Decide with Data, not Decide with Data, not InstinctInstinct

Presented by Presented by

Mike McCormick, CPEMike McCormick, CPEPrincipalPrincipal

McCormick Facilities ManagementMcCormick Facilities Management

EPMA 41th Conference June 22, 2009

““You can’t understand You can’t understand what you don’t measure”what you don’t measure”

How do you know how to How do you know how to manage your school facilities?manage your school facilities?

• What do you know about your What do you know about your operation of plant?operation of plant?

• How do you keep track of what is How do you keep track of what is happening in your facilities?happening in your facilities?

• Do you utilize a systematic, holistic Do you utilize a systematic, holistic approach to decision making?approach to decision making?

Does your school department Does your school department run like this?run like this?

• We do it that way because we always have!We do it that way because we always have!

• If it ain’t broke why fix it?If it ain’t broke why fix it?

• We don’t have enough money to take care of We don’t have enough money to take care of our facilities!our facilities!

• The Board/Voters don’t understand our needs for The Board/Voters don’t understand our needs for facilities!facilities!

• Its an old building so why do we need to put Its an old building so why do we need to put money in to it?money in to it?

• If we let it go, the State (?) will give us a new If we let it go, the State (?) will give us a new one.one.

Does your district choose to Does your district choose to put money into:put money into:

• SalariesSalaries

• ProgramsPrograms

• TechnologyTechnology

• Extra/Co-curricularExtra/Co-curricular

…and let the facilities take care of themselves!

Do you know the value of your Do you know the value of your facility portfolio?facility portfolio?

• # of students x 125 SF/student x # of students x 125 SF/student x $200/SF$200/SF– $25 million per 1000 student$25 million per 1000 student

• Are the members of your facility staff Are the members of your facility staff qualified to manage a portfolio of that qualified to manage a portfolio of that size?size?

Some relevant statistics…Some relevant statistics…how do you stack up?how do you stack up?

• Total M & O costs/student = $823.84Total M & O costs/student = $823.84

• Total utilities costs/student = $297.67Total utilities costs/student = $297.67– should be between $1.50-2.00/SF or about 2% of should be between $1.50-2.00/SF or about 2% of

TDETDE

• Total District Expenditures (TDE) Total District Expenditures (TDE) /student = $8,967/student = $8,967

• Over the last 20 years M & O has Over the last 20 years M & O has steadily declined from 12.75% of TDE steadily declined from 12.75% of TDE to a low in 2004 of 7.43%to a low in 2004 of 7.43%

• M & O as a % of TDE 2007 = 9.19%M & O as a % of TDE 2007 = 9.19%

How many workers do you How many workers do you need?need?

• Each school district custodian covers Each school district custodian covers 25,173 square feet25,173 square feet

• Each maintenance worker maintains Each maintenance worker maintains

100,720 square feet100,720 square feet

• Each grounds keeper coversEach grounds keeper covers

40 acres40 acres

363215Maintenance

9315439Custodial

> 3,500

1000-3,499

< 1000Mean

Score card of Maine SchoolsScore card of Maine Schools(clients we are working with)(clients we are working with)

Our clients have more than Our clients have more than $800,000,000 $800,000,000 of deficienciesof deficiencies

And they have more than And they have more than $970,000,000$970,000,000 of capital of capital renewal needs over the next 20 yearsrenewal needs over the next 20 years

Score card of Maine SchoolsScore card of Maine Schools(all schools that have been assessed)(all schools that have been assessed)

Statewide there is more than Statewide there is more than $1,000,000,000 $1,000,000,000 of deficienciesof deficiencies

And there is more than And there is more than $2,000,000,000$2,000,000,000 of capital renewal of capital renewal

needs over the next 20 yearsneeds over the next 20 years

• Our schools are deteriorating at a rate greater Our schools are deteriorating at a rate greater

than $60,000,000 per year.than $60,000,000 per year. (2% of $3B of asset value)(2% of $3B of asset value)

• Currently, statewide spending for facilities, Currently, statewide spending for facilities, state and local share combined is $150,000,000 state and local share combined is $150,000,000 per yearper year

• At the current rate of spending, it will take 23 At the current rate of spending, it will take 23 years to get the current deficiencies and years to get the current deficiencies and capital renewal to $0capital renewal to $0

• It doesn’t end after 23 years, but it becomes a It doesn’t end after 23 years, but it becomes a more manageable number more manageable number

• We should be able to “keep up” after thatWe should be able to “keep up” after that

But where will the money come But where will the money come from?????from?????

