Capital Development Committee [Jun 15, 2026]

Here.

Here.

Madam Vice Chair.

And Mr. Chair.

Hello, board members. Mr. Chair, thank you for having me. I did not make a presentation for you today, but you should have received a packet with a memo, a list of one project under consideration this year, and then a map with that one project on it as well. In your memo, I'll just summarize some of what it says in case you're not aware. Building Excellence Schools Today grant program, or BEST, is a competitive grant program that's focused on improving health, safety, and security in Colorado schools. It's available to all public schools, charter schools, institute charter schools, boards of cooperative educational Services and the Colorado School for the Deaf and Blind. The funds are typically used for large system replacements and renovations, but can also be large additions and school replacements when necessary. VEST has generated over $4 billion in school improvement projects since its inception. Friendly note, we don't intend to do this necessarily, but it's also an economic driver. 17 and a half jobs are created or supported by every $1 million that's invested in VEST grants. These projects are funded with local matching dollars, of course, as well as funding from the State Land Board, Colorado Lottery, and Marijuana Excise Taxes. This grant round in May, the Capital Construction Assistance Board reviewed 55 grant applications requesting $536 million in state grant funds. It represents a total of $870 million in total project costs. The fiscal year 26-27 cash grant appropriation is $107 million. It was reduced by about $71 million through a couple of bills that were passed in 25. In addition, the CCAB and the Treasurer's Office elected to use half of the available debt capacity available to it pursuant to House Bill 24-14-48. That allowed us to pick up one project for about $68 million. dollars. Ultimately, the CCAB approved 52 of those projects. We have 17 projects that can be funded with available appropriations, and then we have a number of projects that are on a backup list in case grantees aren't able to acquire their match, which is typically because they're going for a local bond in November. The State Board of Education met on June 10th to consider the full list of recommended recommendations and they approved that list and so we are now bringing this list to you for the one project that is being considered for lease purchase agreement it's kiowa c2 pk12 school replacement i'm kind of summarizing what's in your memo here but uh the state board is to provide the list to to you by June 25th each year. And then you have until July 20th to review the list and approve or reject the list. And so we're here today in front of you for your consideration.

I do, Mr. Stein. And I understand we have on our list the Kiowa School Project, but we also have had a pretty big project that's been before this committee for a number of years with the School for the Deaf and Blind that's been trying to work with the BEST program. While we have you here with us, can you speak to that project and kind of the potential of it?

Perfect. Thank you, Executive Director Stein. Madam Vice Chair.

perfect any other any further questions for executive director stein madam vice chair

Executive Director Stein.

Madam Vice Chair.

what's going on? Sure, Stein. We have, sorry, thank you, Mr. Chair. We have an assessment program. We have eight assessors at the Department of Education who are traveling around the state regularly to do a facility condition index for all of those facilities. It's a, you know, you're impossible goods at every school every five years, but we prioritize all grants that are coming in for the best grant in that grant round. So I, you know, I would say that we are close to a hundred percent having at least that sort of, you know, apples to apples comparison that our board can use when, you know, comparing so many similar projects. That's great. I wish I could say that we were getting that work done too. We used to

for Mr. Stein? Seeing none, Madam Vice Chair.

Thank you. Thank you, Mr. Chair.

That is a proper motion. Ms. Forbes, please call the roll.

Rich. Aye.

Madam Vice Chair Yes Mr Chair Yes and that passes unanimously Members we are going to go back to the first item on our agenda consideration of recommendation for the Capital Building Advisory Committee concerning the House lift. We have Chief Clerk Riley with us. It looks like Mr. Lee is with us. Who would like to start us off? Chief Clerk.

Thank you, Madam Chief Clerk. Does the committee have any questions on this project?

My name is Paul Chaney. I'm a project manager with Capital Complex. And in regards to the Senate lift, being that it is a platform lift, it lives straight up, we have found a very good fix, and it was an electronic side. We have had no issues since doing this. And with that lift, in the future if we do have issues, we can just redo all the electronics on it and not have to replace any of the platform itself.

I will just say no questions, but I really appreciate you all doing this. I think it's really important that the people of Colorado, no matter if you have a disability or not, have access to this building and to the folks who they elect. And so I think this is a really important project. I appreciate you all putting the work in and finding a solution here. Madam Vice Chair.

That is a proper motion. Ms. Forbes, please call the roll. Senators and Representatives.

Rich. Aye.

Madam Vice Chair. Yes.

Thank you.

All right. I always press the wrong one when I come here. Thank you and good morning, Mr. Chair and members of the committee. I hope you've had a restful start to your interim. For the record, my name is Sarah Hamming, the Director of Legislative Affairs with the Department of Natural Resources. I'm joined online today by Kim Rogers, CPW Real Estate Section Manager, and Mike Suaro, CPW Area 6 Wildlife Manager. And we are here today to present a property transaction proposal for CPW. This proposal is for CPW to renew a hunting lease with Diamond Peak Performance Cattle LLC for a five-year term on 10,902 acres of property located within Moffitt County. The property provides wildlife habitat for big game species like bighorn sheep, elk, mule deer, pronghorn, black bear, and mountain lion. The lease creates public access to private lands, resulting in a quality big game hunting experience for both the owners of the property and also members of the public. CPW has been leasing this property for decades in partnership with the Raptopolis family, who currently uses the land for livestock grazing and also for hunting. and they will continue to do so throughout the term of this hunting lease. In your packet, you will find concurrence letters from the Moffitt County Board of Commissioners and also from Senators Roberts and Representative Lukens. And with that, we ask for your support of this proposal, and we are happy to take any questions that the committee may have.

