Background for ANSEP



Agenda

Board of Regents

Facilities and Land Management Committee

Wednesday, April 8, 2009, *2:30 p.m. – 5:00 p.m.

Prince William Sound Community College

Valdez, Alaska

*Times for meetings are subject to modifications within the April 8-9, 2009 timeframe.

Committee Members:

Timothy Brady, Committee Chair Robert Martin

Carl Marrs, Committee Vice-Chair Kirk Wickersham

Mary K. Hughes Cynthia Henry, Board Chair

I. Call to Order

II. Adoption of Agenda

MOTION

"The Facilities and Land Management Committee adopts the agenda as presented.

I. Call to Order

II. Adoption of Agenda

III. Full Board Consent Agenda

A. Formal Project Approval for the Energy Technology Facility at the University of Alaska Fairbanks

B. Formal Project Approval for the Science Renovation at the University of Alaska Anchorage

IV. New Business

A. Schematic Design Approval for the Northwest Campus Deferred Renewal at the Northwest Campus in Nome, Alaska

B. Information Item for the Toolik Field Station Stimulus Project at the University of Alaska Fairbanks

C. Information Item for the TVCC Revitalization Phase 3 Exterior Envelope at the University of Alaska Fairbanks

V. Ongoing Issues

A. Update for the ARSC Facility Development at the University of Alaska Fairbanks

B. Update for the Co-generation project at the University of Alaska Anchorage.

C. Status Report on University Investments in Capital Facilities, Construction in Progress, and Other Projects

D. Update on IT Issues

VI. Future Agenda Items

VII. Adjourn

This motion is effective April 8, 2009."

III. Full Board Consent Agenda

A. Formal Project Approval of the Energy Technology Facility at the University of Alaska Fairbanks Reference 10

The President recommends that:

MOTION

“As required by Regents’ Policy 05.12.042, the Facilities and Land Management Committee recommends that the Board of Regents approves the Formal Project Approval request for the University of Alaska Fairbanks Energy Technology Facility as presented, and authorizes the university administration to proceed through schematic design not to exceed a Total Project Cost of $30,600,000. This motion is effective April 8, 2009.”

POLICY CITATION

In accordance with Regents’ Policy 05.12.042, Formal Project Approval (FPA) represents approval of the Project including the program justification and need, scope, the Total Project Cost (TPC), and funding plan for the project. It also represents authorization to complete the development of the project through the schematic design, targeting the approved scope and budget, unless otherwise designated by the approval authority.

A FPA is required for all projects with an estimated TPC in excess of $2.5 million in order for that project’s inclusion of construction funding to be included in the university’s capital budget request, unless otherwise approved by the Board. The level of approval required shall be based upon TPC as follows:

• TPC > $4 million will require approval by the Board based on recommendations from the Facilities and Land Management Committee (F&LMC).

• TPC > $2 million but ≤ $4 million will require approval by the F&LMC.

• TPC > $1 million but ≤ $2 million will require approval by the Chairperson of the F&LMC.

• TPC ≤ $1 million will require approval by the university’s Chief Finance Officer (CFO) or designee.

RATIONALE AND RECOMMENDATION

1. Background

In January 2008, on behalf of the UA System, UAF launched the Alaska Center for Energy and Power (ACEP), a new research unit to investigate energy options for the state and serve as a coordination point for energy related activities across the University of Alaska campuses and the state. ACEP builds upon years of energy research organized under the Arctic Energy Technology Development Laboratory. ACEP is part of the Institute of Northern Engineering, the research branch of the College of Engineering and Mines.

ACEP’s mission is to meet state, industry and federal demand for applied energy research to lower energy costs throughout Alaska, and to develop economic opportunities for the state, its residents and industries.

The three legs of ACEP

Community Energy Solutions - ACEP will be where the rubber meets the road for developing sustainable energy solutions for Alaska communities. ACEP will serve as a proving ground so efficient and effective technologies can be implemented throughout the state, particularly in rural Alaska where diesel fuel and power failures come at a high cost.

Powering the Economy – ACEP will provide the research needed to develop big power projects in Alaska for resource development needs in the state and arctic regions. A new gold rush has begun for resources in an Arctic with diminished sea ice. Growth in Alaska and throughout the Arctic will require power, and Alaska has the opportunity to position itself as a new-world power broker. Large- and small-scale energy and power production is an issue of economic, energy and national security.

