Legislature addressing billions of dollars in deferred maintenance to state facilities

Published: Mar. 5, 2020 at 10:27 PM AKST
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The Senate Finance Committee on Thursday took up, among other items, discussion around billions of dollars of deferred maintenance to state facilities.

Deferred maintenance, according to the Office of Management and Budget, is work that should have been completed in the normal operating budget but due to lack of resources was postponed.

OMB reports the state has over $9.6 billion in deferred facility maintenance costs – up from $8.6 billion 2019.

“Putting off the needed repairs can obviously lead to deterioration and inability to use that asset,” said Shelly Willhoite, capital coordinator for OMB. “Funding deferred maintenance is important, and if you don’t it can result in long-term higher costs.”

OMB says there are over 2,400 facilities in need of maintenance between 14 different state departments. Two departments take up the lion’s share of the maintenance costs: the University of Alaska ($1.3 billion), and the Department of Transportation ($341 million).

Sen. Natasha Von Imhof, R-Anchorage, recognized that it will be difficult to meet deferred maintenance needs with current budgetary constraints.

“We have less revenue, and bigger cash needs … and we have a dwindling CBR balance,” Von Imhof said. “So we have to look at the choices we have in front of us and try to make some of the hard decisions.”

The state is also looking at divesting some of its excess facilities managed by the Department of Administration “with little value or unlikeliness to sell,” but they have to consider liability associated with vacant structures as well as demolition costs.

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