Interim Joint Committee on Appropriations and Revenue


Budget Review Subcommittee on General Government, Finance, and Public Protection


Minutes of the<MeetNo1> 1st Meeting

of the 2010 Interim


<MeetMDY1> October 28, 2010


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Budget Review Subcommittee on General Government, Finance, and Public Protection of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Thursday,<MeetMDY2> October 28, 2010, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Senator Jack Westwood, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jack Westwood, Co-Chair; Representative Royce W. Adams, Co-Chair; Representatives Dwight D. Butler, Adam Koenig, Tom McKee, Brad Montell, Charles Siler, and Wilson Stone.


Guests: Greg Haskamp, Executive Director of the Office of Policy and Audit within the Finance and Administration Cabinet; Kenneth Lucas, Commissioner of the Kentucky Department of Veterans’ Affairs; Margaret Plattner, Deputy Commissioner of the Kentucky Department of Veterans’ Affairs; Jeff Acob, Cemeteries Branch Manager of the Kentucky Department of Veterans’ Affairs; Shaun McKiernan, Fiscal Manager of the Kentucky Department of Veterans’ Affairs; and John Hicks, Deputy State Budget Director.


LRC Staff: Debra Gabbard, Tom Willis, Perry Papka, Melissa Lueker, Kelly Dudley, Katherine Halloran, Frank Willey, and Christina Williams.


Update on American Recovery and Reinvestment Act (ARRA) Funding

Director Haskamp updated the committee on the status of ARRA funding for the Commonwealth. He provided the committee with a multi-page document that included all programs funded by ARRA, the amount of the award, and the activity to date.


In Response to a question by Representative Adams, Director Haskamp stated the weatherization assistance funds for low income families are separate from the Low Income Home Energy Assistance Program (LIHEAP). The awarded money for the weatherization program comes into the Finance Cabinet, is transferred laterally to the Kentucky Housing Corporation, and is then disseminated through the Community Action councils.


Representative Adams inquired why only $21 million had been expended for the weatherization program. Director Haskamp stated all federal guidelines and programmatic schedules must be delivered to the recipient before the funds are released which has caused a delay. He further stated each of the federal agencies have different thresholds that must be met with each of the different programs. The programs have established schedules and the Cabinet is on track to make the necessary expenditures with the programs. The state is conditionally awarded a certain amount of money and then as the programmatic thresholds are met, the remainder of that money is released. Sometimes the money is expended beforehand and the state is reimbursed for that.


Representative Adams asked how long the state has before the $50 million is no longer available. Bill Riggs, Chief of Staff of the Finance and Administration Cabinet stated the reason that more than $21 million has not been expended is because there was a tremendous preparation period for the weatherization program. He stated the decision was made early to go through Community Action of Kentucky for the delivery of the weatherization program. The issue lies in understanding that the ARRA funding is a onetime resource and the state will return to previous allotted amounts after the program is over. The goal is to get the program running successfully and to be able to maintain the program with the ongoing allotted monies after this one time resource has been depleted.


In response to a question asked by Representative Montell, Deputy Budget Director John Hicks stated that Title I is the primary federal education program for the disadvantaged. He stated Title I has a strong relationship to lower socioeconomic income indicators in terms of allocation of funds across the school districts.


Representative Montell stated that, when the stimulus funds were passed, he recalled discussion about “shovel ready” projects. He does not see many “shovel ready” projects listed. He stated it will be interesting to see where the money was spent when the program concludes.


Representative Koenig asked if the effectiveness of the money that is being spent for child support enforcement is being reported or if the report is only showing that the money has been spent to enforce child support payments.


Deputy Director Hicks stated most of the stimulus funds are going through programs that already exist and because of this the programmatic reporting requirements associated with the regular federal grants are also associated with the additional stimulus funds. The recipients of the funds must report to their respective federal entities the routine programmatic elements that they have been reporting on the performance and use of these funds every year.


Representative Koenig asked whether a report will be made, saying that the state had spent $37 million for child support enforcement and a certain amount of money was generated as a result. Deputy Director Hicks stated that was correct. Representative Koenig stated he would like to see that report after it is generated.


Chairman Westwood asked if there is a chance that a portion of the award money that has not been expended will not be received. Director Haskamp stated that would only occur if there were a material breach where the state did not report on something as it should have or if there was a substantial justification not to receive it. Most cases the grants are awarded by formula. In some instances, the funds are competitive grants where Kentucky was selected to receive those grants.


Representative Stone asked whether, when evaluating the sum of the federal investment in Kentucky in comparison to the 2010-2012 Biennial Budget that was passed, there is any significant deviation between what money was included in the state’s budget and what money will actually flow through Kentucky over the length of the Biennial Budget. Deputy Director Hicks stated the only area where there is a deviation between the two is Medicaid. There is deviation from the $138 million stimulus funds congress passed for Medicaid and Kentucky’s 2010-2012 Biennial Budget allotted for $238 million in Medicaid funds leaving a $100 million deviation.


Representative Stone asked whether there is any reason to expect Kentucky would be able to make up for that $100 million by using other resources that did not use all of the funds that were given to them. Deputy Director Hicks stated he is unaware of any other places that would have leftover funds to deal with the deviance.


Representative Adams requested the Finance and Administration Cabinet return for the next meeting so he and the committee could have time to evaluate the material given to them by the Cabinet. Chairman Westwood concurred and said that the Cabinet would be on the agenda for the next meeting.


