Joint Budget Personnel Subcommittee

Jan. 19, 2023

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Sen Davis: Thank you, everyone, for being here today. This is a well-attended meeting for Personnel, so we’re excited. I’m going to go ahead and turn it over to Tony Robinson to discuss item B on the agenda.


Governor’s Office raises

BLR Staff: Thank you, Madam Chairman. Item B is a request from the Governor’s Office to create five new positions from the growth pool available to Constitutional agencies. They’re requesting four new classifications or titles to go along with these five positions. The classifications are chief of staff at an SEO 4, two deputy chief of staff positions at GSO– or, excuse me, SEO 3, a public affairs director at SEO 3, and a chief legal counsel at SEO 3. Although it is not required, the governor’s office has also committed in the letter to eliminating five positions when possible as well. OPM has recommended the requested titles and the positions and requests the actions to be retroactively effective to January 11, 2023.


Sen Davis: All right. Do we have any questions? Senator Hammer, you are recognized.


Sen Hammer: Thank you, Madam Chair. Do you want me to direct this to Kay? Is that okay? Can you direct it to Kay? Thank you. The five positions that are going to be surrendered, are those currently vacant or are they occupied?


Sen Davis: And I’m sorry, Kay, will you go ahead and just introduce yourself for the record?


Barnhill (OPM): Yes. I’m Kay Barnhill, director of the Office of Personnel Management. And Senator Hammer, they have been vacated. They are vacant at the moment.


Sen Hammer: Okay. The actual cost then is going to be an increase to the budget, and/or is it operating within their appropriation levels that they have now, and this is just, basically, a reshuffling of the deck?


Barnhill (OPM): There is no increase to the budget. They’re operating within their current appropriation and funds. It’s just a restructuring of the office with the budget they have currently.


Sen Hammer: Okay. Thank you.


Sen Davis: Representative Richmond, you’re recognized for a question.


Rep Jean: This is Jean in Richmond’s seat. Thank you, Madam Chair. Kay, I understand this is going to be a supplemental and we’re going to correct this–


Barnhill (OPM): Right. This is–


Rep Jean: –in 2024 appropriation. Get it back under to the number where it is now.


Barnhill (OPM): Yes. So this is basically a band-aid approach and the only way we had of doing this business at this point in time. We will have a different governor’s appropriation act coming out that will eliminate those 5 positions and keep us down to the 60 numbers currently authorized.


Governor’s hiring freeze

Rep Jean: And I’ve got a question on the hiring freeze, and you may or may not be able to answer this.


Barnhill (OPM): Yes.


Rep Jean: If there’s a hiring freeze throughout the State, all the departments, I’m mainly concerned about the Department of Corrections, if they can find people that are willing to work there. They have a shortage and also State Police, the public safety factors. Is that hiring freeze on those two entities also?


Barnhill (OPM): No, sir. Those two departments were specifically exempted from the hiring freeze.


Rep Jean: Good.


Barnhill (OPM): Department of Corrections and Public Safety. We’re also receiving and reviewing requests for other exemptions at this time from departments that have critical positions that have to be maintained.


Rep Jean: Okay.


Barnhill (OPM): We’re in the process of reviewing all those.


Rep Jean: Thank you, ma’am. Thank you, Madam Chair.


Sen Davis: All right. Are there any other questions? Excuse me, Sir. Representative, you’re recognized for a question, Representative Springer. Thank you.


Rep Springer: Thank you, Madam Chair. Good morning. So my question is, these five new positions, have you already identified the persons for these positions?


Barnhill (OPM): Yes, Ma’am. I believe they’ve identified who the new incumbent will be.


Rep Springer: So Office of Governor chief of staff, deputy chief of staff, public affairs director and chief counsel, those are–


Barnhill (OPM): Yes, Ma’am.


Rep Springer: Can you tell me whether one of these persons is African-American?


Barnhill (OPM): I am not sure, but I do not believe so.


Rep Springer: Thank you.


Barnhill (OPM): I do not know all of them.


Rep Springer: Thank you.


Sen Davis: All right. Thank you. Any other questions? Okay. Members, seeing none, I need a motion that this item has been reviewed. I’ve got a motion by Senator Hester. Can I have a second? See a second. Any discussion? All those in favor indicate by saying aye. Opposed, no. All right. Motion carries. We will move on to item C.


Department Secretary salary raises

BLR Staff: Thank you, Madam Chairman. Item C is a second request from the Governor’s Office that requires approval by the Joint Budget Committee. They are requesting to utilize the provided language that allows the governor to pay department secretaries up to 50% over the maximum salary of the grade. The current maximum salary for each of the department secretaries is $201,700. They’re requesting to pay the Secretary of DHS at $225,000, Secretary of Education at $250,000, Secretary of Commerce at $225,000 and the Secretary of Corrections at $210,000. OPM has recommended the requested salaries and requests the actions to be retroactively effective to January 11.


Sen Davis: All right. Do we have any questions on this? Representative Jean, you’re recognized.


