HomeMy WebLinkAbout11-05-18 Public Comment - K. White - HB 661 Study of State Labs HB 661 STUDY OF STATE LABS
A Report Prepared for the
Legislative Finance Committee
By
Shauna Albrecht
September 7, 2018
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MONTANA LEGISLATIVE FISCAL DIVISION
INTRODUCTION
The 2017 Legislature adopted and the Governor signed into law HB 661, an interim study on Montana
state laboratories. The intent of this bill was for the Legislative Finance Committee (LFC) to direct a
study of the long-term future of and possible efficiencies to be gained from consolidating or collocating
the state-supported labs that are currently located on the Montana State University campus in
Bozeman.The study is being conducted by a bipartisan subcommittee comprised of two members each
from LFC, Environmental Quality Council (EQC), and Economic Affairs Interim Committee (EAIC).
The goal of the subcommittee was to evaluate the function, condition, and needs of the six labs located
within the MSU Bozeman campus and, if deemed appropriate, recommend a proposal to the LFC in
regard to the subcommittee's findings. The labs included in the study are the Montana Department of
Livestock Veterinary Diagnostic Lab, the Montana Agricultural Experiment Station's (MASS)Wool Lab,
the MAES Seed Lab, the Montana Department of Fish, Wildlife, & Parks (FWP) Wildlife Lab, the
Montana State University (MSU) Pulse Crops Diagnostic Lab, and the Montana Department of
Agriculture Analytical Lab.
The purpose of this report is to convey the subcommittee's recommendation to the LFC, along with
providing additional options for legislative consideration.
SUMMARY
The process for the Study of State Labs included hiring a consulting team with lab design experience.
LPW Architecture and Clark Enersen Partners were hired to conduct initial research, analysis, and
conceptual information options to assist in developing recommendations. The team that was assigned
to this process conducted detailed space needs analysis, interviews with stakeholders, and worked
closely with the subcommittee to identify concerns and proposed solutions. The recommendations of
their work are:
• Option 1 —Construct a new building for the Department of Livestock Veterinary Diagnostic Lab
(VDL)and the Department of Agriculture Analytical Lab. The vacated space in Marsh Laboratory
because of the VDL lab's departure would be renovated for the MAES Seed Lab, MSU Pulse
Crops Diagnostic Lab, and the MAES Wool Lab. The FWP Wildlife Lab will remain in its current
location
• Option 2 — Construct a new facility for the Department of Livestock Veterinary Diagnostic Lab
only. The vacated space in Marsh Laboratory would be renovated for the Department of
Agriculture Analytical Lab, MAES Seed Lab, and the MSU Pulse Crops Diagnostic Lab. The
MAES Wool Lab and the FWP Wildlife Lab will remain in their current locations
• Option 3 — Construct a new facility for the Department of Livestock Veterinary Diagnostic Lab
only. The MSU Pulse Crops Diagnostic Lab would move into unrenovated space in Marsh
Laboratory. The Department of Agriculture Analytical Lab, MAES Seed Lab, MAES Wool Lab,
and the FWP Wildlife Lab will remain in their current locations
Based upon review of the consulting team's report, the subcommittee chose to recommend two
alternate options for legislative consideration:
• Option I— Construct a new building to for the Department of Livestock Veterinary Diagnostic
Lab (VDL), the Department of Agriculture Analytical Lab, and the FWP Wildlife Lab.The vacated
Legislative Fiscal Division 2 of 19 September 7, 2018
space in Marsh Laboratory because of the VDL lab's departure would be renovated for the
MAES Seed Lab, MSU Pulse Crops Diagnostic Lab, and the MAES Wool Lab
• Option 3A— Construct a new facility for the Department of Livestock Veterinary Diagnostic Lab
and the FWP Wildlife Lab. The MSU Pulse Crops Diagnostic Lab would move into unrenovated
space in Marsh Laboratory.The Department of Agriculture Analytical Lab, MAES Seed Lab, and
MAES Wool Lab will remain in their current locations
The following report provides a background of the labs that were included in this study, the process the
consulting team undertook to support their recommendations, and outlines the details of each
recommendation along with possible sources of funding.
BACKROUND & INVESTIGATION
THE LABS
This study analyzed six laboratories and associated programs located on the Montana State University
campus. Each lab is a service lab that performs a variety of functions for stakeholder's primarily in
Montana. The facilities that house these labs are the Marsh Laboratory, McCall Hall, Wool Lab, and the
FWP Region 3 Headquarters.
The following paragraphs in this section are excerpts from the Combined State Lab Study report by
Clark Enersen and LPW Architecture and provide a brief description of each lab, it's location within the
MSU campus, and existing conditions and deficiencies noted during interviews with the design team.
Department of Livestock Veterinary Diagnostic Laboratory
The Dept. of Livestock Veterinary Diagnostic Laboratory (VDL) is the largest tenant housed in Marsh
Laboratory. Located on West Lincoln Street, just west of 19th Avenue, the Marsh Laboratory complex
was built in 1961 and has undergone numerous minor renovations and additions since then. The VDL
is the only institution in Montana that is accredited by the American Association of Veterinary Laboratory
Diagnosticians (AAVLD) and provides critical diagnostic testing serving Montana's food animal and
veterinary industries. Like most accredited veterinary diagnostic laboratories, the facility is separated
into dedicated laboratory sections, each with a specialized focus in the rapid detection of veterinary
pathogens in the samples and animal carcasses that it receives every day.
