DOC

ANNUAL REPORT TO

By Lester Cole,2014-06-17 07:16
8 views 0
ANNUAL REPORT TO ...

    ANNUAL REPORT TO

    THE GOVERNOR

     “Used by permission of the State of Connecticut”

STATE PROPERTIES

    REVIEW BOARD

    FY 2008 2009

    STATE PROPERTIES REVIEW BOARD

    ANNUAL REPORT FY 2008-2009

Executive Summary

Savings Report

The State Properties Review Board realized savings to the State in the amount of $7,211,075 in

    FY 2009. The savings were from Board requirements on modifications or cancellation of

    proposed contracts, resulting in a cost savings. These savings exceed the Board’s total annual

    operating budget of $463,073 by 1,557%.

Total savings achieved on behalf of the State over the 34 years that have elapsed since the Board’s

    inception are $79,519,212 or 755% in excess of a cumulative operating budget during the same period.

The Board approved 363 agency and quasi-public agency proposals during the Fiscal Year 2009.

    Average review time during the fiscal year was 12.61 calendar days. The corresponding statistics for

    FY 2008 are 351 proposals with an average review time of 13.2 calendar days per contract.

Consolidation of State Properties Review Board and the Department of Administrative Services

HB 6802, passed on August 31, 2009, provided for an appropriation for the State Properties Review

    Board as a function of the Department of Administrative Services.

As of today, implementing legislation is being discussed which places the Board within the

    Department of Administrative Services. The Board would no longer be an independent agency, but

    become a part of one of the Executive Branch agencies whose real estate activities the Board was

    created to oversee.

While these extraordinarily difficult times require cost saving measures to balance the State budget, the

    new structure imposes within an Executive Branch agency a board whose mission is to be a watchdog

    over this and other Executive Branch agencies. In addition, the merger will not result in any additional

    savings, but will impair the Board’s ability to review agency proposals effectively and cause costly

    delays in the time it takes to process agency proposals.

The Board recommends that in remain, as it has for 34 years, an independent agency.

    Respectfully submitted,

    STATE PROPERTIES REVIEW BOARD

    Edwin S. Greenberg

    Chairman

    September 30, 2009

     1

    INTRODUCTION

The Connecticut General Statutes, Section 4b-2(a), require the Commissioner of Public Works to

    submit to the State Properties Review Board on September 1st each year a report covering the previous

    fiscal year, which is to include “all pertinent data on her operations concerning realty acquisitions, the

    projected needs of the State and recommendations for statutory changes which may be appropriate.”

    The Board received the Public Works report for the FY 2009 on September 8, 2009.

The Statute also requires the Board to submit the above report with recommendations, comments,

    conclusions and other pertinent information to the Governor and members of the Joint Standing

    Committees on Appropriations and Finance of the General Assembly on or before October 1st of each

    year.

    Part I is a summary of the Board’s activities during the past fiscal year. Part II contains the Boards

    review of the Public Works Annual Report. In accordance with the Governor’s “Executive Directive

    #3” the Board will transmit this report to the Governor and Committees in its electronic version and

    publish it on the Board website: www.ct.gov/sprb.

PART I: STATE PROPERTIES REVIEW BOARD REPORT FISCAL YEAR 2009

Board Members

The Board consists of six members, appointed on a bi-partisan basis for overlapping four-year terms:

    three are appointed jointly by the Speaker of the House and the President Pro Tempore of the Senate,

    and three are appointed jointly by the Minority Leaders of the House and Senate. As of June 30, 2008,

    the six members were:

    Edwin S. Greenberg, Chairman Paul F. Cramer, Jr.

    Lisa A. Musumeci, Vice Chairman Bruce Josephy

    Bennett Millstein, Secretary Pasquale A. Pepe

During FY 2009, the Board employed an Executive Director, Real Estate Examiner, Executive

    Secretary and one Secretary.

Statutory History

The State Properties Review Board was established by Public Act 75-425. Not by way of limitation,

    the Board now operates under Chapters 59 and 238 of the Connecticut General Statutes. The Board

    was established as an independent agency that provides oversight for the Legislature of real estate

    transactions and related consultant contracts proposed by the Executive Branch.

