Joint Committee Committee on Capital Development (04/19/2012)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON CAPITAL DEVELOPMENT

Date:	04/19/2012	ATTENDANCE

Time:	08:03 AM to 08:59 AM	Brown	X
		Renfroe	X
Place:	SCR 356	Schwartz	*
		Vigil	X
This Meeting was called to order by		Sonnenberg	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:
Consideration of Unspent COP Proceeds		Witness Testimony and/or Committee Discussion Only

08:03 AM -- Consideration of Unspent COP Proceeds

The committee was called to order. A quorum was present. Ms. Kori Donaldson, Legislative Council Staff, and Ms. Esther van Mourik, Office of Legislative Legal Services, led a discussion about the potential use of unspent proceeds from the sale of certificates of participation (COPs). The COPs were used to finance a number of higher education institution capital construction projects pursuant to House Joint Resolution 08-1042. Some of these projects were completed under budget, resulting in the unspent proceeds. Committee members received a packet of information outlining the steps that the committee may take to use the unspent proceeds (Attachment A). Ms. Donaldson walked the committee through the materials in Attachment A, and responded to questions regarding the dollar amounts contained in the attachment. Ms. van Mourik explained the legislative action that would be required to direct the use of the unspent COP proceeds. Ms. Donaldson continued to brief the committee on the potential actions outlined in Attachment A.

08:13 AM

Mr. Brett Johnson, Deputy State Treasurer, discussed the steps that would need to be taken to amend the COP documents to refund cash portions of unspent proceeds to higher education institutions that have realized cost savings in COP-funded capital projects. Ms. Donaldson returned to briefing the committee on the decision possibilities contained in Attachment A. Discussion ensued regarding the costs that would accrue to the state if cash funding were to be refunded to higher education institutions realizing capital project savings in proportion to the amount these institutions committed to the projects. Ms. Donaldson responded to questions regarding the source of cash matches committed by two higher education institutions, and then returned to briefing the committee on the information in Attachment A. Discussion ensued regarding the potential for using the unspent COP proceeds to fund controlled maintenance projects. Discussion followed regarding the potential for using the unspent COP proceeds to refinance the COP package, or pay down its principal. Mr. Johnson explained how this might be accomplished.

08:26 AM

Various committee members weighed the options available to the committee for using the unspent COP proceeds, and discussed the benefits and drawbacks to each approach. The discussion turned to the merits of proportionally refunding cash funding to higher education institutions that realized cost savings from their COP-funded capital projects. Ms. Donaldson explained that certain larger capital projects may not be able to be completed within the deadline for using the unspent COP proceeds, and responded to questions regarding dollar amounts involved in refunding institutional cash to the higher education institutions.

08:37 AM

Ms. Donaldson responded to questions regarding the new costs associated with certain higher education institution capital projects that have been re-phased. Representative Sonnenberg discussed the merits of deferring the decision on how to use the unspent proceeds. Discussion ensued regarding the likelihood that the dollar figures associated with the unspent COP proceeds will change in the coming weeks or months. Mr. Larry Friedberg, State Architect, provided his perspective on the use of the unspent COP proceeds, including the benefits of using the money to fund additional higher education controlled maintenance projects in FY 2012-13. Mr. Friedberg responded to questions regarding the status of capital construction needs for Richardson Hall on the Adams State College campus. Mr. Johnson discussed the complications associated with using the unspent COP proceeds to fund additional controlled maintenance projects in FY 2012-13.

8:48 AM

Discussion ensued regarding the merits of funding additional controlled maintenance projects in FY 2012-13. Mr. Friedberg responded to questions regarding the priority levels for projects included on the FY 2012-13 controlled maintenance list, and the potential for treating certain higher education capital projects as controlled maintenance issues, including the Adams State Richardson Hall project. Discussion followed regarding the benefits of deferring a decision on the unspent COP proceeds for one week. Ms. van Mourik explained some options for deferring a decision on using the unspent COP proceeds.


BILL:	Consideration of Unspent COP Proceeds
TIME:	08:38:29 AM
MOVED:	Sonnenberg
MOTION:	Moved to defer the decision on how to use the unspent Certificates of Participation proceeds until the 2013 legislative session. The motion was withdrawn.
SECONDED:
		VOTE
	Brown
	Renfroe
	Schwartz
	Vigil
	Sonnenberg
	Bacon

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION:

08:57 AM

Discussion ensued regarding pending committee business, including how best to approach controlled maintenance funding for information technology projects, and updating the committee on the Capitol Dome Restoration project.

08:59 AM

The committee adjourned.