Thesecond meeting of the Capital Planning Advisory Board of the 2001 calendar year was held on Tuesday, July 24, 2001, at 9:00 AM, and Wednesday, July 25, 2001 at 9:00 AM in Meeting Room A, Council on Postsecondary Education. Representative Perry Clark, Chair, called the meeting to order, and the secretary called the roll.
Members:Representative Perry Clark, Chair; Bill Hintze, Vice Chair; Senator Albert Robinson; Representative Brian Crall; Susan Clary; Debra Gabbard (representing Secretary James Codell); Lou Karibo; Cicely Jaracz Lambert; Glenn Mitchell; Norma Northern; Laurel True; and Garlan Vanhook.
Members of the General Assembly: Representatives Adrian Arnold, Eddie Ballard, Carolyn Belcher, Larry Belcher, Jim Callahan, James Comer, Jesse Crenshaw, Jon Draud, Bob Heleringer, Charlie Hoffman, Paul Marcotte, Harry Moberly, Russ Mobley, Rick Nelson, Fred Nesler, Tanya Pullin, Jon David Reinhardt, Charles Siler, Dottie Sims, Brandon Smith, Kathy Stein, Jim Stewart, Jim Thompson, Tommy Turner, Johnnie Turner, Ken Upchurch, and Susan Westrom. Senators Walter Blevins, David Boswell, Tom Buford, Paul Herron, Alice Kerr, Marshall Long, Ed Miller, Gerald Neal, Joey Pendleton, Dick Roeding, Richie Sanders, Dan Seum, Dale Shrout, Katie Stine, Elizabeth Tori and Johnny Ray Turner.
Guests: Secretary Viola Miller and Terry Thompson, Cabinet for Families and Children; Acting Secretary Marcia Morgan, Cabinet for Health Services; Charles Harman and Brian Easton, Workforce Development Cabinet; Secretary James Bickford, Commissioner Hugh Archer, Commissioner Bob Logan, Jack Keller, and Melanie Bailey, Natural Resources and Environmental Protection Cabinet; Secretary Kevin Flanery and Commissioner Armond Russ, Finance and Administration Cabinet; Debra Gabbard and Jim Ramsey, Transportation Cabinet; Secretary Ann Latta, John Nicholson, and Harold Workman, Tourism Development Cabinet; Secretary Marlene Helm, Kevin Graffagnino, and Sally Hamilton, Education, Arts and Humanities Cabinet; Larry Barker, Department for Military Affairs; BG Les Beavers, Department of Veterans' Affairs; Zig Grigalis, Commissioner Tom Campbell, Ken Dressman, Col. John Lile, Mike Hulettt, Ron Bishop, and Ken Schwendeman, Justice Cabinet; Secretary Dana Mayton, Revenue Cabinet; Secretary Carol Palmore, Personnel Cabinet; Commissioner Billy Ray Smith, Eddie Duvall, and Bill Burnett, Department of Agriculture; Commissioner Jody Lassiter, Department for Local Government; Roger Recktenwald, Kentucky Infrastructure Authority; Stephen Reeder and Don Morse, Kentucky River Authority; President Gary Ransdell and John Osborne, Western Kentucky University; President John Shumaker and Mike Curtin, University of Louisville; President James Votruba, Mike Baker, and Mary Paula Schuh, Northern Kentucky University; President Kern Alexander, Tom Denton, and Dewey Yeatts, Murray State University; President Ronald Eaglin, Beth Patrick, and Teresa Johnson, Morehead State University; President G. W. Reid, Kenneth Chatman, and Joe Gronefeld, Kentucky State University; President Michael McCall and Ken Walker, Kentucky Community and Technical College System; and Interim President Gene Hughes, Doug Whitlock, and Jim Clark, Eastern Kentucky University.
LRC Staff: Pat Ingram, Committee Staff Administrator; Mary Lynn Collins; Nancy Osborne, and Dawn Groves.
Chairman Clark said this is the Board’s traditional two-day meeting at which it reviews all of the six-year plans that have been submitted by the agencies. Before November 1, the Board will produce a six-year statewide capital improvements plan which includes both project and policy recommendations on the state’s capital needs and issues.
Chairman Clark also welcomed the members of the General Assembly in attendance, and thanked the Council on Postsecondary Education (CPE) for allowing the Board to use its facilities for the meeting. Angela Martin, CPE Vice President for Finance, was introduced and welcomed the Board to the Council’s offices.
