MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means and
senate committee on finance
joint subcommittee on higher education/capital improvements
Seventy-First Session
March 8, 2001
The Joint Subcommittee on Higher Education/Capital Improvements was called to order at 8:07 a.m., on Thursday, March 8, 2001. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Mr. Joseph Dini, Jr.
Ms. Chris Giunchigliani
Mr. John Marvel
Mr. Richard D. Perkins
SENATE SUBCOMMITTEE MEMBERS PRESENT
Senator William J. Raggio
Senator Bob Coffin
Senator Bernice Mathews
Senator Raymond D. Rawson
COMMITTEE MEMBERS EXCUSED:
Mr. Lynn Hettrick
STAFF MEMBERS PRESENT:
Gary Ghiggeri, Senate Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Rick Combs, Program Analyst
Connie Davis, Committee Secretary
CAPITAL IMPROVEMENT PROJECTS DETAIL BY PROJECT –
Chairman Arberry recognized Rick Combs, Program Analyst, from the Fiscal Analysis Division. Mr. Combs identified himself for the record and discussed a worksheet (Exhibit C) that had been distributed to the members of the Subcommittee. The worksheet illustrated the manner in which General Funds, dedicated to the Capital Improvement Program (CIP), would be used. Construction projects were listed as follows:
Mr. Combs pointed out that all the maintenance projects with the exception of CIP 01-M1, for the renovation of the east wing of the Department of Motor Vehicles Building, would be paid for with General Fund money. The Department of Motor Vehicles' renovation project would be funded out of the Highway Fund. Mr. Combs added that the CIP maintenance projects totaled $11,012,271.
Mr. Combs moved to statewide projects listed as follows:
Mr. Combs pointed out that certain projects continued to require General Obligation Bond funding even though those types of expenditures were not normally bonded. Those projects included:
Mr. Combs discussed deferred maintenance projects for the university campuses that totaled $10,000,000 and were recommended to be entirely bonded. Additionally, Mr. Combs discussed $3 million in the recommended CIPs that were reallocations from previous CIP programs. Mr. Combs noted that while the subcommittee would, during the meeting, review a project for which funding remained from a previous CIP project, the $3 million had not been identified by the PWB, and that information would be required in the very near future.
Senator Rawson discussed the shortage of both General Fund and bonding monies and expressed concern on whether General Fund money was being used appropriately. Mr. Combs responded that when General Fund monies were used for capital improvement projects, it was, for the most part, to fund maintenance projects. Mr. Combs discussed the difficulty in justifying the use of bonding authority on maintenance projects because maintenance was not "a capital construction outlay" expected to last for a number of years. Mr. Combs also explained that General Fund monies might be better used for other maintenance type projects that were being bonded, rather than for advance planning, however, he said the use of General Fund monies for advance planning was not inappropriate and was a policy decision the committee would be required to make.
Daniel O'Brien, Manager, State Public Works Board, identified himself for the record and introduced Ward Patrick, Deputy Manager, Professional Services, State Public Works Board, and Mike Meizel, Administrator of Facilities, Mail Services, Division of Buildings and Grounds.
PURCHASE AND RENOVATE EICON BUILDINGS (CIP 01-C3)
Mr. O'Brien stated that funding was being requested to purchase from the Employer's Insurance Company of Nevada (EICON), an 82,953 square-foot building in the north, and an 43,119 square-foot building in the south. Mr. O'Brien referred to a diagram, which was provided to the subcommittee and included as Exhibit C in the minutes of the February 28, 2001, meeting and provided in the subcommittee's March 8, 2001, highlights (Exhibit D). The diagram illustrated the PWB implementation plan for relocating staff in the north. The plan for the south was that one floor of the building would be occupied by the Department of Employment, Training and Rehabilitation (DETR). Mr. O'Brien indicated the request included construction work for building walls and modified mechanical systems to facilitate office space. It was pointed out that project management and inspection fees were high, and Mr. O'Brien explained that the fees, plus the cost of purchasing the buildings, had been taken into consideration during the formula process and would be adjusted back down to the true construction-related costs for project management and inspection. Mr. O'Brien advised Chairman Arberry that he would provide information concerning the new figure to the members of the subcommittee.
Mr. Marvel asked if the state appraisals had been completed. Mr. O'Brien responded that Pam Wilcox, Administrator of the Division of State Lands, was working on the request for appraisals. Ward Patrick indicated that appraisals had been received from EICON and had been initiated through the Division of State Lands. Additionally, proposals on both buildings had been received from appraisers, and the PWB was in the process of creating a contract. Mr. Marvel asked if the total project cost would be close to the projected $16 million. Mr. Patrick was of the opinion that the state appraisals should be lower than the EICON appraisals. Mr. Patrick responded to a question from Chairman Arberry on the date it was expected the appraisals would be completed, and said a seven-day response was requested from the appraisers. Mr. Patrick anticipated the contracts would be presented to the Board of Examiners in April.
Chairman Arberry made it clear that budgets would be closing in the next several weeks and asked Ms. Wilcox for her comments on the appraisals. Pam Wilcox, Administrator, Division of State Lands, identified herself for the record and stated that the responses to the request for proposal (RFP) were beginning to be received. Ms. Wilcox indicated she was hopeful that some of the responses would be under the limit and would not have to go to the Board of Examiners. Ms. Wilcox understood the need for the appraisals and said that State Lands had done their best to deliver them. Chairman Arberry reiterated that the appraisals were needed as quickly as possible. Ms. Wilcox indicated the appraisers were aware that the appraisals were needed within three to four weeks of the time contracts would be signed and she believed they would be delivered on time.
Senator Rawson indicated he sensed there was a lack of a comprehensive plan concerning the state's needs and noted that there were details in the projects he could not follow or prioritize, such as communication lines that did not reach the EICON building. It was Senator Rawson's suggestion that perhaps an ongoing subcommittee of the Interim Finance Committee with responsibility to be involved in master planning, along with the Legislative Commission, should be appointed. Senator Rawson noted the "tremendous amount of square footage" that was needed and the lack of bonding capacity for it and strongly suggested a need for more stringent organization. Senator Rawson further advised that during the following session if an appraisal was not received on time, the request would not be considered.
Ms. Giunchigliani discussed an e-mail she had received from employees at the Jean Hanna Clark Rehabilitation Center and asked if the Center was part of the EICON purchase, or if the Center would be sold. Mike Meizel responded that the Jean Hanna Clark Rehabilitation Center was not being addressed as part of CIP 01-C3; however, he indicated that the people associated with the EICON building were trying to decide what they wanted to do with it. Mr. Meizel further explained that the state had only been interested in the office building because of the expensive renovation to the Rehabilitation Center that would have to be made to make it useful.
Ms. Giunchigliani addressed the $441,000 for moving expenses and inquired as to whether the cost of moving could be taken out of general obligation bonds rather than the General Fund. Mr. O'Brien responded that it was proposed the project would be funded entirely with general obligation bonds. However, based upon a request from Senator Raggio, Mr. O'Brien said the PWB reviewed planning and maintenance projects to determine if it would be reasonable to use the $18 million in cash with any of the projects. Based upon their review, Mr. O'Brien indicated it was possible to do some realignment. Mr. O'Brien cautioned, however, that projects accomplished with bonds and cash became an accounting nightmare.
Ward Patrick addressed earlier comments from Senator Rawson concerning the communications conduit system and advised there was a pull box in front of the EICON building at 515 E. Musser that was placed there as a result of a project funded in 1997. Mr. Patrick also indicated that the fiber going to the building was looped around in the box ready to be put through to the building as a result of a project funded in 1999.