The Energy Field of the Future – ACEP will extend ongoing research at the University of Alaska in gas hydrates, heavy oil, coal, carbon sequestration and other opportunities so that the oil industry and the state are prepared for the future. The energy field of the future does not need to be limited to extraction technologies. ACEP will investigate new ways of using existing oil infrastructure in an environment of declining oil reserves.

ACEP is interdisciplinary, needs-driven and agile. Much of the previous energy research at UAF was funded through the Department of Energy fossil energy program, and as such was limited in scope and focused on issues of national interest. ACEP will focus on the needs of the state, its residents and its industries, and with state involvement, will be able to target energy solutions from the community to the state level. ACEP will focus on applied research as well as testing and development in cooperation with other state agencies to test technologies being proposed for Alaska.

ACEP incorporates all three MAUs of the University of Alaska, taking advantage of existing strengths at each campus. ACEP is developing a wide range of partnerships outside the university at the local, state, national and international levels to ensure research conducted through ACEP will be relevant and current.

2. Project Scope

The new Energy Technology facility will attract and retain collaborative initiatives with public and private entities and be the catalyst for power and energy solutions in the State of Alaska. Solutions for energy production, consumption, and distribution are critical right now when most Rural Alaskans cannot afford to heat their homes and are struggling just to keep food on their tables.

The new building and program will encourage abundant undergraduate research opportunities through the programs cohesiveness with the College of Engineering and Mines. Undergraduate research is a key component to the recruitment and retention of Alaska’s best and brightest students.

Research: ACEP does not have any designated space, and must use space in the Duckering Building and other locations on campus, including the Mineral Industry Research Laboratory facility. The office space in the MIRL building is limited to five small cubicles (70 – 100 square feet), and the lack of space requires researchers to double up in a small conference room and reception area. The only ACEP laboratory space is limited to a single small hydrogen laboratory, which houses numerous research and testing activities, and a diesel engine test bed in a small, unheated connex behind the MIRL building. For ACEP to help meet the demand for applied energy research in Alaska, it is crucial that the program have designated space to conduct research, testing and demonstrations. ACEP must also have space where public and private entities can interact with the university. With its present distribution across campus, there is no central location that brings the university and the community together around energy solutions. In addition, the lack of appropriate space also makes it challenging to hire and retain the type of world-class researchers needed to meet ACEP’s long-term program goals.

UAF is proposing construction of a new facility for ACEP to meet their programmatic needs. The fast-tracked building will be completed 20 – 24 months after funding is secured, with a target move-in date in late 2011. Featured in the building will be one floor dedicated to wet, dry, and hazardous research labs. Each lab will be unique in function, but generic enough in design to allow for changes in initiatives. Above the labs will be faculty and student researcher space sized for the current and known growth of ACEP. At least 15 offices will be created along with graduate student space. The proposed site is next to the UAF power plant, where ACEP researchers can take advantage of the plant’s large-scale power production capabilities and work closely with plant staff. The site also makes ACEP accessible to business and industry partners, and university undergraduate students participating in various research and testing activities and projects.

Service to the Community is paramount for science and learning that deals directly with the economic health and welfare of Alaskans. The need for research space ties directly to how the public will access and utilize UAF. The building users will generate useful and innovative research that benefits every resident in the state. To support community engagement, limited space will be available for presentation of research and interaction between investigators and interested community members.

Leveraging UAF’s Lease Payments will help support construction and administrative operations. Currently the Facilities Services Division of Design and Construction department is housed in a leased facility off of the main campus in Fairbanks. The division is charged with planning, designing, and constructing all types of projects with varying dollars amounts and schedule. To better align with the goals of the administration, added space is proposed in the Energy Technology Building for the thirty staff. The new space will accommodate the current staff in close proximity to other Facility Services staff. In the future, if ACEP programs grow beyond projections and other space is available for Design and Construction staff, this can serve as program expansion space. In the near term using existing lease payments to cover some of the required debt and bringing this function on campus provides significant advantages.

The university intends to utilize an Innovative Procurement process to select a Construction Manager at Risk for preconstruction services and possibly the construction of the facility.

