Comprehensive Capital Planning

Transcription

1 Comprehensive Capital ning Comprehensive Capital ning What is it? Why do it? Who does it? How do we do it? APPA Institute Tampa, Florida January 2015 Harvey H. Kaiser Associates, Inc. Comprehensive Capital ning What is it? Process, policies, procedures for capital projects: Definitions Data collection Project prioritization, and Updating Output: Comprehensive list of capital projects, new and existing facilities for annual and 5- and 10-year cycles Includes all buildings and infrastructure capital projects Prioritized list of projects by inflated total project cost and schedule Comprehensive Capital ning Why do it? Basic institutional budgetary responsibility delegated to facilities management Contributes to overall institutional fiscal planning Rationalizes facilities resource requirements Contributes to protection of capital assets Harvey H. Kaiser Associates, Inc. 1

2 Could it happen? The Coming Enrollment Avalanche Total Fall Enrollment in Degree-Granting Institutions, ,000,000 20,000,000 15,000,000 10,000,0002 MM Five decades of post WWII growth 20 MM 5,000, * 2016* Projection of 20 million students by 2016 is understatement; 21 million in 2021 National goal = 60% with college degree 5 Technology and Pedagogy Rapidly Evolving Growing Emphasis on Research Especially STEM 2 MORE of everything: Complex partnerships Problem focus Applied outcomes Actual impact 2,000 Years Ago 1,000 Years Ago 600 Years Ago 25 Years Ago 150 Years Ago Yesterday And then what in 2020 or 2030? Harvey H. Kaiser Associates, Inc. 2

3 Economic Development, Engagement, Regional Stewardship 21st century engaged knowledge institution Human Capital Innovation System Health Care and Wellness Quality of place Sustainability Challenges American College & University Presidents Climate Commitment Economics Sustainability Community development Workforce partnerships Regional industry clusters Social Growing Backlog of Renewal Significantly Rising Costs Still, new construction dominates Cannot be explained entirely by cost inflation. Institutions have average of $80 per GSF of renewal needs. This is about 25% of all capital assets. Sightlines data, in Chronicle of Higher Education Source: CP&M, Construction Cost Report Operating Costs It s partly about what and how we build. Total O&M per GSF plus Purchased Utilities = $ $7.50 Source: APPA Facilities Performance Indicators, Harvey H. Kaiser Associates, Inc. 3

4 So, Where We Are Today Massive and complex facilities challenges + Expansive and unrealistic strategic goals + Inconsistent Capital ning Practices + Relentless problem of scarce capital Comprehensive Capital ning Formulating a New Model Some History: Typical Capital ning Practices In Four domains: Capital Budgeting Projects listed by priority, 5 10 years Space ning Review of current and projected surplus/deficits Condition Audits Assessment of physical conditions (capital renewal/deferred maintenance) Campus Master ning Capital Improvements related to long term physical plan Case Studies: Capital ning Issues Higher education has difficulty in predicting and effectively managing long term capital requirements because of: Lack of integrated strategic, academic, and financial planning Lack of coherent, consistent capital planning process Inconsistent and outdated space inventory, utilization data Comprehensiveness of all capital needs (facilities and infrastructure) Incomplete or obsolete facility condition/ functionality data Failure to integrate existing condition and functionality Implementation gap need for feasible strategic funding framework and performance measurement Harvey H. Kaiser Associates, Inc. 4

5 Pioneering Strategies in Last Decade: Case Studies Success Factors: Integrated data; credible analysis Data on space capacity, renewal, and program needs Methods that provide credible basis to achieve substantial increase in funding Offset urge to make purely political capital decisions Significant progress; visible results Accomplish significant portion of major renovation and programmatic needs Noticeably improved physical campus environment Foundations for a New Model Capital facilities stewardship for the 21st century: 1. Connect capital priorities directly to strategic framework 2. Gain and sustain trust and credibility 3. Use high-quality, consistent technical data 4. Integrate comprehensive, reliable findings 5. Sustain a transparent input/communications process 6. Stick to the plan long-term How do we do it? 1 Project Organization Comprehensive Capital ning Model 2 Strategic Review 3 Assessments 4 Capital Projects & Campus Master 5 Strategic Framework 6 Ongoing Implementation People & Data Context Capital Projects Ongoing Tasks Leadership Team Organization of Working Committees Consultants Communications Strategy Database Preparation & Corrections Issues, Contexts, Opportunities Strategies for Programs, Enrollment, Research, Etc. Existing Facilities s and Studies Policy & Factors Space Capacity Facilities Quality (Condition & Functionality) Special Facilities Infrastructure & Campus Integrated Projects Master ning Site Capital History Capital Sources Scenarios Implementation Team Program Project Alternatives & Preferred Scenario Design Guidelines STRATEGIC FUNDING FRAMEWORK PROJECT PLAN Team & Roles Schedule Work STRATEGIC CONTEXT Strategic Facilities ning Principles Scheme COMPREHENSIVE NEEDS Initial List of / Projects CAPITAL PROJECTS PLAN CAMPUS MASTER PLAN Performance Evaluation and Feedback for Refinements & Updates Harvey H. Kaiser Associates, Inc. 5

