Program Review and Investigations Committee



2017 Interim


<MeetMDY1> May 11, 2017


Call to Order and Roll Call

The<MeetNo2> Program Review and Investigations Committee met on<Day> Thursday,<MeetMDY2> May 11, 2017, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Danny Carroll, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Danny Carroll, Co-Chair; Representative Lynn Bechler, Co-Chair; Senators Perry B. Clark, Wil Schroder, Reginald Thomas, and Stephen West; Representatives Chris Fugate, Brian Linder, Arnold Simpson, and Walker Thomas.


Guests: Greg Thomas, Secretary, Robin Brewer, Executive Director of the Office of Budget and Fiscal Management, Transportation Cabinet; Jonathan Grate, Deputy Secretary, Brad Holajter, Budget Director, Matthew Niehaus, Legislative Liaison, Justice and Public Safety Cabinet; Frank Jemley, III, Chief of Staff, Tourism, Arts, and Heritage Cabinet; Charles Bush, Deputy Commissioner, Department of Fish and Wildlife Resources; and Sergeant Rodney Milburn, Fish and Wildlife Resources officer and president of officers association.


LRC Staff: Greg Hager, Committee Staff Administrator; Chris Hall, Colleen Kennedy, Van Knowles, Jean Ann Myatt, William Spears, Shane Stevens, Joel Thomas, and Kate Talley, Committee Assistant.


Minutes for December 13, 2016; February 17, 2017; and March 15, 2017

Senator Carroll opened the meeting by leading committee and audience members in a prayer and pledge of allegiance.


Upon motion by Representative Simpson and second by Senator Clark, the minutes for December 13, 2016; February 17, 2017; and March 15, 2017 were approved by voice vote.


Secretary Thomas spoke about the Strategic Highway Investment Formula for Tomorrow (SHIFT). Kentucky’s highway plan is overpromised for many years. Only one-half of the 1,400 projects are even partially funded, mostly with federal funding. There is money to pay for 10 percent of the $7.1 billion of projects promised with state funds in the plan. In 2016, the Transportation Cabinet initiated its Pause-50 plan when the road fund was threatened with a negative balance.


This is a transition year for SHIFT. Each priority in the model includes different measures. For example, one priority is economic growth, which includes measures of potential economic growth, which will vary depending on the local area, and daily traffic and freight volume.


The funding formula has two tiers: statewide and regional. The priorities and weights for the statewide formula are to improve safety (25 percent), reduce congestion (20 percent), fuel economic growth (20 percent), spend tax dollars wisely (20 percent), and preserve existing infrastructure (15 percent). The priorities and weights for the regional formula are improving safety (20 percent), reducing congestion (10 percent), fueling economic growth (15 percent), spending tax dollars wisely (15 percent), preserving existing infrastructure (10 percent), district priorities (15 percent), and local priorities (15 percent).


Funding is allocated among four regions (east, west, north, and south), each of which is divided into three districts. Any funding remaining after statewide priority projects are funded would be divided equally among the four regions. Within each region, 25 percent of its funding would be for projects awarded competitively for each district. The remaining 25 percent would be awarded competitively for projects in the region.


The cabinet will develop an initial list of projects based on the current plan. District and local leaders will be able to suggest changes. The cabinet will use the formula to score the projects on the revised list. District and local leaders may suggest moving up regional projects in the priority rankings. Based on these results and revenue estimates, the cabinet will develop a draft plan for the governor. The governor will finalize the plan and submit it to the General Assembly.


In response to a question from Senator Schroder, Secretary Thomas said the Lexington, Louisville, and northern Kentucky areas are in the same region because regions were developed along highway corridors. No matter how a region fares under the statewide formula, each region will receive a fourth of the funding available via the regional formula.


In response to a question from Representative Simpson, Secretary Thomas said the regional formula is not based on population.


In response to a question from Senator Clark, Secretary Thomas said Kentucky’s gas tax is 24.6 cents per gallon. The cabinet needs more revenue to keep up with demand.


In response to a question from Senator Carroll, Secretary Thomas said there is a backlog of 3,700 miles for resurfacing, growing at a rate of 500 miles per year. The cabinet has an internal working group on ways to increase revenue. For every penny the gas tax is increased, revenue increases by $30 million. This revenue is divided approximately in half between the rural secondary program and the road fund.


