State agencies face large rent increase from their landlord — the state

photo by: Mike Yoder

The Robert B. Docking State Office building, 915 SW Harrison St., Topeka.

? Anyone who tried to call the Kansas Board of Regents this past week probably had a lot of trouble getting through.

That’s because on Monday the agency moved its phone lines, along with its computer network servers, off of the state’s internal system and onto an external system called Kan-REN, the Kansas Research and Education Network, based at the University of Kansas in Lawrence.

The biggest reason, Regents officials said, was the cost. By going to outside vendors instead of using the state’s own networks, which are managed by the Kansas Department of Administration, the agency expects to save about $75,000 a year, money the agency says it needs because of higher rental rates it now pays to the state of Kansas to occupy space in a state office building.

“We had been pursuing this for a number of years,” said Regents spokeswoman Breeze Richardson. “However, the timing carries extra gravity in that it will help alleviate some of the financial pressures the agency is facing due to the rental increases.”

The Department of Administration is an agency that few people outside of state government ever deal with. But its various divisions have vast responsibilities that primarily support the operations of all the other state agencies, including building and facility maintenance.

Because it serves mainly as a support agency, the department receives little direct funding from the state. Instead, it is funded primarily through rents and fees that are charged back to the other agencies that use its services.

One of the goals of Gov. Sam Brownback’s administration, however, has been to reduce the amount of real estate that the state owns and occupies.

And nowhere is that more evident than in the Docking State Office Building just west of the Capitol, a 10-story building that is now nearly vacant because the agencies that once occupied it have relocated to office space the state now rents from privately owned buildings elsewhere in Topeka.

One of the side effects of that, however, is that there are now fewer agencies paying rent to the Department of Administration. And so starting in the last fiscal year, that agency raised its rental fees by 27 percent, to $19.40 per square foot.

“Fewer tenants residing in Docking is a factor in the increase,” said Department of Administration spokesman John Milburn.

That was an increase of $4.15 per square foot. And although that may not sound like much by itself, for an agency such as the Board of Regents, which occupies just more than 22,000 square feet in the Curtis State Office Building southeast of the Capitol, that translated to more than $91,000 a year.

Milburn said that before last year’s increase, rental rates had been set “artificially low” for the previous two years, at $15.25 per square foot, and that agencies had been advised in the fall of 2015 that rates would be going back up.

For the current fiscal year, which began July 1, Milburn said rates were lowered slightly, to an even $19 per square foot. But they are scheduled to go up again next year to $19.25, and then to $19.50 in the following fiscal year, which begins in 2018.

In comparison to some other agencies, the Board of Regents is actually rather small, at least in terms of the office space it occupies.

North of them, in the Landon State Office Building, the Kansas Department of Education occupies just over 64,000 square feet, while in the Eisenhower Office Building north of the Capitol, the Kansas Department of Transportation occupies 153,000 square feet.

So far, those agencies haven’t taken the same path as the Board of Regents by seeking lower-cost outside vendors for computer network and phone service. But Deputy Education Commissioner Dale Dennis said the rental increases are being felt.

“When your costs go up and you don’t have any new revenue coming in to pay for it, things get a little snug,” he said.