Facility Conditions
A System Dynamics Review of the CSU Capital Outlay
Program and its Impacts to the CSU, Chico Campus
Andrew Boyd, PMP
MBA Candidate, College of Business
California State University, Chico
400 W. I* Street
Chico, CA 95929-0925
Phone: (530) 321-3780
Email: ajboyd@csuchico.edu
Abstract
The California State University, Chico’s assets are deteriorating. The existing mechanisms to
improve the campus through the California State University (CSU) Capital Outlay program will
do little to address the widespread degradation of the campus facilities. Through delegated
authority, each campus is responsible for the welfare of its facilities; creating 23 separate
approaches to facilities management and enabling a zero sum game for capital resources. The
consequences of widespread facilities degradation is impacting student success and preventing
both the system and individual campuses from focusing on its core responsibilities and
ultimately its mission. While the CSU system appears to be aware of the theory of asset
management and total cost of ownership, policies and practices indicate that there is a large gap
between comprehension and implementation. This paper will analyze the existing CSU facilities
management system utilizing two dynamic models to understand general system behavior, local
impacts to the CSU, Chico campus and potential leverage points for improvement.
Key Words
Facilities Management, Government Policy, Fixes that Fail
June 12, 2013
Introduction
The California State University, Chico has a wide array of facilities, all of which are slowly
decaying. Without the proper allocation of resources, facilities that were once assets become
detrimental liabilities. Operations and maintenance staff become a triage unit focusing primarily
on reactive work which further increases the rate of deterioration of the facilities. Failing
systems impact budgets, shifting precious resources into a pseudo risk pool. The investment in
triaging a problem provides little return, as more often than not the fix only provides
temporary relief to return the facility to service and does not address the true deficiency
(Committee on Advanced Maintenance Concepts for Buildings 1990). The problem is not
isolated to the California State University, Chico campus, but rather is magnified here due to
the advanced age of the University. Almost all campuses within the California State University
(CSU) system are experiencing similar problems ("Major Capital Outlay Programs: 2005-2014"
2012). This past January, Fresno State, which is one of the California State University
campuses, lost the ability to provide power to the majority of its campus for three days due to
failures in its electrical infrastructure (Armbruster 2013). From a system dynamics perspective,
the problem is a classic example of a “fixes that fail” model (Senge 2006), as there is continued
deterioration of facilities with minor improvements that occur periodically when funding is
provided through the Major Capital Outlay Program.
The overall problem appears to be quite simple; resource investment is less than that which is
needed to maintain the physical assets at an acceptable level. Two dynamic models were
created; one to understand the resource allocation of the CSU Capital Outlay Program and the
other focusing on how this resource distribution impacts the deferred maintenance and facility
conditions of the CSU, Chico campus. Ancillary impacts to campus operations are explored to
provide further insight into potential long term risks and the persistent erosion of the level of
service.
California State University, Chico
The California State University, Chico was founded in 1887 as a normal school. The campus is
the second oldest in the CSU system. From a facilities standpoint, 70% of the campus is older
than 30 years. The majority of the campus, over 50% of its physical space, was built between
the 1950's and 1970's (““CSU, Chico Facilities Lifecycle Data” 2012). While age alone cannot be
used to ascertain the state of facilities, it can help to indicate the expected state of the facilities.
Most, if not all, of these facilities were designed by the California State Architect as utilitarian
concrete structures congruent with the modernist movement of the era. This era of design
was mainly focused on creating space, with neither foresight for energy consumption nor
flexibility for future changes (Bernstein 2004). Additionally, building materials of this era
contained three known hazardous materials, asbestos; lead, and polychlorinated biphenyls
(PCBs).
2 June 12, 2013
Today, the CSU, Chico campus is comprised of approximately 36 state general fund supported
facilities of which 24 directly serve the primary function of the educational mission of the
campus. Below is a summary of the 2012 campus facilities conditions (“CSU, Chico Facilities
Lifecycle Data” 2012).
The summary metrics used in the table are common to the field of facilities management and
provide a broad synopsis of the quantity and conditions of the University’s facilities. The key
metric is the Facility Condition Index (FCI), as it defines the percentage of aged building systems
in comparison to the total value of the facility. FCI greater than 0.10 is considered to be poor
(Rush 1991) within the collegial facilities management industry.
Table | — CSU Chico Facilities Conditions
Current Deferred Facility
CSU Chico Gross Replacement Value | Maintenance Condition
Space (sqft) | (CRV) ($) (DM) ($) Index (FCI)
Primary Facilities 1,717,685 | $ 532,533,614 $ 140,573,185 0.26
Support Fac 310,856 | $ 29,585,376 $ 4,974,029 0.17
Total Facilities 2,028,541 | $ 562,118,991 $ 145,547,214 | 0.26
The California State University Capital Outlay Program
The California State University system operates a formal Capital Outlay Program to identify all
of the future needs of the 23 campuses. This yearly Capital Outlay Program identifies the
campus need for both State and “non-State” funded projects ("Major Capital Outlay Programs:
2005-2014" 2012). The focus on this study is “State” funded projects which covers the
majority of academic and support facilities supported by the General Fund of the State of
California. The following is directly from the 2013/2014 Capital Outlay Program:
Basis of the Capital Outlay Program
“The primary objective of the Capital Outlay Program for the California State University (CSU)
is to provide facilities appropriate to the CSU’s approved educational programs, to create
environments conducive to learning, and to ensure that the quality and quantity of facilities at
the 23 campuses serve the students equally well.”
The Capital Outlay Program and the Five-Year Capital Improvement Program (state funded)
have the following basis:
|. Approved Academic Master Plans
2. Approved Campus Physical Master Plans
3. Full-Time Equivalent Student Enrollment Allocations
4. Approved Space and Utilization Standards
3 June 12, 2013
Space and Facilities Database
. Phasing Out of Leased and Temporary Facilities
Estimates of Cost Based on the ENR California Construction Cost Index
Utility Conservation and Alternate Financing for Efficiency Improvement Projects
Seismic Policy and Program
0. Sustainable Building Practices
Ss MP OnNau
Each campus has the responsibility of identifying their individual priorities and must follow
standardized planning rules. The general criteria and/or requirements that shape the list are:
e Each campus may submit a maximum of one project for the first two years, three
projects for the next three years.
= The exception to this rule is that Seismic Retrofits are excluded from the limit and
are prioritized according to recommendations from the CSU Seismic Review Board.
e “Priorities will be determined based upon the strategic needs of the system in
consideration of existing deficiencies in the type, amount and/or condition of campus
space to serve the academic master plan.”
e If more than one large auditorium or lecture hall is proposed, priority will be given to
the project which 50% or more of its funding is from non-state sources.
Detailed project requests are provided by the campus for review at the Chancellor’s Office.
Once approved, the information presented in the Capital Outlay program with a summary of
the key statistics which were utilized in analyzing the project need, please see Appendix C for
further details.
After each campus submits their yearly outlay
plan, the department of Capital Planning, 2013/2014 Priority List $520.5 0181
Design and Construction at the Chancellor’s | 2013/2014 Program $6.339 B
Office constructs a “State Funded Capital
Outlay Program Priority List” for the system. | Historical Avg Priority List $540.0M
This list identifies the system wide priorities | Wistorical Avg Actual Funding | $249.155M
and communicates the CSU need to the
California State Government. In reviewing — Tobie |]
both the current Outlay request and historical
data, the adjacent information can be gleaned.
