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Capital Projects and Bond Oversight Committee

 

 

 

 

 

 

 

 

 

Updated August 28, 2008

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COMMITTEE OVERSIGHT ACTIVITIES

Budgeted Projects | Unbudgeted Projects | Emergency | Court Projects | Bonds | Leases


CAPITAL CONSTRUCTION - BUDGETED PROJECTS

  • Receive quarterly and annual reports from the Finance and Administration Cabinet on the status of the state's capital construction program; receive similar reports from the five state universities that manage their own capital construction programs: Murray State University, Northern Kentucky University, University of Kentucky, University of Louisville, and Western Kentucky University; receive quarterly report from the Administrative Office of the Courts on court construction and renovation projects; receive quarterly reports from the Commonwealth's Chief Information Officer concerning implementation of information technology systems.

    No Committee action required.

  • Receive a report from the Finance and Administration Cabinet and those universities that manage their own construction any time a decision is made to use an alternative project delivery method (design-build or construction- management-at-risk) to construct an authorized project.

             No Committee action required.

  • Review requests to alter GA-approved capital projects. Usually, the request is to increase the scope of a project. Requests to transfer additional moneys to a project are limited by statute to 15% of the authorized project scope, unless the source of funds is private or federal, or the increase is necessitated by action of federal or state courts or regulatory agencies. Moneys specifically budgeted and appropriated by the General Assembly for another purpose shall not be allotted or reallotted in order to increase the scope of a capital project. The Finance and Administration Cabinet administers the state's Capital Construction and Equipment Purchase Contingency Account, which may be used to fund cost overruns on projects - up to 15% of authorized scope.

    Committee action required for scope increases and for allocations from the Contingency Account.

  • Review local public infrastructure projects the Kentucky Infrastructure Authority (KIA) recommends for funding from its loan and grant programs, including those supported in whole or in part by state bond proceeds.  KIA's two largest loan programs are Fund A, the Federally Assisted Wastewater Revolving Loan Fund, and Fund F, the Federally Assisted Drinking Water Revolving Loan Fund.  Both programs are supported by approximately 83% federal funds and 17% state bond funds. Other KIA funds currently active include: (1) Fund B, the Infrastructure Revolving Loan Fund, 100% state supported; (2) Fund C, the Governmental Agencies Program, funded through KIA-issued bonds but with no state appropriation; and (3) Various grant programs, 100% state supported.  KIA also administers grant programs for broadband and gas system restoration projects.

              Committee action required.

  • Review projects that the Kentucky Economic Development Cabinet proposes to fund from the Economic Development Bond Pool. The Economic Development Bond (EDB) Pool program uses state bond proceeds to leverage against private investment for economic development in the Commonwealth. Project selection criteria include, but are not limited to: project's job creation and job retention potential, degree of public and private local involvement, degree and conditions of potential project payback, and provision of child care assistance for employees. Project selection is to be documented with rationale for selection and expected economic development impact.)

    Committee action required.         

  • Receive notice when projects involving equipment estimated to cost over $200,000 or other projects estimated to cost over $600,000 are funded from specified pools of money authorized by the General Assembly, such as repair of state-owned dams, Kentucky River Authority Locks and Dams Renovation and Maintenance Pool, Parks Renovation Pool, Parks Development Pool, Bond-funded Maintenance Pool, University Major Items of Equipment Pools, land acquisition and property demolition, economic development initiatives including the High-Tech Construction Pool and the High-Tech Investment Pool, and the Education Technology Pool, Kentucky Center for the Arts Major Maintenance Renovation Pool, and the Research Capital Match Program of the Research Challenge Trust Fund.

    No Committee action required.

  • Receive reports of land acquisitions funded through the Kentucky Land Heritage Conservation Fund KRS 146.570.

    No Committee action required.

  • Review Kentucky Lottery Corporation capital projects authorized by the General Assembly prior to expenditures being made KRS 154A.060.

    No Committee action required.

  • Receive report from the Secretary of the Finance and Administration Cabinet of any guaranteed energy savings contracts approved by the Office of Financial Management.

