The 1st meeting of the Budget Review Subcommittee on General Government, Finance, and Public Protection of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, October 25, 2001, at 10:30 AM, in the Perkins Building, Room 209, Eastern Kentucky University Campus, Richmond, Kentucky. Representative Royce Adams, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Brett Guthrie, Co-Chair; Representative Royce Adams, Co-Chair; Senator Albert Robinson; Representatives Carolyn Belcher, Charles Siler, Roger Thomas, Jim Thompson, and Jim Wayne.
Guests: Beverly Watts and Anna Adams, Kentucky Commission on Human Rights; Judy Gould and Nancy L. Black, Board of Veterinarians and KY Athletic Commission; Mike Robinson, Governor’s Office for Technology; Donna Dixon and William Bowker, Public Service Commission; David Richardson and Michael Noel, Public Protection & Regulation Cabinet; Randy Smith, Kentucky Racing Commission; Patrice Carroll, Governor’s Office – EMPOWER KY; Carol Jordan, Governor’s Office; Roger Recktenwald and Denise Pitts, Kentucky Infrastructure Agency (KIA); Mike Stivers, Pat Cassetty, Mark Farrow, Ira Linville, and Eddie Duvall, Department of Agriculture; Jim Reynolds, Department for Local Government; Glenn Mitchell, and Kevin Flanery, Finance and Administration Cabinet (FAC); Allen Holt, Governor’s Office for Policy and Management; Jeff Mosley, Governor’s Office of Agriculture Policy; and Ed Monahan, Public Advocacy Department.
LRC Staff: Karen Hilborn Crabtree, Sharon Cantrell, Jim Cozine, and Cassaundra McNeil.
Chairman Adams introduced Jim Cozine and Sharon Cantrell as the new staff for the Subcommittee. He also directed the members attention to the staff assignment sheet in their folders.
Secretary Kevin Flanery and Deputy Secretary Glenn Mitchell were asked to discuss general issues facing the FAC in the upcoming 2002 Session of the General Assembly. Secretary Flanery noted that the FAC is very much aware of the financial situation and will mainly be requesting a continuation budget. The Cabinet’s FB 2002-2004 Capital Budget will include the standard requests for projects to be funded from Emergency Repair, Maintenance, and Replacement Fund, the Capital Construction and Equipment Purchase Contingency Fund, and the Statewide Deferred Maintenance Pool. The next three Capital Budget priorities will deal with the Capitol Complex and Annex which include funds to construct an Executive Office Building ($42.7 million), funds to improve the Capitol Complex infrastructure ($12.8 million), and funds to complete the design of the Capitol Building restoration and the Annex renovation and addition ($2.8 million). Secretary Flanery explained the need to depopulate the Capitol for the renovation and the placing of workers on campus during the construction of the Executive Office Building and the Annex addition. The Executive Office Building will also aid in relieving the current over crowding in the Capitol Building. The Capital Budget request will also include funds for the Land Acquisition and Demolition Fund, Design and Renovation of the State Office Building, Renovation and Construction of the Jones Building, installation of various building security systems, construction of a new state office building, renovation of the Old Capitol, renovation of the Library and Archives Building, modernization of elevators, replacement of the Civic Center roof, and energy performance contracts. Secretary Flanery explained that the construction of a new state office building is supported by studies that recommend less reliance on leased facilities.
Deputy Secretary Mitchell noted that the FAC is also looking at a change in the way buildings are procured. Secretary Flanery added that the value of different delivery methods would save money, time, and provide a better product at the end.
Representative Siler stressed the importance of the FAC working with regional Emergency Medical Services in light of the dwindling local resources. Secretary Flanery agreed with the need for the state to work with the local areas.
Chairman Adams requested Secretary Flanery to review the appropriation increase requests for the Subcommittee. It was noted that the increase request #947 for the Department for Administration, Division of Creative Services was withdrawn. Secretary Flanery stated the FAC requested #873 relating to Restricted Funds totaling $100,000 to enable the Capital Plaza Authority to pay for the Cabinet’s own utilities, #877 relating to Restricted Funds totaling $2 million is to enable the Department of Facilities Management to support increased utility costs, and # 950 relating to Restricted Funds in the amount of $91,100 to relocate a mail center for the Department for Administration, Division of Postal Services. A motion was passed by the Subcommittee to approve the three appropriation increase requests.
