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TABLE OF CONTENTS EXECUTIVE SUMMARY Provide a summary for each section of the Lease Concept Plan Report PROJECT DESCRIPTIONBACKGROUND INFORMATIONSTRATEGIC ALIGNMENTPROGRAM DELIVERY OPTIONS ANALYSISCONCLUSIONS & RECOMMENDATIONSIMPLEMENTATION STRATEGYConcept Plan Report | 3 1.0PROJECT DESCRIPTION1 Project 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 5 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 timeframe2 Project 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 Review3 Project 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 YYYYNote: Projects greater than $50M in initial capital costs must be evaluated by Partnerships BC for public private partnership (P3) viability during 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 http://www.partnershipsbc.ca. Lease Concept Plan Report |Page 4 of 25 RESOURCES  Institutional Accountability Plan & Report  5 Year Capital Plan  Utilization rate  Ministry’s Space Standards  Ministry’s Budget ModelLease Concept Plan Report |Page 5 of 25 1.0BACKGROUND INFORMATION4 Current Situation  Describe the events leading up to the project described in Section 1.0 Project Description Describe the risks of maintaining the status quo- For example, unable to meet regional demand for trades and technology graduates5 Demand  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 trendsLease Concept Plan Report |Page 6 of 25 2.0STRATEGIC ALIGNMENT6 Stakeholder 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 Internal/External Stakeholder Role (I or E) The Ministry Stakeholder #2 Stakeholder #3 Stakeholder #4 Stakeholder #5 Stakeholder #67 Stakeholder Alignment  Evaluate each stakeholder (e.g., business plan, etc.) to determine how the opportunity supports their goals Table 32. Stakeholder Alignment The Ministry How the Institution’s Opportunity Supports Goal Impact the Stakeholder’s Goals (High, Medium, Low) 1. 2. 3.STAKEHOLDER #2 How the Institution’s Opportunity Impact Goal Supports the Stakeholder’s Goals (High, Medium, Low) 1. 2. 3.STAKEHOLDER #3 How the Institution’s Opportunity Goal Impact Supports the Stakeholder’s Goals (High, Medium, Low) 1. 2. 3.Lease Concept Plan Report |Page 7 of 25 3.0PROGRAM DELIVERY OPTIONS ANALYSISThe 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) analysis2. 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 location3. Identification of financing sources for each viable option, including where applicable, Institution or landlord financing of TI’s4. Risk assessment for each viable option Step 3 – Summary of Options: The options analysis will result in the selection of one option as “preferable”, for which an implementation strategy will be developed RESOURCES  Ministry Business Plans  Cross-ministry initiativesLease Concept Plan Report |Page 8 of 25 Table 43. Options Analysis MethodologyIdentify All Options 1P E Determine if any mandatory T Option does not move criteria exist. If so, does the option No forward for further analysis meet the mandatory criteria? SYesEvaluate Viable Options 2P Cost/Benefit Preliminary Preliminary Risk E Analysis Financing Assessment T SQualitative Quantitative Analysis Analysis (Non- (Financial) Financial) 3P Summary of Options E T SLease Concept Plan Report |Page 9 of 25 8 Step 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 quoTable 44. Identify all Options OPTIONS Type of Project Option Capital (include category of project) Description or Non-Capital Status Quo Option #1 Option #2 Option #3 Identify mandatory criteria that the options must meet. For example, mandatory criteria may include:- Infrastructure Improvements: FCI improvement and/or reduction of life safety & occupational health risks- Cost Effectiveness: Funding partnerships and/or cost benefits throughout lifecycle- Innovation: Demonstrates sustainable solutions and/or collaboration- Strategic Alignment: 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 Lease Concept Plan Report |Page 10 of 25 Lease Concept Plan Report |Page 11 of 25 9 Step 2: Evaluate Viable Options  Options that meet mandatory criteria are evaluated through quantitative (cost/benefit) analysis, qualitative (advantages/disadvantages) analysis, financing, and preliminary risk assessment 9.1 Quantitative (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 flow1 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. Lease Concept Plan Report |Page 12 of 25 Table 45. Summary Table of a Quantitative Cost/Benefit AnalysisOPERATING YEAR CASH FLOW FORECAST – Viable Option 1 Inflow/(Outflow) Year 1 Year 2 Year 3 Years Year 20 201x 201x 201x 4….19 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 - $ (x,xxx) - - - Amortized TI’s 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 financing2 $ 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 …….. $ xxxNet Cash Inflow/(Outflow) $ xxx $ xxx $ xxx …….. $ xxxNet Present Value – 20 years at x % $ xxx2 Although debt financing may not be used for specific projects, there is still an opportunity cost of using available cash flow for project funding.Lease Concept Plan Report |Page 13 of 25 A supporting schedule detailing the annual principal and interest payments should accompany the cash flow forecast. For example:LONG TERM DEBT – Continuity DEBT