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Western Oregon University
Wheaton College (MA)
Whitworth University
Widener University
Wilkes University
Williams College
Worcester Polytechnic Institute
Worcester State College
Wright State University
Xavier University
Yeshiva University
Youngstown State University
Why the Roof Hasn’t Caved InSightlines Webinar; Presented by Jim Kadamus
December 3, 2015
Review of facilities trends – Space, capital, and operations;
including 2014 CAUBO study of deferred maintenance for
Canadian Universities
Identify what the trends tell us about the State of Facilities in
Higher Education institutions
Explore the reasons for why the roof has not caved in despite
the “bad news” trends and dire predictions
Examples from campuses that are successfully combating the
challenges
Recommendations and conclusions
Agenda
1
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
2
National Trends & The
State of Facilities
By the Numbers – Sightlines Database
343 Higher Education Member Institutions
Public, 60%
Private, 40%
1.5 Billion Total GSF
2,601,261 Students
educated at included
institutions
51 Institutions Represented in 2014
CAUBO Study
4,364 building totaling
over 200M GSF
Over 860,000 students
educated at included
institutions
$8.4 billion of total
deferred maintenance
identified
4
The Sightlines’ Paradigm
5
Space and Enrollment Growth
Space growing faster than enrollment
0%
2%
4%
6%
8%
10%
12%
2007 2008 2009 2010 2011 2012 2013 2014
Space and Enrollment Growth(National Average in United States)
Space Growth Enrollment Growth
6
0%
5%
10%
15%
20%
25%
% o
f C
on
str
uc
ted
Sp
ac
e
Putting Campus Building Age in Context
The campus age drives the overall risk profile
Pre
-Wa
r
Built before 1951
Durable construction
Older but typically lasts longer P
os
t-W
ar Built between 1951 and
1975
Lower-quality construction
Already needing more repairs and renovations
Mo
de
rn Built between 1975 and 1990
Quick-flash construction
Low-quality building components
Co
mp
lex
Built in 1991 and newer
Technically complex spaces
Higher-quality, more expensive to maintain & repair
Pre-War Post-War Modern ComplexPercent of Total
Space
U.S. 35%
Canada 48%
Percent of Total
Space
U.S. 31%
Canada 28%
Constructed Space – U.S. Constructed Space – Canada
7
Square Footage by Age Category - CAUBO
25%12%
19%
25%
41%
37%
15%26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2018
% o
f S
pa
ce
CAUBO Age Profile
Under 10 10 to 25 25 to 50 Over 50
Buildings Under 10
Little work. “Honeymoon” period.
Low Risk
Buildings 10 to 25
Short life-cycle needs; primarily space renewal.
Medium Risk
Buildings 25 to 50
Major envelope and mechanical life cycles come due.
Higher Risk
Buildings over 50
Life cycles of major building components are past due. Failures are possible.
Highest risk
Unless substantial investment occurs, space over 50 years old projects to double
8
Annual Capital Investment
2014 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(National Spending in United States)
Annual Capital One-Time Capital Average
9
Sightlines’ Impact on Capital Spending
2011 new members’ capital spending before vs. after joining Sightlines
$0.72$1.11
$3.29
$3.30
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
Before After
$/G
SF
54% Increase
10
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
Avg. CAUBO backlog Avg. CAUBO backlog
With $8.4 billion of DM, total CAUBO backlog would average at approximately $85/GSF
11
Facilities Operating Budget
Daily 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(National Average in United States)
Planned Maintenance Daily Service
12
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?
13
Why the Roof Hasn’t Caved In
& Campus Successes
The Predictions Have Not Become Reality – Why???
