ALC-PEER
Video
Transcript
21 documents
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- SliQ live captions
- Model
- SliQ live ASR
- Processing date
- October 2, 2026
Unknown speaker
2:55
Members if we can go ahead and take our seats we're gonna get started
Speaker 7
3:30
let's go ahead and clear clear the the room so we can go ahead
Senator Jonathan Dismang
Unverified
3:33
and get started if you're not a member if you could go ahead and make your way to the audience and if you are a member and you need to have a conversation with someone that is not a member let's take it out to the side room
Speaker 15
4:13
right members chair see some quorum we're
Senator Jonathan Dismang
Unverified
4:17
gonna go ahead and get started with that off bat I'm gonna rep representative MacGruder. thank
Representative Jessie McGruder
Unverified
4:25
you Mr chairir just want to ask this morning that we have a moment of prayer we lost a rep Mr Jesse Jacksonreverend Jesse Jackson last night and we want to make sure we remember him today.
y your heads Father God we come thanking you because we know that we are grateful to stand in this position that we are in today Fa. Father we want to give honor to those individuals who have gone on who allowed us to serve in this position. Father we ask that you open up our minds that we're able to receive the information that we received today and we act especially that you are with the Jackson family who lost their loved one. These not the blessings waxing your sonn Jesus' name. Amen. thank you representative
Senator Jonathan Dismang
Unverified
5:16
emb ers will do this just like every peer meeting we're gonna go through each section all items so B1, C1 and2, d123 we'll come back and if you have a question on an item I will say essentiallyd1 it your mic then if you have a question on d2 let its get through the questions ond1 first again
so we'll we'll kick things off with B1. Thank you M chair we're in section B.
William Parrish
Unverified
5:40
These are various temporary appropriation requests. there's only one on the agenda. this is a letter from the department of laborbor
andliccensing. it's for 273,000 it's spending authority this is to pay administrative costs for their enterprise licensing platform and supported by license and application fees. right thank you members if we have any questions on
Senator Jonathan Dismang
Unverified
6:00
B1? all right seeing no questions what's the will of the committee we've got a motion to approve we've got a second in the discussion
on the motion seeing none all those in favor signify by saying aye all those opposed motion carries right section c thank you Mr. Chair we're in section C these are
William Parrish
Unverified
6:19
infrastructure investment and jobs actct appropriation requests. 1st 1 C1 is a request from the department of transportation this is for $280 million in appropriation it's to provide the IIJA appropriation for the final quarter of the fiscal year behind the request is a 20 ppage report showing all projects obligated with IIJA funds. share number two is on page 22 of your packet C2 is the last page of this packet. this is a request from the department of Commerce state broadband office is for
$195 million in appropriation and to establish an extra help position. This is to award broadband infrastructure grants toet service providers as part of the Arkansas bead programme online and on the screens at your desk is an almost 200 page report that shows colored maps of the provisionally awarded projects for the first tranche. We also received some physical copies from the agency this morning and for the members of the committee it should be at your desk the report details how 15 internet service providers serving over51,000 locations requestst $126 million in grant funds.
Senator Jonathan Dismang
Unverified
7:23
thank you members do we have any questions on C1? rightembers then we'll move on to C2 women questions on C2 Representative Cavanaugh you're recognized for questions on C2. thank you Mr Chair. Could
Representative Frances Cavenaugh
Unverified
7:36
I have someone from the agency come down real quick if you
Senator Jonathan Dismang
Unverified
7:47
could just recognize yourself for the committee and then you'll be recognized for your question Representative Kavanaugh.
Representative Frances Cavenaugh
Unverified
7:56
Glenn howie state broadband director thank you for coming down. I have just really two quick questions on some of these proposed awardees or some of the ones actually not listed on the report. did they ask for any amendments on their contracts you know maybe about the speed that they had previously agreed to or any other conditions that had to be changed on the contracts right so you're you're asking about certain providers that may not be on
Chair
Unverified
8:19
the list today correct? Is that what you're asking on the list or not on the list either one
Representative Stetson Painter
Unverified
8:28
as far as I'm aware no provider has reached out with wanting to update their their project
Representative Frances Cavenaugh
Unverified
8:34
with different speeds or anything like that but they have not asked for
Representative Stetson Painter
Unverified
8:40
a for an amendment from the original agreement OK, so Starlink has sent out to I believe most if not all of the states that they have been provisionally selected across the country wanting certain adjustments to the grant agreement document and so forth we have been strongly
Senator Missy Irvin
Unverified
8:59
communicated to by the NTIA at USomerce that we
Representative Frances Cavenaugh
Unverified
9:02
were not to consider that amendment thank you on that and the second question real quick is once the awards are made,
what plans do y'all have to hold them accountable for their you know communication standards and the timelines to actually finish the projects what what are what are
Representative Stetson Painter
Unverified
9:19
y'all's plan for that? Sure we have a a fully comprehensive risk rated monitoring system that we're going to apply equally across every provider in this program a couple of the
protections include milestone disbursements so providers are only paid when they perform actions irregardless of how much money they have spent so as they perform and build out they get paid out proportionately for the grant that's one way that we protect taxpayer dollars and as far as a the time frame itself under the prior administration we were able to provide points in scoring based on projected time frames of of build out under the current administration at the federal level which changed the rules of the program
