1. Higher Education Capital Facilities Studies: Expanding The Comparable Framework Preliminary Report Joint Legislative Audit & Review Committee May 18, 2005

2. 2 Presentation Topics 1. Higher Education Capital Landscape 2. The “Comparable Framework” as Facilities Information for the State 3. Research Assignments & Key Findings Time as Dimension of Building Preservation Facility Modernization on a Comparable Basis Campus Infrastructure on a Comparable Basis 4. Conclusions and Recommendations

3. 3 Higher Education Capital Landscape 6 universities and 34 colleges occupy 2/3rds of the State’s buildings. Roughly half of capital spending authorized each biennium ($800M to $1.4B in state bonds). A mix of state and local resources help pay for changes to facilities. Institutions collectively spend $470M a biennium to keep facilities open for business.

4. New Construction Acquire and construct brand new building and infrastructure systems. Modernizatio n Upgrade or replace obsolete building and infrastructure systems. Preservation Maintain and repair building and infrastructure systems. Different Types of Facility Investments Come Before Washington Lawmakers The “Comparable Framework” as Facilities Information for the State Assembled 2002Explored 2004 “Time” Dimension Given Buildings Age in Place ?

5. 5 About Modernization Research for the “Framework” Adapting spaces for business purposes, to make use of advances in technology and program upgrades needed because of transformations in specific academic disciplines, or trends in teaching methods that alter how learning takes place. Legislature and governor respond to hundreds of major (>$5M) and minor capital project requests each biennium to modernize facilities across Washington at 133 different higher education campus sites. Modernizatio n Upgrade or replace obsolete building and infrastructure systems.

6. 6 Lessons Learned: Modernization on a Comparable Basis Survey and measurement techniques are emerging, but there is not yet one approach that lends facility comparability on a statewide basis. Assessment not designed to contrast a community college with a university. “Benchmarks” are, by and large, national program peers (e.g., what ASU just built). Ways modernization gets characterized for facilities (typology) may considerably improve communication between stakeholders. Chapter 3 & Appendix 4 of the Report Modernizatio n Upgrade or replace obsolete building and infrastructure systems.

7. 7 About “Framework” Pilot Research CWU Buildings Institution: 1. Established last year of replacement/renewal for 12 major systems and components for six buildings. JLARC: 2. Entered dates into a model that calculates future (life cycle) repair requirements for each major system by facility. WSU Infrastructure Institution: 1. Established quantities of main components, dates of original construction or last renewal and assign a condition score (qualitative assessment). JLARC: 2. Applied replacement cost and cycles for each component; aggregate up to derive system-level measures of campus conditions.

8. Figure 6, Page 13 of the Report 8 Building TwoBuilding OneEntire Pilot Buildings: Preservation Needs Can Be Forecast

9. Component Replacement Value Figure 10, Page 24 of the Report 9 Infrastructure: Campus Conditions Can Be Quantified Electrical Chilled Water Roadways and Parking Sewer Pedestrian paving Marginal Limited Fair Adequate Superior 5 4 3 2 1

10. 10 Lessons Learned: “Time” as a Dimension of Ongoing Building Preservation It is feasible to add time information to the Framework on buildings. It is feasible to add time information to the Framework on buildings. Doing so enables forecasts to be constructed that add value for the inventory condition reporting efforts, and reveal opportune times to synchronize activity with modernization. Doing so enables forecasts to be constructed that add value for the inventory condition reporting efforts, and reveal opportune times to synchronize activity with modernization. Investment strategies may vary but that is not a barrier to understand and examine preservation needs on a statewide, comparable basis. Investment strategies may vary but that is not a barrier to understand and examine preservation needs on a statewide, comparable basis. Preservation Chapter 2 & Appendix 3 of the Report

11. 11 Lessons Learned: Infrastructure on a Comparable Basis It is possible to add infrastructure to the Framework and provide comparable, quantified campus condition profiles on a statewide basis. Taking the next step to estimate “preservation” backlogs would require extensive, additional infrastructure engineering-based research. State does not guide agencies in preparation of major infrastructure project requests. Preservation Maintain and repair building and infrastructure systems. Chapter 4 & Appendix 3 of the Report

12. 12 Research Conclusions: Expand the Comparable Framework? 1. Can preservation profiles for buildings be dynamic by adding dates of last renewal or replacement for systems? 2. Can modernization be accomplished on a comparable basis? 3. What about comparable preservation profiles for campus infrastructure? Feasible; Opportune time to add “time” information to the Framework is when conditions are updated. Not feasible to pursue on a statewide basis at this time. Possible, but success is less certain than for buildings for $.

13. 13 While JLARC “Framework” Research Proceeded, There Were State Budget Developments… 1. OFM evaluates business alternatives for facility inventory and asset systems (FIS/CAMS). Done; reviewed internally but no action yet taken. 2. JLARC completes a performance review of state and agency capital budget processes. Done; OFM response and improvement plan due to the Legislature by December 2005.

14. 14 State Budget Developments… (continued) 3. Universities (Council of Presidents) prepare their 1 st integrated capital project funding request for lawmakers, guided by Higher Education Coordinating Board (HECB). Done; process will be repeated next January-August, before the 2007 Session. 4. 2005 Capital Act instructs JLARC to refresh original preservation information about buildings. Not done Not done; work to begin this summer for use by HECB, OFM and Legislature in early 2006.

15. 15 So... The Framework is one element in a larger discussion now underway about “systems of information,” process and practices in Capital Budgeting. And if the Legislature agrees that the Framework is valuable and provides a way to make sense of individual campus projects, investment choices and preservation tradeoffs, it should act to help sustain it. Pages 29-32 of the Report

16. 16 Recommendation 1 The Legislature should act to place the Comparable Framework within an organization to be maintained (JLARC suggestions), or alternatively, choose deliberately not to sustain the Framework beyond the refresh assignment just given to JLARC for Fiscal Year 2006.

17. 17 Recommendation 2 The Office of Financial Management should contribute to the policy deliberation about sustaining or expanding the Comparable Framework into the future, by making recommendations concerning information assembled from capital agencies about facility preservation and asset stewardship.