Governor's plan for consolidation still on

GOVERNMENT: Governor, Senate committee clarifying who will move, how it will work

May 17, 2011 

A move-in to the state’s new $255 million Department of Information Services headquarters and data center is on schedule to begin July 1. But questions persist over which personnel will actually move in and how it all might work.

Also up in the air is what parts of several existing agencies get merged into a new super-agency – dubbed the Department of Enterprise Services – that will occupy the roughly 1,000 new cubicles in the building located east of the Capitol Campus.

Gov. Chris Gregoire’s plan was to merge the departments of Information Services, Personnel, General Administration, printing and some budget-office functions into a new agency to streamline the delivery of their services to other agencies and governments.

But with payroll, phones and other challenges, Gregoire’s staff has since asked for a chance to delay the actual agency consolidation until Oct. 1. The Senate Ways and Means Committee was agreeable to that delay Monday.

“It’s helpful in that it allows us to plan for success rather than planning for an arbitrary deadline,” said Stan Marshburn, deputy director for the governor’s Office of Financial Management, which is shepherding the merger.

That of course assumes lawmakers agree on a plan. The Legislature is now in Day 22 of a slow-moving 30-day special session, and the House and Senate are still caught in a fight over how to shape the new agency, what to merge and what to outsource to the private sector.

Freshman Republican Sen. Michael Baumgartner of Spokane said he sponsored Senate Bill 5931 with the idea of making agencies more efficient and less expensive to run. On Monday, he dropped a controversial piece hated by the House – his push to directly farm out some state services to the private sector such as printing, the state Motor Pool and real estate contracts.

Baumgartner now favors an approach that melds printing into the new agency but also frees agencies not to use the state printer. He also wants Financial Management to evaluate six government functions a year to see if they could be done better and cheaper by the private sector..

Baumgartner said the bill represents one of eight policy changes that minority Senate Republicans want passed as part of a bipartisan agreement with Senate Democrats.

The Senate Ways and Means Committee was poised to approve Baumgartner’s approach Monday after three Democrats crossed over to join eight Republicans in blocking Democratic Sen. Craig Pridemore’s alternative. The three Democrats – Sens. Brian Hatfield of Raymond, Jim Kastama of Puyallup and Rodney Tom of Medina – also voted for Baumgartner’s bill, leaving it one vote short. But GOP Sen. Cheryl Pflug was absent and could get the bill moved by adding her vote after the fact.

House Democrats see it differently and have much less interest in outsourcing work done by state employees to private businesses. Rep. Sam Hunt, D-Olympia, said state employees need to have a shot at competing for the jobs, which Baumgartner’s approach appears to allow.

The Washington Federation of State Employees blasted the Senate Republicans’ bill, calling it an attack on collective bargaining because it exempts the printer and some technology positions from the competitive contracting provisions in state law.

“This is a huge expansion of what we had talked about. They had talked about three items (to consider outsourcing to businesses) – now they want to expand it to all of state government,” Hunt said. “They are not going to ram something like this down our throats.”

Whatever happens, agencies moving into the new Enterprise Services or Information Services structure will see their rents shoot up by $8 million over the first two years as they move into higher-priced space. That is because the new space is costing $44 per square foot, well above what commercial space is going for in the Olympia area.

The rent would be worse, but developer Wright Runstad is completing the project for an estimated $23.6 million less than estimated – with $15.4 million of that going to the state. Some of that cash is going for tenant improvements, and $2.99 million is buying down rent payments in the first two years as agencies move in, according to OFM.

Hunt said the House budget writers had looked earlier for a way to help agencies with the sticker shock. That help is not yet certain, and Marshburn said agencies have to cover the $200 per-person cost to move personnel into the new building out of their base budgets.

Brad Shannon: 360-753-1688

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