The second meeting of the Program Review and Investigations Committee was held on Thursday, August 10, 2000 at 10:00 AM, in Room 131 of the Capitol Annex. Sen. Katie Stine, Chair, called the meeting to order, and the secretary called the roll.
Members: Chair, Katie Stine; Senators: Charlie Borders, Brett Guthrie, Paul Herron, Vernie McGaha, Dan Seum; Representatives: Sheldon Baugh, Dwight Butler, Charlie Hoffman, Susan Johns, Ruth Ann Palumbo and Dottie Sims.
Guests: Natalie Wilson, Child Support Guidelines Commission; David Cathers, Child Support Guidelines Commission ; Johnny R. Keen, Personnel Cabinet; Nick Spiegl, Ann Swango; Gary Ferguson, Fathers on Rights for Custody Equality, Carol Palmore, Secretary Personnel Cabinet; Nancy Black, Director of Occupations and Professions, Carl Knochelmann, SGLF; Kathy Adams, Division of Child Support; Natalie Hutcheson, Kentucky Housing Corporation; Rosemary Luckett, Kentucky Housing Corporation and M.L. Allen.
LRC Staff: Ginny Wilson, Ph.D., Committee Staff Administrator, Lowell Atchley, Greg Hager, Tom Hewlett, Alice Hobson, Joseph Hood, Doug Huddleston and Susan Spoonamore, secretary, Program Review Staff.
Minutes of the July 13, 2000 meeting were approved by voice vote upon motion made by Rep. Dottie Sims and seconded by Sen. Charlie Borders.
Committee Operations and Rules for the 2000-2001 Interim were approved by voice vote upon motion made by Rep. Susan Johns and seconded by Rep. Dottie Sims.
Ann Swango, with the group Parents and Children for Equality, based in northern Kentucky, addressed criticisms against the Kentucky Child Support Guideline Commission. Based upon information which was collected by a group of public citizens, Ms. Swango alleged that the Commission has failed to comply with several state and local requirements. Ms. Swango distributed to the Committee a list of allegations and asked that the Committee look into these matters ( a copy of the list entitled "The King has no Clothes" can be found in the LRC library file).
Sen. Stine asked if the group's criticism is with the actual guidelines or with the method that the Commission is operating.
Ms. Swango responded that it is with both the guidelines and the operation of the Commission. There are no scheduled meetings, there is no process or accountability or anything.
Nick Spiegl, an advocate for change to the existing Child Support Guidelines Review Commission and change on behalf of non-custodial parents and their children, presented to the Committee information obtained from the Project for the Improvement of Child Support Litigation Technology (a copy of which may be found in the LRC library file). Mr. Spiegl expressed concerns that Kentucky is not in compliance with Title 45 -- Public Welfare and Human Services, Part 302 -- State Plan Requirements, Sec. 302.56 Guidelines for setting child support awards. Mr. Spiegl also had concerns on whether or not Kentucky was meeting the requirements for federal funding.
Sen. Seum stated that he didn't understand why the federal government was in the business of collecting Kentucky's child support.
Natalie Wilson, Chair of the Child Support Guidelines Commission, testified that she is an attorney practicing in the area of family law for several years. She was named to the Guidelines Commission 10 years ago and has been active since that time. She said the Guidelines Commission is charged with the responsibility of reviewing the guidelines at least every 4 years and making recommendations for modification to the guidelines or for any other aspect of child support to the General Assembly. At the present, the Commission is composed of people who have personal, professional experience, training and knowledge concerning child support issues. She said none of them are advocates for any particular cause. She also said one of the issues that has been very difficult for Ms. Swango to accept is the fact that none of them are there to take a position with reference to either non-custodial parents or with reference to custodial parents. They look for a neutral and evenhanded approach. Members are not economists but hire economists to determine the costs of raising children. When Ms. Swango and Mr. Spiegl testified before the Judiciary committee last March, they advanced a policy that the Guidelines Commission would serve better if the people who were on the Guidelines Commission represented different positions - advocates for different causes. That is exactly what we have attempted to avoid on the Guidelines Commission.