4 June 12, 2013
California State University System
Capital Outlay Program
$1,200,000,000
$1,000,000,000
$80,000,000
$600,000,000 5
$400,000,000 Pt a ios m Requested Outlay
$200,000,000 ae m Actual Outlay
&
s > ‘\ 2 OD ay AY
PS OO Sh
Pr oS SH? cH af PSY SY” Or” 8
PP VP Ph VP Ph vt PF Ph” VP” VP” vf
s MX NXE SS RS cS > s
Figure | - *Requested Outlay Data not available for 2000-2005
Facility Lifecycle — Theoretical View
Facilities are an asset to the organization and must be
Total Project Costs
+Operating Costs (O&M)
most organizations analyze the total cost of ownership and +Capital Renewal (CR)
budget accordingly. For an individual facility, the total cost | +Deferred Maintenance (DM)
of ownership is essentially all costs necessary to build, use, | +Decommissioning
modify, extend and eliminate the facility (Donald 2006). | Total Cost of Ownership
Within the CSU system, the Capital Outlay Program
identifies funds for Total Project Costs and Decommissioning. Through CSU Executive Order
847, the Chancellor’s Office has delegated authority and responsibility to the campus to
“...ensure that appropriate resources are directed toward meeting the requirement of
Proper operations and maintenance of the campus physical plant. The responsibility
includes the maintenance (routine, scheduled, deferred) and capital renewal of facilities,
managed as such. To fully exploit and utilize an asset,
utility infrastructure, roads and grounds, which allow the university to meet its
educational mission (Reed January 10, 2003).”
A great deal of debate and research has been expended to determine appropriate deferred
maintenance guidelines to ascertain the expected costs to the organization. Individual facilities
are comprised of numerous systems and subsystems all of which have independent lifecycles
(Kaiser 2009). APPA, formerly known as the Association of Physical Plant Administrators, is
one of the industry leaders in defining lifecycle standards. Additionally, APPA has published
many articles and books detailing the common higher educational problem of deteriorating
facilities, with the seminal book The Decaying American Campus, A Ticking Time Bomb
published in 1989. Many campuses across the United States experienced what was perceived as
a rapid state of decay in the late 1980's and early 1990's, with CSU, Chico (Chico State at the
time) being included within this group. The roots of this phenomenon could be traced to the
5 June 12, 2013
higher education system’s exponential growth rates of the 1950’s and 1960's which satisfied the
demand of the baby boomer generation.
The CSU system has elected to utilize
the FRRM lifecycle model, which $15,000,000
utilizes slightly different lifecycles than
.
€
é —
. o>
what APPA stipulates. When a | 8 @ $10,000,000
system’s lifecycle has expired and the gg \
system is still in use, it’s considered es $5,000,000
to be in a state of deference and is 5 P
identified as deferred maintenance. 6 6 Ba: 30. 40 uso; EO 70: .80
Utilizing FRRM standards for a facility Years
with CRV of $20M, approximately
$12M (~55%) worth of building Figure Il - Replaceable Systems Lifecycle Curve
systems are identified as replaceable. For example, a few items that are not considered
replaceable are foundations, structural framing, etc. In reviewing the lifecycle curve absent any
reinvestment, it’s apparent that facilities are expected to be in a dilapidated state after thirty
years with little to no capital renewal investment.
Facility Lifecycle - The Reality
While the lifecycle curve exists, in an environment of limited resources, only either the truly
critical systems or cosmetic features are reinvested in. From a facilities systems maintenance
standpoint, there are only a few systems that are d d critical. Repl: It of roofs, re-
caulking of windows and paint happen to be the three most prevalent reinvestments across all
facilities according to colleagues within the Facilities Management & Services Department at
CSU, Chico. As of late, the campus has reinvested heavily in replacing lighting systems, as a
replacement of t-12 lamps with t-8 lamps will generate an approximate three year payback. Part
of the rationale for this new investment is
the shared savings of all “energy” projects. Image | — Facilities Asset Model (APPA)
As Lyneis and Sterman (2009) identified,
management will not make _ significant en
investments unless positive feedback is Space Penang Proaeenmny
received through resource reinvestment
From an adoption curve standpoint, the
campus is in the laggard category, as sister = "™Prvem=n's
Replacements Design
CSU campuses have made the transition to
t-8s years ago for both financial and
regulatory reasons; as the U.S. Department
of Energy has mandated that t-12’s can no Rents
longer be produced after January |, 2013.
Retrofits / Upgrades Operations
~ Planned Maintenance
User Requested Needs
6 June 12, 2013
Construction
The campus is comprised of 36 state funded facilities, all at varying stages in their lifecycle.
Operating a preventative maintenance program becomes a lower priority in comparison to
triaging system failures. The dynamics of this problem have been well researched, with multiple
articles on the subject by Sterman, Repenning, Jambekar, Thun and others. In summary, with
limited maintenance hours available and the combination of both a large stock of defective
systems and pressures to immediately correct the problem, preventative maintenance is
ignored, creating a negative reinforcing loop as maintenance funds are diverted to immediate
needs. Lyneis and Sterman (2009) provided a detailed study of this exact problem within a
University’s maintenance operation. Their findings show that overall:
|. Budget pressures have turned maintenance departments into “cost centers”, not
“Investment Opportunities.”
i. Because maintenance staff do such a good job of band-aiding problems, leadership
continues to underestimate the severity of the maintenance backlog problem.
2. A tipping point must be reached for Preventative Maintenance to be a worthwhile
investment, otherwise it simply adds to the costs.
Overall, the Facilities Management system within the CSU system is quite complex, with many
competing areas of need. While Executive Order 847 is clear that campuses are responsible
for maintaining their facilities, few actually maintain them adequately, passing the deficiencies on
to future generations. In reaction to this reality, the Chancellor’s Office has historically made
“Minor Capital”, “Capital Renewal” and “Infrastructure” requests ("Major Capital Outlay
Programs: 2005-2014" 2012). Unfortunately, these requests further perpetuate the problem, as
it communicates two important unspoken truths to the 23 campuses:
|. Existing campus budgets don’t cover the deferred maintenance expense properly.
2. Ultimately, the campus is not responsible for funding these repairs.
While no single individual is to blame, the underlying problem is quite nefarious in its simplicity.
The time delay associated with facilities degradation allows for leadership to both ignore the
necessary investment and/or worse, blame past administrations for their inadequate
stewardship. A fundamental problem is identified by Kaiser and Klein (2010),
“Today, the average tenure of a president/chancellor is less than seven years, decisions
made by any individual chancellor or president, during their tenure, must be part of a
longer-range and continuous facilities stewardship process.
“Facilities stewardship therefore means high-level and pervasive commitment to
responsibility for optimizing capital investments, to achieve a high-functioning and attractive
campus. It includes a major commitment to capital asset preservation and quality.
Stewardship is about the long view of an institution’s past and future. It forms the backdrop
for hundreds of discrete facilities investment and management decisions.”
