1 / 16

FACILITY INFRASTRUCTURE GAP

FACILITY INFRASTRUCTURE GAP. Introduction. Today - Current facility portfolio overview (Where we are today) Yesterday - Historical facility trends (How did we get here) Tomorrow - New directions (What can we do about it). Portfolio Dimensions.

psyche
Download Presentation

FACILITY INFRASTRUCTURE GAP

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FACILITY INFRASTRUCTURE GAP

  2. Introduction Today - Current facility portfolio overview (Where we are today) Yesterday - Historical facility trends (How did we get here) Tomorrow - New directions (What can we do about it)

  3. Portfolio Dimensions Asset Replacement Value $1.1 billion Owned Assets 5.9 million sf (billable area) • Office space 1.3 million sf • Special use facilities 4.6 million sf Leased Assets 1.7 million sf (billable area) • Office space 1.4 million sf • Special use facilities 0.3 million sf (Archives warehouse, MDA warehouse, Aerospace Training Centre, Hanger T5)

  4. Operating Budget Operating Budget Salaries & Benefits $15.7 m Expenditures other than salaries $32.7 m TOTAL $48.4 m Operating unit cost/ yr. $8.20/sf/yr of owned

  5. Current Financial State of Infrastructure Maintenance • No specific capital budget provision for ongoing infrastructure maintenance • Maintenance GAP is estimated at $380.0 million over 10 years or $38.0 million per year (3.5 % of 1.1 billion asset value) • Industry standard = 2% to 5% of asset value • Current maintenance capital approximately $12 million (2003/04 Capital) for building component upgrades • $12.0 million per year = 1.1% of 1.1 billion asset value

  6. Facility Infrastructure Gap Components

  7. Owned Infrastructure Conditions • 2% New • 57% Ailing: In need of life cycle upgrades to protect sustainability and cost effectiveness. • 28% Dire : Life cycle concerns and obsolescence now precipitating, all flexibility to defer exhausted. • 13% Unoccupied : 12% surplus space for disposal plus 1% vacant space

  8. Aging Portfolio • Most facilities have reached or exceeded their useful lifetime of 25-35 years • Electrical, Mechanical, and Structural systems are in dire need of refurbishment and upgrading.

  9. Aging Portfolio (cont’)

  10. Major Construction Booms • 21-40 Age Range - Provincial Office Buildings and Community Colleges - Facility infrastructure component life cycle renewals • 81-100 Age Range - Traditional “heritage” type buildings such as the Legislative Building, Mental Health Institutions, Courthouses, Land Titles Offices, etc. - High degree of functional obsolescence associated with these buildings - Approximately 1/3 of these buildings have undergone major renovations, re-construction, and additions

  11. Infrastructure Deterioration - Why? • Public opinion focused government expenditure on Health & Education program delivery costs • Neglect of the non-visible nature of infrastructure renewals • Traditionally infrastructure viewed independent from government program deliveries • Funds historically expended to alleviate outstanding life/health issues only Not Options for change • Increased Budgets • Business as Usual

  12. Planning/Evaluation Horizonfor Infrastructure Renewal, Replacement, or Disposal • Infrastructure investments require long-term planning -Requires program & facility infrastructure assessments in an overall government program lifecycle • Reality is a short-term cycle due to continuous restructuring • Short-term horizons impede sustainable development decisions

  13. SolutionOptions 1. Do not add to the owned portfolio(and thereby increasing future problems) - Alternative methods of government program delivery with less reliance on owned space (preference to leases and avoidance of tenant occupancy/maintenance risks) 2. Innovation and Technology(use less physical space) - Privatization of the program delivery of some government services - On-line web services - Non-traditional offices (working from home)

  14. SolutionOptions (con’t) 3. New Funding Sources - Charge back systems to client tenants within specialized facilities - Establishing a sinking reserve maintenance fund - P3 4. Sustainable Infrastructure Capitalization - Funding of energy enhancement programs from future avoidance of energy savings (hydro funding) 5. Shed Mandate Components - Retain core facilities - Disposal of surplus and under utilized buildings - Transferring ownership of general purpose office buildings to institutional investors

  15. Key Points • View infrastructure in relation to program delivery within an overall government context • Look to market availability to reduce infrastructure ownership • Life cycle planning - Integrate infrastructure renewals in conjunction with program business cycles and re-organization • Appropriate information resources to support infrastructure decisions whether to renew, replace, or dispose

  16. Facility Infrastructure Gap Presented by: Stephen Kupfer ADM,Accommodation Development Transportation & Government ServicesAddress 2-1700 Portage Ave. Winnipeg, MB R3J 0E1 Phone (204) 945-7552Fax (204) 945-0908E-mail SKupfer@gov.mb.ca

More Related