NOTE ON INCREMENTAL BUDGET FOR RELOCATION
EBA FI 2018 001
09 June 2018
EBA staff
Note on incremental relocation budget
1. This document is for the attention of DG FISMA and DG BUDG. It aims to set out the EBA’s
current estimations of the incremental costs driven by the relocation to Paris in March 2019. It
presents the assumptions used for identifying the incremental relocation costs for the period up
to the end of the EBA’s lease obligations on the London offices at the end of 2020, and follows
this with two budget scenarios.
Assumptions
2. The table below describes the assumptions used in building the relocation budget model.
Assumption
Detail
Expenses are al ocated to the
The EBA operates non-differentiated appropriations
budget year in which they wil be
so commitment appropriations equal payment
committed
appropriations in each budget year.
Building costs are for Tour
For the building in Paris, we are using the costs
Europlaza
contained in the final offer from the landlord of Tour
Europlaza, on the assumption that parliament will
approve the change of the EBA seat and the building
file in good time.
We include only costs that wil be
This applies to fit out and rent. The French
paid by the EBA
government is offering 1.5 million euros as a
contribution to fit out costs, which would be paid
directly to the landlord. The lease agreement will
include 22 months of rent-free period offered by the
landlord, which can be capitalised to cover fit out
costs, so such costs would also be paid directly by
the landlord. The French government is offering
7 million euros as a contribution to the rent.
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Assumption
Detail
The French government
This means that it cannot be used to cover building
contribution of wil only be used to charges and taxes, although these are also costs that
cover rent
are paid to the landlord. We consider that the
timing of the contribution is not yet fixed and this is
why we are presenting two cost scenarios later in
this document.
The EBA remains liable for the
Activating the break clause will bring the lease on
costs of the London offices until
the One Canada Square (1CS) offices to an end on
the end of the break clause
07 December 2020. Until that date, the EBA will
remain liable for rent, building and estate charges
and local taxes. Activating the break clause also
triggers the obligation to repay half of the rent-free
period received as part of the London lease, which
equates to 16 months of rent (on the basis of the
12-year lease). At the termination of the lease the
EBA will become liable for dilapidation costs, for
which the EBA has received two estimates by
professional surveying companies and which have
been included in the EBA 2017 annual accounts as
the average of the two amounts.
The EBA wil endeavour to reduce these costs;
however, we have not included any such reduction
in our relocation budget model, as we have no
certainty that this will be possible. We consider that
the options for cost reduction include subletting or
assigning the lease.
Only incremental costs are
This is a key point. Taking 2019 as the example, the
included
rent on the Paris building will probably be fully
covered by either the landlord’s rent-free period or
the French government contribution (FR€) or a
combination of both. The rent on the London
building will then be considered as a regular, on-
going cost as in a normal year. In the case of
building charges and taxes, however, if these are
not covered by the FR€ then the EBA wil be have to
pay these for both London and Paris buildings. We
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Assumption
Detail
are treating the London charges (after March 2019)
as incremental relocation costs.
Staff relocating from London to Paris will be entitled
to
instal ation and daily subsistence al owances, and to have their household removal paid by the
EBA. All EBA staff will relocate: 145 TA & 42 CA but
only 75% will remove their households. These are
incremental costs.
Interim staff are being hired to fill gaps in
competency and workload and costs for these are
included where they are driven by the relocation.
Costs of
data centre relocation to the CANCOM
cloud contract are included as incremental
relocation costs. These include interim staff (as
referred to above), consultancy and legal costs. We
have assumed three months of overlapping running
costs in 2019 where we have both the existing Serco
and the new CANCOM services running in parallel.
The EBA is in the process of determining what
furniture and equipment (in particular IT and audio-
visual equipment) will be removed to Paris, on the
basis of a cost-benefit analysis taking into account
remaining life, cost of purchase vs. cost of shipping
and practicality of removing.
Annex 2 contains the detailed list of assumptions
driving the costs in the budget model.
GBP costs are converted to EUR at
We have use 0.87 for 2018 and 0.88 for 2019 and
set rates per period
2020.
