Deferred Maintenance Phase I Report

Transcription

1 Ohio University Deferred Maintenance Phase I Report A Case for Addressing Deferred Maintenance Needs at Ohio University Prepared by: University Planning and Implementation and Facilities Management Ohio University Athens, Ohio April 2008

2 Understanding Deferred Maintenance The Association of Physical Plant Administrators (APPA) defines deferred maintenance as the backlog of major maintenance projects unfunded in operating budgets and deferred to a future budget cycle conditions that, if not attended to now, will...become even more costly to remedy in the future. 1 The University of Illinois publishes the following: Deferred maintenance is defined as the upkeep of buildings and equipment postponed from an entity s normal operating budget cycle due to a lack of funds. 2 Wikipedia defines deferred maintenance as a practice of allowing machinery or infrastructure to deteriorate by postponing prudent but non-essential repairs to save cost, labor and/or material Generally, a policy of continuing deferred maintenance will result in higher costs or failure than if normal maintenance had occurred. 3 Because of limited funding, appropriate repairs to the leaking roof are not made. By the time the funds become available, the wood underneath the roof has rotted and the roofing, as well as the planking and structure have to be replaced costing more than the original cost just to repair the roof. The valves on the air handling equipment are old and need to be replaced. Due to lack of funding, their replacement is deferred. A valve breaks and spews water, damaging three stories of the building and the contents therein

3 Purpose of this Report This report is a part of the ongoing effort to best manage the physical plant at Ohio University. Identifying and quantifying current deferred maintenance establishes a baseline against which future work is measured. It also helps the University to manage by information. As the University deliberates how best to invest its capital resources, deferred maintenance needs are meted against functional and programmatic needs, against risk, and against external mandates such as Ohio House Bill 251, the Advanced Energy Law, and the federal American with Disabilities Act (ADA). VISION OHIO is the over arching framework for decision-making. Deferred maintenance needs must be viewed in relation to the goals and objectives in VISION OHIO as well. We Are Not Alone Deferred maintenance is a condition that is plaguing college and university campuses across the country. In November of 2003 the Ohio Board of Regents reported that Ohio s public colleges and universities were looking at about a $2 billion deferred maintenance liability in their instructional and general facilities alone this excludes dormitories and dining halls. They further explained that at least half of this space was built more than 30 years ago. 4 Southern Illinois University estimated deferred maintenance in FY 2006 at $442,600, The University of Wisconsin stated that for the biennium, the backlog of deferred building maintenance is estimated at $800 million. 6 Consequences of Deferred Maintenance As illustrated earlier, the predominant consequences of postponing needed maintenance are failures of systems and increased costs. The two are interrelated in much the way replacing the timing belt in a vehicle is. If you don t replace the timing belt as recommended in the maintenance manual and the belt breaks, serious collateral engine damage will occur. Another consequence of deferring maintenance is the likely increased cost of maintenance due to economic inflation. In the last three years inflation rates in construction have risen dramatically. Each year that a maintenance project is postponed, the cost of doing that work increases. A further outcome is the potential for increased customer dissatisfaction. While the customer doesn t necessarily know that the exterior wall needs a fresh application of waterproofing, when the plaster falls off the walls onto the desk, therein lies the problem. Value of Addressing Deferred Maintenance Avoiding systems failures, decreasing maintenance costs, and improving customer satisfaction are all benefits of addressing deferred maintenance. An increase in operational efficiency in terms of energy consumption and maintainability can also be an outcome. Investing in deferred maintenance needs has the potential to create construction related jobs

4 Scope of this Phase I Report This study assesses all fixed, physical, university assets. All university buildings on the Athens and all regional campuses are included. Non-building assets such as utility distribution, roads, sidewalks, parking lots, bridges, airport runways, communication towers, athletic and recreation fields and landscape are also evaluated. What is not included is loose equipment. This would include furniture, lamps, custodial equipment, maintenance tools and machines, non-fixed research and classroom equipment, books in the library, etc. This study attempts to differentiate between upgrades and deferred maintenance. Upgrades may indeed be desirable but, unless there are deferred maintenance issues, the cost for upgrades is not included. Upgrades are essentially part of the overall capital planning process at Ohio University and are reflected most often in major renovation projects and new construction. The physical infrastructure for information technology is an area that is inherently difficult to assess in terms of deferred maintenance. It is more common to identify information technology needs in terms of capacity and technological upgrades in lieu of deferred maintenance. Whereas, the need for advancement in information technology at Ohio University is very real and significant, it is not included in this report. This study does not address the functional condition of a building or other physical asset. For example, a space may be in excellent condition but totally unsuited for the purpose or function for which it is used. An individual building functionality assessment is being planned for FY Methodology This report was produced by staff members of Ohio University. Over the course of several months the following university personnel shared information and joined in the assessment process: Facilities Management and University Planning and Implementation Dave Brown Steve Mack Susan Calhoun Clyde Pierce Pam Callahan Dick Planisek Pete Clark Richard Shultz Dave Hamill Mike West Mick Harris Mark Whitney Ron Hedrick Kim Wortman Dave Mace Harry Wyatt Other University Personnel Ken Carley Rick Manderick Todd McGuire Brian Thompson Dave Wiseman 4