3. Proposed Cost and Funding Source(s)

Over the course of the last 10 months, significant fiscal planning has occurred at UAF with advice from the Statewide System. The fiscal planning for this facility has been approached from a holistic view of UAF’s master plan. UAF’s fiscal planning includes the three major facilities that will require long-term operating funding commitments as well as the contingency that under poor conditions, funding may be needed for critical infrastructure renewal. The three major facilities are: the Life Sciences Innovation and Learning Facility (UAF highest priority), the ARSC facility lease (ARSC direct funded), and the Energy Technology Facility. Fiscal scenarios consider five key sources; state funding support, UA revenue bonds with UAF funded debt service, corporate and private develop efforts, and most recently, the federal stimulus grant opportunities.

In addition to UAF’s strategic program priorities and the associated space constraints, there are two overriding factors that create the need to move these projects quickly:

• UAF must start construction prior to March 2010 to be within the window of UA’s next F&A rate proposal cycle. UA’s F&A rate proposal determines UAF’s indirect cost recovery rate (ICR) for the next three years. Due to the lack of research facility investments, UAF’s F&A rate has declined over the last two cycles from 50.4%, to 47.5% to the current 45.1%. The operating impact between a 50% rate and a 45% rate on $80 million of eligible research is $4 million per year.

• Active progress on these facilities will position UAF to compete more successfully for the significant research funding opportunities resulting from the federal American Recovery & Reinvestment Act (ARRA). The ARRA funding opportunities may include marginal construction support, but most important is research funding for critically important Alaskan issues; specifically energy and health.

Specific to this project, the UAF FY10 Capital Budget project request of $30.6 million consists of $15.3 million state funding and $15.3 million non-general funds, specifically University Receipts. At a minimum, fifty percent of the total project cost ($15.3M) will be provided through non-general funds which may include private donations from interested donors, alumni, and general industry, in addition to the UA revenue bond funding. The debt service for the UA bond would come from UAF indirect cost recovery as a result of increased research activity, redirecting existing lease payments, and, in the near term, reallocation of UAF operating funds.

Appendix D provides a Preliminary Business Plan for the UAF Energy Technology Facility. There are state funding uncertainties that will be resolved over the next two months. The impact of these uncertainties relative to the business plan will be discussed in depth during the presentation. A more robust business plan will be provided when UAF seeks schematic design approval expected for June 2009.

4. Maintenance and Operating Costs (M&O)

Annual Operating and Maintenance costs have been calculated based on 2012 estimates. Costs are subject to change as other factors besides inflation play a role such as oil cost and utility rates. A significant amount of the M&O funding will be requested from state funding as available ICR will be directed to bond payments. The business plan presented in Appendix D includes provisions for these costs.

Trash/Grounds $20,374

Utilities $234,766

Custodial $116,689

Annual Total $371,829

Fully funded after 5 years - yrs 1-5 build up 20%/yr

M&R (1.5% of value) $450,000

R&R $17,647

5. Consultant(s)

Consultant selection is underway using a publicly advertised Request for Proposals.

6. Other Cost Considerations

The programs associated with Energy Research are, for the most part, grant funded. The research revenue generated by these initiatives covers the incremental operating cost of the program. The UAF FS Division of Design and Construction is a recharge center funded on a capital project assessment basis.

7. Schedule for Completion

Design Start: April 2009

Construction Start: August 2009 (contingent upon funding) Construction Complete: August 2011 (contingent upon funding)

B. Formal Project Approval for the Science Renovation at the University of Alaska Anchorage Reference 11

The President recommends that:

MOTION

“As required by Regents’ Policy 05.12.042, The Facilities and Land Management Committee recommends the Board of Regents approve the Formal Project Approval request for the Science Renovation at the University of Alaska Anchorage, as presented, and authorizes the University administration to proceed through schematic design not to exceed a Total Project Cost of $11,400,000. This motion is effective April 8, 2009.”

POLICY CITATION

In accordance with Regents’ Policy P05.12.042, Formal Project Approval (FPA) represents approval of the Project including the program justification and need, scope, the Total Project Cost (TPC), and funding plan for the project. It also represents authorization to complete the development of the project through the schematic design, targeting the approved scope and budget, unless otherwise designated by the approval authority.

A FPA is required for all projects with an estimated TPC in excess of $2.5 million in order for that project’s inclusion of construction funding to be included in the university’s capital budget request, unless otherwise approved by the Board. The level of approval required shall be based upon TPC as follows:

• TPC > $4 million will require approval by the Board based on recommendations from the Facilities and Land Management Committee (F&LMC).

• TPC > $2 million but ≤ $4 million will require approval by the F&LMC.

• TPC > $1 million but ≤ $2 million will require approval by the Chairperson of the F&LMC.

