DPW Leasing/Property Transfer Workshop July 28, 2010

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DPW Leasing/Property Transfer Workshop

July 28, 2010

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DPW Leasing/Property TransferWorkshop

AGENDA

• INTRODUCTIONS – STAFF CHANGES WITHIN DPW LEASING• PURPOSE OF SESSION• REVIEW:

– STATEWIDE CAPITAL AND FACILITIES PLAN (FACCAP) – 2010/2011 – REQUEST FOR SPACE PROCESS – INTERIM SPACE PROCESS – YOUR AGENCY’S RESPONSIBILITIES – GENERAL PARAMETERS REGARDING LEASES

• DISCUSS 4B27 • DISCUSS LEASE COMPLIANCE • DISCUSS ANNUAL INSPECTIONS of EMERGENCY EQUIPMENT AND FIRE SYSTEMS • DISCUSS STATE’S/AGENCIES RESPONSIBILITIES TO REPORT TO LESSORS • QUESTION/ANSWER

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• PURPOSE OF SESSION IS;

• To ensure you are fully informed about the leasing/property transfer process

• To reduce the amount of time the process takes

• To ensure all of us are in compliance with statutes

• To help DPW meet your agencies’ real estate needs

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REVIEW OF THE

STATE FACILITY PLAN

PAUL HINSCH

OFFICE OF POLICY AND MANAGEMENT

BUREAU OF ASSETS MANAGEMENT

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• Review the OPM Spreadsheets submitted to each Agency

• For costs, use actual numbers for existing leases and estimates for new locations, estimates are as follows:

» Electric - $2.50 p.s.f.» Janitorial - $1.50 p.s.f.» Gas - $1.25 p.s.f.» R.E Taxes - $.25 p.s.f. above a base year» Security - $.25 p.s.f.» Window Cleaning - $.10 p.s.f.» Trash - $.10 p.s.f.» Plus Tenant Improvements (check with your leasing agent)

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WHAT IS THE STATE FACILITY PLAN?

• Mandated by CGS 4b-23 - “The state facility plan shall be used as an advisory document for the leasing of property for use by state agencies and departments and for related capital projects.”

• Any State agency wishing to make use of leased space to meet its facility needs must be approved for the necessary square footage under the Plan.

• If the agency is not approved for the necessary costs & square footage under the State Facility Plan, then the agency may not legally enter into a lease.

• OPM is required to prepare the State Facility Plan on a biennial basis.

• The Plan goes into effect July 1st of each odd-numbered year and remains in effect until June 30th of the following odd-numbered year.

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STATE FACILITY PLAN – AGENCY TIMELINE• Summer of even numbered years, agencies will receive an email of information from

OPM which includes: Spreadsheet of each existing lease Spreadsheet for new space requests Spreadsheet for building demolition,

• Agencies required to: Check information provided on the spreadsheets, and Correct any errors, and Provide any missing information and update request based on future projections.

• Agencies are required to submit the information to OPM, with a copy to DPW, September 1st of each even numbered year.

• Failure to submit the information will result in the agency not being approved for square footage in the State Facility Plan.

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STATE FACILITY PLAN – REPORT TIMELINE• July-September (even numbered years) – Agencies prepare & submit requests for Plan to

OPM with a copy to DPW.• September – OPM works to ensure that submissions are complete & accurate.• October–January - Agency submissions are forwarded to OPM budget analyst who is

responsible for making cost and square footage recommendations in conjunction with preparation of the State Budget.

• February 15th (odd-numbered years) – OPM is required to submit to the State Properties Review Board (SPRB) a Proposed State Facility Plan.

• March 1st – SPRB required to makes recommendations regarding the Plan to OPM.• March 15th – OPM required to present the Plan to the General Assembly.• March-June – General Assembly passes an operating and capital budget• July 1st – State Facility Plan goes into effect.

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STATE FACILITY PLAN – INTERIM SPACE REQUESTS• Interim Space Requests are required when:

An agency wishes to lease space, but is not approved for the space, or funds under the Plan, or

An agency wishes to lease space which is in excess of their Plan approval by 10% or more (including costs),

• Interim Space Requests consists of: Completed DPW Request for Space Form (RFS) Letter from agency head to the Secretary of OPM requesting approval of the Interim

Space Request• Once the Secretary has approved the Interim Space Request, DPW may then

begin the space acquisition process.• CGS 4b-23(k) states “No action may be taken by the state to lease…such

additional facilities unless the secretary makes such a determination.”• The forms are on the OPM website

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STATE FACILITY PLAN – MAJOR PROBLEM AREAS• Failure to submit all of the required information.• Failure to submit information by the required deadlines.• Failure to account for all leased locations;

“Its an existing lease, so I don’t need to report it.” “We’ve been at this location for years so I don’t need to report it.” “My budget analyst knows we have this location so I don’t need to report it.” “I was approved for this space under the old Plan, so I don’t need to request it again.” “I won’t be using State funds to pay for the lease so I don’t need to submit it for the Plan.” “We started the leasing process when the old Plan was in effect.”

