state buildings

With $700K spent, new Reelfoot Lake State Park building may be torn down rather than finished

State officials are tentatively planning to demolish an interpretative visitors center that has been under construction at Reelfoot Lake State Park rather than complete it, reports the Commercial Appeal. That comes 18 months after a ceremonial groundbreaking, expenditure of up to $700,000 in taxpayer dollars and an audit indicating possible bidding improprieties in awarding a construction contract.

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Former TRA headquarters sold for $8.9M — $8.5M for state, $400K for auction company

The Nashville building that was for years home to the Tennessee Regulatory Authority, previously known as the Public Service Commission, was sold at auction Wednesday for just over $8.9 million, according to the Nashville Post. Included was an adjacent parking lot.

The state Department of General Services says via email the state gets $8.5 million of the money. The rest of the $8,925,000 price goes to the real estate company handling the sale.

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State officials give final approval to five-year outsourcing contract with JLL

News release from Department of General Services

The State of Tennessee has executed a five-year contract with Jones Lang LaSalle (JLL) to provide statewide facilities management services.  The contract is effective today (May 26, 2017).

JLL was selected following a two-year multi-step procurement process led by the state’s Central Procurement Office that included representatives from higher education, general government and the legislature.

As we have consistently said, the contract will protect the livelihoods of current state facilities management employees, and is another tool for state departments and institutions to use to keep their expenses low, reducing the need for cost and tuition increases.

To view the contract, (go HERE.)

 Contract Background and Highlights

 ·         The State of Tennessee began to look at opportunities in professional facilities management services after studying results from 10 million square feet of state-owned office buildings currently under a similar arrangement in which taxpayer savings of about $26 million were achieved over three years. An additional third-party inspection of the cost analysis upheld forecasted savings if the program were expanded to more state buildings.

·         Participation by state agencies and institutions is voluntary.

·         The contract includes strict provisions that JLL will retain all current state facilities employees (provided they pass a background check and drug screening).

·         JLL will provide compensation equalization for every employee that is transitioned to ensure that they are made whole at the time of transition.

·         Tennessee’s facilities management program implemented in 2013 is considered innovative nationally, receiving awards from the National Association of State Procurement Officials (NASPO) in 2014 and from the National Association of State Chief Administrators (NASCA) in 2015.

Today the state is also announcing Charles Burkett as the contract governance executive.  A Memphis native, Burkett is a 41-year veteran of the financial services/ banking industry, and most recently a member of the University of Memphis leadership team serving as advisor to the president.  In his role at the university, Burkett was responsible for a range of strategic initiatives including implementation of quality improvement measurements of student satisfaction and managing residence life and dining.

In his new contract governance role, he will be responsible for ensuring the overall oversight of the statewide contract to ensure best service across all stakeholders, and for serving as the main point of contact for interested entities that would like to request a quote for service.

Burkett is a former member of the state’s FM Steering Committee, and will continue to serve as a liaison between the statewide contract with JLL and committee members, which will transition in name to Board of Advisors. Representatives on this advisory committee are from higher education and general government leadership.

Note/UPDATE: The Nashville Post reports Burkett will be paid $95 per hour under a contract, which would be $197,600 for a full year of 40-hour week – more than $20,000 more than his salary at the University of Memphis. Further:

He (Burkett) also was a member of the Facilities Management Steering Committee, which oversaw the secretive two-year process that resulted in JLL’s contract. Roberson said the steering committee will transition to a “Board of Advisors” overseeing the contract.

Roberson said the membership of the new board of advisors could be shaken up, but as it currently stands it consists of the head of the Department of Customer Focused Government, Terry Cowles (salary: $150,000); Bob Oglesby, the commissioner of the Department of General Services (salary: $159,996); Mike Perry, the head of procurement in General Services (salary: $147,900); Larry Martin, the commissioner of the Department of Finance and Administration (salary: $190,260); Brock Hill, a deputy commissioner of the Department of Environment & Conservation (salary: $146,532); Russ Deaton, the deputy executive director of the Tennessee Higher Education Commission (salary: $155,004); Rick Nicholson, the budget analysis director for the Senate (salary: $110,220); and David Miller, the CFO of the UT system (salary: $310,000). TBR has not had a member on the committee since Warren Nichols left for a new job at the beginning of the year but is expected to appoint someone soon.

Comptroller poses 53 questions on JLL outsourcing contract, awaits answers

State Comptroller Justin Wilson’s office has run a proverbial fine-toothed comb through the governor’s potential building management contract with Chicago- based Jones Lang LaSalle, reports the Times Free Press.

