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- October 2, 2026
Speaker 5
2:14
of chairs tires all that it's also that would be that's it's completely irrelevant
Members will they grab your seat Representative Jean will you lead us in prayer please? that's over theiddle
Speaker 13
3:30
East right now we ask that your protection be over them we ask you to forgive us for our sins
inrt's name we pray amen with that we'll go ahead and get started members will go ahead and cover all ofbe 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
4:00
you're recognized. Thank you Mr. Cha. we're in section B. these are various temporary appropriation requests the first item B one is a letter from the department of sharered administrative Services
officefice of State Technology. the request is for3.39 million in appropriation lastst month Pier provided favorable advice to the governor to approve a loan from the budget stabilizationrustund. The loan to this 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 officef ofersonnel Management for3.7
million. This is to fund additional technical staff for the performance goals and compensation system. This system will do staff evaluations statewide and appropriation will also provide for a skills assessment of IT personnel it's supported by the state's central Servicesund. B3's letter from administrative office of the courts it's for 191,000. it's provided for court reporters as statutorily required according to the letter. this is supported by the state's centralervicesund. ex t item B4 is also administrative office of the
courts it's for 90,000 in preparation. This is to provide for court interpreters it's supported by state central services fund as well B5 is a letter from the department of Public Safety's for700,000 is to pay claims to victims of crime. it's supported by special revenue that's criminal fees and damage settlements B6 is a letter from the department of Corrections it's for 16,200 inp 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. B7 is a letter from public safety division of emergency Management for 80,000 appropriation. This is to outsource lab testing for radiation levels it's supported by utility fees and B8 is the last letters from the department of Education division of higher education. these are it's it has two requests the total5.35 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. Representativeladyman, what question do you have? right seeing no questions do you have a motion for B1 through8? have a motion have a second have a second all those in favor say aye all opposed eyes have it with that we'll move on to see
William Parrish
Unverified
6:42
thank you Mr Sher 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 at Fortsmith it's for46,998 spinning authority. they have a grant from the Align program at the officefice of Skills Development to support the LPn program at the western Arkansas Technical Center. seeing no
questions do I have a motion have a
second second all those in favor say aye all opposed ayes have it with that we move on to d one
William Parrish
Unverified
7:15
thank you Miss Sher we're in sectiond this is infrastructure investment and jobs actct appropriation requests there's only one it's from the Department of Energy and Environment Oil and Gasmission it's for 16,617 in new appropriation and32,000 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. you need a motion a second
all those in favor say aye all posed ayes have it without that move on
William Parrish
Unverified
7:53
to E1. Thank you Mr chairir 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 statelice is for4.25 million dollars. it's a transfer from the motor vehicle set aside and is to allow the division to purchase 102 vehicles. seeing no questions or a motion and second
all those in favor say aye all posed eyes have it Thank you Miss Shever the review portion of the agenda this is section appropriation
and or fund transfer requests. this is a letter from the department of Education division of higherducation it's for3.5 million dollars in transfer. It's from various financial aid programs to the Arkansas heroes programme. The letter says it's to maximize the utilization of appropriation provided.
any questions seeing none motion second all those in favor sayy aye all postd eyes have it move on to G same thing goes
for g members we'll go through 1 through3 and we'll come back and take questions. Thank you M Sher we're in section G.
William Parrish
Unverified
9:07
these are cash fund appropriation requests the first item is a letter from the department of laborbor andliccensing division of real estate is for60,000
in appropriation is to purchase in the 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 anhvac repair and maintenance project it's supported by license and application fees and G3 is also the division of real estate at laborbor and licensing it's for $100,000 in appropriation is to repair and maintain the HvaC system it's supported by a license and application fees. in a
motion to approve be through uhg1 through through3.
