Sightlines LLC FY11 Facilities MB&A Presentation New Mexico State University. Date: May 11, 2012 Presented by: Peter Reeves and Sheena Salsberry

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1 Sightlines LLC FY11 Facilities MB&A Presentation New Mexico State University Date: May 11, 2012 Presented by: Peter Reeves and Sheena Salsberry University of Illinois at Urbana-Champaign The University of Maine University of Maine at Augusta University of Maine at Farmington University of Maine at Machias University of Maine at Presque Isle University of Maine at Fort Kent University of Maryland University of Massachusetts Amherst University of Massachusetts Boston University of Massachusetts Dartmouth University of Massachusetts Lowell University of Michigan University of Minnesota University of Missouri University of Missouri - Kansas City University of Missouri - St. Louis University of New Hampshire University of New Haven University of Notre Dame University of Oregon University of Pennsylvania University of Portland University of Redlands The University of Rhode Island, Narragansett Bay The University of Rhode Island, Feinstein Providence The University of Rhode Island, Kingston University of Rochester University of San Diego University of San Francisco University of St. Thomas (TX) University of Southern Maine University of Toledo University of Vermont Upper Iowa University Utica College Vassar College Virginia Commonwealth University Virginia Department of General Services Wagner College Wellesley College Wesleyan University West Chester University of Pennsylvania West Virginia University Western Oregon University 1

2 Sightlines Profile 60+ professionals serving institutions in over 35 states Established in 2001 Over 275 Campuses 120+ Public and 130+ Private 7+ State Systems Database of over 825M GSF Developed a tool based on Common vocabulary Consistent analytical methodology Credibility through benchmarking 2

3 Groups for Comparisons Composite, I&G, and Housing Peers Composite Peer Institutions George Mason University University of New Hampshire Northern Arizona University University of Rhode Island The University of Alabama - Tuscaloosa University of Southern Mississippi The University of Maine Virginia Commonwealth University University of Massachusetts - Amherst I & G Peer Institutions Iowa State University Kansas State University Oregon State University Southern Methodist University Dallas Texas A&M University The University of Arizona The University of Oklahoma Trinity University University of Central Arkansas University of Colorado Boulder University of Missouri Columbia University of Southern Mississippi Housing Peer Institution Clemson University - Housing George Mason University - Housing Mississippi State University - Housing Princeton University Rental House The University of Alabama Tuscaloosa - Housing University of Massachusetts Amherst - Housing University of Rhode Island Housing University of Southern Mississippi - Housing 3

4 A vocabulary for measurement The Return on Physical Assets ROPA SM The annual investment needed to insure buildings will properly perform and reach their useful life Keep-Up Costs The accumulated backlog of repair and modernization needs and the definition of resource capacity to correct them. Catch-Up Costs The effectiveness of the facilities operating budget, staffing, supervision, and energy management The measure of service process, the maintenance quality of space and systems, and the customers opinion of service delivery Annual Stewardship Asset Reinvestment Operations Effectiveness Service Asset Value Change Operations Success 4

5 Core considerations FY11 Physical profile Space is younger than peers, but has more buildings over 25 years old Increase in enrollment has created a denser campus NMSU has more buildings on campus than peers Operations Success Significant drop in facilities budget since FY08 Staffing coverage levels have shifted throughout the years in all departments Strong improvement in I&G s service process score with the new work order system Capital Investments Recurring investments into campus are consistently strong, especially at the I&G campus. I&G is able to hit targets levels higher than peers and the Sightlines database NMSU has a good mix of project types, allocated from the appropriate funds NAV s of campus and campus buildings inform capital investments strategies. 5

6 Space Profile 6

7 Student enrollment out growing space Enrollment went up by 18% since FY05; space by 6% 20% Growth in Space Vs. Students (since 2005) 15% 10% 5% Housing Chamisa Village Pinon Hall I&G Albuquerque Distant Ed Native America Cultural Center HSS Annex Add. 0% % Acad/Admin Residential Student Life Support Student FTEs 7

8 Student enrollment out growing space Enrollment went up by 18% since FY05; space by 6% 20% Growth in Space Vs. Students (since 2005) 15% 10% 5% Housing Chamisa Village Pinon Hall Growth I&G in Albuquerque enrollment Distant Ed Native increases America density Cultural Center HSS Annex Add. 0% % Acad/Admin Residential Student Life Support Student FTEs Student FTEs Change in GSF 8

9 Frequency in Database Density increasing for both NMSU and peers NMSU has slightly more users on campus than peers Density Residential Campuses Research Campuses Commuter Campuses NMSU Composite: 385 Density Factor FY05 FY11 NMSU Peers

10 Housing campus with many smaller buildings Composite building inventory: 146 buildings/1m GSF Buildings/1M GSF Buildings / 1M GSF Building Intensity Building Intensity I & G Housing 60 NMSU Peer Average Peer Avg Building Intensity Impacts: -Maintenance staffing, the higher the building intensity, the more building envelope and systems to work on - Maintenance supplies and materials, with the increase of envelope and building system needs -Campus appearance, the more buildings, the more needs to be addressed Please note the change of scale between charts 10