At Chairman Clark’s request, CPAB Staff Administrator Pat Ingram reviewed the materials provided behind the “Overview” tab in the members’ notebooks – including the timeline for the 2002-2008 capital planning process, changes since the last planning process, and the organization and content of the agency plans. She also referenced several trends in the plans that cut across agency and cabinet lines. They include the submission of several previously-authorized projects for which additional funding is being proposed, several agencies that are seeking authorization to do energy savings performance contracting, several projects that involve collaborative arrangements among agencies or postsecondary education institutions, projects (particularly in postsecondary education) being undertaken using approaches that are outside of the usual state capital construction process, and continuing difficulty in applying the existing definition of an information technology “system.” Finally, Ms. Ingram reviewed the material provided in the members’ notebooks for each agency plan and noted that materials for agencies that had no projects proposed for the 2002-2008 planning period were consolidated under the “Other Plans” tab.
Chairman Clark asked Ms. Ingram to proceed to the review of the agency plans. In each instance (unless otherwise noted), a CPAB review of the agency’s programs, facilities, and current projects, as provided in the Staff Analysis and Comments document, was followed by a presentation from an agency representative and questions from the Board.
Cabinet for Families and Children (CFC) – Secretary Viola Miller and Department for Facilities Management (DFM) Commissioner Armond Russ addressed the Board. Secretary Miller said the Cabinet has made progress in upgrading its space pursuant to the Workforce Improvement Project authorized in the 2000-02 budget and with the help of the Finance and Administration Cabinet. To enhance service delivery and efficiency, they are also trying to combine staff within a county into a single office. Secretary Miller said a lot of space is used for records storage, and the Document Information Management System proposed for 2002-04 would reduce the amount of paper and provide for better use of the available space. She said the Cabinet is also working very closely with the Finance Cabinet to transition the five CFC office facilities to the Department for Facilities Management by July 2002.
In response to Mr. True’s question, Secretary Miller said the Cabinet continues to work on tying together all of the human resource information systems so there can be a single point of entry for client data, but some issues remain to be resolved.
Mr. Hintze asked about the eventual fate of CFC’s Ashland Complex. Commissioner Russ said there are two problems with that facility. It is a former TB hospital that has been converted for use as an office building and would be very expensive to renovate. Additionally, it is too small for CFC and they are seeking other space. There is not currently another state tenant for the building. As of now, no final decisions have been made about the building, but it is Facilities Management’s opinion that it needs to be closed.
Cabinet for Health Services (CHS) – Acting Secretary Marcia Morgan said that, in the past two years, with the help of this Board, the Governor’s Office, and the Finance and Administration Cabinet, CHS has made significant progress in developing a plan and in maintaining the infrastructure of its facilities. She said the 2002-2008 capital plan emphasizes the timely maintenance of hospitals and facilities to protect the state’s infrastructure investment, the continuation of high quality treatment areas and programs for all individuals, flexibility in addressing emergency situations and licensure issues that may affect patient health and safety, and greater statewide accessibility to pertinent health care and aging services data.
Referencing a handout that had been distributed to members, Secretary Morgan reviewed the individual projects listed in the Cabinet’s plan. She said the feasibility study conducted by Luckett and Farley in 1999 had guided the projects proposed for the psychiatric hospitals. Due to budget constraints, Secretary Morgan said they had been unable to proceed with a similar study for the Intermediate Care Facilities for the Mentally Retarded (ICF/MRs), but those facilities were built in the last 25 or 30 years, and their needs are more in the area of routine maintenance than in replacement.
Secretary Morgan said CHS is also doing a cost-benefit analysis with regard to leasing space at the Veterans Affairs (VA) Medical Center in Fayette County to replace the Eastern State Hospital (ESH). ESH was designed for 1,000 patients, but now houses approximately 150 patients daily. Because it does not meet compliance standards, ESH has been granted various Licensure and Regulation waivers. Available space is leased out for offices, but they have high utility costs and lack basic amenities such as water coolers.
Responding to questions from Mr. True, Secretary Morgan said there are no plans for the state to develop more facilities to provide long-term care services. She also said the proposed Aging Client Tracking and Reporting System would be available for hospitals to use.