• TPC ≤ $1 million will require approval by the university’s Chief Finance Officer (CFO) or designee.

RATIONALE AND RECOMMENDATION

1. Background

The Science (SCI) building will be vacated in the Fall of 2009, due to the science programs in this building moving into the new Conoco Phillips Integrated Science Building (ISB). The backfill plan shows that various dry labs that serve the science curriculum will be relocated from Beatrice McDonald Building (BMH) and the Engineering Buildings into the SCI building. Originally constructed in 1975, the SCI building will require remodeling, structural, mechanical and electrical systems renewal and tenant improvements for its redefined function. During the spring of 2008, consultants reviewed the building and the backfill program plan and developed a renovation plan for the building.

2. Project Scope

This project will renovate the existing SCI building to provide classrooms, instructional labs, offices, prep rooms and other supporting areas. The mechanical and electrical systems will be upgraded to extend the life of the building, ensure code compliance and improve efficiencies of pumps, motors, lights and controls. The structure will be upgraded to comply with current seismic requirements. The building envelope will be improved for thermal efficiency.

Funding is not certain until July 2009. If full funding is not received the project will be phased with the first phase to remove hazardous material, upgrade structural, mechanical and electrical as funding allows. A Phase II with FY11 funds would finish the renovation work.

3. Proposed Cost and Funding Source(s)

FY09 Capital Appropriation Fund #17043-564303 $1,250,000

FY10 Capital Appropriation Fund # to be determined $11,400,000

*Note: when $11,400,000 is fully appropriated, the $1,250,000 will be transferred back to FY09 RR projects.

4. Maintenance and Operating Costs (M&R)

This project will reduce maintenance and operating costs due to installation of new building systems.

5. Consultant(s)

Architects Alaska was chosen through the RFP process to do programming, and if approved, the design.

6. Other Cost Considerations

It has been identified that the standby generator will need to be replaced; this cost is being calculated.

If the building is phased because full funding is not obtained, the total project cost may increase and would be addressed in future approvals.

7. Schedule for Completion

Design: Nov 2008 to Aug 2009

Bidding: Sep 2009

Construction: Oct 2009 to Aug 2010; Aug 2011 if phase funded

Occupancy: Aug 2010 pending full funding; Aug 2011 if phase funded

Our project delivery strategy is to accomplish the work in phases as funding becomes available. We envision two phases for this project Phase I: Demolition, hazardous material removal, structural, electrical and mechanical renewal and Phase II: Classroom and office space renewal.

IV. New Business

A. Schematic Design Approval for the Northwest Campus Deferred Renewal at the Northwest Campus in Nome, Alaska Reference 12

The President recommends that:

MOTION

“As required by Regents’ Policy 05.12.043, the Facilities and Land Management Committee approves the Schematic Design Approval request for the University of Alaska Fairbanks Northwest Campus Deferred Renewal Project as presented, and authorizes the University administration to proceed, not to exceed a Total Project Cost of $3,500.003. This motion is effective April 8, 2009.”

POLICY CITATION

In accordance with Regents’ Policy 05.12.043, Schematic Design Approval (SDA) represents approval of the location of the facility, its relationship to other facilities, the functional relationship of interior areas, the basic design including construction materials, mechanical, electrical, technology infrastructure, and telecommunications systems, and any other changes to the project since Formal Project Approval.

Unless otherwise designated by the approval authority or a Material Change in the project is subsequently identified, SDA also represents approval of the proposed cost of the next phase(s) of the project and authorization to complete the Construction Documents process, to bid and award a contract within the approved budget, and to proceed to completion of project construction. Provided, however, if a Material Change in the project is subsequently identified, such change will be subject to the approval process described below.

For the Schematic Design Approval, if there has been no Material Change in the project since the Formal Project Approval, approval levels shall be as follows:

• TPC > $4 million will require approval by the Facilities and Land Management Committee (F&LMC).

• TPC > $2 million but ≤ $4 million will require approval by the chair of the F&LMC.

• TPC ≤ $2 million will require approval by the university’s Chief Finance Officer (CFO) or designee.

If there has been a Material Change in the project since the Formal Project Approval, the Schematic Design approval levels shall be the same as the Formal Project Approval.

