FY 2017-18 Capital Budget Requests

COVER PAGE Department of Agriculture FY 2017-18 CAPITAL CONSTRUCTION REQUESTS (LISTED IN OSPB PRIORITY ORDER) RECOMMENDED FOR FUNDING BY OSPB: Department Office Consolidation (Phase II) (cash-funded) TOTAL: FY 2017-18 CAPITAL CONSTRUCTION STATE-FUNDED REQUEST AMOUNT = $0 FY 2017-18 CONTROLLED MAINTENANCE REQUESTS (1) NOT RECOMMENDED FOR FUNDING BY OSPB: LEVEL II: Repair/Replace Water, Sanitary, and Storm Water Infrastructure on Fairgrounds, Ph 2 of 3 ($1,180,895) HISTORY OF STATE FUNDING $2.7 million has been appropriated on behalf of capital projects at the agency since FY 2012-13. This represents 0.3 percent of the total amount appropriated on behalf of all capital construction and controlled maintenance projects during this period. No funds were appropriated in FY 2016-17. INVENTORY OF GENERAL FUND SUPPORTED FACILITIES The General Fund supported inventory of department facilities totals 660,381 GSF. This total represents 1.4 percent of the entire General Fund supported inventory of state buildings. RECENT CDC VISITS Headquarters Building, Broomfield (August 2014) Branding Board (October 2013) Inspection and Consumer Services Lab, Denver (October 2013) State Fairgrounds, Pueblo (July 2013) Fiscal Year 2017-18 Capital Construction Request Agriculture Department Office Consolidation (Phase II) PROGRAM PLAN STATUS 2018-024 Approved Program Plan? Yes Date Approved: October 3, 2016 PRIORITY NUMBERS Prioritized By Priority DeptInst 1 of 1 OSPB NP of 47 Recommended for funding from cash sources. PRIOR APPROPRIATION AND REQUEST INFORMATION Fund Source Prior Approp. FY 2017-18 FY 2018-19 Future Requests Total Cost CF $0 $16,709,078 $0 $0 $16,709,078 Total $0 $16,709,078 $0 $0 $16,709,078 ITEMIZED COST INFORMATION Cost Item Prior Approp. FY 2017-18 FY 2018-19 Future Requests Total Cost Land Acquisition $0 $0 $0 $0 $0 Professional Services $0 $1,639,785 $0 $0 $1,639,785 Construction $0 $13,520,544 $0 $0 $13,520,544 Equipment $0 $601,650 $0 $0 $601,650 Miscellaneous $0 $140,000 $0 $0 $140,000 Contingency $0 $807,099 $0 $0 $807,099 Software Acquisition $0 $0 $0 $0 $0 Total $0 $16,709,078 $0 $0 $16,709,078 PROJECT STATUS This is a new, never-before-requested project. An earlier project, financed through certificates of participation (COPs), purchased a building and began the consolidation of most of the department's functions in a single location in Broomfield. PROJECT DESCRIPTION / SCOPE OF WORK The Colorado Department of Agriculture (CDA) is requesting cash funds spending authority to construct a 25,166-GSF storage and lab facility adjacent to its headquarters building in Broomfield in order to relocate warehouse storage, and the biochemistry, Rocky Mountain Animal Health, and metrology laboratories. The project also finishes office space in the headquarters building for lab employees. The new facility will complete the consolidation of the department's Denver Metro area offices which began with the purchase and renovation of the Broomfield headquarters building in 2014. The office consolidation projects affect all of the divisions within the department, with the exception of the Colorado State Fair, which is located in Pueblo. The projects address space deficiencies within the department and realize efficiencies through the collocation of services. Prior to the purchase of the Broomfield headquarters facility, the department, which consists of eight divisions, occupied five separate facilities, including two state-owned facilities and three leased offices in the Denver Metro area. The construction of the new laboratory and storage building facilitates the consolidation of the remaining metro-area offices at the new headquarters. Prepared by Legislative Council Staff Fiscal Year 2017-18 Capital Construction Request Agriculture Department Office Consolidation (Phase II) The project provides about 3,000 square feet of long-term storage and 22,000 square feet of lab space. Specific laboratory upgrades include: an overhead crane for loading and unloading trucks and a drive-through drop off delivery space for the metrology laboratory; special flooring and ventilation for the fine measurement portion of the metrology laboratory; and a liquid nitrogen delivery system, improved ventilation, and large walk-in refrigerators and freezers for the biochemistry laboratories. Background. House Bill 13-1234 authorized the State Treasurer to enter into lease-purchase agreements on behalf of the Department of Agriculture for a period of up to 20 years to purchase and renovate a new office building to house seven of the department's eight divisions. The bill also expanded the allowable deposits to the Agriculture Management Cash Fund to include proceeds from the sale of two buildings which currently house the department's Inspection and Consumer