Joint Budget

November 3, 2022

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Department of Agriculture

Rep Wardlaw: Members, we’re going to get started. Department of Ag. And they do have an audit finding. You’re recognized.


Audit findings

Leg Audit: Thank you, Mr. Chair. The audit finding we have for the Department of Agriculture was from the FY 2021 report. And the finding is that the Department of Agriculture did not adequately monitor all sub-recipients for the Arkansas Meat and Poultry Processing Grant program. We reviewed expenditures totaling $7.8 million for 16 of 31 sub-recipients of that program who received funding. Eleven of them did not submit adequate documentation to the department to prove the proper cost share had been achieved. And in addition, two sub-recipients made payments totaling over $343,000 to related parties. Two other sub-recipients also purchased real estate totaling over $376,000, although real estate was not listed as an eligible expense. And then finally, one sub-recipient submitted a $10,000 invoice for equipment that did not contain sufficient detail to verify the eligibility of the expense. Mr. Chairman, that concludes the finding.


Rep Wardlaw: Senator Chesterfield, you’re recognized.


Sen Chesterfield: Are any of these repeat findings, Mr. Chair?


Leg Audit: No, ma’am. This is not a repeat finding.


Sen Chesterfield: All right, thank you. And we can find the response?


Leg Audit: Yes. It should be on the bottom of the finding.


Sen Chesterfield: Thank you so much.


Rep Wardlaw: The reason this wouldn’t be in a repeat finding, this is a new program, correct, Tom?


Leg Audit: That’s correct.


Rep Wardlaw: Thank you. Representative Springer, you’re recognized.


Rep Springer: Good morning. Are there members of the department here from Agri?


Rep Wardlaw: Yeah, but we hadn’t got to that part yet. Questions now are only for Audit.


Rep Springer: Okay. So they can answer the Audit questions then once they come up. Okay. Thank you.


Rep Wardlaw: So with that, I’ll recognize Ms. Kathy, and we’ll go ahead and bring the department to the table and go ahead and hear their budget.


Agri budget presentation

Schmidt (BLR): Thank you, Mr. Chairman. Kathy Schmidt, Bureau of Legislative Research. I’ll be presenting Agri’s budget request and information today. It’s in your budget manual in front of you under week four. We’re going to start on page 386. We’re starting with the Department of Agriculture, their administration and shared services. On the first page, 386, you see an employment summary for this portion of the agency. And then on page 387 and 388 are the actual requests being made. This is the appropriation which provides for the personal services, operating expenses for the cabinet-level staff, and shared services for the department. It is a combination of a mix of revenue sources and they receive funding from the different divisions utilizing the shared services. The agency is requesting the following changes: they’ve requested an additional four positions. They are also asking for a transfer of two positions and we’ll see that later on. They’re coming from operations in the Agri Department and they’re also coming from Natural Resources later on. They are asking for some other salary and personal services matching for positions and upgrades. They are also asking for an additional increase of $250,000 in appropriation for operating expense. And we will see this not only on this appropriation but some other appropriations throughout the agency. And they note the rise in fuel cost and vehicle maintenance cost as a need for these increases. They are also asking for restoration of their capital outlay, $200,000, and that will be to replace vehicles. The agency request is for the request except– the executive recommendation is for the agency request except for the positions and the reclassifications. They are allowing for the transfer of the two positions from Agri and Natural Resources. But the other position changes, they’re waiting for the new administration to make those changes. Then on page 388, you’ll see how that plays out on their line items. We’re going on to the Department of Agriculture. On page 390, you’ll see that there are 30 appropriations in this portion of the agency. We’re going to be looking at 12 of these that have changes. Then on page 391, you’ll see the sources of revenue for Agri. The first appropriation with changes on page 392. This is the operations, and this part of the appropriation supports the administrative operations of the department, the Office of the Secretary, the Forestry Commission, the State Plant Board, and Livestock and Poultry. This appropriation is funded by general revenues. They are requesting restoration of a federal grant position, transfer of one position into shared services. This is the one I mentioned earlier, and then some various personnel changes. The executive recommendation provides for the agency request except for some of those personnel changes and reclassifications which are being held for later.


Schmidt (BLR): Next is appropriation on page 394 and 395. This is livestock and poultry’s animal disease control and eradication program. This appropriation is funded from the fee per head of cattle sold in the state as well as fines and penalties and arrests made. The federal funding comes from the US Department of Agri and the Plant Health Inspection Services and Veterinary Services. The requests that they’re making on this appropriation are an increase in operating expenses, again $50,000 for increased cost, operating cost, and restorations of $120,000 in capital outlay for equipment and emergency response equipment. The executive recommendation provides for that request. The next one is the Egg Grading program. You’ll see that one on 396 and 397. This supports the poultry and egg grading program. It’s funded from egg and poultry grading and inspection fees. The agency is requesting a $50,000 increase in operating expenses, again for additional operating costs. And then they are requesting an increase in the line item called refunds, reimbursements of $575,000 each year to cover the 20% federal share of the grading services revenue collected by the department, and restoration of their capital outlay, and $100,000 to replace office equipment for egg and poultry grading staff. The executive recommendation provides for that request. The next appropriation you’ll find on 398 with changes is the Agri Laboratory Testing. This one is used to provide diagnostic lab testing services for all species of livestock and poultry and it consists of fees charged for diagnostic services that are performed. The agency is requesting some salary and match changes due to various personnel changes. They are requesting additional operating expense of $50,000 for increased operating costs, restoration of capital outlay, $310,000 to replace outdated and inferior lab equipment and testing equipment as well as some new equipment to keep up with the growth of poultry in Arkansas. The executive recommendation provides for the agency request except for those personnel reclassifications and changes. Next is on page 400 and 401. This is the Livestock and Poultry Equine Infectious Anemia appropriation for a program that controls the spread of anemia in the horse family. And they oversee testing of horses and measure ways to quarantine animals that test positive for the disease. It’s funded by special revenues derived from fees that are assessed. The changes they are requesting on this is increase in operating expense of $50,000 and or restoration of their capital outlay of $100,000 and that’s to replace office equipment used for the program. The agency request is what the executive is recommending. We’ll go to page 402. This is livestock and poultry animal health. This one is funded by federal funds. It’s used to increase the level of protection, preparedness and response and recovery should a foreign animal disease enter the state. They are only asking for various personnel changes which the executive recommendation provides for holding those for the new administration to make a review and recommendations on.


