The4th meeting of the Budget Review Subcommittee on Economic Development and Tourism, Natural Resources and Environmental Protection of the Interim Joint Committee on Appropriations and Revenue was held on Tuesday, November 28, 2006, at 10:00 A.M., in Room 169 of the Capitol Annex. Representative John A. Arnold Jr., Chair, called the meeting to order, and the secretary called the roll.
Members:Senator Ernie Harris, Co-Chair; Representative John A. Arnold, Co-Chair; Senator Alice Forgy Kerr; Representatives Larry Clark, Charlie Hoffman, Lonnie Napier, Ruth Ann Palumbo, John Vincent, and Susan Westrom.
Guests: Victoria Faoro, Executive Director, Artisan Center at Berea; Lori Meadows, Executive Director, Kentucky Arts Council; David Morgan, Director, Heritage Council; and, Stephen Klein, President, The Kentucky Center for the Performing Arts.
LRC Staff: Jeffery Hancock, Kevin Mason, Jack McNear, Matt Ellis, and Christina Lee.
Chairman Arnold welcomed and introduced a new member of the staff, Christina Lee.
Chairman Arnold introduced Victoria Faoro, Executive Director of The Kentucky Artisan Center at Berea. Accompanying Ms. Faoro was former Senator Lindy Casebier, Executive Director, Office of Arts and Cultural Heritage, Commerce Cabinet. Mr. Casebier thanked Chairman Arnold for the opportunity to be in attendance and for allowing the four entities to come before the committee. Ms. Faoro proceeded with her presentation.
Representative Napier welcomed Ms. Faoro and staff and stated that he is a frequent visitor to the center and that the state of Kentucky and the whole nation should be proud. He stated that the Artisan Center has further proved that Berea is the folk arts capital of Kentucky and is proud to have been a part of the legislation that enabled that. Representative Napier thanked Commerce Cabinet Secretary George Ward, the Tourism Committee, and Mr. Casebier for the wonderful job being done. Representative Napier stated that anything he could do to help them, he would be glad to do it.
Representative Palumbo asked if the calendar for January 2007 is available and if there is a site online to see upcoming Artisan Center events. Ms. Faoro stated that the schedule will be online soon. Representative Palumbo also stated that the hours [of operation] are seven days a week, twelve hours a day, but questioned if that meant 8:00 A.M. to 8:00 P.M. Ms. Faoro responded that the center is open to the public from 8:00 A.M. to 8:00 P.M. but cafe staff are there at 7:00 A.M. and janitors are there until 10:30 P.M. Representative Palumbo stated she has access to an old Loom. She asked if the Artisan Center needed another one. Ms. Faoro responded yes, if there was any room to store one.
Senator Harris stated that he has been to the Artisan Center and that it is impressive and is a great showcase for Kentucky arts and products. He asked what the Artisan Center annual budget is, how much the state contributed, and where they see the budget going in the next few years. Ms. Faoro responded that visitors have increased and because of their purchases, they have to some extent, been paying their way. However, as more restroom traffic has picked up, there has not been a corresponding increase in spending. As a result, it is becoming increasingly difficult to support the operation. According to Ms. Faoro, revenues support a little over 75% of operations. Ms. Faoro added that the center had approximately $300,000 available at the time the center was established that supplemented the budget each year. She stated that those funds are now exhausted.
Senator Harris asked how much the center will need on a yearly basis from the state. Ms. Faoro indicated a need for $500,000 a year.
Representative Hoffman stated that when he was in Tourism, he saw a presentation on the need for the Berea facility, and at the time the presentation used West Virginia's Tamarack Center as an example. He asked how the Artisan Center ranks compared to Tamarack. Ms. Faoro stated that by the end of the fifth year, The Artisan Center will reach the attendance that Tamarack had during the same period. She also stated that the function of both centers is somewhat different, but customers who have visited both centers like Kentucky's Artisan Center the best.
Representative Hoffman asked if the center has been positive for the other Berea merchants. She responded that there have been very positive responses from the merchant community.
Chairman Arnold asked if the Artisan Center was located off of I-75 and if it is considered a rest stop. Ms. Faoro responded in the affirmative for the location of the center and stated that it is not a rest stop, but a travel center that is open specific hours, and does not operate on a 24-hour basis. Chairman Arnold stated the reason he questioned the classification of the center was because if it was classified as a rest stop the legislature should have provided funds for the center. Chairman Arnold stated if it is strictly a travel and shopping center for information, education and retail, then he was just a little concerned on how expenses were being met such as paying employees, etc. Chairman Arnold extended his appreciation for the invitation to visit the Artisan Center and for the presentation.
With regard to the rest area, Representative Napier stated that a new interchange will be constructed north of Berea near the Bluegrass Ordinance. It is for Homeland Security and is going to tie Highway 52 to the facility and may be one reason the rest areas are being closed. Representative Napier further stated that the center is not a money loser because it brings people into Berea who are spending money and because of this, Berea is further developing the community.
