Success Strategies in School Capital Planning

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Success Strategies in School Capital Planning

  1. 1. PRESENTED BY: SchoolDude SUCCESS STRATEGIES INSUCCESS STRATEGIES IN FACILITY CAPITALFACILITY CAPITAL PLANNINGPLANNING
  2. 2. Do you have a formal capital planning process? Source: 2004 SchoolDude Capital Planning Survey. 737 educational professional respondents from the US, Canada, and Australia
  3. 3. When do you do most of your capital planning? Source: 2004 SchoolDude Capital Planning Survey. 737 educational professional respondents from the US, Canada, and Australia
  4. 4. How do you gather your deficiencies? Source: 2004 SchoolDude Capital Planning Survey. 737 educational professional respondents from the US, Canada, and Australia
  5. 5. Why don’t you have a formal budgeting process? Source: 2004 SchoolDude Capital Planning Survey. 737 educational professional respondents from the US, Canada, and Australia
  6. 6. Is your board out of touch? Source: 2004 SchoolDude Capital Planning Survey. 737 educational professional respondents from the US, Canada, and Australia
  7. 7. Why is facility planning important? • All buildings age, deteriorate, and weaken - little maintenance or noAll buildings age, deteriorate, and weaken - little maintenance or no proactive maintenance speeds this processproactive maintenance speeds this process • If no reliable preventive maintenance process is in place, sustaining aIf no reliable preventive maintenance process is in place, sustaining a building encounters budgetary, personnel, administrative, and evenbuilding encounters budgetary, personnel, administrative, and even personal drains due to stress, not to mention the occasional legal burdenspersonal drains due to stress, not to mention the occasional legal burdens • Lack of funding is often cited as an issue, yet when building componentsLack of funding is often cited as an issue, yet when building components fail before their expected life expectancies are completed or causefail before their expected life expectancies are completed or cause additional issues (e.g., mold, safety issues or violations, emergencyadditional issues (e.g., mold, safety issues or violations, emergency repairs) to arise, thereby multiplying cost burdensrepairs) to arise, thereby multiplying cost burdens • At the core, Schools, Colleges, and Universities are budget businessesAt the core, Schools, Colleges, and Universities are budget businesses and have to be intent upon attracting and retaining students and staffand have to be intent upon attracting and retaining students and staff • Recent studies have shown that a building’s physical appearance andRecent studies have shown that a building’s physical appearance and function affect grade levelsfunction affect grade levels • Additional surveys have shown that a large percentage of staff would haveAdditional surveys have shown that a large percentage of staff would have preferred to work in a nicer environment vs. having a pay increasepreferred to work in a nicer environment vs. having a pay increase
  8. 8. Common Facility Problems Environmental Conditions Deferred Maintenance Inadequate Funding Inadequate Staff Training Insufficient Practices Building and Equipment Deterioration/Expired Warranties Morale and Perception by Staff, Students, Public “Every year we compile our list with estimates. The total is around $15,000,000.00 but we only have about $5,000,000.00 to work with so there is a huge backlog. Therefore we are forced to adjust our plan throughout the year as systems fail that did not make the cut.” Comment from SchoolDude capital planning survey
  9. 9. What questions should you be asking? What is wrong or will be a future issue/need? Will I fix it or replace it? How much will each option cost? How will I price it? How critical is it? When will I address the issue(s)? How will I pay for it? How does it fit into a master plan?
  10. 10. Best Practices Bring together facility condition assessment data, maintenance requirements, and estimated costs for capital and maintenance planning Develop preventive and routine maintenance programs and schedules Track work orders/approved maintenance tasks Measure and compare each building’s overall condition in relation to the others, using a ranking against a means or a “facility condition index” Identify and prioritize major facility upgrades/renovation requirements with cost estimates
  11. 11. Best Practices Develop or obtain cost estimates for all identified future tasks Identify and prioritize tasks/projects, including routine, major, and deferred maintenance Maintain/update data from facility condition assessments and conditions including tasks performed Develop life cycle costs or expected future costs based on current information of facilities and their systems/components Analyze cost benefits periodically for “replace vs. renovate” decisions
  12. 12. Factors in a Plan
  13. 13. Roadmap for Capital Planning Success Identify needs Prioritization of needs Develop estimates and alternative resolution scenarios Presentation of needs and options for approval Finalization of plan(s), project(s), and funding Schedule timeframe Implement Update and identify future needs Source:Source: Construction, Renovation and Long-Term Facility PlanningConstruction, Renovation and Long-Term Facility Planning presented at SchoolDude Universitypresented at SchoolDude University © Copyright 2006 SchoolDude.com, Inc. All rights reserved.© Copyright 2006 SchoolDude.com, Inc. All rights reserved.