Services (ICS) Division. COPs were sold in December 2013 to finance the purchase of the headquarters building and most of CDA's metro- area offices moved to the new headquarters in 2014. Subsequent to the move, it was determined that a planned addition to the new facility would not meet certain design specifications or have adequate space to house the biochemistry, Rocky Mountain Animal Health, and metrology laboratories. CDA originally anticipated that the proceeds from the sale of the ICS laboratory buildings located in the lower Highlands neighborhood would offset the cost of the new Broomfield headquarters. Instead, the full cost of the purchase and renovation of the headquarters building was financed through the sale of the COPs. House Bill 16-1460 authorized CDA to sell a warehouse storage facility located at the National Western Center Complex and to acquire real property to construct a laboratory and storage facility adjacent to its existing headquarters. The bill directed the proceeds from the sale of the real property to be deposited in the Agriculture Management Fund and allowed the proceeds to be spent for expenses related to CDA's ongoing office consolidation. The proceeds were used to purchase property for the new laboratory facility. The property transactions authorized by the bill were completed in November 2016. PROJECT JUSTIFICATION According to the department, relocating its Denver Metro area offices to a single location will allow it to streamline its operations. The various divisions will be able to share supplies, office equipment, vehicles, and in some instances, personnel. For example, the relocation will allow the department to consolidate multiple reception areas, which in turn will free up some administrative staff to support program staff. Other divisions will also realize efficiencies through collocation. CDA explains that the ICS buildings, which were constructed in the 1970s, are outdated, in need of significant deferred maintenance upgrades, and inadequate for its space needs. Furthermore, continuing development in the lower Highlands neighborhood limits parking and makes it more difficult for large trucks to travel to and from the facility's metrology laboratory. The biochemistry building does not provide adequate ventilation and, in spite of ongoing maintenance efforts, the roof leaks in a number of places. The metrology laboratory does not have a separate drop off for large weights and scales, which necessitates a "wait period" after deliveries in order to reset the laboratory to its highly regulated temperature and humidity testing environment. Also, in recent years the laboratory workload has increased significantly, in large part due to new marijuana testing requirements. Finally, the department needs to replace the storage capacity it lost when it sold its warehouse facility at the National Western Center Complex. Project alternative. The department determined that renovating the ICS buildings to address deferred maintenance would cost between $4 and $5 million. Although this is a less expensive alternative, a renovation project would not address the existing space constraints and concerns with changes in the neighborhood. Furthermore, CDA believes that this is an advantageous time to sell the property and reinvest the proceeds in a new facility. The department also estimated the cost to lease space for its laboratories. The estimated cost to lease adequate space is about $560,000 a year. At this lease rate, it would take about 30 years to match the anticipated cost of the new construction project. According to CDA, the anticipated useful life of the new facility is 40 years. Prepared by Legislative Council Staff Fiscal Year 2017-18 Capital Construction Request Agriculture Department Office Consolidation (Phase II) PROGRAM INFORMATION According to the department, Colorado agriculture contributes $41 billion to the state's economy and employs nearly 173,000 people annually. CDA oversees Colorado's agricultural industry to ensure a safe, high-quality, and sustainable food supply. Prior to the sale of the facility, the warehouse at the National Western Center Complex stored twine for the weed-free forage program and veterinarian supplies. The CDA biochemistry laboratories provide analytical testing for several divisions within the department and for the Colorado Department of Public Health and Environment. Some examples of the testing conducted at the biochemistry laboratories include testing for pesticide residues in recreational and medical marijuana, ground water, and farm commodities; testing animal feed for prohibited materials and to verify labeling information; and food safety testing. The Rocky Mountain Animal Health laboratory provides livestock testing

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