Joint Committee Committee on Capital Development (12/01/2010)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON CAPITAL DEVELOPMENT

Date:	12/01/2010	ATTENDANCE

Time:	08:37 AM to 04:38 PM	Brown	X
		Renfroe	X
Place:	SCR 356	Schwartz	X
		Sonnenberg	X
This Meeting was called to order by		Vigil	X
	Senator Bacon	Bacon	X

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

Bills Addressed:		Action Taken:
Election of New Chair and Vice-Chair Overview of FY 2011-12 Capital Construction Requests Office of State Planning and Budgeting FY 2011-12 Capital Requests Colorado Commission on Higher Ed FY 2011-12 Capital Requests Mesa State College FY 2011-12 Capital Requests Fort Lewis College FY 2011-12 Capital Requests Western State College FY 2011-12 Capital Requests Adams State College FY 2011-12 Capital Requests Colorado School Mines FY 2011-12 Capital Requests University of Colorado System Overview CU Boulder FY 2011-12 Capital Requests CU Colorado Springs FY 2011-12 Capital Requests CU Denver FY 2011-12 Capital Requests Auraria Higher Education Center Five-Year Projection of Need Metropolitan State College Ongoing Capital Projects University of Northern Colorado FY 2011-12 Capital Requests Community Colleges FY 2011-12 Capital Requests Colorado State University System FY 2011-12 Capital Requests		Pass Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Pass Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Pass

08:37 AM -- Election of New Chair and Vice-Chair

The committee was called to order. A quorum was present. Senator Bacon made opening remarks.


BILL:	Election of New Chair and Vice-Chair
TIME:	08:39:00 AM
MOVED:	Renfroe
MOTION:	Nominate Representative Sonnenberg to serve as the chair of the Capital Development Committee, and Senator Bacon to serve as vice-chair of the committee. The motion passed on a 6-0 vote.
SECONDED:
		VOTE
	Brown	Yes
	Renfroe	Yes
	Schwartz	Yes
	Sonnenberg	Yes
	Vigil	Yes
	Bacon	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

08:40 AM -- Adoption of Rules


BILL:	Adoption of Rules
TIME:	08:40:08 AM
MOVED:	Sonnenberg
MOTION:	Moved to adopt the Senate rules as the rules of procedure for the Capital Development Committee. The motion passed on a 6-0 vote.
SECONDED:
		VOTE
	Brown	Yes
	Renfroe	Yes
	Schwartz	Yes
	Sonnenberg	Yes
	Vigil	Yes
	Bacon	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

08:40 AM -- Overview of FY 2011-12 Capital Construction Requests

Ms. Kori Donaldson, Legislative Council Staff, provided an overview of FY 2011-12 capital construction requests, and briefed the committee on forecasted available revenue for capital construction. Committee members received a binder containing written descriptions of the capital requests submitted by all of the state departments and higher education institutions, prepared by Legislative Council Staff (a copy of the binder is on file with Legislative Council Staff). Ms. Donaldson discussed a memorandum contained in the binder that summarizes FY 2011-12 capital requests and revenue, along with an additional memorandum discussing the Highway Users Tax Fund moneys available for capital construction. Ms. Donaldson then discussed the remaining contents of the binder, including the written descriptions of the capital requests, five-year projections of capital need, and two-year projections of cash need from higher education institutions.

08:50 AM

Ms. Donaldson continued to brief the committee on the FY 2011-12 capital construction requests. Ms. Donaldson responded to questions regarding program plans approved for each capital project, and provided background on the planning process for capital projects. Discussion ensued regarding requests for state funds for capital projects.

08:56 AM -- Office of State Planning and Budgeting Presentation of FY 2011-12 Capital Requests

Ms. Lisa Esgar, Deputy Director, Governor's Office of State Planning and Budgeting (OSPB), presented OSPB's prioritized list of FY 2011-12 capital construction requests. Committee members received a document outlining the office's priorities, prepared by OSPB (Attachment A). Ms. Esgar first addressed earlier questions regarding the planning process for capital projects, explaining the various documents that are processed by offices and stake holders during the capital request process. Ms. Esgar next provided an overview of the process by which OSPB prioritizes capital requests, and the criteria considered in doing so.

