The Rebuilding of Connecticut’s Higher Education Infrastructure

1. The Rebuilding of Connecticut’s Higher Education Infrastructure (or Some Lessons on How Not to Handle Too Much with Too Little) Mary K. Johnson Department of Higher Education August 16, 2006

2. Presentation Summary • What we have • How we got it • What’s gone wrong • How we’re fixing it

3. Capital Spending in Connecticut • System in the midst of a capital “renaissance” • Investment of over $2 billion since 1996 • Another $1.7 billion expected through 2015 General Obligation, UConn 2000 & 21st Century Bond Authorizations

4. Capital Spending in Connecticut (Con’t.) • System has added another 10 million square feet or 38% more space since the mid-1990s • Funds have been used for new construction, renovation, code compliance and deferred maintenance, land acquisitions and equipment (including library books) Facilities by Decade

5. Major New Facilities/Renovations Include: • University of Connecticut (UConn): • Avery Point Marine Science Research Center ($40.7 million) • Chemistry Building ($56.9 million) • Northwest Residential Facility renovation ($32.1 million) • School of Business ($27.8 million) • School of Pharmacy ($94.6 million) • South Campus Complex ($46.8 million) • Stamford Downtown Campus ($72.4 million) • Technology Quadrant ($70.6 million) • Information Technology and Engineering Building ($34.1 million) • Connecticut State University (CSU): • Academic Center (CCSU - $27.7 million) • Child and Family Development Center (ECSU - $12 million) • Classroom/Administration Building (SCSU - $52.5 million) • Library (ECSU - $27.6 million) • Student Center (SCSU - $33 million) • Science Building (WCSU - $48 million) • Community Colleges (CTC): • New Capital Community College (CCC - $60.5 million) • Center for Arts and Sciences (MCC - $27.1 million) • Learning Resource Center (MCC - $33.9 million) • Information Technology Center (NCC - $15.5 million)

6. Lump Sum and Equipment Funds • UConn: • Deferred Maintenance/Code Compliance/Renovations - $360 million ($172 million expended) • Equipment, Library Collections and Telecommunications - $443 million ($165 million expended) • CSU: • Deferred Maintenance/Code Compliance/Renovations - $86 million ($76 million expended) • Equipment, Library Collections and Telecommunications - $104 million ($84 million expended) • CTC: • Deferred Maintenance/Code Compliance/Renovations - $58 million ($35 million expended) • Equipment, Library Collections and Telecommunications - $109 million ($78 million expended)

7. How We Got It • UConn 2000 enacted in 1995 • Goals of program: • Transform UConn into one of the top public universities • Attract better students • Help stem brain drain • Compete more effectively for research

8. UConn 2000 – “Ground-Breaking” Legislation • Authorized the initial $1 billion for 47 specific projects • Allowed UConn to borrow money and issue securities known as “Husky Bonds” • Provided state debt service commitment (now $90 million per year) • Gave UConn unprecedented authority and flexibility to plan, design, acquire and lease real assets, manage all its capital projects, including contracting for professional services and selecting design and construction firms • Required only the submission of semi-annual reports • UConn 21st Century (2002) provided another $1.3 billion

9. UConn 2000 – “A Political Masterpiece” • UConn had key staff who understood Connecticut and how to sell idea • So bold an idea, hard to say no • Love of bricks and mortar • List of projects included something for everyone • Capitalized on success of basketball teams • Showcased “poster facilities” in major disrepair • Impeccable timing – college-age boomlet right around corner

10. UConn 2000 – A Plan in the Making? • About 75% of projects already were part of Board of Governors five-year facilities plan • Succeeded despite a lack of: • Updated academic plan • A comprehensive facilities master plan • Facility utilization study • Full facilities condition assessment

11. Jumping on the Bandwagon: Funds for the Rest of the System • Governor Rowland made initial commitment of $720 million for CSU and $655 for CTC systems in 1997 • Commitment was extended in 2001 for a total commitment of $866 million for CSU and $725 million for the CTC • No statutory commitment; no authority to manage major projects • CSU also gets $5 million a year in recognition of student financing of auxiliary facilities • Actual allocations, however, are slowing to a snail’s pace • CSU is seeking another $1 billion commitment

12. Project “At Risk” • August 2004 – • First revelations about fire and building code violations in student dormitories hit the press • November 2004 – • State inspectors find numerous code violations. The three major dormitory complexes were never inspected by state because they were below threshold • December 2004 – • Executive Director of Architectural Services resigns • February 2005 – • State auditors issue a report highly critical of how university awards contracts and of its budget and record keeping systems • March 2005 – • New inspection office set up by UConn finds more than 100 other building and safety violations • UConn board commits $15 million to fix problems • Lt. Governor Kevin Sullivan calls for legislative investigation stating that “flexibility is no excuse for mismanagement, fraud and waste” (The Hartford Courant. March 29, 2005)

13. Project “At Risk” (Con’t.) • April 2005 – • Reports of major cost overruns on student union and pharmacy buildings • Governor Rell forms Governor’s Commission on UConn Review and Accountability charged with investigating contracting and construction procedures • June 2005 – • Two audit reports uncover a litany of serious deficiencies in oversight and budgeting • First public mention of 1999 PinnacleOne audit which found similar issues and problems - this audit was never made public to either the BOT or legislature • Numerous press reports and questions about who knew what and when ensued • July 2005 – • UConn official tells Governor’s Commission about how UConn buried a floor of a dorm to avoid state inspection…….

14. “Honey, I Shrunk the Building” Editorial, The Harford Courant, July 31, 2005 Cartoon by Bob Englehart of The Hartford Courant

15. Cartoon by Bob Englehart of The Hartford Courant

16. Project “At Risk” (Con’t.) • August 2005 – • Governor Rell publicly criticizes the University for the first time • BOT Audit committee determines that President Austin and other UConn officials were briefed on PinnacleOne audit in January 1999 • September 2005 – • Governor’s review commission issues its report recommending, among other things, a hands-on construction committee • UConn Code Compliance Officer and VP for Administration and Operations Services put on administrative leave • Student newspaper calls on President Austin to resign • Fire watch ordered at one of the dormitory complexes • January 2006 – • Chief State’s Attorney takes over criminal investigation • May 2006 – • Legislature enacts new oversight legislation

17. The Aftermath • A combination of factors lead to the breach: • Inexperience • Insufficiency • Ignorance • Indifference • Insincerity

18. The Aftermath (Con’t.) • Numerous code violations found in every building inspected to date • Total cost of required dormitory renovations - $23 million • Criminal investigation continues • Overall good of the program, and stunning new and rejuvenated campus facilities far outweighed consequences: • UConn has implemented major changes and internal controls, hired more experienced staff, etc. • Only three employees held accountable to date • Top executives still employed • 21st Century funds still in place • New oversight legislation enacted

19. Public Act 06-143: New Oversight Requirements • Requires BOT to appoint independent auditors to annually audit all projects • Establishes a 7-member Construction Management Oversight Committee • Requires public bidding for any project over $500,000 • Requires prequalification of contractors by Department of Administrative Services • Permits UConn to use “construction manager at risk” • Temporarily assigns public safety staff to Department of Public Safety • Requires all deferred maintenance funds to be spent for that purpose • Requires a review of all deferred maintenance needs and annual report to CMOC • Requires inspection of all university structures and inventory of deferred maintenance needs

20. Stay Tuned….