Rep Jean: Thank you, Madam Chair. Kay, and you may or may not know this, of course this is a supplemental to take care of the next six months on these salaries, right?


Barnhill (OPM): Yes, sir.


Rep Jean: Do you know if the practice is going to be this time that any of these secretaries or any of the secretaries will be able to collect outside income from an independent source?


Barnhill (OPM): Right now, there is no ability of any of these secretaries to receive outside funds.


Rep Jean: So that’s a no?


Barnhill (OPM): That’s a no, right.


Rep Jean: Okay.


Barnhill (OPM): I mean, at the Department of Commerce, the AEDC director is eligible, but Mr. McDonald is serving as a secretary, and the secretary is not eligible for additional funds.


Rep Jean: Okay. Thank you, Ma’am.


Sen Davis: Senator Hammer, you’re recognized for a question.


Sen Hammer: Thank you, Madam Chair. The salary increases are above the current ranges. Do you know what the regional salaries are for these positions? And with the, with the requested salary, are we competitive with our region below it or above it?


Barnhill (OPM): I think these are making us competitive with our region. I don’t have the specific dollars in front of me, but traditionally we’ve been lower with most of these positions in our surrounding states.


Sen Hammer: And the people that were hired to go in these positions, were they hired under the expectation of the current salary range or the expectation of the requested salary range?


Barnhill (OPM): The people were hired knowing the current maximum, which is $201,700, but they were told a request would be made to raise those funds. But they were not guaranteed. There were no guarantees.


Sen Hammer: There were no guarantees?


Barnhill (OPM): Right.


Sen Hammer: Okay. All right. Thank you.


Sen Davis: All right. Representative T. Shephard, you are recognized for a question.


Rep T Shephard: The increase in salary is that a result of– well, will the offset be because of the salaries that are being eliminated?


Barnhill (OPM): Right. The increase, there’s no– again, in this situation, there are no increases to any budgets, appropriation or funds. They’re using existing funds, and so they all can be handled within the current appropriation acts for each department. Like for the Secretary of Commerce, as said, they cannot receive the additional dollars that were previously awarded to the Secretary of Commerce. So this is bringing this back up to about that same level.


Rep T Shephard: Okay. So the elimination of those positions will off set the salary increase in these positions here?


Barnhill (OPM): Yes. Yes. Yes, Ma’am. They all have the ability to make this without any additional.


Rep T Shephard: Okay. Thank you.


Sen Davis: Representative Wooten, you’re recognized for a question.


Rep Wooten: Thank you, Madam Chairman. Miss Barnhill–


Barnhill (OPM): Yes.


Rep Wooten: Following up on Senator Hammer’s questions, is it, the salary increases– looks like they’re 11%, 11.5%, and then one of them is more 24. Are these competitive in the marketplace? I mean, are these adjustments going to come one way or another?


Barnhill (OPM): Well, they have to be approved here, yes, but–


Rep Wooten: I know that. But what I’m asking, the market situation that we’re confronting in order to have people that we need and competent people, then these are within that range of what you’re seeing in the market surveys?


Barnhill (OPM): Oh, yes, sir. Yes, sir, particularly with the skill sets required. As you recall, we were paying our previous secretary of human services $287,000. So this is actually a decrease from what was previously paid to that particular secretary. So all of these are competitive within the market.


Rep Wooten: Okay. One more question, if I may. On that foundation money that’s being paid, that is not going to be paid to Secretary McDonald, but it will be paid to the director of the economics office, right?


Barnhill (OPM): Yes, sir. The special language allows for the director of the Arkansas Economic Development Commission to be paid–


Rep Wooten: It just so happened that secretary Preston had both.


Barnhill (OPM): He served in both roles, but that’s not the case.


Rep Wooten: So he was still entitled, okay.


Barnhill (OPM): Yeah.


Rep Wooten: Okay. All right. Thank you. But it’s still in existence.


Barnhill (OPM): The special language still exists, and I’ve just checked with the department, and I think they’re planning on using it for the new AEDC director.


Rep Wooten: Thank you. Thank you, Madam Chair.


Sen Davis: Representative Springer, you’re recognized for a question.


Rep Springer: Thank you, Madam Chair. To follow up on Senator Hammer and Representative Wooten’s question, the different amounts for these particular positions, are there criteria that were utilized in order to cause the differences in the amounts since they’re all secretaries? What are the criteria that were used for each?


Barnhill (OPM): Yes. Well, earlier Representative Springer, the Office of Personnel Management conducted a study of several positions and almost all state positions are running at least 20% behind the market underneath what the current market is for similar jobs. And these jobs fall within that same category that we’re running below for those particular.


Rep Springer: But–follow up.


Sen Davis: Yes, you’re recognized.


Rep Springer: I understand that. But there are different positions. I mean, so some of the– well, they’re all secretaries and then–


Barnhill (OPM): Yes, ma’am.


Rep Springer: –different ones like the Human Services and the ommerce secretaries have the same salary. However, the Department of Education is higher than either one of the ones that are listed here, so I’m just trying to determine how is it that they’re different salaries in the same position of secretary?


