The State of Facilities at Midwestern Institutions
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The document lists various universities and their facilities data. It then provides a summary of key trends in facilities for Midwestern universities: - Over 60% of space is over 25 years old, posing reliability risks as components age past their lifecycles. - Enrollment has remained flat while space has increased, resulting in a 22% decline in student density and raising questions about space management. - Capital funding recovered in 2013 after cuts in 2010 but remains below inflation-adjusted levels, forcing campuses to do more with less in operations and maintenance. - Shifting investments to building envelopes and systems over space upgrades extends the lifespan of renovations. However, backlogs continue rising due to limited funding
The State of Facilities at Midwestern Institutions
- 1. Center University of Missouri – Columbia University of Missouri – Kansas City University of Missouri – St. Louis University of Nebraska at Kearney University of Nebraska at Lincoln University of Nebraska Medical Center University of Nebraska Omaha University of New Brunswick University of New Hampshire University of New Haven University of New Mexico University of North Texas University of Northern Iowa University of Notre Dame University of Oregon University of Ottawa University of Pennsylvania University of Redlands University of Rhode Island University of Rochester University of San Diego University of San Francisco University of Southern Maine University of Southern Mississippi University of St. Thomas University of Tennessee Health Science Center University of Tennessee, Knoxville University of Texas at Dallas University of the Sciences in Philadelphia University of Toledo University of Vermont University of Washington Vanderbilt University Virginia Commonwealth University Virginia Department of General Services Wagner College Wake Forest University Washburn University Washington University in St. Louis Wellesley College Wesleyan University State of Facilities in Higher Education: 2015 Benchmarks, Best Practices, & Trends Midwestern Institutions
- 2. 16% 24% 33% 27% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Midwest Region %ofSpace 2015 Age Profile Under 10 10 to 25 25 to 50 Over 50 High Risk % of Space Over 25 Years Old Continues to Rise 2 Roughly 60% of space is over 25 years old, which is a critical age threshold that threatens the reliability of program delivery. While some Midwestern institutions have been able to renovate their 25 to 50 year old space, others have had to watch their facilities age without significant renovation and are now crossing over into the over 50 year old category, significantly compounding the challenge of finding money to address the preponderance of needs coming due. 10-25 25-50 Focus on PM: Significant need for PM in young systems. Low Risk: “Honeymoon” period – little need for capital reinvestment. Medium Risk: Lower cost space renewal updates needed. Higher Risk: Life Cycles coming due in core building components. React as Needed: Issues in components past the end of their lifecycles will demand reactive maintenance. Highest Risk: Life cycles of major components past due – end of building life cycle approaching. Operational Demands: Capital Risk: Under 10 Over 50 Balance PM and Reactive Maintenance: Younger components still require PM. Aging components require reactive maintenance.
- 3. 0% 2% 4% 6% 8% 10% 12% 14% 16% Space Growth Enrollment Growth Declining Enrollment Adds to Challenge of Managing Density 3 In addition to older space, Midwestern institutions are dealing with flat enrollment rates while experiencing some of the highest percentage increases in space since 2008. To the point where the increase in space is practically double the increase in enrollment. As a result, Midwestern campuses are experiencing steady declines in student density (22% decrease since 2008), which raises questions about how space will be managed with fewer students. With future enrollment projections difficult to determine, managing campus density will be a critical strategy in the future as rightsizing decisions may become a reality. Central Eastern Midwest Rocky Mountain Southern Pacific Coast
- 4. Capital Funding Slow to Recover; Hitting Highs in 2013 4 0.00 1.00 2.00 3.00 4.00 5.00 6.00 2008 2009 2010 2011 2012 2013 2014 2015 Annual Capital One-Time Capital $/GSF Midwestern institutions took a sizable cut in capital funding in 2010 and it took until 2013 for these institutions to make a full recovery. While facing several years of stagnant investment levels, Midwestern institutions realized that they had to reexamine their funding strategies. Although total capital spending was slow to recover, annual capital spending has been on the rise since 2011 as campuses have begun to look at institutional sources of funding more seriously in recent years. This funding type enables leaders to be proactive about pending critical needs and flexibly apply appropriations to preserve physical assets. This becomes increasingly important when institutions are unable to rely on large one-time infusions of capital to address major needs.
- 5. Mix of Capital Spending on the Right Track 5 42% 39% 38% 38% 38% 37% 41% 38% 40% 43% 49% 48% 46% 46% 41% 44% 18% 18% 13% 14% 16% 17% 18% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Space Renewal & Safety Code Envelope & Building Systems Infrastructure In addition to total spending and funding sources, project selection must also be taken into account to fully understand the impact of historical investment patterns. To counteract the limited capital dollars available, Midwestern institutions have recently made strong efforts to invest a greater portion of their capital into high priority project needs that affect building reliability (envelope and mechanical systems) rather than space upgrades. Sightlines has found that space renewal projects last about 12 years while envelope and buildings systems investment last 30 years or more. So, while funding remains limited, the shift of that funding to more durable, high ROI investments is an important strategy.