The contract is valued at an estimated $1.9 billion over a five-year period, the amount state and higher education facilities are expected to pay for operating their buildings.

As a result of the review, Wilson said in an interview, administration officials have “already indicated to me they will make changes. Now what they are exactly I don’t know.”

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Overcrowding has some kids sleeping on DCS office couches

Some kids in state custody are sleeping on couches in Department of Children’s Services offices or in a Nashville church because state officials cannot find a better place for them to stay, reports The Tennessean.

Davidson County Regional Administrator Tiwanna Woods said no more than 19 teenagers have slept in state offices or the church since the beginning of March — and no more than three teens on a single night. However, sources who work closely with DCS put the number of children higher – as many as 15 teenagers spending the night in offices or the church in just the past week, and as many as seven on a single night.

The reports come just as DCS nears the end of a 14-year federal lawsuit originally brought by children’s rights advocates over kids being place in emergency shelters or other inappropriate settings instead of foster care, group homes or residential treatment centers.

DCS Commissioner Bonnie Hommrich acknowledged the agency is facing challenges placing some of the teenagers coming into custody in appropriate residences. She said that most of the difficult-to-place cases involve delinquent teenagers and foster kids with behavioral or psychiatric problems. While there aren’t always enough spaces for them now, Hommrich said DCS is working to open 60 beds for therapeutic care in July at Mountain View Youth Development Center in Dandridge, a facility for teenage boys who have committed multiple felonies. The new spots will be in a separate section of that facility.

“I think it breaks all of our hearts to see these kids and not be able to place them just like that,” Hommrich said. “It makes us determined for this (situation) to not drag on.”

New outsourcing contract gives JLL a bonus if cost-cutting exceeds expectations

Jones Lang LaSalle’s new contract potentially covers work now performed by about 3,000 state employees who are supposed to keep their positions though the pact gives the company a financial incentive to cut costs as much as possible, reports the Nashville Post.

The contract doesn’t specify an actual number the state will be paying JLL to pay other subcontractors for custodial, landscaping and maintenance work at state universities and agencies across Tennessee, as that will depend on how many campuses opt in or out of the contract. And how much JLL will get paid will also depend on the company meeting benchmark goals and customer satisfaction metrics.

However, the contract also includes a clause that awards JLL 10 percent of any cost savings above and beyond its projected baseline savings in the first year. After that, the percentage decreases each year by one percent, down to 1 percent of savings awards in year 10 of the contract. (The five-year contract has the option of being expanded another five years before the state would have to rebid it.)

…”That’s to reduce operational costs. If you look, it specifically prohibits a reduction in force, period. They cannot reduce the force,” said Mike Perry, the state’s chief procurement officer, during a press conference Thursday.

Yet the terms of the contract include multiple loopholes as to who can be considered “transition employees” and continue on with the subcontractors JLL will hire. Employees must have worked for the state for over 6 months at 30 hours a week or more and be considered to “provide services selected to be performed by the Contractor at a minimum of” 51 percent of their job duties. They must pass whatever background checks JLL deems necessary, along with a drug test. Currently the state does not require either for the majority of its positions.

…Even if employees do pass all the required checks, there’s still no guarantee they’ll be offered the same job, at the same campus. The contract only requires a position be offered in a 50 mile radius. Rehired employees are supposed to be given equitable compensation, but in JLL’s own bid proposal, it admits that an employee with a family of four would have their health insurance premiums double and the out-of-pocket max increase by $2,150. Meanwhile, paid time off will decrease. (A single employee’s health insurance costs will go down, the proposal says.) An employee would ostensibly be paid more to make up for the higher health insurance costs and lack of vacation time, but Perry admitted he had no idea how this would work in practice as far as taxes go.

Note: The post has a copy of the contract posted HERE.

State sells 119-acre Nashville prison site for $12.1M

Rogers Group Inc. has paid the State of Tennessee $12.1 million for the 119-acre vacant former Charles Bass Correctional Complex property in West Nashville, reports The Tennessean.

The Nashville-based provider of crushed stone, sand and gravel, asphalt and highway construction declined to comment on its purchase of for the site, which sits across Richland Creek from its REOStone quarry on Robertson Avenue.

…A new quarry is among possibilities for the property, which could also be used for offices and warehouse, maintenance and/or river transportation-related activities.

Earlier this year, Rogers Group made the highest offer of $12.5 million among six suitors for the site at 7177 Cockrill Bend Blvd. The 119-acre location includes the shuttered 162,700-square-foot former medium-security correctional complex.

The property borders the Cumberland River and a pair of industrial buildings. It is a half-mile from the John C. Tune Airport in an area with many warehouses and light industrial businesses.