Chairman Arnold then asked if Ms. Faoro ever sees the center as being self sufficient. Ms. Faoro responded that the center would have to offer more services and extend its of hours of operation to be able to support the facility.
Chairman Arnold introduced Lori Meadows, Executive Director of the Kentucky Arts Council. Todd Lowe, Chairman of the Arts Council, was also present. Chairman Arnold also recognized Secretary Ward who was in attendance. Ms. Meadows proceeded with her presentation.
Chairman Arnold asked if the 287 weeks of art education residencies represents instances where the council places someone in a school. Ms. Meadows answered in the affirmative and stated that the individuals are artists who work in connection with the school to develop partnership activities and work directly with the students to incorporate arts into the curriculum. Chairman Arnold asked if the council provides this service in every county in the state. Ms. Meadows responded that she does not have that information, adding that the program is about 17 years old. Chairman Arnold stated he would like to know if every county is being afforded the opportunity. Ms. Meadows indicated she would provide that information at a later date. She stated that the council is interested in receiving applications from the counties that don't currently apply to them for funding. Chairman Arnold asked if communities are aware of the availability of the funding. She responded that the council sends information out to all school systems and that the information is available on the agency website.
Chairman Arnold moved to approve the minutes of the last meeting. The motion was seconded by Senator Harris, and the minutes were approved.
Chairman Arnold introduced David Morgan, Executive Director of The Kentucky Heritage Council. Gayle Melvin, Chair of The Kentucky Heritage Council, was also introduced. Mr. Casebier expressed the great impact Mr. Morgan has had on the Heritage Council and congratulated him on his upcoming retirement. Mr. Morgan proceeded with his presentation. Gayle Melvin then spoke about the challenges that the Heritage Council faces.
Senator Harris asked if the state-imposed Kentucky Historic Preservation Tax Credit limit of $3 million is what was referred to in the presentation, and also asked if the Heritage Council is involved with funds designated for Renaissance Kentucky. Mr. Morgan responded in the affirmative, explaining that the Heritage Council works very closely with the Governor's Office for Local Development (GOLD) in selecting the projects, and administers the projects on their behalf. Senator Harris asked if there were limits on what could be upgraded on the interior of a home or commercial building on the historic registry, and how much leeway a person has in restoring a historic building. Mr. Morgan responded that there is a great deal of leeway and that the council refers to it as a rehabilitation as opposed to a restoration. He further stated that even with tax credits there is a great deal of leeway on what can be done. Senator Harris asked if the council makes a distinction between rehabilitation and restoration. Mr. Morgan responded yes, and that the trend is more toward rehabilitation. He explained that a person would restore a building for a museum but would rehabilitate a building for economic purposes. Senator Harris asked if both are eligible for the 20% or 30% tax credit depending on which category it falls into. Mr. Morgan replied in the affirmative.
Representative Hoffman thanked Mr. Morgan for his years of service.
Chairman Arnold stated that the Main Street Program is one of the top programs within the Kentucky Heritage Council. He asked if there was any limitation if more than one town within a county works together. Mr. Morgan stated that there are no limitations, and an idea is being tested to see if one manager can work in more than one community.
Chairman Arnold welcomed Steven Klein, President of the Kentucky Center for the Performing Arts and asked him to begin his presentation. Mr. Casebier introduced Mr. Klein and Chris Roberts and expressed his appreciation for their services. Mr. Klein proceeded with his presentation.
Representative Clark expressed his appreciation for Mr. Klein and the Kentucky Center for the Performing Arts. He stated that he hopes to secure some funding in the next session for the much needed maintenance issues.
Senator Harris asked if the Kentucky Center for the Performing Arts has been included in the past request for Louisville's funding. Mr. Klein indicated he did not know. Senator Harris further stated that funding is usually deferred to the regional representative, such as Jefferson County, to let the General Assembly know what the budget issues are. Representative Clark suggested that the Kentucky Center meet with each individual legislator from Jefferson county to explain the Center's needs.
Chairman Arnold stated that when the General Assembly returns to the budget session the committee will be happy to have them back to expand upon their needs.
Senator Kerr stated that when they talk about chaining things up because they are inoperable, it scares her because it reminds her of the situation in Lexington when the block of concrete from a bank parking lot fell on the pregnant lady. Senator Kerr stated she had also heard rumors that the opera and ballet were not financially secure and wanted to know if there was any truth to the rumor and if they would be able to stay. Mr. Klein stated that the crisis seems to be over, that the ballet and opera have terrific leadership, and the numbers of people coming to the performances have increased. He stated that the orchestra has a new contract and a new executive director. Finally, he indicated that the center is underwriting the organizations and does not charge market rental fees to the orchestra, opera or ballet.
Mr. Casebier stated that the funding requests are a priority of the Commerce Cabinet and that it is important to remember that the Kentucky Center, though located in Louisville, belongs to the whole state of Kentucky. He asked Chairman Arnold to remember that going into the budget session.
Chairman Arnold motioned to adjourn the meeting. The motion was seconded by Representative Clark. The meeting was adjourned at 11:30 A.M.