Call to Order and Roll Call
The 4th meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, October 20, 2016, at 11:00 AM, at the Kentucky Horse Park. It was a joint meeting with the Interim Joint Committee on Labor and Industry and the Interim Special Committee on Tourism Development. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative John Short, Co-Chair; Senators Perry B. Clark, Chris Girdler, and Jimmy Higdon; Representatives Lynn Bechler, Kevin D. Bratcher, Leslie Combs, Tim Couch, Jim DeCesare, Mike Denham, Jeffery Donohue, Daniel Elliott, Richard Heath, Dennis Horlander, James Kay, Dennis Keene, Kim King, Brian Linder, Tom McKee, Terry Mills, Ruth Ann Palumbo, Arnold Simpson, Fitz Steele, and Russell Webber.
Guests: Laura Prewitt, Executive Director, Kentucky Horse Park; Jonathan Lang, Deputy Executive Director, Kentucky Horse Park; Hood Harris, President, AT&T Kentucky; Megan McLain, Transportation Cabinet; Gwen Pinson, Finance and Administration Cabinet; Leigh Powers, Tourism, Arts and Heritage Cabinet.
LRC Staff: John Buckner, Chip Smith, and Karen Brady.
Minutes
A motion was made and seconded to approve the minutes from both the August and September meetings and carried by voice vote.
Kentucky Horse Park
Laura Prewitt gave an overview of the Horse Park, which opened in 1978. The Horse Park has 77 full-time employees, is a true working horse farm, and has over 900,000 visitors annually. At 1,224 acres, the Horse Park is considered one of the best equestrian venues in the world. The park hosts over 200 equestrian events a year, but also serves as a tourist destination featuring attractions such as museums, horse-drawn tours, trail rides, the Hall of Champions, and 260 camping sites. The park also offers concerts, can serve as a wedding venue, and can host receptions, races, and other various events.
Ms. Prewitt discussed the Horse Park as a brand and the park’s future. Marketing efforts focus on Man O’ War’s 100 year anniversary, a run-walk club, cemetery crawl, education outreach, and riding camps.
Ms. Prewitt and other staff have compiled a list of $10 million in capital projects for reinvestment in core park facilities. These projects are important for the park to maintain certain events (such as the Rolex) and attract new ones. The park is trying to do a better job of identifying group sales events.
The Horse Park wants to create a very good guest experience so that visitors will want to return. The park is focusing on great customer service.
Ms. Prewitt discussed the Legacy Trail, which has been expanded from downtown Lexington to the Kentucky Horse Park and extends to Scott County. The trail is a great tourist attraction for the community.
In response to a question from Senator Higdon, Ms. Prewitt said there is a problem with the boilers in Alltech Arena. Seven boilers are in the process of being replaced. Ms. Prewitt stated that the Horse Park has energy management savings policies.
Responding to a question from Representative Denham, Ms. Prewitt spoke discussed the Horse Park’s main competition, Tryon International Equestrian Center in North Carolina. Tryon is an hour from any airport, which is a major drawback.
In response to questions from Representative Smart, Ms. Prewitt stated that the Horse Park has always had a parking fee from which the park receives a large amount of revenue. There are four restaurants at the park that are open seasonally. She discussed the campground and said its infrastructure is 40 years old. The campground needs electrical and water upgrades to be competitive.
Responding to a question from Representative Palumbo, Ms. Prewitt stated the Man O’ War festival will start March 15, 2017 and end November 6, 2017.
AT&T Infrastructure and Investment Update
Hood Harris stated that, two years ago, the General Assembly took the first step towards updating Kentucky’s outdated telecommunications laws. 2015 HB 152 passed to spur telecom modernization with the goal of increasing investment in high-speed internet infrastructure and job creation.
