diverse perspectives on managing facilities demands
DESCRIPTION
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.TRANSCRIPT
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
National and Regional Facilities Trends and Challenges
Speaker: Jim Kadamus, Vice PresidentInstitution: Sightlines
Date: September 29, 2013
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
41% 40% 39% 39% 38% 36%
18% 18% 18% 19% 20% 21%
0%
10%
20%
30%
40%
50%
60%
70%
2007 2008 2009 2010 2011 2012
% of Spa
ce
(%) Square Footage over 25 years old(Renovation Age)
25 to 50 Years of Age Over 50 Years of Age
National Campus Age Despite new space dollars, 57% of space is over 25 years of age
43% 43% 42% 40% 40% 40% 39% 38% 38% 36% 34% 30%
18% 18% 19% 21% 23% 27%19% 18% 19% 19% 20% 25%
0%
10%
20%
30%
40%
50%
60%
70%
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
% of Spa
ce
(%) Square Footage over 25 years old(Renovation Age)
25 to 50 Years of Age Over 50 Years of Age
CACUBO Campus Age
Public Private
Campuses continue to see space cross into the over 50 year age bracket
$1.2 $1.4 $1.4 $1.3 $1.5 $1.7
$3.1 $3.9 $4.1
$3.2 $3.4 $3.4
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2007 2008 2009 2010 2011 2012
$/GSF
Capital Investment into Existing Space
Annual Capital One‐Time Capital
National Campus Investment Campuses still have not seen a full recovery from the recession
$1.0 $1.1 $1.4 $1.1 $1.2 $1.2 $1.2 $1.2 $1.5 $1.3 $1.4 $1.4
$1.9 $2.1
$2.5 $2.2
$2.8 $2.6 $2.2 $2.9
$3.0
$2.1 $2.9 $3.0
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
$/GSF
Capital Investment into Existing Space
Annual Capital One‐Time Capital
CACUBO Campus Investment
Public Private
Both private and public campuses have seen increase since 2010
$78 $79 $80 $82 $85 $89
0%
2%
4%
6%
8%
10%
12%
14%
16%
$‐
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2007 2008 2009 2010 2011 2012
$/GSF
Backlog $/GSF
Backlog/GSF Percentage Change of Backlog
National Backlog Continued growth in backlog
$76 $78 $80 $84 $89 $93
$70 $71 $73 $76 $79 $86
0%
5%
10%
15%
20%
25%
$‐
$20
$40
$60
$80
$100
$120
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
$/GSF
Backlog $/GSF
CACUBO Backlog
Public Private
Capital investment is not enough to stem backlog growth
$4.13 $4.31 $4.41 $4.33 $4.42 $4.47
$0.27 $0.28 $0.28 $0.28 $0.30 $0.32
$‐
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2007 2008 2009 2010 2011 2012
$/GSF
Average Facilities Operating Costs
Daily Service Planned Maintenance
National Operating Costs Modest increase in operating budgets since 2009
$3.42 $3.53 $3.60 $3.51 $3.41 $3.56 $3.32 $3.48 $3.54 $3.44 $3.40 $3.31
$0.25 $0.26 $0.27 $0.28 $0.28 $0.32
$0.21 $0.21 $0.24 $0.23 $0.30 $0.34
$‐
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
$/GSF
Average Facilities Operating Costs
Daily Service Planned Maintenance
CACUBO Operating Costs
Public Private
Operating budgets flat since 2009
$2.30 $2.47 $2.50 $2.27 $2.32 $2.22
$‐
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2007 2008 2009 2010 2011 2012
$/GSF
Average Facilities Operating Costs
National Utility Costs Fuel switching and efficiency projects has helped decrease utility costs
$2.08 $2.20 $2.28 $1.98 $1.97 $1.90
$1.63 $1.95 $2.01 $1.87 $1.99 $1.89
$‐
$0.50
$1.00
$1.50
$2.00
$2.50
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
$/GSF
Average Utility Costs
CACUBO Utility Costs
Public Private
Public and private campuses utility costs below national average
•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
Physical and Institutional 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
Capital 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
Operating Budget Profile
CACUBO Final Comments
Iowa State University
Speaker: Pam Elliott CainInstitution: Iowa State UniversityDate: September 29, 2013
Iowa State Campus ProfileIowa 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 programsSomeone’s always got a problem
*Included in Sightlines’ analysis
47% of buildings are 25‐50 years old ‐ creates unbalanced age profileMore space on campus is high risk
Buildings Under 10Little work. “Honeymoon” period.