6 Phase 1 Project Organization Phase 2 Strategic Review 1 Project Organization People & Data Leadership Team Organization of Working Committees Consultants Communications Strategy Database Preparation & Corrections PROJECT PLAN Team & Roles Schedule Work Definition Organize the plan to plan Align roles and tasks Collect, organize, and update baseline data Define / refine assessment methodologies Establish schedule internal and external communications 2 Strategic Review Context Issues, Contexts, Opportunities Strategies for Programs, Enrollment, Research, Etc. Existing Facilities s and Studies Policy & Factors STRATEGIC CONTEXT Strategic Facilities ning Principles Scheme Definition Identification of strategic framework (issues, directions, priorities) NOT a strategic planning exercise If NO real strategic plan exists, need to begin with Strategic Priorities Drive the capital plan from the strategies Create new: Facility planning principles Scheme for prioritization New or updated policies on space and capital investment Institutional Strategic or Program Priorities Capital ning Principles,, and Policies Phase 2 Strategic Review Inputs Outcomes / Deliverables Strategic Documents Policy and Factors Stakeholder Interviews & Leadership Dialogue New Decisions, if Needed Strategic Directions and Priorities Strategic Facilities ning Principles Criteria Policy Changes Phase 2 Strategic Review Sample Guiding Strategic Principles Balance system-wide analysis and policy with attention to specific faculty missions and differences Develop a comprehensive statement of needs - not just a list of capital projects Sustain the highest priority on asset modernization and preservation Space equity and suitability among users Sustainability considerably greener campuses Give adequate consideration to infrastructure and general campus features ( including Health/Safety/AD) Harvey H. Kaiser Associates, Inc. 6

7 Phase 3 - Comprehensive Capital Assessments 3.1 Space Capacity Analysis 3 Assessments Space Capacity Facilities Quality (Condition & Functionality) Special Facilities Infrastructure & Campus COMPREHENSIVE NEEDS Special Facilities Space Capacity Capital Capital Projects Facilities Quality Purpose Right-size campus space Improve space productivity Assess the institution s space capacity needs Overall space surpluses or deficits New projects to meet capacity deficits Opportunities to improve utilization of classrooms and teaching labs Initial List of / Projects Infrastructure & General Campus Inputs Room Use Codes (FICM) & CIP Codes Space Inventory User & Use Metrics 3.1 Space Capacity Analysis 3.2 Facilities Quality Assessment Tasks Update or Correct the Space Inventory Define Space ning Standards (Space Allowances) Outcomes / Deliverables Surplus / Deficit Calculations Space Utilization Analysis Definition Condition Audit (building/infrastructure systems-based) Determine projects and costs to correct deficiencies, to extend facility useful life Functionality Assessment (user and program-based) Identify all qualitative needs of existing facilities in a combination of physical conditions and functional requirements for programmatic or functional adequacy/quality Identify levels of remdiation, renovation, modernization, replacement, or demolition requirements and estimate prioritized project costs FCA Condition of Building Systems FQA For Comprehensive Capital Renewal Projects FFA Functionality of Building Spaces Harvey H. Kaiser Associates, Inc. 7

8 Tasks Adoption of Facility Quality Criteria Inspections to evaluate buildings & discussions with users Analysis (incorporation of condition data) 3.2 Facilities Quality Assessment Outcomes / Deliverables Building by Building Comprehensive Projects with Cost Estimates Decisions: Repair, replace, renovate, modernize, change use, demolish, or otherwise prepare the buildings to serve well in the future FCI - Issues and Concerns 3.2 Facilities Quality Assessment DM Backlog FCI = Current Replacement Value Widely misunderstood Programmatic upgrades and Infrastructure may or may not be included CR/DM often includes capital renewal over and above Deferred Maintenance Backlogs CRV calculations vary difficult for inter-institutional comparisons (benchmarking) FCI is often manipulated for an acceptable number FCI can serve as a useful institutional metric for measuring DM improvement progress over time for (selfbenchmarking) Facility Quality Index 3.2. Facilities Quality Assessment 3.3 Infrastructure & General Assessment FQI = $ Condition Deficiencies + $ Functionality Improvements $ Current Replacement Value Definition Primarily non-building needs, with exceptions Utilities (distribution systems) Parking and transportation infrastructure General campus environment amenities and features Sustainability policies and plan Information technology (IT) infrastructure (especially portions that are not within buildings) Land acquisition needs Identify campus needs based on existing capacities and capital project need Prepare preliminary project list, amended by campus master planning Harvey H. Kaiser Associates, Inc. 8

