Standard VIII		Physical Resources
William S. Reed René Stewart Poku		wreed@wellesley.edu rpoku@wellesley.edu

Wellesley's physical campus is one of its most prized assets. It is considered singularly beautiful -- many students liken it to "studying in a park". It costs the College approximately $5-6 million annually for standard maintenance and renewal of its buildings, landscape, grounds and walks. The property owned and maintained by Wellesley College comprises over 500 acres in the Town of Wellesley, Massachusetts. The campus was originally designed by Frederick Law Olmsted, Jr. The core campus consists of 64 academic, research, dormitory, and faculty and student service structures and includes a power plant, a cogeneration plant, and children's day care center. The buildings of the College contain over 2.4 million gross square feet, 90% of which is directly associated with student use such as academic buildings, student service buildings and residence halls. The College also owns and maintains 105 housing units which it rents to faculty and administrative staff. The College also owns and operates the 9-hole Nehoiden Golf Course and owns the 40 acres of land directly across Route 135 (the "North Forty"). Almost 2,200 students, 1,200 faculty, staff and union personnel, and thousands of alumnae use the campus each year.

Major administrative and instructional facilities of the College include: the academic quadrangle consisting of Green Hall, Founders Hall, Pendleton Hall, and the Jewett Arts Center and Davis Museum complex; the Science Center complex; the Margaret Clapp Library; and Whitin Observatory. Green Hall houses most of the administrative offices directly affecting the academic and business management of the College. Founders Hall and Pendleton Hall are the College's two main classroom buildings and house the humanities and the social sciences. The Science Center complex, most recently upgraded in 1997, includes scientific equipment, teaching and research laboratories, classrooms, offices, and computing facilities for students, faculty and staff studying, teaching and working in the science departments, psychology, computer science, mathematics, and information technology. The Davis Museum complex, completed in 1993, provides galleries for special exhibitions and the College's permanent art collection. The facility also contains a cinema and cafe, a study gallery/seminar room, art preparation and storage spaces and administrative offices. The Jewett Arts Center, renovated in 1992, consists of an art wing, a music and drama wing, and houses a music library, practice studios, classrooms, offices, an art collection, exhibition rooms and a 320-seat lecture auditorium.

The Library's collection currently numbers over one million books, periodicals, government documents, microfiche, music scores, sound recordings, videocassettes, maps and CD-ROMs. Access to additional materials is provided by the Document Delivery Service and the Boston Library Consortium. The Library's catalog, with connections to numerous remote on-line research resources, is accessible through the campus network and the Internet. The Library has been renovated in the last three years. A significant programmatic component of the renovation of the Margaret Clapp Library was the creation of a state-of-the-art Knapp Media and Technology Center completed in summer 1997. The new center is approximately 19,000 square feet and is located on the ground floor in the space formerly occupied by the reserve room, language laboratory, and the newspaper room. The Knapp Center includes multimedia workstations, with the collections centrally located with direct staff access, as well as group study rooms. It also includes video production facilities as part of the general work space. The Learning and Teaching Center for faculty and students is located in the Clapp Library. The combined seating capacity of the Clapp and department libraries is close to 1000.

Additional major facilities for the use of the College community consist of: the Nannerl Overholser Keohane (NOK) Sports Center; Alumnae Hall; Houghton Memorial Chapel; Simpson Infirmary; Schneider Center; Wellesley College Club; Slater International Center; and Harambee House. The NOK Sports Center is a 150,000 square foot complex consisting of three interconnected buildings housing tennis, swimming, and other athletic facilities, including an indoor swim center, fitness equipment, and 1/8 mile indoor track. Alumnae Hall houses a 1500 person auditorium and a large ballroom and the Ruth Nagel Jones Black Box Theater. Houghton Memorial Chapel houses the College's main chapel with seating for approximately 1200 people. The Simpson Infirmary is a licensed 11-bed facility and outpatient clinic. Schneider Center provides lounge areas, a snack bar, Molly;s pub, the College radio station, and meeting rooms and offices for student organizations. The Slater International Center and Harambee House, an African American cultural center, are complementary adjuncts of the Schneider Center. The Wellesley College Club, with a membership of over 2500, is a major meeting space for faculty, staff and alumnae. It includes a dining room, reception areas and 16 rooms for overnight accommodation of visitors.

The College has 16 residence halls, nine of which have kitchens, and seven smaller residential buildings. Each residence hall has the capacity for 115 to 140 students housed in single and double rooms and some suites.