Due to the age of the structure, outdated HVAC systems and continuously evolving methods and
instrumentation in the diagnostic field, the current facility is in need of replacement and continuously in
danger of losing its accreditation. The existing space allocation for the VDL includes 11,549 net square
feet. Current deficiencies in the VDL include the following:
• Inadequate space sizes, allocation and organization
• Laboratory safety issues including inadequate safety showers, eye washes and egress
• Lack of standby emergency power
• Lack of general power
• Poor ventilation and inadequate make-up air
• Security issues due to multiple public corridors in close proximity to lab spaces handling
unknown pathogens
• Biosecurity concerns due to the lack of a properly appointed and certified BSL-3 laboratory
space
• Aged finishes and cleanability concerns
• Existence of hazardous materials (asbestos tile and insulation)
Montana Agricultural Experiment Station Seed Laboratory
Legislative Fiscal Division 3 of 19 September 7, 2018
The Montana Agricultural Experiment Station Seed Laboratory is also housed in Marsh Laboratory,
occupying a relatively small footprint in the west wing. The organization provides seed analysis for
farmers, regulatory agencies and industry groups. It also maintains a very large collection of seed
samples that are intended to date back three years, but space constraints have made that policy difficult
to meet.
The main laboratory area for the Seed Lab received a light renovation recently and the lab operations
are not particularly stringent as there is little use of hazardous materials or chemicals. The main
deficiency associated with the Seed Lab is a lack of space that is the result of sharing space with the
expanding operations of the Pulse Crops Laboratory. If the Pulse Crops Lab were to be relocated in the
Marsh Laboratory Complex, the Seed Lab could expand into that area with little or no renovations to
alleviate most of their deficiencies.The existing space allocation for the Seed Laboratory includes 1,763
net square feet. Current deficiencies in the Seed Laboratory include the following:
• Inadequate space sizes
• Lack of standby emergency power (for growth chambers)
• Lack of general power
• Aged finishes and cleanability concerns
Montana State University Pulse Crops Laboratory
The Montana State University Pulse Crops Laboratory is the last of the three organizations housed in
the Marsh Laboratory Complex. It is located in the west wing directly across and adjacent to the Seed
Laboratory and shares some of its resources such as a sample receiving area, germination laboratory
and growth chamber space.
The Pulse Crops Lab is presently occupying just 751 net square feet which is a small fraction of what it
needs to perform efficiently. The lab also uses greenhouse space on campus and has requested that a
small new greenhouse be constructed attached or adjacent to the Marsh Lab Complex to alleviate the
problem of transporting plant materials on a regular basis. If the Pulse Crops Lab is provided with new
or renovated space, it will be critical to ensure that the Seed Lab is located within the same building due
to the continued sharing of functions, but the staffs of both labs have stated that the two areas do not
need to be directly adjacent. Current deficiencies in the Pulse Crops Laboratory include the following:
• Inadequate space allocation and size—significant growth in lab and equipment space is needed
• Laboratory safety issues including inadequate safety showers, eye washes and egress
• Lack of standby emergency power
• Lack of general power
• Aged finishes and cleanability concerns
• Need of a small, local greenhouse
Department of Agriculture Analvtical Laboratory
The Department of Agriculture Analytical Laboratory is located in McCall Hall at the northwest corner of
Grant Street and 11th Avenue near the center of the Montana State University campus. It provides
testing on pesticide residues in water, soil, vegetation and animal tissues as well as verification of
product ingredients in pesticide, animal feeds and fertilizer. These services are provided to state
ranchers, farmers, manufacturers, research organizations and regulatory agencies at the state and
national level.
Of all the laboratory facilities included in this study, the Analytical Lab works with most chemically
hazardous samples and materials and has the greatest need for properly functioning chemical fume
hood containment devices and a properly balanced laboratory air flow system. The structure, built in
1952 originally housed what is now the film and photography department and included the university's
television studio. The Department of Agriculture Analytical Lab has occupied most of the facility for
many years and has made minor upgrades to accommodate new instrumentation and improve air flow
Legislative Fiscal Division 4 of 19 September 7, 2018
over the years. While a comprehensive engineering analysis has not been completed as part of this
study, our on-site survey indicates that make up air, laboratory exhaust and laboratory air flow controls
are inadequate for the hazardous chemical environment in the Analytical Lab. The facility users have
stated that the building's location can sometimes be problematic for their clients due to heavy traffic in
the heart of campus, lack of parking and unsuitable truck access. The facility is almost entirely occupied
by the Analytical Lab and is comprised of approximately 6,708 net square feet. Current deficiencies in
the Department of Agriculture Analytical Laboratory include the following:
• Space sizes are mostly adequate although some additional space could alleviate a few areas of
concern for some of the instrumentation needs. The overall layout is not optimized for the
general work and material flow for the lab
• The current layout of the building entrance and general organization of the plan compromises
overall building security and monitoring
• Laboratory safety issues including inadequate safety showers, eye washes and egress
• Laboratory airflow and exhaust are major concerns due to the highly hazardous chemical nature
of the work performed in the lab
• Lack of standby emergency power
• Lack of general power
• Aged finishes and cleanability concerns
Montana Ag Experiment Station Wool Laboratory
The Montana Ag Experiment Station Wool Laboratory is in a stand-alone historical building located at
a major vehicular entrance on the north side of the Montana State University campus at the intersection
of Harrison Street and 11th Avenue. The building was constructed in 1947 and is a two story, wood
framed structure with a walk-out basement, storage attic and a large garage area in the rear. It is one
of only two facilities in the country that provide wool fiber and fleece analysis to aid breeders in the
selection of genetic traits, and the operation shares a long and significant history with Montana State
University.
