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Regents wait rather than act on 2-percent 'M and R' goal

State Board of Regents members decided Wednesday they want a new plan for maintenance and repairs developed for all of South Dakota's public universities.

They directed the central office's staff to bring the plan to the March 27-29 meeting at Black Hills State University in Spearfish.

The regents meanwhile intend to ask the Legislature to approve new buildings at several campuses during the 2018 session that starts Jan. 9.

The regents want to tell legislators the projects would have maintenance and repairs coverage.

But those details weren't clear Wednesday.

The regents already are funding maintenance and repair at less than their policy goal of 2 percent of the appraised value of each academic or administration building.

They were stalled at approximately 1.1 percent for many years. They finally reached 2 percent during the budget year that ended June 30.

But they are back at 1.9 percent this budget year. They expect to slip back to 1.6 percent next budget year, in part because state government's Office of Risk Management now conducts the appraisal rather than the regent central office.

The regents govern the traditional state-university campuses in Aberdeen, Brookings, Madison, Rapid City, Spearfish and Vermillion.

They also oversee university centers in Sioux Falls, Pierre and Rapid City.

At the regents meeting in October, board president Bob Sutton of Sioux Falls said the maintenance and repair issue should be put on a meeting agenda in the future.

Monte Kramer, the regent system's vice president for finance and administration, delivered a report Wednesday as the regents met at School for the Deaf in Sioux Falls.

He said the industry standard is two percent as a minimum and many organizations budget 3 to 4 percent.

Kramer said the easiest approach might be charging two dollars more per credit hour and using the additional money for maintenance and repairs.

But University of South Dakota president James Abbott sent the discussion into uncertain territory, when he told the regents that changing the rules in one swoop wouldn't be right.

Abbott said his university at Vermillion consistently put more of its tuition into the South Dakota Health and Education Facilities Fund than it gets back.

Currently about 11.5 percent of student tuition goes to the HEFF account. The regents spread the money back to the campuses for various projects and for maintenance and repairs.

"It just doesn't seem appropriate or fair," Abbott said about the disparity.

Supposedly none of the university presidents had contacted any regent about the matter until Abbott came forward.

Sutton replied to Abbott: "You knew this was on the agenda and it would be voted on today."

Regent Kevin Schieffer of Sioux Falls however said Abbott was right. Schieffer suggested an exemption for "compelling" situations.

South Dakota State University president Barry Dunn took the guest microphone and agreed with Abbott.

Dunn said there was "a lengthy discussion" at the Council of Presidents meeting a few weeks ago.

"I do think it's a matter of fairness," Dunn said. A precision-agriculture center on the SDSU campus at Brookings is one of the projects lawmakers will consider in 2018.

"The new buildings are larger. They are more complex," Dunn said.

Regent John Bastian of Belle Fourche wondered whether taking action Wednesday would put several campuses at a disadvantage when legislators consider their projects in 2018.

Among them are Northern State University in Aberdeen and Dakota State University at Madison.

"I'm thinking that we might do more harm than good," Bastian said.

The situation seemed to be unraveling. Regent Pam Roberts of Pierre reversed course. "I think we should step back," Roberts said.

The Legislature needs to know the regents are working on a plan, Roberts said. She called for the staff to bring a recommendation to the March meeting.

Sutton agreed. "We need presidents involved in that discussion. We need regents involved in that discussion. And we need staff," he said.