Madam Vice Chair. Thank you, Mr. Chair. So we have a map with some parcels that are highlighted in black. There's northeast and then southern Colorado. I feel like when I read this, it was talking about the, not northeast, northwest, sorry. I feel like it was focused on the northwest ones, but I'm not sure. Can you confirm? Ms. Hamming?

Great. Thanks. And then I have one more question. I also feel like when I was reading, it was probably in the letters. that it shared several big game species that are hunted here, deer elk and pronghorn, it mentions, and I think that was in both the letters, but the introductory information lists quite a few more, so I'm just curious what the real scoop is, because the introduction letter mentions the ones you mentioned, bighorn sheep, elk, mule deer, pronghorn, black bear, and mountain lion. Just wondering if you can confirm that, please.

Mr. Suaro. Thank you committee members, Madam Chair. Again, you guys hear me okay? Yes. Yeah, this access lease will provide public access for all hunting seasons that are established during the fall. So even big game or small game seasons with grouse and different species would be also available to the public. So it does include all species during those big the game fall seasons and small game seasons.

Yes, Senator Molokai,

Yeah, thank you for the question. The main change, and not to get too deep in the weeds, is there is an early bull season associated out in that corner, and those landowners want to retain that early bull quality hunting season exclusive to themselves. So that's why there's a difference between one block of units and the other block of parcels between the two.

Thank you, Mr. Chair. I move to recommend support for the public access lease renewal of 10,902 acres of land in Moffat County from Diamond Peak Performance Cattle LLC, $112,800 for a five-year term.

Henrickson. Aye. Lindsey. Yes.

Winter. Aye.

And Mr. Chair. Yes. And that passes unanimously.

Thank you.

Good morning. Thank you. I'm Cameron Kennedy, Director of State Properties within DPA. the property in question is one that's located in central city it's approximately 10,000 square feet it was occupied by the department of revenues gaming division the division moved out of the property in january and so the property is currently vacant the property was built in 1900 and represents an ongoing cost to the state, and we do not anticipate any state candidate tenants in that market for the foreseeable future. The cost to operate the property is approximately $52,000 per year, and we have a property condition report that recommends approximately $38,000 in immediate repairs to the property. The property represents a cost burden to the state, and as it is going to be unoccupied, also represents potential insurance liability. So we are seeking the committee's approval for the disposition.

I will also say as well, before we do get to questions, there will be, there is a potential that we may have to go and do an executive session in regards to being able to answer some of the questions the committee may have. And so, but if there are questions there, we will cross that bridge when it comes.

Madam Vice Chair. Thank you, Mr. Chair. I might have missed it, but how long has the state not been using the property and what was it utilized for in the past?

And thank you, Mr. Chair. And the reason that they don't need it anymore?

Mr. Kennedy, how long has the state owned this building?

And is there a value associated with the building?

Has there been discussion or a plan of what that listing would look like, or is there already potential buyers that have inquired?

The process, Mr. Kennedy.

Appreciate that, Mr. Kennedy. So you've given us what the approximate appraisal value of the building is. If we give a motion today and the appraisal value is $800,000, is there a potential that you sell it for less than $800,000 or significantly less than $800,000? And I guess what guardrails does this committee have?

we can get staff. What guardrails does this committee have to ensure that the property isn't sold so far below market value that we're not comfortable with?

So I guess I have a question for staff then. If, is there a way to make a motion to allow for the sale of the building and then have, for lack of better words, a trigger if it's sold for less than a certain dollar amount that it has to come back to the committee for approval to ensure that we're not getting information today that a building's worth $800,000, but then it ends up selling for $300,000 and it wasn't before us.

it looks like he might have a question. Ms. Forbes.

Mr. Kennedy. I think it's a very good point, and thank you for considering that. we would be happy to come back when when the offer or when the offers if we choose that direction to go to full market are realized and talk to the committee further about any diminution of value that's identified during course due diligence.

That's pretty much handled my questions I didn't know if we could do a support and an approval so when the project came in we would do final approval I've only been on committee for a year. So I don't know if that's something that's common or not, but as long as there's a guardrail to where if it seems, I agree with the Senator that if it's going to be too low, that we have some kind of stop gap in there. That's all I wanted to add.

Does that make sense, Mr. Kendi? Yes, from my perspective, it does.

Thank you. That makes perfect sense. We'd be delighted to do that. Perfect.

I have just one more question before we get there. So you indicated the building was constructed in 1900-ish. I forget where it was that said that. So what was the building originally constructed for? Like how has it been used over time? Just curious.

Thank you, Mr. Chair. I move to recommend that CDC support for engaging in the process of the sale for 142 and 200 Lawrence Street Central City with the expectation of DPA returning to the Capital Development Committee with offers that are on the table.

Aye. Lindsay. Yes. Rich.

Yes. Madam Vice Chair.

Yes, and that passes unanimously.

Thank you. Next up we have DPA is still here, energy performance contract presentation with Ian Clampert. Come on up. Welcome Mr. Clampert.

