Planning for Higher Education Journal

Plant Upkeep and Financial Equilibrium: What Does it Take to Stay in Balance?

From Volume 16 Number 2 | 1987–1988
By John A. Dunn

Over the years, many colleges and universities have not devoted enough funding to plant. They should implement long-term financial planning to maintain the value of plant assets to continuing operations of the institution. This scheme will help them avoid falling behind in plant upkeep and renewal. Traditional approaches are available to detrmine spending levels needed to preserve plant asset worth to the ongoing program of the university. These methods include straight line historical funding, identification of needs, and breaking the cost of each building down into component systems, such as electric, plumbing, and air conditioning. However, a better approach to maintain plant asset value to changing university needs is based on a financial equilibrium concept. It has two components: plant upkeep (with system life cycle approach) and plant renewal (renovate and replace facilities to sustain the value of the plant). Essentially, a composite plan is necessary to calculate the amount of funding a university must set aside to sustain plant value to ongoing operations. With this approach, the institution may not be able to renew its plant for changing needs but will preserve the usefulness of the plant in its current state.

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