Sightlines latest conference presentation, Change the Conversation to Address Deferred Maintenance, offers four perspectives (the national view, a university system, a campus CFO, and campus facility operations) on how to employ data, analysis, and focused communications to strategically plan for success. This presentation demonstrates how to: - Use data to document and package deferred maintenance projects and set priorities to fund projects that support the institutional mission and strategic focus. - Review actual facility metrics, data, and presentations used with leadership, boards, and external constituents to prioritize projects that remove deferred maintenance. - Communicate the payoffs of deferred maintenance projects (reduced energy consumption, lowered operating costs, improved programs, etc.) versus the additional costs of waiting to fund projects.

1. Change the Conversation to
Address Deferred Maintenance
Jim Kadamus – Vice President
Sightlines
Cuba Plain – Assistant Vice President, Budget and Planning
University of Missouri System
Walt Branson – Vice Chancellor for Finance and Administration
Missouri University of Science and Technology
Bob Simmons – Associate Vice Chancellor for Administration
University of Missouri Kansas City

2. Changing the Conversation

3. Speaker:
Jim Kadamus, Vice President
Company:
Sightlines, LLC
Sightlines’ National and Regional
Trends

4. Robust membership includes colleges, universities, consortiums and state systems
* U.S. News Rankings
Serving the Nation’s Leading Institutions:
• 70% of the Top 20 Colleges*
• 75% of the Top 20 Universities*
• 33 Flagship State Universities
• 13 of the 14 Big 10 Institutions
• 9 of the 12 Ivy Plus Institutions
• 7 of 12 Selective Liberal Arts Colleges
Sightlines is proud to
announce that:
• 450 colleges and
universities are Sightlines
clients including over 325
ROPA members.
• 93% of ROPA members
renewed in 2014
• We have clients in 42
states, the District of
Columbia and four
Canadian provinces
• More than 100 new
institutions became
Sightlines members since
2013
Who partners with Sightlines?

5. Campus Space and Enrollment
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2008 2009 2010 2011 2012 2013 2014
PercentChangeofEnrollment&Space
Growing Campus Enrollment
National Average within Sightlines Database
National Space Growth National Enrollment Growth

6. Campus Space and Enrollment
0%
2%
4%
6%
8%
10%
12%
14%
2008 2010 2012 2014 2008 2010 2012 2014 2008 2010 2012 2014
PercentChangeofEnrollmentandSpace
Growing Campus Enrollment
Nation By Constituent Group
Space Growth Enrollment Growth
Comprehensive Institution Research Institution Small Institution

7. 0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
10
20
30
40
50
60
1880
1885
1890
1895
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
TotalDatabaseGSFConstructed(Millions)
Constructed Space Since 1880
Sightlines Database
Database Construction Trends
Pre-War Post-War Modern Complex

8. The Aging Campus
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
%ofSpace
Square Footage by Age Category
Under 10 10 to 25 25 to 50 Over 50
Public Average Private Average

9. $0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
$/GSF
Capital Investment into Existing Space
Annual Capital One-Time Capital Average
Capital Spending Public vs Private
Public Average Private Average

10. Facilities Backlogs Continue to
Rise
$83
$87 $88 $91 $93 $96 $98
$73 $74 $76 $79 $81 $82 $84
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
$/GSF
Backlog $/GSF
Backlog/GSF Percentage Change of Backlog
Public Average Private Average

11. Facilities Operating Budgets Flat
$4.30
$4.61 $4.43 $4.54 $4.58 $4.60 $4.71
$0.26
$0.27
$0.27 $0.28 $0.29 $0.30 $0.31
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2008 2009 2010 2011 2012 2013 2014
$/GSF
National Operating Budget Average
Daily Service Planned Maintenance

12. $4.17
$4.66
$4.37 $4.50 $4.54 $4.57 $4.71
$4.45 $4.55 $4.53 $4.60 $4.64 $4.63 $4.66
$0.23
$0.24
$0.24
$0.26 $0.27 $0.27
$0.27
$0.31 $0.31 $0.32 $0.32 $0.33 $0.35 $0.37
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
$/GSF
Operating Budget – Public vs. Private
Daily Service Planned Maintenance
Operating Budgets Short of Inflation
Public Average Private Average

13. The Predictions Have Not Become Reality –
Why???

14. What Happened to Manage the Past Risks?
1. Maintenance organizations have, by default, taken an
effective approach to manage the most critical repair risks
for campus. Often lower cost repairs to systems rather than
full system replacements have bought extra service time.
2. Because campuses are a collection of buildings – the risk is
diversified over the portfolio.
3. Engineering lifecycle estimates are appropriately
conservative and therefore systems tend to outperform their
statistical target
4. The functional obsolescence of space drives investments
that brings outside resources that fixes stuff!

