take control of your facilities: explore the tools for aligning space, capital, and operations
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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
Take Control of Your Facilities: Explore the Tools for Aligning Space, Capital, and Operations
Sightlines Webinar; Presented by Jon KingOctober 20, 2015
Introducing Our Presenter
Jon KingAssociate Director, Member ServicesSightlines
Today’s Desired Outcome
Introduction: Who is Sightlines?
Why the Roof Hasn’t Caved In
ROPA+ - Changing the Conversation
Five Strategies for Success
3
Feel Free to “Ask Sightlines”Enter questions in the box at any time
Enter questions here at any point during the webinar
Presentation slides and webinar
recording will be sent to each
attendee following today’s session
Who is Sightlines?
Sightlines is a Facility Asset Advisory Firm
Identify ways to use capital more strategically and identify opportunities to improve operational effectiveness.
Separate fact from fiction on key issues – operational performance, annual funding needs, and project backlogs.
Document trends, provide consistent measurement, credible benchmarking and track progress to goals.
Analytical Rigor, Common Vocabulary, Consistent Methodology, Common Platform
7
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
JP2
Slide 7
JP2 Make sure this is the most recent version of slideJay Pearlman, 10/7/2015
Why the Roof Hasn’t Caved In
0%
2%
4%
6%
8%
10%
12%
% o
f Con
stru
cted
Spa
ce
Sightlines Database- Construction Age Sightlines Database- Renovation Age
Putting Campus Building Age in ContextPr
e-W
ar Built before 1951Durable 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 ComplexPercent of Total
Space 40%Percent of Total
Space 27%
The campus age drives the overall risk profile
Space and Enrollment GrowthSpace growing faster than enrollment
0%
2%
4%
6%
8%
10%
12%
2007 2008 2009 2010 2011 2012 2013 2014
Space and Enrollment GrowthNational Average
Space Growth Enrollment Growth
Annual Capital Investment2014 levels finally reach pre-recession, but with a different funding mix
$1.19 $1.18 $1.27 $1.24 $1.36 $1.50 $1.71 $1.77
$3.18$3.63
$3.86$3.22
$3.58 $3.44$3.45 $3.60
$0
$1
$2
$3
$4
$5
$6
2007 2008 2009 2010 2011 2012 2013 2014
$/G
SF
Capital Investment into Existing Space
Annual Capital One-Time Capital Average
Annual Capital InvestmentPrivate campuses rely more on annual institutional capital
$0.90 $0.84 $1.03 $0.91 $1.02 $1.10 $1.19 $1.02
$2.57$3.07
$3.14$2.84
$3.34 $3.15$3.31
$3.00
$0
$1
$2
$3
$4
$5
$6
$7
$8
2007 2008 2009 2010 2011 2012 2013 2014
$/G
SF
$1.59 $1.68 $1.63 $1.74 $1.89 $2.12$2.52 $2.82
$4.02$4.44
$4.97
$3.81$3.94
$3.91$3.66
$4.44
2007 2008 2009 2010 2011 2012 2013 2014
Public Average Private Average
Facilities Operating BudgetDaily Service & Planned Maintenance
3.99 4.20 4.20 4.15 4.23 4.23 4.36 4.49
0.28 0.28 0.29 0.29 0.30 0.32 0.34 0.35
-
1.00
2.00
3.00
4.00
5.00
6.00
2007 2008 2009 2010 2011 2012 2013 2014
$/G
SF
Facilities Operating Budget
Planned Maintenance Daily Service
Facilities Backlogs Continue to Rise
Backlog $/GSF
Public Average Private Average
0%
5%
10%
15%
20%
25%
0.00
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 2013 2014
$/G
SF
0%
5%
10%
15%
20%
25%
0.00
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 2013 2014
Capital investment not enough to keep backlogs from growing
Summary of Trends
The aging campus is driven by the need to renovate or replace 1960s and 70s buildings, many of which were poorly constructed
To add to the problem, campuses have added new square footage to address increasing enrollment that has now leveled off or is even in decline
The demand for both “catch up” on aging buildings and “keep up” of newer buildings is much higher than the availability of capital funding
Therefore, backlogs continue to grow even though capital funding is finally back to pre-recession levels
Flat operating budgets have not provided relief to the backlog problem
In the face of these “bad news” trends, why have we not seen more building failures and major facility problems on campuses?
The Predictions Have Not Become Reality – Why???
Better data to identify and manage the most critical repair risks for campus.
Systems tend to outperform their statistical target. Lower cost repairs to systems rather than full system replacements have bought extra service time.
Because campuses are a collection of buildings –the risk is diversified over the portfolio.
The functional obsolescence of space drives investments that brings outside resources, especially to space.
What are Campuses Doing to Manage Risk?To keep the roof from caving in and building systems from failing
Better data to identify and manage the most critical repair risks for campus.