Why are we in this position?Why are we in this position?• Majority of school buildings were built as a Majority of school buildings were built as a

result of the baby boom (1950 to 1975)result of the baby boom (1950 to 1975)• Most were built quickly and inexpensively, Most were built quickly and inexpensively,

50 year life expectancy maximum50 year life expectancy maximum• 1950/1975 plus 50 equals NOW1950/1975 plus 50 equals NOW• Previous admin., boards, voters did not have Previous admin., boards, voters did not have

to deal life cycle and deferred maintenance to deal life cycle and deferred maintenance issues as they were just beginning to occurissues as they were just beginning to occur

• Declining student enrollmentsDeclining student enrollments• Increasing costsIncreasing costs• Declining availability of funds from fund Declining availability of funds from fund

sourcesource

You need a comprehensive You need a comprehensive facilities management facilities management

programprogram

You need Data!

How can you take How can you take control?control?

EnergyAudits

Building Automation

Security and

Crisis Planning

ConstructionManagement

StrategicLong Term

MasterPlanning

FacilityCondition

Assessment

FacilitiesManagement

DATADATA

KNOWLEDGEKNOWLEDGE

PLANPLAN

IMPLEMENTIMPLEMENT

REPEATREPEAT

DATADATA

• Do you have comprehensive…..Do you have comprehensive…..– Facilities dataFacilities data– Maintenance dataMaintenance data– Work order dataWork order data– Utility dataUtility data– Facility usage dataFacility usage data– Financial dataFinancial data

We believe that a facility condition assessment is the core or center of all good facility management programs

Without it, all other data is less useful

You can spend money, clean, maintain, monitor energy, and even talk to the buildings, but with out a starting point and progress monitoring, how can you have a score card of the impact of your decision making on the long term care of the most expensive asset you have, your facilities!

Think of it as a check book…Think of it as a check book…

You need a starting balance…You need a starting balance…

Keep track of credits and debits…Keep track of credits and debits…

Always have a current balance…Always have a current balance…

Have an audit on some regularityHave an audit on some regularity

What is a Facility Condition What is a Facility Condition Assessment? Assessment? COST MODELSCOST MODELS

An FCA is an inventory of a facilities An FCA is an inventory of a facilities systems and their conditionsystems and their condition

It identifies each building systemIt identifies each building system

gives it a dollar valuegives it a dollar value

identifies its born on dateidentifies its born on date

assigns a life expectancyassigns a life expectancy

determines its current conditiondetermines its current condition

estimates when it will no longer be estimates when it will no longer be reliablereliable

advises what the renewal cost will beadvises what the renewal cost will be

What is a Facility Condition What is a Facility Condition Assessment?Assessment? DEFICIENCIESDEFICIENCIES

An FCA also identifies actual issues that An FCA also identifies actual issues that the facility may havethe facility may have

These may be referred to as deficienciesThese may be referred to as deficiencies

they are identifiedthey are identified

a description of why it is an issuea description of why it is an issue

it is categorizedit is categorized

it is prioritizedit is prioritized

it has a cost estimate to correctit has a cost estimate to correct

Facility Condition Index FCIFacility Condition Index FCIThe results of the FCA can be used to create The results of the FCA can be used to create

an industry standard analysis of the an industry standard analysis of the relative condition to the replacement relative condition to the replacement value of the assetvalue of the asset

The formula is:The formula is:

Cost to Correct Deficiencies Current Facility Replacement Value

An example:An example:

A building with a current replacement A building with a current replacement value of $25 million that has total needs value of $25 million that has total needs of $5 million would have an FCI ofof $5 million would have an FCI of

20 %20 %

This calculation yields the total cost to This calculation yields the total cost to decision makers decision makers

In our previous example, the FCI was In our previous example, the FCI was 20%20%

But if the total to cost to provide a But if the total to cost to provide a desired level of educational adequate desired level of educational adequate space, and that was for example $20 space, and that was for example $20 million, then the FCI for this building million, then the FCI for this building would bewould be

80%80%

Simply stated, it means that the cost to Simply stated, it means that the cost to address the identified issues equals 80% address the identified issues equals 80% of the cost to replace the entire buildingof the cost to replace the entire building

At that ratio, a district would likely replace At that ratio, a district would likely replace the facility rather than renovate itthe facility rather than renovate it