Thank you, Mr. Klamper. does the committee have any questions for this witness?

Absolutely. Mr. Klamper. Yes, thank you. So it's agency by agency. The financial team is involved throughout the whole process. Treasury is involved at the end when a lender is sought after. In some cases, there are general funds that are brought to the table by that agency. In some cases, it's entirely funded via loan. The lenders are private lenders with rates pretty competitively in the low 4%. The last few that were awarded ranged from about 4.1% to 4.8% interest rates. And the term of the loan really depends on the agency's appetite and comfort level. So some of the loan ranges from 10 years to up to 20 years most recently.

Madam Vice Chair.

The finance team within the individual agency.

Yeah, sure.

So how's it working so far? Like, can you, with any of the initial projects, is it moving along the way you plan? Or are there some hurdles that are popping up that, you know, require some kind of, I don't know, adjustment? How do you do that in the middle of a loan? I don't know. I just I guess I looking at this long list of you know current projects and pending projects and expectations of more projects and you know just be nice to know how it going before we get in too deep with scores and scores of projects and none of them are you know, all of them have problems or something.

I think this is in a bad spot.

Thank you for the question. So the biggest challenge I would say in terms of energy performance contracts is trying to achieve, is having to reduce your expectations with what you're able to achieve given the financial constraints via statutory requirements, but also within the agency itself and their appetite for however long of a term, a loan term, for instance. So most recently, we are looking at a potential project at Buena Vista Correctional Facility. We had hoped to do a significant portion of their steam system as well. We run into the challenge of there's only so much energy savings using that leveraging that savings to borrow funds only allows you to borrow so much therefore the scope of the project has to fit the opportunity for savings so the scope of the projects typically are smaller than you initially look start off with you typically start off with let's see how much of this HVAC system this the steam plant system we can upgrade or replace and in a lot of cases you're left with a smaller project than you had hoped because of the restraints regarding the opportunities for this cost savings i would say that's the biggest challenge overall they have to be cash flow positive on day one the there are a lot of checks and balances with with us the The Colorado Energy Office acting as consultants to that agency or institution. And then obviously the agency or institution has their own in-house finance staff that's also signing off and being due diligent with their work and reviewing it. So in general, it's a great avenue for achieving upgrades, particularly with the backlog of controlled maintenance issues. But in terms of big capital asks, that's where the challenge arises, is trying to do big capital-intensive investments with moderate savings oftentimes fall short. So in a lot of cases, that project scope ends up being smaller than the customer had originally intended.

Can we just dialogue for a minute?

Thank you, Mr. Clampart. So can you just kind of name some of the projects that are most likely to be ones that are going to be able to clear the hurdles and so they are, you know, going to have more benefit, you know, with less cost versus the one you're talking about with the steam, which needs to be done, the steam system at Buena Vista?

So I would say if you look at the memo that I provided, you can kind of get a general sense of the opportunities that do pencil out financially. Off the bat, anything to do with HVAC, lighting, building controls, recommissioning, which is a building tune-up, those are all typically pretty cost-effective. And then some of the other items like air handlers or chillers are more capital intensive with much less savings potential. So typically these projects try to blend faster payback measures with longer payback measures in order to achieve something that addresses as much controlled maintenance as possible, given the opportunity for those cost savings. That's typically how the customers approach it. It's a win-win, but you run into the challenge of replacing a large air handler here, very modest savings versus a full lighting upgrade or a building controls tune-up, for instance. I will add to that the CERN items. So, for instance, the Colorado State University Fort Collins STEAM project, we looked at that specifically with that team. I believe it was approximately $230 million, for instance, in relation to the cash flow savings. It doesn't lean itself into a traditional energy performance contract unless capital was provided via general funds as well to supplement it. So those really long-term capital-intensive projects sometimes will fall out of scope of an energy performance contract, which statutorily has to pay itself off within the lifetime of the equipment. The loan has to be paid off before that equipment's expected lifetime, and also has to be within 25 years. Typically, these agreements, these loans are less than that 25-year mark. They're typically more around the 15- to 20-year range.

I would like to add that in some cases when there is general funds, appropriated funds available, that you're able to supplement a project. You're able to utilize those utility cost savings, leverage those to obtain a loan. Combining that loan with appropriated funds can oftentimes make a more moderately expensive capital-intensive project reasonable. So you're able to leverage cost savings opportunities that are out there, borrow against that, bring additional funds to the table, and make a project larger than you otherwise would have.

Thank you.

Do we have any further questions on this presentation? Seeing none, thank you so much for being here. Next up, Mr. Kendi, you're going to stay in the hot seat. And also, do we have Jim Icke online or in person? Becky?

Department of Treasury? I see Jim raised his hand Jim oh his hand Oh I see him Yeah can we promote Jim While we're doing that, do you want, is Jim presenting or are you Mr. Kendi?

Sounds like a deal. Mr. Kendi.

