HB 409 - DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT CO-CHAIR AUSTERMAN told the committee that the Department of Administration had come up with estimated moving costs associated with HB 409, for which the department would provide an explanation. Number 0063 KEITH GERKEN, Architect, Central Office, Division of General Services, Department of Administration, referred to a hand-out entitled "HB 409 Estimated Moving Costs" and said the costs were based on actual expenditures for several moves within the last year or two. The hand-out portrayed how the department had arrived at the unit cost of $5,000 per position. Mr. Gerken explained that actual costs varied tremendously, depending on the changes necessary. However, the amounts averaged $5,060, which had been rounded to $5,000. Number 0240 MR. GERKEN pointed out the estimate did not include significant building changes; building code improvements that might be required; Adults with Disabilities Act (ADA) accessibility improvements that might be required; or purchasing of new computer equipment or furniture. He said it should be viewed as rule-of- thumb, with different costs for smaller or larger moves. It was as accurate as the department could come up with, given the level of information on what moves might be made. Number 0298 REPRESENTATIVE PETE KOTT asked if the estimate included any administrative-type supplies. MR. GERKEN replied the moves were made with agencies absorbing administrative costs of doing the work. For example, there was no overhead for a department to do design work or for construction administration. Mr. Gerken said the positions were in fairly small increments of 10 - 30 people. Essentially, there was no overhead; the amounts were contractual costs. Number 0355 REPRESENTATIVE KOTT asked if the estimate included items like changes in stationery, letterhead and so forth. MR. GERKEN replied no. The Department of Administration had looked at it purely as a moving cost. For other programmatic impacts of moving, each agency would have to identify those. Number 0387 REPRESENTATIVE KOTT wondered, if the move were to occur, whether it would be administered by taking the low bid or would the state, within the confines of its operations, make the move. MR. GERKEN responded that essentially, all the items were contractually acquired, based upon proposals. Whether the bids were formal or informal would depend on their size, with bids over $25,000 apiece being formal. The amounts, he said, were determined by at least getting informal proposals from movers and contractors. For phones and computers, he added, for the most part, there was an existing, standing contract through Information Services. For example, to move a phone anywhere in Juneau, whether across the room or across town, there was a unit price that had been bid on a multi-year contract. Basically, all the costs were competitively acquired and done through contractors. Number 0492 REPRESENTATIVE KIM ELTON referred to the proposed combination of departments and said he had assumed, using Juneau as an example, that one of two things would probably happen. First, the likely scenario would be that few positions would move from one building to another. A second, less likely scenario, would be needing to find a building where the entire new department could be accommodated, for reasons of efficiency. He asked Mr. Gerken to address that. Number 0558 MR. GERKEN replied that Representative Elton was trying to envision the exact scenario in both Juneau and Anchorage, where most of the estimated 160 positions were. That, he said, was why the Department of Administration had included the amount of $25,000 in each location, to actually prepare a space plan prior to a move. There were a lot of questions, he said, in terms of the best fit, where people logically should ultimately reside. Mr. Gerken suggested that the agencies did not know who would actually go where. He thought there had been an effort in the agency analysis, where they had come up with 160 positions to move, to try to place next to each other those functions which needed to be adjacent. However, they did not yet have a picture of that. He did not know how to answer that question. Number 0626 MR. GERKEN acknowledged that there would need to be, in the new department, some sort of identity as to where they were. He said the department wanted to avoid leasing new space, preferring to make use of what they already owned. However, at least in Juneau, that was probably not going to happen entirely. One of the concerns was lack of an elevator in the existing DCRA building. It was an old building and could not be significantly remodeled without some higher expense than that already being considered. It would take a practical approach to make a shift that did not escalate the cost beyond current estimates. However, Mr. Gerken said, he did not yet have enough information to make that leap. Number 0727 JEFFREY W. BUSH, Deputy Commissioner, Office of the Commissioner, Department of Commerce and Economic Development (DCED), discussed the department's estimate of 160 people who would tentatively be moved under HB 409. It was a very rough number, Mr. Bush stated. He explained that DCED had taken the premise that the sponsor's intent was to create a cohesive economic development department. Those people would be put in one place, with everything else shaking out from there. Number 0764 MR. BUSH explained that the minimum amount of moves possible was proposed, moving people to create space for the new department. The intent was that the existing space, both in Anchorage and Juneau, would be utilized. There would not be new space. For example, the DCRA building would either be used for the new department or for a unit from another department that could stand alone, such as the Division of Occupational Licensing. Number 0818 REPRESENTATIVE ELTON expressed that for private people, a change in a building would trigger new requirements such as adequate parking. He asked if that applied when the state changed the use of one of its existing buildings. MR. BUSH replied that was a question probably better asked of Mr. Gerken. He said, for example, there were ADA concerns with the existing DCRA building. They could not, in essence, move walls or perform structural changes without running into ADA problems. They therefore had assumed they would not do that. Number 0871 CO-CHAIR AUSTERMAN asked if there were questions; there were none. He informed the committee that no further testimony would be taken that day on HB 409. On Thursday, February 22, the committee planned to take amendments and then vote on the bill.