RATIONALE AND RECOMMENDATION

1. Narrative Description

The Library and Nagozruk building’s pilings are failing and must be replaced. New pilings for the Nagozruk building will be placed south of the existing structure. This will allow usage of the building during piling installation, better handicap access and provide better visibility from the street. A site investigation has been conducted and we are in the process of determining the specific piling design for each piling.

The new pilings for the Library will be placed near the satellite buildings, and north of the new Nagozruk building location. This follows the long-range Master Plan for the campus and will provide access to restrooms for the satellite buildings as well as a place for students to study before and after classes. Once the pilings are installed, the structure will be moved and placed on its new foundation.

The services of a structural mover, a company that moves structures, are available in Nome. With the high price of building materials in Nome, the recycling of buildings is vital and common to the town. Equipment is readily available to push/slide buildings onto a flat bed surface. No special equipment is needed.

Each building on campus has its own service drop from the electric utility, this increases costs and maintenance to the campus. Electrical service will be combined and redistributed to the relocated buildings, thus reducing several existing meters, usage charges and maintenance issues. The main service will be to the relocated library, with a distribution panel in the mechanical room.

Water and sewer connections will be modified to have one connection to the city’s main then redistributed to those buildings requiring utilities. Thus abandoning a poorly functioning sewer line and reducing maintenance costs.

The existing heating and ventilation systems in the relocated buildings will be modified to improve distribution of heat and lower costs. The associated fuel tanks will be consolidated and reduced.

2. Graphic Description

The buildings will be relocated to provide better foundation, greater visible presence and combine services to buildings including reduction of electrical services and heating equipment to campus.

3. Proposed Cost and Funding Source(s)

This should describe the cost and funding source(s) for the next phase of the project and for eventual completion of the project.

Funding for this project comes from a state Capital Appropriation, with a line item appropriation in the amount of $3,500,003.

4. Schedule for Completion

Design August 2008 - August 2009

Purchase of pilings to be shipped to Nome August 2009

Bid Period September 2009

Anticipated construction period April 2010 – August 2010

Anticipated Beneficial Occupancy Date mid-August 2010

5. Affirmation

The relocation of the buildings conforms to Northwest Campus’ Master Plan to unify the campus and make room for a new consortium library as well as provide a stable foundation for important campus buildings.

B. Information Item for the Toolik Field Station Project at the University of Alaska Fairbanks

BACKGROUND

The Toolik Field Station is located in the northern foothills of the Brooks Range in northern Alaska on the southeast shore of Toolik Lake, 254 km north of the Arctic Circle adjacent to the Dalton Highway. Toolik Field Station supports 300-400 researchers annually between April through October and more than 100 scientists and students are at Toolik on any given day during midsummer. Toolik Field Station is a unique and valuable center for arctic research because of its history of investment in long-term monitoring of climate, hydrology, biodiversity, and physiological and ecological processes.

The land is owned by the Federal Bureau of Land Management and leased to the University of Alaska. All facilities at Toolik Field Station are owned by NSF or UAF. Toolik is operated and administered by the Institute of Arctic Biology at the University of Alaska Fairbanks under a Cooperative Agreement with the National Science Foundation (NSF). The Cooperative Agreement is worth approximately $3M/year.

Toolik Field Station supports year round operations and research and the TFS development plan calls for expanded winter capable operations, laboratories, dormitories, and support facilities within 5 years.

PROJECT SCOPE

The NSF has allocated approximately $5M from the American Recovery and Reinvestment Act for Toolik facility and infrastructure improvements. The highest priority project in the Toolik Development Plan is a new Kitchen and Dining Facility that can serve 150 people in the summer and 50 people during the winter. Preliminary planning for the project indicates that it is feasible within the available funding. It is also likely that some improvements will need to be made to the water supply system so that it is winter capable.

Design and construction of the project will be performed by the NSF Arctic Logistics Contractor (CH2M Hill Polar Services) or their subcontractors. UAF Facilities Services will not have a procurement role, but will have a review and monitoring role in the project.

FUNDING

The exact amount that will be allocated to Toolik Facilities Upgrades will be determined by the end of March, 2009. The initial indication is $4.5M in construction funds will be allocated for this project. It is currently unknown whether funding will be adequate for the entire project. The University will also investigate its potential for contributing additional funding, if necessary for completion.

SCHEDULE

Project Scoping March 2009 to April 2009

Design April 2009 to November 2009

Possible Site Work August 2009 to October 2009

Construction November 2009 to August 2010

Note: The majority of construction is planned to be modular and performed off site.