Several questions were asked about the possible lease of VA Medical Center space to replace ESH, and whether the state would then have the first call on purchasing the facility if it became available. Commissioner Russ said the VA is reducing the number of beds it has throughout the United States, but is not currently interested in closing the Lexington facility or selling it to the state. Secretary Morgan said the VA space was recently renovated and meets all requirements of the Joint Commission for Accreditation of Healthcare Organizations (JCAHO). There is a potential for shared patient care and services (e.g., cafeteria, maintenance, pharmacy), and to utilize the relationship between the VA and the University of Kentucky for some unique programming. She said the question of whether the VA would give the state the first opportunity to purchase the facility is a major issue in the discussions and that Department for Facilities Management and Division of Real Properties had been an invaluable help in the negotiations.
Should funding be available, Mr. Hintze asked if the ICF/MR study could be completed in time to be used in the upcoming budget process. Secretary Morgan said the psychiatric hospital study in 1999 was initiated in June and completed in November. She said that study had been very useful, and a similar study for the ICF/MRs would be beneficial not only for the Cabinet but also to policymakers who must make decisions on funding requests.
Mr. Hintze asked about the timeline for transferring ESH operations to the VA facility and what would then happen to the ESH buildings. Secretary Morgan said such a transfer would be done over a week to 10-day period. She said the current plan is to do the repairs necessary to upgrade the psychiatric hospital properties so that they can be transferred to the Department for Facilities Management. Relative to the long-range use of the ESH property, Commissioner Russ said the Department of Juvenile Justice is interested in the area now occupied by the Re-ed facilities which the Cabinet for Families and Children will be closing this summer. Other tenants in the ESH buildings are already beginning to relocate. If the property is transferred to DFM, some of the smaller out buildings would be demolished, and an effort would be made to find another state tenant for the property. Improvements to make the facilities usable (e.g., as offices) would be expensive.
In response to Chairman Clark’s question, Secretary Morgan confirmed that there are no longer any plans to close the Bingham Building at Central State Hospital.
Cabinet for Workforce Development – Charles Harman, Executive Director of the Cabinet’s Budget Office, and Facilities Manager Brian Easton, described the projects listed in the Cabinet’s plan and reported on the Department for Employment Services (DES) Facility Replacement and Renovation Program that was authorized in the 2000-02 budget. Mr. Easton said the Cabinet intends to apply proceeds from the sale of five DES state office buildings to the renovation of the Louisville building ($3.4 million) so that vacant space there can be leased to generate an income stream for the Cabinet. The following buildings have been or are to be sold - Frankfort ($800,000), Elizabethtown ($165,000), Maysville (to be sold this summer when DES relocates to space leased from the City), Winchester (to be sold when the new state office building is completed), and Lexington (to be sold when DES moves into the Mayor’s Training Center upon its completion).
In response to Chairman Clark’s question, Mr. Easton said the Cabinet will ask for the Replacement and Renovation Program to be reauthorized in the 2002-04 budget.
Mr. Hintze asked about long-range plans for the Cabinet’s other buildings. Mr. Harman said they have met with Commissioner Russ about DFM taking over some of the buildings, but the Workforce Development Cabinet appears to be on the list behind some other agencies. Federal funds were involved in the initial construction of the buildings and issues about the resulting federal equity complicate capital and financial planning.
Mr. Hintze also asked for a status report on the new Winchester state office building that had been authorized for the DFM in the 1998-2000 budget. Commissioner Russ said the community initially wanted to rehabilitate a downtown building, but that was not feasible. Property on which to construct a building has been identified downtown, but the state has been unable to acquire it at a reasonable price, and they are now evaluating other potential sites. A lot of planning relative to the design of the building has already been completed.
Natural Resources and Environmental Protection Cabinet – Secretary Bickford reviewed the projects submitted in the Cabinet’s plan, then responded to members’ questions. Relative to questions about the proposed new (replacement) tree nursery, Cabinet officials said it would generate about $250,000 - $350,000 annually and would probably be located in the Green River Basin, but a specific site has not been identified.
In response to questions about the deep well-monitoring system proposed for Maxey Flats, Secretary Bickford said the state will have sole responsibility for this site in September 2002 under a 1996 Federal Consent Decree. Initially, it was believed that because of the rock structure in the area, water would not migrate off site. Further studies have indicated that there is potential off-site migration, and this equipment is intended to detect the movement of radioactive material before it reaches downstream property owners.