There are two major services provided by the Wool Lab that are difficult to accommodate in the historic
structure. One of their most important analytical tools is the Optical Fiber Diameter Analyzer. This
instrument should be located in a controlled laboratory environment where temperature and humidity
can be reliably controlled, but no such space exists in the current facility. Another routine procedure
involves boiling fleece samples in chemicals for which the existing exhaust system is not suitable. If the
Wool Lab is to remain in the historic structure, certain spaces should be upgraded to accommodate
these needs. Periodic national meetings and conferences involving breeders are also held in the Wool
Lab and have become difficult to accommodate as the number of attendees has grown. Truck access
is also a challenge on the existing site. The overall space and size of the facility is large enough to
accommodate their needs now and into the future. The building is comprised of approximately 4,781
net square feet. Current deficiencies in the Wool Laboratory include the following:
• Laboratory safety issues including inadequate safety showers, eye washes and egress
• Poor vehicular and truck access
• Poor laboratory ventilation to accommodate certain procedures
• Lack of environmental temperature and humidity control for specialized instrumentation
• Security issues due to public corridors with direct access to the entrance of hazardous laboratory
environments
• Aged finishes and cleanability concerns
Fish Wildlife and Parks Wildlife Laboratory
The Fish Wildlife and Parks Wildlife Laboratory is located on the east side of 19th Avenue across from
Marsh Laboratory on the site of the FWP Region 3 headquarters. Situated in a stand-alone structure to
the east of the main building, the Wildlife Lab consists of a main necropsy space with a small wet
laboratory and walk-in cooler/freezer space.
Legislative Fiscal Division 5 of 19 September 7, 2018
The facility was undergoing a minor renovation at the time the initial discovery phase of this study began.
The renovation has created the small wet lab space with a new chemical fume hood, improved the
ventilation and made provision to add an overhead monorail system for the necropsy floor. The
renovation also added a small storage room to accommodate a mobile x-ray unit that is often used in
forensic investigation. The facility is not equipped with a means to dispose of carcasses, so the Wildlife
Lab is required to transport its large animal waste across 19th Avenue to the incinerator at the VDL.
This represents both a deficiency in both efficiency and biosecurity. Users of the Wildlife Lab, however,
have stated that it is advantageous to be co-located with the FWP Region 3 for the purpose of increased
interaction with field personnel and game wardens. Current deficiencies in the Wildlife Laboratory
include the following:
• Lack of proximity to incinerator or digestor for carcass disposal
THE INVESTIGATION PROCESS
During the first phase of the process, the consultants spent a week on the MSU campus touring labs
and conducting design charrettes with various stakeholder groups. This process allowed for the
consultants to evaluate the condition and adequacy of the existing facilities, and the agencies/labs to
explain their duties, use of existing facilities, and express their needs for expanded spaces and
capabilities as their missions continues to evolve to meet the demands of their respective customers
and stakeholders. During this evaluation process, the consultants communicated frequently with the
lab stakeholders and returned to the site at various times to verify and confirm important aspects of their
conclusions and recommendations.
A report of the existing conditions of the facilities and deficiencies was provided by the consulting team.
There were some common trends throughout:
• Insufficient space sizes, allocation, and organization
• Aged finishes and cleanability concerns
• Laboratory safety issues including inadequate safety showers, eye washes, and egress
• Poor building ventilation and inadequate make-up air
• Lack of fume hoods and associated exhaust systems
• Lack of redundant mechanical systems for lab areas
• Lack of backup power for critical systems
• Security issues due to multiple public corridors in close proximate to lab spaces handling
potential pathogens
• Biosecurity concerns
From this process the consultants developed a baseline space allocation for each lab compared to the
existing space. The baseline provides an overall scope of a new complex if all six laboratories were to
be constructed in a new location. The baseline encompasses an 84,647 gross square foot building at
an escalated project cost of approximately $51.2 million (excluding land acquisition and extension of
utilities to the site). While the baseline is not a recommended option, it does provide the necessary
details to begin developing the following recommendations that have been presented by the
consultants.
CONSULTANT'S RECOMMENDED OPTIONS
The options presented were created by prioritizing the most critical program elements that were
identified through the baseline process. The options then were created utilizing baseline data with some
Legislative Fiscal Division 6 of 19 September 7, 2018
reductions in square footage, which will be clarified in the various options. The projected costs shown
with each option include the cost of building construction and renovation, construction cost inflation
assuming project appropriation in the 2019 Legislative Session, and project associated costs such as
design fees and lab fixtures, furnishings, and equipment. All options exclude the cost of land acquisition,
sitework, and extension of utilities to site if necessary.
In all options other than the subcommittee recommendations, the FWP Wildlife Lab is proposed to
remain in its current location. During the study of the labs, the Wildlife Lab was undergoing renovations
to their existing space. These renovations were completed to overcome several deficiencies the that
lab was experiencing. While there are some synergies between VDL and the Wildlife Lab, the
consultant's analysis concluded they were not enough to warrant a new building. Additionally, there are
no specific functions or spaces that the administration or staff of either facility believe could be combined
or shared. As such, the VDL and FWP have committed to continuing their relationship of lab testing and
consulting. FWP has provided a response to the recommendations which is located in Appendix B.
