Campus Saves Millions by Focusing on Scale

Here is another example of how taking a hard look at the simplest metrics can yield big results. Stories about institutions actually downsizing their campuses have been in the news lately, the most recent being the University of Maine. However, the concept of campus scale, or what we call building intensity, is equally important. The general idea is that the average building size should be consistent with the scale or overall footprint of the campus. It sounds simple, but read below on how one campus used this to accomplish huge savings.

A large university in the Northeast had experienced significant growth in space over the past decades. Much of this was the result of an administrative policy to purchase and occupy Building Count by Size and agebuildings surrounding the institution as they became available. The result was a significant shift in their age profile and average building size. The vast majority of their buildings were 15,000 GSF and smaller, and the primary age of these smaller structures was between 25 – 50 years old. Construction vintage and age profile can have a major impact on maintenance of these structures (See our 2014 State of Facilities report for more on this topic).

As with most institutions nationwide, the recent financial crisis put significant pressures on both capital and operating budgets. However, facilities management was seeing their actual total daily service costs rising and their budget shrinking, which was putting increased stress on the department and reducing the level of their service. Looking at their raw data was not enough to put this issue in perspective. We helped compare their daily service budget with that of peer institutions, and found a notable discrepancy. Their seven-year average daily service budget was $4.86 per gross square foot ($/GSF) while their peers’ average was $3.96/GSF. This context sent up a red flag.

What was driving-up spending? It wound up being the nearly 350 small buildings. A look at building intensity relative to peers directed us to investigate this imbalance. Using their CMMS system, it was observed that these smaller facilities (buildings of less than 10,000 GSF) had daily service costs of $3.20/GSF while the larger buildings had a cost range of $0.99 – $1.30/GSF. The smaller buildings were more expensive to operate and steward.

This discovery allowed campus leadership to develop new policies aimed at reducing capital and operating needs going forward.  The recommendations adopted by the Board of Trustees included:

  • The cessation of the policy of acquisition and occupation that led to the accumulation of large numbers of smaller facilities,
  • The creation of a policy to drive down building intensity approximately 25% to close the gap between peer averages.
  • The razing of many small buildings through “attrition” and replacing them with larger, modern spaces

These policy changes will reduce operating expenses between $1.75 and $2 million annually – savings which are earmarked for increasing annual stewardship funding to slow deferral rates.

 

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