Arkansas Legislative Council, Peer Subcommittee

August 23, 2022

 

Dismang We’re going to go ahead and get started. We do have a supplemental agenda. There’s a little bit of discussion on that right now. So I’m going to wait to ask for a motion to suspend the rules on that. But with that, we’re going to go ahead and get started with the agenda. Item B1. 

 

Anderson Thank you, Mr. Chair. Section B are items held from the previous meeting. There were three items held in subcommittee from last month’s meeting. They were not released at ALC. Two of the items, a rainy day fund transfer and a restricted reserve fund transfer, are approval items. The last item, a cash appropriation, is a review item. B1 is a letter from the governor to transfer $750,000 from the rainy day fund to Arkansas Rehabilitation Services. This is to support World Services for the Blind. B2 is a restricted reserve fund transfer. It’s for the Department of Military, Arkansas National Guard. This is $5 million to support the mission of the National Guard Foundation, providing charitable and educational support to members of the National Guard, dependents, survivors, veterans, and other charitable organizations that support veterans communities. B3 is a cash appropriation increase request. This is for Parks, Heritage and Tourism Division of Heritage. This is a request to increase their cash appropriation by $250,000. The spending authority will be used to disperse a donation from the Attorney General to the Sultana Historical Preservation Society. Mr. Chair, those are the items that were held from the last meeting. 

 

Dismang All right, thank you. Members, first up is B1. Do we have any questions on B1? This is the $750,000 for World Services for the Blind. I do have one question. Do we have anyone here from– thank you. If you could, just go ahead and turn your mic on. And I guess it might be easiest just for you all to recognize yourselves. And then my general question– you can proceed after– is just can you walk us through what you’re doing with the $750,000, how many people you expect it to impact, and that sort of thing, what you expect your outcomes to be. With that, you’re recognized. 

 

Baxter Absolutely. Joe Baxter, Commissioner of Rehab Services. 

 

Lyford Good morning, members. Charles Lyford, General Counsel, Arkansas Rehabilitation Services. 

 

Bowdwin Amanda Bowdwin, CFO for World Services for the Blind. 

 

Jovenatso Sharon Jovenatso, CEO at World Services for the Blind. 

 

Dismang All right. Thank you. Again, so just to kind of repeat the question, the $750,000 request, what are you all looking to do with those funds? My understanding, it’s a building project. How many people do you anticipate– for example, how many people do you anticipate, you know, to service with, you know, the building? What are your outcomes that you expect from the funds and that sort of thing? If you could, just give us some overview. 

 

Jovenatso Sure. Thank you so much, Senator. So this is for a therapeutic group home for World Services for the Blind. For the last 75 years, World Services for the Blind has provided vocational opportunities to people who are blind, not just in Arkansas, but across the nation. This is a project specifically to focus on people for home and community based services under the waiver program that have intellectual and developmental disabilities co-morbid with blindness. The expected impact of this project will be to serve 25 people– 24 permanent to transitional rooms and 1 respite room for people who are taking care of their adult special needs child that may be or is going on vacation. And so, and so, it will be a transit room that we’ll cycle people out of. As our enrollment for our on-campus need has went down, for our vocational clients, we identified a need with more than 3,000 people on the waiting list under HC, home and community based services. And we decided that this would be best served to convert that part of campus, not build anything new, but to utilize our existing footprint in order to do that. So the first thing that needed to be done was the mechanical systems, which we did campus wide. We did a $3.5 million investment for that and then the group home. And so we’re in the process of remodeling the north side of the campus, which encompasses two buildings that will convert all of those rooms into single-use rooms, handicap accessible, everything that’s needed, common areas, classrooms and staff offices as well. That’s the short answer.  

 

Dismang So on the %750,000, you’re going to be utilizing it for a remodel project or a construction project? I wasn’t–

 

Jovenatso It’s, it’s a renovation project using the existing footprint on our Fair Park campus. The entire project, looking at the look back funds as the new market tax credits called it for the $3.5 million, that was done originally for the mechanical systems. That was done between 2019 and 2020 into 2021. And the project for the group home, as well as some other infrastructure upgrades that need to be done, it’s about an $8 million project total. And so this $750,000 will go directly to the renovation project. 

 

Dismang Okay. All right. Thank you. Members, do we have any other questions? All right. Seat 27. 

 

Springer Good morning. Thank you, Mr. Chair. I would just like to say thank you all for all that you do. Your facility is within my district, District 34– well, soon to be 76. So thank you so very much for all that you do for those persons that live in our district. 

 

Jovenatso Thank you so much for all that you do. 

 

Springer Joy Springer. 

 

Dismang All right. Senator Irvin, you’re recognized. 

 

Irvin Just a quick question. Are there any consultants that are going to be paid out of this money, retainers that, that we need to be made aware of? 

 

Jovenatso None. 

 

Dismang Okay. All right. Thank you. I believe I have a motion to approve by Senator Chesterfield. I have a– do I have a second? I have a second by Senator Rice. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. No is noted. Motion carries. Restricted reserve fund transfer request, the Arkansas National Guard. And if we could, just those that are here with the foundation, go ahead and come forward and maybe just take a couple of questions. All right. If you all could just go ahead and recognize yourself for the committee. 

 

Penn Major General Kendall Penn, the Adjutant General for the Arkansas National Guard. 

 

Stanger Scott Stanger, Department of Military, Chief of Staff. 

 

Clugg Damon Clugg, executive director for the Arkansas National Guard Foundation. 

 

Dismang Do that one more time with your mic on. Thank you. 

 

Clugg Damon Clugg, the executive director for the Arkansas National Guard Foundation. 

 

Dismang Perfect. Thank you very much. If you could, just kind of the same question, if you can kind of walk through what y’all are planning to do just briefly with the, you know, $5 million and kind of what your vision is moving forward. Thank you. 

 

