ALC-JBC Budget Hearings

The afternoon with where we held this morning and I think Mr follow the N. and D. F. and they have an explanation on the interest in how the interest is accrued and and spent so if we would will recognize St Paul lows in. Thank you Mr. Follow him if they officer County. There's a question earlier this morning earlier today about the cash or investment earnings. If the thousand foot level breaks down this way. General revenues special revenue generally go into the securities reserve fund and that fund is used to fund separate the items within the state budget it's not specific when it goes into that part back to an agency. It's the distributed on a monthly basis. According to a formula and the I'll go through that more in just a minute. Trust fund specifically on their interest back and is credited back to them and their cash funds that are designated within in their call in funds and those cash funds held by agencies get their interest earnings back on a monthly basis also. So that's the base where the interest is put out there. Securities reserve fund has the interest earnings from federal funds general revenue some miscellaneous and as I said most special revenue funds. A monthly distributions may. And that comes out to to the cash in treasury funds the influence get their distribution each month the State Highway and Transportation Fund discerning from their phones each month game protection fund of the game and fish commission yes Sir funds each month. And then specific federal funds to help America vote Senator government services and the cares Act funds got their interest each month. At the end of the year there is a five million dollar transfer from that securities reserve fund to the budget stabilization trust fund. There's twenty million dollars goes to the highway department. And then there are reimbursements that are eligible from those earnings also. the correction form fund is one of those reimbursement funds the Department military call up account disaster assistance fund. The station will services and the board of election commissioners does. That funded securities reserve funds taken down to a hundred thousand dollar balance year in and that starts the next year's fund balance any remaining funds and go the catastrophic reserve fund at the end of the year. You'll bear with me just a moment I'll give you some idea of what happened in twenty two. And the fiscal year twenty two there was just it was just shy of seventy million dollars earned in interest. The highway department of received a little over six million dollars in interest game and fish protection fund got just under seven hundred thousand the end funds with the cash because the agencies got a ride at one point four million federal funds nine nine hundred ninety two thousand. County Aid. Is a municipal a each receive seven hundred and fifty two thousand almost seven hundred fifty three thousand dollars and that is a percentage of what those to the highway department on there are. station will services got a hundred eighty the other seventy nine million I'm sorry her absentee nine thousand constitutional officers got eighty six thousand. Budget stabilization trust fund was repaid seventeen million eight hundred and fifty thousand dollars and along with it got the five million dollar annual transfer. Catastrophic reserve funds transfer was given nine point nine million dollars that year and. Okay the report and I've got represented within the first. Thank you for coming thank you for putting the information together with you probably knew that off the top you have but my question is I got a report here you're talking about several million dollars for the highway department game consists of real report here that the parks and tourism invested or had a fund balance of twenty two well twenty three million dollars and then made thirteen thousand dollars on that and I've got another example here of investment of one point one five OO million and that made almost two hundred thousand got another one on this page one or two jurors were from you all thank you you will put it go again they got Twenty nine million but no interest is shown now understand. Is twenty nine million five hundred thirty six thousand five hundred ninety three dollars. stand that the interest on all these funds could be used in different places. But we never see that. We we we we never see or understand or comprehend I don't understand maybe you can answer the question. Well we don't have. If the agency pays interest during the year or what is now a line item in their budget and if they have a funding sources everybody I went to everyone of DFA's. And any that had a fund balance. There was no interest income shown anywhere. I just think when you've got two million three million twenty million or forty million invested. You're making interest on it is also be shown as income wherever it shows up if if that the agency does not get that money back some other agency does the nail to show interest income. Because that's a line item. A funding source to them they're using that money. It is that makes sense yes are are we are we do that are you ready here in a minute if you get something like that are you with you know. Here's here's what this boils back to the let's go through the Three County just spoke. We do that. All right the twenty nine million dollars this P. T. phone that is not in the fun that specifically gets its interest back is not a truck okay is not here with us it will where did that money go it it's back into that big part that I spoke of the first is a water revenue will and so it goes into that big part. That I spoke about and I talked to just a second ago about where that money. So it goes into that goes into that big pot now that is divided up among other agencies yes they all okay would do they in can you show me any budget in here other than one well we went through the day this shows interest income under funding source I have to go through the budget matters are of not not many of what is the. Who draws the rules who was going in there it should have been listed as a other funding source. I guess okay okay hello to everyone that has a ten million dollar fund balances and show thirteen hundred and twelve dollars in others so funding so that don't fly. We'll. Run the funding and where is that money going again it depends on where that fund received interest back directly to the fund or not. Because what you're going to find is most of these funds do not receive their interest back okay is going somewhere here's the point you're you're you all will list I'm trying to use the point. The money is going somewhere and it needs to be reported as income so the taxpayers of this state no there were being I don't call managing alone call thirteen thousand dollars over twenty two million dollar. Investment is much to return. Yeah something's not right and I will it is it has to be safer to or lower is. What what can we do not have in our budgets if if an agency pays interest I'll own board money short is a line item is expensive to expenditure and then the show in funding sources because they also make more than thirteen thousand one twenty two million twenty three million dollars I will I will go back and look at the specific accounts to see what the issue is there's obviously an issue when you look at the end people here use you for. Well I will hear you say and I know you will over a long time and I have a great deal of respect for you thank you Sir. But the problem is. We're not showing it as it should be shown at least in my. And you. And several others have expressed the same thing. If the agency pays why can't you answer this why can't you have a line monthly pay interest out is for the budgeted in my business I knew exactly what my interest outflow was going to be a year. I knew exactly what my income was gonna be from funds invested. So what can we do that and what can we have that own these budgets. If the fund that we're looking at hand interest income it should have been listed under other all this on this the if it's if it's paid out it would show as an expense. Okay it will be grouped in those accounts that or are to categorize as interest expense well it is when you look at the detail of the of the GL detail when you start looking at the budgets they roll those numbers up to the cabin categories of operational expenses have the allowed Ms well we need to change that we need to break the that what is what is going to take a law Michael had to invoke Siri should manual wrote to ask you all to please show interest expenses and interest income if I have to I will. Again the for the and I'm school Beyonce we I have looked at a budget menu one through four years but when I did that when you looked at those there's a page that rolls it up to the commitment item level the twos threes owes close commitment items or salaries benefits just a behind that there's another page that has general ledger detail. And if there's an interest expense it should be listed at a general ledger detail number. Okay we don't see that well again I have to look at the budget manual that you were handed but that's what I used to see when I look at it we don't we is not is not shown in these is budget as a interest expense our interest income that's the point that that's all I got you know this this simple to may. I understand I mean if you if you you've got the number anyway you ever agency should have it we haven't and if they give interest income even though they don't even if they don't they have nothing to do with the money that raise the interest. They still get that income in interest and I should be a category unto itself well if I receive interest we have that on the general ledger is interesting come in if they spend it we have it on the general ledger as interest expense I have to the state's financial statements that is transferred over to your budget means and as I said I'll go back and look take an agency you go through and look at it after we get through here today but that that information is in there somewhere because it has to be the balance back to the to the general ledger I'm sure does I'll just I'm not questioning the the this the system is questioning is not showing up here and you're talking about a pretty good amounts of money when you look at the fund balances mmhm and then the other show interest income. And they're not being included in the fund balance so all I'm asking is just to break it out interest income interest expense and that's all Mr chairman and committee of thank you for your For Barron's but I just feel like it's something that we need to we need to look at in more detail thank you very much thank you for your time and have it checked thank you representative within given city would work with them we get a break out on the. Of not saying any more questions we covered this this morning we are. Yeah. We are ready for a motion for number five state parks and tourism. The Division. Executive wrecked I have a motion of central Leding of a second. Second represented Richmond all in favor aye. Posed thank you Mr Leo thing for your report and we will now go to. legislative audit his report if you will come on up. If. Your letter douche yourself in. We're ready for your report. Kevin White legislative audit. Matthew Wilson Arkansas legislative audit thank you receive. I want to present the our findings for the two thousand twenty. Defied apartment audit. There to findings that year the first finding was a situation which three revenue officer employees or circumventing controls in processing the registrations on both new and used vehicles preventing the state from collecting any sales tax due. These employees processed over four hundred improper transactions in which they allowed owners to register their vehicles by either paying an amount below the sales tax due or nothing at all. One of the employees actually process registrations on two of his personal vehicles in this manner. The total amount the three employees benefited from improper transactions cannot be determined based on how the situation was carried out. The amount assessed to the restaurant owners total over eight hundred ninety thousand dollars. This amount includes five or fifty three thousand dollars in sales tax due and the rest being penalties and interest. All the registration process in this manner or suspended in the system until each vehicle owner contacted the FAA to have the issue resolved. One employee was terminated from their employment while the other two resigned. The employee who process transactions on his personal vehicles was charged with two counts of forgery and two counts of attempt to evade or defeat a tax. Second finding involved a Springdale revenue office employees circumventing controls surrounding the deposits of daily collections on five separate occasions the employee did not deposit the entire day's collection calls in the bank account to be a an overdraft status. The deposits retained by the employee range from four thousand to over eleven thousand dollars. However the employee did end up depositing the rest of the misappropriated funds the very next day after each. Collection should have been a deposit resulting in no loss to the state. When questioned by the five Fishel's employee knowledge delaying the park portions of each deposit and resigned. Okay we'll present the single or findings. Thank you Mr chair while Mr Matt Welch presented the findings for definite related to the financial audit I'm going to present the findings under the federal single audit that relate to the FNA these findings are the for the fiscal year ended June thirtieth twenty twenty one the F. and I had three findings under the single audit all three findings relate to the crown of ours relief fund these findings are included on pages seven through twelve of the agenda attachment the findings the first finding relates to the cities towns and counties project the finding relates to the supporting documentation on hand with the FNA for funds dispersed to local entities based one legislative audit's review of the support we identified exceptions with expenses incurred outside the allowed time period for the federal grant also an exception was Notre relating to expenses already reimbursed the local Ansty by different federal grant the second finding relates to known or likely fault fraud affecting the federal award legislative audit became ill where during the course of the audit of certain payments by definitive vendors for products never received Furthermore a civil lawsuit against various companies and individuals was filed by the Arkansas Attorney General alleging actual or constructive fraud in October of twenty twenty one due to the federal reporting requirements we have included this is a finding in a report the third finding relates to the reporting of the expenditures under the coronavirus relief fund to the federal government based upon legislative audit's testing we identified various instances of reporting heirs as detailed in the findings on pages eleven through twelve of the agenda attachment. Thank you Mr chairman thank you Committee that concludes my presentation the fiscal year twenty twenty one single audit findings related to the F. and I. Thank you in and these have been through the audit said committees that correct. Yes Sir could have couple of mine recognized anyway that they have had some legislative overview and I have a question representative with you're recognized. Okay. On the. Page nine. Is this is this the ten million. Dollars that was paid before we ever got the merchandise before we ever received yes Sir that's correct this is it we're we're do you know where the litigation stands at Sir I've I try to keep up some slightly with the filings in court I believe that some of the entities have gotten maybe default judgment maybe some of the entities are still looking for I think possibly one had some money they were looking to turn to the court Tiffany's gonna be better informed of the current status of that that case though okay can we hear from. Yes they will be coming up okay thank you. Not seeing more questions thank you gentlemen for your report. yes all of you come up with your address and be great. You're represent Rudin's question. I did thank you Mr chair Paul Garant partner finance administration of representative wooden you inquired about the on going civil litigation that we are DFA's involved with along with UAMS we do a number of meetings that we had with the attorney general's office of the Attorney General commenced a civil action against a number of different companies and individuals that In entered into agreements with the state of Arkansas to provide personal protective equipment as well as ventilators. we've had a number of hearings in the case of the case is pending here in Pulaski County there are so. A few individuals in that litigation that have been unable to be physically served with litigation due to being Unable to be located by the attorney general's a process servers but certainly at this at this time there is one individual that is down in it serves an escrow agent that has a proxy for five million dollars held in escrow from what for one of those transactions we're we're making efforts to see if we can get that money to be paid into the registry of the court but and currently that's where that led to litigation stands we have not yet got a full recovery of those funds with the attorney general's actively working on the case. Question from Mr were can you explain how this happened I mean why why does one work I know research and I understand the emergency medical medical emergency and all that but one we paid ten million dollars to affirm over in China before we ever got the merchandise I know I think I know where the money went but. Well Sir under those funds were paid to a escrow agents here here in Arkansas of course that the product was originating at least somewhat from of the product order from outside the United States but certainly the I. think you he did not right to the point is that it was urgent we were dealing with a pandemic and certainly there was also a scarcity of these items being need that were crucial to providing care for patients here in Arkansas as well as the care givers in Arkansas but certainly under normal circumstances you would have a much more you have a different process in place for for obtaining this this type of these items that were being purchased. I don't like him do this but I just don't understand. The N. L. ten million dollars. Ahead of time I yeah I could understand making a deposit. Upon delivery. We pay the balance but is this going to procurement and that was what was this for a UAMS or was it for those from the health department who was is for DFA works in conjunction with UAMS for purposes and and their pre correct procurement team and this did not go through ordinary procurement because of of the state of emergency to the pandemic. but as I stated earlier that these these funds were paid to escrow agents that were located here in the in the United States and that the funds would not be released to the of endorsed until they had fulfilled their that the vendors have fulfilled their obligations under the agreement. Well do we. Do we know this firm do we know them I mean. Tell me how this all came about can you or do we need to get some of their from UAMS to. I mean all you should in Lisle yes Sir all those in the estate of. What was happening at the time we were but we were using of our a U. M. S. who is working with the Escrow agents along with other brokers to secure the in the products that we needed. And we were given like in this case we were given money to them and it was going to the inspiration for safekeeping until such time as the product was delivered. They would not schedule production and put the stage name or what was going to be made until receipt was a knowledge about that estrogen are they would not make the product assessable. we had to two three times even after we did that we got out of the airport after the production was made and western and it was then sold to somebody else. At a higher price than what we had originally agreed to purchase for. Just to be honest with the wild wild west there are all kinds of things going on we had to do what we had to do to make the purchases we needed as it turned out for for did work out as well hello Reston you know we got the product with that in it was I was distributed to the people we need to a good example is the ventilators we had an order coming into New York state no business form. And they were transferred from delivery to us to deliver the state of New York state. it's unfortunate happened I understand that but we did what we could save the money at that time thank you that an escrow agent would be of a reputable business and do their business in a reputable matter is simply not have. Okay one more question do you know of any other state that the. That has ended up like we have. As any other states filed suit that you're aware of. representative I'm certainly aware that and we keep informed of the active cases that are involved there there the cases like this both of a civil nature and a criminal nature very widespread in the United States so I wouldn't say that we are uniquely experiencing this situation but certainly is loading pointed out you know the Far majority of the the matters that we were ordering product the the vendors in the brokers they they worked appropriately these particular transactions at issue we did not get performance from the vendors and and the brokers unfortunately but working very actively with the Attorney General to get our get this money returned to the state of Arkansas okay thank you Mr chairman thank you all. Thank you representative Cavenaugh your question for the general. You're recognized thank you Mr chair my question is if we gave the money to the escrow agents. Why don't we get the money from the escrow agents. They are they are parties to that litigation and we work we we have sued those escrow agents as a part of litigation we made every effort to get those escrow agents to pay those monies into the registry of the court here in Arkansas they have not agreed to do so. But will certainly making every effort to have the court compel those aspirations to pay the money to the registry of the court okay when we checked out these escrow agents did we do due diligence in finding out if there were any claims against them for some similar action by other people no there. With the. Okay the other question I have that's very telling the other question I have is will we be required to pay this money back to the fans if they audit this. I would think so okay thank you. Representative Tosh you're recognized. Thank you Mr. While ago that the process server. Has not been able to serve a some of these individuals with against is civil litigation that is pending I guess what I'm curious about is how these individuals are is a attempt by them to avoid the serving of these of civil papers or is it just a lack of effort on the process server or do you really know what this point I would say that that it's for certain defendants in the action it's the being unavailable for service within the United States that some of these entities are located on the western part of United States and they have been unable to be found physically within our borders of the United States. The farmer Jordy of the defendants have been served. Okay thank you yes Sir. Senator Elliot you're recognized. Thank you Mr chair I remember well the. Chaos at the emergency that we're and that's the best word I can think of for it was really chaotic and and the wild west it is that we went through I remember reading a great deal about we thought we had something that we don't because New York has more money than we do and so forth. And from several years of serving on the review committee I know there can be different ways such as you know sole source that we go through the procurement process and in this case It was or something a in this state of the Emergency that we use some other process that's in place that since we did not use a regular process exactly what what is the process that was used. It boiled down to the fact that we had a gentleman that you M. S. that had years of experience procuring these type of products had knowledge of brokers that could help us and he was assigned to go out and find what he could where he could at the best price we used whatever weeds he came up with the purchase the product. I don't remember remember Was that ever reported to the review committee our was it just totally a standalone process. My best guess is no if you remember we there's a law that says that an emergency we can wait processes procedures and we put that notice that out it was made public and we did the best we could that's a big difference in that and also source contract which you know give some of this heart burn sometimes the big differences time. We have the time to go through the process for sole source. Emergency is don't respect our timelines and so I would guess good bad or ugly that's a position we were in not time for sole source which it would have been. Had we been able to follow that timeline but it was just a matter of time that somebody we had to do something and under the under the emergency procedures that we have this is how we were able to do it and it's it stands it does stand to reason to me that when you do that you don't have time to do all of the background check and you need to do you do what you can to do the best you can and hope we have folks who are a legitimate I will do what they're supposed to do but it's just like loaning your. I'll just say your son in law somebody hope things work out and because that somebody you know somebody my respect but there is no guarantee an emergency that's how I see in essence what we're in the position that we're in you did what you had to do with that be a fair characterization of what. When I had fifteen minutes to make a decision. Yes or no no we the question no you're not going to have an opportunity to buy that we can't find the. I remember that well okay thank you thank you. Also we run a even when you said yes Sir Mr still stoner from Jamaica Miller the. A representative Becky recognized. Thank you Mr chair. Two questions. All the staff involved in the outing decided. Mmhm the number one question is what what would prevent this from happening again. Then the number two question is I understand it I hear terms like well all many of these people we've been service of all having that but hearing numbers so in terms of the dollar numbers how many of these things have actually been served so no words of the. Twenty million we have fifteen of them have been we've had fifteen million twice had this or why that's so give me some numbers this is really how. Well we've got this capture how we could possibly get some this back and then the other thing is you know what's gonna prevent us from. Happen again. And represent back to be happy to give you the number of the defendants as well as the number that have of when they were served at and any remaining defendants that have not yet been physically served with the litigation the B. R. I. provide that information to you later today. All. All. At a yeah I mean how. Like it is over half of that money just gone and we can't find these people around the country and it's not going to happen is a twenty five percent or arms that that's kind of the number I'm I'm looking for their I understand that represent back yes I'll be happy to provide you there the escrow agent that's located in the state of Florida has approximately four to five million dollars in that escrow agents account I will be happy to check on the other escrow to determine exactly where those funds are apt for purposes of we certainly don't have a a feeling that this money is just gone in and not going to be recovered were more actively working with the Attorney General to get to get all the return back to the state of Arkansas but I'll be happy to get you the exact figures here later today I work with my staff my office and get that to you thank you yes Sir. Representative Cavenaugh your last all of that on the screen and the second question. You know we have a good process in place. for standard operations that we have. I had this to be honest with you we get back in the same situation we found ourselves and during that time period. Where there's a worldwide shortage of supplies. you may I have a couple more people trying to help the person doing the. But when you're given fifteen minutes twenty minutes to make a decision US resume can we get the money in escrow. Can we do anything to protect the money as best we can as we saw something that those were. you get to scheduling set up and you hope to get the product paid for the time it is there are polling. And that's about the best you can do any work in a lot of cases we were successful a lot of ways. Of the stand out like a sore thumb Sir and I understand that but I think given the. What was going on in the amount of time period we have operated in and who we were doing with understanding where Moses product was coming from. I don't think you do too but a. I don't like it. But I don't think you get to that. Thank you and I you know I understand well if you want some story from private business I can give you a number to call because even in nonemergency times law stores is that of a bar when hits the water you know course you know if you say you got to have insurance if it doesn't get there you better have a deal but there's a lot of things that meant it was in this emergency situation we do appreciate the the questions and because it is considered but our money we appreciate you Helen that region Cavenaugh know you are less than honorable. Thank you Mr chair Who recommended the escrow agent. I would have to assume that if the. The gentleman that was working at UAMS. What was the broker who deal with sure said here's the information we're using we're programs product. Here's to you be able to put the money. If we're successful in getting this money back or some portion of it we will have to turn that over to the fans will be not because we passed the deadline for spending is that correct. Though the money was spent in and purchase the product that was only. I don't think we have a problem if we get the money. But we get the money back and we have to be part of what we sent back but it will be clear monies that were sent back to them right but I mean not in the state so. But we're having. Thank yesterday when it said that they were going to be eight million that was being turned over and call that funding back to the government if we collect this is has to be turned back over also because it's past the time. Okay thank you. Okay not saying any more questions thank you gentlemen for answering questions thank you thank you Mr thank you Committee thanks we've got the D. F. nine sector Walter is coming in of whoever you have with you and we're gonna have presentation referred by Adam Hillman. Refugio being here today and We'll let you. Identify yourself and then Mr Penman you're recognized the report. Melanie hi slip department finance administration element by chief of staff for department Vice Administration Larry Walters secretary department finance administration thank you. Right thank you Mr everyone hear me. Okay. All right of I'm Adam Denman analyst with part of with pure of Legislative Research we're starting this it today we're looking at and your binders is gonna be on your second tab this we're starting with Page two. With part of finance and administration. The. Department this up Page two at age two in your binder on your second tab. This is the Department finance administration administration insurance services Division appropriation. On page two you see the Department summary. And there are. Nine total appropriations here but these are also split between DFA administration shared services and DFA regulatory division because they both share a nine nine oh six business area. There are nine to appropriations Have. NTFA administration that's the second appropriation on the summary that has a change level the requesting four point three million for FY twenty four and twenty five and the executive provide for the agency request except for various personnel changes. And then the rest of the appropriations related to DSA regulatory division those. We have to their with change levels. And the executive provides for agency request may requesting five point seven million for FY twenty four and five point eight million for FY twenty five. So let's go through the preparation that changes will flip the page on page three and four this is untaxed tobacco revenue this is a new appropriation. That the. Funding is provided by the tobacco forfeiture fund which comes from the Director of Arkansas back controls ability to seize and hold for disposition of the courts or tobacco control board all tobacco products found in the possession person dealing or a consumer of these products under certain circumstances. The agency's requesting a hundred thousand dollars in each year by inferred back when force meant an executive commission provides for the agency request. The next appropriation this is on the summary on page five in the summary on page six this is for the department of finance and administration administration shared services appropriation. This is funded by state center services and provides for operations of the shared services division within DFA. The agency requesting appropriation of four point three million dollars for FY twenty four in FY twenty five as in CM summary they're asking for including the following injured quest of various personnel changes and executive recommendation provides for the agency request with the exception of various personnel changes. Senate next one. Next page is going to be Page thirteen. The summary and then page fourteen for the appropriation summary this is for the tobacco inspection program. This was from a grant first warden fiscal year twenty ten which allows Arkansas tobacco control to assist FDA and inspecting retail establishments and is federally funded. Agencies requesting appropriation the amount of seven hundred and fourteen thousand dollars for FY twenty four and seven hundred twenty thousand for FY twenty five and the request includes the following personnel changes. As noted on the summary page and the executive recognition provides for the agency request. Our next preparation with change levels is going to be on page the summary on page seventeen and the appropriation on page eighteen. As for the Arkansas tobacco control revenue enforcement this is utilized for operating expenses of tobacco control board enforcement and is funded by Arkansas tobacco control revenue fund. Agencies requesting a preparation in the amount of three hundred forty seven thousand dollars for FY twenty four three hundred forty nine thousand for FY twenty five which includes a continuation of capital outlay. And the executive recognition provides for the agency request Mr this conclude my presentation for DFA admin. Thank you the representative Cavenaugh you're recognized thank you Mr chair or to right I'm just going to ask you about your excess funding because you know that's the theme of the budget this year so if you'll notice on page eighteen there shows to be quite a bit of a a fund balance two point one million dollars. And your expenditures of three hundred and forty nine three hundred fifty what's the plan for the fund balance. Yes and I actually spoke with tobacco control today this is money that they do receive that the money that goes into this fund is there fees and licenses so what we're going to look at doing and what the plan is is we're gonna look at better allocating some staff cost so the enforcement officers a lot of them right now are being charged to general revenue this is a perfect such funds source for the work that they do on tobacco so we're going to redirect some of those cost over to this fund to better utilize those fees. Okay. One thing I just want to make sure is that we're not just going to move expenses around two uses fund when we could in turn give refunds back to the people who have paid that because we're taking the funds from them that's who deserves it is not for us to make allocate our other expenses to use the fund because we've over collected fees understood I'm right now the retail permit fee is a hundred dollars yearly. and it they got about four thousand of those the wholesale permit is a thousand dollars yearly I've got about a thousand of those permits and you know yes looking at fees is definitely something that we will also do I but in moving that money around we're also saving general revenue. So that that's also a good thing although we will look at the fees and if there's an opportunity to reduce than that is there as well right yes because they're the ones that are that are paying this and this is a special revenues and it's supposed to be used for just certain things and I don't really like the idea of reallocating expenses somewhere else if we can actually give the money back to the people that it belongs to yes it is nice to be appropriate use of the of the the fees yes we're receiving no doubt about that okay thank you. Thank you represent Dotson you're recognized. Thank you Mr chair just along that line of general revenue how much do you anticipate actually reducing the general revenue request in the future once you made that allocation change I don't have that number right now but we can work on getting you that number okay thank you. I'm not saying any more questions I have a motion for executive rank on number seven. And Tax to back forfeiture. I'm didn't hear for. The motion I have a motion I have a second column favor I. Opposed. number seven passes you will proceed own number eight for the if a disbursing officer. Thank you Mr chair of next we are going to DFA disbursing this begins on page thirty six for disbursing officer there preparation summary begins on page thirty six and goes to page thirty eight. As you see they have dozens of appropriations there are twelve that have changed levels. And as you see on page thirty eight there are. Eleven that are not requested to continue for the buy back into the biennium those are related to our pain cares funding. And in total the agency is requesting nine point eight billion for FY twenty four and twenty five and executive recommendation provides for the agency request. And our first preparation that is going to have to change levels begins on page forty four with appropriations summary on page forty five this is for the unemployment compensation claims appropriation. It's utilized for providing reimbursements to drop the commerce division work for services for unemployment compensation claims and the fund comes from state agencies are assessed a percentage of payroll totals to provide funding. The agency is requesting to continue appropriation amount of sixteen million the preparation for each year the executor recommendation is to reduce the appropriation by eight million to ensure the biennium to a new level of appropriation of eight million three each year. In conversation with the agency this was to bring the preparation down to historic spending levels. Our next appropriation with change levels starts on page fifty eight and fifty nine. This is for drug enforcement and education. This is funded by monies for deposit in the Special State assets forfeiture fund. And they're distributed to or distributed by the Arkansas alcohol and drug abuse coordinating council for drug interdiction eradication education rehabilitation state crime lab and to drug courts. The agency's requesting to continue appropriation in the amount of five million dollars for each year the biennium. But the exact recommendation is to reduce the appropriation by three million each of the biennium to bring the total appropriation to two million for each year. Our next appropriation with change levels is going to be on begin on page sixty six in on page sixty seven this is for fire protection services. This is paid for by premium tax about half of one percent collected by the insurance commissioner on certain policies and these funds are distributed to counties to be used by fire departments to upgrade fire protection services. The agency's requesting appropriation in the amount of twenty million dollars for each year the biennium which is a four million dollar increase in their grants and aid appropriation as you'll see on page sixty seven. This would allow for a full disbursement of insurance premium funds to local fire departments and executive recommendation provides for the agency request. Our next preparation with change levels we're going to go to page seventy four and seventy five. This is for indigent patients emergency medical services program. This provides disbursement of funds To defray the cost of hospitalization other medical services in five Arkansas counties in the delta. And it is revenues derived from fifteen additional days of greyhound dog racing. The agency is requesting discontinuous appropriations in the biennium due to cease funding related to dog track racing ending in December of this year and the executor accommodation provides for the agency request. Our next appropriation with change levels this is page eighty six with the preparation on page eighty seven. This is the pregnancy resource centers appropriation this was from ACT one eighty seven of twenty twenty two for the establishment of appropriation to pregnancy resource center grants where funding was provided by one time transfer of one million dollars from the rainy day fund. Where fund within the dispersed Rechlin to the pregnancy resource centers by the effect. As this was a one time transfer the agency is that requesting to discontinue its appropriation into the coming biennium and exactly recommendation provides for the agency request. Our next appropriation with change levels were on page ninety for this correction and ninety one for the appropriation summary. This is the law enforcement stipend grant. This is from ACT twenty four of twenty twenty two and like the previous pregnancy resources grant this was established by a one time transfer fifty this was fifty million dollars from general revenue allotment reserve for appropriation of law enforcement stipend grants and as before this was intended to for a one time transfer so the agency is requesting to discontinue this appropriation in the coming biennium and the second recommendation provides for the agency request. Our next appropriation with change levels going to begin on page one hundred with the preparation summary on page one of one. This is the state's contributions appropriation section. This provides disbursement on an annual basis for Arkansas is used in various interstate organizations. And funding is provided by general revenue. Agencies requesting appropriation of the amount of. One point six million for FY twenty four twenty five. And the agency request includes as you'll see on the summary page on page one hundred the following appropriation funding changes. Asking for increased funding of across FY twenty four twenty five for these four line items. With a net increase of eighty eight hundred dollars for FY twenty four and thirty six thousand dollars for FY twenty five. The agency was also requesting an increase in general revenue funding to fully recoup Fund there it requested appropriation levels. And the executor recommendation provides for the agency request an appropriation only. Our next appropriation with James levels. Is going to begin on page one hundred and ten with the appropriation summary on page one hundred eleven. This is the care's holding account appropriation. It is similar to the company appropriation this cares appropriation provides for transfers of appropriation of state agencies constitutional office as an institution of higher education for expenses associate with cares Act. The agency is requesting a preparation in the amount of ten million dollars for each year which is a decrease from the previous level of one and a quarter billion dollars agencies requesting the change due to expiring funds and the executor recommendation provides for the agency request. On the next page a hundred twelve and one thirteen this is the COVID nineteen cares reimbursement. This is different from the previous appropriation because this provides this preparation provide for transfers of care is funding for entities like local governments with fund accounts outside of the state treasury these are for entities outside of the state treasury outside of state. Like previous funding is provided by federal funds and the agency is requesting to discontinue this appropriation in each year due to expiring funds and executor recommendation provides for the agency request. And then the next we have the discontinuation switch as city before due to Ark Code Ann cares funding and Mister that concludes my presentation for DFA disbursing officer. In a written Cavenaugh you're recognized thank you Mr chair my first question is going to be on page forty three which is disaster assistance grants can can someone explain to me exactly what these funds can be used for. Trying to. Figure out how to how to say that these are disasters declared by the governor and so he does a proclamation which releases funding for whatever those disasters are at certain amounts so it could be tornadoes it could be the flooding this was also used originally dealing with the PP purchases that was discussed earlier part of this money was used for that so. What what else does it have to be a federal disaster is it just a state declared a state no it can be state okay. Then with our cattlemen who have requested money because of the drought disaster not memory serves me correctly the governor has declared that some counties are disaster because of the grout could we not use money to help those cattlemen out of this disaster fund. And I would say yes but you have to the executive branch to ask for it but this is what those funds were designed for. That would be my understanding yes ma'am okay. And Mister chair there's anybody else in the queue I can quit or I've got other questions we do have two more okay I'll get back in thank you. A representative Dotson you're recognized. Thank you Mr chair Page ninety five. The. I can restrict plan appropriation. You're asking continue six point two billion dollars an appropriation this is for. The next fiscal year I believe Have only spent quite a bit of these funds are ready to wear Allen to state were we're going to be getting any more from this particular actor this particular appropriation how much preparation you actually need to cover. This particular fiscal year. Okay so there's a combination of items there you have the federal direct appropriation which is what's going directly to colleges universities and state agencies I'm I do not know how much more they have that they will get. So that was one of the reasons for leaving at now that federal appropriation of the one point six billion we could potentially reduce that yes Sir. I mean were if I recall we've already authorized. Significant portion of that but I don't know how much it's been spent or will be spent by the next fiscal year can you get a an actual number that. We can possibly get this down to that's more in line with. With what's but will be spent during that fiscal year yes Sir and we can do that and if we can do that before we wrap up this section and like to get that number so we can slot in here before we approve this thank you not a problem thank you. President will your recognized. Thank you Mr chairman of. My question is page questions the home page thirty six. The fifth item down personnel service over time actual expenditures zero nine we got sixty six million dollars in there and we're care that all the way through twenty five. Wasn't about what what I would do well is that a new item representive within that is not a new item that is something that has been there that is actually a holding appropriation for all state agencies to come to peer in A. L. C. for approval to use so if a state agency run short of overtime appropriation they can come to peer in Nailsea and request money out of that holding it it's just a holding there is no appropriation ever spent out of their directly. So. DFI has if it will over time that six million the. I mean is there Senate budget. It's in the budget but it is only used if an agency requested through peer nails the request if they don't requested when the last time was the requested actually DFA requested some this fiscal year this is good yes Sir okay the question is on the. I understand miscellaneous grants next one is on the ministration of justice for a twenty five million. And they spent one point eight million. Two things going on there Sir one is the funding that's received on the ALJ administration justice fund has decreased over the years were used to be rather substantial amount it has dropped and the second part of that conversation is a lot of the money that comes into the ALJ Fund is moved out via a transfer verses an expense so we're not hitting this appropriation for that because we're doing it through a legal fund transfer just moving the agency the money so there's money that goes to admin Office of the Courts there's money that goes to department of public safety those items are done via a transfer of funds instead of issuing a check. The expo age we have. This leads workforce investment programs. A million dollars no expenses is that no two are. No Sir again that's not a that's another holding appropriation. Four what are. On just one second. I'm sorry Sir it is the same thing representative would it's a holding appropriation I'm I'm being told that it's used by D. W. S.. For work force in the. Of course. I investment I am so sorry. With the use of. It's when they receive federal grants so this is a Washington money still coming down here is because of the fiscal mess we're in right. We're not spending. So do we need. Hello those saying on the what everybody says well if we don't somebody else will. But that's what you were in the mess we're in this final question of the day Mister chairman I thank. Thank you thank you representative Cavenaugh recommend. Thank you Mr chair I'm going to be looking at page one eleven which is the care is holding. You're asking for an appropriation for ten million dollars and twenty four and twenty five. But why do we need this when we're done with that funding we're done with it you're given back eight million dollars so why we need this appropriation. We're done and not done the seven and a half million or eight million that we are requesting three peer is for current money on hand that was returned earlier you all discuss the court case going on that is primarily what this would be used for as well as any additional items that we may receive back in the meantime that need to be refunded the intent with going ahead and getting this appropriation now is so that when we get that money we can get it back to the feds as quickly as possible. I'm in order to potentially alleviate any interest they might want back on that if we hold it too long. Do we have an indication of how much of the. Los PPP money really is and when is the last time that they can actually have to spend this and give it back. All the money that has been spent that can be spent has been spent so at this time this could be potentially companies returning money because they figure out they weren't do that many it would also be that court case when it gets settled and we get a return of those funds. Okay the I'm so mean that you monitor of the moneys that you give to someone in their project to see if if it met requirements and that they spent about so how do you know if somebody else's this money. That would be an audit finding ma'am. That what we do monitor it giving the money to the state agencies it is up to the state agencies on those programs to determine the monitoring on the recipient. Okay can I continue Mr chairs or somebody else in the. Thank you I'm going to go to page forty three which is going when I'm or talk about that let's go to forty nine. We've already covered that one sorry about that fifty three which is the information network of Arkansas Just what what what does this actually do. Because it's funded three phase so what so what is this actual program what does it do. I'm currently we are in agreement with the I. and date they are building a licensing tool for state agencies to use I'm and we are paying them monthly for those services. That's the primary thing that it's being used for. Okay so how much a month are we paying them for for them to develop this licensing tool. Can you hold on just one second sure. I can get that information for you ma'am I don't have it on hand okay and how long is this agreement to pay them monthly for development of the tool. One year. And how long what is that contract. I apologize I have not been deeply involved in the eye and I we are paying the bills. But I'm looking for assistance no problem. Polwarth India FOR. This is this is more to it than just this contracted just this state this license agreement program these folks Work with us to host stating that work in the State web pages there's been a the agreement with them. At least twenty years they're part of this this work with us for years and years They do work for all state agencies we give them some funding on an annual basis they also then. The. DO resources for us to do the work and then at times when there's a special project the then agency walls and I will contract directly with them to provide that service to them and say have you set up a a licensing program or collections fees program but this is a. A situation where we have a board that's a. The ministers this a state level your senate twelve people of state agency level that are on that board in this contract has been in place. Maybe as low as fifteen years. Okay this appropriation is just for your portion of the funding is that correct the FAA has is provided funding for them for a couple of resources for us is not a war don't work on just one thing they work on a multitude of things for DFA I have over the years in this case they may maybe work on one particular thing this is a long term history we have these folks working with them because I agree to they started this program when the website home first came up back in the early two thousand. Because I'm just looking at the excess funding what we got there so I mean. Right now it's two point two mil I don't know what we're. Back thing to do with that so that's why I'm asking because it is collected from fees yes this is a piece if you if you don't mind let me give you a written document okay Page explains this whole process of how long it's been employees that would be great is is worth reading and understanding okay that would be great. Still nobody else Mister chair. Thank you. So I'm going to talk about just real quick question on sixty seven which is the fire protection services. Does is not available to volunteer fire departments or does that have to be department departments no ma'am that is available to rules and city municipal fire department so it's valid for both of them yes ma'am that is handled through the quorum court's we have to have a quorum court resolution on who receives that money okay and then on. This. Let's go to eighty one. This is a purchase of vehicles. And we're asking for a appropriation of fifteen million dollars each. You're for the purchase of vehicles can you tell me how many vehicles that the state actually owns. I can get to that number yes ma'am if you can give me that number what I'd also like to know in that is what your average cost of the vehicles are. And if you can also tell me what the approximate location of the life cycle of the vehicle is maintained how often do we expect to have to replace those vehicles because I'm assuming in your pool you've got someone every year that you're going to try to allocate to replace the that's what I'm trying to see if we need the full fifteen million to be able to replace what you anticipate or is the fifteen million to replace the whole fleet at one time so that's kinda what I'm asking about on that one. And on. Eighty five. This is deal with Arkansas children's hospital. It says hospital payments can you explain what is hospital payments I understand the intensive care reproductive in the barn but what is hospital payment. That money is given to DHS and DHS gives that money to child to children's hospital but we don't know what the what the hospital payments are no ma'am I do not right off hand I can see what I can find out and get it if you could send that to me I just kind of curious yes ma'am and Mister chair I'll get out let somebody else in and then I'll get back in. Thank you represent Dotson you're recognized. Thank you Mr chair I'd appreciate representative Cavenaugh she's taken almost all the questions at I just. Following back up on the last thing asked with regards to the our profundity also get the amount of that four point six billion dollar appropriation that you it is their way to find out what that number that's already been used and how much is left for that fiscal year as well so we can kind of sloppy. As close together as we can in there and and I'm sure it'll change by time we get to session may not need quite as much but. For the placeholder of this preparation and like to get that modified well over here yes thank you. President will you're recognized. The stock personnel we've talked about cars and children's and as a side note for representative Cavenaugh I believe I believe that's the annual payment to started many many many years ago to give children's and we used to place to low baller in Memphis when I was at the have a ledger will face the same fund or not but as a payment that we just agreed to by a to them for to have a children's pediatric operation along the restored with Neil natal this is some background but only personnel signed a notice you have four hundred eighty three positions over there of the I thank and well I what what one two hundred eighty three of them or in the service revenue services is at the local office where they could seize. isn't what I'm not sure I understand exactly what your question is well the question is revenues under six three zero. It's DFA Revenue Services Division two hundred eighty three vacant positions known as to whether twenty five or more over two years ago when I was asking is that local service revenue offices it it's a it's a combination across all of the FAA are revenue division which would include the balances but yes Sir but are also our our audit offices are but different divisions across DFA revenue. You know the age of those twenty five the thank you for two years. Someone three four five or less or to. Act act certainly can get those numbers to you and and a few of those a number of those are slated to be that we've. March those to be eliminated. Okay if you give that I would appreciate it some question goes down to child support hundred nineteen vacancies are there we go about give a phone call from other for us or is there like that and it's not taking care of his responsibilities and we will hundred nineteen positions thank you okay you're not the seller is not up to par or with market value or education not good people. It represents what we we are I mean we do have challenges and in hiring some of those positions are we've worked to try to upgrade those positions to be able to attract and be able to compete with private sector market it's it has been challenging but we've got a number of those positions that are currently in process that we're that that we've requested to have feel that we're constantly trying to to retain employees but also recruit and and backfield up vacancies there. One more follow up on the Do we do when it when we I guess we're at a point I know y'all don't have personnel over there anymore but are we at a point that we need to look at the total pay schedule for the entire state all employees relative to the market value. I think that is a proposal that we have planned for the next session okay good deal that's great thank you thank you. Represent Cavenaugh I will say that we're in sort of a time crunch so if you could keep the question simple unless him off line if possible we need to get through to more of the budgets pretty quickly president Cavenaugh thank you this is on the infrastructure investment job act you're asking for five hundred fifty million how much are we really expecting that for some reason I thought we were expecting more than that that's why I was asking. It's on page eighty nine. I'm being told that that will be over malt does will be multiple year. Project. Projects. Just in another comment is. I'm not sure if it's in here but the the well there's a lot of unknowns with regard to what we'll come to Arkansas some will have to be applied for it in and get grants from the federal government so it'll depend on our ability to make those grants and then receive the money so we we what we need we're trying to be prepared for whatever we might encounter over the next three years yeah I just didn't know if five hundred fifty million was going to be enough for some reason I thought we were going to get lack of billion or something and I didn't know but if you're saying five hundred fifty million this time five fifty million the next chapter okay that's why I just wanna make sure because I knew we could use another appropriation for the actual like like a our phone here's the one time dollars okay thank you. President Dotson you're recognized you for motion right okay. Thank you Mr but I kinda need an number if you if you guys cut that. Yes. At. President. President Dotson if you want to hold Page ninety five appropriation and till tomorrow first thing okay it have to give you that number that would allow us to move on through this budget are effective we would hold that one like we did for the interest rates and they can get that to you and we'll put that on first in the morning at works for me then if I work for the department. If you need a motion and I'll make a motion to hold that and exactly recommend rest of it that's proper motion drive second. Second all those in favor say aye. All opposed Is habits with that we'll move on to number nine Management Services Division of secretary Walker you're recognized. Adam I'm sorry. Will entertain any questions you might have. Thank you Mr. Deborah is all right. It is okay it happens. okay our next appropriation division appropriation sorry is going to begin the summaries on page one twenty seven this is for the department of. I meant financing ministration Management Services Division. As you see they have nineteen appropriations within the Division therefore that have changed levels other than caring for the salary match for the current biennium and there is also a you'll see at the bottom there is one that is not requested to continue that as the ones from if expressing is related to cares and our or our funding. in summary of the agency and exactly recommendation requesting a hundred fifteen million for both FY twenty four in FY twenty five. And the executive recommendation provides for the agency request with the exception of one requested new position and increases in salary matching related to various personnel changes. And as for all focus on those appropriations that have changed levels so first turn to page one hundred and thirty six. As I one thirty seven this is the agency's operation appropriation. This is funded by state civil services and it provides for operations of management services division that provides state agencies with assistance and accounting budgeting and administering statutorily required controls. Agencies requesting the preparation in the amount of twenty one million for FY twenty four and FY twenty five and on page one thirty five for their budget summary you'll see a breakdown of the changes that request includes the following various personnel changes. And they're asking for a continuation of a hundred thousand dollars in capital outlay and the executor recommendation provides for the agency request with the exception of a new position they're requesting and the various personnel changes in the socio appropriation. Expropriation with change levels were starting on page one thirty eight and one thirty nine this is their information technology appropriation. This is also funded by Senator central services and provides for data processing development implementation enhancement and operation of automated systems within DFA. Agencies requesting appropriation amount of thirty nine and a half million for both FY twenty four in FY twenty five which includes an increase of five million dollars in their information technology services line item and five million dollar is in their asus Billings appropriation line item to support current infrastructure and executor recommendation provides for the agency request. Our next professional change levels is going to be on get on page one fifty six the preparation summary on page one fifty seven. This is for the federal justice reinvestment initiative. That was a data driven approach to reduce correction spendings and reinvest savings and strategies to decrease recidivism and increased public safety this was beginning August twenty seventeen with an agreement with the council of state governments or we receive federal funding granted by the bureau of justice assistance in the US department justice. Where DFA office of intergovernmental Services was designated as the entity or managing activities. And due to an expiring federal grant award the agency is requesting to discontinue the support appropriation into the biennium and executive recommendation provides for the agency request. Our next appropriation with change levels this is on being on page one sixty two appropriation summary on page one sixty three. This is for coronavirus emergency supplemental funds that was where in a governmental services responsible for managing a federal grant program to provide assistance to state local and tribal governments that responded to cover nineteen. The source of funding as our before so Revenue and due to an expiring federal grant award the agencies requesting to discontinue this appropriation into the biennium and the second recommendation provides for the agency request. And Mr conclude my presentation for DFA management services. Representative Cavenaugh. Thank you Mr chair I'm going to deal on page number one thirty seven on the management services state simple services on your increase on your regular salaries you're actually decrease in the number of employees but raise and the amount of your salary request so you're taken as an average of fifty seven thousand a year taking it to seventy thousand five hundred thirty eight as an increase per employee for thirteen to ninety six are we given those types arises. No ma'am. Then why we need the increase. That is based upon changes in the paper it that we're done the ones to though finds that is also inclusive of PAYPLAN. merits that increase. But no ma'am we're not giving races I can tell you that well whether given raises or you're increasing thing merit or whatever it is there is an increase per employee of thirteen thousand two hundred ninety six based on your request. So if were not given that why we need that request is what I'm asking. And I'm getting that based on your Mr you're speaking and was eleven point eight for two hundred and seven employees but the and your executive is for fourteen to fifty four for two hundred and two employees you're actually reducing your employees and raising your cost. Representative Cavenaugh it. The. The eight increased amount of money does include the the it does have some measure of pay increases in it but it also includes additional money for twenty seventh pay period of being that will we will have to provide in the coming night and. Like every business does it so you're gonna be paying that. Every employee additional thirteen thousand two hundred ninety six dollars. No ma'am we'll have to work I'll get you the number. If you can get that because that's what it's that's what it showing. And that and then I have one question on page one forty seven if I could get that information because that it doesn't work out to one of my math doesn't work out. And I I'm a little confused on the agency requested hours is funding. It says we're going to do general revenue of two point three million and it says general revenue two point three total funding two point three excess of two point nine so you get your total funding of five point two. Where's that excess come from because it doesn't show it. I'm confused on that math. that's page one forty seven I'm sorry. And it might just be a misprint or but I I couldn't get it. I am that the. General revenue allocation as the two point three million yes and so they're gonna get general revenue two point three the appropriation balances five point two it is sure it's access appropriation so we're not gonna have funded the two point nine. Right and then that goes back to the five point two so we're only gonna have the two point three M. funding. So I'm so. The two point nine where you're expecting it to come from. So I guess that's why I'm asking we're asking that appropriation where we need it if you're not expecting it. We'll have to get an answer back on that one okay if you could and one final question this is very similar to the last question on salaries it's page one fifty three on that disk developmental disability council you're increasing your personality which currently shows to be thirty six point eight to fifty six four seventy eight you're not really change in the number of ploys you you've got your just it shows that were rights and everybody by nineteen thousand plus dollars. Can I get an explanation on that one too. Yes ma'am will include that in our explanation thank you. Represent what you're recognized. Did you say. What we're going to mention the market value and the that retains did you indicate and when you. Answer the thirteen thousand dollar increase that that was the that you're all just gonna increase that or are you going to bring those positions to. Personnel degree class of in order to give them that additional money into. I didn't I didn't understand what your response will represent what and we have no personnel changes for that appropriation at this time. And that's why we've got to figure out where that thirteen thousand is coming from the election will thank you the intent is not for that to happen okay. Thank you. Senate. I have a motion for example Rick. Second I have a second representative Fortner all those of favour say aye All opposed Is have it switch that will move on to number ten to the racing commission Adam you are recognized. Thank you Mr please don't let Secretary interfere. It's okay. But will be study apartment preparation summary here's begins on page one seventy. This for DFA racing commission although if you see on page one sixty seven it's titled DFA regulatory division. Because racing commission alcoholic beverage control these are all part of the regulatory division appropriation. So on page one seventy with the Division summary. There are five appropriations four of them have changed levels. Agencies requesting twenty eight million for both FY twenty four and FY twenty five and the executive recommendation provides forty agency requests with the exception of various personnel changes. So start on page this is one seventy two. This is their operations appropriation and is funded by general revenue. And this is for. To effectively supervise regulate and control the sport of racing in Arkansas and as of two thousand five they also provided for oversight of X. band electronic gaming at the race tracks in Arkansas. Agencies requesting appropriation and the amount of one point nine million for FY twenty four in FY twenty five and general revenue funding amount of one point eight million for FY twenty four twenty five. With various personal changes listed on page one seventy one in there the summary. And the executive recommendation provides for the agency requests with the exception of the various personnel changes. Our next appropriation is paid on paid begin on page one seventy three and one seventy four this is for their license applications appropriation. This is a cash fund appropriation that comes from license fees that are deposited into the cash fund. And provide for the application process and background investigation for issuing licenses to individuals and industries electronic games of skill areas at Oaklawn and Southland. The agency is requesting a preparation the amount of nine hundred eighty thousand dollars for each year the biennium which includes increases in their extra help personal services managing operating expenses and professional fees line item see those broken out on page one seventy three this is AG says this is to support racing commission operations. And the executive recommendation provides for the agency request. Turning to page one seventy five and one seventy six. This is also a cash and treasury appropriation Mrs for compulsive gambling disorder programs. This is to comply with Arkansas constitutional amendment one hundred that establish a requirement that the Arkansas racing commission would provide an annual amount of at least two hundred thousand dollars to Act for compulsive gambling disorder treatment and gambling disorder just educational programs this was funded by a one time transfer of rainy day funds approved by L. C. in December twenty twenty two the agencies are asking to continue this preparation the amount of two hundred thousand dollars each year in the biennium and executor recommendation provides for the agency request. Our next appropriation with change levels is going to be on page one seventy seven. This is compulsive gambling addictions. This is for this is not about general revenue and would also. President to constitutional amendment one hundred race Commission is been tasked that responsibility for providing two hundred thousand dollars for imposing compulsive gambling of disorder treatment and educational programs. The previous appropriation was for an initial contract would be awarded. For an entity that would handle this Gammons or treatment. The one on page one seventy seven one seventy eight this is for once that one time use money has been this has been used the agency will continue this treatment and educational programs to general revenue. And Mr conclude my presentation for the racing commission. Represent Vaught you're recognized. Representative flowers. Thank you Mr With regard to the dollars that are spent on of compulsive gambling. How how are those dollars expended is that programmatic from the agency or is it Turning grants across the state how is that expended. We recently worked with the office of state procurement and did a request for proposal and RFP process and that contract with is. As with Arkansas employees. Yes. Problem gambling council I'm it is for the full two hundred thousand dollars they do have expectations that they have to meet to get payment that contract is actually on review and will be an ALC Friday for approval. If you want more details on it we can definitely provide you more DS thank you so much yes ma'am. Representative Cavenaugh thank you Mr chair this is going to go with pages one seventy six and one seventy eight the two hundred thousand appropriations why do we need both of them with one is for rainy day funds it's going to be used up why do we need to carry that appropriation on into twenty four twenty five when we're gonna be using general revenue at that time to. In all honesty that that could be removed in twenty four twenty five we will definitely use that by twenty twenty okay four twenty twenty four to make that a. A motion at the proper time to reduce that. Yes ma'am but I would hope that every answer is in all honesty correct an honest. I am sorry. And we will use we will use the rainy day before we use the general revenues this year's general revenue will go back will be reclaimed because we will use the rainy day funds first okay. And with that one final question on this on the Page number one eighty it's the actual raising cash. So I just wanna make sure so this is the money that is collected from casinos to going to the purses for the racing whether it's greyhound or horse racing greyhounds going away so it'd be horse racing only now. Is anything taken out of that fund beyond purse money I mean is there anything taken out of their lack for work comp for right exercise riders for jockeys for people on the backside. That money is paid to the tracks I do not know. We can get the racing commission smoking and Byron up here to see if they have knowledge what the tracks to I can tell you that what we receive in general revenue in the person Awards Fund is what is sent to the tracks for the personal expense there's no need to get him up if you can just give if they can just get that information Mister chair to me I'd like to know if anything is coming out of those funds beyond purse money. Thank you. And I have a motion. Representan five Jean I believe it is. Thank you Mr chairman I was what I was the question also is on the concede over the holding money for the racing of. It looks like we budget twenty five million. And I guess as we enacted all this is is stairsteps is way up look like last year we spent a little over fourteen million. do we do we will what do we do with the excess just put it back in. Of or or that yes the authority to spend up to twenty five million yes Sir it is just the authority to spend up to twenty five million you are correct so in twenty twenty there was seven point eight million that went through that fund in twenty twenty one there was twelve point five last year as you stated it was fourteen point five so we're not sure what those collections are going to be but we also don't want to be in a situation where we cannot disperse it timely so that's why we've put up to twenty five million again that is the authority to spend if the money's not there to spend it it's not going to be spent and the authority does on June thirty okay thank you. Representative voted. Yes on the home page of one seventy two. Fourteen positions this year the fifty thousand. And. The role have fourteen next year but there will be eight hundred thousand which is fifty seven thousand seven thousand dollar raise per employee. Again representative Billy Madison that we want to go back and analyze and figure out why those numbers have jumped so that we can give you a better explanation of that increase is similar to the yes Sir thank you we need to better understand those numbers thank you Mr we're gonna let Mr rex speaking. I believe where the confusion is and also with the previous questions representative Cavenaugh when you look at those position numbers and divide those into the actuals it may be and and it likely is that many of those positions were unfilled for part of the year so it shows up that there are fourteen positions that were filled at any time during the year they would not feel they would have been filled for the entire year so you end up with a much lower average when when we're doing the budget and we do the preparation we do that numbers if it's been if it will be filled for the entire year so you've got two or three things going on you've got the cost of living increase you got the merit increases you've got to twenty seven pay period of I think what's confusing of committee is that the simple fact that many of those positions are unfilled and you're looking at actual expenditures for the entire year that makes sense. The reason the. Mr. So that's the reason we budgeted for eight hundred fifty one announcmenet seven hundred four right that that's what's needed to vote Isshin isn't be much more. Our position so I think we need to look vapor well that's good that that is if the position is filled at the current level for the entire year plus this twenty seven paper does is on top of that when you're looking at the actuals for last year so no one or some of those positions could have been a filled for just a day and it will show up as a position for of that entire year but that will bring the average down that makes it would will hold a hundred fifty one that's fifty six thousand seven ninety eight it's fifty seven thousand right so okay thank you. Representative Cavenaugh you're recognized are you ready for motion. Okay I like to make a motion that we accept agency executive recommendation with the exception on page one seventy six for twenty four twenty five that we take that down to zero. Okay proper motion of second a second representative Fortner all as favor say aye. All opposed ayes have it so with that we'll move on to the alcohol controlled beverages Adam you are recognized. Thank you Mr our next preparation that's it. All it begins on page one eighty two with the appropriation summary for the Department of for alcoholic beverage control administration division and as I said previously this is part of the regulatory division operations bill. As in C. there are two appropriations and with one with change requests. The agency is requesting three point six million for FY twenty four twenty five with the executor recommendation for three point five million for both FY twenty four and twenty five and executive recommendation provides for the agency request except for new positions and various personnel changes. Looking to page one eighty three one eighty four this is the operations appropriation for the Division. This is funded by general revenue along with continued you transfers for the medical marijuana implementation operations fund. For administrating administering regulation supervision and control of manufacture distribution sale of all alcohol beverages in Arkansas and with the masses Americans marijuana amendment it also expanded to include oversight of medical marijuana cultivation facilities and dispensaries. Page one eighty four you'll see there summary the agency's resting appropriation the amount of one point one million for FY twenty four in FY twenty five. And Rep John revenue funding any amount of eight hundred fifty nine thousand dollars for both years biennium. E. eighty to request includes the following various personnel changes that are shown on page one eighty three in detail. And the executive recognition provides for the agency requests with the exception of new positions and various personnel changes and associated appropriation. On page one eighty five and one eighty six. Thank you for the question we continue appropriation here the amount of two point five million this is the medical marijuana commission appropriation that was created due to Amendment ninety eight of the constitution the state of Arkansas. Which is funded by cultivation dispensary application and license fees. And then this is supported by special language there have a contingency line item that allows authorize the CFO of the State to transfer appropriation as needed to agencies that receive that encourage Spence's for the implementation administration or enforcement of laws related to the Arkansas medical marijuana amendment of twenty sixteen. The age is requesting to continue appropriation the amount of two point five million each year the biennium and executive recommendation provides for the agency request. Mr conclude my presentation for A. B. C. administration. Representative Cavenaugh thank you Mr chair this is going to be a one eighty six and it is a question about the contingency for two million just what is that contingency what is that really going to be a case somebody needs it I mean what why would they I guess I'm asking what what is the contingency that they would come to you asking for the two million. For instance DFA ABC Administration ABC Enforcement we did not include appropriation or ask for funding for medical marijuana operations for the investigation the licensing and all the processes that we handle what we use as we use this contingency appropriation either in this section or in that this DFA disbursing officer section and we pull from that appropriation to run those operations so that's what it's for is that content okay can you and another something to staff can you send to them to send us what that's costing you to run that operation because you can't really tale the way it is so if we can tell exactly what it's costing to run that operation are you wanting it just for DFA you wanting it for all agencies who have pulled from for all agencies if we can get it yes ma'am what time period would you like that for just before we start session so we know. Do you just want prior fiscal year CS fiscal year yes ma'am we will get that information thank you. Representative would. Yes Sir thank you page a one ninety four you have twelve positions. You're asking for. Well two more but my question is is that how many. Are you in force will officers in those. No Sir they are not worth the day or in the ninety nine oh six section that was when that as Adam went over first. They are part of the regulatory section but there are part of the ninety nine oh six I appropriation. One of the Page seven I'm sorry or the included here because this is specifically for A. B. C. administration not for A. B.. Russian yes Sir how many how many well I miss a question with how many of this of course will officers or other. I'm sorry I'm looking to staff for answer the that's what the. Forty two currently for the purpose do you have all and all purpose. Doorly is coming up to answer that question. Early Chandler director of alcoholic beverage control currently we have a little over six thousand on and off premise permit six the. In forty two people looking after. Thank you thank you Mr. Members are entertain a motion for the ABC I have a motion the executive director of second. All those in favor say aye. All opposed ayes have it with that we'll move on to the Revenue Services Division Adam you are recognized. Thank you Mr. Our next division we're looking this begins on page one ninety two with the appropriation summary for Revenue Services Division. And this division has nine total appropriations three of which have changed levels aside from salary match just answer asking to carry forward from the current biennium into the next one. And if it. Please chair I will focus only on those appropriation that have changed levels. In total the Davis is asking for one point four billion for FY twenty four and twenty five and executive recommendation provides for the agency requests with the exception of various personnel changes and reduced appropriation in their revenue miscellaneous cash appropriate cash appropriation will see at the bottom of that department summary on page one ninety two. Our first appropriation would change levels is going to be on page one ninety three with the preparation summary on one ninety four as for the commercial driver's license program. This is funded by fees collected for licenses issued their dedicated a special revenue and provides for operating expenses of the Arkansas commercial driver's license program and for other related purposes. Agencies requesting appropriation in the amount of four point eight million for FY twenty four and FY twenty five in on page one ninety three you'll see their includes the following changes various personnel changes and an increase in overtime appropriation to compensate employees with overtime payments versus accruing comp time which includes an increase in personal services matching as well. And the executive recommendation provides for the agency request with the exception of various personnel changes. Our next appropriation with change levels is going to be on page. Two oh seven this is for the operations appropriation. This is funded by state central services and provides for operation of the if revenue to Services Division. The agency's requesting appropriation in the amount of a hundred twenty three million FY twenty four and a hundred twenty four million in FY twenty five. The agency request includes Changes their list on page two oh five in two oh six. Areas personnel changes. And an increase of four hundred fifty five thousand in overtime appropriation as I stated before they're asking to compensate employees with overtime payments instead of accruing comp time which would increase which would include an increase in personal services matching. And they're asking to continue six one thousand dollars in capital outlay. And executive recommendation provides for this agency request with the exception of the various personnel changes. Our last appropriation has changed levels is on page two hundred eleven. This is revenue miscellaneous cash. This is funded by a fees receiving collected from international registration plan unified carrier registration and the nine one one service charge which are distributed to other entities for distribution other purposes. And the agency requesting to continue preparation in the amount of twenty four million for each year the biennium but the executor recommendation provides for a reduction of appropriation in the amount of twelve million. So the new appropriation of will be twelve million for each year of the biennium. And Mister chair the conclude my presentation for Revenue Services Division. Representative Cavenaugh your question yes Sir thank you Mister chair this is going to be on to all four is the miscellaneous tax refunds on the revolving fund we're requested two hundred and sixty million dollars on this. Historically the most that you've ever given out was actually in twenty twenty one which is a hundred twenty seven million. why do we need such over appropriation are we expecting to give out that much refunds is Now yes we don't know if I guess is a better answer the reason that are that are in our appropriation bill for DFA revenue services are all contention upon our taxpayers in our in our companies and then paying taxes and and us having to worry funded over payment we don't know how much we're going to re find now that being said. Could it be reduced. Yes. Potentially we do have special language that allows us to move appropriation between our our refund line items so you know it's what's been there for years if there's an opportunity that you so wish to change that okay. I don't know that we would have any basis to say okay so if we even if you're most to stork is banned one hundred twenty seven million if we drop that to one seventy five that would still give you all plenty of opportunity would not yes ma'am okay I'll have that motion to property hi Mister chair. And it looks like we got another issue Mister recommend to the table. Thank you I just want to point out that the next year that could be an anomaly because of the retroactive tax and decreases that they we've passed or what you passed we're going to have potentially higher re refunds than normal because those those taxes are gonna go back to all the way to January first and cents so it's very possible depending on withholding especially for the higher incomes they're going to get higher refunds and if companies do not use the new tax tables that's also going to the the low income tax credit if they don't receive that in income tax the deductions from their checks are gonna get that next year so next year is sort of anomaly okay so if. If you're most historic only been one twenty seven what is your true projection you think it might be do you think you need the real two sixty because of the upcoming or can it be less. My only caution B. were reducing taxes by five hundred million if those are if the if the tax tables don't take care of that our companies used in the tax tables that came out actually this month for the low income tax credit there's just a potential for having much larger tax refunds in just in twenty four to be on the subject of is there what we but would you feel better if we left it for twenty four and then twenty five reduced it to the one seventy five yes yes ma'am okay and follow up Mr this is on another funding issue it's going to be on two eleven which is the cash in treasuries. the excess funding you're asking for twenty four million. But the most historical that we've paid out on that is that six point five do we need the full twenty five I'm sorry he reduced it to twelve I'm looking for what Jon S. never mind because he that they could have is for twelve million dollars for twenty four okay thank you. Representative will. Thank you Mr chairman of. Let's talk about personnel for them of. Hello I understand you have fourteen hundred ninety five actual positions your authorized fifteen fifty six you got two hundred eighty three vacant positions mail and and and twelve of those. Twenty five of those vacant of two hundred ninety three have been vacant for two years and they're asking for nine more. A list of the. Well. Well the one that you use of the two eighty why why are we adding increasing our budget to cover that employees when we got two hundred ninety three vacancies over there. This is a Charlie Collins a revenue commissioner with the FNA representative Wooten we have a lot of vacant positions as you pointed out most of those are terms G. S. three positions the entry level positions so we done some things actually the legislatures help this by upgrading some of our GS Tuesday GS three you also made an improvement in the GS one to five pay table so that is really helped us in terms of filling more of the roles at those entry levels in terms of most of the changes that we're asking for other in that agency recommendation there not about any morals there about upgrading some of the rules to properly reflect the work that's done that's going to be on hold until the new governor comes in that's the difference between the agency in the executive and you're saying there's nine additional positions that we're asking for in here. That are not on duty sixty five five verses fifteen fifty six now. Agencies that I understand about hold on we're going to hold hopefully if the committee agrees will hold all positions until the new governor upgrades changes and new ones but it is for less this shows nine new position is for let me at let me identify those nine that are not in the hold off period yes Sir let me do that. Representative Wooten they will address that and other personnel subcommittee and then chair that so your bill handle that there will okay this call is we'll just we'll just wait on that until personnel committee but I was curious. I hope you all understand wind like I've said many times we're not trying to penalize anyone we're just trying to be sure and here we filed for flood of mistakes today Justin yours with others but will just hold those to personnel committee and we'll work it out in there yes Sir and it looks like Senator standing and gone through the LC passenger thank you Mr. Represent Cavenaugh represent Wooten just to clarify we will not have to hold it for personal it's going to personnel you know what yes thank. Thank you Mister chair I was going to ask about to two I mean sorry. Two oh two which is the Interstate motor fuel refunds. you're asking for a twenty million allocation that's page two a two but the biggest that you've given out in ten years is five hundred twenty two thousand. Why are we need twenty million appropriation if all we verify the highest we've given out ten years is half a million. Representative Cavenaugh that's another one that's historical it's based on multistate you know if you as you just noted the past trends don't indicate that that we would need that much so it seems like it would be a low research to reduce that amount it's one of those things that it depends on where the trucks driving how the state's share that money based on where the trucks aren't as you're pointing out historically we can't control what that's going to be but it looks like it has not been at that level that just covers to ensure would you be comfortable with taking the ten million. Yes okay ma'am thank you I have a motion the proper time Mister chair. You're recognized thank you I make a motion that we accept this second of recommendation with the exception of page two of two that we change that to ten million dollars and then on page two of four for the year twenty five that we change that to one hundred and seventy five million. That's a proper motion to I have a second I have a second all those in favor say aye. All oppose ayes have it with that we'll move on to the assessment coordination division Adam you are recognized thank you very much Mr chairman committee. Thank you Mr our next appropriation summary we're gonna go back in your manuals to page twenty one this is for DFA assessment coordination division. That exercise general incomplete supervision over valuation assessment and equalization of all locally obsessed at lower taxes in Arkansas. On page twenty one C. their division summary there are four total appropriations and there is one with change levels. Okay we'll begin with Page twenty two and then summary on page twenty three this is for their real property reappraisal program. This in this one the market value of real property located within the seventy five Arkansas counties is rephrase every three to five years for taxation purposes as mandated by Arkansas Code. And the agency has special language that provides funding of this program by proportional transfers as you'll see from the public school fund County Aid Fund in the Municipal Aid Fund up to fourteen and a quarter million dollars and also allows a transfer of funds from miscellaneous agencies fund account for up to one point five million dollars they do requesting a preparation for that total of fifteen million two hundred fifty thousand dollars each year the biennium and executive recommendation provides for the agency request. Going to page twenty four aunts appropriation summary on page twenty five this is for the county assessor's continuing education. This is funded by six hundred dollar assessments collected annually from counties and these proceeds are used exclusively for operation of the continuing education program for local assessment personnel. Agencies requesting to continue preparations in the amount of sixty thousand dollars for each year the biennium and the executive recommendation provides for the agency request. On page twenty seven you'll see the appropriation summary for their state operations appropriation. This is funded by general revenue and transfers from the ad valorem tax fund. And is utilized for personal services and operating expenses of the Division. The agency is requesting a preparation in the amount of three point seven million for FY twenty four and twenty five. And the. Various changes include various personnel changes and an increase of two hundred fifty thousand dollars in their operating expenses line item due to increased contract related costs associated with the national automobile dealers association. An executive recommendation provides for the agency request with the exception of various personnel changes. On page twenty nine oh CV last preparation in this section this is for the cash operations preparation. This is funded by proceeds from the sales of property assessment and appraisal publications and is also collected from private citizens who enroll in assessment appraisal courses conducted by the Division. And these are use lies to purchase that educational materials to Frank printing costs and pay for valuations of agency methods and procedures. The agency's requesting to continue appropriation in the amount of five hundred fifty thousand dollars for each year and the executive recommendation provides for the agency request that you share the conclude my presentation for assessment coordination division. Representative Cavenaugh you're recognized thank you Mr chair on this is going to be page twenty three. Further re appraisal program can someone explain to me what this program actually this fourteen point six million or asking for fifteen point seven what we what happens with this money. Okay. Thank you representative I'm center call your I'm the director of assessment coordination the property reappraisal fund was established by act eleven eighty five of nineteen ninety nine when all counties were mandated to do the three or five year reappraisal cycles we oversee those property appraisals the counties based on their personal account that we. Provide to them that we allow for they are reimbursed on a monthly basis and the reimbursement is based on seven dollars per parcel per year. Okay what do you what do you do for this fifteen million dollars that this is the money that they use to wards to win their mandated reprisals there county wide reprisals that the valuations are due this year we had seventeen counties that completed. And next year I think that there's twelve scheduled their own their own various cycle and depending on their growth is whether they stay on a five year or they move to a three year okay and what does the assessor coordination board have to do with this why do you get the money. Well we we are tasked with overseeing those reprisals auditing the work to make sure that they're in compliance with the rules of the reappraisal. Okay and those rules were set by. Those rules were set as mandated by Act eleven eighty five of nineteen ninety nine so. Okay so we need to look in the Act but y'all don't y'all haven't promulgated any rules around those as assessor coordination board you have a common set up any rules around those we have the rules that were done back two decades ago I am absolutely not been updated in two decades plus okay other question I have is on your S. which is gonna be page twenty five on your continuing education fund you have enough in your fund balance based on your current span for seventy two years. So what are you gonna do with that excess fund thank you for the question we actually two things one we are showing that we did not spend that much of due to of COVID we were not able to do in person reimbursements also a prior administration before me I think were not clear on what all expenses that could are allowed to use that money for a and we have since worked with Melanie very closely and we have a device that and we are in the fact we have spent more this year and we have plans to use that is for what it's purpose is okay you're most is for expand was forty one point four forty one thousand dollars okay and that was in eighteen nineteen so when the pandemic hit you're able to do it but you didn't have to do it in person if you can save money and not do it in person and still get the job done why do we have to spend the money to go out and do it in person we we did the what was the minimum required was done by soon it was of. We did not have as good a pass rates on our test it's really hard for appraisal classes they're very hands on and it was just a lot more difficult to do it by saying aye and the county assessor's and their staffs were asking when we were going to go back in person and they are excited that we now or back in person okay even if you go back and spend up to your historic spend of forty one thousand you're still have a lot in that reserve fund I believe that we will be spending more of that now that Melanie and I have worked on that okay are you going to find a way to give it back to the people that you got it from are you just gonna spend well this is of the H. County association is required to contribute to their continuing ad this is our part is just for the assessors all county associations do that and there's legislation on the books that they are required to submit that. Okay and that's one that we can look at reducing and then that's my final question thank you Sir. So if I heard you correctly you reimburse the counties at seven dollars per parcel what did not save the state some money if the county's consolidated those parcels into the single ownership that some of them reside in yes Sir we have actually encouraged the counties over the years to do so of again we are dealing with locally elected officials and they have the authority in their office to not want to do that every year when a S. like as I said there were seventeen counties that finish this year we received a file of all of their acreage with ownership and we do a combined by spreadsheet and then we give them the partial count that we're willing to reimburse them for anything that there's on their books above that that they want to stay on their books as as such then they're responsible for that money so the taxpayer requesting that combination down one parcel that's not happening either by the way of a know that from experience how do we encourage them to do this even more we every time we have in a room where you're constantly encouraging them to do so now we do have a of an exception of sometimes a landowner who has forty acres they build a house on to they only mortgage to to and they have it surveyed off and they will come in and ask the county assessor to please make that a separate parcel and wheat and all County assessor's oblige that this logical thank you representative will you're recognized thank you Mr chairman who the. This is for coordination of the Asian used to do the railroads utilities and their who does that now public service commission of the ex spy has that now yes Sir they're responsible for that okay ladies and okay raylase. Thank you Mr. Members we have a motion. I have a motion from representative wouldn't drive second. Hello one second all those in favor say aye. All opposed us have it so with that item we recognize you for number fourteen child support enforcement. Thank you Mr chair our last if a division for today is going to be child support enforcement. Of their single appropriation is on page thirty four the description is prescription summary is on page thirty two this is a federal combined federal and state efforts to collect child support from noncustodial parents. In funding for this appropriation consists of a combination of federal funds general revenue fees federal incentive payments and state share of temporary assistance for needy families collections. The agency's report requesting appropriations in the amount of seventy four million for FY twenty four and seventy five million for FY twenty five. And the general any amount of thirteen point two million for FY twenty four and twenty five the agency request includes various personnel changes. A continuation of a hundred thousand dollars in capital outlay an increase of two million dollars in their data processing and equipment expense line item due to an anticipated increase in cost of services for a new contract that would be effective July one twenty twenty three for both years of by any. And the executive recommendation provides for the agency request with the exception of the various personnel changes. And Mr conclude my presentation for the if a child support enforcement. See no questions remembers do I have a motion. I have a motion executive director Dr second. I have a second all those in favor say aye All opposed eyes have seen the members we have no further business we stand adjourned. We will start again at nine AM in the morning.