Inflation drives up cost of UW system campus construction projects
Inflation pushes price tags to University of Wisconsin System Building Projects millions of dollars more than expected, leaving campus leaders with tough decisions about how to move forward with desperately needed facilities.
UW officials said they are weighing what to do with the projects on a case-by-case basis, many of which are funded primarily by taxpayer-funded loans.
Budgets for minor maintenance and repairs can be adjusted over the life of the projects using savings from other projects without returning to the State Building Commission for approval, according to the Department of state administration. But larger projects require additional approval if the cost exceeds the approved project amount.
One option for campuses is to reduce the scope of a project to keep the cost under budget.
That’s what UW-River Falls Chancellor Maria Gallo decided to do with the university new science and technology innovation center. Inflation would have added another $6 million to the $117 million budget approved by lawmakers last summer.
To stay within the building budget, UW-River Falls is postponing the greenhouse portion of the project, reducing the size of the cooling system, and removing items in some labs, such as equipment, cabinets, and utilities.
Other options could be to ask the state for more money or raise funds to offset the increased cost of the project.
How much more money do you need? Alex Roe, who oversees construction projects for the UW system, presented the cost increases to the UW board at a meeting earlier this month.
- Lawmakers approved $96 million last summer to replace Albertson Hall, an academic building for UW-Stevens Point. It is now estimated at $112 million.
- At UW-Green Bay, the Cofrin Technology & Education Center was also approved at $96 million. The price rose to $127 million.
- Levy Hall at UW-Madison, a precursor to the demolition of the dilapidated humanities building, is expected to cost at least $18 million more than the original budget of $88 million.
Roe said she hadn’t seen inflationary pressures this high or for this long in her 25-year career in higher education.
His lines of observation with what News-Record Engineering reports. Used by the UW system as a benchmark for construction costs, the publication puts the current year-over-year increase at 13.1%, the highest since at least 1990.
Not all projects have the same timelines or inflationary impacts, Roe said. The UW system works with each campus to assess the next steps for individual projects.
Roe and his team are also actively preparing project applications for the next biennium which begins July 1, 2023. Regents are expected to approve a list later this summer.
The Department of State Administration asked the agencies to assume that inflation will rise 8% every six months through 2023, then 4% every six months from 2024, Roe said.
A Department of Administration spokesperson said the goal of Gov. Tony Evers’ administration is to minimize the potential for increased cost to ratepayers that could be caused by delays in timely completion. desired.