Clugg Senator, we have begun a $15 million campaign to increase our ability to service National Guardsmen, their dependents, their survivors and veterans communities across Arkansas. Those funds will go to help increase our ability to support Gold Star and survivor families. The National Guard has a certain niche for survivor families in that several of our fallen Guardsmen are not recognized as fallen soldiers by the Department of Defense or by many of the mainline charities that support Gold Star families because their deaths did not occur while they were on a period of active duty. Arkansas has in past years experienced a high number of suicides. Many of those suicides do not occur on duty. Therefore, their dependents and survivors do not receive support from the Department of Defense. That’s our niche. That’s our mission. And we take care of those families that aren’t taken care of by the Department of Defense or by some of the other larger nonprofits. The second project area is education and scholarships for Guardsmen. We have self-funded this for about 50 years out of proceeds of our state-sponsored life insurance program, which is authorized by the federal government and under state law. Transfers from the proceeds of that life insurance program went to build up what was originally the National Guard Arkansas Trust and was in 2013 turned over to the foundation. And with that, we paid scholarships to Guardsmen, their survivors and their dependents. We’re increasing our scholarships from $750 a year to $1,000 a year and increasing the availability instead of just covering degree producing programs, we’ll also be able to cover trade schools and certificate producing programs for spouses and dependents. That will help, we hope, with retention rates for Arkansas Guardsmen. It will also help us cover down on other literacy issues for Guardsmen. We have a significant issue with training Guardsmen on how to respond to other Guardsmen that are in crisis with regard to self harm. And we hope to be able to help out with literacy and workforce development with, with these funds to make an impact in that area. Military family Relief Trust Fund, we administer parts of those funds with monies that we receive from the state of Arkansas each year. Those monies actually go to the Military Department and under previous legislation, you all have authorized us to receive a grant. There’s a rule change pending that will make us the, the TAG’s designee for processing of those grants. But there are certain restrictions on what that trust fund can be used for. And in past years, we found that our military soldier and family readiness coordinators are having to reach out for community block grants to help our soldiers in situations that aren’t covered by the Military Family Relief Trust Fund. For instance, the death of a, of a non-DoD dependent or other situations where they’re not eligible for the trust fund, but we, but we still need to find a way to support those families. In some cases, we’re helping them avoid homelessness in their communities. The youth engagement, we merged earlier this year with the former Arkansas National Guard Youth Foundation. That foundation provides scholarships to the graduates of the National Guard Youth Challenge Program on Camp Robinson. We currently have 22 graduates of the Youth Challenge Program in college. That’s due to the work of your Arkansas National Guard, but we don’t have funds to provide them with educational stipends. The Youth Foundation has previously worked to provide those scholarships. They also work to provide medical care for the cadets that are in that program. They’re normally assigned to us for about four months each. They often come to us without insurance coverage. And right now the foundation provides funding so that, that if there is a kid that becomes sick or injured in training, they can be taken down essentially to do a local urgent care and receive emergent care for whatever their issue is and determine whether they’re cleared to go back into training and complete their degree program or whether they need to go home and heal before they can continue their training out at Camp Robinson. Healthcare assistance– senator, one of the big issues we have, all of our Guardsmen when they enlist at 17, 18, 19, they’re 10-foot tall, they chew barbed wire, spit bullets, and they don’t need things like, like insurance. And then later on, we wind up having to help them when they’re 24, 25, 26, and now there’s a wife and a spouse and somebody’s sick. And while they do have excellent health care coverage, TRICARE requires two months’ premiums be paid in advance. And we often get requests from Guardsmen who are missing work because someone in the family is sick and they don’t have the money to cover two months in advance premiums in order to get their family covered under the military programs. The other issue we have, normally, whenever we mobilize a task force like the 750-man task force that will be mobilizing shortly after the first of the year to head over to Europe and the Middle East, we generally have an issue with dental care among our Guardsmen. We have fairly low participation rates in the dental program. So we’ll be offering ways to incentivize young recruits to take our dental programs and our TRICARE programs at enlistment so they begin paying those premiums from day one, and that becomes a permanent part of their Guard experience. The National Guard legacy programs– part of that is that Arkansas National Guard Museum. Funds from the former National Guard Association of Arkansas Insurance Trust helped create the Arkansas National Guard Museum years ago. It also helped create Armstrong Chapel, which is on Camp Robinson. It also helped create the Fallen Soldier Memorial, which is on Camp Robinson. But this looks towards the future of our separating Guardsmen. One of the things that we see, Senator, is we have a danger zone when Guardsmen separate. The first two years after they separate from the National Guard, the suicide rates go up significantly. And that’s not covered by the Department of Defense. And so we look to help those Guardsmen who are separating after periods of service, often overseas, to maintain their connections with the Arkansas Guard by fostering retiree events where we can bring them back in and help them continue to experience the military family that they experienced during their deployments, senator. 

 

Dismang Thank you. And I appreciate that. And back when we originally talked about this in the, you know, prior to the session, this was a one-time ask. You know, this was going to fill the needs, essentially, forevermore was my understanding when y’all brought it. And so you just listed a number of things that you all do which we’re very thankful for. How is the rest of the capital campaign going and are y’all going to be able to reach your goal of $15 million? And then if so, I mean, how does– how long, you know, how long is this $5 million going to last when we’re talking about all the services you’re looking to start providing. Again, because, I mean, you know, it’s a one-time ask and we’re not going to need to come back. But we’ve got a lot of things that sure looks like you’re going to be operating that are going to be ongoing costs. 

 

Clugg Senator. 

 

Dismang How do we see that working? 

 

Clugg Sorry. 

 

Dismang No, go ahead. 

 

Clugg Senator, the campaign is a $15 million campaign. The Mississippi National Guard just across the border from us operates a $14 million foundation. We see this as– some of these needs are dependent on deployment cycles. The last time we mobilized as many Guardsmen as we’ll mobilize next year, I believe, was in 2017 when we sent a group to Kosovo. So every time we mobilize, there’s an after effect of that. And so next year is a big mobilization window for us. A lot of what we have done over the last year, most of the money that’s currently in our endowments, as I said earlier, came from– has come from Guardsmen paying their insurance premiums for the state-sponsored life insurance program. But we see over and above this appropriation an additional requirement for about $8.5 million dollars. Most of the support for our partner organizations, the National Guard Association of Arkansas and the Enlisted Association of Arkansas– we partner with a lot of the defense contractors, some of which make their products right here in Arkansas, places like Camden. And so we’ve been working over the last year to increase our staffing, increase our marketing, increase our ability to go out to those larger companies and bring them on board to help create the endowments we need to permanently fund these programs. One of the issues that– so, some of this is scalable, Senator. One of the big issues that Guardsmen deal with that’s included in our project areas is childcare. The average E-4 and below in the Arkansas Guard gets paid about $350 a month for coming to drill. His childcare cost when he can find it is about $200 a month. So one of the things we’re looking to do as a part of this capital campaign is how do we increase the capacity for childcare in the areas where– the 52 locations across the state where our National Guard facilities operate. Because we’re not like the Air Force, where we can bring everybody on to Little Rock Air Force Base for their childcare on drill weekend. So I can’t turn that whole switch on tomorrow. I wish I could. But I will scale that up as the, as the capital campaign increases. We, we have in the last six months made contacts with another other– a number of other foundations around the state that– where we can partner with them where they’re aligned, their interest and our interest align. For instance, with the Blue and You Foundation from Blue Cross Blue Shield, we’re helping– we’re applying for grants from them to help us with the need for healthcare for our cadets that are participating in the National Guard Youth Challenge Program out on Camp Robinson. 

 

Dismang But as far as the total campaign, your total campaign is $15 [million], but you probably really only need $13.5 [million] from just doing some quick math. 

 

Clugg We have about $1.5 [million]. 

 

Dismang You have about $1.5 [million] that you’ve raised through the campaign so far? Or is that just premiums? 

 

Clugg No, that’s, that’s our original base amount, senator. 

 

Dismang Okay. So as far as other parts of your capital campaign– this is what I’m trying to ask maybe– how much have you all been able to achieve in realizing your total capital campaign of $15 million? Not counting what goes in from the base, which is the premiums. Outside of this $5 million, how much have y’all been able to raise so far? 

 

Clugg Senator, this will be the first significant– there have been a couple of other small contributions. Realize we had never made solicitations for private donations prior to this year. 

 

Dismang And so my concern is, I mean, if we’re not– if you’re not successful in getting your full endowment of $15 million, then, then what happens? So you just scale down the list of things that we’re talking about doing? 

 

Clugg We’ll help pay for less medical bills. We’ll help pay for less dental care. We’ll help pay for less childcare. 

 

Dismang But that would only– I mean, the way that I understand this would work is y’all are going to take the $5 million, set it aside, you’re not going to spend it, but you’re going to spend off the earnings that may be achieved from the $5 million. Right? That’s how you don’t come back to us asking for additional moneys. And so, but you only do that whenever you’ve raised, you know, amount, an amount significant enough to support, you know, the earnings. I think. I’m just trying to understand how it works, what the game plan is. Because if we’ve got a $15 million campaign, we’re going to have raised $5 [million], we’ve got another $1.5 [million] that we normally have because they’re premiums, and we’re creating an endowment wanting to do all of these things. How are we going to be successful? That’s all I’m asking. 

