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Unknown speaker
0:00
Thank you.
Thank you.
Thank you.
Thank you.
Speaker 5
2:09
of axles, tires, all that, completely irrelevant.
Grab your seat. Representative Gene, will you lead us in prayer, please? That's over the Middle
Speaker 13
3:25
East right now. We ask that your protection be over them. We ask you to forgive us for our sins.
In Christ's name we pray. Amen. Amen. With that,
we'll go ahead and get started. Members, we'll go ahead and cover all of B, and we'll come back and take questions. If you
would, when you have a question, just refer to the item number so we can get the appropriate agency to the table. Mr. Billy,
William Parrish
Unverified
3:55
you're recognized. Thank you, Mr. Chair. We're in Section B. These are various temporary appropriation requests. The first item, B1, is a letter from the Department of Shared Administrative Services, Office of State Technology.
The request is for $3.39 million in appropriation. Last month, PEER provided favorable advice to the governor to approve a loan from the Budget Stabilization Trust Fund. The loan to the Office of State Technology will be used to make major improvements to information technology, implement a new platform, consolidate software licenses, and modernize applications. This request today is to provide appropriation to the agency to spend the loan. B2 is a letter from Shared Administrative Services, Office of Personnel Management, for $3.7 million. This is to fund additional technical staff for the performance goals and compensation system.
This system will do staff evaluation statewide, and appropriation will also provide for a skills assessment of IT personnel. It's supported by the State Central Services Fund. B3 is a letter from Administrative Office of the Courts. is for $191,000. It's to provide for court reporters as statutorily required, according to the letter. This is supported by the State Central Services Fund. Next item, B-4 is also Administrative Office of the Courts. It's for $90,000 in appropriation. This is to provide for court interpreters.
It's supported by State Central Services Fund as well. B-5 is a letter from the Department of Public Safety. It's for $700,000. It's to pay claims to victims of crime. It's supported by special revenue. That's criminal fees and damage settlements. B-6 is a letter from the Department of Corrections, it's for $16,200 in spending authority. This is to cover costs associated with the UAMS juvenile sex offender assessments. It's supported by fees from the Sex Offender Community Notification Assessment.
B-7 is a letter from Public Safety Division of Emergency Management for $80,000 in appropriation. This is to outsource lab testing for radiation levels, it's supported by utility fees. BA is the last letters from the Department of Education Division of Higher Education these are it's it has two requests the total 5.35 million both are to carry out regional workforce grants that had unexpected carryover funds from fiscal year 25 and they will also fund a program to develop a credentialing pathway for high school faculty
representative ladyman what question do you have all right seeing no questions we have a motion for B 1 through 8 have a motion of second have a second all those in favor say aye all opposed eyes have it with that we'll move on to see thank you mr.
William Parrish
Unverified
6:37
chair we're in section C this is the American Rescue Plan Act appropriation request there's only one it's from the
University of Arkansas Fort Smith it's for 46,998 and spending authority they have a grant from the Align program at the office of skills development to support the LPN program at the Western Arkansas Technical Center seeing no
questions do I have a motion have second I
was a second all those in favor say I aye. All opposed. Ayes have it. With that, we'll move on to D1. Thank you,
William Parrish
Unverified
7:10
Mr. Chair. We're in Section D. This is Infrastructure Investment and Jobs Act Appropriation Request. There's only one.
It's from the Department of Energy and Environment, Oil and Gas Commission. It's for $16,617, a new appropriation and $32,000 in reallocations of previously awarded appropriation. They have a grant from the Department of Interior to locate and describe geological units that contain critical minerals collect samples for analysis and integrate data into a database need a motion a second
all those in favor say aye all opposed eyes have it with that move on to e1 thank you mr. chair
William Parrish
Unverified
7:48
we're in section E this is a restricted
reserve fund transfer request it's a letter from the Department of Public Safety Division of State Police is for four point two five million dollars it's It's a transfer from the motor vehicle set-aside and is to allow the division to purchase 102 vehicles.
Seeing no questions, do I have a motion? Second. All those in favor say aye. All opposed? Ayes have it. F1.
William Parrish
Unverified
8:22
Thank you, Mr. Chair. We're in the review portion of the agenda. This is Section F, Appropriation and or
Fund Transfer Request. This is a letter from the Department of Education, Division of Higher Education. It's for $3.5 million in transfer. It's from various financial aid programs to the Arkansas Heroes Program. The letter says it's
to maximize the utilization of appropriation provided. Any questions? Seeing none, motion. Second. All those in favor say aye. All opposed.
Ayes have it. Move on to G. Same thing goes for G members. We'll go through 1 through 3, and we'll come back
William Parrish
Unverified
9:02
and take questions. Thank you, Mr. Chair. We're in Section G. These are cash fund appropriation requests. The first item is a letter from the Department
of Labor and Licensing, Division of Real Estate. It's for $60,000 in appropriation. It's to purchase an AV system for the Real Estate Commission. It's supported by license and application fees. G2 is Labor and Licensing, Real Estate Division, $20,000 in appropriation. It's to hire a project manager for an HVAC repair and maintenance project.
It's supported by license and application fees. And G3 is also the Division of Real Estate at Labor and Licensing. It's for $100,000 in appropriation. It's to repair and maintain the HVAC system. It's supported by license and
application fees. In a motion to approve G1 through 3. Second. You got a second. All those in favor say aye. All opposed. Ayes have it. With that, we'll move to H1. Thank you, Mr. Chair.
William Parrish
Unverified
9:56
We're in section H. This is budget classification transfer request. It's from the Commissioner of State lands. It's $250,000 transfer from
professional fees to operating expenses. The transfer is needed to accommodate the purchase of a building for office use.
