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Lancaster County Replacement Facility Development Strategy

Lancaster County Replacement Facility Development Strategy. Presented by: CGL Capital Solutions May 19, 2011. A World of Solutions. Agenda. Overview of CGL Capital Solutions Discussion of project alternatives benefits and limitations Description of financing solutions

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Lancaster County Replacement Facility Development Strategy

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  1. Lancaster County Replacement Facility Development Strategy Presented by: CGL Capital Solutions May 19, 2011 A World of Solutions

  2. Agenda Overview of CGL Capital Solutions Discussion of project alternatives benefits and limitations Description of financing solutions Detail the procurement process Description of the menu of services for the Request for Proposals A World of Solutions

  3. CGL Capital Solutions Developer and financer of mission critical public infrastructure for the Corrections, Justice and Public Safety Markets We are truly PARTNERS • Development includes ALL aspects of a project including: site acquisition, entitlement, permitting, financing, funding, planning, sustainable design, procurement, construction management, commissioning, training, warranty, facility maintenance, life-cycle management, facility closures, and excess property reuse planning. • Financing includes sourcing the initial capital outlay, ongoing capital expenditures and budgeting operational cost such as staffing, maintenance and utilities. A World of Solutions

  4. Options Status quo Renovate existing jail and build a smaller re-entry facility Renovate existing jail and build Phase 1 of full replacement Build full replacement facility A World of Solutions

  5. Option 1: Status Quo PROS CONS Safety and security issues from overcrowding Excess labor costs Excess utility costs On-going maintenance and equipment replacement No increased capacity • No new capital expenditures A World of Solutions

  6. Option 2: Renovate & Build CCRE PROS CONS Operations of two facilities Excess labor costs Excess utility costs On-going maintenance and equipment replacement No additional high custody beds • Lower capital commitment • Beginning to address the overcrowding issues • All the benefits of re-entry programming A World of Solutions

  7. Option 3: Renovate & Build Phase I PROS CONS Most expensive operational model for staffing, utilities, maintenance Paying for both the existing facility renovations and the full build-out support structure Most expensive per inmate capital outlay On-going maintenance and equipment replacement • Completely solves overcrowding issue • Defers capital expenses A World of Solutions

  8. Option 4: Full Replacement PROS CONS Largest capital outlay • Most efficient operational model for staffing, utilities, maintenance • Safest and most secure • Additional capacity for all security levels A World of Solutions

  9. Option Comparison

  10. 2009 Budget A World of Solutions

  11. Cost Reduction Items Number of Beds • Most recent 2025 projection at 1,760 beds • 13% less than 2009 Construction Costs 2011 vs. 2009 • Material cost and subcontractor margin reductions have lowered cost by 10% or more This is expected to hold true through at least the 1st quarter 2012. Beyond that expect the supply/demand curve to dramatically change. A World of Solutions

  12. Cost Reduction Items Private Finance Model • Conservatively saves 12% from public procurement process through: • Economies of scale • Schedule savings • Constructability knowledge and expertise A World of Solutions

  13. Private Finance Model for 1,760-Bed Full Build Out • 1,760 beds multiplied by $78K/bed • 10% cost reduction due to current market conditions • Current cost estimate under public procurement process • 12% expected savings with private development and finance models $62K / bed A World of Solutions

  14. Finance Options Issue Tax-Free Municipal Bonds • Uses County’s borrowing capacity • General extra soft cost • Usually lowest rate, but not always the least expensive Municipal Lease Models • Uses County’s borrowing capacity • Little flexibility True Lease Model • Can be accomplished off balance sheet • Paid for through the annual DOC operating budget • Very flexible A World of Solutions

  15. Total Cost of Ownership Examples: • Security Electronics • Plumbing • Electrical • Locking Controls • Roofs • HVAC • Design builder is also responsible for operating and life-cycle costs • Fix the repair and maintenance at a designated amount per year at inception of contract • Set schedule for replacement of all major systems at inception and include in initial contract A World of Solutions

  16. Conclusions RFQ/RFP should include: • Design &construction costs • Impact on repair and maintenance and asset life cycle management • Impact on staffing • Impact on utilities • Reuse of existing jail property • Finance options Move quickly to capitalize on all time historic low construction cost Utilize the development, finance, design, and construction markets to analyze the problems A World of Solutions

  17. Questions Comments Next Steps Buddy Johns, President 6401 E Thomas Rd, Suite 106 Scottsdale, AZ 85251 (724) 601-4918 bjohn@cartergoblelee.com www.cartergoblelee.com A World of Solutions

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