Schmidt (BLR): On page 404 and 405 is the Plant Board’s administration and pest control. It’s funded by special revenues derived from the registration and inspection fees from various farm crops, pesticides, feeds, fertilizers, seeds and soils, and various sections from other funding. Federal funds from the US Department of Agri and the Environmental Protection Agency. The agency requests some personnel changes and title changes, as well as the increase in operating expenses for the increased costs. That’s $250,000 each year in restoration of capital outlay, $885,000 each year to replace aging vehicles, and upgrading weather equipment. The executive recommendation provides for the change in the operating and capital outlay. We’re going to move over now to– that was pest control. We’re going to move over to page 408. This is 408 and 409 is the Plant Board’s pest surveillance used to monitor the application, sale, and handling of pesticides. It’s funded by special revenues. The agency is requesting three additional positions. The executive recommendation holds that recommendation for later, with the exception, and allow the new administration to review and recommend. There are no changes on the next one. We’ll skip over to page 412. This is the Agri product marketing program. And this is the program that supports the promotion and enhancement of the agriculture industry and its products. Funding consists of specialty block grants from USDA. It enables the agency to utilize federal funding in a variety of projects. Those are seen on page 412. They are asking for an increase in extra help due to an increase from miscellaneous federal grants, and they are eliminating the line item for the Feral Hog Handbook, $35,000. The executive recommendation provides for that request. Move over to page 418 and 419. This is the forestry operations. This supports the staffing and general operations of the Forestry Commission, and its funding consists of special revenues from timber severance tax, fire protection tax, federal revenue from USDA, and Forest Service grants. The changes they are requesting on this is various personnel changes. They’re also requesting again the increase in operating expenses of $250,000 each year. They are asking for an increase in district office replacement of $300,000 due to rising cost of lumber and building costs. This is for their new Clarksville office and restoration of capital outlay $1,663,000 for replacement of their transportation fleet, pickup trucks, transport trucks, and bulldozers. The executive recommendation provides for the agency request except for the reclassifications. And then on page 421 and 422, this is the Forestry Rural Community Fire Protection federal program. On this one, they are requesting– this is for employee federal funds with state and local matches to assist volunteer fire departments in communities with equipment purchases and upgrades. And on this, they’re asking for restoration of capital outlay of $185,000 for the Cooperative Lands Fire Management grant. I questioned the agency about that since it refers to a grant, but they actually are allowed by this grant to purchase capital equipment, bulldozers, and things. So that is the request on that. The executive provides for the agency request. And for Agri, there are no other changes on any of the other appropriations at this time.


Rep Wardlaw: Representative Springer, you can now ask your question.


Rep Springer: Good morning. Thank you, Mr. Chair. And I could ask my question with respect to the Audit findings, correct?


Rep Wardlaw: Yes, ma’am.


Processing grant overpayment

Rep Springer: Okay, so this involves Arkansas Meat and Poultry Processing Grant program. I have several. First question, how many persons within that program operate in that particular department? How many people do we have there to administer the grant program?


Ward (Agri): Yes, ma’am. Wes Ward from the Arkansas Department of Agriculture. If I may just give a little bit of quick background on that. And so that was CARES act funding that came to Arkansas, one-time funding there. And early in dealing with the coronavirus, there were shortages at grocery stores of meat and protein products. And so we were approached by the industry, Farm Bureau, Cattleman’s about doing a processing grant to increase processing capacity in Arkansas to help address some of those shortages that were evidenced during the coronavirus, especially the initial phases of it. So CARES Act steering committee, we had a proposal that went to them for $5 million and ultimately put out an application process and went back to the legislature and asked for the CARES Act as well as the full legislature asking for $10.4 million. So to answer the specific question of how many people were involved, it was kind of, I wouldn’t say all hands on deck from the entire department, but myself, our livestock poultry director, our CFO, livestock and poultry division, as well as industry partners that participated as part of a review committee in looking at those applications. So that was Farm Bureau, Cattleman’s, University, USDA, Hunters Feeding The Hungry. We had several folks that participated in reviewing those applications. But as far as full-time staff, several, I don’t have an exact number, but there were several of us that participated in it, mostly because it was just a one-time funding, very short time period. It was October 16 when we got the full $10.4 million was approved. They had to turn in receipts by November 30. We had to submit those by December 15. And so it was a very, very short time period and trying to turn that grant program around, but it was one-time, and it ended after that.


Rep Springer: So do you agree with the findings that are here that something happened? So can you explain to us what happened to cause the $1 million overpayment?


Ward (Agri): Yes, ma’am. And so certainly, I wouldn’t disagree with the auditing in that we could have approached some things differently. I would respectfully disagree a little bit with audit findings in that we overpaid by a million dollars, because that was a specific request to the legislature, that the legislature approved a specific dollar amount based off of a review committee and looking at that. And so I think there was a little bit of disagreement. Again, respectfully, I don’t mean to say this negative towards Audit, but the way some of the guidelines were written, we could have wrote that a little bit clearer because it said up to 90% of eligible expenses, which is what the review committee looked at. We received all the applications. The applications were significantly over that $10.4 million. And what we funded and what the legislature approved funding was about what came out to about 90% of what they had submitted in their application. So we didn’t over-promise. It’s just we could have clarified that language and the guidelines to make that more clear.


Rep Springer: Was there a language that was approved by some committee or some sub-committee of the legislature? Or did you all come up with the language?