By the end of 2016, AT&T will have expanded its fiber-optic network to bring more Kentuckians access to the latest in 4G wireless services through the construction of 32 new cell sites. In addition, AT&T has made over 750 enhancements to existing sites. AT&T coordinated with the Kentucky Department of Education to bring fiber-based, high-speed internet to all 173 school districts in Kentucky. This established Kentucky as the first state to meet new higher speed standards for school districts.
AT&T has certified 15 industrial parks across the state as AT&T Fiber Ready, which is a designation that gives economic development officials a huge advantage by raising awareness about the available fiber infrastructure for prospective industries and site selection consultants.
Through participation in the FCC Connect America Fund, AT&T is aggressively deploying high-speed internet capable facilities in rural parts of the state. Over the next six years, high-speed internet will be brought to 84,000 new customer locations in rural Kentucky.
FCC data shows that 82 percent of Kentucky voice connections are now over something other than a traditional landline.
In response to a question from Representative Keene, Mr. Harris stated that the FCC informs AT&T about areas in the state that are underserved or unserved for internet service.
In response to a question from Representative Bechler, Mr. Hood stated that AT&T is required to meet 40 percent of the locations that the FCC has identified as being underserved or unserved by the end of next year, and is required to meet all of the locations in the three years following that.
Responding to a question from Representative Miller, Mr. Hood discussed about a program AT&T has rolled out named Access. Under the program, if an individual is on the Supplemental Nutrition Assistance Program, Access provides 10 meg service for $10/month, or 5 meg for $5/month. There is no installation fee or equipment fee, and the program includes a Wi-Fi router.
In responding to a question from Representative Tipton, Mr. Hood explained that part of the criteria for which areas get prioritized are consumer demand and existing network infrastructure.
Responding to a question from Representative Nicholls, Mr. Hood stated that utilizing P3 legislation for state parks has been reviewed but there are no plans for it.
In responding to a question from Representative Short, Mr. Hood stated that AT&T is communicating with the administration and SOAR to find ways to use the infrastructure already in place in eastern Kentucky. AT&T is in the process of building three new towers on the Mountain Parkway.
P3 Legislation
Megan McLain, Gwen Pinson, and Leigh Powers gave an overview on P3 legislation. Benefits of P3s include efficiency, private industry expertise, reduced risk and cost to taxpayers, and satisfying a public need or benefit. Any agency that uses P3 projects has the ultimate responsibility of ensuring that all of the qualifications are met.
Various criteria are used to determine if a P3 is the most advantageous method of awarding and administering a capital project or other contract. The first set of criteria are qualitative considerations, which include looking at risk allocation, timeliness and efficiency, benefits gained/not gained with a P3, public interest, and the urgency of the project.
There are three regulations related to the Transportation Cabinet. One is regarding the procurement method for P3s, one is regarding unsolicited proposals, and one is regarding how to decide if a P3 is the correct method for a project. Additional transportation qualitative considerations are whether the P3 provides additional options for financing, whether it is complies with federal requirements, and whether it will have long term effects on toll rates and excess toll revenue.
P3 procurements will be conducted pursuant to competitive negotiation (KRS 45A.080). The Transportation Cabinet’s process is slightly different.
Another aspect of P3 legislation is the ability for private industry to submit an unsolicited proposal. A valid unsolicited proposal must be independently generated, be prepared without government involvement, and include sufficient detail to determine benefits to an agency or local government.
In response to a question from Representative Smart, Ms. Pinson stated that the federal government has used P3s for many of the national parks and that they have been very successful.
In response to a question from Representative Denham, Ms. Pinson said she could not discuss any specific unsolicited proposals that state agencies have received.
Responding to a question from Senator Clark, Ms. Powers and Ms. Pinson discussed the handling of state employees under P3 and privatization scenarios. Before an agency can undertake a P3 project that would involve displacement of ten or more employees, the privatization analysis would have to be gone through first. Representative Combs stated that, in these scenarios, the number one goal is not to displace state employees. The intent is actually that employees will be better off and have more opportunities.
There being no further business, the meeting adjourned at 12:45 p.m.