Capital Planning Advisory Board


Minutes of the<MeetNo1> 3rd Meeting

of the 2013 Calendar


<MeetMDY1> July 17, 2013


Call to Order and Roll Call

The<MeetNo2> 3rd meeting of the Capital Planning Advisory Board was held on<Day> Wednesday,<MeetMDY2> July 17, 2013, at<MeetTime> 1:00 PM, in<Room> Room 169 of the Capitol Annex. Representative Terry Mills, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Stan Humphries, Co-Chair; Representative Terry Mills, Co-Chair; Senator Whitney Westerfield, Representative Tom Riner; Charles Byers, Carole Henderson, John Hicks, Sherron Jackson, Mary Lassiter, James W. Link, Mark Overstreet, and Carol Palmore.


Guests testifying before the Board: John Covington, Executive Director, and Denise Pitts, Treasurer, Kentucky Infrastructure Authority; Michael Jones, Executive Director, Office of Management and Administration, and Colonel Steven King, Construction and Facilities Management Officer, Kentucky Air National Guard, Department of Military Affairs; Gilda Hill, Executive Director, Office of Veterans Centers, and Judy Solomon, Internal Policy Analyst, Department of Veterans Affairs; Robin Kinney, Deputy Secretary, and Sam Ruth, Commissioner, Finance and Administration Cabinet; Dr. Leonard Peters, Cabinet Secretary, Energy and Environment Cabinet, and Jeff Derouen, Executive Director, Public Service Commission.


LRC Staff: Shawn Bowen, Josh Nacey, and Jennifer Luttrell.


Approval of Minutes

A motion to approve the minutes of the June 26, 2013, meeting was made by Ms. Lassiter, seconded by Mr. Link, and approved by voice vote.


Information Items

For informational purposes, the Department of Education provided executive summaries for facility assessment studies performed at the Kentucky School for the Blind and the Kentucky School for the Deaf. The information was submitted in response to a request from the board during the June meeting.


Review of Agency Capital Plans

The Capital Planning Advisory Board received testimony regarding five state agency capital plans. The testimony included discussion of capital construction, information technology, and equipment needs for the period 2014-2020. The following state agencies testified: Kentucky Infrastructure Authority, Department of Military Affairs, Department of Veterans Affairs, Finance and Administration Cabinet, and the Energy and Environment Cabinet.


In response to a question from Representative Mills, Mr. Covington replied that a 1.6 percent decrease in KIA’s budget represents a reduction in the amount of funding from the federal Environmental Protection Agency (EPA). The Drinking Water and the Clean Water state revolving fund programs are the largest single line item in EPA’s budget, and as EPA’s budget has been cut, it has cut those programs. The cuts impact KIA significantly because there is less funding available for loans.


Representative Mills asked how KIA uses its priority list to determine which projects receive loans. Mr. Covington said the priority list is part of the Intended Use Plan. KIA enters into a Memorandum of Agreement (MOA) with the Kentucky Division of Water (DOW). Pursuant to the MOA, the Division of Water is the primary agency with regard to drinking water and is responsible for compiling the drinking water, or Fund F, priority list.


For drinking water projects that have requested funding, DOW reviews those projects based upon criteria set forth in the federal Safe Drinking Water Act. DOW then ranks those projects on a priority list using a point scale based on the federal criteria. The priority list is provided to KIA, and projects are invited to apply based on their ranking on the priority list. Only Fund F applicants are invited in order of priority, this is not the case with Fund A, or Clean Water Act, projects. [The Clean Water Act deals with sewer systems.]


With regard to Clean Water Act projects, DOW also evaluates projects based on the criteria in the federal act and provides KIA with a priority list. KIA attempts to fund the most important environmental projects on the list, which would be those with the highest rankings. Projects can be bypassed if they are not ready to proceed. KIA wants to ensure that money is spent within the funding cycle.