Speaker 37
10:12
Senator Dismay. Yeah, I just have a question for the commissioner staff. and if you could
Speaker 43
10:43
just go ahead and recognize yourself sam sparrow fiscal director for the
Senator Jonathan Dismang
Unverified
10:46
commissioner of state lands peyton murphy council for the land commissioner all right thank you Hey, if you could just walk me through a little bit, the $250,000 that's a transfer are operating expenses. So I'm assuming you're talking about utilities or maintenance or what is that? Okay. And that's in relation to
Speaker 47
11:05
the purchase of the new building? Yes. So we're just going to make sure that we have any available funds for any
Senator Jonathan Dismang
Unverified
11:11
upcoming issues with the new building. Are those operating expenses more than what you'd anticipated or
similar to what was, I mean, is it $250,000 more?
Speaker 47
11:19
or this was kind of the plan from the beginning that there would be a transfer? It's similar, but we're currently under a current lease, so it's compounded with the lease, and we're going
Speaker 53
11:28
to finish up the lease in April. This is just going
Senator Jonathan Dismang
Unverified
11:31
to cover us for any unexpected fees. And this is the building that was purchased in West Little Rock? Yes, sir. Okay. December 2024. What refreshed me of the purchase price? 3.5. 3.5. Yes. Okay. And then I guess there was a lease that we walked away from, and that's part of it. I'm trying to understand some of the language that was here.
Speaker 47
11:49
So we're currently under a three-year lease. So we're still under the lease, and that lease ends in April. For the building that's over here? Yes, on 4th and Ringo. Yes, sir. Are you all occupying that building? We have access to it, but we've moved all of our operations over to the Valley Ranch Drive location. So when did we move over? In April of 25.
Senator Jonathan Dismang
Unverified
12:15
Okay. So what are those lease payments? how much how much is we paid in lease since april of 2025 that's 16 000 a month 16 a month 16 7 i
believe yes sir and i guess there was no way to sublease or anything else
Speaker 47
12:29
or was that part of the agreement no sir during the agreement we had with the leasing agent they were going to leave they were going to offer it for lease and if it was leased to another tenant they were going to let us out of our obligation
Senator Jonathan Dismang
Unverified
12:41
i was not aware of that issue when we approved the purchase of that building i don't think any of us were that
we weren't going to be able to get out of the lease that we were in that's pretty good burn rate at 16 grand a month um since april so all right thank you very much
Speaker 58
12:59
any other questions seeing none do i have a motion Do I have a second motion
the second all those favor say I all those opposed We do this one more time
Speaker 60
13:23
All that are for the motion say I all that are opposed I'm gonna say the motion failed
So moving on to I you guys are dismissed sure senator hickey so believe me i
Senator Jimmy Hickey, Jr
Unverified
13:39
don't i agree with senator dismay i don't uh i remember this i don't remember us
ever discussing this uh lease that's why we need to be a little bit more transparent down here but because of where we're at and if these are true operating expenses are we asking them to bring us back exactly what this is or do we have a plan because you know is somebody not going to get paid i think we need to at least have that discussion and if we're asking them by
friday to bring us exactly what these are going to be uh i
just want to know what the if there's a path forward or what's our plan here but i didn't hear any
Speaker 65
14:18
eyes on the right side of my body when i took well i said i but
Senator Jimmy Hickey, Jr
Unverified
14:22
it's reluctant but again i i mean you can ask staff do
they have a plan but members voted twice and i've done that on purpose because i wanted to make sure i
Senator Jimmy Hickey, Jr
Unverified
14:35
called correctly don't don't disagree with you i just uh again if these are true operating expenses i
don't know if they have funds can i ask the ask them a question so what at this point uh you're telling us that these are for operating expenses what is your
Speaker 47
14:54
plan since you're not approved here well these were just to ensure that the operating expenses would be covered for any building maintenance or you know utilities for the fourth quarter okay yes
Senator Jimmy Hickey, Jr
Unverified
15:07
that's for the building that you're currently occupying or is that for the one that's
currently occupying yes sir okay all right so you're not approved what are you going to do tighten up yes sir tighten up so you got the funds to do that we'll hope so all right that sounds good
to me we'll leave it this way thank you sir thank you so you guys are dismissed we'll move on to i pay plan appropriations members we'll do same thing we'll go through one through 15 and then take questions i've got a summary for you
William Parrish
Unverified
15:44
yeah uh thank you mr sheriff section i this is pay plan appropriation request there are 15 agencies they request 25.7 million in appropriation for salaries matching extra help all cite the
salary adjustments that came from implementation of the pay plan within the class and compact can I get DF and a to the table please
mr. secretary if you would introduce yourself for the record and your cohort
and then I'll ask my question a good morning mr. chairman good morning committee jim hudson secretary dfa good morning jessica
moore dfa can you tell me what the balance is after
Speaker 83
16:31
this 25 million is taken out so the balance of that pay plan appropriation will be 60 million with that 20 million 60 yes and that's just appropriation for pay plan that's not
the actual performance fund have we had a request from dhs for any of
these dollars yet no sir so our human development centers are calling
us daily talking to us about the need for nurses
and the need for aids and the excuse we get is a pay plan and we get it from our superintendents from our folks locally and i find it really hard to approve money to
go to the board of election commissions and ethics commission in places where people's lives aren't on the line like a human development center. And it really concerns me
that we haven't even got a request from DHS for any of these dollars, and there's still $60 million in the fund. And we were told
when we approved this pay plan a year ago that this is where they could come
get dollars if their budget didn't have it. Is that correct,
Representative John P. Carr
Unverified
17:32
Secretary? You were in those meetings. Yes, sir. And we've allowed them to budget pay plan and their annual operating plan. I think DHS would be better to speak to whatever the issues are there in the human development centers. I don't think it is a lack of funding for salaries. It must be just some issues in terms of being able to find people to be able to fill the positions, but that would be a better question for DHS. I do want to make sure the committee is aware this request is strictly appropriation.
There's no funding request that we're bringing. I understand.