In response to questions from Representative Bechler, Secretary Thomas said rural secondary funding for needs other than roads will be within each region. SHIFT is a work in progress. If the cabinet succeeds, it will take care of the entire state and all regions. The cabinet will prioritize among projects. When the cabinet presents the plan and list of projects to the General Assembly, legislators will still control the funding of projects. In the past, there was significant over-programming in relation to funding. For the next budget, the cabinet will be transparent about which programs are most cost effective. The appeal to the General Assembly will be that if something is added to the budget, something should be removed.


In response to questions from Senator West, Secretary Thomas said the area development districts and metropolitan planning organizations will receive regional and district input. The chief district engineers will also ask legislators for input. After fulfilling statewide priorities, the rest of the funding will be distributed equally among the four regions. The cabinet will score the projects within each region.


In response to a question from Senator Carroll, Secretary Thomas said there is a delay with the request for proposals for Beaver Dam Rest Stop. Information on the project will be sent to Senator Carroll.


Senator Carroll recognized the Fish and Wildlife Resource Officers in attendance. There was a Kentucky Law Enforcement Foundation Program Fund (KLEFPF) bill in this year’s session to codify language in the budget bill bringing additional law enforcement into the fund. Fish and Wildlife Resource Officers met the requirements to be part of KLEFPF, but there were concerns on how the department was funded. These concerns could not be resolved via conference committee.


Mr. Holajter said KLEFPF is funded through a 1.8 percent surcharge on casualty insurance premiums for property that is at risk. The Department of Criminal Justice Training (DOCJT) program and the law enforcement program of KLEFPF get 72 percent of those receipts. This portion of DOCJT’s budget is approximately $60 million. A balance forward of approximately $5 million is planned each year to cover operating expenses and training stipends prior to receiving the first payment of the year. Last year, there was an $11 million transfer from the fund. DOCJT was appropriated approximately $71 million. It is projected to end with a balance of approximately $7.4 million, which includes $5 million to carry forward. He described DOCJT’s deferred maintenance needs, which total $6.1 million.


In response to questions from Senator Carroll, Mr. Holajter said the Department of Fish and Wildlife Resources (FWR) is requesting that 133 FWR officers be included in KLEFPF. This would cost $658,000 annually. Given the growing needs of the training program statewide, additional funds would be needed to cover adding the new officers and allow a balance forward for solvency. Mr. Grate said the cost of training the FWR officers receive from DOCJT is covered by KLEFPF, as is any other officer across the state. Mr. Holajter said the cost to DOCJT of bringing FWR officers into KLEFPF, but paying the stipend out of the Fish and Wildlife Resource Department’s budget, would be minimal.


In response to a question from Senator West, Mr. Holajter said money for capital improvements was earmarked in the last budget.


In response to a question from Senator Clark, Mr. Holajter said the interest for this budget was estimated at $50,000.


In response to a question from Senator Carroll, Mr. Grate said statute precludes FWR officers from being hired by other law enforcement agencies after retirement because they are not part of KLEFPF. The Justice and Public Safety Cabinet would be amenable to removing the impediment.


In response to a question from Representative Bechler, Mr. Grate said the State Police Department has renewed a mechanism that allows FWR officers to act as peace officers with general jurisdiction.


Senator Carroll commented that Kentucky ranked 47th in a recent ranking of the best states in which to be a law officer. It is important that Kentucky make law enforcement an attractive job for young people.


Representative Fugate noted that FWR officers have assisted the state police greatly in solving cases. He supports making FWR officers part of the KLEFPF.


Mr. Grate commended FWR officers that graduated recently from DOCJT Academy. He invited the committee to come to DOCJT to see how the system works.


In response to a question from Senator Carroll, Mr. Grate said no state trains its law enforcement officers more or better than does Kentucky.


Senator Carroll commented that he also thought there were problems with the ranking list. The number of applicants to the state police has been declining.


Representative Simpson said Kentucky’s low ranking would make a good Program Review and Investigations Committee study in the future.


Mr. Bush said the FWR officers are Police Officer Professional Standards (POPS) certified but cannot be included in KLEFPF. The department does not receive general fund dollars; it is fee-based, like a sheriff’s office. The department is a state agency that follows state personnel guidelines.


In response to questions from Senator Carroll, Mr. Bush said there is currently a $25 million fish and game fund balance, which is average. A balance must be maintained to cover costs because of funding variation during peak seasons. In the 2013-2014 biennial budget, the department mirrored the KLEFPF stipend. The starting pay for new officers is approximately $29,000. Officers are allowed overtime pay beyond the 37.5 hour work week.


