FACILITIES AND ASSET MANAGEMENT

Transcription

1 EB-0-0 Tab Page of FACILITIES AND ASSET MANAGEMENT INTRODUCTION Facilities and Asset Management ( FAM ) provides the real estate, workspace and property services required to operate THESL s business effectively and efficiently. Funds are required to secure property and space, to maintain buildings in good working order and to provide safe, functional and efficient work environments. Expenditures are made to address facility and equipment needs, which are essential to support operations, to conform to safety and environmental regulations and either extend or preserve the usefulness of the facilities owned by THESL. Operating and maintenance requirements for facilities reflect the results of evaluations conducted by a combination of internal experts and independent architectural/ engineering firms. Such assessments form the basis of annual maintenance and capital programs as they relate to facilities. 0 OBJECTIVES FAM must provide cost effective, safe, functional and efficient work environments to positively impact productivity and human performance by: Acquiring real estate and property services necessary to operate THESL; Designing, configuring and maintaining work environments necessary to allow work to be accomplished in a safe and efficient manner; Supporting a dynamic workplace that encourages employees and drives business results (the overriding objective of the FAM function); Maintaining properties and buildings in keeping with the building code, OH&S Act and fire code.

2 EB-0-0 Tab Page of ACTIVITIES FAM provides the following ongoing services for THESL s facilities: Routine maintenance Preventive maintenance Office services Housekeeping service Landscaping maintenance Environmental Services Leasing of incremental temporary space FAM maintains design standards and facilitates the procurement of systems furniture and ancillary furniture. FAM staff works with individuals and departments to assess, document and plan for workspace modifications needed to address changes in business processes or personnel deployment. FAM staff assists in identifying and developing workplace standards, eliminating barriers to optimum human performance, supporting collaboration, enhancing the use of technology and meeting individual needs for privacy. Once a modification plan is developed and approved, FAM staff manages the physical modifications to work spaces including planning, scheduling, procurement, move management and complete installation oversight. 0 OCCUPANCY COSTING MODEL FAM allocates its costs to THESL business units based on the cost allocation model described in Exhibit C, Tab, Schedule. The occupancy charge is a per-square-foot charge used to allocate facility-related costs to users. The rate charged to the business units is based on the type of space (e.g., warehouse or office) and overall occupancy. The underlying principle is to follow commercial practices that closely approximate how landlords transact business with tenants regarding contract rent. The occupancy charge includes all costs related to the on-going operation and maintenance of facilities.

3 EB-0-0 Tab Page of Management believes that THESL s full allocation model is an effective tool to optimize the use of the current facilities to decrease ownership cost and reduce funding requirements. Costs are developed based on an annual review of space allocation. Each year the following process is undertaken to establish the space allocation budget: ) Review previous year s program input and make necessary revisions (budgets, space inventories, and other inputs); ) Establish allocation rates for applicable space types; ) Generate unit and sub-unit space assignments; and ) Submit to management for approval. FACILITIES AND ASSET MANAGEMENT COSTS FAM costs are driven by ongoing costs to maintain the functionality and usefulness of building assets and the formation and disbanding of work groups to support business activities. Work environments need to be flexible to enhance communication among employees, improve efficiency and productivity and continually respond to organizational changes. 0 Table : FAM Maintenance and Operations Costs ($ millions) Test 0 Test 0 Test Actual Actual Actual Bridge FAM Table presents the costs for the historical, bridge and test years. Costs drivers include payroll for FAM employees, property taxes, leases for buildings not owned by THESL, labour and materials related to renovation and repair, maintenance programs for facilities, utilities and other related services.

4 EB-0-0 Tab Page of From the 0 historical to the 0 bridge year costs increase by $. million. This increase is attributable to an additional $0. million associated with building operations and maintenance at THESL s facilities and maintenance contract increases as new contracts are signed, $0. million in increased payroll to hire additional staff and for salary growth among existing staff, and $0. million for general increases in contract labour and materials costs. 0 From the 0 bridge year to the 0 test year costs increase by $. million. The drivers of this increase include: $.0 million in rental expense to provide additional short term space to accommodate staff increases and organizational restructuring. Of this amount, $. million is for additional space at Monogram. As discussed in Exhibit D, Tab, Schedule, THESL plans to purchase Monogram. If this transaction closes successfully prior to the Board's decision on this Application, THESL will inform the Board and reduce its operating expense request by $. million; $0. million inflationary increases in property leases; $0. million increase associated with negotiating new long term service contracts; $0. million increase in utilities costs; and other miscellaneous increases totalling $0. million. From the 0 test year to the 0 test year costs increase by $.million. The drivers of this increase include: $0. million inflationary increases in property leases; $0. million increase in purchased services associated with service contracts; $0. million increase in payroll; and $0. million increase in labour and material costs.

5 EB-0-0 Tab Page of From the 0 test year to the 0 test year costs increase by $. million. The drivers of this increase include: $0. million inflationary increases in property leases; $0. million increase in purchased services associated with service contracts; $0. million increase in payroll; and $0. million increases in labour and material costs. The costs set out above are allocated to all business units based on usage of space. Accordingly, FAM is net budget neutral after allocation as each business unit carries its portion of facilities costs. The costs shown in Table above are before allocation.