Chairman Adams requested the Department for Agriculture to come forward and discuss the dead animal removal program and the Humane Society issues. Ira Linville, Executive Director, Office of Environmental Services, discussed issues relating to the dead animal removal program. In reference to a handout titled, “Kentucky Animal Population/Mortality Estimates”, Mr. Linville explained the animal population in Kentucky represents approximately seven to eight million animals. The average mortality, excluding companion animals averages three percent. The average mortality for companion animals (dogs and cats) is five percent. The total estimated costs for dead animal removal and disposal is approximately $3.9 million. This cost does not include dead animal removal for chickens or horses. Horses usually are sent to diagnostic labs. Animal shelters usually charge $8.00 per dog and $5.00 per cat according to costs provided by a primary contract pickup service company. Thirty-four counties use pick-up services. Approved methods for animal disposal include complete incineration, boiling carcasses, burial, removal by a licensed rendering establishment, composting, or disposal at a contained landfill.
Chairman Adams commented that rendering facilities are having problems. Mr. Linville explained the cost of transporting animal by-products found in “feedstuffs” (by-products used in feed for other livestock) is no longer feasible. Bonemeal prices have dropped substantially. Mr. Linville stated that rendering is the first choice for disposal of dead animals. Currently there are 52 counties with some type of disposal program. Thirty-four counties have removal contracts with companies.
Approximately $1.3 to $1.4 million is available in the state’s FB 2000-02 budget to assist counties with the dead animal removal. The 2000 General Assembly appropriated $500,000 in each fiscal year to the Kentucky Department of Agriculture (KDOA) for animal shelter grants. The KDOA was also appropriated $200,000 in each fiscal year to provide dead animal removal grants to counties. These grant funds are available to award to approximately 40 counties. Each county grant award is based on a total allocation of $5,000 per. The Natural Resources and Environmental Protection Cabinet (NREP) also provides $60,000 per fiscal year for the purpose of providing grants to counties to assist with dead animal removal. KDOA and NREP coordinate these programs.
The Agriculture Development Board awards grants totaling up to $20,000 per county for dead animal removal. Thus far, 10 counties have requested assistance. Counties are required to provide a 50 percent match. Nine requests for funding from Phase I Tobacco Funds have also been approved through the Agriculture Development Board totaling approximately $79,000. Funding requests are currently being evaluated by the county boards.
Mark Farrow, KDOA, noted the 2000 General Assembly provided $1 million ($500,000 in each fiscal year) to the KDOA for grants to animal shelters. The KDOA received 65 applications and awarded grants to 21 animal shelters. The maximum grant award totaled $60,000 per animal shelter. Local shelters are required to provide a 20 percent match. Mr. Farrow stated he hoped additional funds would be made available for this purpose in the 2002-04 Budget. He also mentioned the KDOA is considering combining the Animal Shelter and Dead Animal Removal programs but plans have not been finalized and the KDOA is not ready to discuss their proposal. Mr. Farrow noted, as soon as KDOA’s proposal is finalized, it would be provided to the Subcommittee.
Chairman Adams commented on the importance of volunteers at animal shelters and the $1 million appropriated by the 2000 General Assembly has made a dent in resolving issues relating to retaining animal shelter volunteers.
Senator Robinson noted issues relating to dead animal removal are a large problem at the local, as well as, the state level that need to be addressed. In response to Senator Robinson, Mr. Linville stated dead animal removal issues at stockyards are also major problems. He said many counties are buying their own trucks.
Representative Thomas said these issues are often perceived as agricultural problems by state officials, as well as, the public. However, these are serious social and environmental problems, too, affecting not only fallen animals on farms, but companion animals. He stated the two programs should be combined.
Representative Siler explained that volunteers at animal shelters are often confronted with issues of trying to be humane and, at the same time, finding it necessary to have to terminate animals in shelters.
Mr. Eddie Duvall, KDOA, discussed the Department’s appropriation increase request #988 for Federal Funds in the amount of $300,000 for food assistance programs. A motion was passed by the Subcommittee to approve this request.
