Date: 02/19/2009

Discussion About Projects Subject to the Capital Spending Freeze


Votes: View--> Action Taken:

08:03 AM -- Discussion About Capital Projects Subject to Governor's Spending Freeze

The meeting came to order. A quorum was present. Representative Riesberg explained that the purpose of the meeting was to continue discussion about capital projects subject to the Governor's spending freezes. Ms. Lisa Esgar, Deputy Director, Governor's Office of State Planning and Budgeting (OSPB), made herself available to answer questions about the October 2008 and January 2009 capital spending freezes and the exemption process OSPB followed for both freezes. She reviewed action taken by OSPB since October 2008 regarding the capital freezes and requests for exemptions. She commented on future action to be taken to complete the exemption process for the January 2009 freeze and to make final recommendations to the legislature about reducing appropriations of frozen projects. Ms. Esgar responded to questions from the committee about the process for tracking project expenditures versus work started or completed on projects. Mr. Larry Friedberg, State Architect, also responded to these questions, noting that agencies were very cooperative in providing information about expenditures and the status of work on the project. He explained the differences between expenditure reports generated by the Controller's Office and status-of-work reports compiled by the State Architect.

08:17 AM

Mr. Friedberg explained what his office considered when evaluating the Grand Junction Regional Center for the Heat Plant Repair and Equipment Replacement project, and why his office had different conclusions than the Department of Human Services about the urgency and life-safety components of the project. Ms. Esgar answered additional questions about the capital freeze and, subsequently, about potential cuts to capital projects. Mr. Friedberg responded to questions about projects under consideration for cuts, what freezing and cutting appropriations means for these projects, and the future impact of such delays on the state's capital budget and inventory. He commented on the flexibility given to agencies in the freeze process in 2008 and 2009 versus the process followed in 2001 and 2002, when projects less than 25 percent complete were stopped, even if they were under construction and regardless of the impact of such delays and cuts on their budgets. Ms. Esgar commented on the federal stimulus package and priorities for funding level I controlled maintenance.

08:33 AM

Mr. Friedberg responded to questions about the current market value of state buildings, and inflationary impacts on the cost of capital construction and labor over the past year. Ms. Esgar stated that there are no plans to start new capital projects in the future, including higher education projects funded from federal mineral lease (FML) revenue, until the economy and state revenue are more stable. Committee members commented on pending legislation that may affect capital projects. Ms. Esgar responded to questions about money that might be available for capital projects from a federal stimulus package.

08:40 AM

After the committee's discussion about the capital spending freeze, Representative Riesberg noted that legislation is being drafted to create more flexibility in the review process for higher education cash-funded projects. He announced that the committee would meet next at 7:30 a.m. on Tuesday, February 24, 2009. The committee adjourned.