Systems tend to outperform their statistical target. Lower cost repairs to systems rather than full system replacements have bought extra service time.
Because campuses are a collection of buildings –the risk is diversified over the portfolio.
The functional obsolescence of space drives investments that brings outside resources, especially to space.
What are Campuses Doing to Manage Risk?To keep the roof from caving in and building systems from failing
ROPA+ - Changing the Conversation
Comprehensive Facilities Intelligence Solutions
Changing the Conversation in Higher Education
A Vocabulary for MeasurementThe Return on Physical Assets – ROPASM
Asset Value Change
The annual investment needed to ensure buildings will properly perform and reach their useful life “Keep-Up Costs”
AnnualStewardship
The accumulation of repair and modernization needs and the definition of resource capacity to correct them “Catch-Up Costs”
Asset Reinvestment
The effectiveness of the facilities operating budget, staffing, supervision, and energy management
OperationalEffectiveness
The measure of service process, the maintenance quality of space and systems, and the customers opinion of service delivery
Service
Operations Success
22
Sightlines ROPA+ Service
24
ROPA+ The ProcessDisciplined Methodology + Past Performance = Facilities Intelligence
• Sightlines collects and assembles data on campus to quantify, verify, and qualify facility performance.Measure
• Through the benchmarking process, institutions have the capability to create custom comparisons that help them understand context and performance.
Benchmark
• Sightlines synthesizes an institution's verified data to provide expert insight and perspective and develop strategic directions for change.
Analyze &Interpret
• Sightlines continues to support each campus through our Member Portal, national thought leadership, educational webinars, and ongoing campus consultation.
Membership
Sightlines’ Member PortalIt’s time to get more from your data
25
More SupportInformed with live notification to your data
More AccessCreate customizeddashboard featuring the metrics most important to youSeamlessly benchmark against 300 member institutions
More ContextMy Story feature presents Sightlines key findings as an easy to digest narrative
26
Collected Data Elements
Building Information Building Construction DateDates of Major Building RenovationsBuilding Function (Resident Hall, Academic, Athletic, …)Building Gross Square Footage, Land AcresLocations Served by Central Systems – Heating, Cooling, Electrical
Deferred Maintenance Deferred Maintenance Assessment (in-house or contracted)
Building Information Building Construction DateDates of Major Building RenovationsBuilding Function (Resident Hall, Academic, Athletic, …)Building Gross Square Footage, Land AcresLocations Served by Central Systems – Heating, Cooling, Electrical
Deferred Maintenance Deferred Maintenance Assessment (in-house or contracted) Cam
pus
Prof
ile
Staffing Table Department Organizational ChartDistribution of Trades, Cust. and Grounds Staff by Shop Including Super.
Work Order Report Total Number of Requested and CompletedCompleted Work Orders by Shop and Type (Repair, PM, Project, etc.)
Energy Profile Monthly Utility Cost and Consumption by Fuel Type (Gas, Oil, Electric) Primary Generation Equipment Profile Including Hours of Operation
Staffing Table Department Organizational ChartDistribution of Trades, Cust. and Grounds Staff by Shop Including Super.
Work Order Report Total Number of Requested and CompletedCompleted Work Orders by Shop and Type (Repair, PM, Project, etc.)
Energy Profile Monthly Utility Cost and Consumption by Fuel Type (Gas, Oil, Electric) Primary Generation Equipment Profile Including Hours of Operation
Ope
ratio
ns
Institutional Financial Statement Balance Sheet and Operating Budget
Facilities Operating Budget Operating Budget and Actual by department and line item
Capital Budget Recurring & One-Time Capital budget (Plant fund, R&R account)
Institutional Financial Statement Balance Sheet and Operating Budget
Facilities Operating Budget Operating Budget and Actual by department and line item
Capital Budget Recurring & One-Time Capital budget (Plant fund, R&R account)
Fina
nce
More Space & Smaller Buildings = Savings Opportunity
27
$39.4
$14.2$10.6
$17.3
$8.7
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
3% Replacement Value Life Cycle Need Annual Investment Target
$ in
Mill
ions
FY14 Annual Investment Target
Envelope/Mechanical Space/Program
Defining an Annual Investment Target
28
Functional obsolescence drives investment prior to life cycles &
discounts the annual target
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
2006 2007 2008 2009 2010 2011 2012 2013 2014
Mill
ions
Total Capital Investment vs. Funding Target
Annual Stewardship Asset Reinvestment Annual Investment Target Life Cycle Need
Total Capital Investment vs. Funding TargetIncludes only the investment in existing facilities
Increasing Backlog & Risk
29
Increasing Net Asset Value
Lowering Risk Profile
$0
$10
$20
$30
$40
$50
$60
Tota
l Dol
lars
(Mill
ions
)
Current Need Renewal Need Modernization & Infrastructure
ROPA+ Prediction: Predictive Investment Model
$65
$172
$155
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Asset Reinvestment Need
Tota
l Dol
lars
(Mill
ions
)
30
Asset Reinvestment Need
10 Year Capital Forecast
Facilities Operating Expenditures
31
$-
$1.00
$2.00
$3.00
$4.00
$5.00
Total Daily Service Costs
Maintenance Custodial Grounds
Daily Service Breakout
Area of FocusArea of Focus
Maintenance Staffing Profile vs. PeersMaintenance Performance
32
More Material SpendingSimilar SupervisionCovering More Space
Demonstration Campus
Energy Consumption vs. Peers
33
• Older facilities & new technically complex space is driving up energy consumption
• Older facilities should be targeted for renovation to reduce consumption
• Savings should be redirected back into annual stewardship
Peer Averages
• Peers strong investment into infrastructure & building systems have helps level off energy consumption.