Ward (Agri): And I would have to go back and look at the notes. So when we originally went to the CARES Act steering committee that had legislative members on it, then it went to the House and Senate Ag committee for review of the program. And then after the CARES Act steering committee approved the funding, then it came over to Peer for appropriation, then full ALC for approval. I would have to go back and look to see if the legislature looked at the guidelines that we used. I know that we talked about the guidelines, but I don’t know if the legislature actually saw a physical copy of what we sent out to the public or not. So to that extent, we would agree with Audit. There were things that we could have– we could have done better, been more clear about, and unfortunately, just because of the short time period of trying to turn that funding around– I’m not trying to make excuses. But in hind sight, we would have specified that a lot better.


Rep Springer: Final question. Are you aware, is there any liabilities to the state for this overpayment or is this just something that you all did and there’s no consequences as far as return of funds to the federal government or anything of that nature?


Ward (Agri): Right. No, ma’am, there’s not. And we’ve had some conversations with the Department of Finance Administration, as well as the consultants that were used on the CARES Act. I think there’s been some inquiries to the US Treasury on those sort of questions on that aspect. At the same time, even though that grant is over, we’re still very much involved in the meat and poultry processing portion itself to include our new state meat inspection program that the legislature approved. And so the people that received funding, we’re in pretty constant communication with on just making sure that they’re moving forward on the funding that they received. And hopefully, we’ll have additional processing capacity for the state of Arkansas, which is what the intent of that program was for.


Rep Springer: Mr. Chair, I have a question about their appropriation. Do I need to get back into the queue for that?


Rep Wardlaw: Let’s do that.


Rep Springer: Okay. Thank you.


Rep Wardlaw: Representative Meeks, you’re recognized.


Rep Meeks: Thank you, Mr. Chair. This is just a quick question, and staff may be able to answer this. On page 388 in the shared services paying account, I’m looking at their fund balance is $400 out of a, looks like it’s almost a $10 million budget. We only have $400 in that fund. Is that something that we need to be concerned about?


BLR Staff: No, sir. That shared services is where they will transfer monies from other divisions to pay for those. And they normally don’t see a fund balance carried forward in shared service, so I wouldn’t see that as a red flag, sir.


Rep Meeks: Okay, so this is where we’re just transferring– a fund to allow for transfers of funds?


BLR Staff: Yes, sir.


Rep Meeks: Okay. All right. Thank you. That was my question.


Rep Wardlaw: Senator Hammer, you’re recognized.


Fire departments

Sen Hammer: Thank you, Mr. Chair. Is it on page 422 as far as the funding that was referenced for volunteer fire departments? Is that where you referenced it?


Ward (Agri): So I hope I’m answering the question. We can certainly have Joe Fox come up if we need to be more specific, but that one, I believe, is more specific to the wildfire suppression kits that we distribute to volunteer fire departments. But it’s not specific volunteer– not direct assistance to volunteer fire departments on just funding. It’s specific to wildfire suppression kits that they apply for and then we distribute.


Sen Hammer: Okay. Is that the only thing that’s in all your funding for the rural volunteer fire departments– I caught a bit of it a minute ago– or was there another area that you referenced?


Ward (Agri): So we work very closely with the fire department. I’ll let Joe answer that more specifically. I don’t want to mistake any of that.


Fox (Agri): And the 185,000, Representative Hammer, Senator Hammer. Excuse me.


Sen Hammer: No problem. Honored either way.


Fox (Agri): Is strictly the federal grant portion of what we do for rural fire departments. And it’s a specific grant that we do with about 30 fire departments each year. They apply to us, and they get somewhere in the neighborhood of $3,000 worth of equipment, like personal protective equipment, leaf blowers, that sort of thing. We do many other things for fire departments, but they’re not on that particular account.


Sen Hammer: Okay, so I guess the overall last question would be, is there any additional funding increases in your budget or Department of Ag budget that is specifically directed toward rural volunteer fire departments?


Fox (Agri): There’s one. There’s a $50,000 increase. I’m not looking at the right page. And it’s a transfer, and it will go to rural fire departments ultimately, yes.


Sen Hammer: Okay. All right, thank you. Thank you, Mr. Chair.


Rep Wardlaw: Mr. Fox, while you’re at the table, I was on a fire a couple of weeks ago, and a dozer broke down in the middle of the fire. So I was talking to the Forestry folks that were out there, and they expressed a lot of concern to me that our dozer fleet is getting old. And we went through this about 10 years ago. I actually personally had dozers on that fire as well, and our dozer cut a line around the broke down dozer at the edge of the fire line. It’s very concerning to me that we have staff out there on dozers that are not reliable. Do we have a plan in place to replace some of these dozers or to get a newer fleet in place? As we just went through one of the driest seasons we’ve seen in a long time, we’re very blessed not to have as many big fires as we did, but we could be looking at that year after year. So what are our plans?


Fox (Agri): Thank you, Representative. Well, our plan is to replace about seven dozers and trucks each year. So we’ve got 21 dozer units– that’s the truck and the dozer– that are 15 to 19 years old. We have 25 that are 20 years old and older. So that’s 46 out of 110 dozers in our fleet. Those dozers are safe. When you run equipment, as you know, you’re going to have breakdowns. We make sure that we’re safe. We have radios and we know where people are and that sort of thing. So safety, my mind, is not an issue, but equipment maintenance is. Now there’s two problems: one is supply chain. We got no dozers delivered to us out of an order of five. We had two dozers that have been ordered for 15 months, delivered this week on Monday. And that’s the first two we’ve gotten in over 15 months. Not because we weren’t trying. Have trouble with transport trucks, getting deliveries on them. That’s almost impossible under the current conditions. That’s one. Two, we have a passel of dozers, I think it’s 15 or 16 dozers that we bought in 2002 from another federal grant. So a big federal grant at that time. So it’s the age of the fleet is interesting, will be the word I can use. And we will use, we hope, some of the new federal funds that we haven’t received yet from the IIJA, Infrastructure Investment and Jobs Act, and from the Inflation Reduction Act. We intend to buy dozers and trucks out of those funds as we receive the funds. We’ll be back here asking for MFGs when we have something to– when we have numbers that we can use and ask. But we intend to work heavy on our dozers and transport trucks and pickup trucks.


