Transcript Capital Improvement Program FY 2002 through FY 2007

Capital Improvement Program
and
Campus Renewal
Texas Higher Education Coordinating Board
2004 Facilities Conference
February 6, 2004
Capital Improvement Program and
Campus Renewal
U. T. System Key Statistics
 9 Academic Institutions
 6 Health Institutions
 170,000 Total Students
 160,000 Academic Students
 $7.1 Billion Annual Operation Budget
 $2.5 Billion Academic Budget
 60 Million Square Feet of Facilities Space
 35 Million Square Feet of Academic Facilities
 1400 Buildings
 $13.5 Billion Replacement Value
February 6, 2004
Page 1
Capital Improvement Program (CIP)
Overview
 Adopted every two years by the Board of Regents and
amended periodically
 Includes all proposed new construction of $1 million or
greater
 Includes all repair and renovation of $2 million or greater
 Includes any project with Board-authorized debt
 Inclusion on the CIP requires that the project have a
realistic funding strategy and meet certain evaluation
criteria
 Inclusion on the CIP allows up to 3% of the project budget
to be spent on programming and preliminary design
February 6, 2004
Page 2
Capital Improvement Program
Evaluation Criteria



The project’s consistency with the institution’s mission
The level of importance of the project in meeting institutional goals
Project funding:
Whether the project will generate gift or grant funding or other unique
funding opportunities
The component’s ability to access other sources of funding as measured by
debt service coverage and unrestricted current fund balance.



