Date: 12/14/2015
Final
Staff Briefing on Capital Briefing to JBC
COMMITTEE ON CAPITAL DEVELOPMENT
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03:07 PM -- Staff Briefing on Capital Briefing to JBC
Mr. Bo Pogue, Legislative Council Staff, discussed the format and strategy for presenting information about the Joint Budget Committee (JBC) staff budget briefing for capital construction. Committee members received a copy of the briefing document. The document is available on the JBC website and can be found here: http://www.tornado.state.co.us/gov_dir/leg_dir/jbc/2015-16/capbrf.pdf. Mr. Alfredo Kemm, JBC staff, came to the table to discuss issue one in the briefing document regarding the Governor's FY 2016-17 budget request for capital construction. He discussed specific recommendations in the briefing, including funding controlled maintenance before funding continuation projects for new buildings. Ms. Donaldson discussed the JBC staff recommendation to fully fund Levels 1 and 2 of controlled maintenance and the recent investment in capital construction by certain state agencies. She also discussed the ability of state agencies to adequately manage a larger number of controlled maintenance projects and the possibility of increasing the appropriation to the Emergency Controlled Maintenance Account.
03:18 PM
Mr. Pogue provided input about the JBC staff recommendation to incrementally sell state buildings equal to 1.0 percent of the insured replacement value each year. Committee discussion ensued on whether any buildings have been specifically identified for sale, the cost savings associated with owning a building over leasing it, and other advantages and disadvantages of replacing owned space with leased space.
03:26 PM
Ms. Donaldson discussed the JBC staff recommendation to finance the Adams County Youth Services Center and Digital Trunked Radio System Microwave Infrastructure projects using certificates of participation (COPs). She explained how initial costs of the project compare to COP financing. Committee discussion ensued on the current COPs for the Department of Corrections.
03:33 PM
Mr. Kemm presented issue two from the capital briefing document. Mr. Kemm responded to a question about whether an enterprise created to manage state assets would be a state agency. Discussion ensued on this topic. Mr. Becker discussed how costs associated with controlled maintenance could be paid from interest earnings on the Controlled Maintenance Trust Fund and the possibility of making the FY 2016-17 SB 09-228 General Fund transfer to the Controlled Maintenance Trust Fund rather than to the Capital Construction Fund. Mr. Pogue responded to the recommendation in issue two to create an enterprise to manage state assets. Mr. Kemm responded to a question from the committee about legislation authorized during the 2015 legislative session concerning setting aside an amount equal to the depreciation of assets funded through the capital budget.
03:52 PM
Discussion returned to the topic of creating an enterprise entity to manage state assets.
03:58 PM
Mr. Kemm next presented issue three from the capital briefing document. Ms. Donaldson presented some thoughts about the JBC Staff recommendation to pursue legislation that creates a State Management Trust Enterprise to manage all of the Department of Human Services (DHS) real property assets. Ms. Donaldson responded to questions regarding the ability to quantify economies of scale for DHS facilities throughout the state, and the potential for staff to create a document summarizing its thoughts on the JBC Staff proposal.
04:08 PM
Discussion ensued regarding the time frame for taking action on the proposals set forth by JBC Staff. Mr. Becker addressed a JBC Staff proposal to sell the Grand Junction Regional Center campus, noting some positions taken by the Regional Center Task Force assembled to study issues associated with the campus. Mr. Becker responded to questions regarding the timeline for this task force to issue a final report. Discussion followed regarding the potential for pursuing the creation of an authority to manage DHS assets, and the merits of other components of the JBC Staff proposal.
04:17 PM
Mr. Kemm presented issue four from the capital briefing document. This issue, in part, contemplates accessing lottery moneys to help fund higher education controlled maintenance. Discussion ensued regarding the ongoing need of the programs that currently receive lottery moneys, and the need to amend the State Constitution to access lottery moneys for higher education capital construction.
04:26 PM
The committee adjourned.