second you got a second all those in favor sayy aa all postd eyes have it with that we'll move toh1. thank you Mr
William Parrish
Unverified
10:01
Char. 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
Speaker 37
10:16
use. senator dissmay yeah I just have a question
Unknown speaker
10:19
for the commissioner staff if you could just go ahead and recognize yourselfammsparrow
Speaker 43
10:50
fiscal director for the commissioner of state lands Peyton Murphy
Senator Jonathan Dismang
Unverified
10:56
counsel for the land commissioner right thank you hey if you could just walk me through a little bit the 250,000 that's a transfer our operating expenses so I'm assuming you're talking about utilities or maintenance or what is that ok and that's in relation to the purchase of the new
Speaker 47
11:10
building. Yes, so we're just going to make sure that we have any available funds for any upcoming issues with the
Senator Jonathan Dismang
Unverified
11:16
new building are those operating expenses more than what you'd anticipated or
similar to what was I mean is it $250,000 more or this was kind
Speaker 47
11:25
of the plan from the beginning that there would be a transfer a current lease so compounded with the lease and the we're gonna finish up the
Speaker 53
11:33
lease in april this is just gonna cover us for
Senator Jonathan Dismang
Unverified
11:36
any unexpected things and this is the building that was purchased in West LittleRock sircember 24 in what was refresh me of the purchase price3.5 OK. and then I guess there was a lease that we walked away from and that's part I'm trying to
Speaker 47
11:53
understand some of the language that was here so we're we're currently under we're 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 ont yes sir are y'all occupying that building? We have access to it but we've moved all of our operations over to the alley ranch Drive location. so when did we move over in april of 25. so what are those lease payments
Senator Jonathan Dismang
Unverified
12:23
that well how much how much is we paid in lease since April of 2025.16 a month.167 I
believe. yes sir and I guess there was no way to sublease or anything else or
Speaker 47
12:34
was that part of the agreement during the agreement we had with the leasing agent they were going to lead they were gonna offer it for lease and if it was leased to another tenant they were gonna let us out of our obligation I was not aware of that issue when we approved the
Senator Jonathan Dismang
Unverified
12:46
purchase of that building I 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 a pretty good burn rate at 160 a month. since april
so all right thank you very much any other questions
Speaker 58
13:04
seeing none do I have a motion have a second motion to second
all those in favor sayy aye all those post do this one more time
Speaker 60
13:28
all that are for the motion say aye all that are
opposed I'm gonna say the motion failed so moving on toi you guys are dismissed sure senator hickey believe me,
Senator Jimmy Hickey, Jr
Unverified
13:44
I don't I agree with senator dismaying. I don't I I remember this. I don't remember
us ever discussing this 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 if somebody not gonna 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 I just want to know what the if there's a path forward or or what's our plan here it's
Speaker 65
14:23
not that I disagree but didn't hear any eyes on the right side of my body when
Senator Jimmy Hickey, Jr
Unverified
14:27
I tookll I said Iy but it's reluctant but again
I mean you can ask staff do they have a plan but members voted twice and I've done that on purpose because I
Senator Jimmy Hickey, Jr
Unverified
14:40
wanted to make sure I called it correctly. don't don't disagree with you. I just again if these are true operating expenses I don't know if they
have funds. Can I ask the ask him a question. so what at this point you're telling us that these are for operating expenses what is your plan since you're not approved here? these were just
Speaker 47
14:59
to ensure that the operating expenses would be covered for any
building maintenance or you know utilities for the fourth quarter OK yes oh yes sir and and that's for the and
Speaker 42
15:09
that's for the building that you're currently occupying or is
Senator Jimmy Hickey, Jr
Unverified
15:12
that for the one that's currently occupying yes sir 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 hope so 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 toipa plan preparations members will do the same thing we'll go
William Parrish
Unverified
15:49
through 1 through 15 then take questions thank you Miss Sher we're in section Oz ispa plan appropriation requests there are 15 agencies that request 25.7 million in appropriation for
salaries match and extra help all cite the salary adjustments that came from implementation of the pay plan within the class and compact.
Can I getdFNA to the table please Mr Secretary, if you would introduce yourself for the record and your cohart and
then I'll ask my question good morning Mr Chairman. good morning committee Jim Hudson Secretary DFfa. good morning Jessica MooredFfa can you tell me what the balance is after this 25 million is taken out?
