Yale’s two new residential colleges may not be built yet, but the University is already planning for the day when they will need renovating.
Yale allocates part of its annual operating budget, which was $199 million in the 2008-’09 fiscal year, for the maintenance and renovation of campus buildings, and when the colleges are completed, the amount will increase. When administrators introduced this component of the budget, the capital replacement charge in 2003, the upkeep of campus structures had been neglected for decades. The fund is not a form of discretionary spending, but a required component of the yearly operating budget, Deputy Provost Lloyd Suttle said.
“If we don’t spend [the capital replacement charge], then the buildings deteriorate,” he said.
From the 1970s to the early 1990s, Yale, like many other universities, suffered from “deferred maintenance,” Suttle said. The campus was in disrepair when University President Richard Levin took over his post in 1993, but Levin initiated the most sweeping period of physical growth in the University’s history since the original residential colleges, Sterling Memorial Library, the Hall of Graduate Studies and other buildings were constructed in the 1920s and 1930s.
Provost Peter Salovey called the fund a self-imposed “discipline” forcing the University to set aside funds for maintaining and replacing buildings as needed. Though money is allocated for all buildings on campus, not every building receives maintenance each year. Until its creation, funding for renovations and maintenance came exclusively from gifts or the University’s borrowing capacity.
“We never again want to be in a position where there are huge amounts of facilities with upgrading needed, and we have no money to do it,” Salovey said.
When the capital replacement charge was formed, the endowment was growing rapidly, the campus was expanding every year, and it was relatively easy to collect, Salovey said. With the recent economic crisis and endowment’s 24.6 percent plunge in the fiscal year 2009, the University has postponed several building projects, such as updating and replacing many of the labs on Science Hill and breaking ground on the new colleges. But even in a time of tightening budgets, Salovey said the fund will remain an important component of University spending.
“We have to see the [capital replacement charge] as an appropriate discipline we collect through thick and thin,” he said.
Suttle said the University hired architecture firm Kieran Timberlake in 2002-’03 — prior to the introduction of the fund — to assess buildings on campus and determine costs of maintaining and repairing them. Administrators estimate most Yale buildings would last 80 years without any maintenance, Suttle said. The University has projected the replacement costs for each structure if it should deteriorate completely.
On average, the capital replacement charge constitutes 2.7 percent of the projected replacement cost of each building, adjusted for inflation, according to Yale’s 2009 Self-Study Report for the New England Association of Schools and Colleges Commission on Institutions of Higher Education. Because administrators calculate the amount set aside in the budget for these projects primarily based on square footage, as well as an index of construction costs, buildings like the new colleges proportionately increase the allotted spending.
The capital replacement charge is used for small repairs such as broken windows, peeling paint, or faulty heating systems, Suttle said, as well as leaking roofs, falling shingles, and other routine fix-ups buildings require. It also contributes to major building projects like the renovations of the twelve colleges and the construction of new labs on Science Hill, Salovey said.
A committee chaired by Bruce Alexander, vice president for New Haven and state affairs and campus development, regulates the allocation of the CRC, Salovey said.
The building and grounds committee of the Yale Corporation must review any capital projects exceeding $4 million.