Mr. Eake.

or? Madam Vice Chair. Thank you, Mr. Chair. So what's the time frame look like to go through this process that you're describing, Mr. Eke? Thank you, Madam Chair. The process, so we've

Great. Thank you. Just curious. I have a couple of questions. First one is on 1313 Sherman Street. I guess I'm looking at the other two projects. You look at the one in Golden and the one in Lakewood. Those are actively involved with either somebody's looking at ground lease or the Lakewood project is adjacent to a project that's already ongoing. But 1313 is kind of – we haven't had any presentation on kind of what the plan is. And I know in the document that we have, it states that, you know, there may be a future presentation on concepts of what to do with that up to a sale. And so I guess with that with us not having kind of any idea of what going to happen with it why would we include it in this project

It's reasonable for us to remove the encumbrance because it will remove a limitation that it's on the property right now. So it's a very good question. Do we include it with the two others because the others are active, or do we include it because it's being contemplated for some other use by the state. And I think what we've learned is that the use of a property is actually impacted by the COP encumbrance. So we have to make sure that that's removed. The state wants to use it for some other purpose as well. So that's a very good question.

And I guess my other question, too, is so $100,000, and I'm probably dumbing this down, but it doesn't seem like it's an overly complicated thing that we're essentially taking three buildings or three properties away or three pieces of collateral away to put in a new piece of collateral to fill their space. We just heard that it sounds like it could be done in around a month. Yeah, it's $100,000 for a month's worth of work. That seems a little excessive to me and And I'm not a bond expert, but for something that doesn't seem very complicated, Mr. Eek or Mr. Kennedy?

I would defer to the Treasury on that question. Yes.

No.

Oh, sorry.

I heard Kennedy in there. So sorry, my bad. So you have to look at as a whole. Yes, like I said, I know it might be longer than a month, but again, we're paying for people's services and we're paying for services that, you know, have significant cost. Bond council is obviously the biggest cost in here and at $40,000 to do this transaction and to redo all the documentation, that's typical lawyer costs. When we do regular COPs at the treasurer's office, we have a pool of bond counsel, disclosure counsel, real estate counsel that we can reach out to and ask for, hey, this is a transaction we're going to do, this is what we need, they come back and they bid on their services. So we're using the same team that we used for the original Rural Colorado. So they're very familiar with what's in the documentation and actually are representing us at a pretty reasonable price for doing this type of job. Typically for any of these type of things, you're looking somewhere in the ballpark for $100,000 just for a bond council. So that's just an example there. The others are you have to pay for appraisals. You have to pay for the removal of the property through Fidelity, taking out those encumbrances. Those are fixed costs. There's nothing we can do about those type of things. and subsequently you know with the surveys those are those are based off the size of the buildings and or the land that we're looking at so sometimes they be $2,500. Other times they can be $25,000. So again, that depends on the scope of work and how much labor is involved to get some of those things done. So in essence, you can't look at it as, you know, it's one month's worth of work and it's $100,000. There's a lot of moving parts in there that we have to be considerate about that you have to pay costs on. The one thing I do want to highlight. And again, for my role as the debt manager for the state of Colorado and everything like that, property is absolutely critical for us to do COPs. It's the only way we can do COPs, the only way we can do financings in the state, since it's too hard to do a general obligation funding. So I want to highlight that liquidating large state-owned collateral directly reduces the size of our available collateral COPs for both the COPs and for Tabor Reserve. We need to maintain an adequate pool in its critical or favorable financing terms, both past and present. So this reduction is inevitably going to drive up borrowing costs and increase the difficulty of future fundings and legislative authority or authorizes certificate of participation or TAVR reserves in the future. So I just want to make that known as well.

Potentially.

Thank you, Mr. Chair. But don't we already have costs associated with these properties, like annual costs for regular maintenance? Is that true? Mr. Eek.

Yes. With every property, there's going to be annual costs and things. I just want to I just want it to be known that any time that we start going through in this situation, we're taking three rather large pieces of collateral off our books in the future. It's going to be harder for us to do financings because we have to dig into smaller and smaller properties to to make up for financing. So, again, when you're talking about a $20 million building or a $10 million building or something like that, and you don't have those on your books, and all of a sudden now all you have are $5 or $2 million buildings, it takes more buildings. Subsequently, like I was explaining, you have Alta and ESA survey costs that would be involved. So if you add more collateral, each one of those is $10,000. so you increase the cost for future financings.

I believe that is the case, but again, I will defer to Treasury for the direct answer to the question.

Madam Vice Chair.

Mr. Eek.

generous in saying the Rockies haven't done well in the last couple of years. But I do have a question for Mr. Kennedy. So I understand $100,000 probably in the big scheme of things isn't a lot, but I think that there's a principal component to it as well. Is there any discussion about those costs being rolled into the project?

Perfect.

Thank you, Mr. Chair. Mr. Kennedy, I thought, well, I wrote down on my page when I was taking notes when you were talking, that the $100,000 was being paid by the P3. Am I wrong? That the initial coverage of that cost will have to come from, will have to come through the P3 office, yes. Okay.

Yes. The cost is covered by the P3. It must be covered by P3. Okay.

And then one more question.

