The total cost of
renovating the State Board of Equalization's woeful headquarters building at
Fifth and N streets in Sacramento is estimated to be $65 million, staff told
the board at its October 6 meeting. Pressed by new BOE Member Jerome Horton,
staff acknowledged that the $65 million figure does not include lost
productivity from staff moving from floor to floor as repairs are made. Liz
Houser, deputy director for administration, estimated the lost productivity at
six days per employee.
When Mr. Horton
asked about potential costs to the board for adverse decisions from building-related
employee lawsuits, staff said that topic should be discussed in executive
session, behind closed doors. Board Member Bill Leonard pointed out that in
addition to all of these costs, the building will have higher-than-ordinary
maintenance costs for all time.
Ironically, during
this discussion, three of five elevators in the high-rise were out of service,
causing congestion and delays. Board members were told that it will take 36
months to "modernize" the elevators.
Board Chair Betty
Yee expressed her displeasure about the way the board has been apprised of
costs – on a bit-by-bit basis. She said small amounts don't sound like much,
but the entire cost needs to be shown.
Board staff said
they believe they have no choice but to go along with the piecemeal renovation.
Mr. Horton asked, "Why not pack up and leave?" Ms. Houser said,
"I hate to see more dollars spent on the building, but we have no
choice." She added that originally, staff thought it would be over soon,
but it has become a bad episode of "This Old House."
When told that the
board rents the building, but has no lease, Mr. Horton asked for a legal
opinion on the board's obligation to stay in the building.
Despite the
condition of the building, which is owned by the State Department of General
Services, the board was told that there will be a rent increase. The board
agreed to submit a budget change proposal to the Department of Finance for an
additional $2.48 million to pay for the rent increase. (Cal-Tax: With the state budget hemorrhaging red ink, and with
services being cut, this request may face steep odds.) Ms. Yee insisted that
the request be tied to the implementation of legislation requiring a study of a
possible move to another site or sites.
Mr. Leonard asked
why the administration did not include the building on the list of properties
that it recently proposed to sell. There was no answer.
(Cal-Tax: It is apparent that the board
would like to vacate the building, and taxpayers are tired of throwing good
money after bad. Apparently, the road blocks are at the Department of General
Services. The Governor's Office should step in and get this problem resolved.)
Cal-TaxReports, October 13, 2009
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