Costs that relate to facility management are not directly charged to properties serviced. There is no clear accountability for effective and efficient management of real property assets.
Utilize mechanisms such as service level agreements and BOMA standards to establish allowable and appropriate costs for occupying City owned or leased facilities.
Cost Savings, Revenue Enhancement, Service Improvement
Bureau of General Services
Estimated Annual Impact:
While the immediate financial impact cannot be estimated, applying and developing these standards will enable the City to accomplish a reduction in its real estate portfolio and better manage its remaining assets.
Estimated Implementation Costs:
Barriers to Implementation:
While the proposed database of City properties (see Recommendation 4-B) should enhance this process, this change should be implemented using historic or market-based cost allocations without the database being completed.
Develop service level agreements with entities occupying City owned or managed space; benchmark service charges against industry standards such as those reported by BOMA.
Experience in the private sector indicates that significant economies occur in space utilization when tenants are directly impacted by their space utilization choices. All occupants of City owned or leased facilities should be assessed a flat charge per square foot for all occupied space. The amount charged should be sufficient to cover all operational costs, overhead, and capital.
Uniform and enforced standards would help determine tenants’ true cost of occupancy. The availability of this information is critical to identifying facilities that are particularly costly to operate. This information can then be utilized to pursue facility consolidation opportunities.