TERM Schedule Year 1 Year 2 Year 3 Years Year 20 201x 201x 201x 4 to 19 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 RepaymentA supporting schedule detailing the total capital cost estimate should also be included. For example:CONSTRUCTION YEAR TOTAL CAPITAL COST ESTIMATE Year 1 Year 2 Year 3 201x 201x 201x Land: Acquisition cost Site preparation $ xx,xxx $ - $ - xx,xxx Parking and improvements x,xxx x,xxx - x,xxx Soft Costs for Above - xxx xx,xxx xx,xxx Land ContingencyTotal Land Costs $ xxx,xxx $ xxx,xxx $ xxx,xxx $ xxx,xxx Buildings: Hard costs (construction materials and labor) $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxx x,xxx,xxx Soft costs (design, engineering, PM/CM etc.) xxx,xxx xx,xxx x,xxx xx,xxx Construction contingency xx,xxx x,xxx x,xxx xx,xxx Total Building Costs $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxx Furniture, Fixtures & Equipment Furniture fixtures $ x,xxx - $ xx,xxx xx,xxx Equipment xx,xxx - xxx,xxx xxx,xxx Soft Costs for Above Contingency for FF&E Total F,F&E $ xxx,xxx $ xxx,xxx $ xxx,xxx $ xxx,xxx Sub-total Inflation during acquisition and development $ xxx $ x,xxx $ xx,xxx $ xx,xxx period Construction financing costs $ xxx $ x,xxx $ xx,xxx $ xx,xxx Total Capital Cost $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxxLease Concept Plan Report |Page 14 of 25 9.2 Qualitative 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 goalsLease Concept Plan Report |Page 15 of 25  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 Lease Concept Plan Report |Page 16 of 25  For each viable option, compile qualitative analysis findings in a summary table. For example:Viable Option 1: NAME Summary of Qualitative Analysis Advantages DisadvantagesOperational   Physical   Environmental   Strategic  Viable Option 2: NAME Summary of Qualitative Analysis Advantages DisadvantagesOperational   Physical   Environmental   Strategic   Lease Concept Plan Report |Page 17 of 25 9.3 Financing  For each viable option, identify intended sources of capital and operating funding, including direct capital funding (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 46. Sources of Funding for Each Viable OptionYear Year Year Project Financing Total 1 2 3 Sources of Financing Direct capital funding . Source A $ xxx $ xxx . Source B New debt financing . Source A $ xxx $ xxx . Source B Internal financing . Source A $ xxx $ xxx . Source B $ xxx $ xxx External financing . Source A $ xxx $ xxx . Source B $ xxx $ xxx Total Project Financing $ xxx $ xxxLease Concept Plan Report |Page 18 of 25 9.4 Risk Assessment  For each viable option, identify the risks using the Ministry risk 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’s Risk Management Guide . Refer to the Ministry’s Risk Register for further details and examples of risk identification and evaluation  Note that risk response, risk monitoring & control, are completed during the implementation phase of the proposed project Table 47. Risk Register- Risk Identification & Evaluation (Inherent)RESOURCES  Ministry’s Risk Management Guide  Ministry’s Risk RegisterLease Concept Plan Report |Page 19 of 25 10 Step 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 optionKey Findings Viable Option 1 Viable Option 2Net Present Value $ $Qualitative Advantages  Qualitative Disadvantages  Financing  Risk Assessment  Lease Concept Plan Report |Page 20 of 25 4.0CONCLUSIONS & RECOMMENDATIONS11 Conclusions  List major conclusions based on Section 4.0 Identify the preferred option that has been selected12 Recommendations  Recommends that the preferred option be approved by the Institution’s Board  Recommends that the Lease Concept Plan Report be approved by the Ministry5.3 Next StepsFollowing Ministry approval of the Lease Concept Plan Report, the next steps will include: The preparation of a formal Lease Request Submission for approval by the Ministry of Advanced Education and Ministry of Finance.  Please refer to the Ministry website for the procedures outlined in the CARG, Section 14, Acquisition and Disposition Of Property.Lease Concept Plan Report |Page 21 of 25 5.0IMPLEMENTATION STRATEGY An implementation strategy is developed for the preferred option identified in Section 5.0 Conclusions & Recommendations13 Project Delivery Models  Provide a preliminary analysis of alternate project 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 delivery model 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 Refer to the Project Delivery Option Analysis Tool (CARG Templates 13).Table 68. Summary of Procurement ModelsProject Delivery Models Advantages DisadvantagesProcurement Model 1Procurement Model 2Procurement Model 3Lease Concept Plan Report |Page 22 of 25 14 Schedule  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 and approvals 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 - Occupancy15 Project 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 scopeFigure 61. Example of an Organizational Structure for a ProjectLease Concept Plan Report |Page 23 of 25 InstitutionStakeholders Project ManagerDesigners Contractors SupplierLease Concept Plan Report |Page 24 of 25 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 GuideLease Concept Plan Report |Page 25 of 25

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