In response to questions from Senator Humphries, Mr. Covington stated that KIA began funding broadband projects in 2006. A new section of KRS Chapter 224A was passed in 2006 that changed the definition of “eligible projects” so that broadband deployment projects could receive funding. KIA has made it known that these funds are available, but it does not actively advertise. Projects are funded on a first come first serve basis. KIA has $9 million potentially to fund any other type of project other than water or sewer. There are limited funds available and broadband projects can be expensive.


In response to a question from Senator Humphries, Mr. Covington said KIA estimates that between 92 to 95 percent of Kentuckians have access to potable water. The percentage of Kentuckians with access to potable water is calculated by correlating the water lines with highway rights-of-way. KIA does not count whether residents actually have potable water, instead it examines whether water is available. KIA has considerable information about the existing drinking water infrastructure in the state, including the location of drinking water lines.


In reply to a question from Representative Mills, Mr. Covington said KIA is not able to provide funding to wireless service providers and is only able to fund governmental projects.


In response to a question from Representative Mills, Mr. Jones replied that many of the Department of Military Affairs’ files are still on microfilm. He said the use of microfilm is outdated, and the department is working with the Department of Libraries and Archives to eliminate older technology.


In response to a question from Representative Mills, regarding the implementation of the community living concept into Department of Veterans Affairs’ nursing homes, Ms. Hill stated that as new construction is built in the nursing home industry, construction companies are implementing this design concept into their projects. The concept is a cultural change that is occurring across the nation because the public is becoming more aware of how they want to live as they grow old. This design concept creates functional and efficient home-like environments for the residents with long and/or short term needs.


In regard to the Design/Construct Sower Boulevard Office Complex project, Representative Mills asked which state agencies will occupy the new building when construction is complete. Ms. Kinney said the Finance and Administration Cabinet is not sure which agencies will occupy the new building; however, the goal is to move agencies that are in leased facilities to state-owned space.


Representative Mills asked if the reorganization of the Commonwealth Office of Technology (COT) will create efficiencies in state government and centralize information technology initiatives. Ms. Kinney stated that the reorganization will result in geographic and functional consolidation. However, many of the people who are part of the consolidation are still housed with their agencies due to the nature of their jobs. The reorganization should be completed within the next 24 months. The executive order to transfer staff was issued June 16, 2013.


Relative to questions from Mr. Hicks regarding the Finance and Administration Cabinet Commonwealth Energy Management and Control System (CEMCS) project, Mr. Ruth replied that there are four major components to the CEMCS: utility monitoring and analysis; building automation integration and diagnostics; centralized, automated utility bill paying; and work order generation and tracking. He added that the new Eastern State Hospital and the Glasgow State Nursing Facility were built with systems in place that are compatible with CEMCS.


In response to a question from Ms. Palmore relative to the Finance and Administration Cabinet Kentucky One Stop Phase 2 project, Ms. Kinney replied that the Finance Cabinet and the Secretary of State’s Office are working together on this project. The Business One Stop Portal, which is a result of 2011 Senate Bill 8, creates an extensive system of online services to citizens through the creation of a single, easy to use, unified entry point to state government.


In response to a question from Representative Mills relating to the Energy and Environment Cabinet Engineering Standards Laboratory project, Mr. Derouen replied that the Public Service Commission calibrates the water and gas meters, but it does not have the capability to calibrate electric meters. Electric meters are calibrated by third party sites or independently verified by utility companies.


Mr. Hicks recommended that the board carry forward to the current capital plan three existing policy recommendations from the 2012-2018 Statewide Capital Improvements Plan. The recommendations included endorsement of the Council on Postsecondary Education’s strategy for financing capital needs of the postsecondary institutions; a recommendation that in each biennium sufficient funding be appropriated for state agency maintenance pools; and a recommendation that the Governor and the General Assembly continue to place a high priority on fully funding the Budget Reserve Trust Fund.


The next meeting is tentatively scheduled for Wednesday, August 21, 2013, in Room 169 Annex starting at 1:00 PM. With there being no further business, a motion to adjourn the meeting was made and approved, and the meeting adjourned at 2:45 PM.