Rep Wardlaw: Thank you. And some of that was expressed to me as well about the delivery of the dozers that had been ordered for time span. So with that, Representative Wooten, you’re recognized.


Rep Wooten: Thank you, Mr. Chairman. Mr. Secretary, I’d like to talk a little bit about your personnel. I had the analysts look at the vacancies and you have 100 vacancies in the department. And you’re asking for four new positions and I think two transfers. Is that correct, Miss Schmidt? So why are you asking for new when you’ve got 100 vacancies?


Ward (Agri): Yes, sir. And great question. And so just looking at our most current numbers, so as of this week, we’re at 572 filled positions and we’ve got an additional about over 30 that are being advertised, about 618 that we’re trying to trying to get filled. So you’re right, there is a little bit of a gap between what we have and what we’re asking, and so that was part of what we’ve been working on with OPM. We’ve got some positions that are either too low graded and that we’re trying to–


Rep Wooten: Why not just use what you’ve got, and then if you need more, come back?


Ward (Agri): Yes, sir. And the short answer is that some of those positions are not appropriate for what we’re trying to get them to do.


Rep Wooten: Well, you can transfer them.


Ward (Agri): Yes. Well, I meant–


Rep Wooten: Upgrade them, whatever, still, without having to add new positions.


Ward (Agri): And that’s what we’re trying to work on with OPM. So last year, we gave up 14 positions, and I think we requested 7 in return, so trying to get the positions that we can’t use that are inappropriately graded or titled, swapping those for the positions that we need to do specific jobs. But you’re asking great questions. We agree with you completely, and it’s been an ongoing process to make sure we’ve got the right personnel to do the jobs that we’re asking them to do.


Rep Wooten: And also on page 389, employee summary shows 475 employees. Okay? Go over to page 390. It shows 514 actual employees. And we’ve gone through this with several departments, and I know that these numbers are at points in time, but that’s 64 difference between 475 and 514. And then you’re authorized 540, but when you look at the vacant positions, if you add 475 and you add 74 vacant positions in the Department of Ag, that puts you at 549. That’s 9 over the authorized 540. And if you put 74 over the 514 number, which are individual bodies, that puts you at 588, so that puts you 48 over. And then if you look at authorized and you take 74 away, you only have 466, but you say you’ve got 475 people. So there’s some discrepancies in all these numbers, and we’re seeing this in every agency. There’s got to be some clarification somewhere. We don’t know whether you’re 48 positions over your 540. Or 549, you’re 9 over there. So how many people do you have?


Ward (Agri): I would agree with you, sir, that these numbers are very confusing, and I’d be more than happy to share the list that we go off of. Every week, we print this off. We share it with our division director so we know who we’ve got, what positions are open, what positions–


Rep Wooten: Well, how many have you got?


Ward (Agri): So we have right now, as of Monday, 572 positions that are filled, 123 extra help positions.


Rep Wooten: 572?


Ward (Agri): That are filled.


Rep Wooten: That are filled?


Ward (Agri): Yes, sir.


Rep Wooten: Well you’re authorized 540.


Ward (Agri): Yes, sir. So I think maybe the number we’re using is a combination of Agriculture and Natural Resources. So we’re looking at two, I think, separate fund accounts, but this breaks that out separately.


Rep Wooten: Well, this is just on the Department of Ag that I’m talking about.


Ward (Agri): And Natural Resources–


Rep Wooten: We have 540 authorized, and you’re telling us you’ve got 572?


Ward (Agri): Yes, sir. And I think that’s– so Natural Resources is part of the Department of Agriculture, but I think for budgeting purposes and previous appropriation bills prior to transformation, everything was separated out, which makes it hard to follow the numbers.


Rep Wooten: Mr. Chairman, I’ve got couple of more questions. Do you want me to get back into queue or ask them now?


Mr. Chair (sitting in): Yes, Representative Wooten, you can just get back in the queue.


Rep Wooten: All right, thank you.


Mr. Chair (sitting in): Thank you. Representative Beck, you’re recognized.


Rep Beck: Thank you, Mr. Chair. I have a quick question on page 419. So it has to do with the district office replacement. And there may be a good reason for this, but you’ve increased from $300,000 to $600,000. And the thing that sort of flags that a little bit for me is we just got through talking about some education things, so we just ran through some of these numbers as far as building increased costs and stuff like that. That’s a doubling, and we didn’t see that in the other– or there’s another reason.


Fox (Agri): Our original idea and what we thought it would cost three or four years old was $300,000. We quickly realized that we were way low with our estimation of what it would cost. It didn’t actually double. We missed the estimation of what it would cost for a 3,500 square foot district office, and that’s why it’s higher. The actual fact is that lumber has come down since we’ve gotten a very recent bid on this office. It’s slightly under $600,000.


Rep Beck: Thank you.


Mr. Chair (sitting in): Representative Springer, you’re recognized.


Rep Springer: Thank you, Mr. Chair. Hello again. I’m over here. And I appreciate the questions asked by Representative Wooten. I want to follow up again. I’m on page 389 and page 390, and I’m specifically looking at the numbers and the breakdown on this particular page between white employees, black employees, and others. And I want to go– I’m just looking at the numbers, and I’m of concern with those numbers. So I’m going to page 390, and I’m looking under the first line item, Appropriation, Ag Department Operations, and there are 212 positions. I would like to know, what are those positions? Can you describe what kind of job classifications, position names, what are those, the 1,200 positions there? And if you can give me some examples, then tell me what are the qualifications for those positions. And the third question, who makes up those positions by race and gender, if you have that information?


Zaki (Agri): Inoussa Zaki, chief fiscal officer. So you’re looking on page 389?


Rep Springer: I’m looking at page 390, the first line, where it talks about your positions, the first line item, Operations, AG Department Operations. You have 212 positions. So what position titles of the persons that make up that 212, what kind of positions are they?


Zaki (Agri): So it would be a combination of several positions from our GS4 to our GS12 positions, so Agri inspectors, division managers, some fiscal program managers as well.