15
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
16
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
17
State System Sets Priority on 1960-70s Buildings
19% 20% 20% 20% 21% 21% 21% 21% 20% 20% 19% 19% 17% 20% 20% 20% 22% 23%29% 30% 30%
35% 37% 37%
14% 14% 13% 13% 13% 14% 14% 14% 14% 14% 15% 16%10%
10% 10% 12%14%
14%
15% 16% 17%
17%18% 20%
47% 47% 46% 46% 45% 43% 42% 40% 40% 40% 38% 36%
59% 57% 57% 56%53% 50%
44% 41% 38%34% 31% 29%
20% 20% 20% 20% 21% 22% 23% 25% 25% 26% 28% 29%
13% 13% 12% 12% 12% 12% 12% 13% 14% 14% 14% 14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% o
f To
tal
Cam
pu
s G
SF
Renovation Age by Category
Under 10 10 to 25 25 to 50 Over 50
Peers State System
18
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
$/G
SF
Planned/Preventive Maintenance $/GSF
Impact of Renovating or Replacing 1960-70s Buildings
76% 77%79% 79% 80% 81% 82% 82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014
Campus Inspection Index
19
Identified Needs by Category
Categorizing the $151.6 M in total campus needs; building needs are heavily in A timeframe
$130.5 , 86%
$15.3 , 10%
$5.8 , 4%
Total Needs by Structure$ in millions
Building Needs Infrastructure
Grounds Needs
$84.0
$2.3 $0.7
$27.4
$3.5 $10.4
$19.1
$0.1
$4.2
$0
$20
$40
$60
$80
$100
$120
$140
Building Infrastructure Grounds
To
tal N
ee
d, $
in
mil
lio
ns
Total Needs by Structure and Timeframe
A (1-3 years) B (4-7 years) C (8-10 years)
20
7%
9%
55%
1%
28%
Campus Identified Needs
Reliability
Safety/Code
Asset Preservation
Economic Opportunity
Program Improvement
Identified Needs by Investment Criteria
Timeframes A, B, & C only
8%
11%
48%
3%
30%
Comparison Campuses
Reliability – Issues of imminent failure of compromise to the system that may result in interruption to program or use of
space.
Safety/Code – Code compliance issues and institutional safety priorities or items that are not in conformance with
current codes, even though the system is “grandfathered” and exempt from current code.
Asset Preservation – Projects that preserve or enhance the integrity of buildings systems or building structure, or
campus infrastructure.
Economic Opportunity – Projects that result in a reduction of annual operating costs or capital savings.
Program Improvement – Projects that improve the functionality of space, primarily driven by academic, student life, and
athletic programs or departments. These projects are also issues of campus image and impact.
21
Identified Needs Compared to Investments
Identified needs means shift in future funding allocations
17%
41%14%
19%
9%
Campus Identified Needs
10%
21%
23%
39%
7%
Historical Project InvestmentsFY03-FY14
Building Envelope
Building Systems
Infrastructure
Space Improvement
Safety/Code
22
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
23
Aligning Facilities Renewal Needs with Resources
$295
$103
$186
$378
$0
$100
$200
$300
$400
$500
$600
10 Year Need, FCA $ + soft cost
Mil
lio
ns
5-Year Need Current Need
Need Years 5-10 Lifecycle
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Mil
lio
ns
10-Year Facilities Renewal Needsincluding soft costs
10-Year Facilities Renewal Needsincluding soft costs
*Backlog quantified by FCA analysis
24
Gap Between Facilities Need and Resources
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Mil
lio
ns
Systems Exterior Interior
*Backlog excludes programmatic needs.