Mr. Kennedy.

but I do think that there is some merit to the effort and to considering the opportunities that we have in front of us to use these and to fulfill some of those identified requirements on behalf of the folks, the people of the state. But I take your point very seriously. And one of the things that I – we initiated this conversation with you all because this is something we flagged. We want you all to be aware of it. We're not here seeking authorization. We want to have this conversation with the committee. And going forward, what I would like to do is propose that we engage more fully with you all and maybe provide quarterly or, you know, biannual reports on these projects that P3 is engaged in are large scale. They're going to take time for the development to come online. There's pre-development work that has to be done in planning, engineering, et cetera, and things that we come to you all with and other cases with some frequency, and P3 does operate so independently that maybe, perhaps, you'll feel better about this if we start engaging in that a little bit more frequently and providing updates on the individual projects. So I would offer that by way of just answering your question. Any further questions? Mr. Ford. Yes, this is Seth Ford, legislative liaison, Department of Personnel and Administration. And to some of Representative Storey's point, I wanted to offer a little bit of additional context. And that is that with regard to the P3 model overall, the state is actually benefiting financially from those transactions with private entities. And the way a P3 generally works is that we're entering into essentially a contract with a long-term contract, a long-term lease with these private entities who are building housing, including attainable and affordable housing on that property. But there is a 99-year lease, and the state still owns that piece of land. And so they're paying a lease fee back to the state, which is going back to the underused state property fund and generating more P3 opportunities moving forward. So it is to some extent self-sustaining over the long term, and we would essentially be able to leverage those projects for future projects. Perfect. Thank you, Mr. Ford. Does this committee have any further questions? Seeing none, thank you so much for being here. Next up, we have consideration of emergency supplemental requests, Fort Lewis College. Samantha Gallagher online. Hi Hi Ms Gallagher Hello. Are you ready for me? Yep. Okay, cool. Perfect. Awesome. So I'm here today just to give you kind of a high-level review of what has happened with us. So we had a project at the end of last fiscal year. we had 163,000-ish of cash spending authority that should have been encumbered. Due to a miscommunication on our side, it was not. This is just the cash match portion of the project. So we've put in a supplemental request to reinstate the cash spending authority so that we can complete the project. But it's all cash spend from Fort Lewis, and it will not happen again. Thank you, Ms. Gallagher. Does the committee have any questions for Ms. Gallagher? Seeing none, Madam Vice Chair. I move to recommend that CDC, or I move that CDC recommend the supplemental request from Fort Lewis College to add $163,314 of additional cash spending authority to the college's fiscal year 22-23 appropriation available for use through the end of fiscal year 25-26. That is a proper motion. Ms. Forbes, please call the roll. Senators and Representatives, Henriksen. Aye. Lindsey. Yes. Rich. Aye. Winter. Yes. Madam Vice Chair. Yes. And Mr. Chair. Yes, and that passed unanimously. Thank you so much for being here, Ms. Gallagher. Thank you so much. Take care. Next up, we have consideration of emergency supplemental request, Department of Corrections. Ms. Boerlinda and it looks like Mr. Karstens, who wants to start us off? Ms. Boerlinda. Ms. Boerlinda. Good morning. Good morning. The department is coming before you with a supplemental capital renewal request for additional funding for the previously approved capital renewal project for the life safety systems at Denver Reception and Diagnostic Center for the fire protection system replacement. The facility is currently on 24-7 fire watch. and this will allow us to bid and complete the project scope. Additional building code requirements and code impacts from the jurisdiction having authority fire response have impacted both the project scope and the construction costs in addition to a robust construction market. Also, our current consultant, the statement of probable costs far exceeds what we were given for it. And what we are requesting is an additional to augment the million that was already given to the department We seek this so that we can actually bid the project. The project has been designed. Yeah, Senator Henriksen. Thank you, Mr. Chair. So I guess I have some questions on process for this. This is approved. Is that later reflected in a supplemental that comes before the full General Assembly later? Where does that $8 million come from? Ms. Bogerlender? Senator Henriksen. Mr. Karstens. Mr. Karstens. Yeah, Mr. Karstens. So what we are asking is for future appropriations. So we would need to have an appropriate or approval by you all to then go to JBC for appropriations of $8 million. What we are looking for in a 1331 is to be able to keep the project moving and going. So if we waited, we would have to wait for supplemental next January in order to do that, which would further drive inflationary costs, fire watch, additional things like that. So in order to even bid the project, we have to have funds that scope the total size of the project. So we would be asking for additional appropriation. Senator Henriksen. Thank you for that clarification. And so JBC does not have $8 million. So would that JBC approval reflect where those funds would be coming from? Mr. Karstens? I would imagine so, yes. They would need to be able to identify those funds and where the funds are coming from and able to appropriate it. How are we off by in one year over 35% and in another year 19%? That just seems like a significant inflation factor that's off, and I'm getting looks. So I'll just read this straight from the report that the CD state staff identified an inflation calculation error by 35.3% for FYI 2026 and 19.1% for FYI 2027. Ms. Forbes, are you wanting to add to that? Nina Forbes, legislative council staff. So that error was identified in fiscal year or for fiscal year 2526. And you may remember that was when CDC staff recommended adjusting the originally requested amount down to reflect the corrected inflation factor. So the amount that you all recommended to the JBC and the amount that the JBC approved for fiscal year 25-26 reflected a correction of that. And now we're back saying that it needs to be $8 million more from what we approved. And so how are we here? Is it because of what you're – did something happen internally at DOC? is this are these how are we here Senator Mulligan we are we're additional the statement Probable costs from our selected professional services, our fire protection engineer, are more, plus also code implications that came into play that we need radios as well as all the elevator improvements that are required by the jurisdiction having authority. I appreciate that, and I know we have a question coming up, but this, compared to the cost of this project and the additional dollars that you're asking for, it's very significant, you know, to go from $14 to $22. And so that's not just, you know, to me that's not just a radio. It feels like something was missed here. And so I guess I'm trying to figure out how do we miss $8 million of potential costs on a $14 million project. Senator Mullica. The study had approximately $10 million was anticipated for the cost. It came in at over $17 million, the statement of probable costs. We have to have, in order to bid through the state, we need to keep a 10% contingency. And then there's, that's where we're at. Senator Hendrickson. Thank you, Mr. Chair. I am sympathetic very much actually to the, you know, changes in code, changes of code modernization can be costly. And I guess my concern with that, however, is