Chairman Clark noted the numerous Frankfort facilities occupied by the Cabinet that the Board had toured during its last meeting, and asked whether there was any way to consolidate or relocate now, rather than waiting for a new state office building. Secretary Bickford said there are problems coordinating activities because some of the current offices are far apart, but they cannot find a place large enough in which to relocate.
Finance and Administration Cabinet – Secretary Kevin Flanery, accompanied by Commissioner Armond Russ, reviewed the materials that were distributed to members including a chart showing the construction sequencing for the major Frankfort office building projects that are proposed (new construction and renovation).
In response to Representative Crall’s questions, Secretary Flanery said he could provide a rendering of the master plan for the Capital Campus. Relative to cost projections, a lot of states have been renovating their Capitols and Kentucky has looked at those costs as well as the Master Plan prepared with funding from the 1998-2000 budget; Secretary Flanery and Commissioner Russ said they are comfortable with the $215 million figure being reported as the total project cost. The cost per square foot for the new Executive Office Building is high because of the desire to have a stone facade that will fit with the other buildings on the Capitol Campus. Secretary Flanery noted that in doing a similar project, Utah constructed a building that did not match its campus, and it was later removed.
In response to Mr. Hintze’s question, Secretary Flanery confirmed that the three Capitol-campus related projects listed as priorities number four, five and six for 2002-04 need to proceed in tandem. They are not discreet projects to pick and choose among.
Mr. Hintze noted that much of the funding provided previously for renovation of the State Office Building had been transferred for construction of the new Transportation Cabinet Office Building and asked if anything that resulted from the initial funding was still usable for the State Office Building renovation project as proposed in this plan. Secretary Flanery said some of the programming was usable in conjunction with design of the Transportation Cabinet Office Building. Commissioner Russ said much of the plan regarding the structural renovation work in the State Office Building will also still be usable. He noted that the $8 million proposed for 2002-04 is not just for design, but also includes amounts for some demolition and to connect to the new central utilities plant.
Mr. True asked several questions about the state office building feasibility study. Secretary Flanery said they are finalizing the report and want to share it as soon as possible. It will look at renting compared to alternatives that do not require an appropriation or bonding authority from the General Assembly. It will also look at variations such as three 100,000 square foot facilities instead of a single 300,000 square foot building.
Transportation Cabinet - Debra Gabbard, Executive Director of the Office of Policy and Budget, listed the priorities in the Cabinet’s plan. She then explained the status of the Kentucky Vehicle Information System (KVIS) project, which was intended to replace the 20-year-old AVIS system. KVIS was developed using amounts from EMPOWER Kentucky and from the Road Fund, but Secretary Codell stopped the project four months ago due to an ongoing operating cost estimated at $12 million. Subsequently, the vendor working on development has said it could provide the system at a much lower cost if it is outsourced to them rather than being done in-house. The outsourcing would involve providing hardware (computer terminals in the offices of the county clerks and PVAs) as well as support for the system. Ms. Gabbard said a recommendation would be forthcoming fairly soon from the Governor’s Office for Technology relative to whether or not to continue with the project. Mr. Mitchell asked whether any of the improvements identified in the EMPOWER project had been implemented in the existing AVIS system. Jim Ramsey, Executive Director of the Cabinet’s Office of Technology, said cash drawer functionality has been provided for nine counties but is now on hold pending a final decision on KVIS.
Responding to questions from Mr. True and Mr. Mitchell about the proposed Statewide Transportation Operations Center, Ms. Gabbard said it would serve the Central Kentucky area including Louisville. (ARTIMIS, which was a joint project between the Ohio Department of Transportation and Kentucky, serves the Cincinnati/Northern Kentucky area.) It will incorporate existing activities regarding snow and ice emergency coordination and vehicle enforcement, as well as other new functions.
Kentucky Lottery Corporation (KLC) – There was no discussion of the KLC plan following the presentation of the CPAB Staff Analysis and Comments.
After a lunch break, Chairman Clark called the meeting back to order at 1:00 PM.
Judicial Branch – Cicely Jaracz Lambert, Director of the Administrative Office of the Courts (AOC), and Garlan Vanhook, General Manager of Facilities at AOC, presented the Judicial Branch plan. Ms. Lambert explained the assessment, evaluation and prioritization process that was used to develop the 2002-2008 plan. They then presented a slide show of pictures of the 21 priorities listed for 2002-04. (A printed copy was distributed to the members.)
