TABLE OF CONTENTS

EXECUTIVE SUMMARY

1.0PROJECT DESCRIPTION

2.0BACKGROUND INFORMATION

3.0STRATEGIC ALIGNMENT

4.0PROGRAM DELIVERY OPTIONS ANALYSIS

5.0CONCLUSIONS & RECOMMENDATIONS

6.0IMPLEMENTATION STRATEGY

OTHER RESOURCES FOR THE CONCEPT PLAN REPORT

EXECUTIVE SUMMARY

Provide a summary for each section of the Lease Concept Plan Report

PROJECT DESCRIPTION

BACKGROUND INFORMATION

STRATEGIC ALIGNMENT

PROGRAM DELIVERY OPTIONS ANALYSIS

CONCLUSIONS & RECOMMENDATIONS

IMPLEMENTATION STRATEGY

Concept Plan Report | 1

1.0PROJECT DESCRIPTION

1.1Project Objectives

  • Identify and state the project objectives in the context of the strategic and business drivers as stated in the Institutional Accountability Plan & Report. Drivers can be related to demographics, program changes, technology, economic or business changes, environmental, social changes, or legislation.

-For example, accommodate 25% of the forecast demand of trades and technology workers in the region, in the next five years

-For example, the project will provide new access for a certain number of FTEs annually

  • Objectives must be clear and measurable within a specified timeframe

1.2Project Scope

  • Indicate the number of additional FTEs the project will accommodate
  • Articulate user needs based on student surveys, interviews, workshops, etc.
  • Translate the user needs into space requirements using the Ministry’s budget model and space standards:

-Post-secondary Institutions Capital Budget Model

-BC College, University College, and Institute System Space Standards Review

1.3Project Outcomes

  • Describe the concrete results necessary to meet the project objectives
  • For example, new academic programs are required to meet forecast demand for ## workers. As a result, an academic building of XX square meters must be completed by YYYY

Note: Projects greater than $100M in initial capital costs must be evaluated byPartnerships BC for public private partnership (P3) viabilityduring the Concept Plan Report activity. Institutions are instructed to coordinate with the Ministry for any services provided by Partnerships BC. While it is not mandatory to use PBC’s services to plan, deliver and oversee project delivery, they do offer those services.Please refer to Section 13.0 Governance in the CARG and

RESOURCES
  • Institutional Accountability Plan & Report
  • Five Year Capital Plan
  • Utilization rate
  • Ministry’sSpace Standards
  • Ministry’s Budget Model

2.0BACKGROUND INFORMATION

2.1Current Situation

  • Describe the events leading up to the project described in Section 1.0Project Description
  • Describe the risks of maintaining the status quo

-For example, unable to meet regional demand for trades and technology graduates

2.2Demand

  • Identify the number of FTEs to be accommodated based on demand
  • Provide current labour market demand and forecast demand information
  • Analyze relevant reports, data, or trends using tables/figures relating to the project, including those identified in the following:

-BCStats Population Projections (P.E.O.P.L.E.)

RESOURCES
  • BCStats Population Projections (P.E.O.P.L.E.)
  • Provincial data on labour trends

3.0STRATEGIC ALIGNMENT

3.1Stakeholder Identification

  • List stakeholders (both internal and external) and provide a description of why they are/should be invested in this opportunity
  • Include other ministries with similar goals and objectives

Table 31.Stakeholder Identification

Stakeholder / Internal/External
(I or E) / Role
The Ministry
Stakeholder #2
Stakeholder #3
Stakeholder #4
Stakeholder #5
Stakeholder #6

3.2Stakeholder Alignment

  • Evaluate each stakeholder (e.g.,business plan, etc.) to determine how the opportunity supports their goals

Table 32.Stakeholder Alignment

The Ministry
Goal / How the Institution’s Opportunity Supports the Stakeholder’s Goals / Impact
(High, Medium, Low)
1.
2.
3.
STAKEHOLDER #2
Goal / How the Institution’s Opportunity Supports the Stakeholder’s Goals / Impact
(High, Medium, Low)
1.
2.
3.
STAKEHOLDER #3
Goal / How the Institution’s Opportunity Supports the Stakeholder’s Goals / Impact
(High, Medium, Low)
1.
2.
3.

