REAL
PROPERTY
NOVEMBER 2018
REAL PROPORTY FUNDING ACCOUNTABLITIES FOR CLIENT DEPARTMENT’S
FINANCIAL OFFICERS
FROM THE PERSPECTIVE OF A TYPICAL CLIENT DEPARTMENT’S REAL PROPERTY TEAM
1
Presentation Overview
2
GoCTBS
CFOHRRP/IT/Security
Client Department / Agency
Real Property Team
PSPCAccommodation
Management
PSPCReal Property
Program
5
Real Property within the Government of Canada… Context
Financial Administration Act
Federal Real Property and
Federal Immovables Act
GOVERNMENT
OF CANADA
LEGISLATION
Policy Framework for the Management of
Assets and Acquired Services
Policy on Management of Real Property
Guide to the Management of Real
Property
TREASURY BOARD
SECRETARIAT
PUBLICATIONS
Real Property within the Government of Canada… Context
All departments as defined in Schedule I, section 2 of the Financial Administration Act, unless specific acts or regulations override it
are subject to these Real Property policy documents.
GOVERNMENT
OF CANADA
LEGISLATION
Custodial departments and Crown corporations regularly record, update and
certify information in the Directory of Federal Real Property (DFRP).
TREASURY BOARD
SECRETARIAT
PUBLICATIONS
4
5
Real Property Office Accommodation… Context
PUBLIC SERVICES
AND PROCURMENT
CANADA MANDATE
Department of Public Works and Government Services Act
“PSPC’ Federal Accommodation Program is the designated custodian of general-purpose office
accommodation in Canada, provided on an obligatory basis to departments [and agencies], and
sets the standards for them.”
CLIENT DEPARTMENTS
AND FEDERAL
AGENCIES
Standard Terms and Conditions of PSPC-Administered Accommodations
“The management of federal accommodations is a shared accountability between PWGSC and client
departments to ensure open and public accountability for the allocation, compliance, health
and safety, and use of accommodations.
5
6
Real Property Office Accommodation… 13% Levy
CLIENT
DEPARTMENT
TREASURY BOARD
SUBMISSION
Clients Departments contribute a 13% accommodation levy through their Treasury Board
submissions for accommodation costs.
The levy forms the basis for adjusting the client department space envelope; Program Growth
Report.
The 13% default approach typically covers the space required for the FTEs only. All SPS must be identified
and costed separately.
13%PSPC TB SUBMISSION
QUASI-STAT
FUNDING FORMULA
PSPC does not have automatic access the 13% premium for accommodation.
These funds are retained by the Department of Finance and PSPC can access them through an
annual Treasury Board submission.
The “Office” funds are for Non-Reimbursing “rent” and for PSPC’s portion of fit-up projects.
6
7
Real Property Office Accommodation… Space Envelope
Note: FTEs located in custodial building do not contribute to PSPC’s 13% accommodation levy.
The Treasury Board (TB) approved space envelope refers to the total amount of space client departments and agencies can occupy based on
funding received by PWGSC from TBS to provide accommodation in accordance with standards, policies and guidelines.
The non-reimbursing occupancy level refers to the total number of square metres rentable (m²r) occupied by client departments and agencies in
facilities under the administration of PWGSC.
The variance or difference between the approved space envelope and the total non-reimbursing occupancy level is generally referred to as
“headroom”.
Reimbursing Expansion Control Framework (ECF) refers to those occupancies of a client department or agency that exceed the applicable
department or agency’s approved space envelope.
PSPC
SPACE ENVELOPE
Non-Reimbursingm2r
Headroom - m2r
ECF-Reimbursing - m2r
7
8
PSP
C C
ost
Real Property Office Accommodation… Space Envelope
ECF-REIMBURSING
OCCUPANCY
INSTRUMENT
PSPC
SPACE ENVELOPE
NON-REIMBURSING
OCCUPANCY
INSTRUMENT
Includes “Headroom”
Clie
nt
Co
st
Non-Reimbursingm2r
Headroom - m2r
ECF-Reimbursing - m2r
8
Note: FTEs located in custodial building do not contribute to PSPC’s 13% accommodation levy.
9
Real Property Office Accommodation… Occupancy Instruments
Lease-Out Contract - Occupancy Instrument (OI): A formal agreement between a department or agency and PSPC concerning occupancy in a particular asset.