Mr. True asked how funding for the maintenance of courthouses is handled. He said many of the problems reflected in the slides appear to be related to lack of management and maintenance, not a lack of space. Mr. Vanhook said AOC pays its pro rata share of maintenance costs based on its percentage of occupancy of the building. When a specific project needs to be done, the county is responsible for handling it then AOC pays the pro rata share of the cost. Mr. Vanhook said for existing buildings, AOC can reduce the amount reimbursed for maintenance but cannot require the county to repair the building. However, for projects undertaken pursuant to House Bill 734, enacted by the 2002 General Assembly, if a county is not using the maintenance dollars appropriately, AOC will be able to withhold those amounts from the county reimbursement and do the needed maintenance itself in order to protect the state’s investment in the buildings. In response to Senator Robinson’s question about what data are used to determine court facilities needs, Mr. Vanhook said it is a combination of census and caseload data.
Mr. Hintze said while some of the issues such as those raised by Mr. True have not yet been resolved, enormous steps have been taken to address previous problems with the planning and construction of court facilities. He said the lengthy list in the current plan is the result of having the first comprehensive inventory of needs. He noted that Kentucky has made more investment in courthouses than any other segment of the capital budget in the past six years. While the court system was changed in 1976, the effort to address facilities for the new system did not begin until 1996. Mr. Hintze also noted that new facilities are usually being constructed for the courts, such that the state is vacating the existing courthouses and leaving their needs to be addressed by local governments. He said while this is not an issue within the Board’s purview, it should not go unnoticed. Mr. Hintze also said that while great improvements have been made, there are still issues to address with regard to the courthouses. The bond rating agencies have taken note of Kentucky’s large investment in county courthouses, as they look nationally at how states are providing capital assistance for what were previously local responsibilities. Finally relative to Mr. True’s comments, Mr. Hintze said the Board should probably periodically look at the issue of compliance with the agreements that are being put in place concerning maintenance of the new facilities.
Responding to Mr. True’s question, Mr. Vanhook said AOC wants to follow a policy of having 100% court facilities in the future. Chairman Clark asked whether there had been any resistance to this from the counties. Mr. Vanhook said most local officials recognize the benefits of having additional jobs while construction is underway and then owning the facility after the debt is retired.
Representative Crall asked whether there has been any effort to save money by standardizing the design of the facilities. Mr. Vanhook said a design guide is being developed that will establish standards (e.g., for finishes) for all facilities based on the AOC needs.
Tourism Development Cabinet – Secretary Ann Latta said that in order to be competitive with other states it is essential that Kentucky’s tourism infrastructure be upgraded, improved and well maintained and that new attractions come on line. She then described the priorities of each agency within the Cabinet that had submitted a capital plan. She said the Department of Parks’ plan includes not only renovation, but also funding for development including conference centers and golf courses. A new arena is needed by the Kentucky Horse Park to compete with new equestrian facilities being built in surrounding states and to offer more diversified shows. The highest priority of the Kentucky State Fair Board is to construct a new South Wing C and renovate the existing East Wing and East Hall at the Kentucky Fair and Exposition Center (KFEC).
Chairman Clark asked how the Cabinet would implement the statutory language that allows the Berea Artisan’s Center to set aside facility-generated revenues in a reserve for future capital needs. Secretary Latta said the Center hopes to be self-supporting in a few years and will put aside some funds for maintenance if that is required. However, one reason for constructing such facilities is the economic impact to the community, and sometimes they cannot be both self supporting and have that economic impact.
Mr. Hintze asked for an update on the $102 million expansion at the KFEC. Mr. Harold Workman, President and CEO of the State Fair Board, said construction documents for the expansion phase of the project, which were funded in the 2000-02 budget, are expected to be complete in the next 30 to 45 days. The last expansions at the KFEC were in 1992 (South Wing B) and 1990 (South Wing A). Having a total of 690,000 square feet of Class A space (high bay, column free, utilities in the floor) will enable Louisville to compete with other cities that have had major expansions or built new convention centers. Mr. Hintze asked if the KFEC and the Kentucky International Convention Center (KICC) downtown serve different groups. Mr. Workman said the facilities do serve different groups. In the first year after renovation and expansion of the KICC, they booked more than double the amount of the expected increase in business.
