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HomeMy WebLinkAboutMINUTES - 08112009 - C.54Michael J. Lango Director Terry Mann Deputy Director Stephen Silveira Administrative Services Officer CONTRA COSTA COUNTY General Services Department ADMINISTRATIVE SERVICES 1220 Morello Avenue • Martinez, CA 94553 (925) 313-7100 Phone • (925) 313-7108 Fax DATE: July 20, 2009 TO: Finance Committee Supervisor John Gioia, District 1, Chair Supervisor Susan Bonilla, District 4, Vice Chair FROM: Mike Lango, Director of General Services SUBJECT: REAL ESTATE ASSET MANAGEMENT PLAN ___________________________________________________________________________________________ Recommendation Receive report for a proposed Real Estate Asset Management Plan (RAMP) to guide the policy and program elements to effectively manage the County’s general government real estate assets and direct the Department of General Services, in consultation with the County Administrator’s Office, to initiate the plan. Summary The proposed Real Estate Asset Management Plan (RAMP) would be a working policy and management guide for managing the life cycle of County real estate assets including the acquisition, leasing, design, construction, maintenance, renewal, and disposition of real property used to support County operations. Comprehensive asset management planning will enable the County to manage its real estate assets as a part of an integrated system of facilities and resources. In addition, asset management principles can be used to stimulate strategic and proactive thinking to effectively utilize, preserve, and maximize the value of County real estate assets. The proposed Real Estate Asset Management Plan has four primary goals and 13 essential objectives that are described in the attached report. In addition, next steps and future actions necessary to implement RAMP are also included. Attachment c: David Twa, County Administrator Lisa Driscoll, County Finance Director -2- Department of General Services Real Estate Asset Management Plan July 2009 Introduction The proposed Real Estate Asset Management Plan (RAMP) is a working policy and management guide for managing the life cycle of county property including the acquisition, leasing, design, construction, maintenance, renewal, and disposition of real property that is used to support County operations. Comprehensive asset management planning will enable the County to manage its real estate assets as a part of an integrated system of facilities and real estate resources. In addition, asset management principles can be used to stimulate strategic and proactive thinking to effectively utilize, preserve, and maximize the value of County real estate assets. RAMP Program Goals RAMP has four primary interrelated goals, which must implemented within an integrated framework to achieve maximum strategic benefits and results: Goal 1. Identify and meet the County’s space needs in the most efficient and cost effective way possible. Goal 2. Extend the useful life of County real estate assets with a focus on maximizing value over the life of a facility by making strategic capital investments. Goal 3. Establish best management practices relative to facilities maintenance and property management. Goal 4. Engage in partnerships with departments and other public agencies to better plan for facilities needs, capital renewal, and joint venture development opportunities. RAMP Program Objectives The following information describes the elements involved in developing a comprehensive real estate asset management plan. 1. Real Estate Asset Management Policy. The County real estate portfolio is an asset to be used to maximize long-term public benefit. The General Services Department, in consultation with the County Administrator, should develop a policy to guide implementation of RAMP goals and objectives. 2. Real Estate Inventory. The General Services Department should identify and create a comprehensive database of the County’s real estate assets, including property descriptions and estimated valuations. The inventory should identify whether assets are fully utilized or have expansion, disposition, or revenue potential. -3- RAMP Program Objectives (continued) 3. Needs Assessment and Master Planning. The General Services Department should work with County departments, under direction of the County Administrator, to develop master planning documents that depict the potential future growth of programs and/or facility needs throughout different geographic regions and/or functional areas of the County. These plans have a 15 to 20 year planning horizon and should be updated every five years. 4. Facilities Condition Assessments. The General Services Department has completed a comprehensive assessment of 103 County buildings totaling over 3 million square feet to identify deficiencies in building conditions and systems. The assessment included estimated replacement cost and capital renewal requirements to better plan for necessary facilities improvements and should be updated every 5 years with a 10 year planning horizon. 5. Real Estate Management Strategy. Using the Real Property Inventory, Master Plans, and the Facilities Condition Assessments, a real estate management strategy should be developed that integrates information to strategically assess and plan for County facilities needs over time. This strategy initiative includes evaluation of land and building acquisition, leasing, adaptive reuse, and disposition. It should be updated on an annual basis with a planning horizon of 10 to 15 years. 6. Leasing. The General Services Department administers leases where the County acts as a landlord and a tenant. Revenue leases where the County is a landlord are negotiated and managed to produce the highest return to the County. Acquisition leases where the County is a tenant are negotiated and managed to minimize the County’s costs. RAMP policy and program objectives would include comprehensive review of the County’s leasing portfolio to identify and incorporate best management and strategic practices. 7. Capital Improvement Plan. The General Services Department should prepare a five- year Capital Improvement Plan (CIP) that identifies capital improvement needs including the relationship between operations and maintenance costs and investments in capital renewal and replacement. This plan would be updated and approved by the Board of Supervisors on an annual basis with direction from the County Administrator and input from departments as part of the budget development process. 