Worcester State University FY17 Building Portfolios Results Presented by: Jordan Morris September 2018 University of Southern University of Southern Maine University of St. Thomas University of Tennessee, Knoxville University of Texas - Austin University of Texas at Dallas University of Texas Health University of Texas Rio Grande Valley University of the Sciences in Philadelphia University of Toledo University of Vermont University of Washington University of West Florida University of Wisconsin - Madison Vanderbilt University Virginia Commonwealth University Wake Forest University Washburn University Washington State University Washington State University - Tri-Cities Campus Washington State University - Vancouver Washington University in St. Louis Wayne State University Wellesley College Wesleyan University West Chester University West Virginia Health Science Center West Virginia University Western Oregon University Westfield State University Widener University Williams College Worcester Polytechnic Institute Worcester State University Xavier University
Peer Group Comparative institutions used for benchmarking Institution Babson College Bentley University Keene State College Massachusetts College of Art and Design University of Hartford University of Maine - Augusta University of New Haven University of Southern Maine Westfield State University Comparative Considerations Location Babson Park, MA Waltham, MA Keene, NH Boston, MA Hartford, CT Augusta, ME New Haven, CT Portland, ME Westfield, MA Size, technical complexity, region, geographic location, and setting are all factors included in the selection of peer institutions Technical Complexity Users / 100,000 GSF 5.0 4.0 3.0 2.0 1.0 0.0 900 800 700 600 500 400 300 200 100 0 Tech Rating 2.7 2.7 A B C D E F G H I WSU Density Factor 377 333 A B C D E F G H WSU I 2
A Shifting Campus Age Profile Worcester State University is operating with a younger age profile than peers 100% 90% 80% Campus Renovation Age by Category 3% High 28% Risk 16% Buildings Over 50 Life cycles of major building components are past due. Failures are possible. Core modernization cycles are missed. Highest risk % GSF 70% 60% 50% 40% 41% High Risk 43% Buildings 25 to 50 Major envelope and mechanical life cycles come due. Functional obsolescence prevalent. Higher Risk Buildings 10 to 25 30% 20% 10% 0% 26% 29% 15% WSU Renovation Age Peer Average 2017 Short life-cycle needs; primarily space renewal. Medium Risk Buildings Under 10 Little work. Honeymoon period. Low Risk Under 10 10 to 25 25 to 50 Over 50 3
Average Capital Investment Doubled in the Last 5 Years Recent investments have been directed towards new space Total Capital Investment $60.0 WSU FY2008-FY2012 WSU FY2013-FY2017 $50.0 10% Millions $40.0 $30.0 41% 59% 90% $28 $20.0 $10.0 $12 $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Existing Space Investment New Space Investment Average Examples of recent major new space investment: Wellness Center Construction (2015/2016) $52.0M, Sheehan Construction (2014) $43.0 M Examples of recent major existing space investment : Admin Renovation (2008/2009) $17.6M, Dowden/Chandler Heating Loop/Expansion (2009) $1.4M 4
Average Existing Space Investment has Decreased Future investment needs are weighted more heavily toward Building Systems Total Capital Investment into Existing Space $50.0 Total Capital Investment by Package BPS Identified Needs *Chart excludes new construction $40.0 4% 7% 10% 8% 8% 12% Millions $30.0 $20.0 36% 43% 27% 44% Envelope Building Systems Space Renewal Safety/Code Infrastructure $10.0 $0.0 $7.1 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 $2.7 Existing Space Investment Average 5
Existing Space Investment Compared to Peers Investments during FY2013-FY2017 into existing space have fallen below peer average $25.00 Worcester Total Project Spending into Existing Space Peers $20.00 $15.00 $/GSF $10.00 $10.04 $5.00 $3.52 $3.76 $4.47 $0.00 $18.82 $20.53 $3.09 $4.52 $3.23 $3.34 $2.21 $4.95 $3.70 $3.39 $2.89 $3.79 $4.03 $4.23 $3.88 $3.36 $3.31 $3.95 $5.92 $5.80 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 My Average Peer Average 6 *Chart does not include new space spending
