Simply put, we were out of space at our Hayden location and the cooperative continues to grow rapidly. Our growing ranks and the fleet of vehicles used to serve our members were straining our previous facility. A third-party professional study of our long-term needs placed our property requirements at more than twice our Hayden facility size.
Below are some of the specific growing pains we must overcome in the immediate future.
KEC has a fleet of more than 100 vehicles. Our Hayden facility did not have enough enclosed or covered vehicle storage for a fleet of this size. This forced a portion of our fleet to be parked outside in the elements, which shortens the overall life of the vehicles and can increase our response time during outages. We needed another nine truck bays (or nearly double our Hayden space) to adequately serve our membership. It may seem more logical to park these vehicles outside, but when you consider that an average line truck costs well over $100,000 and the price of a digger derrick (a truck with a long boom and a drilling/digging bit on top) can top $400,000, it’s clear KEC needs to protect these assets to ensure they can serve the membership for as long as possible.
KEC’s previous mechanics’ bay was too small to effectively support, maintain, and repair a fleet our size.
Traffic flow in and out of our Hayden facility was inefficient for the size of our fleet as well as for large equipment deliveries.
Road restrictions imposed by highway jurisdictions and roundabouts planned near our former headquarters further impede our operations.
We had outgrown our material warehouse which needed to be expanded by about 30 percent.
KEC’s Hayden location's outdoor space was limited and didn’t allow for adequate onsite material storage.
Due to our growing workforce, the space our crews needed to meet daily and complete required safety sessions was no longer adequate and needed to be increased to accommodate growth.
Interior office space had reached maximum capacity. There were no available offices to accommodate new employees, even considering work-from-home opportunities.
Space required for storage and IT equipment was largely undersized and could not be expanded without eliminating offices.
Our Hayden headquarters facility sat on about 15 acres of land divided by Dakota Avenue in Hayden. This division caused some logistical and safety challenges, as it required a steady flow of both foot and vehicle traffic between sites on an increasingly busy road. While some of our constraints at the time could be corrected through a major building remodel on that site, it would not be efficient or effective in the long term.
Additionally, there were some challenges that were location-specific:
Road configurations and traffic restrictions made it extremely difficult for materials and equipment to be delivered to our Hayden headquarters and for our own trucks to leave our site. Annual spring road restrictions further exacerbated these problems.
Due to the proximity of our location to the airport, the cooperative was subject to significant building restrictions, thus constraining our ability to remodel the facility or construct additional vehicle storage.
Our previous headquarters located in Hayden was built in the late ‘70s and had been incrementally expanded as needs arose. Additions were constructed in 1994, 2004, and 2015, but that potential had been exhausted. The site across the street from our headquarters was purchased to use for poles, transformers, machinery, and other equipment storage.
In order to provide a safe and efficient facility to serve our members and in which our employees can work effectively, the Hayden building would need to be expanded beyond what the site could accommodate. All things considered, was determined to be more cost-effective to construct a new building that meets our needs now and into the future than to further renovate and expand the previous one.
In the early 1970s, we had 18 employees and approximately 4,000 meters on our system. Today we have over 100 employees and 30,000 meters on our system. We have added 18 employees to our workforce just since 2015. Looking ahead, we expect to add an additional 12 to 15 employees over the next five years as our membership and community continue to grow.
In 2020, we engaged a third-party consultant to provide an independent evaluation of the cooperative’s facility needs and use. The consultant specializes in headquarters facility planning studies and planning and design for electric cooperatives around the country.
They completed a comprehensive site, facility, and needs assessment with these goals in mind:
Protect expensive materials, vehicles, and equipment
Improve operational efficiency
Accommodate future growth
Provide facilities that allow for adequate emergency operations response
Improve and foster safety and security
Foster a collaborative and high-performing employee culture
This study was commissioned in part to validate the findings of a similar study that had been completed the year prior. The construction of a new facility represents a considerable undertaking for the cooperative. We wanted to ensure all alternatives were considered and our decisions were fully informed. Crucially, both studies arrived at the same conclusions.
The results revealed that our previous facilities were inadequate for current and future space needs. In fact, our Hayden facilities only met approximately 54 percent of our anticipated square footage needs based on our historic growth. The previous buildings would require moderate-to-significant modifications to meet our needs and building code requirements. While repairs/replacements would have improved the physical conditions, energy efficiency, and overall layout, items like traffic flow and operational efficiencies could not be overcome at our former location.
The consultant presented five options to KEC’s board of directors based on the needs assessment. Each option identified which needs would be addressed.
The options are outlined below and range from addressing only immediate facility deficits to finding a new site and constructing a new facility.
Remain on the Hayden site and address immediate facility needs.
Remain on the Hayden site and renovate it to suit future needs to the extent possible, given size and location constraints.
Purchase a five-acre site directly across Dakota Ave. from our main Hayden building and construct a new engineering and operations center on that site, along with major renovations of our existing facilities. The site sold, in fact, prior to the completion of our assessment, rendering this option less likely.
Construction of a new engineering and operations center at a new location while maintaining our administrative presence at our Hayden location. In this scenario, we could lease out the space currently occupied by our engineering and operations departments to another tenant. The new facility could be constructed in such a way as to accommodate the alternative below should that be needed in the future.
Construction of a new headquarters facility at a new location. In this scenario, our current headquarters would be sold or leased to another tenant.
The KEC board of directors ultimately eliminated the first three options due to their limitations and further evaluated options 4 and 5.
We successfully negotiated a sales agreement with Kootenai County on our Hayden headquarters facility which was approved by both the KEC board of directors and Kootenai County commissioners. The County purchased our headquarters for $4.72 million. As part of the deal, KEC had the right to continue operating from it rent-free for the next three years. The value of the transaction was fair for both parties, making it a good deal for our members and for the residents of Kootenai County. Crucially, the sale of our headquarters eliminated risk for the cooperative. The focus could then shift to the construction of a new headquarters.
Construction of a new headquarters began in early spring of 2022. KEC was able to occupy the new headquarters in late October 2023. The process was not unreasonably rushed. Ensuring our future facilities were well planned and constructed efficiently was a primary goal.
This investment in our future was not inexpensive. It represents an investment of between $42 to $46 million. To ensure our headquarters was not overbuilt, the initial construction was planned to accommodate about ten years of new growth. The facility is laid out so that growth beyond that can be accommodated by expanding administrative office space, warehousing, fleet parking, and our materials laydown yard as future growth occurs.
Since this was a capital investment, the cost of the headquarters will be depreciated over the life of the building. Our Hayden headquarters served our needs for more than 40 years and we expect our new facility to have a similar lifespan. The good news is interest rates were historically low and the financing for the facility will be paid back over a 30-year period. This allows members today and into the future to contribute to the benefit they receive.
In the early 1970s, we had 18 employees and approximately 4,000 meters on our system. Today we have over 100 employees and 30,000 meters on our system. We have added 18 employees to our workforce just since 2015. Looking ahead, we expect to add an additional 12 to 15 employees over the next five years as our membership and community continue to grow.