To help understand the dynamics at play, a mental model was created to identify the perceived
total cost of ownership structure. The problem facing the CSU system is a lack of resource
7 June 12, 2013
Image II — Total Cost of Ownership Casual Diagram
Actual
Pa, —
Campus Ss
olay
z Population | 4 Ne
ie
investment at the Renewal phase
of a facility's lifecycle. The
impact of this problem can be
2 a JE a F
ra gee ig Speesik Te traced to the ballooning Capital
orgie om Kes
| ‘Additional | Rane Outlay Program and perpetuance
\ + Reece: PS Space” of reactive maintenance.
pace
Density . - Gap Assuming under investment
fi f Target continues to occur in renewal
fe - ace/FTE " fi ,
EUI yf projects; the State of California
/ - Tae can expect to bear the burden of
/ ty +f the burgeoning capital outlay
\ Political Capital A program as this is typically a
General Fund expense and does
X \. Pressure +9 if! Projects
x
Demo not impact the yearly operating
Total Cost of i i
nih Operation & Goncrhip q budget allocation. Finally, further
Service yy, Maint review of individual campus
: a renewal allocations is warranted,
ResclivePrevent DM&Renewal Quality Gap 5 , a .
et —" Projects 4 but is not included within this
study.
\ y M aa
Dynamic Models
The dynamic models were created for multiple reasons, primarily to show that deteriorating
facilities conditions have a dramatic impact on campus operations, specifically facilities
management operations. Originally, the model was to focus solely on the CSU, Chico campus,
but, many of the drivers were predicated at the systemwide level as the Capital Outlay Program
is the key resource driver for capital projects. To simplify the analysis, two independent
models were created, both with the same core assumptions and rates. The Systemwide model
attempts to identify the variables that determine capital investment needs in facilities with
attention paid to the basis of the Capital Outlay Program. The CSU Chico model predicts the
conditions of all state facilities utilizing the Chico component of the CSU Capital Outlay
Program. Together, these models help predict the facilities condition both at the systemwide
and campus level over a 35 year period.
8 June 12, 2013
Systemwide CSU Capital Outlay Model
Within the model there are five core areas:
I. Deferred Maintenance and Capital Renewal
Facilities Systems Lifecycle and Reinvestment
2. Facility Growth
Impacts of Population Growth and Space Utilization needs
3. Major Capital Outlay Program
Systemwide Resource Allocation Program
4. | Minor Capital Outlay and Energy Projects
Campus initiated and approved projects
5. Liabilities
Effects of Failing Systems
*6. Programmatic Needs — Not included in model
Reinvestment to support evolving pedagogy and technologies
Deferred Maintenance and Capital Renewal
As mentioned above, systems and subsystems in facilities have a defined lifecycle. While a roof
may have an expected life of 30 years, it’s important to note that most systems typically
degrade in an exponential manner. At year 29, the roof will be showing serious signs of wear
and deterioration. The ideal model would utilize the respective decay curve for each system.
The current system utilized by the CSU system focuses solely on deferred maintenance, which
is defined as “...maintenance work that has been deferred on a planned or unplanned basis to a
future budget cycle or postponed until funds are available” (Kaiser 2009). A roof that is 29
years old will show $0 in Deferred Maintenance which is accurate by definition, but incongruent
with reality.
The depreciation of facilities has been formally identified in federal tax code since 1934.
Current GAAP standards dictate that 80 years is the appropriate life of a fire resistant building
("Duke Financial Services" 2004). The lifespan is similar to that proposed by APPA. As
mentioned above, a more accurate model would identify each system’s rate of decay. The
accuracy gained by this method would generate a higher rate of decay than the linear method,
as the lifecycle curve shows that approximately 95% of the replaceable systems expire after 30
years of age. To be conservative and simplify the model, both dynamic models utilize a
deterioration rate (DM Accrual) of 1.176%, which assumes a lifespan of 85 years. This core
assumption is less than what is recommended by the National Research Council of 2%-4%.
Kaiser and Klein (2010) provide further validation of this minimal rate, stating that Boston
College utilizes a rate of 1.5% for their facilities renewal allocation.
From a capital renewal standpoint, the historical data from the past 13 years presents a wide
array of possibilities. The maximum state funded outlay occurred in 2002/2003 totaling
approximately $480m. The minimum state funded outlay occurred in 2009/2010 with a mere
9 June 12, 2013
$16m. On average, the state of California has
appropriated $250m per year. As mentioned
previously, funding requests for each project
are identified by their respective phase
(P,W,C,E). These partial requests are an
acknowledgement that large facility projects
take time, typically four years in totality. It
becomes an art to time the outlay request with
the phases of the project to ensure adequate Image Ill - DM & Reinvestment System
funding exists to continue the project. With this in mind, it’s important to look at four year
averages, as this provides a better facility representation. The maximum, minimum and average
four year span of capital outlays were $1.5B, $337M and $1B respectively. State funding is
deled utilizing the absolute value of a sine curve to introduce funding variability, with the 13
year average of the curve equaling $250m/year.
Major Capital Outlay Program
CSU Capital Outlay The system created for the Capital Outlay
Priority List Program is a basic series of stocks and valves. The
BIA BIB mil model identifies all potential projects under
55.9% 56.4% Systemwide Project Need. This rate is
determined by the Deferred Maintenance and
Growth Needs of the system. Each campus
71% 11.4% specifies their priorities and the Five Year Capital
Outlay Program is created. The approximately
2006-2010 2010-2014 $6B dollar Outlay program is narrowed down to
37.0% 32.2%
on average $520M for the
Yearly Capital Outlay
Figure IV — Renewal
Funding Breakdown
Figure III
Priorities. The adjacent graph shows the historcal avearges based
of each project category (CAT).
Further analysis of IB — Renewal Funding, specifically from the
2013-2014 capital outlay program shows that resources within this
category are most likely to produce the allocation in Figure IV.
In reviewing the Capital Outlay Program, it became clear at the CSU, Chico level that the total
needs of the campus are not being communicated in the 5-Year Outlay program. As mentioned
previously, the CSU system has been collecting lifecycle data for years utilizing a program called
FRRM. Each campus provides the appropriate data for their facilities and identifies any capital
10 June 12, 2013
renewal that has occurred. The FRRM program analyzes the data based on lifecycle standards
and ultimately generates a Deferred Maintenance (DM) Backlog value for each campus. As of
2012, the systemwide DM Backlog was $1.7B. CSU, Chico has the highest DM value in the
system totaling approximately $145M and growing. The $145M is the accumulation of aged
systems from all state funded facilities on campus. As expected, the Capital Outlay Program
fails to identify this need directly, as it is a theoretical campus responsibility. To counter this
unfunded mandate, campuses let facilities deteriorate to
the point of disrepair, requiring either a major
renovation or replacement, requiring inclusion on the
Major Capital Outlay list.
The restriction of only one project per active outlay
year and no deferred maintenance projects creates a
zero sum scenario, where each campus strives to
receive the largest allotment possible; thereby
decreasing the number of smaller renovation projects.
Past historical outlay requests partially validate this
theory, as the average yearly request for each project
categorized as IB or Il is approximately $19M.