11 Buildings/1M GSF Building Intensity by campus Campuses with more buildings can result to more demands and declining impressions scores General Repair Inspection Buildings/1M GSF General Repair Inspection 350 Building Intensity - Housing 5 80 Building Intensity I&G Building Intensity General Repair impression Building Intensity General Repair impression 11

12 GSF Physical space view 672buildings; 4.58MGSF 50% Younger Campus Age Renovation Age NMSU Composite vs. Peers Older 45% 40% 35% 30% 36% 43% 39% 36% 32% 25% 27% 20% 15% 10% 5% 8% 15% 17% 19% 10% 18% 0% NMSU Construction Age NMSU Renovation Age Peers Renovation Age NMSU has 49% of space over the age of 25 Peers have 54% of space over the age of 25 12

13 % of GSF NMSU has less space over the age of 50 Age Profile by Campus 100% 90% 80% 8% I&G vs. Peers 30% Housing vs. Peers 16% 18% 70% 60% 50% 42% 32% 30% 39% 40% 30% 20% 10% 0% % of space over 25 years 36% 37% 11% 22% 32% 14% 16% 16% I&G I&G Peers Housing Housing Peers 50% 62% 46% 57% Under 10 Years 10 to 25 Years 25 to 50 Years Over 50 Years 13

14 Typical lifecycle costs of a building $/GSF Age Category < 10 Years Age Category Years Age Category Over 25 Years Renovation Age: 15% 36% 49% # of buildings $30 $25 $20 I&G: Housing: % 8% 7% 6% $15 5% 4% $10 $5 $0 3% 2% 1% 0% Years % of Space Typical Annual Lifecycle Need Amortized Lifecycle Need - $6.34/GSF 14

15 Operations Profile 15

16 $/GSF NMSU Facilities operating budget Peers are more affected by the cost of living than NMSU $/GSF $10.00 Total Facilities Operating Budget $10.00 Adjusted Facilities Operating Budget $9.00 $9.00 $8.00 $8.00 $7.00 $7.00 $6.00 $6.00 $5.00 $5.00 $4.00 $4.00 $3.00 $3.00 $2.00 $2.00 $1.00 $1.00 $- $- Daily Service PM Utilities Daily Service PM Utilities Peer Avg. $5.75 Peer Avg. $5.03 Cost of Living Source: Council for Community and Economic Research 16

17 Facilities Operating Budget NMSU budget dropping at a faster rate than peers Peers Changes from FY08 to FY11 NMSU Changes from FY08 to FY11 18% 22% 26% 77% 7% 24% 17

18 Energy unit cost drops below peer average Energy savings through unit cost reductions $13K in savings since FY08 through reduced unit cost 18

19 Daily service constitute over 50% of budget Lower daily service than peers NMSU s Average FY08-FY11 44% 52% 4% Daily Service PM Utilities Peer's Average FY08-FY11 37% 60% 3% 19

20 Maintenance performance Staff covering more space with less resources General Repair/ Impression Score Peers: NMSU:

21 Custodial Performance Covering more space than peers with less supervision Difference of 3 supervisor Peers: 4.2 Cleanliness Inspection NMSU:

22 Grounds Performance Increase in staffing with resources less than peers Grounds Inspection Peers: NMSU:

23 Service Process Work order system I&G new work order system AIM provides more capabilities Organizational Structure Service Process - FY2011 Items to bring score up to a 5 Centralization of Request Scheduling Process Work Request Capabilities Performance Measurement I&G FY09 I&G Service desk assigns schedule Run reports to support project list Supervisor measure quality of work completed Reports generated for quality and time work is completed Backlog of work order report is updated and re-prioritized 23

24 Next steps Conducting a Customer Satisfaction Survey General Satisfaction with Facilities Services FY11 6% 4% 5% 32% 53% Far Below Expectations Below Expectations Meets Expectations Exceeds Expectations Far Exceeds Expectations 24

25 Capital Investment Profile 25

26 Large investment in new construction FY11 New construction totaled $23.1M in FY11, approx. 67% of spending that year $ (in Millions) $45.0 NMSU (Composite) Capital Investment $40.0 $35.0 Total Spending (FY05-FY11): $165.9M $30.0 $25.0 Average (With New Space): $23.7M $20.0 $15.0 $10.0 Average (w/o New Space): $12.8M $5.0 $- FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Existing Space New Construction 26

27 Stewardship levels are strong compared to peers Annual stewardship funds are able to address many needs on campus $/GSF $6.00 Peers Total Project Spending NMSU $5.00 $4.00 $3.00 $2.00 $1.00 $- FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Peer Average (AS & AR): $3.69/GSF Annual Stewardship FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Asset Reinvestment NMSU Average (AS & AR): $2.83/GSF Peer Average (AS): $.91/GSF NMSU Average (AS): $1.32/GSF 27