Old TRA/PSC/PUC building to be sold at auction by state

More than two acres of state-owned property in downtown Nashville, formerly used by the Tennessee Regulatory Authority (previously known as the Public Service Commission and soon to be known again by its ancient label of Public Utilities Commission), is being sold at auction on June 21, reports The Tennessean.

Chattanooga-based Compass Auctions & Real Estate LLC will oversee the auction… (of) two tracts on the north side of James Robertson Parkway and Gay Street … (including) a 45,294 square foot office building on the roughly 1.18 acres at 460 James Robertson Parkway (that) once housed the Tennessee Regulatory Authority (and)… the 0.87-acre parking lot site (nearby) will be offered in two separate, but adjoining, parcels and as a whole.

David Roberson, a spokesman for the state’s Department of General Services, said state law allows sale of properties by auction. “Because this is a high-profile property, we decided an auction would produce the highest and best price for Tennessee taxpayers,” he added.

Justin Ochs, vice president of national development for auction and real estate company Compass, said the property located near the NewsChannel 5 Network headquarters is already drawing interest from across the country.

“Downtown Nashville has become a place where families want to live and businesses want to operate,” he said.

Note: The TRA, once a major player on the Tennessee political scene under the name Public Service Commission, has become somewhat incidental in the overall lay of the state governmental landscape in the last couple of decades and is deemed no longer worthy of having a headquarters building (probably appropriately). The agency’s name is also being changed again in its days of dwindling significance to its original name — or, well, pretty close to it. See previous post HERE.

Haslam budget booster amendment: Surplus money for new state library, roads

With his tax package now approved by the legislature, Gov. Bill Haslam Tuesday proposed some changes to the 2017-18 state budget plan he presented back in February.

Maybe the most notable revisions are the addition of $55 million in supplemental one-time funding (from the current budget surplus) on road projects — beyond what is envisioned in his tax bill, which includes higher gas and diesel fuel taxes — and $40 million towards the $98 million needed to build a new state Library and Archives building, advocated for years by Secretary of State Tre Hargett.

Both of those proposals are virtually guaranteed approval of the legislature as lawmakers get into serious work on the budget next week. The publicly-released documents don’t say which road projects get the new advance funding (but one could speculate that projects in the districts of legislators who voted no on his proposl might not be a high priority). It also appears that the governor is leaving about $125 million in surplus money for legislators to distribute as they, collectively, decide how to spend.

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Bill to block state park privatization moving in House & Senate

Republican-controlled committees of both the House and Senate have approved a Democrat-sponsored bill that would block new privatization efforts at Tennessee state parks.

Key sentence in the bill (SB1110/HB1208), sponsored by House Minority Leader Craig Fitzhugh, D-Ripley, and Sen. Sara Kyle, D-Memphis:

“The management, operation, and preservation of state parks, including the management, operation, and preservation of any buildings, facilities, structures, or improvements upon state park property must not be the subject of any private contract or otherwise outsourced to any private company or individual.”

It doesn’t apply to contracts in place before July 1, 2017. But Fitzhugh says that existing contracts coming up for renewal after that date could be subject to the prohibition when they expire and come up for renewal.

In the Senate Energy, Agriculture and Natural Resources Committee, Kyle’s bill was approved quickly Monday without discussion  – Chairman Steve Southerland seconded the motion for passage — on a vote of 7-0-1. Sen. Delores Gresham, R-Somerville, abstained.

On Wednesday, the House Agriculture and Natural Resources Committee approved the bill on voice vote with no apparent opposition after a short discussion, including Fitzhugh declaring privatization of parks “is something the people do not want” and there is a danger of “overpricing” park visits under current plans so that average Tennesseans cannot afford them “when we try to make a profit out of state parks.”

At Fall Creek Falls State Park, current plans call for demolishing the present Inn, building a new one at a state cost of $22 million, then turning operations over to a private company with anticipation that the average cost of a room would be $151 per night, compared to $75 at the existing Inn.

Near unanimous Republican support for a Democrat-sponsored bill even remotely controversial is an oddity. But it remains to be seen whether the committee votes are a symbolic gesture that will be scuttled later in the process, a genuine defiance of the governor’s plans or something in between.

Note: See also Sam Stockard’s report following Senate committee approval, but prior to the House sub’s vote. The article notes that current Haslam administration plans call for getting a contract signed for the Fall Creek Falls private operations in May, which could mean the deal gets included in the grandfather clause for contracts in place by July 1.

ABOUT THIS BLOG

Former Knoxville News Sentinel capitol bureau chief Tom Humphrey writes about Tennessee politics, government, and legislative news.

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