State officials say DHHS consolidation will benefit taxpayers

dbracken@newsobserver.comOctober 17, 2012 

State officials indicated this week that they plan to move forward with plans to consolidate the offices of the Department of Health and Human Services in a central location despite concerns raised by legislators.

The project was discussed at Tuesday’s meeting of the Legislative Oversight Committee on Health and Human Services. After the meeting, Anne Bander, chief operating officer of the Department of Administration, put out a statement saying delaying the project ultimately would cost the state money.

“There are many reasons for doing this now, and not delaying, to take advantage of low construction and land costs,” her statement said. “The state has been criticized in the past for taking on construction projects when prices are at peak, and for not taking advantage of economic conditions. It makes good business sense to move forward now.”

Bander earlier sent a letter to the three Republican co-chairmen of the oversight committee, responding to concerns that they had raised last week. One of those co-chairs, Rep. Nelson Dollar of Cary, said he still isn’t convinced the plan is in the best interest of taxpayers.

“I don’t believe that the proper time and attention for a 20-year commitment that involves hundreds of millions of taxpayer dollars is being given the appropriate work,” Dollar said. “This is being rushed.”

DOA posted a request for proposals in July for consolidating DHHS in a single location. It is now evaluating proposals submitted by 10 developers, and hopes to get approval to move ahead with one project in January.

Dollar said Gov. Bev Perdue is pushing the consolidation because she “wants to be able to make some type of commitment with that (Dorothea) Dix property. And that should not be driving what we’re doing. We need to take the time to do the consolidation of Health and Human Services right.”

The first DHHS employees to move to the new campus would be the 1,400 workers at the Dix campus. Perdue has joined with Raleigh leaders in voicing support for making the Dix campus a public park. In announcing the consolidation plan in July, she said one reason for moving ahead now is that it would remove a key hurdle to turning Dix into a park.

If DOA simply enters into a long-term lease with a developer for the new campus, it would not need General Assembly approval. State officials are expected to get approval from the Council of State once a developer and site are selected.

The request for proposals states that the cost of the new campus will be paid for using existing funds now used to pay leases and other operational costs at DHHS’ existing facilities, including Dix. During the public comment period of Tuesday’s oversight committee meeting, it was stated that those costs amount to about $17 million a year.

DHHS’ lease payments for the new campus are expected to increase over time as more of the agency’s 4,300 workers leave the 30 state-owned and -leased facilities that it now has in Wake County. DHHS will need 600,000 to 650,000 square feet no later than June 2014, and more space in 2017 and 2019.

Bracken: 919-829-4548

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