• State Facility Plans expire on June 30th of each odd-numbered year, and all approvals in those plans expire at the same time.

• Only those approvals in the current State Facility Plan, or approved Interim Space Requests, can legally be acted upon.

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STATE FACILITY PLAN - MAJOR PROBLEM AREAS (continued)• Technically, Interim Space Requests expire when the Plan expires, however, DPW and

OPM have jointly agreed that Interim Space Request will be good for 18 months from the date of OPM approval. Data should still be entered in the Plan.

• It is possible that your space request will not be approved under the Plan or you will be approved for a lesser square footage and/or cost.

• In such cases, an Interim Space Request approval is still required before a lease can be entered into by an agency.

• There are no “special circumstances” or “really important” projects that negate State law.

• To legally enter into a lease your agency must either:– Be approved for the cost and square footage under the current State Facility Plan, or– Have an Interim Space Request that has been approved within the previous 18 months

• Providing information that is complete, accurate and on time is the best way to ensure that the leasing process proceeds as quickly as possible.

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STATE FACILITY PLAN – QUESTIONS?

Paul Hinsch

Office of Policy and Management

Bureau of Assets Management

(860) 418-6429

[email protected]

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REVIEW REQUEST FOR SPACE PROCESS

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• REQUEST FOR SPACE FORM• Existing Leases

– 18 month notice letter is sent to agency stating lease end date. The old RFS form is included (if available) in this package.

– The agency must fill out the RFS form as a rough draft and return it to Leasing for basic review. We will call you back to discuss any details and explain what other info is required to complete the form.

– If the amount of space or cost is less than 10% over the amount in FACCAP, we can proceed with the commissioner signatures. If it is more than 10% over the amount in FACCAP – an interim space request is needed.

– The interim space request form ----- Paul Hinsch– When the existing lease is NOT in FACCAP (happens when the agency fails

to submit space request in each even year to OPM!) the agency must follow the Interim Space Request Process outlined earlier.

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REVIEW INTERIM SPACE REQUEST PROCESS• These cover letters are required when the agency is seeking more square footage than

it is approved for under the current State Facility Plan. They are on the OPM website.• Sample ISR Letter #1 - To be used when an agency needs to exceed State Facility

Plan square footage approval by more than 10%.• Sample ISR Letter #2- To be used when the space request was not submitted for

inclusion in the State Facility Plan.• Sample ISR Letter #3 - To be used when a space request was submitted for inclusion

in the State Facility Plan, but not approved.• Required Cover Sheet - To be used as a cover sheet when submitting an interim

space request submitted to OPM.

• Interim Funding Requests (IFR)• Required when the agency is seeking lease funding beyond what it is approved for

under the current State Facility Plan.• Sample IFR Letter

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GENERAL PARAMETERS REGARDING LEASES/PROPERTY TRANSFER:

• Leasing/Property Transfer does not solicit bids, but rather request for proposals

• Once advertised we can look at anything

• A new lease is necessary if an existing lease is expiring and there is no renewal option or it is a new location

• A purchase and sale agreement will be necessary on a transfer

• The leasing process, and to a lesser extent property transfer, is based on statutes, policies and procedures

• The leasing/property transfer process is not negotiable, it must be followed

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AgencyIdentifies Need Submits

Requests

OPMReviews & Approves

Step 1

FASCAP (5 yr..)

Approval

Interim Space Request

Approval

DPW PlanningReviews & Approves Request

RFS Approved

RFS NotApproved

Request for Space (RFS)

Not approved if square footage or costs > 10%

Lease Renewal OnlyStep 2

New LeaseStep 2

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Step 1New Lease

AgencyIdentifies Need

DPW Facilities Planning

Either reviews or prepares RFS and Level 3. Checks to ensure State Owned

space is NOT available

OPM - BudgetReviews & Approves

If RFS has vacant/projectedpositions, DPW forwards to OPM Budget


Reviews, recalculates RFS & Level 3based on OPM approved staffing

AgencySigns RFS


Administrator Signs RFS, the DPWCommissioner Signs RFS

OPM - Asset Mgt.Reviews & Approves if not in FACCAP ormore than 10% of space/cost is requested

Interim Space Request


Sends Approved RFS to Leasing

If no Interim Space Requestis required

Approved RFS

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DPW Leasing

DPW Bid/ContractsReceives Ad from DPW, places ad

and receives responses

Comptroller

AdvertiseRequest if 2,500 sq.ft. or over

Proposals from LL.