But there's funding available after this request of $60 million, correct? There is funding available. So let me
Speaker 83
18:05
clarify, the $60 million that's available is for the appropriation. The funding for performance fund is at $45 million right now. $45? Correct. And
that's with this $25 million in there or without
Speaker 83
18:15
this $25 million? This $25 million is only for appropriation. It's not for the
funding. I understand that. But if you took the $25 million, if these agencies used this $25 million, what would be left in the
performance fund? Is it $20 million or is it $45 million?
Speaker 83
18:29
So the performance fund is the $45 million. This $20 million, so the biggest of this is corrections. was approved last month for the funding really so it's already received so after they
took that funding what's left in the performance fund 45 45 yes sir all right thank you thank you
sir uh senator dismay i would like for the department
Senator Jonathan Dismang
Unverified
18:50
of corrections i don't know if you all need to stick around or not but to talk about what that additional money is doing because it was alluded to i think in a previous meeting how much how that was benefiting their hiring and retention and so i
So I think it'd be important just to kind of hear what the outcome is, probably in its most, you know, the most prudent place to talk about it would be right now, I think, as opposed to some of the
Speaker 100
19:14
other meetings we've had. We'll stay if corrections won't come
Senator Jonathan Dismang
Unverified
19:26
forward. Chad Brown, Department of Corrections. Okay, and so just to kind of recap what I was talking about here, you know, the governor's pay plan provided significant increase, obviously, Department of Corrections with the purpose of retention and new hires to fill open spots that we have not been able to fill before.
Correct. In one of the previous meetings, it was very quickly mentioned and then kind of moved on that that was actually, we were getting the result we had hoped to get as far as retention and new hires. Can you elaborate on that? I think it's probably, like I said, last time it was kind of brushed over and made a minor
point. I think that's a major point and a major achievement if that is happening. So if you could address that.
Speaker 108
20:03
Yes, sir, Senator, I'll do the best I can. Yes, that has helped us tremendously in the Department of Corrections.
We do see turnover, though, but we have no problem in filling positions. I'm working on seeing some answers that Representative Wooten asked during our budget hearing, and I'm going to provide those to Bureau staff. I should be done with those this week, and it will include the answers to what you're questioning. No, I look forward to that. I
Senator Jonathan Dismang
Unverified
20:29
mean, I hope it was a significant investment, not just by the governor's office, but by the legislature and to the Department of Corrections, one that was unsolicited but a recognized need. And so I would like to make sure that we follow up on it and we continue to provide the means necessary for you all to be successful.
Speaker 108
20:46
Is there anything you would like me to include specifically other than
Senator Jonathan Dismang
Unverified
20:50
what I'm going to provide to Representative Wood? I think a historical view of where you were on hiring and vacant positions and where you are now would be valuable. But anything, I mean, I'm asking for you to look at what we've done and what the results are. Sure. So, yeah. I can do that. Thanks. Representative Eubanks. Thank you,
Speaker 110
21:09
Mr. Chair. Could we ask DHS to come to the table, please? That's a proper request.
I see Secretary Janet Mann coming to the table.
If you guys would introduce yourself for the record, Representative Eubanks,
Representative Jon S. Eubanks
Unverified
21:33
you're recognized for your question. Thank you, sir. Janet Mann, DHS Secretary. Hi, good morning. Melissa Weatherton, Director for Medicaid Specialty
Populations. Yes, I have some of the same concerns that Chairman Wardlaw has about the human development centers.
I've gotten multiple calls. I have one in my district, Boonville Human Development Center, and apparently, at least from the calls that I've gotten, they're short-staffed, and they're losing employees because of the overtime that has been asked for them to provide. So I'm curious as well as why there isn't a request here. because it sounds to me, based on the information that I've got, and I've gone over and had a meeting with them, is that they're short-staffed.
Thank you, Representative Eubanks. Yes, they are short-staffed. Let me start there. But the issue is not, in our opinion, we looked at it not
Speaker 121
22:36
with the pay plan. We have budgeted positions that we can afford that are constantly being advertised, and we're having a very hard time hiring. And we're having extremely high turnover right now, which is just kind of a snowball effect when you're having to work so much over time
and then they don't want to work and they leave, and we're not able to hire as many people as are leaving every
Representative Jon S. Eubanks
Unverified
23:05
single month. Is the amount, the rate that you're paying for these positions competitive so that you can attract these employees? Yes, we think so.
Speaker 112
23:17
Yes, sir. They saw an increase with the pay plan that went into effect on July 1, which did have us change
Senator Breanne Davis
Unverified
23:22
some of our differentials to level that out. That was the purpose of the pay plan, so we wouldn't have to have so many different add-ons.
but in addition with the overtime we try to balance the overtime with the nursing contracts if we have to fill in but we have to meet our ratios for the clients and so while we are trying to continuously hire we do have a high turnover and then we do have overtime and then we have contracts to try to substitute but it is it's a delicate balance. What is the reason for the high turnover
Representative Jon S. Eubanks
Unverified
23:53
is it the overtime solely or is there other reasons i mean you and i know that
Speaker 121
24:03
historically we've had a high turnover at all the centers because it's a hard job um but right now yes i mean people are getting burnt out with the overtime
Representative Jon S. Eubanks
Unverified
24:12
have you considered raising the rates to see if that would help solve the
Senator Breanne Davis
Unverified
24:21
problem we have not taken that into consideration we've just had the pay plan a little over six or seven months so we were trying to see if that was working and would help with the turnover and as we are continuing to discuss it we look at it almost every week
Representative Jon S. Eubanks
Unverified
24:37
so what's the plan i mean that i understand that you've lost uh maybe 30 employees just here recently, and I don't know if that was scattered from across all of the human development centers, but it seems like you're getting into a dire situation if you're going to be able to provide care for these clients that are at these human
development centers. Yes, sir. We did lose 30 employees across all five in the last
Speaker 121
25:07
30 days, which is a very high number. So we're constantly
talking about it um continuously advertising these positions putting more out there than we actually need right so that we can try to get in front of this we have historically lost 10 staff hired 10 staff a month right or 15 we've always kind of done that um but this we've just gotten behind and we're just trying to catch back up well i would suggest that if
Representative Jon S. Eubanks
Unverified
25:38
what have you what you've been doing is not working, that we might ought to try something else.
