Department of General Services Real Property Asset Management Principles and Practice April Heinze, P.E. Director, General Services 14 September 2007

Department of General Services 2 9/14/07 Real Property Asset Management San Diego County Facts  Charter County est  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  3 rd most populous CA County  4 th most populous U.S. metropolitan area

Department of General Services 3 9/14/07 Real Property Asset Management 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

Department of General Services 4 9/14/07 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

Department of General Services 5 9/14/07 Real Property Asset Management Linkage to COSD Strategic Plan  Required Disciplines linked to asset management –Essential Infrastructure –Fiscal Stability –Customer Satisfaction –Skilled, Competent and Diverse Workforce

Department of General Services 6 9/14/07 Real Property Asset Management COSD Asset Management Responsibility DGS  1,724 acres  115 leased facilities  561 owned facilities actively maintained (Cat 1-4)  657 owned & leased facilities, as needed only DPW  4,192 acres  1,928 miles of roads  206 bridges  8 airports  9,866 street lights  159 traffic signals HHSA  347 acres  1 skilled nursing facility Parks  39,047 acres  42 parks  3 community centers  90 facilities

Department of General Services 7 9/14/07 Real Property Asset Management Real Property Asset Management Principles 1. Support mission & strategic goals 2. Use benchmarks & best practices 3. Employ life-cycle cost benefit analysis 4. Promote full & appropriate utilization 5. Dispose of unneeded assets 6. Provide appropriate levels of investment 7. Accurately inventory & describe assets 8. Employ balanced performance measures 9. Advance customer satisfaction 10. Provide for safe, secure & healthy workplaces

Department of General Services 8 9/14/07 Real Property Asset Management 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

Department of General Services 9 9/14/07 Real Property Asset Management Capital Asset Management Facility Life Cycle Land Acquisition Entitlement/Permits Design Construction Commissioning Inventory of Assets Condition Assessment Operations & Maintenance Major 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

Department of General Services 10 9/14/07 Real Property Asset Management 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 investment FY 04/05FY 05/06FY 06/07FY 07/08 $8.2M$7.0M$102M$32.1M FY04/05FY05/06FY06/07FY07/08 Basic Maint$18.23M$19.9M$21.94M$23.39M Planned Major Maint$3.6M$8.6M$7.7M$12.8M Walk-in Major Maint$22.36M$17.8M$42.2M$2.8M YTD Total Maintenance$44.1M$46.3M$71.84M$38.99M Investment %1.2%1.29%2%1.1% YTD

Department of General Services 11 9/14/07 Real Property Asset Management Capital Asset Management  Accurate Inventory – some holes in data  Condition Assessment – underway  Requirement Standards – quantity & quality  Gap Analysis based on defined goals =  Major Maintenance Requirements System  MMRS = 5-yr forecast maintain/repair  Capital Improvement Needs Assessment  CINA = 5-yr forecast replace/rehab

Department of General Services 12 9/14/07 Real Property Asset Management 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

Department of General Services 13 9/14/07 Real Property Asset Management 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 1 st County goal

Department of General Services 14 9/14/07 Real Property Asset Management 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

Department of General Services 15 9/14/07 Real Property Asset Management MMIP DEVELOPMENT MODEL Project Identification and Review Facility Planning Board Review Facility Planning Board Review Routine & Preventive Maintenance /Operations County Departments County Departments Dept. MM/ Requests MMRS Developed By DGS MMRS Developed By DGS Annual Inspection Summary /MM Project Requests Approval Recommendation for Major Maintenance made to the GM’s EMERGENT REQUIREMENT $$ REQUEST Dept. MM Work Orders Dept of General Services (Facilities & PM) Dept of General Services (Facilities & PM) START

Department of General Services 16 9/14/07 Real Property Asset Management DGS prepares Spending Plans for Each Approved project DGS prepares Spending Plans for Each Approved project Group General Managers Review & Approve MMIP Group General Managers Review & Approve MMIP Approval Recommendation for Major Maintenance made to the GM’s START MMIP DEVELOPMENT MODEL Funding approval and Implementation Op Plan Instructions Include Approved projects Op Plan Instructions Include Approved projects DGS Develops MMIP document DGS Develops MMIP document DGS/CDM report Quarterly on Status of projects DGS/CDM report Quarterly on Status of projects DGS Executes Major Maintenance Program DGS Executes Major Maintenance Program Upon receipt Of approved Spending plan, Encumber funds Upon receipt Of approved Spending plan, Encumber funds Central Projects & Acct’g Section (CPAS) facilitates Spending plan approval Central Projects & Acct’g Section (CPAS) facilitates Spending plan approval MMIP

Department of General Services 17 9/14/07 Real Property Asset Management CINA DEVELOPMENT MODEL Facility Planning Board Reviews, prioritizes, and Recommends Projects and Funding source Facility Planning Board Reviews, prioritizes, and Recommends Projects and Funding source GM’s Review, Prioritize and Authorize Projects for Step II Action GM’s Review, Prioritize and Authorize Projects for Step II Action County Depts. Prepare Required Forms to Include Justification and Prioritization forms County Depts. Prepare Required Forms to Include Justification and Prioritization forms DGS Prepares the “Call For Projects” Responses for Review DGS Prepares the “Call For Projects” Responses for Review Call for Projects Issued By the Chief Financial Officer Call for Projects Issued By the Chief Financial Officer DGS Capital Planning Assists in Preparation of Necessary Forms & Associated Operating & Maintenance Cost Estimates DGS Capital Planning Assists in Preparation of Necessary Forms & Associated Operating & Maintenance Cost Estimates Commence Step II Step I Process Initiated

Department of General Services 18 9/14/07 Real Property Asset Management Facilities Planning Board Reviews & Recommends Adoption Facilities Planning Board Reviews & Recommends Adoption County Depts. Complete Required Step II Forms to Include Funding Sources & Construction Cost Estimates County Depts. Complete Required Step II Forms to Include Funding Sources & Construction Cost Estimates DGS Prepares the CINA DGS Prepares the CINA $$$ Work Authorizations Group Review & Action Group Review & Action DGS Capital Planning Assists in Preparation of Necessary Forms & Associated Construction Cost Estimates DGS Capital Planning Assists in Preparation of Necessary Forms & Associated Construction Cost Estimates GM’s Review, Prioritize and Approve the CINA GM’s Review, Prioritize and Approve the CINA Commence Step II $$$ Spending Plans GM’s s Approve and the CINA to the BOS for approval GM’s s Approve and the CINA to the BOS for approval DGS Executes CIP Op Plan Instructions Include Approved projects Op Plan Instructions Include Approved projects DGS/CPAS report Quarterly on Status of projects DGS/CPAS report Quarterly on Status of projects CINA DEVELOPMENT MODEL CINA

Department of General Services 19 9/14/07 Real Property Asset Management CINA Project Score Sheet Weighted Value SCORE Line Score Prioritization Ranking CRITERIA Strategic Plan Linkage Project 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 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 Quality of LifeProject 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 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 14 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 13 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 26 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 39 Prioritization Ranking Score 62

Department of General Services 20 9/14/07 Real Property Asset Management 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