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Scenarios
3. The French government offer comprises two financial elements: a 1.5 million euro contribution
towards fit out costs; and a seven million euro “participation in the rent charges for the first 9
years of lease”. The EBA is discussing the options on the contribution to the rent, with a view
to front-loading this i.e. covering all Paris rent until the seven million is exhausted. The sections
below show the estimated incremental budget under the scenarios of the contribution being
spread over the life of the lease and of it being front-loaded. Annex 1 shows the detail of each
scenario.
French government contribution spread over lifetime of lease
4. Under this scenario, the EBA will have to pay the security deposit from the 2018 budget and the
FR€ will cover only 34% of the Paris rent in 2020.
Cost type
Total
2018
2019
2020
Incremental staff costs
5 218 017
694 954
4 493 063
30 000
Building costs
10 747 895
2 066 219
775 130
7 906 546
Other relocation costs
943 366
543 014
400 352
-
Total net costs
16 909 278
3 304 187
5 668 545
7 936 546
French government contribution front-loaded
5. Under this scenario, the FR€ is used to cover the security deposit and the entirety of the Paris
rent in 2020. Taking into account the estimate of the fit-out costs, we estimate that
approximately 3.8 million euros of the FR€ would remain at the end of 2020, to be used against
rent in future years.
Cost type
Total
2018
2019
2020
Incremental staff costs
5 159 581
694 954
4 434 627
30 000
Building costs
8 480 575
1 425 899
775 130
6 279 546
Other relocation costs
943 366
543 014
400 352
-
Total net costs
14 583 522
2 663 867
5 610 109
6 309 546
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Annex 1 – Detailed scenarios
In the tables in these annexes, items in [square brackets] are estimates.
Relocation budget – FR contribution spread
Total
2018
2019
2020
Incremental staff costs
[Installation allowance (TA)]
1,955,470
- 1,955,470
-
[Daily subsistence al owance (TA)]
830,702
-
830,702
-
[Taking up duty (TA)]
10,105
-
10,105
-
[Removal costs - TA]
615,475
-
615,475
-
[Installation allowance (CA)]
253,344
-
253,344
-
[Daily subsistence al owance (CA)]
240,617
-
240,617
-
[Taking up duty (CA)]
2,927
-
2,927
-
[Removal costs - CA]
178,275
-
178,275
-
[Legal: staff regs advice]
90,000
30,000
30,000
30,000
[Orientation missions]
79,650
79,650
-
-
[Operational missions]
43,200
34,200
9,000
-
Interim programme manager
362,202
213,293
148,909
-
Interim facilities coordinator
103,159
60,748
42,411
-
Interim procurement assistant
45,167
31,725
13,442
-
[Interim IT project manager]
158,767
111,517
47,250
-
[Interim IT cloud specialist]
190,521
133,821
56,700
-
Total incremental staff costs
5,159,581
694,954 4,434,627
30,000
Building costs
Property advisors
25,000
25,000
-
-
[Fit out design and project management]
350,000
350,000
-
-
Legal: Lease advisors - Paris
50,000
50,000
-
-
[Legal: Lease advisors - London]
16,968
16,968
-
-
Security deposit - Paris
640,320
640,320
-
-
FR gov't contribution to security deposit
-
-
-
-
Rent
Rent - Paris
4,695,680
- 2,134,400 2,561,280
Use of landlord's rent-free period
(2,193,680)
- (2,134,400)
(59,280)
FR gov't contribution to rental costs
(875,000)
-
- (875,000)
Building charges
Building charges - London
1,220,477
-
549,215
671,263
Estate charges - London
295,216
-
132,847
162,369
Taxes - London
106,136
-
53,068
53,068
Fit out cost
[Fit-out cost]
4,002,000 4,002,000
-
-
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Total
2018
2019
2020
FR gov't contribution to fit out
(1,500,000) (1,500,000)
-
-
Capitalisation of rent-free period (fit out) (2,502,000) (2,502,000)
-
-
[Furniture]
383,931
383,931
-
-
[IT equipment]
600,000
600,000
-
-
[Office set-up services]
40,000