Replaceable Deferred Maintenance funding is not
directly identified in any document. In reviewing
project scopes and comparing their parametric costs to
the request, a conservative Renewal Funding allocation — Funding—-o_
towards deferred maintenance is 35%. An example of
this situation is the Siskiyou Il Science Replacement
Facility noted in the Table Il above, with a total project
request of $75.9M. The project will replace the
existing Siskiyou Hall, which occupies prime real estate
on the core of campus and is in poor shape ($1.7M
DM, 0.25 FCI). From a campus planning perspective, mage IV — Capital Outlay Program System
this project makes all the sense in the world, as the
facility underutilizes land within the core of campus and would provide modern facilities for the
College of Natural and Physical Sciences, which currently occupies two poorly conditioned
facilities (Holt Hall-0.31 FCI & Physical Sciences Bldg-0.43 FCI). However, from a deferred
maintenance perspective it appears that the new Siskiyou II project will utilize $75.9M to solve
a $1.7M problem (Siskiyou’s current DM Backlog) and $10M problem (Physical Sciences’
current DM Backlog) With the two facilities combined, 15% of the project total is being
utilized to offset Deferred Maintenance. Looking at CSU, Chico’s request further, the total of
the 5 year outlay request is $287.5M. If these projects were all funded and constructed,
approximately $21M in Deferred Maintenance would be addressed (assuming all systems are
I June 12, 2013
renovated), leaving at least $124M in campus wide Deferred Maintenance backlog without
considering further accrual.
Minor Capital Outlay Program and Energy Projects Image V - Minor Capital Outlay and Utilities
Minor Capital Projects are defined in California Public
. . Cap Renewal
Contract Code as projects whose construction costs are Fromi’Stane _
less $610k. In past outlay programs, the Chancellor’s pin state State
- : . roportion ‘
Office typically makes a systemwide request for either ra qo
. . . . 7 . Progammatic 7
Capital Renewal, or Minor Capital projects. While Capital = A srccinent eS aes )
= DM Ratio
Renewal may consist of projects exceeding the Minor Critical DM g
7 : Investment Minor Capital
Capital threshold, they are typically less than $3M and are - =, Hee
almost strictly used to repair failing systems. The amount peice x
received ranges historically from $0 to $77M. Over the ey
Utilities Energy
past 13 years, this averages out to $20.2M a year ct ca
systemwide. Distribution of these funds is managed by the oo. pe Se
, . , Bud ney E
Chancellor's Office, typically based a campus’ percentage “8° utilities Projea “Qu” ed
an i . ie Budget Ratio
of maintainable space in relation to the total space within
hide Energy Savings <CRV
the system. Managed Effectiveness \
Ney /
woe <Total DM Pr ted Energy
Additionally, campuses are mandated to fund all ees ictnwe — Efficieny nating
a . . . 5
maintenance projects from their own operating budget per bees | /
EO 847. But, due to the time required for a facility to (efoto
decay, minimal investments are made, which typically focus ee, eg
jowance,
on failed systems. This behavior is not unique to the CSU —srkstu _4 x SMB oe sa
. : FF , Budgeted 7 Actual
and as it was well stated in the 1998 study, “Stewardship of °°" — Generating “"" e
Federal Facilities.”
“Because facility deterioration occurs over a long period of time, it may appear to senior executives
and public officials that the maintenance and repair of facilities can always be deferred one more
year without serious consequences in favor of more urgent operations that have greater visibility.
Unless a roof actually falls in, senior managers are not likely to be held accountable for the
condition of a facility in any given year. Yet they are held accountable for current operations.
Consequently, public officials and senior executives have few incentives to practice effective
stewardship of the federal facilities portfolio and are subject to few penalties if they do not.”
As more funds are invested in energy projects, the return on investment requires a longer
payback as the highest return on investment projects are assumed to be targeted first, creating
a balancing loop. This effect is not currently modeled, but the improvements to EUI are
minimal, indicating that model structure is conservative.
12 June 12, 2013
The model for energy investment is based on the CSU, Chico budget, with Chico’s ratio of
students to the system being the modifier. In total, the Systemwide Minor Capital yearly
investment is estimated to be about $50.9M which includes both the state and campus
appropriated funds. The model also tries to utilize the Energy Use Intensity (EUI) metric to
show that reinvestment in existing facilities will lower energy use ("What is EUI?" 2012).
Further research is necessary to consider these results as valid. But, the overall concept is
sound, providing awareness to operational costs that are a function of the energy efficiency of
the campus and the exogenous cost of energy.
Facility Growth
The CSU has a very thorough space utilization program. The program follows HEGIS standard
nomenclature. The CSU has defined space standards and formulas to analyze the difference
between what the standards call for, and
what space actually exists ("CSU Space image Vi- Growth
Planning Intro to 1|-2" 2012). To be fo Space Ratio
spate: % (actual/desired)
deemed a need, the campus must show Target ge
Net
that capacity deficiencies exist, either eae
utilizing existing FTES or future FTES as, |¢
‘ f some Espace Added
the key variable. Growth projects must oa conversn ap
be identified within the campus master \F potential aw __ SSF ae
/ ae
plan as there are numerous planning _ |ropuation fe ee ee \.
\ V4 ne ~~, Impacted _
challenges that can occur as more FTES i eS —
Potential a
are brought to a campus. i aes oe 2
To simplify the analysis, growth projects are simply predicated on population growth. Current
estimates predict that California will grow at a 1% rate into the foreseeable future (Trounson
2012). This rate underestimates the impending spike in the current high school demographic
(some estimate as high as a 1.4% growth rate over the next ten years (Schnagl et al. 2012)).
Additionally, the model assumes that the system has enough space to meet its current
enrollment needs.
Image VII — Liabilities & Risk
Liabilities ee
Finally, if the overall facilities condition is deteriorating, % (on coe
there are secondary impacts that will occur to Pee owe SS fe
maintenance operations. Non-academic studies have ai Ne is:
shown that when the facility condition index (FCI) Rs
approaches 0.30, maintenance staff are severely Fale Cost yf
impacted (King et al. 2012). From analyzing hundreds ae —_—s
of campuses, Sightlines Inc. proposes that if levels of wees
service remain static, operation budgets are impacted Impact
13 June 12, 2013
by a factor of 3. This information has been used as justification nationwide for other campuses
and university systems to invest significantly in either a large outlay or a consistent budgeted
deterioration allotment. This concept is expanded further in the CSU, Chico model and is used
here as supplementary data.
CSU, Chico Master Plan Model
CSU, Chico Master Plan
The campus master plan is a critical document for each university within the CSU System. This
document serves multiple purposes from a planning standpoint, as it is a major component of
the campus’ Environmental Impact Report (EIR). The EIR is a legal document that ensures
compliance with the California Environmental Quality Act (CEQA) and facilitates discussions
with the community at large in regards to campus growth, projects, etc., long in advance of the
actual projects. Additionally, the University is insulated from legal challenges to an extent as
long as the project or initiative is identified properly within the EIR. Depending on the campus’
preference, the document can be defined at the program level (campus) or project level
(explicit facilities), and is therefore a mix of high level and explicit analysis. The master plan
does not necessarily communicate the order of projects, but rather identifies all near term
projects.
The Major Capital Outlay Program is utilized as the refining document, identifying the campus
priority for projects identified on the Master Plan. As mentioned previously, the CSU, Chico
Five Year Outlay only identifies six new projects. While the outlay shows the funding to occur
over a five year period, historical analysis shows that at a minimum, five years will span each
allocation. Therefore, the model spreads these projects evenly over the next 30 years for
completion of this list.
