ALC-JBC Budget Hearings (9a-11:30A)

Testing one two three. One. Members will go ahead and continue with the labor department and with that I will recognize a miss Katie and you're welcome to proceed. What. Yes. Thank you Mr chairman. The wall. Thank you. Coleman thank one with. Quarantine. We have an open. I really appreciate your help. Presented. You. And if you're. And labor and. The work. I'm. At their their top right hand corner you'll find three pack thanks for making. So the. I'm gonna go through them in order and we'll begin with the department of labor and one thing division of labor in. The department of labor at the proctor promote developed to help AT and welfare of the week Arkansas. working laws to improve working conditions and any opportunity eight and profitable employment. It includes the division of labor the workers compensation commission and I'm work licensing board commission related very profession or on the state. As I said I'm beginning active the department of labor licensing division they work. And I'll start with the shared services appropriation I think the failed on page one forty six that act. This service is appropriate then that the park authorized that's the language to train for buying and appropriation and to help pay for the operate benefit great if caught. All their division board thank you mission. An agency is it's creek this appropriate by two point nine million. by adding twenty three conditions for extra help in the and all the located salary then matching those physician. They're also reflecting ACT eight hundred and eighty four thousand dollars be expenses and fifteen thousand in conflict and travel expenses. Executive recommendation provide for the agency but. I'm gonna go over the division of labor appropriation. The division of labor have for functional yeah the occupational thank you unit labor standards unit department in public thank. Absent appropriation held on page one fifty. Page one fifty. And it is and the division appropriation begin fifty one. In this section we're only going to review the operation federal programs wait an hour and Senate already conference appropriations and the remaining you will be working later in this working commission appropriation request. First starting with the operation's appropriate things at the detail what if one fifty three fifty three PM your packet. Appropriation and funding the general revenues seen better already knew the elected by the elevator in the program non revenue receipt from black thank verification even if the price inspecting. Appropriation into the point two million dollars total and includes an overall change level to be re at two point oh one billion year this increasing create includes the transfer of the majority the technician twenty two positions that I mentioned previously. Extra help positions as designated salaries enacting extra help operating expenses and travel expenses all for that transfer that I'm an early the shared services appropriation and get that department thank administer all of the conditions. Thank thank effective. Another item worth noting is that this appropriation include one point nine in general revenue funding any executive recommendation is request. Appropriation eighty one eighty seven and one fifty seventy. For the federal program administered by the department of labor which includes OSHA training nine thank you health occupation and occupational injuries and salary survey. The appropriate total one point five million dollars per year and it includes that changed the increase of a hundred and thirty two thousand dollars operating expenses here this is also transfer the services appropriation. Thank you thank you recommendation. If if you're still on page one sixty three and one sixty three B. yes. You can see. Well that's not doing that one doesn't have one okay. One fifty three B. is the best one also. Okay. Yes Sir that's a good one okay so on page one fifty three in your packet that's our state operations. There's a one fifty three and one fifty three B. and the reason they're like this is because one fifty three has there historical data the actual budgeted authorized and then one fifty three B. was in a different page in a different section of the books we put them together that has the agency requesting executive recommendation for this appropriation so we put them together for you and what I was going to bring you two on the bottom of page one fifty three C. shared service transfer. You'll see that eight hundred and forty one million in parens for twenty one. That is what the agency is told us they are transferring over this year to share services. And then the numbers we used as provided to us. On page one fifty three B. you can see the seven thirty five four forty seven in parens in their agency request on the shared services transfer line item that's how much that this piece of paper this document with these numbers reflect is being transferred over shared services. We have been told there might be some discrepancy in these numbers but the the department would have to address that. Well clearly I mean this would be the most difficult year to try to track it because after that we will you will you know we will have some of budget to match against it but of on a go forward basis trying to keep up with the are we. Of Kevin is it bad department can we get it back by department it's that to the new of yes government transformation can we get of this line items to to to balance to look at to see whether we've got a net savings or or to a loss yes Sir I have that we're is. Totals all the shared service transfers. And I've actually actually done that for the boards and commissions that we're going to get to in the third hand out we're not there yet we also have a for this document that I can share with the committee and I may need to get with the department of labor peace and make sure there aren't any discrepancies on the shared service transfers in this manual. Okay there are a a me we've got I can get that for you yes Sir there's two things to transformation obviously there's of monetary gain but we don't want to make the anymore bureaucracy so trying to track this the efficiency is I think very important force thank you Mr chair. Thank you senator. A couple more questions of center Chesterfield. Do you have a question for the house thank you Mr chair looking at one fifty three and it says shared services transfer eight hundred forty one thousand one eighty five. And then one fifty three be excess shared services transfer seven hundred thirty five four forty seven why is that different what are the different. By the number of different. The I guess you probably have to ask the department that Mr chairman if that's okay Senate senator we're gonna let the department present and we'll come back to that question that's kind of puzzling if you you know we we had information from the department that the numbers that were submitted to us were incorrect so we're going to let him address those inconsistencies and then we'll go from there alright thank you so much thank you. Absent of all. Thank you Mr chair that was my question also okay. So seeing no further questions we have no audit findings correct so will go to Mr beset. It would it would let you introduce yourself and your guest and all you guys can present and then we'll go to questions from the committee. Thank you Mr chairman madam chairman members of the committee appreciate the opportunity to come come before yet there to Two two real good reasons that I'm I'm pleased to come is because there is significant discussion last Tuesday concerning some numbers that were just referred to on a spreadsheet that you you you had has that been passed out to each of them now do they have the spreadsheet Mr secretary can we get your guest introducer so I'm so sorry I missed year this is Karen Fricker. I'm Karen freaky on the CFO for the department of labor licensing thank you. Your guys are recognized thank you Sir they do have the spreadsheet that I'm getting ready to refer to. Okay. Yes we do not have your spreadsheet so we're going to need to get that to handed out to the committee members is. Thank you. Thank you. While they're doing that Mister chairman I just want to again emphasize how how how pleased we are to be able to come in and kind of shed some light on on a number of the issues that that the committee had last Tuesday transformation has been a challenge there's there's there's no doubt about that but I suppose in any great endeavor It sacrifices have to be made but we're certainly pleased with the sacrifices that our staff is made the a cooperative spirit that's been exhibited by the directors of the various agencies as well as the boards of directors of those agencies because they've made made this transition and all full of a lot easier. As you know from your perusal of our our our hours are. Appropriation summaries were relatively small department compared to many of those that you will be reviewing our general revenues only comprises two point two percent of our budget and so as we look at savings savings ninety seven percent of us is of our budget is special revenue and sore savings are going to be in that special revenue category but we think of savings is being sex and we're very proud that to date we we've been able to we read been able to realize one point four million dollars in an actual and estimated savings and I'll get a little more specific about that as we go through Go through spreadsheets. I think most of you have them now I think this this discretion that you're looking at. Spreadsheet that you're looking at is the exact same spreadsheet that you were looking at on Tuesday with. Two exceptions there Bennett two additional columns placed out to the right of of these eleven entities that you discussed on Tuesday that were obviously if you look at the difference the differences that you saw on Tuesday were significantly in the red. as you peruse the current spread sheet that shows that the spreadsheet that we've introduced to you now then you can clearly see that there are differences why those why that why the differences the difference is because the expenditure column that you see and the SS transfer columns were correct columns of the total cost columns are different and they're different because the SS transfers columns there's duplication of expenditures and so as you as a result we've got duplicate expenditures in each of these in each of these eleven. At the end of the day though you're still going to see some red numbers and we'll talk about those as much as much as you like I want to be as brief as possible to give you an opportunity to ask questions given the of certain being at deferential to your to your heavy schedule today but in each of those eleven instances there was a duplication of SS transfers and co consequently they were they were in the they were in the negative if you would like I will go through each of those eleven and specifically outlined where those Those with where we had to put cation I don't know if that's in order because I know you're going to want to meet with each of the directors later on would you like me to do that now would you like me to do that as you call the director's up individual I've got a question for you first through that may lead into the answer of your question yes when we look at a spreadsheet we just handed out so I take this mask office mobile. When we look at total shared service transfer it matches are spread sheet of number one number. But then we look over to the right to that blue section added on. Those numbers don't add up including those numbers that are the same. So I need you to explain to me and you can pick one agency and maybe we can. Get it from there List let's look at auctioneers. Would you still negative with no explanation and Astrid's out to the side. And explain to us how those differences. Of your duplicated numbers as you call on were submitted into the. Yes Sir so what what you're seeing is is that we are adding in the that the column that's and entitled indirect allocation that is actually being added as an additional expense this year's all star so hold on it explain to me in the committee what indirect means. Those those indirect art that they've chart the charges for the basic administrative functions for those individuals that are in the shared services area. So where did the term indirect come from I'm sorry it's it's it's it's something that's typically used in the federal programs is indirect cost and and and and that's where it comes from. Okay it at the end of at the end of the day the important pieces that the shared services expenses are really expenses that these boards and commissions have typically paid it's their rent their D. I. S. bills their telephone bills X. Sentara and so that's not in the addition to their expenses those expenses are actually showing over here in the FY twenty column and and we're just going to pay it out of the shared services areas so that for instance we don't have to write twenty two different warrants to pay the rent we can do it with one warrant otherwise we're gonna be looking at having to pay the rent with twenty two different checks ex center with each one of these types of of expenditures because we have the twenty two different entities and the only way we can write the one check is if we do it out of the shared services area. So all we've done is really transferred the appropriation. To to the shared services so that we can for for that for the operational piece for those particular expenses so that we can. We can ride it out of that one. Appropriation. And in this particular instance we've backed out the fifteen thousand seven hundred and fifty dollars and duplicated expenditures and so with moves from the thirty four thousand nine sixty four negative to the thirteen thousand forty six negative still negative. But it's less naked. So. I'm following you on the spreadsheet and what you're telling me is your ad in the shared service an indirect allocation at your total transfer. Well just so you know that's the exact number we had last week when that language is drafted to protect the actual fees from going up and you guys claim to that number was wrong. But your spreadsheet shows that number to be the same. But where it gets crazy at is over on the right. You still got you've got black numbers from for most of the eleven. But you have these three which is accounting towing and auctioneers and you have one down the bottom which already understand as the athletics and understand we're working on that in the session to put some fees back into that but you have no explanation for those top three of why they're still negative and what your plan is to get on back positive and we heard the governor say there be no fee raises so how do we address those negative numbers. What one thing would if I might Mister chairman one one of the let's look at accountancy accountancy is is still in the negative by one thousand two two nine as we adjust that that figure we're gonna look at that at because we know that they're going to save sixteen thousand dollars each year the biennium in rent of we're also going