-
40,000
-
Dilapidation - London
2,685,392
-
- 2,685,392
Rent-free period repayment - London
2,707,455
-
- 2,707,455
Total building costs
10,747,895 2,066,219
775,130 7,906,546
Other relocation costs
Data centre relocation
377,640
377,640
-
-
Serco study on data centre relocation
10,926
10,926
-
-
ISDN relocation to CW
55,448
55,448
-
-
[Serco project support costs]
46,000
46,000
-
-
[TESTA (Serco)]
23,000
23,000
-
-
[Legal advice on Data Centre contract]
30,000
30,000
-
-
[Data centre running costs]
298,079
-
298,079
-
[Office relocation costs]
102,273
-
102,273
-
Total other relocation costs
943,366
543,014
400,352
-
Incremental staff costs
5,159,581
694,954 4,434,627
30,000
Building costs
10,747,895 2,066,219
775,130 7,906,546
Other relocation costs
943,366
543,014
400,352
-
Total net costs
16,850,842 3,304,187 5,610,109 7,936,546
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Relocation budget – FR contribution front-loaded
Total
2018
2019
2020
Incremental staff costs
[Installation allowance (TA)]
1,955,470
- 1,955,470
-
[Daily subsistence al owance (TA)]
830,702
-
830,702
-
[Taking up duty (TA)]
10,105
-
10,105
-
[Removal costs - TA]
615,475
-
615,475
-
[Installation allowance (CA)]
253,344
-
253,344
-
[Daily subsistence al owance (CA)]
240,617
-
240,617
-
[Taking up duty (CA)]
2,927
-
2,927
-
[Removal costs - CA]
178,275
-
178,275
-
[Legal: staff regs advice]
90,000
30,000
30,000
30,000
[Orientation missions]
79,650
79,650
-
-
[Operational missions]
43,200
34,200
9,000
-
Interim programme manager
362,202
213,293
148,909
-
Interim facilities coordinator
103,159
60,748
42,411
-
Interim procurement assistant
45,167
31,725
13,442
-
[Interim IT project manager]
158,767
111,517
47,250
-
[Interim IT cloud specialist]
190,521
133,821
56,700
-
Total incremental staff costs
5,159,581
694,954 4,434,627
30,000
Building costs
Property advisors
25,000
25,000
-
-
[Fit out design and project management]
350,000
350,000
-
-
Legal: Lease advisors - Paris
50,000
50,000
-
-
[Legal: Lease advisors - London]
16,968
16,968
-
-
Security deposit - Paris
640,320
640,320
-
-
FR gov't contribution to security deposit
(640,320)
(640,320)
-
-
Rent
Rent - Paris
4,695,680
- 2,134,400 2,561,280
Use of landlord's rent-free period
(2,193,680)
- (2,134,400)
(59,280)
FR gov't contribution to rental costs
(2,502,000)
-
- (2,502,000)
Building charges
Building charges - London
1,220,477
-
549,215
671,263
Estate charges - London
295,216
-
132,847
162,369
Taxes - London
106,136
-
53,068
53,068
Fit out cost
[Fit-out cost]
4,002,000 4,002,000
-
-
FR gov't contribution to fit out
(1,500,000) (1,500,000)
-
-
Capitalisation of rent-free period (fit out)
(2,502,000) (2,502,000)
-
-
[Furniture]
383,931
383,931
-
-
[IT equipment]
600,000
600,000
-
-
[Office set-up services]
40,000
-
40,000
-
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Total
2018
2019
2020
Dilapidation - London
2,685,392
-
- 2,685,392
Rent-free period repayment - London
2,707,455
-
- 2,707,455
Total building costs
8,480,575 1,425,899
775,130 6,279,546
Other relocation costs
Data centre relocation
377,640
377,640
-
-
Serco study on data centre relocation
10,926
10,926
-
-
ISDN relocation to CW
55,448
55,448
-
-
[Serco project support costs]
46,000
46,000
-
-
[TESTA (Serco)]
23,000
23,000
-
-
[Legal advice on Data Centre contract]
30,000
30,000
-
-
[Data centre running costs]
298,079
-
298,079
-
[Office relocation costs]
102,273
-
102,273
-
Total other relocation costs
943,366
543,014
400,352
-
Incremental staff costs
5,159,581
694,954 4,434,627
30,000
Building costs
8,480,575 1,425,899
775,130 6,279,546
Other relocation costs
943,366
543,014
400,352
-
Total net costs
14,583,522 2,663,867 5,610,109 6,309,546
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Annex 2 – Detailed assumptions
Constant Unit