Campus Facilities Condition
The model utilizes a nearly identical deterioration structure in comparison to the CSU
Systemwide model. The focus on the CSU, Chico model is the facility condition status. Every
facility deteriorates. It’s proposed that a facility goes through five stages in total; New, Aging,
Expired, Failure, Dead.
Dead A facility is never truly New.
Wear and deterioration start
New | Aging Expired Failure
0 FCI<0.30 | 0.30<FCI<0.40 | 0.4<FCI<0.53 | FCI>0.53
almost immediately for
Table IV — FCI Stages individual subsystems. A
facility starts Aging after year |, coincidentally when the contractor’s warranty expires. The
facility deteriorates steadily, even under normal maintenance. At a certain point, systems start
reaching their theoretical lifecycle and are considered Expired. Like the milk in a fridge, it can
be used past the expiration date, just with risk associated in doing so. The Expired facility soon
starts going into Failure mode, where systems are randomly failing. Typically, the wave is so
14 June 12, 2013
large that it makes little sense to reinvest in the facility, at which point it is considered Dead.
The CSU, Chico model utilizes FCI as the metric used to determine the phase of the facility.
The FCI value is capped in the model at 0.55 as the focus of this study is on replaceable
systems. Deterioration may occur in non-replaceable systems, but is not analyzed within this
study.
Risk Pool
As facilities deteriorate they become potential liabilities
from an operations standpoint. Critical systems will alias ie.
begin to fail, causing both an impact to daily operations Campus
and the overall campus budget. While initial failure ns
costs will most likely impact the Maintenance budget at aires
first, the scale of the problem will require a larger campus Dead Mee
funding source to keep the facilities in operation. The SAS io
model addresses this aspect by allocating all costs Ratio
associated with failure probability to the Risk Pool.
The impact to the risk pool is modeled as follows: aie Dead Ratio
2.5% Dead +0.5% Failure +0.1% Expired. Hie
The probabilities chosen are anecdotal but are cud
assumed to be less than actual. Analyzing historical potter, Risk Poot
reactive work orders, in correlation with the facilities
BF Allocation.
condition index would provide more credible
probabilities. Panes |
ow "I
Other :
Depts
Maintenance Operations FMS Allocation
As facilities deteriorate, there is a detrimental impact
to the maintenance operation. In the federally funded ome] ws [ee
study, “Committing to the Cost of Ownership”, the meet Rees
highest ratio of reactive to planned work is proposed Hetat: Allocations
to be 0.30 (Committee on Advanced Maintenance
Concepts for Buildings 1990). As this ratio increases, ‘Maintenance
typical scheduled maintenance routines become planned ih Ka hex
interrupted as the focus becomes triaging reactive t
work orders. In an ideal situation, staffing levels could eS
be increased to accommodate both. This is rarely the pi
case. Instead the level of service to the campus image Vill - Risk Pool & Level of Service
deteriorates. Simple tasks that are rote, such as
changing a light bulb, are not performed in a timely manner. Light bulbs can go weeks without
changing, as long as there is additional light in the area. Another classic example is loose or
hanging 12”x12” ceiling tile, waiting to fall. Worse, the culture of the entire organization shifts,
IS June 12, 2013
continually lowering expectations. This shift is conveyed to the campus in various forms most
acutely with long time delays.
From a strategic perspective, ultimately, the inability of the maintenance staff to keep up with
the decay will impact operations on campus. This impact while not explored in depth can be
quite dramatic, as the campus serves multiple purposes, with the primary focus on student
achievement. Losing one facility for any length of time will impact on average at least 600
classroom or laboratory stations. Over the course of a day, the facility is turned over
approximately 6 times; meaning 3600 classroom hours will be lost if a building has an unplanned
maintenance event for one day. Further, there
is an intangible component to the state of
facilities. As has been well documented, there
are various forms of incentives that
management can provide (Herzberg 2003).
Typically, one of the simplest means of
acknowledging employee's value is by showing
respect. A few years ago at an academic
summit, the number one priority developed by
a group of academic faculty and staff was to
study and teach within a professional setting.
While professional can be considered a
subjective term, it most likely does not involve
lights out, hanging ceiling tiles, or worse, a drip pan draining to a bucket in the middle of a
classroom, as the adjacent picture highlights. By continuing to allow these conditions to occur,
Image IX — Active Classroom — Physical Sciences Building
the CSU system is inadvertently showing signs of disrespect and asking the campus to perform
in a challenging environment, which ultimately impacts the success of students, faculty and staff.
Model Results
CSU, Chico Master Plan
The behavior of the CSU, Chico Master Plan model follows the Fixes-That-Fail archetype.
With minimal resources to reinvest in a large array of facilities, the campus deteriorates
steadily. | The implementation of the master plan provides only minor, temporary
improvements.
16 June 12, 2013
One of the more alarming results from the
model is the value of Dead facilities in 35 years,
totaling roughly $160M. Due to the age of the campus and absent any true capital reinvestment
program, facility conditions will be extremely
poor by 2048. The following graph highlights the
Figure VI
$300,000,000
CSU, Chico DM over Time
$250,000,000 anal
vi
$200,000,000
= Lane
fa) $150,000,000
$100,000,000
$50,000,000
4
q
$-
0 5 10 15
Time (Years)
eeeTotal DM
xem Aging
== Expired
em Failing
ite Dead
20 25 30 35
various facility phases from a Deferred Maintenance perspective.
Risk Pool
As expected, the accumulation of dead and failing
rr facilities has a negative impact on the overall
campus budget. In the next ten years, the model
oT predicts that yearly, an additional $2M will need
[— to be reassigned to triage decaying facilities.
0 5 10 15 20 25 30 35
(Year)
Figure Vil mews
Level of Service Figure VIII
Consequently, the level of service provided by os
the maintenance department will steadily
erode. Unfortunately, reactive maintenance ws
will dominate. This behavior causes a ; ,,
secondary impact, which is not included in this
model, in that facilities that are poorly 02
maintained will degrade faster than those
. . : : 0
which are actively maintained, further a 5 16 G a5 Pi Bs
‘Time (Year)
exacerbating the problem.
June 12, 2013
Finally, the mission of CSU, Chico will become compromised as the quantity of Failing and Dead
Stations grow rapidly. As can be seen in Figure IX, within the next I5 years, the majority of the
University’s classes will be held in spaces that are considered Failing, with an FCI greater than
0.40.
Figure IX
Condition of Academic Space
qetmm Aging Stations
== Expired Stations
Lecture or Lab Stations
a
S$
Ss
r=)
4000 exam Failing Stations
2000 qe Dead Stations
0
0 5 10 15 20 25 30 35
Time (Years)
Systemwide CSU Capital Outlay Model FCI Actual
The systemwide model exhibits similar behavior
to the CSU, Chico model in that there is a steady
increase in the accumulated Deferred
Maintenance. If funding continues at its historical °25
average and distribution of resources remains the sane p= ean
same, the FCI of the system will continue to | ——
deteriorate, growing from 0.13 to 0.25, which is 01
the accumulation of $2.3B worth of Deferred a > x Fimo (vend * * *
Maintenance. Systemwide, absent any policy and Figure X
implementation change, the entire CSU system will
be ina similar state to that of today’s CSU, Chico Campus.
