Challenges to the Physical Campus

How to Change the Conversationabout Facilities on Your Campus

Panel of Experts:

Bill Ballard, Associate Vice President, Admin. & Facilities, at University of Vermont

Ken Cody, Vice President for Administration & Finance, at Bentley University

Moderated by:

Jim Kadamus, Vice President, at Sightlines

Learning Objectives

Upon completion of this program you will be able to:

• Communicate national and regional trends affecting higher education

finance and facilities today

• Address the age profile and functional obsolescence of campus buildings

• Optimize campus operations and reduce facilities overhead

• More effectively build constituency on campus and engage your Board to

identify and support the right facilities improvements

Campus ProfilesPublic

university with 13,000

students466 acres

276 buildings and nearly 5.5

million GSF

Sightlines member since

2005

Private university with 5,600 students

163 acres

49 buildings and more than 1.7 million GSF

Sightlines member since

2002

Robust membership includes colleges, universities, consortiums and state systemsServing the Northeast’s Institutions:

• 138 institutions – evenly split public and private with 422 million gsf

• Average of over $2 billion in capital investment per year

• Average of over $3 billion in annual facilities operating budgets

• Backlog of over $40 billion

* U.S. News 2014 Rankings

Sightlines is proud to announce that:

• 450 colleges, universities and K-12 institutions are Sightlines clients including over 340 ROPA members.

• 93% of ROPA members renewed in 2013

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

• 100 new members since 2013

Sightlines advises state systems in:

• Alaska• California• Connecticut• Hawaii• Maine• Massachusetts• Minnesota• Mississippi• Missouri• New Hampshire• New Jersey• New York: CUNY and

SUNY• Oregon• Pennsylvania• Texas• West Virginia

Sightlines Profile & Database

Northeast Regional Trends in Higher Education Facilities

Campus space growth less than enrollment growthEnrollments leveling starting in 2011 and declining in 2013

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2007 2008 2009 2010 2011 2012 2013

Perc

ent C

hang

e of

Enr

ollm

ent &

Spa

ce

Growing Campus EnrollmentNortheast Average within Sightlines Database

Northeast Space Growth Northeast Enrollment Growth

Bentley has increased enrollment by 7% while shrinking campus GSF by 1%

UVM’s enrollment has grown by 14% while campus GSF has increased by 6%

Campus Space and Enrollment by Institution TypeResearch institutions only group to see continued enrollment growth and lower space growth

0%

2%

4%

6%

8%

10%

12%

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

Percen

t Cha

nge of Enrollm

ent a

nd Spa

ce

Campus Enrollment vs. SpaceBy Constituent Group

Space Growth Enrollment Growth

Comprehensive Institution Research Institution Small Institution

Discussion Questions for the PanelIssue 1: What are the implications for facilities of the enrollment changes facing northeast campuses?

UVM:How does a changing mix of students (in-state; out-of-state and international) impact facilities decisions?

How do UVM’s enrollment trends affect your space management and capital investment strategies?

Bentley:How do you factor in anticipated enrollment changes in your long term financial planning for facilities?

How do you address facilities needs to attract and retain quality students and faculty?

Pre-War Post-War Modern Complex

Waves of Construction in the Northeast

0

10

20

30

40

50

60

Tota

l Dat

abas

e G

SF C

onst

ruct

ed (M

illio

ns)

Constructed Space Since 1880

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

% o

f Spa

ce

Square Footage by Age CategoryRenovation Age

Under 10 10 to 25 25 to 50 Over 50

Northeast Average Public Average Private Average

Northeast Public and Private Campuses after RenovationsNortheast publics have high % of space in 25-50; private high % in over 50

Nearly 50% of UVM’s GSF is Over 50 Years Old with More than 10% Under 10 

Years Old

Bentley’s GSF Profile is Balanced with Approx. 50% Under 25 Years Old and 50% 25 to 50 Years 

Old

Capital has not recovered from 2008-09 recession

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

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

$/G

SF

Capital Investment into Existing Space

Annual Capital One-Time Capital Average

Public Average Private Average

UVM has Averaged $4.37/GSF

Bentley has Averaged $6.31/GSF, the Majority from Annual Capital

Reliance on annual institutional capital sources is growing

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

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

$/G

SF

Capital Investment into Existing SpaceRecurring Capital

Annual Capital Average

Public Average Private Average

Facilities Backlogs Continue to RisePublic campuses over $100/GSF; private campuses at $80/GSF

