This document discusses strategies for prioritizing deferred maintenance projects and developing a multi-year capital plan. It recommends categorizing buildings into portfolios based on investment strategy and condition. Funding should be allocated to portfolios and specific project types based on institutional priorities and investment criteria. A transitional portfolio is suggested for buildings slated for demolition or sale. The goal is to develop a comprehensive, strategic plan to address deferred maintenance needs over multiple years.

1. 1
Backlog, Deferred Maintenance
& it’s use in planning
March 29th, 2012
Gina Matsoukas
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
Wheaton College (MA)

2. 2
Focusing on the backlog & deferred
maintenance

3. 33
A vocabulary for measurement
The Return on Physical Assets – ROPASM Asset Value Change Operations Success
Annual
Stewardship
Reinvestment
Asset
Operating
Effectiveness
Service
The annual
investment needed
to insure buildings
will properly
perform and reach
their useful life
“Keep‐Up Costs”
Annual
Stewardship
The accumulated
backlog of repair
and modernization
needs and the
definition of
resource capacity to
correct them.
“Catch‐Up Costs”
Asset
Reinvestment
The effectiveness
of the facilities
operating budget,
staffing,
supervision, and
energy
management
Operations
Success
The measure of
service process, the
maintenance
quality of space and
systems, and the
customers opinion
of service delivery
Service

4. 4
Why it needs to be more than a backlog
Finite Facilities Needs
1. Catalog the needs
2. Analyze the data
Strategic Direction
3. Identify building portfolios
4. Develop targets
Investment Capacity
5. Define phase out plan
Finite Facilities
Needs
Strategic
Direction
Investment
Capacity

5. 5
Going beyond “deferred maintenance”
Utility
Infrastructure
Develop a
Comprehensive
List of Needs
Repair &
Replacement
Campus
Modernization
Master Plan

6. 6
Goals & Process Overview
Backlog Goals:
•Common Project Codification in One Database
•Consistent Pricing & Timeframe Assignment
•Coordination Between All Needs To Maximize Capital
•Reconcile Need To Financial Capacity ‐ The Multi‐Year Phase‐Out Plan
What the Full Process Should Look Like:
1. Base Data Assembly
1. Collection of existing studies and key planning documents
2. Inspection of building components and characteristics
2. Inventory Creation
1. Incorporate existing studies and assessments
2. Interviews with key facilities staff
3. Project pricing and codification
3. Development of Building Portfolios
1. Group buildings based on investment strategy
2. Allocation of available funding by portfolio
4. Development of Multi‐Year Funding Plan

7. 7
Adding value to each project
•Repair/Maint
•Modernization
• Infrastructure
Define Work
Classification
•Reliability
•Asset Preservation
• Space Improvement
• Economic Operations
• Safety / Code
Define Project
Classifications
•A: 1‐3 years
•B: 4‐6 years
•C: 7+
Define Project
Priority
What is the
Work?
What is the
Impact?
What is the
Priority?

8. 8
Putting strategy to the numbers

9. 9
Defining a Multi‐Year Investment Plan
Beyond Picking Projects
Descriptive text goes here
?
Full Inventory
of Projects Apply
Building Portfolio
& Timeframe
Apply
Investment
Criteria &
Timeframe
Multi‐Year
Project Plan
Geographic, Program,
Transitional, & Years
Reliability, Asset
Preservation, Program,
Economic Operations ,
Safety/Code & Years
Full Inventory of
Projects
Electrical, Plumbing,
HVAC, Mechanical,
Exterior, Interior,
Safety…
How Do You
Target
Projects
Sightlines’ Process
Proposed Solution Current Challenge
Electrical, Plumbing,
HVAC, Mechanical,
Exterior, Interior,
Safety…
Pick
Projects