Whether the project will generate self-supporting revenues
The project’s cost effectiveness in terms of new construction versus
renovation
Effectiveness of the project based on the THECB space utilization and
cost criteria
The condition of the existing facilities
February 6, 2004
Page 3
Capital Improvement Program
Process for Adding Project to CIP
component institutions
submit list of CIP projects
System Administration
receives list of CIP projects
Academic Affairs, OFPC, OF
review projects in accordance
with CIP project guidelines
Health Affairs, OFPC, OF review
projects in accordance with CIP
project guidelines
draft CIP presented to EVC
Business Affairs, EVC Academic
Affairs, and EVC Health Affairs
February 6, 2004
Page 4
Capital Improvement Program
Process for Adding Project to CIP
CIP presented to Chancellor
Recommended CIP and
Capital Budget presented to
BOR for adoption
BOR evaluates and adopts CIP
component can
expend up to 3% for
programming and
DDs. Later, project
is moved to Capital
Budget.
BOR evaluates and approves
Capital Budget
new
construction
projects
brought
back to BOR
February 6, 2004
repair and
rehabilitation
projects
approved
and
appropriated
Page 5
Capital Improvement Program
Process for Adding Project to CIP
BOR
approves
DDs;
appropriates
funding;
authorizes
expenditures
Chancellor
approves
DDs;
authorizes
expenditures
project proceeds to completion
February 6, 2004
Page 6
Capital Improvement Program
Project Delivery Process
 Component Institution Establishes Internal Capital
Improvement Program
 Identifies needs
 Identifies resources
 Determines resource allocation and establishes priority
 Project Staffing
 Component establishes building committee of departmental users,
facility management staff, and appropriate service departments
 OFPC assigns Project Manager and retains design team and
construction team to work with building committee
February 6, 2004
Page 7
Capital Improvement Program
Project Delivery Process
Campus Administration
Other Service
Departments
Building
Users
Facility
Department
OFPC
Project
Manager
Design
Team
Construction
Team
February 6, 2004
Page 8
Capital Improvement Program
Cost Control: Influence Curve
BUDGETARY INFLUENCE
• Ability to influence budget is very high in early
design and very low during construction.
FP
0
• Project flexibility and options should be explored
early in facility program and schematic design.
• Cost uncertainty is directly related — it is high in
the early phases and low during construction.
• To mitigate the risk of uncertainty, contingencies
must be high early and can be reduced later.
DESIGN
NTP
15 mo.
CONSTRUCTION
SC
33 mo.
Page 9
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
166 Projects totaling $4.59 Billion*
Current CIP (2002-2007)
Net Changes to Existing Projects
Completed Projects
Removed Projects
New Projects Added
New CIP (2004-2009)
$4,311,723,981
43,665,000
(549,457,799)
(472,006,882)
1,257,984,500
$4,591,908,800
*August 2003
February 6, 2004
Page 10
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
Recent Trend in CIP Growth
$5,000,000,000
$4,591,908,800
$4,500,000,000
$4,000,000,000
$3,764,153,981
$3,500,000,000
$3,243,141,250
$3,396,171,135
$3,000,000,000
Academic
$2,765,759,772
$2,500,000,000
Health
$2,428,540,250
Total CIP
$2,236,340,250
$2,000,000,000
$1,763,575,531
$1,500,000,000
$1,159,830,885
$1,000,000,000
$1,335,613,731
$1,348,767,550
$1,002,184,241
$500,000,000
$August 2000
August 2001
February 6, 2004
August 2002
August 2003
Page 11
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
166 Projects totaling $4.59 Billion
Arlington
Austin
5%
6%
Dallas
1%
El Paso
4%
New Projects
$1,257,984,500
Pan American
3%
Permian Basin
0%
San Antonio
6%
Tyler
27%
1%
S.M.C. Dallas
1%
73%
M. D. A.C.C.
70%
M.B. Galveston