  14. 14. Identify Needs Walkthroughs (internal, 3rd party, or combination) Work requests Staff interviews and/or surveys Board or government-required mandates Review of previous year(s) for leftover needs or ongoing projects Surveys to, or requests from, facility staff or occupants
  15. 15. Prioritization of Needs Primary Priority (emergency vs. low) Varying viewpoints with Priorities (e.g., identify a resolution as a low priority from an aesthetic perspective that may be a high priority in relation to a health/safety risk or litigation point of view) such as: • ADA/Accessibility • Air Quality • Building Code • Cosmetic • Educational Impact • Environmental Impact • Litigation Potential • Safety Determine building deficiencies in these arenas:Determine building deficiencies in these arenas: • Codes and standardsCodes and standards • Architectural/StructuralArchitectural/Structural • MechanicalMechanical • PlumbingPlumbing • Electrical/EnergyElectrical/Energy • Site ConditionsSite Conditions • Additional NeedsAdditional Needs
  16. 16. Estimates and Alternative Resolution Scenarios Patch vs. Replace scenarios and estimated costs of approaches Your previous experience, but also your neighbors! Bids and estimates for contracted work RS Means, Whitestone, or similar estimating benchmarking tool Project the future cost (add inflationary value as time progresses)
  17. 17. Estimates and Alternative Resolution Scenarios
  18. 18. Present Needs and Options for Approval Summarize report into categories: Sites/Campuses and associated Buildings Priorities Projects Master Plan(s) Funding Sources Years Types of Work (mechanical vs. energy conservation vs. roofing) Summaries from various viewpoints may be able to coincide with one another (one room’s needs could fold into others for one large project vs. many small ones) Have details ready for specific needs to help in plan of action Provide graphical view for additional impact with bar graphs and pie charts
  19. 19. Categorize Your Projects or Needs  ADAADA  AdditionsAdditions  AestheticsAesthetics  AnalysisAnalysis  Asbestos AbatementAsbestos Abatement  Codes/StandardsCodes/Standards  Damage/WearDamage/Wear  DesignDesign  Disabled AccessDisabled Access  Electrical System UpgradesElectrical System Upgrades  Energy ConservationEnergy Conservation  EnhancementEnhancement  EnvironmentalEnvironmental ImprovementsImprovements  Facility UpgradesFacility Upgrades  FunctionalityFunctionality  Health and Life SafetyHealth and Life Safety UpgradesUpgrades  Human ErrorHuman Error  Life SafetyLife Safety  Loss PreventionLoss Prevention  Mechanical System UpgradesMechanical System Upgrades  New Site ConstructionNew Site Construction  Preventive Maintenance WorkPreventive Maintenance Work  RemodelingRemodeling  RenovationRenovation  Repairs - MajorRepairs - Major  Repairs - MinorRepairs - Minor  Roof ReplacementsRoof Replacements  Site ServicingSite Servicing  Site UpgradesSite Upgrades
  20. 20. Finalization of Plans, Projects, and Funding Constantly monitor plans to shift to alternative solutions or entirely remove from plan to: Manage available monies and resources Adapt to changes (facility change, legal requirements) Finalize proposed bid from multiple contractors Include next year’s projects into this year’s remaining funding and resources
  21. 21. Schedule Timeframe For 5, 10, 15, 20 year plans, establish a fiscal or calendar year of when need will the most likely impact
  22. 22. “Life Cycle” A life cycle analysis is a structured approach or methodology to establish a facility’s life cycle costs Life cycle costs are anticipated expenses for each stage in the life of a facility and its components Life cycle costs will include capital investment costs, financing, operations and maintenance, repair and replacement, salvage costs, facility alterations and improvements, and functional use costs SOURCE: REVIEW OF DEFERRED MAINTENANCE IN THE COMMONWEALTH [of VA], DECEMBER 2004, AUDITOR OF PUBLIC ACCOUNTS
