Diverse Perspectives on Managing Facilities Demands

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Aging campus buildings; growing deferred maintenance; less capital funding; more debt – this is what campus leaders are predicting. While all campuses face challenges, the diversity in facilities needs and investment capacity vary from institution to institution. There is no single solution, but campuses that use performance metrics to diagnose their needs are developing strategies to meet their capital needs and improve operating effectiveness. A panel of senior Business Officers from three highly diverse campuses will demonstrate how they use data, analysis, and modeling to meet facility and financial challenges now and in the future.

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  • KB – why astrics?
  • A lot of space concentrated in one age category means that a lot of need is coming due at once. In 20 years, half of campus will be due for renovation.
  • The plan to grow stewardship funding (budgeted capital dollars) is very important.
  • The plan to grow stewardship funding (budgeted capital dollars) is very important.
  • Daily Service = People Costs + Expenses, Planned Maintenance = planned & preventative work done in the operating budget to extend the useful life of building systems and components. Resource management model is key to success and operating at lower levels.
  • Why high demand campus? Technical, large campus, lots of students, programs – drive demand
  • Rick – How have you pushed stewardship up over the last 3 years?
  • Rick – how are you getting by with under $3/GSF for daily service?
  • Take away – CSB is a relatively young campus compared to peers, but its buildings are aging. If the trend continues, buildings will move into higher risk age categories.
  • Take away – campus is aging because CSB is investing in building new buildings (adding GSF) instead of investing in renovating/modernizing old space and resetting the buildings’ life cycles.
  • Take away – because CSB spends so little on AS and AR, its backlog has been increasing. CSB will need to increase spending on AR to catch up on the backlog and deferred maintenance costs. It will need to increase AS to prevent future increases in backlog, especially as campus buildings age.
  • Take away – CSB invests very little in both keep up and catch up costs compared to its peer group
  • KB – want to show budget or actuals? The above is budgetTake away – CSB spends comparatively very little on operating its facilities but achieves comparable inspection scores
  • Take away – Capital investment aimed to decrease energy consumption and a focus on energy management has successfully allowed CSB to be one of the top performers in the Sightlines database.
  • KB - ????
  • Diverse Perspectives on Managing Facilities Demands

    1. 1. Diverse Perspectives on Managing Facilities Demands • National and Regional Facilities Trends and Challenges – Jim Kadamus • Case Study – Iowa State, Pam Elliott Cain • Case Study –Washburn U, Rick Anderson • Case Study – College of St. Benedict, Sue Palmer Date: September 29th, 2013
    2. 2. National and Regional Facilities Trends and Challenges Speaker: Jim Kadamus, Vice President Institution: Sightlines Date: September 29, 2013
    3. 3. Introducing the Comparative Institutions Sightlines Facts: • Over 1.2 Billion GSF in database • Over 90% Retention Rate • 380+ campuses included into database • 22 Private institutions & 38 Public Institutions in the CACUBO Region • CACUBO represents over 200 million GSF & over 600,000 student FTEs
    4. 4. National Campus Age  Despite new space dollars, 57% of space is over 25 years of age 18% 18% 18% 19% 20% 21% 41% 40% 39% 39% 38% 36% 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 % of Space (%) Square Footage over 25 years old (Renovation Age) 25 to 50 Years of Age Over 50 Years of Age
    5. 5. CACUBO Campus Age  Campuses continue to see space cross into the over 50 year age bracket Public Private 18% 18% 19% 21% 23% 27% 19% 18% 19% 19% 20% 25% 43% 43% 42% 40% 40% 40% 39% 38% 38% 36% 34% 30% 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 % of Space (%) Square Footage over 25 years old (Renovation Age) 25 to 50 Years of Age Over 50 Years of Age
    6. 6. National Campus Investment  Campuses still have not seen a full recovery from the recession $3.1 $3.9 $4.1 $3.2 $3.4 $3.4 $1.2 $1.4 $1.4 $1.3 $1.5 $1.7 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2007 2008 2009 2010 2011 2012 $/GSF Capital Investment into Existing Space Annual Capital One‐Time Capital