Low Risk
Buildings 10 to 25Short life‐cycle needs; primarily space
renewal.Medium Risk
Buildings 25 to 50Major envelope and mechanical life cycles come
due.Higher Risk
Buildings over 50Life cycles of major building components are past due.
Failures are possible.Highest risk
11% 14%
18%19%
47%31%
24%36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ISU Peer Average
% of Tot
al Cam
pus GSF
Campus Age by Category
Under 10 10 to 25 25 to 50 Over 50
Breakout of space 25‐50 years old
0
20,000
40,000
60,000
80,000
Under 10 10 to 25 25 to 50 Over 50
Average Building Size
31%
59%
3% 7%
Acad/adminScience researchStudent lifeSupport
GSF
Function of 25‐50 year old buildings
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
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
Annual Stewardship (cost of keeping up)
$31.6$23.7
$42.5
$14.9
$81.4
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
3% Replacement Value Total Need Target Need
$ in M
illions
Envelope/Mech Space/Program
FY12 Stewardship Need
DepreciationModel
$74.1 MLife CycleModel
$38.6 MFunctional
Obsolescence
ISU FY12 Replacement Value = $2.7 Billion
Industry Standard Sightlines Recommendations
Life cycle is discounted for the coordination of modernization and
renovation.
Note: Chart is for state‐supported, Ames campus space only
Determining the “right” level of annual funding
Total project spending
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$ in M
illions
Capital Spending vs. Target Need
Budgeted Capital Dollars One‐Time Capital Dollars
Increasing Backlog
Stabilizing Backlog
Decreasing Backlog
One‐time funding kept facilities investment closer to target until FY10
(State capital, Bonding, Grants, Gifts, College Funding)
13%
28%
12%
42%
5%
5 year project spending on existing buildings
Envelope Building SystemsInfrastructure Space RenewalSafety/Code
Fiscal Year Project Name Actual Spent2012 Util‐Vet Med Steam Supply Improvements $ 4,031,107 2012 Vet Med, Col Of‐Lar Hvac 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 replacement $ 1,375,846 2012 Util‐Applied Science Center Chiller Improvements $ 1,034,466
Total asset reinvestment backlog
$‐
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
AR Ba
cklog $/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
Historic investment has managed the backlog
Facilities operating budget
$‐
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
Ope
ratin
g Bu
dget $/GSF
Facilities Operating Budget vs. Peers
Daily Service Planned Maintenance Utilities
ISU
Operating with fewer resources than peers; using resource management model
Peers
Custodial coverage Custodial is operating efficiently and providing high value across campus
Cleanliness Inspection Scores:
ISU3.9
Peers4.2
DB4.2
Total energy consumption Consuming 40k fewer BTU/GSF than peers in FY12
‐
50,000
100,000
150,000
200,000
250,000
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
BTU/GSF
Energy Consumption vs. Peers
Fossil Electric
ISUPeers
Future projects include transition from coal to natural gas for four primary boilers
Consuming less energy than peers. Campus users paying for utilities has made a difference.
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
Washburn University
Speaker: Rick Anderson, Vice PresidentInstitution: Washburn UniversityDate: September 29, 2013
Washburn Campus ProfileWashburn University is a mid‐sizedcomprehensive 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
More space on campus is high risk 66% of space is over 25 years old – campus is older than peers
21% 23%
14%21%
42%33%
24% 23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Washburn Peer Average
% of Tot
al Cam
pus GSF
Campus Age by Category
Under 10 10 to 25 25 to 50 Over 50
Buildings Under 10Little work. “Honeymoon” period.
Low Risk
Buildings 10 to 25Short life‐cycle needs; primarily space
renewal.Medium Risk
Buildings 25 to 50Major envelope and mechanical life cycles come
due.Higher Risk
Buildings over 50Life cycles of major building components are past due.
