Call to Order and Roll Call
The 1st meeting of the Interim Joint Committee on Labor and Industry was held on Wednesday, June 17, 2015, at 10:00 AM, in Room 169 of the Capitol Annex. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative Rick G. Nelson, Co-Chair; Senators Perry B. Clark, Carroll Gibson, Chris Girdler, Denise Harper Angel, Jimmy Higdon, Wil Schroder, Reginald Thomas, and Mike Wilson; Representatives Lynn Bechler, Linda Belcher, Regina Bunch, Will Coursey, Jeffery Donohue, Dennis Horlander, Thomas Kerr, Adam Koenig, Tanya Pullin, Tom Riner, Jim Stewart III, and Brent Yonts.
Guests: Sharon Clark, Commissioner, Kentucky Department of Insurance; Dr. Kate Akers, Acting Executive Director, Kentucky Center for Education and Workforce Statistics; and William Woodward, District Council President, Iron Workers Southern Ohio and Vicinity District Council.
LRC Staff: Carla Montgomery, Adanna Hydes, Matt Ross, and Sasche Allen.
Update of the Kentucky School Boards Insurance Trust
Commissioner Sharon Clark, Kentucky Department of Insurance, gave an update on the Kentucky School Boards Insurance Trust. The main goals of the Rehabilitation of the Kentucky School Boards Insurance Trust (KSBIT) by the Kentucky Department of Insurance have been attained. In November of 2013, the Department of Insurance filed two rehabilitation assessment plans, one for the KSBIT Workers’ Compensation Fund and one for the KSBIT Property & Liability Fund, with the Franklin County Circuit Court totaling $48.5 million. After further review by the Deputy Rehabilitator and findings of unreported claims and reinsurance issues, the total was adjusted to $49.2 million, which includes $34,633,573 for the Workers’ Compensation assessment and $14,583,074 for the Property & Liability assessment. Commissioner Clark said that originally the KSBIT Board of Directors had filed an assessment plan in July 2013 with the Department of Insurance totaling $72.3 million, but after working with various entities, the board was able to reduce the amount. In March of 2014, the Franklin County Circuit Court reviewed the plans put forth by the Department of Insurance and they were approved in May 2014.
The assessment plans that were approved are partly comprised of an itemization of the amounts owed along with the percentage of the total assessment for each member. The purpose of this was to allow the members to financially prepare for what they would be responsible for and so they could include it in their budget for the upcoming fiscal year. The Deputy Rehabilitator sent notification letters to the members and schools in the summer of 2014 requesting payment of the assessment. The letter informed the members of the amount of the assessment along with flexible payment options that included paying the assessment in total, paying over a six year period without interest with the workers’ compensation transaction, and using a bonding authority over the course of up to 20 years through the Department of Education. All members paid the assessment but the University of Louisville paid its assessment under protest. The Franklin County Circuit Court upheld the school’s assessment and the University of Louisville appealed the assessment to the Court of Appeals.
Risk Management Services Corporation in Louisville took over the run-off of the Property & Liability Fund. Although the transfer was done in the summer of 2014, 38 percent of the claims transferred were settled in the first year, which may be a sign that all claims may be settled well before the five years that was originally projected. Kentucky Employers Mutual Insurance (KEMI) was transferred all the workers’ compensation claims in November 2014 through a loss portfolio transfer. KEMI accepted all future obligations for the amount of $35 million. Commissioner Clark commended KEMI for its work and for providing savings to the school by offering to allow payments of the assessment over six years without interest.
Commissioner Clark said that the Department of Insurance is privileged to have a vastly knowledgeable Deputy Rehabilitator, Joe Pope, who supervises the daily operations and previously worked for the Department of Insurance as a Financial Examiner. The department is pleased with the progress and does not have any major issues with transfers of claims to Risk Management Services Corporation or KEMI.
