Rural Issues (09/09/2005)

Final
STAFF SUMMARY OF MEETING

RURAL ISSUES

Date:	09/09/2005	ATTENDANCE

Time:	09:03 AM to 04:30 PM	Entz	X
		Fitz-Gerald	X
Place:	Grand Junction Two Rivers Convention Center	Gallegos	X
		Gardner	X
This Meeting was called to order by		Kester	E
	Representative Hodge	Klein	E
		McKinley	E
This Report was prepared by		Rose	X
	Ron Kirk	Shaffer	E
		Whitefeather	X
		Isgar	X
		Hodge	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Presentations		-

09:03 AM -- Call To Order

Representative Hodge, Chair, called the meeting to order and welcomed the public to the event. Representative Hodge explained that the committee was created by HJR 05-1055 to consider economic issues facing rural Colorado such as economic development, retention of employees, and access to technology. The committee members introduced themselves and commented on concerns in their districts that fall under the committee's charge. Staff present were Natalie Mullis and Ron Kirk, Legislative Council Staff, and Karen Epps, Office of Legislative Legal Services.

09:05 AM -- Presentation by USDA Rural Development

Ms. GiGi Dennis, State Director for USDA Rural Development and Ms. Patti Snidow, Governor's Office of Economic Development, Grand Junction, distributed two handouts to the committee entitled "USDA Rural Development 2004 Accomplishments Colorado" (Attachment A), and a booklet on USDA Rural Development (Attachment B).

Ms. Dennis began by discussing USDA programs and commented that USDA is the only federal agency that can provide loan and grant funding to build a community from the ground up. USDA provides funding for over 40 programs to help rural communities with housing, infrastructure, businesses and cooperative development, and community facility needs. Ms. Dennis commented that resources from the federal government benefit rural Colorado by putting federal dollars back into rural communities.

Ms. Dennis discussed the Guaranteed Homeownership Loan Program and stated that the program assists families and individuals of moderate income to purchase their homes by guaranteeing private lenders' loans. For this loan program, USDA guarantees up to 90 percent of the loan amount and does not require a down payment.

Ms. Dennis commented on USDA's Home Repair Loan and Grant Program. This program provides money to homeowners to help pay for the removal of health or safety hazards, or make general repairs to a home. Generally, this program uses federal funding to help with community needs. Ms. Dennis closed saying to date, the Bush Administration, through USDA, has invested $50 billion to help create or save over 800,000 jobs for rural America. Over the last four years, the federal government has invested about $1.2 billion in rural Colorado to provide housing, infrastructure, job creation, technical assistance, and many other needed services for the citizens of Colorado.

09:18 AM

Ms. Patti Snidow briefly discussed the loan guarantees that USDA offers to small rural businesses and commented that this federal assistance creates jobs. Ms. Snidow said that one USDA program, the Community Facilities Guarantee Loan Program, can be used to fund projects such as health care services, public safety, police and fire stations, adult and child day care, community, social or cultural services, the purchase of equipment, and to construct or relocate public buildings. This program creates jobs through a partnership with the state. As one example, Ms. Snidow said that USDA offers seniors grants for home repairs or to retrofit bathrooms or walkways to specific elderly needs. Loans can be structured as 20-year loans and cost the homeowner 1 percent interest over the life of the loan.

Ms. Snidow commented that the state needs to provide technical assistance to rural communities that do not have the resources and staff to provide critical local government services to its citizens.

The committee briefly discussed the federal loan guarantee programs that are currently available to taxpayers in Colorado through USDA. Committee members discussed whether federal moneys under USDA could be used for local government road paving projects.

Ms. Dennis closed the discussion by talking about some of the programs funded with federal moneys that are used for renewable energy and biodiesel production.

