changing the conversation in facilities management a step ... › › resource › ... ·...

CenterUniversity of Missouri – ColumbiaUniversity of Missouri – Kansas CityUniversity of Missouri – St. LouisUniversity of Nebraska at KearneyUniversity of Nebraska at LincolnUniversity of Nebraska Medical CenterUniversity of New BrunswickUniversity of New HampshireUniversity of New HavenUniversity of North TexasUniversity of Northern IowaUniversity of Notre DameUniversity of OregonUniversity of PennsylvaniaUniversity of RedlandsUniversity of Rhode IslandUniversity of RochesterUniversity of San DiegoUniversity of San FranciscoUniversity of Southern MaineUniversity of Southern MississippiUniversity of St. ThomasUniversity of Tennessee, KnoxvilleUniversity of Texas at DallasUniversity of the PacificUniversity of the Sciences in

PhiladelphiaUniversity of ToledoUniversity of VermontVanderbilt UniversityVassar CollegeVirginia Commonwealth UniversityVirginia Department of General

ServicesVirginia State UniversityWagner CollegeWake Forest UniversityWashburn UniversityWashington University in St. LouisWellesley CollegeWesleyan UniversityWest Chester UniversityWest Liberty UniversityWest Virginia Institute of TechnologyWest Virginia School of Osteopathic

Changing the Conversation in Facilities Management:A Step Towards Total Campus Engagement

Introducing Our Presenters

Jay PearlmanAssociate Vice PresidentSightlines

Bill DeversAccount ExecutiveSightlines

Today’s Desired Outcome

Introduction: Who is Sightlines?

Key Challenges in Facilities Management

Five Strategies for Success

Case Studies

3

Who is Sightlines?

Comprehensive Facilities Intelligence Solutions

6

Who Partners with Sightlines?Robust membership includes colleges, universities, consortiums and state systems

Serving the Nation’s Leading Institutions:

• 14 of the Top 20 Colleges*• 15 of the Top 20 Universities*• 34 Flagship State Universities• 12 of the 14 Big 10 Institutions• 8 of the 12 Ivy Plus Institutions• 8 of 13 Selective Liberal Arts Colleges

* U.S. News 2015 Rankings

Sightlines is proud to announce that:

• 450 colleges, universities and K-12 institutions are Sightlines clients including over 325 ROPA members.

• 93% of ROPA members renewed in 2014

• We have clients in 43 states, the District of Columbia and Canada

• 100 institutions became new members since 2013

Sightlines advises state systems in:

• Alaska• California• Connecticut• Hawaii• Maine• Massachusetts• Minnesota• Mississippi• Missouri• New Hampshire• New Jersey• Oregon• Pennsylvania• Texas• West Virginia

Key Challenges in Facilities Management

The Sustainability of Higher Education is in QuestionHigher education stakeholders are faced with…

Federal and state funding levels for higher education have fallen to historic lows with no near term vision for recovery.

Demographic shifts have led to level or declining enrollments in traditional students.

Affordability of education has expanded student debt, capped tuition growth, and increased dependency on Pell Grants.

Tuition dependency has grown, tuition discounting (privates) increasing, operating margins have fallen, and balance sheets have weakened.

Administrative and support costs have grown compared to education costs.

8

“Approximately one-third of all colleges and universities have financial statements that are significantly weaker than they were several years ago.”

Denneen & Dretler, The Financially Sustainable University

Higher Education’s Liquidity Crisis

9

Protect the Real Prize…

The average

endowment

The average building

replacement value

“One side effect of this rapid growth has been the creation of an increasingly large obligation for the future renewal and replacement of the physical plant.”