APPROPRIATE APPROVALS

Board of Regents’ approval under Policy 05.12 will be needed for this project. It is possible that a combined Formal Project Approval and Schematic Approval will be requested in the June 4-5, 2009 Board of Regents Meeting. The combined approval may be appropriate due to procurement being performed by the NSF and its Arctic Logistics Contractor.

C. Information Item for the TVCC Revitalization Phase 3 Exterior Envelope at the University of Alaska Fairbanks Reference 13

POLICY CITATION

In accordance with Regents’ Policy P05.12.047, approval levels required for changes in the source of funds, increases in budget, or material in project scope identified subsequent to schematic design approval shall be determined by the chief finance officer based on the extent of the change and other relevant circumstances. This determination requires judgment, but will generally be based on the nature of the funding source, the amount, and the budgetary or equivalent scope impact relative to the approved budget at the schematic design approval stage, and assigned as follows:

• Changes with an estimated impact in excess of $1.0 million will require approval by the board based on recommendations from the regents’ committee responsible for facilities;

• Changes with an estimated impact in excess of $0.4 million but not more than $1.0 million will require approval by the regents’ committee responsible for facilities;

• Changes with an estimated impact in excess of $0.2 million but not more than $0.4 million will require approval by the chair of the regents’ committee responsible for facilities;

RATIONALE AND RECOMMENDATION

1. Narrative Description

The UAF Tanana Valley Campus Center at 604 Barnette Street in Fairbanks, Alaska (formerly the Fairbanks Courthouse) was designed and constructed in 1962-63. The building has four stories plus a mechanical penthouse with a total of 78,504 gross square feet. Since taking ownership in 2003, the University has accomplished a series of two State funded projects and two additional projects funded by the Denali Commission. The second State funded project, Phase 2 Mechanical and Electrical Upgrades, is in the final stage of completion.

The Phase 3 Exterior Envelope project will replace the entire existing exterior building envelope and windows which have failed.

The existing exterior wall system consists of enamel coated aluminum storefront panels with an R-value of no more than 4. The panels enclose asbestos containing materials (ACM) that provide most of the insulating value. Hazardous materials handling methods will be employed for demolition and disposal of the panels. The exterior aluminum windows have deteriorated and are beginning to fall out of the exterior skin. The storefront system also acts as the building’s vapor barrier which is not continuous, and is leaking. The poor wall system and inconsistent vapor barrier has led to some corrosion of the structural systems, access for mold, drafty and uncomfortable spaces, and poor use of energy.

The new wall system will be an Exterior Insulation Finish System (EIFS) exterior integrated with a pre-fabricated, lift-in-place panel system. The system is medium priced with many advantages including low maintenance, durability, excellent thermal performance, and site assembly methods that result in minimum exposure of the building interior during construction. The new panel system will connect to the structural connection points of the existing curtain wall system, and will provide an R-21 insulation value and a continuous vapor barrier at the perimeter of the entire facility.

The new windows will be fixed double pane, argon filled, low E-coated, high performance (HP) insulated windows with extruded aluminum (thermal break) frames. There are approximately 224 windows and replacement will improve both function and aesthetics. Each window will have a separate window shade.

All storefront and insulated hollow metal doors will be replaced as part of this project. Storefront interior and exterior doors, sidelights and transoms will be replaced with insulated, thermal break (HP) systems. The building’s exterior electrical equipment will be replaced with color-corrected, high pressure sodium lights and new headbolt outlets on control points for energy conservation.

The exterior look of the building will take on a 21st century, modernized look utilizing a series of linear and square/rectangular panels. The existing penthouse and building parapets will be modified to tie into the building design.

The sizes will allow for day lighting deeper into the building spaces including the programmed student lounge areas. An insulated, translucent wall system will be installed on the exterior wall where the main stair is located at the east end of the facility (Barnette Street). Daylight will penetrate into the building through the panels while still maintaining a thermal buffer from the exterior cold.

Replacement of the exterior envelope will impact the interior perimeter hydronic heating system and various architectural, mechanical, and electrical aspects of the interior rooms. The impact to these systems and areas will be addressed as needed by this project.