It also records the terms and conditions that govern the provision and occupancy of the accommodation, as well as charges for accommodation and agreed upon fit-up funding accountabilities.
Client/Agency Real Property
Cost Centre Manager
PSPC Accommodation
Manager
9
10
PSP
C C
ost
Clie
nt
Co
st
Real Property Office Accommodation… Occupancy Instruments
ECF-REIMBURSING
OCCUPANCY
INSTRUMENT
NON-REIMBURSING
OCCUPANCY
INSTRUMENTIncludes “Headroom”
10
Non-Reimbursing Occupancy: Space provided to a client department as part of their space envelope is provided via a non-reimbursing occupancy instrument as it is funded by PSPC through the Treasury Board Approved 13% Accommodation Levy. Charges for the occupancy, which include rent, Standard Building Services and Standard Fit-up “bundle of good” are funded by PSPC.
Expansion Control Framework (ECF) Occupancy: Space provided to a non-reimbursing client department in excess of their space envelope (i.e. over and above PSPC-funded accommodations) is provided via an Expansion Control Framework (ECF) occupancy instrument. Charges for the occupancy, which include rent, Standard Building Services and Standard Fit-up “bundle of good” are NOT funded by PSPC.
11
Real Property Office Accommodation… Split Funding Model
11
Funding accountabilities for GCworkplace Fit-up Projects are shared between PSPC and Client Departments which are illustrated in section A3.2, Funding Accountabilities of PSPC and Client Departments, of the Government of Canada Workplace 2.0 Fit-up Standards.
If appropriate funds are not available when PSPC requires these funds, a reverse re-profiling arrangement with TBS can be used to fund these funding pressures. This is similar to a loan that a department or agency would pay from its future budget.
Ideally these planned projects should be funded with existing in year appropriated funds, however if the funding related to client fit-up costs exceed the departments capacity to fund, CFO’s need to work closely with the their TB Analyst to account for these large one-time costs .
12
Real Property Office Accommodation… Fit-up Project Cycle
12
In 2017-18, PSPC advised all client departments that when a lease or occupancy instrument (OI) is being renewed in space that does not meet the Government of Canada Fit-up Standards; a fit-up project must be implemented. Therefore, all options considered in the financial analysis for any lease renewal, or the renewal of an OI in a Crown-owned asset, must incorporate a fit-up upgrade in line with the Fit-up Standards.
When PSPC makes portfolio investment decisions to proceed with a fit-up project based on their investment analysis and governance model client department and agencies are committed to fund the client costs related to these delivery of the fit-up project.
13
Real Property Office Accommodation… Stakeholder Model
13
Stakeholder Engagement and Governance Model
One of the key steps in ensuring all stakeholders are aware, engaged and have the same understanding of the funding requirements to support a Departmental National Accommodation Strategy is to establish a new governance model for accommodation planning and delivery.
Real Property Managers, Program Managers, Financial Officers and Human Resources need to strengthen their networks and broaden their department or agency’s understanding of the Office Accommodation program of works and the funding required to successfully implement the GoC Workplace Renewal Objectives.
14
Real Property Office Accommodation… Stakeholder Model
14
Chief Financial Officer-Gather/report TB Submission/MC activity annually and report on TB approved FTE and Salary dollars.
-Obtain funding from TBS for client fit-up projects costs.
Real Property Responsible for:
-Developing national accommodation strategies, annual programs of work to deliver office
accommodations services in support of programs across the country.-Annual life-cycle fit-up project
forecast.
