real property asset management principles and practice
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Real Property Asset Management Principles and Practice. April Heinze, P.E. Director, General Services 14 September 2007. San Diego County Facts. Charter County est. 1850 5 Districts & Supervisors County Administrative Officer w/ 5 Deputies Budget $4.68 billion (FY07/08) - PowerPoint PPT PresentationTRANSCRIPT
Department of General Services
Real Property Asset ManagementPrinciples and Practice
April Heinze, P.E.Director, General Services
14 September 2007
Department of General Services
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San Diego County Facts Charter County est. 1850 5 Districts & Supervisors County Administrative Officer
w/ 5 Deputies Budget $4.68 billion (FY07/08) Full-time equivalents: 17,026 Population: 3,066,820
– 2,601,267 in 18 incorporated cities
– 465,553 in unincorporated area Size: 4,261 Sq Miles
– 3,572 Sq Miles in unincorporated areas
3rd most populous CA County 4th most populous U.S.
metropolitan area
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COSD Real Property Assets
Land– 35,290 acres (not including easements)– 10,321 acres leased (parks, libraries, DPW
bins, parking) Buildings & Structures
– 1,103 owned: 7.9 Million Gross Sq Ft– 115 leased: 1.35 Million Gross Sq Ft
Total Replacement Value of Improvements (not including land) estimated at $3.6 Billion
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Real Property Asset Management
County Real Property Assets are vital to the accomplishment of the County’s mission
Challenges in managing real property include:– Deteriorating facilities– Increasing under-performing assets– Limited capital investment funds– Reliance on costly leasing– Unreliable data for strategic asset management– Multiple departments responsible for management
Asset Management promotes the efficient & economic use of real property through sound management principles
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Linkage to COSD Strategic Plan
Required Disciplines linked to asset management– Essential Infrastructure– Fiscal Stability– Customer Satisfaction– Skilled, Competent and Diverse
Workforce
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COSD Asset Management Responsibility
DGS1,724 acres115 leased facilities561 owned facilities actively maintained (Cat 1-4)657 owned & leased facilities, as needed only
DPW4,192 acres1,928 miles of roads206 bridges8 airports9,866 street lights159 traffic signals
HHSA347 acres1 skilled nursing facility
Parks39,047 acres42 parks3 community centers90 facilities
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Real Property Asset Management Principles
1. Support mission & strategic goals2. Use benchmarks & best practices3. Employ life-cycle cost benefit analysis4. Promote full & appropriate utilization5. Dispose of unneeded assets6. Provide appropriate levels of investment7. Accurately inventory & describe assets8. Employ balanced performance measures9. Advance customer satisfaction10.Provide for safe, secure & healthy workplaces
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Advantages of Asset Management
Establishes a systematic & economical method for periodically updating asset conditions
Avoids surprise equipment or systems failure Determines critical maintenance requirements for
physical assets Optimizes operations & maintenance dollars to
maximize return on investment Develops sound, defensible budgets based on goals
& objectives rather than physical condition alone Ensures consistency of methodology among facility
manager requests Allocates maintenance & repair dollars among
competing requirements & organizations
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Capital Asset ManagementFacility Life Cycle
Land AcquisitionEntitlement/Permits
DesignConstruction
Commissioning
Inventory of AssetsCondition Assessment
Operations & MaintenanceMajor Maintenance/Rehab
Capital Requirement Definition (scope, cost, time)Planning, Prioritizing & Budgeting
Feasibility Studies (lease, build, buy)Environmental Assessments
Only 15% of cost incurred before
occupancy
85% of all cost incurred after construction
Total cost of Ownership
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Appropriate Levels of Investment Annual investment in maintenance
– (Basic + Major Maintenance) * 100 Replacement Value
– Target 2-4% used by IFMA• 2% for Basic Maintenance (does not include services)• 1-2% for Major Maintenance
Capital Outlay investmentFY 04/05 FY 05/06 FY 06/07 FY 07/08$8.2M $7.0M $102M $32.1M
FY04/05 FY05/06 FY06/07 FY07/08Basic Maint $18.23M $19.9M $21.94M $23.39MPlanned Major Maint $3.6M $8.6M $7.7M $12.8MWalk-in Major Maint $22.36M $17.8M $42.2M $2.8M YTD
Total Maintenance $44.1M $46.3M $71.84M $38.99MInvestment % 1.2% 1.29% 2% 1.1% YTD
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Capital Asset Management
Accurate Inventory – some holes in dataCondition Assessment – underwayRequirement Standards – quantity & qualityGap Analysis based on defined goals =
Major Maintenance Requirements SystemMMRS = 5-yr forecast maintain/repair
Capital Improvement Needs AssessmentCINA = 5-yr forecast replace/rehab
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Facility Condition Assessment
Standardized inspection process to produce accurate, consistent & repeatable results
Detailed inspection of facilities, infrastructure, & fixed equipment
Standardized cost data to determine repair & replacement cost
IMS to prioritize current & anticipated maintenance requirements to maximize resource utilization & ROI
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Benchmarks & Best Practices
Facilities Condition Index (FCI)$ Maintenance Req’d = FCI$ Replacement Value
– Target of .05 used by Universities– No current target for County– Outcome of current condition
