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University of Nebraska at OmahaDigitalCommons@UNOBusiness/Finance/Operations Portfolio/Visit 2016-181-1-2015NU Stewardship Spending - A Strategic Approachto Capital Planning 2015University of NebraskaFollow this and additional works at: http://digitalcommons.unomaha.edu/oiebusinessThis Report is brought to you for free and open access by the Portfolio/Visit 2016-18 at DigitalCommons@UNO. It has been accepted forinclusion in Business/Finance/Operations by an authorized administratorof DigitalCommons@UNO. For more information, please contactunodigitalcommons@unomaha.edu.Recommended CitationUniversity of Nebraska, "NU Stewardship Spending - A Strategic Approach to Capital Planning 2015" (2015). Business/Finance/Operations. Paper 72.http://digitalcommons.unomaha.edu/oiebusiness/72University of NebraskaStewardship SpendingA Strategic Approach to Capital Planning1Strategic Focus• Access to capital is limited:– Borrowing, bottom line• “Top line” is flat:– State funding challenges– Tuition/affordability goals– Pressure to defer renewals• LB 605 tolls in 2017/2021January 2016 Legislative AskPlanning Team• Sasaki Associates• NU Work Group– UNK: Charlie Bicak, Lee McQueen– UNL: Bill Nunez, Jennifer Dam Shewchuk, Mark Miller, Jim Jackson– UNMC: Paula Turpen, Ron Schaefer, Melinda Pearson– UNO: Bill Conley, John AmendSasaki Strategic Tools• Renewal and Deferred Maintenance (RDM)Model• Visualizer• PrioritizerRDM5RDM Purpose• Accurate measure of renewal liability• Model to test what‐if capital investment strategies based on– Building condition– Renewal spend– Replacement valueNel5iasha RDM DefinitionsThe current spend anticipates a minimum base budget annual spend per yearThe starting point = total liability with the dashed line matching the Target FCI (moves with change in target).Keep‐up and catch‐up numbers reflect funding needed to match the Target FCIRDM InputsRDM Liability: cost to bring building to acceptable conditionReplacement Value: cost to replace current useRenewal spend: base budget expenditures Current Replacement Value (CRV): cost to replace current use of a building with an equivalent quantity of new (or like‐new) space Cost/Space: classrooms, labs, office space, etc. have different replacement costs Square foot Cost: project cost/space type = cost/space type and soft cost multiplier (20%) to derive total project cost by space type Cost/GSF: costs were prorated by space type to derive an average replacement cost for each building CRV: The average replacement cost per GSF was multiplied by the total gross square feet to derive the full CRV9Current Replacement ValueNel5iasha 10Campus GSFReplacement Values$ $/GSFUNK 1.0M $385.6M $375.8UNL 5.4M $2,051.6 $392.9UNMC 2.0M $787.0M $399.8UNO 1.8M $678.6M $386.8System 10.0M $3,902.9M $391.4Current Replacement ValuesCampus GSFTotal Liability1 Adjusted Liability2$ $/GSF $ $/GSFUNK 1.0M $119.3M $116.3 $52.3M $50.9UNL 5.2M $692.4M $132.6 $317.1M $60.7UNMC 2.0M $149.8M $76.1 $47.0M $23.9UNO 1.8M $149.8M $85.4 $39.9M $22.7System 10.0M $1,111.3M $111.4 $456.2M $45.7Table shows the costs based on the CRV to bring a building to ‘like new’ 100% FCI (total) or an ‘acceptable’ (adjusted) level of 80% FCI(1) Represents the aggregate dollar liability to renew each building to a FCI score of 100%.(2) Represents the aggregate dollar liability to renew each building to a FCI score of 80%. 11LiabilityNel5iasha RDM VariablesWhat ifTHE VISUALIZER13 116 buildings across four campuses:Campus # of Buildings Gross Square FeetAssignable Square FeetUNK 14 1.0M 0.6MUNL 68 5.2M 3.1MUNMC 20 2.0M 1.1MUNO 14 1.8M 1.0MSystem 116 10.0M 5.7M Selection criteria: State‐aided funding source Greater than $5 million replacement value Excludes utility/mechanical plants14Buildings IncludedVisualizer InputsBuilding AuditSuitability: classrooms, dry lab, wet labFacility Condition Index: Structure, secondary structure, service systems, safety standards, energy use, efficiency, functional analysis.Building Audit HDR conducted intensive evaluations of each building for Facility Condition and Suitability for use. Condition includes the state of repair on each floor of the building, and produces ratings in two broad categories:– Architectural (e.g., interior finishes, life safety, accessibility, entrances, exterior envelope, substructures, superstructures)– MEP (e.g., plumbing, HVAC, fire protection, electrical, conveying systems) Suitability (e.g., floor to floor heights, column spacing, structure) generated ratings for use as classroom, dry lab and wet labNel5iasha Facility Condition Index The FCI is a broad description of building's state of repair; a building in perfect condition would receive a score of 100%, while a facility in desperate need of major renovation might score below 50% Scores in each individual category are weighted and averaged to derive  a composite FCI for each building All scores and sub‐scores are accessible within the VisualizerNel5iasha 11%63%26%14%51%34%1%60%29%11%41%59%UNO80% Average ConditionUNK77% Average ConditionUNMC86% Average