Education, Arts and Humanities Cabinet – Secretary Marlene Helm reviewed the results of the recently completed study to determine a state strategy for records archival and storage. One recommendation suggested using mobile compact shelving, which then prompted a building capacity study of the current Library and Archives facility. Four of the five options presented in the building capacity study involved retrofitting the current facility. After considering the cost, disruption of services, security issues and timing, the Kentucky Department for Libraries and Archives decided on the fifth option – construction of a building addition. (Note: This change had not yet been incorporated into the 2002-2008 plan as submitted by the Cabinet.)
Secretary Helm then reviewed other priorities in the Cabinet plan which included Phase II of the previously-approved renovation project for the Kentucky Center for the Arts (KCA), rebuilding the master control and production infrastructure for digital program development at Kentucky Educational Television (KET), a new tractor for the Kentucky Historical Society’s (KHS) Historymobile, replacement of the cameras used by KET for legislative coverage, and casework to protect the portraits of the Governors at the Kentucky History Center.
Mr. Hintze asked whether the KET project relative to digitalization is to address the federal requirement that stations be able to broadcast in a digital format by May 2003 for which a substantial investment was made in the 2000-02 budget, or if this is the next step beyond that. Sally Hamilton, KET Deputy Executive Director for Administration and Support, said the 2000-02 funding allowed KET to meet the May 2003 deadline and thus avoid any licensing problems.
Representative Crall asked whether it might not be less expensive to hire out transporting the Historymobile rather than purchasing a new tractor for that purpose. KHS Director Kevin Graffagnino said the driver is well trained in Kentucky history and does a lot of educational work.
Department of Education – The Department did not make a presentation following the CPAB overview of the Staff Analysis and Comments, but Tom Engstrom, Director of Administrative Services, was available to respond to questions. Mr. Hintze noted that the Department’s plan is really a major maintenance request for the Kentucky School for the Blind (KSB), Kentucky School for the Deaf (KSD), and FFA Leadership Training Center. This is consistent with CPAB’s emphasis over the years that agencies need to take care of what they have so that serious problems, which generally get more attention, do not arise.
Mr. True noted that enrollment in KSD’s full-time program is declining while it is increasing for the summer programs. He asked why this was the case and about enrollment projections for the School. Mr. Engstrom said he works with facilities, rather than programs, but would get back to the Board with that information.
Economic Development Cabinet – The Cabinet did not make a presentation following the CPAB overview of the Staff Analysis and Comments, but Jerry Frantz, Commissioner of the Department of Administration and Support, was available to respond to questions. Mr. True asked whether any of the funds to be allocated through the new high tech pools would be recaptured through paybacks. Mr. Hintze said there are no provisions for that. He explained that the pools were funded from one-time money in 2000-02 and no funding has been identified at this time to renew them in future biennia. Mr. Frantz added that funds from the two pools can be either loans or grants based on recommendations by the Office of the New Economy Commissioner and approval by the Economic Development Authority, as provided in House Bill 572.
School Facilities Construction Commission (SFCC) - The Commission did not make a presentation following the CPAB overview of the Staff Analysis and Comments, but Dr. Robert Tarvin, SFCC’s Executive Director, was available to respond to questions.
In response to Mr. Hintze’s questions, Dr. Tarvin said the unmet need peaked at a little over $3 billion and is down to $2.4 billion now; the number of facilities receiving a “5” rating (the “worst” rating on the scale used to assess facility condition) has declined from 126 to 76. It has been easier to address the big needs due to the recent authorizations allowing offerings to accumulate over a four or six year period.
Mr. Vanhook said the SFCC and the Department of Education have done a good job of prioritizing and addressing the needs, as well as requiring accountability.
Department for Military Affairs – Larry Barker, Executive Director of the Department’s Office of Management and Administration, reviewed five projects in the Department’s plan. They were expansion of the emergency operations center at the Boone National Guard Center, armories for Morehead and Maysville, the next phase of the new radio system, and renovation of the Old State Arsenal in Frankfort.
Ms. Clary said it would be important for the Department to work with the Department of Juvenile Justice relative to the establishment of new sites for the Youth Challenge Program.