OPTION 1
WOOL
LAB
DEPTF.OF AG
SEED _ VACATED ANALYTICAL
LAB FOR LABORATORY
(existing) REUSE 12,795 GSF
PULSE VETERINARY
CROPS DIAGNOSTIC
LAB LABORATORY
40.815 GSF
71
®MARSH LAB NEW BUILDING
Under Option 1, the recommendation is to build a new lab facility that would house the VDL and
Analytical Lab. The new construction would be the first phase of the project. The new building would be
a total of 53,610 gross square feet. This scenario increases the size of the VDL by 12,940 net square
feet, this is slightly smaller than the original scope presented in the baseline, due to removing the food
safety and DNA sequencing lab spaces since these are not functions the agency is currently offering.
Also, the square footages of the new BSL-2 enhanced necropsy and BSL-3 labs were slightly reduced.
The Analytical Lab, will gain approximately 1,000 net square feet.
Legislative Fiscal Division 7 of 19 September 7, 2018
Phase 2 of this option would be to renovate Marsh Lab to accommodate the MAES Wool Lab and
expansion of both the MAES Seed Lab and MSU Pulse Crops Diagnostic Lab. The Pulse Crops
Diagnostic Lab is the in the most critical need for additional space. Their existing space is 751 net
square feet. This proposal expands this lab by 2,653 net square feet and re-locates them in Marsh Lab
to another area that was vacated by the VDL. With minimal renovations, the Seed Lab would then be
able to expand into the area that was housed by Pulse Crop Diagnostics. The Seed and Pulse Crops
labs would remain adjacent to each other and continue to capitalize on the synergies they have. By
moving the Wool Lab, this alleviates many of the access and safety/ventilation issues they are currently
experiencing. The Wool Lab would occupy renovated vacated space and would be decreased by
approximately 450 net square feet compared to their current location. This reduction will not impact any
functions of the lab.
PHASE 1: New Building PHASE 2: Renovation
Construction Cost Summary Construction Cost Summary
Building Construction 27,049,626 Building Construction 3,338,751
Project Associated Costs 6,762,407 Project Associated Costs 834,688
New Building Cost 33,812,033 Renovation Cost 4,1731439
OPTION 1
Total Construction Cost Summary
Phase 1: New Building 33,812,033
Phase 2: Renovation 4,173,439
Total Project Cost 37,985,471
Legislative Fiscal Division 8 of 19 September 7, 2018
OPTION 2
DEPT.
OF AG
— ANALYTICAL
LAB
SEED
LAB = --
(existing)
PULSE VETERINARY
CROPS DIAGNOSTIC
LAB LABORATORY
40,815 GSF
MARSH LAB NEW BUILDING
The second option presented is also a two-phase process. The first phase would be the construction of
a new lab for the VDL. The new building would be a total of 40,815 gross square feet. This scenario
increases the size of the VDL by 12,940 net square feet, this is slightly smaller than the original scope
presented in the baseline, due to removing the food safety and DNA sequencing lab spaces since these
are future functions desired by the agency. Also, the square footages of the BSL-2 enhanced necropsy
and BSL-3 labs additions were slightly reduced.
Phase 2 includes renovation of 11,281 net square feet of vacated space in Marsh Lab. This option
renovates most of the space for the Department of Agriculture Analytical Lab. By relocating into the
Marsh Lab, the Analytical Lab will increase by approximately 1,200 net square feet. The remaining
space would be the expansion of the MSU Pulse Crops Diagnostic Lab. Like option 1, the Pulse Crops
Diagnostic Lab would increase by 2,653 net square feet. Without any renovation, the MAES Seed Lab
would then be able to expand into the space vacated by move of the Pulse Crops Diagnostic Lab.
PHASE 1: New Building PHASE 2: Renovation
Construction Cost Summary Construction Cost Summary
Building Construction 20,823,183 Building Construction 5,860,220
Project Associated Costs 5,205,796 Project Associated Costs 1,465,055
New Building Cost 26,028,979 Renovation Cost 7,325,275
Legislative Fiscal Division 9 of 19 September 7, 2018
OPTION 2
Total Construction Cost Summary
Phase 1: New Building 26,028,979
Phase 2: Renovation 7,325,275
Total Project Cost 33,354,254
OPTION 3
SEED __ VACATED
LAB FOR
(existing) REUSE
d
PULSE VETERINARY
CROLAB PS DIAGNOSTIC
LABORATORY
(existing) 40,815 GSF
}MARSH LAB
NEW BUILDING
The final option is the construction of a new lab for the VDL.The new building would be a total of 40,815
gross square feet. This scenario increases the size of the VDL by 12,940 net square feet, this is slightly
smaller than the original scope presented in the baseline, due to removing the food safety and DNA
sequencing lab spaces since these are future functions desired by the agency. Also, the square
footages of the BSL-2 enhanced necropsy and BSL-3 labs additions were slightly reduced.
In a second phase, the MSU Pulse Crops Diagnostic Lab would move into a portion of the vacated
space remaining in Marsh Lab. The MAES Seed Lab would be able to utilize the portion vacated by
Pulse Crops Diagnostic Lab. Under this proposed option, no renovations have been included for the
moving of Pulse Crops Diagnostic or MAES Seed Lab.
Legislative Fiscal Division 10 of 19 September 7, 2018
OPTION 3
Construction Cost Summary
Building Construction 20,823,183
Project Associated Costs 5,205,796
Total Project Cost 26,028,979
CONSIDERATIONS
As mentioned at the beginning of this section, project costs for the recommendations do not include
acquisition costs for land or the associated costs for site work. The subcommittee worked closely with
MSU and the Board of Regents (Regents) throughout the lab study and conceptual design process. A
request was made by the subcommittee in February 2017 for MSU to consider allowing the state to use
15 acres of MSU land adjacent to the existing Marsh Laboratory for any new construction if a building
was funded. The Board of Regents and MSU have not declined or accepted this request. At the time of
the request, there were many unknown variables and the Regents needed further information. Further
discussions will be necessary to determine if land is available for a lab complex at MSU.
