In the early 1980s, experts were raising red flags about the looming capital challenges facing Higher Education. These warnings elevated concerns about structural and mechanical systems literally and metaphorically caving in, and drew attention to a problem that was seen as large and growing to untenable proportions. Thankfully, in the years since, the widespread failures prophesied have largely not come to pass. This makes us at Sightlines ask the question why.
Sightlines’ research and partnership with more than 400 campuses across North America offers some insight. Our database shows that campus buildings received investments to repair systems, but the resources were far below the forecasted need. Additionally, the data shows that investment levels are well below target life cycle needs. Buildings continue to age and funding is continually falling short, however, widespread failures are not commonplace. So, why hasn’t the roof caved in?
Sightlines believes several factors working in concert have reduced the risk deferred maintenance creates:
1. A more effective approach to maintain components of systems rather than wholesale replacement
2. The diversification of risk that a campus of buildings presents
3. Conservative life cycle estimates
4. Impact of functional obsolescence
5. Better use and management of data
While the conversations from the ‘80s may have exaggerated the urgency of the deferred maintenance problem, the problems have not gone away and there is still cause to worry today. While we believe that catastrophic failures are not imminent, there is real urgency to manage the risks campus buildings present to institutional program, assets, and budgets. Therefore, we believe that a key to success is understanding and addressing the risk factors without being blinded by the totality of the problem. We have found that institutions that are able to leverage these factors in workable combinations are able to more effectively manage their “facility risk.” Specifically, institutions can change their focus and the conversation about risk management, by:
1. Defining key risk issues within classes of assets
2. Integrating program upgrades with repair needs
3. Setting multi-year investment directions
4. Recycling operating savings to grow capital budgets and then optimizing these budgets through a balanced project selection strategy
5. Measuring and communicating all progress (and setbacks)
In the coming months, Sightlines will dive deeper into these five limiting factors and these risk management strategies.
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