Multiple Perspectives on Quality of ServiceService Process, Campus Inspection, and Customer Survey
Service Process
How are requests made?
Who can make requests?
Who schedules the work?
Is there a timeline/completion date given?
Are customers made aware of request status?
34
Multiple Perspectives on Quality of ServiceService Process, Campus Inspection, and Customer Survey
0 1 2 3 4 5
Performance…
Work Requests
Organization
Scheduling Process
Centralization
Service Process
35
Multiple Perspectives on Quality of ServiceService Process, Campus Inspection, and Customer Survey
0 1 2 3 4 5
Performance…
Work Requests
Organization
Scheduling Process
Centralization
Service Process
Campus Inspection
Sightlines completes a building and grounds inspection rating the general repair, cleanliness, exterior condition, and mechanical systems spaces in a 3 hour tour
36
Multiple Perspectives on Quality of ServiceService Process, Campus Inspection, and Customer Survey
0 1 2 3 4 5
Performance…
Work Requests
Organization
Scheduling Process
Centralization
Service Process
0 1 2 3 4 5
Grounds
Exterior
Mechanical Spaces
General…
Cleanliness
Campus Inspection
37
Multiple Perspectives on Quality of ServiceService Process, Campus Inspection, and Customer Survey
0 1 2 3 4 5
Performance…
Work Requests
Organization
Scheduling Process
Centralization
Service Process
0 1 2 3 4 5
Grounds
Exterior
Mechanical Spaces
General…
Cleanliness
Campus Inspection
Customer Survey
13%
50%
32%
5%
Far Exceeds ExpectationsExceeds ExpectationsMeets ExpectationsBelow Expectations
38
Multiple Perspectives on Quality of ServiceService Process, Campus Inspection, and Customer Survey
0 1 2 3 4 5
Performance…
Work Requests
Organization
Scheduling Process
Centralization
Service Process
0 1 2 3 4 5
Grounds
Exterior
Mechanical Spaces
General…
Cleanliness
Campus Inspection
Customer Survey
13%
50%
32%
5%
Far Exceeds ExpectationsExceeds ExpectationsMeets ExpectationsBelow Expectations
1.00
3.00
5.00
1.00 3.00 5.00
Wor
k P
erfo
rman
ce
Communication & Process
ExcellentPerformance
PoorPerformance
ExcellentPerformance
Best practice range
Separate report with all the results & feedback
39
40
ROPA+ = Total Facilities Intelligence Solution
1. Stewardship falls2. Failures increase3. Increased operational demands4. Customer satisfaction
decreases5. Capital investment driven by
customers. Space wins over systems.
6. Backlog increases
1. Focused project selection2. Decreasing operating costs3. Increasing stewardship4. Reduce emergency work5. Increased customer
satisfaction6. Flexibility of project selection
Five Strategies for Success
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
Campuses Taking ActionOur partnership gives them the power to act and drive results
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
Campus A
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
Today: No Integration in the Process
Fails to harness operating knowledge
Does not tie to mission, strategy or
master plans
Ignores financial capacity
Misses opportunities to optimize capital
resources
Technical Assessment
Project Selection
Today: No Integration in the Process
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
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
10 Year Capital Renewal Curve
10-Year Needs vs. Investment Capacity
$0
$5
$10
$15
$20
$25
$30
Tota
l Dol
lars
(Mill
ions
)
10 Year Total Capital Need by Year
$107$120
$23
$100
$0
$50
$100
$150
$200
$250
Total 10 Year Need ProjectedInvestmentCapacity
Tota
l Dol
lars
(Mill
ions
)
10 Year Total Capital Need & Capacity
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
11%
10%
20%
35%
24%
Project Spending Mix
Building Systems Envelope Infrastructure Space Renewal Safety/Code
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
JP3
Slide 64
JP3 Update to "Coming Soon - 2015 SoF"Jay Pearlman, 10/7/2015
Questions & Discussion
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