The3rd meeting of the Capital Planning Advisory Board was held on Friday, August 21, 2009, at 10:00 AM, in Room 169 of the Capitol Annex. Representative Melvin B. Henley, Chair, called the meeting to order, and the secretary called the roll.
LRC Staff:† Don Mullis, Shawn Bowen, and Jennifer Luttrell
Co-Chair Henley made a motion that the minutes of the July 7, 2009, meeting be approved with two amendments. He requested that the minutes reflect his recommendation to Murray State University that the ďConstruct New Breathitt Veterinary CenterĒ project (2010-2012 biennium, General Funds, Priority No. 6) be moved ahead of the ďConstruct Paducah Regional Campus FacilityĒ project (2010-12 biennium, General Funds, Priority No. 5) due to the possibility of federal funding for the Paducah facility. He also asked that the minutes reflect a recommendation that the existing Paducah campus facility be renovated. He said renovation of the building would cost approximately one half or less than $20 million and would provide more classroom space.
Co-Chair Henleyís motion to approve the minutes of the July 7, 2009, meeting was seconded by Mr. Hintze and approved by voice vote.
Co-Chair Henley asked Mr. Mullis to go over the informational items on the agenda.
Mr. Mullis explained that the first information item was a comprehensive list of agency maintenance pools approved in the last session, along with the amounts by agency, and the purposes for which they have been spent to date. Mr. Mullis then gave a brief overview of the remainder of the capital planning process.
Co-Chair Henley then asked Ms. Laurie Dudgeon, Director, Administrative Office of the Courts, to present the Judicial Branchís plan.
Ms. Dudgeon stated that the Judicial Branch is requesting one project in its 2010-2016 capital plan, the Telecommunication Equipment Replacement project (2010-12 Biennium, $1,894,000, General Funds). This project will entail installation of Voice Over Internet Protocol (VOIP) systems in every court system and will support the Administrative Office of the Courts (AOC) e-courts system. VOIP will allow Judicial Branch staff to log into a web-based application system, which would provide them with one statewide phone number. AOC staff will design and install this system.
Ms. Dudgeon said there are nine VOIP systems in place and 35 additional judicial centers will have VOIP systems. This will leave 84 systems to be installed. Jefferson County is one of the two extra large systems, and will be the most expensive to install. The branch is requesting $1.9 million for 30 systems in 2010-2012, $2.4 million for 32 systems in 2012-2014, and $1.8 million for 22 systems in 2014-2016. The need will be revised if new judicial centers are constructed. She said for the 2012-2018 Plan, AOC will request the VOIP system and a new case management system called the e-courts initiative that will include e-filing, to enhance access to the stateís court records.
Mr. Hintze asked if the new system was coordinated through the Commonwealth Office of Technology (COT). Ms. Dudgeon replied that AOC has worked in partnership with Homeland Security and Kentucky State Police (KSP) on the ewarrant system, which is in place in six counties.
Co-Chair Westwood asked if the money requested would be enough to complete the project. Ms. Dudgeon replied that there are recurring costs, but that the amount requested would be enough for the 30 systems requested.
Co-Chair Henley next asked Secretary J. Michael Brown to review the Justice and Public Safety Cabinetís plan.
Secretary Brown gave an overview of the Cabinetís needs, which included the construction of a medical examiner/lab. He explained that the current lab is currently located one room in a building on Barrett Avenue in Louisville. Commissioner Brewer of the Kentucky State Police noted that the medical examinerís equipment is antiquated and does meet the criminal justice systemís standards.
Representative Crimm asked if there is property available to build a new medical examiner lab. Secretary Brown responded affirmatively and said the site being considered has easy access from major roads and is invisible to public view with security already in place.
Secretary Brown then gave a presentation on the Kentucky State Police Academy facilities. Commissioner Brewer gave a brief history of the Academy and training facility. He said the Cabinet has purchased a 45,000 square foot building in Perimeter Park that will house all of the record-keeping and IT functions for KSP. The building is being remodeled now and should be ready in January 2010. Commissioner Brewer said rather than constructing a new facility at a cost of $30 million, the KSP facility located on Louisville Road in Frankfort could be remodeled at a cost of $4 to $6 million.
