1 DPW Leasing/Property Transfer Workshop July 28, 2010

2 DPW Leasing/Property Transfer Workshop AGENDA INTRODUCTIONS – STAFF CHANGES WITHIN DPW LEASING PURPOSE OF SESSION REVIEW: –S–STATEWIDE CAPITAL AND FACILITIES PLAN (FACCAP) – 2010/2011 –R–REQUEST FOR SPACE PROCESS –I–INTERIM SPACE PROCESS –Y–YOUR AGENCY’S RESPONSIBILITIES –G–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

3 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

4 DPW Leasing/Property Transfer Workshop REVIEW OF THE STATE FACILITY PLAN PAUL HINSCH OFFICE OF POLICY AND MANAGEMENT BUREAU OF ASSETS MANAGEMENT

5 DPW Leasing/Property Transfer Workshop 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)

6 DPW Leasing/Property Transfer Workshop 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.

7 DPW Leasing/Property Transfer Workshop STATE FACILITY PLAN – AGENCY TIMELINE Summer of even numbered years, agencies will receive an 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 1 st 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.

8 DPW Leasing/Property Transfer Workshop 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 15 th (odd-numbered years) – OPM is required to submit to the State Properties Review Board (SPRB) a Proposed State Facility Plan. March 1 st – SPRB required to makes recommendations regarding the Plan to OPM. March 15 th – OPM required to present the Plan to the General Assembly. March-June – General Assembly passes an operating and capital budget July 1 st – State Facility Plan goes into effect.

9 DPW Leasing/Property Transfer Workshop 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

10 DPW Leasing/Property Transfer Workshop 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 30 th 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.

11 DPW Leasing/Property Transfer Workshop 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.

12 DPW Leasing/Property Transfer Workshop STATE FACILITY PLAN – QUESTIONS? Paul Hinsch Office of Policy and Management Bureau of Assets Management (860)

13 DPW Leasing/Property Transfer Workshop REVIEW REQUEST FOR SPACE PROCESS

14 DPW Leasing/Property Transfer Workshop 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.

15 DPW Leasing/Property Transfer Workshop 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

16 DPW Leasing/Property Transfer Workshop 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

17 Agency Identifies Need Submits Requests OPM Reviews & Approves Step 1 FASCAP (5 yr..) Approval Interim Space Request Approval DPW Planning Reviews & Approves Request RFS Approved RFS Not Approved Request for Space (RFS) Not approved if square footage or costs > 10% Lease Renewal Only Step 2 New Lease Step 2

18 Step 1 New Lease Agency Identifies Need DPW Facilities Planning Either reviews or prepares RFS and Level 3. Checks to ensure State Owned space is NOT available OPM - Budget Reviews & Approves If RFS has vacant/projected positions, DPW forwards to OPM Budget DPW Facilities Planning Reviews, recalculates RFS & Level 3 based on OPM approved staffing Agency Signs RFS DPW Facilities Planning Administrator Signs RFS, the DPW Commissioner Signs RFS OPM - Asset Mgt. Reviews & Approves if not in FACCAP or more than 10% of space/cost is requested Interim Space Request DPW Facilities Planning Sends Approved RFS to Leasing If no Interim Space Request is required Approved RFS

19 DPW Leasing DPW Bid/Contracts Receives Ad from DPW, places ad and receives responses Comptroller Advertise Request if 2,500 sq.ft. or over Proposals from LL. Responses from LLs Step 2 Lease Renewal Option Agency SPRB Lease RenewalResolve Issues DPW Leasing “End” Renewal OK Landlord Lease Renewal Letter Rent Control Card Landlords (LL) Submit Proposals Advertising DPW Bid/Contracts Receives responses, summarizes them for Leasing DPW Leasing Rent Control Card Lease Renewal Not OK

20 Step 2 New Lease DPW Leasing DPW Leasing DPW & Agency Visit Sites & Picks Site DPW Facilities Planning Approves Space Request IT Web-site Board of Realtors Mayor DPW Bid/Contracts Advertises, receives LL Proposals Agency DPW Leasing Negotiates Lease & Fit-Out Landlord DPW Leasing (Estimating, compiling costs) Agency Reviews/Modifies & Approves Plans Agency Design & Est. Or LL Designs Landlord As Built Prelim Design Financial Affidavit Signed Lease Step 3 Approved Space Request Form DPW Security Conducts Audit In Parallel on Selected Site DPW Leasing Prepares ad DPW Leasing sends letter informing of agency’s need DPW prepares & forwards standard lease Resolve Issues

21 Step 3 New Lease (Con’t) DPW Leasing Agency Signed Lease OKNot OK DPW D. Comm./ Comm. DPW Leasing Signed Lease OK/Not OK OPM Signed Lease DPW Leasing Signed Lease OK SPRB Visit site, etc. Signed Lease Resolve Issues Signed lease OK/Not OK DPW Leasing AG Approve Lease for Form (Content) Signed Lease & AG Check list Resolve Issues Re-write Lease Signed Lease OK Step 4 Signed Lease Resolve Issues Re-write Lease Resolve Issues

22 DPW Leasing Prepares Rent Control Card Step 4 New Lease (Con’t) Agency Comptroller Rent Control Card Landlord DPW Leasing (Facil. Mgt. If Req’d) Annual Inspection Unresolved LL/Agency Issues Move-in coord, Space Planning, Data, T-Com, Etc.. Day to Day Issues Town Hall End/ Lease Notice Recorded Rent Control Card Sent by Agency, last step Fit-out is Completed DPW/Agency Approve/sign off

23 DPW Leasing/Property Transfer Workshop DISCUSS 4B27 Discussing 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

24 DPW Leasing/Property Transfer Workshop 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

25 DPW Leasing/Property Transfer Workshop 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.

26 DPW Leasing/Property Transfer Workshop 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

27 DPW Leasing/Property Transfer Workshop 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…)

28 DPW Leasing/Property Transfer Workshop 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

29 DPW Leasing/Property Transfer Workshop QUESTIONS/ANSWERS THANK YOU FOR COMING!