  23. 23. “Life Cycle” Institutions should perform the life cycle analysis during the design of a new building in conjunction with the condition assessment of older buildings Review the programmatic and functional use of the building to develop a life cycle analysis of the cost to operate a newly designed or previously constructed building for at least 10 years For new construction, the life cycle analysis provides information on the cost to operate and maintain the building to assist in budgeting for these costs For older buildings, the analysis includes repair or replace options SOURCE: REVIEW OF DEFERRED MAINTENANCE IN THE COMMONWEALTH [of VA], DECEMBER 2004, AUDITOR OF PUBLIC ACCOUNTS
  24. 24. “Life Cycle” and Maintenance Everything has a life span or expectancy Proper preventive and timely corrective maintenance can easily extend the life span of building components and save capital Typical Replacement Cost (US)Typical Replacement Cost (US)** –– $16,183/student$16,183/student • Value of roof (6% of bldg. cost)Value of roof (6% of bldg. cost) $16,183 * .06 =$16,183 * .06 = $971/student$971/student • Value of HVAC (11%)Value of HVAC (11%) $16,183 * .11 =$16,183 * .11 = $1,780/student$1,780/student Total for just two systems:Total for just two systems: $2,751/student$2,751/student Traditional life of component = 15 Years thereforeTraditional life of component = 15 Years therefore $2751 / 15 =$2751 / 15 = $183.40$183.40 If extend this by 2 years of PM = 17 Years thereforeIf extend this by 2 years of PM = 17 Years therefore $2751 / 17 =$2751 / 17 = $161.88$161.88 Capital Budget Relief/Difference:Capital Budget Relief/Difference: $21.58/student$21.58/student If FTE is 2000 students:If FTE is 2000 students: 2000 * $21.58 =2000 * $21.58 = $43,154.67$43,154.67 savings!savings!* - American School & University magazine 27TH ANNUAL OFFICIAL EDUCATION CONSTRUCTION REPORT Assuming a 15-year life cycle extended to 17 years with a PM program (very conservative estimate)
  25. 25. $100K $75K $50K $25K $0K 0 5 10 15 20 25 Extend the Life Cycle through PM... $ $ Less Dollars to Fix Issues More Dollars to Fix Issues Opportune Time to Invest in PM $ Benefit $ Replacement Threshold 2318 Source: MACTEC EngineeringYears PM Little or No PM
  26. 26. Sample Life Expectancies Varies due to proper maintenance Varies due to region Costs vary in future due to availability of resources for maintenance and construction materials System Site Improvements 25 n/a n/a Site Utilities 40 n/a n/a Foundation/Substruct. 50 10.25% 5.78% Superstructure 50 13.63% 16.57% Exterior Wall System 25 9.10% 7.49% Exterior Windows 30 2.41% 2.59% Exterior Doors 20 0.48% 0.44% Roof Systems 20 4.64% 5.09% Interior Partitions 50 5.27% 5.28% Interior Doors 30 1.63% 1.72% Interior Floor Finishes 15 5.45% 5.61% Interior Wall Finishes 25 2.07% 2.17% Interior Ceiling Finishes 25 3.48% 3.23% Specialties 40 2.66% 2.94% Conveying Systems 40 0.38% Plumbing piping 30 3.50% 3.65% Plumbing Fixtures 30 1.72% 1.54% Fire Protect./Suppres. 30 2.57% 2.74% HVAC Distribution 40 5.05% 5.25% HVAC Equipment 30 11.43% 10.75% HVAC Controls 20 2.15% 2.50% Electrical Serv./Gen. 40 2.04% 2.68% Electrical Distribution 50 2.45% 2.76% Electrical Lighting 25 5.59% 6.05% Special Electrical 15 2.46% 2.80% Equip and Furnishings 25 n/a n/a 100.00% 100.00% Life Expect % cost 1- story % cost 2- story
  27. 27. Schedule Timeframe Prior to upcoming year, begin associating estimated start dates to work and consider: –Workload of staffWorkload of staff –Contractor timeframes and your timeContractor timeframes and your time to manage themto manage them –Impact on facility’s operationsImpact on facility’s operations –Budget, budget, budgetBudget, budget, budget
  28. 28. Implement Track statuses, keeping an eye out for new impacts and prioritizing work Tracking actual time and expenditures in conjunction with milestones or achievements Remaining time including delays and slack time Update and identify future or remaining needs for all plans and projects
  29. 29. Summary
  30. 30. Summary
  31. 31. Contact SchoolDude for more Information: Email – sales@schooldude.com Phone – 877-868-3833

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