The Kentucky Longitudinal Data System – Connecting Education and Outcomes
Dr. Kate Akers, Acting Director, Kentucky Center for Education and Workforce Statistics (KCEWS), discussed the purpose for the center and its various data and statistical analyses. The center is an independent state agency that maintains the P20 W, which is the State Longitudinal Data System (SLDS), and evaluates education and workforce at all levels. KCEWS, which builds upon the P-20 Data Collaborative, is authorized by the legislature to collect data throughout the state from all education and workforce programs. KCEWS was created in 2010 by Executive Order and was ratified into law after the 2013 regular session. The center receives a portion of state funding, $814,000 for the 2016 fiscal year, however, it is maintained mostly through federal grants. A board of Kentucky education and workforce leaders oversees the center. Through the Kentucky Longitudinal Data System (KLDS), information is taken from different state agencies and programs and is stripped of all personal identifiers to then be analyzed. The analyses and data can be provided to state education and workforce agencies to better serve them. The KLDS has information on public K-12 students, K-12 Teachers and Staff, public and independent postsecondary institutions, proprietary colleges, teacher/educator certification, in-state employment and earnings from the unemployment insurance system, early childhood and kindergarten readiness, financial aid, career and technical education from the Kentucky Department of Education, unemployment claims from the unemployment insurance system, the Office of Vocational Rehabilitation, the Office for the Blind, and job seeker information. KCEWS is trying to expand early childhood and workforce data to better understand and offer analysis on the education to workforce pipeline. Some of the limitations of the data are that it only includes people employed in-state, it does not include federal or military employees, and it only provides quarterly reports by industry and employer location. The center is in the process of applying for grants that will help them explore out-of-state data.
One of the most recent reports that the center has completed is the 2015 Early Childhood Profiles which are available for every county in the state and there is also a state level report. The report covers kindergarten readiness and gives results by the five different domains for the kindergarten readiness screening. Currently, 50 percent of Kentucky students are ready for kindergarten. It has data regarding early childhood programs that are available. The profiles include additional assessments such as third grade reading assessments, information pertaining to the funds spent on different programs, and the number of students served in preschool, head-start, and other child care resources.
Some of KCEWS’s signature reports are the High School Feedback Reports on College Going and College Success. Dr. Akers pointed out that other states have tried to model their high school feedback reports after KCEWS’s because of the specific metrics and how they are defined in the reports. The two different reports are by school, district, and region. The College Going Report gives information on recent graduates and their college readiness if they are continuing on to a postsecondary institution and the College Success Report offers data on credit hours earned, financial aid packages, and GPAs after the students have entered postsecondary. Currently, 62.8 percent of public high school graduates are exceeding the benchmarks needed for college/and or career readiness. There is a dramatic difference between students who are considered college ready and students who are not considered college ready related to their grades and earning of college credit. The average first year GPA of students considered to be college/and or career ready is 2.65 and the average first year GPA of students not considered to be college/and or career ready is 1.81. The average credit hours earned of students considered to be ready is 22.9 and for students not ready is 12.1.
KCEWS also completed a report involving K-12 Employment Outcomes and found that high school graduates not attending college earned $7,567 per year one year out of high school and earned $11,511 three years out. Females earned 70 percent of what males earned three years out and African American students earned 30 percent less than Caucasian students three years out. Notably, graduates with 20 or more unexcused absences in their senior year earned up to 55 percent less than those with 5 or fewer. Another report completed was on Postsecondary Employment Outcomes that found three years after students graduated 80 percent of Associate degree recipients were employed in state, 75 percent of Bachelors degree recipients were employed in state, and 30 percent of out of state students were employed in Kentucky. Other reports include the Postsecondary Feedback Report, which has information regarding enrollment, employment outcomes, wages, and dropout rates for each of Kentucky’s public and independent higher education institutions, and the Teacher Preparation Feedback Reports, which are available for all in state postsecondary institutions with teacher education programs and provide a snapshot at an aggregate level by institution of enrollment, time to employment, teacher retention, and district of employment.