Barnhill (OPM): I think those decisions were made within the governor’s office. I think it’s been clear that the governor has made education a priority and this job, that’s the amount that they requested to pay the secretary.


Rep Springer: Thank you.


Sen Davis: Thank you. Representative Cavenaugh, you’re recognized for a question.


Rep Cavenaugh: Thank you, Madam Chair. I just want to follow back up with Representative Jean because I kind of got lost in that conversation. So none of these positions– I didn’t quite understand. So you said none of those were getting money outside their salary as a secretary.


Barnhill (OPM): Yes, Ma’am, correct.


Rep Cavenaugh: But then you said something about the Secretary of Commerce.


Barnhill (OPM): Okay. Under the previous administration, Mike Preston actually received a bonus of an almost up to $50,000 or sometimes over $50,000.


Rep Cavenaugh: Yes, Ma’am.


Barnhill (OPM): But he received that bonus because he served in a dual function as AEDC director and secretary of commerce. Mr. McDonald will not be serving as the AEDC director, and the special language is very specific to that one position of AEDC director.


Rep Cavenaugh: Okay.


Barnhill (OPM): So he will not be receiving any additional–


Rep Cavenaugh: Okay. Thank you. That’s where I got confused. I just wanted to– okay. Thank you.


Sen Davis: All right. Senator Hammer, you’re recognized for a question.


Sen Hammer: Thank you, Madam Chair. Could we get somebody from the governor’s office that would answer questions instead of Kay, please, to the table, if there’s somebody here?


Sen Davis: I believe there is someone here from the governor’s office. We’ll let them decide who’s taking the questions. Thank you. If you would, please introduce yourself for the record.


Governor’s Office response


Black (Gov. Office): Thank you, Madam Chair. My name is Aaron Black. I’m happy to answer any questions.


Sen Hammer: Thank you, Madam Chair. Morning, Mr. Black. Just a couple of questions. The first order of business is coming in and asking for increased salaries above the range. The individuals have been hired knowing that they are coming in at the current range with the expectation that we would be having this conversation this morning. Could you just maybe give a little bit of insight to the latitude you’ve been given permission, as to the mindset of what the governor is trying to do as far as asking for the increase in salaries and the justification for it, please?


Black (Gov. Office): As mentioned by Miss Barnhill, these positions are related to priority issues that the governor is focusing on. I can’t speak to her mindset specifically, but I think these individuals were in similar jobs with excellent backgrounds and resumes. And so to attract them, the pursuit of additional revenue was an important part.


Sen Hammer: And with the consolidation, I know that there’s expectation to give up five. Is it the intent to, and I’m going to say it this way, to do more with less as far as giving up the five positions? I mean, is that kind of the direction, to your knowledge that you’re able to speak, of trying to go is to compensate with the expectations that we’ll have savings later by not having as many people but expecting fewer people to do more. Is that the direction we’re trying to go here?


Black (Gov. Office): That is a very accurate description of the current restructure that the chief of staff and the governor’s office is seeking to do.


Sen Hammer: Could we expect that across the board with all the other agencies as well?


Black (Gov. Office): I know that during the process of working with Miss Barnhill, that’s been a goal of mine to visit with each secretary about being innovative and utilizing talent to do more, maybe with less individuals specifically.


Sen Hammer: Okay. Very good. Thank you for that explanation. I appreciate it. Thank you, Madam Chair.


Sen Hammer: All right. Representative Wooten, you’re recognized.


Rep Wooten: Thank you, Madam Chair. Mr. Black, I want to be sure that the committee fully understands that monetarily this is going to be a wash when it’s all said and done, that these increases that are going to those secretaries and these new positions you’re adding, when it’s all done, finished up, and you all have completed your reorganization, there will not be any additional cost to the taxpayers of the State. You’re going to be within your appropriation and within your budget. Is that is that a correct assumption on our part and on your part?


Black (Gov. Office): Yes, sir. There will be no appropriation request. That is correct. We will stay within the existing appropriation approved by the legislature.


Rep Wooten: Okay. Thank you. Thank you, Madam Chair.


Sen Davis: All right. Seeing no more questions, I have a motion to approve item C. Motion. Do I have a second. Second. Any discussion? All those in favor, please say aye.  Opposed no. Motion carries. All right. Thank you. We will move on to item D.


DHS salary raises

BLR Staff: Madam Chairman, item D is also a request that requires approval. The Department of Human Services is requesting to pay two DHS deputy director positions above the current maximum of the grade. Positions are graded at SEO three with a maximum salary of $167,000. The agency requests to utilize similar language from item C, which allows agencies to exceed the maximum salary by up to 25%, for up to 10% of the agency’s employees. They’re requesting to pay the two positions at $172,000 each, which is 3% above the maximum. OPM has recommended the requested salaries and requests the actions to be retroactively effective to January the 11.


Sen Davis: Okay. Are there any questions on item D? Okay. Seeing no questions, do I have a motion for approval? A Second? Second. Any discussion on the motion? All those in favor, please say aye. Opposed, no. Motion carries. All right. Thank you, members. We are adjourned.