to propose to the board there there's free boards under DLL that still maintain private banking accounts we're going to propose to the board have proposed to the board they follow our advice and move those funds out of the private banking it private bank accounts into the treasury if they did that they would see a savings of fifteen thousand two hundred dollars a year that would put them and in the in the in the policy so that's how we're going to address the accountancy issue. Okay so then the drawing board for me well towing that's a that's a that's a whole other other other issue there twenty expenditures exceeded receipts even without the SS transfers we've not been able to realize savings with towing Sir because they still have a lease they're in a lease that's not going to expire until twenty twenty three and the problem that we have with towing is that the bulk of their expenditures are in salaries in match and you know. Well we we look at nine thousand dollars and duplicate expenditures over there that's not gonna help them very much and we really don't have a lot of latitude there with with with their problem primarily being salaries in and match now we have recently had a resignation over there and but it's not going to cover the entire sixty one thousand if we don't hire that position we can probably save about fifty thousand dollars and then that would bring them to a negative eleven thousand dollars we're still going to have a problem there because as I say most of their problem is salaries and match. Okay auctioneers. Auctioneers is a problem that they are they they are a casualty of the times because things have changed significantly they are one of the entities however Sir when we when we aggregated these entities we did a full financial review of all of the all of the agencies they were one of the entities that we discovered early on that had significant financial issues to be specific the number of active licenses is been slowing for a number of years this is in do due in large part to the popularity of online auctions and the numbers of auctioneers that are now going away from in person auctions to online auctions we anticipate that that problem is going to be exacerbated especially in the covert nineteen air again this is an instance where the bulk of their expenditures is in salary and match the board has a single employee and that salary in match represents roughly three quarters of their receipts again in this instance we discovered there were approximately fifteen thousand seven hundred fifty dollars and duplicated expenditures but that's the auctioneers is a long term problem we do know that were what we're we're saving money in that area they're gonna realize of approximately five thousand dollars save is actually forty five hundred dollars in savings each year the biennium Justin ran and again this is one of the boards that maintains a private bank account if we can move that moneys into the treasury they'll be a savings of roughly two thousand dollars a year. Can you explain to me why moving those bank accounts expressly fifteen thousand dollars in savings what how do how do you say six fifteen thousand dollars will move in a bank account I have heard that the answer to that but let me let us see CPA extension that understand the there being charged a fee for the fact that their monies are not in the treasury hi I actually am not certain that the the source of the fee it may be just as an incentive to get these entities to put their monies in the bank account in the in the treasury but I can also tell you that because they don't have their monies in the treasury my staff is having to do additional work it takes three entries to to post a deposit it in order to get to get the money because we have to then turn around and put it in asus because it's not there originally so it could be a function of the treasury also having to do some additional work and there's an additional charge. Okay we'll go to committee members Senator hammer you're recognized for a question. Thank you Mr chair could you tell us how you defend the savings that are identified a shared expenses and what you used to establish that number and what services of actually been moved over to shared services that are being utilized. We we went and looked at the historical utilization for things such as rant phones internet and copiers looked at the twenty FY twenty expenses for those particular items and moved the appropriation associated with those expenses to the shared services so that we could actually make those payments as one. Warren. And so has have we actually combined the legal and communications in the I. T. in the accounting over to shared services for all these individual agencies. Our our. Going the of. Not not one hundred percent Sir there's some clearly that we have you know we we've we've largely combined IT we're working on finance legal there are some questions about who exactly we're going to continue to put in shared services so I want to be completely transparent and say that that's a work and work in progress. Are these numbers based on work in progress or they based on real time or anticipated anticipated into the future when you get through the transformation process these on real time now. Okay and then last thing would be on the savings that you're realizing on a moving from the private bank to the treasury there was actually a bill I think that was attempted to run to move accounts over to the treasurer you're not and during last session of metal out resistance are you anticipating a lot of resistance from the banks and banking industry when you actually go to move those moneys over to the treasury senator I have not discussed it with the banks I'm I'm simply looking at the bottom line in trying to find ways to bring those who are in the red into the black and that represents a significant savings and that's the most apparent way to do that okay thank you thing Mr. Thank you senator Representative Lundstrum. He represented Hodges. Mike's what. Okay. That was very. Okay now I have a question for. The lady first if you like go. Thank you Mr chair my question is the. On the duplication was there a glitch in the system with that human error that call so duplication of couple question want to make it if a mass and then do we have the dog do you have you guys have the dollar amount of the duplications with you all today that we can we can possibly have the the dollar amount of multiplication well we we did in I don't know what created the The duplications we we didn't submit that spread sheet to you on Tuesday that was your scratchy that that we we I don't know how to answer that that was in our spreadsheet that you were reviewing on Tuesday. What the what this spreadsheet is that you have right now is to spread sheet that we're we're representing so like a I think that came from a okay but in the SS the total assets transfer uses duplications he's in that a dollar amount so do we know how do we have that dollar amount of those duplications. And and then what it what it house how was the duplication. You have to come about with that human there with a with a glitch in the system had added that happen it will not no I don't think it was that I think it was just a misunderstanding of what on the part of some individuals about what was being represented it was in the in the budget manuals all the transfers were showing AS one law AS one transfer as though it was one transfer in actuality that that transfer amount the total under your **** transfers that transformation out is is actually correct but it's made up of the two different pieces the one piece that the shared services which is actually the duplicated peas so if you look at the shared services call on there for that add back column because essentially that's what as that's what's happened and on the right hand side of this is taken the shared services expenses and adding them back the and because they were duplicated so those columns those two columns is four hundred and thirty six thousand. Eight hundred dollars is what you're looking at is the duty as the duplicated expenses okay thank you. Represent of hardest if you look on the spread she passed out by the labor department and then you look at the large sheet that we handed out to you and your three part handout the SS total transfer. Is the same and that's the same number we were working with Tuesday that I've broken out into what goes into that number but the numbers the same. Did that help you at all. Gingrich but again not. Area. Okay that we help we have I was not here to use them sorry but the other for the help I just want you to understand what a two columns a line on the two pages but the rest of the numbers do not align with the numbers on our sheet okay. Thank you. Thank you. Representative gray you're recognized sorry for the confusion thank you Mr chair I am not a guest maybe I'm to slow the game here but I know you're saying that they're duplicated services I just what I want to make sure is where it shows shared expenses and indirect allocation what you're telling me is the indirect allocation is essentially the same thing is the shared services and the shared services is not going to be charged to these boards. No no no the shared services column will will not be charged to the board the it. That actually the what a show one under the shared services is also reflected in your twenty year nineteen twenty expenses. Okay it. That for those things that we were going to pay as as the department these individuals pay their part in their twenty expenses. Okay. So they're already charged out in the numbers they're reflected in fiscal year twenty yes ma'am there already reflect in for instance if you looked under appraisers which is the second one there the four oh four six forty two. Includes thirty four thousand dollars with which they paid their rent their D. I. S. build their telephone bills like that or that has been that's actually already in the expenditure P. so that when when when the addition was done for the total amount of the shared services you ended up with the duplication of those particular our on going operational expenses that they had previously paid for in twenty okay thank you that clears that up so essentially if I look at appraisers that thirty four thousand was already included in the four hundred four thousand yes now I'm going to add fifteen thousand seven hundred thirty six an additional indirect costs that they've not been used to paying yes ma'am okay and one more question if I might Mister chair and. I don't feel like and that the response that you gave to you the Representative Wardlaw earlier on the savings in the bank account I just don't feel like that was an adequate explanation I'd like to know how we actually achieve that amount of savings when the moving money they are actually charged it is showing on the on the truck on the trial balance as an expense that they actually are charged on a quarterly basis. So there charge like four thousand dollars on a quarterly basis yes that that counts the board would have been charged four thousand dollars roughly four thousand dollars on a quarterly basis yes ma'am. Can can we see that I just like to see that if I could I I'll be happy to the trial balance and send it to you if you'd like for me to I'd be happy to report which that's make a note to request that represented thank you nice not even so much the trial balance I want to see I just like to see it on a bank statement and how how bank is actually allowed to charge an agency it's that amount of money man if I may it's not the bank that's charging it's it's it's the it's the the targets the treasury it's the it's the it's the state of Arkansas that actually charging so the state of Arkansas is penalizing them four thousand dollars a quarter for not having their money in the state treasury. At. Your your use of the the term was I don't know about that I'm just telling you that when we're looking at the expenses that this particular board is is incurring that is one expense and and if you look at it and you say well if I put that money into treasuries that expense would not be there what what do we get somebody from D. F. and A and it third seat to tell us why the state of Arkansas is charging that amount of money but it's. Or maybe treasury and we don't have anybody here from treasury I guess. Jake you can't seem to get on the hot seat. A check with the FAA office of budget we're trying to figure out that answer right now okay we we want that answer before the morning up yes yes Sir. Thank you chairman three for now thank you. Okay so we'll go back to the order represented Cavenaugh. Thank you Mr chair over here to your life I have a question dealing with the motor vehicle and the collection you have a wine you have a column there called grants and they're the only two that have these grants. If you if they don't have these grants there in the red. So what are these grants from and are they expected to continue if not we've got the same problem actually banned these grants are grants dare granting this out they are actually sending out this roughly two hundred thousand dollars to the very is either high schools or called colleges in this in in the state so if we don't if we didn't send that out to those colleges then like they would be operationally they are not in the red it's it's just that that book is gonna stop with with me there because that's a hundred ninety nine thousand nine hundred ninety six dollars that goes of for training grants to our high schools and and to several institutions of higher education and I was intent on making sure we maintain that I that outline to those to those colleges that's that's something that's been a long time and the big long time going and I think that's a very very effective program and a very good usage of of of money Well we're on them though the motor vehicle commission we know that they're heading in the right direction because they're going to save men Representative almost forty five hundred dollars a year and just rant and so again as I mentioned earlier there another one of those entities that have their monies in the private banking at a private private facility at I think a motor vehicle as well to. And so what we're going to we're going to suggest that they again. Over there funds to the treasury's will. What is that answer your question me no okay. To be honest now so I guess where I'm confused is if you look at their receipts. There were three to five hundred eighty four thousand they're expenditures of five eighty five. Yes ma'am so they're they're operational in the red there will all but that that I understand that included in their five eighty five is this two hundred thousand dollars worth of grants that are going now their actual operational we talked to operate it is that something closer to the three hundred and eighty five thousand dollars. Okay so you're adding the grants back in to get the operational yes ma'am okay. Alright thank you. Thank you Representative represent fielding you're recognized for a question. It's represented Bentley over here represent fielding spot but my question is for treasury under