09:06 AM

Ms. Esgar continued to brief the committee on OSPB's FY 2011-12 capital construction priorities, and discussed the funding required to cover these priorities. Ms. Esgar briefly discussed the top priorities on OSPB's priority list, along with the projects that were prioritized for which funding is not likely available.

09:16 AM

Ms. Esgar discussed the reason for discrepancies between OSPB's list of capital priorities and the Colorado Commission on Higher Education's list. Ms. Esgar then continued briefing the committee on OSPB's capital priorities. Ms. Esgar provided an overview of FY 2011-12 cash-funded capital requests from state departments, and the sources of revenue for the cash projects.

09:26 AM

Ms. Esgar continued briefing the committee on FY 2011-12 state department cash-funded capital requests. Ms. Esgar responded to questions regarding the amount of Federal Mineral Lease Fund moneys available for capital projects. Ms. Esgar responded to further questions regarding the balance in the Corrections Expansion Reserve Fund (CERF) available for capital projects, and the reasons for shortfalls in revenue for capital projects within the Department of Corrections. Discussion ensued regarding the use of CERF moneys in recent years, and the connection between the passage of legislation that is projected to increase the prison population and deposits of money in the CERF.

09:36 AM

Ms. Esgar discussed the state's capital construction certificates of participation (COP) payment obligations for FY 2011-12. Ms. Esgar then discussed FY 2011-12 controlled maintenance needs, and the controlled maintenance process in general. Discussion ensued regarding planning for depreciation of the state's capital construction inventory, and the current accounting process for assessing this depreciation.

09:46 AM

Ms. Esgar discussed the inflation factor allowed for FY 2011-12 capital requests, and forthcoming capital construction supplemental requests for ports-of-entry projects. Ms. Esgar then discussed the Adams County Youth Services Center replacement project. Ms. Esgar finally discussed the required General Fund transfers for FY 2011-12 and FY 2012-13 to cover OSPB's capital construction priorities.

09:49 AM -- Colorado Commission on Higher Education Presentation of FY 2011-12 Capital Projects

Mr. Dan Krug, Director of Capital Assets and Compliance, Department of Higher Education, and Dr. Patricia Pacey, Commissioner, Colorado Commission on Higher Education (CCHE), presented CCHE's FY 2011-12 capital construction priorities. Mr. Krug provided opening remarks, and Dr. Pacey provided an overview of CCHE's capital prioritization process, and discussed future activity to be undertaken on the list by CCHE and OSPB. Dr. Pacey next discussed higher education's FY 2011-12 cash-funded capital requests. Discussion ensued regarding fees assessed on students for capital projects, and the lengths of the terms for assessing these fees. Mr. Greg Stevinson, Commissioner, CCHE, provided input regarding student capital construction fees.

10:00 AM

Discussion continued regarding student capital fees, the projects constructed using the fee proceeds, and the economic conditions that have led students to self-assess these fees. Mr. Krug discussed the recent increase in enrollment at higher education institutions, which is driving a need for expanded capital assets at these institutions. Mr. Krug then briefed the committee on higher education's capital needs, and explained how the institutions are coping with controlled maintenance needs on their campuses.

10:11 AM

Mr. Krug responded to questions regarding how CCHE factored controlled maintenance needs into its capital construction prioritization process.

10:14 AM

The committee recessed.