One of the fundamental problems for the system is defining hierarchy of needs. With a finite
budget, theoretical targets are rarely reached due to inadequate funding. For instance, the CSU
space utilization policy states that the target ratio of Assignable Space (ASF) to FTES is 75sf.
The model utilizes Gross Space (GSF) and by mandate, ASF must be at least 60% of GSF. The
model therefore utilizes 125sf as the target for space demand. The stated total GSF for the
state system is 42.6M sf which equates to 340,800 FTES. Yet, the system was operating at its
maximum in 2008 at 470,000 FTES. This begs the question, what truly is the current capacity of
18 June 12, 2013
Actual Space
the system? While reality suggests that there
is spare capacity, the base model indicates
that additional space is required. The most %™
likely culprit for the system’s ability to _ a
‘ ' . 50M
fluctuate is that each campus can adjust their
60M
space utilization for specific hours of 454
operation. At most campuses enrollment is
heaviest on Tuesdays & Thursdays and under =?“ |
5 0 i 2 2 30 3
enrolled on Fridays. Further, on the CSU, Time (¥ eat)
Chico campus buildings are assigned to colleges who get priority for their Figure XI
respective classrooms. Underutilized space is common (I’m currently in a class
with 10 students in a room that seats 50) as each college’s goal is to secure space, not optimize
the use. The current model does not optimize the space utilization system, but this calculation
should be identified for future analysis.
As expected, the Capital Outlay Program becomes a series of reservoirs, collecting built up
facility needs all dependent upon the funding rates of the system. The model indicates that
there is a fairly consistent systemwide need, with moderate growth over time. This main valve
is fed by both the Deferred Maintenance Accrual and Space needs. Future development of this
model will allow for Programmatic needs to
be included in this stock. 5yr Capital Outlay Plan Figure XIl
The stock that shows the fastest growth rate
is the 5 Year Capital Outlay Plan. The 16.5B
rationale behind this behavior __ is
straightforward; the system is communicating *
that it has a static need of approximately as, gE
$520M. As time passes, neither space needs il
nor deferred maintenance needs are met by 6BL
F A 0 5 0 i 2 2 30 35
state funding, creating a bottle neck at the 5 Time (Year)
Year Capital Outlay Plan.
a Total Systemwide Facilities Need Figure XIII
The combination of all stocks represents the ti .
total systemwide facilities need. If funding
were sufficient to satisfy the demand, the level 175B
within the stock would remain at or near
wo: 15B
constant. Unfortunately, this is not the case, * ° an
as the needs of the system are growing, with +
both increases in population and decaying aw
facilities. The combined need grows rapidly in 10B
25 30 35
19 June 12, 2013
the next 35 years, increasing by approximately 50%.
Potential Solutions
The problems at both the systemwide and campus level revolves around adequate funding. If
facility planning, maintenance and operations are to continue as they have since the 1960's,
additional resources are needed to ensure that state assets remain assets, and not liabilities.
Conversely, the facility system could be reengineered to be more dynamic, especially in
consideration with today’s academic needs. The 1960's classroom and campus did not have a
virtual component to potentially offset demand, nor did it have hazardous conditions to
remediate prior to construction. Even the pedagogy within the classroom is evolving, as there
is growing support for the “flipped classroom.” With both these ideologies in mind, alternative
solutions will focus on the following:
Increased Funding - Various Sources
Student Fees or State Bond
Localized Bond Sale
Corporate Sponsorship
Adjustable Resource Allocation
Focus on Sustaining Current Facilities, Lower Growth Priorities
Adaptability Planning Focus
Increased Funding
The past five years have proven that the funding support by the state of California is subject to
the volatility of the state economy. Unfortunately for all campuses within the system, the needs
of the CSU are caught in the state political web, oftentimes used as leverage to sway voters for
or against a position.
With this in mind, the most probable mechanism to raise funds for systemwide facilities would
either be through a bond sale or student fees. There are a few different possible scenarios,
such as the state carrying the bond debt, or students supporting the bond debt through a new
fee. Similarly, rather than receive a large outlay at once, a student fee could be instituted to
provide a consistent level of funding for deferred maintenance projects.
On the CSU, Chico campus, a recent measure was passed in support of the new Wildcat
Recreation Center. The fee each student on campus must pay to ensure proper coverage of
the bond debt is roughly $500/year. Using this value across the system produces a total bond
sale of roughly $2B, depending upon the current bond rate. Conversely, the fee could generate
consistent revenue of on average $208M per year, providing over $7.3B spread across 35 years.
Neither scenario includes inflation. For actual results to mimic the model, the student fee
would have to be adjusted frequently for inflation, otherwise the buying power of $200M will
be significantly less 35 years from now.
20 June 12, 2013
The results of both options ultimately fail to keep Figure XV
the facility condition index from worsening. Of the 92
FCI Actual
two options, consistent support provides the
greatest stability to the condition of facilities. As
can be seen in the adjacent graph, the facilities ,,; i
condition index increases by approximately 15% lyr =|
over the next 35 years, but is still well below the 0.125 “Per
threshold of 0.30. on
5 10 15 20 25 30
Time (Year)
Another option utilizing consistent student fee
funding would be to appropriate these resources strictly to projects categorized as IB —
Renewal and Renovations. The distribution of state supported resources would remain as
originally designed, IB would simply see an influx of $200M per year. This potential solution
provides the greatest relief to the facility conditions,
ultimately lowering the FCI by 45% to a value of
0.07, which is below the recommended NACUBO.
maximum of 0.10. The CSU system as it currently
exists ignores a key cost in the total cost of jy
ownership, Deferred and Programmatic
FCI Actual Figure XVI
Maintenance. Focusing a new student fee on this
key cost would help to ensure that students learn in 43
a professional setting, ultimately helping with long
5 10 15 20 25 30
Time (Year)
term student success.
Still another financing option would be to allow the California Universities to raise fiscal
support locally, similar to community colleges. Currently in the state of California, community
colleges are included in K-14 bond sales. These bond sales are typically supported by either
increased property taxes or local sales taxes which requires voter support. Political hurdles
would be difficult to overcome, as most campuses support numerous counties, eliminating the
ability to isolate voters. Regardless, the ability to raise funds locally, avoiding the California
State budget nightmare, would provide the entire system a chance to operate strategically in
regards to maintaining its long term assets.
Rather than accumulating more debt or fees, an untapped source of revenue would be to
actively pursue corporate sponsorship of facilities throughout the system, similar to corporate
sponsored stadiums and arenas. Currently, the naming of facilities is a beaurocratic quagmire.
In general, most facilities on campuses are named after either a campus historical figure or a
county of the state of California. While it may be unsettling to make such a dramatic change; in
an economically challenged environment, the system is obligated to exhaust all avenues to
generate needed resources. The opposite approach of doing nothing creates great liability for
21 June 12, 2013
the campus and ultimately the state. Deteriorated facilities can pose numerous hazards to
occupants, from mold allergies and legionnaire disease, to broken handrails, elevator failures
and even falling structural elements.
From a sales standpoint, the entire system could be compared to athletic arenas. For example,
business majors comprise approximately 10% of the total student population at CSU, Chico.