Speaker 83
16:37
so the balance of that pay plan appropriation will be60 million dollars with that 20 million yes and that's just appropriation for pipeline that's not
the actual performance fund have we had a request fromdHS 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 e 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 still60 million dollars 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 secret you were in those
Representative John P. Carr
Unverified
17:39
meetings sir and we've allowed them to budget pay plan in their annual operating plan I think you know DHS be better you know able 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 it must be just some issues in terms of being able to find people to be able to fill the positions but that'd be a better question for DHS do you want to make sure the committee's aware this request is strictly appropriation there's no funding request that we're bringing understand but there's funding available after
Speaker 83
18:09
this request of60 million correct the is funding ability let me clarify the60 million that's available is for the appropriations the funding for
performance fund is at45 million right now and that's
Speaker 83
18:20
with this 25 in there or without this 25 million is only for appropriation
it's not for the funding that but if you took the 25 million if these agencies use this 25 million, what would be
left in the performance fund iss it 20 million or is
Speaker 83
18:34
it45 million the performance fund is the45 million this 20 million for so the biggest of this is
corrections that was approved last month for the funding release so it's already
received so after they took that funding what's left in the performance fund4545. right thank you thank you
sir senator dissmay I would like for the department of
Senator Jonathan Dismang
Unverified
18:55
Corrections, I don't know if y'all 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 think it'd be important
just to kind of hear what the outcome is probably in its most you know the the most prudent place to talk about it be right now I think as opposed to some
Speaker 100
19:19
of the other meetings we've had we'll stay if corrections won't
Senator Jonathan Dismang
Unverified
19:31
come forward Chad Brown Department ofrections. OK and so just to kind of recap what I was talking about here you know the 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 fulfill before and 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 yes sir senator I'll do the best
Speaker 108
20:11
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 some some answers thatpresentative Woootton asked during our budget hearing and I'm going to provide those to bureau staff should be done with those this week and it will include the answers to what your No I look forward to that I mean I I hope you know
Senator Jonathan Dismang
Unverified
20:34
there was a significant investment not just by the governor's office but by the legislature into the department oforrections one that
was unsolicited but 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 y all to
Speaker 108
20:51
be successful. Is there anything you would like me to include
Senator Jonathan Dismang
Unverified
20:55
specifically other than what I'm gonna provide to representativetorical 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 you for you to look at what we've done and what the results are so yeah I can do that thanks Representative Eubanks
Speaker 110
21:15
thank you Mr Chair could we ask DHS to
come to the table please that's a proper request I see Secretaryjanet mann coming
to the table you guys would introduce yourself for the record andpresentative Eubanks
Representative Jon S. Eubanks
Unverified
21:38
you're recognized for your question. thank you sir.janet mann, DHS secretary. Hi, good morning. Melissa Weatherton, director for
medicaidpecialtyulations. so 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 uhboonville 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 shortstaffed. Thank you Representative Banks. The yes they are shortstaffed. let me start there but the issue was not in our opinion we looked
Speaker 121
22:41
at it not 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 that that yeah and we're having extremely high tone over right now. which is just kind of a snowball effect when you have to work so much overtime 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 single
Representative Jon S. Eubanks
Unverified
23:10
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
23:23
Yes sir they saw an increase with the pay plan that went into effect on July
Senator Breanne Davis
Unverified
23:27
1 which did have us change some of our differentials to 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 that 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 it's it's
Representative Jon S. Eubanks
Unverified
23:58
a delicate balance what is the reason for the high turnover? Is it the overtime solely or is there
Speaker 121
24:07
other reasons? I mean you and I know that historically we've had a high turnover at all the centers because it's a hard job. but right now yes, I mean people are getting burned out with the overtime. have
Representative Jon S. Eubanks
Unverified
24:17
you considered raising the rates to see if that would help solve the problem
Senator Breanne Davis
Unverified
24:27
we have not taken that into consideration. we've just had the pay plan a little over6 or7 months so we're we're trying to see if that was working and would help with the turnover and as we're continuing to discuss it, we look
Representative Jon S. Eubanks
Unverified
24:43
at it almost every week so what's the plan? I mean it I understand that you've lost maybe30 employees just here recently and I don't know how if that was scattered from across all of the human development
centers but it seems like you're getting into a 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 lose30 employees across all
Speaker 121
25:12
ive in the last 30 days which is a very high number. so we're constantly talking about it 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 but this we've just gotten behind and we're just trying to catch back up Well I would suggest that if what have you what
Representative Jon S. Eubanks
Unverified
25:43
you've been doing is not working that we might ought to try something else sir thank you Representativeladyman you're recognized Thank you Mr Chairman
Representative Jack Ladyman
Unverified
26:02
well I've got some of the same questions but first off retention's a problem and I'm
gonna 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 are56 years old a $20 million is a lot of money but working in a building is56
years old it'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 thedH at the HDC's differential pay plan. Now I believe I haven't researched this but 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 not help?