Representative Jack Ladyman
Unverified
25:45
Yes, sir. Thank you. Representative Ledeman, you're recognized. Thank you, Mr. Chairman. Well, I've got some of the same questions, but first off, retention's a problem. And
I'm going to ask for more money for facilities. I hope that my colleagues here will vote for that. I have a bill for $20 million to rebuild some of the facilities. I want to fund it during this coming session
because I believe to retain people, you need a good work environment. We've got buildings that are 56 years old. $20 million is a lot of money, but working in a building that's 56 years old that's not functional is also a problem. But getting to my question, with the pay plan, prior to the pay plan, we had a thing at the HDC's differential pay plan. Now, I believe, I haven't researched this lately,
Boonville and Arkadelphia are two of the sites that really struggle. And I believe in that old plan, we had differential pay for those areas to draw people to those sites. Now, we struggle in Jonesboro, but not as bad as these two sites. And I thought that differential pay plan was working to help that situation. So why don't we request to put that back for like Boonville, who's losing a lot of people. I get the same emails that everybody else does.
So why don't we request funds to do that, or do you think that would help or would
Representative Jon S. Eubanks
Unverified
27:27
not help? So prior to the pay plan being implemented this last July, we were essentially kind of
Speaker 121
27:33
band-aiding it together. I had come here multiple times before you guys and asked for various increases to our staff. We even set up C&A schools, as you all remember, so that we could actually make them C&A level to pay them more.
And then the shift differentials for the weekends and a rural differential, like if we couldn't hire in certain areas like Arkadelphia, which historically has been an issue for us in that town. We pieced together a salary. The new pay plan significantly increased what we pay CNAs and RNs and LPNs. And so we were looking, waiting, hoping for about six months to a year to see what that looked like. and if we could retain and retract at the pay plan rate.
But I think that is an option that we could discuss with our sister agency. But right now, I'm not sure, honestly, that it's necessarily the pay. And it's definitely not that we don't have open positions. So I'm not going to come and say I think more pay is going to help at this moment. But, you know, we're really looking into exactly what is going on. all right thank you speaker Evans you're recognized thank you mr. chair if
Representative Brian S. Evans
Unverified
28:57
others have questions for DHS I'll get back in the queue my questions is for secretary Hudson on a separate
topic yeah I'll come I'll come back to you thank you I think the other two members have DHS questions
Representative Denise Garner
Unverified
29:13
representative Garner thank you mr. chair I just have a quick question what what are the positions that we're losing, and how much
Representative Jon S. Eubanks
Unverified
29:23
are they paid? I know the positions we're losing, but I might need help from Kay
on how much they're paid if she has her chart with her. So it's the same ones that we have a hard time with. It's the CNA level, the LPN level, and the RN level. Okay, very good. Yeah,
Representative Denise Garner
Unverified
29:39
I'll get back with you, and we'll talk about some of those things. Thank you. represent batty is your question
for dhs yes it is mr chair yes sir
Representative Howard M. Beaty, Jr.
Unverified
29:53
you know you said something that i think this committee and most
of the members in this room are doing and that's waiting
and hoping that some of these problems at dhs rectify themselves and take care of problems but some of us are getting tired of waiting and hoping so my question you know this is a problem and then having to come and try to address and answer questions of this body what i what i'm going to ask you to do is prepare a written plan something in writing how you're going to address this issue again it's some of the most vulnerable of our population and and we're not taking care of these folks for some reason i mean they they need continuity of staff that are there the
constant turnover is a turmoil and and disrupted their lives i want to know that our agency is taking care of this issue and i don't have confidence that it's being taken care of now you know it's a problem and you're waiting and hoping and that's what most of us in this room are doing so i want a written plan if you could submit that to this committee i would appreciate that do you have anything in writing i would have to go back and ask just a simple no it'll be fine put something in writing and get to
the committee thank you dhs uh speaker evans has a different question you guys are dismissed from this issue
don't go too far because i think there's some questions on the
Representative Brian S. Evans
Unverified
31:15
trust fund coming Speaker Evan. Thank you, Mr. Chair. Secretary, the performance fund, this request that's before us today for the $25 million, is that for the remainder of the fiscal year, or is that specifically for a month?
Representative Brian S. Evans
Unverified
31:32
remainder of the fiscal year. Okay. So looking at the top line, the State Board of Election Commissioners, there's a request for $22,000, I believe. So they're needing 22,000 additional dollars to finish their pay plan
for the remainder of the fiscal year. Is that what I'm understanding? Yes, sir. Okay. So refresh my memory. Selby's just confirmed that you were talking
Representative John P. Carr
Unverified
31:57
about appropriation only, not funding. Correct. Correct. But they need the appropriation
Speaker 157
32:00
in order to expand the funding. So in other words, they're going to
Representative Brian S. Evans
Unverified
32:04
need another $22,000 to pay out for the rest of the year. Is that correct? Yes, sir. You're going on the same page. So if I remember correctly, back from the pre-budget hearings a couple of weeks ago,
on the budget line for the State Board of Election Commissioners, they received a significant decrease in their funding for the next budget. Is that correct? That decrease was related to the election
Speaker 159
32:30
expenses and not their operation budget. so we allocate
Speaker 83
32:35
four million dollars for the election expenses and they carry that funding forward so that's the reduction
Representative Brian S. Evans
Unverified
32:40
you saw okay so then the their line item within their budget for salaries will be addressed in in the balanced budget and not taking a decrease since we already
Speaker 83
32:51
see that they're short for the current year there will be no
Representative Brian S. Evans
Unverified
33:00
decrease for election commissioners will there be an increase at the current moment there is not so if there's not an increase then we're expecting them to tighten down as the gentleman said
Speaker 161
33:07
earlier to be able to meet their payroll expenses for the year if they don't have enough
Speaker 158
33:11
money now to do that now they have sufficient funding to do it they don't have sufficient
Representative John P. Carr
Unverified
33:17
appropriation okay that's all we're addressing here is a lack of appropriation to be able to expand their funds that are already in hand okay
thank you so members we've heard explanation do I have a motion for I 1 through 15. I have a motion. Do I have a second? I have a second. All those in favor say aye. Aye. All opposed? Ayes
have it. Out of my eye is passed. We'll move on to J. The overtime request. Thank you, Mr. Chair. We're in section J. This is an
William Parrish
Unverified
33:55
overtime appropriation request. Department of Emergency Management request $16,000 in
overtime appropriation to pay for disaster-related operations, and Department of Military request $10,000 in overtime appropriation due to staff shortages. Do I have a motion for item J? Motion. Do I
have a second? I have a second.
