1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 MAY 31, 2012 9 10 P OTHER ADMINISTRATIVE MATTERS 11 P5 ADMINISTRATION DEPUTY DIRECTOR'S REPORT 12 P5.2 HEADQUARTERS FACILITIES UPDATE 13 14 15 16 17 18 19 20 21 Reported by: Juli Price Jackson 22 No. CSR 5214 23 24 25 26 27 28 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Michelle Steel Vice-Chairwoman 6 7 Betty T. Yee Member 8 9 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per 13 Government Code Section 7.9) 14 15 Joann Richmond Chief, Board 16 Proceedings Division 17 18 For the Staff: Liz Houser Deputy Director 19 Administration Department 20 21 ---oOo--- 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MAY 31, 2012 4 ---oOo--- 5 MS. HOUSER: My next item is an update on the 6 450 N Street facility. 7 On Tuesday, May 1st, an employee on the 18th 8 floor reported a hearing a popping sound and then 9 noticed a small hairline fracture on the internal glass 10 of a dual pane window on the -- located on the north 11 side of the building. 12 Upon inspection, the fractures were determined 13 to be approximately three to four inches in length. 14 As a precautionary measure, employees were 15 moved away from the window. And BOE contacted DGS and 16 asked that the forensic architect term -- firm of 17 McGinness Chen, who had previously worked on the 18 building -- the windows, be immediately brought back in 19 to conduct an inspection of the windows on the 18th 20 floor. 21 They confirmed the glass was fractured and 22 termed -- determined that there were five additional 23 windows on the 18th floor with similar issues. The 24 windows were all replaced over the weekend of May 18th 25 through 22nd. 26 Due to BOE's overall concerns regarding the 27 windows, DGS has contracted with the firms Interactive 28 Resources and F. D. Thomas to conduct a thorough 3 1 inspection of all windows in the building and provide a 2 report on their condition and to determine what is 3 causing the fractures as seen on the 18th floor and the 4 spandrel glass breakage, as experienced between the 8th 5 and 9th floors. 6 We thank the BOE employees and you for your 7 patience while BOE works with DGS to correct these 8 building problems. 9 MS. MANDEL: How are the fans? 10 MS. STEEL: One -- 11 MR. HORTON: Whoa. 12 MS. HOUSER: Are there any questions? 13 MR. HORTON: Ms. Mandel. 14 MS. MANDEL: How are the fans? Did they fix 15 the fans? 16 MS. HOUSER: They are still having problems 17 with the HVAC system, Ms. Mandel. They seem to have -- 18 it seems to have a problem holding the temperature 19 setting, so -- 20 MS. MANDEL: I wouldn't mind if it held it low, 21 but it's awful. 22 MS. HOUSER: It continues to reset at high. 23 They realize they do have a problem with the HVAC system 24 in the building. 25 They've been working on it for the last couple 26 of years. We don't seem to making the progress we'd 27 like to see, but we understand they're doing another 28 assessment of that and, hopefully, we'll have a plan to 4 1 fix that. 2 MS. MANDEL: Okay. 'Cause I'd like to have 3 a headquarters facility report some day where there's 4 not something new that happened. 5 MS. HOUSER: So, would I, Ms. Mandel. 6 MS. MANDEL: I am sorry if I was very cranky 7 when my office was too hot. 8 MS. HOUSER: Understood. 9 Any other questions on the facility? 10 MR. HORTON: Ms. Steel? 11 MS. STEEL: I have a question. We've been 12 doing all these band-aid work, I mean, you know, these 13 windows popping and it's just amazing to see. 14 When they going to replace the building? 15 MS. HOUSER: Uhm -- 16 MS. STEEL: You know, we've been talking about 17 we don't have a lease signed. I mean, why we have to -- 18 all these staff have to suffer? 19 MS. HOUSER: We continue to be in discussions 20 with the Department of Finance and the Department of 21 General Services to try to begin the process to move BOE 22 out of the building. 23 Their current concern is the bonds that were 24 sold on the building in November are ten-year bonds that 25 require the tenant remain in the building. And they 26 feel the BOE is the tenant in the building and that we 27 need to be here for ten years to satisfy the conditions 28 of the bonds. 5 1 Then, in addition to that, there is the 2 terrible fiscal situation of the State that makes it 3 very difficult for them -- 4 MS. STEEL: But I think -- 5 MS. HOUSER: -- begin this process. 6 MS. STEEL: -- when they start replacing all 7 the windows, it's going to cost more than the building 8 itself that they going to -- I mean, you know, move 9 ourselves to another building. 10 MS. HOUSER: And that's why we're asking for 11 the second opinion on the -- from Interactive Resources 12 and F. D. Thomas, because we -- we don't want to keep 13 putting band-aids on the windows. We -- we think 14 there's some -- we -- they have got to figure what's 15 causing this. 16 And we're hopeful that when information is 17 brought forward, we will, of course, share that with the 18 Department of Finance and any cost estimate for the 19 repairs. 20 So, I think they're just going a little bit at 21 a time here and making decisions based on the 22 information they have before them. 23 MS. STEEL: Thank you. 24 MR. HORTON: Do we have earthquake insurance? 25 Just kidding. 26 Okay. 27 MS. HOUSER: You remember what happened last 28 time when I was trying to set up here and give a report? 6 1 MR. HORTON: Yeah. Please continue. 2 MS. HOUSER: So, we -- the State is 3 self-insured. 4 MR. HORTON: Yeah, I know. 5 MS. HOUSER: So, I guess we have as much as we 6 want to pay for. 7 So, any more questions on the facilities? 8 MR. HORTON: No, I don't believe so. 9 ---o0o--- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 1 REPORTER'S CERTIFICATE. 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 MAY 31, 2012 I recorded verbatim, in shorthand, to the 10 best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding pages 1 13 through 7 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: JUNE 13, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 8