 

Clugg We’re going to, we’re going to be engaging with high net worth individuals and other private foundations that that can contribute to this cause. The issue, Senator, the reason why we’ve had to kick this off is, with the exception of myself, who’s retired and one other retired Guardsman, almost every member of our board are currently serving Guardsmen. These aren’t people that know high net worth individuals or have interactions with, with, with other private foundations. We have– so we are to the point that we’re increasing our ask for these, for these other organizations. But we are a partner organization to the National Guard Association of Arkansas and the Enlisted Association. And both those organizations have a category of corporate sponsors that, that annually support their organizations. They all have foundations. They all have corporate giving programs. But there has to be work done to, to elevate your program to the point that you’re able to go out and engage with, with organizations like Lockheed Martin or Collins Aerosmith or BAE or a number of the other corporate members of our associations to be able to engage with them on more than simply a membership level, but to truly engage their their corporate giving. In the last year we’ve, we’ve– the association has created a partnership with Wal Mart. They sponsored a Gold Star event for us at our, at our state conference this, this last year. So you’re looking at a foundation that has been inwardly facing and largely focused on how do we appropriately expend the revenues that have been generated from insurance. But we have also– part of the reason why we created the foundation in 2013 was to take over the work of kind of a coalition of small nonprofits and charitable entities that had sprung up around the Guard but didn’t all have the corporate governance and the management to maintain, maintain all the records and have the annual audits and do everything necessary. So we have taken over management and funding for the museum. We’ve taken over management and funding from the former Youth Foundation. There’s a number of former entities that have been consolidated under the foundation’s flag. And we have managed to do that internally in the past. But now it’s time to be able to put these all these programs on a permanently funded basis and be able to take care of our Guardsmen on a more reliable, less of a hand-to-mouth way and more in a, in a permanent way, Senator.  

 

Dismang Yeah, and that’s my– I mean, I think we share this, this, I think, the same vision we talked about before. My, my concern, though, is, is that being able to be permanent if we are not able to achieve the rest of the $8.5 million in fundraising that’s needed, you know, to set up the full $15 [million] to carry out the vision. And so, hopefully, y’all are able to do that. Seat– or I’m sorry. Senator Hammer. 

 

Hammer Thank you, Mr. Chair. Over here to your far left. Just point– couple of points of clarification. I thought I heard you say that you took over the Youth Challenge account. Did I misunderstand that or not? 

 

Clugg Not Youth Challenge, Senator, the former National Guard Youth Foundation. 

 

Hammer Okay. 

 

Clugg And they did support primarily the National Guard Youth Challenge Program, Minuteman Youth Camp. 

 

Hammer Okay.I’m going to give, try to give quick questions with quick answers. So did–

 

Clugg Sorry. 

 

Hammer That’s alright. Did you absorb any of their money or through– or being of any of those entities you just referenced, does that go toward the total $15 million? Or what happened to the funds to those that you absorbed, if indeed there were funds. 

 

Clugg There were funds, Senator. We absorbed about, I want to say, $18,000 from the Youth Foundation. We also took in a little over $3,000 from the former Minuteman Youth Camp, which was simply a fund, not really a foundation. The museum– originally, they created an endowment with us for $60,000 back in 2014. I think that has grown now to about $90,000. They use those funds annually to help preserve artifacts and acquire artifacts for the museum. 

 

Hammer Okay. So all those funds are going to be put toward the long list of things that you’re trying to do with the $15 million? 

 

Clugg That’s correct, Senator. 

 

Hammer Okay. And then, I guess it would be nice if we could get a list as to how much that totals, because I think that would go in on the change that you’re trying to get to on the $15 million. If you’re absorbing other funds, how much does that total up to? And then secondly, do you have somebody– you talked, you threw out some names of some, some high profile entities. Do you have somebody hired or retained that is going to be helping you secure funds from those individuals, from those high level entities you mentioned a while ago? 

 

Clugg We do not at this time, Senator. 

 

Hammer So you have intentions of hiring someone? 

 

Clugg That’s a possibility, Senator. 

 

Hammer Okay. 

 

Clugg But that will be funded out of private funds, Senator. 

 

Hammer Foundation funds or private funds? 

 

Clugg Out of the foundation funds, which at this point are all private funds. 

 

Hammer All right. I’ll stop there. Thank you, Mr. Chair. 

 

Dismang All right. Thank you. Senator Chesterfield, you’re recognized. 

 

Chesterfield Thank you, Mr. Chair. And thank you all for being here this morning. 

 

Clugg Yes, ma’am. 

 

Chesterfield You referred to the inability to provide young people in the military with the necessary childcare that they, that they need. Did I understand that correctly? 

 

Clugg Yes, Senator.

 

Chesterfield Is the pre-K program that is sponsored by the state available to your individuals who serve? 

 

Clugg Senator, I believe the issue is that it’s not available for weekend service. 

 

Chesterfield I see. So that’s the biggest difference. 

 

Clugg Many of the childcare organizations around the state aren’t open on weekends. 

 

Chesterfield Okay. Gotcha. Thank you. 

 

Dismang Senator Irvin. 

 

Irvin Thank you. I guess just a question for staff. At this previous meeting, we received a letter from a member of the legislature outlining conflicts or I guess just interest with these three requests. I’d like a status update on that. 

 

Dismang So that’s probably for y’all. Just as far as, you know, we had a disclosure. Senator Johnson’s wife is a– was a fundraiser for y’all, I think for these high net worth folks previous to. If you don’t mind just giving– I think what you’re asking for is an overview of–

 

Irvin We would need an update– I’d like to know an update of that status because that was given to this committee at the last meeting, that disclosure was. 

 

Dismang It was actually– I think it was given to ALC, not even this– 

 

Irvin Oh, that’s correct. It was not given to this Peer subcommittee. It was given at ALC.

 

Dismang So if you can just give a status, I guess–

 

Irvin I’d just like to know the status of where we are with that situation. 

 

Clugg Katherine Johnson is no longer employed by the Arkansas National Guard Foundation.  

 

Irvin Okay. And then my second question is, back to what Senator Dismang discussed, is the intention to park this money into an investment account and like accrue interest off the $5 million? 

 

Clugg Senator, that– each one of these– yes, Senator. Each one of the program areas that I outlined has a, a fundraising goal that would fully fund all of the activities that we, that we seek to conduct under those seven project areas that I outlined earlier. For instance, with the Gold Star families– 

 

Irvin Wait, let me– that’s not my question. 

 

Clugg I’m sorry. 

 

Irvin My question is specific to this $5 million in front of me that I’m looking at. Is it your intention for the foundation to take this $5 million and invest it with some sort of investment firm and then live off the proceeds of that to fund the programs that you’re discussing? 

 

Clugg Yes. 

 

Irvin Okay. How, how– these are taxpayers’ dollars. What level of surety do I have that– because I’ve invested money with certain people and it’s gone really well, and I’ve invested money with certain people and it’s not gone really well. So that’s my money and I take responsibility for my money. 

 

Clugg Understood. 