1%
H.S.C. Houston
2%
Existing Projects
$3,333,924,300
Total CIP: $4.59 Billion
New Projects: $1.26 Billion
February 6, 2004
Page 12
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
H. C. Tyler
$13,691,250
Arlington
$149,309,146
Brow nsville
$26,010,000
Austin
$612,319,000
Academic
$1,348,767,550
Dallas
$48,093,750
El Paso
$97,422,000
Pan American
$64,587,000
29%
M. D. A. C. C.
$1,868,030,000
Permian Basin
$23,650,000
San Antonio
$271,026,654
71%
Tyler
$56,350,000
S. M. C. Dallas
$383,200,000
Health
$3,243,141,250
H. S. C. San Antonio
$123,100,000
M. B. Galveston
$360,970,000
H. S. C. Houston
$494,150,000
CIP by Institution
Total CIP: $4.59 Billion
February 6, 2004
Page 13
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
Other Institutional
Funds
Insurance
Claims
PUF Bonds
2%
U. T. H.C. Tyler
0%
1%
10%
U.T. Arlington
7%
Hospital
Revenues
U. T. Austin
16%
17%
U. T. Dallas
1%
Grants
38%
5%
U. T. El Paso
3%
Revenue
Financing
Bonds
U. T. Pan American
1%
U. T. Permian Basin
1%
U. T. San Antonio
7%
13%
U. T. Tyler
1%
U. T. M. D. A.C.C.
45%
Gifts
Designated
Tuition
11%
U. T. S.M.C. Dallas
7%
U. T. H.S.C. Houston
5%
U. T. M.B. Galveston
6%
3%
Tuition Revenue Bonds
CIP Funding
RFS by Institution
February 6, 2004
Page 14
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
Tuition
Revenue
Bonds
Revenue
Financing
Bonds
Tuition
Revenue
Bonds
10%
Gifts
11%
35%
Revenue
Financing
Bonds
Gifts
14%
15%
30%
7%
Grants
6%
Grants
PUF Bonds
7%
Other 1%
Institutional
2%
Funds
Insurance Claims
8%
25%
25%
PUF Bonds
Hospital Revenues
Health CIP: $3.24 Billion
Hospital Revenues
2%
Other
2%
Institutional
Insurance Claims
Funds
Health CIP W/out Auxiliary: $2.95 Billion
February 6, 2004
Page 15
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
Designated Tuition
Gifts
Tuition
Revenue
Bonds
Designated Tuition
13%
Tuition
Revenue
Bonds
4%
Other
Institutional
Funds
Grants
2%
19%
23%
Grants
1%
Revenue
Financing
Bonds
13%
Gifts
8%
11%
47%
18%
24%
Revenue
Financing Bonds
16%
Other
Institutional
1% Funds
PUF Bonds
Designated Tuition
3%
Tuition
Revenue
Bonds
PUF Bonds
Academic CIP W/out
Auxiliary: $881 Million
Gifts
3%
Grants
Other
Institutional
2% Funds
3%
38%
37%
PUF
Bonds
14%
Revenue
Financing Bonds
Academic CIP w/out
Auxiliary or Austin: $443 Million
Academic CIP: $1.35 Billion
February 6, 2004
Page 16
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
Projects by Type
Athletic
$74,400,000
Health
Educational/Administrative
$402,400,000
Academic
Educational/Administrative
$498,896,355
Clinical
$779,308,000
9%
Student Services
$ 76,719,000
Day Care
$6,100,000
Hospitality
$79,000,000
17%
11%
Parking
$274,694,500
17%
38%
Auxiliary
$794,131,500
8%
Health Research
$1,767,253,250
Academic Research
$349,919,695
Total CIP: $4.59 Billion
Housing
$283,218,000
Auxiliary Projects: $794 Million
February 6, 2004
Page 17
Capital Improvement Program
FY 2004-2009 Capital Improvement Program Summary
Repair and
Renovation Health
$614,838,000
New Construction
Academic
$1,064,094,599
13%
Repair and Renovation
Health
$450,880,000
10%
New Construction Health
$1,477,880,000
23%
Repair and
7% Renovation Academic
43%
32%
New Construction
Academic
$1,945,633,000
$284,672,951
57%
15%
New Construction
Health
$2,628,303,250
Repair and Renovation
Academic
$675,783,000
Future Projects: $4.55 Billion
Total CIP: $4.59 Billion
February 6, 2004
Page 18
Campus Renewal
Project History
 Working Group Established Fall 2000
Three Academic Component Representatives
Three Health Component Representatives
 Working Group Reviewed Alternatives and Issued RFP in June 2001
 Contract Awarded to Pacific Partners Consulting Group October 2001
The University of California System
The University of Oregon
Smithsonian Institute
 Constructing the Model Assumptions Fall 2001