Until a site is decided, the consultants provided a range of costs that would be associated with site and
utility costs. The range of an additional $1.0 to $2.5 million, is dependent upon site selection, zoning,
access, site utilities, etc. These additional costs will need to be a consideration in the overall scope of
any project selected.
The options that have been presented detail renovations and recommendation on what facilities should
be moved to an existing building that is owned by MSU. In addition, if a new building is constructed for
the VDL and Analytical Lab this would leave vacated space totaling 18,257 net square feet.
MSU has been a significant help during the lab study process including attendance at all subcommittee
hearings, as well as participating in building tours and providing building details and floorplans.
However, at this point MSU and the Regents have not been officially consulted regarding their long-
term building plans for Marsh Lab, MAES Wool Lab, MAES Seed Lab, or the MSU Pulse Crops
Diagnostic Lab. Further discussion with MSU and the Board of Regents needs to take place if the
legislature would like to proceed with any of the recommended options.
And finally, consideration needs to be made on the potential impacts to general fund once a new building
is constructed.The labs that have been identified as a part of a new facility have minimal operation and
maintenance (O&M) costs in their existing spaces. With a new building, additional and increased O&M
would be anticipated creating a potential impact to general fund for the appropriation to those agencies.
While both the VDL and Analytical Lab receive general fund, a portion could possibly be offset by the
fees they charge for their services.A more in-depth analysis would need to be conducted to determine
if their fee structure would be enough to offset any impacts to general fund or could their fees be
increased to provide the funding source for the new O&M requirements. Please see Appendix A for an
overview of the funding by source for the VDL, Analytical Lab, and FWP Wildlife Lab.
SUBCOMMITTEE FEEDBACK
Based upon review of the consulting team's report, the subcommittee chose to recommend alternate
Option 1A and 3A for legislative consideration which are detailed below. These variations are based
Legislative Fiscal Division 11 of 19 September 7, 2018
upon certain concerns they had about the FWP Wildlife Lab even after the current renovations of their
facility is complete.
The first concern is about the safety of transporting carcasses to the VDL for incineration. Currently,
carcasses are transported in an open bed pick-up and there is concern regarding potential
contamination and exposure to the public of harmful pathogens. While it is outside the scope of this
study to evaluate the safety regulations related to this activity, the design team concluded that current
transport practices could be altered if necessary to comply with current regulations.
A secondary concern is the drainage system of the necropsy lab at FWP and the release of untreated
effluent going to the waste water plant. Both the VDL and FWP Wildlife Lab are up to code requirements
with their drainage systems. Both Department of Administration Architecture & Engineering Division
and MSU University Services have provided confirming documentation. According to the lab
consultants, effluent treatment is not required with the bio-safety level of labs that are included in this
study. At such point in time as the regulations related to the labs changes to require effluent treatment,
the consultants have identified a number of effluent sterilization systems that can be added to an
existing lab. The design for new construction would incorporate the required code guidelines to ensure
the drainage is following appropriate protocols based on the type of the effluent that is present.
And a third but primary concern to the subcommittee is the ability for Montana to conduct Chronic
Wasting Disease (CWD) testing. Currently the FWP Wildlife Lab and VDL must send suspect samples
to Colorado State University's Veterinary Diagnostic Lab for confirmation of CWD. Due to the limited
number of labs that can conduct the diagnostic tests for CWD, the results can take up to six weeks to
be returned to FWP and VDL. As an outcome of a new lab facility would be to provide the available
space and equipment to allow VDL to conduct CWD diagnostic testing.
Option IA
Under Option 1A, the recommendation is to build a new lab facility that would house the VDL, Analytical
Lab, and the FWP Wildlife Lab. The new construction would be the first phase of the project. The new
building would be a total of 62,007 gross square feet. This scenario increases the size of the VDL by
12,940 net square feet, this is slightly smaller than the original scope presented in the baseline, due to
removing the food safety and DNA sequencing lab spaces since these are not functions the agency is
currently offering. Also, the square footages of the new BSL-2 enhanced necropsy and BSL-3 labs were
slightly reduced. The Analytical Lab will gain approximately 1,000 net square feet. An additional 2,046
net square feet would be added to the FWP Wildlife Lab.
Phase 2 of this option would be to renovate Marsh Lab to accommodate the MAES Wool Lab and
expansion of both the MAES Seed Lab and MSU Pulse Crops Diagnostic Lab. The Pulse Crops
Diagnostic Lab is the in the most critical need for additional space. Their existing space is 751 net
square feet. This proposal expands this lab by 2,653 net square feet and re-locates them in Marsh Lab
to another area that was vacated by the VDL. With minimal renovations, the Seed Lab would then be
able to expand into the area that was housed by Pulse Crop Diagnostics. The Seed and Pulse Crops
labs would remain adjacent to each other and continue to capitalize on the synergies they have. By
moving the Wool Lab, this alleviates many of the access and safety/ventilation issues they are currently
experiencing. The Wool Lab would occupy renovated vacated space and would be decreased by
approximately 450 net square feet compared to their current location. This reduction will not impact any
functions of the lab.
