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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