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August 16, 1996

UW SYSTEM CAPITAL BUDGET SUPPORTS GOALS OF 21ST CENTURY REPORT

MADISON -- The University of Wisconsin System 1997-99 Capital Budget to be considered by the Board of Regents meeting here Aug. 23 has two primary objectives: to extend the life and maximize the use of existing facilities, and to provide facilities that support the System's mission of teaching, research and public service into the 21st Century.

Projects included for consideration by the Regents total approximately $309.4 million, including about $248.1 million in General Purpose Revenue (GPR) funding and $61.3 million in self-generated gifts, grants and program revenue.

"Overall, these projects will extend the useful life of the University's physical plant, obtain greater efficiency and effectiveness of existing facilities, provide additional or replacement space where no other option exists, and support learning-technology improvements and distance education initiatives throughout Wisconsin," said Paul Brown, UW System vice president for Physical Planning and Development.

More than 70 percent of the UW System's 1,600 buildings are over 25 years old and 30 percent are over 35 years old, Brown explained. The state's investment in these facilities has a replacement value of about $4.7 billion. The 1997-99 Capital Budget continues a 10-year plan established by the Regents in 1991 to eliminate a backlog of deferred maintenance and to update outmoded facilities.

Major components of the Capital Budget are:

  • Recommended to be funded through $248.1 million of state funds:
    • $121.6 million for 14 major projects (list attached)
    • $44.2 million for the Wisconsin Initiative for State Technology and Applied Research program (WISTAR)
    • $82.3 million for infrastructure repairs and renewal
  • Recommended to be funded through $61.3 million of private and program-revenue funding:

    • $27.2 million in program revenue for 11 major projects (list attached)
    • $20.0 million in program revenue for infrastructure projects
    • $1.8 million in program revenue matching funds and $500,000 in gifts toward two major GPR projects
    • $11.4 million in gifts and grants toward 5 major projects
    • $400,000 in gifts and grants for an infrastructure project

Included with the GPR-funded major projects is a systemwide request for $10 million for classroom renovation and instructional technology improvements to complement the operating budget request for improved technology, support distance education and modernize the learning environment.

Not included is $104 million for 17 projects that System Administration is recommending be deferred for a variety of considerations, including fiscal constraints. For example, some requests were for new space while it has been a priority to continue making better use of existing space.

Another component of the 1997-99 Capital Budget is a proposal to establish "Healthstar," a State/University initiative to invest a minimum of $150 million for construction of new facilities on the UW-Madison campus for interdisciplinary health sciences programs. A funding match with at least two-thirds gifts and grants and up to one-third -- but not to exceed $50 million -- of state funding over three biennia is proposed.

Principal Healthstar projects include:

Interdisciplinary Research Complex:

A $100-million facility consisting chiefly of flexible, state-of-the-art research laboratories dedicated to innovation and rapid transfer of basic science discoveries into clinical applications.

Health Sciences Learning Center:

Estimated at $50 million, this facility would serve health-care education needs in a clinical instructional facility. Included would be a consolidated health sciences library, and facilities for distance education and continuing education needs of the Schools of Medicine, Nursing and Pharmacy.

The Regents also will consider as part of the Capital Budget a proposal to authorize the Board of Regents to use revenue bonds for UW capital projects instead of the state's General Obligation Bonding authority. Nationally, 27 states use revenue bonding to fund construction at their public universities. The proposal would stabilize UW System capital resources, keep private matching opportunities alive, encourage careful long-term capital planning of university projects, and relieve pressure on the overall state bonded debt. Overall, the plan would enable the Board of Regents to plan and commit to new projects as existing UW bonds are paid off.

Similar to the procedure for Department of Transportation revenue bonds, legislative action would be needed to establish and adjust bonding limits. Oversight of UW System capital budget priorities, authorizations for construction and the issuance of revenue bonds for UW System projects would be retained by the State Building Commission and the Department of Administration.