Roger Recktenwald, Executive Director, KIA, was requested to provide a status report on the 2020 Water Program. Mr. Recktenwald noted that access to water and how access is obtained are two important issues. The issues may involve securing and protecting ground water or bringing the water in by pipes. There has been a change in the role of KIA with the passage of SB 409 by the 2000 General Assembly, including trying to integrate services and encourage regional contracts. The planning for the projects is now a responsibility of the local level. Local councils are required to put together an area water management plan that has a regional context. These plans are sent to the Area Development Districts (ADD)s. The ADDs are responsible for prioritizing the projects by unserved or under served areas and forwarding the plans to the KIA. KIA has received funding requests for 1,517 projects with a total cost of $1.56 billion. KIA is charged with fairly allocating the $50 million in available funds towards meeting the $1.56 billion identified need. Mr. Recktenwald noted that the development of a single application is being developed and Natural Resources and Environmental Protection Cabinet, Public Service Commission, and Department for Local Government would be included in the group to review projects and provide a collective offer for funding to the applicant. The first round of grant awards will be to those projects that have come through the Regional Councils and are selected by KIA. KIA will require verification of the information submitted before funding is awarded. Senator Robinson and Representative Thomas noted the need for planning the laying of water lines that would be large enough to serve future needs. Representative Siler and Representative Thompson stressed a need to work with the Transportation Cabinet in using highway easements. Mr. Recktenwald responded that he has met with the Transportation Cabinet and the Cabinet is aware that there are differences between the District Offices when handling projects. Representative Wayne briefly discussed the recommendations that will be coming from the Smart Growth Task Force.
The Subcommittee reviewed the appropriation increase requests #914 and #913 for KIA which totaled $1.9 million in Restricted Funds and $115,000 in Federal Funds respectively. A motion was passed by the Subcommittee to approve both requests.
Chairman Adams requested that the EMPOWER KY presentation be deferred until the November meeting. He also asked the Subcommittee members if they had any questions on the appropriation increase requests contained in their folders.
Representative Belcher questioned the source of the Restricted Funds for the Public Service Commission (PSC) increase totaling $50,000 (#911). Mr. Bill Bowker explained that the estimate is provided by the Kentucky Oil and Gas Association and the PSC has received the payments.
Representative Thomas questioned why the Federal Funds increase totaling $736,400 (#1110) was being received by the Office of the Governor instead of the Department for Agriculture. Jeff Mosley, General Council, responded that over $500,000 of the total appropriation increase would be transferred to, and administered by, the Kentucky Department of Agriculture for the purpose of promoting specialty crops, providing additional support for the Emergency Food Assistance Program (EFAP), and promoting Kentucky food products. A motion was passed by the Subcommittee to approve this request.
A motion was passed by the Subcommittee to approve all remaining appropriation increase requests as follows: Department for Local Government, #815, Restricted Funds in the amount of $300,000; Department for Local Government, #820, Federal Funds in the amount of $377,000; Department for Local Government, #927, Federal Funds in the amount of $400,000; Office of the Governor, #843, Restricted Funds in the amount of $75,000; Governor’s Office for Technology, #1084, Restricted Funds in the amount of $226,300; Office of State Budget Director #930, Restricted Funds in the amount of $500,000; Emergency Medical Services Board, #923, Federal Funds in the amount of $329,800; Public Service Commission, #911, Restricted Funds in the amount of $50,000; Public Service Commission, #912, Federal Funds in the amount of $117,727; Kentucky Racing Commission, #986, Restricted Funds in the amount of $605,000; Office of the Secretary – General Operations, #1007, Restricted Funds in the amount of $255,000; Kentucky Board of Nursing, #1032, Restricted Funds in the amount of $264,800; Kentucky Commission on Human Rights, #1072, Federal Funds in the amount of $202,600; Board of Veterinary Examiners, #1086, Restricted Funds in the amount of $25,000; and Kentucky Athletic Commission, #1088, Restricted Funds in the amount of $15,000.
There being no other business before the subcommittee, the meeting adjourned at 11:55 a.m.