Representative Jon S. Eubanks
Unverified
27:34
So prior to the to the pay plan being implemented this last July we work
Speaker 121
27:38
we were essentially kind of bandating it together. I had come here multiple times before you guys and ask for various increases to our staff we even set upc andA schools as y'all remember so that we could actually make themcAle to pay them more and then the shift differentials for the weekends in 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 paycAs and RNs andlpns 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 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 you know, I'm not going to come and say I think more pay is going to help at this moment. you know we're we're really looking into exactly what is going on all right thank you
Speaker 141
28:59
Speaker Evans you're. Thank you Mr Chair. if others have
Representative Brian S. Evans
Unverified
29:02
questions for for DHS I'll get back in the queue. my question is just for
Secretary Hudson on a separate topic come I'll come back to you I think the other two members have DHS questions.
Representative Denise Garner
Unverified
29:18
Representative garner thank you Mr Chair. I just have a quick question what what are the positions that are that we're losing and
Representative Jon S. Eubanks
Unverified
29:28
how much are they paid? and yet the positions were lazing 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 thec andA level the LPN level
Representative Denise Garner
Unverified
29:44
and the Rn level very good yeah I'll get back with you and we'll talk about some of this Represent beatty
is your question for DHS? Yes it is Mr
Representative Howard M. Beaty, Jr.
Unverified
29:58
Chair. Yes sir you know you said something that I think this committee
and 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 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 gonna 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? would have to go back and ask a simple no will be fineut something in writing and get it to the
committee thank you. DS uhpeaker Evans has a different question you guys are
dismissed from this issue don't go too far because I think there's some questions
Representative Brian S. Evans
Unverified
31:20
on the trust fund coming. Speaker thank you Mr.ir. Secretary the the performance fund this request it's before us today for the $25 million is that for the remainder of the fiscal year or is that specifically for a month that
Speaker 154
31:35
should be sufficient for the remainder
Representative Brian S. Evans
Unverified
31:37
of the fiscal year so looking at the top line that 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 sir OK so refresh my memory Selby's just confirmed that you were talking
Representative John P. Carr
Unverified
32:02
about appropriation only not funding correct but they need the appropriation
Speaker 157
32:05
in order to expand the funding so in other words they're gonna
Representative Brian S. Evans
Unverified
32:13
need another 22,000 to to pay out for the rest of the year is that correct? 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 signific a significant decrease in their funding for the next budget is that correct decrease to
Speaker 159
32:35
the election expenses and not their operation budget. so we allocate4
Speaker 83
32:40
million dollars for the election expenses and they carry that funding forward so that's the
Representative Brian S. Evans
Unverified
32:44
reduction you saw so then the they're line item within their budget for salaries will be addressed in in the balanced budget and not taking a decrease since we already see that they're short for the current year there will be no decre decrease for election
Speaker 83
32:58
commissioners. Will there be an increase at the current moment there
Representative Brian S. Evans
Unverified
33:05
is not so if there's not an increase then we're expecting them to tighten down as the gentleman said earlier to be able to meet their payroll expenses for the
Speaker 158
33:15
year if they don't have enough money now to do that they have sufficient funding to do it
Representative John P. Carr
Unverified
33:22
they don't have sufficient appropriation that's all we're addressing here is a lack of appropriation to be able to expand their funds that are already in
hand thank you some members we've heard explanation do I have a motion for I1 through 15. have a motion do I have a second have a second all those in favor say aye
all opposed ayes have it out of my is passed we'll move on to Jay the
William Parrish
Unverified
33:59
overtime request. Thank you Miss chairr we're in section J. this is an overtime a
probation requests Department of emergency Management requests 16,000 in overtime appropriation to pay for disasterrelated operations and Department ofilitary requests 10,000 in overtime appropriation due to staff shortages.