Rep Springer: Okay. So tell me the qualifications for those positions. So for instance, the inspector, what are the qualifications for a person to be hired as an inspector?


Zaki (Agri): I would have to defer to the division managers or the hiring manager.


Staff diversity (part 1)

Rep Springer: Okay. So I’ll just cut to the chase. The reason why I’m asking these questions is because you all only have 4% black people that work within this department. And so I’m trying to figure out what are the qualifications for you to be able to work in this department when you only have out of– on page 389, out of 475 employees, you only have 17 that are African American, and then you have 12 of other minorities. So I’m trying to see, is there something going on to keep black people and other minorities from holding these positions? So that leads me to believe, what are the qualifications in order for a person to be an inspector, to be a manager, to be in the physical plant or wherever it is, all those positions? There are over 1,200 of those positions, so why isn’t it that people of color can’t hold those positions?


Ward (Agri): I don’t think it’s a matter that they can’t hold the positions. We would love for them to. Certainly, our positions are open to anyone that applies and to the best qualified applicant, and we do a lot of outreach. We’ve got a specific position within the department that does minority outreach. And so we do participate in job fairs and career fairs and so trying to just help advertise about the positions. I think we struggle overall to find people that want to have positions in agriculture, so I don’t think it’s necessarily a minority issue, but we would love to have more minority representation across the board. And we try very hard to have an equal representation across the board, regardless of whether it’s within Forestry or Livestock or Plant Industries or within our fiscal staff and shared services within the department itself. But our position qualifications are reviewed by OPM. They’re standard across the board, and we’d be happy to share any of those with you.


Rep Springer: I would like to see that because I’m aware that the University of Arkansas at Pine Bluff, they have agricultural majors there, so I know that there’s a pool right there for you to look into. And then you say you have– I’m sorry, Mr. Chair, one last question, and I’ll get back in the queue. You say now you have 100 vacancies that you’re trying to fill. So my question goes back to the original question. What are those 100 vacancies that you’re trying to fill?


Ward (Agri): Yes ma’am. And certainly, we could share the list of positions that are being advertised, and we would love to do additional–


Rep Springer: Please do. I would like to see that list. Thank you.


Ward (Agri): Yes, ma’am.


Rep Wardlaw: Representative Wooten, you’re recognized.



Rep Wooten: Thank you, Mr. Chairman. First of all, on page 417, there’s $1 million in that scholarship fund, but you only used $20,000 last year. So I’ve got two questions. One, how come you just– how come we just put out– was that one scholarship or two? And then where is that $1 million invested?


Ward (Agri): Yes, sir. I’m making sure I’m looking at the right page here. So that’s correct in that it is only a $5,000 scholarship.


Rep Wooten: So you gave four of them last year?


Ward (Agri): We gave four, so yes, sir. And that’s something that we’ve got a proposal that we’ve just recently presented to the governor’s office on trying to make some corrections to this. The reason why that $1 million appropriation is mentioned there is because, when I go back to when we were first dealing with Dicamba and the legislature approved doing a $25,000 penalty for intentional misuse of the Dicamba products, there was a question of, if we get this large influx of Dicamba penalties, what would we do with it? And it would go towards scholarships. And so the scholarships are paid from civil penalties. We thought there might be a big influx of civil penalties related to Dicamba. That number was increased. We haven’t seen that large influx, but that’s why that number is so large, was to account for that possibility, but we are anticipating having a proposal during the legislative session really to try to clean up some of the scholarship funding and make sure that it’s more appropriate and addressing the needs across the state.


Rep Wooten: Are you talking about the money part of it or the number you’re giving, or?


Ward (Agri): So I think it could be both, depending on the desire of the legislature, if you all wanted us to increase that number as far as the amount of scholarships that are given. So we have these four that are specific to the universities, and then we have the forestry scholarship, and we’re also looking at veterinarian scholarship as well, but it’s something we hope to present to you all in the session on what would you all like for this sort of program to look like based off the amount of funding that’s there.


Rep Wooten: My follow-up, if I may, you have a lot of fund balances, a significant amount of money. Where do you record your interest? Where’s does your interest show?


Ward (Agri): Yes, sir. So we’ve got the number of the interest that we’ve collected off of those accounts, and I can let Inoussa, our CFO, correct any discrepancies that I state, but one of those for Business Area 0400 was about $9,900 in interest that we collected over the last fiscal year. And then we’re using that funding–


Rep Wooten: Where is it shown? How much?


Ward (Agri): It’s $9,961.45.


Rep Wooten: Where is that shown?


Zaki (Agri): Appropriation N45.


Rep Wooten: Do what?


Zaki (Agri): It will be in appropriation N45 in your packet.


Rep Wooten: How come you don’t show it as a funding source?


Ward (Agri): We may have to get back to you on that. So I don’t think that it does show it as a funding source. I think your point is well made, that it doesn’t document that.


Rep Wooten: It’s additional income that comes into your agency. And also one more, on page 442 and page 504. And 442 is in the Department of Ag, deals with feral hog eradication. And then you’ve got another page, 504, Natural Resources. What’s the difference in the two programs?


Ward (Agri): Yes, sir. So really at this point–


Rep Wardlaw: Hold on. We haven’t made it to 504 yet. So before we go to that question, let’s get through the next section, Representative Wooten.


Rep Wooten: Well, it’s time to–


Rep Wardlaw: I understand. When we get through the next section, I’ll let you come back to that.


Rep Wooten: All right, thank you.


Rep Wardlaw: Senator Hammer, you’re recognized.


Sen Hammer: Thank you, Mr. Chair. A couple of quick questions, Wes. How long have you been director or secretary?


Ward (Agri): I started in March of 2015, sir.


Staff diversity part 2

Sen Hammer: You ever had a discrimination lawsuit brought against you or your agency because of your hiring practices?


Ward (Agri): Not that I’m aware of. No, sir.


Sen Hammer: Okay. Then the second thing is on page 419, under shared service transfer, is that an internal transfer, or is that over to the Shared Services Agency on 419? It’s going to be under Forestry Operation, Special.


