Call to Order and Roll Call
The third meeting of the Interim Joint Committee on Local Government was held on Wednesday, September 23, 2015, at 10:00 AM, in the Gheens Room of the Islands Pavilion, Louisville Zoological Gardens, Louisville, Kentucky. Representative Steve Riggs, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Joe Bowen, Co-Chair; Representative Steve Riggs, Co-Chair; Senators Ralph Alvarado, Morgan McGarvey, and Dorsey Ridley; Representatives Linda Belcher, Ron Crimm, Mike Denham, Jim DuPlessis, Adam Koenig, Brian Linder, Tom McKee, Michael Meredith, Russ A. Meyer, Phil Moffett, Arnold Simpson, Rita Smart, James Tipton, and Susan Westrom.
Guests: Kelly Grether, Louisville Zoological Gardens; David Adkisson and Trevor Burton, Kentucky Chamber of Commerce; Russell Salsman, Darren Sammons, and Tammy Vernon, Department for Local Government; Jack Couch, KIPDA Area Development District; Darryl Link, Kentucky Council of Area Development Districts; Bryanna Carroll, Kentucky League of Cities; and Jeff Busick, McCarthy Strategic Solutions.
LRC Staff: Mark Mitchell, John Ryan, Joe Pinczewski-Lee, Courtney Daniel, Michael Garton, and Cheryl Walters.
Approval of Minutes
Upon a motion of Representative Simpson and second by Senator McGarvey, the minutes of the August 26, 2015 meeting were approved.
Discussion of Louisville Zoo Programs and Plans
Kelly Grether, Development Director with the Louisville Zoological Gardens, said that the Louisville Zoo is the largest non-profit attraction in the region, attracting about 850,000 visitors on average annually. The Zoo strives to meet the region’s needs for lifelong academic attainment and increased quality of life amenities and environmental awareness through conservation and education programming.
The Louisville Zoo plans to have an expanded elephant yard that will open early next spring and a new penguin exhibit. As part of the Zoo’s $10.4 million campaign, there is going to be an expanded dining experience and an African primate experience. Much emphasis is put on education, and there is an award-winning school at the Zoo. Also, the Zoo will be taking early childhood education messaging throughout the state. The classroom that the Zoo will be housing will be focused on early childhood education. There is a great need to help preschoolers be prepared for kindergarten.
The Louisville Zoo is producing a master plan that will be effective through 2028 or 2030 which will include a new African Savannah. The Zoo is going to take the multi-species rotation that it has and take it to the next level. There are only a few zoos within the United States and a few in Europe that actually have multi-species sharing at the same exhibits booth and not just rotating through spaces. The Zoo will have multi-species in the same exhibit space, which is unique.
The Louisville Zoo plans to have an education expansion that is going to be housed at the front of the zoo. The Zoo intends to have a Kentucky trails exhibit featuring the animals that are native to the state of Kentucky. There are plans for an animal encounter, and the Zoo intends to expand its waterpark by four or five times its current size. The Zoo plans to add a crocotorium, which no other Zoo has, to feature Cuban crocodiles.
In response to a question from Senator Bowen, Ms. Grether said that the Zoo’s budget is $15 million.
Senator McGarvey commented that the Zoo has won numerous awards and has had a big economic impact for the state.
In response to a question from Representative Smart, Ms. Grether stated that the Zoo offers several programs to the community and classroom space for early childhood education. In addition, the Zoo takes some of their programs to the schools.
In response to a question from Representative Riggs, Ms. Grether said that schools outside Louisville take field trips to the Zoo.
In response to a question from Representative Simpson, Ms. Grether said that new Zoo attractions have increased attendance as a result of funding that was requested and received from the legislature.
In response to a question from Senator Bowen, Ms. Grether said that the Louisville Zoo compares itself to the Cincinnati, Nashville, and Indianapolis zoos, even though those zoos have bigger budgets.
Representative Riggs commented that he would like to see the state be a bigger partner with the Zoo.