 

Irvin But this is taxpayers’ money. And so that makes me– I’m not sure how I feel about that, to be just really frank with you. You know, I’m a huge supporter of everything that you’ve just discussed. Huge supporter. I’ve been a speaker at the Youth Challenge Programs– I’ve– at their graduations. I love that. But this is a, this is a request of taxpayer dollars that you and your foundation– and I don’t know who’s on your foundation. I don’t know who’s making those decisions. I don’t know if you’re going to invest it with the best people in the world or if you’re going to invest it with so-and-so’s buddy. And it may– I don’t mean to be flippant about that. I’m just– this is important because this is a lot of money that we’re asking here. So is there, is there a board that directs these decisions or how does that occur? 

 

Clugg There is, Senator. There is a board of directors that is comprised of elected members of the National Guard Association of Arkansas and elected members of the Enlisted Association of Arkansas. We also have some outside directors that aren’t necessarily associated with the military. We have three financial planners that are members of our board. We have an investment committee that oversees the work of our investment advisor. We have quarterly board meetings that review the status of our investments. We have an annual audit that is turned into the state military department. We, we have been in operation now since 1969, Senator. We’re not– we may be new at this amount, but operating the insurance trust since 1969, we’ve been audited every year. And we have a track record of being– we, we target a return to the endowments within the foundation of 4% a year with about 1.25% currently dedicated to do the administrative cost. Even in the down market this year, we still had income from our investments of about $80,000 to fund the programs that were outlined to be supported out of the various endowments under our fund. It’s– I’m no investment adviser, but we, we provided names of our investment advisors to the– well, I started to say to Legislative Audit. I’m not sure if that, if that– I got that question from somebody on the committee earlier. I can provide you with the names of our, our investment advisors. We review that on about a 3-year basis, who, who is actually handling the return on our funds. So we have a track record of managing the state’s funds and managing funds in a, in an appropriate way. 

 

Irvin Well, and I’ll just stop at that. I mean, I appreciate that. I’m just– we are getting now into, as state legislators, into a private foundation’s operations because of this money. And I’m not sure if I– that’s, that’s, that’s something new. And I’m, I’m a– I’m just a little nervous about that because I don’t know if that state level of inquiry– I don’t, I don’t know if that’s a good thing or a bad thing. I can tell you that, you know, what was reported in the paper from what was paid in consulting fees was, in my opinion, a lot of money. And so I just, I’m just nervous about doing this with taxpayers dollars. Even though you’re incredible and I love everything you’re doing, it’s just really a function of what we are supposed to be doing with taxpayers dollars. And I’m concerned about that. Thank you. 

 

Dismang All right. Thank you. Senator Hickey, you’re recognized for a question. 

 

Hickey Thank you. I’m up here to your left. Appreciate you being here today. Appreciate what you do. But of course, we’re supposed to ask these questions I’m going to. 

 

Clugg Understood, sir. 

 

Hickey Along the same lines of Senator Dismang, Senator Irvin. So I guess I’m a little confused now. So the principal, the $5 million, you’re never planning to spend that? Is that correct? 

 

Clugg Senator, we would prefer to use that to initiate– each one of these, these project areas has an endowment associated with it. And we would like to use that money to set those endowments up for it with a funding source that we can use to support these programs on a regular basis. 

 

Hickey Okay. Back to my question, respectfully. You get $5 million. Are you going to spend the $5 million or are you just going to spend the earnings, the interest off of those? 

 

Clugg Senator, our plan, with this being one part of the campaign, is to invest the $5 million. But if we need the $5 million to support operations over the next– until the rest of this money is raised, then we could potentially use it for that, Senator. 

 

Hickey Okay. Okay. Well, then, then I’m not for sure you don’t get into some other aspects. I mean, if you’re going to be co-mingling these funds as other funds are going to come in or are you going to keep it in a separate account? 

 

Clugg It would be in a separate account. Senators, we’ve received– for instance, we recently received a $100,000 grant from the Military Family Relief Trust Fund. The MOA that we had to sign with the Military Department required us to keep those funds in a separate account. 

 

Hickey Am I mistaken here or had I not heard that you all were willing to come to us for a lesser amount? Have those discussions not taken place here in the last week or two? 

 

Clugg No, Senator. 

 

Hickey Okay. So what you’re saying is it’s your intent, it’s your intent– and I think Senator Dismang went down– it’s your intent that you’re just going to park the $5 million in an investment account. If you do that, where are those going to be? 

 

Clugg Are you asking what the– 

 

Hickey I’m asking who your broker is. I’m asking, you know, who your financial person is. I’m asking what your bank is. Yes, sir. That’s what I’m asking. 

 

Clugg Sir, we, we bank with Arvest Bank. That’s where the Military Family Relief Trust Fund is currently located. We use Lighthouse Financial as the local broker for our investment advisor. And we– give me just a second– I’m going to say the wrong name if I don’t look at something real quick. The actual capital equity, I’m going to say the wrong name of the company that actually holds the funds. Senator, I can, I can send that to you. 

 

Hickey But you’re planning on keeping those separate from your other– 

 

Clugg That’s correct, Senator.  And we’ve already talked with them about these will be in a separate account from our current endowment. 

 

Hickey And if I heard you a minute ago, your, your intention is, is that you would like to see that you get like a 4% return. 

 

Clugg That’s the target, Senator. Yes. 

 

Hickey So if you’re really not planning on using the $5 million, we could basically just look at giving you $200,000 a year and then you all could come, come before us each year so that we could see where the money was spent. We could have a report supplied to this committee to make sure that everybody within this body is in agreement to it. Would that be a problem? 

 

Clugg Yes, Senator. I don’t think $200,000 would, would– again, this is a down payment on a larger capital campaign. We do supply the Military Department with our audit annually. And it was provided earlier to the Bureau of Legislative Audit. In fact, the final audit was done– was provided on Friday. So you can see where the funds were utilized. 

 

Hickey So your intent really is to spend the $5 million? Because if we were, if we were willing just to give you what the interest was going to make off the $5 million, which is what I thought was alluded to at the beginning of this, of this thing, then you should be happy with that. But what I’m hearing is that won’t work. So your intent really is to spend the $5 million. 

 

Clugg Senator, the $5 million would make it scalable. It would make us be able to do some of these things in lieu of any other funding. But we don’t– we’re not done with, with raising campaign– raising funds at this point. 

 

Hickey Thank you, sir. 

 

Dismang All right, Senator Hammer. 

 

Hammer Thank you. Question to you all and then a question to the chair, please. And please don’t misunderstand any of these questions as people not being supportive of the cause or the mission. But do you, because this is going to involve investments, do you put that out for competitive bid as far as who it is that manages your, your foundation account or is that already preselected and determined? 

 

Dismang Senator, we have revised that. We have, we have put it out in the past. And the current group that we’ve been working on with Lighthouse, I believe we’ve been with them for two years. Prior to that, we were with Bass and Bell. And in another year or so, we will put that out for another bid. So, so it’s– there is a– not connected to this appropriation, but on a regular basis, we do look at that. 

 

Hammer All right. Can I ask the chair a question? I, just for my own knowledge– is there something unique about this request so that it would prohibit other state-funded institutions that may have foundations from coming to us and asking for money for their foundation or is this strictly unique because it’s the National Guard? Or is this opening up the door to other foundations to come and ask for money like they are? 

