Repair and Rehabilitation fee remains, despite increase in state funding

IU Bloomington seniors remember not paying a repair and rehabilitation fee.
Their sophomore year, 2011, the fee first appeared on Bursar bills. Their junior year, the fee doubled to $180 per semester.

Now in its third year, the fee is back at the same rate and poised to bring in almost $25.6 million across all campuses.

Repair and rehabilitation fees are intended to help finance projects such as repairing sewer lines, installing fire alarms and electrical systems and fixing sidewalks and roofs.

“R and R is a lot of things that are under the ground and above the ceiling,” said Tom Morrison, vice president of capital planning and facilities.

In 2011, IU received no state funding for R and R and decided the fee was necessary, Morrison said.

“If it’s not coming from the state of Indiana, the students are our other source of revenue,” he said.

This fiscal year, IU is receiving $11.5 million for R and R from the state of Indiana, the first time in almost half a decade it has received state money. 

“We did not get rid of the fee or reduce the fee even with the state funding,” said Mark Land, associate vice president of public affairs and government relations for IU. “Even with the state money we have demands for R and R that go beyond those two funds.”

Land said a student fee is necessary for now in part to help lessen $700 million in deferred projects the University has accumulated. These are projects that don’t involve immediate safety needs and were put off because of low funding.

Morrison could not provide a specific time frame for when the deferment backlog grew.
As recently as 2000, the IU Board of Trustees meeting minutes indicate that R and R deferrals were under control.

“We do not have large backlogs of deferred maintenance at Indiana University because we have been successful in convincing the General Assembly to support this very important need,” then-Vice President and Chief Administrative Officer Terry Clapacs said at the May 2000 meeting.

Four years later, Clapacs shared a different story.

“Essentially all we’ve done for the last four to six years are those projects that are truly emergencies,” Clapacs said in a June 2004 trustees meeting. “We are way behind in building very rapidly a very large deferred maintenance set of projects that we’ve not been able to do.”

In 2005, the Board of Trustees charged the facilities committee to review the growing deferred maintenance and consider alternate ways of funding R and R.

Morrison said from approximately 2006 to 2009, the deferment rose from $600 million to $700 million as state funding continued to decrease.

“We had to stop the hemorrhaging,” Morrison said.

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The fee was first introduced on the Bursar bill in 2011 as the “temporary repair and rehabilitation fee.”

This year, the word “temporary” was dropped from the Bursar bill, though it reappeared in the State of the University address Oct. 1 when President Michael McRobbie referred to the fee as a “special temporary student fee.”

Even before the fee, students helped fund R and R projects through their tuition via the University’s general operating fund.

Land said creating a fee rather than increasing tuition allowed the money to be channeled specifically into R and R.

“All we did a couple years ago with the R and R fee is to absolutely say, ‘This is where your money is going,’” Morrison said. “We were just being more transparent.”

IU reinvests in its buildings through annual repairs, a cost ranging from $40 million to $50 million a year. This year, IU plans to spend $44 million on R and R across all its campuses.

Student fees will generate almost $25.6 million this year, more than half of which will come from IU Bloomington.

Students at other IU campuses pay a lower fee than students in Bloomington, though their campuses contribute significantly less to the deferment total.

With the student fee and the state funding, about $7 million will still have to be taken from the University’s general operating fund.

Morrison said state funding would have to cover yearly R and R needs before the student fee could be eliminated. This mostly likely won’t be happening soon, he added, looking at the history of state funding during the past decade.

Land said he cannot predict when the fee will be removed.

“Until such time that it occurs, that the state more fully funds R and R, we’re going to have the fee,” Land said.

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If there have been student complaints about the R and R fee, Land hasn’t heard them.
He said he believes it is because the fee was frozen at the same rate.

Likewise, IU Student Association Treasurer Casey Baker said she hasn’t heard any student comments about the fee, though she said the overall rising cost of tuition is always a big issue.

“I think it’s a delicate balance of keeping our campus beautiful, updated and attracting students, but it’s also that you don’t want to charge too much to students,” she said.
Land acknowledged the fee adds an extra burden to students’ bills.

“We realize it was an additional fee to everybody, but it wasn’t like the state gave us all the money we needed,” Land said.

But, he quickly added, IU is grateful to have state funding at all this year. Without money from the state, IU would have looked to raise the fee.

Repair costs of a deferred project increase as the building or system ages. Seventy-six percent of IU Bloomington buildings are more than 40 years old.

“Just because the funding doesn’t come doesn’t mean the roof doesn’t leak or the sidewalk doesn’t crack,” Morrison said. “The need doesn’t go away. Everyone can recognize that.”

Between the state and student funding the deferred project total will reduce by 21 percent to $558 million, Morrison said. This is the first time in a decade the deferral amount will reduce, he said.

During the State of the University address, McRobbie said his primary goal is to chip away at small deferred projects totaling about $170 million before tackling large projects. Such projects would include entire building renovations of Swain Hall, Ballantine Hall and the Geology Building, Morrison said.

“A lot of it isn’t sexy,” Land said. “But it’s this vital structure, making campus safer and more comfortable for students.”

Follow reporter Megan Jula on Twitter @MeganJula.