10-Year Facilities Renewal Needs
Projected funding based on last 5 years of spending
$481
$250
$0
$100
$200
$300
$400
$500
$600
10-Year Need ProjectedFunding
Mil
lio
ns
Need vs. Funding
25
Gap Between Facilities Need and Resources
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Mil
lio
ns
Lifecycle Current Need
Average Funding, FY10-14 Grow Funding by $3M/year
10-Year Facilities Renewal Needsincluding soft costs
$481
$250
$0
$100
$200
$300
$400
$500
$600
10-Year Need ProjectedFunding
Mil
lio
ns
Need vs. Fundingincluding soft costs
Any needs above the
funding line would be
added to the backlog in
future years
*Backlog quantified by FCA analysis
26
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
27
Needs by Building Portfolio
Total Project Inventory
$1,854 M
New Space
$341 M
Building Needs
$1,443 M
Transitional Facilities
$171 M
Building Renovation
$505 M
Repurpose
$39 M
Maintain
$735 M
Non-housing facilities
$551 M
Housing facilities
$183 M
Site & Infrastructure
Needs
$70.3 M
28
Asset Reinvestment Progress
Significant investments in new and existing space in 2014
$1,974 $1,895 $1,792 $1,627 $1,607
$1,497 $1,443
$126 $107
$82
$82 $82
$77 $70
$457 $434
$410 $571 $541
$442 $341
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
April 09 Update Fall 09 Update June 2010Update
June 2011Update
June 2012Update
June 2013Update
June 2014Update
Mil
lio
ns
BPS Identified Needs by Update Stage
Building Needs Infrastructure New Space
$500M+ of Asset Reinvestment need
addressed since FY09 through O&M,
capital investment/renovation, and
demolition of aging facilities
29
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
30
Blended Functional and Investment Portfolios
Aligning needs with funding opportunities
Total Needs
$253.9M
New Construction
$83.3M
Grounds & Infrastructure
$11.3M
Building Needs
$158.3M
Institutionally
Funded
Academic
$41.7M
Administrative
$18.9 M
Sci./Research
$33.9 M
Athletic
$11.6 M
Residence Halls
$18.0 M
Faculty/Staff Housing
$10.9 M
Fraternities & Sororities
$9.0 M
Transitional
$14.2 M
Potential Grants Potential Gifts Potential to Sell Potential Gifts
Focus investment
into core campus
facilities that are
unlikely to receive
donor funding
31
Increasing Capital Investment Over Time
Investing capital in envelope and mechanical; using department dollars for space upgrades
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
2007 2008 2009 2010 2011 2012 2013 2014
$ in
Mil
lio
ns
Envelope Systems Infrastructure Space Renewal Safety/Code
Life Cycle Need
($74.3M)
Target Need
($38.9M)
Stabilizing/Decreasing
Backlog
Total Capital Investments FY2007 – FY2014
32
Recommendations and
Conclusions
We Need to Make the Problem Smaller
Not all buildings are created equal, therefore they
should not be treated that way.
Use building portfolios – for operations and capital - to
make the problem smaller
Subdivide capital projects by issues of reliability,
safety/code, program, and asset preservation.
Create “balance” and “diversity” in all facility
investments to lower risks.
34
Time is On Our Side
Yes it is
What we’ve learned over the past 30 years …
fixing components rather than replacing entire systems,
that life cycle estimates are inherently conservative,
coordinating campus needs and projects can lower capital costs, and
functional obsolescence of space can bring capital resources to allocate for repairs
There is no reason to believe that these factors will change in the next 15 to 20 years. Therefore although we will need to act, we have time to manage the investments.
35
Make the Case for Resources
By controlling the things you can control
The old approach of defining needs in a way that makes the DM
problem bigger and then requesting money will not work.
Problem is too big to address in total – must break it down in size
and priority
Opportunities exist to… Lower Demands - Space Management
Make the Problem “Smaller” – Use Building Portfolio
Management
Sustain Impact of Finite Funding - Create Multi Year Plans
Mitigate Risk - Target Capital to Reliability, Safety/Code, and Critical
Asset Preservation Issues
Apply these actions to make the case for additional
funding and use savings to self-fund stewardship
36
Questions & Discussion
2015 State of Facilities in Higher Education
Annual report available now! Webinar on December 10
www.sightlines.com/insight/state-of-facilities-2015
Webinar: The State of Facilities in
Higher Education – An In-Depth Look at
the 2015 Trends and Best Practices
December 10, 2015 @ 1pm EST
Invitation to follow today’s session!
38
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