Creating a Facilities Investment Plan with Building Portfolios

Challenge: Facilities Needs Assessment and Investment Guidance

Every good facilities investment plan starts with a clear understanding of needs. Just ask Merced County. Located in California’s central valley, the county needed to develop a data-based understanding of their facilities inventory to better organize and communicate funding requests. Merced was also in search of an objective perspective to help define areas of emphasis and justify resource allocation. Ultimately, county officials wanted to get their facilities investment plan off to a good start.

Solution: Strategic Capital Planning

Merced County engaged with Gordian and their Strategic Capital Planning service to determine a baseline of their facilities needs through assessment and initiate an effective and intentional facilities investment plan. Merced’s needs assessment started with comprehensive walkthroughs of each county-owned building to inventory and conduct a visual inspection of components to determine functionality and condition. Gordian assessed a total of 1.2 million gross square feet (GSF), beginning with the 18 buildings considered highest-priority based on function and community impact. This grouping consisted of libraries, community spaces and recreational centers that were starting to show their age.

The second phase of walkthroughs totaled 98 buildings, including a combination of lower priority support and community-facing facilities, and higher priority critical services facilities. Upon compiling this information into a working asset inventory, Gordian conducted a series of interviews with key facilities operators to confirm inventory and relative condition observations and validate project scoping and lifecycle pricing.

Learn more about gathering the right facilities data and engaging key stakeholders in our free eBook, “From Data to Action: 5 Steps to Creating a Sustainable Capital Plan.”

With technical findings set, Gordian evaluated each building’s Net Asset Value (NAV), the percent good of a building based on need- to-replacement value, to split the total need among strategic building segments based on overall condition. These segments, or portfolios, highlighted areas of importance and identified candidates for renewal, replacement or divestment. Gordian then created a flexible project scoring model to guide investment sequencing and encourage objective, priority-based project selection. This would allow Merced County to pivot their plan strategically as priorities naturally shifted over time.

Result: Condition-Based Portfolios and a Clear Facilities Investment Plan

By compiling both assessment phases, Merced County developed a detailed inventory of future facilities investment needs that saw funding requirements grouped by functional priority and NAV. This has helped county decision-makers understand the importance and impact of each potential project. Portfolio analysis revealed the smallest segment of their inventory required the most investment on a $/GSF basis. At a level where the needs potentially outweighed the function, critical decisions needed to be made on the future of these spaces before investing resources into them. Individual project scoring, in alignment with the full capital plan, will help prioritize buildings based on scope and urgency. Funding and spending capacity will then aid Merced in making balanced investment decisions and reducing additional financial burden through politically-supported divestment.