All those in favor say aye. Aye. All opposed? Ayes have it. With that, we'll move on to the reports.
Mr. Bill, if you would do K1 through 8 and we'll take
William Parrish
Unverified
34:35
questions Thank you, Mr. Chair K1 is a surplus income and distribution report It shows the sources of unobligated funds and then the distributions for the restricted reserve and catastrophic reserve fund As of the end of last month the restrict reserve fund in the middle table shows 608 million Distributions in overall balance of 1.93 billion the total catastrophic reserve fund balance is 1.8 billion new to the report is Our transfers from the water and sewage treatment facilities grant program fund the second page of the port breaks out the set-aside accounts within the restricted reserve fund
Online 06 is the motor vehicle set-aside. It was originally allocated at 13 million 75,000 has already been distributed from that set-aside state police today has a request for 4.2 6 million The new balance would be 8 million six hundred six sixty seven thousand the new restrictions are balanced would be 929 billion k2 is the budget stabilization trust fund report it shows cash flow loans throughout the fiscal year as of the end of last month there are 16.3 million in outstanding loans and the cash balance is 193.5 million k3 is the tobacco settlement report and it gives a summary of
income fund balances investments actual payments to state and on the second page are all expenses by fiscal year k4 is the state central services fund report it shows the fund balance and disbursements as well as the expenditures of each agency supported by that fund k5 is the Education Adequacy Fund Report, and on the second page at the top, it shows the fund balances from fiscal year 20 through 26. The table shows monthly transactions, and the fund had a balance of 641 million at the beginning of last month. 55.8 million was deposited into the fund that month.
There are no transfers. This leaves a balance of 697 million at the end of February, and this amount will build throughout the year unless the department recertifies the need to draw more funding. K-6 is the Medicaid Trust Fund report. I'll start with the beginning balance of fiscal year 26 was $491 million. The current balance at the end of February is $326 million. For the month of February, $90 million has been distributed from the fund for private nursing home care. K-7 is the Infrastructure Investment and Jobs Act report. It shows all IIJA awards to state
agencies at the end of the month. And then K-8 is a revenue services division fund appropriation transfer report. Special language allows appropriation transfers between refund line items. The secretary must report these transfers to ALC. The report shows 50 million in spending authority was transferred from the corporate income tax line to the miscellaneous tax line. The report says it supports refunds processing for various refunds including sales tax, motor vehicle and driver services and then the share we have one last report
on the agenda it's the quarterly report for the state hospital damage DHS according to the report construction was to begin March 3rd with a substantial completion date of
October 21st the state insurance adjuster calculated the cash value to be 1.82 million that amount was received by DHS transferred to DFA and credited back on February 27th. Senator
Hickey, you recognize for a question, which item? K6 and
Senator Jimmy Hickey, Jr
Unverified
37:42
L1 will be the two that I want to discuss today.
Speaker 14
37:46
All right, let's get DHS back to the table. It covers both of them.
Representative Jon S. Eubanks
Unverified
38:14
good morning melissa weatherton director for medicaid
Senator Jimmy Hickey, Jr
Unverified
38:17
specialty populations senator hickey you recognize thank you mr chair believe it or not i wasn't going to ask you all to come down here until i seen this 90 million dollar burn for february uh for lack of a better word so i know we keep discussing this and keep asking budget hearings where we're going to be but i think we're probably if you extrapolate this out with this 90 million it's going to be less than what we thought because if i if i go through this it looks like to me that our deficiency is about 20 million 694 a month averaged out over the eight months so if we
continue on that, we're going to be down to about $243 million. Again, we understand everything's not going to fall exactly like that, but I guess my question to you is this. Are we expecting in March, April, May, June, are we going to have some more of these big numbers? Because as I look back through the year, I mean, this was our second largest. We did have $123 million and another 53 but do we know what those numbers are going to be approximately for the next four months
are we going to be at the 11 million are we going to be at the 50 million are we going to be at a 90 million and it's just i know we're rounding but it makes such a big difference as a way that i'm
trying to extrapolate these this out to try to figure this out yes sir thank you
Senator Breanne Davis
Unverified
39:47
for the question so the month of february was it was larger than the previous months because it is one of the months throughout the year with cash flow that we get the least amount of state general revenue
so we do depend on the trust fund in february a great deal when the sgr is it goes up and down depending um on our schedule so we did use more of it this month i would like to make one correction on the report the um we did transfer 90 million dollars in total 66 million dollars did come out of the trust fund account or the tmp 0900 for regular course of business it was not just for the nursing homes the bulk of the rest of the transfers are our weekly transfers for the nursing
home payments then going for then going forth with your question to finish march april may and june um it's going to be it's going to be lower we think we will end the year with the balance as we discussed during budget hearings somewhere between 150 and 200 million that is a big range but it changes almost every week it also depends on some quarterly payments that will be made and some end of the year payments so while we are watching it i don't know that we're going to have
another 90 million dollar month i but i don't know that we won't um and and i know that's not really answering your question but i'm just saying balancing out the s the state general revenue the other revenues that flow through our trust fund and funds and then these two accounts we will be finishing the year
we anticipate to be at 100 of the budget which is i believe around 9.75 billion total okay and if
Senator Jimmy Hickey, Jr
Unverified
41:27
i remember correctly what we were saying is is that
with the new budget we were going to increase that and also have a set aside was that
Senator Breanne Davis
Unverified
41:40
correct for for next year my understanding i'm going to start and secretary hudson will correct me is the hundred million set aside that was for state fiscal year 26 has not been requested to be touched this year we are we do not anticipate using it but then there will in the budget proposal that he presented for governor sanders it does include a second hundred million dollars set aside for state fiscal year 27 and he also we discussed during
the budget hearing that we will probably be using some if not all of that and he's going to come correct me where i
said something wrong he did ask to come
Representative John P. Carr
Unverified
42:20
up there so jim that's secretary dfa just again the the february report you've got now but we understood the situation with february
when we were here for budget hearings so everything that we testified to during the budget hearings is still true in our mind and i think what what we said and i think
what we said was we have the hundred million dollars already in a set aside we're going to establish a second set aside for an additional hundred million dollars i fully expect in fy 27 we're going to tap into that you know at least a hundred million perhaps more to get us through fy 27 and then for us to have a larger conversation as we get into the regular session
about just Medicaid, both on the income and the expense side because I think it's both that have to get addressed. Okay.