Do I have a motion for item J? you'll have a second have a second all those in favor say aye all opposed I have it
that we'll move on to the reports Mr. Bill if you would do K1 through 8 and then we'll take
William Parrish
Unverified
34:40
questions. Thank you Mrirr. K one 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 at
the end of last month. The restricted reserve fund in the middle table shows608 million in distributions in overall balance of $1.93 billion the total catasharic reserve fund balance is 1.8 billion news report is our transfers from the water and sewage treatment facilities grant program fun. the second page of the report breaks out the set aside accounts within the restrict reserve fund line06 is the motor vehicle set sign. It was originally allocated 13 million75,000 has already been distributed from the set aside state police today has a request for4.26
million. the new balance will be 8,667,000. the new restrictionserve balance would be 1.929 billion. K2 is the budget stabilizationrustund 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 in the cash balance is 193.5 million K3 it's 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's central services fund report it shows
the fund balance and disbursements as well as the expenditures of each agency supported by that fund. Kive is theation adequacy Fund report and on the second page at the top it shows that the fun bounces from the fifth year 2 through 26. the table shows monthly transactions and the fund had a balance of641 million at the beginning of last month,55.8 million was deposited into the fund that month there are no transfers this leaves the balance of697 million at the end of February and this amount will
build throughout the year unless the department recertifies the need to draw more funding. Case6 is the medicaid trust fund reports I'll start with the beginning balance of this year 26 was491 million. the current balance at the end of February is326 million for the month of February 90 million has been distributed from the fund for private nursing home care K7 is the infrastructure investment and jobs Act report it shows all IIJA awards state agencies as the end of the
month and then K8 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 shows50 million in spinning authority was transferred from the corporate income tax line to the miscellaneous texton. The report says it supports refunds process ing for various refunds including sales tax, motor vehicle and driver services and then Miss Sher 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 March3rd 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 twenty7th. en ra hickey you're
recognized for a question which item K6 andl1 will be the
Senator Jimmy Hickey, Jr
Unverified
37:47
two that I want to discuss today. all right let's get
Speaker 167
37:56
depardHS back to the table it covers both of them
Representative Jon S. Eubanks
Unverified
38:19
Good morning Janet mann, DHS secretary good morning, Melissa Weatherton director for medicaid specialtyulationssenator hickey you recognize
Senator Jimmy Hickey, Jr
Unverified
38:26
thank you Mr chairirlieve it or not I wasn't going to ask you all to come down here until I seen this $90 million burn for February 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 if I go through this it looks like to me that our deficicency is about 20694 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 then another53 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 gonna be at the50 million or we're gonna be at a 90 million? and it's just I know a rounding but it makes such a big difference is 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
39:52
for the question so the month of February was a 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 on our schedule so we did use more of it this month. I would like to make one correction on the report the we did transfer $90 million in total,66 million dollars did come out of the trust fund account or the TMP0900 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. it's going to be it's gonna be lower we think we will end the year with the balance as we discussed during budget hearings somewhere between 150 and200 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 month but I don't know that we won't and and and I know that's not really answering your question but I'm just saying balancing out the 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.
Senator Jimmy Hickey, Jr
Unverified
41:34
and if 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
Senator Breanne Davis
Unverified
41:45
was that correct? for for next year my understanding I'm going to start and Secretary Hudson will correct me is the 100 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 2nd $100 million 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 her to come
Representative John P. Carr
Unverified
42:25
up there Jim that 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 $100 million already in a set aside we're gonna establish a second set aside for an additional $100 million. I fully expect in fy 27 we're going to tap into that you know at least 100 million perhaps more to get us through Fy27 and then for us to have a larger conversation as we get into the regular session about just
medicaid both both on the income and the expense side because I think it's both
Senator Jimmy Hickey, Jr
Unverified
43:12
that have to get address ed OK so based on if we're gonna use 150 million is that what if that's what we're gonna do basically that's gonna average out for another44 million deficit per month for the next four months. I'm just sitting here on the calculator so so if the next month or the following if we if we start seeing that this is averaging more than that then we're then we're even gonna drop lower than the 150 so so I guess that's what we're gonna
start watching for the next four months because like I say if we're thinking that we're gonna get down to 150 I've just been figuring that we're having a deficit of about a little over 20 million but it appears like for the next four months
Representative John P. Carr
Unverified
43:50