9 3.4 Infrastructure & General Assessment Sustainability Policy Solutions Tasks Infrastructure Assessment Outdoor Space and Features Sustainability Assessment Land Acquisition Outcomes / Deliverables Initial Project List Supplementary List + Campus Master Sustainability Action 1. Establish LEED Silver+ building standard 2. Adopt Energy Star appliance purchasing written policy 3. Encourage and provide access to public transportation 4. Participate in recycling by adopting at least 3 waste reduction measures 5. Support climate & sustainability shareholder proposals at companies where endowment is invested 6. Offset GHGs from air travel 7. Buy/produce XX% of electricity from renewable resources 8. Create opportunities for education and interpretation Sustainability Technical Solutions Elements for Assessment and Development of Actions that Affect Capital 1. Reduce storm water runoff 2. Reuse and recycle storm water and waste water 3. Improve water quality 4. Reduce heat island effect 5. Reduce energy consumption to obtain C02 neutral 6. Preserve physical and cultural resources 7. Increase density and enhance connectivity 8. Innovative wastewater technologies 9. Reduce noise and air pollution 10. Reduce waste and reuse resources 11. Promote alternate transportation 12. Restore natural habitats / plant communities 13. Enhance microclimate 14. Reduce light pollution Definition Not identified by Space Capacity Analysis May be suggested by Facilities Quality Assessment where replacement is required Highly varied; usually one-of-a-kind facilities Specific to academic programs (agriculture, aviation, physics, performing arts, etc.) Campus / student life facilities Campus support facilities Community / economic development facilities Define needs for new buildings or additions Be more systematic and analytical in evaluation of these needs (and their priority) 3.4 Special Facilities Assessment Harvey H. Kaiser Associates, Inc. 9

10 4 Capital Projects & Campus Master Capital Projects Integrated Projects Master ning Site Alternatives & Preferred Scenario Design Guidelines CAPITAL PROJECTS PLAN CAMPUS MASTER PLAN Phase 4 - Capital Projects AND Campus Master Definition A prioritized list of capital projects based on integrated, comprehensive needs assessments Master derived from Capital Projects (not wish list ) Capital Projects Create analytically-based, comprehensive, vetted, integrated list of capital projects (with cost estimates) Campus Master Prepare analyses of the site Create development scenarios Select scenario Identify additional capital projects as a result of above Define capital projects Develop Develop Cost cost Estimates estimates Apply Apply prioritization prioritization scheme scheme Combination of Essentiality and Urgency Factors Building Essentiality Sort Category A Academic Buildings Building with College History Residence Halls Primary Category B Support Services Other Academic & Administration Category C Research Facilities Faculty/ Staff Housing 4.1 Capital Projects Project 4.1 Example of Criteria 4.1 Sample Prioritized Capital Projects Categories: (Essentiality) Priorities: (Urgency) I. Urgent II. Infrastructure III. Academic / Instructional IV. Academic / Non-Instructional V. Administrative A Year One- Current Fiscal Year ( ) B Years One and Two (FY ) C Years Three and /Four (FY ) D Five years or more (2017+) VI. Residence VII. Student Life VIII. Campus Support IX. Other 40 Harvey H. Kaiser Associates, Inc. 10

11 4.1 Communicating the and the Prioritized Capital Projects can be sorted in various ways for presentations The What: Capital Projects 4.2. Campus Master The How: Campus Master Strategic Framework Assessments Capital Projects Master ning Technical Selected Campus Development Scenario Additional Capital Design Guidelines 4.2 Campus Master 4.2 Campus Master Tasks Study the physical campus and alternatives for its future development to arrive at the Campus Master Add capital projects arising from the analyses of the Campus Master process particularly Infrastructure and campus environment projects Sort final Capital Projects levels of priority ideally connected to pragmatic phasing and sequencing logic in the Campus Master Revise and refine the Capital Projects and Campus Master, in light of Phase 5, if needed Image courtesy of Symmes Maini McKee Associates Harvey H. Kaiser Associates, Inc. 11

