Categories: Economic News

NU’s deferred maintenance program moves forward, providing economic boost |

Replacing roofs, paving new sidewalks, and replacing light bulbs aren’t the kinds of projects big donors usually come to when the University of Nebraska calls.

But leaky roofs, uneven walkways and dim classrooms are the kinds of things students and faculty notice on campus, and hope the university does something about it.

NU is working at a frantic pace to do so, addressing an $800 million project backlog through legislation (LB384) from Sen. John Stinner of Gering that increased state and university funding to address these needs through 2062 .

A little more than a year after securing $400 million in bond financing to begin shortening its deferred maintenance list, NU has spent $57.9 million on roughly 80 projects, according to data provided by the university .

And 94 percent of the funds spent so far have gone to Nebraska companies, mostly contractors in Lincoln and Omaha, home to NU’s largest campuses, but also companies in Kearney, Grand Island, North Platte and Chadron.

So far, NU has spent nearly $200,000 replacing windows in Oldfather Hall and $51,000 upgrading generator transfer switches at the University of Nebraska-Lincoln, among other projects.

More than $6.6 million has been invested to date to improve the heating and cooling systems and building envelope of Warner Hall at the University of Nebraska at Kearney, while $616,000 has been invested to waterproof three sides of the Criss Library at the University of Nebraska at Omaha.

Dozens of other efforts are also under way: dowel masonry, asbestos removal and lighting improvements at NU, the kinds of “unsexy” projects LB384 was designed for, they said the administrators

“That was the intent: to go in and use that money for a lot of those projects that are important but don’t get noticed, at least until something breaks,” said Chris Kabourek, NU’s vice president for business and finance.

While NU has seen generous support from donors and philanthropic groups in recent years, especially as new buildings have changed or will change the face of a campus, Kabourek said those people aren’t always enthusiastic about “replacing water pipes. broken sewers or air conditioners.”

And funds built into campus budgets for maintenance projects haven’t always kept up with what was needed, especially when there are 900 university-owned buildings statewide.

NU worked with a consultant to identify and prioritize a list of deferred maintenance projects before approaching Stinner in 2021 to introduce a bill to the Legislature to increase funding for the program.

That allowed NU to hit the ground running when LB384 was passed by the Legislature and signed by Gov. Pete Ricketts, immediately locking in $400 million in bond financing at a record 2.9 percent interest rate.

At the time, NU President Ted Carter said the ability to raise low-cost funding would save taxpayers about $1.5 billion over the next four decades.

Those savings have already become apparent, Carter said this week, as inflation has squeezed the economy, forcing the Federal Reserve to raise interest rates several times.

If the university had waited until this year to try to secure funding for its deferred maintenance program, NU would have had to pay 4.5 percent interest over the life of the bond, roughly $6 million more in annual interest.

“Now, multiply that over 40 years, and we’re talking serious money,” Carter said, adding that it was also “a major win for current and future students, faculty and staff.”

Kabourek said the pace of work being done at NU will increase over the next two to three years as the university adheres to IRS rules for entities that issue tax-exempt bonds that the require spending 85% of income within 36 months. March.

The next projects will be bigger and more expensive, including entire facility replacements in some cases, such as a $75 million replacement of the Westbrook Music Building at UNL, before the university downsizes from 2025.

During the second phase, NU plans to use existing maintenance funds as well as a new fund created through LB384, which requires the university to set aside an amount equal to 2% of the cost of any new building project in a designated account for deferred maintenance.

Then in 2030-31, NU will again seek favorable market conditions for a second round of bond financing that would address the remainder of its backlog.

“We want to build in some flexibility,” Kabourek said. “We don’t want to tie the hands of the next administration for 40 years with this, but there is rhyme and reason to our thinking.”

North Platte Regent Bob Phares, board chairman, said NU’s deferred maintenance program is a “prime example of the long-term, disciplined approach” to tackling what was once a daunting challenge.

“We hit it at exactly the right time, and it’s already paying dividends for Nebraskans and creating economic growth for our state,” Phares said.

Kabourek said that while many of the projects won’t be seen by the general public, things like new concrete and working air conditioners play a big role in drawing people to NU’s campuses.

“We like to say that students and faculty buy with their eyes,” he said. “They want world-class facilities that are well maintained.”


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