    7. 7. CACUBO Campus Investment  Both private and public campuses have seen increase since 2010 Public Private $1.9 $2.1 $2.5 $2.2 $2.8 $2.6 $2.2 $2.9 $3.0 $2.1 $2.9 $3.0 $1.0 $1.1 $1.4 $1.1 $1.2 $1.2 $1.2 $1.2 $1.5 $1.3 $1.4 $1.4 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 $/GSF Capital Investment into Existing Space Annual Capital One‐Time Capital
    8. 8. National Backlog  Continued growth in backlog $78 $79 $80 $82 $85 $89 16% 14% 12% 10% 8% 6% 4% 2% 0% $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $‐ 2007 2008 2009 2010 2011 2012 $/GSF Backlog $/GSF Backlog/GSF Percentage Change of Backlog
    9. 9. CACUBO Backlog  Capital investment is not enough to stem backlog growth $76 $78 $80 $84 $89 $93 $70 $71 $73 $76 $79 $86 25% 20% 15% 10% 5% 0% $120 $100 $80 $60 $40 $20 $‐ 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 $/GSF Backlog $/GSF Public Private
    10. 10. National Operating Costs  Modest increase in operating budgets since 2009 $0.27 $0.28 $0.28 $0.28 $0.30 $0.32 $4.13 $4.31 $4.41 $4.33 $4.42 $4.47 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $‐ 2007 2008 2009 2010 2011 2012 $/GSF Average Facilities Operating Costs Daily Service Planned Maintenance
    11. 11. CACUBO Operating Costs  Operating budgets flat since 2009 Public Private $0.25 $0.26 $0.27 $0.28 $0.28 $0.32 $0.21 $0.21 $0.24 $0.23 $0.30 $0.34 $3.42 $3.53 $3.60 $3.51 $3.41 $3.56 $3.32 $3.48 $3.54 $3.44 $3.40 $3.31 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $‐ 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 $/GSF Average Facilities Operating Costs Daily Service Planned Maintenance
    12. 12. National Utility Costs  Fuel switching and efficiency projects has helped decrease utility costs $2.30 $2.47 $2.50 $2.27 $2.32 $2.22 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $‐ 2007 2008 2009 2010 2011 2012 $/GSF Average Facilities Operating Costs
    13. 13. CACUBO Utility Costs  Public and private campuses utility costs below national average $2.08 $2.20 $2.28 $1.98 $1.97 $1.90 $1.63 $1.95 $2.01 $1.87 $1.99 $1.89 $2.50 $2.00 $1.50 $1.00 $0.50 $‐ 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 $/GSF Average Utility Costs Public Private
    14. 14. CACUBO Final Comments Physical and Institutional Profile •Age profiles of institutions indicate that both public and private institutions face growing deferred maintenance needs and overdue life cycles •Public institutions have a higher portion of space over 25 years of age, which will require additional capital investment and can begin to have an impact on daily operations Capital Budget Profile •Both public and private campuses have seen increased capital funding since the decline in 2009 •The amount of capital invested into facilities has not been enough to keep campuses from hitting the life cycles associated with buildings over 25 years of age •As a result, backlog at CACUBO campuses has risen substantially to over 20% within the past 6 years Operating Budget Profile •More demand placed upon maintenance staff means level of attention to older buildings may falter •Stable operating costs paired with increasing backlog makes it difficult for facilities to keep pace with facilities’ demands. •Significant reduction in energy consumption and unit cost have led to gains in utility operations
    15. 15. Iowa State University Speaker: Pam Elliott Cain Institution: Iowa State University Date: September 29, 2013
    16. 16. Iowa State Campus Profile Iowa State University is a large, public land‐grant and space‐grant institution Fast Facts: • Founded: 1858 • Located: Ames, IA • 174 buildings* • 6.6 Million Gross Square Feet* • 32,000 FTE students • Created nations first Public Veterinary Medicine school in 1879 • Leader in agriculture and engineering • High demand campus • Large, technically complex campus that houses many students and programs *Included in Sightlines’ analysis Someone’s always got a problem
    17. 17. More space on campus is high risk  47% of buildings are 25‐50 years old ‐ creates unbalanced age profile Buildings over 50 Life cycles of major building components are past due. Failures are possible. Highest risk Buildings 25 to 50 Major envelope and mechanical life cycles come due. Higher Risk Buildings 10 to 25 Short life‐cycle needs; primarily space renewal. Medium Risk Buildings Under 10 Little work. “Honeymoon” period. Low Risk 24% 47% 18% 36% 31% 19% 11% 14% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ISU Peer Average % of Total Campus GSF Campus Age by Category Under 10 10 to 25 25 to 50 Over 50