Presentation of the Kentucky Chamber of Commerce’s Report: “Kentucky’s Workforce Challenges”
David Adkisson, President and CEO of the Kentucky Chamber of Commerce, said that the top concern of Chamber members is workforce challenges. About 500 people responded to a survey as it relates to the workforce: 15 percent of potential employees cannot pass a drug test; eight percent of the overall workforce has good skills; 23 percent of employers have trouble finding people with the right technical skills; 27 percent of employers have trouble finding people with good “soft” skills; ten percent of employees have good skills but need retraining for specific technical skills; and 17 percent cite concerns with a generational difference in work ethic.
Challenges facing Kentucky’s workforce include: lack of employer engagement; serious skills gap; need for transparency in workforce programs; insufficient program coordination; inconsistent use of credentials; finding drug-free applicants; and better soft skills among workers.
Educational recommendations include: developing and incorporating soft skills and work readiness certification into college and career readiness requirements for schools; and increasing coordination between the education and business communities.
The Chamber recommends the following: identifying all funding sources of workforce programs and ensuring accountability; a greater role for employers in choosing local workforce board members; Kentucky’s next governor should order a review of the state’s workforce training and development system; promoting what is available through outreach campaign; and incorporating drug screening into the application process for workforce training programs.
Congress passed the new Workforce Innovation and Opportunity Act, which will more meaningfully engage employers.
In response to a question from Senator Bowen, Mr. Adkisson stated that the 500 people surveyed form a good cross-section of the state.
In response to another question from Senator Bowen, Mr. Adkisson said that the workforce was the top concern by a large margin.
In response to a question from Representative Crimm, Mr. Adkisson said he was not worried about the Governor of Florida coming to recruit employees from Kentucky. There are ways to improve business conditions, but at the same time, Kentucky has much to offer.
In response to a question from Representative DuPlessis, Mr. Adkisson stated that the Chamber favors state investments in early childhood education but also supports career ready programs.
Regarding workforce challenges, Representative Denham commented that his district has been able to solve all of them but the drug problem. In response to a question from Representative Denham, Mr. Adkisson said the legislators must weigh in at budget time and bring stories to Frankfort from their districts. The legislature’s oversight is essential. A signal needs to be sent that if an employee does not pass a drug test there will be no job.
In response to a question from Representative Simpson, Mr. Adkisson stated that Michigan, South Carolina, Georgia, and Arizona are doing well with workforce issues.
Representative Westrom commented that senior citizens would be an option for helping with workforce challenges. There should also be jobs for non-violent offenders.
In response to a question from Representative Westrom, Mr. Adkisson said that employers are practical and may be able to adjust the sensitivities relating to drug use in consideration of the responsibilities of the job. There should be an all hands on deck approach and agreed that senior citizens, disabled persons and non-violent offenders would be an option. Congratulations are in order, also, to the Workforce Cabinet for regulations that promote accountability in response to the new federal regulations that are in effect.
In response to a question from Representative Meyer, Mr. Adkisson said that the Department of Education should have information on how many school systems have technical schools.
Representative McKee commented that in his district, which includes Scott County, there is a technical school that is in partnership with Toyota and other businesses that has become a model for the whole country.
Representative Belcher commented that she was glad to hear that the Chamber was interested in early childhood education. In response to a question from Representative Belcher, Mr. Adkisson stated that determining curriculum and filling needs is as simple as making connections between the business community and the schools.
Representative Moffett suggested letting younger students, such as those of middle school age, know what trade schools are available and what they have to offer.
Regarding the skills gap, Representative Meredith commented that the business community should have more say and play a bigger role. Evaluations should be making sure a successful contact is made. Regarding the drug issue, a prospective employee should be directed where to get treatment.
In response to a question from Representative Riggs, Mr. Adkisson stated that the Chamber has not explored which drugs are the problems. Representative Riggs commented that the drug needs to be known so the issue can be addressed.
Implementation of 2013 HB 1 relating to Special Purpose Governmental Entities by the Department for Local Government
Russell Salsman, Chief of Staff, Department for Local Government (DLG), said that Florida was used as the benchmark in the drafting of HB 1. Prior to the Auditor’s report in 2012, about 1,200 special districts had been identified. Today there are over 1,800 in the registry.
