Call to Order and Roll Call
The fifth meeting of the Interim Joint Committee on Local Government was held on Wednesday, November 17, 2010, at 10:00 AM, in Room 149 of the Capitol Annex. Representative Steve Riggs, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Damon Thayer, Co-Chair; Representative Steve Riggs, Co-Chair; Senators Walter Blevins Jr., Julian M. Carroll, Mike Reynolds, and John Schickel, Representatives Mike Denham, Ted Edmonds, Derrick Graham, Charlie Hoffman, Brent Housman, Adam Koenig, Stan Lee, Tom McKee, Ken Upchurch, and Jim Wayne.
Guests: Greg Haskamp and Bill Riggs, Finance Cabinet; Jon Steiner, J. D. Chaney, Bert May, and Tony Goetz, Kentucky League of Cities; Richard Moloney and Dawn Bellis, Department of Housing, Buildings, and Construction; Lynn Littrell and Andrew Hartley, Department for Local Government; Judy Taylor, Lexington-Fayette Urban-County Government; Jim Thompson, Education and Workforce Development Cabinet; Charlie Harman, Department of Education; Russell Romine and Gail Mayeux, Department of Transportation; Mark Mangeot and Tanya Dickinson, Justice Cabinet; Rick McQuady, Kentucky Housing Corporation; Beth Jurek, Cabinet for Health and Family Services; Lona Brewer, Energy and Environment Cabinet; Ron Wolf, Associated General Contractors of Kentucky; and Teena Halbig, Floyd’s Fork Environmental Association.
LRC Staff: Mark Mitchell, John Ryan, Joe Pinczewski-Lee, Matt Niehaus, Tom Dorman, Bryanna Carroll, Tom Willis, and Cheryl Walters.
Introduction of New Kentucky League of Cities Executive Director
Representative Riggs introduced Mr. Jonathan Steiner, the new Executive Director/CEO of the Kentucky League of Cities (KLC). In response to a question from Representative Riggs, Mr. Steiner said his personal challenges will be to travel across the state to meet all of the local elected officials and to be the voice of KLC. He looks forward to working with the committee.
Discussion of the Aspects of the American Reinvestment and Recovery Act as it relates to Local Governments
Representative Riggs introduced Mr. Greg Haskamp, Executive Director of the Office of Policy and Audit, Finance Cabinet, to discuss the American Recovery and Reinvestment Act (ARRA). The ARRA was passed by Congress on February 13, 2009, and provides fiscal relief to states; ensures continuity of community services; preserves or creates jobs and job training; invests in infrastructure improvement; fosters long-term research for growth; and gives tax relief to individuals and businesses.
Mr. Haskamp stated that the ARRA total national investment is $787 billion. Kentucky has been awarded $3,456,900.00. The total is comprised of 2,645 individual grants, 47 loans, and 916 federal contracts. Approximately $3 billion of the total is channeled through state government by formula, match, or competitive award. Sixty-eight percent of the funds have been expended, which includes grants made in the past 120 days. There is roughly $800 per capita in awards, grants, and contracts. Kentucky is 25th among states for overall ARRA awards.
Mr. Haskamp explained how the ARRA money comes in. Congress appropriates funds to 28 federal agencies. Federal agencies make funds available to state and local governments or directly to academia, business, and organizations. Federal agencies also provide entitlements and tax credits covered by the ARRA. State and local governments make funds available for contracts and grants to academia, business, and organizations. State agencies also administer funds for unemployment compensation.
Mr. Haskamp next explained where the ARRA money is going: $990 million for Medicaid; $924 million for education; $421 million for roads and bridges; $272 million for health and welfare; $120 million for the general fund; $71 million for water and sewer lines; $66 million for job training and public safety; $63 million for energy projects; $50 million for transit; and $12 million for community development.
Mr. Haskamp described the ARRA award process. Pre-award—agency establishes conditions, dates, forms, and reviews submissions; award—recipient is notified, funds are awarded, and Congress and public are notified; post-award—both grantee and awarding federal agency complete status report; and closeout—archive all records and conduct final reviews.
Mr. Haskamp said Section 1512 of the ARRA, which is the primary vehicle, specifically requires all recipients of awards to file reports that include, among other information: the total amount of fund received from a particular Federal agency; a description of the projects the funds are being used for; and the status of the projects and the amount of funds spent to date.
Regarding transparency, Mr. Haskamp noted that Kentucky is rated number two nationally by an independent watchdog group. The website provides programmatic descriptions and details; “dashboard” facts; downloadable reports; report search functions; job breakouts; interactive maps and charts; and contract searches for all eligible state contracts.