last year we were not able to score based on timelines. so there was a four year build out time frame for this program which we will hold them to it's been my prerogative to these providers the whole time I want it done in two years or less that that's my prerogative to them. I don't care how small the project is or how large the project is and that's our prerogative and
Senator Missy Irvin
Unverified
10:16
we'll do our best to to get it done and you'd have enough staff
Representative Frances Cavenaugh
Unverified
10:20
to be able to hold them accountable and you're not going to give out monies until they hit certain milestones. OK thank you all right thank you
Representative Stetson Painter
Unverified
10:31
Representative painter you are recognized for questions thank you Mr chairir Glenn, I know we talked a little bit last time but I got just a couple of quick questions there are 15 companies out of the 21 that you that are presented on
the award list. what is the status of the other six? Sure originally we had I think 20 was was the actual number that we had since that time we've had a couple of providers back out of their
obligations under the program since that time we're working with NTIA to to find a solution for those locations and for three others right back in November I mentioned to the greater body that this is an ongoing evaluative process I will only bring forth provisional selecteees when we are ready to execute a grant agreement with them and so we have 15 today in front of you that we are ready to execute grant agreements they've met all of their obligations and checked all the boxes to date. We continue to evaluate several
Senator Missy Irvin
Unverified
11:27
others and should those pass muster we'll bring them in the coming months
Representative Stetson Painter
Unverified
11:33
OK thank you and my second question what has happened with the recent defaults on the RDOF federal awards for broadband. that is a
great question. That is a great question. So for any members that that don't know there is a separate federal grant program that is not administered by our office it's administered directly by the FCC at the federal level it was very prevalent in Arkansas. a handful of those providers in Arkansas that are subject to that separate federal grant program have defaulted on
some of their locations and notified the the federal government that they will not be able to build out to some of those locations and so you know although kind of in reality and practically and by the rules it's not sort of our program to to satisfy I understand that it's it's politically it's an issue right and we have a job and even though it's not our program and not our funding we're going to do everything in our power to work with those federal partners and see if we can't find a solution for those folks. My last question Mr Chair, if
there's a you know I guess is there a solution with the that's going to be left with the leftover
bead money if so do you know what that might be? Yeah it is everything that we have heard from our federal partners on this is that look Arkansas is in a great position because we ran such an effective marketdriven competitive process. We have about650 million dollars in the bead programme that is sort of excess funding kind of left over if you will after we've awarded these infrastructure grants we expect guidance from US commerce about the middle of next month so middle of March we expect US commerce to say ok states that
have run a great program and you have extra funding here is sort of a menu of options that we will let you look at and and design a program for the extra money. probably they'll give us about 90 days to to produce a plan for them on that so again in short we expect guidance from US commerce probably middle of March with
Senator Missy Irvin
Unverified
13:21
a 90 day time frame for us to then get a plan back to them.y great thank you thank you
Chair
Unverified
13:30
Mr chairir. Representative MacGruder you're recognized for a question thank you thank you Mr chairir
Representative Jessie McGruder
Unverified
13:36
thank you Mr How for all the work you're doing we truly appreciate it. I'm trying to get an update on a completion time for some of these projects and creating and inross County. I know we're we're very patient but I do have constituents contacting me about their broadband service so just trying to see if we had an update on when it will be. close to completion.
Representative Stetson Painter
Unverified
13:55
Sure there's probably off the top of my head there's probably several grant programs operating in and aroundrittenton County on the east side of the state some of them likely are there could be others that are direct
federal programs we will I will get an update for you on that yes sir thank
Senator Jonathan Dismang
Unverified
14:12
you thank you chair thank you Senator Irvin
Senator Missy Irvin
Unverified
14:15
you're recognized for a question thank you thank you so much just a quick question if you have one that has been audited and they're not able to complete the project because of an audit because they haven't really met their obligations as you've laid out. do you have a backup plan for that so that the project can still go forward? do you have a
backup company a backup plan, just to make sure that those areas are deployed the fiber or just talk to me how
that would happen. so when the bead program to be honest with you NTIA is still figuring out
Representative Stetson Painter
Unverified
14:54
a lot of this themselves right and so if we went through the process two years from now and you know someone was not able to complete their obligation right NTIA has yet to date given us guidance on what to do next with that it could be any combination of ok
who was number two in the original bidding talked to them about it see if they can do it for the cost. it could be you know we'd have to do something with the assets right if they built out half the network right we would need to do something with that so NTIA would would have to give us guidance on what
Senator Missy Irvin
Unverified
15:26
to do in that scenario and and at that time if they if we do have to transition to the second one, does that then do you bring that back to us for an update or approval or anything like that. OK thank you
Senator Jonathan Dismang
Unverified
15:42
we go right Representative orpeaker Evans you're
Representative Brian S. Evans
Unverified
15:46
recognized for a question thank you Mr chairirglenn could you give us just kind of a highlevel definition of what what
Representative Stetson Painter
Unverified
15:53
the term broadband serviceable locations means yeah so broadband serviceable location or BSl for short it's simply a a occupied home, right or business with electricity that is actually inhabited or in use right so it doesn't count land or empty facilities and so forth basically in short a home or
Representative Brian S. Evans
Unverified
16:13
business that's active with electricity so then with that definition what this means is through this round one we're going to use $12626.1 million to service51,566 new accounts yeah51,566 homes and businesses correct
Chair
Unverified
16:32
you all across the state Representative Kavanaugh you're recognized for a question
Representative Frances Cavenaugh
Unverified
16:44
thank you when you said that and he asked that question that just something in my mind so if I'm looking down atcnl broadband connect they're getting approximately3 million dollars for 85 so looking
Senator Missy Irvin
Unverified
16:57
at that list they would actually they requested grant amount is $965,000 their match amount that they committed to put
Representative Stetson Painter
Unverified
17:04
up as a part of the project is that is that 2 million so the total cost of the project is right around32.93 million the grant funding for
Senator Missy Irvin
Unverified
17:17
that is 965 and themselves are matching $2
Representative Frances Cavenaugh
Unverified
17:20
million but guess I'm wondering why is it costing35,000 dollars to get broadband to 85 customers. Yeah so again good question you
Chair
Unverified
17:27
know for us we're concerned about the grant cost per
Representative Stetson Painter
Unverified
17:32
BSl right? so for that particular project it was a little over $11,000 per location and that one for us we don't want to go in and like set a price cap or look at those things you know we run a very open
competitive process and you knowcnl bid on those locations and they were the best application for that area and so they were
Representative Frances Cavenaugh
Unverified
17:56
the winner yeah but what makes that I guess what I'm trying to say is what makes that particular area so costly to get internet to great question. generally
Representative Stetson Painter
Unverified
18:05
there's a number of variables to that how dense are the locations are they closer together because if if locations are closer together it's gonna be less costly to get to them so if locations are spread out that can increase
cost how far is that particular ISp from those locations they have to build out further to get to them that can increase cost the type of terrain they ran right so if we're looking at granite or rock it's going to be more expensive to to build there than it would be necessarily like in the delta where it's where it's less friction right when you're building so
Representative Frances Cavenaugh
Unverified
18:40
a couple of variables that can influence that and this is just thinking so if it's so costly to get it there and there's so few customers
have we in the process looked at financial viability if these we're spending our money to get it there have we looked at the financial viability of the providers to make sure they're going to be able to continue to provide
Representative Stetson Painter
Unverified
19:01
those services. Sure, yeah one of the things that we've evaluated across all of our selecteees and this 15 are our financials and viability yes ma'am we've
Representative Frances Cavenaugh
Unverified
19:08
drilled down into their finances to make sure ok all right thank you right thank you
Senator Jonathan Dismang
Unverified
19:16
we had a couple on everybody hopped off is that
correct no more questions? OK. all right thank you very much right members we've heard C1 and two we've went through the questions what's the recommendation of the committee we've got a motion to approve itemsc1 and two we've got a second in discussion on
the motion seeing none all those in favor signify by saying aye all those opposed motion carries sectiond. thank you Mr Chair.
William Parrish
Unverified
19:44
we're in section D. these are appropriation and or fund transfer requests the first one is a request from the department of Correction division of
Correction special language in their act allows to transfer among various capital improvements and construction projects after approval by the governor and ALC the department requests to transfer of458,000 from the female work release program to the tucker union water treatment plant. This is supported by a general improvement funds that were released in fiscal year 2016. Next itemd2 is request from Department of Education division of elementary and secondcondary Education special language allows to transfer up to twice a year after approval by the state
CFfo and ALC. The department requests transferring 25 million from their school funding contingency and national board offessional Teacherans sections to the following 15 million to declining enrollment,10 million to merit teacher incentive 200,000 to school recognition and 16,000 2 Easter seals Next item T3 is a letter from department of shareddministration Services special language and the dispersion officer actc at DFA allows the transfer after approval of the CFfo and review
by Lc Department requests transferring 229,000 from the project development fund to cover salary and match for two positions at the project management office. The letter explains the office is a cost recovery cost recovery agency that's limited to charging for services provided. However, the positions at the office provide services that produce statewide value and are therefore difficult to assign to a specific project. innovation and project development fun provide
support for the responsibility of the statewide project governance, shared tools enterprise reporting and
crosspart project support we shared those are all
Senator Jonathan Dismang
Unverified
21:29
the transfer requests all right thank you members we have questions ond1 rightpresentative you are
Representative Denise Jones Ennett
Unverified
21:37
recognized thank you Mr chairir iss somebody here from the department
Senator Jonathan Dismang
Unverified
21:42
of Education let's is your question educate or d2 or d1 0 sorry
Speaker 76
21:46
it's d it'sd2 I'm sorry on one second we'll
Senator Jonathan Dismang
Unverified
21:49
get there right members do we have any questions ond1?
all right seeing no questions what's the will of the committee we've got a motion to approve D1. we've got
a second in discussion on the motion seeing none all those in favor signify by saying aye all those opposed motion carries are
at d2 Representative you are recognized for a question if you'll hit your mic one more
Representative Denise Jones Ennett
Unverified
22:13
time. thank you thank you again Mr chairir. I have a question about the the decline enrollment if somebody can answer that when you have anyone from the department there we go
Senator Jonathan Dismang
Unverified
22:34
and if you could just recognize yourself for the committee and thenre representative you are recognized for
Representative Denise Jones Ennett
Unverified
22:48
your question Greg rogers department of education Courtney Sali ford Department of Education. thank you. I had a question about the decline in
enrollment is that $15 million? how do you how many districts are suffering
Speaker 88
23:01
declining enrollment? this year there's 152 districts that are on the preliminary list received declining enrollment
Representative Denise Jones Ennett
Unverified
23:05
funds so how do you divvy up the 15 million between those school districts wass how do
Chair
Unverified
23:12
you do that? there's a calculation in law for under622305 we take the proceeding to average ADM of the preceding two years less last year's ADM and whatever that difference is multi by by the foundation funding of this year and I have one more question so it's the
Representative Denise Jones Ennett
Unverified
23:28
15 million is that just the standard or does it go up any or is that just a standard amount
Chair
Unverified
23:37
each year so we have an appropriation line item in public school fund for 23 million and we're projecting that we need about another 10 million in there. we put a little bit more in there in case our preliminary's off but last year the appropriations is 23 million we spent 24 million last year on foundation on declining enrollment and we're thinking somewhere between 28 and30 million this year right thank you and just to make
Senator Jonathan Dismang
Unverified
24:01
sure that I'm clear we're paying for kids that are not actually in the classroom just to make sure that
the districts have an ability to a time frame runway whatever you want to call it to you know stabilize their funding situation OK thank you all rightpresentative Langje greg,
I'm over here what we were
Representative Lane Jean
Unverified
24:24
talking over here what is the total number of school districts today there
Chair
Unverified
24:31
are 260 tra traditional schools and open enrollment charter schools and 150 of them
Representative Lane Jean
Unverified
24:38
are declining 152 are receiving declining enrollment funds this year thank you right thank you members
Senator Jonathan Dismang
Unverified
24:47
do we have any other questions on d2? all right p re s ent ative Ra y just a
Speaker 99
24:56
quick question how long do the districts receive the declining enrollment funds so it's based off
Chair
Unverified
25:01
the calculation it's always rolling so we're looking at the preceding two years from the last year's ADM to see if
they're having a decline and so that calculation goes on that so if a district is declining they could receive
Speaker 83
25:15
the funds each year if they're having that decline that keeps going on so it's two years ok thank you
Senator Jonathan Dismang
Unverified
25:21
all right thank you senator you're recognized for a question
Senator Joshua Bryant
Unverified
25:24
thank you Mr chair. what is the minimum number of s enrollment that has to decline before it triggers the ability for them to ask for declining enrollment. it really depends on
Chair
Unverified
25:35
what's happening in the preceding two years and the last year if
they're having at if the average declining enrollment is going down those last two years and then it continues to go down that third year then they get whatever the difference is that ADm they get that amount of declining enrollment.
Senator Joshua Bryant
Unverified
25:52
so would that trigger even at two students a year for the last three years
Chair
Unverified
25:57
with trigger it yes it could if they're average if their average daily membership
Senator Joshua Bryant
Unverified
26:00
was going down that much yes ok do you know what the average declining enrollment is for the 152 schools? like some schools say6 to800 is
that don't don't have that I I could get that but I
Senator Jonathan Dismang
Unverified
26:17
don't have that on with me today thank you right members we have any other questions ond2 all right seeing no other questions ond2 what's the will of the committee we've got a motion to approve we've got a
second in discussion on the motion seeing none all those in favor signify by saying aye all those opposed
motion carriesd3. that's right d re do you have any questions
ond3? right seeing no questions what's the will of
the committee we've got a motion to approve D3. we've got a second. any discussion on the motion seeing none all those in favor signify by saying aye all
William Parrish
Unverified
26:55
those opposed motion carries eyee to me thank you, Miss Sherwinn Section E this is a budget stabilization trust fund loan request is from the department of sharered Administration Services officefice of state Technology, Arkansas code allows the office of state Technology to borrow from the budget stabilizationrustund after approval of the governor but only after the governor obtains
advice of ALC The office requests4.7 million to implement a new platform for information technology service management portfolio management and centralized change management consolidating IT tools and assessing executive branch applications in an effort to consolidate licenses and modernize applications. The letter says these activities would result in cost savings, improved security and efficiencies. Mr Chair the action for this item will be to advise the governor on whether to approve the loan. all right thank you members do
Senator Jonathan Dismang
Unverified
27:44
we have any questions on E1 Senator hickey you recognized for
Senator Jimmy Hickey, Jr
Unverified
27:49
a question on E1. OK I guess I guess my question's gonna be is the is the cost savings do they have anything in writing that's gonna show that it's gonna fully cover the4.7 million or funds supposed to come from somewhere else to pay the loan back. we have anyone from the
Senator Jonathan Dismang
Unverified
28:04
agency that wants to tackle that right and if you could just
recognize yourself for the committee and then senator hickey probably be best to restate your question
Speaker 108
28:25
thank you Mrir. Jamescaldwell, CFfo of shared administrative Services Jay
Speaker 109
28:29
Harton director of office of state Technology. OK I'm
Senator Jimmy Hickey, Jr
Unverified
28:32
up here and I'll I'll restate the question as the chair asked me to first of all of course I understand that we do this from time to time, so you got4 it's but it in the in the
end it's4.7 million dollar loan that you're getting getting from us so how are you going to pay it back? It says cost savings is it fully is it gonna be repaid fully with cost savings or is there going to be other funds or are you
Speaker 110
28:59
going to be trying to get a higher appropriation or what how are we going to do that the cost savings we expect to come later we don't have an actual number projected a lot of that's probably going to come through the consolidation of different applications throughout the state
the currently OsT has a loan from Adfa for some equipment we had to buy a few years ago that loan ends right before we start paying on this one so it runs through our rates just like everything else so it shouldn't have any impact on the rate because this loan's actually lower than the previous loan but it'll be recovered through rs just like everything else. OST's cost recovery so everything we do is recovered through the rates we build the departments OK so and I heard what you said of it being lower or how from my standpoint and
Senator Jimmy Hickey, Jr
Unverified
29:46
I'm gonna use a term like evergreen is it loan that's that's what I'd call evergreen because if you have that now but you're just rolling it over and we're never fully fully the fully paying the thing off
Speaker 110
30:00
is that actually the case with this no because it was these are for specific projects so that previous loan was for a data center modernization project. this one is to improve Jay can speak better to what this one's
Speaker 113
30:14
for right so this is for our
I spoke to it at the IT communications committee but this is for our implementation of a product called ServiceNow so it's how we deliver our IT services to the other 15 departments and which of course then impacts the constituents because there'll be more efficient on how they were able to do business and to James's point on the application, we we don't know exactly how much we're going to save. we did back in November
we asked all the departments to report all their major applications and current ly that list is sitting in about5,000 applications across the 15 departments we got this from this the spreadsheet and everything and the idea from North Carolina who at one point when they went through it they had over3,000 applications and now they're down to just under600 applications so we know we're gonna see the cost savings we're
just not sure exactly a good example is we know that there's probably 8 to10 different grant management systems that everybody's paying a different licensing it's not a common platform so that's one of the first ones that we're gonna try and tackle but
Senator Jimmy Hickey, Jr
Unverified
31:34
what you're telling me though is cost saving so cost savings is not going to fully pay this because I heard you say that there's gonna have to be a an increase in the rates is that
Speaker 109
31:45
correct no well so what James was alluding to previously we had a
Speaker 113
31:50
data center monetization project that we had gotten a loan from ADfa on that ends so that that project's complete the payoff of that loan will end in June and so we won't be pulling any money off of this loan until July1. so in this payment back will be less than what we're currently paying for Adfa. what are you what are you what
Senator Jimmy Hickey, Jr
Unverified
32:14
are you using these funds for this this loan these these this specific4.7 million dollars what are you using those loan
Speaker 113
32:22
proceeds for so these proceeds are for the implementation the rest of the implementation of ServiceNow which is the enterprise portfolio management system the business continuity and disaster recovery module and then also our governance risk and compliance from a cybersecurity perspective which we're all put in a requirements of Act480 and Act489 and that's
Senator Jimmy Hickey, Jr
Unverified
32:49
fair so we've we've got we've got
what we're going to do with the funding but then the payback of that where where are the additional funds because you're getting4.7 million dollars where are the additional funds gonna come from to pay that back and I've already heard that it's not in cost savings because although we put that in here we don't truly know what they are which is a little odd to me but that's another another thing so where the funds gonna come for to pay this back and then how long is it going to be before we
have a zero balance on that back to the budget stabilization trust
Speaker 110
33:28
fund for that it's the under the code it's a five years is the maximum time we can pay it back so it'll be a five year payback period based on the projected loan payment we won't have to increase the rates over where they are now because we're gonna offset that extra with the other loan we had that's the only reason I mentioned the other loan is because we won't have to increase the rates because of this one yes it's a cost but it's not it's being rep it's replacing
another cost basically so there's no increase to the rates just because of this loan and
Senator Jimmy Hickey, Jr
Unverified
34:01
you're paying the other one out of your appropriation so you're just going to be paying this back out of your appropriation yeah
Senator Jonathan Dismang
Unverified
34:09
it's so the way that I understand it in in talking to staff they have a loan that is maturing it's going to be paid off it's monthly payment is $100 a month just making it up and so now they're about to take out another you know4.7 million dollar five year loan whose payment is going to be $90 a
monthing that they have is a pass through from an agency so right now they're divvying up the $100 a month amongst the agencies in the and that's part of the bill that's sent to the agencies moving forward they'll be divvying up a $90 bill amongst the agencies and that's who we'll be paying for it mean that right so essentially you you had an old car
you've paid off your old car and you're buying another car. Yeah
Senator Jimmy Hickey, Jr
Unverified
34:50
it's just as I call an evergreen loan for for however you're going to do it because at the end of this time where are we gonna be? I guess the one
issue I have I'm not saying I have an issue with your thing but we're sitting here trying to elude that there's cost savings and things like that but maybe there is maybe there's not whenever you come in here before me and we don't know what those cost savings are but we're alluding to it in here it makes it appear like we're going to pay for this whole thing with the cost savings and that's not the case at all all we're doing is using state funds to pay to pay a loan back that we're giving you. so anyway, thank you Mr Chair. like I said, I think we got
where we need to be. I just I want to make
Senator Jonathan Dismang
Unverified
35:34
sure that we fully understand what's going on. Thank you. all right thank you members do you have any other questions on E one all right seeing no other questions
Senator Missy Irvin
Unverified
35:44
senator you're recognized for a question? No so just from staff do you need a motion to not just don't approve it but to advise ok so I'll make a motion to advise. right we have a motion to advise
Senator Jonathan Dismang
Unverified
36:02
advise the governor to approve in accordance with the letter that's been presented today Oh goodness now we're gonna back that off. I would like for you to make a motion for favorable favorable advisement is that right favorable advice or favorable advice Senator Irvin has made a motion for favorable advice do we have a second? we have a second in the discussion on the motion seeing none all those in favor
signify by saying aye all those opposed motion carries that was a new one. right we're moving on to the review section we'll go through all of F we'll take them one at a
William Parrish
Unverified
36:46
time. Thank you Mr. Chair in section F these are cash fund appropriation requests. first oneF1 is a letter from the department of laborbor andliccensingdivision of laborbor wage and Hour this is 200,000 in approparation is to cover the increase in payments made to wage and our claimants after violations have been found in the Fair Labor
Standard Act and Arkansas wage and our laws supported by client depositsext item if two is a letter from auditor states for $15 million in appropriation. This is to meet projections for the unclaimed property claims F3 is a letter from Parks Heritage and tourism division of Heritage is for 8000 insinian authority it's to utilize a grant from the Walton Family Foundation for an afterschool and summer program at the delta
Cultural Center but share those are all the requests all right thank you members
Senator Jonathan Dismang
Unverified
37:31
do we have any questions on f1?
any questions on F2 and F3 is
there any objection to reviewing items F1 through3? or no objections the items have been reviewed. Section G. Mister Chair, we're in section G. this
William Parrish
Unverified
37:51
is a miscellaneous federal grant appropriation request. there's only one it's from the department of Education, Career and Technical Education is for 1.1 million in spending authority. they have a grant from the US Department of Education for the college and career coaches program to assist
students for a postsecondary education or careers these funds will be used to
Senator Jonathan Dismang
Unverified
38:13
expand the program for rural districts all right thank you members we have any questions ong1? seeing
no questions is there any objection to reviewing item G1? rightg one is reviewed
William Parrish
Unverified
38:26
without objection. Section h thank you M. Char. we're in section H. this is pay plan appropriation and performance fund requests 14 agencies request3.8 million in pay plan appropriation for regular
salaries and match. Most cite the salary adjustments that came from implementation of the pay plan within class and compact. laborbour and licensing and the real estate commission also cite the need for extra help positions. There are4 agencies that show a total of 28 million in transfers from the performance fund the transfers are also related to pay plan implementation. thank
Senator Jonathan Dismang
Unverified
38:58
you members do we have any questions on section H? all
right seeing no question is there any objection to reviewing sectionh?
there is no objection. Section h has been reviewed.
William Parrish
Unverified
39:11
Section9 thank you M Sher we're in section I this is the proposed budget manuals guidelines the department of financedministration submitted formatting changes for the budget manuals for the upcoming biennium. Most of the changes clarify titles and more clearly state fiscal years if members have any more questions someone from DFA will be able to go through that manual. thank you any questions
Senator Jonathan Dismang
Unverified
39:31
on I one? aren't seeing no questions or any objections to reviewing on one
seeing none out of my one has been reviewed. Members were at reports do we have any questions on the reports? Senator hickey
Senator Jimmy Hickey, Jr
Unverified
39:49
you recognized for a question yes whenever you say
reports are we doing the eye also I wanna do I I wanna talk about the medicaid trust fund I guess
Senator Jonathan Dismang
Unverified
40:02
we did I already on that's that's an a no glasses today understood
yes we have anyone from DHS can answer questions on the medicaid trust fund or maybe DFfa however you'd like to split well I'd
Senator Jimmy Hickey, Jr
Unverified
40:15
like todHS and then I'm gonna ask uhdFNA something too so
Senator Jonathan Dismang
Unverified
40:59
right if y'all could just recognize yourself for the committee and then you'll be recognized for your question
Speaker 135
41:05
Senator hickey. thank you sir janet mann DHS
Senator Jimmy Hickey, Jr
Unverified
41:08
secretary. Jimtson SecretarydFfa thank you my favorite report as y'all know lets you
slide last month because those was tied up on a couple of other things but OK, back on this medicaid trust fund we passed this legislation to try to at least keep a grasp of where we were. I think we all knew we had a large balance in there
maybe that we were using a lot of that money but that we were going to pay it down to a certain number and it looks like to me that of course that according to the report we've had this thing back from 2022 that we had a balance of660 million in there and that is this for seven months ended this this report as a it be as of the end of January ok, I used7 months but I wanted to make sure because I didn't see that on there so so and then
now as of the seven months for this fiscal year we're down to 394 million and of course I extrapolated that out and put that, you know, looks like to me that's about round numbers about $13.8 million a month that we're declining so it looks like to me that it's gonna get us somewhere oh down to325 million by the end of this fiscal year unless there's some things that are cyclical nature or timing or seasoning
so could you tell me have you run any numbers and and believe that's going to be about where we're at or or is there something that we don't know as far as timing coming
Senator Breanne Davis
Unverified
42:50
in from the feds or other cyclical type things and Secretary Hutson will chime in. so we do run projectje projections we look at stuff every week when we pay claims and we are currently running with our AOP to not have any
alarms on the budget. I do think I don't know what was the number that you
Senator Jimmy Hickey, Jr
Unverified
43:10
said again just to make sure now right now of course you're at394 million as of the seven months ending in this fiscal if I, you know just divide that out which I don't I understand it's not exact it looks like to me that we're going to get down to about325 million at
the end of this fiscal year all things being even so don't know that all
Senator Breanne Davis
Unverified
43:30
things can be even. I think it will be a little bit lower but not very
Senator Jimmy Hickey, Jr
Unverified
43:38
much we do spend more in the fourth quarter lower
than the325 or lower than the394 that you're showing right now lower than the394 so anyway I think I think my point and as a lot of us know, I'm not the only one in here on this stuff.gain, I know that you know at the end of the fiscal year in 21 we're at5042266023688 and then we're down to579491,394
and now we're going to be lower than that it's obvious that we're spinning it down and again, I think we knew we were spinning it down but at what point are we going to say and how much money are we going to say that we want to maintain in that trust fund and then my question to DFNA is for this budget how much are we going to increase that so that's that's kind of where I'm heading because we've been watching this and it looks like to me that this this alligator here is about to show up a little bit
Speaker 143
44:42
Yes sir. I mean I think we we're all agreement that we've been spending it down we knew we're gonna have to put some additional capital in the trust fund sooner or later we have $100 million in the set aside right now that's not been touched that will have to come in at some point we'll have conversations the governor obviously will with leadership as we're working on the budget and see where kind of medicaid you know factors into that in terms of any additional monies that we want to set aside for that but you know the the
path of spending in terms of just the cash burn rate you know it's gonna keep drawing that number down so we need to look at not only from a cash perspective but from an expense perspective as well and what are all the things we can do potentially to mitigate the speed of the cash burn but we we can't continue to spend it
Senator Jimmy Hickey, Jr
Unverified
45:31
down and not respond in some way. sure and I mean I think the time to respond though was before maybe maybe before now and of course we've known this is happening so back to my original question though, and I heard what you
said there about the the money we have so is our intention to just put this in another account and not actually put it in a budget and just to give it to DHS as they need it with another
Speaker 146
45:56
set aside I can't speak to any intentions
Senator Jimmy Hickey, Jr
Unverified
45:59
at this point we're still talking through the budget so what is what is our ideal as far as as an ending balance on this thing from year to year what what are we looking to have because like I say we've been at660,688 and there's probably an argument that that's too
much. I I will say that. but what what are the discussions been on where we need to be? Is it is it400 million or is it going to be the350 million or is it 200 million or or what what and now I know that's subjective but surely we've had those conversations
Speaker 143
46:33
we don't have a recommended number at this point again that'll be part of the conversations about preparing the budget and what if any additional capital needs to come in on top of the 100 that is still there and has not been moved in the trust fund yet
you're you're just talking about in the set aside that
Senator Jimmy Hickey, Jr
Unverified
46:54
we've done yeah but it's it's dedicated to medicaid yeah I understand which is gets and I heard your conversation to Representative Kavanaugh last month about the you know a balanced budget. I'm in agreement with her that it's not all things being equal you know you put all your debits and all your credits in so me and you don't exactly agree on some of that because I wanted it I personally want to see it. I personally want to see it where it's in the budget and I understand we can't be exact
especially with this thing but so I guess this is the start of conversation for the budget hearings I will, I will definitely be wondering if we've come up with a number of what we want to maintain in there and to try to make sure that how much money is not in the budget that we're just putting in some set aside or you know that too so that we're all as that
word we like to use very transparent that's a we'll be speaking to it in the budget process thank you Secretary Hussey and thank you Misss mann. all right thank you
Senator Jonathan Dismang
Unverified
47:49
Representative Cavanaugh you recognize hold on thank you
Representative Frances Cavenaugh
Unverified
47:56
my question is as we're looking at this trust fund, are you projecting any real changes to our medicaid rate so that we know are y'all projecting that when you're looking at what we might have to put in there are we looking down the road to see what might actually happen to our raid or you know what we're going to have to actually start matching are
we looking at all that when we're projecting what might be in this trust fund
Senator Breanne Davis
Unverified
48:20
yes ma'am if you're referring to the Fm map that changes everyoctober one we do have a tentative number for that and we do build that in. we have a range usually that comes from the federal government of what it could be and we do try to look at those the high and the low of that range and that'll
Representative Frances Cavenaugh
Unverified
48:36
be used when y'all determine how much we might have to put back into the trust fund. I guess that's that will be one of the many factors I'm assuming that y'all will be using when you're looking at that
Senator Breanne Davis
Unverified
48:46
for our expenditures that then will become part
Representative Frances Cavenaugh
Unverified
48:51
of the cash flow discussion for for the trust fund and when we're looking at our expenditures do we have any sort I know you don't have a you know a way to really kind of know this but you might have a feel for are there any real expenses that you think that we're having some health crisis within the state that's going to raise those expenses up are you seeing anything that's alarming that's going to make us have to pay more out than what we originally had thought.
Senator Breanne Davis
Unverified
49:23
as far asium I think as we work through our rules that will also
Speaker 154
49:31
determine certain things. OK all right thank
Senator Kim Hammer
Unverified
49:34
you thank you senator hammer thank you Mr Chair we're here to the right the full ramifications of everything that we passed during the last legislative session or kind of tagging ontores representative Kavanaugh things that may have come up unexpectedly that may attribute to the declining balance have
those all come into play and been put into place or is there anything looming out there that you would identify that's going to be taking more money out of
Speaker 135
50:04
the balance as of today we have not implemented all of the rules from
Senator Breanne Davis
Unverified
50:07
the acts of last session we are working with Cms and this body to get those implemented those could have some impact to the best of our ability the medicaid program will try to function with the current balances as we implement those. so do you have a price tag that
Senator Kim Hammer
Unverified
50:26
goes with about how many about how many pieces of legislation
that you've not processed the rules for yet are still lingering out there and have you calculated what the price tag is that is associated with those don't have an exact price tag we
Senator Breanne Davis
Unverified
50:42
have over 10 outstanding rules that we are working through withcms because they've asked some questions and until we solve those questions and they approve it would be hard for me to finalize a forecast of those expenses chances of that
Senator Kim Hammer
Unverified
50:57
happening before fiscal session would be what nil to none or it's
Senator Breanne Davis
Unverified
51:00
a 5050 I mean we we meet with Cms every other week. via conference call in in between we send information back and forth so we are working on it daily. Senator
Senator Kim Hammer
Unverified
51:11
Hudson, you look like you want to say something. Well I
Speaker 163
51:13
just think it's you know, I think since you you bring up the you know kind of the mandated benefit side of things it is an important topic
Speaker 143
51:21
for us to be mindful of that any time we pass something that says that medicaid's gotta pay for something there is it's a direct
impact on the cash balance in the trust fund and so there are things that you know will be want to be mindful of as we go into session next year about increasing the spin rate coming out of Medicaid it's when we when we solve this problem we got to solve it both from you know cash coming in but also managing the cash going out well just
Senator Kim Hammer
Unverified
51:45
sooner than later when you know the price tag on those things thank you. I'm gonna senator irvin
Senator Jonathan Dismang
Unverified
51:54
in just a second but we also had the big
beautiful bill and that additional funding that's coming into the state you know I mean I'm assuming there's going to be a lot that's going to happen in conjunction with those additional fundings and actually our current medicaid spend possibly especially program implementation in in that sort of thing may not be the
day to have that conversation but when we get into the budget meetings I believe it
Speaker 143
52:19
will be for sure I think generally some of the concerns that you know potentially uhpresentative Kavanaugh raised in terms of just health factors that are out there in the state you know
chronic diseases there's a lot we're going to be able to do with that billion dollars over the next five years to hopefully drive down claims costs not only for medicaid but
Senator Breanne Davis
Unverified
52:40
also for private insurers as well and and may I add that that those funds and monies that will be distributed cannot be used for rate increases and they cannot supplant anything that's currently in place. they will have to be used for outcomes and new new things but I'm assuming
Senator Jonathan Dismang
Unverified
52:54
it's going to work a lot like it did when we implemented the private option
later on our home whatever we want to call it there were current expenses that were being paid at a lower match rate in medicaid and those you know through a process were adjusted to be part of the new program or we ended programs or whatever we did because they recovered otherwise I'm assuming there's some of those things that are going to happen which hopefully will ultimately lessen at at least at the end of the
five years the burden on our medicaid state dollar contribution senator I think
Speaker 143
53:31
there's there's gonna be a whole bunch of initiatives that we're going to be able to fund with the federal money to establish an ROI over the next five years and once we determine there's a positive return on that investment then we can look at turning on the the payment factors in medicaid to be able to control those
Senator Jonathan Dismang
Unverified
53:50
costs using Medicaid funds right thank you
Senator Missy Irvin
Unverified
53:53
senator Irvin thank you think it's a good reminderd talking about just kind of the schedule and the flow if you don't mind just
repeating like refreshing us about the the flow of those revenues and the value of the Medicaidrust fund but how it changes based on timing of the year and why it's important that it's you know secure but but there are times where there's an ebb and flow but do you mind I think it's just a good time just to have that refresher from you about this as
a utilization tool for that revenue as it relates to either the beginning
of the fiscal year the the change in the Fm map etc. that's my first question if you don't mind I think it's important just to state that when it when we come to the medicaid trust fund so that we understand why it's
Speaker 135
54:47
in place and the utilization of it thank you for the questions so the medicaidrust fund is a compilation
Senator Breanne Davis
Unverified
54:52
of many different funds some of them have very specific uses that are used for quarterly payments to providers the providers put up that state match through those funds so
there is some ebb and flow every quarter of those funds and we try to match those funds and spend them within the week to two weeks that we do obtain them because we're holding those monies for those providers in addition the carry forward account and the soft drink account can be used for any funding in the medicaid program as as needed and so we do use that on a quarterly basis depending on large expenses that are either due or after we have
used our SGR and other funds that's in our paying accounts or things if we need additional monies that's when we use the trust fund. So on a quarterly basis it does ebb and
Senator Missy Irvin
Unverified
55:47
flow quite a bit. thank you for that and then my next question is it is going back to whatpresentative Kavanaugh stated but we did see we do have to respond legislatively which we have done you know, legislatively particularly when it comes to labor and delivery. So I mean that's that's something that you know we I just want us to be very mindful as we're having these
discussions with medicaid that it's not a one size fits all approach. there are there are critical health concerns and issues in the state of Arkansas that we together have come together executive branch and legislative branch to address and so but there are other areas where we have said you know what we're good and that needs to remain flat rate solid rate whatever so I think it's really important just to have that discussion that and recognize you know we did that
particularly with labor and delivery because of what's happening and we know that those rights have to be adjusted you know for labor and delivery so that we don't lose any more you know, delivering units across the state so I just I wanted to add that because I think it's an important discussion point and I'd love to see you know changes that we've discussed to help make this trust fund more solid you know as far as hos hospital assessments and things
like that so I think it's a just a good point of discussion but I appreciate the fact that we came together to say rates have to be increased for lifero deliveries so that women
can have healthier babies and healthier deliveries. So I just wanted to add that to the conversation.
Senator Jonathan Dismang
Unverified
57:24
thank you for letting me Mr Chair. Absolutely. right thank you members we any other questions on
this report or any of the right seeing none with that I think we've concluded our
Unknown speaker
57:38
business for the day thank you for your attention and time we are adjourned
Agenda
A. Call to Order
Items for Approval
B. Various Temporary Appropriation Request
C. Infrastructure Investment and Jobs Act Appropriation Requests
D. Appropriation and/or Fund Transfer Requests
Item to Advise Governor
E. Budget Stabilization Trust Fund Loan Request
Items for Review
F. Cash Fund Appropriation Request
G. Miscellaneous Federal Grant Appropriation Request
H. Pay Plan Appropriation and Performance Fund Requests
I. Proposed Budget Manual Guidelines
Reports
J. Biannual Report
K. Quarterly Reports
L. Monthly Reports
7. Infrastructure Investment and Jobs Act Report
M. Other Business
N. Adjournment
Documents
Speakers
Speaker 7
Senator Jonathan Dismang
Unverified
Speaker 15
Representative Jessie McGruder
Unverified
William Parrish
Unverified
Representative Frances Cavenaugh
Unverified
Chair
Unverified
Representative Stetson Painter
Unverified
Senator Missy Irvin
Unverified
Representative Brian S. Evans
Unverified
Representative Denise Jones Ennett
Unverified
Speaker 76
Speaker 88
Representative Lane Jean
Unverified
Speaker 99
Speaker 83
Senator Joshua Bryant
Unverified
Senator Jimmy Hickey, Jr
Unverified
Speaker 108
Speaker 109
Speaker 110
Speaker 113
Speaker 48
Speaker 135
Senator Breanne Davis
Unverified
Speaker 143
Speaker 146
Speaker 154
Senator Kim Hammer
Unverified
Speaker 163