Legislative Fiscal Division 12 of 19 September 7, 2018
WOOL
LAB FDEPT. G FWP
WILDLIFEY LABORATOR
SEED _ VACATED 12,795 GSF 8,397 GSF
LAB FOR
(existing) REUSE
_ - PULSE
CROPS
LAB
VETERINARY
DIAGNOSTIC
LABORATORY
40,815 GSF
4 MARSH LAB NEW BUILDING
PHASE 1: Ne w Building PHASE 2: Renovation
Construction Cost Summary Construction Cost Summary
Building Construction 31,320,863 Building Construction 3,338,751
Project Associated Costs 7,830,216 Project Associated Costs 834,688
New Building Cost 39,151,079 Renovation Cost 4,173,439
OPTION 1A
Total Construction Cost Summary
Phase 1: New Building 39 151079
Phase 2: Renovation 4,173,439
Total Project Cost 43,324,518
Option 3A
This option is the construction of a new lab for the VDL and the FWP Wildlife Lab. The new building
would be a total of 49,212 gross square feet. This scenario increases the size of the VDL by 12,940 net
square feet, this is slightly smaller than the original scope presented in the baseline, due to removing
the food safety and DNA sequencing lab spaces since these are future functions desired by the agency.
Also, the square footages of the BSL-2 enhanced necropsy and BSL-3 labs additions were slightly
reduced. The FWP Wildlife Lab will gain approximately 2,000 net square feet.
Legislative Fiscal Division 13 of 19 September 7, 2018
In a second phase, the MSU Pulse Crops Diagnostic Lab would move into a portion of the vacated
space remaining in Marsh Lab. The MAES Seed Lab would be able to utilize the portion vacated by
Pulse Crops Diagnostic Lab. Under this proposed option, no renovations have been included for the
moving of Pulse Crops Diagnostic or MAES Seed Lab.
FWP
VACATED WILDLIFE
SEED = LABORATOR
LAB FOR 8,397 GSF
(existing) REUSE
f
VETERINARY
_ — — - - DIAGNOSTIC
LABORATORY
- 40,815 GSF
= PULSE
CROPS
LAB
(existing)
MARSH LAB NEW BUILDING
OPTION 3A
Construction Cost Summary
Building Construction 25,094,419
Project Associated Costs 6,273,605
Total Project Cost 31,368,024
FUNDING OPTIONS
There are a range of options that could be considered to fund the construction of a new lab complex.
The viability of any funding option depends upon many factors including but not limited to: which mix of
labs are included in the project; the overall cost of the project; availability of state or non-state funds
available for a cash program; and level of legislative interest in a bonded construction program.
Historically, state and university projects similar to the labs have been funded through general fund
appropriations, proceeds from the sale of GF general obligation bonds, federal grants, private
donations, or a combination of those. During the 2017-2018 interim study into alternative financing
concepts, LFD staff has provided additional funding options that have not traditionally been used for
state or university-owned buildings and which would require statutory framework or change. Additional
information about alternative funding concepts can be found at the following links:
Legislative Fiscal Division 14 of 19 September 7, 2018
• Funding Concepts for State Building Projects, June 18, 2018 LFC Meeting
• State and Local Infrastructure Financing Options, September 6, 2018 LFC Meeting
Of interest to the subcommittee are funds that may be available through federal programs, or the
possibility of a public-private partnership. There currently is a proposed bill supported by Senator Tester
which would supply funding for chronic wasting disease if passed. The current bill, S.2252 Chronic
Wasting Disease Support for State Act would provide grant funds to eligible state agencies for the
research, identification, and management of chronic wasting disease. Due to the bill not being passed
at the date of this publication, there is uncertainty on the availability of these funds in the future.
The United States Department of Agriculture — Rural Development (USDA-RD) offers Business &
Industry Loan Guarantees for purchase and development of land, business development, and other
eligible purposes. In the case of a new lab complex, this program would allow a private lender to borrow
funds with a federal guarantee to construct the complex. Public-private partnerships have been used
by the university system for the construction of certain revenue-producing facilities such as dormitories,
parking structures, and athletic facilities. The state, outside of the university system for revenue-
producing facilities, has not ventured into this area of financing to date.
Staff will continue to research the public-private partnership option, as well as any other option(s) the
LFC deems appropriate to determine each option's legality, necessary statutory changes, and other
requirements.
NEXT STEPS
LFD and Legislative Services Division (LSD) staff is available and prepared to assist the LFC, should
the committee desire additional information, research, or to draft committee legislation intended to
appropriate funds to construct or renovate the state labs located on the MSU Bozeman campus.
Alternately, individual legislators may seek similar assistance through the following contacts:
• Shauna Albrecht, LFD, salbrecht(a-mt.gov, 444-1783, Capitol Building Room 110Q
• Joe Kolman, LSD, jkolman(j�mt.gov, 444-3747, Capitol Building Room 171 B
Legislative Fiscal Division 15 of 19 September 7, 2018
APPENDIX A
The following charts provide an overview of the funding by source for the VDL, Analytical Lab, and FWP
Wildlife Lab.
Veterinary Diagnostic Lab
3,000,000 Appropriations by Source of Funding
2,500,000
222,000,000 9,000- 59,579 59,431
- 9.982 29'000
9,951
],181581 ],182,673
ry 1,500,000 .
�1,750,323 .� g4p
o
1,340,791.
