Decide with Data, not Instinct

1. Decide with Data, not Instinct Presented by Mike McCormick, CPE Principal McCormick Facilities Management EPMA 41th Conference June 22, 2009

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

3. How do you know how to manage your school facilities? • What do you know about your operation of plant? • How do you keep track of what is happening in your facilities? • Do you utilize a systematic, holistic approach to decision making?

4. Does your school department run like this? • We do it that way because we always have! • If it ain’t broke why fix it? • We don’t have enough money to take care of our facilities! • The Board/Voters don’t understand our needs for facilities! • Its an old building so why do we need to put money in to it? • If we let it go, the State (?) will give us a new one.

5. Does your district choose to put money into: • Salaries • Programs • Technology • Extra/Co-curricular …and let the facilities take care of themselves!

6. Do you know the value of your facility portfolio? • # of students x 125 SF/student x $200/SF • $25 million per 1000 student • Are the members of your facility staff qualified to manage a portfolio of that size?

7. Some relevant statistics…how do you stack up? • Total M & O costs/student = $823.84 • Total utilities costs/student = $297.67 • should be between $1.50-2.00/SF or about 2% of TDE • Total District Expenditures (TDE) /student = $8,967 • Over the last 20 years M & O has steadily declined from 12.75% of TDE to a low in 2004 of 7.43% • M & O as a % of TDE 2007 = 9.19%

9. How many workers do you need? Mean < 1000 1000-3,499 > 3,500 Custodial 39 4 15 93 Maintenance 15 2 3 36 • Each school district custodian covers 25,173 square feet • Each maintenance worker maintains 100,720 square feet • Each grounds keeper covers 40 acres

10. Score card of Maine Schools(clients we are working with)‏ Our clients have more than $800,000,000 of deficiencies And they have more than $970,000,000 of capital renewal needs over the next 20 years

11. Score card of Maine Schools(all schools that have been assessed)‏ Statewide there is more than $1,000,000,000 of deficiencies And there is more than $2,000,000,000 of capital renewal needs over the next 20 years

12. Our schools are deteriorating at a rate greater than $60,000,000 per year.(2% of $3B of asset value)‏ • Currently, statewide spending for facilities, state and local share combined is $150,000,000 per year • At the current rate of spending, it will take 23 years to get the current deficiencies and capital renewal to $0 • It doesn’t end after 23 years, but it becomes a more manageable number • We should be able to “keep up” after that But where will the money come from?????

13. Why are we in this position? • Majority of school buildings were built as a result of the baby boom (1950 to 1975)‏ • Most were built quickly and inexpensively, 50 year life expectancy maximum • 1950/1975 plus 50 equals NOW • Previous admin., boards, voters did not have to deal life cycle and deferred maintenance issues as they were just beginning to occur • Declining student enrollments • Increasing costs • Declining availability of funds from fund source

14. How can you take control? • You need a comprehensive facilities management program • You need Data!

15. Facility Condition Assessment Energy Audits Strategic Long Term Master Planning Facilities Management Building Automation Construction Management Security and Crisis Planning

16. DATAKNOWLEDGEPLANIMPLEMENTREPEAT

17. DATA • Do you have comprehensive….. • Facilities data • Maintenance data • Work order data • Utility data • Facility usage data • Financial data

18. 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!

19. Think of it as a check book… • You need a starting balance… • Keep track of credits and debits… • Always have a current balance… • Have an audit on some regularity

20. What is a Facility Condition Assessment? COST MODELS An FCA is an inventory of a facilities systems and their condition It identifies each building system gives it a dollar value identifies its born on date assigns a life expectancy determines its current condition estimates when it will no longer be reliable advises what the renewal cost will be

21. What is a Facility Condition Assessment?DEFICIENCIES An FCA also identifies actual issues that the facility may have These may be referred to as deficiencies they are identified a description of why it is an issue it is categorized it is prioritized it has a cost estimate to correct

22. Facility Condition Index FCI The results of the FCA can be used to create an industry standard analysis of the relative condition to the replacement value of the asset The formula is: Cost to Correct Deficiencies Current Facility Replacement Value

23. An example: A building with a current replacement value of $25 million that has total needs of $5 million would have an FCI of 20 %

24. This calculation yields the total cost to decision makers • In our previous example, the FCI was 20% • But if the total to cost to provide a desired level of educational adequate space, and that was for example $20 million, then the FCI for this building would be • 80%

25. Simply stated, it means that the cost to address the identified issues equals 80% of the cost to replace the entire building • At that ratio, a district would likely replace the facility rather than renovate it • A guide for using the ratio might look like this: • 0-30% Clearly renovate • 31-60% Maybe renovate, lots of things to consider • 62-100% Very likely to replace

26. You should include all costs We like to include all costs required to provide a proper learning environment: • Deficiencies • Code related issues • Capital renewal, deferred and 20 years ahead • Adequacy upgrades • Additional space needs

27. Maintaining your database Any database must be maintained to continue to be useful. It is meant to be dynamic, not static As requirements are completed, they must be removed from the database As new issues arise, they should be entered

28. Maintaining your database As deficiencies are corrected, you should: • Archive them for historical use • Update the building description • Update the system model (cost model)‏

29. FCA may reveal issues that are beyond local ability to deal with them • May have to hire outside help to fully comprehend depth of the issues and develop a plan to address them • After you gain a thorough knowledge of the problem, must develop a plan!

