Webinar Series

The ABCs of BCAs: Their Value in Asset

Management and Planning

Bill Bacon, DpIT, CET, PMPSenior Technical Project Manager, Technical Services Dept,

Housing Services Corporation

October 28, 2015

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Upcoming eventsSHARE Webinar

Slicing up the Cake: Making Stock Transfer Happen in Canada

November 17, 2015 | 12:30 to 1:30 p.m. EST | Cost: free

Join us for this unique opportunity to go in-depth with BC Housing’s CEO, Shayne Ramsay on the creation of a

program to facilitate the stock transfer. He will share the nuts-and-bolts of the program, including its structure, goals

and expected outcomes.

You will learn:

• The details and mechanics of the program

• Structural elements and requirements: policies, operating agreements and financial tools

• Approaches and methods for assessing and selecting non-profit providers

• Frameworks for accountability and reporting

• Financing support and resources for non-profit providers

• The role of BC Housing and non-profit providers Shayne Ramsay is CEO of

BC Housing, the provincial

agency responsible for

creating housing options for

those most in need in British

Columbia.

To register, go to the events tab on the SHARE website: http: //share.hscorp.ca

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Bill Bacon:

Senior Technical Project Manager

About this Webinar:

� Increasingly, housing providers across Canada are using a

Building Condition Assessment (BCA) as a trusted resource to

effectively manage aging assets and to make informed

decision-making about capital planning.

� This webinar intended to demonstrate how to move from a

reactive to a planned asset management approach using a

Building Condition Assessment (BCA).

Outline

�The BIG PICTURE - capital planning and why it

matters

�Building Condition Assessments (BCA)- what,

why and how

�Using and Interpreting the BCA

�Updating Existing BCAs

�“I need HELP”

What is involved in managing assets?

THE BIG PICTURE:

Typical stages in the lifecycle of an asset

Decision making model for capital projects

1

Evaluate needs and priorities - assess planned and unplanned capital needs, prioritize projects

2

Establish annual plan - assess project options and develop formal plan with regard to available funding, risks and capacity

3

Implement plan - execute projects or defer projects with associated monitoring, revise capital needs list accordingly

What do I need to get started?

To help establish your comprehensive capital

plan, you will need 3 key ingredients:

Building Condition

Assessment (BCA)Energy Audit (EA)

Reserve Fund Forecast (RFF)

What is a Building Condition Assessment?

• It is a technical inspection of your building and its individual

components that assesses the future maintenance needs of a

project; usually involves:

� a walk-through of the building and property

� a review of maintenance history and drawings

� discussions with key staff

• Undertaken by competent assessors and/or a qualified

technical advisor

• Can be done visually or by using computer based models (or a

combination of both)

Value of a BCA

� Essential in keeping facility managers in control of their

facilities.

� Assists in planning for major expenditures within a certain

timeline.

� Provides information required to develop a capital repair

reserve fund.

� Minimizes pre-mature asset failures, shorter useful asset lives,

higher repair and replacement costs that can impact capacity

and quality (health, life, safety).

Important is mitigating unnecessary exposure to

legal, social and other risks associated with

deteriorated facilities, statutory non-compliance

and hazardous materials.

A building condition assessment is not the same

as a technical audit. Technical audits look for

construction and design defects. They usually

involve “destructive testing” to inspect in and

behind walls and ceilings, and are much more

expensive.

What a BCA provides?

For the building and its major components, a BCA provides

reliable and objective details on:

Current condition rating

Serviceable life remaining

When repairs or replacements will

be required moving forward

An estimate of costs for the future

repairs or replacements

What a BCA provides?

� forecasts replacement needs over the extended operating period of the

building (up to 30 years) using standard useful life estimates

� estimates capital costs for replacement/repairs, identified for each

element and rolled up to help provide a cumulative annual picture of

projected costs over time

� estimates typically valid for up to 5 years from initial inspection, so it

should be updated every 3-5 years to ensure that the BCA continues to

reflect actual conditions

� by using standard templates, the base projection of the BCA can be

refreshed every 5 years, enabling the capital plan to remain a valuable and

reliable tool for managing assets over time

What a BCA doesn’t provide…

• Estimates of other costs that may need to be incurred i.e.,

�Soft costs related with design, tendering, permits etc.

�Consequential costs i.e., removal of roof top equipment to repair roof

�Cost of inflation

Caution: Estimates on near term costs will be more

accurate than longer-term forecasts and this should be

taken into account.

Requirements to conduct BCA

� Commission/ engage competent assessment firm (RFP)

� Provide assessors: – Full access to building and all building components

– Building construction drawings and specifications

– Details of any renovations/changes/alternations made to facility

– Maintenance records- especially anything that suggest repeat problems in units

– Any compliance orders by Authorities Having Jurisdiction

– All existing warranties, guarantees and service contracts

• Assessor will inspect your building. There is no need to look at every single items. Unless you are doing a more complete inspection to create benchmark data for your maintenance program, a sample will do.

If you ask your staff to do this job, be realistic

about the amount of work involved. It can take up

a lot of time. That could take away staff time from

other essential work for your organization.

What is in a BCA report?

� Introduction (general descriptions, purpose, scope of investigation)

� Terms of Reference (Authorizations, investigation procedures,

limitations)

� Observations/ Condition Analysis (roof, exterior windows,

interiors, landscaping, mechanical systems, electrical systems)

� Financial Analysis (Reserve fund study projections)

� Conclusions and Recommendations

� Appendices� Capital Replacement Study Table

� Capital Replacement- 20 year schedule

What’s not in the report?