10:22 AM -- Mesa State College FY 2011-12 Capital Requests

Mr. Tim Foster, President, and Mr. Patrick Doyle, Vice President for Finance and Administration, Mesa State College, presented the college's FY 2011-12 capital construction requests, along with its two-year projection of cash need. Committee members received a packet of slides outlining the presentation (Attachment B). Mr. Foster provided an overview of Mesa State College and its enrollment trends, and discussed the college's capital construction projects. In particular, Mr. Foster spoke about the need for additional student housing because of the increase in the student population. Discussion ensued about the need for additional capital construction on various college campuses because of increases in student enrollment. Mr. Foster invited the committee to visit during the next legislative interim.

10:33 AM

Discussion turned to the Leadership in Energy and Environmental Design (LEED) certification requirements for various capital projects and the cost efficacy of the program. Mr. Foster addressed a question about enrollment trends and how the college projects need for its programs. He explained that the college has added a lot of on-line courses. Discussion returned to LEED certification requirements.

10:46 AM

Mr. Foster addressed a question about whether the enrollment increases reflect an increase in the number of veterans attending college.

10:47 AM -- Fort Lewis College FY 2011-12 Capital Requests

Dr. Dene Kay Thomas, President, and Mr. Steven Schwartz, Vice President for Finance and Administration, Fort Lewis College, presented the college's FY 2011-12 capital requests. Committee members received two handouts summarizing Dr. Thomas' presentation (Attachments C and D). Dr. Thomas made some introductory comments and described the high caliber of the college's faculty. She also invited the committee to visit the campus during the next legislative interim. She next discussed enrollment trends. Mr. Schwartz gave an overview of the FY 2011-12 capital requests. He also walked the committee through the college's five-year projection of need for state funds. Mr. Schwartz addressed a question about the priority order of the projects listed on the five-year projection of state need.

11:00 AM

Ms. Donaldson addressed a question about required approvals for projects requested from cash and/or federal funds. Dr. Thomas responded to comments from Senator Bacon about a state-wide tour of higher education institutions she recently conducted. Dr. Thomas spoke about the importance of cooperating with other agencies and institutions to maximize spending for projects.

11:02 AM -- Western State College FY 2011-12 Capital Requests

Mr. Brad Baca, Vice President for Finance and Administration, and Ms. Julie Feier, Associate Vice President of Facilities Planning, Western State College, presented the college's FY 2011-12 capital requests. Mr. Baca made some introductory comments about the college, including a discussion of its history and the student population. He summarized the amount that has been spent in recent years by the college, the state, and private donors on capital projects. He also discussed recent projects completed on the campus. Mr. Baca said a recently conducted facility condition audit identified $26 million of unfunded liability on the campus. He said projects planned for completion in the next year or two will cut this unfunded liability in half.

11:10 AM

Ms. Feier explained that the college recently updated its facility master plan, and she summarized the FY 2011-12 capital requests. She also outlined the college's five-year projection of need for state funds. She said the west end of campus is being cleared for a future gymnasium project and additional student housing. Mr. Baca addressed a question about the use of campus facilities by the local school district and explained that the college has a strong partnership with the local school district and with the City and County of Gunnison. He also addressed a question about whether a biomass facility was included in the program plan for Taylor Hall and explained some supply issues that the campus would have faced if it had included a biomass facility as part of the building. He said the building is biomass ready.

11:18 AM -- Adams State College FY 2011-12 Capital Requests

Mr. Erik van de Boogaard, Associate Vice President of Facilities Planning, Design, and Construction, Adams State College, presented one FY 2011-12 capital construction request. He described the scope of controlled maintenance need for various facilities on the campus. He next addressed a question about enrollment trends at the college. Discussion turned to how Federal Mineral Lease dollars are earned for higher education projects.

11:33 AM -- Colorado School of Mines FY 2011-12 Capital Requests

Mr. Bill Scoggins, President, and Ms. Kirsten Volpi, Senior Vice President of Finance and Administration, Colorado School of Mines, presented the school's FY 2011-12 capital construction requests. Committee members received a summary of the presentation (Attachment E.) Mr. Scoggins made some introductory remarks about the school, including a discussion of the research conducted by the school and the school's key strategic goals. He said one of the school's key objectives is to make the campus a residential rather than a commuter campus. Ms. Volpi referenced page 8 of Attachment E and described the current capital projects underway on the campus, and the new projects requested for FY 2011-12. She next described the new projects listed on the school's Two-Year Projection of Cash Need list.