8. Design & Construction. The General Services Department performs and engages professional consultants to provide architectural and engineering services. Construction documents should be developed based on pre-established building standards and design criteria including space standards, life cycle cost analyses, and evaluation of maintenance and operational impacts. 9. Operations and Maintenance. The General Services Department identifies and implements custodial, grounds, and preventive maintenance standards, corrects building deficiencies, and monitors building system performance to extend the useful life of facilities to the extent possible with the County’s budgetary requirements. RAMP will accentuate comprehensive life-cycle cost analysis to guide strategic decisions relative to new construction, capital renewal, and investment. -4- RAMP Program Objectives (continued) 10. Surplus Real Property. The real property inventory will be used to identify underutilized County owned properties and evaluate opportunities for revenue generation (leasing) or declaring property surplus to the needs of the County, which is then eligible for sale through a public auction or negotiated sales process. 11. Financing Capacity Analysis. Assess the overall ability to finance capital projects including revenue and expenditure projections, fund balances available to pay for facilities maintenance, capital renewal, new construction, property acquisition, and a comprehensive review of the County’s existing debt service obligations, cash and revenue projections, and capacity to finance future capital projects. 12. Internal Services Fund for Facilities Maintenance Evaluate the feasibility of developing an Internal Services Fund for facilities maintenance to improve planning and paying for deferred maintenance and capital renewal of buildings. An ISF would stabilize funding for building repairs and establish a more equitable and consistent process for maintaining the County’s building assets. 13. Administration of RAMP Partnerships. Under direction of the County Administrator, the Department of General Services should initiate collaborative partnerships with County departments to identify how departments are currently planning for and utilizing real estate assets and to manage department space needs within the framework of RAMP policy, goals, and objectives. RAMP Next Steps/Future Actions To implement RAMP, the Department of General Services would initiate the following actions. 1. Real Estate Asset Management Policy In consultation with the County Administrator and Department Heads, identify and develop policies and procedures to guide implementation of RAMP goals and objectives including policies and procedures to determine optimal business decisions and strategies relative to leasing or owning real estate to support County operations. Estimated Time: 4 to 6 months Estimated Cost: Budgeted Resources: CAO/GSD staff 2. Real Estate Inventory Develop and maintain a comprehensive real property inventory of the County’s general government real estate assets that includes basic information such as property size, deed reference, use, zoning, fair market value, facility information, and source of purchase funds/debt obligations. Estimated Time: 6 to 12 months Estimated Cost: Budgeted Resources: GSD staff -5- RAMP Next Steps/Future Actions (continued) 3. Needs Assessment and Master Planning Engage departments to develop comprehensive needs assessment and master planning documents to guide decisions related to utilization of existing assets and the need for additional facilities with a planning horizon of 5 to 15 years. Estimated Time: 12 months Estimated Cost: Budgeted Resources: CAO/Department/GSD staff 4. Facilities Condition Assessment Update County Facility Condition Assessment in fiscal year 2012. Estimated Time: 6 months Estimated Cost: $100,000 Resources: GSD staff/consultants 5. Real Estate Valuation and Insurance Develop and implement an appropriate method of routinely appraising and insuring the value of County owned real property. Estimated Time: 4 to 6 months Estimated Cost: Budgeted Resources: CAO/Risk Management/GSD staff 6. Capital Improvement Plan Develop a 5-year capital improvement plan using the Facilities Life-cycle Investment Program (FLIP) database and prepare annual reports to the County Administrator as part of the budget development process. Estimated Time: 9 months Estimated Cost: $100,000 Resources: GSD staff/consultants 7. Operations and Maintenance Complete an accurate accounting of County-owned facilities, systems and equipment and enter into a database designed to dispatch routine scheduled maintenance orders, track maintenance, and in predicting useful life and capital renewal needs. Estimated Time: 4 to 6 months Estimated Cost: Budgeted Resources: GSD staff -6- RAMP Next Steps/Future Actions (continued) 8. Financing Capacity Identify and implement practices to reduce operating costs, extend the life of facilities, capture grant funds, maximize lease revenues, minimize debt interest payments, develop and refine monitoring of real estate related revenue and expenditures, and identify viable funding strategies to finance capital renewal and improvement projects. Estimated Time: Immediate/ongoing Estimated Cost: Budgeted Resources: CAO/GSD staff 9. Surplus Real Property Develop and maintain information relative to real property that may be surplus to the needs of the County to identify and facilitate possible disposition strategies. Estimated Time: 3 months/ongoing Estimated Cost: Budgeted Resources: CAO/GSD staff 10. Internal Services Fund for Facilities Maintenance Evaluate the feasibility of developing an Internal Services Fund for facilities maintenance to improve planning and paying for deferred maintenance and capital renewal of buildings. An ISF would help stabilize funding for building repairs and establish a more equitable and consistent process for managing and maintaining the County’s building assets. Estimated Time: 12 months Estimated Cost: Budgeted Resources: CAO/Auditor/GSD staff 11. Partnerships and Resources Work with departments, identify technology requirements, and review programs in other counties to identify best practices related to RAMP initiatives and implementation. Estimated Time: 3 months Estimated Cost: Budgeted Resources: GSD staff