10. 10
Creating a comprehensive plan
Project
Identification
•Inventory
•Interviews
•Other studies
Project
Codification
•Timeframe
•Package
•Investment
Criteria
Project
Selection
•Project scores
•Meet
investment
objectives
Building Portfolio
Creation
•Group Buildings
•Outline investment
strategies Funding
Identification
•What financial
resources are
available?
Funding
Allocation
•By Portfolio
•By Investment Criteria Multi‐year
capital
investment
plan
Capital
Allocation
Planning

11. 11
Core Concepts of the Building Portfolio Approach
Funding is allocated by Building Portfolios
• Ensures that the right buildings have funding for needs
• Funding allocation is done by Institutional leadership
Funding is allocated by Project Outcome (Investment Criteria)
• Ensures that the right type of work is done within each Portfolio
•The type of work funded will differ by Portfolio
Project selection is done to meet the funding allocations
• Flexibility of project selection within the appropriated funding allocation
•Project selection completed by Facilities leadership
Result
• Institutional leadership has set the level of, and direction for, investments
• Facilities leadership can control individual project selection based on their detailed
understanding of the campus facilities
• Campus‐wide confidence, understanding, and involvement in capital investment strategy

12. 12
The portfolio approach starts by
breaking down the numbers

13. 13
Total Identified Needs
Total Needs
$86 M
New Construction
$625,000
Grounds & Infrastructure
$14.1M
Building Needs
$71.3 M
Academic/Admin
$26.4M
407,665 GSF
$65/GSF
Residential
$31.8 M
330,354 GSF
$96/GSF
Student Life
$11.5 M
271,345 GSF
$43/GSF
Support
$1.5 M
60,924 GSF
$25/GSF

14. 14
Identified Building Needs By System ‐ $71.3M
Timeframe A,B, & C only – Excluding new construction, grounds, & infrastructure
$21.1
$14.2
$12.9
$7.0 6.7
$3.9 $3.7
$1.4
$25
$20
$15
$10
$5
$0
$0.4
Interior Shell Plumbing HVAC Safety/Code Exterior Shell Electrical Heating Mechanical Cooling
$ in Millions
Total Need by System
$4.8
$6.9
$4.1
$2.0 $2.8
$0.9 $2.0 $0.6
$0.2
$4.3
$2.0
$2.8
$1.4
$2.2
$1.7 $0.9 $0.3 $0.1
$12.0
$5.3
$6.0
$3.6
$1.8
$1.4 $0.8 $0.5 $0.2
A B C

15. 15
Identifying Buildings with Greatest Need
$12
$15
$6
$3
$3
$4
$5
$7
$5
$3
$23
$26
$25
$22
$20
$12
$11
$14
$11
$15
$8
$14
$51
$57
$54
$16
$29
$16
$25
$39
$78
$169
$17
$9
$10
$12
$1
$11
$9
$8
$19
$11
$7
$8
$8
$13
$36
$105
$22
$3
$14
$33
$15
$1
$19
$44
Historic Project Investments into
$‐ $50 $100 $150 $200 $250
Building #16
Building #15
Building #14
Building #13
Building #12
Building #11
Building #10
Building #9
Building #8
Building #7
Building #6
Building #5
Building #4
Building #3
Building #2
Building #1
Building Needs
Envelope Building Systems Space Renewal Safety/Code
9%
13%
37%
41%
Buildings
FY03‐FY11

16. 16
Sample Campus #1
Mission‐Driven Portfolios

17. 17
93%
77%
76%
81%
71%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Recruiting
Retention
Academic
Admin/Support
Undetermined Future
Average NAV by Portfolio
NAV by Building Portfolio
*Total Campus NAV includes infrastructure/grounds
*Total Campus NAV – 74%
Peer Campus NAV – 80%

