DFCM outlines FY2027 capital plan, flags ISF deficit and rate changes
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Summary
The Division of Facilities Construction and Management told the Transportation and Construction Appropriations Subcommittee the FY2027 capital budget totals about $287 million, described a $41.7M facilities management ISF and a one‑time $7.6M reallocation to address ISF deficits, and proposed rate‑setting changes and property sales to manage long‑term shortfalls.
The Division of Facilities Construction and Management (DFCM) presented its FY2027 administrative and capital budgets to the Transportation and Construction Appropriations Subcommittee on Jan. 27, saying the base capital appropriation is about $287 million and the administrative operations line is $11.6 million.
DFCM’s presentation noted the capital budget is down year‑over‑year — a common result when multi‑year project funds move into off‑budget project accounts — and described the statutory requirement that the state set aside at least 1.1% of the replacement value of state buildings for capital improvements. The governor’s budget and EAC action put the proposed base at about 1.5% of replacement value, which DFCM said would fund roughly 484 capital‑improvement projects versus about 362 at the statutory 1.1% level.
DFCM flagged major funding sources: about $123 million from the general fund and about $161 million from the income tax fund, with the capital improvements line totaling roughly $216 million. The agency and legislative analyst discussed several one‑time options and analyst reductions, including a proposed Higher Education Capital Improvement Swap that would use degree‑granting institutions’ net unrestricted balances as a one‑time swap to fund capital improvements, and potential sales of state properties such as Highland Plaza, the Cannon Building and the Ogden Regional Center to generate one‑time proceeds.
Officials also detailed the facilities management internal service fund (ISF), which collects fees from state agencies to operate and maintain about 220 buildings (approximately 8 million square feet). DFCM finance director Eric Grant said the ISF began running a structural deficit after 2023 because several anomalies — a heavy snow year and large utility spikes — combined with a rate‑setting process that forecasts 18 months in advance. The department plans a one‑time internal reallocation of about $7.6 million (already included in the base bill), technical corrections to align appropriations with DFCM rates, and a requested 2027 rate increase. Grant recommended improving forecasting by using industry utility projections (for example Moody’s energy forecasts), construction‑cost indices and other external data rather than relying solely on internal estimates.
DFCM stressed operational efficiency measures instituted this year, including a Taylorsville building automation project that saved roughly $80,000 annually in energy costs, and a Dixie Technical College preconstruction programming effort that reduced a construction request from about $66.8 million to $59.9 million.
DFCM said it will publish the five‑year building plan (the 5‑year book) and individual project materials online for committee review. The agency also signaled it will follow up with refined acquisition and renovation cost estimates for potential purchases such as the FranklinCovey campus and phased work at the Ogden Regional Center.