The 2nd meeting of the Budget Review Subcommittee on Justice and Judiciary of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Thursday, October 22, 2009, at 10:00 AM, in Room 169 of the Capitol Annex. Senator Robert Stivers II, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Robert Stivers II, Co-Chair; Representative Jesse Crenshaw, Co-Chair; Representatives Martha Jane King, Alecia Webb-Edgington, and Brent Yonts.
Guests: Laurie Dudgeon, Director, Administrative Office of the Courts; Carol Henderson, Budget Director, Administrative Office of the Courts; and LaDonna Thompson, Commissioner, Department of Corrections.
LRC Staff: Mike Mullins and Ashlee McDonald
A quorum was not present.
Senator Stivers introduced the first guest, Laurie Dudgeon, Director, Administrative Office of the Courts.
Laurie Dudgeon stated that the Court of Justice has 3,800 employees statewide, which is approximately 10% of the state workforce. Total funding for the courts is about 3% of the state budget.
She indicated that her presentation would specify the budget units for the Administrative Office of the Courts. It will also provide an overview of the fiscal situation for the current fiscal year, 2010, and it will discuss the anticipated budgetary needs for fiscal years 2011 and 2012. There are three major appropriation units in the Court of Justice. They are: Operations and Administration, Local Facilities, and Judicial Retirement. Court Operations and Administration pays for all employees’ and elected officials’ salaries and benefits, and operating costs associated with those employees and the services they provide. The Local Facilities Unit includes all funds for the debt service for the court houses and the lease payments for the private sector leases. The Judicial Retirement Unit includes the funding for retired judges.
In fiscal year 2010, the Court Operations budget has an appropriation of $170.7 million. The estimated expenditures are $202.8 million, which includes a reduction in positions and operating expenses at AOC. The court operations appropriation for fiscal year 2010 has a deficit of approximately $32 million. This deficit is present due to the budget reduction required in the bill passed during the last special session, the requirement for 1% annual increments for staff, and increases in the cost of health insurance and retirement. AOC has restricted funds of $33.1 million available to offset the deficit in 2010. These restricted funds have accrued over the past few years.
The local facilities appropriation will have a balance of a little over $15.2 million at the end of fiscal year 2010. This is due to the time frame for completing some of the projects and for savings due to lower than expected interest rates. That amount should cover all new costs for Local Facilities in fiscal year 2011.
The current expenditure level for Court Operations is $202.8 million. The defined calculations according to the budget instructions total $17.6 million. Consequently, Court Operations will need $220.4 million. The baseline budget amount for court operations is $170.7 million. AOC would still need $49.7 million more than the base budget provides.
The baseline appropriation for facilities in fiscal year 2010 is $96.8 million. If AOC carries the $15.2 million into fiscal year 2011, no additional funds will be needed. The Judicial Retirement System baseline appropriation is $5.8 million. The new actuarial study indicates that additional $5.7 million will be needed in fiscal years 2011 and 2012 to be adequately funded.
The restricted funds revenue is estimated to be $28.2 million. The expenditures are expected to be about $36.9 million, putting the restricted funds in a deficit of $8.7 million. Excluding the defined calculations, the Judicial Branch needs $44 million to continue current services. Fiscal year 2012 needs $106 million, excluding the defined calculations.
If furloughs were used to address the $44 million deficit, it would take require all employees to take off 85 days without pay. About 39% of the non-elected employees would have to be laid off to cover the deficit through a lay off plan. There are other ways the AOC would make budget reductions, but this illustration indicates the seriousness of the impact that such reductions would cause.
Ms. Dudgeon indicated that the judicial branch is doing all it can to reduce costs. They have 800 foster care review volunteers statewide who have done 20,000 reviews of 10,000 children in foster care. They have also implemented the monitored conditional release program statewide that has saved $30 million to local county jails. Through the CDW program, judges are collaborating with school systems to conduct truancy diversion programs statewide. She stressed the importance of keeping these programs in place as well as keeping current staff levels.
Representative Yonts inquired about a program mentioned last year to collect bad debts to the judicial system. He wanted to know how much success they have had with that program. Ms. Dudgeon stated that they had a vendor come in and evaluate any outstanding debt in the court system. They did an intensive review of 10-12 counties state wide and determined that it was not cost effective to attempt to collect. The AOC now has an accounts receivable program that will go into effect November 1st that will track the debt electronically.
