Legislature(2003 - 2004)
04/08/2003 03:40 PM Senate STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SCR 6-LOCATION OF NEW SEAFOOD LAB
CHAIR GARY STEVENS asked Senator Wagoner to introduce the bill.
SENATOR THOMAS WAGONER, bill sponsor, stated there are two
current issues pertaining to the resolution.
· The lease on the existing seafood lab located in an old
Piggly Wiggly Store in the Matanuska Valley is not
available for releasing.
· The Alaska Industrial Export Authority currently owns a
250,000 square foot underutilized, state of the art seafood
processing facility in Anchorage. There is no evidence that
indicates the processing unit will be used to process fish
in the foreseeable future.
He paraphrased from the sponsor statement:
The funding history for replacement of the lab began
in FY 1999 with a $145,700 appropriation for a
feasibility study. In FY 2001, at a cost of $240,000,
the Department of Environmental Conservation
contracted for a conceptual design. A state-owned
parcel adjacent to the Anchorage Department of Health
and Social Services public health lab was determined
as the most accessible and economical site for a new
lab. In FY 2002, an appropriation of $1.3 million was
allocated for a complete design.
This year, the legislature is being asked to approve a
bond bill for construction costs of some $14.285
million.
This resolution suggests that a better use of state
funds would be to incorporate the proposed lab into
the existing AIDEA owned building that currently
houses Alaska Seafood International (ASI).
AIDEA has provided $50 million for construction and
long-term financing for the processing building and
retains a 29 percent equity position in ASI and
ownership of the plant and land underlying the plant.
The state could realize substantial cost savings by
construction of the lab within this existing state
owned facility.
SENATOR JOHN COWDERY understood Alaska Seafood International
does some lab work in the facility and wondered whether this
would become an extension of that lab or remain separate.
SENATOR WAGONER advised the proposal was exploratory in nature
but the design called for the two to remain separate. He
remarked $15 million is a lot of money for the state to spend on
a lab particularly when much of the lab, as designed, is devoted
to office space.
SENATOR COWDERY asked how many square feet were needed for the
lab and whether it was available in the AIDEA building without
jeopardizing ASI needs.
SENATOR WAGONER replied they need a little more than 20,000
square feet and it wouldn't jeopardize ASI needs in the
foreseeable future.
CHAIR GARY STEVENS asked Doug Bell to speak to the ASI position.
SIDE B
4:25 pm
DOUG BELL, Alaska Seafood International representative, advised
they are neutral with regard to the resolution. They do have the
room and would be willing to share the space.
CHAIR GARY STEVENS asked for confirmation that this would
present no conflict and ASI would be comfortable working with
the seafood lab.
MR. BELL assured him there were no space issues.
SENATOR FRED DYSON asked for the square footage of the AIDEA
building.
MR. BELL replied the building has 202,000 square feet and they
occupy about 25 percent.
SENATOR COWDERY asked whom the seafood lab would pay for use of
the facility.
MR. BELL wasn't sure those arrangements had been made but they
were open to the discussion.
SENATOR COWDERY asked what the state was currently getting in
return for its $50 million investment in the AIDEA building. He
said, "I know you had about 80 something in it."
MR. BELL replied he was correct. Currently AIDEA is deferring
ASI rent and that will continue until October 2003.
SENATOR COWDERY asked whether the seafood lab rent would be
similarly deferred.
MR. BELL advised AIDEA would have to speak to that question.
SENATOR COWDERY asked whether ASI would have any problems paying
rent beginning in October.
MR. BELL was unable to give a definitive answer but, at this
point, is would be difficult.
SENATOR COWDERY stated for the record he hosted a legislative
lunch using ASI donated product.
CHAIR GARY STEVENS asked if an AIDEA representative was present
and was advised they were on line.
SENATOR GRETCHEN GUESS asked whether the operating costs would
remain the same regardless of where the lab was located.
SENATOR WAGONER said personnel costs would probably remain the
same and lab costs are basic. He advised it would be a three way
process between ASI, AIDEA and DEC and AIDEA could speak to the
costs better than anyone else.
SENATOR COWDERY asked him to state for the record exactly what
the lab would do.