Rick Biedenwig – 1980Founder, Pacific Partners Consulting Group

Source: Before the Roof Caves In II: Published with assistance from APPA and Stanford University

An Accurate Prediction

0%

2%

4%

6%

8%

10%

12%

% o

f Con

stru

cted

Spa

ce

Constructed Space 1880-2015

Sightlines Database

Act Your Era – Not Your Age

12

Pre-

War Built before 1951

Durable constructionOlder but typically lasts longer Po

st-W

ar Built between 1951 and 1975Lower-quality constructionAlready needing more repairs and renovations

Mod

ern Built between 1975 and

1990Quick-flash constructionLow-quality building components\

Com

plex

Built in 1991 and newerTechnically complex spacesHigher-quality, more expensive to maintain & repair

Pre-War Post-War Modern Complex

Campus Space and EnrollmentNational average for enrollment and space growth

0%

2%

4%

6%

8%

10%

12%

2007 2008 2009 2010 2011 2012 2013

Perc

ent C

hang

e of

Enr

ollm

ent &

Spa

ce

National Space Growth National Enrollment Growth

Campus Space and EnrollmentBy institution type

0%

2%

4%

6%

8%

10%

12%

2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013

Perc

ent C

hang

e of

Enr

ollm

ent &

Spa

ce

Space Growth Enrollment Growth

Public Private

Campus Space and EnrollmentBy institution type

0%

2%

4%

6%

8%

10%

12%

14%

2007200820092010201120122013 2007200820092010201120122013 2007200820092010201120122013

Perc

ent C

hang

e of

Enr

ollm

ent a

nd S

pace

Growing Campus EnrollmentBy Constituent Group

Space Growth Enrollment Growth

Comprehensive Institution Research Institution Small Institution

0%

2%

4%

6%

8%

10%

12%

14%

% o

f Con

stru

cted

Spa

ce

Constructed Space 1880-2015

Sightlines Database Texas

Texas – A Slightly Different Profile

16

Pre-War Post-War Modern Complex

Texas - Campus Space and EnrollmentNational average for enrollment and space growth

0%

5%

10%

15%

20%

25%

30%

2009 2010 2011 2012 2013 2014

Perc

ent C

hang

e of

Enr

ollm

ent &

Spa

ce

National Space Growth National Enrollment Growth

0

200

400

600

800

1000

1200

1400

Den

sity

Fac

tor:

Use

rs/1

00,0

00 G

SF

Density Factor TrendingBy Constituent Group

Density ProfileBy constituent group

Community College Comprehensive Institution Research Institution Small Institution

Texas – Density Factor is Increasing

370

380

390

400

410

420

430

440

2008 2009 2010 2011 2012 2013

Den

sity

Fac

tor (

Use

rs/1

00,0

00 G

SF)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013

Tota

l Dol

lars

(Mill

ions

)

Existing Space New Space

Capital Investment into Existing Space

Public Average Private Average

51%49%

62%

38%

Budgets Not Keeping Up With Inflation

$5.22  $5.33 Public Private

Custodial Coverage Increasing

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2007200820092010201120122013 2007200820092010201120122013 2007200820092010201120122013

Tota

l GSF

/FTE

National Average Public Average Private Average

Facilities Backlogs Continue to Rise

$77 $79 $80 $82 $84 $87 $90

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2007 2008 2009 2010 2011 2012 2013

$/G

SF

Backlog $/GSF

Backlog/GSF Percentage Change of Backlog

23

Facilities Backlogs Continue to RiseBy constituent group

$92 $93 $96 $100 $104 $106 $110

$79 $81 $82 $85 $88 $90 $92

$77 $80 $82 $84 $86 $88 $90

$75 $76 $77 $79 $82 $84 $86

0%

5%

10%

15%

20%

25%

$-

$20

$40

$60

$80

$100

$120

$/G

SF

Backlog/GSF Percentage Change of Backlog

Community College Comprehensive Institution Research Institution Small Institution

Significant Reductions in Normalized Consumption

Focus on Energy ReductionBy region

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Perc

ent C

hang

e Si

nce

2007

BTU

/GSF

Fossil Consumption Electric Consumption Percent Change of Total Consumption

Great LakesMid-east

New England

Southeast Southwest & Far West

Plains & Rocky

Unit Cost By RegionBy region

$0

$5

$10

$15

$20

$25

Tota

l Ene

rgy

Uni

t Cos

t $/G

SF

Great LakesMid-east

New England

Southeast Southwest & Far West

Plains & Rocky

Normalized Utility Emissions FallingBoth normalized metrics falling at similar rates

Five Strategies for Success

Changing the Conversation in Higher Education

Five Strategies for Success

Build strategically

Less can be more

Look ahead Keep-up

Reward savings

Less Can be More

> “No Net New Space” – A policy rooted in sustainability, it states that no new space on campus will be built without the removal of an equal amount of deficient square footage.

