This session explores how The University of Arkansas was able to create a 15-year Facility Renewal & Stewardship Plan to address their keep-up and catch-up costs while planning for the future despite previously struggling to develop a cohesive strategy to address their alarming growth of deferred maintenance, which totaled approximately $245 million. With a sound project selection process in place and an innovative, yet modest, student facilities fee, The University of Arkansas has prevented the accumulation of additional deferral, while also reducing the backlog by over $75 million. This session features Mike Johnson, Associate Vice Chancellor for Facilities at The University of Arkansas, and Matt Bausher, Senior Director of Member Services at Sightlines.

1. Wheaton College (MA)
Whitworth University
Widener University
Wilkes University
Williams College
Worcester Polytechnic Institute
Worcester State College
Wright State University
Xavier University
Yeshiva University
Youngstown State University
Making the Case for Future Facilities Funding
Matt Bausher – Senior Director of Member Services
Sightlines
Mike Johnson – Associate Vice Chancellor for Facilities
University of Arkansas
October 12th, 2015

2. Review of national facilities trends – Space, capital, and
operations
Explore the University of Arkansas Story
Discuss Strategies to Make the Case for Funding
Agenda

3. 3
Who Partners with Sightlines?
Robust membership includes colleges, universities, consortiums and state systems
* U.S. News Rankings
Sightlines is proud to
announce that:
• 450 colleges and
universities are
Sightlines clients
including over 325
ROPA members.
• 93% of ROPA
members renewed in
2014
• We have clients in 42
states, the District of
Columbia and four
Canadian provinces
• More than 100 new
institutions became
Sightlines members
since 2013
Sightlines advises state
systems in:
• Alaska
• California
• Connecticut
• Hawaii
• Maine
• Massachusetts
• Minnesota
• Mississippi
• Missouri
• Nebraska
• New Hampshire
• New Jersey
• Pennsylvania
• Texas
• West Virginia
Serving the Nation’s Leading Institutions:
• 70% of the Top 20 Colleges*
• 75% of the Top 20 Universities*
• 34 Flagship State Universities
• 13 of the 14 Big 10 Institutions
• 9 of the 12 Ivy Plus Institutions
• 7 of 12 Selective Liberal Arts Colleges

4. Changing the Conversation

5. Space and Enrollment Growth
Space growing faster than enrollment
0%
2%
4%
6%
8%
10%
12%
2007 2008 2009 2010 2011 2012 2013 2014
Space and Enrollment Growth
National Average
Space Growth Enrollment Growth

6. 0%
5%
10%
15%
20%
25%
Space and Enrollment Growth
Research institutions only group growing enrollment faster than space
Small InstitutionComprehensive Research Institution Community College

7. Putting Your Campus Building Age in Context
7
Pre-War
Built before 1951
Durable construction
Older but typically lasts
longer
Post-War
Built from 1951 to 1975
Lower-quality
construction
Already needing more
repairs and renovations
Modern
Built from 1976 to 1990
Quick-flash construction
Low-quality building
components
Complex
Built in 1991 and newer
Technically complex
spaces
Higher-quality, more
expensive to maintain &
repair
Pre-War Post-War Modern Complex
Percent of Total
Space 40%
Percent of Total
Space 27%
The campus age drives the overall risk profile
0%
2%
4%
6%
8%
10%
12%
14%
Title
Sightlines Database- Construction Age Sightlines Database- Renovation Age Arkansas

8. Square Footage by Age Category
Progress in resetting the clock on buildings over 50 years old
14% 20%
17%
25%
32%
31%
37%
24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Construction Age Renovation Age
%ofSpace
Construction Age vs. Renovation Age
Under 10 10 to 25 25 to 50 Over 50
Buildings Under 10
Little work. “Honeymoon” period.
Low Risk
Buildings 10 to 25
Short life-cycle needs; primarily space
renewal.
Medium Risk
Buildings 25 to 50
Major envelope and mechanical life cycles come
due.
Higher Risk
Buildings over 50
Life cycles of major building components are past due.
Failures are possible.
Highest risk

9. The Aging Campus
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
%ofSpace
Square Footage by Age Category
Under 10 10 to 25 25 to 50 Over 50
Public Average Private Average

10. Annual Capital Investment
2014 levels finally reach pre-recession, but with a different funding mix
$1.19 $1.18 $1.27 $1.24 $1.36 $1.50 $1.71 $1.77
$3.18
$3.63
$3.86
$3.22
$3.58 $3.44
$3.45
$3.60
$0
$1
$2
$3
$4
$5
$6
2007 2008 2009 2010 2011 2012 2013 2014
$/GSF
Capital Investment into Existing Space
Annual Capital One-Time Capital Average

