Dining requested a 2.6-percent general inflationary increase just to maintain the current financial outcomes, and an additional 0.4 percent to put toward the asset stewardship fund. Housing requested 2.4 percent for general inflation and an additional 2.6 percent for the asset stewardship fund. Over time, the goal of the asset stewardship fund is to buy down the current deferred maintenance backlog, which may go unnoticed in the short run by students living in the facilities (e.g. a new roof). But it is also important to make improvements to the spaces that students will notice, such as new built-in furniture, windows, and bathrooms. CWU is now in year 16 of the plan and the current estimated, immediate, deferred-maintenance backlog is $38 million. With the addition of Dugmore Hall, CWU now has more modern rooms available than “vintage” rooms, which students seem to appreciate. In addition, inventory now includes 700 more beds than in 2006, which will support the long-term growth in enrollment that the university expects. The basic elements of the plan are not exceptionally novel. The combination of efficient operations, strong occupancy, and steady rates that are competitive yet provide enough funds for asset re-investment are critical to our the long-term health of the housing and dining system. Of course, an additional benefit of the 30-year plan is that it is not static. It has changed significantly over time as the environment around the housing and dining system has changed; the current plan would be unrecognizable to the original drafters. For example, the original plan had Courson and Muzzall Halls (the two “high-rise” buildings formerly next to Munson Hall) in place and in service until 2034. Instead, they were demolished in 2008 and replaced by Wendell Hill Hall. This is a prime example of eliminating a significant portion of the deferred maintenance backlog by replacing old beds with new beds. If each key element of the plan is considered (rates, occupancy and efficient operations) and the outcome provides better amenities to the students, while also reducing the asset re-investment backlog, the plan works. Other Washington universities face the same issues, they are just further behind in the repair and improvement plans. We know this because they have come to ask us what we have done to get to where we are today. Life-Cycle Costs of a Building The purpose of raising rates above standard inflation is to set aside enough money to re-invest in physical assets over time. Industry standard is to set aside 3 percent of the total asset value each year, which would effectively reserve nearly enough money to replace each building after 30 years—if it weren’t for inflation. Considering the effects of inflation, particularly construction-cost inflation, which has historically been more than double the general inflation rate, a 3-percent annual set-aside should provide for basic system replacement over the life of the building (HVAC, roofs & windows, plumbing, electrical, etc.). After 30 years, the original bonds should be paid off and the building would likely be antiquated, from a student’s perspective, but in reasonably good physical condition. At some point a decision has to be made to either do an extensive remodel, or tear down and replace the building, and the cycle starts over again.
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