1. Using Total Cost of Ownership To Make Decisions League of Innovation Conference March 13, 2013 Greg Nelson Vice President of Administrative Services

2. San José City College Founded in 1921 10 th Oldest Community College in California Accredited by the ACCJC/WASC Approximately 10k Students San José City College

3. Accreditation Requirements Plan to Support the Operations and Maintenance of New Planned Facilities Plan must include actual calculations of Total Cost of Ownership of New Facilities & Equipment Plan Also Must Include Planned Maintenance and Maintaining Existing Equipment of Existing Facilities

4. A 2010 Retrospective No Identifiable Methodology No Preventative Maintenance No Consistent Data No Calculation of TCO No Formalized Process Placed On Sanctions

5. Total Cost of Ownership Traditionally Used for IT Hardware Traditionally Used for IT Software Used in Many Corporate Sectors for Investment purposes What About Higher Education?

6. What is Your Definition of Total Cost of Ownership?

7. http://www.savemoneywithgates.com/images /iceberg-large.jpg

8. TCO Lifecycle

9. San José City College Overall: “…to determine a value that will reflect the true, effective cost of the San José City College facility including planning, design, constructing and equipping of the facility and also the recurring costs to operate the facility over the useful lifespan on the facility.”

10. College Goals Related to TCO 1. Establish an agreed upon systematic procedure for the evaluation of existing and proposed college facilities 2. Utilize the concept of to develop a process for the evaluation of facilities that can be integrated into the overall TCO 3. Develop a procedure for the assessment of existing and proposed facilities that utilizes existing data from college files

11. College Goals Related to TCO 4. Ensure that the database developed for the procedure is compatible with current state reporting systems 5. Design the prototype system in a manner that allows the College to annually update the information in the system and add additional data elements related to planning and budgeting

12. Building the Foundation Formalized Plan and Process Assessed All Campus Facilities Instituted Data Collection Process Established TCO Equation Link Process to Decision Making

13. How Did We Approach It? Reviewed Revised Master Plan Demolishing and New Construction What Data Was Present How Are We Integrating Preventative Maintenance Issues What Was Missing

14. San José City College Total Cost of Ownership Process Facilities Master Plan ExistingNew Ongoing Costs Total Cost of Ownership Gilbane

15. Existing Facilities Approximately 480k Square Feet of Existing Space Some Buildings Scheduled for Demolishing Buildings That Need Non-Aesthetic Upgrades Newer Buildings Built in Last 10 years Buildings from 1948 to 2012 Campus is Land Locked

16. NEW DEMO PLAN JAGUAR GYM

17. New Facilities Renovate Existing Vo-Tech Facilities New Media Arts Center New Kinesiology, Athletics & Wellness Bldg. Underground Infrastructure Improvements New Campus Loop Road

19. San José City College Total Cost of Ownership Process Facilities Master Plan ExistingNew Ongoing Costs Total Cost of Ownership Gilbane

20. Ongoing Costs Payroll & Benefits – Custodial, Facilities Maintenance, Grounds, Management & Support Staff For These Employee Groups Elevator & Other Service Related Contracts Taxes – If Any

21. Ongoing Costs Energy, Water/Sewer, & Gas Maintenance Costs i.e. Filters, Bulbs etc. Telecommunication Related Costs

22. Present Value (R & S) Current value of existing facilities based on Santa Clara County Assessors Office and Commercial Rates in South bay (Buildings older than 1980 with no improvements value at 35% of replacement value. Buildings after 1980 with renovation, seismic upgrades or new facilities value at 80-90% of replacement value) Some Counties or Municipalities Complete Assessed Value for College For Exemption Calculations Multi-County Service Areas With Capital Assets Can Vary By County

23. Present Value (Replacement) Costs associated with replacing a facility or unit of a facility at the present fair market value or other third party assessment if fmv not available Gilbane Building Company and Foundation for Community Colleges (FUSION Database) Gilbane for Continuing and New Facilities Foundation for Community Colleges for Buildings Scheduled to be Demolished

24. TCO Equation TCO = REPL – RES + E + W+ OM&R + O + P TCO = Total Cost of Ownership REPL = Present Value of Capital Replacement Costs RES = Present Value (resale value, salvage value) E = Present Value of Energy Costs W = Present Value of Water Costs OM&R = Present Value of Operating, Maintenance & Repairs Costs O = Present Value of other known costs (contracts for services) P = Payroll Costs of Maintenance & Custodial Personnel

25. Preventative Maintenance

27. Which One Are You?

28. Total Costs of Ownership Calculations Assumptions Total Gross Square Footage for SJCC Campus840,528 Total Assignable Square Footage for SJCC Campus435,108 Number of Custodians8 Number of Grounds Personnel2 Number of Maintenance Personnel7 Number of Managers for above areas2.25 Total Employee Count19 Annulaized Cost of Custodians952,283 Annulaized Costs of Grounds Personnel164,636 Annualized Costs of Maintenance Personnel608,786 Annualized Costs of Managers for above areas246,132 Total Salary & Benefits1,971,837 Custodians Cost per Square foot$2.19 Maintenance Cost per Square foot$0.72 Grounds Cost per Square Foot of outside space (Total Acreage less Gross Square Footage)$8.65 Managers Cost per Square foot$0.29 Annual Water Usage for May 2011- April 2012$132,236.29 Cost Per Square Foot of Assignable Space$0.16 Annual Constellation Gas usage for May 2011 - April 2012$80,168.00 Annual PG&E Gas usage for May 2011 - April 2012$56,395.00 Cost Per Square Foot of Assignable Space$0.31 Total Gas usage$136,563.00 Annual Constellation Energy usage for May 2011 - April 2012$271,220.03 Annual PG&E Energy usage for May 2011 - April 2012$1,011,897.97 Cost Per Square Foot of Assignable Space$2.95 Total Energy usage$1,283,118.00

30. Where We Are Now Removed From Sanctions Clear Calculations and Assumptions Making Informed Decisions Transparent to All Stakeholders Proven Process Good Data Sets and Criteria

31. Full Documents http://www.sjcc.edu/data/files/galle ry/FacilitiesFileGallery/20112012_SJ CC_Total_Cost_of_Ownership.pdf http://www.sjcc.edu/data/files/galle ry/FacilitiesFileGallery/20112012_SJ CC_Total_Cost_of_Ownership.pdf

33. It Really Works!!!