5 Each of Ohio University s 217 buildings was discussed and evaluated in terms of deferred maintenance. Each building was placed in one of the following four physical status categories: SA Satisfactory No deferred maintenance MI Minor Rehabilitation Needs minor physical rehabilitation or repair. The estimated cost of deferred maintenance is between 10 and 25 percent of the replacement value of the structure RE Moderate Rehabilitation Needs moderate physical rehabilitation or repair. The estimated cost of deferred maintenance is between 25 percent and 50 percent of the replacement value of the structure. MA Major Rehabilitation Needs major physical rehabilitation or repair. The estimated cost of deferred maintenance is 50 percent or more of the replacement value of the structure. Replacement Value This number is based on the current worth of the building including foundation and fixed equipment and is equivalent to the full insurable value of the building as reported to the Ohio Board of Regents in A deferred maintenance cost liability was computed as a range based on the above. For example: Building A has a replacement value = $2,400,000. Building A is rated RE Moderate Rehabilitation The deferred maintenance range is computed as between -- 25% of $2,400,000 = $600,000 and 50% of $2,400,000 = $1,200,000 The total building liability range is then broken down into building systems by applying the following percentages based on the useful life in years of the system and the percentage of building cost each system represents: Foundations 1.11% Columns and Beams 2.82% Exterior Walls 1.83% Exterior Windows and Doors 2.25% Roofing and Flashing 6.89% Partitions and Doors 5.79% Wall Finishes 5.34% Floor Finishes 7.61% Ceiling and Finishes 15.62% Conveying (Elevators, etc.) 0.52% Plumbing 5.43% Heating 5.73% Cooling and Ventilation 15.44% Electrical Service and Dist. 1.23% Lighting and Power 7.82% Safety Standards 7.29% Sidewalks and Approaches 7.29% See attached addenda for detailed data collected and analyzed. 5

6 The following non-building physical assets were also assessed for deferred maintenance on a system by system basis: Airport Infrastructure Runway, taxiways, parking, navigational aids, lighting, fencing and utility infrastructure Communication towers and facilities Campus utility infrastructure Domestic cold water, storm/sanitary sewer, natural gas, tunnels, steam/condensate lines, domestic hot water, electricity Landscape Parking, roads, sidewalks, fences and gates, athletic fields, lawns, plants, etc. See attached addenda for detailed analyses of all non-building physical assets. Results In the aggregate, Ohio University is looking at a deferred maintenance minimum to maximum liability of $247,000,000 to $480,000,000. These dollars can be broken down as follows: $140,000,000 to $292,000,000 is attributable to general fund buildings; $70,000,000 to $140,000,000 is attributable to auxiliary fund buildings; $8,000,000,000 to $19,000,000 to regional campus buildings and $29,000,000 to infrastructure. Deferred Maintenance by Area Regional Campuses Infrastructure $29 M Regional Campuses Infrastructure $19 M $29 M $8 M Auxiliary Fund $70 M General Fund $140 M Auxiliary Fund $140 M General Fund $292 M Minimum $247,000,000 Maximum $480,000,000 6

7 Of the 217 buildings comprising Ohio University, 74 have no deferred maintenance, 48 need minor rehabilitation, 32 need moderate rehabilitation, 47 need major rehabilitation and 16 are vacant. There is deferred maintenance involved with the vacant buildings in terms of both securing the structures and maintaining them in a mothballed condition. The dollar value of this has been added to the aggregate total liability. (See chart below and attached campus map.) Buildings 16 Vacant 47 Major Rehab 74 Satisfactory 48 Minor Rehab 32 Moderate Rehab 217 Total Buildings In terms of the University s 8,400,000 total gross square footage (gsf), 2,200,000 gsf are in satisfactory condition, 1,800,000 gsf require minor rehabilitation, 1,800,000 gsf require moderate rehabilitation, 2,200,000 gsf are in need of major rehabilitation and 400,000 gsf are vacant. Gross Square Feet (gsf) 400,000 gsf Vacant 2,200,000 gsf Satisfactory 2,200,000 gsf Major Rehab 1,800,000 gsf Minor Rehab 1,800,000 gsf Moderate Rehab 8,400,000 Total Gross Square Feet 7