Res

pons

es f

rom

LL

s

Step 2Lease Renewal Option

Agency

SPRB

Lease Renewal Resolve Issues

DPW Leasing

“End”

Renewal OK

LandlordLease Renewal Letter

Rent Control Card

Landlords (LL)Submit Proposals

Advertising

DPW Bid/ContractsReceives responses, summarizes

them for Leasing

DPW Leasing

Rent Control Card

Lease RenewalNot OK

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Step 2New Lease

DPW Leasing

DPW Leasing

DPW & Agency Visit Sites &Picks Site


Approves Space Request

IT Web-site Board of Realtors

Mayor

DPW Bid/Contracts

Advertises, receivesLL Proposals

Agency

DPW LeasingNegotiates Lease

& Fit-Out

Landlord

DPW Leasing

(Estimating, compiling costs)

AgencyReviews/Modifies& Approves Plans

Agency Design & Est. Or LL Designs

LandlordAs BuiltPrelim Design

Financial Affidavit

Signed Lease

Step 3

Approved Space Request Form

DPW SecurityConducts Audit

In Parallel on Selected Site

DPW LeasingPrepares ad

DPW Leasingsends letter informing of agency’s need

DPW prepares& forwards standard lease

Resolve Issues

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Step 3New Lease (Con’t)

DPW Leasing

Agency

Signed Lease OK Not OK

DPWD. Comm./

Comm.

DPW Leasing

Signed LeaseOK/Not OK

OPM

Signed Lease

DPW Leasing

Signed LeaseOK

SPRBVisit site, etc.

Signed Lease

Resolve Issues

Signed lease OK/Not OK

DPW Leasing

AGApprove Lease for

Form (Content)

Signed Lease & AG Check list

ResolveIssuesRe-writeLease

Signed Lease OK

Step 4

SignedLease Resolve

IssuesRe-writeLease

Resolve Issues

Resolve Issues

Resolve Issues

Resolve Issues

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DPW Leasing

Prepares Rent Control Card

Step 4New Lease (Con’t)

Agency

Comptroller

Rent Control Card

Landlord

DPW Leasing

(Facil. Mgt. If Req’d)

AnnualInspection

Unresolved LL/Agency Issues

Move-in coord, SpacePlanning, Data, T-Com, Etc..

Day to Day Issues

Town Hall

End/ Lease NoticeRecorded

Rent Control CardSent by Agency, last stepFit-out is Completed

DPW/Agency Approve/sign off

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DISCUSS 4B27Discussing your agency’s real estate needs with anyone outside your agency and DPW,

jeopardizes the leasing/property transfer process

• Can result in the elimination of a prospective site

• Will result in slowing everything down

• May result in having to start over again

• Confuses prospective lessors/buyers/sellers

• Violation of 4B27 is a class A misdemeanor

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YOUR AGENCY’S RESPONSIBILITIES:

• Provide timely accurate information throughout entire process

• Sign all documents correctly

• Deliver all documents to DPW directly

• Please do not discuss your agency’s real estate needs outside of DPW or your Agency

• Read your lease (s), understand your obligations and the lessor’s obligations, CALL US WHEN IN DOUBT

• If you don’t hear from DPW, call us

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Discuss Lease Compliance

• Ensures Lessor is in compliance with lease

• Ensures user agency is in compliance with lease

• Ensures both parties are in compliance with life/fire safety, codes, etc.

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Annual Inspections of Emergency Equipment and fire systems

Agencies must:

• Perform fire drills – a minimum of two per year

• Self inspect fire extinguishers, date and initial tag, monthly

• Self inspect emergency lighting, monthly

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AGENCIES’ RESPONSIBILITIES UNDER STATE STANDARD LEASE

• Notify Leasing:

– Give prompt notice of damage or other casualty to Leasing so we can inform lessor

– of any water penetration IMMEDIATELY

– Of any matter/issue regarding the lease (i.e., lessor not performing duties, etc…)

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Annual Inspections of Emergency Equipment and fire systems

LESSORS must:

• Annual alarm testing by licensed alarm equipment contractor (annual is minimum, may need to be more frequent, depending on type of occupancy)

• Annual inspection of sprinkler systems by licensed contractor

• Annual fire extinguisher service by licensed contractor

• Proof of all should be sent to Dave Maura at 713-7260

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QUESTIONS/ANSWERS

THANK YOU FOR COMING!

Documents

DPW Leasing/Property Transfer Workshop July 28, 2010