11. Capital Spending
Private campuses rely more on annual institutional capital
$0.90 $0.84 $1.03 $0.91 $1.02 $1.10 $1.19 $1.02
$2.57
$3.07
$3.14
$2.84
$3.34 $3.15
$3.31
$3.00
$0
$1
$2
$3
$4
$5
$6
$7
$8
2007 2008 2009 2010 2011 2012 2013 2014
$/GSF
$1.59 $1.68 $1.63 $1.74 $1.89 $2.12
$2.52
$2.82
$4.02
$4.44
$4.97
$3.81
$3.94
$3.91
$3.66
$4.44
2007 2008 2009 2010 2011 2012 2013 2014
Public Average Private Average
Annual Capital One-Time Capital Average

12. Facilities Backlogs Continue to Rise
Backlog $/GSF
Public Average Private Average
0%
5%
10%
15%
20%
25%
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
2007 2008 2009 2010 2011 2012 2013 2014
$/GSF
0%
5%
10%
15%
20%
25%
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
2007 2008 2009 2010 2011 2012 2013 2014
Capital investment not enough to keep backlogs from growing

13. Facilities Operating Budget
Daily Service & Planned Maintenance
3.99 4.20 4.20 4.15 4.23 4.23 4.36 4.49
0.28
0.28 0.29 0.29 0.30 0.32 0.34 0.35
-
1.00
2.00
3.00
4.00
5.00
6.00
2007 2008 2009 2010 2011 2012 2013 2014
$/GSF
Facilities Operating Budget
Planned Maintenance Daily Service

14. Summary of Trends
The aging campus is driven by the need to renovate or replace 1960s and 70s
buildings, many of which were poorly constructed
To add to the problem, campuses have added new square footage to address
increasing enrollment that has now leveled off or is even in decline
The demand for both “catch up” on aging buildings and “keep up” of newer buildings
is much higher than the availability of capital funding
Therefore, backlogs continue to grow even though capital funding is finally back to
pre-recession levels
Flat operating budgets have not provided relief to the backlog problem

15. Campus Profile (E&G Only – 2014)
$1.87B Replacement
Value
Sightlines member
since 2006
4.3M
GSF
$819M
Endowment
26,237
Students
Founded
1871

16. Understanding the Arkansas Story
Where was the campus in 2009 and where
was it heading?
Implementing Change
Where is campus now?

17. Aging Campus and Increasing Operating Costs
Under 10,
18%
Under 10,
15%
Under 10,
14%
10 to 25,
23%
10 to 25,
23%
10 to 25,
21%
25 to 50,
36%
25 to 50,
39% 25 to 50,
40%
Over 50,
24%
Over 50,
23%
Over 50,
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2009 2014
Projection
Campus Age
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
2002 2009 2014
Projection
$/GSF
Operating Costs
Daily Service PM

18. Chasing a Moving Target: 86% of Target FY02-FY09
Total capital spending reaching target funding
$0
$5
$10
$15
$20
$25
$30
$35
2002 2003 2004 2005 2006 2007 2008 2009
TotalDollarsinMillions
Spending to Target: FY02-FY09
Annual Stewardship Asset Reinvestment
Equilibrium Need
18
$-
$50
$100
$150
$200
$250
$300
$350
2002 2009 2014
Projection
TotalBacklog(Millions)
Backlog

19. Campus Space and Enrollment
By institution type
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
PercentChangeofEnrollment&Space
Campus Enrollment
By Public vs. Private
Space Growth Enrollment Growth
Public PrivateArkansas

20. -
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2002 2009 2014 Projection
CampusGSF
MTCDE
Longitudinal Gross Emissions (All Facilities)
Scope 1 Scope 2 Scope 3 GSF
Total Emissions Over Time
20

21. Understanding the Arkansas Story
Where was the campus in 2009 and where
was it heading?
Implementing Change
Where is campus now?

22. Implementing Policy Change
In 2008/2009 change came, a New Campus Facilities Management Strategy was
implemented through two major policy changes. “The Facility Renewal and
Stewardship Plan” was born:
1) Create a Facilities Fee –repurposed fee to address modernization of space
and reduction of deferred maintenance on campus.
• $2 per credit hour in FY09 and could grow (and did) to $10 per credit
hour over 5 years
• In total, $120M of $243M 15 year capital plan.
2) Energy Savings Performance Contract Projects
• $34M in energy savings and efficiency projects that will lower energy
costs, reduce deferred maintenance and reduce greenhouse gas
emissions while improving indoor air quality

23. Understanding the Arkansas Story
Where was the campus in 2009 and where
was it heading?
Implementing Change
Where is campus now?

