At the break we agreed to carry on with Capital Estimates 2009–2010. At this time I’d like to ask the Minister responsible for the bill if he is going to bring in any witnesses. Mr. Miltenberger?
Yes, Mr. Chairman.
Sergeant-at-Arms, will you escort the witnesses in.
For the record, Mr. Minister, can you introduce your witnesses, please?
Thank you, Mr. Chairman. I have with me Ms. Margaret Melhorn, deputy minister of Finance; Mr. Michael Aumond, deputy minister of Public Works and Services; and Mr. Russ Neudorf, deputy minister of Transportation.
Thank you, Minister. Welcome, witnesses. We’re on general comments with regard to Tabled Document 93-16(2). What is the wish of the committee?
Detail.
The first department, Legislative Assembly, page 1-2, we’ll defer. Carry on to 1-4, Office of the Clerk, Activity Summary, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $130,000. Mrs. Groenewegen.
Thank you, Mr. Chairman. We’re talking about capital for the Legislative Assembly. I wonder if we could just get a description from the Minister of Finance about the condition of the property here and what the plans are for our ever sinking driveway, parking lot and heaving roadway that we call asphalt.
Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Chairman. That’s beyond the scope of my knowledge, other than what’s in the capital plan. The Legislative Assembly maintains and looks after the building and grounds.
Under this budget, Mr. Chairman, it’s a legitimate question. I see there is a security system and an exterior door replacement, but is it appropriate in this discussion on this capital budget to be asking if there are any plans for the condition of the deteriorating property out there in terms of the driveway?
It’s a legitimate question; it’s just not one I’m in a position to answer.
The Legislative Assembly reports to Gov Ops. Where is the forum to ask questions about capital for the Legislative Assembly?
In regard to your question, Mrs. Groenewegen, are you requesting that someone, either the Speaker or someone from his office, come before the House to explain the situation we see here by way of infrastructure for the Legislative Assembly?
Thank you. That would be helpful. I would be interested, because it seems like it’s a worsening situation, and it has already been deferred for quite a while. I’m just wondering if it’s a priority or if it’s in a two, three, five, ten, 20-year plan. What’s the plan?
Thank you, Mrs. Groenewegen. I’ll request a formal invitation to the Speaker to come before the House and answer those questions. We’ll request the presence of the Speaker to respond.
We’ll continue on. If it’s okay with the Members, we’ll stand down. Mr. Bromley.
Thank you, Mr. Chairman. I just wanted to let you know I would also have a question for the Speaker on the Legislative Assembly.
Okay. If it’s agreeable to committee, we’ll stand down the Legislative Assembly and move on to the Financial Management Board Secretariat. Is that okay until the Speaker is prepared to come before the House?
Agreed.
Agreed. Moving on to the Financial Management Board Secretariat, defer page 2-2 and go to page 2-4, Directorate, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $5.152 million.
Financial Management Board Secretariat, Directorate, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $5.152 million, approved.
We can go back to page 2-2 in regard to Department Summary, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $5.152 million.
Financial Management Board Secretariat, Department Summary, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $5.152 million, approved.
Municipal and Community Affairs, defer page 3-2 and go to 3-4, Activity Summary, Municipal and Community Affairs, Regional Operations, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $28.09 million. Mr. Bromley.
Thank you, Mr. Chairman. I believe I’ve raised this before, but I do have concerns about the high costs of our data management systems, which seem to involve very large capital costs. If I’m correct that it’s flowing in this department, technology service centre — oh, sorry; I had that wrong. That would be under the Department of Public Works and Services. I’ll hold the question until then.
Thank you, Mr. Bromley. We’re on page 3-4, Municipal and Community Affairs, Regional Operations, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $28.09 million.
Department of Municipal and Community Affairs, Activity Summary, Regional Operations, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $28.09 million, approved.
We can go back to page 3-2, Municipal and Community Affairs, Department Summary, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $28.09 million.
Department of Municipal and Community Affairs, Department Summary, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $28.09 million, approved.
Dealing with the next department, Public Works and Services,
I can refer you to page 4-4. Public Works and Services, Activity Summary, Asset Management, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $17.22 million. Mr. Bromley.
Thank you, Mr. Chairman. It’s actually another couple of pages before I get to it.
Mrs. Groenewegen.