Board Duties and Objectives

The Board is required by Statute to provide oversight of State real estate activities involving the

    acquisition, development and assignment or leasing of real estate for housing the personnel, offices or

    equipment of agencies of the State. The Board approves transactions that involve the lease or sale of

    surplus real estate by Public Works, Transportation and other State agencies and approves the

    acquisitions of farms in fee simple and agricultural development rights proposed by Department of

    Agriculture. The Board also reviews and approves contracts with consultants for major capital projects

    prior to their employment by the Department of Public Works. 2

The Department of Mental Retardation has the authority to lease group homes of less than 2,500 gross

    square feet and submit these leases directly to the Board for approval. The Connecticut Marketing

    Authority also submits leases directly to the Board for land and wholesale/distribution space located at the Connecticut Regional Market in Hartford. The Board reviews realty transactions required by

    Special or Public Acts of the General Assembly. In FY 2009, six different State agencies submitted

    real estate proposals and/or consultants’ contracts for capital development projects to the Board.

The Board is also required to hear appeals by any aggrieved party concerning the amount of

    compensation paid by Transportation for the acquisition of outdoor advertising structures. In FY 2009,

    regulations were adopted concerning procedures for hearing the appeals. Recently enacted Public Act

    09-186 requires the Board to mediate, in conjunction with Public Works, the Office of Policy and

     Management and the Department of Environmental Protection, negotiations between certain eligible

    parties who are seeking to repurchase their former residences from the Department of Transportation. STATISTICAL SUMMARY, FISCAL YEAR 2009

Pursuant to Section 4-67m of the General Statutes, the Board’s Annual report for the fiscal year ending

    June 30, 2009 addresses the following five program measures:

    ? Number of agency proposal reviewed and processed;

    ? Average calendar days to process and review proposals;

    ? Savings to the State as a result of Board actions;

    ? Auditors of Public Accounts evaluation of management performance; and

    ? Statutory recommendations.

    The two tables that are incorporated into this report cover the first three performance measures bulleted above; a summary of each table follows:

Number of Proposals Reviewed and Review Time

Table I, State Properties Review Board, Annual Statistics, Summary contains a statistical

    summary of 363 agency and quasi-public agency proposals reviewed by the Board in FY 2009.

    Average review time during the fiscal year is 12.61 calendar days per proposal, including weekends

    and holidays.

The corresponding statistics for FY 2008 are 351 proposals with an average review time of 13.2

    calendar days per contract.

Sections 4b-23(c) and (i) of the General Statutes require the Board to accept, reject or request the

    modification of leases submitted by Public Works within 90 days of receipt and within 30 days if the

    proposal is a consultant contract made by Public Works. Therefore, the Board has complied with

    applicable Statutes in FY 2009.

Savings to the State as a Result of Board Actions

Table II, State Properties Review Board Savings Report shows that the Board realized savings to

    the State in the amount of $7,211,075 in FY 2009. These savings exceed the Board’s total annual

    operating budget of $463,073 by 1,557%. For FY 2008, savings were $749,968 or 173% in excess of a

    total operating budget of $458,480.

     3

Total savings achieved on behalf of the State over the 34 years that have elapsed since the Board’s

    inception are $79,519,212 or 755% in excess of a cumulative operating budget that totals $10,533,438 during the same period.

    Average annual processing cost for the 17,571 proposals reviewed over 34 years is $599 per contract in contrast to annual cash savings of $4,526 per contract.

The Board’s objective is to realize annual savings in excess of its annual operating budget whenever

    indicated and feasible. This performance measurement was achieved in FY 2009 and attributable to agency cooperation in the implementation of Board recommendations.

Management Performance as Evaluated by the Auditors

    Management performance was most recently evaluated by the Auditors of Public Accounts for the fiscal years ending June 2006 and 2007. The Auditors recommended that the Board coordinate with the Department of Administrative Services to develop procedures to ensure that software inventory records are prepared and maintained in accordance with the software inventory policy and procedures as set forth in the State of Connecticut’s Property Control Manual. The Board concurred with the finding, and the Department of Administrative Services agreed to implement procedures to correct the Auditors’ finding. Public Act 05-251 requires the Commissioner of Administrative Services to provide

    personnel, payroll, affirmative action and business office functions to the State Properties Review Board. The Auditors did not consider the lack of a software inventory to be a material weakness. No other recommendations were issued. The Auditors found that the Board has developed appropriate performance measures and is actively monitoring its measures as required by Section 4-67m of the General Statutes.