Chairman Arberry addressed the 43,119 square-foot capacity of the EICON building in Carson City and the fact that the agencies housed in the building would rent 25,048 square feet. Chairman Arberry questioned how the additional 18,071 square feet would be used. Mr. O'Brien responded that Projects C-10 (Capitol, Capitol Annex and Blasdel Building Renovations) and C-3 (Purchase EICON Buildings in Carson City and Las Vegas) tied together. Mr. O'Brien pointed to the diagram provided in the subcommittee's March 8, 2001, highlights (Exhibit D) and noted that the diagram illustrated the three floors of the building with Purchasing on the third level, the Controller on the second level and Public Works Board on the first level. Mr. O'Brien further advised that the purchase of the EICON building relieved pressure on some of the other agencies that required additional space.
Senator Rawson expressed concern that regarded any long-term use of the Blasdel Building. Senator Rawson made it clear that while he understood the need for continued use of the building during a transition plan, he would not support a plan for the building to be there for another four years.
At the Chairman's request, Mr. O'Brien continued his comments regarding the master plan. Mr. O'Brien indicated that the PWB staff had received direction from the Governor to work on a ten-year plan that determined the state's needs and if the subcommittee so desired, Mr. Meizel would provide information on the ten‑year plan.
Mike Meizel addressed the ten-year master plan for state agencies' building needs and indicated that one of the goals of the plan was to minimize lease payments. Mr. Meizel advised that the state currently paid about $18 million a year for leased space. In an effort to gather data on needed requirements, Mr. Meizel said all state agencies were interviewed concerning their projections, all of the state's land and facilities were reviewed, and a ten-year plan was developed based on maximized benefits to the state. Along with the ten-year plan and the fact that the state did not have the revenue to build a state office building in Carson City, the EICON building was suggested by the Governor as an alternative measure. Mr. Meizel advised that the EICON building in Carson City was "a good deal," because it had been completely renovated in the last five years and had fiber optic connections as well. Mr. Meizel indicated that the Las Vegas EICON building was relatively new with rehabilitated mechanical systems, and with 50,000 to 60,000 square feet of useable space was also considered a good buy.
Mr. Meizel indicated a plan was developed to occupy the Carson City EICON office building and the Las Vegas EICON building although, because the buildings were new acquisitions, there had not been a lot of time to work on the plans. The plan included placing DETR in the Las Vegas EICON building since they were currently in leased space. It was projected that DETR would probably build a building in five years and, at that time, an actual plan would be completed to place state agencies from the leased community in the Las Vegas EICON building. With DETR's projected move into the EICON building, plans were being formulated that defrayed the state's leased expense.
Mr. Meizel addressed lease violations and indicated that while there were times when leases were negotiated with owners, the state had to abide by lease agreement terms. Mr. Meizel addressed Senator Rawson's earlier concern and indicated that the EICON buildings in Carson City and Las Vegas fit in with the ten‑year plan because funding was not available to build a 100,000 square-foot building in Carson City.
Mr. Meizel also addressed Senator Rawson's concern that regarded continued use of the Blasdel Building and indicated the Kinkead Building would be his first choice for replacement since the Kinkead had been substandard from the time it was built. Mr. Meizel advised that both the Blasdel and Kinkead Buildings were proposed for demolition in the master plan; however, if the Blasdel were to be removed at this time, the state would be faced with a need for 35,000 to 40,000 square feet of leased expense at $1.25 to $1.50 per square foot, which was not economically feasible.
Senator Rawson calculated that at $18 million a year minus inflation, the state would pay $540 million for leased space over a period of thirty years and suggested looking at a revenue bond to build a state office building. It was Senator Rawson's premise that since the $540 million had already been dedicated for leased space, the cost of the lease payments would probably pay for the construction of 2.2 million square feet of office space for which a revenue bond could be used. Senator Rawson, however, indicated he recognized the necessity of a systematic transition so that eliminating private property leases did not affect the local economy.
Chairman Arberry questioned whether the PWB had considered using the Las Vegas EICON building for the new Highway Patrol headquarters. Mr. Meizel responded that the EICON building had not been considered for the Highway Patrol because the Highway Patrol was currently housed 90 percent in state‑owned space and that one of the Governor's goals was to eliminate the cost of leased space. Mr. Meizel further explained that while they did not have a location for it, a CIP existed for a new headquarters building for the Highway Patrol for which funding was approved by the legislature in 1999. Chairman Arberry pointed out the EICON building had convenient freeway access, the required square footage, and appeared to be suited to the Highway Patrol's needs.
Mr. Marvel asked if any non-General Fund agencies would be moved into the Las Vegas EICON building. Mr. Meizel responded that the conservation agencies had to be moved out of the Sawyer Building to make room for the constitutional officers, and a plan existed to move the conservation agencies, which were General Fund agencies, into the EICON building. Mr. Marvel clarified that his previous question referenced agencies moving into the EICON building that were not funded out of the General Fund. Mr. Meizel advised that DETR was an agency that was not funded out of the General Fund and that DETR's agencies would occupy most of the square footage. Mr. Marvel pointed out that non‑General Fund agencies that moved into the EICON buildings should pay for their own moving costs. Mr. Meizel responded the moving costs had been determined before plans were formulated concerning the occupants of the buildings. Mr. Marvel strongly indicated that moving costs for a non-General Fund agency should not be taken from the General Fund. Mr. O'Brien further indicated a "blanket number" had been used to estimate moving costs, and that, at the time, DETR was not considered because the agencies that would occupy the building were unknown. Mr. Marvel indicated it appeared that if the building was purchased and DETR moved in, money would have to be "reshuffled." Mr. Meizel agreed.
Chairman Arberry questioned when a plan for the use of the EICON buildings would be available for the subcommittee's review. While Mr. Meizel advised the plan was still being formulated, he agreed to provide what they had.
Chairman Arberry also requested that the PWB provide a breakdown on renovation costs and specifically, that the board delineate the portion of the renovation costs attributed to each building. Mr. Meizel advised that a breakdown on renovation costs for each building had not yet been developed. Chairman Arberry explained that time was limited and that decisions needed to be made so that budgets could be closed and asked that the board be specific as to when a breakdown would be provided. Mr. O'Brien advised that the plan for the Carson City EICON building was nearly completed and could be provided. Mr. O'Brien explained that the board had some difficulty with who would occupy the second floor of the Las Vegas EICON building and while DETR had shown some interest, a decision had not yet been made. Mr. Meizel added that one floor in the Las Vegas EICON building was "tied down" for DETR, however, work was still required for the second floor. Mr. Meizel explained that meetings were taking place every day on who would occupy the second floor, which he said, might be reserved for DETR, or perhaps a mix between DETR and some General Fund agencies. Chairman Arberry cautioned that if a plan was not received in the very near future, a decision would be made to house the Highway Patrol in the EICON building and DETR would be out.
In response to a question from the Chairman on who would be housed in the current Las Vegas Highway Patrol building, Mr. Meizel indicated that some discussion had taken place concerning placement of parole and probation offices in the space currently occupied by the Highway Patrol. Mr. Meizel advised that a place was needed for the parole and probation offices at the end of the biennium because it was not economically feasible to renovate the Campos Building where the parole and probation offices were currently housed. Mr. Meizel made it clear that the plan to move parole and probation into the Highway Patrol building was not firm but was being contemplated. After further questioning from the Chairman, Mr. Meizel advised that if the parole and probation offices did not move into the Highway Patrol building, there was some thought to putting commerce agencies there. Commerce agencies were currently being housed in the Bradley Building. Chairman Arberry asked Mr. Meizel when a plan would be provided for the movement of agencies in Las Vegas and Mr. Meizel responded that moving the parole and probation offices was driving long-range plans. The Chairman emphasized that staff should be provided with plans as soon as possible.