In response to Mr. True’s questions, Mr. Barker said that despite funding 75% of the construction costs, the federal government holds no equity in the armories, and when appropriate they are disposed of through the surplus property process used by all state agencies. Mr. Hintze explained that capital construction statutes require that if property acquired with state capital construction funds is sold, the proceeds are returned to the state treasury. Therefore, some state agencies and universities elect to lease out property rather than dispose of it. He cited the examples of the University of Kentucky’s Coldstream Research Farm and the University of Louisville’s Shelby Campus.
Department for Veterans’ Affairs – General Les Beavers, Commissioner of the Department, said the two veterans’ nursing homes currently under construction will be open early next year. He said these facilities have adequate specialty care units for patients with Alzheimer’s Disease and severe dementia, which were not provided in the existing Thomson Hood facility in Wilmore. The Department’s top priority for 2002-04 is a renovation project to address this need, as pointed out in recent inspections, at the Thomson Hood Center. General Beavers also discussed the new veterans’ cemeteries that are also listed in the Department’s plan.
In response to Mr. Hintze’s question, General Beavers said the state would have to front the costs for the special care unit at Wilmore and then apply for reimbursement by the federal government. He said Kentucky may be competing with states seeking funding for their first veterans’ nursing homes, but renovations for health and safety issues move to the top of the priorities. If federal funds are not available, the Department would finance the project with agency funds.
There being no further discussion, the first day of the meeting was recessed at 3:30 PM.
The meeting reconvened at 9:00 AM on Wednesday, July 25. Chairman Clark noted that Commissioner Ed Roberts would be representing Board member Secretary James Codell.
Kentucky River Authority (KRA) – Executive Director Stephen Reeder said the approach being taken by the Authority is to renovate the dams to address structural problems, then to address the locks if the funding is available. He noted US Representative Ernie Fletcher has secured a federal authorization of $24 million for Dam 10. Dam 10 was transferred from the federal government to the state in 1996.
Mr. Reeder said Lexington’s concern is having an adequate water supply which would require raising some of the pools; however, that is dependent upon the environmental impact statements that have yet to be completed. KRA's goal is to use federal funds to stabilize Dam 10 and to add a maximum of four feet in order to increase water supply. It is also proposed that Dam 9 and Dam 11 be stabilized and increased by a maximum of four feet if environmentally and structurally possible. Current agency receipts would be sufficient to finance capital projects in the 2002-04 biennium. Water withdrawal fees would be raised in future biennia if all projects were undertaken and no other source of funding was available. Replying to Senator Robinson’s question, Mr. Reeder noted that the Kentucky River Basin touches all or a part of 42 counties and impacts about 780,000 people in the state.
In response to Mr. Mitchell’s questions, Mr. Reeder said KRA's water supply goal is to increase by the year 2020 the raw water available in order to survive a 1930's level drought. Based on modeling the Kentucky River, it was determined there is a nine billion gallon deficit that could be reduced by one-third through the installation of water valves in downstream locks (which has been accomplished), by one-third through conservation measures, and the final one-third or 3 billion gallon deficit would be eliminated by raising the three dams at 10, 9, and 11.
After breaking for lunch, Chairman Clark called the meeting back to order at 1:00 PM to review the plans of the postsecondary education institutions.
Western Kentucky University (WKU) – President Gary Ransdell said WKU does not plan to seek state funds for new buildings on the main campus over the next three biennia, but instead to focus on needed renovations. The first priority for 2002-04 is additional funds to renovate four buildings that comprise the WKU science complex. Other proposed renovations include Florence Schneider Hall (which would be converted from student housing to be the Kentucky Academy for Math and Science serving high school juniors and seniors), Van Meter Auditorium, Garrett Conference Center (which would become the center of WKU’s information technology programs), and Gordon Wilson Hall. President Ransdell said WKU’s top off-campus priority is a joint project with the Kentucky Community and Technical College System to construct a regional postsecondary education center in Owensboro. WKU also needs to convert its television station (WKYU) to meet a federal mandate for digital transmission by 2003. Finally, President Ransdell referenced a recently-completed study that identified $64 million in deferred maintenance needs of academic buildings at WKU.
President Ransdell also listed three other projects affecting the WKU physical plant. They are the transfer of dormitories to a new Student Life Foundation in 2000 so that entity (through the Warren County Fiscal Court) could issue bonds for their renovation, the proposed transfer of Diddle Arena to the City of Bowling Green who would then issue bonds for its renovation, and the conveyance of approximately 2.5 acres of property to be the site of the new Southern Kentucky Performing Arts Center.