Joint Committee Committee on Capital Development (02/12/2009)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON CAPITAL DEVELOPMENT

Date:	02/12/2009	ATTENDANCE

Time:	08:01 AM to 08:47 AM	Kopp	A
		McFadyen	E
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
	Jennifer Moe
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Discussion with the Joint Budget Committee		Witness Testimony and/or Committee Discussion Only

08:01 AM -- Discussion with the Joint Budget Committee

The meeting came to order. A quorum was present. The Joint Budget Committee (JBC) came to the table to discuss the review process for higher education cash-funded projects and the impact of the Governor's recent spending freezes on capital projects. Members present included Senator Keller, Senator Tapia, Senator White, Representative Marostica, and Representative Ferrandino. Representative Gagliardi joined the Capital Development Committee (CDC) at the table as well. The legislators received a memorandum about higher education cash-funded capital construction, prepared by Joint Budget Committee staff (Attachment A), and a summary of capital projects requesting an exemption from the January 15, 2009, spending freeze, prepared by the Governor's Office of State Planning and Budgeting (OSPB) (Attachment B).

Senator Tapia made opening remarks about capital projects and any potential federal economic stimulus package. Mr. Eric Kurtz, Joint Budget Staff, summarized the main issues addressed in Attachment A. He began by going over the flowchart on page 3 of Attachment A, noting how higher education projects are reported, reviewed, and approved by the legislature and the Colorado Commission on Higher Education (CCHE). Mr. Kurtz provided examples of projects that exemplify some problems with the existing review process for cash-funded capital projects, and explained some of the issues surrounding these projects, as described on pages 4 and 5 of Attachment A. He also highlighted comments from higher education institutions about the review process, including how long it takes to get a project from concept initiation to building construction, as described on pages 5 and 6 of Attachment A.

08:16 AM

Mr. Kurtz identified factors in the reporting and review process for cash-funded capital projects that seem to be important to the General Assembly, including the JBC and CDC, and shared recommendations from JBC and CDC staff to meet these criteria, as described on pages 6 through 9 of Attachment A. For each recommendation, Mr. Kurtz explained why the recommendation was made and what it would accomplish. Representative Riesberg commented on the concept of concurrent review of cash-funded projects by the appropriate governing body and the legislature.

08:24 AM

Senator Keller spoke about some testimony the JBC heard from higher education institutions in fall 2008, and indicated her support for streamlining the review process and for concurrent review so the CDC and JBC are not examining the same issues. Senator Bacon spoke about the need at times for review of cash-funded projects by both the CDC and the JBC, and wondered how to balance this with the need for a streamlined process. He also expressed his support for loosening legislative controls over higher education when the institutions are raising their own funds due to the declining availability of state dollars for capital projects. Representative Marostica commented on cost savings associated with the expedited review and approval of higher education cash-funded capital projects. Discussion ensued regarding the need for less legislative oversight and more flexibility in any process that is established. Senator Schwartz commented on the need to assess elements of each project, and prioritize capital projects on each campus (e.g., a research building is important, but if basic subject areas do not have their building needs met, the institution and the state need to meet the basic needs first). Senator Kopp commented on potential obligations to the state in the future for operating and maintenance expenses of some higher education cash projects, and wondered whether the public and the General Assembly should continue to be made aware of these potential obligations. Senator Keller indicated that the JBC is still working out this issue.

08:35 AM

Discussion continued regarding state operating and maintenance costs for higher education facilities that are constructed from cash sources, and the level of oversight necessary by the state when there are potential future costs in these areas. Discussion turned to how to set aside money for future operating and maintenance costs up front in a type of trust fund when new facilities are constructed. Mr. Larry Friedberg, State Architect, came to the table at the CDC's request and in response to a question, confirming that money is being set aside for operating and maintenance costs for the new Colorado History Museum and the new Center for Justice funded by certificates of participation (COP). Senator Schwartz also commented on the need to level the playing field for higher education institutions, which have varying capabilities to raise private funds or impose additional student fees.

08:45 AM

Representative Riesberg asked Senator Keller when the CDC should make recommendations regarding capital projects to the Joint Budget Committee. Senator Keller reviewed the JBC's plan for introducing and acting on supplemental bills for the current fiscal year.

The chairman announced that the CDC would meet next on Tuesday, February 17, 2009, at 7:30 a.m. The committee adjourned.