Funding changes to FPM will be felt across campus

As part of the university plan to manage diminishing state appropriations and provide a salary increase for faculty and staff, the facilities planning and management (FPM) budget was cut $500,000 for the fiscal year that began July 1. The result will be fewer projects this year to repair classrooms, lighting and ventilation systems or sidewalks, and improve building access control.

In addition, as part of a broader university strategy to share some administrative costs -- rather than continue covering them with general funds -- interim vice president for finance and university services Pam Cain directed FPM leaders to allocate the unit's central administrative costs to all customers, regardless of their funding source, in the form of rate increases. This change created an additional $1 million reduction to FPM's general fund budget.

The total $1.5 million reduction represents a 4.5 percent cut to general fund support for FPM.

Facility services expense pool reduced

FPM's general fund support provides an affordable, basic service level for building and grounds maintenance and custodial and other services. These expenses are allocated annually to university resource units -- the colleges, ISU Extension, student affairs auxiliaries -- on a square-footage basis. Because FPM is now receiving less general fund support, that charge has been reduced 5 percent for FY19, resulting in savings for campus units.

"We have been allowed to retain and realign sufficient general funds to provide the same level of daily maintenance and services to the campus," said Paul Fuligni, associate vice president for facilities planning and management. "But the overall effect is a reduction of funds available for building repairs and other projects."

An assist from utility services

Utility services, which is a self-funded auxiliary unit within the FPM umbrella, will contribute more than $500,000 per year toward university-wide administrative costs. As a result, utility rates are about 2 percent higher than what was previously planned for FY19.

Utility services operates much like any public utility company. All the costs associated with the campus utility systems -- including commodities such as water, natural gas and coal -- are included in the rates billed to university units.

New rates will cover all administrative costs

Excluding the utilities enterprise, approximately 60 percent of FPM's budget comes from university general funds, with 40 percent provided by university units. In allocating costs, FPM charges the same labor rates and fees to all units, regardless of how those units are funded.

"In the past, those rates covered salaries, benefits and some, but not all, department administrative costs," Fuligni said. "The new rates will now cover all of our administrative costs."

Sampling of FPM rates: Average increases for FY19

FPM's project management fee will rise to 5.2 percent of project expenditures, up from the previous 5 percent.

Fuligni said the new rates weren't set yet when the fiscal year started. The university budget development timeline was impacted by the the state Board of Regents' decision to approve tuition rates after the Legislature adjourned, about five months later than usual. The new rates and fees are posted on the FPM website.

He said FPM will share more information about rate changes directly with campus units in the weeks ahead.

Related story

• Reallocations bolster new budget, Aug. 2, 2018