18. 18
Allocating funding by Building Portfolio
Remaining $9.7 M of funding allocated to portfolios based on remaining A timeframe needs
Portfolio Average
NAV
“A Timeframe” Needs
Excludes “urgent reliability” and
“Special Interest projects”
% of Total Funding
Allocated
Funding Allocated
Recruiting 93% $8.7M 8% $0.7M
Retention 77% $29.2M 27% $2.4M
Academic 76% $55.7M 52% $4.5M
Admin/Support 81% $8.0M 0% $0.0M
Undetermined Future 71% $5.2M 0% $0.0M
Infrastructure/Grounds n/a $14.1M 13% $1.1M
Sub‐Total
10% of $9.7 M as Contingency
78%
‐
$121.0M
‐
100%
‐
$8.7 M
$1.0 M
Total $9.7M
Excludes Admin/Support and Undetermined Future Portfolios

19. 19
Summary of FY12‐14 $30 M Funding by Building Portfolio
$8.7
A Timeframe Needs vs. FY12‐FY14 Funding Allocation
$29.2
$55.7
$8.0
$5.2
$14.1
$2.6
$7.8
$3.6 $0.5
$0.7 $4.9
$0.4
$0.7
$2.4
$4.5
$1.1
$60
$50
$40
$30
$20
$10
$0
Recruiting Retention Academic Admin/Support Undet. Future Infra/Grounds
$ in Millions
Remaining Allocated Funding
"Just In Time" Reserve
Urgent Reliability & "Special Interest" Projects
A Timeframe Needs
Note: $1.0 M of “Special Interest” project funding for the Retention Portfolio, and $125 K of Infrastructure/Grounds funding is addressing B or C timeframe needs.

20. 20
Sample Campus #2
Targeting NAVs by Portfolio

21. 2211
Understanding the Net Asset Value Index
NAV Index =
(Replacement Value‐Building Needs)
Replacement Value
X 100
Campus leadership can set different NAV levels for different
buildings and portfolios, helping to balance capital
investments across campus and prioritize project selection
Investment Strategy
100%‐
85%
85%‐
75%
75%‐
60%
Below
60%
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”
Demolition/Transitional/ Gut
Renovation Stage: Major buildings
components are in jeopardy of
complete failure. Reliability issues
are widespread throughout the
building.
NAV of Index

22. 22
Building Portfolios
Total Identified
Needs
$197.0 M
New
Construction
$36.9 M
Infrastructure &
Grounds
$27.7 M
Building Needs
$132.4 M
Education &
General
$45.3 M
Under 25 Years
Old
$18.6 M
Over 25 Years Old
$26.7 M
Residential
$73.6 M
First Year
Residences
$22.6 M
Upper Class
Residences
$51.0 M
Auxiliary
$13.2 M
PAC Site
$0.2 M
Targeting investment to institutional priorities
7 Buildings
355,494 GSF
5 Buildings
331,140 GSF
11 Buildings
639,830 GSF
3 Buildings
138,571GSF
10 Buildings
504,618 GSF
1 Building
55,000 GSF
Sub‐Portfolios

23. 23
Funding Allocation Methodology Option
110%
100%
90%
80%
70%
60%
50%
40%
Education &
General‐ Under 25
Years
Education &
General‐ Over25
Years
Current NAV Index by Sub‐Portfolio
Residential‐ First
Year
Residential‐
Upperclass
Auxiliary PAC Site
Sub‐Portfolio
NAV
Establishing Target NAV by Portfolio or Sub‐Portfolio
E&G‐Under
25
E&G‐Over
25
Residential‐ First
Year
Residential‐
Upper Class Auxiliary PAC Site Total
Current NAV 82% 83% 80% 73% 70% 99% 79%
Target NAV 85% 85% 80% 80% 75% 99% 81%
Est. Investment Need to
Target NAV $3.4 M $2.7 M ‐ $13.9 M $2.1 M ‐ $22.1 M

24. 24
Sample Campus #3
Targeting Investments based on
Facility NAV and Value to Program

