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Out with the OldCreating a New Paradigm around the Fate of Your Buildings

Sightlines Webinar: Interview with Tony Calcado of

Rutgers University

March 23, 2016

Today’s Interviewer and Interviewee

Interviewer Interviewee

Jim Kadamus

Senior Advisor

Sightlines

Tony Calcado

Senior Vice President of Institutional

Planning and Operations

Rutgers University

2

Introduction to Sightlines and our database

Review of national facilities trends – Space, capital, and

operations

Rutgers’ story – what data made the case that a paradigm

shift was needed?

Q&A with Tony Calcado – What strategies were adopted?

What are the expected outcomes? How is campus engaged in

the conversation?

Summary of strategies and concluding thoughts

Agenda

3

Feel Free to Start a Dialogue with Our Presenters

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

4

Introduction

Who We Serve

Robust membership and growing database provides experience and perspective

Partners to the Nation’s Leading Institutions:

• 14 of the Top 20 Colleges*

• 15 of the Top 20 Universities*

• 34 Flagship State Universities

• 13 of the 14 Big 10 Institutions

• 8 of the 12 Ivy Plus Institutions

• 8 of 13 Selective Liberal Arts Colleges

Serving state systems in:

• Alaska

• California

• Connecticut

• Hawaii

• Maine

• Massachusetts

• Minnesota

• Missouri

• New Hampshire

• New Jersey

• Oregon

• Pennsylvania

• Texas

• West Virginia

66

Sightlines Drives a New Conversation

Facilities intelligence toolkit that connects the dots between space, capital, and operating policies

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.

7

2015 State of Facilities in

Higher Education

Space and Enrollment Growth

Space growing faster than enrollment in 2013 and 2014

0%

2%

4%

6%

8%

10%

12%

2007 2008 2009 2010 2011 2012 2013 2014

Space and Enrollment GrowthNational Average

Space Growth Enrollment Growth

9

Space per Student

Slight increase as enrollment levels off

0

100

200

300

400

500

600

2007 2008 2009 2010 2011 2012 2013 2014

GS

F/S

tud

en

t

Space per Student(Public/Private)

Public Private National Average

10

Square Footage by Age Category

Progress in resetting the clock on buildings over 50 years old

14%20%

17%

25%

32%

31%

37%24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Construction Age Renovation Age

% o

f S

pace

Construction Age vs. Renovation Age

Under 10 10 to 25 25 to 50 Over 50

Buildings Under 10

Little work. “Honeymoon” period.

Low Risk

Buildings 10 to 25

Short life-cycle needs; primarily space renewal.

Medium Risk

Buildings 25 to 50

Major envelope and mechanical life cycles come due.

Higher Risk

Buildings over 50

Life cycles of major building components are past due. Failures are possible.

Highest risk

11

Annual Capital Investment

Private 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

12

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

13

Facilities Operating Budget

Daily 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

14

Custodial Coverage

Custodial coverage rates going up slowly – cleanliness scores declining slowly

3.80

3.85

3.90

3.95

4.00

4.05

4.10

4.15

4.20

4.25

4.30

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014

To

tal

GS

F/F

TE

Coverage Cleanliness Scoring

Custodial CoverageGSF per FTE

National Average Public Average Private Average

15

Maintenance Coverage

Maintenance coverage rates steadily increasing

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

To

tal

GS

F/F

TE

Maintenance CoverageGSF per FTE

National Average Private AveragePublic Average

16

Rutgers’ Facilities Story

Institutional Profile – Rutgers University

> Sightlines Member since

2003

> Public University

> 67,000+ total students

> Main Campus in New

Brunswick, NJ

> Biomedical & Health

Science Campus in

Newark, NJ

> Regional campuses

across the state

> 27 Million GSF

> 1,009 Buildings

> 1,550 Maintained Acres

18

Rutgers is Getting Busier

0%

5%

10%

15%

20%

25%

2008 2009 2010 2011 2012 2013 2014 2015

% C

han

ge f

rom

FY

08

Change since FY2008 – Students vs. Academic Space

Rutgers Student FTE Rutgers Academic GSF

Increasing

DensityD Space

D Students

19

Space Challenge: Older Buildings

50.4 49.448.8

41.1

0

10

20

30

40

50

60

Rutgers Big 10 Peers

Years

Construction vs. Renovation Age

Construction Age

Renovation Age

Under 10 Years

Under 10 Years

10 to 25 Years

10 to 25 Years

25 to 50 Years

25 to 50 Years

Over 50 Years

Over 50 Years

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rutgers Big 10 Peers

% o

f To

tal C

am

pu

s G

SF

Campus Buildings by Renovation Age

High

Cost

High

Cost

20

Space Challenge: Smaller Buildings

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Rutgers Big 10 Peers

Ave

rag

e G

SF

/ B

uild

ing

Average Building Size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Under10,000GSF