 

Dismang I think DFA is looking at me and put their heads down to probably not want to come answer. And I don’t know. I mean, I don’t know that we– I mean, I don’t know that we’ve set up seed money in foundation money in part of an endowment before for a nonprofit. I mean, I would say typically as you have things come through for one-time expenses, which are typically capital in nature. But I don’t know the answer to that. And maybe DFA can answer your question there. I don’t know. 

 

Hammer Chair’s call whether you want to bring to the table or not. But I’ll find out otherwise. 

 

Dismang They’re talking now to see if they can answer that question. And while we’re waiting on that, assuming we’re going to bring them up for just a second, but I’m going turn– I’m going to let Senator Irvin ask her question so we’re kind of moving along. 

 

Hammer Thank you. 

 

Irvin Well, it’s the same question. I’d like to know if we’ve ever done this before. Have we ever used– and this is DFA– have we ever used taxpayer dollars to set up an endowment? Because that’s what we’re doing here. This is not a capital improvement project. This is not a funding of a certain project. And this is a– it’s a private nonprofit organization, from what I understand. And so I’m not sure if we’ve ever done this before. Because I don’t– my concern is the level of oversight over taxpayers’ dollars. Because I can’t, I can’t, I can’t,– I mean, unless your foundation and board is going to come before us and give an audit or something, I mean, I don’t know how this works, to be quite honest with you. 

 

Stanger Senator, Scott Stanger, chief of staff for Department of the Military. The Department of the Military has been tagged for this to be a throughput agency. And so previously with the Foundation for a smaller amount, we developed an MOU that basically gives us, me, access to their books any time to include their audits. So we can bring that as far as the Department of Audit to Leg Audit or whatever, to answer whatever questions we have to. To be honest, we had some of the same questions ourself as a throughput agency, but we have done one of these kind of MOUs before to include currently going through the rules promulgation process to establish the rule on how trust fund money is set out the way we currently do it with the funding we get through the checks box system on income taxes. So we–

 

Irvin Okay. 

 

Stanger We own some of that responsibility. 

 

Irvin Okay. I understand that. I’m uncomfortable with an MOU. I think you need– this is going to require– in my opinion, you would– this one should require some legislation to set up a structure here. Because I’m not comfortable with a $5 million– I’m just not comfortable with an MOU. I’m not comfortable with rules and regs or promulgation unless you have specific statute that directs us to where there are some real accountable measures. Just– I don’t need to sit here and tell you what I want. I think it needs to go through this legislative body to really develop that type of a structure legislatively so that we have real clear accountability for the taxpayers’ dollars, however this is going to be spent. But I appreciate that answer very much. That does help me a little bit, but it’s probably something that really needs to go a more legal structure. 

 

Stanger Yes, ma’am. If, if that’s the decision, the department, we’re not opposed to that. And we can help develop that process as well. 

 

Irvin That’s probably something. But, Mr. Walther, you want to answer Senator Hammer’s question and mine, if we’ve ever set up an endowment before? 

 

Dismang Just go and recognize yourself for the committee. And then, Senator Hammer, did you want– are you– do you mind hitting your button and restating your question? 

 

Hammer Thank you, Mr. Chair. The question is, have we done this before? Is this the first time that we’re doing it? And does it create the potential for any other entities that are dependent upon state dollars to expect to be given the same treatment, the same opportunity that we’re giving here today? 

 

Walther I’m Larry Walther. I’m the secretary of the Department of Finance and Administration. I’ve kind of– I’ve polled the DFA team here today, and we don’t know of any incident where this has happened before. What we would do, we would like to– I’d like to work with the Department of Military and determine if there are any and the, and the legality of it. We’d be more than happy to come back to you. I don’t know what the urgency or the time on the $5 million is, so I can’t address if it needs to be addressed today or could it wait until September? 

 

Hammer And, Mr. Chair, everybody in this room wants to help. I just don’t want it to come back and bite anybody in the room either. That’s all I got to say. Thank you. 

 

Dismang Yes, sir. Thank you. So with where we are, I think I’ve got about half my room gone. If you don’t mind, we’re going to recess for just– if we can recess for 3 minutes, and I’ll come back to the chair. So with that, we’ll stand in recess. 

 

[Recess] 

 

Dismang Members, if you can, go ahead and take your seats. We’re going to get started here in a minute and a half. Members, if you can, go ahead and grab your seats. And if y’all don’t mind, we’re going to go ahead and dismiss y’all. I think there’s a conversation that a few members would like to have to make sure they understand, you know, how this works and that sort of thing. And then we’re going to pass over this item for right now and then come back. I’ll state that when we go back into actual meeting. But again, we’ll circle back up with you guys here in just a minute. Members, with that, we’re going to come back out of recess. Just to restate, we’re going to pass over this item right now. That allows for conversations to occur, maybe a little bit more understanding about the intent with the $5 million. And we’re going to move to item B3. And so with that, if we could have– go ahead. 

 

Anderson Thank you, Mr. Chair. We’re on B3. This is a cash appropriation increase request. It’s for the Department of Parks, Heritage and Tourism. It’s $250,000. Again, this spending authority will be used to disperse a donation from the Attorney General to Sultana Historical Preservation Society. 

 

Dismang Thank you. Do we have anyone from the Sultana Historical Society? I’m not sure if I’m saying that right. Yes, sir. If you could, just recognize yourself for the committee. And we’re going to kind of go through the same process, just ask in general what you intend to do with the funds, how they’ll be utilized, outcomes, that sort of thing. 

 

Fogleman My name is John Fogleman. I’m a retired circuit judge. I am president of the Sultana Historical Preservation Society. We’re a 501(c)(3) nonprofit that was formed in order to recognize the people of the Sultana. If any of you aren’t familiar with the Sultana, it’s the deadliest maritime disaster in American history, yet few people know about it. And our goal is to make certain that those men and women that were on the Sultana that died are remembered and recognized by the country that they fought to preserve. 

 

Dismang Thank you. Now, specifically, you know the release from the Attorney General’s office, how do you plan on utilizing those funds? Where would they be held? And I know that one of the questions that’s coming is, was there any, you know, consultants paid from these funds or will be paid, on that sort of thing. So if you can address those. 

 

Fogleman We are in the process of raising $10 million to renovate and add to a gymnasium that the Marion School District has donated for use as the Sultana Disaster Museum. The $10 million will build the museum, add on to it, and pay for the exhibits that are fabricated and added there. We, to date, including the $250,000 we haven’t gotten yet, is we’ve raised just over $5.3 million. A little over a year ago, we had only raised $1.2 million. So we’re making good progress on that goal. We do have a consultant. The money that we have raised, the money that we have committed, not a dime of it is going to pay the consultant. The consultant is paid out of money from the City of Marion’s Advertising and Promotion Commission. They’ve set aside certain money to help us with the museum and they are paying the fundraising consultant. 

 

Dismang All right. Thank you. Senator Sullivan. 

 

Sullivan I’m over here. Yes. And of course, no state money is going to help all of Northeast Arkansas. This is just for the Sultana. But certainly the Sultana project will be a hub for all of Northeast Arkansas. And we– there’s a lot of us over there support what’s going on with the Sultana and appreciate what you’ve done. 

