lancaster county replacement facility development strategy

Lancaster County Replacement FacilityDevelopment Strategy

Presented by:CGL Capital Solutions

May 19, 2011A World of Solutions

A World of Solutions

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


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


No new capital expenditures

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

Option 2: Renovate & Build CCRE


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


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


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


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.

Cost Reduction Items


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


• 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


• 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


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


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


Buddy Johns, President6401 E Thomas Rd, Suite 106

Scottsdale, AZ 85251(724) 601-4918

[email protected]

lancaster county replacement facility development strategy

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