In response to a question from Senator Carroll, Mr. Jemley said the Tourism, Arts and Heritage Cabinet, in consultation with the Personnel Cabinet, is considering a 40-hour work week for officers.


In response to a question from Senator Carroll, Mr. Bush said FWR cannot transfer money to KLEFPF because federal funds are involved. The department is willing to continue paying the stipend as it does now.


Mr. Jemley said the Tourism, Arts and Heritage Cabinet supports moving FWR officers into KLEFPF as long as the stipend continues to be paid by FWR.


In response to questions from Senator Carroll, Mr. Bush said FWR officers’ last pay raise was in the early 2000s. He will provide more specific information. FWR has been unable to raise salaries due to the structure of the state personnel system.


In response to questions from Senator West, Mr. Bush said the fees-in-lieu-of funding balance is currently $90 million. There is $25 million in reserves. He said that the authority to raise salaries would be with the Tourism, Arts and Heritage Cabinet and the Personnel Cabinet. Mr. Jemley asked for clarification from Personnel Cabinet staff who were in the audience. They said that the two cabinets and state budget office would be involved.


Senator Carroll said that one option is to enact a statute to allow FWR officers to be rehired by other law enforcement departments after retirement. Another option is to move FWR officers into KLEFPF, retaining the stipend from FWR, which would allow for rehiring based on existing statutes.


In response to a question from Senator Carroll, Mr. Bush said FWR officers want to be in KLEFPF because of the pride attached to being treated similarly to other POPS-certified officers and to allow for rehiring.


Senator Carroll said that the initial hope was that the FWR stipend would come from KLEFPF, so FWR money could be freed up for raises and hiring more officers.


In response to a question from Senator Carroll, Mr. Jemley said the Tourism, Arts and Heritage Cabinet would support funding for the stipend coming from that cabinet as a permanent solution.


Senator Schroder said that an issue with the funding in this year’s session was that the funding was via a budget amendment, which did not allow for sufficient time for legislators to get full information.


Sergeant Milburn said FWR officers are POPS-certified, in addition to the department’s own 12-week academy. Inclusion in KLEFPF is important because FWR officers are paid less than other state law enforcement officers. When there are storms or floods, FWR officers are often the first to arrive with special equipment. Last year, 8,000 citations were written by FWR officers, of which 15 percent were warrants for criminals or drug abusers.


In response to questions from Senator West, Sergeant Milburn said being promoted is the only way to receive a raise. A Conservation Officer I makes approximately $29,000; a Conservation Officer II makes approximately $32,000. The force has approximately 130 officers, of whom 10 are captains 2 are majors, 1 is a colonel, and 9 or 10 are lieutenants. The rest are officers or sergeants.


In response to questions from Senator Carroll, Mr. Bush said moving to KLEFPF will not change the status of funding from which officers could be given raises.


Sergeant Milburn said FWR officers are leaving for other state law enforcement agencies because they already have the necessary training.


Mr. Bush reiterated that restricted funds in FWR cannot be used for raises because it is constrained by how funding is allocated in its budget and authority for raises is with the cabinet.


Representative Simpson said that the erosion of FWR talent as it loses trained officers to other agencies is an issue. Another issue is that funding seems to be available but cannot be used for raises. The General Assembly may be able to take action to help increase salaries, but it is up to cabinet secretaries to help with raises for their employees.


In response to a question from Senator West, Mr. Bush said budget items are restricted and FWR cannot draw from them for officer salaries. The enacted budget is given to the department through the cabinet from the budget office.


In response to a question from Senator Carroll, Mr. Bush said that excess funds cannot be used by other cabinet areas. The department must hold back a reserve of $13 to $14 million in case of emergencies such as chronic wasting disease and to maintain operating costs.


In response to a question from Senator Carroll, Sergeant Milburn said passing a law putting FWR officers in KLEFPF but having the stipends come from the Tourism, Arts and Heritage Cabinet would be supported by the officers. FWR officers generate revenue for the state from the arrests they make outside of FWR violations, but the department does not receive the revenue.


Senator Carroll commented that this issue boils down to FWR being fee based and having restricted funds. The cabinet structure needs to be addressed.


The meeting adjourned at 11:50 AM.