Senator Mathews requested clarification on the necessity of moving the State Controller's office to the second floor of the Carson City EICON building and asked who would occupy the space currently occupied by the Controller. Mr. O'Brien explained that the Controller's office was currently housed in the Annex of the Capitol Building. He indicated that if the Controller's office moved to the second floor of the Carson City EICON building, they would be provided with the space they required and post-audit and internal audit would be moved to the Annex leaving the Governor's staff with the additional space required for his staff. Additionally, Mr. O'Brien advised that post-audit's move from the Blasdel Building to the Annex would provide space for personnel training. Senator Mathews commented that it appeared "the bottom line" was that the Governor needed more space and people had to be "shuffled" around to get the space. Mr. O'Brien agreed with Senator Mathews' assertion.
Mr. O'Brien indicated the consolidation of departments and divisions and eliminated leased space were positive benefits of the moves. Mr. O'Brien pointed out that currently the personnel office had facilities at Stewart, purchasing offices were in 2,200 and 4,800 square feet of leased space and internal-audit was in 3,300 square feet of leased space which in total would eliminate 5,000 square feet of leased space.
CAPITOL, ANNEX & BLASDEL BUILDING RENOVATIONS (CIP 01-C10)
Mr. O'Brien advised the subcommittee that CIP C-10 recommended funding for renovations to the Capitol Building, the Capitol Annex, and the Blasdel Building, and was tied to the purchase of the EICON buildings. Mr. O'Brien explained the renovations included some minor refurbishing of finishes in the Capitol, acoustical treatment in the old Assembly and Senate rooms and a proposal that converted the Senate room to a conference room for the Governor's use and moved the museum area to the Assembly. Mr. O'Brien addressed questions concerning asbestos removal, and he reported that there was no asbestos problem in the Capitol Annex. Mr. O'Brien indicated the Blasdel Building required some minor remodeling and about $18,000 worth of asbestos removal that had not been included in the asbestos program. Mr. O'Brien indicated that funds were available for asbestos removal and reported that the remodeling planned for the Blasdel would be limited. Mr. O'Brien explained that when the personnel offices moved into the first level of the Blasdel Building, a sound wall would be constructed to separate a large room into two training rooms.
Senator Coffin strongly expressed agreement with Senator Rawson's earlier comments on the Blasdel Building and indicated that any remodeling that prolonged the life of the building should only be done for the "life and safety of the employees." It was Senator Coffin's opinion that the Blasdel Building marred the beauty of the town and the Capitol mall and asked that long-term plans for the Blasdel Building be addressed. Mr. Meizel responded that the master plan for the Capitol Complex included the removal of the Blasdel Building; however, he said the availability of funding precluded a definite date for removal. Senator Coffin recommended that a date should be set for the destruction of the Blasdel Building. Mr. Meizel indicated that the Governor shared legislative concern regarding the Blasdel Building.
Chairman Arberry asked if there was any idea on when it could be expected the Blasdel Building would be taken down. Mr. O'Brien agreed with Mr. Meizel's earlier comments on the availability of revenue and explained that if the state office building had been included in the CIP and funding had been available, consideration would have been given to moving staff out of the Blasdel Building. Since funding had not been included in the CIP, Mr. O'Brien indicated they would have to look to a future CIP. Mr. O'Brien addressed earlier comments concerning the appointment of a committee appointed to work on the master plan and indicated the availability of the PWB and Buildings and Grounds staff to work with the committee.
Senator Raggio commented that everyone who lived in the area would like to see the Blasdel Building evacuated and torn down; however, since the budget had limited resources, the proposed state building could not be funded. While he agreed that the Blasdel needed to be demolished, Senator Raggio was not in agreement that the staff of the PWB and Buildings and Grounds should be compelled, during the current session, to indicate when the Blasdel would be torn down. Additionally, while Senator Raggio concurred that a lot of money should not be put into the Blasdel Building, he said the building had to be made available and safe for the present and pointed out that some renovations and the new buildings were needed to just get through the biennium. Senator Raggio reiterated earlier remarks on the unavailability of funding to provide further office space or even rental space.
Senator Coffin agreed with Senator Raggio, however, indicated that while removal of the building could not be accomplished this session, the PWB and Buildings and Grounds staff could begin work on the numbers so that when funding was available, the building could be replaced by grass and trees. Senator Coffin indicated that Carson City officials should "pick up" on the need to remove the Blasdel Building.
The Chairman noted that projects had been recommended for the Capitol and Blasdel Building that totaled $3.3 million and a project for the Capitol Annex that totaled $1 million. The Chairman also noted that the combined costs of the projects totaled $4.3 million, which the Governor had reduced to $2.3 million, and asked if the reduced funding was enough to fund the renovations to the buildings. Ward Patrick identified himself for the record and explained that Project 01-C10 included the Capitol, Capitol Annex and Blasdel Building. Mr. Patrick explained that the original proposal, approved by the PWB, included a greater level of architectural renovation to the Blasdel Building, which had been cut. Mr. Patrick clarified that the renovations in the Capitol Annex and Capitol Building were predominately the same as originally recommended to the Governor by the Public Works Board. During that time between the board's budget presentation to the Governor and January, Mr. Patrick indicated the number of people proposed to be moved decreased, which, as noted in earlier remarks by Senator Mathews, meant reduced moving and renovation expenses.
Chairman Arberry asked that the PWB identify the areas that had the greatest need for refurbishment in the Blasdel Building. Mr. Patrick explained that the board was actively pursuing where the walls needed to be placed and which carpets needed to be replaced. As pointed out earlier, Mr. Patrick indicated that the board was involved in the preliminary stages of the acquisition of the EICON buildings and in the next few weeks should be able to provide a report that included the cost of the actual moves, as well as telecommunication cost renovations.
Chairman Arberry asked that the agencies targeted to be placed in the Stewart facility space be identified. Mr. Meizel questioned whether the Chairman meant building 17, which he said would be discussed in CIP 01-C11, next on the list. The Chairman indicated he had addressed the space being vacated by the training section of the Department of Personnel. Mr. Meizel explained that it had been known for several years that the community college, currently in the building, would be moving back to the community college campus in July 2001. Mr. Meizel advised that funding had been recommended to remodel one half of building 17 for prison administration staff who were crowded into several of the Stewart facility buildings. The recommended funding for CIP 01-C11 would renovate the infrastructure of the entire building. Mr. Meizel indicated the thirty-year-old building had been used as a school and required a complete mechanical renovation because of the lack of central air and electrical wiring required for modern office work. Mr. Meizel explained that while the infrastructure of the entire building would be renovated, only one floor would be completely finished, and that floor was targeted for prison administration staff. It was projected the second floor would be finished the following biennium, and it was possible the prison would occupy that floor as well. Mr. Meizel concluded that should the prison decide not to occupy the second floor, there were other agencies that could be moved to the Stewart building facility.
Mr. Dini requested clarification on whether building 17 was the same space that personnel's training section and the community college were vacating. Mr. Meizel explained that personnel training was currently in building 17 and would be relocated back to the Blasdel Building and the community college would be out by the end of June 2001.
REMODEL BUILDING #17 AT THE STEWART FACILITY (CIP 01-C11)
Chairman Arberry asked that Mr. O'Brien address the asbestos issue. Mr. O'Brien recalled that in reference to discussion on the previous project, he might have confused the sum of $18,000 for projects C10 and C11. Mr. O'Brien advised that an asbestos abatement was necessary for building 17, and that the estimated cost of $18,000 had not been included in the Statewide Asbestos Abatement project (CIP 01-S6). However, Mr. O'Brien noted a $25,000 difference existed between the listed projects and requested funding and that the $18,000 could be included in the statewide asbestos project. Additionally, Mr. O'Brien reported that the partial remodel of building 17 was part of an overall domino effect that would move the personnel training function from the Stewart building back to the Blasdel Building with the Department of Personnel. Mr. O'Brien reiterated an earlier statement that prison administration staff currently housed in building 6 were crowded and had a real need for space. Mr. O'Brien indicated those crowded conditions justified the project as a benefit to the state and requested that Jackie Crawford, Director of Prisons, provide additional comments on the Department of Prisons' need for space and that the remodel of the one floor would meet those needs.