it's going to be larger than than that well I think as Secretary mann said you know it's 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 a wholeheartedly agree and we look at it all the time we do think that we're solvent we're gonna be solvent through the remainder of the fiscal year we're gonna have to interject inject some capital next next fiscal year no doubt about it yes sir and just
Senator Jimmy Hickey, Jr
Unverified
44:24
just to go 11 step further and if someone said this and I missed it, I just don't remember I think I had to ask if something was cyclical or seasonal and we didn't really throw that out there if we know if we knew February was going to be whenever I ask this question
you're in 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 asked 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 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 s 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 we're not going to run it to
Speaker 177
45:15
zero I can assure you that. yeah because we'll get into
the set aside thank you sir so looking back I mean it brings up a question I just asked Billy to
look at it look it up but looking back over the last let's just say5 years looking at the third quarter of the of the fiscal year has this historically been a high month of charges is February always hit us this way or has some month in the quarter
and not necessarily February hit us this way kind of give me some historical
Senator Jimmy Hickey, Jr
Unverified
45:46
data that backs up where we're
Senator Breanne Davis
Unverified
45:49
at with 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 can cause
it to be a very expensive quarter. Additionally in the first six months of a state fiscal year we spend about45% of our budget where we spend55% January through June historically so usually January, February, March and then June are very expensive months for medicaid. just
wondered if that was historical data uhpresentative Collins you recognize Thank you this is
Representative Andrew Collins
Unverified
46:36
just for my clarification here so 90 million
is the outbound but there's 21 offsetting it so is it a burn rate of70ish or
Senator Jimmy Hickey, Jr
Unverified
46:50
is it a burn rate of 9 So there are collections every month that will go into
Senator Breanne Davis
Unverified
46:56
the individual accounts 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 it's not a 1 to 1 so we could collect in we could collect fees from past
dental 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 I'm butchering your my answer because I'm getting into de too many details so we took in the money but we did not use that all of that 2 million to match. We use some of it in the the quality assurance fee and then we used the bulk of it in the medicaid match to pay ongoing regular expenses. OK so
Representative Andrew Collins
Unverified
47:46
so they don't really offset so we should look at this as a $90 million
burden right then ok thank you members seeing no further questions thank you for your answers and seeing no other business we stand well you gotta hit a button
Senator Jimmy Hickey, Jr
Unverified
48:21
that we were taking this out of restrictive reserve before getting our
insurance proceeds I see that you all have paid back was at 1.8 million OK recently are we still on track to get all of the restricted money back OK. so how much are we not going to get back we think so because when we started this we had said that we were gonna get the was it5 million let's see how much did we originally do?5 million so
and we just got back 1.8 million. so
Speaker 121
48:57
how much more are we going to get back? 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 like3 times, right? The actual cost is right there in paragraph3. So3 million46,000 is what it's gonna 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
Senator Jimmy Hickey, Jr
Unverified
49:29
we don't have any additional money coming 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 $5
million back sirok why why and again I can't don't know whenever we started this I I believe we we asked question
after question and we thought that we would get it all back amm I wrong in that? I mean I know we've got streaming video that we can go back and see but was
Speaker 191
50:07
that not was that not what this body was told soisty Eubanks DHS so I want to
Speaker 192
50:12
double back to 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 $100,000. so I think what we've been told by insurance that we could get somewhere around $97,000 but we need to have gone ahead and paid for at least $2 million of the construction that is under process 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 ofhvac we knew that there were potentials of depreciation. I believe I did say that and I have those reports out there that 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 one DE and the bid and
Senator Jimmy Hickey, Jr
Unverified
51:28
then the reimbursement would come afterward so basically we've only got 97 maybe possibly $97,000 more dollars that might
we might get reimbursed for this what I call a loan out of the restricted reserve
Speaker 190
51:44
yes that's that's what we anticipate getting back today but that was
Senator Jimmy Hickey, Jr
Unverified
51:48
not what we anticipated whenever we did this. everybodydy was acting like there was we were gonna get basically all of this money
I mean we can sit there and not say anything and I don'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 gonna get this money back from the insurance we say why in the world we are we getting money out of restricted reserve before we're getting our insurance proceeds all it's got to be done this way this is the way it is. we're anticipating we're gonna get the whole5 million and we basically wind up with 1.8 million plus possibly another
Speaker 192
52:30
$100,002 million back 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 and the and 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 entire5 million back
Senator Jimmy Hickey, Jr
Unverified
53:00
the policy that we that we have I guess we had a policy correct hass has our insurance commissioner or something looked at that to make sure that everybody's paying correctly, that they weren't required to pay more as all of that
been through that process have you have you got outside
Speaker 192
53:16