             No Committee action required.

CAPITAL CONSTRUCTION - UNBUDGETED PROJECTS

  • Review requests for unbudgeted projects. Unbudgeted projects are permitted only if 50% or more of the funds are private or federal funds, or if the project is necessitated by state or federal court action or by regulatory action. Unbudgeted acquisition of scientific, research or medical equipment, excluding computer equipment and aircraft, is permitted if the acquisition will not involve funds budgeted for other purposes and is reported to the Committee upon acquisition.

    Committee action required except for reports of unbudgeted acquisition of scientific, research, or medical equipment.

  • Receive requests to use funds in the Capital Construction and Equipment Purchase Contingency Account to finance feasibility studies for projects which may be contemplated for future funding.

    Committee action required.

EMERGENCY REPAIR

  • Receive notice from the Finance and Administration Cabinet when funds have been allocated from the state's Emergency Repair, Maintenance, and Replacement Account for emergency expenditures on state facilities. Cabinet is required to report such allocations within 30 days.

    No Committee action required.

COURT PROJECTS

  • Receive quarterly reports by the Administrative Office of the Courts on the status of court projects authorized by the General Assembly. (While these projects continue to be local projects, usually funded by local bond issues, the State pays a use allowance for court space based on local debt service.)

    No Committee action required.

  • Review requests by the Administrative Office of the Courts to permit modifications in court projects that will impact the authorized use allowance.  Overruns shall not exceed 15% of the authorized use allowance.

    Committee action required.

BOND ISSUES

  • Review, prior to issuance, all state agency bonds. State agencies affected by the requirement include: the State Property and Buildings Commission, the Kentucky Asset/Liability Commission, Kentucky Housing Corporation, Kentucky Infrastructure Authority, Kentucky Higher Education Student Loan Corporation, Kentucky River Authority, Kentucky Agricultural Finance Corporation, Kentucky Local Correctional Facilities Construction Authority, Turnpike Authority, and state postsecondary institutions. Information to be submitted for each proposed bond issue includes the purpose and amount of the issue, as well as an itemized list of costs directly and indirectly associated with the issue, and the names of those receiving fees or commissions.

    Committee action required for all but Turnpike Authority issues.

    (Follow-up reports are submitted to the Committee on the results of bond sales, but no further Committee action is required.)

  • Review, prior to issuance, all bond issues by local school districts that include state funding through the School Facilities Construction Commission. All bond payee disclosure information is required to be reported to the Committee. In addition, any local tax increase associated with the issue is noted.

    Committee action required.

  • Receive, prior to issuance, bond payee disclosure information on all school bond issues that are 100% locally funded. Any local tax increase associated with the issue is noted.

    No Committee action required.

  • Receive reports from the Auditor's Office certifying that procedures required by statute were followed in the selection of underwriters and bond counsel for state bond issues; receive reports from the Auditor's Office certifying statutory procedures were followed in procurement of built-to-suit leases.

    No Committee action required.

LEASES

  • Review new state leases before execution when the annual rent is over $100,000. All leases with annual rent in excess of $200,000 are to be included as a line-item in the applicable enacted State/Executive Budget, with certain exceptions: (1) when there is a space consolidation; (2) additional space is needed to meet space-need standards; (3) 50% of the rental costs are to be paid with federal or private funds; or (4) an emergency is declared. Emergency leases can be reported after execution; all other leases over $100,000 annually are to be reported prior to execution.

    Committee action required.

  • Review, prior to execution, all leases that contain a lease-purchase option or are built-to suit leases; review any proposal to exercise an option to purchase.

    Committee action required.

  • Review all modifications of state leases. Customarily, such modifications might involve increases/decreases in leased space footage or interior wall or electrical alterations to meet current needs of the occupying agency.

    Modifications costing less than $50,000 over the term of the lease are to be reported after execution. No Committee action required.

    Modifications costing $50,000 or more over the term of the lease are to be reported prior to execution. Committee action required.

  • Review biennial reports by the Auditor's Office relating to compliance with state leasing laws.

    Committee action not required

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