 

Fogleman Thank you, Senator Sullivan. We do. And we have got some great architects. It’s Hayslip Studios out of Memphis who have done museums all over the country, including the Scott Family Amazeum in Bentonville. Really good group of architects. And this museum will be a hub of a string of museums that are along the Delta, including Johnny Cash, Pfeiffer Hemingway, Lakeport down in South Arkansas, the Hampson Archeological Museum in Wilson. It is going to be a hub. Our feasibility study that was conducted by the City of Marion was done by a fellow named Owens and updated by University of Arkansas Little Rock Economic Division, a man by the name of Hamilton, Dr. Hamilton. And it projects it will have 50,000 visitors a year. Most of these will come from out of state. To date, we have a small museum of about 1,000-square feet, and so far we have had visitors from all 50 states and 14 foreign countries, if you can believe that. That is what is remarkable to me. 

 

Dismang Thank you. Senator Chesterfield. 

 

Chesterfield Motion at the proper time. 

 

Dismang All right. Members, we have any other questions? All right. Seeing none, we have a motion to review. Do we have a second? We have a second by Representative Fite. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed. Motion carries. We’re going to move to C1. 

 

Anderson Thank you, Mr. Chair. We’re in the items for approval section of the agenda. The first section is C. C1 is of the various appropriation requests. This is a letter from the Department of Commerce Division of Workforce Services. It’s for $11 million in appropriation. This is to modernize unemployment information technology systems and hardware. Act 667 of 2021 dedicated 0.15% of taxable wages collected from April 1, 2021, to December 31, 2023, to modernize UI information technology. 

 

Dismang All right. Thank you. Members, do we have any questions on C1? Seeing none, I need a motion to approve. Got a motion. I’ve got a second. All those in favor signify by saying aye. All those opposed. Motion carries. D1– or we’ll go ahead and just run through. 

 

Anderson Thank you, Mr. Chairman. In Section D, these are the American Rescue Plan Act appropriation requests. There are three requests on the regular agenda. They are all Arkansas Steering Committee Awards. The first one, D1, is Department of Parks, Heritage and Tourism’s Division of State Parks. This is a request to reallocate previously awarded funds. The original request was to implement broadband at 27 locations at state parks and welcome centers. Easements at the project at Lake Katherine State Park resulted in savings. The request is to use $6,000 from the savings for two additional broadband projects that were not included in the original request. On page 4 is a schedule that shows the progress of each project. The next item is on page 5. This is for the Auditor of State deputy prosecuting attorneys. It’s $4.5 million. And this is to relieve the backlog of cases that is attributed to suspending in-person proceedings during the pandemic. Funds will be used to hire additional deputy prosecuting attorneys in judicial districts that continue to have congested backlogs. Next is page 27. On page 27 is D3. This is the Arkansas Public Defender Commission. This is also $4.5 million and similar to the last request, funds will be used to acquire the assistance of licensed attorneys and qualified staff in resolving the large number of cases. Mr. Chair, those are all of the ARP requests on the regular agenda. 

 

Dismang All right. Thank you, members. Do we have any questions on D1? D2. Senator Ingram, you’re recognized. 

 

Ingram I’m sorry. I jumped the gun. I got a question on D3. 

 

Dismang I’m going to bet I’m at you now. D3, you’re recognized for a question. 

 

Ingram Yes. I’d like to get the– I think, is it Mr. Robinson? Who runs the Public Defenders? Greg Parrish. Yeah, Greg Parrish. 

 

Dismang Yeah, and if you could just go ahead and recognize yourself for the committee. And then Senator Ingram, you’re recognized for your question. 

 

Parrish Greg Parrish, Arkansas Public Defender Commission. 

 

Ingram Thank you, Mr. Chairman. This $4.5 million request, I guess I’d like to ask about some money that has been expended before. I think we’re all aware that evidently the public defender’s office hired some– a legislator that was ineligible to serve as a public defender. Is that correct? 

 

Parrish That’s correct, Senator. 

 

Ingram Okay. And, you know, how that occurred I scratch my head. But I guess my question is, that individual’s been paid, what, about $9,000 for– 

 

Parrish I think it was about $6,000 give or take. 

 

Ingram Okay. 

 

Parrish Not quite $9,000, I don’t think. 

 

Ingram It was about $6,000. 

 

Parrish I think so. And, and, Senator, and what we– what I was relying upon is a past AG opinion in the law. But Senator Garner has reached out to me specifically trying to make arrangements to pay that money back himself. And I’ve met with OPM about a process for that to occur. And I owe Senator Garner a telephone call right now. 

 

Ingram Okay. So, so that $6,000 is going to be repaid? 

 

Parrish Yes, sir. He’s offered to repay that money. 

 

Ingram Okay. Thank you. That answered my question. 

 

Dismang All right. Thank you. Members, do we have any other questions on D1, 2, or 3? Seeing none, I need a motion to approve. I’ve got a motion to approve. I’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed. Motion carries. And we just approved items D1-3. Item E1.

 

Anderson Thank you, Mr. Chair. Section E is an insurance department appropriation reclassification request. In fiscal year 2022, Peer and ALC reviewed two requests for miscellaneous federal grant appropriation for the Department of Insurance. The Department has since learned that the funds came from the Federal American Rescue Plan Act. The letter explains no funds have been expended. The department has resubmitted the items as ARP requests and the first request is for $500,000 in ARP spending authority for system and program modernization. The second request is for a little over $116,000 in ARP spending authority to expand the public health workforce in responding to people with disabilities and older adults. And these items are approval items. 

 

Dismang All right, thank you. Members, do we have any questions on item E1? No questions. I need a motion. I’ve got a motion to approve item E1. I’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed. Motion carries. Item F1. 

 

Anderson Thank you, Mr. Chair. Section F is the rainy day fund release requests. The first item, the only item, is a letter from the governor to transfer $1.6 million from the rainy day fund to the DHS Division of Children and Family Services. The funds will be used for foster family supplemental payments. Staff reached out and learned that the payments will assist provisional, relative, and fictive kin resource parents. And this is in a time when rising costs of food, gasoline and other necessities could be a barrier to becoming a caregiver. These homes are open on a provisional basis. They are not eligible for full board payments that are made to homes that have met all the requirements of the Child Welfare Agency review boards minimum licensing standards. The ALC executive subcommittee authorized the support payments through an emergency rule last month. 

 

Dismang All right, thank you. Members, are there any questions on F1? No questions. I’ve got a motion to approve. I’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed. Motion carries. G1-7. 

 

Anderson Mr. Chair, we’re in section G. These are the restricted reserve fund transfer recommendations. The first item, G1, is– and I’m sorry. These seven requests are totally $9.25 million in transfers from the majority vote set aside account within the restricted reserve fund. This is set aside A in the surplus income and distribution report. That’s P1 on the agenda. So G1 is for the University of Arkansas. It’s $1 million. This is to provide support for the construction of the university’s multi-user silicon carbide research and fabrication facility. Next item G2. This is also the University of Arkansas. This is for $350,000. It’s to maintain, expand, and support the operation of the Arkansas Center for School Safety. The next item is G3. This is on page 5. Again, University of Arkansas. It’s $1 million dollars. It’s to provide support for the construction of the university’s Anthony Timberland Center for Design and Materials Innovation. Next item is on page 8. This is G4. It’s Department of Commerce Economic Development Commission. It’s $3 million to support renovating a hospital to house a crisis stabilization unit in El Dorado. Next item is G5. Again, Development Commission. It’s $1 million. The letter explains that this would be to make a grant to Harbor Home for capital projects. The agency reached out to us– reached out to let us know that there was a typo in the request. The grant would go to Harbor House, not harbor home. This correction will be reflected in the report to ALC. Next item, G6. This is again Economic Development Commission. It’s $1 million. It’s a grant– to make a grant to the Community School for the Arts. And G7 is on page 11. It’s a Parks, Heritage and Tourism Division of Heritage. It’s $1.9 million. And it’s to provide assistance in establishing the National Cold War Center on Eaker Air Force Base in Blytheville. And then we have one more request. This is not on the agenda. It was submitted this morning. And I believe that DFA’s going to come up to present it. It’s for Energy and Environment. It’s $1 million for the used tire recycling and accountability program. There will be no vote on this today. But it is just going to be presented for the committee’s information, and ALC will take action on this item on Friday. 