15. How Do We Make the Case for Resources?
The old approach of defining needs in a way that makes the DM
problem bigger and then requesting money will not work.
Problem is too big to address in total – must break it down in size and
priority
How do we …
Lower Demands - Space Management
Make the Problem “Smaller” – Use Building Portfolio Management
Sustain Impact of Finite Funding - Create Multi Year Plans
Mitigate Risk - Target Capital to Safety, Reliability and Program Issues
Increase Funding - Invest in Operations to release savings that self-funds
stewardship

16. Speaker:
Cuba Plain
Assistant Vice President, Budget and Planning
University of Missouri System

17. Land grant institution with four campuses,
hospital & clinics, system administration,
experiment station and farms
24,000 Employees
77,283 Student
Headcount
59,565 Student FTE
29.5M
GSF
1,500+
Buildings
$8.5B
Facilities
Replaceme
nt Value
Total
Operating
Budget:
$3B
System Profile

18.  38% growth in headcount and 45% growth in FTE
students since FY2001
 Legislative limits on tuition increases equal to CPI
 State operating appropriations per FTE student
have declined 32% in nominal terms and 50% in
real terms since 2001.
 Flat nominal state operating appropriations since
2010 which resulted in a cumulative real loss of
$300 million through FY14
 No new state capital appropriations since FY2008,
minimal investment between FY2001 and FY2008
Changes and Challenges

19. $0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
FY10 FY11 FY12 FY13 FY14
$inMillions
Actual Appropriation Received CPI Adjusted Appropriation Cumulative Difference
State Appropriations Over Time

20. $0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
2009 2010 2011 2012 2013 2014
$ in Millions
UM Annual M&R Spending
by Sightlines
One‐time capital Sources
Institutional Recurring Capital
Sightlines Recommended Annual M&R Target
Maintaining or
Increasing
Value
Decreasing
Value
Funding Levels Fall Short

21. Backlog of Need Increased by 69%
$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
FY10 FY14
$ in Millions
Facility Needs Backlog by Priority
Immediate Within 1 Year 2‐5 Years 6‐10 Years
$838
$1,415

22. Facilities Condition by Campus

23. Shaping Campus Policies

24. Predicting Future Condition
31%
24% 23%
40%
45%
35% 35%
55%
0%
10%
20%
30%
40%
50%
60%
MU UMKC S&T UMSL
FCNI
FY 2014 FCNI INDEX FY 2023 PROJECTED FCNI INDEX
 Best Practice ≤ 0.30 FCNI

25. Potential Funding Sources
 State Bond Issue
$200 million plan
15 Year financing
$17.7 million annual debt service
 50/50 Match – Private gifts and State
Funding
 Dedicated Recurring State Appropriation
 Student Facilities Fee
• $300 to $350 annual fee per student FTE

26. $0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$ in Millions
UM Annual M&R Spending
by Sightlines
Annual M&R Renovation and Other Capital
Projected Impact of $200M

27. Recent Developments
 More Aggressive Marketing to Elected Officials
 State Bond Issue - $95M appropriated for
Maintenance and Repair from new state bonds as
part of a $200M funding package for higher ed
 University leveraged an additional $32.5M to complete 5 projects,
eliminating $88M in deferred maintenance
 50/50 Match – Private gifts and State match -
$28.6 million in state general funds appropriated
 Leveraged against $29.7M private gifts to build 4 academic buildings
 Impact of these 9 projects

28. Recent Developments
 Projects will eliminate 6.2% of the $1.4 billion
M&R backlog, but it continues to grow …
$1.20
$1.40
$1.60
$1.80
$2.00
$2.20
$2.40
$2.60
$2.80
$3.00
FY2016 FY2018 FY2020 FY2022 FY2024
Billions
Backlog Impact of State's Aid
Current backlog with funding at current level adjusted for inflation
Current Backlog with funding to stablize facilities conditions
Current backlog with funding at current level adjusted for inflation with State's Aid
Current Backlog with funding to stablize facilities conditions with State's Aid

29. Strategy Moving Forward
 We must continue to make it a priority to
reallocate more internal funding to facility needs.
 We need sustainable funding sources so
renovations and repairs may be planned.
 We must examine the utilization of our existing
space and work towards ‘right sizing’ the
campuses with the type of space needed.
 We are evaluating a policy of NO net new space
without net new revenue.

30. Speaker:
Walter Branson
Vice Chancellor for Finance and Administration
Missouri University of Science &
Technology

31. Leader in green:
First US university to receive ISO 14001
certification for environmental management
Solar village
Sightlines member
since 2007
2.7M GSF
165
Maintained
Acres
8,642
Students
Founded
1870
Campus Profile

32. Operating Costs by Building
Size
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
A B C MS&T D E F G
GSF
Average Building Size
*Ozanne analytics
$3.00/GSF
$1.00/GSF
Smaller Buildings Than Peers

33. 20%
14% 14%
19%
19% 27% 24%
25%
41% 40% 44% 27%
20% 20% 19%
29%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Missouri S&T FY03 Missouri S&T FY08 Missouri S&T FY14 Peer Average
%ofTotalCampusGSF
Campus Age by Renovation Age Category
Under 10 10 to 25 25 to 50 Over 50
Space Profile
Renovations and new construction are managing campus age

