Institutions committee questions BGS plan to use cash fund for $8 million in major maintenance; asks for pipeline detail

Institutions Committee members on Wednesday, Feb. 26, pressed Buildings and General Services officials about using the state cash fund for major maintenance projects and asked BGS staff to return with a line-by-line pipeline of encumbrances and near-term needs.

The committee was reviewing the Corrections & Institutions section of the governor’s capital bill when members raised concern that the proposal would allocate $8,000,000 from the cash fund for major maintenance in fiscal 2026 and $8,500,000 in fiscal 2027, a share committee members described as nearly half of available cash in some line-item groupings.

Why it matters: committee members said the use of cash reduces flexibility for other projects and can create pressure to spend funds quickly; BGS staff said the agency is prioritizing cash for projects that will spend faster and that some previously appropriated cash remains unexpended or encumbered.

Juan de Manoli, commissioner of Buildings and General Services, said the agency picks cash “to support the demands within the capital bill, and we identified cash to projects that we would spend faster on.” He told the committee that some projects (for example, White River Junction) are already under contract and that best practice has been to spend cash first when cash is available.

Committee members repeatedly asked for more detail about what cash is already encumbered and what remains in the pipeline. One member framed the problem as a choice the committee can make during markup: either keep FY2026 cash in place and reduce FY2027, or zero out FY2026 and rely on the committee to revisit the request in next year’s adjustment process. The chair indicated a preference to keep FY2026 available and revisit FY2027 as necessary, noting the committee will be back in January for budget adjustment.

Joe, director of design and construction, Buildings and General Services, told the panel his team is moving funds out the door and cited current spending: “we are under $800,000 through to June this year, and that money is going out the door as we speak.” He and other staff said recent floods and project staffing disruptions delayed some work and left cash from prior years unexpended or only partially encumbered.

Committee members pressed BGS on two policy points: whether the agency can reallocate cash among line items, and the statutory limits on reallocations across sections or fiscal years. Staff said there are statutory limits and approval steps when moves cross sections or fiscal years; the committee also discussed adding not-withstanding language for an older appropriation (2015) so those dollars can be moved into a current uninterruptible power supply project.

Project status and cost pressures

Committee members and BGS staff reviewed a long list of state facilities and corrections-related projects tied to the same section of the capital bill. Discussion items and the status the committee recorded included:

- A set of six secure/residential/correction-related sites (Vergennes, Middlesex campus, Newport, St. Johnsbury, Saint Albans and one other) that together used prior appropriations (about $3 million from prior bills) and are expected to be bid this spring; BGS staff said permitting and bid timing could let some designs go out in March–May and that some sites could reach construction this summer or fall if permitting and bids proceed as expected. Staff cautioned bid results have been volatile and higher than prior estimates on recent line-item projects.

- Statewide major maintenance: the committee debated using cash vs. bonded dollars as a policy philosophy (planning/design vs. construction), and members said they want an up-front discussion of how the committee will apply cash vs. bond treatment across projects rather than handling it only line by line.

- Security and card-access upgrades for state buildings (committee reference to prior-year funds and a remaining FY24 balance of roughly $100,000); staff said some funds would be applied to corrections facilities and information centers to upgrade camera and access systems where rest areas or remote sites are staffed by one person.

- A multi-site slate of roofs and site work funded in prior bills (the transcript named Waterbury and Middlesex archives among others). BGS warned that historic-preservation constraints on the Waterbury slate roofs limit alternative materials and make the work costly; the agency is investigating imitation slate and targeted copper work to limit snow/ice damage, and noted the repair program will be staged because weather windows constrain large continuous reroofing.

- West Cottage (historic building): prior cash of $750,000 was noted as insufficient for full renovation; staff said the $750,000 is a design/start amount and full renovation will require additional appropriations, possibly in later biennia.

- 302 Cherry Street (multimodal / parking garage): BGS has signed a construction-manager contract and reported schematic documents indicate higher-than-anticipated costs; staff are reviewing scope to remove nonessential elements (for example, an optional courtyard seating feature) to bring the project back toward available funding.

- Asa Puer (skyline/garage/sewer projects) and other campus infrastructure items: staff said the bill phases work so the agency can advance priorities (sewer first, then skylight/roof), and that some cost unknowns will only be resolved once crews open the structure.

- 120 State Street HVAC and other large building systems: prior cash exists; staff plan to start design work and to develop temporary relocation plans for occupants during multi-floor HVAC replacement work.

Cost uncertainty in procurement

Multiple committee members asked how much project bids are exceeding estimates. BGS staff described recent bids that came back substantially higher in absolute terms (examples cited: a roof design bid higher by tens of thousands on individual courthouse projects, and general upward pressure on equipment and labor) but told the committee that exact percentage overruns vary by project and some bids are still under review. The agency noted tariffs, labor market conditions and limited bidder pools are contributing to bid volatility.

Next steps, committee directions

The committee directed BGS staff to: - Return to the committee with a more detailed pipeline/encumbrance spreadsheet showing what prior appropriations are committed, what cash remains in FY2024–FY2025 buckets, and which projects are ready to encumber and expend in the near term. (Staff said they will provide that.) - Identify which projects are suitable to be funded from cash versus bonded dollars, so the committee can decide on any reallocation during markup. Staff agreed to flag items the agency recommends shifting. - Provide a list of permitting and bid milestones and expected encumbrance timing for the six secure/residential/corrections sites discussed so the committee can see which dollars will realistically be spent in FY2026.

The chair closed the section by directing staff to return quickly with the requested pipeline detail; the committee will resume consideration of Section 3 in the next markup meeting.

Ending

No formal votes were recorded in the transcript for the items discussed in this session. Committee members emphasized that the capital bill markup remains iterative: the committee can reallocate cash and bonded dollars during later adjustment sessions, but first they want BGS to document the pipeline of work, outstanding encumbrances from prior bills, and a clearer cost and permitting schedule for each major project discussed.