A guide for using the ratio might look like this:

0-30% Clearly renovate31-60% Maybe renovate, lots of things to

consider62-100% Very likely to replace

You should include all costsYou should include all costs

We like to include all costs required to We like to include all costs required to provide a proper learning environment:provide a proper learning environment:

• DeficienciesDeficiencies

• Code related issuesCode related issues

• Capital renewal, deferred and 20 years Capital renewal, deferred and 20 years aheadahead

• Adequacy upgradesAdequacy upgrades

• Additional space needsAdditional space needs

Maintaining your databaseMaintaining your database

Any database must be maintained to Any database must be maintained to continue to be useful. It is meant to continue to be useful. It is meant to be dynamic, not staticbe dynamic, not static

As requirements are completed, they As requirements are completed, they must be removed from the databasemust be removed from the database

As new issues arise, they should be As new issues arise, they should be enteredentered

Maintaining your databaseMaintaining your database

As deficiencies are corrected, you As deficiencies are corrected, you should:should:

• Archive them for historical useArchive them for historical use

• Update the building descriptionUpdate the building description• Update the system model Update the system model (cost model)(cost model)

FCA may reveal issues that are beyond FCA may reveal issues that are beyond local ability to deal with themlocal ability to deal with them

May have to hire outside help to fully May have to hire outside help to fully comprehend depth of the issues and comprehend depth of the issues and develop a plan to address themdevelop a plan to address them

After you gain a thorough knowledge After you gain a thorough knowledge of the problem, of the problem, must develop a planmust develop a plan!!

PlanningPlanning

We suggest that you develop at leastWe suggest that you develop at least

3 plans3 plans

1. A 20 year strategic vision to deliver 1. A 20 year strategic vision to deliver educational programming, and how educational programming, and how your “campuses” fit that visionyour “campuses” fit that vision

2. Must have a long term plan for 2. Must have a long term plan for facilitiesfacilities

-a “facilities master plan” -a “facilities master plan” -10 year forward look -10 year forward look (minimum, 20 is (minimum, 20 is

better)better)

3. A capital renewal plan3. A capital renewal plan

- minimum of five year forward - minimum of five year forward looklook

- adequate funding sources- adequate funding sources

- capital reserve set asides- capital reserve set asides

Strategic Master PlanningStrategic Master Planning Do you have a campus plan that works?Do you have a campus plan that works?

Determine what your desired final Determine what your desired final outcome might look likeoutcome might look like

• Who would/will use a plan?Who would/will use a plan?• Develop guiding principalsDevelop guiding principals• Develop a planning agendaDevelop a planning agenda• Develop a strategic long term visionDevelop a strategic long term vision

Must have these before Master Must have these before Master Planning Planning can begincan begin

Facilities Master PlanningFacilities Master Planning

• Enrollments- historical, trends, projectionsEnrollments- historical, trends, projections• Funding projectionsFunding projections• Program requirementsProgram requirements• Space adequacySpace adequacy

– usage, occupancyusage, occupancy– size requirementssize requirements

• Condition of facilities – FCACondition of facilities – FCA• Economy of the area, look aheadEconomy of the area, look ahead• RegionalizationRegionalization

What is included in a Master What is included in a Master PlanPlan

• Space analysisSpace analysis– Must be currentMust be current– Must be reviewed annuallyMust be reviewed annually– Include schedulesInclude schedules

• Existing/emerging plansExisting/emerging plans– Teaching and learning trendsTeaching and learning trends

• Peer BenchmarkingPeer Benchmarking– How can you do more with lessHow can you do more with less

Must

include

all these

• Changes in enrollment/facultyChanges in enrollment/faculty

• Physical condition, FCAPhysical condition, FCA– Zones of legacyZones of legacy– Zones of opportunityZones of opportunity– Institutional identityInstitutional identity

• Program flexibilityProgram flexibility

And

these

too

To be successful, a master plan must...To be successful, a master plan must...

• be realisticbe realistic

• be visionary, creativebe visionary, creative

• involve all partiesinvolve all parties– TaxpayersTaxpayers– StaffStaff– StudentsStudents

• A master plan is never finalA master plan is never final– Get to final draft, then continually Get to final draft, then continually

updateupdate– Review every 6 monthsReview every 6 months– Redo every 12 monthsRedo every 12 months

• Keep it alive and activeKeep it alive and active– Remind all players that there is a master Remind all players that there is a master

plan, and follow it!plan, and follow it!