Representative Yonts wanted to know how many millions of dollars was not collected. Ms. Dudgeon said that unfortunately they do not know a number because they have not had the ability or technology to collect that data.
Representative Yonts stated that the Chief Justice said there would be no recommendations for additional judicial local facilities. Rep. Yonts wanted to know if there are facilities that have been authorized but not yet under construction. He inquired if it was at all possible to suspend these projects for a period of time to reduce the amount of additional money needed. Ms. Dudgeon stated that five projects were authorized in 2008. A project in Carlisle County, which had burnt to the ground, is currently under construction. The other projects are in Phase A, or first stage of design.
Representative Yonts wanted to know how much money would be saved if they froze these projects. Ms. Dudgeon said that the only ones that were in the design phase are Franklin Co., Morgan Co., Lawrence Co., and Bracken Co. They have already issued the interim financing for those projects for the costs associated with them before the actual construction can be started. She also stated that it would save $3-4 million total (not per facility) because they would have to pay off the debts associated with the projects first.
Senator Stivers referred back to the court facility projects. He wanted to clarify whether there would actually be any savings this biennial period if these projects were stopped in their tracks. Ms. Dudgeon explained that there would be very little, if any. She is anticipating that for those projects, at least a six month debt service in fiscal year 2012.
Representative Crenshaw referred to a presentation regarding a GPS tracking device that Fayette County was using for corrections. He explained that this program could save money by allowing the non-violent offenders to be released on the monitoring device system. This in turn would save the local facilities money by not having to house those inmates. He wanted to know if they had seen a presentation about it and what they thought about this program. He also stated that the judges have discretion as far as sentencing goes and wanted to know if the judges could be urged to utilize those monitoring systems. Ms. Dudgeon said that they have a significant number of judges who are placing defendants on ankle monitoring devices pre-trial. They are all defendant paid. Ms. Dudgeon stated that they are always encouraging the pre-trial officer to allow this if the defendant is low-risk or non-violent.
Representative Crenshaw wanted to know how the judges felt about this program. Ms. Dudgeon answered by saying that the judges who do use it are very positive with their experience. She said that the judges are very receptive and willing to use this program, granted that the defendants’ charges allow it. She also explained that she can get the statistics to the committee on exactly how many people have the GPS monitoring devices.
Representative King asked about the bad debt collection. She wanted to know how and what type of technology they have to track this. Ms. Dudgeon explained that they have had a program in development for the past year that will begin November 1st. However, they do not have a method of tracking the older bad debts, but when this program is implemented; the debt information will be transmitted to the Department of Revenue.
Senator Stivers asked Ms. Dudgeon about the facilities budget. He wanted to know if they were placing the funding for salaries of staff working with local facilities in the Local Facilities or Operations and Administration appropriation units. Ms. Dudgeon stated that all salary costs are included in the Operations unit.
Senator Stivers wanted to know how many people in court operations are assigned to work with the facilities. Ms. Dudgeon said that for Capital Construction there were 9 people. Once the buildings are finished, another group of about 10 assumes oversight of the buildings.
Senator Stivers wanted to know if Ms. Dudgeon had that broken down into budget units. Ms. Dudgeon stated that she did have that information internally and would get that back to Senator Stivers.
Senator Stivers inquired about how many trial commissioners there were state wide and the expenditures for them. Ms. Dudgeon explained that the expenditures were slightly less than $300,000.00 for the non-constitutional trial commissioners. She also stated that there were 77 total trial commissioners. She would get the specific details for the expenditures to Senator Stivers.
Senator Stivers also explained that, as he understood it, the statutory requirement for a trial commissioner is to be in a county where there is not a sitting resident judge. Ms. Dudgeon did confirm that was correct.
Representative Yonts inquired about commissioners in general, not just the trial commissioners. He wanted to know how many courts were using mediation as a mandate in Family Courts. He also wanted to know how many courts used domestic relations commissioners and what was the cost associated with that. Ms. Dudgeon said that there are approximately 22 circuits that do not have family court judges. She said that she will forward the more specific details to the committee.
Representative Yonts noted that this process was adding to the cost of going through the court system. Representative Crenshaw asked Ms. Dudgeon if she could get the committee a paper copy of the power point presentation that she provided.
Senator Stivers thanked Ms. Dudgeon for coming and providing the presentation. At this time he also introduced the second guest on the agenda, Ms. LaDonna Thompson, Commissioner, Department of Corrections.