11:44 AM

Ms. Volpi and Mr. Krug addressed questions about the Higher Education Revenue Bond Intercept program.

11:47 AM

The committee recessed.

01:31 PM -- University of Colorado System Overview

Ms. Monisha Merchant, Regent and Chair of the Capital Subcommittee, University of Colorado (CU) Board of Regents, Ms. Kelly Fox, CU Vice President and Chief Financial Officer, and Mr. Bruce Benson, CU President, presented an overview of the multi-campus system's capital construction outlook. Ms. Merchant read a statement on behalf of the Board of Regents. President Benson then discussed recent developments in capital construction at CU, and briefed the committee on the system's capital needs. President Benson also explained how the CU system prioritizes its capital projects, and discussed some of the university's initiatives that drive an expansion of capital assets. President Benson next discussed a forthcoming fund raising campaign at the university, the proceeds of which will be partially dedicated to capital projects.

01:42 PM

Ms. Fox provided clarification regarding the source of funds for the CU Denver Academic Building project.

01:43 PM -- CU Boulder FY 2011-12 Capital Construction Requests

Dr. Philip DiStefano, Chancellor, and Mr. Frank Bruno, Vice Chancellor for Administration, University of Colorado at Boulder (CU Boulder), presented the university's FY 2011-12 capital construction requests, two-year projection of cash need, and five-year projection of capital need. Committee members received a packet of slides associated with the presentation (Attachment F). Dr. DiStefano briefed the committee on a number of the university's programs and initiatives, and explained how these programs are impacted by capital need. Dr. DiStefano next briefed the committee on the university's capital construction priorities.

01:53 PM

Dr. DiStefano continued to brief the committee on CU Boulder's FY 2011-12 capital construction priorities. Dr. DiStefano then briefed the committee on the university's two-year cash-funded capital list. Dr. DiStefano next discussed the Systems Biotechnology Building project, and presented a supplemental request for the project. Committee members received a written description of the project, prepared by Legislative Council Staff (Attachment G).


BILL:	CU Boulder Systems Biotechnology Building Supplemental Request
TIME:	02:00:38 PM
MOVED:	Bacon
MOTION:	Approve the supplemental request from the University of Colorado Boulder for additional cash funds spending authority for the Systems Biotechnology Building project ($15,159,287 CF). The motion passed on a 6-0 vote.
SECONDED:
		VOTE
	Brown	Yes
	Renfroe	Yes
	Schwartz	Yes
	Sonnenberg	Yes
	Vigil	Yes
	Bacon	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:02 PM -- CU Colorado Springs FY 2011-12 Capital Requests

Dr. Pamela Shockley-Zalabak, Chancellor, University of Colorado Colorado Springs (CU Colorado Springs), presented the university's FY 2011-12 capital construction priorities, two-year projection of cash need, and five-year projection of capital need. Committee members received a packet of slides associated with the presentation, prepared by the university (Attachment H). Dr. Shockley-Zalabak provided an overview of the university and its initiatives, and discussed the impact of capital construction need on the university's programs. Dr. Shockley-Zalabak then briefed the committee on the university's FY 2011-12 capital construction requests. Dr. Shockley-Zalabak next provided an overview of the university's cash-funded capital construction requests.

02:12 PM

Dr. Shockley-Zalabak responded to questions regarding a new weekend higher education program at CU Colorado Springs, and potential changes to the university's two-year projection of cash need.

