Capital Planning Advisory Board


Minutes of the<MeetNo1> 1st Meeting

of the 2011 Calendar


<MeetMDY1> May 13, 2011


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Capital Planning Advisory Board was held on<Day> Friday,<MeetMDY2> May 13, 2011, at<MeetTime> 1:00 PM, in<Room> Room 169 of the Capitol Annex. Senator Jack Westwood, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jack Westwood, Co-Chair; Senator Paul Hornback, Representative Ron Crimm, David Buchta, Charles Byers, Carole Henderson, John Hicks, Ryan Keith, Mary Lassiter, Mark Overstreet, and Carol Palmore.


Guests testifying before the Board: Gene Fuqua, Chief of Staff; Donna Duncan, Commissioner, Department of Financial Incentives; and George Burgess, Executive Director, Office of Administrative Services, Economic Development Cabinet; Marcheta Sparrow, Cabinet Secretary and Tim Pollard, Executive Director, Office of Finance, Tourism, Arts, and Heritage Cabinet; Harold Workman, President and CEO, Kentucky State Fair Board; Tammy Branham, Executive Director, Office of Budgets and Fiscal Management, Tom Zawacki, Commissioner, Department of Vehicle Regulation; and Jack Morris, Executive Director, Facilities Support, Transportation Cabinet; Stephen Reeder, Executive Director, Kentucky River Authority; Dr. Robert Tarvin, Executive Director, School Facilities Construction Commission; and Tony Wilder, Commissioner, Department for Local Government.


LRC Staff: Shawn Bowen and Jennifer Luttrell


Approval of Minutes October 29, 2010

There was a motion made by Representative Crimm, seconded by Mr. Buchta and adopted by voice vote to approve the minutes of the October 29, 2010 meeting.


Welcome New Members

Chairman Westwood said since the Boardís last meeting in October 2010, three new members have been appointed. The Senate President appointed Senator Paul Hornback to fill the vacancy left by Senator David Boswell. The Speaker of the House appointed Carol Palmore to replace Laurel True, and the Governor appointed Ryan Keith to replace John Esham.


Overview of Capital Planning Process

Senator Westwood said the major responsibility of the Board every two years is the development of a statewide capital improvements plan. Before beginning the review of the six-year capital plans of the various agencies, he asked Ms. Bowen to provide an overview of the planning process.


Ms. Bowen briefly discussed the Boardís meeting schedule for development of the 2012-2018 statewide plan and the format for review of the agency plans at the upcoming meetings. The Board will meet monthly up until September. The last meeting in September will require members to vote upon the final draft of the 2012-2018 Statewide Capital Improvements Plan, including any policy and project recommendations agreed upon by members.


Summary Information on Certain Executive Branch Agency Plans

Ms. Bowen said included in membersí folders was a document listing various state agencies, boards, and cabinets that are not scheduled to testify before the Board. These agencies utilize restricted funds only or they do not have any capital project requests.


Consideration of Agency Plans

The first plan to be reviewed was for the Economic Development Cabinet. Representing the Cabinet were Mr. George Burgess and Ms. Donna Duncan. Mr. Burgess gave a brief overview of the Cabinetís capital plan and discussed four General Fund project requests for the Kentucky Economic Development Finance Authority, the High-Tech Construction and Investment Pools, the Economic Development Bond Program, and the Parking Garage Maintenance Pool.


In response to a question from Representative Crimm, Mr. Burgess stated that the Phoenix Parking Garage in downtown Lexington is not owned by the state. The Phoenix Garage, which was closed in May due to structural issues, is owned and operated by the Lexington-Fayette Urban County Government.


In response to a question from Chairman Westwood, Mr. Burgess responded that the Cabinet owns four parking garages: Lexington Financial Center Garage, Vine Street Parking Garage, Covington City Center Parking Garage, and Sullivan Parking Garage. The Cabinet initially owned six garages; however, the ones in Covington and Owensboro were sold. He added that private entities are interested in the other four state-owned garages and, if these garages were to be sold, it would eliminate the Cabinetís request for funding for the Parking Garage Maintenance pool.


In response to a question from Mr. Hicks, Ms. Duncan gave a brief history of the High-Tech Construction and Investment Pools and explained how the pools have evolved since the programís inception. She stated that initially funds were used for small business and university-related infrastructure projects, but funds are now being used for more specific knowledge-based, high-tech companies that have developed business plans with products, innovations, and patents.


The next plan to be reviewed was the Tourism, Arts and Heritage Cabinet (TAHC). Cabinet Secretary Sparrow and Mr. Tim Pollard gave a brief overview of the Cabinetís capital plan request. The agencies within TAHC submitting General Fund project requests included the Department of Parks, the Kentucky State Fair Board, the Kentucky Horse Park, the Kentucky Center for the Arts, the Kentucky Artisan Center, and the Frankfort Convention Center. Two other entities submitting General Fund project requests, the Northern Kentucky Convention Center and the Eastern Kentucky Exposition Center are, by statute, attached to the TAHC for administrative purposes only. Also discussed were project recommendations for the Department of Fish and Wildlife Resources, which is funded 100 percent with Restricted Fund sources.


In response to a question from Chairman Westwood, Mr. Workman replied that the closing of Kentucky Kingdom has impacted the stateís revenues significantly. As an example, he said youth conventions that book facilities in Louisville have had to find alternative venues for entertainment.