SENATOR WAGONER explained the lab runs a variety of tests on
dairy products, on animal meats and meat products, and shellfish
products. Any food tests the state is required to run are
handled in the lab.
SENATOR GUESS advised one of the arguments for moving the lab
into Anchorage was to provide better access to the airport.
SENATOR WAGONER agreed time is of the essence when testing a
food product. This is a more complex issue than he was initially
aware.
CHAIR GARY STEVENS added this is extremely important to the
seafood industry particularly when testing for paralytic
shellfish poisoning.
He announced Matt Tanaka from DOT, Tom Livingston from
Livingston Sloan Architects, Elise Hsieh from the Department of
Law, Ron Miller and Sara Fisher-Goad from AIDEA were all on-line
and available to answer questions.
He asked an AIDEA representative to speak to the questions
regarding payments.
RON MILLER, AIDEA representative in Anchorage, testified they
have discussed the DEC and DOTPF proposed plans and have
proposed rental rates for that portion of the building. The
arrangement would be a lease between AIDEA and DEC for the space
in the facility.
CHAIR GARY STEVENS asked how ASI fit into the picture.
MR. MILLER explained AIDEA owns the building, ASI leases the
building and the lease payments are deferred until October 2003.
Should DEC move into the building and ASI continue to occupy the
building after October, AIDEA would make some lease adjustment
to ASI since they would be occupying less space. They would make
a separate lease agreement with DEC.
There were no further questions for Mr. Miller.
KRISTIN RYAN, Director for the Division for Environmental
Health, explained DEC started a process with DOTPF to see
whether SJR 6 was feasible. DOTPF manages state leases and DEC
does not. A significant portion of the funds have already been
allocated to design the lab that would be built on state-owned
land next to the public health facility so they wanted to act
quickly to determine the feasibility of this proposal. The
current lease expires in December 2006 and a new lab must be in
place on or before that time.
With regard to Senator Cowdery's questions about lab functions
she explained it tests raw dairy product to make sure the fat
content is correct and to ensure the pasteurization process is
working. Every portion of dairy products that are sold to the
military and to schools must be state certified. The lab also
tests shellfish for paralytic shellfish poisoning, and reindeer
and other large animals shipped out of state for brucelosis. It
also performs the Fish Monitoring Project analysis to test for
persistent organic pollutants such as heavy metals.
DOT director Matt Tanaka contracted with Livingston Slone to
analyze the AIDEA building as an option to relocate the lab. She
noted preliminary information was in the packets and page 2
provides a comparative analysis.
CHAIR GARY STEVENS asked if she was referring to the Seafood and
Food Safety Laboratory Replacement spreadsheet dated 4/3/03.
MS. RYAN said that was correct. It compares building the lab as
planned to building it in a portion of the AIDEA building that
is leased by ASI.
Putting the lab in that building would save the state a bit more
than $700,000. The reason the savings is not greater is that the
state has already spent $1 million in design work and that is a
sunk cost. If the lab were to share the ASI space, the state
would have to start over. Only $2 million could be saved in
construction costs because the requirements for a lab are very
specific. All heating and ventilation systems would have to be
completely separate and the only existing infrastructure that
could be used is the floor and one wall. Contingency costs are
about $500,000 more to put the lab in the building ASI leases
because of the unexpected costs to modify an existing structure.
SENATOR COWDERY asked if she said it would cost $500,000 more to
put the lab in the existing facility.
MS. RYAN responded it would cost about $700,000 less to use the
ASI leased building. The $500,000 covers contingencies.
They worked with the Department of Revenue to analyze the
impacts to the funding options. For one thing, certificates of
participation couldn't be used to modify an existing state
facility, which means the construction costs would require a
$13.2 million general fund appropriation.
SENATOR DYSON asked, "As opposed to what?"
MS. RYAN explained the lab that is already designed could be
funded with certificates of participation. They could sell bonds
and debt service would assume the annual cost of paying back
that bond debt. The Governor is introducing a bond bill to
provide that option if the Legislature elects to take that
route.