02:13 PM -- CU Denver FY 2011-12 Capital Requests

Dr. Jerry Wartgow, Chancellor, and Ms. Lily Marks, Executive Vice Chancellor, University of Colorado Denver (CU Denver), provided an overview of the university's FY 2011-12 capital construction requests, two-year projection of cash need, and five-year projection of need. Committee members received a packet of slides associated with the presentation, prepared by the university (Attachment I). Dr. Wartgow discussed recent initiatives and capital projects on the university's Auraria campus, and briefed the committee on FY 2011-12 capital requests associated with the campus. Dr. Wartgow also discussed space utilization and deficits on the Auraria campus. Dr. Wartgow then discussed the cash-funded capital requests associated with the Auraria campus.

02:24 PM

Ms. Marks provided an overview of CU Denver's Anschutz medical campus and its programs. Ms. Marks also discussed the economic impact of the Anschutz campus on the community and region, and provided an overview of the capital assets on the campus.

02:34 PM

Ms. Marks discussed the space and infrastructure needs of the Anschutz medical campus. Ms. Marks then provided an overview of the state- and cash-funded requests for Anschutz over the next few fiscal years. Ms. Marks responded to questions regarding the Anschutz campus two-year cash list, and the source of funding for meeting COP payment obligations associated with the campus. Ms. Marks and Dr. Wartgow responded to questions regarding how CU Denver's constituent campuses are coping with controlled maintenance issues in the face of a capital construction funding shortfall. Discussion ensued regarding the ability of medical universities to turn out enough doctors and other medical professionals to meet demand.

02:47 PM

Discussion continued regarding the medical professional shortfall, both locally and nationally, and funding issues associated with this shortfall. Dr. Wartgow discussed a CU program that directs university resources toward medical school tuition assistance. Discussion ensued regarding other programs that seek to boost the number of medical professionals in Colorado. Ms. Marks responded to questions regarding the placement rate for nursing students, and the number of nursing students at the Anschutz campus. Ms. Marks responded to further questions regarding the cost of tuition for health care students compared to the cost of educating them.

02:58 PM -- Auraria Higher Education Center Five-Year Projection of Need

Ms. Barbara Weiske, Interim Executive Vice President for Administration, and Ms. Jill Jennings Golich, Campus Planner, Auraria Higher Education Center (AHEC), provided an overview of the five-year projection of capital construction need for AHEC. Ms. Weiske provided an overview of AHEC, and discussed recent capital construction projects on the campus. Ms. Weiske also discussed the campus space needs. Ms. Weiske next briefed the committee on the projects shown on the AHEC projection of five-year capital need list. Ms. Jennings Golich responded to questions regarding the priority order of the projects on the list.

03:06 PM -- Metropolitan State College of Denver Ongoing Capital Projects

Dr. Stephen Jordan, President, and Mr. Rob Cohen, Chair, Board of Trustees, Metropolitan State College of Denver (Metro State), provided an overview of ongoing capital construction projects on the campus, since Metro State does not have any FY 2011-12 capital requests. Committee members received a packet of slides associated with the presentation, prepared by Metro State (Attachment J). Dr. Jordan discussed Metro State's ongoing capital projects, and the status of each of the projects. Dr. Jordan also discussed how Metro State's academic programs will be impacted by these capital projects.

03:17 PM

Mr. Cohen discussed the importance of Metro State to the community and local economy.

03:18 PM -- University of Northern Colorado Capital Requests

Ms. Kay Norton, President, Ms. Michelle Quinn, Senior Vice President for Finance and Administration and Chief Financial Officer, and Mr. Kirk Leichliter, Assistant Vice President for Facilities Management, University of Northern Colorado (UNC), presented the university's two-year projection of cash need, and also provided an update on UNC's future capital need. President Norton discussed the capital construction and capital funding landscape at UNC, and efforts being undertaken to fund capital projects in the absence of state funding. President Norton also discussed controlled maintenance needs on the campus

03:28 PM

President Norton continued to discuss efforts at UNC to fund capital construction projects through cash sources, including assessment of additional capital fees on the students. President Norton responded to questions regarding the university's planning process for finding revenue sources for cash projects. Ms. Quinn responded to questions regarding the university's ability to sell bonds backed by a student capital fee.