Senator Jimmy Hickey, Jr
Unverified
43:07
So based on if we're going to use $150 million, if that's what we're going to do,
basically that's going to average out for another $44 million deficit per month for the next four months. I'm just sitting here on the calculator. So if the next month or the following, if we start seeing that this is averaging more than that, then we're even going to drop lower than the 150. So I guess that's what we're going to start watching for the next four months because, like I say, if we're thinking that we're going to get down to 150, I've just been figuring that we're having a deficit of a little over $20 million, but it appears like for the next four months it's going to be larger than that.
Representative John P. Carr
Unverified
43:45
Well, I think, as Secretary Mann said, you know, February is unique. It is a low GR release month for us just because collections and refunds being what they are across state government. And it is a higher expense month for them. So I'm not sure you can project February onto the remainder of the fiscal year. But to your point that the fund bears watching, I wholeheartedly agree. And we look at it all the time. We do think that we're solvent. We're going to be solvent through the remainder of the fiscal year. We're going to have to inject some capital next fiscal year.
Senator Jimmy Hickey, Jr
Unverified
44:18
No doubt about it. Yes, sir. And just to go one step further, and if someone said this and I missed it, I just don't remember. I think I had asked if something was cyclical or seasonal, and we didn't really throw that out there. If we knew February was going to be, whenever I asked this question during budget hearings and before, that February is always going to be that way, then, you know, that's what I would have expected whenever I ask, is there anything seasonal or cyclical? I don't know how else to ask the question. I mean, so just trying to figure out where we are.
Appreciate the explanation, but again, it's just trying to make sure this thing's not going to go to zero. I understand we've got reserve funds. I understand we have set-asides. But we've been trying to figure this out
for two years now where this is going to wind up, or I have at least. We're not going to run it to zero, I can assure you of that. Yeah, because
Speaker 177
45:10
we'll get into the set-aside. Thank you, sir. So, looking
back, I mean, it brings up a question, and I just asked Billy to look it up.
But looking back over the last, let's just say, five years, looking at the third quarter of the fiscal year, has this historically been a high month of charges? Has February always hit us this way, or has some month in the quarter, not necessarily February, hit us this way? Kind of give me some historical data
Senator Jimmy Hickey, Jr
Unverified
45:41
that backs up where we're at with
Senator Breanne Davis
Unverified
45:44
February. Yes, sir. So historically, the first quarter, January, February, and March, is always a high-expense quarter for multiple reasons.
We always have inpatient, outpatient, UPL, which flows through for the hospitals. We also have cost settlement with children's that usually comes through in January, February, or March. So those payments, in addition to regular expenses, can cause it to be a very expensive quarter. Additionally, in the first six months of a state fiscal year, we spend about 45% of our budget, where we spend 55% January through June historically. So usually January, February, March, and then June are very expensive months for Medicaid.
Okay. I just wondered if that was historical data. Representative Collins, you recognize. Thank you. This
Representative Andrew Collins
Unverified
46:31
is just for my clarification here. So 90 million is the outbound, but there's 21 offsetting it. So is it a burn rate of 70-ish, or is it a burn
Senator Jimmy Hickey, Jr
Unverified
46:45
rate of 90? So there are collections every month that will go into the individual accounts
Senator Breanne Davis
Unverified
46:51
that are for very specific expenses. So in the month of March, we did use money from several of those accounts.
So it's not a one-to-one. So we could collect fees from past tax or a hospital assessment fee or an ICF provider fee, but then not transfer it out to be matched. So what we try to do is match the money with the expenses. So, and I'm butchering my answer because I'm getting into too many details. So we took in the money, but we did not use all of that $20 million to match.
We use some of it in the quality assurance fee, and then we use the bulk of it in the Medicaid match to pay ongoing regular expenses. Okay, so
Representative Andrew Collins
Unverified
47:39
they don't really offset, so we should look at this as a $90 million burden rate then. Yes. Okay, thank you. Members,
seeing no further questions, thank you for your answers. And seeing no other business, we stand – well, you've got to hit a button. Well, I assume it.