    18. 18. Breakout of space 25‐50 years old 80,000 60,000 40,000 20,000 0 Average Building Size Under 10 10 to 25 25 to 50 Over 50 Buildings built between 25 and 50 years ago are, on average, much bigger than those built in other time periods. • Aging building systems (E.g. HVAC) • Harder to maintain • Bigger, more complicated systems • Need more specialized staff 31% 3% 7% 59% Acad/admin Science research Student life Support GSF Function of 25‐50 year old buildings Majority of buildings built between 25 and 50 years ago are science research buildings. • Technically complex systems • Require specially‐trained maintenance staff • Expensive equipment • High replacement and modernization costs
    19. 19. Annual Stewardship (cost of keeping up)  Determining the “right” level of annual funding FY12 Stewardship Need $31.6 ISU FY12 Replacement Value = $2.7 Billion Life cycle is discounted for the coordination of modernization and renovation. $23.7 $42.5 $14.9 $81.4 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 3% Replacement Value Total Need Target Need $ in Millions Envelope/Mech Space/Program Depreciation Model $74.1 M Life Cycle Model $38.6 M Functional Obsolescence Industry Standard Sightlines Recommendations Note: Chart is for state‐supported, Ames campus space only
    20. 20. Total project spending  One‐time funding kept facilities investment closer to target until FY10 $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 Decreasing Backlog Fiscal Year Project Name Actual Spent 2012 Util‐Vet Med Steam Supply Improvements $ 4,031,107 2012 Vet Med, Col Of‐Lar Hvac Stabilizing Backlog Improvements $ 3,587,498 2008 Util‐College Of Vet Med Chilled Water Plant $ 2,622,564 2010 Replace heating system $ 1,808,384 2009 Vmri Building #40‐Renovate Hvac System $ 1,413,947 2010 Refrigeration system Increasing replacement Backlog $ 1,375,846 2012 Util‐Applied Science Center Chiller Improvements $ 1,034,466 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ in Millions Capital Spending vs. Target Need Budgeted Capital Dollars One‐Time Capital Dollars (State capital, Bonding, Grants, Gifts, College Funding) 5 year project spending on existing buildings 13% 28% 12% 42% 5% Envelope Building Systems Infrastructure Space Renewal Safety/Code
    21. 21. Total asset reinvestment backlog  Historic investment has managed the backlog $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $‐ 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 AR Backlog $/GSF Total Asset Reinvestment Backlog vs. Peers ISU’s backlog increased by 17% between 2008‐2012, but is significantly lower than peers Peers’ backlog increased by 18% between 2008‐2012
    22. 22. Facilities operating budget $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $‐ 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Operating Budget $/GSF Facilities Operating Budget vs. Peers Daily Service Planned Maintenance Utilities ISU  Operating with fewer resources than peers; using resource management model Peers
    23. 23. Custodial coverage  Custodial is operating efficiently and providing high value across campus Cleanliness Inspection Scores: ISU Peers DB 3.9 4.2 4.2
    24. 24. Total energy consumption  Consuming 40k fewer BTU/GSF than peers in FY12 250,000 200,000 150,000 100,000 50,000 ‐ Peers ISU Consuming less energy than peers. Campus users paying for utilities has made a difference. 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 BTU/GSF Energy Consumption vs. Peers Fossil Electric Future projects include transition from coal to natural gas for four primary boilers
    25. 25. What’s the plan for the future? • Resource Management Model • Working with colleges • Long term master planning • 20‐year outlook • Exploring alternative capital financing sources • Creating flexible space • Example: Troxel Hall • Eliminating high backlog buildings
    26. 26. Washburn University Speaker: Rick Anderson, Vice President Institution: Washburn University Date: September 29, 2013