Thank you, Mr. Chairman. Can we get some more information on the proposed facility? Oh, we’re on Public Works now, right? Okay; good. The proposed facility for Inuvik for multi-use facility and records: what’s the use of that building going to be?
Mr. Aumond.
Thank you, Mr. Chair. The purpose of the Inuvik office complex records storage facility is to house government employees who were in the Perry Building, which had to be vacated in early 2007 because of structural problems. They have now been put into leased accommodations, and they’re jammed in there pretty tight.
The purpose is also to move people from MACA who are in a current MACA facility, which is a good old trailer about 25 or 30 years old, and also to accommodate a health clinic. Then there’s a separate building that’s just for paper storage. It also houses the regional data centre, which was in the Perry Building. So it will include employees from Public Works, MACA, Health and Social Services, Education, Culture and Employment.
Mr. Beaulieu.
Thank you, Mr. Chair. Just a quick question on whether or not the department has a policy on lease versus build.
Thank you, Mr. Beaulieu. Mr. Aumond.
Yes, we do, Mr. Chair.
Could I get a quick explanation of what the process is to determine lease versus build?
We have a policy where if we are going to lease office space, we have to go through a financial analysis to estimate the construction cost versus the estimated lease cost over, say, a 20 year period if that’s what the term of the lease would be. Then we do a net present value of the cash or the money that would be applied to either construction or lease.
In this case that was applied and based on the information that we had over the 20 year life of the lease. It would be about $38.6 million more to lease the facility over 20 years than to construct it ourselves.
Thank you, Mr. Aumond. Mr. Beaulieu, any further questions?
Yes. I have a question on this specific facility. What’s the size in square footage?
Thank you, Mr. Beaulieu. Mr. Aumond.
Thank you, Mr. Chair. The total area for the office building is going to be about 3,575 square metres, and the record storage is going to be about 793 square metres.
Mr. Krutko.
I have a similar question on this item. I know for a fact there was a request for proposal for an office space with the option to lease/purchase, but that fell by way of financial or legal ramifications for doing that. But there was a lot of emphasis and effort put out by the private sector to look at this request for proposal. They took the time to develop the proposal, looked at the lease arrangements, and looked at the different options. They did have a building designed and everything else.
We also have the private sector that provides office space in Inuvik, where they made a lot of capital investment with millions of dollars. As a government don’t we have a policy on market disruption? Also, what are we doing to allow for the private sector to provide such accommodation as the facility we’re already leasing? I’d like to ask: was that ever taken into consideration?
Also, in regard to the request for proposal that was previously called for, do those groups still have an option to consider the possibility of building a facility and leasing it back to this government?
The Member is correct. There was an RFP that the department put out last year. There was no response, for the reasons the Member raised. We did however get an unsolicited proposal from one of the proponents to build an office building and lease it. We used that as the basis to do the least cost scenario versus leasing or owning. As I indicated earlier, it was significantly less expensive for us to build and own the building ourselves.
I guess with respect to market disruption, we are not proposing to take anybody who was not in the Perry Building or in leased space into the new office complex. We’re only going to be accommodating those employees who were in the Perry Building and displaced when that building was closed and not people who are already in other government facilities.
In regard to the cost per square foot is there an actual number for what the cost per square foot is going to be for this government facility versus the request for proposal of the facility — the request that did go out in regard to the cost per square foot — as to the private sector building it versus the government building it?
We could provide that information — I don’t have it with me today — on what the cost per square foot is for this building. I could not tell you what the cost per square foot would be for the proposals that weren’t received in the RFP.
In regard to this site that was located, I know there’s going to be a request for a cost to clean up the old Arctic College site. There again, there was a request for proposal. There were no takers.
There is also concern in regard to environmental contamination. Has a study been done on the environmental contamination on the site to be remediated for this building to be built?
Yes, we had an environmental assessment done on the building. The Member may recall when we did the RFP. The original proposal considered having the proponent demolish the building, clean up the site and then provide a leased building for the government. We are going to be doing that. We’re proposing to do that ourselves.
We have an idea of what the assessment is. There was a project in Education, Culture and Employment through the supplemental appropriation that was previously considered by the House a couple of weeks ago and put into ’08–09. So there’s about $3.75 million allocated for the demolition and remediation of that site. There’s a separate project here for Public Works and Services to build an office building on that site.
In regard to the environmental assessment was there any detection of environmental hazardous contaminants such as lead paint or any other types of hazardous products that are in the existing facility that’s being retrofitted?