> “No Net New Backlog” – A variation of no net new space that states that no new construction can occur without the mitigation of an equal value of backlog.

New Policies to Control Overhead

Tracking Backlog Progress Since 2005

Look Ahead

25% 31%21%

45%45%

23%

31% 24%

34%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ConstructionAge

RenovationAge

Peer RenovationAge

Buildings Under 10Little work, “honeymoon”

period.Low Risk

Buildings 10 to 25Lower cost space renewal updates and initial signs of

program pressures Medium Risk

Buildings 25 to 50Life cycles are coming due in envelope

and mechanical systems. Functional obsolescence prevalent.

Higher Risk

Buildings over 50Life cycles of major building components are

past due. Failures are possible. Core modernization cycles are missed.

Highest risk

Unique Campus Age Profile

Under 10 10 to 25 25 to 50 Over 50

Approx. $45M to be Due in 5 Years

Currently Critical

Immediate

Potentially Critical

Year 1

Necessary- not yet critical

Years 2 to 5

Recommended Years 6 to 10

Does not meet current codes/standards

$196.5K

Total identified needs by priority

$2.1M $42.5M $12.0M $486.7K

Majority of priority 1 projects already

addressed

10 Year Capital Renewal Curve

Build Strategically

Sample: Nearly Double Peers’ Users

7,500More users on campus versus peer campuses

Liberal Arts Comprehensive University Urban/City School Community College

Users/100K GSF

Insufficient Classroom Space?

0%10%20%30%40%50%60%70%80%90%

100%

%

Room Utilization – General Classrooms

Room Utilization

Difficult Scheduling During Most of Day

Functional Obsolescence is the Real IssueMany Small Courses, Few Small Rooms

0% 2%

43%

38%

17%

44%

23%

29%

4% 1%

41%

23%27%

9%0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0-25 26-30 31-35 36-40 40+

Distribution of Rooms

Room Capacity Fall '13 Enrollment Spring '14 Enrollment

Build Strategically

Technical Assessment

Project Selection

Traditional Facilities Assessment

Fails to harness operating knowledge

Does not tie to mission, strategy or

master plans

Ignores financial capacity

Misses opportunities to optimize capital

resources

Today: No Integration in the Process

A More Cohesive Approach

Tie to Operations, Mission & Finance

Technical Assessment: Conduct Building walk-throughs and component inventory to develop initial list of needs.

Step 1: Integrate Technical NeedsIntegrate operational perspective to target inspections and reduce overall capital needs

Step 2: Create Building PortfoliosSegment the backlog and tie projects to mission and institutional strategy

Step 3: Develop Multi-year Capital PlanCreate outcome based strategies by portfolio

Step 4: Project SectionPick projects that support mission, operations, and financial capacity

Example: Blended Functional and Investment PortfoliosAligning needs with funding opportunities

Keep Up

The Multiplier Effect of Reinvested Savings

* Stewardship is the annual investment into campus facilities

$1 Invested in Stewardship* …$3 in Capital Backlog Need

Equals

…$2.70 in Annual Operating Costs

Equals

$1 Invested in Planned Maintenance

Another investment impact is....

Reward Savings

Low Energy Consumption Keeps DroppingIncrease in PM supports lower energy consumption

Regional Peer Avg.

Regional Peer Avg.

Among the top 10% of lowest consuming institutions in Sightlines’

database

Increasing Focus on Systems, Envelope, & Infrastructure

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

FY08 FY09 FY10 FY11 FY12

$/G

SF

Project Spending $/GSF

“The State of Facilities in Higher Education”Sightlines’ annual publication on broad industry trends

Questions & Discussion