Total Capital Investment vs. Funding Target Investment has fallen short of funding target since 2010 $16.0 $14.0 $12.0 *Chart does not include new space or infrastructure spending Total Capital Investment vs. Funding Target Increasing Net Asset Value Millions $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 Lowering Risk Profile Increasing Backlog & Risk 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annual Stewardship Asset Reinvestment Annual Investment Target Life Cycle Need 7
Historical Trend Asset Reinvestment Backlog WSU s $/GSF backlog decreased 2016 to 2017 with addition of the Wellness Center $200 $180 $160 Worcester $169 Total Asset Reinvestment Need Peers $140 $/GSF $120 $100 $80 $60 $40 $20 $0 $96 $83 $163 $156 $157 $157 $166 $173 $183 $175 $184 $176 $69 $72 $74 $78 $82 $85 $88 $91 $93 $96 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Worcester Average Peer Average MA State Average 8
Identified Needs by Structure Categorizing the $185.1M in total campus needs Total Needs by Structure $ in millions 3% 8% 89% Building Needs Infrastructure Grounds Needs Total Need, $ in millions $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 Total Needs by Structure and Timeframe $164.0 $5.8 $14.6 Building Infrastructure Grounds A (1-3 years) B (4-7 years) C (8-10 years) 9
Identified Needs by Timeframe 82% of Need in 1-3 year timeframe Identified Needs - $185.1M 7% $13.1M 11% $20.0M Recent BPS Experience 20% 82% $15.1M Timeframe A (1-3 years) Timeframe B (4-7 years) Timeframe C (8-10 years) 29% 51% Timeframes A Timeframe: Projects due or coming due within the next one to three years B Timeframe: Projects coming due within the next four to seven years C Timeframe: Projects coming due within the next eight to ten years. Outside of ten years is considered X timeframe and outside of the scope of work for Building Portfolio Solutions 10 *Recent BPS experience includes Qualified data through July 2016 **Charts exclude new construction
Identified Needs by Project Category Similar Repair/Maintenance Profile, higher % of need in Infrastructure Identified Needs - $185.1M 11% Recent BPS Experience 4% 23% 66% Repair/Maintenance Modernization Infrastructure 29% 67% Project Category Repair/Maintenance: Replacement of components that have failed or are failing, or planned replacement at the end of a component s life expectancy Modernization: Replacement of components before the end of their life expectancy Infrastructure: Replacement of grounds and utility components outside of buildings *Recent BPS experience does not yet include DCAMM data 11
Identified Needs by System HVAC and Electrical have similar near term needs Identified Needs by System, by Timeframe $35.0 $30.0 $30.1 $26.3 $25.9 $25.0 $22.1 Millions $20.0 $15.0 $18.6 $15.7 $15.6 $14.6 $10.0 $5.0 $8.0 $5.8 $0.0 HVAC, Heating, & Cooling Renovation Electrical Exterior Shell Interior Shell Plumbing Safety/Code Grounds Conveyance and Kitchen Infrastructure A - 1-3 years B - 4-7 years C - 8-10 years 12
Total Needs by Building Student Center is the highest need building on campus $50.0 $42.8 $40.0 Identified Needs by Building $31.6 Millions $30.0 $20.0 $24.1 $22.0 $13.9 $10.0 $9.0 $8.8 $6.4 $3.4 $0.0 Student Center Chandler Village S&T Building Learning Resource Center Sullivan Building Dowden Hall Wayslean Hall Sheehan Administration Building A - 1-3 years B - 4-7 years C - 8-10 years 13
$/GSF Need by Building Student Center and Chandler Village both above $350/GSF candidates for replacement $700 Identified Needs by Building $/GSF $600 $579 $500 $/GSF $400 $300 $200 $100 $353 $250 $209 $142 $110 $98 $46 $55 $0 Student Center Chandler Village S&T Building Learning Resource Center Sullivan Building Dowden Hall Wayslean Hall Sheehan Administration Building A - 1-3 years B - 4-7 years C - 8-10 years 14