help 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 youo with a Cadillac 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 HVvac we want it to replace was from the 1960s and that there just wasn't any value there. so we didn't have like a replacement
Speaker 198
53:54
a re a replacement policy on all this or anything and this is through the state's
Speaker 192
54:03
consolidated insurance program and so that's what we all bid in and buy
through. just 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 has now been consolidated so I want to be very clear on this. This was one of the old claims that
Senator Jimmy Hickey, Jr
Unverified
54:24
got moved forward so I guess this is the thing though if under this new plan
that we're doing like this you know if we have some major catastrophic damage or what are we gonna are we gonna run in this everywhere where we only get 20% of what what some building was if we have some major hurricane or something of that nature's comes through and takes out a billion dollars worth of stuff are we are we are we about to have to come up with 800 million? Is that is that or do we need to relook at this or have we got it structured correctly
Senator Jonathan Dismang
Unverified
55:04
Senator Dismaying you you're I'm yeah, I mean at the end of
the day the state of Arkansas had an insurance policy with someone. I don't know if he 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 then become
eligible for the depreciation amount that the insurance company always pays later I'm going through that right now myself. 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 that we now we may be on the hook for having to cover the cost when it actually happens or we're gonna be on the hook because we're gonna have 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 mean I would encourage you to dig into it but the way that we have structured right now is a is a way to be able to keep the premiums as low as possible recognizing that at the end of the day we're we're going to be the ones they're going to be covering the cost of whatever happens
and it's it's a reinsurance policy and so again I I think it's a much better fit than what we have right now which is the experience that they're having and and and again I think it's yeah I thinkdig dig into it I think you'll appreciate what you
Senator Jimmy Hickey, Jr
Unverified
56:37
see well I think 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 whenever we did this money out of restricted reserve. there was a an understanding that we were going to get approximately what we what we'd put out and and I don't consider this to even be close so again, I know that we had those discussions
and they were all in open meeting so you know 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'd rather us just kind of been more upfront on the on the front end
of this thing and said no we're not going to get this money back.en you're 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 fullcopa insurance policy, not a depreciation type policy and that we were going to get
reimbursed the whole5 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 as we were going to get the5 million back if we moved it over to the insurance and looks like depreciation and old building andcadillac all hit us in the forehead and now we're3 million dollars in change into this and I wrong you're not
Speaker 192
58:05
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 to us a year ago moving to5 million dollars we'd get it all back where y'all under the understanding you thought you were going to get it all back from insurance or were
Speaker 192
58:32
you not? 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
substantiallyho 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 Representative beatty you have a question
Representative Howard M. Beaty, Jr.
Unverified
59:04
Yes, Mr Chair. so is this another instance of waiting and hoping
Senator Breanne Davis
Unverified
59:16
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 alluding to
Representative Howard M. Beaty, Jr.
Unverified
59:42
the fact that we were hoping and waiting we were going to get5
Representative Stephen Meeks
Unverified
59:47
million. so thank you Representative meeks thank 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. has there been any consideration given to the fact that maybe at some point we just need to cut our losses and look into relocating to somewhere that might be a better fit long term
Speaker 121
1:00:12
for us we have looked at that we've been also working with ArkansasBuilding Authority on
these projects. they've been great to work with. We had him come out to see if it would just be cheaper to raise the buildings right and the analysis was that it would not be the building the reason we chose to move forward with unit3 since we can't do both. we're doing unit3 and then as you guys probably remember we are going to use unit3 as the area where we do secur ed 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 churn beds which saves us money and our daily rate is lower so if 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 unit3 to do secured restoration if and when we're able to expand and we're able to get more funds for construction unit4 is right across the
courtway from unit3 so the plan would be to if we can expand if this does show the cost savings we're hoping then we can convert unit4 also for secured restoration but the reason we wanted it at the state hospital inside the fence, right? 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 over behind ash that we owned that now community corrections is using 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 the secured restoration moving in there
because we do think overall that will save us money. OK all right thank you thank you seeing no further questions You ladies are excused and we will one more time be adjourned
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
Speaker 141
Representative Brian S. Evans
Unverified
Representative Denise Garner
Unverified
Representative Howard M. Beaty, Jr.
Unverified
Speaker 154
Speaker 157
Speaker 159
Speaker 158
Speaker 167
Speaker 177
Representative Andrew Collins
Unverified
Speaker 191
Speaker 192
Speaker 190
Speaker 198
Representative Stephen Meeks
Unverified