Ms. Thompson started her presentation by providing pictures of the damage that occurred at the Northpoint Training Center due to the prison riot. She also provided pictures indicating the progress in cleaning up the site, and making it as functional as possible. Senator Stivers asked for a paper copy of the PowerPoint presentation.
Ms. Thompson went over the time line of the disturbance at the facility. At 6:36 p.m., the first fire was reported. Around 7:00 p.m., the emergency teams were activated, and at 7:45 p.m. the State Police, Sheriff’s Office, and the local police department arrived. At 8:35 p.m., the all security teams were at the facility. The inmates were compliant with the staff at 9:30 p.m. The first count was conducted at 10:30 p.m. and about 1:00 a.m. the last of the fires were extinguished. Shortly after the disturbance, 700 inmates were moved from Northpoint to the other prison facilities. The remaining inmates at Northpoint were in the gymnasium and Chapel. The dorms were damaged and could not be utilized. The riot resulted in the destruction of 6 of the Northpoint support buildings.
She also provided pictures of the locks on the doors. Although they were fire resistant, they were not security doors. The inmates were able to break the locks open and get out.
She gave an update on the current status of the physical plant. Demolition of damaged buildings has been completed. The fire exit doors have been replaced in the remaining dorms, but they were not upgraded. Most operations, including medical and visitation, are operating out of dorms that were not severely damaged. A temporary food service building is in place, so they are now able serve meals.
They have insurance coverage that allows for replacement costs for the buildings, but any upgrades will result in additional costs. They are working with the insurance adjusters and hope to have a projected cost by November 1st. The initial insurance estimate they have is for a total cost of $25 million. The demolition costs to date are $690,000. It was cost $195,000.00 for the food service station.
For the construction planning, they asked for technical assistance from the National Institute of Corrections. The Kentucky State Police is conducting an on-site investigation for possible criminal charges. They also have a team of internal officers to handle the administrative investigations for the internal charges to be filed. They have identified numerous inmates who participated in the riot that are charged criminally and within the institution. They have a Critical Incident Review team on site and are awaiting their findings. The CIR has interviewed inmates and staff as well. Ms. Thompson stated that as soon as they received a copy of that, they would forward it to the committee.
Senator Stivers told Ms. Thompson that he appreciated the update on Northpoint. He does feel that it is appropriate to ask about many details of the riot since the investigation is still in progress. Ms. Thompson agreed that was a good idea. She would provide the complete report as soon as she received it.
Representative Crenshaw reiterated that at some point he would like the opportunity to ask questions regarding the Northpoint riot report. Ms. Thompson answered by saying that as soon as something came in, she would let them know so they could schedule something to review that report.
She also spoke about Electronic Monitoring and Home Incarceration. She sent out a survey to the other states about their usage. She had a response from 30 states, and 22 of them use it for monitoring sex offenders; 15 of the states use it for Parole Officer Requirements; 15 states use it as a requirement of the courts; 22 states use it for work release; 12 states use it for home incarceration; and 16 states have other requirements.
She reported that, from October 1st, 2008 – October 1st, 2009, Corrections had over 1,000 participants in this program. Out of the 1,000, they had 170 inmates come off that program due to parole violations. Out of the 170, 92 came back due to substance-related charges. They had a growth of 24% in the program for fiscal year 2009. This program has saved the Department of Corrections $1.9 million.
Representative Crenshaw inquired as to whether more non-violent offenders could be placed in home incarceration using GPS monitoring and whether they have estimates on the amount of money that could be saved if judges would place offenders on the monitors instead of sending them to a correctional institution. Ms. Thompson stated that she has not seen any analysis on the number of inmates that come to the corrections because of monitoring referral. The DOC does not pay for the inmates’ jail bed costs prior to sentencing.
Representative Crenshaw explained that his concern was the influx of non-violent offenders coming into corrections and if there was a way to stall that by implementing the monitoring system.
Ms. Thompson said that DOC can place Class D or C felons who are within 180 days of completion of their time in the home incarceration program. They have to be non-violent and non-sex offenders. If DOC recognizes that an inmate cannot afford the $5.00 a day cost for monitoring, the DOC will waive that fee, rather than pay for the daily jail bed usage.
Senator Stivers stated that he was interested in the future costs of housing inmates versus monitoring and would like to see a report on that in the future. Ms. Thompson agreed that she would get as much information to the committee as possible.
The meeting was adjourned at 11:17 a.m.