Senator Boswell asked if federal money from the Drug Enforcement Administration is available to help with this project. Commissioner Brewer stated that KSP has not received any money at this point. The money went to smaller local agencies nationwide. He added that they received approval for stimulus money to renovate the Perimeter Park building and the Louisville Road building, however, these funds are not sufficient. He said it is hard to get federal dollars for construction, as the government would rather put the money into equipment and programs.
Secretary Brown then gave a presentation on the Department of Corrections. The total population in custody is approximately 21,500 and another 39,000 who are on probation and parole. There are 13 state institutions within the Department of Corrections and three contracted private prisons. Secretary Brown said the electrical lines at the Kentucky State Reformatory needs to be upgraded because the prison has been experiencing electrical failures for the last year. He also stated that Northpoint Training Center needs to be renovated because it does not have enough room to house inmates.
Mr. True stated that 23 percent of all charges are drug charges, to which Secretary Brown replied that if you added all the drug related charges such as robbery for drugs that that number would be more like 70 - 80 percent.
Secretary Brown said he worked with Governor Beshear last year on the Criminal Justice Council to produce a series of recommendations that would improve the correctional system. He said he had also worked with legislators during this last session on legislation to improve the correctional system. He noted that they are also reviewing legislation that would address geriatric and medical parole.
Mr. True stated that the idea of paroling older people and putting them on Medicaid was proposed by Governor Carroll during his first budget cycle.
In response to a question from Mr. True regarding the correctional systemís mental health program, Secretary Brown stated that there are drug treatment, as well as drug diversion programs available. He said out of the 21,500 inmates currently incarcerated, all but 104 of them will be released in the future. He said the state needs to target dollars for substance abuse which in turn would reduce recidivism.
Mr. Mullis introduced Mr. Charlie Harman, Executive Director, Office of Budget and Administration, Education and Workforce Development Cabinet. Joining Mr. Harman at the table were Mr. Wayne Onkst, State Librarian, Department of Library and Archives; Shae Hopkins, Kentucky Educational Television; Gary Freeland, Educational Professional Standards Board; and Ann Riggs, CIO, and Brian Easton, Facilities Manager, Education and Workforce Development Cabinet.
Mr. Harman summarized the Cabinetís plan briefly. He pointed out that most projects are IT-related. The Cabinetís main priority is to maintain facilities, some of which are over fifty years old. The Online Certification Integration project for the Education Professional Standards Board will include online services to the public to review their certifications. It will give the educators the ability to renew their applications and collect fees online. Part of this system will include Integrated Voice Recognition System (IVR), which will run 24 hours a day. The next priority is the expansion of the Department of Library and Archives to create additional space. He said the HVAC needs to be updated in all the facilities.
Co-Chair Westwood asked if the work on the Library and Archives building would be a physical expansion on site. Mr. Harman said that the work will be on site, and will include a three-story building and a climate-controlled automated warehouse.
Mr. Hintze asked how many people would use the online certification system. Mr. Freeland replied that approximately 30,000 applications are processed annually.
Mr. Mullis introduced Hank List, Deputy Secretary, Energy and Environment Cabinet; Larry Bond, Deputy Secretary, Public Protection Cabinet; and Steven Estepp, Executive Assistant, Kentucky Horse Racing Commission.
Secretary List stated that the Mine Safety, Licensing & Mapping Application is important for safety in the coal mines and makes data available to the mining, oil, and gas industries. This project was started approximately seven years ago and it is important to keep this database going. The project will cost $965,000. He said the Cabinet is recycling for all administrative agencies, and the Cabinet is requesting a paper shredder at a cost of $285,000. He noted that the shredder generates revenue for the Cabinet. The cabinet is also requesting $4,000,000 for maintenance of the 73 state-owned dams and $1,185,000 for the maintenance of Cabinet-owned facilities. The Cabinet is requesting $6,200,000 to upgrade the Wildland Fire Suppression. He also pointed out that soils need to be replenished at the Morgan County Nursery and the John P. Rhody Nursery because the seedlings will not grow over a foot tall in the soil that is currently there.
Deputy Secretary Bond stated that the most important request for the Public Protection Cabinet is on behalf of the Kentucky Horse Racing Commission. The Commission needs a database that is able to collect accurate information such as attendance numbers and wagering totals.
Mr. Hintze asked if the race tracks report attendance to the Kentucky Horse Racing Commission. Mr. Estepp replied that the Commission does collect that information and the tracks pay an admission tax based on that information. He added that Turfway does not charge admission so they estimate how many people attend daily. The new program would keep track of that information.