RECOMMENDATIONS

    1. Consolidation of State Properties Review Board and the Department of Administrative Services

    HB 6802, passed on August 31, 2009, provided for an appropriation for the State Properties Review Board as a function of the Department of Administrative Services.

    As of the date of this report, implementing legislation is being discussed which places the Board within the Department of Administrative Services. The Board would no longer be an independent agency, but become a part of one of the Executive Branch agencies whose real estate activities the Board was created to oversee.

    While these extraordinarily difficult times require cost saving measures to balance the State budget, the new structure imposes within an Executive Branch agency a board whose mission is to be a watchdog over this and other Executive Branch agencies. In addition, the merger will not result in any additional savings, but will impair the Board’s ability to review agency proposals effectively and cause costly

    delays in the time it takes to process agency proposals.

    The Board recommends that in remain, as it has for 34 years, an independent agency.

2. Property Leased to the State: Improving the Process

    Public Works is the sole entity authorized to represent the State in its dealings with third parties of leasing real estate for housing the offices or equipment of the State. As part of the overall review process, the Board notes when lease proposals are initiated. In its presentations to the Board, Public 4

Works has indicated that the leasing process takes a minimum of 18 months, and that DPW gives client

    agencies notification 18 months prior to lease expiration. Board statistics corroborate the minimum18-

    month processing time, but in three of the past five fiscal years the minimum processing time was 24

    months:

    # OF DPW DPW LEASES: AGENCY PROCESSING TIME FISCAL LEASES PRIOR TO SPRB REVIEW YEAR REVIEW BY (AVERAGE) SPRB

    2005 29 575 days/18.90 months

    2006 21 766 days/25.2 months

    2007 36 549 days/18.0 months

    2008 40 853 days/28.0 months

    2009 30 729 days/24.0 months

Statutes governing leasing have been developed over time in a piecemeal fashion. The goal of the

    legislation has been to create a level playing field, with checks and balances, to ensure best industry

    practices and ethical conduct. DPW has instituted clear procedures that satisfy statutory requirements,

    but the result is a lengthy transaction process.

The Board recommends that Public Works streamline the leasing process:

    ? It frequently takes more than one year for DPW staff to prepare the lease proposal for the

    Landlord’s signature. In addition, our statistics show that often a full six months of additional

    processing time is required for State agency approvals.

    ? The lengthy leasing process promotes lease holdovers whereby the agency continues on in

    space leased on a month-to-month basis. This is contrary to prudent business practice.

    Holdovers should be discouraged because they increase the State’s exposure to eviction notices

    and encourage Lessor demand letters for extraordinary rents and therefore, administrative, legal

    and/or litigation cost increases.

    ? The lengthy leasing process works against the SPRB goal of approving lease agreements that

    are based on current market conditions. Leases based on advertisements that had been placed

    in excess of twenty months prior to the Board’s review have been presented for Board approval.

    There needs to be a reasonable limit to the time that elapses between the date of advertisement

    and the date a lease is fully approved.

The Board also recommends that the many Statutes governing the leasing process be examined for

    consolidation in a way that clarifies, simplifies, and improves the current process. Statutes governing

    leasing have been developed over time in a piecemeal fashion. The goal of the legislation has been to

    create a level playing field, with checks and balances, to ensure best industry practices and ethical

    conduct. DPW has instituted clear procedures that satisfy statutory requirements, but the result is a

    lengthy transaction process.

    1

1 The following Statutes and Executive Orders, in some or all cases, affect lease agreements:

    C. G. S. Section 4a-60; 4a-60a; 4b-1; 4b-3; 4b-4; 4b-15b; 4b-23; 4b-24(2); 4b-24a; 4b-26; 4b-27; 4b-

    29; 4b-30; 4b-30a; 4b-31; 4b-32; 4b-33; 4b-34; 4b-37; 9-612; Executive Orders: Gov. Thomas J.

