Committee hears how capital building tiers, matches and pool operate; tier 1 set dollars date to formula genesis

BISMARCK — The committee received a briefing from the university system finance office on capital building funds, how tiers operate, and the matching requirements institutions must meet to access the money. Key points: Jamie Wilkie, NDUS director of finance, explained tier 1 is not a separate appropriated pool but rather a set dollar amount taken from each institution’s formula allocation intended for deferred maintenance and extraordinary repairs; the dollar amounts date back to the formula’s original calculations and reflect historical insurance/valuation work rather than a current replacement‑cost metric. Wilkie and campus business officers noted that those tier 1 dollar figures are historical and do not represent “extra” state funding — they are partially a set-aside of the formula-derived appropriation. Tier 2 and tier 3: The capital building fund program established tier 2 and tier 3 pools. The committee was told those pools were funded from a mix of sources in various biennia, and recent appropriations raised tier 2 to $15 million and tier 3 to $11.5 million for the 2025–27 cycle. Requirements for board approval include that institutions show matches and project plans; match ratios were adjusted in 2025 so that nine institutions now have a 1:1 match requirement for tier 3 while UND and NDSU remain at 2:1 for tier 3; tier 2 requires 1:1 match for all institutions. Capital pool and use: The code also establishes a capital building fund pool that would collect unclaimed funds after an initial claim window; staff noted that, to date, no funds have flowed into the pool because institutions have claimed awarded amounts. Across the three tiers and required matches, the system office estimated about $87.6 million in total project dollars available for 2025–27 when matches are included. Deferred maintenance request: Committee members requested a more detailed breakout of how much capital-building funding is being used for deferred maintenance versus new construction — staff said campuses vary in methodology and some deferred-maintenance tallies reflect more recent asset-condition assessments than others, so data will need alignment before cross-campus comparison. Ending: The system office and business officers agreed to provide further detail at the next meeting, including clearer deferred-maintenance accounting and the history behind tier 1 dollar numbers.