secures at the these photos still have autonomy we're gonna be able to trace this money for those in the treasures of my questions are for the treasury if we ever get over here thanks. How. We're working on that represent Bentley so if you want to get back in the queue will come back to you when it gets here. Senator rice you're recognized. Thank you A Clerk press than that heard or is in this budget is or any of the boards and commissions paying additional for places for their. The. Monthly meetings. That they had a place before transformation they don't have a place now are they having to pay extra for that no Sir we have adequate conference room space in the in the capital location actually put three come with A and they are having to go to meet. Find a place to meet no they can meet in our in our capital facility in our we're at nine hundred west capital now so many amity route we have three conference rooms one of one of law and they're not having to find or pay for no Sir thank you. Thank senator center Hendren you're recognized. Thank you Mr remind us in conjunction with Represent gray and others about treasury because I I and the the bill the center hammer mentioned I know was discussed in there was law discussion in the session about keeping money in banks versus treasury and I wouldn't aware of any fee that treasury was charging to agencies for for not putting the funds and treasury so my my questions the same out I'd like a explanation from them about what's the basis for that and how that. If I may the funds that are in the treasury are actually in banks I I think there's there's some that could be argued in fact I know it could because again is Senator hammer said there was a discussion about mandatory deposit in private banks versus treasury deposits or some of our schools and other government entities and there is a lot of push back against that is he replied because banks do do a lot in our local industry and that's part of the reason that was pushed back from that but again I wouldn't aware and I think a lot of us want to question about I understand incentive incentives to try to do the right thing but if they're gonna get a lower rate of return I just wanna know where the taxpayer's gonna get the best rate return and what fees being charged to to make that happen. Senator were trying to get someone here at the moment. We'll come back to you as well. Representative Lowery you're recognized. Thank you Mr chair right here of just want to get a better understanding about this this. Concept of bringing getting money from you mention private banks the private bank accounts and moving it into Into the system to be able to cover some of the steps of that money that is in this private accounts that is that calculated as cash fund that that an agency or commission has that that whether it's in treasury weathers a private bank is that part of their cash fund. Yes Sir. It is yes okay so that would be that would be the way that that would be attractive that money is shifted over is that there there is a paper trail in terms of being able to provide oversight and and accountability yes Sir because I use this is actually the states the counting system we are literally a journaling into that system. The amounts that are in these commercial bank account so that the state. Accounting we'll be in total at it but they but they are out in individual banks it just requires an additional step for us to take that information off of their bank statements and journal it into. The ISIS system for the for the states okay kaffir in their total banking okay and as it's put into the system or put into use to cover a deficit or was there ever there is then a declining cash fund balance that does show up in all of the the spreadsheets in the accounting that we receive yes Sir that that gets back kind of what I was speaking about a minute ago and for the additional entries in the additional work that's required because as opposed to just doing it from the treasury issuing a warrant for a payment of an expense these in these entities are actually keeping books and quickbooks or some side set some some outside system off of aces make in their expenses and then we're having to turn around and duplicate that work in the asus this them so that it can be tracked for the state okay alright thank you for for that explanation thank you Mr chair. Thank you guys give me a second. But we. So Jake if you would come on to the table I think you've got some insight into the treasury. You're recognized. A check DFA office a budget so I emailed to staff here the specific code section which is Arkansas code nineteen five two oh six and will obviously make sure the copies are available for you all the under that code language DFA is entitled to a charge of a certain amount to agencies whose cash funds are not held in state treasury the funds that are charge to these accounts. That money that charge fund goes into state central services to help support operations of the state. The original law dates from nineteen ninety three My recollection or my thinking is that at some point in time when we begin setting up basis when we began setting up our treasury we had to build into the process some incentive for agencies to pull their accounts out of commercial bank accounts where we did not have a great deal of transparency on what they were doing with their money where their money was and get them to come over and pull into treasury and so this is one of the mechanisms that was the adopted. Senator Hendren do you have any questions ago with the. Can you get your. You're recognized yeah at that helps Jake I guess what I would wonder is I mean is that fee that we're charging from to to central services. Offsetting in greater than that the the gain that the institution is going to have if they leave their funds where they are. That that's a good question I guess you have to look at the interest rate they're getting or or whatever benefits they might have in the bank my assumption is the agencies have been made more than aware of of these transfers and that's just a decision to admit on their own. Yeah. But they have the choice state in obviously and that's part of what you all are recommending is because of that fee you're going to go ahead and go into treasury my only question is is are we getting a do we get as good a return on the money in treasuries we would if it were in a commercial bank account. Of course I don't like commercial bank accounts payments now anyway so. But it would really just depend on the individual circumstances the agency I hesitate to say the you're getting an interest rate that's more than that but it would really just depend I just think it. Some point if there if we're doing this to a lot of state agencies that bear some analysis to see if were making wise use it rent Senate rising people to get lower rates of return on taxpayer dollars then we need to rethink that yes. I think Senator Sturch are represent Cavenaugh did you have a question on treasury. Okay few would push a button now put you back and. Speaker shepherd you're recognized for a question. Thank you thank you Mr chairman of. Going back to the sheriff's shared service expense so my understanding is that the shared expenses are already part of the actual expenditures and that's what they were added back in the far right column I would like to know and maybe this is already been stated but I don't recall with regard to the indirect allocation what does that represent. It basically is like a man the king your button placement sorry I didn't realize he turned it off I apologize it basically is your your central administration charge charge backs that it. It is for instance if if if you if your your administrative costs are then be in split across the entire operation so they're going to pick up a piece of for instance the the secretaries expenditures at except for a and so were those expenses not expenses that had been had in the past. Well they were not expenses that were being in the cat in the well the secretary may not have been at at a good explanation most of these boards and commissions that we took over were service bureau. Boards so they were not that they didn't they didn't have to. Do their own accounting work that was being done by us by others now they're counting work is being done by the department of labor licensing and But I guess that's where I would think that if it's if it is with regard to accounting would that not be already be issue should that not also be a shared expense that's actually already paid for because somebody was having to perform that work. At the the. Speaker it let me be of probably more direct A I think your question is are they having to pay a expenditures that they weren't before yes they are in some instances some of these the two obviously with payroll finance legal in some cases those a duties were being handled by the service bureau for many of these entities before and that was free and and that was that's where I was going with this to try and understand it in would it be correct to say that the shared expenses reflected those are expenses that were already you can already see that you paid for those in the past and therefore that's why you added them back in at least for purposes of the spreadsheet the indirect allocation would be expenses for which in the past there may not it actually had actual dollar spent because the service may have been provided by D. F. and A and that's by my understanding is that there are some services that the if in a provided in the past at no charge that is obviously changed and then secondly there may be some one time expenses are there one time expenses that are that are included here as part of it kind of this transition that's correct Sir you understand correct. Thank you. Thanks Speaker. Represent Dotson. Thank you Mr chair over your right in the back. I've got several different questions but I guess. Trying to understand why any of them would be. I mean the management decision to charge an or to to pay an extra fee to keep their money in a bank versus taking treasury white why there's any of them that are still doing that if it is true that that large and how many of them are there that are that are doing that out of this list And then I guess. You had mentioned there was a a outstanding lease that it isn't until twenty twenty three. The did that agency actually move into a different location so they're they're duplicating rant no Sir. Okay that's towing there there's still they just haven't come under our umbrella yet they're still a separate facility so that that cost of of is not an actual duplicated cost yeah could not rent remember not charging them with not charging them right now so they're not okay I guess I just misunderstood that and then If you could ask the answer the what wire any of them still doing. Missed Representative of we have just begun serious discussions with the board and we're meeting with them one at a time and if it is as I as I just discovered more reasons why they're doing it I'll let you know okay I'm sure there are myriads of reasons why they want to continue to do that and of course their decision but work we're going to strongly recommend that they discontinue that practice okay thank you this one here than that for sure and then at. Have you received by. Any guidance on how to handle shared services like are you doing the same way other secretaries are across. Why why is it this one is having we're having a little bit more trouble with this one shared services than maybe some others. Well she. Little different than most other state agencies I I think we're the only entity where we have all of these a licensing entities that are underneath us the I think the only other agency that's even close to what that approximates what we're trying to do is the health department and they've been doing that for for for while and so we're treading new ground with these licensing entities and so as if it was their template no there wasn't a template but we're creating one and have done I think a pretty good job of creating a good path forward over the last year as I said early on their challenges of Mister Representative to transformation any great endeavor they're challenges we're just trying to address each of them as we as we go along the primary goal though here is to is to keep everyone in the black is to keep is to take take these red numbers and move them to black numbers and if we can do that and continue to do that then we're obviously doing something right then that that gives us an opportunity to go back and tweak the nuances of shared services in a way that we think is going to be more that'll be transparent and be transparent to each of you that's the best way I can answer that question okay and finally I'm I'm still having a hard time kind of following in this new spreadsheet that you had handed out here that has the the green columns of top the blue and and and such could could you take me through and since at the top of of. Our sheet that we have here appraiser licensing I mean. As in that second on your sheet it's easy enough to go straight across the column here you take me across because I look at the new difference on here's a positive not a negative a hundred and four thousand at the end are you saying that. There are not eleven that are negative there there only to. Seven that are in the negative looking all the way over to your call yes Sir right yes Sir. So I mean it it looking back over the price or licensing for the last decade or so it looks like they fluctuate about forty or fifty thousand dollars a year in their expenses which kind of seems like it's in line with with your FY twenty expenses in that particular line item. Is it. Are we talking about a difference between actual expenses and then. Just receipts that are expected are there is there a hold over from one year to the next I guess. No Sir I I think what we were talking about is there was a there was a misunderstanding on just what how we were going to interpret what was in in the original book. And is the as the chairman pointed out the numbers the expenditure numbers and the shared services transfer numbers are actually correct what we what we got though is a duplication in the expenditures and so as you walk across on the appraiser line. You're seeing a difference the difference of it in in the in the in the first line of course is twenty seven oh one seven. That differs from the difference that you had the other day of sixty five nineteen because if you look at the total estimated cost there there's the difference and that difference it results from duplicating transfers that were already in the expenditures and that's what we're trying to explain and and perhaps we're not doing it well enough but that's that's why you're seeing that difference we're backing that. Duplication out of the estimated total cost number to get the new twenty seven thousand dollars so so the thirty four thousand on that line is the duplicated line is what you're saying so the thirty four thousand was in the four oh four six forty two. So in reality that four four six forty two is actually. And three hundred and something