my understanding is that the traditional process with code changes that are required to be met in statute are published in advance of the implementation date of those changes. And I'm wondering if that was not the case here. Was this something where there was a surprise of, like, okay, these new codes got published, but there was no forecast that these codes would be published? Because we've seen so many other, you know, instances of code implementation being published, like, five years out. So we know in many cases in the housing space, for example, what the codes are going to be in 2030. even if they're not for builds under construction today. Is that different in the DOC space? Ms. Boderlinger. Senator Hendrickson, Senator Mullica. I probably just did that backwards. I apologize. Wonderful. With regards to the building codes, the 2024 was accepted. It's typically accepted a year after it goes into play. So that was the jurisdiction having authority is where these other two items come into play also. So if I could follow up on that. So my understanding is that there was a jurisdictional authority change during the latest update Is that what I hearing Ms Boderlinder Senator Mullica Senator Hendrickson yes Representative Lindsay Thank you, Mr. Chair. Can you walk me through this study piece again? You said it was originally came in at $10 million and then ended up being $17 million. How? How did that walk me through all the pieces of the study that added an additional $7 million? Thank you. Ms. Bogerlinder. Senator Mullica, Representative Lindsay, we asked that question also. And the individuals, the company that did the initial study, just wasn't thorough enough with their numbers for the budget estimate. We seek third-party studies for everything that we submit to the state. We're not trying to do it just out of RS means or, hey, this previous project that we did was only this much, so we're just going to increase the numbers and away we go. We want something solid that identifies everything. The individuals that we hired, the company for professional services, was extremely thorough, walked everything, probably investigated it more detailed, and therefore that's where we're at. We have spent the early part of this year, of this actual calendar year, meeting with them, asking the questions, what was missed before? Why is it this? Are we sure? We need a basic operable, maintainable system, not something with all the bells and whistles. Representative Lindsay. Thank you, Mr. Chair. And so is it the same professional services that did the first piece where they were, like, underestimating and so it's different so have you stopped working with the is it a contractor that you'd worked with before and now they are no longer on your list to work with because this is it's just it's just quite an oversight and um like mr chair had said to come back and ask for something that's like a in addition um a third more and I think if I'm remembering correctly like when we were considering projects like again it was kind of like the school of the deaf and blind and things and this one I think was one to us that we were kind of not I'll speak for myself that I was like wavering on where to put it even perhaps under the line and so then to have that happen and then have be approved and then have to spend an additional eight million dollars on it I find that quite unacceptable. Senator Hendrickson. Thank you, Mr. Chair. So I'm understanding there's a prior consulting firm that underestimated the bid. A new consulting firm, we're confident, has adequately assessed the costs of what the project would be. a huge part of the disparity was driven by a change in jurisdictional authority by which the current building codes apply to. Is that something that should have been anticipated by the previous contractor and wasn't? and was identified by the new contractor? Ms. Bogerlinder. Senator Mullica, Senator Hendrickson. It was identified by our current one. It was not clearly identified by the previous. Senator Hendrickson. Thank you, Mr. Chair. Are there any other projects that the previous consultant contractor is doing business with DOC on? Ms. Bogerlinder. Senator Mullica, Senator Hendrickson, they are doing no work with us for fire protection, the previous one. Are they doing any work at all with DOC at this time? Ms. Bogerlinder. Senator Malika, Senator Hendrickson, they're doing some security work, low voltage, for parole offices. Thank you. Madam Vice Chair. Thank you, Mr. Chair. I think we're all struggling with sort of the same thing, but, you know, you indicated it was a $10 million cost proposal for the first consultant, the study that was done. And then it became $17 million with the second consultant, plus you have to add in the 10% contingency. 10% of that would make it $18.7 million. but now we're at 22.3 and I mean I think we're all going well it was 10 million dollars and now it's 22.3 so that's over 100% cost increase more than doubled from the original 10 and And if the second consultant was the one that caught the additional need for additional code issues, et cetera, like I don't know I I think we can justify all the projects I've said this before all the projects that come before us I can justify all of them and why they need to be done but we are always in this place where we don't have but a fraction of the money to cover and we have been trying to get this West Hall project across the line for at least three years for the School for the Deaf and Blind, and, you know, we can't make that happen, but now this project that JBC elevated to be funded, which, again, you know, can justifiably say that it needs to happen, it needs an additional $8 million, and we couldn't get $8 million to start the Denver School for the Deaf and Blind. And so how is if we were to support this today for an additional million you not going to get JBC to answer to that today or tomorrow And, you know, it sounds like it would be part of the budget next year, right? Is that what we're thinking? I don't understand either where are we coming up because it's not just supplemental dollars that we can sort of say, oh yeah, just use it out of this little bucket of money we have. I don't know where that $8 million really is coming from either for us to say yes, go for it, even if we could get on board, I guess. Do you? Can you answer that question more directly? Like where would this $8 million be coming from, a budget that's already settled for the fiscal year? Thank you, Madam Vice Chair. And we do have a staff member from the JBC, Ms. Yule. If you want to come up and maybe, my understanding is there may be some emergency supplementals. I think there's probably still debate on how those are to be used, but maybe you can explain if there is a tranche of dollars that are there that maybe we didn't know about. And coming out of the budget situation, I think that we had this last session, there's probably a lot of questions. So Ms. Yule. Thank you, Andrea Yule, JVC staff. So basically what happens when the JVC meets in June and September, when they approve 1331s that have a general fund cost and when they hear the forecast updates, we basically often can fall out of balance immediately because all the projected revenue that we balance to is changing and because they might be approving general fund costs. And if that puts us below the required reserve we were trying to end the year with, we basically just, the money rolls into the next year and we have to continually rebalance. So in this case, the expenditure needs to come from the capital construction fund. So the JBC can approve it and say DOC can spend this additional $8 million from the capital construction fund. But what then has to happen is once we're back in session, the JBC during supplementals has to sponsor a transfer bill to move the $8 million from the general fund to the capital construction fund. and then that $8 million dent shows up in the fiscal year 26-27 budget, and that deficit can move forward into the upcoming budget year. So it basically just keeps – like it's a cost that hits the upcoming budget, and we're continually trying to get ourselves back in balance. So we