Joint Committee Committee on Capital Development (03/24/2009)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON CAPITAL DEVELOPMENT

Date:	03/24/2009	ATTENDANCE

Time:	07:31 AM to 08:50 AM	Kopp	X
		McFadyen	*
Place:	SCR 356	Schwartz	X
		Sonnenberg	X
This Meeting was called to order by		Bacon	X
	Representative Riesberg	Riesberg	X

This Report was prepared by
	Kori Donaldson
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
University of Colorado - Colorado Springs Supplemental Request Consideration of Draft Committee Legislation		Pass Witness Testimony and/or Committee Discussion Only

07:31 AM -- University of Colorado - Colorado Springs Supplemental Request

The committee was called to order. A quorum was present. Ms. Kelly Fox, Interim Vice-President of Budget and Finance, University of Colorado System, presented a supplemental request for the Science/Engineering Buildings, Phase I of III project. Committee members received a description of the request, prepared by Legislative Council Staff (Attachment A).


BILL:	University of Colorado - Colorado Springs Supplemental Request
TIME:	07:32:47 AM
MOVED:	Bacon
MOTION:	Approve the supplemental request to reauthorize the Science/Engineering Buildings, Phase I of III project for FY 2006-07 ($2 million CCF). The motion carried on a vote of 4-1-1.
SECONDED:
		VOTE
	Kopp	Yes
	McFadyen	Excused
	Schwartz	Yes
	Sonnenberg	No
	Bacon	Yes
	Riesberg	Yes

Final YES: 4 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

07:33 AM -- Consideration of Draft Committee Legislation

Mr. Jeremiah Barry, Office of Legislative Legal Services (OLLS), briefly described various iterations of a higher education reform bill. He told the committee that the Joint Budget Committee has decided to carry a bill that addresses some of the reforms requested by higher education institutions, including how financial aid is administered. Mr. Barry then outlined the differences in two drafts of a Capital Development Committee (CDC) bill concerning flexibility for capital construction projects at state institutions of higher education. Committee members received two versions of the CDC draft legislation, including a March 19 (3/19) draft (Attachment B), and a February 19 (2/19) draft (Attachment C), both prepared by OLLS. Committee members also received a side-by-side comparison of the two drafts, prepared by OLLS (Attachment D). Mr. Barry addressed questions about Attachment D.

07:41 AM

Several representatives from higher education institutions came to the table to share their perspective regarding the draft committee legislation. Representatives included:

Mr. Rich Schweigert, Chief Financial Officer, Colorado State University System
Ms. Kelly Fox, Interim Vice-President of Budget and Finance, University of Colorado System
Ms. Kirsten Volpi, Senior Vice-President for Finance and Administration, Colorado School of Mines
Ms. Natalie Lutes, Chief Financial Officer, Metropolitan State College of Denver
Mr. Randall Haack, Chief Financial Officer, University of Northern Colorado
Mr. Cliff Richardson, Vice-President of Finance and Administration, Colorado Community College System

Mr. Schweigert said the purpose of his testimony is to encourage a speedier approval process for cash-funded capital construction projects in order to further improve the quality of higher education in the state. Mr. Schweigert walked the committee through the 3/19 version of draft legislation (Attachment B) and spoke about its advantages and the review process for cash projects. He said the 3/19 draft legislation allows for greater flexibility for cash-funded projects. Mr. Schweigert expressed his reservations about the 2/19 draft legislation (Attachment C), including, he said, a requirement for a lengthier review by the Colorado Commission on Higher Education (CCHE) of proposed projects.

Ms. Fox concurred with Mr. Schweigert's testimony. She explained that when a cash project has commenced, a higher education institution must reinitiate the review process if it wants to make a change to a project's scope. Ms. Fox provided examples of times when a project's scope may need to change and said the existing review process discourages any change to a project after it commences. Ms. Volpi addressed a question about student fees and spoke to the internal process used to develop program plans at the Colorado School of Mines.