24. Chasing a Moving Target: 152% of Target FY10-FY14
Total capital spending reaching target funding
$0
$10
$20
$30
$40
$50
$60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TotalDollarsinMillions
Annual Stewardship Asset Reinvestment Equilibrium Need
24

25. Facility Renewal and Stewardship Program Major Accomplishments
Classroom and Teaching Lab Modernization:
• 29 Buildings
• 139 General Access Classrooms Modernized/Renovated
(Targeting of 160 Classrooms)
• 49 Teaching Lab/Lab-related Spaces
Modernized/Renovated (Targeting of 40 Teaching Labs)

26. Facility Renewal and Stewardship Program Major Accomplishments
Deferred Maintenance and Renewal Projects:
• Various Roof & Building Envelope Projects
• HVAC Renewal Projects/BAS Replacement Projects
• Elevator Code and ADA Compliance upgrades
• Primary/Secondary Building Electrical System
Upgrades

27. Facility Renewal and Stewardship Program Major Accomplishments
Major Renovations and Additions of Space:
• Hillside Auditorium – New Construction
• Anderson Design Center Addition – New
Construction
• Ozark hall Renovation & Addition
• Vol Walker Hall Renovation
• Peabody Hall Renovation
• Davis Hall Renovation
• Epley Center for Health Professions Renovation &
Addition

28. Impact 1: Making Campus Younger
Under 10,
18%
Under 10,
15%
Under 10,
22%
Under 10,
19%
10 to 25,
23% 10 to 25,
23%
10 to 25,
20%
10 to 25,
24%
25 to 50,
36%
25 to 50,
39%
25 to 50,
38%
25 to 50,
36%
Over 50,
24%
Over 50,
23%
Over 50,
20%
Over 50,
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2009 2014 Peers 2014
Campus Age
Project Plans for FY16-23:
$145M towards renewal &
stewardship
$61M private funds towards
renovation/new space

29. Impact 2: Decreasing Backlog
Decreasing backlog of need; Public and Private need still rising
$70
$67
$63
$53
$46
$39
$86 $88
$90
$93
$96 $98
$74 $76 $78
$81 $82 $84
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
$-
$20
$40
$60
$80
$100
$120
$/GSF
Backlog/GSF Percentage Change of Backlog
Public Average Private AverageArkansas

30. Impact 3: Decreasing Daily Service
30
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$/GSF
Daily Service Planned Maintenance Total Utilities
Arkansas Peers

31. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2010 2014
RoomUtilization
Room Utilization
Impact 4: Increasing Utilization of General Access Classroom Space
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2010 2014
SeatUtilization
Seat Utilization

32. • Average room utilization has increased from Fall 2010 46.9% to 72.6%
• Average seat utilization has increased from 54.5% to 64.7%
• Average schedule compliance has increased from 55.8% to 73.7%
• Transparency in reporting created an atmosphere of cooperation between
colleges
• Parking across campus has evened out due to classes being more evenly
spread among the buildings
 The completion of Champions Hall, SCEN 2nd floor renovation, and AFLS renovation allowed us to
place an additional 250 classes for Fall 2015.
 Our general access classroom space has increased from 144 rooms to 173 rooms since Fall 2010
 It has been our experience that we have had 125 to 180 classes not scheduled in the batch
scheduling process at the desired times due to lack of rooms or the correct sized rooms.
Colleges/departments were required to change their class time or wait till another class was
cancelled to secure a room. However, Spring 2016 batch scheduling is almost complete, 3 weeks
earlier than scheduled, with only 5 classes not placed in a batch. This a major milestone. Of the 5
classes not placed, all are meeting outside official class times during the prime time period. So,
we’ve gone from about 125 classes not placed in a room to 5 for this next spring.
Results of Centralized Scheduling

33. -
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
CampusGSF
MTCDE
Longitudinal Gross Emissions
Scope 1 Scope 2 Scope 3 GSF
Impact 5: Maintaining Emissions with growing campus
33

34. Facilities Renewal and Stewardship Plan – Phase II
Recently, adjustments have been made to the plan:
• Overall plan has grown from $243M (actual spent $251 @ year 7) to $512M
over the 15 years (Through FY23)
• Proposed another $2 per credit hour fee increase per year for the next 7
years. (Board of Trustees annual approval required)
• Established goals to decrease deferred maintenance on campus to +- $50M
range by 2023

35. The Impact of Future Spending
$-
$100
$200
$300
$400
$500
$600
Original Plan Adjusted Plan
Phase 1
Adjusted Plan
Phase II
PlannedSpending(Millions)
Capital Plan (15 years)
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
2002 2009 2014 2014 w/o
plan
Target
Backlog

36. Strategies to Make The Case for Funding
Strategy 1: Change the conversation throughout higher education.
Educate policy makers about the impacts of the space profile, capital
plans that are aligned with the institutional mission and risk, and
improving operating effectiveness while lowering costs.
Strategy 2: Focus on what the campus will become if we continue to
ignore the problems that are in front of us.
Strategy 3: Show the impact of change so that decision makers can
see the value provided through strategic and targeted capital planning.

37. Strategies to Make the Case for Funding
Strategy 4: Use comparison data to show what other institutions are
implementing to address similar issues on their campuses.
Strategy 5: Promote a balanced strategy that addresses proactive
maintenance of facilities while attacking deferred maintenance needs on
campus.
Strategy 6: Get buy-in from and share with the right people. It goes
without saying that the right information needs to make it to the decision
makers in order to create change. However, without the proper backing
and support from administration, the plan can fail before it even begins.