In response to another question from Chairman Westwood, Mr. Workman said the Fair Board is reviewing a proposal from the Kentucky Kingdom Redevelopment Company to reopen the park through a public/private partnership. The initial proposal calls for $50 million to reopen the park, with Kentucky Kingdom Redevelopment providing the initial $3 million and the Commonwealth of Kentucky providing $30 million. The Fair Board is working with the City of Louisville to develop sources for the remaining funding needed. The company is prepared to provide an additional $4 million if necessary. The plan to reopen Kentucky Kingdom in 2012 is based on the results of a study commissioned by the Fair Board, the Kentucky Kingdom Redevelopment Economic and Fiscal Impact Analysis. This study was accepted by the State Fair Board last year, and was completed by Economics Research Associates in November 2010.


The next plan to be reviewed was the Kentucky Transportation Cabinet. Representing the Cabinet were Ms. Tammy Branham, Mr. Tom Zawacki, and Mr. Jack Morris. The discussion highlighted the Cabinetís highest priority projects to be funded with General Funds and Road Funds. The Cabinetís plan focused on the maintenance and upkeep of its facilities statewide.


Mr. Zawacki then discussed the Flat Digitized License Plates project. This $1,250,000 Road Fund project includes the purchase of a digital printer, blanking, and finishing support equipment needed to transition to flat, digitized license plates.


In response to a question from Chairman Westwood, Mr. Zawacki stated that even with the purchase of new equipment, the license plates program would still be operated by the Department of Corrections. The inmates will learn the new technology necessary to operate the equipment.


In response to another question from Chairman Westwood, Ms. Branham replied that two airplanes, a 1975 Piper PA 31-350 (Navajo) Twin-Engine Fixed-Wing and a 1967 Cessna R172E/T-41 (Skyhawk) Single-Engine Fixed-Wing had recently been sold on E-bay.


In response to a question from Chairman Westwood, Ms. Branham replied that she was not aware that the Finance Cabinet had recently released a Request for Proposal (RFP) for construction of a hangar at the Capital City Airport, but she would follow-up on the question. The RFP was issued on behalf of the Department of Aviation.


In response to a question from Mr. Hicks, Mr. Morris said the Cabinet is working to update its storage facilities, and has started a schedule to replace storage buildings that were built in the 1950s and 1960s.


The next plan to be reviewed was the School Facilities Construction Commission (SFCC). Representing SFCC was Dr. Bob Tarvin. Dr. Tarvin discussed the history of SFCC and then gave a brief overview of their capital plan. The two major components of SFCCís plan are targeted urgent needs funding and SFCC bond funding.


In response to a question from Representative Crimm, Dr. Tarvin stated that SFCC does not actually see the facilities for which funding is being requested and/or approved. When a district puts together a local facility plan, the local group hires an architect to assist in the development of the plan and review of the facilities. He added that a study of school facilities statewide is currently being conducted for the Kentucky Department of Education. An outside third-party firm, consisting of ten teams, will physically assess these facilities based on a set of criteria to develop consistency across the state for evaluating school facilities. That study, known as the Facility Inventory and Categorization System, will involve 486 buildings.


Representative Crimm requested that Dr. Tarvin provide additional information as to who owns the Bellwood Presbyterian Childrenís Home in Anchorage and who is responsible for the maintenance of the facility. Dr. Tarvin replied that he would follow-up with the requested information.


In response to a question from Chairman Westwood, Mr. Tarvin responded that high growth districts, up until 2008, had the opportunity to pass two local nickels. If they passed two local nickels, the first one was equalized. However, in 2008, the legislature took that authority away. Now, high growth districts have no authority or opportunity for additional funds. In 2008, schools in the Base Realignment and Closure (BRAC) district were provided with an additional nickel for northern Kentucky, Elizabethtown and Fort Knox. The concentration of growth is in northern Kentucky, Oldham County, and Warren County.


The next plan to be reviewed was the Kentucky River Authority. Mr. Steve Reeder gave a brief overview of the 2012-2018 Capital Plan for the Kentucky River Authority. Included within the discussion were the highest priority projects to be funded with a combination of General Funds and Agency Bonds.


In response to a question from Chairman Westwood, Mr. Reeder stated that even though the project scope for the renovation of Locks 1, 2, 3, and 4 has decreased, the repairs are not patchwork fixes. The repairs will last for at least ten years or more due to the high quality of the timbers being used.


In response to a question from Mr. Hicks, Mr. Reeder replied that the Tier Two fee is 30 cents per month to cover Dam 9 now and will need to be increased to cover expenses. Tier II fees are assessed on main stem withdrawals and used solely for capital projects.


The next plan to be reviewed was the Department for Local Government. Commissioner Tony Wilder gave a brief overview of the 2012-2018 Capital Plan for the agency. The Department is requesting grant funds for three programs it administers: the Flood Control Matching Program, the Renaissance on Main Program, and the Community Enhancement Program.


In response to a question from Chairman Westwood, Mr. Wilder replied that flood control matching funds may be used for any flood-related federal government grant or loan program requiring local matching funds. The local match required is 12 percent and some communities are not able to provide this amount.


Representative Crimm commended the Department for the Renaissance on Main program. Mr. Wilder added that the program has changed the landscape for many cities across the state.


Board Discussion of Planning Issues

Chairman Westwood stated that in the past, the practice has been for the statewide plan to include both policy and project recommendations. He said based on what has been heard and discussed today, some members may have already identified items or policy issues for consideration and may want to follow-up with staff.



Schedule of Future Meetings

Senator Westwood stated that the next meeting is scheduled for Friday, June 17 starting at 9:00 AM for a full day session.



With there being no further business to discuss, the meeting was adjourned at 3:06 PM.