Senator Jimmy Hickey, Jr
Unverified
48:00
see that we were taking this out of restricted reserve before getting our insurance proceeds
I see that you all have paid back was at 1.8 million okay recently are we still on track back to get all of the restricted money back no okay so how much are we not going to get back we
think so because when we started this we had said that we were going to get that was it 5 million let's see how much did we originally do 5 million okay so and
we just got back 1.8 million so how much more are
Speaker 121
48:52
we going to get back well the issue is the insurance reimbursed us for 1.8 million which we sent the check back but the actual cost because we bid this thing like three times
right the actual cost is right there in paragraph three so three million forty six thousand is what it's going to cost us to get the building back to where it was before this storm damage but the insurance only reimbursed us for 1.8 so we don't have any additional money coming
Senator Jimmy Hickey, Jr
Unverified
49:24
from the insurance company no sir so really then at this
point we're finished with this report and we just know that we
didn't get the five million dollars back
yes sir okay why why and again I can't don't know Whenever we started this, I believe we asked question after question, and we thought that we would get it all back. Am I wrong in that? I mean, I know we've got streaming video that we can go back and see, but was that not what this body was told? So, Misty Eubanks, DHS.
Speaker 191
50:04
Yes, ma'am. So I want to double back to
Speaker 192
50:07
one of the questions you initially had asked about whether we could get any additional insurance proceeds we do have the ability to get some more insurance proceeds once we get closer to substantial completion however we do not believe that that number would be in excess of a hundred thousand dollars so i think what we've been told by insurance that we could get somewhere around ninety seven thousand dollars but we need to have
gone ahead and paid for at least two million dollars of the construction that is under processed now so if we were to receive that proceed it would also come back to the restricted reserve as for our prior testimony about the insurance proceeds because these buildings are quite old and we had a lot of hvac we knew that there were potentials of depreciation I believe I did say that, and I have those reports out there,
but would be happy to talk with you about that. So it was one of the issues of we needed the funding to start the construction because we needed the funds to do the 1DE and the bid, and then the reimbursement would come
Senator Jimmy Hickey, Jr
Unverified
51:27
afterward. So, basically, we've only got maybe possibly $97,000 more that we might get reimbursed
for this, what I call a loan, out of the restricted reserve.
Speaker 190
51:39
Yes. That's what we anticipate getting back today. Yep. But that was not what
Senator Jimmy Hickey, Jr
Unverified
51:43
we anticipated whenever we did this. Everybody was acting like we were going to get basically all of this money. I mean, we can sit there and not say anything, and I won't blame you. There's nothing to say other than it's disappointing. I mean, it's disappointing whenever, you know, we do this stuff and we sit here and talk like we're going to get this money. We're going to get this money back from the insurance. We say, why in the world are we getting money out of restricted reserve before we're getting our insurance proceeds?
Oh, it's got to be done this way. This is the way it is. We're anticipating we're going to get the whole $5 million, and we basically wind up with $1.8 million plus possibly another $100,000. two million dollars back
Speaker 192
52:28
out of out of that yes i mean certainly we're also disappointed in the fact that insurance isn't going to get us back to where we need to be with the building however i do think that the way that the fund was structured in the in the letter that said to the extent we received insurance proceeds back we would dollar for dollar reimburse them i don't know that we
knew for certain that we would get the entire five million back
Senator Jimmy Hickey, Jr
Unverified
52:54
okay the policy that we that we have i guess we had a policy correct has has our insurance commissioner or something looked at that to make sure that everybody's paying correctly uh that they weren't required to pay more have as all of that
been through that process have you got outside help
Speaker 192
53:11
so and we we have been heavily involved in that process even at the beginning and then they flew in special people to look at the building i think the issue for us is that the building was so old and in such poor condition
that essentially they said you're trying to replace a yugo with a cadillac um because of the depreciation factor there and so that that is one of the things that has happened to us in in this process is that they're saying like the hvac we want to replace was from the 1960s and that there just wasn't any value there so
Speaker 198
53:49
we didn't have like a replacement a replace a replacement policy on all this
Speaker 192
53:54
or anything no and this is through the state's um consolidated
insurance program and so that's what we all bid in and buy through just uh no
i guess i can't let that happen no this is not through the new insurance policy through the state this
was through the older entrance plan that has now been consolidated. I want to be very clear on this. This was one of the old claims that got
Senator Jimmy Hickey, Jr
Unverified
54:19
moved forward. I understand. So I guess this is the thing, though. Under this new plan that we're doing like this,
if we have some major catastrophic damage, are we going to run in this everywhere where we only get 20% of what some building was if we have some major hurricane or something of that nature comes through and takes out a billion dollars worth of stuff are we are we figure are we about to have to come up with 800 million is that is that or do we need to re-look at this or have we got it structured correctly senator dismaying are you you're i'm yeah i mean at the
Senator Jonathan Dismang
Unverified
55:03
end of the day the state of arkansas had an
insurance policy with someone i don't know if you had replacement costs or acv or what you had it sounds like you had actual value and that's why you're not being reversed for the full amount and also i'd say it's very very normal for someone to have to pay the repairs before they're paid depreciation that's a standard insurance policy and so the state of arkansas was asked to help them come up with the money so they could start the repair process and then become eligible for the depreciation amount that the insurance company always pays later i'm going through that right now myself um but again this is an old policy and regardless and this was always the argument
in regards to insurance the state of arkansas is always on the hook and then we now we may be on the hook for having to cover the cost when it actually happens or we're going to be on the hook because we're going to pay an increased premium to be able to pay back that insurance company later on and so we're always going to pay for the repairs costs associated with it I believe, and I would encourage you to dig into it, but the way that we have structured right now is a way to be able to keep the premiums as low as possible, recognizing that at the end of the day we're going to be the ones.
They're going to be covering the cost of whatever happens, and it's a reinsurance policy.