““Its not a product… Its not a product… …it’s a process”…it’s a process”

Long term facilities planningLong term facilities planning

Must have a long term facilities master Must have a long term facilities master planplan– Minimum of a 10 year forward lookMinimum of a 10 year forward look– Understand facilities needs, dollars Understand facilities needs, dollars

requiredrequired– Know district finances, ability to raise and Know district finances, ability to raise and

expend funds, total budget and facilitiesexpend funds, total budget and facilities

Incorporate district vision and growthIncorporate district vision and growth– ProgrammingProgramming

Enrollment trendsEnrollment trends– Increasing or decreasingIncreasing or decreasing

StaffingStaffing– Student teacher ratiosStudent teacher ratios– Space needsSpace needs– Cost to provideCost to provide

EnergyEnergy– Are you efficient nowAre you efficient now– Cost will continue to increaseCost will continue to increase

Operations and maintenanceOperations and maintenance– Costs to catch upCosts to catch up– Costs to keep upCosts to keep up– Custodial coverage and costCustodial coverage and cost– Project costs steadily increasingProject costs steadily increasing

All that information will reveal All that information will reveal the total space requirements the total space requirements and the ever increasing cost and the ever increasing cost to own, maintain, and keep to own, maintain, and keep

your facilitiesyour facilities

Implement the planImplement the plan

• Keep the stakeholders informedKeep the stakeholders informed– Let them know how it is workingLet them know how it is working– Keep a score card, results are your best Keep a score card, results are your best

advocateadvocate

• Continually redevelop funding Continually redevelop funding strategiesstrategies

• Stick to the planStick to the plan

• Update the plan regularlyUpdate the plan regularly

Financial DataFinancial Data

• Regular review of expenditures to compare Regular review of expenditures to compare and to national and regional benchmarksand to national and regional benchmarks

• Observe operations and maintenance Observe operations and maintenance practices to determine if best practices are practices to determine if best practices are being used; maintenance, custodial, being used; maintenance, custodial, energy, capital renewalenergy, capital renewal

• Review chart of accounts and record Review chart of accounts and record keeping to see if daily operations are “best keeping to see if daily operations are “best fit” for proposed annual fundingfit” for proposed annual funding

• Continual professional development to Continual professional development to learn of new facility management practiceslearn of new facility management practices

Energy and Utility AuditsEnergy and Utility Audits• Every campus or system should have an energy Every campus or system should have an energy

information technology infrastructureinformation technology infrastructure• Every energy input at each buildingEvery energy input at each building

– should be meteredshould be metered– measuredmeasured– collectedcollected– analyzedanalyzed

• Should have a detailed time of use database ofShould have a detailed time of use database of– electricityelectricity– fuel oilfuel oil– gasgas– woodwood– waterwater– sewersewer– facility usagefacility usage

• Allows tracking and benchmarkingAllows tracking and benchmarking

• Can verify unit costs, guaranteed Can verify unit costs, guaranteed savings verification for ESCOssavings verification for ESCOs

• ““The most efficient dollar saved is the The most efficient dollar saved is the one one never spent”never spent”

• Turn things off!Turn things off!

• Do you have an energy policy at the Do you have an energy policy at the Board/school level?Board/school level?

• Create and enforce an energy Create and enforce an energy programprogram

• Do you allow the “tri-fecta” of Do you allow the “tri-fecta” of personal appliances in the personal appliances in the classrooms?classrooms?– Coffee maker, microwave, mini fridgeCoffee maker, microwave, mini fridge– $25 per year of taxpayer money$25 per year of taxpayer money

• Who turns them off during vacations?Who turns them off during vacations?

• Re-commission HVAC systems every Re-commission HVAC systems every 10 years10 years

What are energy conservation What are energy conservation measures?measures?

