Pennsylvania Association of School Business Officials 56th Annual Conference

Technologies in Capital Planning

Forecasting Facility Needs and Long-Term Planning

David KornegaySenior Applications Engineer

and SchoolDude “Mayor”

Pennsylvania Association of School Business Officials 56th Annual Conference

Resources Available to You

www.schooldude.com/resources www.myschooldude.com

Pennsylvania Association of School Business Officials 56th Annual Conference

Perception Gap –What Others See

Pennsylvania Association of School Business Officials 56th Annual Conference

Perception Gap –The Reality

Pennsylvania Association of School Business Officials 56th Annual Conference

Why Capital Planning?Quality School

Facilities

Strong Neighborhood

s

Economic Growth

Awareness

Thriving Community

Strong Tax Base

Pennsylvania Association of School Business Officials 56th Annual Conference

Before students stepped foot inyour doors this year, there was a

$5,400 per student backlogof problems you needed to fix.

Source: “Repair for Success: An Analysis of the Need and Possibilities for a Federal Investment in PK-12 School Maintenance

and Repair”Prepared by the 21st Century School Fund

November 16, 2009

Survey Time!Are You Planning?

• Yes – Once a Year• Yes – When we need a bond, grant or

emergency funding• Yes – Throughout the Year• Sometime over a 5 year period• No

Pennsylvania Association of School Business Officials 56th Annual Conference

Facilities need a radar!

Why Planning Matters

Pennsylvania Association of School Business Officials 56th Annual Conference

What’s Threatening Your Buildings?• Lack of Strategic

Planning• Chronic

Underfunding

• Limits on Resources

• Status quo

Rick says stats too high.Blue start at .05, orange end at .45I modified slightly. Orange is at .45 in 2009.

For every $1 of maintenance you defer,

it takes $3-4 to fix

Deferred Maintenance

Potential

Pennsylvania Association of School Business Officials 56th Annual Conference

Current Realities

The American Society of Civil Engineers in 1998 gave public school infrastructure a grade of “F”.

By 2009, schools had raised their grade to a “D”.

Pennsylvania Association of School Business Officials 56th Annual Conference

What You Face Along with Budget Limits

“Everyone blames me when things break down and decay, even though my requests have been denied.”

“My _______ does not understand what it costs to keep these facilities going.”

“I need strong support to articulate the need.”

Pennsylvania Association of School Business Officials 56th Annual Conference

What You Face Along with Budget Limits

“The available solutions out there are out of my reach or are ineffective.”

“Politics, politics, politics.”

“My _______ does not believe my list.”

“I’ve been putting band aids on things.”

Pennsylvania Association of School Business Officials 56th Annual Conference

Four Step Program to Get More Money, Capital, Staff, etc.

1.

2.

3. 4. Present your request for staff and

money

Pennsylvania Association of School Business Officials 56th Annual Conference

Four Step Program to Get More Money, Capital, Staff, etc.

1. Improve your image2. Establish a respected

methodology3. Educate the decision makers and

decision influencers4. Present your request for staff and

money

Pennsylvania Association of School Business Officials 56th Annual Conference

Change the Budget Conversation• Deferred maintenance is a statement of

fact, but good control means:– Annual backlog is visible, predictable– Good stewardship is easily illustrated

• Budget discussions tooemotional; shift conversationsfrom “wants” to “risks/needs” as predictive data identifies potential threats

“Maintenance” Definitions

Routine Maintenance: periodic “tune-ups”

Capital Renewal: replacing major subsystems

Backlog of Renewal (DM): necessary renewal work that has been deferred

Modernization:responding to changes in standards and/or program

Modern

izatio

n

Renew

al

Routine

Backlog

What is Your Process?What most closely matched your facility capital budgeting process?

Source: Registration Survey for“Capital Planning and Forecasting

for Educational Facility Funding Needs”

(282 respondents)

Pennsylvania Association of School Business Officials 56th Annual Conference

The ListInexpensive but questionable credibility

Pennsylvania Association of School Business Officials 56th Annual Conference

The List

Pennsylvania Association of School Business Officials 56th Annual Conference

Facility Condition AssessmentHighly credible, but too expensive for some

Pennsylvania Association of School Business Officials 56th Annual Conference

Issue, Need or Deficiency

Pennsylvania Association of School Business Officials 56th Annual Conference

Estimate, Correction or Resolution

Pennsylvania Association of School Business Officials 56th Annual Conference

Life Cycle ModelingProven methodology, highly credible and very affordable

Pennsylvania Association of School Business Officials 56th Annual Conference

Typical Systems in Modeling

Pennsylvania Association of School Business Officials 56th Annual Conference

The Concept of Life Cycle Modeling:

1. Building Systems have known life expectancies;

2. The remaining life of each building system can be estimated;

3. Renewal costs can be estimated.

Source: Pacific Partners Consulting Group

Pennsylvania Association of School Business Officials 56th Annual Conference

Sample Renewal Plan

Pennsylvania Association of School Business Officials 56th Annual Conference

Key Terms:

CRV (Current Replacement Value) – how much would it cost to replace the same size building that has the same purpose?