And so, again, I think it's a much better fit than what we have right now, which is the experience that they're having. And, again, I think it's – yeah, I think – dig into it. I think you'll appreciate what you see. Yeah, well,
Senator Jimmy Hickey, Jr
Unverified
56:31
I think we discussed it some, but, again, I just don't think – I do not believe – and I've seen you nodding your head was the reason I mentioned your name. I thought maybe you wanted to jump in. So, you know, but from my standpoint, this is not what was alluded to
whenever we did this money out of restricted reserve. There was an understanding that we were going to get approximately what we had put out, and I don't consider this to even be close. So, again, I know that we had those discussions and they were all in an open meeting, so we can go back and look at that. I don't know what good it's going to do other than
I just want to make a point of it that I would rather us just kind of been more up front on the front end of this thing and said, no, we're not going to get this money back.
Senator, you're 100% correct. i was in all those meetings not only in the committee room but
behind the scenes and we were under the illusion that this was a full cost paid insurance policy not a depreciation type policy and that we were going to get reimbursed the whole five million now that ain't where we're at and i don't know if the department knew that's where we were when we were going through all that or not but that's what was told to the members is we were going to get the five million back if we moved it over through the insurance and looks like depreciation and old building and cadillac all
hit us in the forehead and now we're three million dollars and change into this am i wrong you're
Speaker 192
58:00
not wrong about the situation with the building and then in addition we only have funds at this point to rehab one of the two buildings that were negatively impacted so am i right or
wrong about the fact that the insurance policy that was told us a year ago moving to five million dollars we get it all back were y'all under the understanding you thought you were going to get it all back from insurance or were you not
Speaker 192
58:25
i i don't think that we thought that we would get all of it back i mean i think we thought that we would get made much more substantially whole than this amount so we were misled I'd be happy to recirculate the reports that I provided I mean the early amount even from the insurance adjuster at that point was I believe lesser okay
Representative Howard M. Beaty, Jr.
Unverified
58:55
represent Beatty you have a question yes mr. so is this another instance
Senator Breanne Davis
Unverified
59:11
of waiting and hoping I would like to say no but I think given the the facts today that we have turned over everything we anticipate plus plus the remaining amount for depreciation on two old buildings that we will only be able to
rehab one so I think I think this is where we are I don't know that
there is any more hoping and waiting well I was more
Representative Howard M. Beaty, Jr.
Unverified
59:37
alluding to the fact that we were hoping and waiting we were going to get five million so thank you representative makes thank
Representative Stephen Meeks
Unverified
59:48
you mr. chair officer to your far right so just listening in on the discussion here these old buildings and how much we're spending on this um has there been any consideration given to the fact that maybe at some point we just
need to cut our losses and look into uh relocating to somewhere that might be a better fit long term for us
Speaker 121
1:00:07
we have looked at that we've been also working with arkansas building authority on these projects they've been great to work with we had them come out to see if it would just be cheaper to raise the buildings right um and the analysis was that it would not be the building the reason we chose to move forward unit three um since we can't do both um we're doing unit three and then
as you guys probably remember we are going to use unit three as the area where we do secured restoration we've been piloting secured restoration in a different unit in the state hospital we're seeing great success with how often we're able to turn beds which saves us money and our daily rate is lower so the pilot so far has been having showing very good outcomes and we are putting out an RFP to put a contractor permanently and they will use unit three to do secured
restoration if and when we're able to expand and we're able to get more funds for construction unit four is right across the court way from unit three so the plan would be to if we can expand if this does show the cost savings we're hoping then we can convert unit four also for secured restoration but the reason we wanted it at the state hospital inside the fence right it um is with our with our security there and not in a different location it's just economies of scale
so we're able to save money because we're already paying for food we're already paying for a pharmacy there we're already paying for security it's very secure inside the gates we already have an intake process so we did look actually at doing it in a building um over behind ash that we owned that now um community correct corrections is using um and we just couldn't make the dollars work right to have something isolated and off to itself so that's why we've worked really hard to try to move forward with all these hurdles with this unit three with the storm damage and then the uh the
secure restoration moving in there because um we do think um overall that will save us money okay all right thank
you thank you mr seeing no further questions you ladies are excused and we will one more time be adjourned Thank you.
Agenda
A. Call to Order
Items for Approval
B. Various Temporary Appropriation Requests
C. American Rescue Plan Act Appropriation Request
D. Infrastructure Investment and Jobs Act Appropriation Request
E. Restricted Reserve Fund Transfer Request
Items for Review
F. Appropriation and/or Fund Transfer Request
G. Cash Fund Appropriation Requests
H. Budget Classification Transfer Request
I. Pay Plan Appropriation Requests
J. Overtime Appropriation Requests
Reports
K. Monthly Reports
L. Quarterly Report 1. Department of Human Services – State Hospital Damage Report
M. Other Business
N. Adjournment
Documents
Speakers
Speaker 3
Speaker 5
Representative Jeff Wardlaw Chair
Unverified
Speaker 13
William Parrish
Unverified
Speaker 37
Speaker 43
Senator Jonathan Dismang
Unverified
Speaker 47
Speaker 53
Speaker 58
Speaker 60
Senator Jimmy Hickey, Jr
Unverified
Speaker 65
Speaker 42
Speaker 83
Representative John P. Carr
Unverified
Speaker 100
Speaker 108
Speaker 110
Representative Jon S. Eubanks
Unverified
Speaker 121
Speaker 112
Senator Breanne Davis
Unverified
Representative Jack Ladyman
Unverified
Representative Brian S. Evans
Unverified
Representative Denise Garner
Unverified
Representative Howard M. Beaty, Jr.
Unverified
Speaker 154
Speaker 157
Speaker 159
Speaker 161
Speaker 158
Speaker 14
Speaker 167
Speaker 177
Representative Andrew Collins
Unverified
Speaker 191
Speaker 192
Speaker 190
Speaker 198
Representative Stephen Meeks
Unverified