MAYVILLE, N.D.-The University of North Dakota is eyeing a new steam plant, and it is looking at achieving this goal without state appropriations.

Mike Pieper, head of facilities at UND, spoke to the Legislature's Higher Education Committee at Mayville State University on Monday, June 4, about the project. The group is an interim legislative committee tasked with looking at various higher education issues in the state before the upcoming biennium.

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The facility would cost $75 million in total, with $50 million of that for the plant itself and $25 million for the building's mechanical equipment.

Pieper said the current steam plant, which was built in 1909, is a critical support building and is in the worst condition of all UND buildings.

The facility would be operated and maintained by a third party, Johnson Controls, under a long-term capital lease agreement. The terms of the agreement can last as long as 50 years.

"Basically it's using our current steam revenues in a way to build a new plant and create efficiencies and not request state appropriations," he said. "The project really isn't any different; it's just a different way to pay for it. So, instead of going to the state and saying 'Give me $50 million so I can write a check' we'd be doing it over, say, a 40-year lease and make annual payments."

Pieper said they will have an agenda item during the State Board of Higher Education's June meeting to ask for "permission to execute the final agreement." The agreement details should be ready sometime in July, Pieper added.

If the agreement is approved by the SBHE, the old location would be razed and the site would be reclaimed. The area could be used for Campus Road realignment and improved parking, Pieper said.

The new plant would also be smaller than the original building by 12,000 gross square feet. Pieper said they would hope to have the facility running in the summer of 2020.

Other business

Rick Tonder, director of facilities planning for the North Dakota University System, spoke about existing buildings on campuses across the state. He noted at least 10 facilities across the system that are no longer occupied, adding that there are a number of facilities that are being removed and/or deactivated to reduce current operational costs.

Tammy Dolan, vice chancellor for administration affairs and chief financial officer at NDUS, spoke to the committee about the higher education funding formula calculations for the upcoming biennium, as well as showing what the impact of the governor's proposed budget cuts would be on different campuses.

Dolan said the budget process is ongoing, but NDUS has been in contact with the governor's office about the proposed cuts and their effect on institutions across the state. She said that they have considered what tuition increases could be implemented in the future, but said NDUS was still in the process of looking at what any potential increase could look like at specific campuses.

The committee will meet again on Tuesday in Grand Forks. This portion of the meeting will focus on the research work campuses are doing.