Call to Order and Roll Call
The Capital Projects and Bond Oversight Committee meeting was held on Tuesday, August 19, 2014, at 1:00 p.m., in Room 169 of the Capitol Annex. Senator Chris Girdler, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senators Chris Girdler, Julian Carroll, and Bob Leeper; Representatives Steven Rudy and Jim Wayne.
Guests: Mr. David Martin, Director of Contract Administration and Procurement Services, University of Louisville (UofL); Ms. Cori Bibelhauser, Contract Administrator, UofL; Mr. John Hicks, Deputy State Budget Director; and Mr. Ryan Barrow, Executive Director, Office of Financial Management.
LRC Staff: Josh Nacey and Angela Offerman.
Approval of Minutes
Senator Carroll moved to approve the minutes of the July 15, 2014, meeting. The motion was seconded by Representative Rudy and approved by voice vote.
Information Item
Mr. Josh Nacey, Committee Staff Administrator presented a notice of advertisement for leased space from the Finance and Administration Cabinet for the Department of Corrections in Fayette County.
Project Report from the University of Louisville (UofL)
Mr. David Martin, Director of Contract Administration and Procurement Services, UofL, presented a new lease with Jewish Hospital and St. Mary’s Healthcare, Inc., for 9,107 square feet (sq ft) of clinical space for the Department of Family and Geriatric Medicine. The department has been at the location since 2005; however, the university reported it as a new lease because the rental rate increased to $18.24 per sq ft for an annual cost of $166,112. The lease will expire December 31, 2015.
In response to questions from Representative Wayne, Mr. Martin said the property is owned by the UofL Foundation and leased to Jewish Hospital. The foundation has increased the rental rate to Jewish Hospital, which has resulted in an increased rental rate to the department, who is subleasing from Jewish Hospital.
Senator Carroll made a motion to approve the new lease. The motion was seconded by Representative Rudy and approved by roll call vote.
Project Report from the Finance and Administration Cabinet
Mr. John Hicks, Deputy State Budget Director, presented a new unbudgeted capital project, Kentucky Statewide Longitudinal Database System Data Quality Upgrade project, from the Education and Workforce Development Cabinet. The $636,000 project was 100 percent federally funded by the U.S. Department of Labor Workforce Data Quality Initiative grant.
Senator Carroll made a motion to approve the new capital project. The motion was seconded by Representative Wayne and approved by roll call vote.
Reports from the Office of Financial Management (OFM)
Mr. Ryan Barrow, Executive Director, OFM, presented follow-up reports on three previously approved bond issues. The first report was for $27,460,000 Morehead State University General Receipts Refunding Bonds, 2014 Series A and Series B, which will finance the current refunding of some outstanding bonds and the associated costs of issuance.
The competitive transactions closed June 25, 2014, with a net present value savings of 7.363 percent and 3.744 percent, respectively. No action was required.
The second report was for $88,145,000 University of Kentucky General Receipts Refunding Bonds, 2014 Series D, which will finance the partial advance refunding of some outstanding bonds and the associated costs of issuance.
The competitive transactions closed June 26, 2014, with a net present value savings of 9.46 percent. No action was required.
The third report was for $61,445,000 Kentucky Housing Corporation Single Family Housing Revenue Bonds, 2014 Series A, which will finance the refunding of some outstanding bonds. The costs of issuance were paid by the corporation.
The negotiated transaction interest rate was 3.143 percent. No action was required.
New School Bond Issues with School Facilities Construction Commission (SFCC) Debt Service Participation
Mr. Barrow reported three school bond issues with SFCC debt service participation with a total par amount of $4,340,000. The state portion of the annual debt service payment was $172,609 and the local contribution was $143,616. The bond issues did not involve a tax increase.
Senator Carroll made a motion to approve the bond issues. The motion was seconded by Senator Leeper and approved by roll call vote.
New School Bond Issues with 100 Percent Locally Funded Debt Service Participation
Mr. Nacey said three local bond issues were reported to the committee. The bond issues were 100 percent locally funded and do not involve new tax increases. No action was required.
With there being no further business, the meeting was adjourned at 1:12 p.m.