VIII-10.10 - POLICY ON FACILITIES RENEWAL FOR AUXILIARY AND NON-AUXILIARY CAPITAL ASSETS (Approved by the Board of Regents, May 1, 1992; Revised and approved by the Board of Regents, December 9, 2005) 1. Subject to limitations established by law, the Board of Regents is empowered to maintain the capital assets under its jurisdiction, including land, structures and infrastructure, for auxiliary and non-auxiliary programs. 2. Facilities renewal is the planned renovation, adaptation, replacement, or upgrade of the systems of a capital asset during its life span such that it meets assigned functions in a reliable manner. 3. Institutional spending for facilities renewal shall be targeted at 2% of the current replacement value (RV) of all institutional capital assets. The allocation of funds and the selection of projects shall be approved through the operating budget process with the support of $15 million per year in Academic Revenue Bonds (for State buildings only) appropriated among institutions based on their pro-rata share of replacement value. Operating funds shall be enhanced as follows at each institution until the 2% of replacement value spending level is reached: a. Institutions will increase operating expenditures (from all sources) at an (annual 5-year average) increment of 2/10th of 1% of replacement value. Where tuition represents less than 25% of the State-supported budget, the increment for FR will be implemented at 50% of the aforementioned goal. b. To close the gap further, the Regents may require ½ of 1% of the replacement value (RV) of any new building be allocated annually from the institutional operating budget as part of the cost of building start-up. 4. Institutions shall provide information on the amount of funds and their use to enable the Chancellor to monitor and report on the progress of the facilities renewal program on an annual basis to the Regents. 5. After approval of the budget request by the Board, the request for State funds to the Governor shall not be less than the previous fiscal year unless there are Systemwide funding constraints. The Chancellor may recommend to the Board an institution's one-time only exception from policy or may recommend amendments to an institution's budget request to meet the facilities renewal policy, following recommendations by the President. 6. Furthemore, the Regents will approve an annual Capital Budget request to the State that includes, at a minimum, the FY2006 level of funding for building renovation and replacement ($70 million) adjusted for inflation. Replacement for: Policies of the former University of Maryland, included in a report titled Critical Capital Needs, fall 1985, which highlights facilities renewal requirements for non-auxiliary facilities. The Campus Funds Construction Program for non-auxiliary facilities and policy for the University Funded Construction Program for auxiliary facilities. Policy of the former Board of Trustees of State Universities and Colleges, included in a report titled Facilities Management: A Comprehensive Plan, as approved by the Finance and Management Committee.