UAF Engineering Building

Construction continues on the new UAF Engineering Building Tuesday afternoon, September 15, 2015.

FAIRBANKS—New University of Alaska President Jim Johnsen is putting a half-finished Fairbanks engineering building at the center of his first spending request.

Johnsen's proposed $134.8 million capital budget for fiscal 2017 includes a single construction project — a $34.8 million request to wrap up work on the University of Alaska Fairbanks engineering building. The building, which was once expected to host classes this fall, remains partly completed after the final phase was left out of the Legislature's spending plans last session.

The requested funding would put the new 120,000-square-foot facility on pace for completion in spring 2018. The facility is putting a dent in UA's budget even as it sits vacant: It will cost an estimated $1.4 million to operate and maintain the building next year, even though it won't host any classes.

"We drive by that building every day that we still have to pay to operate," said Michelle Rizk, UA's chief strategy, planning and budget officer.

Rizk said the request also highlights the building's high priority. The number of engineering graduates at UAF has more than doubled in the past decade.

The request is part of an ambitious spending plan that Johnsen will present Thursday to the UA Board of Regents at a meeting in Juneau. The proposals occur during a tight funding environment in the state capital, as the Legislature continues to wrestle with a sharp decline in oil revenues.

Johnsen's capital request also includes $50 million for deferred maintenance and $50 million for "sustainment funding" to keep up with current facility maintenance needs. In all, the capital request is a huge increase from this year's funding, which included just $3 million for systemwide maintenance needs.

Johnsen's operating budget proposal includes an increased state contribution of 7.7 percent, to about $378 million.

Of the $27 million in additional funds requested from the state, about half will cover compensation increases for UA employees. It also includes funds for utility replacement and increases and unfunded federal mandates.

About $2.2 million would go toward "high-demand programs" such as a new veterinary medicine partnership with Colorado State University and the Alaska Center for Energy and Power. Rizk and UA spokeswoman Carla Beam said the programs represent areas that Johnsen believes should receive investment, even in lean times.

"These are consistent with what we've heard the Legislature talk about is important to the state," Beam said.

Regents will also discuss the tuition rate for the 2016-17 academic year, although the discussion will focus on concepts rather than specific details, Rizk said. A specific tuition proposal will be considered by regents at their November meeting.

Johnsen took over leadership at UA on Sept. 1, and Thursday's budget-focused meeting will be his first since taking over as president.

He isn't the only UA leader new to his role. This will be the first budget cycle for six regents on the 11-member board, as well as UAF Interim Chancellor Mike Powers and University of Alaska Southeast Chancellor Rick Caulfield.

Agendas and a link to watch the regents' meeting online are available at www.alaska.edu/bor/agendas.

Contact staff writer Jeff Richardson at 459-7518. Follow him on Twitter: @FDNMbusiness.