$91 $93 $95 $98 $101 $104 $107

$69 $70 $73 $74 $76 $79 $80

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$-

$20

$40

$60

$80

$100

$120

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

$/G

SF

Backlog $/GSF

Backlog/GSF Percentage Change of Backlog

Public Average Private Average

Bentley’s $/GSF Backlog Remains Significantly Below the National Average, but is Growing at a Similar Rate

UVM’s $/GSF Backlog has Grown by 12% Over This 

Time and is Well Below the National Average

Discussion Questions for the PanelIssue 2: How are you addressing age profile and growing backlog in buildings on your campus?

UVM:How are you balancing investments into new and existing space?

What are you doing to address buildings that are in poor condition or functionally obsolete and underutilized?

Bentley:How are you addressing the needs of campus buildings from the ‘60s and ‘70s?

What data are you using to better understand space utilization of buildings?

Northeast Campuses Operating Budgets FlatAnd definitely not keeping pace with inflation

$4.6 $4.7 $4.8 $4.8 $5.0 $4.9 $5.0

$0.3 $0.3 $0.3 $0.3 $0.3 $0.3 $0.3

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

2007 2008 2009 2010 2011 2012 2013

$/G

SF

Operating Budget $/GSF

Daily Service Planned Maintenance

$4.50 $4.72 $4.76 $4.72 $4.94 $4.83 $5.00$4.62 $4.73 $4.88 $4.94 $4.98 $5.04 $5.07

$0.22$0.24 $0.25 $0.25

$0.28 $0.28$0.27

$0.31 $0.32$0.35 $0.35 $0.36 $0.38 $0.40

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

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

$/G

SF

Daily Service Planned Maintenance

Public vs. PrivateOperating budgets averages adjusted for inflation

Public Average Private Average$5.63 $5.89

Bentley’s Operating Budget has Shrunk per GSF by 3% since FY2009

UVM’s Budget has Increased by 6% per GSF Since FY2009 and is Still Below the Public Average

Discussion Questions for the PanelIssue 3: How are you managing campuses with limited operational funding?

UVM:What organizational and operational changes have you made to reduce the impact of significant funding cuts?

How have these changes impacted customer satisfaction?

Bentley:What are you doing to reduce the overhead of facilities operations and make the facilities department more proactive?

Conclusions

Enrollment trends in northeast are declining, having a negative impact on net tuition revenue used to fund facilities investments or pay for debt service

Aging facilities are competing with faculty needs and financial aid for funding

Capital funding has not returned to pre-recession levels; public campuses have continued to see cuts in State funding

Funding for facilities operations have not kept pace with inflation, meaning cuts in staffing and contracts

Backlogs are growing and at public campuses reaching unsustainable levels

Institutional mission needs to drive the facilities conversation if money is to be secured

Strategies for Long-Term Facilities Success

19

Strategy 1: Build strategically. New construction must support the master plan and future programneeds of the university. Implement policies that result in minimal net new square footage until the backlog isreduced to manageable levels.

Strategy 2: Less can be more. Sometimes less is more when it comes to addressing agingbuildings with high backlogs. Consider eliminating or replacing aging space of certain construction vintageswith more modern and more efficient facilities.

Strategy 3: Look ahead. Set capital priorities that reflect an investment strategy spanning at least fiveyears. Such an approach has proven highly effective at lowering the backlog needs in aging buildings that aredetermined to be critical to the mission and programmatic needs of universities.

Strategy 4: Keep-up. Make annual stewardship (keep-up) investment a priority at every campus. Themore a campus keeps-up with life cycles as they come due, the less the backlog grows.

Strategy 5: Reward savings to be more proactive. Incentivize facilities operators whomake buildings run more efficiently (lower maintenance, custodial or energy costs) by reallocating the savingsto increase annual capital budgets – stewardship. The payback in capital is three to four times the value of thesavings reallocated.

Strategies for Long-Term Facilities Success

Discussion Questions for the PanelIssue 4: Which of these strategies are you implementing on your campus and how are you securing support for those strategies?

Group Discussion:Which strategies have you used to develop broader support for facilities investment?

Which data did you need to look ahead and make the case for annual investment in facilities?

How have you engaged the Board to secure funding for deferred maintenance needs on campus?

Questions from Audience?

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