Assuming this percentage is consistent across the other 23 campuses, 42,500 students daily
utilize business facilities. If naming rights for all business school facilities were sold to a
corporate sponsor, the potential return could be upwards of $120M over 20 years, or $6M per
year for business schools alone (Sauter 2011). On the Chico campus, receiving $6M once over
23 years to renovate the business facilities would almost eliminate their current combined
deferred maintenance and reinvestments would keep pace with lifecycle replacement costs.
Flexible Priorities
Owning assets without the ability to maintain them is both
irresponsible and neglectful. Regardless of the funding
mechanism, the priority of the system could shift from Laboratories
growing and replacing, to maintaining and renovating.
Classrooms
Faculty
Unfortunately, our facilities were not built with longevity
: . : Pare Student Support Services
in mind which leads to the existing conundrum; why
reinvest in a facility that isn’t worth saving? If resources ASmInGH DIN Subpart
were no object, removing old antiquated facilities with Auxitary Support
those more dynamic and efficient would be the goal of
every campus. But, resources are limited. Therefore, the Image X — Facilities Hierarchy
obligation of both the system and the campus is to optimize investments in support of the
strategic goals of the organization. Simply put, invest resources that support the core mission
in a strategic manner. What this means to a campus is that not all buildings hold equal value. If
a hierarchy were to be established for each facility in its relation to the mission of the
University, it may look like the adjacent pyramid.
The next question to be asked is what should the
facility state for a classroom or laboratory be? Is it
acceptable to have lights out, leaking ceilings or
window, non-operable window blinds, too few
electrical plugs, falling ceiling tile, too hot/cold, too
many desks, etc.?. The answer should always be no.
For this to be remedied, each facility must be
renovated on a more frequent schedule. To put this
in context, a current joke we have on campus is our
ability to travel in time. If we desire to travel to
Image XI — Plumas Hall Classroom
22 June 12, 2013
1961, we can go to a classroom in Physical Sciences Building. If we desire to travel back in time
to 1972, we can go to a classroom in Plumas Hall. The rationale behind this joke is that by and
large, the faci
ies and classrooms throughout campus have not been touched after their
original construction. While no one individual can be blamed for this situation; this practice can
and must be remedied. There are two main corrections that can be made which will
redistribute funds more evenly.
I, Reduce the amount of investment in growth projects.
The mission of the CSU states that all qualified California students are to be accepted.
Satisfying this goal while limiting growth of facilities will become a new challenge.
Ultimately, it could be overcome; either through partnership with community colleges
or through the virtual classroom. A more detailed dynamic model would help forecast
where critical investments should be made.
2. Limit the size of the Major Capital Project
While this feels inherently wrong from a planning standpoint, when viewed from the
facility condition lense, it ensures the greatest likelihood of stability across the system.
Further investigation is warranted in reviewing densification opportunities. For instance,
if the major capital system were to allow for large projects but require the removal of
multiple facilities; operational costs would be saved over the long run. The value in
operating under this condition would only be realized if these savings were reintroduced
into the capital outlay system to protect against a zero-sum situation.
The impact of these two options can be seen at both the systemwide and campus level. If CSU,
Chico were funded at an average of $11M per year, which is the average Major Capital
allocation over the past |3 years, the Facility Condition Index would zero out in 30 years.
Growth at the campus would be stagnant under this scenario, but all facil
maintained in acceptable conditions. Similarly, Systemwide Deferred Maintenance would be
s would be
reduced by approximately $800M in comparison to the base model. It’s important to note that
focusing on deferred maintenance only allows for replacement of existing systems. While these
systems would be improved, the facility would only be as good from a programmatic state as
originally designed back in the 1960’s or 1970's. Identification of additional renewal funds to
repurpose spaces would provide the greatest benefit and return on investment for both the
academic and facility needs.
Neither of these options solves the long term systematic problem of balancing the needs of the
CSU. To obtain a comprehensive picture, additional research must be spent in developing both
an adaptability index and programmatic index for each facility ("Framework for Facilities
Lifecycle Cost Management"). Determining the adaptability index is a task that the facilities
management team can perform. An adaptability model proposed by researchers from Hong
Kong provides breadth in analysis and could be used a starting point for the CSU (Langston et
al. 2008). Once an adaptability index is established, facilities could be ranked, creating a
23 June 12, 2013
priority list for whatever minimal reinvestment each campus will make into its facilities.
Facilities that are not considered adaptable could be phased out, with the campus goal of
ensuring that no classes are taught in squalid conditions. With the establishment of the
adaptability matrix, the campus could begin collaborative discussions with the academic
community to ensure that high priority facilities meet the needs of the user, providing the best
possible learning environment. Similar to the adaptability index, the programmatic index would
establish a priority list, ensuring strategic reinvestment into the existing facilities.
Conclusion
The facility conditions at the CSU, Chico campus are starting to reach their tipping point. The
current renewal system does not adequately address this looming crisis. To avoid calamity and
Proactively manage its assets, both the campus and the CSU at large must identify a better
means of maintaining their assets. Excuses of reduced funding simply pass the blame on to the
state government and do little to provide solutions. The dynamic models created show that
there are options out there that will ensure reliable classrooms and campuses. Situations like
the electrical failure at Fresno are almost entirely avoidable if resources are reinvested into
facilities. The impacts of not doing so only create a greater financial burden for campuses and
ultimately the state taxpayers. Critical investment in CSU facilities is needed to ensure our
goals and sensibilities are not eroded to the point of despair. It’s incumbent upon all of us
within the system to demand and create a better, safer and more reliable learning environment.
One of the behavioral causes of the situation 0.4
is complacency, of both the campus and the
system. To help avoid rhetoric and actually
focus on solving the larger problem, a Max | 502
FCI must be established for all facilities within
the system. Relevant ranges can be on
established and determined as a function of 0
the adaptability index or some other similar 0.2 0.4 0.6 0.8 1
i i i j Adaptability ind
index that takes the hierarchical needs into ‘aptability Index
consideration as well. While this won't Figure XVI — Max FCI Curve
actually bring additional revenue into the
system, it will allow for a common language across all campuses to communicate through,
ensuring that scarce resources are being used strategically on the priorities of the system.
Regardless of Adaptability Index, operating facilities that have a FCI greater than 0.3 is not
fiscally sound and should be avoided at almost all cost, as the return on investment in the
facility will most likely be paid back through operational savings and the avoidance of potential
risk liabilities.
It’s apparent at the CSU, Chico campus that change is needed. While it would be easy to
recommend increased funding or even reallocating resources, neither of these identify the root
24 June 12, 2013
cause of the problem. Growth and building replacement are critical processes to the overall
facilities plan of campuses and can’t be ignored. Similarly, for far too long, Deferred
Maintenance throughout the system has been ignored. A robust dynamic model would allow
administrators to act with clarity. A balanced system must be established to ensure long term
viability for the 23 physical campuses within the system. At each individual University, the
problem is not simply a Business and Finance problem, but rather a campus wide problem.
Collaborative discussions must take place to educate deans on both the theory of facilities
management and the expected state support. With a common understanding of the systems at
play, a strategy can be developed, providing a unified campus approach.