Ward (Agri): Shared service transfer? Yes, sir, I believe that’s correct. If I’m understanding the question correctly, that would be Forestry’s portion of shared service. So that accounts for fiscal, HR, legal, all of that.


Sen Hammer: And I notice that– am I reading it right, that it’s going up or that you’re requesting appropriation to increase moving forward?


Ward (Agri): Yes, sir, that is an increase there.


Sen Hammer: Okay. Real quick, why is it going up?


Zaki (Agri): Senator Hammer, so this is to cover the increase in our operating cost.


Sen Hammer: I’m sorry, I didn’t understand you. I’m sorry.


Zaki (Agri): The increase is to cover an increase in our operating cost. So we did project–


Rep Wardlaw: You’re going to get real close to that microphone.


Zaki (Agri): So the increase is to reflect the increase in our projected costs department-wide.


Sen Hammer: Okay. I’ll visit offline with you about the driving up of cost. Thank you. Thank you, Mr. Chair.


Rep Wardlaw: Senator Chesterfield, you’re recognized.


Sen Chesterfield: Yes. I was going to move executive rec, but a number of people have said that they’re in the queue. Is that correct? Okay. I move executive rec.


Rep Wardlaw: I have a second. Do we have any discussion on the motion?


Staff diversity part 3

Sen Chesterfield: I just want to say one thing, Mr. Chair. Because we don’t have lawsuits pending against us does not mean we can’t do a better job of hiring minorities because if nobody’s working there, nobody’s going to sue you, and I think we need to make that clear. Thank you so much. With that, I’d appreciate a good vote.


Rep Wardlaw: Representative Dotson, do you have discussion?


Rep Dotson: No, I had questions, but I’ll just see how this vote goes.


Rep Wardlaw: Okay. With a motion and a second, all those in favor say aye. All opposed? Ayes have it. So with that, we’ll move on to section 3 through 6. Ms. Kathy Schmidt, you’re recognized.


Foresters Registration Board, Natural Resources, Vet Board

Schmidt (BLR): Thank you, Mr. Chairman. The Foresters Registration is on page 453 through 455. This is for regulating foresters registered in the state. There are no changes to this. It’s a $46,000 appropriation each year. And as you suggested, moving on to number four, the Veterinary Medical Board, that is beginning on page 456. And then on page 457 and 458, you see the appropriation. It’s responsible for determining the qualifications of applicants for a license to practice general veterinary medicine or specialty areas. This is funded by special revenues from fees that are charged to member constituents. They are requesting an increase in professional fees of $10,000 each year for being able to contract out complaint services and talking with them. They need to be able to contract with vets who are not currently on the board of the agency, and so this would allow them to do that.


Schmidt (BLR): And moving on now to Natural Resources, that one is going to start on page 459, Natural Resources. The description of their department summary is on page 460 and 461, and you’ll note that they have 22 appropriations. I’m going to go over changes in 12 of them, starting with the appropriation on page 464 and 465. This is the dam inventory appropriation. It’s used to conduct periodic inspections, and they also maintain a database of information. It’s federally funded. They are requesting a restoration of $10,000 in capital outlay to replace existing equipment. They are also asking for an increase of $50,000 each year in their professional fees line item. They note that this would be to contract with engineers for doing those inspections.


Schmidt (BLR): The next appropriation with a change is on page 466, Water Waste Disposal and Pollution Abatement. They are requesting reclassification, and on this, the executive provides for the agency request, with the exception of the reclassification and associated appropriation for that, placing that on hold for the new administration. On page 468 is Natural Resources Commission operations. This one is the transfer of one position to the shared services. I mentioned that earlier on that there were two positions being transferred in from Agri and from Natural Resources. This is that Natural Resources position, reclassification of one position and then reallocation from the research project line item to grants and aid. They had $1,882 in research project, and they’re just moving it up to their grants and aid to use in that line item. The executive provides for the agency request except for the reclassification request.


Schmidt (BLR): Moving on to page 472 is the next appropriation with changes. This is the flood insurance program. It’s funded entirely by federal revenues. It provides a community flood insurance assistance program and provides funding to Arkansas Geographic Information Office. They are requesting an increase in grants and aid of a little over $2 million each year. This is to account for some additional federal grant funding that they are expecting to receive and to distribute to communities and then restoration of their capital outlay, $25,000, and that would be for equipment replacement. The executive recommendation is the agency request.


Schmidt (BLR): There’s no changes on the next few. We’re going to skip over now to page 479 and 480. This is the Rural Fire Protection Program, provides assistance to rural communities to develop rural water impoundments and improve firefighting capabilities, and they are moving this to the Agri area, page 446, so you’ll see this appropriation. So on this one, they are decreasing that because they are moving it, again, to page 446. It’s where we’ve seen this already.


Schmidt (BLR): Next is the appropriation of Natural Resources Commission cash. We’re going to see that on page 483 and 484. This provides for the Safe Drinking Water Program and Water Grants Program. It provides administration for the safe drinking water and projects that are funded through activities of Arkansas Development Finance Authority. It is cash for maintenance and support of the program. The changes they’re requesting are reclassification of positions and restoration of capital outlay of $225,000 each year to replace vehicles and equipment. The executive recommendation provides for the agency request except for the reclassifications and associated appropriation with that.


Schmidt (BLR): Moving on now, on page 487 and 489, this was the Ouachita River Waterways Project. And on this appropriation, they note that this is being transferred or moved to the Parks Agency. So that took place in Parks earlier. Moving on to page 491 and 92, this is the appropriation for Conservation District clerk’s insurance. The Conservation District clerk’s employees are able to participate in the state employee group health insurance program, and this appropriation provides the state matching portion for their health insurance premiums and it’s funded by general revenue. They are asking for the increase in personal services matching to account for increases in EBD payments. That’s $96,000. There are 80 positions that are covered by this appropriation. The executive provides for that agency request.