    27. 27. Washburn Campus Profile Washburn University is a mid‐sized comprehensive urban public university in Topeka, Kansas Fast Facts: • Founded: 1865 • Located: Topeka, KS • 44 buildings • 1.35 Million Gross Square Feet* • 7,300 student headcount ‐> 5,500 student FTE • Consistently ranked among top Midwestern universities as an independent public institution • Top rated school of law • High demand campus • Large, technically complex campus that houses a high number of students *Included in Sightlines’ analysis
    28. 28. More space on campus is high risk  66% of space is over 25 years old – campus is older than peers 24% 23% 42% 14% 33% 21% 21% 23% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Washburn Peer Average % of Total Campus GSF Campus Age by Category Under 10 10 to 25 25 to 50 Over 50 Buildings over 50 Life cycles of major building components are past due. Failures are possible. Highest risk Buildings 25 to 50 Major envelope and mechanical life cycles come due. Higher Risk Buildings 10 to 25 Short life‐cycle needs; primarily space renewal. Medium Risk Buildings Under 10 Little work. “Honeymoon” period. Low Risk
    29. 29. Breakout of space over 25 years old 50,000 40,000 30,000 20,000 10,000 0 Average Building Size Under 10 10 to 25 25 to 50 Over 50 GSF Buildings built more than 25 years ago are, on average, much bigger than those built in other time periods. • Lower quality construction • Harder to maintain • Bigger, more complicated systems • Need more specialized staff The majority of high tech space (tech rating 4‐5) is over 25 years old (57%). • More complex systems within aging structures • Energy intensive • Costly to maintain • Demanding of staff Distribution of High Tech Buildings 39% 4% 16% 41% Under 10 10 to 25 25 to 50 Over 50
    30. 30. Density factor presents challenges for WU  Washburn is much busier than similar comprehensive universities Database Distribution Peers Liberal Arts Comprehensive University Urban/City School Community College Database avg = 348 Roughly 1,500 more people on campus than at peer institutions Users/100K GSF Washburn Density Factor Database Distribution Users/100K GSF
    31. 31. Annual Stewardship (cost of keeping up) $13.2 $5.3 $4.0 $6.1 $2.1 $14 $12 $10 $8 $6 $4 $2 $0 3% Replacement Value Life Cycle Need (Equilibrium) Functional Obsolescence (Target) $ in Millions FY2012 Stewardship Targets Washburn U Replacement Value = $440M Industry Standard Sightlines Recommendations
    32. 32. Total project spending  One‐time funding kept facilities investment closer to target until FY10 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 Capital Spending vs. Target Need Decreasing Backlog Stabilizing Backlog 2007 2008 2009 2010 2011 2012 Annual Capital One‐Time Capital $ in Millions Increasing Backlog (Keep up funding) (One‐time catch up funding)
    33. 33. Total asset reinvestment backlog  Lack of historical investment has led to an increasing backlog $100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $‐ 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 AR Backlog $/GSF Total Asset Reinvestment Backlog vs. Peers Peers’ backlog grew 19% between 2008‐2012 WU’s backlog grew 29% between 2008‐2012
    34. 34. Lean facilities operating budget $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $‐ Peers WU 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Operating Budget $/GSF Facilities Operating Budget vs. Peers Daily Service Planned Maintenance Utilities
    35. 35. Total energy consumption  Consuming considerably less energy than peers 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 ‐ Peers WU Complete HVAC upgrade to Morgan Hall (admin) 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 BTU/GSF Energy Consumption vs. Peers Fossil Electric ‐$750,000 in 2012 Campus‐wide HVAC system upgrade ‐$1.4 mil in 2010
    36. 36. What’s the plan for the future? • Recently completed a comprehensive campus master planning effort including a classroom capacity study. • Mid‐way thru implementation of a $12.3 million dollar performance energy contract with Trane Corp. Will reduce our annual energy consumption by 27%. • Hail insurance proceeds will allow for 10‐15 roof replacements in the next two years • Our main 1950’s classroom and administrative building will be transformed into a student success center and Iconic campus “front door” by Spring 2015. • Will build a forensic science lab facility in conjunction with the Kansas Bureau of Investigation by January 2015. • Complete a demand study for additional on‐campus housing by December 2013. • Target capital improvement funds to address the highest priority deferred maintenance issues on campus.
