Budget update: Feb. 26, 2020

February 26, 2020

Tori Tragis

— by Dan White, chancellor

Last week, the Board or Regents (BOR) approved the UAF Campus Master Plan 2020, as well as some key land sales and I want to share my thoughts on these decisions and impacts on future planning and budgeting for UAF. In particular, we received approval to sell or lease the Rae and Orca Buildings in Seward. I have identified these buildings among others in previous communications as part of our strategy to reduce footprint and monetize assets. According to Board policy, the board and President have authority to determine where funding goes from any asset sales (President for sales less than $1M and the Board for more than $1M). While there was appreciable discussion about how revenues should be directed, in these two cases the BOR approved UAF’s retention of these funds. This will be important for both our ability to renovate new space in Seward for current occupants and to realize real revenue. 

As I’ve mentioned before, UAF is using one-time money to bridge the significant reductions to the FY20 budget. Our ability to bridge a portion of the FY21 cut includes additional anticipated property sales and lease revenues. The use of asset sales and strategic reserves will allow UAF to step down the budget in as thoughtful and strategic way as possible.

We will work on public noticing for the sale or lease of the Orca and Rae buildings in Seward, as well as an adjacent parking lot. The noticing for sale does not obligate UAF to sell these properties, but does allow us to evaluate our options.

Also approved at last week’s board meeting was the University of Alaska Fairbanks’ Campus Master Plan 2020. We are required to update our master plan every 5-7 years. Our previous master plan was approved in 2010. In 2016, UAF received a 2-3 year deferral on the master plan update because Strategic Pathways introduced many unknowns to our future programs. In 2019, UAF completed an update to the plan to include UAF strategic goals, our accreditation themes and the BOR goals and metric. Because of the uncertainty in the budget at the June 2019 board meeting, the regents gave the masterplan a one-year provisional approval. The final approval of our 2020 Master Plan is an important step forward in our planning process.  

It is important for UAF to have a master plan beyond the BOR requirement. It is necessary to retain our Northwest Commission on Colleges and Universities (NWCCU) accreditation. It is also a critical framework for decisions that will ensure we have adequate facilities and guide our capital plans. UAF’s Master Plan informs our strategic approach to facilities improvements and new building construction as well as demolition. Our aim is to modernize our facilities and reduce our deferred maintenance costs whenever possible. 

We have engaged Portland attorney and UAF alum Jeremy Vermilyea, who specializes in public private partnerships (P3s), to help us understand P3s as a path for new construction at UAF. There are a variety of ways P3s can be packaged and we are evaluating options that best serve UAF and align with our masterplan and strategic goals. A P3 construction plan could allow us to reduce long term deferred maintenance while building modern student residence halls, a parking garage and expanding the Patty Center all without state funds. As we learn more, I will share this information with the campus community and solicit feedback.

This week, the planning and budget committee led by the provost and vice chancellor for administrative services will meet with stakeholders regarding future FY21 budget planning strategy and start our planning for FY22. Look for updates on future developments and funding recommendations from those meetings. 

Thank you for continuing to share your thoughts with me. I’ve received a variety of feedback regarding the proposed revised fee structure for UAF and continue to collect great ideas via the Box of Big Ideas. I’m looking forward to reviewing your proposals for the shared service business model for the UAF Troth Yeddha’ campus in the coming weeks.

Thank you for choosing UAF.