Dave Cain is director, facilities superintendent, building maintenance, for the office of residential life at Illinois State University, Normal, Illinois. His 1997 doctoral dissertation, Analysis of Facilities Benchmarks as a Predictor of Institutional Quality, discussed at length APPA's Strategic Assessment Model, NACUBO's benchmarking project, and other benchmarking efforts.
The Office of Residential Life at Illinois State University is responsible for the maintenance of approximately 2.2 million of the university's 5.7 million square feet, including all student housing and food service areas. The oldest residence hall opened in 1950 and the newest in 1968, meaning that even the newest residence halls are 30 years old and the two oldest buildings are almost 50 years old. Since Illinois State University opened its first residence hall, the Office of Residential Life has never conducted a comprehensive facilities audit. As has been the case with most major universities nationwide, the building boom of the 1960s and 1970s has left Illinois State University in the 1990s with deteriorating residence halls and a lack of funding to make necessary major repairs. Emergency maintenance and critical needs are being met, but major renovations and repairs have typically been deferred. Projects are continually planned and re-prioritized in the struggle to anticipate failures in system components (heating, electrical, air conditioning, plumbing, etc.) and to comply with new legal standards set by federal, state, and local governments. Compounding all these issues is the need to upgrade facilities to compete with other universities and private entities for students. Students today demand higher standards in their living environment, a greater variety of options, and higher quality services.
The university's executive administrators and administrators at the Office of Residential Life recognized the need for a facilities audit that would allow us to analyze and adjust the university's existing capital renewal plan and assist in the reprioritization of maintenance and operational needs. The audit would assist the Office of Residential Life to develop a formalized planning and budgeting model to serve as a long-term facilities management plan. To ensure that the audit would be effective, the university's executive administrators and Residential Life administrators developed a model based in part on international quality management practices.
In a definitive study of international quality management practices, four organizations (automotive, banking, computer, healthcare) were examined within four leading industrialized nations (Canada, Germany, Japan, and the United States). This comprehensive empirical research examined 945 management practices in over 580 organizations on three continents. This ambitious research included considerable international cooperation and was jointly conducted in 1992 by the American Quality Foundation and Ernst and Young. The results were titled Best Practices Report: An Analysis of Management Practices that Impact Performance.
The Best Practices Report suggests that the current quality knowledge base is more theoretical and contains anecdotal information with isolated proprietary studies. Furthermore, the authors state that little to no solid evidence is available. The rationale given to conduct such a study was based on the growing disenchantment in the business community. Enormous resources are being expended by organizations, including the business of higher education, in search of improved operational, financial, and market performance.
Over the past ten years or so, the quality movement has been in the forefront of the performance improvement effort. According to the Best Practices Report, the basic axiom of that movement has been Improve quality, and the overall performance improvement will follow. Additional consideration given to conduct the study was based on the belief that many corporate business leaders questioned the actual results these quality initiatives reported to produce. A general consensus was that companies experienced mixed results after implementing the latest new management practices that were reputed to improve quality and overall performance.
This study challenges the older assumption that quality efforts, regardless of current performance, can benefit from the widespread adoption of management practices. Simply put and contrary to prevailing wisdom, universal quality effort does not work for all levels of an organization. This study rejects the underlying premise that the same set of management practices can be effective for all organizations. This hypothesis is supported by the analysis of the Best Practices Report, but the results are not illustrated solely as statistics.
The findings were studied for more than a year by two independent researchers who cited two separate viewpoints. One assessed the impact of individual management practices on three dimensions: profitability, productivity, and quality. The second focused on the theoretical perspective and developed a causal model to look at the interaction of practices that create a critical path for quality improvement.
Not surprisingly, a general quality model did emerge from the study. The following is a recommended list of six universally beneficial sets of practices that can be incorporated in any of the four organizations studied.
Beyond the general findings of the study are specific recommendations presented for three performance categories: lower, medium, and higher performance companies. In each of the subsections, the results are organized around the fundamental activities such as managing people, process and strategy, and technology.
The Best Practices Report is considered a landmark effort that responds to the quality challenge facing business and industry globally. The study concludes that quality should be better defined, measured, tracked, and managed across the organizational board.
This Best Practices Report should serve as a model for public higher education. The broad scope of management practices discussed in the Best Practice Report is also found in higher education. The purpose of the study undertaken by the director of facilities was to determine the applicability of financial benchmarking to institutions of higher education and whether the financial benchmarks are related to institutional quality.
Some studies of quality management practices relating directly to higher education have been conducted recently. A Foundation to Uphold (1996) examines facilities conditions at U.S. colleges and universities and is a collaborative effort of the APPA, the National Association of College and University Business Officers (NACUBO), and the Sallie Mae consulting group. This study was done as a follow-up to The Decaying American Campus: A Ticking Time Bomb (1989), which drew national attention to the tremendous backlog of capital investment and accumulated deferred maintenance (ADM) needs on our nation's college campuses.