• Lighting and Lighting ControlsLighting and Lighting Controls

• Energy Management SystemEnergy Management System

• Motor Replacement and Variable Frequency Drive Motor Replacement and Variable Frequency Drive InstallationInstallation

• Building Envelope ImprovementsBuilding Envelope Improvements

• Plug load ControllersPlug load Controllers

• Boiler Replacement / Heating ConversionBoiler Replacement / Heating Conversion

• Renewable powerRenewable power

• Co-generationCo-generation

• Technology upgradesTechnology upgrades

• Water and sewer conservationWater and sewer conservation

• Energy PurchasesEnergy Purchases

Key objectives of an energy Key objectives of an energy auditaudit

• Provide energy modeling for the Provide energy modeling for the buildingbuilding

• Define and calculate energy savings for Define and calculate energy savings for Energy Conservation Measures (ECMs)Energy Conservation Measures (ECMs)

• Determine Operational Savings and Determine Operational Savings and obtain agreement from customerobtain agreement from customer

• Determine follow-up survey and data Determine follow-up survey and data gathering requirementsgathering requirements

• Develop economic (cost vs. savings) Develop economic (cost vs. savings) analysis for various project scenariosanalysis for various project scenarios

• Develop documentation for final Develop documentation for final proposalproposal

• Determine acceptable alternate Determine acceptable alternate Energy Solutions with customer inputEnergy Solutions with customer input

• List sustainability measuresList sustainability measures

• Reduction of Carbon footprintReduction of Carbon footprint

• Obtain pricing for ECMSObtain pricing for ECMS

• Determine an acceptable Determine an acceptable Performance Contracting per RFPPerformance Contracting per RFP

What do you get uponWhat do you get uponProject CompletionProject Completion

• New technologyNew technology• Energy Savings (fuel-water-electrical)Energy Savings (fuel-water-electrical)• Improved learning and work environmentImproved learning and work environment• GuaranteeGuarantee• New EquipmentNew Equipment• Life Cycle savingsLife Cycle savings• Carbon Footprint ReductionCarbon Footprint Reduction• GreenerGreener• SustainabilitySustainability

What isWhat isPerformancePerformance Contracting?Contracting?Performance contracting installs Performance contracting installs energy efficient facility improvements, energy efficient facility improvements, with no up front costs, paid for out of with no up front costs, paid for out of guaranteedguaranteed energy savings from your energy savings from your existing operating budget.existing operating budget.

• TechnicalTechnical

• Financial Financial

• ContractualContractual

Building AutomationBuilding Automation

• Can you talk to your buildings?Can you talk to your buildings?

• Do your buildings talk back to you?Do your buildings talk back to you?

• Do you control your facilities or do they Do you control your facilities or do they control you?control you?

• What do you have for data?What do you have for data?– How is it collected, updated, shared?How is it collected, updated, shared?

Should have “direct digital controls” Should have “direct digital controls” (DDC)(DDC)

– Door access controlDoor access control• facility usagefacility usage• SecuritySecurity

• Zoned lighting controlsZoned lighting controls– coordinated with facility usagecoordinated with facility usage

• Zoned heating controlsZoned heating controls– coordinated with facility usagecoordinated with facility usage

• Individual air handler controlsIndividual air handler controls– coordinated with facility usagecoordinated with facility usage

• Boiler controlsBoiler controls– outside air temperatureoutside air temperature– timed to facility usage and ramp up/down timestimed to facility usage and ramp up/down times

• Computerized monitoring of DDC systemsComputerized monitoring of DDC systems– central access controlcentral access control– reports for analysis reports for analysis

• ONLY NON PROPRIETARY SYSTEMSONLY NON PROPRIETARY SYSTEMS– firmware and softwarefirmware and software– LON and BAC NET capableLON and BAC NET capable

Technology and SoftwareTechnology and Software

• What do you know about your What do you know about your facilities financial condition?facilities financial condition?

• What do you know about your What do you know about your facilities energy condition?facilities energy condition?

• Use technology to help stay ahead of Use technology to help stay ahead of the curve when managing your the curve when managing your facilitiesfacilities

The technology is here today to The technology is here today to completely computerize your completely computerize your building systemsbuilding systems

Use the technology to stay on top of Use the technology to stay on top of operationsoperations

Use WEB (IP) based systemsUse WEB (IP) based systems

Control costs with informationControl costs with information

Decide with Data, not Decide with Data, not InstinctInstinct

Questions?Questions?

Thank you for your time todayThank you for your time today

Thank you for choosing to work inThank you for choosing to work in

Public EducationPublic Education

CreditsCredits

The following organizations provided data and The following organizations provided data and materials for this presentation:materials for this presentation:

• McCormick Facilities Management ConsultantsMcCormick Facilities Management Consultants• TraneTrane• Capital Planning SolutionsCapital Planning Solutions• School DudeSchool Dude• American School and UniversityAmerican School and University• National Center for Education StatisticsNational Center for Education Statistics• U.S Department of EducationU.S Department of Education