Mr. Marvel asked whether the honor camp inmates were utilized to assist in the moves. Mr. Meizel advised that while inmates had been used for smaller interagency moves, they had not been used to move large agencies from one part of town to another. Mr. Marvel questioned whether it would be possible or practical to use inmates for the large moves. Mr. Meizel responded that the feasibility of using the honor camps depended on availability of the trucks, and he said that while there was no reflection on the inmates, who were used every day to move desks and files, expensive equipment had sometimes been broken in large moves. At Mr. Marvel's request, Mr. Meizel indicated he would further investigate using honor camp inmates for the moves.
The Chairman recognized Jackie Crawford, Director of Department of Prisons. Ms. Crawford spoke in support of the renovation of building 17 at the Stewart facility and testified that the Department of Prisons faced a huge space problem that would create a domino effect until building 16 was renovated. Ms. Crawford indicated that a request for leased space would most likely be included in the Department of Prisons' budget in the 2003 session. Problems brought about by the overcrowded conditions were detailed by Ms. Crawford, however, emphasis was placed on the difficulty encountered in recruiting qualified people who were willing to work in such a congested environment. Ms. Crawford reported that staff productivity was affected by the congested workspace, lack of automation, and the paper intensity of the office. Ms. Crawford added that for a 45-day period last month, the administrative office received 68,000 phone calls. Ms. Crawford concluded her testimony and asked for the subcommittee's favorable consideration on the prison's request for the additional space.
Chairman Arberry asked Ms. Crawford to comment on the Department of Prisons' plans to automate. Ms. Crawford reported that the department was probably 10 to 15 years behind in automation and had requested some tools in The Executive Budget for 2001-2003. However, Ms. Crawford indicated a study would be requested in the next biennium to further automate the department.
Mr. Marvel questioned whether fiber optics capability was available at the Stewart facility. Ms. Crawford responded that while she was not technically knowledgeable concerning communications capability at Stewart, it was her understanding that capability was limited but that certainly fiber optics technology was needed. Ms. Crawford reported that the buildings had been built in 1926 and there had been some minor renovation that included asbestos abatement. It was Mr. Marvel's opinion that the technology requirements should be brought up to standard. Mr. Meizel reported that Patrick McInnis, Chief Engineer for the Division of Buildings and Grounds, had advised that all the conduit required had been placed in the ground at Stewart during the last renovation.
RENOVATE HVAC SYSTEM IN EAST WING OF CARSON CITY DMV HEADQUARTERS (CIP 01-M1)
In reference to the renovation of the Blasdel Building, CIP 01-C10, Mr. O'Brien indicated he had misstated the funding requested for the asbestos removal and asked that the record reflect the amount of asbestos removal for the Blasdel Building was minimal and, in fact, only related to some covered pipes. With confirmation from Ron Crook, Project Manger for the PWB, Mr. O'Brien indicated there was no significant dollar amount related to asbestos removal in the Blasdel Building. In response to a question from Chairman Arberry, Mr. O'Brien advised an additional $18,000 was not being requested for the Blasdel Building. The $18,000 was being requested for the CIP 01-C11 project at the Stewart facility.
Mr. Meizel moved to the renovation of the HVAC system in the east wing of the Carson City DMV headquarters and reported that the request for funding, if approved, would replace the entire heating, ventilating, and air conditioning system (HVAC). Mr. Meizel advised that the renovation included a "desperately needed" total overhaul of the HVAC in the 25-year-old building that included replacement of the chillers and boilers and redistribution of the air and controls. In a justification of the request, Mr. Meizel pointed out that the building was built for a specific use that had been exceeded both in the type of equipment being used and distribution of staff. Chairman Arberry asked that the agency representatives address the funding request approved during the 1995 and 1997 sessions for a total remodel of the DMV.
Mr. Meizel testified that a remodel did not always address renovating the HVAC and called upon Patrick McInnis, Chief Engineer for the Division of Buildings and Grounds, to provide an explanation to the members of the subcommittee. Mr. McInnis identified himself for the record and advised that the architectural side of the DMV's east wing was being remodeled in the second phase of a project that was started two years ago. Mr. McInnis reported that the renovation should progress to the second floor of the building later in the year. In the process of the remodel, Mr. McInnis advised it was identified that the chiller was only half the size required for the number of people planned for the building and that the boiler was at the end of its life. Mr. McInnis reported that the mechanical upgrades were almost entirely in the mechanical room and that they were not doing anything to the main building that would affect the architectural remodel. Mr. McInnis ended his testimony with remarks that indicated the project would increase the capacity and reliability of the mechanical systems that supplied the cooling for the system at the DMV headquarters' east wing.
Chairman Arberry questioned whether any funding remained from CIP 97-H2, approved in 1997, for a complete renovation of the existing structure that included an upgrade of the mechanical, electrical and communications systems in the building. Mr. McInnis was uncertain that any funds remained; however, as requested by the Chairman, agreed to research whether any funds remained. Mr. McInnis indicated that he believed the 1997 project might have been for the west wing of the building. Chairman Arberry disagreed. Mr. McInnis advised that the first floor electrical distribution system was updated during the architectural remodel and the controls on the air conditioning system were revamped; however, the main components such as the chiller, boiler, and air handlers were not upgraded at that time. Chairman Arberry reiterated his request that the agency representatives research whether any funds remained from the 1997 remodel project and provide the information to staff.
MISCELLANEOUS REPAIRS TO THE GOVERNOR'S MANSION (CIP 01-M2)
Mr. Meizel reported that the CIP for the Governor's mansion was based on an inspection the previous summer conducted by PWB facilities' staff who discovered a number of infrastructure problems. The need for the project also resulted from a private restoration that renovated part of the mansion and constructed the Nevada room. That restoration placed an additional load on the mansion's infrastructure. Mr. Meizel reported the mansion's problems included chillers that had outlived their usefulness, an electrical system that did not meet code, cracked sidewalks, and the sewer system had been neglected for a number of years. Mr. Meizel indicated the costliest problem was the replacement of the entire sewer distribution system. While the building had a lot of architectural renovations over the years and looked nice, Mr. Meizel said the infrastructure had been neglected and funding was requested for various repairs.
Chairman Arberry requested a description of the Americans with Disabilities Act (ADA) improvements that would be made to the mansion. Mr. Meizel responded that the project cost estimate included $53,076 for miscellaneous ADA improvements; however, he was uncertain concerning the detail. Ward Patrick advised that ADA improvements included renovation of a wheelchair lift on the main front steps and access work to the public way (work on the sidewalks). In response to a request from Chairman Arberry, Mr. Patrick agreed to provide a cost breakdown to staff.
HVAC SYSTEMS RENOVATIONS FOR STEWART BUILDINGS #12 AND #13 (CIP 01-M3)
Mr. Meizel reported that independent boilers had recently been placed in buildings 12 and 13 that were occupied by the Highway Patrol Division and POST respectively. Mr. Meizel explained that the CIP called for replacement of the heat exchanger that no longer functioned. Rick Combs, Program Analyst, Fiscal Analysis Division, questioned whether staff could remain in the building while the heat exchanger was being replaced. Mr. Meizel responded that staff would not be moved during the installation process.