David Cathers, a member of the Child Support Guidelines Commission, told the Committee that he has been head of the Jefferson County Child Support Division in Louisville for 14 years and prior to that was an attorney for the Cabinet for Human Resources and a special prosecutor throughout the state handling child support cases. He was the State IV-D Director, head of the Child Support Division, which is Steve Veno's job at the present time. Mr. Cathers stated that the Guidelines Commission consists of judges, family court judges, district court judges, representatives from large jurisdictions and small counties, and county attorneys. The Commission is charged, under the statutes, to look at what had been established before and determine whether or not the applicability of those statutes is still working. He said all of the people on the Commission serve voluntarily at their own expense and are dedicated and don't have an agenda, but have a legitimate interest in seeing that the Guidelines work and work well.
Sen. McGaha asked what the budget is for the Commission.
Ms. Wilson stated that the Commission doesn't have a budget. Its begs the money from Cabinet for Families and Children, which has a substantial budget that does alot of projects and that the Commission is included in that budget.
Steve Veno, Director of the Division of Child Support, Cabinet for Families and Children, told the Committee that the Guidelines Commission has no operating budget. When they ask for certain things, the Division of Child Support finds the money in the budget to provide for them. The Division serves the Commission in a supporting role for them to conduct business. There is no line item budget.
Sen. McGaha asked if that left the door open for the Commission to do as much research as they felt necessary?
Mr. Veno answered in the affirmative. The Cabinet Secretary Viola Miller has given the Division a green light to provide the Commission with any resources necessary in terms of conducting an economic study.
Sen. McGaha asked if the Commission was charged in making recommendations every 4 years.
Mr. Cathers stated that the Commission makes recommendations at least every two years in a report to the Governor and to the Legislature.
Sen. McGaha stated that, according to the numbers supplied by Ms. Swango, it appears that from 1994 through 1998, the Commission had been inactive. He also asked whether it was correct that the Commission had no meeting in 1996?
Mr. Cathers stated that was not correct. The incorrect information is based on what they were able to find from recorded meetings and tapes. Due to budget constraints, those tapes were reused and taped over from other meetings, so are not a complete record.
Sen. McGaha stated that the Commission has indicated that in 1989 Robert Williams had nothing to do with the development of allocations, but it was based on the Colorado model. He asked where Robert Williams is from.
Ms. Wilson stated that Robert Williams is from Colorado.
Some of the committee members expressed concern over the number of phone calls they are receiving from constituents with child support problems.
Motion made by Rep. Johns and seconded by Sen. Herron for Program Review staff to review the information given by both sides and report back to the Committee at the next meeting. Motion passed.
Dr. Ginny Wilson presented to the Committee a synopsis of 14 study topics that were identified By Sen. Stine as those on the study list that were of interest to members.
Motion made by Rep. Sheldon Baugh and seconded by Sen. McGaha to combine study topics 16 and 29, Economic Development and East and West Kentucky Corporations, respectively, as a single study topic for the interim. Motion passed with Rep. Dottie Sims voting no.
Motion made by Rep. Palumbo and seconded by Sen. Borders to combine study topic 2, Special Contracts with study topic 33, Personal Service Contracts as a single study topic for the interim. Motion passed unanimously.
Rep. Johns stated that this Committee has done all the investigation work on Nursing Homes and that the information obtained is available. Rep. Johns asked that this Committee, sometime in the future, go into detail as to why the Inspector General needs subpoena power in order to protect the citizens.
Sen. Stine agreed with Rep. Johns and instructed staff to do a follow-up.
Motion made by Sen. Borders and seconded by Sen. McGaha that study topic 30, Performance Based Budgeting be included as a study for the interim. Motion passed unanimously.
Rep. Hoffman asked staff to consider study topic #4, Children Health and Welfare (Implementation of HB 583 - child care centers) as a study topic for the interim. Sen. Stine asked staff to do an in-depth background study regarding HB 583 and report on same at the next meeting.
Joseph Hood, Program Review Staff, presented a follow-up to the Division of Occupations and Professions Study which was done in August of 1999. (a copy of the presentation in its entirety can be found in the LRC Library file).
Sen. Stine stated that if the legislation that provided for sunsetting of some of the boards and commissions had actually been implemented, would that have shrunk some of the need for the staff. She asked if that seems a viable option. Mr. Hood stated that he thought it might reduce the need for appropriations, but that Ms. Black should address the question.