Regional Training Winter 2001/2002

Data Collection and Scrubbing Spring 2002

Presentation of Results Summer 2002

Update Results Summer 2003
February 6, 2004
Page 19
Campus Renewal
Project Goals
Statistical Model to:
 Project funding requirements of current backlog
 Project annual funding requirements for ongoing renewal
 Allow facility staff to better predict and plan capital
renewal projects
 Provide a consistent assessment tool to monitor
facility conditions over time
 Allow facility staff to maintain and update the model
with reasonable effort
February 6, 2004
Page 20
Campus Renewal
Renewal Curves and Life-Cycle Modeling
The Concept of Life Cycle Planning
Two Key Elements:
 Building Systems have known life expectancies.
 The remaining life of each building system can be
estimated.
February 6, 2004
Page 21
Campus Renewal
Life Cycle Planning
The “Basics” of A Renewal Curve
 Life cycles and replacement costs are predicted for each
subsystem based on institution specific experience and
industry standards
 Renewal costs are based on campus experience for the
type of system and building
 A 30-year forecast is made by facility, by types of
facilities, by campuses and, finally, system-wide
February 6, 2004
Page 22
Campus Renewal
Facilities Wear-Out is Cyclical
Annual Renewal Needs
$80.0
$60.0
$50.0
Renewal
Average
$40.0
$30.0
$20.0
$10.0
2035
2030
2025
2020
2015
2010
2005
2000
1995
1990
$0.0
1985
Millions of Dollars
$70.0
Year
February 6, 2004
Page 23
Campus Renewal
Why are Renewal Curves Important?
 Renewal curves are cyclical
 The top is frequently 200% - 300% of bottom
 The “bottom” frequently happened in the 1990s
 Backlog and Renewal are related
February 6, 2004
Page 24
Campus Renewal
Renewal and DM Backlog are Related
February 6, 2004
Page 25
Campus Renewal
The Facilities Renewal Resource Model
Process for Developing a U. T. Facilities Renewal Model
Facilities Inventory
1. Determine focus of Capital
Renewal/Deferred
Maintenance Study
2. Group facilities into common
categories: Basic, Complex,
Simple, Small
3. Identify subsystems for
each facility category
Facilities included
Facilities excluded
Categories of Facilities
Basic
Complex
Simple
Small
Subsystems
Plumbing
Electric
4. Determine life cycle and
renewal cost parameters for
each subsystem
HVAC
Roof
Etc.
Life Cycle and Cost
February 6, 2004
Page 26
Campus Renewal
FY 2004-2009 Capital Improvement Program Summary
Working Group Recommendations: Subsystems and Life Cycles