8 Foundation Columns & Beams Exterior Walls Exterior Windows & Doors Roofing & Flashing Partitions & Doors Wall Finishes Floor Finishes Ceiling & Finishes Conveying (Elevators) Plumbing Heating Cooling & Ventilation Electrical Service & Distribution Lighting & Power Safety Standards Sidewalks & Approaches $ Millions The breakdown of deferred maintenance liability in individual building systems or components is represented by the following chart. The most significant liabilities reside in interior finishes, in roofing, and in mechanical, electrical and plumbing systems. (See chart below and attached addenda.) Building Systems $80 $70 $60 $50 $40 $30 $20 $10 $0 Minimum Maximum Existing Strategies Several existing planning and budgeting practices at Ohio University include strategies to specifically address deferred maintenance needs. The Athens Campus 10 Year Capital Plan; the Regional Campuses 6 Year Capital Plans; the maintenance programs at all campuses; and government relations efforts to secure additional state funding all contribute to diminishing the deferred maintenance liability at Ohio University. The current 10 and 6 Year Capital Plans address deferred maintenance in three major ways. The plans include major building renovations which will, by their nature, eliminate substantial amounts of deferred maintenance. The plans also include specific capital projects dedicated to infrastructure needs in which deferred maintenance will be addressed. Lastly, the plan for each campus includes a Basic Renovation line item that is principally intended for maintenance projects. Taking the Athens Campus 10 Year Capital Plan it can be estimated that planned fund uses will result in the following reduction of deferred maintenance: 8

9 Possible Future Strategies Identifying additional revenue streams for capital improvements is challenging. Ohio University has utilized several funding streams besides state capital to fund construction on campus. These include student fees, issuance of bonds, gifts and grants. These funding streams can be investigated for use in offsetting deferred maintenance, though it is perhaps difficult to imagine a fund raising campaign dedicated solely to maintenance. It is more likely that fund raising would be associated with new programs and new/renovated facilities. However, as mentioned before, renovations are effective ways to address deferred maintenance as well as functional (programmatic) needs. A strategy that should be considered going forward is the establishment of an endowment for new capital projects. This endowment would be specifically created to boost maintenance efforts and assure that preventive maintenance measures are accomplished and that deferred maintenance issues do not accumulate. The extent of an endowment can be calculated based on several factors including current campus wide maintenance budgets, building complexity and building usage. A critical activity that has long term substantial effect on maintaining any facility is the design of that facility. Care must continue to be given to select products, materials, and engineered systems that have longevity and can be easily and efficiently maintained. White carpet doesn t go well in the track locker room. 9

10 Next Steps As a result of this deferred maintenance report, metrics can be established to gauge the status of deferred maintenance at Ohio University. It is anticipated the extent of deferred maintenance will be reviewed and recalculated on a biennial basis. This can be accomplished for building systems as well as in the aggregate. Measuring progress in terms of dollars invested as well as planning for future funding to offset deferred maintenance will be outcomes of this process. Dashboard indicators based on the graphs and charts in this report will be the tool for communication to the University s executive leadership. This is a Phase I report. It is planned that in FY 2009 a Phase II Deferred Maintenance Report will be produced. Authored by the same individuals responsible for Phase I, the Phase II report will examine in more depth the individual building systems in university facilities. For example, roofs, windows, heating, cooling, safety systems, etc., each will be evaluated on a building by building basis. Many of these systems are currently assessed and tracked at Ohio University. The Phase II Report will consolidate these existing efforts and strive to create a comprehensive data base with detailed information on each building system. Work in Phase II will also establish the Facilities Condition Index (FCI) for each building at Ohio University. Being able to compare the condition of facilities will allow staff and leadership to prioritize need and to measure reinvestment in facilities on order to prevent and/or control expansion of deferred maintenance. Facilities Condition Index (FCI) Defined: Deferred Maintenance ($) Current Replacement Value ($) 7 Neither the Phase I nor the Phase II Deferred Maintenance Report addresses the functionality of a given facility. In FY 2010, Phase III of the Deferred Maintenance Report will assess the status of a given building or facility in terms of how well the facility fits the program or function contained therein. For example, a given building might be in excellent condition but, the dance program housed within cannot function well given the 8 foot ceiling heights in the facility. Lastly, it is planned that deferred maintenance on all University campuses will be reassessed on a biennial basis starting in FY It is to this data that the metrics will be applied and Ohio University will be better able to gauge its progress in reducing the deferred maintenance liability. I:\Pam Deferred Maintenance Report Narrative

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