The Kentucky Center for Education and Workforce Statistics recently applied for an SLDS grant for $7 million over a four year period that would allow them to complete more interactive reports. The center would also like to collect more information on those students who are deemed college/and or career ready including what colleges they are attending, what they are studying, the types of industries they are employed in, and median salary statistics. Some of the annual upcoming reports that the center will release include reports on Adult Education Feedback, Teacher Supply and Demand, Teacher Preparation, and Postsecondary Feedback.
In response to a question from Senator Gibson, Dr. Akers pointed out that the Department of Education would have more information on how the state compares to other states in high school graduation rates and also potential solutions for the differences in high school graduation rates by county but she would work with the department to obtain that information.
Representative Horlander commended KCEWS for its work they have done and for its direction in helping the students and workers of Kentucky.
Replying to a question from Representative Belcher pertaining to students who obtain their GED, she said the statistics in the K-12 Employment Outcome Report would only include students who received their GED prior to whatever date would have been considered the end of that current school year. Dr. Akers also mentioned that he had recently brought in information from the Kentucky Adult Education agency to compile the Adult Education Feedback Report that includes GED statistics.
Senator Higdon pointed out that due to the passing of House Bill 240 in 2013, personal identifiers are not attached to the information that is collected that makes it possible for the center to create reports. He complimented the center for its work.
Dr. Akers responded to Representative Bechler by stating that the center uses the same definition of college/and or career readiness as the Kentucky Department of Education. College readiness indicates that a graduate has met the Kentucky benchmarks for English (18), mathematics (19), and reading (20) on any administration of the ACT or passed a college placement test (Compass or KYOTE). Career readiness indicates a graduate met benchmarks for Career Ready Academic (ASVAB or ACT WorkKeys) and Career Ready Technical (KOSSA or received an industry-recognized career certificate). She also said she would follow up with him with information from the Kentucky Department of Education on how the state’s graduation rate and college/and or career readiness statistics compare to other states. Dr. Akers stated she has been working with offices from other states and discussing specific metrics and definitions of college/and or career readiness.
Addressing Representative Yonts, Dr. Akers stated that the center had received a Workforce Data Quality Initiative Grant that helped bring in information from the Office of the Blind and the Office of Vocational Rehabilitation which was $1 million over three years. The 2012 SLDS grant expires this year and the center has applied for an extension. The center also will be receiving $814,000 from the state for fiscal year 2016 but still relies mainly on grants. Responding to a follow up question, Dr. Akers said the center receives new information every fall from the previous academic year and for some reports must wait on outcome data. Representative Yonts also inquired about electronic data from postsecondary institutions. She said the center is receiving information in a timely manner electronically from those institutions and she plans to meet with various institutions’ research offices to further discuss the data and its impact soon.
Representative Nelson commended KCEWS and also spoke of Harlan County Independent School that has had all of their graduating seniors this year be accepted to college. He requested that something be sent to the school in recognition of this accomplishment.
Senator Thomas requested a large copy of the map displaying the 2014 percentage of public high school graduates ready for college/and or careers. He pointed out the achievement gaps of students in his home county of Fayette County. Dr. Akers said if the center could disaggregate some of the information then it could better address those achievement gaps. Senator Thomas also commended Woodford County for its high percentages of students who displayed kindergarten and college readiness.
Replying to Senator Wilson, she said that the early childhood profiles include students from any type of instructional setting prior to attending kindergarten and is not aggregated but she could obtain that data from the Kentucky Department of Education. Answering a follow up question, Dr. Akers said that postsecondary reports for private colleges are available online. She said that reports have been done for all Kentucky public, private, and independent colleges but not for proprietary colleges.
Responding to Representative Riner, Dr. Akers stated that KCEWS partners with the Commonwealth Office of Technology to prevent hackers from obtaining information. The center does not use personal identifiers in its database, which ensures privacy.
Dr. Akers responded to Representative Koenig explaining when it comes to teacher supply and demand information the center ensures that it communicates that it does not include out of state data. However, if the center obtains its 2015 SLDS grant, it will want to work with other states to obtain more out of state employment data.