03:32 PM

The committee recessed.

03:47 PM -- Community Colleges FY 2011-12 Capital Requests

Dr. Nancy McCallin, President, and Mr. Cliff Richardson, Vice President of Finance and Administration, Colorado Community Colleges System, and Mr. Andy Dorsey, President, Front Range Community College, presented the system's FY 2011-12 capital requests. Dr. McCallin began with some introductory comments about the system, including the dramatic growth in enrollment at various community colleges. Mr. Richardson presented four state-funded requests and provided a status update for the projects funded with Federal Mineral Lease dollars.

03:57 PM

Mr. Richardson continued his presentation of FY 2011-12 state-funded capital requests. He next described one new request listed on the Two-Year Projection of Cash Need. Mr. Dorsey began with an update about projects recently completed on the Front Range Community College, Larimer Campus. He next described an FY 2011-12 state-funded request for the Westminster campus. He also provided some information about the Two-Year Projection of Cash Need list.

04:06 PM -- Colorado State University System FY 2011-12 Capital Requests

Mr. Richard Schweigert, Chief Financial Officer, Colorado State University (CSU) system, Mr. Brian Chase, Director of Facilities, CSU, and Ms. Shelly Carroll, Engineer, Facilities Management, CSU, presented the FY 2011-12 capital requests for the university. Mr. Schweigert began with some introductory comments about the CSU system. Mr. Craig Cason, Associate Vice President for Facilities Management, CSU -- Pueblo, joined the other CSU representatives at the table. Committee members received a handout outlining the state-funded requests for FY 2011-12 and the projected out-year need for capital funds (Attachment K), and a handout showing projects underway or recently completed on the campus (Attachment L). Mr. Chase began with a presentation of projects currently underway or recently completed on the campus.

04:16 PM

Mr. Chase continued his presentation of projects currently underway or recently completed on the campus and addressed a question about whether the university is using performance contracting to pay the costs for some of the renovations currently underway. He explained that energy costs will not increase next year in spite of the addition of new facilities in part because of investments in certain energy conservation projects. In response to a comment, Mr. Chase said that the university chooses to do green projects that make good economic sense. Ms. Carroll commented briefly on Attachment L. She next walked the committee through the projects listed in Attachment K. Discussion turned to a negative supplemental request to rescind cash funds spending authority for nine projects in order to move the projects to the university's Two-Year Projection of Cash Need list. Committee members received a summary of the request, prepared by Legislative Council Staff (Attachment M).


BILL:	Colorado State University Negative Supplemental Request
TIME:	04:25:02 PM
MOVED:	Bacon
MOTION:	Approve the Colorado State University negative supplemental request to rescind cash funds spending authority for nine projects, in the amount of $150,116,343 CF. (See Attachment M.) The vote passed on a vote of 6-0.
SECONDED:
		VOTE
	Brown	Yes
	Renfroe	Yes
	Schwartz	Yes
	Vigil	Yes
	Bacon	Yes
	Sonnenberg	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:26 PM

Ms. Carroll continued with a presentation of projects listed on the university's Two-Year Projection of Cash Need. She also addressed a question about controlled maintenance funding received by the university in recent years.

04:29 PM --

Colorado State University -- Pueblo FY 2011-12 Capital Requests

Mr. Cason made some introductory remarks about the growth on the CSU -- Pueblo campus and changes resulting from recent construction on the campus. Committee members received a description of projects recently completed on the campus (Attachment N). Mr. Cason walked the committee through Attachment N. He next discussed one project on the university's Two-Year Projection of Cash Need list. Mr. Cason addressed a question about a student fee used for capital projects. Mr. Schweigert made some closing remarks.

04:38 PM

The committee adjourned, to reconvene at 9:00 a.m., Thursday, December 2.