1,512,172 1J85,tx9'�
1,697,811'. I y„�� _3,784I _ 30,585 30,606
1,000,000 i
- 51SA07 518,658
500,000
i 1,449 A r
- 705.767 705,636
302,661
FY2010 FY2011 FY 2012 FY2013 FY2014 FY201S FY2016 FY 2017 FY2018 FY 2019
General Fund State Special Revenue Federal Special Revenue Pmpdemry Funds
Analytical Lab
1,aao,aoR
Appropriations by Source of Funding
1.200,000
212,759
249,973 257.05
3,000,000 - 549,376 -
197,947
afflp ,� 99 55A224 1 ,477
573,015 225,037 - --
- 548,372
a
600,000
a 1,006,920 -
968,225 975,616
400,000 495,757 651073 8.37,8M
714,208 766,552
454,190 -
382,291
200,000
74,670 69,511 MASS 72,547 78,775
' -20,455 -19A42 15A71-_ _15,774- 15;820
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY 2017 FY2018 FY 2019
General Fund State Special Revenue Federl Special Revenue
Legislative Fiscal Division 16 of 19 September 7, 2018
FWP Wildlife Lab
Appropriations by Source of Funding
anJ,ow
3 9J,ou
I
i
i
100,000 ;
I
r I
6 250,000
o -
C
zoo,000
e
q$
a 1S000U
150,385 153 150,539
145,587 ,303
100,OW
R
AUDO IJS,99d i
51,300 60, 78,
>
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
FY 2017
■State Special Revenue ■Federal Special Revenue
Legislative Fiscal Division 17 of 19 September 7, 2018
APPENDIX B
Montana Fish Wildlife and Parks' resl2onse to lab consultant
rep=
While Montana Fish, Wildlife and Parks (FWP) and the Montana
Department of Livestock (DOL) have some similar lab needs, there are
also differences in functional scope and quantity. Additionally, FWP is
different from DOL in that we don't need additional lab space and do not
face an ongoing lab accreditation situation.
We appreciate the concept of potential synergies with co-located lab
facilities and the hard work by legislators, staff, and consultants working
on this topic. However, given FWP's federal funding sources and the
strings attached to them, it would be difficult to be part of a capital
investment option unless the facility was owned and operated by the
department and used to further specific fish and wildlife goals. For capital
investment or leasing, FWP's federal funding involves grant writing,
making the expenditure, and then being reimbursed by the U.S. Fish and
Wildlife Service (USFWS). These funding stipulations and circumstances as
represented by the USFWS make it more practical for FWP to be part of a
tailored leasing arrangement rather than a joint capital project.
Out of the context described above, FWP does agree with the consultant
report insomuch that it accurately describes the FWP lab situation,
including recent facility enhancements. If the FWP lab were not part of a
joint facility, there would remain the need at some frequency to transfer
biological samples or carcasses to a joint lab facility. Such efforts are now
and can be appropriately managed with fitting protocols and procedures.
As for the FWP lab drain, while it is not consistent with a biosecurity level
3 facility, a biosecurity level 3 facility is not needed by FWP except for a
very small number of cases, as is the case with other comparable wildlife
necropsy labs. The limited number of cases where pathogen exposure is
of higher concern can be handled using specific protocols between the
FWP and DOL labs. As for the relatively small volume of biosafety
Legislative Fiscal Division 18 of 19 September 7, 2018
concerns these specifics represent, they could be further addressed by
being housed within a joint facility with DOL that allowed for higher
biosecurity or perhaps future upgrades to the FWP facility. The recent
upgrades include a class II biological safety cabinet that can be used to
necropsy smaller animals that are suspect for infectious disease.
The consultant's report also recognizes the reduced interaction between
FWP lab staff and other FWP staff if FWP were part of a joint facility. While
accurate, FWP recognizes that loss would not be over- impactful to the
FWP lab's mission because required, albeit reduced, interactions would
necessarily continue in a joint facility.
To be clear, if the joint lab was to move forward without FWP we would
still look for a significant service-for-fee relationship with the DOL
Diagnostic lab. FWP would also maintain the option for additional biosafety
enhancements at the FWP lab and would approach its lease expiration date
(2026) with MSU under the assumption that a lease renewal option would
maintain the current facilities.
In summary, FWP concurs with the consultant's recognition that current
circumstances and functions do enable the FWP lab to continue as is, so
long as we maintain our working relationship with the DOL Diagnostic lab.
This, coupled with the constraints of FWP's federal funding and its
complicated allocation process, does arguably make the case for a
continued stand-alone FWP lab. That said, FWP respects the concept of
shared efficiencies, and remains open to hear additional options for a
shared lab if legislators wish to further explore that potential.
Legislative Fiscal Division 19 of 19 September 7, 2018
�°•,� MONTANA LEGISLATIVE BRANCH
Legislative Fiscal Division
Room 110 Capitol Building*P.O.Box 201711 *Helena, MT 59620-1711 *(406)444-2986*FAX(406)444-3036
Director
AMY CARLSON
DATE: October 18, 2018
TO: Legislative Finance Committee
FROM: Study of State Labs Interim Subcommittee
RE: Addendum to Study of State Lab Report
The Report on the HB 661 Study of State Labs was presented at the September LFC meeting.
Subsequently, the interim State Labs Subcommittee held their wrap-up meeting on October 18,
2018 to formally adopt the report and finalize committee work. The State Labs Subcommittee
supported a motion to endorse Option 1 as defined in the Report, with a caveat to pursue Pittman-
Robertson funding as a source for construction which then would add the FWP Wildlife Lab as a
tenant in the new constructions (Option 1A). The supported motion also included pursuing a
variety of options for funding rather than relying solely on general fund obligation bonds.