 

Dismang Members, do we have any other questions on any other items, 1-7? Senator Chesterfield, or you need a– on which item? All right. Item 6. Senator Chesterfield, you’re recognized for a question on item 6. 

 

Chesterfield I just want to know where the Community School of the Arts is located or is it more a concept than a place? 

 

Dismang And if you could, just go ahead and recognize yourself for the committee. And I think you’ve heard her question, and so you can proceed. 

 

Chesterfield Hi, Mr. Hambrick. 

 

Hudson Good morning, committee. Good morning, Senator Chesterfield. Jim Hudson, Chief of staff, Department of Commerce. It is a very real place. It’s in Fort Smith. It’s an existing school that is focused on the arts, and they’re going through a capital campaign right now. They’ve raised most of the money, more than, more than $9 million. 

 

Chesterfield I just wanted to know where it was. I’m not opposed to the concept at all. I think it’s great. 

 

Hudson We have reps here from the school if you have more questions. 

 

Chesterfield Really, I just wanted to know the location.  I don’t want us to overthink location. Thank you so much. 

 

Dismang All right. Thank you. And then, the handout is coming out on the additional item. Again, we won’t take that up today, but we’ll consider it in full ALC. And then DFA can come forward to go ahead and present or make comments on that letter while they’re doing that. Would you mind repeating G1, please? 

 

Anderson Thank you, Mr. Chair. G1, that was University of Arkansas. This was $1 million dollars. It’s for the multi-user silicon carbide research and fabrication facility or MUSC lab. 

 

Dismang He does a wonderful job. All right. With that, you’re recognized. 

 

Breck Thank you. Robert Breck, Office of Budget. I hope I don’t have to repeat that. Now what is being passed out today is a request for $1 million from the restricted reserve account. This would go toward the tire recycling and accountability program. These funds would come out of the restricted reserve account that has been deemed the majority vote various improvement projects set aside. This was the $150 million restricted reserve account that was established recently. If, if this is done, they would like for this money to actually be paid out of the post-closure trust fund. But there is no mechanism to do that unless you’re in session. So the plan at this time is to take this money, use the restricted reserve funds, and then in the next session, those funds would be replenished out of the post-closure trust fund. There’s just not a mechanism to do that at this time. 

 

Dismang Sounds good. Senator Ingram, you’re recognized for a question. 

 

Ingram Robert, what’s the balance in that post closure trust fund? 

 

Breck I’m told it’s around $6 million. And there’s, there are funds that are available for this purpose, they just can’t reach them. 

 

Dismang All right. Thank you. Do we have any other questions on the letter? Again, this is– Senator Rice. Senator Rice has a motion. There are no other questions. Actually, we don’t– no motion on this item yet. It will come up in ALC. All right. So with that, do we have any other questions on items G1-7? All right. Seeing none, I’ve got a motion to approve. I’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed. Motion carries. Items– or item H1. 

 

Anderson Thank you, Mr. Chairman. We’re in Section H. These are the appropriation and/or fund transfer requests. There was a request to transfer $996,000 in appropriation and funding from the Sustainable Building Design Program to Henderson State University. This is for the Department Transformation division of building authority. The spending authority will accompany a loan to address two HVAC projects, a chiller replacement in a dorm and replacement of units on the roof of their gym. The loan agreement payment schedule is included with this request on the following pages. 

 

Dismang All right. Members, do we have any questions on item H1? Any comments? All, right item H1 is reviewed without objection. I1-5. 

 

Anderson Thank you, Mr. Chairman. We’re in Section I. These are cash appropriation increase requests. The first one is for Supreme Court of Arkansas. It’s $570,000. It’s pay for– it’s to pay for increased operating costs due to inflation and potential one-time expenses related to the new building. I2 is on page 3. It’s Department of Corrections. It’s a letter from Department Corrections for $2.5 million. It’s to cover the purchase of capital equipment such as kitchen and laundry equipment through the remainder of the year. I3 is on page 4. It’s a letter from the Department of Education Division of Higher Education. It’s $68,000 in appropriation and to establish a line item. This is to upgrade the Division of Higher Education Student Information System. I4 is on page 5. It’s a letter from Department of Commerce Division of Workforce Services. It’s for $725,000, in spending authority. And it’s to add additional IT resources and fast track development to replace the current UI system. I5 is on page 6. This is from the Department of Military. It’s Arkansas National Guard. It’s $250,000 in spending authority. This is to disperse a donation from the Attorney General to the Department of Military to make grants to the National Guard Foundation. Those are all the requests.

 

Dismang All right. Thank you. Members, do we have any questions on item 1-5, I-5? All right, seeing no questions and no comments, items 1-5 have been reviewed without objection. Items J1-3. 

 

Anderson Thank you, Mr. Chair. We are in the miscellaneous federal grant request section of the agenda. The first item is for Administrative Office of the Courts. This is $600,000 in spending authority to expand adolescent substance abuse disorder treatment services in the existing 13 juvenile drug treatment courts. It requires a 25% state match or about $201,000. Next item, number 2, is Administrative Office of the Courts again. It’s $750,000 in appropriation. This is to implement and enhance operations of adult drug courts and veteran treatment centers– sorry, veteran treatment courts. It also requires a 25% state match. It’s 250,000. J3 is Department of Education Division of Higher Education. It’s $1.3 million in spending authority. It’s to implement the Transforming Information Technology Apprenticeships Now project and this one is 100% federally funded. 

 

Dismang All right. Members, do we have any questions or comments on items J1-3 All right. Seeing none, items J1-3 are reviewed without objection. Items K1-2. 

 

Anderson Thank you, Mr. Chair. Section K is Pay Plan holding account, and there are two requests totaling $127,000 in appropriation. The State Bank Department requests $27,000 for extra help and match. And DFA Budget Management Services requests $100,000 for extra help. 

 

Dismang All right, thank you. Members, any questions on items K1-2, or 1 and 2. All right, seeing none, any objections? Seeing no objections, items 1-2– or items K1 and 2 are both reviewed without objection. L1. 

 

Anderson Thank you, Mr. Chair. Section L is overtime appropriation transfer requests. This is for DFA Revenue Service Division. It’s $400,000 in overtime. The division received $30,000 overtime in appropriation during the special session earlier this month. That was just to get through the month of August. 

 

Dismang All right. Members, any questions on L1? Any objections? Seeing no questions or objections, items L– or item L1 is reviewed without objection. All right. We’re up for M1-35. And these are the ESSER requests that have come through the Department of Education. I’m assuming everybody’s looked through that list. And if you don’t mind, I think you have a brief summary kind of how that. All right. You’re recognized to give a summary. 