160 Physical Plant staff maintain and oversee the College's grounds with a total annual budget in 1998/99 of over $13 million, not including major maintenance and renovation and depreciation. In 1997/98, a campus master planning process was undertaken. This comprehensive long-range plan, the final draft of which was presented to the Board of Trustees in October, 1998, will provide explicit and systematic guidance for the restoration, management, ongoing maintenance and overall use of campus for at least the next two decades.

Capital Maintenance and Ongoing Construction

Wellesley College is committed to maintaining and improving its physical infrastructure as well as its telecommunication and information system networks. The Physical Plant department participates in the planning and oversight of major maintenance projects and the further development of the campus through ongoing programs of renovation and new construction. Over the past thirteen years, the College has spent approximately $160 million in major maintenance and capital construction projects. Major projects completed include:

• complete renovation of rooms, kitchen and servery in Bates, Freeman and McAfee residence halls
• renovation of Tower Court dining hall and servery with expansion of office space and creation of private dining area
• a 30,000 square foot expansion of the Science Center with HVAC upgrades
• a complete renovation of the Jewett Arts Center; replacement of the central boilers
• construction of a cogeneration plant providing for the capacity to generate our own electricity for annual savings of $800K-$1 million
• renovation of the greenhouses; construction of the Davis Museum, Collins Cinema and Café
• complete renovation of Founders Hall classrooms and offices
• structural upgrades to selected classrooms in Pendleton Hall
• addition of the Knapp Media and Technology Center to the Clapp Library.

In addition, Wellesley completed an upgrade of telecommunications systems, including installing a high-speed data network, providing e-mail and voice-mail to all students, faculty and staff; regular replacement of all faculty and administrative computing workstations, with computer lab cluster and wiring in all dorms and major classroom facilities; and implementation of an integrated database administrative software system to enhance functionality, data flow and work processes. The College has installed a video network with viewing capacity in classrooms and common rooms, but has not implemented network expansion to the individual dorm rooms. We have a process in place to address the issues surrounding Y2K.

In fiscal year 1996, a multi-constituency task force led by the President and the Board of Trustees, the Task Force on Plans, Priorities, and Fiscal Policies (TFPPFP), was convened to ensure that the College was allocating its financial resources in the most cost-effective manner without cutting into its core educational mission and without sacrificing innovation. The Task Force made several important recommendations about the College's financial planning variables. One of the most significant was that the College phase in the funding of its annual cost of replacement and renewal of the campus physical facilities and grounds in to the operating budget. (Historically, the College has spent about $5 million per year on major maintenance.) The board approved a provision that a special endowment supplement would be voted each year to offset some of the impact with the expectation that, after five years, the operating budget would be fully able to absorb all of the annual cost. 1997/98 is the first year of the implementation of this recommendation.

Debt

The College currently has $65.1 in outstanding debt with a AA+ bond rating. These tax-exempt revenue bonds were taken out in 1992 and 1993 respectively to finance some of our major capital construction projects and to upgrade our physical and telecommunications infrastructure. The annual cost of carrying this debt, at very favorable interest rates, is approximately $4.8 million, including principal and interest. Since Wellesley could significantly increase the size of its debt in order to fund high priority capital projects without adversely affecting its credit rating, the Board has approved a proposal to issue additional debt by November, 1998. The College is in the process of raising an additional $40-$50 million in new tax-exempt debt to finance the following projects.

• Renovation of Stone-Davis residence hall in order to upgrade, revitalize and perform major maintenance work, including the installation of a sprinkler system and new elevators, upgrades to the heating and electrical systems, and improvements to student rooms and the common areas. In addition, the building will be made ADA compliant and asbestos will be removed. The estimated project cost is $8-$10 million.
• Renovation of Clapp Library -- project plans include replacement of the main air handling unit of the library and renovation of the fourth floor, including the archives and special collection reading room, and construction of a new conservation and preservation laboratory. The estimated cost of this project is $6-$7 million.
• Renovation of Green Hall -- the scope of this project is to upgrade, revitalize and perform major maintenance work, including installation of air conditioning and new lighting throughout the building, upgrades to office, classrooms and conference rooms, and modernization of the bathrooms. As with the Stone-Davis project, the building will be made ADA compliant and asbestos will be removed. The estimated cost of the project is $10-$11 million.
• Renovation of Pendleton East -- Pendleton East houses the social science departments and classrooms. Project plans call for the reconfiguration of one of the lecture rooms into a computing and multimedia laboratory, modernization of common facilities, the addition of new seminar rooms and the addition of computing and audio-visual equipment to the classrooms. It will be renovated and modernized throughout and made ADA compliant. The estimated cost of the project is $10-$11 million.
• Installation of fifth engine for the co-generation plant -- The co-generation plan, constructed in 1994, has been very successful and has produced savings of approximately $800,000-$1 million annually in electricity costs. Increase in electrical demand warrants the purchase of a fifth engine to meet peak demands. The estimated cost of an installed engine is $2.5 million.