Schmidt (BLR): On page 495 and 496, this is the Nonpoint Source Pollution Control. It’s a federal program in conducting US Environmental Protection Agency Section 319 grant program to fund nonpoint source pollution management strategies. The request on this from the agency is restoration of capital outlay, $50,000, to replace equipment for water quality projects. The executive recommendation is for that agency request. On page 499 and 500, this is the Water Use program, and on this one, they recently completed an update to the Arkansas Water Plan, and one of the priorities identified in the update was the need for reliable water use data. So this is federally funded, and on this one, they’re decreasing all line items because they’re moving it to water use data reporting. So you’ll notice on page 500 all of the individual line items are being consolidated down to the water use data reporting.


Schmidt (BLR): On page 501 and 502 is the Conservation Technical Assistance. This includes oversight of the 75 conservation districts, and they are requesting restoration of $40,000 in capital outlay to replace existing equipment, and the executive provides for that request. The Feral Hog Eradication Program is found on 503 and 504. On this one, they are requesting to move this to Agri, so we saw this on page 442 earlier when I presented the Department of Agri’s budget. Then I believe that’s all the changes in Natural Resources, but I would like to go back and pick up soil classifiers. That one you’ll find on page 507. This is the registration board for professional soil classifiers. Their primary duty is to regulate the profession of soil classifiers. They are asking for no change in this appropriation. It’s $1,296 a year. And those are the changes today for Agriculture.


Rep Wardlaw: Representative Dotson, you’re recognized– or Senator Dotson, I guess.


Rep Dotson: Not yet. Thank you, Mr. Chair, I have a few questions here. If I might go to page 426. And I just had a question on how many loans you guys actually use out of this fund.


Fox (Agri): Those loans are rural fire departments. There are no-interest loans, three years. And we’ve never had a default on those loans, by the way, but they’re to rural fire departments. I think we had– what did you tell me? It was a question of how many–


Rep Dotson: How many loans? Yeah.


Fox (Agri): How many loans do we have out? The limit for them– I can get you the correct answer. I don’t have it off the top of my head, but the limit, the maximum loan is $15,000.


Rep Dotson: 15k is the max? Okay. And on page 438, I just had a question on this particular appropriation. Looking back over your 10-year history, it looks like you’ve used $93 10 years ago and you haven’t used any funds out of this since then. Is this appropriation really needed? What’s the purpose of this particular appropriation?


Ward (Agri): Sir, I will try to answer that question. I know [inaudible] may have to correct any mistakes. So this appropriation is tied to fertilizer and live tonnage fees. So we collect that funding, and then we transfer that funding to the University of Arkansas Division of Agriculture.


Rep Dotson: Okay. So it’s just a transfer fund. It’s not the expenditure in here. It may be a fluke on why it was there 10 years ago.


Ward (Agri): Yes, sir. That’s right.


Rep Dotson: Okay. All right. And then on page 458, you have a relatively large fund balance in this. I know there’s been a lot of discussion about fund balances throughout this budgetary session. And I mean, it’s seven or eight years’, I guess, worth of fund balance. Do you care to speak to that?


Veterinary scholarships

Ward (Agri): Yes, sir. And that actually ties to some of the earlier comments about the scholarships and the veterinarian issues. And so I would say one of the topics that we hear a lot about, especially on the animal agriculture side, is the lack of large animal veterinarians. So there is a larger fund balance that’s with the Veteran Medical Examining Board, and we had actually proposed to the board of using some of that fund balance for scholarship to help address some of those specific veterinarian issues. They weren’t necessarily in favor of that at the time, and so we’re working on a proposal that we ran by the Governor’s Office that we would like to see some of this fund balance used for a scholarship purpose to help address some of the veterinarian issues. And that’s both large animal veterinarians for food, animal veterinary needs, as well as veterinarians in rural parts of the state that may not have access as easily as some others would, but that’s our intent to address some of the larger fund balance that we have there. But certainly, that’s something we would certainly present to the legislature during the upcoming session.


Rep Dotson: Okay. And on page 467, basically, similar question on the fund balances that you’ve got there. They’re quite a bit larger than what your annual expenditures are, not to mention the project disbursements. Are you anticipating disbursing $90 million worth of–


Ward (Agri): Yes, sir. I’ll let Chris fix my comments here to you. But those are tied to the water and wastewater projects, which often are large and expensive projects. So we allocate the funding, but then when a decision is made by the Natural Resources Commission, we don’t write them a check at the moment that there’s different steps that they have to take. So we’ve allocated funding. Funding hasn’t been distributed yet. That’s what that represents.


Rep Dotson: All right. Yeah. Mr. Chair. I’ve got a few more, but I’ll jump back in the queue if anybody’s got other questions.


Rep Wardlaw: Representative Crawford, you are recognized.


Fort Smith consent decree

Rep Crawford: Thank you, Mr. Chair. Hello. I had a question on page 493, 494. It says that this money is for grants, low interest loans, deferred loans. My question is, in my district in Fort Smith, we have a consent decree, as everybody in the state knows. I was just wondering if this could be used toward paying some of that, I think, millions of dollars that we need. So I didn’t know if this could go into that project, maybe even helping with what the EPA has put on the City of Fort Smith.


Ward (Agri): I want to try to give a summary, and I’ll let Chris jump in. So we’re certainly aware of the Fort Smith need that’s there. And we brought some of this up a little bit during the American Rescue Plan conversation. So we have within the department some existing programs for water and wastewater needs to include what Fort Smith is dealing with and others throughout the state. There’s about three or four different funds that we use in existing programs. The majority of that would be for loans as opposed to some sort of grant or principal forgiveness aspect tied to that recent approval of American Rescue Plan. There’s about $270 million that we’re working through that process. The application process ends tomorrow. Hopefully, a decision will be made on December 2. Just about all those water, wastewater providers are aware of that. So if they can’t use an existing program, which is mostly loan, maybe they can get American Rescue Plan, which is a grant. If they can’t get that, there’s also infrastructure investment in Jobs Act funding that we’re working on a proposed plan to submit to the EPA. And so there’s several different pots of money. But to your point, we want to be helpful to Fort Smith and other water, wastewater systems across the state. We’d love to find a way to help them do that. I know that we’ve had some conversations with them, but be more than happy to provide more specific information or whatever you need to–


Rep Crawford: Yes. If you would work with me so I can work with my city, I’d appreciate that. Thank you.