I'm not going to the math of Tom had their. Three seventy something like that but the if you go across then the indirect to collocate allocations is the additional expense that fifteen seven that the record is the only additional expense truly the net general additional expense for that particular one that's correct Sir okay thank you. Thank you Representative so I got a question now listen to represent of Dotson's question let's go back to the auctioneers. Are you add it back that fifteen thousand seven hundred fifty dollars. You gave them credit of rent savings of forty five hundred fifteen dollars and then you're given credit of sixteen thousand feet are sixteen hundred fifty five dollars for the bank account not being moved you're not taking that away you're giving it to him. And that's how you got that number down to negative thirteen instead of the negative we had should you be subtracting that bank out instead of adding it in. Sure to trading out the forty five thirteen to sixteen hundred fifty five. This is this assumes that they would put their money in the treasury and I would say that money and that would get them. Definitional sixteen fifteen. Okay Representative Boyd you're recognized. Thank you Mr chairman hours. Meditating this mess. Let me first thing let me clarify from DFA it's really not the treasury this charge and it is today if you probably want to the legislature and said look we've got X. amount of money here in the bank so we will rule hello all a code or whatever you call it we're not charging for putting that money in the private industry in the bank. Is that a correct assumption is Jake in here. He made the I'm sorry. He didn't know Mr chairman he made the comment he didn't know anything about or trying to figure out what was going on any bill that it was a law. And if I understood him may be incorrect with the finest in the city was DFA. There was collecting the for the. When the member in the course they would deposited in the state treasury is that is that correct. FOR the department for is it or isn't where you understand that or is it to treasury. Of I I can't speak for DFA but that's how on I understand bill who who's supposed to supposed to the treasures of pages that the have a. This is exactly. What we have to deal with in the time frame that we are up here look at these budgets and then the have agencies come in here and have seven of them the overspent is absolutely ridiculous. Blaming you all. Went to transformation several years ago as director of the department of commerce. And it's very simple there's nothing harder complicated about it you have X. expenses would you pulling into the central office that rises my next question Mr chairman if your bear with me go ahead Sir is your in the department of labor licensing cabinet level has thirty five positions is that what you're calling a central office is yes Sir was there before your information yes the department of labor the parties understand it was there before yes you did add any new positions for transformation no Sir you just cooperate all this accounting for all these individual agencies. In and to get over and didn't have to add any position no one did you pull in positions out of the agencies no Sir. Okay how are you arriving it what you're charging them. Agency. For your central office operation I know your salaries MALOCH B. spread alimony the agency's all these thirty five spread out no Sir we're cost allocating the executive team or cost allocating five CFO legal. I. T.. chief of staff. And administrative assistant. Seven positions so what's the amount to per agency has how it you charges agency is cut five employees and one is cut two hundred and seventy one employees hello you decide what right you're going to charge them based on your central office operation. Dividing it equally among all these. Yes Sir we are which would allow a minute she shook her head no when you said yes will we we did. Yes it's based on the payroll so let me the payroll for workers comp is going to obviously go up or down or or some of the other agencies but we're doing on the basis of payroll so we saying the same thing but do you have a different answer. So you use in the salaries of the agency to determine the percentage of amount of money that you're putting in that you're charging them a monthly rate of monthly for the. In your transfer and then into your operation. Two DLL. Okay let me get back to Mr really Jake you you made the comment when we first ask about this treasury did you said you didn't know you were checking it or you're always trying to figure that out did I understand you correctly when you came back and said it was a law was passed for DFI. D. F. A. in fact my office makes the assessment and the agencies didn't know that no Sir I did not you were not aware of the fact that we're charging these agencies money no Sir I did not. This is hard to believe. I appreciate may serve you and if we have the head you because you have the made that comment we would've blamed it on this treasurer of straight of the state treasurer then then. Well if it's my wrist. It is. I know what you did. You took all that money away from the private industry to the banks and put it in the state treasurer and if I didn't do it you charged on the funny is that correct I'm not sure what I did in particular I can tell you that the law passed by the General Assembly in nineteen the General Assembly I'll guarantee you it came from the funny. Promise you that too little blame it on us the law is to act in that manner. We were we will up all you all. To provide us with the information and I have been director of DFI. Hello and I'm only in the Leri and what he's having to deal with over there. But you know. Don't don't don't blame it on us. Someone in the AS that that be done is not correct. It was nineteen ninety three Sir I was not here at that time. Let's go back Mister chairman if you'll bear with me. I want I want to talk a little bit about your budgeting overall. You have in the total department all your agencies secretary Bassett. You have three hundred and ten actual positions. You have two hundred and thirty four of those positions fail. This is things that you all need to look at from the central office the ample. You have fifty seven budget the vacant positions. Let's call string of million. This ghost three hundred thousand. Dollars a year. For for for for the four hundred twenty dollars a month you're paying into the insurance fund. Or managing and two point six million. FOR sale rates based on forty five thousand dollars a year is laying dormant there in that budget now. Here's my question. You need to look at one thirty three put thirty three of those three hundred and ten positions have been vacant for more than two years. And we're still Karen to amend the budget. Mister chairman I'm I'm I'm trying to just know that we've got about fifteen of our allies Thirty three of those positions have been vacant for more than two years. In my humble opinion I think we're playing games. In the agency not just yours but all of them relative to the insurance and the matching. Carrying those positions in order to collect that money to put over to cover the cost of the insurance. Mister chairman we just were hit with the thirty nine million dollar deficit miss furniture. There we were not made to wear a. So the game were plan is not working. But I would encourage you Mr secretary to look at those thirty three positions have been there for more than two years thank you Mr chairman not apologize to the membership your your good. I appreciate you Sir and I share your sentiments in that regard. Senator Johnson you're recognized for a question. Thank you Mr chairman A Mister secretary I was. Trying to look more closely at the situation with the. Towing board and they're they're they're castigate out. On this chart and on the spreadsheet you you sent us now on this lease of this longer term lease they have were they located. I'm over here Mr. I have enjoyed it a wake I hardly see you through four panels of glass there I understand north little rock Sir north little rock. They're located in north little rock yes Sir okay And that's the biggest north little rock I'm just wondering if it weren't they once located like in Searcy or somewhere outside of Pulaski County is that not correct I predate predates me Sir okay well of the. The. I'm just I'm I'm concerned about it when you look at the proportion of that sixty one thousand versus their their budgets like you know it just really sticks out that there's some some serious management issues I guess I need what to the director gets up here and ask those questions if I could Mr chair I wanna move over just briefly to motor vehicle of a Mister six three the two hundred million dollars two hundred two thousand dollars in grants that they hand out and my understanding is. That they charge a fee. To the dealer for I will call it licensing I think that might not be a real. Appropriate term but for each sales mine so I wonder in to one of my friends it's in the car business I Hey I want to be a salesman I say okay and they send a check to the to the motor vehicle commission and I'm a license sales but until I leave that dealership and then I go to another one and it got starts all over again and my understanding is that that that's where this two hundred thousand dollars that they give out to the schools comes from and believe me I think it's fine I know that to you ACC Marlton my district has received some of that in there you know training students to work on particular types of vehicles and use the new. Computer alignment equipment or whatever and all that that's good I'm just I'm my question is do with what who and one who gives out those grants and what criteria and qualifications do they have to do it it would appear to be an educational decision rather than members of this commission deciding who gets or needs the grants versus someone that's involved in in either vocational education are are are general education this the scholarships are administered by the high schools and the institutions of higher education Mister senator all I understand where it ends up and who who does that I'm just curious about who makes the decision that this close to Martin high school institute Connelly high school or Mayflower high school or Maumelle eyes that's kind of how I'm I'm a I'm not know when it gets those schools what they do with it and I've and for that I just trying to the side this is obviously a finite amount of money for the whole state and and I'm not saying it's too much or too little I'm just saying who makes the decision is it the commission itself. We anticipated this questions and one sandy's called and I think you'll be able to give you and okay thanks bye I'll be patient thank you Mr thank you Mr chair thank you Sir think Senator. Representative Ladyman you're recognized. Thank you Mr chair. First off let me thank you all for the spreadsheet I when that the Tuesday meetings I'm trying to catch up on the discussion here but this lot of good information but in this question may have been answered if you have a I apologize it wasn't answered very clearly in my mind Senator rice as the question as any have any of these boards lost money on the rent of the words are they paying more than they were before. And I think your answer was that they did not. But when you look at rent savings increase their increase in order the their savings there's one two three four that shows negative. In that rent column. On the spreadsheet. So if they didn't lose money in other words if it if it did not cost them more in the new facility why are those numbers in red. Will you can answer the second part let me do the first of the the only their their rent decreases across the board Representative Ladyman the only increases that we are seeing going to see in rent is going to be for geology geology's Gunness experience about a seven thousand dollar increase but only because they will pay no rent where they were for since the first time they're paying rent home inspectors will see a model of a minor Reid increase of about two thousand dollars the square footage was on known and appraisers we'll see four hundred and sixty four dollar rent increase because they requiring additional storage every other entity from accountants every other entity we'll see. Read decrease. Okay we're we we're we're going to save eighty thousand four hundred eighty three dollars in rent. Well it looks really good I thought that would be an area of big savings when transformation was discussed but look at HVAC none at the bottom last one what what's their issue they're they're negative twelve thousand. Very bottom line on this veggie. They were actually part of the department of health. And so I don't know that there's a that there's a real clear comparison and and then they came into the department of labor licensing they met they moved in actually before we actually moved into the new facility that we're in right now so it's it's a it's not there's not a clear. Calculations so the department of health to just over charging is what you're saying well no we don't want to say that. We don't want to say that well okay we will we can say is that there expenses since we inherited them is half their previous year's expenses total and our fund balance has increased by three hundred thousand dollars. Yes they look good in the last column of the other question we talked about towing and their their negative number there and I think you said there in a long term agreement and they can't move their rent the correct that's correct so if you look at three of the others down below there that are negative they have no rent savings soar they in the same ballpark is is towing or is was the rent situation on those three the last three their boiler inspection and let's let the boiler okay electrical I'll let you deal with boiler and electrical and then I'll deal with that okay the boiler we actually purchased two vehicles last year for the boiler group and so that's included in the A. that purchase of those vehicles is included in the expenditures and we did that so that we would actually save money these individuals were given state vehicles and they'll pay for themselves in two years and they'll be savings after that but are they on saving money on rent. You know their part they're part of the department of labor and and and no Sir I don't think that they will say. Okay of athletic is we've kind of gone over that a little bit that that's a function of them excluding wrestling from their revenue base they did that by legislation several years back and that happened to be there principal revenue source and so they have really especially in this car over there I think they've had one deposit is there they're struggling right now what the loss and the revenues causing that the crown it's it's going to be until that situation is correct and there's no rent savings for them. Shown at least again I move from the department of health the of the week we inherited them from health as well all right all right thank you very much thank you Mr. Thank you Representative Representative Beck you're recognized