Addressing Senator Schroder, Dr. Akers explained that kindergarten readiness is measured with the BRIGANCE K Screen that is compiled of five domains which are academic/cognitive, language development, physical development, self-help, and social-emotional. She also said that all the information is from Kentucky’s public kindergartens.
Issues Concerning Falsified Welding Certificates and Testing
William Woodward, District Council President, Iron Workers Southern Ohio and Vicinity District Council, gave a presentation on matters pertaining to the falsification of welding certificates, the current and possible future outcomes of forging these documents, and his proposed legislation he believes may resolve the problem.
Mr. Woodward stated that the Iron Workers Southern Ohio and Vicinity District Council covers Indiana, Kentucky, West Virginia, and Southern Ohio. He wanted to bring the committee’s attention to the issue of welding certificates being falsified and inspectors not checking the forms which could lead improper welding performed for on structural steel buildings. The actual certificate should include the test number, the person’s name, the facility where the test was given, the testing material lot number, and other things. These things are required to be present by the American Welding Society.
Mr. Woodward stated that on May 22, 2011 a new school gymnasium in McCracken County collapsed during construction and potentially as a result of unqualified welders that had forged or falsified their welding certificates to perform on this job. Mr. Woodward obtained the certificates of the welders of the company that built the structure, which Mr. Woodward claims have been altered. The welders also signed affidavits saying that they had not taken a welding test for this particular company. 31 out of 34 of the certificates had not been signed by an officer from the company and 11 out of 34 did not have a test number. The company was paid to build the structure, remove debris after the collapse, and was also paid to erect the building the second time. The insurance company did cover the collapse so Mr. Woodward submitted what he says is proof of the falsified certificates to the Kentucky Insurance Fraud Division, who then contacted the Attorney General. The company is now under investigation and has since closed. Mr. Woodward offered a list of other Kentucky projects that the company had worked on, which included judicial buildings and several schools. Repairs were eventually made to the school in McCracken County while school was in session and the building was inspected again.
There are testing facilities that have not adequately provided welding tests to individuals. For one such facility the cost to obtain a welding certificate through the mail is $100. According to Mr. Woodward anyone can complete a weld, send it in with any name on it, and receive a welding certificate in the mail. To test this theory, a weld was sent in with the name of an animal on the application who became a certified welder. Another individual failed on a test that had been inspected before being sent in, but he was told that if he sent in another $100 he would pass.
Mr. Woodward stated that many certificates have deleted out information and another name is inserted while the test number is not changed. Some certificates do not obtain the correct information. Some individuals have even used a dead man’s certificate. Mr. Woodward has found these falsified certificates on several job sites.
Mr. Woodward believes that future legislation could limit this problem and ensure that all welders on structural steel buildings are properly certified by an accredited testing facility and proper inspections by certified welding inspectors are done on structural steel buildings.
Mr. Woodward informed Representative Yonts that to his knowledge there had been no civil suit against the company that built the collapsed school building. Representative Yonts also felt that the U.S. Attorney should be notified by Mr. Woodward. Mr. Woodward said to Rep Coursey that to his knowledge none of the projects he mentioned in his presentation have been reinspected.
Mr. Woodward said he had notified other schools and court houses of these issues in response to Representative Yonts. Mr. Woodward said the University of Cincinnati gave him the bad certificates used by a contractor now working at the University of Kentucky but they had not gotten this information form UK. Representative Donahue appreciated the presentation and meeting with Mr. Woodward. Mr. Woodward suggested that Representative Belcher talk to the school boards who may be planning new construction or renovations since they are in charge of the general contractors used. Representative Belcher thinks the Kentucky Department of Education should be informed on this subject.
Mr. Woodward informed Senator Gibson that there are several different types of tests done for buildings versus bridges. Being state qualified is a more stringent test, but something like this could happen. Most of the time on a state job such as controlled by the Department of Transportation they want workers to do their tests on site and not bring in separate papers. He explained that different welding jobs have different requirements.
The July meeting will be in Louisville. The meeting was adjourned.