Ward (Agri): Yes, ma’am.


Rep Wardlaw: Representative Dotson.


Rep Dotson: Thank you, Mr. Chair. So page 384 on the grants and aids line item there, it looks like you have quite a bit of fund balance. The question is, out of that appropriation, why are not more loans being made? Or like in previous answers, are they delayed and we’re just not seeing those as actual expenditures being made in the current year?


Ward (Agri): I don’t think any of us have a page 384, unfortunately.


Rep Dotson: Sorry, 484.  I’m sorry.


Ward (Agri): 484.


Rep Dotson: If I misspoke, I apologize. That grants and aids line item.


Colclasure (Natural Resources): Good morning. Chris Colclasure, director of Natural Resources. Some of that– or I guess the best way to describe it is we may have some grants in or some loans in the queue, but it’s based on disbursements of when the construction projects are going. So we may go ahead and approve something, but it’s based on when they start construction and as they submit invoices to us.


Rep Dotson: So do you have other ones in the queue that you’re anticipating using the $6 million in appropriation over the course of the next year or two years?


Colclasure (Natural Resources): Yeah. So we will have projects throughout the year, and then we get new projects. We have a Water and Wastewater Advisory Committee that meets once a month that makes recommendations to communities on where to go get funding. And so we’re getting new projects all the time. I will say that with the American Rescue Plan funds, some of that has slowed down a little bit because they’re going to be trying to see if they can qualify for those funds. Then they’ll come back to us.


Rep Dotson: Got you. So this doesn’t have anything tied to do with the ARPA funds?


Colclasure (Natural Resources): Excuse me, sir? Say that one–


Rep Dotson: This isn’t at all to do with the ARPA funds.


Colclasure (Natural Resources): No, sir.


Rep Dotson: This appropriation wouldn’t be– okay.


Colclasure (Natural Resources): These are our existing programs.


Rep Dotson: Then if you turn the page to 486, the question is, how many loans do you oversee in this? These are all federal, right?


Ward (Agri): So the loans in particular, I know that there are several. I’ve got it in one of these big behemoth binders, so I’d be more than happy to provide you a copy of it. But there are several, and some of those range from smaller loans to larger loans. But we’d be more than happy to provide a list of our current loans that we have.


Rep Dotson: Okay. Is there a maximum amount of loan value on these?


Ward (Agri): There’s not. No, sir.


Rep Dotson: There’s not. Okay. And then, if you would, 488– sorry, 490.  Unfortunately, I can’t read my writing there. So, I’ll get back in the queue if I can figure this one out. Thank you.


Rep Wardlaw: Representative Wooten, you’re recognized.


Rep Wooten: Thank you, Mr. Chairman. On the budgeted positions, you have 71 authorized, and you’re budgeting 149. How’s that happening?


Zaki (Agri): Representative Wooten, what page are you on?


Rep Wooten: This is on a report from the personnel analyst.


Zaki (Agri): Representative Wooten, on the department position summary, we’re looking at a total of 669 positions budgeted on the 672 authorized. That’s what we’re showing in a–


Rep Wooten: I show a total department authorization of 673. What I’m asking about is why are you budgeting 149 and you’re authorized 71 in the Natural Resource?


Zaki (Agri): So back in 2012, I believe, we surrendered 14 positions to get 9, then turned around and did an MFG for a grants manager.


Rep Wooten: Well, that still doesn’t answer my question.


Zaki (Agri): Okay. So when you take–


Rep Wooten: We’ll just have to get with staff and work that out.


Zaki (Agri): Okay. So when you take your total, take 14 position out and add the 9 positions that we gain as a result of the surrender– plus those two MFGs, that will bring you up to your total.


Rep Wardlaw: Representative Wooten, those employee differences are the Conservation District employees. They’re not considered state employees, but we do pay their insurance. So therefore, they’re authorized, but they’re not budgeted positions, if I’m explaining that right, and Tony said he could explain that to you offline.


Rep Wooten: Okay. All right. Well, that’s what I was looking for, the difference and why. Okay. I’ll direct your attention to page 484. You’ve got a $1,411 fund balance, $11 million. You’re budgeted $2.5. In your next biennium, you’re requesting $9 million, and you only spent– is that projects in progress. Is that what that’s about? Is that what you said when Representative Dotson asked the question?


Colclasure (Natural Resources): Yeah, it’s for loans that we anticipate, loans–


Rep Wooten: Why? Why is your agency being charged $414,000 for shared services and the nonpoint pollution control program is $11,560 budgeted, but nothing was paid? Why is that $414,000 flowing to shared services?


Zaki (Agri): Representative Wooten, the total contribution from the natural resources is more than $400,000. But just for this appropriation $420, the $413 is just to cover the fiscal in HR, marketing, IT, and legal costs going into the shared service.


Rep Wooten: To your central office–


Zaki (Agri): Yes, sir.


Rep Wooten: –with more or less.


Colclasure (Natural Resources): Yes, sir.


Rep Wooten: And that’s for all of the– that’s for the whole department of Natural Resources.


Ward (Agri): It’s for the entire Department of Agriculture. Yes, sir. So we share our fiscal HR legal for the entire department, whether it’s–


Rep Wooten: I know. I realize that, but you’re moving $414,000 to your central shared services?


Ward (Agri): That’s right. Yes, sir.


Rep Wooten: Okay. All right. Thank you, Mr. Chairman.


Rep Wardlaw: Senator Chesterfield, you’re recognized.


Sen Chesterfield: Yes, I move executive rec for items three through six.


Rep Wardlaw: That is a proper motion. Do I have a second? I have a second. Any discussion on the motion? Senator Hammer, do you have discussion on the motion? All those in favor, say aye. All opposed? Ayes have it. With that, committee, that is all of our agenda for today. Personnel is going to meet immediately upon adjournment. And we’ll see you guys on Tuesday morning.