    Meskill, No. 3 & No. 17; Gov. John G. Rowland, No. 16; Gov. M. Jodi Rell, No. 7C and No. 14. 5

    PART II. THE DEPARTMENT OF PUBLIC WORKS REPORT FISCAL YEAR 2008 2009

     The Board has reviewed the “Annual Report to the State Properties Review Board for Fiscal Year 2009” and considers it to be a comprehensive representation of the activities of the Department of

    Public Works and of the Board. The Public Works Report meets the requirements of Section 4b-2(a)

    except for the inclusion of Public Works’ recommendations for statutory changes which may be

    appropriate.

The report does include a survey of legislation affecting Public Works passed in 2009. The General

    Assembly did not enact SB 1155, drafted to include a Public Works proposal to redefine “project” as used in Section 4b-23(i). SB 1155 would have reduced the number of contracts reviewed by the Board

    by raising the threshold value from $100,000 to $300,000 in consultant services for which Board

    approval is required. Because SB 1155 did not pass, the Board continues to review contracts for which

    professional fees for design services exceed $100,000, or for constituent units of Higher Education,

    fees that exceed $300,000.

Section I: State’s Realty Activity

Section IA, State-Owned Property, of the Public Works Report shows that the amount of land owned

    by the State is 257,956 acres at the end of fiscal year 2009, a decrease of 2,209 acres compared to the

    preceding year. Considering that Environmental Protection’s holdings increased by 1,879 acres, real estate holdings by all other State agencies decreased by 4,088 acres. Recognizing the unlikelihood of

    the loss of this magnitude in holdings, the Board contacted the Office of the State Comptroller to

    quantify the decrease. They acknowledged some discrepancies in the acreages reported, and provided

    the following summary of State-Owned Property, which shows an overall increase of 2,149 acres:

    Custodial Agency Acres, 2009 Acres, 2008 Acres, Change

    Environmental Protection 230,833 228,954 1,879

    Higher Education Facilities 5770 5,322 448

    Transportation 8892 8,897 (5)

    Corrections 3021 3,021 0

    Military 2548 2,544 4

    Mental Health & Addiction 833 833 0

    Dept. of Developmental Services 1899 1,898 1

    All Other State Agencies 3327 3,505 (178)

    Total 257,123 254,974 2,149

State-owned building floor area decreased 2.77% from 62,762,348 to a total of 61,019,166 gross

    square feet in 3,785 structures. Public Works states that the decrease in floor area is attributable to a

    correction in the JESTIR database reporting system. The largest category of building space remains

    the floor area attributable to higher education, including the University of Connecticut and the

    Connecticut State University System, the Community Technical Colleges and UCONN Health Center

    facilities.

As reported in Section IB, Property Leased to the State, in FY 2009, total agency leased floor area

    increased 3.3% from 2,876,041 to 2,972,080 gross square feet distributed through 186 leases during

     6

the fiscal year. The average annual rental rate climbed from $15.46 to $16.07 per square foot, a 3.9%

    increase.

Public Works reports that in FY 2009, the Board approved 22 leases. The Board’s statistical record

    shows approval of 27 leases, rejection of 2 leases, and Public Works withdrawal of 1 lease proposal

    that was not resubmitted, for a total of 30 leases submitted by the Department of Public Works. The

    Board approved 58 lease-out transactions involving State-owned property.

Appendix “A”, Table IV, Construction Contract Awards, identifies a total of 8 formal construction

    contracts awarded, with an aggregate value of $30,442,343. Corresponding activity in FY 2008 was 5

    formal construction contract awards with a total value of $11,828,000. Formal contracts are those

    contracts with a value in excess of $500,000.

Appendix “A”, Table V, Construction Projects Completed, shows Public Works closed 24

    construction contracts at a total cost of $113,481,726 in FY 2009. Completed construction cost

    includes the value of 634 change orders that add $5,549,037 (5.1%) to original contract value of

    $107,932,689. The data shows a significant decline in the number of change orders for FY 2009.

Last fiscal year, DPW reported 32 construction closed contracts at a total cost of $183,289,039, with

    1,219 change orders that added $12,064,701 (7.05%) to original contract value of $171,229,338. In the

    current report, the FY 2008 activity is reported to be 36 contracts at a total cost of 213,995,063 with

    change orders adding $12,676,979 (6.30%) to original contract value of $201,318,084. The report

    change for prior fiscal years is the result of the current report being prepared using the “DPW Project

    Tracking System” database.