for a question. Thank you Mr chair and I want to A couple questions is on the shared expense column. That that we have. It's interest so you that came out of the previous years expenditures correct. Yes Sir I said this is to share it's interesting that is rounded off so I guess you guys just a rounding thing there right as a result carry out like your expenditure column does yes Sir the the this is actually just an estimate of that we moved of of appropriation it's being there so we'll have it there to pay for these expenses okay. All right so the indirect allocation you earlier said that this was a I think the explanation was these were services that were given to these agencies for free and now they're being charged for. Correction correct all right so. They're a corresponding reduction somewhere else in the budget. To these. The reason being is have someone doing for free that robs the they were coming in and just working for free there somebody coming and some of those doing the services so where do those reductions fall. If someone was doing it for this agency for free some other agency on sending was doing that then did we reduce their budgets because now they're no longer doing this service for free I don't know I knew we had that would be D. F. and A if a service bureau performed those services for these entities prior Representative back I don't know what they or just once they've made in that regard And I don't know if I'm answering your question that I represent Beck I think D. F. and A has a insight to that question okay thank. So prior to transformation we created center we maintain something called the service bureau which was really a service that we provided to some of the smaller boards and commissions so the you know my office for example does all the budgets for these agencies of the office of personnel management at all the personnel transfers accounting did all their accounting procurement that all their procurement easy on all these things can be pretty complicated you've got a part time position there it doesn't yes so of those positions were paid for out of state central services fund they are paid for out of state central services fund the work that was needed to to support these little agencies was really spread out across the other the folks in the agency if there are any savings there I'm not sure that we can necessarily calculate those because what you're looking at is really a reduction in the amount of work that has to go around which we have to balance against the lower head count that we've had for some time and some of the other issues that we're dealing with that we might not have as many late nights if that is necessarily a good answer but you know we would do the things when this all came up as we begin looking at will okay if we don't have a service bureau does that say this money what can we do with those positions and as something we're working on but given kind of the direction that this might go we might be looking at reinstating some of those positions because it of agencies are. Gonna need these services one way or the other and if the part labor licensing is not going to be in a position where they can necessarily charge out for that we still have to make sure that these boards and commissions have budgets they have personnel that they have the accounting work done. So I guess you know the total to almost have to meet will close to half a million dollars. Not all of that is. Let me from wrong occur but not all of that would be attributable to work which had been done by the service bureau. Now that includes that includes IT and and. And. The negative back to the original answer which was given that that column was work that was being done by other agencies. And FOR free and now it's being allocated for you guys to do. Cell. I had it done confused so which is it was a dumb other agencies or not I think it be a combination of the two he's so some of that will be the ministry of expenses that had previously been performed some of it will be other expenses which the department of labor licensing as in curry and to to provide services so so some of it what you're saying is in an. This big red statement some of it was other agency some of it was already in your agency but being done for free is that correct some some of it was was work that was being done by the service bureau some of it is work is being done by my agency at two two of up to a place of those free services that they were getting and so the someone appointee is whether or not the department is going to be able to continue to charge out those services if we can't charge out those services someone's going to have to perform those services and I think that's what Mr believe was alluding to that is that they may have to re institute some form of a service bureau if we can't get those indirect allocations and charge those charges to these entities okay thank you one quick question you mention that I'm just pays a price is board because you mentioned that the additional ran associated with that was because they needed additional storage or something nothing like so is that additional storage of what they had before they moved there now they needed additional storage over at the capital location I think it was seventy five dollars or something like that my the minimus amounts so it was storage that they already had their previous location. That no they actually wanted they've they're allocated space at the capitol location but they wanted more space okay and so then that additional space is going to increase their ranked two four hundred dollars something right thank you very much. Thank Representative senator Hickey you're recognized for a question. Your. By Representative Beck act as my exact same question so I'm very interested in those savings with the the FNA because if we had that service bureau and they were providing providing that for free and now we're charging it. to see where those from a global standpoint we need to see where those cost of one way within the F. and A or there's no savings so again thank you Mr chair but again missed represent back asked exactly what I was going to. What and and if I could respond to that one of the issues we've got with when we look at are we saving money and how we saving money is you're not going to see the savings necessarily all in one single fund you're not necessarily going to see them in all in one report that's not really how the budget manuals are prepared but it BT this sort of thing and I'd love to sit down and work with you on Senator on how we can present that it is your right if there are savings that DFA the if these costs are being shifted off and I'm not entirely convinced that there are but if those costs are being shipped off that something we should be reflected. Yes Sir and may have merit continue Mr chair and I believe that question has been asked repeatedly and in many different committees is you know what transformation exactly how much is it is it saving and I know whenever we passed that out and state agencies we were told that we would get that number I've never seen anything that actually just consolidated that and puts it into one one form so I appreciate you saying that Mr believe now would welcome but if we could ever do that because that was the goal and if the the goals either working or is not working so. And I agree and you know I think the one of the things were wrestling with right now in particular with labor and licensing is some of the growing pains that come with this kind of a change it is something that were absolutely watching and as this works itself out as we begin developing this sort of shared services the the sector but that's been working on that it is something that I look forward to working with you on being able to illustrate really how how it's all working that it is working and to what extent thank you I'm cautiously optimistic. Thank you senator. Senator hammer. Thank you Mr chair let me start by asking based on the comment you just made and response to center it can Senator back. And I realize we're just dealing with a limited number of agencies here how can you defend the numbers that are listed under shared expenses an indirect allocations given the uncertainty that you express Mr Billy. Of those the costs as determined by the agency which are necessary to be allocated out to the other entities within the department. Okay and. Perhaps this is too sector beset the agency some self tells about the discussion that went on with the directors of the agencies and the boards the inner discussion one on as far as arriving at the numbers that are presented to us how involved were they in the discussion they're very involved we have we have weekly meetings with all of the rector's each Tuesday me well now we're actually starting to meet in person prior to prior to last week we were doing it June on a weekly basis and then we were having weekly meetings with the board chairs two because transparency absolutely is critical we'd we don't want to be doing and making decisions in a vacuum and so we've I think we've done a excellent job of of getting the message out to the boards in the director's exactly what we were trying to accomplish here with transformation. And on the matter of the treasury and the mounts in the fees and and all that discussion and Mister chair we gonna have some me from treasury coming and that we can address them directly with Mr bleeding and ski answering on their behalf. I think I feel like Mr blades done a good job of answering those questions so if you have anymore and that ram just go ahead and ask them to take Billy alright thank you Sir so. The the money's the the fees that were mentioned awhile ago and and I think our call the statement but if I didn't amend correct I apologize but would is that be moved into central services did I hear that comment while ago yes Sir the the proceeds of that fee do go into the state central services fund and so. For the discussion of what we're gonna try to do to pull it back into treasury will those dollars no longer going to central services or would they go back to the agencies or where where is the money going to land if that goes through. I think you all just depend on what ever solution we look at doing during the session and you know how much money we're talking about not only I presume that you know we're talking about it for what's on the spreadsheet but are we talking about other agencies as well where they have their moneys investor we just limited to these I don't have a specific amount right now but I will get by staff to put one together and we'll hopefully get it for you before this meeting is done but the agencies that we do is says that are the board of accountancy the medical board the board of collection agencies and the auctioneers licensing board so therefore entities to pay that fee okay and the last question I guess would be. With regards to the the moneys that are listed under shared expenses and in direct allocation. Is that a correct statement that if you look at any one of those that those were monies that were already being spent with in the budget of each one of these is just being re packaged and the responsibilities are now going to be We've been working with find that as a real benefit in so. That's why legal. Senator hammer you having followed yes Sir thank you Mister the so let me just like to state we give the opportunity to respond and I'm not saying that this is the way it is but I want to hear your response to it. If and and this in my opinion is a sampling of what we need to look at across the board for all agencies to see if this is the model in this is the template is it being applied to everyone else because I guess based on comments if they didn't have a cost before because they either didn't need work using did not have justification to but now we are charging them account all cost it would almost seem like we're doing that to shore up the expense of shared services at the expense of these individual agencies that didn't have that need before but now they're being made to have that need and that money is being taken away from them in order to shore up shared services would you respond please yes Sir that that that respectfully that is not the case we're not in any instance charging them for services that they previously that they don't need we're allocating cost to them for services that they were receiving prior but now art received over yeah because of service bureau of the and so in every instance where we allocate cost is for services that they need or services that they had before they need to continue those services and and I can assure you that is happening in every instance it at no point are we charging for services that they don't need. It is so the service bureau was no longer existing is that riders it just a remnant of what used to be we still maintain the service bureau because not all the agencies the utilize those services that were moved into departments through the transformation act we still have some independence out there that the use of services how much how much have you reduced the service beer or expense of the transferred out because you've you've shifted the duties. A over I don't have a specific number on the there is mine my understanding is that there were two positions which had been service bureau primarily service bureau positions those positions were shifted over in the revenue as you know some of our revenue offices within DFA have there's waiting time issues and so we've been trying to increase staffing there so those positions were shifted over there that could be a savings I guess within the the sure the services bureau world because of the that prevents the I guess revenue department from having to pay that much more but as far as a specific number I'm afraid I don't have one for you thank you Mr the senator senator Ingram you're recognized for a question. Thank you Mr chair of. First represent wooden we were talking back here unbelievably we didn't know that you were in DFA and we're all very curious about what it was like to serve in the did Donaghy administration so we've got a lot of questions for you Of. I will make sure I understand about the the savings part of of the treasury so to force these cash agencies to utilize the treasury of you if they didn't we put a penalty on. That's that's what absorb what it is correct correct. All right in that penalty accrued to D. F. and A or some agency so the it goes to the state central services fund which does primarily support DFA also supports other agency okay crew to a state agency yes Sir. So I've heard director Bassett. Save the and characterize this is a savings. How can this be a savings because aren't you in effect just taking it out of one pocket and putting it into another. Show me where the savings the as I guess what I'm asking well the savings is to the individual individual entity that no longer has to carry that on their books as an expense but on the other hand the the of the treasury was accruing a benefit in handling it then because okay is that correct alright then show me where the savings is because a remote state agencies the savings