If the lab were built in the ASI leased building, DEC would have
concerns about vibration to their microscopes and scales from
ASI or other tenants. Fulcrum scales that measure one part per
billion are so sensitive that a person walking into the room can
impact the reading. DEC has discussed these concerns with AIDEA
with regard to ASI and other tenants. The lab would occupy just
ten percent of the building and house 14 people. Labs are built
as stations for each type of analysis that is done with each
station representing a function.
SENATOR COWDERY asked if sharing the building would cause
problems.
MS. RYAN replied it might because lab equipment is sensitive to
vibration and fumes.
CHAIR GARY STEVENS asked about the seafood processing business
already on the premises.
MS. RYAN replied ASI business is compatible with the lab but
there could be ethical issues because the lab would oversee and
regulate ASI.
SENATOR COWDERY asked whether another food vending entity would
have an impact on the lab.
MS. RYAN said they regulate any food processing and might test
their products. AIDEA would have to determine the possible
conflicts with every potential tenant.
SENATOR DYSON said he was startled by the cost to convert one
quarter of the building. He asked whether the heating system was
hot air.
TOM LIVINGSTON with Livingston Slone Architects replied the
existing system was built for manufacturing and food processing
occupancy. The lab would need a separate ventilation system to
prevent mixing and contamination. More control over the
ventilation systems is also required.
SENATOR DYSON restated his question regarding the heating
system.
MR. LIVINGSTON replied they propose to put in a stand-alone
heating and ventilation system specifically for the lab. The
projected cost per square foot is $85, which is commensurate
with Anchorage building costs.
SENATOR DYSON asked if it was correct that the temperature and
environment in the lab had to be carefully controlled.
MR. LIVINGSTON said that was true. They designed the lab to
occupy a corner of the two-story building. For economy and to
utilize the volume effectively they propose a two-story build-
out within that space. Two insulated exterior walls and the roof
and floor slab could be used, but all interior utility systems
would be independently provided. The lab would be an independent
building with the opportunity to expand the building outside the
current footprint at some point.
SENATOR DYSON asked if the existing heating system was hot air.
MR. LIVINGSTON replied it was hot air with an air exchange rate
that is lower than required by the seafood lab.
SENATOR DYSON asked why they couldn't use a heat exchanger off
the existing hot air system to provide a hydronic system or
whatever was needed for the proper environmental control in that
quarter of the building.
MR. LIVINGSTON advised they are trying to utilize existing
systems wherever possible and would tap into the emergency power
system.
SENATOR COWDERY asked whether placing an environmentally
sensitive lab in the building would jeopardize any other options
for usage.
MR. MILLER responded it is a concern that DEC would be a
preemptive tenant. They also noted the proposed footprint would
take up two or three of the current loading docks, which might
serve as a disincentive for a future tenant.
CHAIR GARY STEVENS asked him to comment on what has already been
spent in the design phase of a new lab because he understood
$145,000 was spent on a feasibility study.
MR. MILLER explained that money was spent by DEC and DOTPF.
CHAIR GARY STEVENS noted $240,000 was spent on conceptual
design. He asked whether the $1.3 million appropriated in FY 02
had been expended.
MR. MILLER advised they were not involved; DEC and DOTPF might
be able to answer the question.
CHAIR GARY STEVENS asked Mr. Tanaka whether the $1.3 million FY
02 design appropriation had been expended.
MR. TANAKA replied part had been expended. Footnote (1) on the
spreadsheet states that if the decision is made by 4/15/03 about
$650,000 would be available to carry forward for the design of a
lab in the building ASI leases. To date they have spent
somewhere in excess of $700,000 on the design of a lab to go
next to the existing public health lab on Tudor Road. That
design effort would be shelved if the direction were changed to
pursue building a lab in the ASI building. When comparing the
two proposals and including sunk costs for the Tudor Road lab,
the projects are a wash. Both would be $14 million projects.
SENATOR COWDERY noted he wanted to move the bill on to Finance,
but he questioned whether the change of direction proposed by
SCR 6 would actually save the state money.
He made a motion to move SCR 6 from committee. There being no
objection, it was so ordered.
| Document Name | Date/Time | Subjects |
|---|