Client Department / Agency
Internal Engagement and Governance Human Resources
Responsible for :-Gathering/reporting FTE requirements
by regional segment.-Change Management Activities related
to Workplace Renewal- Leadership
15
Real Property Office Accommodation… Fit-up Funding Model
15
Occupancy Instrument Expiry Forecast = Fit-up Budget
Cost Type Unit cost ($)
SPS cost per m2u: $1,000
Cost per FTE: $15,500
Fiscal Year Cost FTE SPS m2u Percentage2020 $6,250,000 400 50 4%
2021 $3,120,000 200 20 2%
2022 $12,470,000 800 70 8%
2023 $2,325,000 150 0 2%
2024 $1,162,500 75 0 1%
2025 $15,850,000 1000 350 10%
2026 $9,420,000 600 120 6%
2027 $3,200,000 200 100 2%
2028 $2,325,000 150 0 2%
2029 $12,590,000 800 190 8%
2030 $3,915,000 250 40 3%
2031 $10,275,000 650 200 7%
2032 $13,330,000 860 0 9%
2033 $9,577,500 615 45 6%
2034 $14,350,000 900 400 9%
2035 $9,320,000 600 20 6%
2036 $11,745,000 750 120 8%
2037 $1,550,000 100 0 1%
2038 $2,325,000 150 0 2%
2039 $11,685,000 750 60 8%
Totals $156,785,000 10000 1785 100%
Organizations ~10,000 FTEs - 20 Year Model
16
Real Property Office Accommodation… Fit-up Funding Model
16
Organizations ~10,000 FTEs - 20 Year Model
Occupancy Instrument Expiry Forecast = Fit-up Budget
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
Clie
nt
Fit-
up
Co
st
17
Real Property Office Accommodation… Fit-up Funding Model
17
Organizations under ~10,000 FTEs - 20 Year Model
Occupancy Instrument Expiry Forecast = Fit-up Budget
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
Clie
nt
Fit-
up
Co
st
18
Real Property Office Accommodation… Fit-up Funding Model
18
Organizations ~10,000 FTEs - 20 Year Model
Portfolio Approach based on 5% of Inventory Fit-up
per year = Fit-up Budget
Cost Type Unit cost ($)
SPS cost per m2u: $1,000
Cost per FTE: $15,500
Fiscal Year Cost FTE SPS m2u Percentage2020 $7,836,750 500 86.75 5%
2021 $7,836,750 500 86.75 5%
2022 $7,836,750 500 86.75 5%
2023 $7,836,750 500 86.75 5%
2024 $7,836,750 500 86.75 5%
2025 $7,836,750 500 86.75 5%
2026 $7,836,750 500 86.75 5%
2027 $7,836,750 500 86.75 5%
2028 $7,836,750 500 86.75 5%
2029 $7,836,750 500 86.75 5%
2030 $7,836,750 500 86.75 5%
2031 $7,836,750 500 86.75 5%
2032 $7,836,750 500 86.75 5%
2033 $7,836,750 500 86.75 5%
2034 $7,836,750 500 86.75 5%
2035 $7,836,750 500 86.75 5%
2036 $7,836,750 500 86.75 5%
2037 $7,836,750 500 86.75 5%
2038 $7,836,750 500 86.75 5%
2039 $7,836,750 500 86.75 5%
Totals $156,735,000 10000 1735
19
Real Property Office Accommodation… Fit-up Funding Model
19
Proposed Large Organizations over 10,000 FTEs - 20 Year Model
Budget for ~5% workplace moderation per fiscal year
Portfolio Approach based on 5% of Inventory Fit-up per year = Fit-up Budget
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Clie
nt
Fit-
up
Co
st
20
Real Property Office Accommodation… Fit-up Funding Model
20
Proposed Large Organizations over 10,000 FTEs - 20 Year Model
Budget for ~5% workplace moderation per fiscal year
Portfolio Approach based on 5% of Inventory Fit-up per year = Fit-up Budget
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Clie
nt
Fit-
up
Co
st
Presentation Conclusion
21
Client Department / Agency
Real Property Team
GoCTBS
CFOHRRP/IT/Security
PSPCAccommodation
Management
PSPCReal Property
Program
22
Questions
Discussion
REAL
PROPERTY
NOVEMBER 2018
REAL PROPORTY FUNDING ACCOUNTABLITIES FOR CLIENT DEPARTMENT’S
FINANCIAL OFFICERS
FROM THE PERSPECTIVE OF A TYPICAL CLIENT DEPARTMENT’S REAL PROPERTY TEAM
23
REAL
PROPERTY
NOVEMBER 2018
REAL PROPORTY FUNDING ACCOUNTABLITIES FOR CLIENT DEPARTMENT’S
FINANCIAL OFFICERS
FROM THE PERSPECTIVE OF A TYPICAL CLIENT DEPARTMENT’S REAL PROPERTY TEAM
24