is to the entity that was having to carry that on their books as an expense and in this instance was creating the negative number so it it's a savings to the entity that's having to to having to A bill it as an expense and how treasury handles that I would have if it's if it's a savings to one the entity then it's got to be a loss to central services correct and I think correct yeah no I see your point and go from there they're standpoint what they're trying to do is make the department of labor licensing which does not get state central services funding as efficient as possible I got your state central services point standpoint there's a side of me that wants to say yeah keep your money in the private bank account right I mean I get to it but to sell this as a savings it is a savings on one hand but on the other hand it's a last to central services so with zeros alot in the save to bring this to us and say this is an actual savings that that didn't quite true it's taking it out of one pocket and putting it in another if you look at it as as a as the state is the state funds. Would you agree well I don't I don't agree that do I was being disingenuous I don't know I I just. The thing is sample what I'm saying is simply from my perspective as secretary I'm trying to create efficiencies at the department of labor licensing and if my entities are having to carry that as an expense then if I can keep them from having to do that for me that represents a savings I think Mister Billy just alluded to what position it would be on the treasury side but from my perspective it is a savings okay it's a savings on your SAT but it's a loss to central services on the other side which. Of director IBM you're looking out for your area I understand that but to sell transformation that it's a savings this is just a paper transaction I mean it it it really is not and that then that's fine that's all the point that I want to thank. Thank you senator with that I will go to represent of all. Thank you Mr chair I'm I presented at an amendment on Tuesday and I think staff is going to hand it back out again today and. As I've said here in this also still things a little muddy and the numbers seem to be very subjective and we start columns that are in the red I believe that a good public policy for us to do is to go ahead and pass this amendment So with that I can go back over the amendment if you want me to say but basically it just won't let him spend into deficit so with that I move the adoption of this amendment that's proper motion the second. Second. Discussion I got a second and we do have some discussion So let's go to discussion of senator Hester. You're recognized for discussion. You know looking at some of these particular it may be that we're just talking about the labor licensing but some of these boards have huge surpluses and they they have at the direction of the legislature cut their fees. With the intent of working down those surpluses right so if you're the appraisal board you've got a million dollars in your budgets three or four grand a year they cut their fees intentionally to operate out of on a deficit to be to be responsible and to do basically the direction we ask like to save people money and burn down their surplus so I don't I don't I don't want to do this in and remove their ability to to use their To use the fund balances because those funds were taken particular purpose have to be used for that purpose I don't think we can just go taken from so anyway that's my only concern. Thanks center. Are there any other discussions on this motion Cassiar hand please. Representative Tosh you would enter button. You're recognized. Thank you Mr chair this is just I guess for the chair or for Bill large procedural question looking at this amendment it's It's noted that it is special language and I guess my question would be as the this committee. Can we can we actually approve this a member with that it ever being heard before special language committee yes Sir this committee can do that as a whole. Okay. Then I saw four Senator hammer with your hand for discussion of this amendment yes Sir you're recognized thank you Mr. Can I ask you a question of Representative Baltz or can I ask a question she respond hurt your chooses to handle you can but we have emotional floor Sir be no more questions to the witnesses that. Does not loss to speak question on the on the amendment that's before she. If they hit the three year average. How is it going to be a. How it how do you anticipate that the agency would account for when to trigger. Collection of the fees again versus not doing it I'm just worried about the mechanism of how this is going to be enforced. If I'm understanding amendment right. Thanks staff's going to dress that. I believe that would be fiscal year by fiscal year the it would wait till the next fiscal year the way this language is drafted. So first ma'am Mr. You're recognized thank you for some of for so for some of the smaller agencies maybe that don't carry is big of revenues. Will it potentially create. A financial issue for them if. If someone catastrophic event happens or we're just gonna expect and be better planners and anticipate what might happen and I'm thinking about like a code would repeat or something like that. I well I can't really speak for against this but I would say that that is definitely always a possibility senator. Or thank you thank you Mr the center. Representative Lynch. Yes I have the same concern about how the different boards to be able to access their fund balances and it appears to me that this. Amendment is going to prevent that from happening so I have the same concern. Thank you represent a Jake pleads got an answer to that. Of I'm sorry I was trying to answer of previous question I was not listening what could you please repeat the question all of that don't motion that you have an answer I'm sorry Sir I wanted to to comment on on something Senator hammer head raised but if I could. At the no. Our. Representative let scan your. Repeat your question yes so it appears to me that this amendment is going prevent the various boards from accessing their fund balances. The if they have a half million dollars in our fund balance in their budget is is equals our revenue how they ever access the funds in the in their fund balance if we pass this amendment. The the the and got an answer for that hold on one second the there's a section in there I think one of the paragraphs down at the little addresses fund balances but all that Representative Vaught speak to the. If you'll look down into section seven. The amendment. I think your question is addressed there. I can take out the line that says other than normal operating expenses if you need me to. At the the problem I have with it is I don't lock these boards into a position where they can't access those funds when they need right so go down to seven and raid. And in that it does. Address what your I don't know where you're at Representative Lynch but action seven yes. And if you need us to take out the other than normal operating expense. I can do that like we probably should. See do. Absent later you good. Yes sometimes it thank you. Representative Ladyman. Thank you Mr chair I just have a comment in the discussion phase here that I I I agree with what senator Hester brought up and Representative Blanchet I think we're putting limitations on these boards and agencies commissions that we shouldn't we already had example earlier of the board that spent about two vehicles even the three year average you could exceed that if you had a major capital investment and I understand you could change the language but I still believe were put limitations on these boards if if the boards commission if they get into the financial situation we could act at that point. So I I just on an eight I can support the amendment thank you Mr thank you. Senator hammer if you got a motion. Substitute motion for could Mr absolutely like to make a substitute motion to refer this to special language so it can be aired out and also give a chance for the agencies that will be impacted by this to have of opportunity come before legislative branch and explain their thoughts on this I don't think it's a bad idea I just think we're or position we've got a lot to cover the rest this morning this pretty heavy lift without having the input of the agencies it's going to impact that be my substitute motion proper motion of a second all those in favor of sin this is special language say aye. All opposed ayes have it so with that we'll hold this budget until I will hold this portion will go back and handle the division. Centers for you recognized for a question thank you I've been waiting to ask you to hold all morning A. Speaker this I mean you're. Secretary of the Senate. On page one fifty three. S. get early and they said I'd be able to ask you have the agency under shared services transfer is is eight hundred forty one thousand one hundred eighty five. And then on one fifty three B. is this transport shared services transfer seven thirty five four forty seven could you explain the difference in the two. Mr lead is anxious to explain that all right to be anxious the explain that to me I'm not sure that's the best way to characterize. Whale slowly explaining to me. Here in Michigan. What with trepidation around the so it looks like we're looking at transfers in different years so we've got one transfer that is for twenty twenty one and the second is between twenty one and twenty two. Senate would it just be a difference in their mapping and twenty twenty one. I understand that but. House this not totally making sense to me but okay you're saying that because it's budgeted for twenty twenty one eight forty one one eighty five. And what is budgeted for twenty twenty one to seven thirty five four forty seven. So I'm trying to understand the difference if the budgeted for the same year why is this why is the number of different. It would just. The distinction I think is between the different years so one would be the amount budgeted for the current year when we're getting up and rolling the next would be for a four twenty two if I'm looking at that correctly Senate bill say twenty twenty one. I'm sorry. So on twenty twenty one sept under your on page one fifty three it's a seven thirty five or forty seven but twenty twenty one and the other one on one fifty three or is it just off the table we're not dealing with that at all. The budget was eight forty one one eighty five why is the budgeted amount different that's what I'm trying to get to the hi I'm looking at something perhaps different. Thank you for fiscal years as we can because the words I can go over with you please after. Senator yourselves five the no but it's okay we've been here long enough I would have had the same sentiment. Representative gray you're recognized for a question. Thank you member we're back on the main division budget now. The main division budget handout says the department labor license division. And well my question was referring to the could the cost allocations can I presented that thank you an. So like I you know back in college I took a couple of cost accounting classes so with my mind what I'm trying to do is trace back to what you're actually allocating out to each one of these boards and commissions I've got it a. A spreadsheet Aptiva PDF that I'm looking at in about four different of indirect rates of gun eleven point five one percent federal and nine point two one percent division of labor and I go through here and I can see you're charging out the secretary for the department chief of staff legal counsel. And I can to the very end of the sheet I'm looking at I'm not entirely sure where I got it and I think it was sent out to all the directors but essentially what you're taking is their salary expense and your multiplying your salary in match times whichever indirect rate they were assigned to you whether be the eleven point five one or the eight point three days and you're coming up with their indirect costs I look at that indirect cost on that and then I look at the indirect allocation that's in front of me and the two don't match and then also I guess I'm having a hard time when I when I think a cost accounting what I think of is maybe is I'm looking at products I think what what all does it take to make this product whether it's a direct cost or an indirect cost so you're calculating the indirect cost based as a percentage of salary not salary of the actual agency that's getting charged not the actual experience of. The six positions are seven positions. That makes sense. And the reason that we are is because the calculation of the raid itself. Yes ma'am and it's because the calculation of the raid itself was of that separation for those indirect cost as a ratio to the all other direct cost that don't include those are in direct cost say that one more time please. So. Were filed and in this is that this is the way that the federal government lays out the the calculation but essentially we take the expenses for those people that are shared services in direct cost and and the rate is a calculation of that total to the total personnel direct costs. Salaries in match for everybody else is about and so essentially you're applying that ratio every time you're paying an individual. So I should be able to take the total indirect costs and that total amount that's being charged out to everybody should total the total amount of salaries in expenditures of all the indirect costs so if I take the seven people actually six people on this bridge G. but I think the six people on here the accounting division which has the administrative services manager special is personnel division division of labor. The total amount you're charging out to all the agencies is a total of the total salaries and expenses of all of those people of of those indirect peace peace yes and as enter an issue and it should recover this I'm assuming that there is no change in the salaries of those particular. Agencies because it's done on a payroll by payroll basis and so as there are fluctuations it's not going to be perfect okay I guess I understand what we were trying to do with transformation but I'm having a really really hard time taking the like the board of accountancy for example that they they need to pay a portion of an HR manager and assistant personnel manager human resources manager and state. All chief of staff for the secretary of department of labor licensing fees are not cost that they've ever experienced that they should not have to expend them I guess I want you to justify how your how these people here are actually providing a benefit to these agencies. Well. Like I guess. I think we're providing a benefit to them if you never have before but never provided the benefit to them for no not before so I could not afford translate functioning a hundred percent on their own and now all the sudden they got to pay eight to eleven five to eleven percent to have services that they never needed before as have all the twenty one before yes. Thank you Mr I'm have a hard time digesting this and these are fees that are constituents are paying I feel