- 6. Facilities Operating Budgets Slowly Rising 6 3.53 3.64 3.58 3.53 3.56 3.65 3.67 3.7 0.25 0.27 0.27 0.28 0.30 0.32 0.31 0.34 0.00 1.00 2.00 3.00 4.00 5.00 2008 2009 2010 2011 2012 2013 2014 2015 Daily Service Planned Maintenance Facilities operating budgets are starting to grow at Midwestern institutions, but at very modest rates. When compared to steady state adjusted levels, campuses are funding their facilities operations approx. 13% less than the rate of inflation. This is forcing campuses to try to do more with less. $/GSF
- 7. 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 0 20,000 40,000 60,000 80,000 100,000 120,000 TotalGSF/FTE Steady Increase in Staffing Coverages Maintenance staff coverage rates 7 Central Eastern Midwest Rocky Mountain Southern Pacific Coast Due to the increase in space and flat operating budgets, Midwestern institutions are experiencing significant increases in maintenance staff coverage rates. Essentially, many institutions are adding additional square footage, but not adding additional maintenance workers. This approach may work in the short term while buildings are new, but as buildings age, fewer maintenance staff could reduce the number of repairs and actually add to the deferred maintenance backlog. ServiceScores(1to5scale)
- 8. Facilities Asset Reinvestment Needs Continue to Grow 8 60 65 70 75 80 85 90 95 100 2008 2009 2010 2011 2012 2013 2014 2015 While funding shifts to more durable, high ROI investments have helped to mitigate some risk, overall funding reductions have caused facilities backlogs to increase by almost 21% since 2008. Finance and Facilities leaders at Midwestern institutions will need to look into implementing strategies that make the problem smaller and more manageable, which will help build confidence among decision makers and lead to a greater commitment of capital and operational resources for facilities. $/GSF
- 9. 9 Changing the Conversation Strategies for success Understand and communicate that not all buildings are created equal Use building portfolios Invest over time Reallocate savings Visit our website at Sightlines.com to download a free copy of our 2015 State of Facilities in Higher Education report for further insight into the four strategies for success.
- 11. What Does Sightlines Do? We Connect the Boiler Room to the Boardroom.
- 12. Who Partners with Sightlines? Robust membership includes colleges, universities, consortiums, and state systems 12 * U.S. News 2016 Rankings Sightlines is proud to announce that: • 450 colleges and universities are Sightlines clients including over 350 ROPA members. • Consistently over 90% member retention rate • We have clients in over 40 states, the District of Columbia and five Canadian provinces • More than 125 new institutions became Sightlines members since 2013 Sightlines advises state systems in: • Alaska • California • Florida • Hawaii • Maine • Massachusetts • Minnesota • Mississippi • Missouri • Nebraska • New Hampshire • New Jersey • Pennsylvania • Texas Serving the Nation’s Leading Institutions: • 70% of the Top 20 Colleges* • 75% of the Top 20 Universities* • 34 Flagship State Universities • 14 of the 14 Big 10 Institutions • 12 of the 14 SEC Institutions • 9 of the 12 Ivy Plus Institutions
- 13. Sightlines Creates a Common Vocabulary A vocabulary for Facilities Measurement, Benchmarking, and Analysis 13 Asset Value Change The annual investment needed to ensure buildings will properly perform and reach their useful life “Keep-Up Costs” Annual Stewardship 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 Operational Effectiveness The measure of service process, the maintenance quality of space and systems, and the customers opinion of service delivery Service Operations Success
- 14. Sightlines Drives a New Conversation Facilities intelligence toolkit that connects the dots between space, capital, and operating policies 14 A new conversation around facilities management… • Treats physical plant like a core business • Uses concepts of endowment management to contextualize investment decisions; • Aligns facilities operations and capital investment with institutional mission and finance; • Uses predictive analysis to focus on outcomes and not inputs. • Lets you tell your “facilities story” as effective as possible.
- 15. Three Phases for Continuous Improvement 15 ROPA+ model
- 16. 16 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 $/GSF 54% Increase This chart is based on a sample of 30 campuses that began working with Sightlines on our ROPA+ process for the first time in 2011. We examined each institution’s capital spending pattern prior to engaging in the ROPA+ process and then after having been engaged in the process for three years. The data above speaks for itself. This is a very positive trend based on Sightlines analysis that $1 of annual capital or stewardship investment can enable a campus to avoid as much as $3 in future capital renewal investment.
- 17. Connect with Sightlines Get in touch with us to start a new facilities conversation on campus 17 We’re eager to discuss your needs and answer any questions you may have about our Facilities Intelligence Solutions or these latest trends. Call us at (203) 682-4950 Email us at [email protected] Website: www.sightlines.com/ contact-us