� A report on every item in your building. Capital

items that are meant to last the life of the building,

such as foundations, won’t be covered unless the

assessor spots a structural problem- or you point

one out.

� A discussion of routine repairs and maintenance.

Your report won’t talk about these things except to

suggest preventive maintenance to make capital

items last longer.

Don’t expect:

Your report should also suggest ways you can save money, such as:

• preventive maintenance practices – ways of looking after capital items to

make them last longer

• less expensive replacement items that could work just as well as the

original items

• where higher-quality replacements can save you money in the long run

• When it is cheaper to replace a capital item than keep on repairing it,

even if the item is still working.

A good report should give you an opinion on your building’s

general condition and note any problem areas that may need

in-depth testing. It should also tell you about any building

code changes that will mean upgrading when you change a

capital item, rather than just staying with the same quality as

before.

Using and interpreting the BCA

�Look for priority issues i.e., Life Safety,

Structural Integrity etc.

� Develop action plans to address issues based on

their priority

SAMPLE PRIORITY RATINGS

PRIORITY A Life, Safety

PRIORITY B Structural Integrity

PRIORITY C Legislative Requirements

PRIORITY D Building Functionality

PRIORITY E Cost Effective Upgrades

Using and interpreting the BCA

SAMPLE CONDITION RATINGS

GOOD Like new condition, no work or maintenance required

FAIR Working condition with some maintenance or minimum work required

POOR Replacement or major report work required

CRITICAL No longer working or failure is imminent

� Look for critical or poor conditions that require

attention:

� Prioritize, and develop action plans to address

required repairs or replacements

� Consider synergies where practical

Using and interpreting the BCA

� Look at Repair and Replacement Schedule (costs and

timelines)

� Develop a plan (Reserve Fund Forecast) to ensure monies

required for the forecasted repairs and replacements is

available when needed

Example- Ontario

• Ottawa Community Housing Corporation conducted a BCA of

its portfolio in 2008 and identified $211 million in capital

repairs that were overdue and a further $121 million in

repairs that would be required over the next five years. The

BCA estimated that if OCHC invested about $66.5 million each

year for five years, the repair backlog for the entire portfolio

would be reduced.

Building on the original BCA, OCH is developing an integrated

program that will provide updated data on capital requirements,

along with financial planning and project implementation

planning. The enhanced system, known as the Integrated BCA

will be the foundation for OCH capital decision-making.

Example- Ontario

The United Counties of Leeds and Grenville (United Counties) conducted 2 case

studies.

1) affordable housing strategy in 2004.

2) building condition assessment study in 2005.

Studies revealed:

– changing demographics in their communities: the population was aging &

required barrier-free and/or accessible housing

– increase in the number of smaller households, particularly single-person

households.

– social housing stock was also aging and operating costs were increasing,

particularly utilities and maintenance.

– capital cost projections noted in the BCA study were high.

The United Counties calculated it would cost $1 million per year for the

next 30 years to keep their social housing in good repair

What if you have a BCA from 10 years ago?

Step 1: Find your BCA….REMOVE THE DUST…its still usable but!

Step 2: Validate or update your existing BCA

– Revise the timing of replacements based on new lifespan

information. Perhaps you expected to replace a number of

carpets, say, in the past 3 years, but you replaced fewer (or

more); or maybe that roof is going to last longer than you

expected.

– Revise the cost replacements based on new cost

information. The cost of materials change and so does tech.

Sometimes building code changes mean a standard

replacement that’s different from what you expected.

What if you have a BCA from 10 years ago?

Step 2: Validate or update your existing BCA

– Additional things to the list of capital items if necessary.

There may be a capital item that you didn’t expect would

need replacing like an elevator or wiring systems.

Bill Bacon Adeel Qasim Kerrie Michelutti Alan Bodimeade

If you want to know more about updating your

existing BCA, contact HSC Tech Services team:

EOA? No Way! Not

Without a BCA!”

Often times housing providers get a BCA completed

just because they’re “supposed to”. The BCA can be

a very powerful tool for more than assessing your

building needs.

Why BCAs are important for EOA Planning

• Updating or creating BCA’s is usually a first step

undertaken in looking at options at EOA.

• If a building has considerable capital needs a BCA can

help you decide if it is worth to continue to pour huge

amounts of money into it or is it time to renovate,

redevelop or sell?

“Dude, you’d be whacked to try to progress on EOA

without BCA info!” (Street Rap Cooperative)

Tools:

Building Condition Assessment

• BCA Updates

• Asset Planner

Designated Substance

Survey

Energy Use and Savings

Study

Accessibility Study

HSC Technical Services Can Help with Your

Capital Projects To-Do List

Ontario & across Canada

Procurement Management

Full Project Management

Services

Multi-Year Project

Management

Preventive Maintenance

Planning

Building Inspection

Reports

Data Verification

for Asset Planner

Thank you

Contact information:

Bill Bacon, DplT, CET, PMP

Senior Technical Project Manager

Telephone: 705-618-0512

E-mail: bbacon@hscorp.ca

Adeel Qasim, PMP

Senior Project & Program Manager

Telephone: 416-594-9325 ext. 248

E-mail: bbacon@hscorp.ca

Alan Bodimeade

Senior Technical Project Manager

Telephone: 416-594-9325 ext. 227

E-mail: abodimeade@hscorp.ca

Questions?

Bill Bacon, DplT, CET, PMP

Senior Technical Project Manager

Telephone: 705-618-0512

E-mail: bbacon@hscorp.ca

http: //share.hscorp.ca