would be voting on essentially an $8 million hit to next year's budget, essentially. Basically, yeah. Madam Vice Chair Thank you Mr. Chair and I guess the hope would be that more revenue is coming in anyway so that it's more revenue came in in the previous quarter than we anticipated and so now there's more revenue in the state but nonetheless that's $8 million that could have been spent on something else it just seems like we're behind the curve in terms of our planning on this project in particular. Representative Lindsay. Thank you, Mr. Chair. And I would just... I'd like to state, on the heels of a year or two ago when we had had some questions about inflation costs that were, I think, we felt pretty collectively exorbitant, that it just really makes me question the process of how your estimates are coming through. And if there's a company that has been found to have done such a poor job, they should have no contract on any piece of any work that we are approving because they botched that so terribly. And so now I'm like, now you've got my ears perked up of like, how the heck is this working? And I just, I know specifically with this department, when you have come before us before, that we have had questions about these numbers, sometimes too high, apparently, sometimes too low. And again, that serves us so poorly because then we can't make accurate decisions about the very little funds that we even have to look over and make these prioritization lists for. So I just want to reiterate that I'm very concerned that we are keeping that contractor on any project that we are working with DOC. And I don't know what the heck to do with that information right this second, but I'm unhappy about that. Representative Winter. Thank you very much. There's been a lot of worth and a lot of what my colleagues have said throughout this process. There's been a lot of questions. But once again, I want to put on the record like I always do. You know, when we talked about the School for the Deaf and Blind, unfortunately, when we looked at the upfront costs of them getting their projects started, there were bills passed in our chambers that created a lot of the overhead, whether it was the public art and public spaces, the solar panels on the roof, the charging stations, in the ground that are, you know, mandated by legislation to be done when there's any upgrade. And then once again, here we see, you know, codes and things of that nature, putting more stressors on top of projects that we already have. So even though I know we have a hard time getting numbers, I mean, at some point, you know, as we look at these projects, we have to look at what's been self-inflicted. You know, inflation is something that we're all dealing with. And at the end of the day. I know that our state's in a tough financial crisis and we have had trouble getting the right numbers. And I think Rep. Lindsay, there was a lot of value in a lot of what she said, but I would be remiss if I didn't go on the record saying in some point we're shooting ourselves in the own foot by creating more hurdles and more costs to be able to get these projects off the ground. And I just wanted to put that on the record. Thank you. Thank you, Representative Winter. I will also say, and I know Madam Vice Chair, it looks like she has another question, just a comment and then i'll have a maybe some more questions but this is not the project we voted for a 14 million dollar project that's what we we as a committee are in charge of putting those recommendations to the jbc and it was a difficult budgetary year we were only able to i think put five or six items above the line and this is one of those projects that we put above the line because it made the numbers work and because we believed in the project. If this project was $23 million, I don't know if it would have been above the line. And I think that that's the concerning piece is that, you know, to piggyback off of Representative Lindsey's comments is that we're given information to make decisions that are really hard in budgetary years like this. and now a couple of months later it's coming back and it's completely different. And that making this job really hard and I struggling with that because we went off of the million number We go with Madam Vice Chair and then Senator Hendrickson Question to staff. Do we have other fire protection systems that we have paid for in other DOC units or DOC facilities that offer some kind of comparable comparison or something. I don't know. Because I know this is not a brand new thing that's been necessary. I'm just curious, looks like. Ms. Forbes. Ms. Forbes. Thank you, Mr. Chair. Thank you for the question. I know we've had other projects like this before. I don't remember off the top of my head what the price on those was. Maybe the DOC staff could help us answer that question. Ms. Bogerlinder. Senator Mullica, Representative Story. We can send a list of projects and the dates in which they've been done. Some are, this is complete fire suppression as well as alarm. Some have just been alarm or fire suppression, one or the other. This is because the current systems that are there, the fire suppression has not been working. So the reason we're on 24-7 fire watch. Senator Henrickson. Thank you. I would caution just as having toured the intake facility and having toured some other DOC corrections, it is logistically a very different facility. And I cannot imagine that because of the way that the housing is set up, because of the different processing stations you have to go through, I would assume that the fire suppression system is uniquely different than what you'd see, and I would caution that we should be hesitant about using other facilities' fire suppression systems, which I'm sure we have, as an apples-to-apples comparison, just having actually been there. I can imagine why this is different on those grounds. I would say, you know, when we have had requests to approve budget overages in the past, and we have on make it, you know, when it is from a cash fund, when we're approving to dip into a contingency set aside that has already been set aside, So the money is there. It just hasn't been approved to be expended yet. When we're approving a COP to finance additional funding, those are buy-ins from the department against themselves or from the school against themselves. And my concern here is that you know the costs of this are going to be borne elsewhere in the general fund We don know where But that the effect And that's something that has concerned me and some other project concerns that my colleague from Aurora had mentioned earlier is that somebody else is going to bear those costs. And that's one of the things I struggle with. I just wanted to vocalize. I want to take an opportunity, too, because we have you before us. And obviously this project, and no matter – it's my understanding that no matter how we vote on this project, JBC still considers it. But I think that hopefully our recommendation holds weight with them, too. But I also want to shift gears here a little bit because I've received a number of communications in regards to an incident that happened at Bent County or Bent, the Bent facility. And we're talking here about keeping inmates safe. We're talking here about keeping staff safe. That's what this project is about. That's what we've heard about. We put it above the line. we still haven't heard anything there's been no response there's been no reports back to the legislature about what happened at that facility that where two inmates lost their lives where another inmate was taken to the hospital and so I also want to take this opportunity if we're going to be talking about projects when it comes to safety and safety at state-owned facilities are Are we having those same expectations at our privately owned facilities? And also while we're here on the record, when is the legislature expected to hear about what happened there so that we can adequately respond to the folks who are reaching out to us as elected officials in this state? Yeah, I'll take that one. Thank you. So we do expect the same level of security at our privates as we do in our state-run facilities.