EXTEND AIR INTAKE LOUVERS AT GRANT SAWYER STATE OFFICE BUILDING (CIP 01-M4)
Chairman Arberry requested that agency representatives discuss the $7,292 requested for "design contingency." Ward Patrick reported that when the construction cost breakdown was developed, some members of the staff used "low-bid type" numbers to generate their cost estimate. Mr. Patrick explained that in such a situation, a contingency was created to bring the project into budget. Using the construction cost breakdown, Mr. Ward indicated a very specific breakdown of historically low prices existed, for example, a sheet metal cost of $5.25 per pound and an exterior finish and installation system at $45 per square foot. Mr. Patrick explained that in order to make the budget work, the project manager added a design contingency to create a successful project.
In response to a question from the Chairman, Mr. Patrick confirmed that the "design contingency" was a cost that was included on top of the estimate for construction. Mr. Patrick provided some background on the overall design process and explained that early in a project it was common for architects and engineers to use a design contingency in estimating costs. Mr. Patrick explained that when architects submitted a cost estimate at 30 percent through design, a line item was included in their cost estimate for contingency because they could not be aware of all the requirements that might develop in the project. Mr. Patrick said that at 50 percent through a design, a contingency in the 3 to 4 percent range still carried through in cost estimates, and toward the end of a project at 100 percent submittal, when as many items as were planned had been identified, the contingency tended to "go away."
In response to a question from Mr. Marvel on where the actual funding went, Mr. Patrick advised that as the projects progressed, additional requirements developed that had not been taken into consideration during the estimating process and those were items covered by the design contingency.
Chairman Arberry asked agency representatives to identify the $8,022 cost for contractor overhead and profit. Mr. Patrick explained that contractor overhead and profit was based on subcontractor prices on the street and that the estimated 10 percent overhead and profit was appropriate for a small project.
Chairman Arberry recessed the meeting at 9:20 a.m.
Chairman Arberry reconvened the meeting at 9:45 a.m.
GENERAL IMPROVEMENTS AND DEFERRED MAINTENANCE AT THE CLEAR CREEK FACILITY (CIP 01-M5)
Mr. Meizel reported that the CIP 91-M5 project for general improvements and maintenance at the Clear Creek facility was based on an evaluation conducted the previous year. Mr. Meizel indicated that a recommendation of $2.6 million over the next ten years was divided into three phases and the first phase, CIP 91-M5, addressed, ADA, sidewalk improvements, and upgrades to the fire alarms, exit lighting, plumbing and flooring.
Chairman Arberry questioned whether funding for ADA improvements and paving projects at the facility had been inadvertently left out of the statewide projects. Mr. Combs clarified that the project description indicated that paving and ADA requirements were needed at the facility, yet those requirements had not been delineated in the statewide projects. Mr. O'Brien briefly reviewed Project 01-S-2 for the statewide ADA program and confirmed the ADA improvements at the facility were not delineated under the construction cost breakdown. Mr. O'Brien advised he would provide the requested information on ADA improvements and paving projects to staff.
Mr. Meizel reported that the project brought the Clear Creek facility up to modern standards, and improvements were issues that needed to be addressed whether the state decided to keep the facility or not.
Chairman Arberry commented on the $50,000 approved by the 1999 legislature for new flooring in the large administrative area at the facility and noted that project cost estimates included $185,069 plus inflation for flooring. The Chairman asked the agency representatives to discuss where and what type of flooring would be installed. Mr. Meizel responded that the request for funding only included flooring that had not yet been installed and while they had been slowly installing flooring, the 1999 funding had not been sufficient to complete the installation. Mr. Meizel agreed to provide a list of the flooring that had already been installed and the flooring that would be installed with the requested funding.
Chairman Arberry questioned the project cost estimate of $3,402 for "remote site costs" and asked agency representatives to define if a site over ten miles was considered remote. Mr. Patrick indicated the line item for "remote site costs" could be eliminated.
DEMOLISH RESIDENCE AT 303 ROOP STREET (CIP 01-M6)
Mr. Meizel reported that the residence located at 303 Roop Street was acquired by the state several years ago to finish the Capitol Complex to the east along Roop Street. The residence was proposed to be demolished for the anticipated construction of the new state office building. Mr. Meizel indicated the PWB would recommend to the Governor that the demolition of the property be delayed for the current biennium since there was no funding for the new state office building. Additionally, minor improvements were made; the house was painted and rented and the rent helped to defray the maintenance expenses.
Chairman Arberry questioned the status of the bowling alley building on the Division of Child and Family Services' (DCFS) campus. Mr. Patrick responded that the bowling alley building was a project currently funded and anticipated to be demolished during the summer 2001. Chairman Arberry recalled that the board had testified during the 1999 legislature that the bowling alley was a liability and nuisance and asked for comments concerning the liability factor and the reason for the delayed demolition. Mr. Meizel advised that the bowling alley was not a building over which Buildings and Grounds had jurisdiction. At Chairman Arberry's suggestion, Mr. Meizel agreed to work with PWB representatives and provide the requested information to staff.
KINKEAD BUILDING CEILING REPLACEMENT AND RESTROOM REMODELS (CIP 01-M44)
Mr. Meizel reported that CIP 01-M44 recommended renovations for the Kinkead Building, built in 1975. Over the years, roof and wall leaks had been repaired, ceiling tiles had been replaced, and HVAC and telecommunication work had been performed. CIP 01‑M44 recommended the replacement of acoustical ceilings and the remodel of seven restrooms. Chairman Arberry asked if any funding remained in CIP 99-M26, approved during the 1999 legislature, that could be used to support the costs of the project. While Mr. Meizel was uncertain that any funding remained, he indicated he would provide the requested information to staff. The Chairman asked the agency to comment on whether the employees who worked in the building would need to be relocated while the project was being completed. Mr. Meizel envisioned that the work would be accomplished after hours and during weekends.
REPAIRS AND IMPROVEMENTS TO THE GRANT SAWYER STATE OFFICE BUILDING (CIP 01-M45)
Chairman Arberry asked that reasons for the elimination of the indoor atrium at the Grant Sawyer Building be addressed. Mr. O'Brien clarified that the project would not eliminate the atrium but would replace areas of dirt with concrete where palm trees had once been planted. Mr. Marvel questioned whether the entire $46,000 would be used for concrete. Mr. Patrick responded that the PWB started to pursue the project three or four years ago and had the authority to go through "non-public bids" for an amount less than $25,000. Bids were received in the low $30,000 range due to the fact that tile similar to the tile in the atrium also had to be replaced. It was Mr. Patrick's opinion that as time went on compatible ceramic tile would be less readily available and would tend to increase the cost. Additionally, Mr. Patrick indicated that smoke evacuation fans, vents, and other appurtenances were required. It was Mr. Patrick's opinion that $46,000 would cover the cost of the project. Chairman Arberry requested that the PWB provide a breakdown to staff on the area of square footage that would be replaced.
Additionally, Chairman Arberry questioned whether greater efficiency could be gained if the PWB and the Buildings and Grounds Division combined all or certain portions of the Sawyer Building projects. In response to a question from Mr. Meizel, Chairman Arberry restated his question and asked if CIP 01-M4 and CIP 01-M45, both slated for repairs and improvements to the Sawyer Building, could be combined. Mr. Meizel agreed to provide information to staff on the feasibility of combining the projects.
Mr. Marvel expressed his dismay at a recommended expenditure of $1.5 million for what he indicated was a relatively new building. Mr. Meizel pointed out that the Sawyer Building was large and complicated insofar as the heating and ventilation systems. While he was uncertain as to the life of the window sealants, the probability was that the sealants had a six- or seven-year guarantee. However, Mr. Meizel explained that once the state assumed ownership of a building, it became the state's responsibility to maintain it, especially the sidewalks, which became a liability as they buckled and cracked.
