Call to Order and Roll Call
The second meeting of the Capital Planning Advisory Board was held on Tuesday, September 20, 2016, at 10:00 AM, at The 300 Building in Frankfort, Kentucky. Representative Terry Mills, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Stan Humphries, Co-Chair; Representative Terry Mills, Co-Chair; Senator Whitney Westerfield, Representative Tom Riner; Scott Brinkman, John Chilton, Jane Driskell, Carole Henderson, William Landrum, Mark Overstreet, Kaelin Reed, and Katie Shepherd.
Guests: Mike Burnside, Commissioner, Department for Facilities and Support Services; Andy Casebier, Director, Division of Engineering and Contract Administration; Scott Aubrey, Director, Division of Real Properties; and Sherron Jackson, former member of the Capital Planning Advisory Board.
LRC Staff: Shawn Bowen, Julia Wang, and Jennifer Luttrell.
Welcome and Comments
Representative Mills welcomed Mr. Brinkman to his first meeting as a member of the board and acknowledged Sherron Jackson, a former member of the board, who was in the audience.
Approval of Minutes (October 20, 2015 and July 19, 2016)
A motion to approve the minutes of the October 20, 2015 and July 19, 2016 meetings was made by Mr. Landrum, seconded by Ms. Driskell, and approved by voice vote.
Information Item
Shawn Bowen, Committee Staff Administrator, said there was one information item included in members’ folders regarding the University of Kentucky (UK) Facilities Renewal and Modernization Pool Project. In August, committee staff sent correspondence to UK requesting that the individual project scopes be shared with the board upon finalization. The university anticipates that the project scopes will be finalized by mid to late October. At that time, the information will be shared with the board. [At the board’s July 19 meeting, UK provided a list of seven primary buildings and eight alternative buildings to be included in the pool project. Because the dollar amounts for each project were not finalized at the time, they were not included in the list.]
Representative Mills stated that he and Senator Humphries met with university officials last year regarding this project. The purpose of the meeting was to clarify the board’s expectations in regards to the type and amount of information being submitted in UK’s capital plan. Projects submitted during the capital planning period with incomplete or scant details are not acceptable to the board, and the board does not want to set a precedent by not questioning projects, pool or otherwise, that are submitted with insufficient or inadequate details. The board gives equal consideration to all agency submissions and pool projects submitted in agency capital plans are carefully reviewed for details as to the individual projects included in the pool.
Senator Humphries added that although the university has been working hard to answer the board’s questions, it is hard to know what is needed before a renovation project is started.
Instructions for the 2018-2024 capital plans
There was a motion made by Mr. Overstreet, seconded by Ms. Henderson, and adopted by roll call vote to approve the 2018-2024 capital planning instructions. The motion also included the authorization for staff to make the necessary editing changes in finalizing the instructions for publication.
In response to a question from Senator Westerfield, Ms. Bowen stated that the only changes to the instructions are the inclusion of two additional pages of narrative regarding the role of the Commonwealth Office of Technology and the role of the Council on Postsecondary Education in the capital planning process. Representative Mills recommended that each member review those changes thoroughly.
Presentation – Long-range plan for housing state agencies in Frankfort
Mike Burnside, Commissioner, Department for Facilities and Support Services; Andy Casebier, Director, Division of Engineering and Contract Administration; and Scott Aubrey, Director, Division of Real Properties, gave a brief overview of The 300 Building, which is the new state office building in Frankfort. The presenters also discussed the long-range plan for housing state agencies in Frankfort.
The new state office building, known as The 300 Building, is located at 300 Sower Boulevard off the East-West Connector in Frankfort. The building replaces the Capital Plaza Tower (Tower) which was built in 1967. The 300 Building is situated on 34 acres of state-owned property. Construction started in March 2015 after the Finance and Administration Cabinet signed a build-to-suit agreement with CRM/DW Wilburn of Lexington. Under the terms of the agreement, the property was conveyed to CRM/DW Wilburn, and is being leased to the Commonwealth. The lease term is 35 years, and the annual payment is $4,525,574. At the end of the lease term, ownership of the property will revert to the Commonwealth. CRM/DW Wilburn is responsible for maintaining and managing the building as a term of the lease agreement.
The Finance and Administration Cabinet is now evaluating the future usage of the Tower. A Request for Expressions of Interest was issued by the cabinet in October 2015, and no responses were received. In July 2016, the cabinet issued a Request for Proposal (RFP) for sale or lease of the property. The RFP received one response, however, after reviewing the overall project, the cabinet made the decision to cancel the solicitation.
In response to questions from Senator Westerfield and Representative Mills, Mr. Aubrey and Mr. Casebier stated that the Tower in its current state is not suitable for use. Part of the façade is falling off the building, the mechanical systems are old, and the building contains asbestos and other hazardous materials. The cost to demolish the building is estimated at $21 million, and the estimated cost to renovate the building is $68 million. Mr. Casebier added that the building’s facade continues to grow weaker over time and eventually will turn to sand. They have placed shelters over all the doors to protect people from softball-size pieces of concrete that are falling off the building. There are approximately 200 people in the Tourism, Arts, and Heritage Cabinet and the Department of Agriculture left in the Tower, and they should be relocated to other office space by December 2016. After the Tower is empty, the utilities will remain on to protect the building from mold and other deterioration.
Senator Humphries commented that during the capital planning process, the board needs to be conscious in recommending new construction that may not be a good return on the Commonwealth’s investment. Mr. Casebier stated that they try to construct buildings that last at least 50 years before significant work is needed. The new building will house up to 1,500 employees, and utilizes 255 gross square feet (gsf) per person rather than 310 gsf per person that was typically used in past Kentucky buildings. Currently, there are 1,457 employees housed in the building, including 1,339 employees from the Energy and Environment Cabinet, 95 from the Education and Workforce Development Cabinet, 21 from the Commonwealth Office of Technology, and two Kentucky State Police employees situated at the front entrance.
In response to questions from Representative Mills, Mr. Casebier stated that the Department for the Blind will manage the food service area and the vending machines. This will be the first time the Department for the Blind has run a cafeteria. The food service area, which will seat 200 indoors and 45 outdoors, is under construction, and should be ready in 2017.
In response to questions from Mr. Overstreet and Representative Riner about the increased traffic on the East-West Connector and the lack of available spaces in the parking lot, Mr. Casebier stated that two traffic studies were done and both studies determined that the current traffic flow patterns are acceptable for the amount of traffic. The developer established a $50,000 fund to pay for any additional ingress or egress changes that may be needed in the future. A 200-car parking lot has been built between The 300 Building and the Central Lab to hold all the fleet vehicles and this lot can be expanded in the future.
Other Business
Representative Mills expressed appreciation to the board’s staff for their guidance and to the members for their participation. Senator Humphries and Representative Mills acknowledged two retiring members of the board, Mr. Sherron Jackson and Representative Tom Riner, with the reading of resolutions in their honor. Resolutions were also presented for three retired members that were not in attendance: Mr. John Hicks, Ms. Mary Lassiter, and Mr. Jamie Link. Representative Mills announced that the next meeting will be held in May or June of 2017.
Adjournment
With there being no further business, the meeting was adjourned at 11:00 AM. A tour of the building commenced upon adjournment of the meeting.