Fixing NC government buildings could cost $5 billion - WNCN: News, Weather

Fixing NC government buildings could cost $5 billion

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RALEIGH, N.C. -

Gov. Pat McCrory has been pointing to a small electrical fire in a downtown Raleigh building where most of his staff works to make the case that the state government has an infrastructure crisis.
    
The fire, caused by an overheated uninterruptible power source for a computer network, was put out quickly and no one was hurt.
    
"We've got to put out some short-term fires," McCrory quipped recently, but "I didn't mean it literally."
    
The result could have been worse inside the 1960's-era Administration Building, one of scores of government buildings he and officials around him say are ill-prepared for modern technology. The fire happened in an open closet that lacks ventilation for a server station.
    
"Before we build any new buildings, we've got to... take care of some of the existing buildings and make sure, first, they're safe for employees and make sure we have sufficient security in place for information systems," said McCrory, a former Charlotte mayor.
    
Building repairs are just one example of what the Republican says are worse-then-expected problems as he tries to keep a campaign promise to fix what he called a "broken government." His new administration also says it's aiming to overhaul information technology that it says is duplicative, disjointed and unable to communicate well across agencies or with local governments. Agency IT spending reached $1.2 billion in 2011, according to legislative researchers.
    
"It's a herculean task," said Chris Estes, the new state chief information officer and a former private-sector IT consultant.
    
Fixing the problems won't be easy.
    
McCrory and legislative leaders say they'll be hard-pressed to find additional cash for maintenance next year beyond what state law requires and through finding other savings in state government because revenues aren't projected to be robust. While a state panel says North Carolina could borrow more and still remain within guidelines to keep its credit ratings high, many Republicans at the legislature are wary about the state incurring more debt.
    
The Department of Administration says the cost of correcting deficiencies within the state's portfolio of nearly 12,000 buildings covering 117 million square feet is estimated at more than $5 billion - an amount equal to one-fourth of the state's annual operating budget. Some structures are falling apart or are just plain dirty.
    
"We have buildings that are very old. You walk into some of our buildings and literally the smell of mold throws you back," said Dr. Aldona Wos, secretary of the Department of Health and Human Services, which operates hundreds of buildings statewide.
    
The state's fragile economy has exacerbated building repair needs.
    
Since 2000, the most cash set aside annually for repairs and renovations of University of North Carolina and state government buildings was $222 million for the 2006-07 fiscal year, according to legislative data. But since mid-2009 and the Great Recession, the total net amount has been less than $70 million combined.
    
Sen. Pete Brunstetter, R-Forsyth, co-chairman of the Senate Appropriations Committee, said budget shortfalls and emergencies, particularly with Medicaid overruns, have siphoned away most of the repair and renovation money.
    
"We always start out by reserving the money on the long sheet and it ends up being lost to those emergencies, so one of the answers is you've got to get rid of the emergencies that you have," Brunstetter said.
    
State law directs lawmakers to set aside 25 percent of the money unused or over-collected at the end of a fiscal year in a special repair and renovation account. But the General Assembly often grants itself exceptions to the rule, particularly in bad economic times.
    
Speros Fleggas, the Department of Administration's deputy secretary for buildings and construction, said his office has focused recently on safety improvements and repairs that otherwise would render a building unusable.
    
"The way we've managed over the years during these shortfalls of funds is to try to hit the critical things," he said. "You forego some of the cosmetic (items) until it becomes unbearable."
    
But even on Fleggas' list of 90 high-priority items, only 19 items are now being funded, such as escalator repairs at the North Carolina Museum of Natural Sciences. Needs still awaiting funding are a cooling tower replacement at the State Bureau of Investigation Laboratory and deck repairs to the USS North Carolina battleship historic site.
    
McCrory must decide whether to propose in his coming two-year budget to set aside cash for maintenance, borrow money, or both. An annual report coming out of State Treasurer Janet Cowell's office last week said North Carolina can afford to issue a combined $700 million in debt through mid-2015.
    
With information technology, most of McCrory's early focus is upon the Department of Health and Human Services, which has a lot riding on a new Medicaid billing system that's supposed to come online July 1. It's years behind schedule and has cost hundreds of millions of dollars more than originally anticipated.
    
Other IT problems at HHS are more basic. Software programs on personal computers are generations behind the current editions, making it difficult to read data needed for decision-making, according to Estes. Wos said she arrived at her job last month to find a couple thousand of the more than 17,000 department workers didn't have a government email address.
    
"That's as basic as we can get," she said. "We don't have an ability to speak to each other."

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