Mr. Haskamp next discussed the ARRA’s local impact in Kentucky. The Federal Health and Human services total in Kentucky was over $1.3 billion, which included over $940 million for Medicaid. Total infrastructure investments were over $822 million, including: over 200 individual transportation projects; over 50 clean and drinking water projects; and 12 competitively awarded broadband projects, serving 71 Kentucky counties, for a total investment of over $300 million. State Relief and Stabilization funds totaled over $650 million, including: over $532 million in Education assistance to over 176 Local Education Agencies (LEAs) and state universities; and more than $118 million to assist corrections and public safety. Energy and weatherization projects totaled over $259.6 million, which served 34 projects and provided weatherization assistance to a goal of over 9,000 Kentucky homes. Hundreds of thousands of hours were worked, which funded 10,000 jobs, estimated as of October 30. This number of jobs was calculated at a 40 hour full time equivalency.
Lastly, Mr. Haskamp showed members Kentucky’s informational website on the distribution of ARRA funds in Kentucky.
In response to a question from Representative Wayne relating to the creation of 10,000 jobs, Mr. Haskamp stated that the number includes those jobs that would have been lost had ARRA money not come to the state.
In response to a question from Representative Lee regarding whether or not Kentucky gained 10,000 jobs because of the stimulus bill, Mr. Haskamp explained that the jobs-reporting that takes place with the Stimulus Act is that those hours were worked with stimulus funds and they would not have been worked without the funds. What is reported is the number of hours that were actually worked utilizing stimulus money; that is what the jobs calculation basically reflects.
In response to a question from Representative Lee, Mr. Haskamp said that the 10,000 number includes some employees of such agencies as fire and police departments and local and state governments, among others, but the exact breakout would have to be compiled separately.
Bill Riggs with the Finance Cabinet told Representative Lee that the data is taken from stimulus payroll. That payroll would not have been there had it not been for stimulus dollars. If that payroll went to an individual who would have otherwise been laid off, then yes, a job was created because that person would have been drawing unemployment and receiving other government assistance. There was a mixture of new jobs that did not exist before and jobs that are supported because the stimulus dollars were there. But the absolute payroll came from stimulus money so that can be counted as a current worker that would have been laid off, who, because of stimulus funds, had a job and continued to receive money and pay taxes and contribute to his family or that person because that stimulus was not there, would have been laid off. It could have been a new job creation but the only way to truly measure it by actually taking the payroll and saying this payroll is there because the stimulus money was there.
In response to a question from Representative Lee, Mr. Riggs said the cabinet does not know how many were actually public jobs. It can go back and take a look at that. If it was a public sector or private sector, it is still a job that was paid for with stimulus funds and that the community somehow got enhanced because that person was there working. The cabinet will try to break that out to see whether the jobs are private or public.
Representative Graham commented that the government did not have to fund unemployment as much because of the use of stimulus funds.
Senator Carroll commented that the stimulus dollars have been of tremendous benefit to keeping approximately 9,200 Kentuckians employed who might otherwise have been drawing unemployment and not paying local taxes.
In response to a question from Representative Housman, Mr. Haskamp stated that the stimulus money is expected to peak in 2011 and it begins to sharply taper off after that point running into 2012 and 2013.
In response to a question from Representative Housman regarding a breakdown of how many of the 5,200 jobs created or retained in education are at the collegiate level versus the local level, Mr. Haskamp said that information was not readily available, but that he would get it.
Representative McKee commented that a bridge is being built in his district by a company that is back building because of stimulus funds.
Senator Thayer commented that taxpayers are funding the ARRA.
Representative Denham commented that he appreciated the Mr. Haskamp’s presentation which will be a big help in explaining the ARRA to his constituents.
In response to a question from Senator Thayer regarding how $118 million in funds were appropriated and the criteria for allocating those funds to provide fiscal relief to the state to prevent tax increase and avert cutbacks in other critical services, Mr. Haskamp said that is the money which was used by the general assembly that went to support corrections.
Senator Thayer said he would like to know when the CDBG grants were announced for Marion and Lewis Counties. He would also like to know the deployment of all ARRA funds between August 15th and Nov. 1st in Fayette, Franklin and Jefferson Counties. He would like that information sent to his office in the next couple of weeks.
Senator Carroll said he would like that information for Franklin and Fayette counties sent to his office. Information for Franklin County should be given to Representative Graham.
Representative Riggs thanked Mr. Haskamp for the presentation and said it would come in handy for members when meeting with constituents.
Consideration of Referred Administrative Regulations
The committee considered referred Administrative Regulations, 109 KAR 15:020, which establishes the standards for budgeting, report, and recordkeeping for debt, receipts, and disbursements for local governments and local government officials handling public funds; and 815 KAR 7:110, which establishes requirements for local building departments to request and be granted expanded building code plan review, inspection jurisdiction and to collect fees for those activities. Representative Riggs stated that a written report of the review will be submitted to the LRC.
There being no further business, the meeting was adjourned at 11:25.