34. Capital Profile
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TotalDollarsinMillions
Institutional Recurring Capital One-Time Capital Sources Target Need
Capital investments falling short of target

35. $0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TotalDollarsinMillions
Institutional Recurring Capital One-Time Capital Sources Infrastructure
Capital Profile
Significant infrastructure spending for geothermal energy

36. 16%
59%
21%
4%
5-Year Historical
Investment Mix
Envelope Systems
Space Safety/Code
0
5
10
15
20
25
30
35
Envelope Systems Space Safety/Code
Years
Average Life Cycle
Spending focused on “bang-for-buck” projects
Historic Spending Mix

37. $0
$50
$100
$150
$200
$250
$inMillions
Backlog Growth Since FY03
Backlog Maint/ Repair Backlog Modernization Backlog Infrastructure
Recent investment curbs growth in infrastructure, Repair/Maint grows
Total Backlog

38. Balancing Institutional Demands

39. Speaker:
Bob Simmons
Associate Vice Chancellor, Administration
University of Missouri –
Kansas City

40. Engaged and Green:
The President’s Higher Education Community
Service Honor Roll with Distinction.
RecycleMania 2012 Grand Champion Winner.
Sightlines member
since 2007
5.1M
GSF
149
Maintaine
d Acres
11,397
Students
Founded
1933
University of Missouri – Kansas
City

41. Changing Campus Density
-5%
0%
5%
10%
15%
20%
ChangeinDensityFactor
Density Factor Rate of Change
UMKC Change Peer Change
*Density Factor is measured in Users/100kGSF
2010-2020 Strategy Statement:
By 2020 we will grow enrollment to
20,000 and increase graduation
rates 10% by ensuring student
success through a small college
experience as Kansas City’s
community engaged urban
research institution, while
leveraging our strengths in the
visual and performing arts, life and
health sciences and
entrepreneurship.

42. 23%
17%
18%
20%
46%
42%
14%
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
UMKC '03 UMKC '14
%ofTotalCampusGSF
Campus Renovation Age
Under 10 10 to 25 25 to 50 Over 50
Age Shifts Over Last 10 Years
Buildings Under 10
Little work. “Honeymoon”
period.
Low Risk
Buildings 10 to 25
Short life-cycle needs; primarily space
renewal.
Medium Risk
Buildings 25 to 50
Major envelope and mechanical life cycles
come due.
Higher Risk
Buildings over 50
Life cycles of major building components are past
due. Failures are possible.
Highest risk

43. Changing Funding Sources
$-
$10
$20
$30
$40
$50
$60
$70
$inMillions
UMKC Capital History - Sources
1990 - 2012
State Federal Private Campus Bonds Other (PPP)
As state funding decreases, shifting toward creative use of bond funding

44. 0
2
4
6
8
10
12
14
16
18
20
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Capital$/GSF
Backlog$/GSF
Capital Spending vs. AR Backlog
Backlog Maint/ Repair Capital Spending/GSF
Capital Spending and Backlog
Large infusions of capital have significant impact on backlog

45. Leaner Budget Than Peers
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$/GSF
Daily Service
Daily Service Over
Time

46. $0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$/GSF
5- year Avg. Planned Maintenance
PM Avg. Avg. w/o Highest Peers
Planned Maintenance
Increased PM efforts has improved in-house PM performance
Institutions ordered by tech rating
$0.12
$0.31 $0.29
$0.17
$0.13
$0.25 $0.27
$0.01
2011 2012 2013 2014
UMKC PM
In-House
External

47. Driving Capital Investment Strategy
Program Value
SAMPLE DATA

48. Strategies to Address Deferred
Maintenance
Strategy 1: Change the conversation throughout higher education.
Educate policy makers about the impacts of the space profile, capital
plans that are aligned with the institutional mission and risk, and
improving operating effectiveness while lowering costs.
Strategy 2: Set capital priorities to address the deferred maintenance
needs in aging buildings that are determined to be critical to the mission
and programmatic needs of universities.
Strategy 3: Consider eliminating or replacing aging space with new
modern facilities, especially buildings with certain construction vintages
where poor quality construction was prevalent. Sometimes less is more
when it comes to addressing aging buildings with lots of deferred
maintenance.

49. Strategies to Address Deferred
Maintenance
Strategy 4: New construction must support the mission of the
university and support the future program needs of each university.
Strategy 5: Make annual stewardship (keep-up) investment that
addresses building components as they come due a priority at every
campus. The more a campus keeps-up with life cycles as they come due,
the less deferred maintenance grows.
Strategy 6: Institute facilities operational practices that are proactive
at extending the life cycles of key expensive building components like
HVAC, electrical systems and roofs. Proactive maintenance is not only a
good idea when it comes to managing university facilities, it will save
money in the long-run.