4.0PROGRAM DELIVERY OPTIONS ANALYSIS

The program delivery options analysis can be summarized in three steps, as follows:

  • Step 1– Identify All Options:List all options including status quo. These are evaluated against mandatory criteria to determine which options are viable and should undergo further analysis
  • Step 2 – Evaluate Viable Options:Options that meet mandatory criteria undergo rigorous testing:
  1. Options are compared using quantitative (cost/benefit) and qualitative (advantages and disadvantages) analysis
  2. For the lease option, ensure you provide current, reliable and comparable market data for the type of land, building, and/or space in that commercial market location
  3. Identification of financing sources for each viable option, including where applicable, Institution or landlord financing of TI’s
  4. Risk assessment for each viable option
  • Step 3 – Summary of Options: The options analysis will result in the selection ofone option as “preferable”, for which an implementation strategy will be developed

RESOURCES
  • Ministry Business Plans
  • Cross-ministry initiatives

Table 41.Options Analysis Methodology

4.1Step 1: Identify All Options

  • List all options (both capital and non-capital options), Include “do nothing” as an option to identify the costs and disadvantages of maintaining status quo

Table 42.Identify all Options

OPTIONS
Option / Type of Project
Capital (include category of project) or Non-Capital / Description
Status Quo
Option #1
Option #2
Option #3
  • Identify mandatory criteria that the options must meet. For example, mandatory criteria may include:

-InfrastructureImprovements: FCI improvement and/or reduction of life safety & occupational health risks

-CostEffectiveness: Funding partnerships and/or cost benefits throughout lifecycle

-Innovation:Demonstrates sustainable solutions and/or collaboration

-StrategicAlignment: Alignment with government priorities (e.g., Ministry Service Plan) and Institutional priorities (e.g., mission statement, master planning etc.)

-Quality Education: Improves student learning outcomes, and/or improve access to learning and/or utilization rates

-Location of the facility

-Timing – when is the space or facility required

-Control – what degree of control does the institutions require over the space or facility (this should be justifiable)

  • Options are evaluated against mandatory criteria to determine if any options can be dismissed.For example:

-Strategic – the option does not conform to the Institution’s Campus Master Plan, etc.

-Quality Education – the option does not accommodate the FTE forecast at maximum utilization rates

4.2Step 2: EvaluateViable Options

  • Options that meet mandatory criteria are evaluated through quantitative (cost/benefit) analysis, qualitative (advantages/disadvantages) analysis, financing, and preliminary risk assessment

4.2.1Quantitative (Cost/Benefit) Analysis

  • A quantitative analysis provides a preliminary estimate of annual capital and operating costs, including program/service delivery and facility lifecycle costs
  • Prepare a 20-year net present value cash flow analysis for the shortlisted viable options. The term of the cash flow analysis should equal to one of the following:

-If asset is financed with debt – use the term for the debt/mortgage.

-If no debt financing required – use the expected life of the new asset.

  • Ensure that assumptions are adequately disclosed for revenue and cost estimates
  • For the lease option, forecast lease rates for the entire 20 year period
  • Include schedules detailing the annual principal and interest payments to accompany the cash flow forecast, as well as for total capital cost estimate
  • The cash flow analysis should reflect the total ‘incremental’[1] costs and revenues associated with each project option being evaluated, not the ‘full cost’ including existing programs and facilities. However, in cases where the new project/program also results in additional costs or cost savings in existing facilities or programs, these amounts are also to be included in the project incremental cash flow