Unfortunately, balanced systems are hard to come by. But, with some incremental
improvements, the largest university system in the world can move towards a more sustainable
future. First, clarity and transparency must to be brought to facilities management within the
CSU. In reviewing multiple annual reports both at the system and campus level, it became clear
that very few documents were highlighting the current deferred maintenance backlog. Further,
those that were, were doing so in such broad terms that it sounds like another administrator
lamenting about the lack of state funding. To sell any idea, one must be made aware of a
product, educated about the product and then sold on the product’s value. Similarly, the public
must be made aware of the problem, in terms that create meaningful dialogue. Doing so will
ensure that they become educated on the impacts of underfunding. With time, negotiation,
determination and perseverance, changes will occur. The story that needs to be told for the
system is the total cost of ownership. In design stages, life cycle costs are analyzed to ensure
buildings minimize long term costs. This is only one component of total life cycle costs. The
appendix includes a proposed total life cycle cost template for both the system and for CSU,
Chico. Rather than utilizing accounting documents and past lexicon that covertly speak of
operational funding and depreciation, annual reports must reference the total cost of facilities
ownership, as this is the true cost of operating and maintaining a campus.
25 June 12, 2013
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http://www.csuchico.edu/bud/budgetplans/index.shtml.
26. CSU, Chico, "Financial Statements." Last modified 2010. Accessed November 10, 2012.
http://www.csuchico.edu/fr/financial_statements.shtml.
27. CSU, Chico, "Updating CSU, Chico's Strategic Plan for the Future." Last modified 2006.
Accessed October 31, 2012. http://www.csuchico.edu/prs/documents/strategicplan5_06.pdf.
28. Parsons, "White Paper on the Facility Condition Assessment Cost Model and Deficiency
Relationship." Last modified 2008. Accessed September 9, 2012. http://www.pdfio.com/k-
241058.html.
28 June 12, 2013
Appendix A: Glossary of Terms
Facility Condition Index (FCI) Unitless:
The ratio of Deferred Maintenance Costs to the Current Replacement Value.
FCI = DMI/CRV (Kaiser 2009)
Deferred Maintenance (DM) ($):
Maintenance Work that has been deferred on a planned or unplanned basis to a future
budget cycle or postponed until funds are available. (Kaiser 2009)
Current Replacement Value (CRY) ($):
The estimated cost of constructing a new facility containing an equal amount of space that is
designed and equipped for the same use as the original building, meets the current
commonly accepted standards of construction, and also complies with environmental and
regulatory requirements. (Kaiser 2009)
Defined as $294/sf for “Basic and $491/sf for “Complex” facilities within the CSU.
Gross Space (GSF) (sqft or sf):
The total quantity of space for a facility, including general and utility spaces.
Full Time Equivalent Student (FTE or FTES’):
The total number of credit units taken by all students in a term or year divided by the
number of units a full time student takes during an academic year (30 units per semester).
FRRM Lifecycle Model:
Database-Model utilized by the California State University System to track facility lifecycles
and Deferred Maintenance backlogs.
Major Capital Outlay Program:
Consists of all projects exceeding $610,000 in construction costs.
Minor Capital Outlay Program
Consists of all projects up to $610,000 in construction costs
Executive Order 847 (EO 847):
Directive from the California State University Chancellor in regards to responsibilities for
campus facilities management.
Energy Use Intensity (EUI) (kBtu/sqft):
A unit of measurement that describes a building’s energy use. EUI represents the energy
consumed by a building relative to its size. Avg. Office Building = 193 (
29 June 12, 2013
Appendix B: FRRM Data
State Funded Facilities
33,092
[
FC] SUMMARY REPORT I (000's)| (000's)
Building FCl| Built
FMS ADMINISTRATIVE OFFICE 0431974
S SIERRA HALL AND ANNEX 043| 1926
a UNIVERSITY STADIUM-FIELD 0.43[ 1963
= FMS WAREHOUSE 0.40 1968
MERIAM LIBRARY 0,40] 1958, 1972
PHYSICAL SCIENCE BLDG 0.39] 1964
|BUTTE HALL 037[ 1972
KENDALL HALL 037| 1929
‘a TRINITY HALL 0,36| 1933, 1975
oe IGLENN HALL 0.34] 1959, 1994)
a LANGDON ENGINEERING CTR $17,106] 0.34] 1967
a ISHURMER GYMNASIUM 24,305 $7,138 033[ 1956
PERFORMING ARTS CENTER 111,122) $32,636 0.32[ 1967
HOLT HALL 130,610) 031] 1972
LAXSON AUDITORIUM 1932
Oo , 543} 1932
= [CONTINUING EDUCATION 8,276 $2,625 1949
2 [SAPP HALL 6,202 $1,967 $93] 0.05[ 1884
[COLUSA HALL 12,898 $4,091 $148] 0.04] 1921
& [TEHAMA HALL 90,157 $26,476] $103] 0.00] 1992
3 [AE WRECEPTION CENTER 5,650 $1,792 $0] _0.00/ 1923, 2000
§ |BOHLER BASEBALL FIELD 44,000 $673 $0] 0.00] 1997
© [FMS GARAGE 5,878 $899 $0] 0.00] 1968
QJ [GATEWAY SCIENCE MUSEUM 9,656) $4,741 $0] 0.00) 2008
9 |NETTLETON STADIUM-BLDG 8,364 $1,279 $0] 0.00] 1997
© JoCONNELL TECHNOLOGY CTR 74,566 $21,898} $0] 000] 1992
[STUDENT SERVICES CENTER 119,865 $35,200} $0} 0.00] 2008
YOLO HALL 70,626 $20,741 $0] 0.00] 2002
UPD/EHS 8,200 $2,403 $0] 0.00] 2012
Campus Totals) 2,042,809 $554,418) $141,528] 0.26
30 June 12, 2013
Appendix C: CSU, Chico 2013/2014 Capital Outlay Program
Five-Year Capital Improvement Program 2013/14 through 2017/18
(Dollars in 000's)
CHICO
State Funded
Funds to
Project Fre |cat| 2013/14 201415 2015/16 2016/17 201748 Complete
Taylor ll Replacement Building | N/A | I E 2,693]
‘Siskiyou II Science a |B P2271) WwW 2,253] c_67,640 E 3,732]
Replacement Building
Butte Hall Renovation o |B Pwe 47,372] = 1,087]
Utilities Infrastructure NA | IB Pwe 39,823
Agriculture Teaching and NA | IB Pwo 34,319) Ee 1,961
esearch Center Renovation!
Expansion
|Acker/Shurmer Gym NA | IB Pwo 7.380] E 1,348]
Classroom/Faculty Office
Renovation, Phase Il
‘Modoc Il Classroom/Faculty o fu Pwo 28,932] E 3,290
Office and Laboratory Building
[Totals $207,511] 31 $4,964] $49,625] $107,463] $34,319) $91,140] $6,599|
FTE represents the impact to Full Time Equivalent Student (FTES in the model) with increase
or decrease associated with the new or remodeled facility.
Project Category (CAT):
Represents the type of project:
Type I: Existing Facilities/Infrastructure
A: Critical Infrastructure Deficiencies
B: Modernization/Renovation
Type Il: New Facilities/Infrastructure
Project Costs
Projected costs are broken into four categories to coincide with the typical funding patterns of
the CSU system:
P — Planning Funds
W — Working Drawings
C — Construction
E — Equipment
31 June 12, 2013
Appendix D: Total Cost of Ownership
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June 12, 2013
32