Source
FORECAST INPUTS
TIMING ASSUMPTIONS
1st model column start date
01 Jan 2018 date
Relocation date
31 Mar 2019 date
Length of forecast period
4 years
Months per model period
1 months
Financial year end month number
12 month #
London lease end date
07 Dec 2020 date
1CS lease
FRENCH GOVERNMENT CONDITIONS
Contribution to fit out
1,500,000 €
FR government offer
Contribution to rental costs
7,000,000 €
FR government offer
Period of contribution to rental costs
front-loaded
Unconfirmed
LEASE CONDITIONS - CANARY WHARF
Rent
148,910.00 £ / month
1CS lease
Dilapidation cost charge
2,685,392.00 €
EBA 2017 annual accounts
Refundable rent-free period
16.00 months
1CS lease
FINANCIAL CONDITIONS - LONDON
Surface
4,150.00 sqm
Rental cost (monthly)
35.88 £ / sqm / month
Building charges (monthly)
12.94 £ / sqm / month
Estate charges (monthly)
3.13 £ / sqm / month
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Constant Unit
Source
Taxes (annual)
46,700.00 £ / year
2017 charge
LEASE CONDITIONS - PARIS
Proposed surface
5,336.00 sqm
Tour Europlaza final offer
Rental cost (monthly)
40.00 € / sqm / month
Tour Europlaza final offer
Building charges (monthly)
7.83 € / sqm / month
Tour Europlaza final offer
Taxes (monthly)
3.67 € / sqm / month
Tour Europlaza final offer
Lease term
9.00 years
Tour Europlaza final offer
Security deposit months
3.00 months
Tour Europlaza final offer
Rent-free period
22.00 months
Tour Europlaza final offer
OTHER BUILDING COSTS
Property advisors
25,000.00 €
Contract with BNP Paribas Real Estate
[Project managers]
350,000.00 €
Estimated value - procurement procedure on-going
Lease advisors - Paris
50,000.00 €
Contract with LCA avocats
[Fit-out cost]
750.00 € / sqm
BNP Paribas Real Estate
[Lease advisors - London]
15,000.00 £
Estimation based on previous London experience
[Legal: letting advice - London]
- £
[Letting agents - London]
- £
RELOCATION COSTS
Data centre relocation
377,640.00 €
CANCOM offer
Serco study on DC relocation
10,926.00 €
Serco contract
ISDN relocation
48,239.60 £
BT offer
[Serco project support costs]
46,000.00 €
Serco estimation
[TESTA (Serco)]
23,000.00 €
Serco estimation
Data centre running costs
99,359.68 € / month
CANCOM offer
[Legal advice on DC contract]
30,000.00 €
Internal estimation
[Furniture]
383,931.00 €
Internal estimation based on purchases under FWC
[IT equipment]
600,000.00 €
Internal estimation
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NOTE ON INCREMENTAL BUDGET FOR RELOCATION
Constant Unit
Source
[Office removal]
90,000.00 £
Estimation based on market analysis
[Legal: staff regs advice]
30,000.00 € / year
Internal estimation
[Office set up services]
10,000.00 € / month
Internal estimation
Interim programme manager
21,840.00 £ / month
Committed
Interim facilities coordinator
6,220.30 £ / month
Committed
Interim procurement assistant
3,942.96 £ / month
Committed
[Interim IT project manager]
13,860.00 £ / month
Internal estimation based on FWC prices
[Interim cloud specialist]
16,632.00 £ / month
Internal estimation based on FWC prices
DILAPIDATION COSTS
[Fit-out cost]
200.00 € / sqm
BNP Paribas Real Estate
STAFF INPUTS
Average household size
3.20 persons
Calculation based on existing staff
Installation allowance average (TA)
13,486.00 € / person
Calculation based on existing staff
Installation allowance average (CA)
6,032.00 € / person
Calculation based on existing staff
Daily subsistence al owance average
1,145.80 € / month /
Calculation based on existing staff
person
[Mobility]
69.69 € / person
Calculation based on existing staff
[FR language courses]
[Percentage of staff removing]
0.75 %
Based on internal survey
[Household removal cost]
5,000.00 £ / household
Internal estimation
[Staff relocation cost]
- € / staff member
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