And I guess just to respond to that, I'll be on the record. As an elected official, not knowing what happened, seeing the news, and I think from hearing from constituents, and I'm sure I'm not the only elected official that's heard from their constituents, it's concerning. And hopefully we are having that same standard, and hopefully we do have the ability to keep our inmates safe and our staff safe. Any further questions on this project? Questions or comments? Seeing none.

Yeah, and real quick before any motion, I just want to be clear on the mic. Supportive of the project. I was supportive of this project being above the line. When we have the number of projects that we had before us to have it be above the line is one of the six. I think speaks volumes to what this committee thought about it. I'm going to be a no today, though, as a recommendation, because I do find that this dollar amount and the process is inappropriate. I don't agree with it. I don't think that, you know, if you had come to us and said there was, you know, minor overage, you know, that's something else. You have that ability already within the contracts that you have up to 10%. this is a significant dollar amount over what we voted for. Like I said earlier, we voted for $14 million. Now it's coming back to being over $22 or $23 million. And that is, to me, that's not appropriate. And I don't think it's fair to put that on this next budget when we have so many unknowns and to automatically, you know, potentially cement it in. Now, I will say that JBC has the ability to consider whatever they choose to consider, and then we will have as a body to consider that next legislative session. And so this is just a recommendation. But I know as the chair, as a member of this committee, and as a member of the body, I'm struggling with an extra $8 million to this project and just find it concerning. And I think my hope is, too, from this is that we don't ever see this situation again, because I do think that the projects that you bring before us are extremely important. And I think that this committee recognizes that and our work shows that. But I also think that we have a responsibility to govern a certain way and to just come in in the situation that we are in from a budgetary standpoint and essentially lock in another $8 million compared to when the project was only $14 million. I struggle with that. So I will be a no. on the recommendation.

As a proper motion, Ms. Forbes, please call the roll.

Rich. No.

Madam Vice Chair. Not today, with not, without more information.

Yeah.

Ms. Forbes. Thank you Mr Chair So really quickly just wanted to try to nail down these dates for the rest of the year So in July I think we had initially proposed the week of July 27th but I'm now seeing that that is the NCSL annual summit, which some of you might be attending. So we could either stick with that week if nobody's actually attending or move to the week prior, the week of July 20th, or you're out of town the 20th, okay, or the week after, the week of August 3rd. Okay, I saw some nods for the week of August 3rd. So maybe Tuesday, August 4th at 10.

I'm not seeing anybody saying that doesn't work, so let's go with that. Then moving into September so to offset a bit let do maybe the week of September 14th If nobody out of town so maybe Tuesday again Tuesday September 15th at 10

Moving on to October. The week of October 19th or October 26th. There's no preference. Maybe I'd propose.

Okay. How about Tuesday, October 20th? Okay.

And then finally, usually we take a break in November because of, you know, election and holidays. And that puts us into December for our two and a half day December hearings. So we were proposing Tuesday, December 15th through a half day on Thursday, December 17th, if that is okay with everyone Okay I seeing some nods Okay Tuesday December 15th through Thursday December 17th Okay great And we send out these dates in an email as well

Thank you.