Table 43. Summary Table of a Quantitative Cost/Benefit Analysis

CASH FLOW FORECAST – Viable Option 1
Inflow/(Outflow) / OPERATING YEAR
Year 1
201x / Year 2
201x / Year 3
201x / Years
4….19 / Year 20
201x
Operating Cash Flows
Incremental program revenues, by source / $ xxx / $ xxx / $ xxx / …….. / $ xxx
Incremental program costs, by source / $(xxx) / $(xxx) / $(xxx) / …….. / $(xxx)
Incremental facility operating costs, by source / $(xxx) / $(xxx) / $(xxx) / …….. / $(xxx)
Interest expense on new debt financings * / $(xxx) / $(xxx) / $(xxx) / …….. / $(xxx)
Total Operating Cash Flows / $ xxx / $ xxx / $ xxx / …….. / $ xxx
Investing (Capital) Cash Flows
Total capital cost including soft costs and Amortized TI’s / $(x,xxx) / - / - / - / -
Furniture, Fixtures and Equipment
1-time costs – moving, brokerage fees, etc
Annual capital renewal, by source / $(xxx) / $(xxx) / $(xxx) / …….. / $(xxx)
Total Investing Cash Flows / $(xxx) / $(xxx) / $(xxx) / …….. / $(xxx)
Financing Cash Flows
New debt financing[2] / $x, xxx / - / - / - / -
Internal financing / $ xxx / $ xxx / $ xxx / …….. / $ xxx
External financing / $ xxx / $ xxx / $ xxx / …….. / $ xxx
Annual debt repayments / $(xxx) / $(xxx) / $(xxx) / …….. / $(xxx)
Total Financing Cash Flows / $ xxx / $ xxx / $ xxx / …….. / $ xxx
Net Cash Inflow/(Outflow) / $xxx / $xxx / $xxx / …….. / $xxx
Net Present Value – 20 years at x % / $ xxx

A supporting schedule detailing the annual principal and interest payments should accompany the cash flow forecast. For example:

LONG TERM DEBT – Continuity Schedule / DEBT TERM
Year 1
201x / Year 2
201x / Year 3
201x / Years
4to 19 / Year 20
201x
Long term debt, opening balance / $ xx,xxx / $ xx,xxx / $ xx,xxx / …….. / $ x,xxx
Annual debt payment:
Interest expense / xxx / xxx / xxx / …….. / xx
Principal repayment / (xxx) / (xxx) / (xxx) / …….. / (xxx)
Long term debt, closing balance * / $ xx,xxx / $ xx,xxx / $ xx,xxx / …….. / $-
* Closing balance = Opening balance less Principal Repayment

A supporting schedule detailing the total capital cost estimate should also be included. For example:

CAPITAL COSTESTIMATE / CONSTRUCTION YEAR / TOTAL
Year 1
201x / Year 2
201x / Year 3
201x
Land:
Acquisition cost
Site preparation
Parking and improvements
Soft Costs for Above
Land Contingency / $ xx,xxx
x,xxx
- / $ -
x,xxx
xxx / $ -
-
xx,xxx / xx,xxx
x,xxx
xx,xxx
Total Land Costs / $ xxx,xxx / $ xxx,xxx / $ xxx,xxx / $ xxx,xxx
Buildings:
Hard costs (construction materials and labor)
Soft costs (design, engineering, PM/CM etc.)
Construction contingency / $ x,xxx,xxx
xxx,xxx
xx,xxx / $ x,xxx,xxx
xx,xxx
x,xxx / $ x,xxx,xxx
x,xxx
x,xxx / x,xxx,xxx
xx,xxx
xx,xxx
Total Building Costs / $ x,xxx,xxx / $ x,xxx,xxx / $ x,xxx,xxx / $ x,xxx,xxx
Furniture, Fixtures & Equipment
Furniture
fixtures
Equipment
Soft Costs for Above
Contingency for FF&E / $ x,xxx
xx,xxx / -
- / $ xx,xxx
xxx,xxx / xx,xxx
xxx,xxx
Total F,F&E / $ xxx,xxx / $ xxx,xxx / $ xxx,xxx / $ xxx,xxx
Sub-total
Inflation during acquisition and development period / $ xxx / $ x,xxx / $ xx,xxx / $ xx,xxx
Construction financing costs / $ xxx / $ x,xxx / $ xx,xxx / $ xx,xxx
Total Capital Cost / $ x,xxx,xxx / $ x,xxx,xxx / $ x,xxx,xxx / $ x,xxx,xxx