Appendix “D”, Consultant Contract Activity Legal Unit (Report #7) describes 90 consultant

    contracts for architectural, engineering and other professional services that were approved by the

    Board during FY 2009. The total value of these agreements was $76,861,921. This includes two

    projects totaling $43,750,000 awarded on a design-build basis. In FY 2008, the Board approved 114

    consultant contracts with a total value of $24,888,896.

Appendix “H”, Claims, identifies 2 contractor claims in the total amount of $2,875,281 that were

    settled for $39,396.13, or 1.4% of damages claimed. In the prior fiscal year, 3 contractor claims in the

    total amount of $6,790,990 that were settled for $3,068,981 or 45% of damages.

Section II: Projecting the Realty Needs of the State

Section II of the Public Works Report notes that the State’s long range real estate needs and capital

    recommendations are definitively addressed in the Statewide Capital and Facilities Plan (FACCAP)

    prepared by the Office of Policy and Management for Board review on or before February 15

    th of each

    odd-numbered year. Pursuant to 4b-23, the new FACCAP was presented by OPM to the Board for

    approval on March 16, 2009. The Board reviewed the plan and submitted its recommendations to the

    Office of Policy and Management on March 26, 2009, and they are included at the end of this report.

    Section III: Set-Aside Contractor Participation

    Section III of the Public Works Report confirms that the agency’s consulting, construction and

    procurement contracting programs realized 96.2% of the statutory goals for the set-aside requirements

    of Section 40a-60g of the Connecticut General Statutes for small business contractors. Of the contracts 7 set aside for these contractors, Public Works realized 184.6% of its goal for awarding contracts to

    minority and women owned business enterprises.

     TABLE I

    State Properties Review Board

    Annual Statistics, Summary - F.Y. 2009

    7/1/2008 to 6/30/2009

     Agency Processing SPRB Days Days Prior to SPRB to Review Category Contract Type Count Average Average

     Department of Public Works

     Consultant Contracts "On-Call" 2 154.00 19.00 Amendment/Commission Letter 27 171.37 13.33 Commission Letter 28 226.54 12.75 New 18 702.61 12.50 Task Letter 24 90.00 10.00 AE Total 99 263.48 12.32

     Real Estate Contracts Acquisition 2 1,216.00 17.00 Assignment 3 18.00 3.00 Conveyance of Property 3 1,214.00 13.67 Design/Build 2 1,091.00 13.00 Easement Agreement 1 275.00 31.00 Grant of Easement 2 127.50 7.00 Lease 30 728.67 13.30 Lease-Out 7 426.00 17.57 License Agreement 13 386.23 16.54 Purchase and Sale 1 704.00 8.00 RE Total 64 615.73 14.06

     DPW Total / Averages: 163 401.79 13.01 Department of Transportation

     Admin Settlement 2 377.00 12.50 Agreement 1 85.00 5.00 Assignment of Easement 2 640.50 12.50 Concession Agreement 3 674.67 12.67 Conveyance of Property 4 167.75 16.25 Grant of Easement 2 652.50 9.50 Lease-Out 7 283.14 13.14 License Agreement 1 84.00 1.00 Release 2 45.50 14.50 Release of Easement 1 975.00 12.00 Rental Agreement 1 110.00 6.00 Sale 31 512.77 13.26 Transfer 1 15.00 4.00 Voucher 48 470.98 13.58 RE Total 106 451.70 13.06

     8

    State Properties Review Board

    Annual Statistics, Summary - F.Y. 2009

    7/1/2008 to 6/30/2009

     Agency Processing SPRB Days Days Prior to SPRB to Review Category Contract Type Count Average Average Department of Environmental Protection

     Conveyance of Property 2 279.50 13.50 Exchange 2 901.00 12.00 Grant of Easement 1 350.00 11.00 RE Total / Averages 5 542.20 12.40 Department of Agriculture

     Purchase of Development Rights 15 366.07 14.33 Lease 1 513.00 6.00 Lease-Out 18 152.11 13.00 RE Total / Averages 19 171.11 12.63

     DOA Total / Averages: 34 257.12 13.38 Department of Administrative Services

     Lease-Out 53 89.92 9.75

     Department of Economic & Community

     Conveyance of Property 2 648.00 19.00

    Grand Total / Averages: 363 360.57 12.61

     9

Report this document

For any questions or suggestions please email
cust-service@docsford.com