2. Proposed Cost and Funding Source(s)

SB 221 SLA08 FY09 General Fund Appropriation $7,000,000

UAF & TVC Operating Funds $400,000

3. Variance Report

The reason for this Total Project Cost Increase request is to award construction of the Formal Project and Schematic Design approved scope of work. There has been no significant change in the scope of work as a result of the design process. The Contractor’s low bid to construct the work was significantly higher than the Engineer’s estimated cost. An analysis for reasons the estimate differs from the bid amount identified three likely causes. The estimate did not include sufficient costs for the project schedule, wall framing, and handling of hazardous materials. The scope of the project has not changed from the time of Formal and Schematic approval and the University is requesting approval to add funds and proceed with the work.

4. Schedule for Completion

Design Development (65%) October 10, 2008

Construction Documents (95%) December 5, 2008

Bid Documents (100%) January 5, 2009

Bid Period January 11 to March 15, 2009

Construction March 15 to October 31, 2009

Occupancy Continuous Coordinated Occupancy

5. Affirmation

The Board of Regents gave Formal Project Approval at the June 18, 2008 Meeting.

6. Action Requested

Total Project Cost Increase Approval by the Chair of the Facilities and Land Management Committee.

V. Ongoing Issues

A. Update for the ARSC Facility Development at the University of Alaska Fairbanks

An information item was provided at the December 1-2, 2008 and the February 17-18, 2009 Board of Regents meetings regarding the proposed ARSC Facility Development Project. This third information item is an update on the project’s progress and subsequent changes.

PROJECT INTENT

Capitalize on private/public partnerships or agency partnerships in order to:

• develop new facilities which alleviate the physical and infrastructure constraints currently limiting growth of the ARSC;

• complete the Data Center element in time to meet grant funding opportunities which will occur in Federal FY 2010;

• set the stage for partnering opportunities and ARSC expansion opportunities for a 25 year planning horizon;

• capture and share with a development partner the “value” inherent in the synergies made possible by an ARSC Technology Park;

• leverage the “waste heat” produced in the Data Center to reduce operations cost and maximize Phase I development; and,

• enhance the Strategic goals of the University of Alaska, University of Alaska at Fairbanks, and the ARSC.

An RFP was issued on November 21, 2008 and the initial due date for proposals was January 29, 2009, but has been extended to April 2, 2009. The developers will have the option of submitting proposals for building on University owned land or private parcels. The University will select the Proposer that best meets the development goals, is technically competent, and offers the best long term value for a 25-year lease.

FUNDING

ARSC and UAF have committed $1M per year to lease the maximum amount of space, but as a minimum to have a data center that can accommodate their needs. They have also committed $400,000 for operating expenses above and beyond the basic lease. This additional commitment was in response to proposer feedback that the project was not viable without additional funding.

INITIAL FEEDBACK FROM PROPOSERS

Proprietary meetings were held with four Proposers on December 11 and 12, 2008 and January 29-30, 2009 to discuss all aspects of the project and the RFP. A common theme from all Proposers was the $1M/yr lease budget was insufficient for the required scope.

Addendums to the RFP were issued on January 20, February 5, and February 20, March 11, and March 16, 2009. The addendums clarified the amount of equipment ARSC will purchase, terms and conditions, and Addendum No. 3 changed the lease conditions from full service to triple net. This change is essentially an increase in funding as the operating expenses of the facility are assumed by ARSC/UAF.

There is likely to be a range of possible responses to the RFP and proposals will be ranked based on which team can provide the facility closest to the original RFP requirements.

REVISED SCHEDULE

Although there is an immediate need for more space, ARSC has agreed and planned future supercomputer purchases around the following schedule:

RFP Preparation, Evaluation and

Lease Award Design October 2008 to June 2009

Design June 2009 to December 2009

Construction (possible site/foundations August 2009-April 2011

in 2009)

Occupy Lease Space April 2011

APPROPRIATE APPROVALS

The chosen submittal/project and subsequent contracts may require Board of Regents’ approval and possibly Legislative approval. It is anticipated that appropriate approvals will be sought at the June 2009 board meeting. A special Board of Regents meeting may be needed for this project if contract negotiations cannot be completed prior to the agenda submission date for the June, 2009 meeting.

B. Update for the Co-generation Project at the University of Alaska Anchorage

PROJECT SUMMARY

Anchorage Municipal Light & Power, Providence Hospital and University of Alaska Anchorage are preparing to develop a combined heat and power project for the benefit of the three organizations.  The project will contain one or two gas turbine generators each with a heat recovery boiler and a thermal distribution system that will connect Providence Hospital and UAA buildings to the plant.