4.2.2Qualitative Analysis

  • A qualitative analysis is required to evaluate the non-financial costs (disadvantages) and benefits (advantages) of each viable option, including physical, social, environmental, and risk considerations
  • Determine a list of qualitative criteria. Examples include:

-Operational– criteria related to expected facility or program operational improvements, such as:

  • ability to meet student needs and enrollment demand
  • ability to attract new learners (e.g., First Nations, international students)
  • improved staff recruitment and retention
  • integration of new and existing programs
  • ability to implement new technologies and learning methodologies
  • impact on other areas of the Institution such as parking, food services, recreation, housing, student, and health services
  • improved operations and maintenance facility costs, e.g.,energy efficiency, improved FCI

-Physical– criteria related to increased or decreased facility functionality, efficiency etc., such as:

  • effectiveness of facilities for meeting existing and new program needs
  • integration with existing facilities
  • improved access and mobility
  • flexibility to adapt to changing demands in the future

-Environmental – criteria related to the impact that the project and subsequent operations is expected to have on the local environment, such as:

  • increase/decrease in noise levels
  • Increase/decrease in local traffic levels
  • Impact on GHG emissions, waste levels etc.

-Strategic– criteria related to impact that the project and subsequent operations is expected to have on key stakeholders, such as:

  • government education and training goals
  • response to industry requirements
  • attracting research funding now or in future
  • program or Institution prestige
  • public/student perception of the program(s) and/or the Institution
  • public and private sector perception of the Province/the Ministry
  • perception of other provincial and national Institutions
  • For each viable option, compile qualitative analysis findings in a summary table. For example:

Viable Option 1: NAME
Summary of Qualitative Analysis
Advantages / Disadvantages
Operational
Physical
Environmental
Strategic
Viable Option 2: NAME
Summary of Qualitative Analysis
Advantages / Disadvantages
Operational
Physical
Environmental
Strategic

4.2.3Financing

  • For each viable option, identify intended sources of capital and operating funding, including direct capitalfunding (e.g., provincial grants), federal grants, own resources, debt financing, private financing, land lord and/or institute financing of TI’s disposition of surplus property, etc.
  • Financing must include details of conditions, associated with external funding, borrowing assumptions, and planned commercial revenues
  • For each source of capital financing, include a table showing the required financing draws for each year of the project development, matching the applicable categories in the cash flow forecast, as follows:

Table 44. Sources of Funding for Each Viable Option

Project Financing / Year
1 / Year
2 / Year
3 / Total
Sources of Financing
Direct capital funding
  • Source A
  • Source B
/ $ xxx / $ xxx
New debt financing
  • Source A
  • Source B
/ $ xxx / $ xxx
Internal financing
  • Source A
  • Source B
/ $ xxx
$ xxx / $ xxx
$ xxx
External financing
  • Source A
  • Source B
/ $ xxx
$ xxx / $ xxx
$ xxx
Total Project Financing / $ xxx / $ xxx

4.2.4Risk Assessment

  • For each viable option, identifythe risks using the Ministryrisk register and evaluate the risks in terms of probability, impact, risk owner, and mitigation strategies
  • The Ministry risk register is in accordance with project management best practices as described in the Ministry’sRisk Management Guide. Refer to the Ministry’sRisk Registerfor further details and examples of risk identification and evaluation
  • Note thatrisk response, risk monitoring & control, are completed during the implementation phase of the proposed project