25. 25
Descriptive text goes here
25
Min, Max, & Average NAV by Portfolio
120%
100%
80%
60%
40%
20%
0%
Academic (Non‐
Research)
Academic
(Research)
Min, Max, and Average NAV by Portfolio
Campus Average*
= 82%
Dormitory Student Life Athletic Admin/Support Aux. Housing
*Campus average includes Infrastructure & Grounds needs

26. 26
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
NAV Index by Building
Academic (Non‐Research)
26
Using the NAV Within Portfolios
Portfolio: Academic (Non‐Research)
Portfolio Average = 88%
Bottom 10%
# of Buildings 6
Investment to Bring
Buildings to Portfolio
Average
$7.6 M

27. 27
Using the detailed analysis for multi‐year investment planning
Investment strategy and project selection based on facts
100%
90%
80%
70%
60%
50%
40%
Net Asset Value vs. Program Value
By Building
High Program Value, High NAV
Low Program Value, High NAV
Focus on system work, minimal space
4 5 6 7 8 9 10
Building Condition (NAV)
Value of Facility to Program
1‐10 scale, 1= low, 10 = high
Maintain & protect
High Program Value, Low NAV
Repairs & Space Improvement
Low Program Value, Low NAV
Emergency work only

28. 28
Sample Campus #4
Utilizing a “Transitional” Portfolio

29. 29
Needs by Building Portfolio
Total Project
Inventory
$2,280 M
New Space
$571 M
Building Needs
$1,627 M
Transitional
Facilities
$196 M
Building
Renovation
$581 M
Repurpose
$40 M
Maintain
$812 M
Non‐housing
facilities
$602 M
Housing facilities
$208 M
Site &
Infrastructure
Needs
$80.4 M
Transitional Portfolio contains buildings to be demolished or sold

30. 30
FY11 Investments by Building Portfolio
FY11 Building Investments by Portfolio
20%
17%
34%
0.21%
2%
25%
2%
Maintain
Maintain (Housing)
Building Renovation
Transitional
Repurpose
Infrastructure
New Space
Building Portfolio FY11 Investment ($/GSF)
Maintain $3.58
Maintain ( Housing) $4.30
Building Renovation $14.89
Transitional $1.54
Repurpose $1.29

31. 31
Sample Campus #4
Bringing it all together

32. 32
Process Summary
Descriptive text goes here
• Campus
Communication
• Portfolio “Re‐alignment”
• Priority Revision
• Tracking Spending
• Communicate Results
• Contingency Management
• Project Impact
• Portfolios
• Investment Criteria
• Financial Alignment
•Multi‐year Plan
• Technical Review
• Information by System
• Integrate Program
• Integrate
Infrastructure
• Assess Urgency
Project ID Project
Selection
Capital
Budget
Process
Project
Execution

33. 33
Sightlines Approach …
•Utilizing trade management and staff in assessment process
•Present material to facilities staff before bringing findings to
senior staff or trustee level
•Include supervisors in presentations to institutional senior staff
Engage the people
who know the
buildings and
systems
•Incorporating campus master plans and modernization
programs
•Alignment between financial capabilities and facility needs
Build support of
Users
•Reporting of all needs to the campus community
• Align facility needs to the institution’s financial capacity
Create
Transparency

34. 34
The Successful Plan Will …
•Understand how underfunding creates backlog
• Impact of changing campus age
Articulate the Cause of
Backlogs ‐ Catch‐up vs.
Keep Up
• Comprehensive, credible and flexible
• Illustrate operations impact
•Benchmarking for context
Communicate a Credible
Inventory of Needs
• Building Portfolios reflect institutional strategy
• Investment Criteria define the investment outcome
•Timeframe – aligns financial capacity to facilities needs
Set Priorities that Create
Investment Strategies,
Not Picking Projects
•Fact – Never get enough funding
•Fact – New things always occur – contingency management is key
•Fact – Customer support is important
Measure and Report
Performance Annually

35. 35
Questions & Discussion