OVERVIEW

Combined heat and power production offers the possibility of improving the fuel efficiency of an electric generating process by more than 100% when compared to conventional electric plants and by more than 70% when compared to combined-cycle electric generating plants. 

The University of Alaska Anchorage and Providence Hospital are two large institutional customers served by Anchorage Municipal Light and Power.  Anchorage Municipal Light and Power is a regulated utility.  The University and the Hospital fall within its exclusive service territory.  Together the two customers make up about 4% of the utility’s sales.

ML&P is currently updating its resource plan and will replace some of its generating equipment.  The University has a number of boilers that are near the end of their useful life and Providence continues to grow to meet the needs of the community and is faced with capital investment for infrastructure to meet its growth.  It is a favorable time to develop a single project to meet the three organizations overarching goals.

Nearly all power and heat in the Anchorage area is produced by combusting natural gas and it is in the public’s best interest to use this fuel efficiently. All parties expect the cost of natural gas to remain high.

THE PROJECT

An opportunity exists to develop a project to meet the three organization’s goals:

□ Use fuel more efficiently

□ Reduce emissions associated with making electricity and heating buildings

□ Reduce operating costs

Currently, we anticipate the project will be:

□ Located on University land

□ Located adjacent to Providence Hospital

□ Use ML&P generating assets

□ Use ML&P natural gas

□ Rely upon Enstar for natural gas transportation

□ Include heat recovery boilers

□ Bundle with other facilities such as Providence Laundry, UAA Parking structure

The proposed project will locate ML&P generating assets near the two institutions, where heat, that is normally wasted when making electricity, is recovered to meet the thermal energy needs of the University and the Hospital. The Hospital has the largest constant heat load and is essential to the project.

For the project to move forward the institutions will continue to rely upon ML&P as an electric service provider and the institutions must realize economic benefit by meeting their thermal energy requirements with low-cost, waste-heat.

Independent, preliminary studies have been completed by all three parties.  Each believes that a project can be developed that serves their best interest and that the greatest benefit will be achieved by all three parties cooperating to plan, finance and operate a single facility.

The project cost is estimated to be about $63 million and the schedule is estimated to be 36 months.

The three parties have committed themselves to:

□ Organize a working group,

□ Select a lead organization that is responsible for directing various consultants to perform in the best interest of the joint project and

□ Contribute one third of the cost ($100,000 each) verifying that the project is technically, operationally and financially sound.

□ Submit a renewable energy grant application to the state this December for partial funding of the project

If the project is validated, the three parties will continue to work together to manage the construction project and oversee the ongoing operation of the plant.  Legal, permitting and financial services will also be required.

The bottom line for the partners (ML&P, Providence Hospital, UAA) in this project is:

□ Providence and UAA and possibly other UMED district members could reduce their heating costs by over half.  For UAA that is over $1M/year. 

□ Reduced Carbon Footprint of both campuses by using waste heat for space heating

□ Renewed infrastructure through replacement

□ A jointly used energy system adjacent to Providence’s Facilities area

□ A training site for energy system operators and maintenance personnel

□ A great project for the State’s Renewable Energy Grant. 

 

SCHEDULE

Grant application submission November 2008

UA BOR Presentation December 2008

Complete Reconnaissance Phase April 2009

Define and Build the Business June 2009

Complete Feasibility Analysis June 2009

Conceptual Design September 2009

UPDATES

HGA refinement of project costs continues and is within early estimates

HGA collecting plume and turbine noise data from like plants

UAA is looking at alternative site(s) for Power Plant

UAA is exploring business model(s) and Regulatory Commission likely opinion

UAA is looking at “in building” equipment and costs associated with connection

Phase II energy grant projects to be sent to Legislature without AEA recommendation

Phase II energy grant projects are unlikely to be acted upon this session

This is an information and discussion item; no action is required.

C. Status Report on University Investments in Capital Facilities, Construction in Progress, and Other Projects Reference 14

Kit Duke, Chief Facilities Officer, and campus facilities representatives will update the committee regarding the ongoing investment in capital facilities and answer questions regarding the status report on active construction projects approved by the Board of Regents, implementation of recommendations by the external consultants, functional use survey, space utilization analysis, and other recent activity of note.

This is an information and discussion item; no action is required.

D. Update on IT Issues Reference 15

CITO Smith will report on IT issues of importance for the university including an update on the status of online security review and remediation across the system.

VI. Future Agenda Items

VII. Adjourn

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