The USM in 2010: 

Responding to the Challenges that Lie Ahead

Capital Investments

New and renovated facilities are essential to supporting instruction, research, faculty recruitment, and burgeoning student enrollments.

USM institutions are fortunate to have stately historic buildings which underscore the System's academic strength and tradition as well as vibrant, high tech facilities which support cutting-edge technology, research, and "virtual" education. Unfortunately, all facilities are prey to functional and physical obsolescence. A robust Capital Improvement Program (CIP) and its auxiliary facility counterpart, the System Funded Construction Program (SFCP), are necessary to ensure adequate facilities to support the unique role and mission of each institution.

State Investment in USM Facilities

Thanks to the generosity of the Governor and the Maryland General Assembly, the overall size of the Capital Budget has increased dramatically. At $831 million, the Governor's five year CIP for FY 2001-2005 is nearly twice that of previous budgets. With a variety of new and accelerated projects, the FY 2001 CIP approved by the General Assembly ($292 million) is more than three times the average annual budget of the last ten years. It is understood, in return for this record-high funding, the System must complete these projects in a timely fashion and within allotted budgets. The USM's capital program must also be managed and implemented within the context of the State's commitment to sustainable development and smart growth.

Building to Meet Strategic Objectives

Many of these new buildings support instruction and research in key areas of science and technology, and all will contribute to academic excellence at the institutions. For example, in order to recruit high-quality faculty members whose research success will support the drive toward national eminence, it is not uncommon for institutions to have to provide start-up packages of space and equipment in six and even seven figure amounts.

In addition, in order to expand the numbers of students served and to meet their educational, physical, social, and other needs, the USM will need new and renovated facilities. In this context, it is important to note that technology and education are becoming increasingly intertwined. In fact, technology has dramatically changed the way architects design buildings, affecting the size and configuration of spaces within buildings, as well as wiring for power and communications. The increased use of technology in education will significantly affect future capital needs.

Effective Debt Management

Because of the successful use of non-university debt, the SFCP, which is limited primarily by the level of debt available for institutional projects, has been expanded in terms of the value of projects undertaken. The best examples of this are the public-private partnerships that USM institutions have been successfully pursuing to construct housing in response to growing enrollments.

Rising Construction Costs

Building costs have been increasing at a faster rate than the economy. In some cases, a lack of skilled subcontractors and a scarcity of materials have caused bids and schedules to regularly exceed estimates.

USM Response

USM institutions will:

• Enhance capital funding directed to building renovation, infrastructure and facilities renewal.
• Build student communities at all institutions by seeking State funds for critical auxiliary projects.
• Define and publicize the qualitative and quantitative benefits of new facilities (e.g., new research facilities bring increased research grants and area employment) for each institution and for the State as a whole. USM institutions should incorporate Statewide initiatives like Smart Growth into plans for facilities location and construction.
• Organize our service centers to engage architects and contractors in a timely manner, and encourage contractors to complete construction work on time and within allotted budgets. This is the highest priority effort of the System during the next five years, as evidenced by the recent policy adopted by the Board of Regents regarding the use of construction managers in the project delivery process.
• Expand the funding ability of the SFCP by maximizing the use of "off balance sheet" or non-university/system debt. In assessing each potential project, focus on financial viability and impact on bond rating.
• Develop a strategy which strikes a balance among: (a) value engineering; (b) requesting additional funds when bids exceed established budgets; (c) capping projects and requiring institutions to reduce scope; and/or (d) choosing not to proceed with a project until funding issues are resolved.
• Coordinate capital planning and programming with System-wide strategies for the use of technology in education. Online learning and distance education present both opportunities and challenges with regard to capital facilities. Most USM institutions will have to support growth in both classroom-based enrollments and online off-campus enrollments. In either case, the technology infrastructure must be carefully planned and implemented.