculates deferred maintenance.
This variability in the numbers UMass has been providing raises concerns about the public university’s transparency. UMass’ disclosure of their capital renewal needs would in theory provide policymakers with a clearer understanding of funding needs for deferred maintenance that should be considered in any conversation regarding further capital additions. In this way, accurate reporting is fundamental to helping the state see a more comprehensive view of the university’s capital health and determine the proper appropriation level. Without accurate and consistent reporting, there is no reasonable basis on which to make these determinations.
Most experts consider $100/GSF to be the point beyond which facilities can’t be optimally managed. Considering that UMass has reported deferred maintenance needs in excess of $100/GSF every year since 2009, it’s imperative that the legislature, the Department of Education and other public officials charged with ensuring UMass’ sustainability understand the implications of this backlog in the context of the university’s continued facilities expansion.
It’s imperative that we let facts guide the public conversation about the future of UMass. A good starting point for this discussion is consistent reporting of key metrics — something that, as illustrated above, is absent from UMass’ documents.