REGENTS REPORT

South Dakota Higher Education: Good Investment. Great Future. NO. 64, 02/07/97

The Higher Education Facilities Fund

HEFF PROVIDES RESOURCES TO MEET FACILITY NEEDS

Facilities are an important part of the publics total investment in higher education. Proper construction and maintenance are critical for long term accommodation of higher education needs in South Dakota. The South Dakota Legislature made a forward-looking move in 1984 by creating the Higher Education Facilities Fund (HEFF) for capital construction and improvement at the state's universities. HEFF provides a dedicated revenue source for facility priorities as opposed to taking money directly from operating funds, which are vitally needed for instructional efforts. HEFF plays an important role in protecting the state's infrastructure investment in higher education.

WHAT IS HEFF?

HEFF is limited to academic and administrative facility related expenditures for the universities. HEFF does not address facility needs at the two special schools or the Agricultural Experiment Station. HEFF is defined by state statute (SDCL 13-51-2) to allow the Board of Regents to:

• make lease-purchase payments to the South Dakota Building Authority for projects authorized by the legislature
• maintain and repair existing facilities in amounts as may from time to time be authorized by the legislature, and
• build and equip new facilities as may from time to time be authorized by the legislature.

SDCL 13-51-2 also requires that at least $3 million be allocated to maintenance and repair projects before a new building can be funded.

Deposits are made annually into the HEFF account from 20% of all state support tuition collected system-wide-including off-campus centers and other distance education. The HEFF account is pooled for the system; there are not pre-set amounts designated for spending on any one campus.

Source of HEFF Money

20% Allocated to HEFF

State Support Tuition

HEFF CASH FLOW

In FY97 approximately $8 million will be deposited into the HEFF account from tuition deposits-20% of all state support tuition. Over half of that amount will be used for maintenance and repair projects on the campuses and about 40% will be used to pay lease payments to the South Dakota Building Authority, for buildings such as the I.D. Weeks Library at USD and the Bio-stress Laboratory at SDSU.

HEFF Expenditures: FY97

SOURCE: Board of Regents

PRIORITIZATION

To determine where HEFF funds are allocated, the Board of Regents prioritizes projects submitted by the universities to determine the greatest need facing the system. HEFF money is pooled system-wide to achieve the greatest impact from facility investments for the Unified System. Below is a graph showing the allocation of HEFF for maintenance and repair projects on the campuses. Between FY90 and FY97 M&R allocations have increased 95%.

HEFF M&R Allocations: FY90-FY97

SOURCE: Board of Regents

CONCLUSION

HEFF allows the Unified System to meet many facility needs by combining resources and prioritizing needs. All of the system universities have benefited from and will continue to benefit from HEFF--a revenue source dedicated to priority facility needs throughout the Unified System.