Lancaster County Replacement Facility Development Strategy Presented by: CGL Capital Solutions May 19, 2011 A World of Solutions

 Overview of CGL Capital Solutions  Discussion of project alternatives benefits and limitations  Description of financing solutions  Detail the procurement process  Description of the menu of services for the Request for Proposals Agenda

CGL Capital Solutions A World of Solutions Developer and financer of mission critical public infrastructure for the Corrections, Justice and Public Safety Markets We are truly PARTNERS Development includes ALL aspects of a project including: site acquisition, entitlement, permitting, financing, funding, planning, sustainable design, procurement, construction management, commissioning, training, warranty, facility maintenance, life-cycle management, facility closures, and excess property reuse planning. Financing includes sourcing the initial capital outlay, ongoing capital expenditures and budgeting operational cost such as staffing, maintenance and utilities.

1.Status quo 2.Renovate existing jail and build a smaller re-entry facility 3.Renovate existing jail and build Phase 1 of full replacement 4.Build full replacement facility Options A World of Solutions

 No new capital expenditures Option 1: Status Quo A World of Solutions PROSCONS  Safety and security issues from overcrowding  Excess labor costs  Excess utility costs  On-going maintenance and equipment replacement  No increased capacity

Option 2: Renovate & Build CCRE A World of Solutions PROS  Lower capital commitment  Beginning to address the overcrowding issues  All the benefits of re-entry programming CONS  Operations of two facilities  Excess labor costs  Excess utility costs  On-going maintenance and equipment replacement  No additional high custody beds

Option 3: Renovate & Build Phase I A World of Solutions PROS  Completely solves overcrowding issue  Defers capital expenses CONS  Most expensive operational model for staffing, utilities, maintenance  Paying for both the existing facility renovations and the full build-out support structure  Most expensive per inmate capital outlay  On-going maintenance and equipment replacement

Option 4: Full Replacement A World of Solutions PROS  Most efficient operational model for staffing, utilities, maintenance  Safest and most secure  Additional capacity for all security levels CONS  Largest capital outlay

Option Comparison 1: Status Quo 2: Renovate & Build CCRE 3: Renovate & Build Phase I 4: Full Replacement Capital 1234 Staffing 2431 Utilities/ Maintenance 4321 Impact on: Budget/ Cash Flow 1342 Programming & Recidivism 42 or 3 1 Security & Safety 42 or 3 1 Inmates 42 or 3 1 Employees 42 or 3 1 Community 42 or 3 1

2009 Budget 384-bed Community Re-entry Center$25M$66,400/bed 1,262-bed Phase 1 Build Out with Renovation of Existing Jail $115M$91,200/bed 2,158-bed Full Build Out$169M$78,100/bed A World of Solutions

Cost Reduction Items A World of Solutions Number of Beds Most recent 2025 projection at 1,760 beds 13% less than 2009 Construction Costs 2011 vs Material cost and subcontractor margin reductions have lowered cost by 10% or more This is expected to hold true through at least the 1 st quarter Beyond that expect the supply/demand curve to dramatically change.

Cost Reduction Items A World of Solutions Private Finance Model Conservatively saves 12% from public procurement process through: 1.Economies of scale 2.Schedule savings 3.Constructability knowledge and expertise

Private Finance Model for 1,760- Bed Full Build Out A World of Solutions 1,760 beds multiplied by $78K/bed 10% cost reduction due to current market conditions Current cost estimate under public procurement process 12% expected savings with private development and finance models $137,280,000 ($13,728,000) $123,552,000 ($14,826,240) $108,725,760 $62K / bed

Issue Tax-Free Municipal Bonds  Uses County’s borrowing capacity  General extra soft cost  Usually lowest rate, but not always the least expensive Municipal Lease Models  Uses County’s borrowing capacity  Little flexibility True Lease Model  Can be accomplished off balance sheet  Paid for through the annual DOC operating budget  Very flexible Finance Options A World of Solutions

Design builder is also responsible for operating and life-cycle costs Fix the repair and maintenance at a designated amount per year at inception of contract Set schedule for replacement of all major systems at inception and include in initial contract Total Cost of Ownership A World of Solutions Examples:  Security Electronics  Plumbing  Electrical  Locking Controls  Roofs  HVAC

1)Move quickly to capitalize on all time historic low construction cost 2)Utilize the development, finance, design, and construction markets to analyze the problems Conclusions A World of Solutions RFQ/RFP should include:  Design & construction costs  Impact on repair and maintenance and asset life cycle management  Impact on staffing  Impact on utilities  Reuse of existing jail property  Finance options

Questions Comments Next Steps A World of Solutions Buddy Johns, President 6401 E Thomas Rd, Suite 106 Scottsdale, AZ (724)