28 Defining a stewardship target $ in Millions $35 NMSU Composite FY2011 Stewardship Targets $30 $25 $20 $16.4 $15 $10 $32.3 $7.1 $5 $12.6 $9.5 $0 3% Replacement Value Life Cycle Need (Equilibrium) Functional Obsolescence (Target) Totals: $32.3M $29.0M $16.6M Envelope/Mechanical Space/Program Industry Standard Sightlines Recommendations Replacement Value = $803Million 28

29 Recurring capital investment over time Closing in on the target with increasing recurring funds $ in Millions $35.0 NMSU Composite Target Range $30.0 $25.0 Increasing Net Asset Value $20.0 $15.0 $10.0 Sustaining Net Asset Value Decreasing Net Asset Value $5.0 $ Envelope/Mechanical Space/Programming 29

30 NMSU stewardship above peer and database average I&G s target levels within 10% of Sightlines database % of Target 70 Total Annual Stewardship by Campus Type 5 Year Average (FY07-FY11) I & G NMSU Housing Peer Average Stewardship Range # of schools Less than 20% 50% 20%-50% 40% Over 50% 10% 30

31 Stewardship investment % of target NMSU outperforming database for all years of analysis % Funded Space/Programming Database Avg. 120% 100% Emphasize Space spending Annual Stewardship Investments % of Target Outperforming Sightlines Public School Database 80% 60% 40% 20% Underperforming Public School Database FY05 FY06 FY08 FY11 FY07 0% 0% 20% 40% 60% 80% 100% 120% FY09 FY10 % Funded Envelope/Mechanical Database Avg. Emphasize Envelope/Mechanical Spending Graph includes Sightlines public institutions database 31

32 Total investment over time On average, hitting 93% of target $ in Millions $35.0 NMSU Composite Target Range $30.0 $25.0 Increasing Net Asset Value $20.0 $15.0 $10.0 Sustaining Net Asset Value Decreasing Net Asset Value $5.0 $ Annual Stewardship Asset Reinvestment 32

33 $/GSF Type of spending by funding source AS target on Envelope, Systems, and Infrastructure; AR targets Space projects AS Project Split-out FY07-FY11 8% 13% $0.80 $/GSF by type of project FY07-FY11 Avg. 23% 29% $0.70 $ % Bldg. Envelope Infrastructure Code AR Project Split-out FY07-FY11 Bldg. Systems Space $0.50 $0.40 $0.30 6% 7% $ % $ % 18% $0.00 Bldg. Envelope Bldg. Systems Infrastructure Space Code NMSU AS Avg. 5 years average $1.48/GSF NMSU AR Avg. 5 year average $1.49/GSF 33

34 AR Backlog in line with peer and database average The mix of I&G and housing needs balance NMSU to the peer average $/ GSF 140 Total Asset Reinvestment Backlog ($/GSF) I & G Housing NMSU Peer Average 34

35 Net Asset Value Border lining Repair and Maintain and Systemic Reno. stage Investment Strategy Capital Upkeep Stage: Primarily new or recently renovated buildings w/ sporadic building repair & life cycle needs; You pick the projects Repair and Maintain Stage: Buildings are beginning to show their age and may require more significant investment on a case-by-case basis Systemic Renovation Stage: Buildings may require more significant repairs ; large-scale capital infusions/ renovations are inevitable; The projects pick you Critical Maintenance/Gut Renovation Stage: Major buildings components are in jeopardy of complete failure. Reliability issues are widespread throughout the building. Net Asset Value = Replacement Value Deferred Maintenance Replacement Value *Institutions ordered by tech rating Peer Average 35

36 Using Asset Value for Strategic Spending Estimated NAV for I&G space NAV Index 100% 90% 80% NAV I&G Index* Over 25 years Over 50 years Repair / Maintain 70% 60% Systemic Renovation 50% 40% 30% 20% Transitional / Demo 10% 0% * Net Asset Value Index (% in good condition) is an estimate. Sample only includes buildings over 10,000 GSF 36

37 Concluding comments Asset Reinvestment FY2011 Summary Campus profile: The building intensity creates a higher demand on staff and can be a factor of the lower campus scores. Additionally, NMSU has more users on campus than peers, creating more wear and tear on campus. Continue to develop the stewardship program to prepare for the upcoming needs for the younger space on campus. Operation services: Facilities has been able to reduce overall operating budgets, which has also caused a shift in coverage and material spending levels. Conducting the customer satisfaction survey will help facilities understand if the change is sustainable and how they can still provide service to the users, while maintaining costs. FY2011 Annual Stewardship Operating Effectiveness Capital Project Spending: NMSU has a strong mix of spending from both recurring and one-time capital funds. The consistent investment has helped NMSU get closer to target levels, and has met target needs in three out of the last seven years. Investing into different funding strategies will give another level of knowledge of picking projects to reduce the AR backlog. Service 37

38 Questions and Comments 38

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