Table 45. Risk Register- Risk Identification & Evaluation (Inherent)

RESOURCES
  • Ministry’sRisk Management Guide
  • Ministry’s Risk Register

4.3Step 3: Summary of Options

  • Typically, the preferred option is the lowest net cost option on a net present value basis. However, other considerations including those identified in the qualitative analysis, financing, and risk assessment may surface another viable option with a higher net cost as the preferred option
  • Summarize the results from Sections 4.1-4.2, providing advantages, disadvantages, and key findings to select a preferred option

Key Findings / Viable Option 1 / Viable Option 2
Net Present Value / $ / $
Qualitative Advantages
Qualitative Disadvantages
Financing
Risk Assessment

5.0CONCLUSIONS & RECOMMENDATIONS

5.1Conclusions

  • List major conclusions based on Section 4.0
  • Identify the preferred option that has been selected

5.2Recommendations

  • Recommends that the preferred option be approved by the Institution’s Board
  • Recommends that the Lease Concept Plan Report be approved by the Ministry

5.3 Next Steps

Following Ministry approval of the Lease Concept Plan Report, the next stepswill include:

  • The preparation of a formal Lease Request Submission for approval by the Ministry of Advanced Education and Ministry of Finance.
  • Please refer to theMinistry websitefor the procedures outlined in the CARG, Section 14, Acquisition and Disposition of Property.

6.0IMPLEMENTATION STRATEGY

  • An implementation strategy is developed for the preferred option identified in Section5.0 Conclusions & Recommendations

6.1Project Delivery Models

  • Provide a preliminary analysis of alternateproject delivery models (e.g., design-bid-build, design-build, construction management, etc.)
  • In the case of leasing, the only two delivery options for completing tenant improvements are:

-Tenant Financing using the appropriate project deliverymodel for the project

-Landlord Financing using the appropriate project delivery model for the project

  • Summarize findings to arrive at a preferred project delivery model for procurement purposes

Table 61. Summary of Procurement Models

Project Delivery Models / Advantages / Disadvantages
ProcurementModel 1
Procurement Model 2
Procurement Model 3

6.2Schedule

  • Create a Gantt chart that identifies the expected duration of each task in the project, including the following:

-Institution prepares and submits a Lease Concept Plan Report

-Institution and Ministry reviews andapprovals of Lease Concept Plan Report

-Institution enters into lease negotiations

-Institution prepares and submits a Lease Submission package to the Ministry of Advanced Education and Ministry of Finance for review and approval

-A Ministerial decision is provided

-Design and construction of tenant improvements, etc.

-Commissioning

-Occupancy

6.3Project Governance

  • The appropriate project governance structure is based on the complexity and size of the project.Refer to Figure 6-1 for a project organizational structure.
  • The organization structure identifies relationships and communication lines between project members, and is intended to:

-Encourage appropriate input from a wide range of sources

-Facilitate timely decisions

-Fulfill all Institutional and government requirements

-Ensure good business practice in accordance with government contract guidelines and financial and signing authority controls

-Focus on making design and equipment decisions within the boundaries of key project parameters such as budget, schedule and project scope

Figure 61.Example of an Organizational Structure for a Project


OTHER RESOURCES FOR THE CONCEPT LEASE PLAN REPORT

  • Institutional Accountability Plan & Report
  • 5 Year Capital Plan
  • Campus Master Plan
  • Utilization rate
  • Ministry’s Space Standards
  • Ministry’s Budget Model
  • BCStats Population Projections (P.E.O.P.L.E.)
  • Provincial data on labour trends
  • Ministry Business Plans
  • Cross-ministry initiatives
  • Ministry’s Risk Management Guide

Lease Concept Plan Report |Page 1 of 21

[1] Incremental costs refer to the additional costs associated with the new program only. Costs for the existing programs prior to the new development would not be included.

[2]Although debt financing may not be used for specific projects, there is still an opportunity cost of using available cash flow for project funding.