The first meeting of the Interim Joint Committee on Local Government was held on Wednesday, June 28, 2006, at 1:30 PM, in Room 131 of the Capitol Annex. Senator Damon Thayer, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Damon Thayer, Co-Chair; Senators Walter Blevins Jr, Julian M Carroll, Carroll Gibson, Ernie Harris, Alice Forgy Kerr, Elizabeth Tori, and Johnny Ray Turner; Representatives Adrian K Arnold, Ron Crimm, Mike Denham, Ted "Teddy" Edmonds, Derrick Graham, Jimmy Higdon, Charlie Hoffman, Dennis Keene, Thomas M McKee, Terry Shelton, and Arnold Simpson.
Guests: Myralee Smith-Cowley, Andy Barr, Peggy Satterly, Jeff Hanna, Cathy Figlestahler, Jennifer Oberlin, Gene Kiser, Lara Robertson, Mark Williams, Jodie McDonald, Edwin Scott, and Bob Chandler, Governor's Office for Local Development; and Bert May, Kentucky League of Cities.
LRC Staff: Jamie Franklin, Donna Gaines, Mark Mitchell, Joe Pinczewski-Lee, and Cheryl Walters.
The first order of business was review of the 2006 Kentucky Small Cities Community Development Block Grant (CDBG) Program. Senator Thayer introduced Ms. Myralee Smith-Cowley, Executive Director of the Office of Grants with the Governor's Office for Local Development (GOLD), to explain the 2006 CDBG application.
Ms. Smith-Cowley told the committee that the purpose of the hearing is to discuss GOLD's plans for the 2006 CDBG program and to highlight what has been done in the past.
Ms. Smith-Cowley then gave an overview of the 2006 CDBG program. She explained that the program is administered by the U.S. Department of Housing and Urban Development (HUD), and that the primary mission of the CDBG Program is to assist persons of low and moderate income persons. Ms. Smith-Cowley noted that GOLD accepts applications in five distinct areas: (1) Public Facilities--which includes installation of water/sewer lines and construction/upgrade/expansion of water/sewer plants; (2) Housing--which includes acquisition of dilapidated structures and relocation of households; (3) Economic Development--which includes property/building acquisition and equipment purchase or lease; (4) Community Projects--in which projects vary but may include construction of senior citizen or community centers as well as health department buildings; and (5) Community Emergency Relief Fund--which are projects designed to be a source of emergency funding if an emergency situation such as a natural disaster arises in a community.
Ms. Smith-Cowley told the committee that in 2006, Kentucky will be receiving $27 million in CDBG funds, and that $26.4 million will be available for distribution to cities that are eligible. She noted that this is 3 million dollars less than last year. Ms. Smith-Cowley mentioned that a change in this year's application from the 2005 application is the institution of the Performance Measurement System, which is required by HUD for standardization of program performance.
Ms. Smith-Cowley stated that the 2006 CDBG area allocations are as follows: $7,500,000 for Economic Development; $7.4 million for Public Facilities; $3 million for Public Services (Recovery Kentucky); $4 million for Housing and Renaissance; $3.5 million for Community Projects; and $1 million for Community Emergency Relief Fund.
Ms. Smith-Cowley told the committee that in 2005, Kentucky received $30 million in CDBG funds. She noted that the 2005 CDBG area allocations were: $8.2 million for Economic Development and Public Facilities; $3.7 million for Housing and Community Projects; $4 million for Public Services; and $1 million for Community Emergency Relief Fund.
Ms. Smith-Cowley also pointed out that Kentucky is third in the nation for spending CDBG money.
Senator Harris commented that GOLD is a great link between Frankfort and the other communities throughout Kentucky. He told Ms. Smith-Cowley that her office was doing a good job.
Representative McKee also commented about GOLD's good work. He told Ms. Smith-Cowley that one of his communities had applied for CDBG funding and had been unsuccessful. He asked if there was a limit as to how many times a community can apply. Ms. Smith-Cowley replied that there was not a limit.
Senator Carroll said he wanted to echo Senator Harris' remarks about what a good job GOLD was doing. He commented that he was concerned that we were creating a lack of participation by local governments in these projects in regards to their contributing money. Ms. Smith-Cowley stated that the local governments did have to contribute a certain amount of money towards the project.
Senator Thayer told Senator Carroll that the Task Force on Local Taxation studied that issue and it's report will be available soon.
Representative Higdon commented that the CDBG program was a good program and thanked Ms. Smith-Cowley for her good work.
Senator Thayer asked if there were any comments from the audience. There being none, Representative Simpson moved, seconded by Representative Crimm, to accept the CDBG report as presented and to submit it to LRC. The motion carried by voice vote.
The last item of business was review of Executive Order 2006-678, relating to the reorganization of the Department for Local Government now known as the Governor's Office for Local Development (GOLD). Senator Thayer introduced Mr. Andy Barr, General Counsel for GOLD, to explain Executive Reorganization Order 2006-678.
Mr. Barr told the committee that the reorganization of GOLD was necessitated by 06 HB 380, the state's budget. He noted that the reorganization plan also included the Kentucky Appalachian Commission, East Kentucky Corporation, and West Kentucky Corporation.
Representative Arnold asked what has happened to the East and West Kentucky Corporations. He stated that the statutes still exist but there is no money appropriated in the current budget. Mr. Barr said the East and West Kentucky Corporations do not have any appropriations in 06 HB 380 and they did not have any appropriations in 05 HB 267, the previous budget. He said the East and West Kentucky Corporations are abolished in the Executive Order due to the fact that they no longer function because they have no funding.
Senator Blevins asked if money will still continue to go to local fire departments from the coal severance money. Mr. Barr replied yes. Senator Blevins also asked if the money could be used for equipment. Mr. Barr said yes.
Senator Kerr moved, seconded by Senator Tori that Executive Reorganization Order 2006-678 to be approved as submitted and such be reported to LRC. The motion carried by voice vote.
Senator Thayer announced that the next meeting of the committee will be held on July 13th in Owensboro in conjunction with the summer convention of the Kentucky County Judge/Executive and Magistrates and Commissioners Associations. He asked that staff send members a list of future committee meetings.
There being no further business, the meeting was adjourned at 2:10 p.m.