    37. 37. College of Saint Benedict Speaker: Susan Palmer, Vice President Institution: College of Saint Benedict Date: September 29, 2013
    38. 38. College of Saint Benedict Campus Profile A nationally ranked private liberal arts college in St. Joseph, MN, known as St. Bens Fast Facts: • Founded: 1913 • Located: St. Joseph, MN • 39 buildings • 1.23M Gross Square Feet • 2,059 students • Highest ranked Catholic college for women in the country • Academically integrated with Saint John’s University • Relatively young campus, but moving to an older age profile • Limited capital investment historically
    39. 39. Campus facing higher risk age profile  Buildings are aging on this still relatively young campus 49% 53% 63% 10% 16% 39% 39% 37% 32% 31% 40% 25% 12% 7% 12% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% St. Ben's 2010 St. Ben's 2012 Peer Average % of Total Campus GSF Campus Age by Category Under 10 10 to 25 25 to 50 Over 50 Buildings over 50 Life cycles of major building components are past due. Failures are possible. Highest risk Buildings 25 to 50 Major envelope and mechanical life cycles come due. Higher Risk Buildings 10 to 25 Short life‐cycle needs; primarily space renewal. Medium Risk Buildings Under 10 Little work. “Honeymoon” period. Low Risk
    40. 40. Investing mainly in new space  Future investment will focus on existing space St. Ben’s: FY07‐12 Capital Investment by Type 28% 7% 65% St. Ben’s has spent significantly more into new construction over the last six years than into existing space. New space keeps the average age down and makes the campus more competitive; but existing space becoming more high risk. Peers: FY07‐12 Capital Investment by Type Existing Space New Space Non‐Facilities 63% 33% 4%
    41. 41. Annual Stewardship (cost of keeping up)  Determining the “right” level of annual funding FY12 Stewardship Need $4.7 St. Bens FY12 Replacement Value = $413M Life cycle is discounted for the coordination of modernization and renovation. $3.5 $5.6 $2.8 $12.4 $14 $12 $10 $8 $6 $4 $2 $0 3% Replacement Value Total Need Target Need $ in Millions Envelope/Mech Space/Program Depreciation Model $10.3 M Life Cycle Model $6.3 M Functional Obsolescence Industry Standard Sightlines Recommendations
    42. 42. Total project spending vs. targets  Backlog has built up over years; 2012 increase in annual capital is by design $12 $10 $8 $6 $4 $2 $0 FY07 FY08 FY09 FY10 FY11 FY12 Millions of $ Capital Spending vs. Target Need Decreasing Backlog Sustaining Backlog Increasing Backlog Total deferral to target over 6 years: $25.2 M Annual Capital One‐Time Funds
    43. 43. Total project spending  On average, investing $2.67/GSF less than peers annually CSB Total Project Spending by Annual Capital and One‐Time Funds 2007 2008 2009 2010 2011 2012 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2007 2008 2009 2010 2011 2012 $/GSF Peers Would need to invest an additional $3.3 M annually to invest at peer average. Annual Capital One‐Time Funds
    44. 44. Lean facilities operating budget  Fewer operating resources than peers, but similar inspection scores $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $‐ Campus Inspection Custodial Maintenance Grounds St. Ben’s 4.4 3.7 3.9 Peers 4.2 3.9 3.9 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Operating Budget $/GSF Facilities Operating Budget vs. Peers Daily Service Planned Maintenance Utilities
    45. 45. Total energy consumption  On average, consuming over 40,000 BTU/GSF less than peers annually 140,000 Peers WU 120,000 100,000 80,000 60,000 40,000 20,000 0 2007 2008 2009 2010 2011 2012 $/GSF 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2007 2008 2009 2010 2011 2012 BTU/GSF Energy Consumption Consuming 49,000 fewer MMBTUs annually ‐ yields a savings of more than $550,000.
    46. 46. What’s the plan for the future? Development of a long‐term capital plan to steward our facilities which includes a multi‐pronged funding approach: • Capital campaign funding to construct a new academic building and a significant renovation and expansion of the existing student center • Strategic use of debt to update infrastructure needs on campus • Budget plan to increase annual amount allocated for capital • Year end surpluses allocated to capital reserve accounts
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