Chairman Arberry questioned whether the doors in the Sawyer Building would be replaced with electronic or push doors and further questioned the cost difference. Mr. Meizel discussed the weight of the large doors and advised the Chairman he wanted to further investigate the door issue and provide the requested information to the subcommittee.
NEW STATE MOTOR POOL FACILITY, LAS VEGAS (CIP 01-C4)
Mr. O'Brien advised the members of the subcommittee that the State Motor Pool had been required by the Clark County Airport Authority to vacate the facility on Rent-A-Car Road in Las Vegas. Mr. O'Brien indicated that because of the time period to vacate, the PWB needed to move forward on the design and construction of a new facility, which was being done in-house. A model of the facility was presented to the subcommittee as shown in the attached photo (Exhibit E). Mr. O'Brien noted that the PWB worked with the University during the drafting process to design a facility that would house the State Motor Pool and University of Nevada Las Vegas' (UNLV) Motor Pool operations. The facility would allow the state and UNLV to share meeting rooms permitting state agency representatives to take a shuttle to the Motor Pool to hold a meeting and return to the airport via the shuttle. Mr. O'Brien indicated that the PWB was moving quickly on the project because of the need to vacate the current facility and that they were pleased with the design. Mr. O'Brien introduced Frank Revell, Chief of the State Motor Pool.
Mr. Revell identified himself for the record and informed the members of the subcommittee that when the State Motor Pool learned five years ago that the Clark County Airport Authority would not extend the lease on the current facility, the division began investigating whether to build another facility. After determining UNLV's need, it was decided that a cooperative facility would be built that would house the State Motor Pool and UNLV's Motor Pool operations.
Chairman Arberry questioned whose responsibility it would be to pay for demolition of the building once it was vacated. Mr. Revell responded that the Office of the Attorney General was reviewing the original lease, which appeared ambiguous as to whose responsibility it was to pay. Mr. Revell anticipated that since the Motor Pool was being evicted, the Clark County Airport Authority would assume responsibility for removing the building. In response to a question from Chairman Arberry, Mr. Revell confirmed that attorneys from the Office of the Attorney General were involved in "ironing out" the language in the lease as to whose responsibility it was to pay for demolition of the building.
Chairman Arberry requested comments on whether anything from the current facility was salvageable and could be used in the new building. Mr. Revell responded that all the equipment was portable and would be removed and taken to the new facility.
Chairman Arberry addressed the number of gross square feet for the new facility and questioned whether the figure was 13,000 gross square feet or 10,258 gross square feet. Mr. O'Brien responded that the PWB project manager confirmed the correct figure was 10,258 gross square feet.
Chairman Arberry questioned how the operating costs for the facility would be allocated to UNLV and the Motor Pool. Mr. Revell responded that a letter from the PWB stated that the operating costs would be split according to the square footage of use exclusive to each of the entities.
Chairman Arberry asked for comments that addressed the remaining obligation that required payments on the building at the current site until 2010. Mr. Revell advised that the Office of Attorney General was looking into whether the obligation that remained on the current building could be passed back to the Clark County Airport Authority and that he was uncertain on where the Motor Pool stood with the Airport Authority at this particular time.
Ms. Giunchigliani recalled an earlier statement that the Motor Pool was advised five years ago that the property would be taken over by the Airport Authority and questioned whether any advance planning had taken place after notification of the need to vacate. Mr. Revell advised that advance planning was conducted and at that time, inquiries were initiated; however, the Airport Authority would not commit to anything more than they might do something with the property in five years. Ms. Giunchigliani indicated that it appeared there was no contingency plan and inquired as to the date of eviction. Mr. Revell responded that the date of eviction was November 1, 2002. Ms. Giunchigliani expressed surprise that the cost of the demolition and how it would be shared was unknown and questioned why the contract was not reviewed when it had been known for five years that a move might be required. Mr. Revell responded that inquiries had been initiated to the Airport Authority five years ago, the lease had been reviewed, and there had been some answers. Ms. Giunchigliani pressed for the answer and again questioned whose responsibility it would be to demolish the building. Mr. Revell acknowledged there was still no answer to that question.
Ms. Giunchigliani addressed the operating cost of the new facility based on square footage and inquired as to whether a revised budget had been developed on the reduced number of square feet. Mr. O'Brien advised a breakdown was available that the PWB would provide to the subcommittee.
Ms. Giunchigliani questioned whether the billing rate was based on an area per square foot and whether the market rate applied. Mr. O'Brien indicated the PWB would have to get back to the subcommittee with the billing rate information.
In response to Ms. Giunchigliani's question that addressed a revised budget, Mr. O'Brien indicated the PWB would also get back to the subcommittee on that question.
It was Ms. Giunchigliani's opinion that before any action was taken, a decision should be made on privatization and indicated that it would be "a waste of money" to build a new facility if a decision was made to privatize. Mr. Revell responded that the privatization issue had been reviewed, and a $50,000 study was currently underway to determine if it was even feasible to privatize a small part of the operation. Mr. Revell advised that substantially more money would be required to determine if the entire operation should be privatized. If the current study determined privatization for a small number of vehicles was not feasible, Mr. Revell said that privatizing the entire operation would be "prohibitively expensive," as substantiated by recent inquiries. Mr. Revell also indicated he had numbers that illustrated it was more costly to lease a commercial vehicle over vehicles in the Motor Pool's inventory. Additionally, Mr. Revell said an RFP would be required to find out if privatization was feasible and advised that no other state had privatized their leased operations. Ms. Giunchigliani questioned whether $50,000 should be spent on a study since it had already been determined that no other state had privatized their Motor Pool operation. Ms. Giunchigliani indicated she had been willing to look at the privatization issue, but it appeared a temporary facility was needed while the issue was being contemplated. In response to a question from Ms. Giunchigliani, Mr. Revell indicated a period of between five and six years was needed to study the privatization issue.
In response to a question from Ms. Giunchigliani on whether an agreement would be negotiated with UNLV to take over the new facility if the Motor Pool was privatized, Mr. Revell advised that some type of an agreement would be negotiated. The subcommittee was provided with information concerning Greeley, Colorado's, privatization effort, and Mr. Revell said that six years after the city privatized, they bought back all of their buildings and hired back their mechanics because the operation was unsuccessful. It was Mr. Revell's feeling that even if the Motor Pool was privatized, the state should be prepared to provide the service if the operation was unsuccessful. Ms. Giunchigliani asked Mr. Revell to share his feeling with the Governor and indicated that perhaps the legislature would not recommend privatization.
It was Mr. Marvel's opinion that the Clark County Airport Authority had broken the lease and expressed an inability to understand why the state had to continue to pay the rent. Mr. Revell agreed with Mr. Marvel's opinion, however, clarified that the state was actually paying for the cost of the building which had been paid out of the General Fund and a loan from the Highway Fund.
Chairman Arberry asked the agency to address their plans for repayment of the new project. Mr. Revell advised that the loan would be amortized over a number of years and repaid to the General Fund out of their budget through revenues collected from state agencies. Chairman Arberry questioned whether UNLV would contribute to the repayment plan for the facility. Mr. Revell indicated the repayment would be divided between UNLV and the Motor Pool. Chairman Arberry requested that Mr. Revell provide statements in writing to the members of the subcommittee that stated the agreement to divide the cost of repayment between UNLV and the State Motor Pool.
