Bond spending is halfway done

The UNC system has officially crossed the halfway mark in spending the $2.5 billion from the Higher Education Bond Program approved by voters in 2000.

“I think this is a major milestone,” said Jeff Davies, the system’s vice president for finance.

Davies presented his report Thursday to the Budget and Finance Committee of the UNC-system Board of Governors.

“To have spent half the funds provided by the voters of the state, and to have done it so successfully, just couldn’t go unnoticed,” he said. “That’s why I felt we had to report it to the board.”

The report states that more than $1.25 billion has been expended in a program that boasts 316 separate projects across the UNC system’s 16 campuses. Of those, 74 have been completed, and 242 are under way.

At UNC-Chapel Hill, the bond is funding a total of 49 projects expected to cost more than $510.5 million.

UNC-CH and N.C. State University are by far the largest recipients of bond funding.

N.C. State was budgeted more than $468 million for 40 new projects.

It has fully completed about 48 percent of its bond-related construction, compared to 24 percent at UNC-CH.

There are only a few system universities past the halfway mark in terms of fully completing projects, but none had anywhere close to as many construction jobs as UNC-CH or N.C. State.

Of the remaining system schools, East Carolina University had the largest bond budget at $190.6 million.

It has completed about 52 percent of its 13 projects.

Bruce Runberg, UNC-CH associate vice chancellor for facilities planning and construction, said the program is doing well thus far.

“Our responsibility is to take those 49 projects and finish them by 2008 and be within budget,” he said.

That doesn’t mean that each individual job has to be on budget, so long as the overall program finishes in the black.

“Some will be a tad over and some will be a tad under, which is happening,” Runberg said. “Sometimes we focus too much on one project, whereas the real goal is the program.”

Runberg and Davies said they are pleased with the way bond expenditures have worked out to date, but both said they expect that the second half of the fund will have to stretch just a bit more.

Construction costs have increased markedly in the last few years, they said.

“It’s important that we were able to save money at the beginning of the process when the economy was clearly suffering and the construction industry was very hungry to work on our projects,” Davies said.

Relatively low bids on earlier projects allowed campuses to get more accomplished without dipping too far into their bond funding.

“If you look at the first couple years of the program, we had a really good market, and we had some savings,” Runberg said.

Since the prices of steel and other commodities have risen sharply, “we’re having to use those savings now on the projects at the tail end,” he said.

Contact the State & National Editor at stntdesk@unc.edu.