Failures are possible.Highest risk
Breakout of space over 25 years old
0
10,000
20,000
30,000
40,000
50,000
Under 10 10 to 25 25 to 50 Over 50
Average Building Size
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
39%
4%
41%
16%
Distribution of High Tech Buildings
Under 1010 to 2525 to 50Over 50
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
Databaseavg = 348
Roughly 1,500 more people on campus than at peer institutions
Use
rs/10
0K GSF Washburn
Density Factor
Database Distribution
Use
rs/10
0K GSF
Annual Stewardship (cost of keeping up)
$13.2
$5.3 $4.0
$6.1
$2.1
$0
$2
$4
$6
$8
$10
$12
$14
3% Replacement Value Life Cycle Need(Equilibrium)
Functional Obsolescence(Target)
$ in M
illions
FY2012 Stewardship TargetsWashburn U Replacement Value = $440M
Industry Standard Sightlines Recommendations
Total project spending
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2007 2008 2009 2010 2011 2012
Capital Spending vs. Target Need
Annual Capital One‐Time Capital
$ in M
illions
Increasing Backlog
Stabilizing Backlog
Decreasing Backlog
One‐time funding kept facilities investment closer to target until FY10
(Keep up funding) (One‐time catch up funding)
Total asset reinvestment backlog Lack of historical investment has led to an increasing backlog
$‐
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
AR Ba
cklog $/GSF
Total Asset Reinvestment Backlog vs. Peers
Peers’ backlog grew 19% between 2008‐2012
WU’s backlog grew 29% between 2008‐2012
Lean facilities operating budget
$‐
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
Ope
ratin
g Bu
dget $/GSF
Facilities Operating Budget vs. Peers
Daily Service Planned Maintenance Utilities
WUPeers
Total energy consumption Consuming considerably less energy than peers
‐
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
BTU/GSF
Energy Consumption vs. Peers
Fossil Electric
Complete HVAC upgrade to Morgan Hall (admin)‐$750,000 in 2012
Campus‐wide HVAC system upgrade‐$1.4 mil in 2010
WUPeers
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.
College of Saint Benedict
Speaker: Susan Palmer, Vice PresidentInstitution: College of Saint BenedictDate: September 29, 2013
College of Saint Benedict Campus ProfileA 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
Campus facing higher risk age profile Buildings are aging on this still relatively young campus
12% 7% 12%
39%40% 25%
39%37%
31%
10% 16%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
St. Ben's 2010 St. Ben's 2012 Peer Average
% of Tot
al Cam
pus GSF
Campus Age by Category
Under 10 10 to 25 25 to 50 Over 50
49% 53% 63%
Buildings Under 10Little work. “Honeymoon” period.
Low Risk
Buildings 10 to 25Short life‐cycle needs; primarily space
renewal.Medium Risk
Buildings 25 to 50Major envelope and mechanical life cycles come
due.Higher Risk
Buildings over 50Life cycles of major building components are past due.
Failures are possible.Highest risk
28%
65%
7%
St. Ben’s: FY07‐12 CapitalInvestment by Type
Existing Space New Space Non‐Facilities
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.
63%
33%
4%
Peers: FY07‐12 Capital Investment by Type
Investing mainly in new space Future investment will focus on existing space
Annual Stewardship (cost of keeping up)
$4.7$3.5
$5.6
$2.8
$12.4
$0
$2
$4
$6
$8
$10
$12
$14
3% Replacement Value Total Need Target Need
$ in M
illions
Envelope/Mech Space/Program
FY12 Stewardship Need
DepreciationModel
$10.3 MLife CycleModel
$6.3 MFunctional
Obsolescence
St. Bens FY12 Replacement Value = $413M
Industry Standard Sightlines Recommendations
Life cycle is discounted for the coordination of modernization and
renovation.
Determining the “right” level of annual funding
Total project spending vs. targets Backlog has built up over years; 2012 increase in annual capital is by design
$0
$2
$4
$6
$8
$10
$12
FY07 FY08 FY09 FY10 FY11 FY12
Millions o
f $
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
Total project spending On average, investing $2.67/GSF less than peers annually
2007 2008 2009 2010 2011 2012
CSB
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
2007 2008 2009 2010 2011 2012
$/GSF
Peers
Total Project Spending by Annual Capital and One‐Time Funds
Would need to invest an additional $3.3 M annually to
invest at peer average.
Annual Capital One‐Time Funds
Lean facilities operating budget Fewer operating resources than peers, but similar inspection scores
$‐
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
Ope
ratin
g Bu
dget $/GSF
Facilities Operating Budget vs. Peers
Daily Service Planned Maintenance Utilities
Campu
s Insp
ectio
n Custodial Maintenance Grounds
St.Ben’s
4.4 3.7 3.9
Peers 4.2 3.9 3.9
Total energy consumption On average, consuming over 40,000 BTU/GSF less than peers annually
WUPeers
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2007 2008 2009 2010 2011 2012
$/GSF
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2007 2008 2009 2010 2011 2012
BTU/GSF
Energy Consumption
Consuming 49,000 fewer MMBTUs annually ‐ yields a
savings of more than $550,000.
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