like. They're paying for services that they don't actually need so thank you. Senator Chesterfield you're recognized Mister chairman of the executive wreck on the department of labor. As far promotion drive second. I have a second. All those in favor say aye aye all opposed house haven't. We're gonna move on to workers comp. And will recognize Katie from the bureau. And like in place. Yes ma'am you're recognized. The sternum my call. Thank you. Yes ma'am. Thank you the next section we're gonna go over just going to go over the change levels and the second packet it is the workers compensation commission packet. The workers compensation commission. And administers and enforces the Arkansas workers compensation law to ensure that all covered employees secure insurance coverage from commercial carriers three self insurance programs and educate all work related injury claims by employees against their employers are insurance carriers. They're laws are designed to protect employers employees and their dependents for financial burdens imposed by job related injury disease. In addition they regulate the workers compensation awards. And they have several appropriations they have read something claims administration second injury claims building repair and seminar caption treasury the only appropriation working a review today is there a ministration appropriation and that's found on page one sixty nine and one sixty nine the of your second package. This appropriation provides for the operation of the workers compensation commission and the administration of the funds. My name is derived from a three percent premium tax levied on all workers compensation policy sold in the state. The agency's requesting eleven point three million dollars for each year of the biennium and this includes an overall increase of forty seven thousand dollars in fiscal year twenty two and fifty thousand in fiscal year twenty three. In addition to normal salary in matching adjustments the requesting a transfer of ninety eight thousand dollars in salaries and matching each year and this is for the transfer of one nineteen position to the shared services appropriation. And the executive recommendation provides for the agency request of those transfers and that those are my remarks all the rest of the appropriations are requested to stay the same level for the next fiscal year thank you Mr chairman. Senator Chesterfield you're recognized as some of the executive right as proper motion drive second. I have a second all those in favor say aye all opposed eyes have it. With that this. Move on to the department of labor license boards and commissions. Yes animal recognize Mister Anderson for that portion. Thank you Mr chairman we we do have a spread sheet summarizes these boards and commissions and Katie can get into detail of any bill want any. The special language that was dealing with these boards and commissions has been referred to the special language subcommittee. So that that will come into play later but right now we can look at the recommendation for the appropriation levels for this either executive wrecker agents request or some modification there so you'll see the spread sheet in the first column list all the boards and commissions second column shows you the page and then you have your historical data that we've been talking about and the agency request executive recommendation last two columns ms chairman that's a real high level the spurs G.. Thank you. There any questions outside of what we've been discussing all morning. Seeing none senator Chesterfield do you have a motion. Of although I do have one question represent Dotson you're recognized. Thank you Mr chair Just just to be clear. This motion will be for all the boards and commissions. On that list on this list. Can you repeat that we were getting this question are we considering doing them all all the **** this just for this yes Sir this is a as a batch on this Lou this the long spreadsheet form you had been the one that we had passed out today right yes Sir and and this is for the appropriation levels or is this for is the executive preparation as active record preparation levels but the special language will be dealt with next week and special language. Shouldn't we can hold off on this until after that meeting I'm fine with that if it's a motion. Guess all moved to. To hold off on that or is it a substitute motion I don't know if there is a. Motion on the table I don't have a motion on table but Mister Anderson devise and me we don't have to do that we can adopt the executive rags and the special language would then be attached. Yes please. Representantes in the at this completely the will this committee we were talking whether we should hold this or not the appropriation levels will not be affected by the shares service language the shared service language determines I'm sorry the cap language determines how much they can transfer route it does not affect these appropriation levels in the executive recommendation so it's it's up to the committee but they are kind of separate issues so is just for the appropriation levels that we're considering that's correct yes Sir okay thank you I guess I move executive recommend. I do have that I'll take the motion Senator hammer do you have discussing on discussion on that motion. Your Mike is on they give thank question to the chair please yes Sir. I was looking at today's agenda and and maybe I missed it but were we going to have the individual executive directors of the boards come in to answer questions or are we about to bypass all that or did I miss we we do have on present and if you want to ask any of the questions I will bring a man we are against a hard time line of twelve noon we have moved the executive subcommittee to twelve noon for that purpose so if you want to bring a man I'm much obliged to bring whichever one you want in two what let's pick up thank you might mention the auctioneer board awhile ago can we bring them in. Are you my motion so thank you. We do not have a motion floor so we'll hear that. The. Secretary can yell But seventy. Yes ma'am. I made the motion you asked me to hold until Mister Dotson ask questions that mean that my motion was yes ma'am all right. I'll be making it again here so all right. You guys introduce yourself for the record and. Then Senator hammer to your left has a question. A bread Willie chairman of the auctioneers licensing board. I'm Christy Arnold without an executive director of the auctioneers licensing. Senator thank you Mr chair I'm over here to help there you go the left. So we've. Hello feel heard the discussion out they're not all morning yelp were the lucky pick of the litter to come in and answer a few questions. What term. Tell me about the dialogue that went on with the board and with D. F. A. any of the other principal parties that were involved in the discussion with regards to moving some of your funds over to a the shared services and I just like to hear your response and about the interaction that went on with the board before those decisions were made or as they were being made. With the borders Expressed They they want to keep your money where it is. This money belongs the auctioneers of the of Arkansas they've paid in it's for it mainly is for recovery fund it is the recovery fund that we did away with the bonding and may do a recovery fund and that fund is the is good where it is in the board wants to keep it there. And I was not aware of the fact that we were being charged what were or penalized for keeping that money out in a in a local bank. And we don't think that's reasonable of course. Do you know how much you're being charged in your particular case by the bank. Is about sixteen hundred I mean one thousand six hundred a year a year a year okay a well also known for for would look is projecting you all to be in the red. According to the sheet that were looking if I'm interpreting it right In the comment was made about being in a unique time because a lot auctioneers are going to on line auctioning. With with the way things are trending in going right now if we go through with this. How how much. What's going to happen in the future so a six months to a year down the road departure fund balances and what what's going to happen. It'll be and will be in the negative. We'll be broke. Were you trained in that way anyway. Apparently so the numbers have been going down of course to cope with it in with public auctions it's very difficult to conduct those kind of options in this time frame that we're in and so the numbers have been down I'm very surprised at the way but that see the we're still in renewals so there is still time for those numbers to go up A could be there waiting to the last minute to remove I don't know but it did appear to me and I became aware of it I guess about three to six months ago the we know if we kept down this path we were gonna run at a gas. And and if I'm looking at the chart right about twenty one thousand that that's plus or minus that's being charged off against you from shared expenses and indirect allocations are going to be gonna be taken from you do you know what you were getting done what was getting down with that money before that you are going to reap the benefit from it be moved over the shared services now. The. The only thing that what we would say even rent online I'm sorry we only gonna save and rent. Is for that by five I mean four thousand a year but with these and directs hidden as it's gonna actually cost us more on the indirect. Any will be at five thousand instead of seven four thousand will actually be paying more like a thousand dollars more a year. Then we were. And there for services the weeds that we've been expending splaine to this we still understand why we worked charge before for the services when now we're being charged for the services and we really don't see any benefit from those services it appears to us we're just paying other people salaries that we weren't paying before. Do you know where you get in a services of were you getting services provided by the service bureau of DFA yes. You know what the dollar value of that was because the conversation is that the justification for to come out of your. Fun now is that you were receiving those services at no cost from the server spear which DFA had to pick up. That call somebody got to pay for so I'm just worry about wonder about the trade off that you. We don't know. But right now. I mean we're going to be and I were having to pay for it now we're having to pay that eight point three two percent might look closer Mike please start we have what we were told it would have to pay that eight point three two percent. For the services that we were getting that we were getting for for a. With with and. Wrote seven positions up by seven. Okay a Mister I know you're up against heart clock but thank you for the lounge if there's no other questions I might have a comment. Yes Sir will come back to you for that. represent wouldn't do you have a question for the auctioneers or someone else. You're recognized. Thank you Mr chairman this for this it'll be inclusive of all. If I if I'm looking at the numbers correctly is Senator pointed out. Your your. When you look at the forty five hundred and thirteen the savings and rent and if you moved your bank account into the state treasury of that amounts to about ten sixty three U. asst so sixty five hundred dollars. If you deducted that all through the twenty thousand nine hundred and thirty nine dollars the you're being charged that would leave somewhere around fourteen twelve fourteen thousand dollars in it is that in an additional expenses to what you had that you did not have before the transformation. The only thing that were is the division or is the is in the room the indirect costs we had to pay the shared services in this is this you didn't have that before right okay Mister chairman that. Share with the committee the that's the inherent problem. In the transformation reorganization or whatever you run into a. These agencies that operate with special revenues all these that are listed. All right agencies is the really independent in a way of state government if a if I'm making sense and and they have operated independently of four years since back in the Senate in the early seventies when the other transformation to place it's just hard to incorporate into you take agencies like forestry and geology and at all state agencies words of direct service this provided by the state that's a whole different ballgame. With these agencies here. When when they come in and brought in the state involved in two of the overall shelter or role agency if you will this is what you're going to run into particularly in the smaller ones. The the larger ones you could maybe do away with the accounting or something like that and it was pointed out earlier incorporate that into but I'm going along with the. Gray area Representative gray I'd love to see the formula. They've come up with the central office to run to the right of it is fourteen thousand dollars investors believable. The percentage in the allocation to the ratios and some agencies have one services agencies have another so that's the complexity of what we're dealing with here but but here here and here you have a group. Of this you're only talking about a hundred and I will leave the. Expenses are hundred nine thousand ninety five thousand in receipts a hundred and six thousand in expenses and we're charging on fourteen thousand dollars a year. Taking their money the television heirs have paid in through the for the. Same thing with motor vehicle same thing with a Kelling extractor surveyors fire protection so I mean it it's a. DO treacherous past that we're pursuing relative to the solvency of these agencies that control help people operate and with the protection to the people of the state of Arkansas thank you Mr chairman. And. Thank you Representative. senator Hickey do you have a question for this agency. I'm over here quick question and it's very hard to answer but what you know about transformation now would you rather of done this or would you rather just not. eight use the services within the service bureau would you rather those been eliminated do you think that you would have been better off. The way it is here or do you think I mean because there is a cost but from of looking at this from a overall for the state what what your idea about that. Well I mean I think that it would be a good thing but we were disuse of not having to pay the those cost and it's going to hurt our agency I mean what it what we were doing one anyway but. But I guess my and again I probably wasn't clear so would would you rather be doing this. Or would you just of rather the services have went if you to have an option two years ago if you said well this was going to happen transformation was going to happen. For the service bureau was going to go away for so if I needed an attorney I would just have to go out and procure my own. My own attorney and have that own calls which way would you rather of done. I guess it all depends on how much it would cost because we only made four times out of the year so I wouldn't