Board briefed on $477 million authorized but unallocated capital authorizations, deferred maintenance backlog

System capital staff presented the committee with an overview of capital planning, the state bond process and program priorities, saying the system has a large volume of authorized projects that remain unallocated while the bond commission allocates funds in limited stages.

Keith (system capital staff) and Pete Epstein, vice president for facilities, real estate and infrastructure, told the Finance and Infrastructure Committee that the system's capital inventory includes nearly $2.7 billion in facilities and equipment and that many campuses have aging buildings that require ongoing investment. They described capital as a long-term program requiring coordination with campuses, OPM and the Department of Administrative Services, and said that authorizations do not equal available cash until bond commission allocations occur.

Why it matters: Staff said about $477 million in authorizations exists for projects and programs that have not been allocated; that authorization does not guarantee timely availability of construction funds. Staff and regents discussed project prioritization, the staging of requests to the governor and bond commission, and how delayed allocations can drive inefficient interim repairs and increased costs.

Key points from the presentation

- Authorized vs. allocated: Staff explained the difference between projects authorized in prior bond acts and the allocations that must be made by the bond commission and OPM before funds are available for construction. -Scale of authorizations: Staff reported about $477,000,000 in authorizations (FY2024'FY2025 authorizations referenced in the packet) that remain unallocated, and noted the number has grown. - Staging requests: Staff said they typically stage requests (for example, seeking roughly $20 million for colleges and $20 million for universities at a time) and that the bond commission's frequency and priorities affect how quickly funds are released. - Distribution methodology: For smaller, annual distributions (e.g., a $20 million deferred-maintenance allocation), staff described a pro rata model that factors campus square footage and average facility age, with provisions for contingency funding (10% set aside for colleges) to respond to urgent needs. - Priority categories: Life-safety and building systems, student-facing projects, deferred maintenance, energy conservation and master planning were emphasized as top capital priorities. - Project examples and delays: Staff pointed to longstanding projects such as Norwalk and Gateway that have design authorizations or awaiting construction allocations; the inability to secure construction funding has left some design work stranded and driven interim spending (for example, reroofing) that increases total cost. - CHIFA vs. GO bonds: Staff described CHIFA (bonding backed by student-fee revenue) as quicker to access but with contractual covenants and a five-year spending expectation; general obligation (GO) bond funds are slower and require OPM and legislative processes and bond commission approvals.

Committee discussion and concerns

Regents and faculty raised concerns about project sequencing, stranded design work, code-compliance needs that remain unaddressed, and apparent differential treatment among state institutions for capital approvals. Professor Cunningham asked about rapid funding reported for a new dorm at another institution and whether the system could track or replicate novel financing mechanisms; staff said those financing options were not readily available to the system in the same way.

Regent questions also covered public-facing campus services (for example, fuel depots and electric vehicle charging stations), their treatment in master plans, and reimbursement/liability arrangements for public users. Staff said some charging stations were initially provided through grants and might be free for a limited period, and that the system is installing additional charging stations with third-party monitoring and reimbursement for electricity in place for some installations.

Master planning and use of external studies

Staff said master plans (updated roughly every 8—0 years) and recently commissioned utilization and demographic studies are informing the capital program and helping identify whether buildings should be renovated, repurposed or, in rare cases, closed. Staff noted that most capital requests in the 10-year projection are renovations rather than new construction; they also described a 10-year projection of deferred-maintenance and replacement-equipment needs and said a systemwide program (like the prior CSU 2020 program) could make the system more efficient.

Distinguishing discussion, direction and action

Discussion: Committee members probed the backlog of authorized but unallocated funds and the consequences of design work without timely construction funding.

Direction: Regents asked staff to present capital priorities and sequencing in formats that make it easier for the board to understand which authorizations are likely to be released, which are stranded, and the timing assumptions behind staged requests.

Action: No formal votes on capital allocations occurred at this meeting; the committee received the review and asked for improved presentation formats and follow-up information.

Ending

Staff said they will finalize the annual program projection in the coming weeks and provide the board with clearer priority lists, master-plan documentation and a more readable presentation of which authorizations are committed, available and unallocated.