Lobbyists form contractor alliance to seek $315 million for university building repair backlog

TOPEKA — A fledgling association of construction contractors led by two political lobbyists is developing a plan to persuade the Kansas Legislature to make an unprecedented seven-year, $315 million investment to shrink the academic building repair backlog at the state’s six public universities.

Without official endorsement of the campaign by the Kansas Board of Regents, lobbyists Ed McKechnie and David Kensinger have worked behind the scene to enlist commercial contractors and an assortment of subcontractors to christen the University Contractors Association of Kansas. This newfound association would finance the partners’ lobbying at the Capitol while they seek passage of a $45 million per year plan to address antiquated, wrong-sized academic buildings on campuses in Manhattan, Lawrence, Wichita, Hays, Emporia and Pittsburg.

The state Board of Regents is standing by its request that the 2022 Legislature appropriate an extra $25 million annually to chase building maintenance, rehabilitation and demolition projects at the University of Kansas, Kansas State University, Wichita State University, Fort Hays State University, Pittsburg State University and Emporia State University.

The proposal being shopped by the budding association of contractors, according to an internal association memo, would culminate in a $1.2 billion investment in upgrading campus facilities. The plan calls for the cost to be covered by addition of legislative appropriation, a surge in contributions by universities and growth of an existing statewide property tax levy dedicated to building needs.

The memorandum said the association’s strategy was to secure $45 million annually in new state funding for seven consecutive years during the legislative session starting in January. The six universities would be expected to contribute matching funds of $45 million annually for seven years from either tuition or endowed giving.

That total would be combined with a minimum of $45 million per year from the Educational Building Fund, or EBF, which has provided university building maintenance support through a 1 mill property tax. The EBF is expected to grow to $53 million within 10 years. In years eight, nine and 10 of the program, the universities would increase their self-funded building maintenance budgets to match whatever was produced by the EBF.

Bottom line of the association’s blueprint: $1.28 billion for university building upgrades through 2032.

“If you’re going to get something passed, this is probably the year to get it done,” said McKechnie, a lobbyist from the Pittsburg area who served as a Democrat in the Kansas House and as a member of the state Board of Regents. “We’re looking for a few legislators to begin that conversation.”

His preference for action during the 2022 session was based on awareness of the state government sitting on approximately $1 billion in federal economic and coronavirus relief funding. At the same time, Kansas’ tax collections have surpassed expectations to the extent that Republicans and Democrats have been preparing to debate tax cuts.

Lukewarm response

McKechnie formed the bipartisan university lobbying partnership with Kensinger, who served as a campaign manager and chief of staff to Sam Brownback when the GOP lawmaker sought and won election as governor and U.S. senator. Both operate lobbying firms.

A brief profile of McKechnie said one of his achievements was helping the American Short Line and Regional Railroad Association secure $3,500 annual tax credits for every mile of railroad track maintained by Watco, his former employer. In 2008, U.S. Sen. Pat Roberts won re-election and declared Kensinger the Kansas GOP’s “pit bull without lipstick, whose expertise in this new and very different world of political campaigns is unrivaled.”

In an interview, McKechnie said about 10 contracting companies with a vested interest in commercial-scale multimillion-dollar projects at state universities had been approached about joining the association’s single-issue bid to land state funding for university building maintenance. He didn’t identify those companies, but the list appeared to include the heating, ventilation and air conditioning company Trane Technologies. Documents outlining the association’s agenda contained the Trane name and logo on the pages.

That association memo said six subcontractors had signed on to the university lobbying approach modeled after Economic Lifelines, a coalition of companies and organizations supportive of comprehensive state transportation program spending.

Some companies solicited by the lobbying duo have been reluctant to join, including J.E. Dunn Construction, McCownGordon Construction and Hutton Construction.

“Some people are not sure they want to participate,” McKechnie said. “They’re hoping that maybe they can get it to happen without any help. Maybe it can. Maybe things will magically occur.”

Hutton Construction, with offices in Wichita and three other cities, waved off involvement in the lobbying push due to concern with optics of construction companies manufacturing the political framework to land big contracts from the universities. Company founder Mark Hutton, a former state legislator, is a member of the state Board of Regents. His company has done work at Wichita State and K-State.

“We’ve been approached and we said, ‘No.’ For obvious reasons. We don’t want to be associated with lobbying for something that’s perceived to benefit a regent. That would be incredible,” Hutton said.

He said it would be illegal for university building construction or renovation contracts to be directed to companies in exchange for financing the association’s lobbying. There’s too much government oversight for lobbying organizations in Kansas to get away with a pay-to-play effort, he said.

Expanding backlog

The six state universities maintain 28,000 acres with 1,130 facilities comprising 38 million square feet. Half of these structures are categorized as “mission critical,” with half of those properties more than 50 years old. The Board of Regents commissioned a study that concluded the cost of resolving the deferred maintenance backlog was $1.26 billion. As time passes, the cost rises.

“If nothing is done within 20 years it’s going to be over $4 billion,” said Blake Flanders, president of the state Board of Regents. “There needs to be an approach that starts to mitigate the deferred maintenance.”

The challenge of fixing campus buildings goes beyond aesthetics. Kicking the can down the road would eventually lead to higher repair bills, more building system failures, additional health and safety hazards and an inability to meet functional needs of academic programs.

Flanders said the Board of Regents was convinced state buildings must be cared for with taxpayer support. That prompted the recent request for $25 million annually in state aid from the 2022 Legislature and the governor, he said.

“We also know there might be some really good ideas out there,” he said. “If the board’s ask doesn’t come to fruition, then obviously we will continue to advocate for the board’s priorities.”

The Board of Regents took the initiative to direct each university to gradually expand over the next six years budget devoted to building maintenance.

Matching challenge

Under the university building maintenance reform plan presented by McKechnie and Kensinger, the new state dollars would provide $315 million or 25% of a $1.2 billion program. The EBF, funded by property tax, would deliver $492 million over the next 10 years for 38% of the total. The universities would be responsible for generating $473 million during the period for a share of 37%.

Doug Girod, chancellor at the University of Kansas, said the need for state support to repurpose or upgrade campus buildings was overwhelming. However, he said, financial commitments by the universities as envisioned by the construction association’s lobbyists weren’t practical.

“There’s a matching expectation, which I have real concern about,” Girod said. “There’s no way we can do that.  There’s a lot of things we can raise money for, but operations and deferred maintenance aren’t two of them.”

Richard Myers, the retiring president at Kansas State University, said he had fewer objections to a plan hinged on universities raising more cash for building maintenance.

“Partnerships have worked in the past. That would be attractive I would say,” he said.

Myers said the Legislature ought to accept the EBF was insufficient to reasonably maintain a portfolio of university buildings in Kansas with a replacement cost of nearly $7 billion. The $45 million or so allocated to universities each year through the EBF falls well short, he said.

The investment of tax dollars in universities should be considered a form of academic enrichment and economic development, Myers said.

“We can’t nibble away at it very effectively with the current funding we have,” the president said.

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