Identified Needs by Investment Criteria 23% of need in reliability category, mainly in Student Center and LRC BPS Identified Needs Recent BPS Experience 29% 8% 23% 12% Reliability Safety/Code Asset Preservation Economic Opportunity Program Improvement 3% 28% 11% 48% 10% 28% Reliability: Issues of imminent failure or compromise to the system that may result in interruption to program or use of space. Safety/Code: Code compliance issues and institutional safety priorities or items that are not in conformance with current codes, even though the system is grandfathered and exempt from current code. Asset Preservation: Projects that preserve or enhance the integrity of buildings systems, structure, or campus infrastructure. Economic Opportunity: Projects that result in a reduction of annual operating costs or capital savings. Program Improvement: Projects that improve the functionality of space, primarily driven by academic, student life, and athletic programs or departments. These projects are also issues of campus image and impact. *Safety/Code projects outside of project scope 15
100% Understanding Net Asset Value NAV of Index Investment Strategy 90% 80% 70% 75% 72% 100%- 85% Capital Upkeep Stage: Primarily new or recently renovated buildings w/ sporadic building repair & life cycle needs; You pick the projects % NAV 60% 50% 40% 85%- 70% Repair and Maintain Stage: Buildings are beginning to show their age and may require more significant investment on a case-by-case basis 30% 20% 10% 61% 70%- 55% Systemic Renovation Stage: Buildings may require more significant repairs ; large-scale capital infusions/ renovations are inevitable; The projects pick you 0% A B C D E F G H I WSU Peer Average MA State Average (Replacement Value-Building Needs) NAV Index = X 100 Replacement Value Below 55% Demolition/Transitional/ Gut Renovation Stage: Major buildings components are in jeopardy of complete failure. Reliability issues are widespread throughout the building. 16
% Four buildings in the Transitional NAV stage 100% 80% 60% 40% 20% 0% 99% 92% 92% 91% Capital Upkeep 83% 82% NAV by Building Repair/Maintain 78% 74% 55% Systemic Reno 51% 21% Transitional/ Reno -2% -20% -40% -36% -60% Wellness Center Parking Garage Sheehan Modular Building Administration Building Wayslean Hall Dowden Hall Sullivan Building S&T Building Learning Resource Center 17 Candlewood Chandler Village Student Center 17
High Density & Asset Reinvestment Impact Operations High campus use intensity, coupled with high Asset Reinvestment need leads to tighter coverage and supervision ratios Maintenance Staffing Maintenance Supervision Maintenance Materials 160,000 40 $45,000 140,000 35 $40,000 120,000 30 $35,000 GSF/FTE 100,000 80,000 60,000 40,000 103,738 FTE/Supervisor 25 20 15 10 13 $/FTE $30,000 $25,000 $20,000 $15,000 $10,000 $16,477 20,000 5 $5,000 0 A B C D E F G H I WSU 0 A B C D E F G H I WSU $0 A B C D E F G H I WSU Ordered by: Tech Rating 18
Key Takeaways Significant needs despite younger age profile 70% of space on WSU s is under 25 years of age. Much of the space in the 10-25 age group is beginning to show wear and need for systemic renewal. Spaces over 25 years of age are candidates for renovation or replacement, most notably Chandler Village and Student Center. Existing space investment not meeting target The majority of capital funding in the last five years has been directed toward new space. Investment levels have fallen short of stewardship targets for existing campus. Limited investment and higher use intensity of campus have accelerated wear in existing buildings. Investment based on building condition Maintain high NAV buildings with PM and Annual Stewardship. Buildings below 70% NAV are candidates for major systemic renewal or gut renovation from one-time funding infusions. High needs in the Student Center, coupled with it s unique and obsolete HVAC distribution make it a candidate for demolition and replacement. Asset Reinvestment Need Impacting Operations High $/GSF need and densely populated campus are leading to increased operating costs and coverage ratios of maintenance trades. Many systems are past their useful life and are being repaired rather than replaced, while also seeing accelerated use. Short term investments should focus on reliability needs and projects that replace systems to alleviate operating costs. 19
Questions & Discussion 20