assessment will be used to establish 1st County goal
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Facility Condition Assessment CAC completed in FY04/05 Sheriff detention completed in FY06/07 Sheriff non-detention ready to start All other facilities underway with completion scheduled
for Jan 2008 (40% complete with inspections as of 7 Sep)– Final reports will be distributed as received– Results will better define Maintenance & Capital needs– Remaining useful life of facilities & components– Recommended repairs & replacements by year– Budget estimates
Recurring inspections recommended every 3-5 years depending on facility type
Cost approximately $0.20-$0.24/SF
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MMIP DEVELOPMENT MODELProject Identification and Review
FacilityPlanning
BoardReview
Routine & Preventive Maintenance /Operations
County Departments
Dept. MM/Requests
MMRSDeveloped
By DGS
Annual Inspection Summary /MM
ProjectRequests
ApprovalRecommendation
for Major Maintenance
made to the GM’s
EMERGENT REQUIREMENT $$ REQUEST
Dept. MM Work Orders
Dept of GeneralServices
(Facilities & PM)
START
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DGS preparesSpending Plans for
EachApprovedproject
Group General ManagersReview & Approve MMIP
ApprovalRecommendation
for Major Maintenance
made to the GM’s
START
MMIP DEVELOPMENT MODELFunding approval and Implementation
Op PlanInstructions
IncludeApprovedprojects
DGSDevelops
MMIPdocument
DGS/CDM reportQuarterly on
Status of projects
DGSExecutes
MajorMaintenance
Program
Upon receiptOf approved
Spending plan,Encumber funds
Central Projects & Acct’g Section
(CPAS) facilitates
Spending planapproval
MMIP
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CINA DEVELOPMENT MODEL
FacilityPlanning
Board Reviews,prioritizes, andRecommendsProjects and
Funding source
GM’s Review, Prioritize
and Authorize Projects for Step II
Action
County Depts. Prepare Required Forms to Include
Justification and Prioritization forms
DGS Prepares the“Call For Projects”
Responses for Review
Call for ProjectsIssued By
the Chief Financial Officer
DGS Capital Planning Assists in Preparation of Necessary
Forms & Associated Operating & Maintenance
Cost Estimates
Commence Step II
Step I Process Initiated
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FacilitiesPlanning
Board Reviews & Recommends
Adoption
County Depts. CompleteRequired Step II Forms to
Include Funding Sources & Construction Cost Estimates
DGS Prepares theCINA
$$$WorkAuthorizations
Group Review & Action
DGS Capital Planning Assists in Preparation of Necessary
Forms & Associated Construction Cost Estimates
GM’s Review, Prioritize
and Approve the CINA
Commence Step II
$$$ SpendingPlans
GM’s s Approve and the CINA to the BOS
for approval
DGS Executes CIP
Op PlanInstructions
IncludeApprovedprojects
DGS/CPAS reportQuarterly on
Status of projects
CINA DEVELOPMENT MODEL
CINA
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CINA Project Score SheetWeighted
Value
SCORE Line Score
Prioritization Ranking
CRITERIA 3 2 1 05 Strategic Plan
LinkageProject clearly supports a County Strategic Initiative
There is a CAO approved goal that includes the project
There is a department approved goal or plan that includes the project
There is no plan linkage
3 15
5 Critical Need: Life, Safety, Emergency
Project needed to correct an existing deficiency
Project needed to correct a potential deficiency
Project promotes or maintains health/safety
No health or safety impacts
3 15
5 Quality of Life Project provides a measurable benefit to the Quality of Life for all county residents
Project provides a measurable benefit to the Quality of Life for a majority of county residents
Project provides a minimal benefit to the Quality of Life for all county residents or a measurable benefit to a smaller population.
No measurable Quality of Life Benefits
2 10
4 State/Federal Mandate-Legal Binding Commitment
Projects with enforceable sanctions or with a legal binding commitment to complete work, with State or Federal funding.
Projects with enforceable sanctions or with a legal binding commitment to complete work, without State or Federal funding.
Projects that have an agreement by the Board of Supervisors to complete work.
No mandate or commitment
1 4
3 Operating Budget Impacts
Project results in quantifiable reduced operating costs
Project has minimal or no new operating costs
Project has minor added operating costs
Project requires significant added operating costs
1 3
3 Maintenance Budget Impacts
Project results in quantifiable reduced maintenance costs
Project has minimal or no new maintenance costs
Project has minor added maintenance costs
Project requires significant added maintenance costs
2 6
3 Customer Service Benefits
Customer service level is significantly increased
Customer service level is moderately increased
Customer service level is maintained
Customer service level is decreased
3 9
Prioritization Ranking Score 62
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CINA Timeline Aug-DGS prepares instructions, CFO issues call for projects,
departments prepare draft forms identifying capital requirements
24 Sep-Departments submit draft forms for new or changed projects
Oct-DGS prepares or updates preliminary estimates & submits budget proposals to FBP
Nov-FPB reviews current submissions & existing CINA, funding requirements, establishes priorities & prepares recommendations for GMs
Jan/Feb-CINA requirements submitted to CFO for consideration as part of annual budget allocation
Mar/Apr-FPB revises program allocations based on the established budget, CINA is modified and published
May-CINA approved as part of budget Jun-Departments submit program requirements to DGS to
initiate design for approved projects