Darren Sammons, Staff Attorney with DLG, said that special districts can be traced back almost to the time Kentucky became a state, and that they have been a part of American government almost since the nation was founded. There is evidence that a special district was organized in Philadelphia as early as 1790.
Special Purpose Governmental Entity (SPGE) means any agency, authority or entity created or authorized by statute which exercises less than statewide jurisdiction; exists for the purpose of providing one or a limited number of services or function; is governed by a board, council, etc. with policy-making authority that is separate from the state, county or city; and has the independent authority to generate public funds; or may receive and expend public funds, grants, awards, or appropriations from the state, from any agency or authority of the state, from a city, county from another SPGE.
Many citizens are likely to confuse the services of special districts with their cities and counties because their boundaries often match those of local governments and the local governments often retain the job of collecting fees, charges or taxes for the district. This partly why special districts remained relatively obscure for such a long time.
In November, 2012, State Auditor Adam Edelen published the report, “Ghost Government: A Report on Special Districts in Kentucky.” He noted the difficulty with determining the number of such districts and whether they comply with the law.
The Auditor’s report found more than 1,200 special districts with very little oversight and accountability, yet they spend $2.7 billion annually. In all but three counties, taxpayers pay more to special districts in property taxes than to their county governments. The report paved the way for 2013’s HB 1, which passed and created a new chapter of Kentucky Revised Statutes—KRS 65A. For the first time in the history of the Commonwealth, the new law called for centralized oversight and transparency for special districts, and DLG was tasked with this enormous responsibility. KRS Chapter 65A defines SPGEs, requires registration with DLG, and compels financial reporting.
One of the big challenges for DLG was to create a registry of these “ghost governments.” This meant identifying all of the SPGEs which were known, finding previously unknown entities, and reaching out to let them know about the new law. Due in part to the historical lack of a centralized registry, even contacting some of those entities has been a challenge—getting up-to-date contact names and information was merely one part of the task. But DLG staff worked diligently and contacted each known SPGE. Identifying new and existing SPGEs is an ongoing process. To date, 96.9 percent of identified SPGEs are registered through DLG’s online portal, allowing unprecedented public oversight. Of the 1,800+ SPGEs currently identified, 93.5 percent properly submitted their FY 2015 budgets for public review. DLG staff continues to notify delinquent entities as it continues its goal of 100 percent compliance.
Tammy Vernon, Branch Manager for DLG, explained that compliance with KRS Chapter 65A includes registration and financial disclosure. Registration should be completed annually and basic information should be collected about the SPGE, including: district’s point of contact; physical local and area of operation; a list of entities that have oversight over the SPGE; statute under which the SPGE was formed; date, time and location of board meetings; a listing of board members; if the entity has taxing authority; and types of services provided by the SPGE. Registration fee payment is calculated off previous fiscal years’ total revenues and is between $25 and $500.
Financial disclosure includes one year reflection of a SPGE’s finances and audit/attestation engagement.
Ms. Vernon showed members how to use the online public portal.
In response to a question from Representative Simpson, Mr. Salsman stated that DLG does not have a branch that oversees discrepancies in the financials from the public.
In response to a question from Representative Koenig, Mr. Salsman said the 6 percent that do not comply will not get funding. Mr. Sammons added that the bill has several penalties for those SPGEs that do not comply including public notice of non-compliance, possible special audits and potential dissolution.
In response to a question from Representative Meredith, Mr. Salsman said important consideration is given to smaller special districts with small budgets to educate them to be compliant.
Representative Meredith said that there needs to be a change in the newspaper notification process to work for the smaller special districts.
Representative Riggs asked members who wanted changes to the bill to contact LRC staff.
In response to a question from Representative Tipton, Mr. Sammons there is a mechanism in the bill where the state can dissolve a special district for non-compliance.
In response to a question from Representative Westrom, Mr. Salsman said that the Metropolitan Sewer District was the largest district, and that DLG has no way to verify the audits from the SPGEs.
There being no further business, the meeting was adjourned at 11:45 a.m.