07:53 AM

Ms. Fox addressed a question about the review process for cash projects required by the 3/19 draft legislation. Ms. Volpi answered a question about whether boards for higher education institutions are appointed or elected. Discussion ensued. Representative Riesberg expressed concern about the approval process for new student fees. He encouraged higher education institutions to conduct campus-wide elections for new student fees. Discussion ensued. Discussion continued about the role of CCHE in the review of cash projects. Senator Schwartz said it is important that there is an opportunity for public input regarding new capital projects.

08:02 AM

Representative Sonnenberg asked whether it is possible to maintain accountability for new capital construction projects at higher education institutions and still give institutions the freedom to maximize cash funds. Discussion returned to the appointment or election of boards for higher education institutions. Senator Schwartz spoke about the state-wide perspective provided by CCHE regarding the allocation of programs and resources at higher education institutions. Ms. Fox explained that the 3/19 draft legislation requires all higher education institutions to submit a 2-year plan for proposed cash projects, which gives both CCHE and the CDC an opportunity to review and comment on upcoming projects. Senator Kopp spoke about the accountability of elected versus appointed boards of higher education institutions.

08:12 AM

In response to a question, Ms. Fox said that the CDC will have an opportunity to review 2-year plans for proposed cash projects when each higher education institution presents its annual requests to the committee. Discussion ensued. Mr. Schweigert addressed a question about changes included in the 3/19 draft legislation concerning the bidding process for higher education capital construction projects. Mr. Richardson explained that the 3/19 draft legislation increases spending limits for certain small projects, and that this is advantageous to community colleges. Senator Schwartz suggested adding language directing higher education institutions to consider energy efficiency standards in new cash-funded capital construction projects.

08:21 AM

Several representatives from state agencies involved in the review of higher education capital construction came to the table to share their perspective of the draft legislation. Representatives included:

Mr. Larry Friedberg, State Architect, Office of the State Architect, Department of Personnel and Administration
Ms. Lisa Esgar, Deputy Director, Governor's Office of State Planning and Budgeting (OSPB)
Mr. David Skaggs, Executive Director, Department of Higher Education

Director Skaggs explained his reservations with the 3/19 draft legislation regarding the possible future use of state monies for operating and maintenance for projects that were not reviewed. Director Skaggs said the executive and legislative branches of government should have some voice in the approval process of cash projects. Ms. Esgar explained that, in general, OSPB does support more flexibility for higher education capital construction projects, especially when these projects are 100 percent cash-funded. Ms. Esgar recommended that cash-funded projects that may request state funds for operating or maintenance expenses in the future should still have some level of review by either CCHE or the CDC. Discussion ensued.

08:32 AM

Discussion turned to the use of student fees for cash-funded capital construction and whether projects built with revenue from student fees should be eligible for future controlled maintenance. Mr. Friedberg walked the committee through pages 8 through 11 of the 3/19 draft legislation and explained current practice regarding the bid process for higher education capital construction projects. He explained the role of his office in electronic advertising and the importance of making changes to current law that are fair and equitable to state agencies as well as higher education institutions. Discussion ensued.

08:40 AM

Ms. Esgar responded to a question about how future operating and maintenance costs are reviewed for cash-funded projects at higher education institutions. Director Skaggs spoke about the collaborative process used during the 2008 legislative session to make changes to laws affecting higher education capital construction. Senator Bacon said higher education institutions should not be penalized for using cash funds to construct buildings by limiting future requests for state dollars for operating or maintenance. He suggested that there be a designated amount of time before a higher education institution can request state dollars for operating or maintenance costs. Director Skaggs said it is important to have some oversight of projects that may request future state dollars.

Representative Riesberg asked the various interested parties to work together to resolve some of their differences of opinion regarding the 3/19 draft legislation, and decided to resume discussion at the committee's Tuesday, March 31 meeting.

08:50 AM

The committee adjourned.