lancaster county replacement facility development strategy presented by: cgl capital solutions may...
TRANSCRIPT
Lancaster County Replacement FacilityDevelopment Strategy
Presented by:CGL Capital Solutions
May 19, 2011A World of Solutions
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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
Agenda
CGL Capital Solutions
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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.
1. Status quo
2. Renovate existing jail and build a smaller re-entry facility
3. Renovate existing jail and build Phase 1 of full replacement
4. Build full replacement facility
Options
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No new capital expenditures
Option 1: Status Quo
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PROS CONS
Safety and security issues from overcrowding
Excess labor costs Excess utility costs On-going maintenance and
equipment replacement No increased capacity
Option 2: Renovate & Build CCRE
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PROS
Lower capital commitment Beginning to address the
overcrowding issues All the benefits of re-entry
programming
CONS
Operations of two facilities Excess labor costs Excess utility costs On-going maintenance and
equipment replacement No additional high custody
beds
Option 3: Renovate & Build Phase I
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PROS
Completely solves overcrowding issue
Defers capital expenses
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
Option 4: Full Replacement
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PROS
Most efficient operational model for staffing, utilities, maintenance
Safest and most secure Additional capacity for all
security levels
CONS
Largest capital outlay
Option Comparison1: Status
Quo2: Renovate &
Build CCRE3: Renovate &Build Phase I
4: Full Replacement
Capital 1 2 3 4Staffing 2 4 3 1Utilities/ Maintenance 4 3 2 1
Impact on:
Budget/ Cash Flow 1 3 4 2Programming & Recidivism
4 2 or 3 2 or 3 1
Security & Safety 4 2 or 3 2 or 3 1Inmates 4 2 or 3 2 or 3 1Employees 4 2 or 3 2 or 3 1Community 4 2 or 3 2 or 3 1
2009 Budget
384-bed Community Re-entry Center $25M $66,400/bed
1,262-bed Phase 1 Build Out with Renovation of Existing Jail
$115M $91,200/bed
2,158-bed Full Build Out $169M $78,100/bed
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Cost Reduction Items
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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.
Cost Reduction Items
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Private Finance Model• Conservatively saves 12% from public procurement
process through:1. Economies of scale2. Schedule savings3. Constructability knowledge and expertise
Private Finance Model for 1,760-Bed Full Build Out
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• 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
$137,280,000
($13,728,000)
$123,552,000
($14,826,240)
$108,725,760
$62K / bed
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
Finance Options
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• 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
Total Cost of Ownership
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Examples: Security ElectronicsPlumbingElectricalLocking ControlsRoofsHVAC
1) Move quickly to capitalize on all time historic low construction cost
2) Utilize the development, finance, design, and construction markets to analyze the problems
Conclusions
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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
Questions CommentsNext Steps
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Buddy Johns, President6401 E Thomas Rd, Suite 106
Scottsdale, AZ 85251(724) 601-4918