Senator Coffin requested clarification on the proposed location of the new facility on the UNLV campus. Mr. Revell identified the location as "immediately west of the Thomas & Mack Center" on the UNLV campus. In response to a question from Senator Coffin, Mr. Revell said that the university was "excited" over the prospect of the shared facility because they currently occupied only "a small garage with two bays." Mr. Revell commented that even the president of UNLV had "signed on with the project." Senator Coffin indicated that while the president had a parking space forty feet from her office, the faculty needed every bit of available parking and that the Thomas & Mack Center already had limited parking for attendees at public events. Senator Coffin expressed concern over the removal of parking spaces and the potential loss of classroom space as well.
Mr. Revell explained that the new facility, as illustrated in the original design, was located immediately to the south of the university on Tropicana and Swenson in a parking area once used for exhibit trailers. In response to a question from Senator Coffin, Mr. Revell explained that the property in the original design was not used because the space was leased from the airport authority and the small electric golf carts, used by the university, would have had to be driven across a busy street. Mr. Revell explained that the proposed location for the new facility was decided upon because it "fit" better in the space near the Thomas & Mack Center rather than taking space needed for academic uses. Additionally, Mr. Revell noted that the space currently occupied by UNLV's Motor Pool operations was located within the core of the campus and was better suited for other uses. In response to a question from Senator Coffin concerning UNLV's intentions concerning the space, Mr. Revell said he believed there were plans for another building. In response to a question from Senator Coffin, Mr. Revell advised that 235 parking spaces would be removed. Senator Coffin questioned whether it would still be possible to negotiate for the space illustrated in the original design. Mr. Revell explained that the Motor Pool had until November 1, 2002, to move into a new facility and that the property leased from the Airport Authority was in the flight path. In a statement directed to Chairman Arberry, Senator Coffin indicated that before approving funding to construct the new Motor Pool facility, the university should provide a solution to the parking shortage that would be exacerbated by the new facility. Senator Coffin added that there was other space along the green belt on Swenson, not far from the athletic fields, and recommended that university officials and Motor Pool staff meet to discuss other areas that were not being used.
HVAC SYSTEM RENOVATION FOR PRINTING FACILITY IN CARSON CITY
(CIP 01-M7)
Mr. Patrick described project 01-M7 as a HVAC system renovation for the State Printing Division that included replacement of mechanical equipment, cooling tower, pumps, boiler, and piping and insulation, all approximately 35 years old. While Mr. Patrick advised that the agency and the PWB understood that the operations of the Printing Division would be subject to privatization, he explained that the project was scaled back to a recommendation of $206,125 for items that were necessary no matter who occupied the building.
Chairman Arberry requested comments on whether there was a proposal that required the State Printing Division to repay the General Fund and if a repayment plan would be a condition for approval of the project. Mr. Patrick responded that the project was recommended to be funded out of the General Fund and deferred further comment to Don Bailey, Chief, State Printing Division. Mr. Bailey identified himself for the record, and reported that the repayment for the renovation would be funded out of the General Fund under the Public Works Board. Mr. Bailey supported the renovation project and advised that the equipment, in place since 1965, was failing and on several occasions the Buildings and Grounds Division had discussed "red tagging" the furnace. Chairman Arberry directed the agency to contact staff concerning their repayment schedule. It was Mr. Bailey's understanding that the recommended funding would be a loan and would be paid back from funds collected by the division.
Chairman Arberry discussed proposed legislation that required the State Printing Division to be one of the three bidders for state agency printing jobs. Chairman Arberry requested comments from the agency concerning a potential loss of revenue if the bill was enacted. Mr. Bailey advised that BDR 568 required that the Printing Division should be one of three bidders for state agency printing jobs that were in the amount of approximately $1,500. While Mr. Bailey indicated the Printing Division could become competitive, he projected an initial revenue loss of between 5 and 10 percent, or about $500,000. It was Mr. Bailey's opinion the projected initial revenue loss could be made up by further promoting the Printing Division. Additionally, Mr. Bailey anticipated that revenue would be gained by work from the cities and the University System and would perhaps even exceed current collections. In light of Mr. Bailey's testimony, the Chairman indicated his expectation that the Printing Division would not appear before the Interim Finance Committee, at some point in the future, to report a shortfall. Mr. Bailey expressed his desire to avoid a request from the Interim Finance Committee.
Ms. Giunchigliani also expressed some concern over the potential loss of revenue and recalled the "quick copy" concept that was brought up during the 1999 Legislative Session. Ms. Giunchigliani anticipated an initial decrease in funds concerning the proposed legislation and indicated some assurance was required that a potential for earning revenue was there and that the same problems would not be encountered as were encountered with the "quick copy" program. Mr. Bailey explained that the Las Vegas "quick print operation," proposed in the last biennium, was initially abandoned because of problems with the vendor. Currently, Mr. Bailey advised, there were three vendors who could provide what was required in Las Vegas and could work electronically between Carson City and Las Vegas. Mr. Bailey further advised that revenue would be forthcoming from the Las Vegas operation and expressed confidence that the Printing Division would be successful as a result of the recommended legislation.
EXTERIOR REPAIRS TO THE STATE PRINTING OFFICE (CIP 01-M8)
Mr. Patrick advised that $206,000 was recommended to repair the exterior concrete structure and window sealant of the printing office facility. Mr. Patrick advised the members of the subcommittee that there were a number of capital improvement projects related to sealant maintenance that had been inspired by the renovation needed for the printing office building. Speaking in support of the recommendations for repair, Mr. Patrick advised that the printing facility was a small building within the 20,000 square foot range and that repairs for some of the other projects would be significantly less if completed in a more proactive measure. Chairman Arberry questioned whether any efficiency could be gained by combining CIP 07-M7, the HVAC renovation for the printing facility and M-8, the renovation of the exterior of the facility. Mr. Patrick responded that one project was for concrete and caulking work and the other for heating, ventilation, and air conditioning, and if the two were combined, the general contractor would have to add overhead and profit. Additionally, Mr. Patrick said that whether or not the projects were combined, two separate contracts would be executed for "efficiencies of money." In response to a question from Chairman Arberry, Mr. Patrick indicated the PWB would coordinate between the two contractors and advised he was uncertain that the projects would be planned concurrently but that they would not be a problem if they were.
ADVANCED PLANNING FOR READINESS CENTER IN CLARK COUNTY
(CIP 01-C6)
Chairman Arberry asked that comments be addressed concerning the location of the new armory. Mr. Patrick advised that Office of the Military representatives were working with the Division of State Lands to find a location and deferred to Brigadier General Giles E. Vanderhoof for additional comments.
Brigadier General Giles E. Vanderhoof, Adjutant General of Nevada, identified himself for the record and advised the members of the subcommittee that while the land located by the Henderson Executive Airport, south of the McCarran International Airport, was not yet "locked up," the department was working on it with Pam Wilcox, Administrator, Division of State Lands. The Brigadier General indicated the intent was to withdraw the land from the Bureau of Land Management (BLM) for the Henderson site.
Chairman Arberry asked the Brigadier General to comment on the North Las Vegas site. The Brigadier General advised that with the addition of new units, the North Las Vegas site was over 61,000 square feet short of the space the department needed. Additionally, the Brigadier General advised that in addition to picking up new units, Henderson had become completely encircled with houses so that the vehicles and equipment that had been in Henderson were no longer viable there. The Brigadier General advised that between having units added to the location used by the cavalry squadron in North Las Vegas, the housing developments in Henderson, and a new truck company coming on board, as well as 468 soldiers and 300 vehicles, a new facility was needed.
RURAL ARMORY RENOVATIONS (CIP 01-C12)
Chairman Arberry asked the Brigadier General to address why the federal government would pay for 50 percent of construction costs for the rural armory renovations but would not fund the costs for plan checking, testing services, project management and inspection fees. The Brigadier General advised that the items for which the federal government would not pay were, in the past, funded entirely by the state. He advised that it had been a difficult process to continue to fund those additional items. The Brigadier General considered it a bonus that the state was being provided with funding for 50 percent of the construction costs.