09:45 AM -- Presentation by St. Mary's Hospital and Regional Medical Center

Mr. Dan Prinster, St. Mary's Hospital and Regional Medical Center, distributed a handout to committee members on the facility and Grand Junction region (Attachment C). Mr. Prinster mentioned that despite the fact that Mesa County is not a rural county, St. Mary's serves about 20 percent of the patient population from rural communities. Mr. Prinster commented that the facility has 650 full-time employees and its wages and benefits cost about $100 million annually.

Mr. Prinster continued by discussing the job opportunities offered by the hospital. He pointed out that currently, St. Mary's has a 4 percent job vacancy rate which is below the 7 percent national average and pays comparable wages to the Denver metro area. Mr. Prinster closed by commenting on the challenges that rural health care facilities face when recruiting medical staff.

10:03 AM -- Presentation by Rocky Mountain Health Plans

Mr. Steve ErkenBrack, Rocky Mountain Health Plans, mentioned that he is on the Club 20 Health Care Task Force and briefly discussed the approach that Rocky Mountain Health Plans takes for the delivery of health care services. Mr. ErkenBrack said that the Rocky Mountain Health Plans approach looks at preventative practices such as immunization screening to save millions of dollars in long-term treatments. Early detection of disease such as diabetes and breast cancer can save health care providers significant amounts of money.

Mr. ErkenBrack closed by commenting that the health care industry needs to find ways to make health insurance more affordable for everyone in rural communities in Colorado.

10:11 AM -- Presentation by The Visiting Nurse Association

Ms. Sue Birch, Visiting Nurse Association, commented on the community-based services that visiting nurses provide to people in rural communities. Ms. Birch discussed the importance of funding for early intervention programs as a way to deliver effective home care. The concern is that there are 60,000 citizens in Colorado that need to be seen each week or once a month. Colorado does not have the nurses to meet the demand. In addition, there are 20 counties in Colorado that do not have home care programs.

Ms. Birch continued to discuss the nursing shortage in Colorado. This professional worker shortage presents a significant concern when the aging demographic population of rural communities is considered. To add to the concern, the average age is 46 for RNs in home care and the nurse attrition rate is high for this group of medical professionals. Younger women are not choosing to enter the nursing profession because it is very hard work and requires long hours. There is also an issue of pay discrepancy between the salary that hospital nurses and visiting nurses earn that makes mainstream nursing at large hospital facilities more attractive.

Ms. Birch mentioned that there is also a concern regarding the way money from the recent tobacco tax increase with be disbursed to rural communities.

The committee discussed the effect of high gasoline prices on the expenses that visiting nurses incur. Ms. Birch said that the typical visiting nurse spends about 3.5 hours per visit and drives a significant distance to reach each patient. Ms. Birch closed by saying that the health care industry will have to re-frame the delivery of health care to meet the future demand of an aging population. The state may have to provide incentives to get nurses to work in home care environments.

10:40 AM -- Recess

10:50 AM -- Presentation by The Home Care Association of Colorado

Ms. Jill Elliott, Home Care Association of Colorado, began by distributing a map that shows the number of Colorado Counties without Home Health Care Centers (Attachment D), a handout on TeleHealth (Attachment E), a presentation handout (Attachment F), and Senate Joint Resolution 04-038 (Attachment G) to committee members.

Ms. Elliott began by discussing the importance of the TeleHealth initiative as an effective way to address the growing demand for health care in rural communities. Home care providers must seek funding for options to extend their use of TeleHealth in the early detection and intervention of chronic disease. As an example, low-end TeleHealth intervention programs would use telephone follow up calls and audio consultation in between home visits for high risk patients. High-end TeleHealth Intervention would be tele-monitoring audiovisual data consultation.

Ms. Elliott discussed SJR 04-038 as a resolution that endorses TeleHealth and urges funding for research and to address the nursing shortage. With the aging demographics in rural communities, there is an increasing need for more nursing homes and assisted living facilities.

Ms. Elliot closed by saying that TeleHealth can reduce the overall number of hospital stays and allows patients to remain in their own homes while consulting a professional nurse.

11:15 AM -- Presentation by The Colorado Oil and Gas Association

Ms. Kathy Hall, Colorado Oil and Gas Association, began by discussing the oil and gas boom in western Colorado and its impact on regional economies. During 2004, there were 2,917 permits issued in Northwest Colorado and the association expects that over 3,000 will be issued by the end of 2005. Currently there are 66 of 82 statewide drilling rigs working in Northwest Colorado.

Ms. Hall discussed the number of new jobs that have been created by the oil and gas industry and cited that it takes 44 to 48 workers to drill the average gas well. These employees who work on oil and gas wells earn about $48,000 to $50,000 annually. Currently there are 24 companies with drilling operations in Northeast Colorado.

The committee discussed the impact of drilling for oil and gas in Northeast Colorado and its impact on the global market. Ms. Hall closed by saying that the current market demand is not the same as the boom that was experienced in the early 1980s. The current market demand is expected to last for 40-50 years. Ms. Hall distributed a handout on the Energy Expo "06" (Attachment H) and explained that it is scheduled for Friday, February 24, 2006, at the Two Rivers Convention Center.

11:53 AM

Mr. Greg Schnacke, Colorado Oil and Gas Association, discussed the long-term demand for oil and gas and commented that Colorado produces over 6 percent of the natural gas in the United States. The recent boom in the oil and gas market differs from the 1980 boom because it is long-term, whereas the 1980's boom was short-term. There are 50 years of jobs in the current market boom for oil and natural gas drilling operations.

11:56 AM

Mr. Ken Wonstolen, Colorado Oil and Gas Association, briefly discussed the impact of natural gas drilling on regional rural economies and commented on the number of new jobs that have been created by the recent demand for oil and natural gas.

11:58 AM -- Presentation by Associated Governments of Northwest Colorado

Mr. Jim Evans, Associated Governments of Northwest Colorado (AGNC), distributed a AGNC Economic Review handout (Attachment I) and a handout on potential legislative initiatives to assist rural communities (Attachment J). Mr. Evans summarized some of the statistics in the economic report. Because of the drilling activity in Northwest Colorado, the Northwest region is often referred to as the energy capital of the state.

Mr. Evans commented on the impact of oil and natural gas drilling to rural regional economies. The Northwest region is a major mining and energy producing area. In 2004, a large portion of all of the oil and natural gas produced in Colorado came from the Northwest region of Colorado. This region is a multi-billion dollar economy. In 2003, the region's aggregate personal income totaled $5.8 billion and in 2004, retail sales in the region amounted to $5.9 billion.

Mr. Evans closed by discussing a number of wage and labor force statistics found in the AGNC Economic Review report.

12:15 PM -- Presentation by the Colorado Mining Association

Ms. Dianna Orf, Colorado Mining Association, commented on the number of new and secondary jobs that are being created by the mining industry in Colorado. Gold, Coal, and Uranium production are up and the demand for these minerals has resulted in an expansion of many of Colorado's mining operations.

Ms. Orf commented on some of the largest mining projects in Colorado and their impact on regional economies. When mining projects begin production, they become long-term residents in their communities. Ms. Orf concluded by commenting on the money that the industry has spent on environmental remediation.

12:30 PM -- Lunch

01:30 PM -- Presentation by Region 10

Ms. Leslie Jones, Region 10, explained that Region 10 is a nonprofit alliance of government and business that has become the regional resource center for the businesses and residents of Delta, Hinsdale, Ouray, Montrose, Gunnison, and San Miguel counties. Ms. Jones discussed regional transportation planning and commented on the importance of sound transportation networks to move goods to market.

Ms. Jones commented that population projections in Southwest Colorado will double over the next 25 years. Generally, Southwest Colorado covers a large geographic area that has ski areas and national monuments. In this region, there are few large employers. Transportation challenges include serving the tourism industry, which brings many travelers through on the I-70 corridor. One of the transportation challenges includes how to best accommodate these travelers.

Ms. Jones commented on the importance of the transportation corridors to regional economies and the value of rail transportation lines for coal transportation in the state. Transportation planning must be done on a cooperative effort between state and local planning agencies. Governments must find an appropriate funding split to deal with limited transportation funding resources. Ms. Jones closed by commenting on the importance of truck traffic to regional economies.

The committee engaged in a brief discussion on the benefit of improvements along the Highway 50 and 160 corridors.

02:00 PM -- Presentation by Gracestone, Inc.

Ms. Anne Peters, Gracestone, Inc., began by distributing a handout on her presentation (Attachment K) and discussing the economic impacts of recycling and reuse industries in Colorado. Ms. Peters commented that recycling is a good fit for rural Colorado because the industry creates jobs that pay above the average wage. These jobs have a multiplier effect to local economies. Another advantage of the recycling industry is that it reduces illegal dumping.

Ms. Peters discussed the government role in rural recycling. Government can assist rural recycling businesses by providing start-up funding and tax incentives. In many instances, public-private partnerships are effective in creating rural jobs and stimulating regional economies.

Ms. Peters closed by discussing the state waste tire fee. Colorado's only support comes from a $1 fee that is charged by tire shops on returned or used tires. Ms. Peters closed by recommending that the waste tire fee be increased from $1 to $1.25 to provide additional money for recycling grant money.

02:05 PM -- Presentations by Lifespan Recycling Technologies

Mr. Rick Larson, Lifespan Recycling Technologies, discussed the recycling operations of the Grand Junction-based Lifespan Recycling Technologies. He commented that in remote locations the recycling industry has created numerous jobs in the state for rural Colorado. With more state support, Lifespan would open a recycling center that would employ a half dozen more employees. He closed by discussing the jobs created by the recycling industry in Colorado and in other states. The recycling industry would create another $1 million in business revenue for western Colorado.

Ms. Peters closed by reiterating that an increase in the state tire fee would aid rural economic development in Colorado. Currently, the fee will sunset in 2006 if it is not extended.

02:18 PM -- Presentations by The Mesa County Worforce Center

Ms. Sue Tuffin, Mesa County Workforce Center, commented that healthcare is a primary need for citizens and businesses along the western slope. Ms. Tuffin commented on the importance of workforce development to businesses in rural Colorado. Businesses need an educated and trained workforce and the western slope is lacking trained individuals for the energy industry. Ms. Tuffin commented on the need for more trained workers and talked about the low-passage rate for local drug-screening tests. Ms. Tuffin closed by discussing the energy industry's effort to hire local trained help and the role that the workforce center plays in providing trained workers for the energy industry.

02:30 PM -- Presentation by The Colorado Housing Investment Fund Coalition

Ms. Britta Fisher, Colorado Housing Investment Fund Coalition, commented on the impact of rural regions that do not have affordable housing for service-sector employees. Affordable housing plays an important role in the rural economy because it allows workers to live close to their work and stimulate rural regional economies. Ms. Fisher commented on the importance of the availability of affordable housing to families and turned the presentation over to Ms. Nicole Fisher to comment on the importance of affordable housing to her family.

Ms. Nicole Fisher, single mother, commented on the difficulties she experienced as a young, single mother raising three children in a rural area that had little affordable housing. Ms. Britta Fisher closed by discussing the importance of affordable housing and housing authorities to families.

02:45 PM -- Presentation by The Northwest Colorado Council of Governments

Mr. Gary Severson, Northwest Colorado Council of Governments, distributed a presentation handout (Attachment L) and commented on the value of affordable housing to economic development in North Park. Mr. Severson commented on the lack of affordable housing in the Walden area and the cost of living in rural Colorado. He commented on the disparity between cost-of-living increases in different counties and the related increase in real estate prices from 1998 to 2004. Mr. Severson closed by commenting on rural job growth in Eagle and Pitkin counties and the lack of workforce housing in these rural regions of Colorado.

02:53 PM -- Presentation by The Community Capital Corporation and The Colorado Housing Investment Fund Coalition

Mr. Ken Hoagland, Community Capital Corporation and Colorado Housing Investment Fund Coalition, distributed a packet of materials (Attachment M) and talked about rural housing trends. Colorado's rural areas face challenges unique to these areas, including water issues, aging household stock, in-migration and escalating land prices, along with demographic changes and poverty. Rents in many rural communities are affordable but many challenges exist because these rural areas are experiencing higher poverty rates than the state average. These higher poverty rates place available housing out-of-reach for many rural citizens because they do not have the income to afford the rent.

Mr. Hoagland commented on several rural housing challenges and pointed out that jobs and housing are needed to retain young adults in aging communities. In addition, the condition of older, rental homes and the increasing number of seniors living in older homes creates a strong demand for housing that can accommodate their needs.

Mr. Hoagland closed by commenting on the economic benefits of affordable housing.

03:00 PM -- Presentation by Yampa Valley Partners

Ms. Audrey Danner, Yampa Valley Partners, briefly commented on the importance of a good telecommunications infrastructure for higher education and the health industries in Colorado.

03:20 PM -- Presentation by C & G Healthcare Management Inc.

Ms. Joyce Humiston, C & G Healthcare Management Inc., commented on the problems that long-care facilities experience due to the disparity in state Medicaid reimbursement rates.

Ms. Arlene Miles, Colorado Health Care Association, commented on the importance of nursing home care to rural communities and the need to make state reimbursement rates for long-term care facilities more uniform. Ms. Miles discussed the previous cost-based reimbursement system for state Medicaid reimbursement that existed in the late 1970s and the disparity that is present under the current system.

03:45 PM

Ms. Janet Snipes, Board of Examiners of Nursing Homes Administrators, commented on the importance of maintaining nursing homes in rural Colorado communities because they are some are the largest employers in the region. Ms. Snipes closed by noting the economic impact of these facilities to regional economies.

04:00 PM -- Public Comment

Dr. Mark Johnson, representing himself, commented on the importance of rural public health care systems to both regional economies and the value of investing in higher education to provide a trained workforce for these facilities.

04:13 PM -- Committee Discussion on Legislation

Staff commented on the bill requests that were made by the committee during the previous two meetings. The committee requested bill drafts for the following:

• a statewide ethanol requirement;

• a statewide biodiesel requirement;

• legislation that would allow voluntary regional tax-base sharing as a way to offset the state backfill requirement for school districts in regions that phase out the business personal property tax;

• a biodiesel producer state income tax credit; and

• a value-added program that makes grants and loans available to ethanol producers.

The committee discussed amending the biodiesel legislation to require only state vehicles to use a B-20 diesel blend and state fleet filing stations offer at least one B-20 blend. (This amendment is in place of a statewide mandate that would require all filling stations to offer a B-20 blend of diesel.)

Representative Gardner requested that staff look at the incentives other states provide to energize the biodiesel market.

The committee briefly discussed legislation that would lessen the disparity between state Medicaid reimbursement payments for facilities that provide Medicaid services but no legislation was requested at this time. (Representative Gardner discussed the possibilities of identifying inefficiencies in facilities that receive higher-reimbursement rates than facilities that receive lower reimbursement rates. The committee closed by briefly discussing some ways to make state Medicaid reimbursement rates more uniform.)

As the last item on the agenda for committee business, Representative Hodge, Chair, commented that the Executive Committee of the Legislative Council approved a request for an additional meeting of the interim committee to allow more time to discuss legislation. The committee cancelled the meeting scheduled for October 12 and rescheduled the meeting for October 3. The additional and final interim committee meeting was scheduled for October 27, 2005. Both October 12 and October 27 meetings will be held at the Capitol in HCR 0112. Each meeting will begin at 9:00 a.m. and conclude when the committee completes its agenda for legislative recommendations.

04:30 PM

Adjourn.