Senator Boswell asked if racetrack licensing is under the Commissionís review. Mr. Estepp replied that the Commission licenses trainers and owners.
Mr. Mullis introduced representatives from the Tourism, Arts, and Heritage Cabinet: Marcheta Sparrow, Secretary, and Tim Pollard, Executive Director, Office of Finance.
Secretary Sparrow gave a brief history of each department and a summary of the Cabinetís priorities, which included the maintenance needs of the Department of Parks, Kentucky Horse Park, State Fair Board, Kentucky Historical Society, Kentucky Center for the Arts, Kentucky Artisans Center at Berea, Northern Kentucky Convention Center, Department of Fish and Wildlife Resources, the Secretary's Office, Eastern Kentucky Exposition Center, and the Frankfort Convention Center.
Mr. Hintze asked about the condition of the state park system. He noted that the Commonwealth has invested over $200,000,000 in the Department of Parks over the last 15 years to upgrade the golf courses and furnishings. Secretary Sparrow replied that the golf courses are in great shape and maintained well, but some of the parks need attention and need to develop a structure for continued and preventative maintenance.
In response to a question from Co-Chair Westwood, Secretary Sparrow said the Kentucky Artisans Center needs to be renovated because it has become a rest area for travelers. She said it was not originally constructed as a rest area, but this is a good opportunity to showcase the stateís arts. In response to another question from Co-Chair Westwood, Mr. Pollard replied that in 2009 the Transportation Cabinet provided $350,000 in road funds to pay personnel to run this facility and the $610,000 project would be in addition to what is provided for the maintenance of the facility.
In response to questions from Co-Chair Westwood about the temporary stadium being constructed at the Horse Park for the Alltech FEI World Equestrian Games, Secretary Sparrow replied that the Stadium is temporary and will be used only for the games. Afterwards, it will be deconstructed. She said they are now negotiating a lease with the World Equestrian Games for use of the stadium. The project is being funded with private funds, but since it is on state property it has to be reported.
Mr. True asked how much the state subsidizes the state park system other than capital expenditures. Secretary Sparrow replied that they receive $35 million. Mr. True asked if the Cabinet foresaw closing of that gap. Secretary Sparrow replied that they might reduce it, but not close it.
Mr. True asked how much the state subsidized the State Fair Board, to which Secretary Sparrow replied that they receive no money and that they rely on agency receipts. Mr. True asked if they pay for the service of the bonds and Mr. Hintze pointed out that the Fair Board is dependent on General Funds and that they pay cash for their maintenance pools.
Ms. Bowen introduced Shannon Morgan, Deputy Secretary, and Robin Kinney,
Executive Director, Office of Administrative Services, Finance and Administration Cabinet.
Secretary Morgan provided a basic overview of the Cabinetís priorities for the 2010-12 biennium, which included the Emergency Repair, Maintenance, & Replacement Fund costing $12,500,000, the Capital Construction and Equipment Purchase Contingency Fund costing $12,500,000, the Miscellaneous Maintenance Pool costing $8,000,000, the Statewide Deferred Maintenance Pool costing $12,500,000, and the Capitol and Capitol Annex Terrace Repairs project costing $2,518,000. He added that they are requesting money to continue the comprehensive tax system project which includes e-file for corporate and partnership returns and will eventually be used for individual tax returns. The Cabinet is also requesting money for the modernized front-end software rewrite, which will allow the tax returns that are not filed electronically to be scanned and imaged.
Mr. True asked how much rental space had been reduced in this current biennium.† Sam Ruth, Commissioner for Facilities and Support Services, Finance and Administration Cabinet, responded that after renovation, the old State Office Building increased occupancy from 800 to 1,100 employees and reduced leased space. Currently they are leasing 51 buildings and paying out about $11 million per year to third parties. Mr. True asked if they are planning to continue to reduce leased space, to which Secretary Morgan replied yes.
Mr. Hintze asked if the projects will be undertaken with restricted funds based on some set of assumptions about the cash flow to the Commonwealth Office of Technology (COT). Ms. Kinney replied that COT believes it can do these projects based on their rate schedule for the next biennium. The request is based on keeping a general status quo for rates.
Ms. Bowen introduced Janie Miller, Cabinet Secretary, Beth Jurek, Executive Director, Office of Policy and Budget, and Frank Lassiter, Executive Director, Office of Administrative and Technology Services, Cabinet for Family and Health Services.