In response to a question from Speaker Dini concerning the armory kitchens, Brigadier General Vanderhoof advised the members of the subcommittee that while the department had new equipment for the kitchens provided by the legislature in previous biennia, that equipment could not be installed until electrical wiring was brought up to standard. The Brigadier General further advised that the State Fire Marshal had declared that the kitchens were not suitable for commercial use and therefore, "a small part" of the requested funding would go toward renovation of the kitchens so that the equipment purchased with previous funding could be installed and the kitchens could be used.
In comments addressed to the PWB representatives, Chairman Arberry requested information on why the renovation of the armory kitchen should not have been completed as part of the previous CIP 95-M43. Mr. Patrick responded that CIP 95‑M43 had been for equipment for one specific armory and the funding requested in CIP 01‑C12 was for nine armories. Mr. Patrick advised that he would review the 1995 and 2001 CIP projects in question and provide the requested information to the subcommittee. Chairman Arberry further requested that Mr. Patrick also provide staff with information concerning the projects that were and were not completed under CIP 95-M43.
SOUTHERN NEVADA VETERANS' MEMORIAL CEMETERY EXPANSION, PHASE IV (CIP 01-C7)
Mr. Patrick reported that CIP 01-C7 recommended funds for phase IV of the expansion of the Southern Nevada Veterans' Cemetery in Boulder City. Mr. Patrick explained that the project consisted of 5,000 pre-buried burial vaults and 5,000 cremation niches and that the cemetery staff had conducted more than 12,000 burials. Mr. Patrick pointed out that the facility had been master planned and the expansion was a part of the plan. While the federal government would provide funding for 100 percent of the project, the $300,000 in state funding requested for the project was considered seed money and would be reimbursed by the federal government.
Chairman Arberry addressed the project management and inspection fees that appeared to be based on the total cost of the project, which included $1,457,505 for the purchase of burial vaults and niches. Chairman Arberry asked for comments on whether the project management and inspection fees could be reduced. Mr. O'Brien indicated that the fees would be reviewed and the requested information would be provided to the members of the subcommittee.
FINISH SOUTHERN NEVADA VETERANS' NURSING HOME (CIP 01-C8)
Mr. Patrick reported that the Southern Nevada Veterans' Nursing Home project was a continuation of Project 97-C16. Mr. Patrick cited numerous problems that had occurred during the course of CIP 97‑C16, which included a landscaping bid that was not awarded because of unfavorable bids and delays and complications with architectural design issues that created excessive change orders. Mr. Patrick advised that a decision was made to request funding for landscaping to complete the project, which would be implemented with inmate labor and a construction manager with landscaping capability. Additionally, Mr. Patrick advised that the construction cost breakdown listed funding for anticipated change orders on the existing project as well as additional furnishings and equipment.
Chairman Arberry requested that comments be addressed to the anticipated completion date of the Veterans' Nursing Home. Mr. Patrick said that, based on progress meetings with the contractor, the current estimated completion date was the middle of April 2001. In response to a question from Chairman Arberry, Mr. Patrick advised that the original completion date, as outlined in the bid documents, was May 2000. Chairman Arberry expressed concern over the contractor's delay and asked whether damages were being paid. Mr. O'Brien advised that, as a provision of the contract, the PWB would review whether "liquidated damages" should be incurred after substantial completion of the project. Mr. O'Brien discussed the problems that had plagued the project and advised that meetings had taken place with the staff from the Office of the Attorney General, a claims consultant had been hired to review the time delays associated with the project, and meetings had taken place with the architects and the agency.
Chairman Arberry requested confirmation that the square footage, as approved in 1997 for the nursing home facility, had been reduced and further requested that the PWB manager elaborate on the reason for the reduction. Mr. O'Brien concurred that the size of the building had been reduced from the original 115,500 gross square feet and advised the Chairman that his staff was currently researching the reasons for the change. Mr. O'Brien indicated that some information had been received from the architect, which was being incorporated into a report to be provided to the members of the subcommittee. Chairman Arberry strongly advised the manager that the subcommittee needed all of the information requested and pointed out that the PWB had not requested Interim Finance Committee approval for a change of scope for the project.
Senator Raggio reminded the PWB that the project under discussion was being revisited for about the third time and asked that comments be addressed to the number of problems that could be attributed to change orders. Mr. Patrick responded that there were a significant number of change orders; the project was in the $14 million range and change orders totaling 5 to 6 percent of that amount had been approved. Mr. Patrick added that change orders on construction projects normally were not more than 3 percent of the construction budget.
Senator Raggio requested information on how the decision was made to include only one restroom for every four residents. It was Mr. O'Brien's understanding that the change occurred during the design phase in order to stay within the budget and would be addressed in the report the PWB was preparing for the subcommittee. In response to a question from Senator Raggio, Mr. O'Brien confirmed the reduction in square feet was also a design change to stay within budget. In an effort to gain a better understanding of the delay, Senator Raggio requested that the PWB representatives elaborate on the issues that prevented the contractor from completing a smaller building in the allotted time period. Mr. O'Brien explained that the contractor's position was that there were some problems with the plans, which was confirmed by the architect. In response to a question from Senator Raggio, Mr. O'Brien agreed that while there were some architectural problems associated with the project, some of the problems were also attributed to the contractor. In response to a question from Senator Raggio, Mr. O'Brien advised that David Schmidt was the project manager. Senator Raggio expressed strong concern over the funding request since the project was originally represented as being funded in major portion by the federal government.
Senator Mathews discussed the modifications that had occurred during the design phase of the project and questioned why the Interim Finance Committee was not notified since the changes had to be approved by the PWB. Mr. O'Brien indicated that, after reading past audit reports, it appeared the changes of scope in construction and design had not been returned to the Interim Finance Committee for approval. In response to a question from Senator Mathews, Mr. O'Brien advised that the project manager for the Southern Nevada Veterans' Nursing Home and the project manager for the Lied Library were not the same person. In reference to past operating policies and procedures, Mr. O'Brien indicated his commitment to take any changes in scope of work and design during his tenure to the Interim Finance Committee. In response to a question from Senator Mathews, Mr. O'Brien confirmed that he had been hired after the Southern Nevada Veterans' Nursing Home had been initiated.
Chairman Arberry advised the PWB that, in the interest of time, a budget hearing for CIP 01-C13, that would convert the Belrose warehouse space to a records storage center and the CIP-01-E1 for a new office building in Las Vegas would have to be rescheduled.
Chairman Arberry asked if there were any projects initiated by the PWB that had been completed on time and without any major problems. Mr. O'Brien responded that while it was unfortunate several "high-profile, large ticket item projects" had problems, at least 95 percent of the projects were coming in on time, within the budget and with relatively few problems. It was Mr. O'Brien's opinion that tightening up some of the PWB's procedures would help to resolve many problems and pending legislation would enable the board to use better contractors.
Chairman Arberry advised Mr. O'Brien that high-profile projects such as the Lied Library and the prisons should have the brightest and best project managers. Mr. O'Brien commented that he believed that many circumstances had contributed to the problems, and he had impressed upon the PWB project managers the importance of presenting changes of scope and design to the Interim Finance Committee for approval.
Senator Mathews expressed concern in reference to the reduced number of restrooms for the Veterans' Nursing Home and questioned whether anything could be done to correct the situation. Mr. O'Brien advised that he had toured the facility a number of times and the design was too far along to make any changes. However, he advised there were common facilities in the hallways that could be accessed. Senator Mathews indicated that the restroom situation was unacceptable.
With no further business to be brought before the subcommittee, the meeting was adjourned at 10:58 a.m.
RESPECTFULLY SUBMITTED:
Connie Davis
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: