Call to Order and Roll Call
The 3rd meeting of the Capital Planning Advisory Board was held on Friday, October 24, 2014, at 12:00 PM. The meeting convened at Western Kentucky University in Downing Student Union. Senator Stan Humphries, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Stan Humphries, Co-Chair; Representative Terry Mills, Co-Chair; Senator Whitney Westerfield; Charles Byers, Carole Henderson, John Hicks, Sherron Jackson, and James W. Link.
Guests testifying before the board: Bryan Russell, Chief Facilities Officer, and Ann Mead, Senior Vice President for Finance and Administration, Western Kentucky University.
LRC Staff: Shawn Bowen, Katherine Halloran, and Jennifer Luttrell.
Tour of WKU Capital Projects
A tour of Western Kentucky University (WKU) capital projects preceded the meeting.
Approval of Minutes
Due to the lack of a quorum, the minutes were not approved.
Welcome and Comments
Senator Humphries thanked Dr. Ransdell and other university staff for hosting today’s meeting. He then announced that the Governor appointed Jane Driskell as a new board member. Ms. Driskell is replacing Fontaine Banks who passed away not long after he was appointed as a member of the board.
Mr. Russell welcomed board members and guests. He briefly discussed the WKU 2014 Construction and Master Plan Update, which includes completed, current, and future capital projects.
Tax Increment Financing for Postsecondary Construction
Ms. Mead briefed members on the use of tax increment financing (TIF) for construction of WKU postsecondary capital projects. Twenty-eight projects have been completed or are under construction in the TIF district, known as the WKU Gateway to Downtown Bowling Green. The TIF district was established in 2007 after the city of Bowling Green and Warren County reached an agreement with the state to create a 383-acre, 52-block special development and tax district. The district receives 80 percent of the increases in payroll, property, sales, and other tax revenue generated by new development within the district. As of June 30, 2014, capital investment in the TIF district surpassed the required goal of $150 million six months ahead of schedule.
Ms. Mead discussed several projects constructed within the TIF district; including the Augenstein Alumni Center, Alumni Square Parking Garage, WKU Student Life Foundation Apartments, the Medical Center/WKU Health Sciences Complex, and Hyatt Place Hotel. One new project, the WKU College of Business, will be included in WKU’s 2016-2022 six-year capital plan. The new facility will replace the Gordon Ford College of Business built in 1966.
Mr. Hicks said tax increment financing is a funding mechanism typically used for renovation or infrastructure projects. He asked what portion of the project costs are considered infrastructure. Ms. Mead said the total value of the TIF projects for WKU and the Student Life Foundation is approximately $61 million and all has been counted toward the construction goal. The university must meet certain reporting requirements, and the value of all construction in the TIF district has been allowed by the state. Infrastructure costs are not accounted for separately.
In response to another question from Mr. Hicks, Ms. Mead said the WKU Foundation initially helped finance a land acquisition in downtown Bowling Green eventually used for a downtown parking garage. This project was under the Downtown Economic Development Authority’s oversight.
Legislative Research Commission Program Review and Investigations Committee Staff – Information Technology Study
Senator Humphries discussed the results of the LRC Program Review and Investigations Committee survey on the state’s information technology (IT) resources. State agency leaders, technology managers, and Capital Planning and Advisory Board members were surveyed via electronic questionnaire.
Mr. Jackson said the Program Review Information Technology Study may include recommendations that could be beneficial during the next capital planning period. He suggested that the board consider the possibility of meeting before the end of the year to discuss the results of the report when it is released. Senator Humphries said after the November Program Review meeting, a copy of the report will be mailed to members. If the report contains recommendations regarding the capital planning process, an additional board meeting before the end of the year will be convened.
Information Items
Three information items were included in members’ folders for review: the COT Commonwealth Office of Technology (COT) and its role in state agency information technology functions, the Next Generation Kentucky Information Highway project and the average cost of Internet services, and recommendations for improvement to the Kentucky Business One-Stop Portal project.
In response to a question from Senator Westerfield regarding the centralization of IT infrastructure for executive branch agencies, Mr. Hicks said the Executive Order that centralized executive branch IT operations under COT could not mandate the inclusion of constitutional offices. However, officials within the Finance and Administration Cabinet and COT invited the constitutional offices to participate in the consolidation. To date, one agency, the Office of the Attorney General, plans to participate in the consolidation.
Adjournment
With there being no further business, a motion to adjourn the meeting was made. The motion was seconded, and the meeting adjourned at 1:00 PM.