In response to a question asked by Representative Adams, Deputy Director Hicks stated the $4 million the Underground Storage Tank Fund will be receiving will not negate the need for bond money to make up for the shortfall which was a result of money being borrowed from the fund. Deputy Director Hicks stated he is unsure if the $4 million has the exact same usage in terms of the eligible recipients as the state program that Representative Adams referred to, but the Energy and Environment Cabinet would know the answer to that.


Representative Adams stated he would like to know if the money will be allowed the same usage because there is an obligation to the people of the state of Kentucky to replenish the Underground Storage Tank Fund. Deputy Director Hicks stated he would find that information out and report back to the committee.


            Chairman Westwood asked what the process was for the weatherization program, who is defined as low income in order to qualify for the program, and what exactly the program entails. Director Haskamp stated that, in order to qualify for the weatherization program, a family has to be at 200 percent below poverty rate. He stated there are applications taken by each Community Action agency which has a list of qualified applicants. Each agency rates those applications then the grant supplies the money to complete as many of those applications as possible. Up to $6,500 per household can be spent for weatherization purposes. The full amount of the $6,500 allotment is usually not spent.


Chairman Westwood stated he wanted to make sure the people that are eligible for the weatherization program are aware of its existence and how they can apply for the program.


Chairman Westwood stated he had received calls from constituents stating in order to receive their meals from meals on wheels, they must sign for them. Chairman Westwood asked if that policy was local, or if that was a requirement from the grant itself. Deputy Director Hicks stated he is unable to answer the question at that time, but he would get that information to the committee.


In response to a question asked by Representative Adams, Deputy Director Hicks stated the money shown in the Community Development Block Grants with the Department of Local Government is money that is in addition to what has already been allotted for that purpose.


Representative McKee stated he would like to discuss at the next meeting what categories got priority and what was left out in grants. He stated he has several questions and would agree with having the Cabinet back at the next meeting.


Update on Department of Veterans Affairs Budget

Shaun McKiernan, Fiscal Manager for the Department of Veterans Affairs utilized a PowerPoint presentation to update the committee on the Department of Veterans Affairs Budget.


Jeff Acob, Cemeteries Branch Manager of the Kentucky Department of Veterans’ Affairs updated the committee on the Veterans’ Burial Honors Program.


Representative Montell thanked the Department for its service to veterans.


Representative Montell asked if veterans that do not stay in the nursing homes receive funds to help support themselves. Mr. Mckiernan stated 70 percent of service connected disabled veterans can receive full cost of care at nearly any nursing home. He further stated the other 30 percent of veterans would not receive any assistance to enter just any available nursing home. Thirty percent would have to stay at one of the three veterans’ nursing homes or not receive any assistance from the Department.


In response to a question asked by Representative Montell, Mr. McKiernan stated the average cost per day to stay in one of the three veterans’ nursing homes is $220. Mr. McKiernan also stated that cost may be a little higher than the cost of long term care in the state, however the quality of care in the veterans’ nursing homes is fantastic therefore he believes it is of great value.


Representative Adams thanked the veterans’ affairs staff for what they do. He encouraged the committee to visit a veterans’ nursing home. He stated he recently visited a veterans’ nursing home facility and was impressed by the cleanliness of the facility and the amount of care the veterans were receiving.


Representative Adams stated in the previous conference committee funds were taken from the Burial Honors Program and given to the Department of Military Affairs. He asked if the Department of Veterans’ Affairs were able to access those funds. Mr. McKiernan stated a few years ago the Department received $20,000 for the Burial Honors Program from the Department of Military Affairs. He stated normally the Department does not have access to those funds.


Representative Adams asked if the Department had contacted the Governor’s Office to request a furlough exemption for the Department of Veterans affairs because of issues with the veterans’ nursing homes being able to maintain the level of care needed due to employees being furloughed.


Commissioner Lucas stated there is a concern about furloughs and Chairwoman Pullin, Co-Chair of the Interim Joint Committee on Veterans, Military Affairs and Public Protection is planning to address that situation.


In response to a question asked by Representative Adams, Mr. McKiernan stated there were approximately 40 veterans paying 100 percent of the funds to stay in the nursing homes themselves.


Representative McKee asked if the state has a sufficient number of beds at the veterans’ nursing homes to meet the needs of veterans. He asked if there were a waiting list to get in the nursing homes and if so, how large the list is. He also asked if the state would need to build an additional nursing home when the funds become available to meet the needs of veterans’ in Kentucky. Commissioner Lucas stated the special needs veterans, such as veterans with Alzheimer’s and dementia, are where more assistance is needed. There is a waiting list for veterans in those categories, however in terms of ordinary care veterans, the state is doing great.


In response to a question asked by Chairman Westwood, Commissioner Lucas stated there are a few vacancies in the veterans’ nursing homes, but not many. He stated one wing of a facility had been recently remodeled and because of the process to enroll a veteran in a nursing home, it is taking a while to fill the rooms back up.


Representative Adams asked what percentage of the veterans’ nursing home residents are in wheelchairs. Margaret Plattner, Deputy Commissioner of the Kentucky Department of Veterans’ Affairs, stated she is unaware of what percentages are in wheelchairs at this time; however 75 percent of the veterans have Alzheimer’s or dementia.


Representative Adams stated he has been informed that Kentucky is one of the leading states in relation to how the state cares for its veterans.


Chairman Westwood thanked guests and members for attending the meeting and adjourned the meeting at 11:12 A.M.