FCI (Facility Condition Index) used to provide a statistical comparison of a group of facilities’ conditions.

= $xxx ?

Facility Condition Indexing (FCI)

DM (Deferred Maintenance) + CR (Capital Renewal)

__________________________

CRV (Current Replacement Value)

FCI % =

Building condition can be defined as: • (Good) 0 to 5 percent FCI• (Fair) 5 to 10 percent FCI• (Poor) 10 to 30 percent FCI• (Critical) greater than 30 percent FCI

$290,000 + $450,000

$6,500,00012%

Other FCI Interpretations

Pennsylvania Association of School Business Officials 56th Annual Conference

Alaska

Pennsylvania Association of School Business Officials 56th Annual Conference

Pennsylvania Association of School Business Officials 56th Annual Conference

Life Cycle Modeling

• Approach endorsed in a joint publicationby APPA, NACUBO & SCUP

• Implemented by The Smithsonian, The Getty, NASA, US Navy

• Implemented on >100 million sq. ft. of educational facilities including 200+ districts, private schools and college campuses**

* Stanford University and Pacific Partners**Examples of colleges include state university

systems for CA, MN, NY, OR, TX

*

Pennsylvania Association of School Business Officials 56th Annual Conference

Objectives of Life Cycle Modeling

Create multi-year strategic capital plans that incorporate renewal needs:

– Estimate the magnitude of the backlog.

– Predict when building systemsneed to be replacedor renovated, plusthe associated costs.

Source: Pacific Partners

Pennsylvania Association of School Business Officials 56th Annual Conference

Objectives of Life Cycle Modeling

Provide a sustainable planning methodology:

– profiles of each building– easy to update– inexpensive to implement

and maintain

Save money:a) minimizing condition assessmentsb) identify buildings to “consume”c) consolidating capital projects Source: Pacific Partners

Translating Life Cycle Modeling to Non-Facility Folks

www.brickbits.com

Minimal info is needed to see trends and estimates

Pennsylvania Association of School Business Officials 56th Annual Conference

Useful Information

• Histograms

• Backlog

• Renewal Needs

Analysis

Backlog Over $1 Million Source: Pacific Partners Consulting Group

Breakout by

• Systems and subsystems

• Sites or Campuses

• Buildings

• Years

Pennsylvania Association of School Business Officials 56th Annual Conference

Sample Data:Categories for Capital Reasons

• ADA/Accessibility• Additions• Aesthetics• Analysis• Asbestos

Abatement• Building Adequacy• Codes/Standards

Compliance• Design• Early Renewal

• Early System Failure

• Educational Adequacy

• Energy Conservation

• Enhancement• Environmental

Improvements• Functional

Improvements

• Human Error• Loss Prevention• New Site

Construction• Remodeling• Renovation• Repairs - Major• Repairs - Minor• Roof Replacements• Site Servicing

Pennsylvania Association of School Business Officials 56th Annual Conference

Sample Data:Categories for Capital Reasons• System Abandoned• System Beyond Useful

Life• System Damaged/Worn• System Failing• System Inadequate• System Missing

• Upgrades – Facility• Upgrades – Health and

Life Safety• Upgrades – Mechanical

Systems• Upgrades – Site• Upgrades – System

Pennsylvania Association of School Business Officials 56th Annual Conference

Overcoming the Challenges

• Articulate the Needs– Short-term– Intermediate– Long-term

• Avoid the Status Quo• Leverage Techniques and Technology

to “market” your department’s needs

Pennsylvania Association of School Business Officials 56th Annual Conference

Questions?

Pennsylvania Association of School Business Officials 56th Annual Conference

Bring It All Together

Pennsylvania Association of School Business Officials 56th Annual Conference

Identify Other Needs Along With Renewals

Pennsylvania Association of School Business Officials 56th Annual Conference

PlanningDirect

On-Demand

Profiles for each location

Detailed estimatesfor the next 5-15 years of the Backlog and renewal projections by location, year, system and more

Unlimited support and online training

Pennsylvania Association of School Business Officials 56th Annual Conference

Questions?