 

Anderson Thank you, Mr. Chair. So in June, ALC approved $500 million in ARP appropriation for the Department of Education for ESSER grant funds to local school districts. In July, ALC expunged that vote and moved to have the department request the appropriation anew. It was recommended that the new request incorporate teacher retention strategies as advised in a memo from the US Department of Education. On today’s agenda is the department’s second round of requests. The request is for $123 million to make grants to 35 school districts. The second handout you have is a schedule that’s provided by the department that shows the break out of the school districts’ responses. Of those 35 school districts, 11 districts had plans that met the ALC recommendation. Eight districts revised their plans to meet the ALC recommendation. And 16 districts did not revise their plans, and a justification is provided in the last column. 

 

Dismang All right. Members, do we have any questions on any of the responses, items M1-35? All right. Seeing none, so just revisit, we’ve got 19 that will meet the recommendation ultimately, and 16 that will not. And they have provided explanation, which many of those have already provided bonuses or those of a lesser amount or have a different circumstance. But with that, I need a motion to approve. I’ve got a motion to approve items M1-35. I’ve got a second. Any discussion on the motion? Seeing none, all the items then are approved. Moving on to N1. 

 

Anderson Thank you, Mr. Chair. We’re in the report section of the agenda. N1 is a report for the Division of Workforce Services, TANF Transfer reports. And this– they have special language in their appropriation bill that requires a report to ALC showing all transfers of general revenue to the Department of Human Services. On the second page, a table shows $3.4 million was transferred for TANF administrative and program costs. 

 

Dismang All right. Any questions? All right, seeing none, O1-4. 

 

Anderson Thank you, Mr. Chair. We’re in quarterly reports now. O1 is the DHS interagency and inter-divisional match fund transfers. It shows the quarterly interagency and division match fund transfers as required in their special language. The report shows $3.1 million in transfers. That’s from the individual division’s fund accounts to the corresponding grant payment accounts. O2  is the Office of Attorney General Cash Settlement Fund. And it shows the quarterly cash account activity. The report details six settlements and shows the balance of cash funds, cash receipts, disbursements and a transaction detail report. O3 is from State Police. It’s a report that shows asset forfeitures, expenditures– asset forfeiture expenditures for each quarter of the fiscal year. The first page of the report shows $34,000 expenditures for the 4th quarter out of the TPC 0 100 find. This is the fund for federal asset forfeitures. And on the second page, it shows $1,800 in expenditures in the 4th quarter out of the TPC 0 200 Fund, and that is the fund for state asset forfeitures. And then the last report is O4. It’s federal grant applications and awards. And those are all the applications awards by the agencies in the last quarter of fiscal year 2022. 

 

Dismang All right. Thank you. Senator Chesterfield, you’re recognized for a question. 

 

Chesterfield Yes. Yes, Mr. Chair, I slept the other question on the ESSER Fund. 

 

Dismang Yes. 

 

Chesterfield We have taken the $500 million back. When, when are we going to distribute that to the schools or are we? 

 

Dismang We’re doing that as they bring back their plan or explanation. 

 

Chesterfield Then the amount that was originally allocated for them will then be distributed? 

 

Dismang Yeah, that’s what we just did, was for all those 35 schools that responded and we did one the prior week. And just to be aware, members, we will most likely come in next week to approve another round of requests. 

 

Chesterfield All right. Thank you so much. 

 

Dismang All right. Thank you. Any other questions on the reports? Seeing none. P1-5. 

 

Anderson Yes, sir. Monthly reports. P1 is the surplus income and distribution report. This report shows sources of unobligated funds and then the distributions from the rainy day restricted reserve and long term reserve funds as of the end of last month. The rainy day fund shows $10.4 million in distributions and a balance of $6.1 million. There’ll be a new balance of $3.7 [million]. That’s after today’s $2.4 million in transfers on today’s agenda. The restricted reserve fund shows $183.7 million in distributions and an overall balance of $187.3 [million]. If you take into account today’s distributions of $14.25 million, that new balance is $173 million. The total catastrophic reserve fund balance is $1.2 billion. Next report is P2, Budget Stabilization Trust Fund report. And it shows the cash flow loans throughout the fiscal year. As of the end of July, there are $23.9 million in outstanding loans and the cash balance is $176 million. P3 is the tobacco settlement report and it gives a summary of income fund balances, investments, actual payments to the state. And on the second page are all expenses by fiscal year. The next report, P4, is a state social services report. And it shows the fund balance and disbursements, as well as the expenditures of each agency supported by the fund. And the last report, P5, is the American Rescue Plan Report. The first three pages of the report show requests that were approved by the ARP steering committee. And that’s what the state has discretion in awarding. On the fourth page begins Attachment A. That’s a report of ARP funds that are sent directly to state agencies from various federal entities. And the last three pages are attachment B. That’s a report of the ARP funds that were sent directly to institutions of higher education. 

 

Dismang All right. Members, we are going to, my understanding, pass over B2– is that what it was?– Item B2, which that’s the National Guard Foundation request of $5 million. So that’s going to be held over at this point. And then also, members, at your desk, there is a supplemental calendar. And it’s going to have– and I’ve, I’ve messed up everything in front of me, so I’m sorry. It’s like I played pick up sticks with my papers. All right. So, and so members, what we’re going to do on this, just so you understand, we received the request for this supplemental yesterday around noon, which would have been less than 24 hours notice to have it considered in committee today. This is nothing against any of the projects that are to be considered. But I think we would like a little bit more head time or, you know, lead time to be able to review these before we bring them up. And so what I’d ask is that we not– we just pass over the supplemental agenda or not take a vote on the supplemental agenda, which means that these items would come up on our next monthly report. There are, there are four items, and there are individuals here prepared to speak to those. If you have questions, we can take questions on each one of those items, and I’m happy to have a discussion. I’ll leave that up to the committee. So what I’ll do is I’ll just go 1 through 4, and if there’s no questions and y’all aren’t ready to talk about it, then we’ll move on. If you do, we can call the appropriate witnesses forward. Senator Chesterfield, you’re recognized. 

 

Chesterfield Point of personal privilege. Who is sending the information to the school districts, because we got how many last time, Mr. Chair? 

 

Dismang The Department of Education. What they did, they sent a survey, essentially, to the districts asking them to respond. And as those responses are collected, they, the department education ensures that everything’s been answered. And if they are answered, regardless, I mean, they could– whatever it says, they send it to us then for a final approval. 

 

Chesterfield What I’m trying to do is see what we can do to light a fire on those who have not yet responded. 

 

Dismang Fair enough. 

 

Chesterfield And so that’s what I– that’s my concern. Because we have less than 100 districts that have responded. And so I would encourage the Department of Ed, if they’re here, if I may, to contact these individuals, these school districts which have not responded ,and ask them to do so ASAP. 

 

Dismang And I’m not sure of those how many have not responded at all and how many just need some additional information provided or didn’t fill it out correctly. 

 

Chesterfield Thank you. 

 

Dismang All right. With that, so we’re going to– you can just look at your supplemental. If you have questions you would like to discuss now, you know, let me know and we’re going to bring people forward. If not, we will wait until the next month to take these up. So items A-1 on supplemental? A2?  A3? Or A4? Okay. With that, we had no questions. And so, for those in the audience we’ll bring this up next month. And for those on the steering committee, if you could just give us a little bit more lead time. You know, these things are planned out a month in advance. We all know when Peer is going to meet and if we can get these items on so we can actually get them notified to the public instead of just supplemental calendars. I know we’ve been doing a lot of supplementals, but I would prefer the best we can to get away from that. With that, I appreciate your time and work this morning. And we are adjourned. Thank you.