This research reveals that deferred maintenance levels have actually increased by $5.5 billion since the original study in 1988. The gap has also widened between capital funds and both deferred maintenance and capital renewal. The study suggests that the backlog of deferred maintenance will continue to grow unless adequate funding resources become available for facilities reinvestment and steps are taken to ensure facilities are safe, functional, and meet state and federal compliance. Furthermore, the study recognizes that both the funding issue and the deferred maintenance problem represent a threat to the capability of higher education facilities to support the missions of the universities and colleges.
APPA conservatively estimates that $26 billion in 1996 dollars is needed to eliminate deferred maintenance backlogs for colleges and universities by today s standards. Interestingly, the study reveals that public colleges typically have more deferred maintenance than their private counterparts.
The 1996 Foundation to Uphold study analyzed data from nine college types and computed financial benchmarks for comparisons using the Facilities Condition Index (FCI). These comparative benchmarks are represented as a baseline of current conditions to analyze year-to-date changes in campus deferred maintenance. The FCI is expressed as a ratio of the accumulated deferred maintenance divided by the current replacement value (CRV) of the physical plant. The FCI method was developed by Applied Management Engineering of Virginia Beach, Virginia, and published in 1991 by NACUBO in Managing the Facilities Portfolio.
The FCI uses empirical data to benchmark the relative measures of conditions on campuses. The following is a suggested guideline for comparative conditions: FCI < 5% (.05) = good condition; FCI 5-10% (.05 - .10 = fair condition; FCI > 10% (.10) = poor condition). The cost for correcting deferred maintenance obtained from a good facilities audit and a calculation of the CRV allows a facilities manager to model the variables for annual funding needs as well as to prioritize the deferred maintenance.
Another useful fundamental concept cited in this study is the rule of thumb that the annual reinvestment rate of 1.5 to 3.0 percent of the CRV be used to prevent further accumulation of the deferred maintenance backlog.
Finally, in A Foundation to Uphold, the survey identified five possible policy issues that have the greatest impact for change and influence regarding accumulated deferred maintenance. Eighty percent felt that the single most important factor was developing an understanding of the issue of deferred maintenance and obtaining the support from executive administrators. It was felt that unless campus leadership commits itself to address the deferred maintenance problem and establishes it as a priority, current unsatisfactory facilities conditions will continue to prevail.
Next in importance to the commitment of campus leadership is gaining the support of the trustees and the state legislators (73%), followed by the campus budgetary process and financial strategies (59%). The fourth policy implication is knowing the institution s financial condition (46%) and the fifth issue refers to the funding level from state appropriations (24%).
After their review of studies concerning quality management practices and financial benchmarking in both business and industry and university settings, administrators at Illinois State University's Office of Residential Life recognized the need for a facilities audit based on the criteria established in those studies. The audit should allow them to analyze and adjust the university's existing capital renewal plan and assist in the reprioritization of maintenance and operational needs and assist the Office of Residential Life in developing a formalized planning and budgeting model to serve as a long-term facilities management plan. To be effective, the model should be based on a collaborative effort between experts, both external and internal. The audit would also help the university gather independent data to verify that current funding levels were inadequate for maintaining or replacing existing building components that were at the end of their life cycles. Further, the audit would develop a financial baseline of current facilities conditions for comparative benchmarking against itself and other public institutions within its class.
The selection of a facilities audit firm was an important first step in the process and was based on the following criteria:
As a public entity, the university is required to publicize their search for a firm to conduct a facilities audit and run statewide newspaper advertisements. Those responding to the advertisements were required to submit detailed information about their firms, allowing the university to determine which firms most closely conformed to the selection criteria above. A short list of firms was invited to interviews with university administrators. After the formal interviews, the university selected a consulting firm with five design offices in Illinois and Iowa.
The consulting firm's first step in the audit procedure was to establish exactly what the university expected and how they wanted it to be presented. After numerous discussions with university staff, both in meetings and individually with key members, the consulting engineers recommended that the university utilize a computerized database. This database would need to be powerful enough to generate the variety of reports required, but also easy to use so the entire staff at both the consulting firm and the university could have access to the information. In addition the software would need to have the capability to operate in a network environment providing maximum security and system integrity.
With the input of the university staff and the firm's consultants, a relational database called Paradox was selected as the platform for this audit. It was powerful enough and had the required network compatibility. It also was software that the university was licensed to use. However, other databases could be used effectively. The university indicated a need for a prioritized list of the items requiring work, including a cost estimate and a recommended year of action. The final result was a 20-year road map of prioritized projects (0-300) and a polished ten-year capital renewal plan.
After the consulting firm's survey team gathered the required information, they generated an initial draft of the report on the first campus and presented it to the university for review and comment. The consulting firm and Illinois State University staff scheduled a round table discussion to analyze the information presented and to make suggestions for modifications.
As a result of these meetings between staff members at the consulting firm and Illinois State University, several major changes were instituted as to the level of detail and organization of the materials. The consulting firm's staff revised the report accordingly and reissued it for review prior to proceeding with the remaining campuses.
