Understanding FCI: the financial strategy for our campus assets

Knowing when to repair and when to replace campus assets

As buildings age their condition naturally deteriorates. During that time, we invest in maintenance, repairs, and renewals (i.e. strategic maintenance) until we ultimately replace the building with a new one (i.e. capital investment). Each building on campus serves a unique purpose so the balance between strategic maintenance and capital investment is unique to each building. How do we determine when and how much to invest?

We can measure the condition of each building using a Facility Condition Index (FCI) score and use that score to understand the big picture.

What is the Facility Condition Index?

FCI is the total cost of needed building repairs and renewal divided by the current cost of replacing the building. Each building’s FCI score reflects the current condition of the building: good, fair, poor, or critical. It is normal to see buildings in all stages of condition.

For example, the bubble diagram below shows the condition of our core buildings as assessed by the Ministry of Advanced Education in 2016.

  • The size of the bubble represents the square footage, so bigger buildings are bigger bubbles.
  • The colour represents the classification of the condition. Green is good and these are generally the newer buildings; red is critical and these are generally older buildings with end of life systems or equipment.
  • The blue trend line is the condition deterioration you would expect to see as a building ages.

Seeing our investments make a difference in building conditions

There are two ways we can improve a building, through capital investment or strategic maintenance. We’re working to find the best blend of both.

For example, we see a number of interesting things in the 2016 assessment:

  • Our current overall condition are in the high orange zone, i.e. POOR, and we need to get it to the yellow zone over the next 10 years. At POOR we are doing too much reactive repair and wasting money.
    • We need to focus our minor capital projects on the buildings in the high orange area to reset these buildings down below the red line.
    • We also need to focus our strategic operations and maintenance on the green and yellow buildings to keep them from trending above the orange line.
  • Many of our critical buildings are slated for major renewal or demolition (DH Copp, SUB, Powerhouse, Bio Sci), this will help improve our overall condition.

In 2016–17, we completed $43 million worth of capital projects funded jointly by the Government of British Columbia’s Ministry of Advanced Education and UBC; this represents a fraction of our total capital spend on new buildings. Our total capital spend enabled us to bring our FCI from 0.32 to 0.30.

Where are we going in 2017-18?

The assessment below shows a projection of the condition of our core buildings for 2017-18.

  • Notice how many red bubbles, i.e. CRITICAL buildings, have disappeared thanks to building renewal or replacement. This represents improved condition or a fresh new start with modern building techniques.
  • Most of these bubble turn orange (renewals) or green (replacement).
  • Select yellow buildings actually move into the green.

Click here to see an animated comparison between the two graphs.

How does FCI inform our financial strategy?

While these diagrams give us a snapshot of building conditions for the current year, we can also compare diagrams from year to year to see if our investments are steadily improving the overall condition of facilities—which is what we want to see.

Our goal is to reach an FCI of 0.18, a condition of buildings that demonstrates that we are spending funds in the wisest possible manner when considering the cost of a building’s repair and maintenance relative to its overall lifespan.

Rather than solely relying on historical spending, we can use the facility condition data to articulate the need for a more precise amount to be spent in any given year to provide a balance between reliable spaces and spending capital dollars.

As stewards of campus assets, it’s important that our financial management builds trust with campus stakeholders so that UBC continues to reinvest in us.

 

 

Interested in learning more about our approach to campus management?

The EAOS program is helping us find a better balance between the proactive and reactive maintenance needs.