Show Me the MoneyChanging the Conversation about deferred maintenance and funding facilities

Moderated by: Jim Kadamus Vice President of Sightlines

Panel of Experts:Tony Calcado: Vice President, University Facilities and Capital Planning at Rutgers University

Greg Scott: Assistant Vice President for Finance and Business at The Pennsylvania State University

Norm Young: Associate Vice President for Facilities Planning and Management at the University of Hartford

Learning ObjectivesUpon completion of this program you will be able to:

• Communicate national and regional trends affecting higher education

facilities today

• Define strategies institutions are using to tackle enrollment challenges

• Address the age profile and functional obsolescence of campus buildings

• Optimize campus operations to limit the impact of funding cut backs

• More effectively build constituency on campus and engage your Board to

support facilities improvements

Northeast Regional Trends in Higher Education Facilities

Campus space growth less than enrollment growth

Enrollments leveling starting in 2011 and declining in 2013

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2007 2008 2009 2010 2011 2012 2013

Perc

ent C

hang

e of

Enr

ollm

ent &

Spa

ce

Growing Campus EnrollmentNortheast Average within Sightlines Database

Northeast Space Growth Northeast Enrollment Growth

Campus Space and Enrollment by Institution TypeResearch institutions only group to see continued enrollment growth and lower space growth

-2%

0%

2%

4%

6%

8%

10%

12%

2007200820092010201120122013 2007200820092010201120122013 2007200820092010201120122013

Percen

t Cha

nge of Enrollm

ent a

nd Spa

ce

Campus Enrollment vs. SpaceBy Constituent Group

Space Growth Enrollment Growth

Comprehensive Institution Research Institution Small Institution

Pre-War Post-War Modern Complex

Waves of Construction in the Northeast

0

10

20

30

40

50

60

Tota

l Dat

abas

e G

SF C

onst

ruct

ed (M

illio

ns)

Constructed Space Since 1880

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

% o

f Spa

ce

Square Footage by Age CategoryRenovation Age

Under 10 10 to 25 25 to 50 Over 50

Northeast Average Public Average Private Average

Northeast Public and Private Campuses after Renovations

Northeast publics have high % of space in 25-50; private high % in over 50

Capital has not recovered from 2008-09 recession

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

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

$/G

SF

Capital Investment into Existing Space

Annual Capital One-Time Capital Average

Public Average Private Average

Reliance on annual institutional capital sources is growing

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

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

$/G

SF

Capital Investment into Existing SpaceRecurring Capital

Annual Capital Average

Public Average Private Average

Facilities Backlogs Continue to RisePublic campuses over $100/GSF; private campuses at $80/GSF

$91 $93 $95 $98 $101 $104 $107

$69 $70 $73 $74 $76 $79 $80

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$-

$20

$40

$60

$80

$100

$120

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

$/G

SF

Backlog $/GSF

Backlog/GSF Percentage Change of Backlog

Public Average Private Average

Northeast Campuses Operating Budgets Flat

And definitely not keeping pace with inflation

$4.6 $4.7 $4.8 $4.8 $5.0 $4.9 $5.0

$0.3 $0.3 $0.3 $0.3 $0.3 $0.3 $0.3

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

2007 2008 2009 2010 2011 2012 2013

$/G

SF

Operating Budget $/GSF

Daily Service Planned Maintenance

$4.50 $4.72 $4.76 $4.72 $4.94 $4.83 $5.00$4.62 $4.73 $4.88 $4.94 $4.98 $5.04 $5.07

$0.22$0.24 $0.25 $0.25

$0.28 $0.28$0.27

$0.31 $0.32$0.35 $0.35 $0.36 $0.38 $0.40

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

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

$/G

SF

Daily Service Planned Maintenance

Public vs PrivateOperating budgets averages adjusted for inflation

Public Average Private Average$5.63 $5.89

Conclusions

Enrollment trends in northeast are declining, having a negative impact on net tuition revenue used to fund facilities investments or pay for debt service

Aging facilities are competing with faculty needs and financial aid for funding

Capital funding has not returned to pre-recession levels; public campuses have continued to see cuts in State funding

Funding for facilities operations have not kept pace with inflation, meaning cuts in staffing and contracts

Backlogs are growing and at public campuses reaching unsustainable levels

Institutional mission needs to drive the facilities conversation if money is to be secured

Facilities Experts in the Think Tank

Questions for the PanelIssue 1: How are you dealing with enrollment challenges and the implications for facilities?

Penn State and Rutgers:Growth at Main and some Regional Campuses

Decline at some Regional Campuses

How to balance your investments –both capital and operations?

University of Hartford:How to prioritize programs in the face of enrollment challenges?

How does this impact facilities?

Questions for the PanelIssue 2: How are you addressing age profile and functional obsolescence of campus buildings?

Rutgers:How are you balancing investments into new and existing space

University of Hartford:How are you addressing campus buildings from the 60s and 70s?

Penn State:Resource allocation between main campus and regional locations

How are you involving and engaging the Board of Trustees?

Questions for the PanelIssue 3: How are you managing campuses with limited operational funding?

Rutgers:What organizational and operational changes have you made to reduce the impact of significant funding cuts?

How has the UMDNJ merger impacted funding and resource distribution?

University of Hartford:How have you shifted your operations following the creation of a model that reflects the full cost of buildings?

Penn State:How do you manage operations across multiple campuses that have very different needs?

Questions for the PanelIssue 4: How are you securing additional facilities funding to support the institutional mission?

Group Discussion:What strategies have you used to develop broader support for facilities investments on campus?

Which strategies were most successful, which were unsuccessful?

How have you engaged the Board to secure funding for deferred maintenance needs on campus?

Upon completion of this program you will be able to:

Learn the process required to

create that

QUESTIONS

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