OMB details facilities budget, rent model and $34M maintenance fund; updates state hospital and Minot office project

Brandon Solberg, facilities management division director with the Office of Management and Budget, told the Government Operations budget section the division manages 42 authorized FTEs and has several vacancies while overseeing on‑site work at the Capitol Grounds and off‑site projects.

"We've got a lot of material to cover," Solberg said, introducing OMB presentations on the rent model, capital projects and space reconfiguration (first presentation by Brandon Solberg, SEG 077). Crystal Hogarth, OMB fiscal officer, said the facility management budget is financed by two main sources — the general fund and the rent model fund — and that utilities remain the largest and most unpredictable expense. "Utilities continue to be our largest and most unpredictable expenses," she said (Crystal Hogarth, SEG 166).

Why it matters: OMB collects rent from agencies that occupy space on the Capitol Complex and uses those revenues and general fund appropriations to pay daily operations and capital projects. Hogarth said rent collections were $2,900,000 for fiscal year 2024 and $2,800,000 for fiscal year 2025, and that rental rates are set using the state's federally approved cost‑allocation methodology (Statewide Cost Allocation Plan).

Details of the rent model and operations: Hogarth outlined the rate calculation: gather building costs (grounds, maintenance, utilities, salaries, SWCAP costs and assessments), allocate costs by square footage, include depreciation and adjust for carry‑forward over/under collections. Agencies pay the same per‑square‑foot rate for comparable space in each building, and storage rates are based on utility costs alone (Crystal Hogarth, SEG 231–241).

State facility maintenance fund and projects: Lindsay Ashley, OMB statewide construction manager, described a $34,000,000 maintenance fund established to address deferred maintenance across 65 projects for 12 agencies. "These projects equal a total of the $34,000,000 that are in the fund," Ashley said and noted the majority of early projects are mechanical and plumbing work; $20,000,000 is budgeted for 31 such projects (Lindsay Ashley, SEG 349–375). She reported $291,690.84 had been spent from the fund to date.

State Hospital and Minot office projects: Ashley also updated the committee on the new North Dakota State Hospital project (roughly 297,000 square feet and 140 beds), which was funded in House Bill 1015 with a $300,000,000 appropriation (including $200,000,000 from SIF funding and up to $100,000,000 from a Bank of North Dakota line of credit). Construction began in July; foundations and footings are in place, structural steel delivery is imminent and exterior enclosure is targeted for March 2027 with facility operations anticipated in 2028 (Lindsay Ashley, SEG 524–553). On the North Central State Office Building in Minot, OMB said it received $5,600,000 in House Bill 1487 for design and construction and plans to issue construction documents for public bid in February and award contracts in April (Lindsay Ashley, SEG 783–813).

Capitol Grounds projects and campus improvements: Solberg summarized work on the Capitol Grounds including a boiler replacement that has produced noise and delays; mock window installations followed by replacement of 808 windows (projected completion next October); Liberty Memorial Building foundation remediation and a roof replacement slated for August 2026; and the nearly complete state lab with a projected substantial completion in April 2026 (Brandon Solberg, SEG 909–1017; SEG 996–1004; SEG 1016–1017).

Space reconfiguration and master planning: OMB reported roughly $7,000,000 available for space reconfiguration to reduce off‑site leases and optimize existing space, following interviews with 42 agencies. Common issues include unclear locations for vital records, parking shortages with added staff and inadequate restroom access on some floors; OMB said it will pursue design solutions and stakeholder engagement as part of an updated Capitol Complex master plan (Brandon Solberg, SEG 1230–1236; SEG 1245–1256).

Questions and clarifications: Legislators asked whether special funds include federal dollars (OMB: agencies may use federal funds to pay rent but OMB treats collections as special revenue), who pays for agency remodels (generally the agency unless OMB appropriation covers specific reconfiguration), and whether there is a systemwide asbestos abatement plan (OMB: no overall abatement plan exists within the current maintenance fund; abatement is addressed on a project basis) (various Q&A, SEG 184–199; SEG 469–476).

Next steps: OMB said it will follow up with additional operational cost estimates tied to the state hospital and provide more detailed leasing and cost‑savings information for the Minot project when available.

Ending: The committee accepted OMB's presentation and moved on to the Public Service Commission testimony later in the session.