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)

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Real Property Asset Management Principles and Practice

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Real property asset management principles and practice

Real Property Asset ManagementPrinciples and Practice

April Heinze, P.E.

Director, General Services

14 September 2007


San diego county facts

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

Real Property Asset Management


Cosd real property assets

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

Real Property Asset Management


Real property asset management

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

Real Property Asset Management


Linkage to cosd strategic plan

Linkage to COSD Strategic Plan

  • Required Disciplines linked to asset management

    • Essential Infrastructure

    • Fiscal Stability

    • Customer Satisfaction

    • Skilled, Competent and Diverse Workforce

Real Property Asset Management


Cosd asset management responsibility

COSD Asset Management Responsibility

Real Property Asset Management


Real property asset management principles

Real Property Asset Management Principles

  • Support mission & strategic goals

  • Use benchmarks & best practices

  • Employ life-cycle cost benefit analysis

  • Promote full & appropriate utilization

  • Dispose of unneeded assets

  • Provide appropriate levels of investment

  • Accurately inventory & describe assets

  • Employ balanced performance measures

  • Advance customer satisfaction

  • Provide for safe, secure & healthy workplaces

Real Property Asset Management


Advantages of 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

Real Property Asset Management


Capital asset management facility life cycle

Capital Asset ManagementFacility Life Cycle

Only 15% of cost incurred before occupancy

Total cost

of Ownership

85% of all cost incurred after construction

Real Property Asset Management


Appropriate levels of investment

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

Real Property Asset Management


Capital 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

Real Property Asset Management


Facility condition assessment

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

Real Property Asset Management


Benchmarks best practices

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

Real Property Asset Management


Facility condition assessment1

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

Real Property Asset Management


Real property asset management principles and practice

MMIP DEVELOPMENT MODEL

Project Identification and Review

Dept of

General

Services

(Facilities

& PM)

County

Departments

Dept. MM Work

Orders

START

Routine &

Preventive

Maintenance

/Operations

EMERGENT REQUIREMENT $$ REQUEST

  • Annual Inspection

  • Summary /MM

  • Project

  • Requests

Facility

Planning

Board

Review

MMRS

Developed

By DGS

Approval

Recommendation

for Major

Maintenance

made to the GM’s

Dept. MM/

Requests

Real Property Asset Management


Real property asset management principles and practice

MMIP DEVELOPMENT MODEL

Funding approval and Implementation

Group General Managers

Review & Approve MMIP

Approval

Recommendation

for Major

Maintenance

made to the GM’s

START

DGS prepares

Spending

Plans for

Each

Approved

project

DGS

Develops

MMIP

document

Op Plan

Instructions

Include

Approved

projects

DGS/CDM report

Quarterly on

Status of projects

MMIP

Central Projects

& Acct’g Section

(CPAS)

facilitates

Spending plan

approval

DGS

Executes

Major

Maintenance

Program

Upon receipt

Of approved

Spending plan,

Encumber funds

Real Property Asset Management


Real property asset management principles and practice

CINA DEVELOPMENT MODEL

Step I

Process

Initiated

GM’s Review,

Prioritize

and Authorize

Projects for Step II

Action

Call for Projects

Issued By

the Chief Financial

Officer

Commence

Step II

Facility

Planning

Board Reviews,

prioritizes, and

Recommends

Projects and

Funding source

County Depts. Prepare

Required Forms to Include

Justification and

Prioritization forms

DGS Prepares the

“Call For Projects”

Responses for Review

DGS Capital Planning Assists

in Preparation of Necessary

Forms & Associated

Operating & Maintenance

Cost Estimates

Real Property Asset Management


Real property asset management principles and practice

CINA DEVELOPMENT MODEL

DGS Prepares the

CINA

Facilities

Planning

Board Reviews

& Recommends

Adoption

GM’s Review,

Prioritize

and Approve the

CINA

Commence

Step II

County Depts. Complete

Required Step II Forms to

Include Funding Sources &

Construction Cost Estimates

GM’s s Approve and

the CINA to the BOS

for approval

Group

Review &

Action

$$$

Work

Authorizations

$$$

Spending

Plans

Op Plan

Instructions

Include

Approved

projects

CINA

DGS Capital Planning Assists

in Preparation of Necessary

Forms & Associated

Construction Cost Estimates

DGS/CPAS report

Quarterly on

Status of projects

DGS Executes CIP

Real Property Asset Management


Cina project score sheet

CINA Project Score Sheet

Real Property Asset Management


Cina timeline

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

Real Property Asset Management


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