The consulting firm's first step in conducting the audit was to break down each campus into individual buildings. The five campuses ended up having 13 separate buildings. Each building was then evaluated in 11 major components: ADA compliance, civil/site, conveying systems, electrical systems, exterior envelope, HVAC systems, interior finishes, plumbing systems, trash removal, structural components, and fire protection.
The primary source of information on the condition of the components was the current university staff and trades. They are in the facilities daily and generally know what systems were performing adequately and which were substandard. The consulting firm's team of engineers interviewed the entire range of university staff members to get a good list of the perceived problems. Many of the university staff members were organized in disciplines which correlated well with the experience of the survey team (i.e., electrical, plumbing, mechanical, etc.).
Staff from the consulting firm also reviewed the historical files and documentation on the buildings. Where available, they also reviewed original design documents and the files that Illinois State University kept on subsequent improvements. These files were useful in pinpointing the age of some of the systems. Review of these documents also helped point out the systems that were having reoccurring problems. The final information item was a physical inspection of the items in the audit. This generally confirmed the information supplied previously.
After the consulting firm's survey team gathered information on the condition of the items currently in place, they evaluated the condition of each item and assigned a recommended year of replacement. This was typically based upon the anticipated life of the item, its current condition, and the survey crew's opinion on remaining life.
Staff at the consulting firm then generated cost opinions for items that required repair or replacement. Where possible, Means Construction Cost data was used. The consulting firm's staff also contacted contractors and vendors for specialty items. Where no other sources were available, staff generated their own opinion of construction costs. The firm's engineers then assigned priorities based upon a combination of condition and consequences of failure.
During the course of the consulting firm's survey, the Office of Residential Life asked them to prepare presentation boards to document some of the deteriorated conditions that they had observed. Initially these presentation boards were used to help convince the administrative staff and the student body of Illinois State University of the need for infrastructure improvements.
Staff members at the consulting firm prepared a presentation board for each individual campus and for the facilities as a whole. Each board had photographs of deteriorated elements and dollar totals for the required improvements. When the survey was complete, the consulting firm prepared a Powerpoint slide presentation, with appropriate handouts, to present the results of the survey to the senior level staff of the Office of Residential Life. Portions of this presentation were used by the author and his staff for additional presentations to the executive administration.
Financing needed repairs through increasing board and room fees in the residence halls would make the cost of living in the halls prohibitive for many students. However, the audit made it clear that the current level of funding would fall far short of what would be needed to complete necessary renovations in the residence halls. This realization led the university community to propose a referendum to increase student fees to finance needed infrastructure repairs. The referendum, called the Campus Facilities Enhancement Project, proposed $42 million in campus improvements, $25 million of which was dedicated to infrastructure work in the residence halls. Publicity in the campus newspaper, the Daily Vidette, and presentations to student leaders and university administrators, based on information provided by the audit, emphasized that although the residence halls appeared to be in acceptable condition, they were falling apart from the inside out. By the time the Campus Facilities Enhancement Project was voted on by the general student body on February 13, 1996, support for it was strong and it passed by an 83 percent majority.
Under the terms of the referendum, a $55 per semester construction/renovation fee will be charged to all university students for ten years beginning in the 1998 fall semester when work covered under the Campus Facilities Enhancement Project is scheduled to begin. At the end of the ten years, the enhancement fee will be discontinued but subject to review.
Now that funding was secured, it became the task of the university staff, with assistance from the consulting firm, to prepare a ten-year renovation plan. All of the items in the report were reevaluated and ranked based strictly on need. Items that logically belonged together were then reorganized and combined into projects. These projects were assigned a budgetary year of action that took into account the need, the programming impact, and the budgetary guidelines.
What has emerged is a needs driven, ten year plan for improvement of the infrastructure of the residence halls facilities. The university now has a road map into the future.
The results of the facilities audit conducted at Illinois State University of residence hall buildings and infrastructure with 2.2 million gross square footage (GSF) revealed an $80 million deferred maintenance backlog. At an average CRV of $100/GSF ($230 million), the FCI is .3478, indicating that the condition of the residence halls was poor.
The facilities audit concluded:
The infrastructure facilities audit process has been very beneficial to the university. Not only does the university staff have a clear understanding of the condition of their facilities at this time, they have a computerized management system that will become a living document. As the university replaces or renovates an item, they revise the entry on the computerized database and they will have current data on their facility at all times.
Ernst & Young. Best Practices Report: An Analysis of Management Practices that Impact Performance, 1992. A joint project with the American Quality Foundation. New York.
Kaiser, H. H. A Foundation to Uphold, a study of facilities conditions at U.S. colleges and universities. A collaboration of APPA: The Association of Higher Education Facilities Officers and the National Association of College and University Business Officers, with assistance from Sallie Mae. Alexandria, Virginia: APPA, 1996.
Rush, S. C., & Johnson, S. L. The Decaying American Campus: A Ticking Time Bomb. A joint report of the APPA and NACUBO in cooperation with Coopers & Lybrand. Alexandria, Virginia: APPA, 1989.