Based upon the replacement value of our physical plant, the College needs to spend between $5 and $6 million annually in order to maintain its physical plant. In addition, the College spends approximately $1 million per year on technology and scientific equipment, furnishings, vehicle replacements and renovations of academic and administrative offices.

Appraisal and Projections:

Overall, the College's commitment to maintaining and enhancing its physical campus has been effectively realized. We do not have a backlog of deferred maintenance and we have begun to phase in the funding of our annual major maintenance as one of the key recommendations of the Task Force on Plans, Priorities, and Fiscal Policies. A physical plant of Wellesley's size, scale and complexity presents a unique challenge in terms of long-term planning, preservation and maintenance efforts, and efficiency.

There are several major issues to face in the years ahead:

1. Depreciation: As we continue to maintain our physical plant, the value of it as an asset increases and the annual amount of money we need to spend to keep our buildings and grounds well maintained increases accordingly. We need to spend approximately $7.3-$7.6 million per year over the next three years to adequately cover our major maintenance costs. We have a mandate from the Trustees to capture the greater part of our major maintenance costs ($5 million/year) in our operating budget as an expense (please see Standard 9 for further explanation). As the corresponding major maintenance supplement from the endowment the Trustees voted to offset this expense decreases each year, it becomes more difficult to balance the operating budget doing "business as usual." We need to find permanent budget savings and significant structural adjustments in order to fund this additional $5 million. Even with the successful integration of $5 million of major maintenance as an ongoing operating expense, as our annual depreciation continues to grow to the $7.4-$7.6 million level, the question of how to fund the "gap"of $2 million that we need to cover grows more urgent. Approximately 75% of colleges and universities have devised methodologies to address this. Wellesley College needs to examine the depreciation question carefully and make sure that our major maintenance allocations are appropriately addressed and funded without setting the operating budget askew.
2. Size of Debt and Debt Service Policy: We must periodically fund major capital and renovation projects that fall outside of the purview of the major maintenance category. We usually finance these projects with major capital gifts or tax-exempt debt. In January, 1999, the College will be issuing tax-exempt revenue bonds of $40-$50 million through the Massachusetts Health and Education Facilities Authority (MHEFA) to support five major capital projects which we have determined would be unlikely to generate much financial support during a campaign. All projects funded through the bond issue must be completed within three years. Our total outstanding debt will be $105-$115 million with the new issuance. Since we plan to structure this new debt to take advantage of the historically low fixed interest rate, with some portion borrowed at a variable interest rate to maximize our fiscal flexibility and capitalize on our favorable financial ratios, we anticipate that the cost of issuance and the additional annual debt service will be relatively low. With this upcoming debt issuance, the Investment Committee's policy of having the operating budget and the endowment split the annual cost of debt service has been modified in favor of the operating budget so that the operating budget will absorb only 25% of the additional debt service and the endowment will cover the remaining 75%. Determining an equitable policy on the servicing of our debt will be important as we consider other major capital projects in the years to come to ensure that we have the appropriate fiduciary balance between the current and future generations of Wellesley students.
3. Campus Master Plan: Last year, the College undertook a comprehensive campus master planning process to guide the restoration, enhancement, maintenance and long term planning needs of the campus buildings, landscape and grounds. The process was broadly inclusive and solicited input from alumnae, trustees, students, faculty, staff, neighbors and friends of the College. The final plan was completed in October, 1998. During 1998-99, the College will design a process to assess the variety of choices, strategies and proposals detailed in the campus master plan, set priorities and develop a long-term implementation plan in the context of other institutional needs. One of the major campus plan recommendations was to enhance resources (staffing and operating support) for the maintenance of grounds and the landscape as the initial step in implementing the plan. Unless the College has adequate maintenance standards for the existing physical campus, implementing enhancements and restoration projects cannot be supported long-term. This will require a major investment of resources.
4. Capital Project Planning and Decision-Making Process: Capital budgeting was one of the major concerns of the Task Force on Plans, Priorities, and Fiscal Policies because capital expenditures represent such a significant commitment of College resources and represent important choices about institutional priorities. We have developed a process to examine critically the development and approval of capital projects at the College. Procedures for approval of all major maintenance and construction have been clarified such that all major capital allocation decisions are made comparatively, in the context of the range of the anticipated future directions or goals of the College. In addition, we have an inclusive campus-wide process for the development of the five-year major maintenance schedule, which is continually updated so that the Trustees are aware of the scope of anticipated capital needs along a continuum.

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