Secretary Miller gave a brief history of the Cabinet and then turned the presentation over to Ms. Jurek to give an overview of the Cabinetís priorities, which included a maintenance pool costing $11,826,000, the replacement of Glasgow State Nursing Facility for $20,000,000, the MHDDAS Facility Information System Phase I costing $10,200,000, the renovation of a sprinkler system at Western State Hospital (WSH) costing $9,313,000, and an upgrade of the electrical and emergency power system at WSH costing $7,970,000.
Ms. Jurek said a lot of the Cabinetís equipment is outdated and they need to upgrade their network infrastructure to a more web-based environment known as the Kentucky Access, Accuracy, and Accountability Project (KAAAP). This project would benefit the County Attorneysí offices and the Friend of the Courtsí offices, which collect child support as contracted by the Cabinet to transfer payments to the citizens.
Representative Crimm asked if people were living in the condemned buildings at Hazelwood Nursing Home. Ms. Jurek stated that the Elk Building is not occupied, but the 101 Building is occupied. The Cabinet put the residential buildings at the top of the priority list for life safety issues.
In response to a question from Ms. Lassiter regarding construction scheduling of the projects, Ms. Jurek replied that the projects could be phased.
Mr. True asked about the status of the smaller facilities at Hazelwood. Secretary Miller replied that these buildings were being built to relocate patients and to separate those patients who have intensive care needs from the more mobile patients who have completely different needs.
Mr. True asked if the Western State Hospital patients are long-term patients. Ms. Jurek said she did not know, but she would get that information for the Board.
Mr. True asked if Medicaid finances these facilities. Secretary Miller replied that a portion is financed by Medicaid. Once a facility is designated by the state as an Institute for Mental Disease, it is covered by Medicaid. Mr. True asked what the mental health occupancy is now. Ms. Jurek stated that they have seen some increases, but it has stayed relatively constant in the psychiatric hospitals.
Mr. True added that he had some concerns about the lack of communication between the Justice Cabinet and the Cabinet for Health and Family Services because it seems the Cabinets have many opportunities to provide more services. Secretary Miller replied that she recognizes these opportunities, but that the mental health facilities have been affected by a lack of funding for the last ten years.
Mr. True asked if the Cabinetís partners, such as the community health centers, are going to be able to communicate through the KAAAP system. Ms. Jurek stated that would be Phase II of the project where the patient information could be electronically exchanged.
Mr. Hintze asked for a progress report on the relocation of the Eastern State Hospital. Secretary Miller replied that Fayette County has approved bonds to construct the facility and a construction manager has already been contracted to manage this project. The project is currently in Phase A, the design stage. Ms. Jurek added that October 1, 2009 is the completion date for the Design Phase and the new facility will meet Leadership, Energy and Environmental Design (LEED) requirements.
Co-Chair Henley introduced Nikki Jackson, Secretary, and Jill Anderson, Kentucky Human Resources Information System (KHRIS) Project Manager, Personnel Cabinet.
Secretary Jackson gave a brief history of the Personnel Cabinet and then Ms. Anderson explained the Cabinetís one requested project to enhance the Human Resource System. This new system, the Kentucky Human Resource Information System (KHRIS), will replace the legacy payroll and benefits systems, which are 28 years old. The project is planned for the 2012-2014 biennium and will cost $5,000,000. The Cabinet is working with the Office of State Budget Director and the Finance and Administration Cabinet to determine specific funding needs.
Ms. Lassiter asked what the expectation of this system is since technology changes so rapidly. Ms. Anderson stated that this system would eliminate and reduce some current outdated systems. The vendors say that this system would not need to be upgraded for ten years rather than every three years.
In response to a question from Ms. Lassiter about legacy costs, Ms. Anderson replied that the Cabinet would need to maintain access to the data. The resources to support the current systems would transfer into KHRIS.
Mr. True asked why there would be a reduction in scope and an increase in costs. Ms. Anderson stated it would reduce risk to the Commonwealth and allow them to better manage the pacing and sequencing of the roll-out to the agencies. She said the original costs were underestimated.
With the conclusion of the agency presentations, Ms. Bowen said the Boardís next two meetings were scheduled for September 18 and October 9 at 1 p.m. in the Capitol Annex.
There being no further business, the meeting was adjourned at 3:20pm.