ConditionUNL68% Average ConditionFCI Score80-100%60-79%40-59%0-39% UNMC and UNO campuses are in relatively good condition– A significant number of the evaluated state-aided buildings are above the 80% FCI target– Only a handful of facilities require major renovations UNK and UNL require significant investment1.0M GSF 5.2M GSF 2.0M GSF 1.8M GSF18NU FCI BreakdownVisualizer InputsSpace Utilization Usage of the various components:classrooms, labs, office space.Inventory of Space: classrooms, lab, office, social14%15%24%10%20%9%8% 9%30%31%11%8%7% 4% 7%32%30%6%9%9%7% 12%24%36%11%2%11%4%ClassroomsLabsOffice and ConferenceLibrary / StudySpecial UseGeneral UseSupportUNOUNK UNMCUNL0.6M ASF 3.1M ASF 1.1M ASF 1.0M ASFSpace Breakdown by Assignable Square Footage (“ASF”)20Inventory Utilization of space is not only dependent upon appropriate location, technology and current pedagogies, but current space condition If 80% FCI is an appropriate threshold, the amount of academic related space below 80% FCI highlights the need for system‐wide RDM spend  Further study of classrooms, labs and offices in buildings below 60% FCI is needed to determine if those buildings require renewal or replacementPercent of Academic Space in Buildings Below 80% FCIPercent of Academic Space in Buildings Below 60% FCI2190%60%92% 100%91% 89% 87%98%29%35%53%85%56%83%59%7%Classroom Lab Office StudyUNK UNL UNMC UNO36%17%38%1%40% 39% 42%28%2%10% 13%3%0% 0% 0% 0%Classroom Lab Office StudyUNK UNL UNMC UNOUtilization – NU Academic SpaceLab utilization = Weekly Room Hours agriculture, biology, chemistry, physics, engineering, earth and health sciencesAgronomy and Horticulture 17 20 23 23 31Animal Science 6 7 13 13 14 15Anthropology 5 17Art and Art History 11 17 23 28 31 34 34 34 40 40Biochemistry 8 16Biological Science 9 11 11 17 20 26 26 31 34 34 34Biological Systems Engineering 9 12 19Chemical and Biomolecular Engineering 23Chemistry 8 9 11 12 14 14 14 16 17 17 20 20 20 31 31 31 34 34College of Architecture 9 12 12 12 12 12 12 12 14 20College of Business Administration 10 25Community and Regional Planning 22Computer Science 19Dean College of Education and Human Sciences 5Earth and Atmospheric Sciences 7 13 14 26Electrical Engineering 3 26Entomology 3 14Food Science and Technology 9Interior Design 12 13Johnny Carson School of Theatre and Film 15 17Mary Riepma Ross Film Theatre 18Military Science 13Naval Science 13Nutrition & Health Sciences 17 20Physics and Astronomy 6 17 20 26 37Psychology 17School of Music 2 5 7 9 18Teach/Learn & Teacher Ed 3 6 8 12 16Textiles, Merchandising & Fashion Design 4 16 16Veterinary and Biomedical Sciences 11 11 13UNL science labs are under pressure, but a fair number of other labs have additional capacity, information valuable in determining renewal projectslow Target 18-24 highUtilization ExampleTHE PRIORITIZER23ProjectsProjects are entered with a name, paragraph description, dependencies, tag andestimate.And then ranked based on the Strategic FrameworkPrioritizedFollowing ranking: Projects can be weighted based on priorities:AccessTeaching ExcellenceResearch ExcellenceEffective EngagementCost Effectiveness INTEGRATIONVISUALIZER26Facility ConditionOtto OlsenComposite Score:54%Replacement ValueOtto OlsenReplacement Value:$25.5MLiabilityOtto OlsenLiability:$11.8MDepartmentsOtto OlsenBusiness & TechnologyInformation TechnologyDaycareCurrent UseOtto OlsenClassroom: 24%Office: 18.5%Circulation: 18%Lab: 20%Average Weekly Room HoursOtto OlsenFall 2014:10.2 average hours spent in classrooms per week30‐40 WRH is considered optimumVisualizer Analysis• Building in poor condition– Cost to bring back to original almost 50%• Houses Business & Technology, Information Technology & Daycare• Built for Vocational Arts, primary current use is classroom• Condition of space equates to average Fall 2014 weekly room hours of 10+Nel5iasha INTEGRATIONPRIORITIZER34Projects Replacing Otto OlsenBOR Strategic FrameworkPrioritized with other ProjectsPrioritizer Analysis• Replacement projects fit well with BOR Strategic Framework– Projects allow for relocation of Business & Technology as well as Daycare– Removes antiquated building from assetsNel5iasha INTEGRATIONRDM39RDM Analysis• LB 605 tolls in 2017/2021 – Assuming $11M available in 2017– Potential to fund $80M+ in projects• Allows university to consider– Proposed projects and impact on renewal– Additional funding needed for priority projects– Commitment to annual capital investment similar to LB 1100 2% depreciation– Campus condition and impact of addition or reduction in square footageNel5iasha A Powerful Combination of ToolsRDMA Powerful Combination of ToolsRDMVisualizerA Powerful Combination of ToolsRDMVisualizerPrioritizerA Powerful Informed AskRDMVisualizerPrioritizerPowerfulInformedLegislative AskVisualsPrioritiesRenewalNeeds

NU Stewardship Spending - A Strategic Approach to Capital Planning 2015

https://digitalcommons.unomaha.edu/cgi/viewcontent.cgi?article=1071&context=oiebusiness

NU Stewardship Spending - A Strategic Approach to Capital Planning 2015

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