10,000 to30,000GSF

30,000GSF to60,000GSF

Over60,000GSF

Building Count vs. Building Size

% of Buildings

% of GSF

21

Spending into Existing Space Below Target

$0

$20

$40

$60

$80

$100

$120

$140

Milli

on

s

Capital Spending vs. TargetsExisting Space Only

Annual Stewardship Asset Reinvestment

Target Need Equilibrium Need

$98

$79

$126

$96

$0

$20

$40

$60

$80

$100

$120

$140

Rutgers Big 10$/G

SF

Asset Reinvestment NeedFY10 vs. FY15

FY10 FY15

22

Funding Challenge: New Space Uses 69% of Available Funds

$0

$20

$40

$60

$80

$100

$120

Milli

on

s

Existing vs. New Space Spending

Existing Space New Space

35%

65%

Rutgers FY2010-FY2015

60%

40%

Big Ten FY2010-FY2015

23

Maintenance & Custodial Coverages on the Rise

Budget reductions straining service levels

0

20,000

40,000

60,000

80,000

100,000

120,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Maintenance Coverage

GS

F/F

TE

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Custodial Coverage

GS

F/F

TE

24

Interrelated Facilities Issues Affecting Rutgers

Small, Older

Buildings

Underfunding

leads to

Increased

Backlog

Strain on Operations &

Service Levels

25

Q&A with Tony Calcado:A New Paradigm at Rutgers

University

• Facilities and CAO/Provost work side by side for space allocation, especially dealing with decisions about the future of small buildings

• Facilities supports the mission of the University

• Project coordination occurs between facilities needs and program needs

EXPECTED

OUTCOME

Envelope32%

Building Systems

36%

Safety/ Code6%

Infrastructure6%

Space Renewal

20%

Project Selection for Existing Buildings –

College Avenue Campus,FY2011-FY2015

Currently, building needs drive investment. With

a coordinated approach, Rutgers will achieve a

more balanced investment mix.

Keystone Strategy: Facilities Needs a Seat at the Table

• Positive relationship between Facilities and campus leadership teamACTION

27

• Small buildings are taken down

• Buildings with high backlog are taken down

EXPECTED

OUTCOME

Strategy #1: No Net New Policy

• For any new building, at least one building comes down

• Enforced through Facilities Leadership & President’s OfficeACTION

$0.00

$1.00

$2.00

$3.00

$4.00

Under 10,000GSF

10,000 to25,000 GSF

25,000 to50,000 GSF

Over50,000 GSF

Main

ten

an

ce C

ost

-$/G

SF

Typical Maintenance Costs* by Building Size

*Costs are from the Sightlines database, featured in the Chronicle of Higher Ed article,

“Less is More: Campus Officials Trim Square Feet to Cut Costs”

28

• Owners release space

• University has flexibility to consolidate and take down excess space

• Campus utilization increases – more revenue with lower carrying cost of facilities

EXPECTED

OUTCOME

Strategy #2: Change the Budget to Charge for Space

• Schools/Departments/Centers pay for space – RCM ModelACTION

29

Strategy #3: Change the Paradigm of Classroom Utilization

• Document and measure utilization

• Get serious about scheduling – target the low hanging fruit

• Set policies that incentivize central control:

• If departments put space into the pool for general use, facilities will support upgrades

• If departments keep space for their own use, the department is on their own to fund improvements

ACTION

• Campus utilization increases – more revenue with lower carrying cost of facilities

• Starts to make an impact on reducing the cost of Higher Education

EXPECTED OUTCOME

30

Interrelated Strategies to Drive Change on Campus

• Divest from old

space

• Divest from small

buildings

• Divesting reduces

backlog

• Frees capital for high

priority/use spaces

• Lower backlog allows operators to do PM instead

of fight fires

• Larger buildings create economies of scale

31

Summary of Strategies &

Concluding Thoughts

Summary of Strategies

Facilities needs a seat at the table

No net new policy

Change the budget to charge for

space

Change the paradigm of classroom utilization

33

Questions?

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Thank you!

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35

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our report, The State of

Facilities in Higher

Education: 2015

Benchmarks, Best

Practices & Trends, please

go to sightlines.com to

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