Report: Unused building space costs state up to $18M annually

Nov. 15—As one of the largest employers in New Mexico, state government has to provide a lot of office space.

But walk into, say, the Harold L. Runnels Building on St. Francis Drive — the largest state-owned office building in Santa Fe — and several floors are unoccupied.

At least that was the case when program evaluators with the Legislative Finance Committee conducted a site visit in August as part of a review that found the state is underutilizing building space and overestimating office needs for employees, costing taxpayers up to $18 million annually.

The findings reveal a need for state government to develop better space planning around vacancies and an increase in telework, program evaluators told lawmakers Tuesday.

While the state's underutilization of available building space predates the coronavirus pandemic, recent trends in telework have exacerbated the issue, Clayton Lobaugh, one of the program evaluators, told committee members.

Based on August data, up to 38 percent of state government employees telework on any given day, he said.

"The state plans for more space than we have staff to fill it. This is partially because agencies budget their space needs based on budgeted staff positions even though thousands of state positions are consistently vacant each year," he said.

In addition, Lobaugh said, the number of people working for state government has decreased since the Great Recession.

"But the state has not significantly decreased its building space since then," he said.

"New Mexico is at a crossroads where state agencies could either return to a pre-pandemic level of office use or reduce its building space in response to fewer employees and increased telework practices," Lobaugh said. "While other states have reduced building space and rent costs with telework, New Mexico is paying up to an estimated $18 million for unused space."

John A. Garcia, secretary of the General Services Department, which includes the Facilities Management Division, told lawmakers he appreciated the report but said program evaluators made "a few" incorrect assumptions.

The division "has not taken any space away from anybody that was teleworking because telework is temporary, so people are going to come back," he said. "The buildings will be used to, hopefully, capacity."

Garcia, as well as Nora Meyers Sackett, press secretary for Gov. Michelle Lujan Grisham, said the state is developing a teleworking policy.

"An updated statewide teleworking policy from the State Personnel Office is forthcoming following meetings with state employee union representatives," Sackett wrote in an email. "It is important that the state maintains available office facilities for all state employee positions as we continue to transition out of pandemic-era state policies."

Garcia said the report offered "some really good recommendations," including proposed revisions on plans to build a new $221.6 million executive office building in Santa Fe to account for cost increases and teleworking.

"They talk about, 'Do we need an executive office building?' We agree with the report," Garcia said. "Maybe we don't."

Follow Daniel J. Chacón on Twitter @danieljchacon.