really. Know from past experience I guess is what I'm asking. Are to say it is it's hard to say well the reason I'm asking a question is to find out whether or not we should on transformation or shouldn't have done transformation and as far as is our as far as is concerned related to you all. So. Because you know we're looking at savings within state government. you know what I'm kind of struggling with so if some of this is savings or if it's a new tax for a lack of a better word it's been put on the agencies and that's a bad way to put it the tax whatever. But you know I'm assuming that the other Boards and commissions are out there here you're hearing the same question and I'd like to hear back from them which way they would have rather had it honestly thought I knew that we were our to our industry is been the way in one and I thought with this transformation opt out that it would definitely save us money. And really there's not that much savings that as we can see in a small board with us I can only speak for us also there is a problem with the facility eight that it can accommodate is we have board meetings four times a year we we give exams four times a year you know we've been moved over this new facility now for the I think it was of eight or nine nine hundred square foot office to two hundred square foot office we can't store all of our records in the same room they and again they can accommodate our meetings were still meeting over there at the mall on main street to have our meetings hearings and have our exams Mr almost stopped because I know you're all the time but that's our main that's my question though. That was down transformation and whenever you take all that into account. Would you rather win under transformation or would your rather this your service bureau. That you were getting have just went away in that you procured your own services just just something to think about as we have these discussions in that I know that you all. get a hold of all the legislators that's what we need to hear. Thank you Sir. Senator Chesterfield you're recognized thank you Mr chair move executive reckon if I can get a second I'd like to speak to it. Thank you. I'm not taking that motion at us to have members of questions well I'm I'm not asking for an immediate bill but I do have the right to you're not taking my motion our I want to let you come back and make that motion but I need to take off then if I put motion on my floor came here from what we're talking about now please okay. There are serious questions about transformation. But we have a responsibility to either accept the executive Rick or not accept the executive director and during the regular session which is impending we have the opportunity to change whatever it is we don't like about transformation. We had this conversation in the previous regular session it pass transformation is here is going to be up to each one of us to decide whether or not we want to go back again and the man transformation do away with transformation but we cannot solve their problem in this budget here. And so I would ask that we consider that as we go forward look at what we want to do. Put legislation in place pre file some bills that would address some of the concerns so that we will be able to deal with the budgetary process and also deal with the upcoming session and those issues that we must deal with S. March transformation is concerned thank you Mr chair. I think Senator. Chesterfield you have a question for the auctioneers are different one. Thank you Mr nice service just have a quick statement I think what we're seeing here is a collateral damage that the sold to us from transformation bill that was sold to us on the guise of saving the government money when you're going to actually see a lot of the smaller boards and these commissions actually go out of business and become insolvent. And that's exactly what I was concerned with whenever we went we were Taking. The cell transformation bill in the in the in the first place at it was sold was saying it was going to save the government a lot of money when actually it's going to cost. Like this the auctioneer boards and many this is just a small example we're just getting started to see I mean these are going to go out of business. Thank you Mr. The senator. Represent mark Johnson our Senator mark Johnson I'm sorry you have different board you want to hear from yes Sir motor vehicle commission if we could of thank you guys for presentation and thank you Mr chairman motor vehicles. Yes Sir. Senator rice while we're waiting on the boards and let you make a statement thank you I I would just remind the committee that my question earlier about whether there these agencies were having to I don't know whether pay for different room to have their commissions meetings then or not and was total no they did and they had three really. This this board right here said they're having to do so there's some discrepancy there thank. Thank you senator. Morning you guys would introduce yourself for the record and Senator mark Johnson has a question yes Sir I'm saying district and I'm the director of the Arkansas motor vehicle commission. I'm joined like in chip the chairman of the commission. Senator you're recognized thank you Mr chairman I'm over here mystery of. My question had to do with the the grants that the commission makes I understand what they're for I think it's a good thing but the process I'm I'm have some questions about who actually awards the grants who decides where the money goes to high school a or community college be or whatever. Yes Sir what we do the way it works is we send out an announcement to all of the vocationaltechnical schools high schools around the state and say that we are on our line you can come in and make application we are considering application for these grants we get the applications and we give the deadline we get the applications and we can all put together and then we have a subcommittee of the commission this made up of the chairman and two or three others depending on who it is that you're may change but we try to have a couple of the car dealers on there because this is all going towards training technicians for the automotive industry and then one of our consumers are commission is a little different from some in that were made up of nine commissioners for or dealers and fiber consumers. And so what we try to do is put that subcommittee gather they go to they look at all of these applications and then they determine which ones that they feel like meet the parameters that we have set out for us to fund and then that recommendation goes back to the full commission and the full commission does have all of the application so if they see one so one of the persons the commissioners not on that committee season application they feel like is is good application and that they should be funded and they can bring that up and it can be voted on in that meeting. A thank you for that explanation and I understand where you're coming from on it Mister chairman I. Personally have a problem with the that being done by the commission which is so sore like they've been they've invented to a process that may and it may work out fine like you said that it broke at the necessarily mean that it's not right but on the other hand I just believe is something that should be administered by someone that's arm's length like the department of education or a perhaps even workforce services where the they're more tuned in to the actual function of grants to and not just the particular let's say a computerized car repair system where you and those have changed over and over again through the years the one that you can buy harbor freight now with equivalent to one it was hundreds of dollars in the past but to if the vet I'm just it just doesn't seem like a prop prop proper governmental function for this commission but I don't want to hold up at this level is is you make clear and Mister Anderson said we're this is not the last word on this budget but I do appreciate your explanation Sir for for that and I will yield back my time at this point thank you Mr chair thank you senator Senator hammer do you have a question for the motor vehicles I do one quick question thank you Mr chair. The services you were receiving services from the service bureau at DFA prior to transformation was that is that correct or not yes Sir. What savings have you realized as a result of transformation that you work already receiving at the service bureau of DFA and would you be saving more money if you would just been left at service bureau and we beefed up service bureaus budget. I went back and actually pool numbers from my last year that is in the spreadsheet showing what we spent what our expenses or and from looking at the numbers from last year versus what I'm being charged for the two the two columns of the total of those it's pretty much of a break even for us because we do save enough on the rent and some other issues that that we were paying for directly to where it's showing me is like a fifty five thousand dollar a deficit and truly saving somewhere in the fifty two to fifty four thousand dollars maybe even a little bit more I didn't get a whole lot of depth on it but just trying to look so in answer to your question it's for me it's pretty much a break even now I did not pay for service bureau that's correct and we didn't pay anything for service bureau. But you know that's kind of a misnomer in that somebody had to play those people a service bureau even though I wasn't paying form someone it to pay for the the work I mean they're nice people I'm sure the calling or working with nothing in so somewhere from state that money was coming from somebody if. General revenue I'm assuming we're now we're paying our fair share of it. Okay into question it it did okay are there any non dollar this budget number two center yes sorry are there any non dollar benefits that you're receiving that you can assign a dollar value to but you can sign other value to it thank you Mr a yes Sir I feel like it there there are by being over there in the building that we're in I have direct access to both the CFO of her people that work for her they can answer questions correctly for me it also gives me and I'm not saying that the I didn't have that information from service bureau I'm just saying that now it's easier because I literally can is walking down the hall and ask a question of one of those folks of I also have access to legal help the lady who is our attorney there is very open and anytime I have a question I can walk down her office and she helps me I have access to IT in this not saying the I just didn't do a good job it's just that the this was a long way away from where I was and now I can literally just walked down the hall and Graham and I to go and ask a question and generally or gal and generally get my questions answered pretty quickly so for me in my small agency it is actually been made as many things a whole lot easier for us yes Sir. Thank you. Senator Chesterfield you're recognized for that motion yes I move executive Rick. I have a motion and a second. All those in favor say aye nine all opposed ayes have it thank you guys. So with that we're gonna move around on the agenda a little bit members with fifteen minutes to go we don't have time to dive into the department of health so we're going to move that to Tuesday morning sorghum move into health services permit agency minority health commission and tobacco settlement and miss Mildred. You are. Recognized to start with the health services permit agency. Members. We're gonna go ahead and start on page eighty eight. The health services permit agency reviews applications for permits of approval for nursing homes in similar care facilities there are fundings general revenue some fund balances and some fees for certificate of need applications of authorized in statute. They are requesting appropriation in the amount of five hundred seventeen thousand dollars each fiscal year. generating forces about four hundred and twelve thousand. They are also with posting restoration of their category de funding which is nineteen thousand eight hundred and seventy five dollars for both fiscal years. The executive recommendation does provide for the agency's request this will be for appropriation only and they're going to have some type of positions the two positions are to be discussed in the personnel subcommittee. They're appropriation summaries on page eighty nine. And as a consider but it has not changed very much any changes or in the regular salaries line items and they would like those to continue into the next biennium. There is some carry forward on page ninety the traditionally have Kerry for each fiscal year that's the end of my presentation Mr chair. Thank you senator Chesterfield you're recognized. As proper motion of second I have a second all those in favor say aye. All opposed eyes have it. With that we'll move on to the minority health commission please ma'am thank you moving to page ninety eight you'll see the department appropriation summary. The commission assesses the delivery of health services to minority Senate and fight the gaps in services and make recommendations to direct the legislature with regard to how they can address these gaps they are funded with general revenue fund balances and cash funds you can see there are three appropriations none of them have changes they would like to continue their eight authorized positions into the next biennium with their budget of approximately one point nine million. The exact a recommendation does provide for the agency's request for each of these appropriation. Senator Chesterfield you're recognized will executive. A promotion on the second. I have a second all those in favor say aye. All opposed us have a motion passed so this move to the tobacco settlement commission thank you Mr chair we're going to move to page one hundred fifty one this is for the operations for the tobacco settlement commission the responsible for evaluating and monitoring the programs funded by the tobacco settlement proceeds act of two thousand they are funded from the interest earnings on the tobacco settlement program fund and they're program accounts they would like to continue their authorized level of appropriation into the next biennium is approximately four hundred and seventeen thousand dollars they would also like a time machine for one position again that will be discussed in the personnel subcommittee page one fifty two has their appropriation detail and you can see that the majority of their funds were spent and professional fees for the hundred seventy five thousand dollar grant that they have for you CA to conduct their on annual report every year the executive recommendation does provide for the agency's request for continuation of this appropriation level. Thank you I have a motion executive wrecked by senator Chesterfield I have a second I have a second all those in favor say aye. All opposed house haven't that includes on my presentations Mr chair thank you miss Miller. So if that committee we see no further business we stand adjourned to choose the more.