30. Planning We suggest that you develop at least 3 plans 1. A 20 year strategic vision to deliver educational programming, and how your “campuses” fit that vision

31. 2. Must have a long term plan for facilities • -a “facilities master plan” • -10 year forward look (minimum, 20 is better)‏

32. 3. A capital renewal plan • - minimum of five year forward look • - adequate funding sources • - capital reserve set asides

33. Strategic Master PlanningDo you have a campus plan that works? Determine what your desired final outcome might look like • Who would/will use a plan? • Develop guiding principals • Develop a planning agenda • Develop a strategic long term vision Must have these before Master Planning can begin

34. Facilities Master Planning • Enrollments- historical, trends, projections • Funding projections • Program requirements • Space adequacy • usage, occupancy • size requirements • Condition of facilities – FCA • Economy of the area, look ahead • Regionalization

35. What is included in a Master Plan • Space analysis • Must be current • Must be reviewed annually • Include schedules • Existing/emerging plans • Teaching and learning trends • Peer Benchmarking • How can you do more with less Must include all these

36. Changes in enrollment/faculty • Physical condition, FCA • Zones of legacy • Zones of opportunity • Institutional identity • Program flexibility And these too

37. To be successful, a master plan must... • be realistic • be visionary, creative • involve all parties • Taxpayers • Staff • Students

38. A master plan is never final • Get to final draft, then continually update • Review every 6 months • Redo every 12 months • Keep it alive and active • Remind all players that there is a master plan, and follow it!

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

40. Long term facilities planning Must have a long term facilities master plan • Minimum of a 10 year forward look • Understand facilities needs, dollars required • Know district finances, ability to raise and expend funds, total budget and facilities Incorporate district vision and growth • Programming Enrollment trends • Increasing or decreasing

41. Staffing • Student teacher ratios • Space needs • Cost to provide • Energy • Are you efficient now • Cost will continue to increase • Operations and maintenance • Costs to catch up • Costs to keep up • Custodial coverage and cost • Project costs steadily increasing

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

43. Implement the plan • Keep the stakeholders informed • Let them know how it is working • Keep a score card, results are your best advocate • Continually redevelop funding strategies • Stick to the plan • Update the plan regularly

44. Financial Data • Regular review of expenditures to compare and to national and regional benchmarks • Observe operations and maintenance practices to determine if best practices are being used; maintenance, custodial, energy, capital renewal • Review chart of accounts and record keeping to see if daily operations are “best fit” for proposed annual funding • Continual professional development to learn of new facility management practices

45. Energy and Utility Audits • Every campus or system should have an energy information technology infrastructure • Every energy input at each building • should be metered • measured • collected • analyzed • Should have a detailed time of use database of • electricity • fuel oil • gas • wood • water • sewer • facility usage

46. Allows tracking and benchmarking • Can verify unit costs, guaranteed savings verification for ESCOs • “The most efficient dollar saved is the one never spent” • Turn things off! • Do you have an energy policy at the Board/school level? • Create and enforce an energy program

47. Do you allow the “tri-fecta” of personal appliances in the classrooms? • Coffee maker, microwave, mini fridge • $25 per year of taxpayer money • Who turns them off during vacations? • Re-commission HVAC systems every 10 years

48. What are energy conservation measures? • Lighting and Lighting Controls • Energy Management System • Motor Replacement and Variable Frequency Drive Installation • Building Envelope Improvements • Plug load Controllers • Boiler Replacement / Heating Conversion • Renewable power • Co-generation • Technology upgrades • Water and sewer conservation • Energy Purchases

49. Key objectives of an energy audit • Provide energy modeling for the building • Define and calculate energy savings for Energy Conservation Measures (ECMs)‏ • Determine Operational Savings and obtain agreement from customer • Determine follow-up survey and data gathering requirements • Develop economic (cost vs. savings) analysis for various project scenarios

50. Develop documentation for final proposal • Determine acceptable alternate Energy Solutions with customer input • List sustainability measures • Reduction of Carbon footprint • Obtain pricing for ECMS • Determine an acceptable Performance Contracting per RFP