12 4.3 Integrated Capital Projects and Master Gain and sustain trust and credibility Quality of technical data and findings Comprehensive, accurate, reliable Quality of process Include constituencies Be transparent Follow strategic framework Communications strategy Raw Input from Four Assessments Initial List of Defined Capacity Strategic Academic Building Quality Special Facilities (Condition & Functionality) Application of Application of Analysis & Criteria / Factors Feasibility Infrastructur e & Campus Campus Master Additional Infrastructure & Campus 5 Strategic Framework Capital History Capital Sources Scenarios STRATEGIC FUNDING FRAMEWORK Phase 5 Strategic Framework A strategic funding framework to guide decision-makers in capital investments Methodology Achieve larger, longer view of funding challenges for making informed project priority and financing decisions Develop information for funding sponsors that places requests into the larger context of total capital investment requirements Look at the entire picture, thus leading to some creative solutions that otherwise might not be apparent. 5.1 Strategic Framework 5.1 Strategic Framework - Example Tasks Review Capital History Identify and Analyze Capital Sources Operating Funds Public Funds Capital Markets Capital Gifts Endowment Income Third-party sources Prepare Scenarios Outcomes/ Deliverables Understanding of past financing Assessment of fund sources and potentials Strategic Framework Harvey H. Kaiser Associates, Inc. 12

13 5.1 Strategic Framework Distribution of Capital Projects by Source of Year Period 6 Ongoing Implementation Ongoing Tasks Implementation Team Program Project Phase 6 Ongoing Implementation Definition All those ongoing leadership, management, and technical tasks and processes required to implement, update, and evaluate the Comprehensive Capital Facilities Engage the correct team Adopt sophisticated program management approach Deploy varied, innovative project management techniques Evaluate outcomes and make steady progress 6.1 The Implementation Team 6.2 Program Oversight Governance Oversight Executive Leadership Reporting Overall View from the Top Project Delivery and Procurement Policies Database Maintenance Interim Space Allocation Updates Ongoing Communications Performance Evaluation Decisions Performance External Experts/ Consultants Internal Facilities Staff Internal Advisory Group Services Feedback Harvey H. Kaiser Associates, Inc. 13

14 6.3 Project Comprehensive Capital ning Model In the Trenches In-house and outsourcing Design selection and oversight Project delivery and procurement Scheduling and temporary measures Post-project evaluation 1 Project Organization People & Data Leadership Team Organization of Working Committees Consultants Communications Strategy Database Preparation & Corrections 2 Strategic Review Context Issues, Contexts, Opportunities Strategies for Programs, Enrollment, Research, Etc. Existing Facilities s and Studies Policy & Factors 3 Assessments Space Capacity Facilities Quality (Condition & Functionality) Special Facilities Infrastructure & Campus 4 Capital Projects & Campus Master Capital Projects Integrated Projects Master ning Site 5 Strategic Framework Capital History Capital Sources Scenarios 6 Ongoing Implementation Ongoing Tasks Implementation Team Program Project Could We Do This? Empire State Building Completion Date: 1931 Cost: $41 million Height: 1,250 feet Stories: 102 Construction Time: 1 Year, 45 Days PROJECT PLAN Team & Roles Schedule Work STRATEGIC CONTEXT Strategic Facilities ning Principles Scheme COMPREHENSIVE NEEDS Initial List of / Projects Alternatives & Preferred Scenario Design Guidelines CAPITAL PROJECTS PLAN CAMPUS MASTER PLAN STRATEGIC FUNDING FRAMEWORK Performance Evaluation and Feedback for Refinements & Updates Approach to Customized Model How to Adapt the Model to Your Institution s Specific Situation Need for Customized Solutions Facilities budgeting and decision-making are on a moving train.. Harvey H. Kaiser Associates, Inc. 14

15 Approach to Customized Model Integrated Capital Projects and Master Assess what exists Define gaps Update existing pieces Develop missing pieces Integrate, prioritize, communicate Long-range Capital ning Model Raw Input from Four Assessments Initial List of Defined Capacity Strategic Academic Building Quality (Condition & Functionality) Special Facilities Infrastructur e & Campus Campus Master Additional Infrastructure & Campus Application of Criteria / Factors Application of Analysis & Feasibility Comprehensive Capital ning Framework 1. Capital planning process, policies, procedures 2. Capital planning database 3. Prioritized capital project prioritized list 4. Strategic funding framework 5. Program management / implementation process Conclusion Harvey H. Kaiser Associates, Inc. 15

16 No Silver Bullet No Ruby Red Slippers No Magic Wand No Easy Answers Even very cool software tools will not substitute for higher order decision processes and consistency of policy and direction over time. Hard Work, Long View, Integration, Credibility, Big Goals There is ONLY hard work and movement in a clear and consistent path to success Take a long-term view of campus investment strategy It must survive leadership changes Use the model, but tailor it to your specific case Create missing pieces and integrate all of it Achieve credibility, transparency, and buy-in with evidence-based needs assessment and prioritization Really minimize politics No Fairy Godmother No Circus Tricks No Rabbit in a Hat Set and pursue important investment goals, e.g. Space productivity End space fiefdoms Modernization preferred to new Reinvest where possible Energy conservation Reduce carbon footprint Facility equity ALL programs in good quality space Comments and Discussion Harvey H. Kaiser Associates Harvey H. Kaiser Associates, Inc. 16