Roofing
20-100
Exteriors
20-30
Elevators
25
HVAC Equipment
20
HVAC Distribution 40
Electrical
30
February 6, 2004






Plumbing Fixtures
Plumbing Rough-in
Fire Protection
Fire Detection
Built-in Equipment
Interior Finishes
30
50
25
20
25
15
Page 27
Campus Renewal
Preliminary Results
Typical Replacement Costs*
% SF
Construction $/SF
Project $/SF
Basic
51%
$150/SF
$185/SF
Complex
33%
$250/SF
$310/SF
Simple
11%
$ 40/SF
$ 50/SF
Small
5%
$ 85/SF
$105/SF
*Based on 58 U. T. System projects over the last five years.
February 6, 2004
Page 28
Campus Renewal
How Does it Work?
Building XYZ constructed in 1975 (complex)
Building
Subsystem
Life
Cycle
Years
Roofing
Building Exterior
HVAC Equipment
Electrical
Plumbing
Fire Protection
Built-in Equipment
Interior Finishes
30
30
20
30
30
20
25
15
Last
Renewal
Date
1975
1975
1995
1975
1975
1995
2000
1990
February 6, 2004
Next
Renewal
Date
Cost
to
Renew
2005
2005
2015
2005
2005
2015
2025
2005
$
$
$
$
$
$
$
$
Page 29
Campus Renewal
Total Construction in 5-Year Cohorts
7,000,000
6,000,000
5,000,000
4,000,000
Academic
Medical
3,000,000
2,000,000
1,000,000
February 6, 2004
2000
1990
1980
1970
1960
1950
1940
1930
1920
1910
1900
1890
1880
1860
1850
0
Page 30
Campus Renewal
Preliminary Results
Calculating a Facilities Condition Index (FCI)
FCI =
Backlog
CRV
 Numerator = Backlog (Est. Current Renewal Needs)
Building Components that have
exceeded their life-cycle
 Denominator = CRV (Current Replacement Value)
Based on Current OFPC Costs
February 6, 2004
Page 31
Campus Renewal
Benchmark Data
Facility Conditions Index
(Backlog divided by CRV)
System (#)
UT (15)
System A (24)
System B (7)
System C (9)
Low
0%
3%
6%
7%
February 6, 2004
Ave. High
6% 10%
11% 36%
18% 24%
23% 32%
Page 32
Campus Renewal
Benchmark Data
Why are there such large variances in the FCI
Benchmark?
 Age of Campus
 Types of Buildings
 Special Considerations
February 6, 2004
Page 33
Campus Renewal
Comparison of 2002-2003 Model Results
9 Academic
Campuses +
System
Admin
2002
2003
Variance
Average
Annual
Renewal
($M)
Average
Annual
Renewal
/ CRV
Total E&G
Backlog ($M)
Total E&G 5
Year Renewal
($M)
7.9%
7.1%
-0.8%
$
$
$
374.3
356.3
(18.0)
$
$
$
368.1
447.3
79.2
7.7%
6.9%
-0.8%
$
$
$
108.3
113.7
5.4
1.7%
1.7%
428.7
590.0
161.3
4.8%
4.3%
-0.5%
$
$
$
189.3
189.9
0.6
$
$
$
242.4
301.6
59.2
5.7%
5.4%
-0.3%
$
$
$
111.6
115.2
3.6
1.7%
1.7%
891.5
1,126.1
234.6
6.4%
5.7%
-0.7%
$
$
$
563.7
546.2
(17.5)
$
$
$
610.5
748.9
138.4
6.9%
6.3%
-0.6%
$
$
$
219.9
228.9
9.0
1.7%
1.7%
Total Backlog
($M)
Total 5 Year
Renewal ($M)
$
$
$
509.6
487.2
(22.4)
$
$
$
462.8
536.1
73.3
$
$
$
291.3
284.8
(6.5)
$
$
$
$
$
$
800.9
772.0
(28.9)
$
$
$
FCI (%)
FCI (%)
6 Health
Campuses
2002
2003
Variance
Total System
2002
2003
Variance
February 6, 2004
Page 34
Campus Renewal
Case Study #1: Benedict/Mezes/Batts Renovation—UT Austin
120,000 GSF classroom, lab, and office space for Departments of Psychology and
Spanish and Portuguese, completed in 1951; in the center of campus, now considered
historic
Challenge
 doesn’t meet life/safety code or ADA
 inadequate and worn out mechanical and electrical systems
 interior finishes have substantial wear
 exterior needs substantial maintenance
 original uses moving out of building creating need for different configuration
 location in historic center of campus presents several issues
strong desire to maintain the original architectural character
need for more space is great—real estate is precious
Response
 rebuild building completely with all new mechanical, electrical, and fire/life safety
systems
 reconfigure buildings to meet new needs for new departments
 addition of new SF in center of campus will be done in original campus architecture
February 6, 2004
Page 35
Campus Renewal
Why U. T. System Selected Life Cycle Modeling
 Relatively Inexpensive — 1/10 the cost
 Flexible Multi-year Planning
 Sustainable Approach
 Credible with Senior Officers
 Consistent and Comparable Results Across Institutions
 Relatively Easy to Update and Can be Used as a Multi-Year
Performance Tracking
February 6, 2004
Page 36
Campus Renewal
Key Points
 Histograms are valuable — Facility conditions are
closely related to age
 Definitions are important
 Renewal is cyclical
 Renewal and the Backlog are LINKED
 Life Cycle models are planning tools
 Building wear-out — some are not worth reinvesting
 Next 10 years is a period of increasing renewal needs
February 6, 2004
Page 37
Campus Renewal
Case Study #2: Founders Building Renovation—UT Dallas
119,000 GSF science/research building for Natural Sciences and Mathematics
completed in 1964
Challenge
 doesn’t meet life/safety code or ADA
 inadequate and worn out mechanical and electrical systems
 HVAC systems don’t meet current standards for laboratory
 lab layouts are inadequate to meet current lab standards
 space utilization has expanded into corridors
 without “surge” space renovation would be incremental, disruptive, and expensive
Response
 construct new addition to house relocated, utility-intensive wet labs from Founders
 renovate part of existing building to a lesser standard without wet labs—only offices,
dry labs, and support space
 indefinitely mothball and vacate portion of building
February 6, 2004
Page 38
Campus Renewal
Case Study #3: Experimental Science Building
Renovation—UT Austin
215,000 GSF science/research building for Natural Sciences built in 1950
Challenge
 doesn’t meet life/safety code or ADA
 inadequate and worn out mechanical and electrical systems
 HVAC systems don’t meet current laboratory standards
 lab layout and arrangement do not meet current lab standards
 limited floor-to-floor height (12 to 13 ft.)
 location in historic portion of campus requires maintaining original architectural character
 new Center for Nano and Molecular Science and Technology research program scheduled
to occupy building; requires Class 100, 1000, and 10,000 clean rooms
Response
 constructed new addition to house clean rooms and required mechanical space; in


original campus architecture
renovate portion of existing building to house administrative office and support spaces
large portion of existing building will remain untouched until suitable funds and building
use are established, or a decision is made to replace the building
February 6, 2004
Page 39
Questions?
www.utsystem.edu/fpc