Project Analysis and Feasibility Report (2)

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item expenses useri in the proforma. It is important to note that these cost estimate are projections of first year expenses only. We have been advised that they have been dju inflation using market data and inflation values. for In order to check the accuracy of the O& M projections, Marion County evaluated each component of MMC's expenses and compazed them with our own buildings. Labo , cost accounting procedures and different utility rates account for some differences in th distribution of county building expenses. The county's Facility Management Department estimat s$0.31 /sf for O& M. With the assistance of Arbuckle Costic we also received information on t newly constructed Robertson Building. This facility is privately owned and leased to the tate of Oregon. Monthly O&M expenses are $0.23 /sf . While this seems low, the estima es for utility costs; minor maintenance, and janitorial services are comparable to MMC projectio s. It is also likely that the newness of the building and warranty on building equipment is holdi g first year O & M costs down. Marion County's current O& M costs for county buildings is higher than the proje tions used in the proforma. This is cause for some concern and is the result of our higher labor sts in some azeas. We also have older buildings and systems in our inventory, some of which perate around the clock seven days a week. The projections for Courthouse Square assume mark t rates for some services such as janitorial. If we use our current labor force, the county's rat would rise to a range of $0.36 to 0.39. A policy decision has been made to contract out these se ices (such as janitorial) in order to meet proforma projections. Several questions have been raised about specific cost centers in the proforma. Wh t is covered by the personnel figure of $0.25 /sf? A definition of this, and other items, is includ in exhibit B. The cost estimate is reasonably close ta our labor costs except for employees at the op steps of their salary range. _ Have provisions been made for reserves? The county currently sets aside some re rves in our facility budget for major building expenses. These revenues aze co-mingled and d, where needed, on county buildings. The proforma's expense category in exhibit B, called major maintenance, is synonymous with capital reserves. Based on current projections, believe the figure of $0.16 /sf added to existing building reserves is adequate. It should be not d however, that the county dces not have a building replacement fund included in our rental fo ulas. This issue is currently under discussion by our internal finance committee. Have landscaping, security, outside maintenance and common area costs been incl ded? Several of the cost centers in exhibit B, such as"other maintenance & minor maintenance" contain expenses to cover these needs. Management cost (overhead) is included as a component of the county's cost acco ting system. All major cost centers include a chazge back for management and this cost has bee factored into the county's estimates. 2