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