The State Labs Subcommittee chose to adopt the report with the following additions:
• Effluent Treatment. The Veterinary Diagnostic, Analytical, and Wildlife Labs do not have
an effluent treatment mechanism/process prior to fluids entering the Bozeman sewer
system. Although the lab consultants determined that effluent treatment was not required
for these labs under current regulations, the subcommittee felt that disposing of untreated
lab effluent directly into the Bozeman sewer system is not a good practice and therefore
a deficiency that should be corrected during any upgrades or new construction
• FWP Hoist/Trolley System. The FWP Wildlife Lab uses a hoist and trolley system
supported off the facility's structural system, which in the past has been insufficient to
reach all areas needed when handling large animals within their facility. There is a project
currently underway in the FWP lab that may address these deficiencies. The
subcommittee remains concerned about this problem and, if not fixed within the current
upgrades, recommends that it be corrected through additional structural upgrades or new
construction
• Hazardous Chemical Storage. The lab consultants noted the lack of access control in
the Analytical Lab as an increased risk of accidental contact with hazardous chemicals.
The subcommittee acknowledges the need for physical security, and in addition feels as
though there is a deficiency of secure storage for hazardous chemicals in the Analytical
Lab that needs to be addressed in the existing facility or through new construction
• Additional Funding Option — Public/Private Partnership. Cited in the final report, on
page 15, was a statement indicating public-private partnerships have only been utilized
by the university system. However, the new Department of Natural Resource and
Conservation headquarters building in Helena was constructed by a private entity as a
lease back to the agency. The subcommittee would like this to be understood as a
potential funding option for the labs
• USDA Rural Development Opportunities. The report discussed the USDA - Rural
Development (USDA-RD) loan guarantee program. Charles Robison, Montana State
Director for USDA-RD, provided a memo detailing the opportunities available for assisting
the State of Montana in meeting its infrastructure needs. The subcommittee would like this
added as an appendix in the report
The State Labs Subcommittee sends this addendum to the LFC, to respectfully inform the LFC
about their final subcommittee action in adoption of the Report on the HB 661 Study of State Labs.
_USDA
United States Department of Agriculture
To: State Representative Kerry White
Chairman
Legislature Interim Committee on Study of State Labs at MSU Bozeman
From: Charles Robison
Montana State Director
USDA Rural Development
Chairman White,
In April, I met with the Montana Legislature's Interim Committee on Study of State Labs
at MSU Bozeman to present information on USDA loan guarantee programs and how
our loan guarantees can facilitate public-private partnerships in construction of State
facilities.
Agriculture Secretary Sonny Perdue has challenged Rural Development to prioritize
infrastructure, partnerships, and innovation to facilitate rural prosperity and economic
development. I appreciate the opportunity to provide more information on how USDA
can assist the State of Montana in meeting its infrastructure needs.
To recap briefly, USDA Business & Industry Loan Guarantees are available for bank
and credit union loans to for-profit businesses, nonprofits, cooperatives, federally-
recognized Tribes, public bodies, and individuals to finance projects in rural
communities (census population 50,000 or less). Most relevant to your Committee, an
eligible borrower could use a USDA-guaranteed loan to buy, construct or renovate a lab
(or other building) for lease to the State of Montana or other tenants. Terms and
conditions of guaranteed loans are set by the lender. We often see terms up to 30
years and fixed interest rates on USDA guaranteed real property loans; all terms and
contitions are determined by the lender.
In the context of constructing or renovating space for a lab or other State needs, the
USDA guarantee can help control project costs and make a project more feasible.
In conversations with builders and developers in Montana, I have concluded that many
developers are open to building structures that could be leased to the State of Montana
on privately owned land or land leased from the State of Montana. In the scenario
where the land is leased, the State has the ability to have structures built on existing
State office or school campuses for better efficiency and proximity.
There are a number of different and innovative leasing structures that the State could
pursue with private developers, including a standard straight lease or a lease with the
option to purchase. In a lease with the option to purchase, the State would have the
Rural Development•Montana State Office
2229 Boot Hill Court•Bozeman, MT 59715
Voice(406)585-2580•Fax(855)576-2674
USDA is an equal opportunity provider and employer.
To file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form, found online at
http://www.asor.usda.gov/complaint filing cust.html,or at any USDA office,or call (866) 632-9992 to request the form. You may also write a letter
containing all of the information requested in the form.Send your completed complaint form or letter to us by mail at U.S. Department of Agriculture,
Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue,S.W.Washington,D.C_20250-9410,by fax(202)690.7442 or email at
program.intake@ usda.gov.
2
benefit of purchasing the building after a predetermined time. This could allow the State
to reserve funds for future purchases over time instead of committing cash up front. This
also gives the state flexibility to delay purchase and continue to lease a building
depending on the fiscal climate of the state at any given time.
By way of example, I believe the Department of Fish, Wildlife & Parks currently has a
lease for 15,000 sf of office space in Helena at $18.50/sf. I believe the lease includes
janitorial, utilities and other costs. My understanding is that construction costs for
similar space would probably run around $4.5 million (or more) today. A lease like this
can provide the Legislature with options beyond paying the up-front cost and provide
flexibility as the State's needs change over time.
If the Legislature decides that public-private partnerships are an efficient way to meet
State facilities needs, developers and the State can work together in innovative ways to
continue to invest and build infrastructure across the State of Montana. USDA's loan
guarantees can make these public-private partnerships more affordable for private
owners, which should translate to lower costs for the State of Montana.
I appreciate the opportunity to provide the Committee with this information, and I wish
you the very best in finding a solution to the needs of the state labs. Please feel free to
reach out Nate Brown, our USDA Business-Cooperative Program Director, who can
speak to the technical specifics and eligibility rules regarding this program. Don't
hesitate to call anytime I can help or answer questions.
Sincerely,
Charles Robison
State Director
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