Nancy Black, Director, Division of Occupations and Professions, Finance and Administration Cabinet, stated that she didn't have an answer. There is one board of certification that only has 38 people in the state of Kentucky licensed.
Sen. Stine asked if it could be merged with another Board and was there a recommendation that some of these boards be merged.
Ms. Black stated that she thought some of the boards could be merged, but no recommendation was made to that effect.
Lowell Atchley, Program Review Staff, presented a follow-up on the KHC Homeless Shelter Grant Program (a copy of the presentation in its entirety can be found in the LRC library). Mr. Atchley stated that the U.S. Department of Housing and Urban Development allocates Emergency Shelter Grant funds to states and ESG funds are aimed solely at dealing with homelessness. KHC has the responsibility of administering the use of these funds in Kentucky. Kentucky generally receives from $1 million to 1.5 million each year in ESG funds to be allocated. This spring KHC awarded almost $1.3 million to 29 Kentucky nonprofit agencies and local governments. A total of 43 shelters or local governments or organizations applied for funding.
F. Lynn Luallen, CEO, Kentucky Housing Corporation, stated that the Emergency Shelter Grant process was modified last year based not only on the feedback from this committee and staff, but also from the Department of Housing and Urban Development and also from the KHC staff. KHC feels that the end result is a process that is now fair, understandable and very easy to use. The Emergency Shelter Grant application has been modified per Recommendation No. 1. A description of the application process and point system is also included, which was Recommendation No. 4. A description of the appeals process for applicants who do not receive funding has been included as part of the application packet, in response to Recommendation No. 3. Based upon the committee's recommendation, KHC has made a commitment to conduct more site visits. KHC is continuing to encourage involvement in the ESG program throughout the state, which was Recommendation No. 5 and KHC has consistently allocated funds in all 15 Area Development Districts since KHC began administering the program in 1994. KHC has encouraged applicants in the same area to combine applications in order to improve their chances of funding. KHC continues to provide technical assistance to all applicants as part of Recommendation No. 5. The point process has been modified to better accommodate first time applicants. KHC opted not to award bonus points for what was termed unique programs as was recommended. (a copy of Mr. Luallen's presentation can be found in the LRC Library file).
Rep. Baugh asked what is done to prevent homelessness.
Mr. Luallen stated that KHC counsels people and tries to put them in a situation where they can receive other funds from other programs that KHC administers, either with HUD funds or funds that KHC has generated to help put them in a rental housing situation, transitional housing situation or even home ownership.
Rep. Baugh asked how much of the $1.3 million dollars was left over to prevent homelessness.
Natalie Hutcheson, Director of Specialized Housing Resources, stated that much less prevention funding is provided because for, most communities, it is a number 1 priority just to keep their shelter open. Several prevention programs are funded and, for the most part, they are run by local governments who use the funding to do financial assistance to keep someone from losing their home and then having to go shelter and go through the whole cycle. One requirement that KHC adds that is not a HUD requirement is counseling. Any agency that provides financial assistance has to provide counseling so that the family won't find themselves in the same situation again.
Rep. Baugh asked again how much of the $1.3 millions dollars was used for homelessness prevention.
Ms. Hutcheson stated KHC is limited to 10% of the total grant that is received. Each applicant is not limited to that, but just the whole pool. That cap has been reached twice in the last two years.
Brenda Major, Director of the Division of State Valuation, Revenue Cabinet, provided a follow-up to the Motor Vehicle Registration study. She provided the Committee the 2000 Motor Vehicle Statistics information. This broke down the amount of taxes brought in to state and local governments last year through Motor Vehicles, Boats, and Freddy Freeroader program. In 1998, this Committee recommended that this Division continue to work with the State Police and the Division has done so. The Division has kept doing what it was doing and tried to improve the way that it was done. (a copy of the 2000 Motor Vehicle Statistics can be found in the LRC Library file)
Tom Hewlett, Program Review Staff, stated that, in the fall of 1998, staff presented to the Committee the results of a review of The Personnel Pilot Projects. The 1994 General Assembly authorized these projects as a way of experimenting with state personnel practices on a small scale. Staff found that the overall design weaknesses of the pilot limited their effectiveness as experimental research projects. The pilots varied greatly in size and scope, but the most frequently piloted changes were to the state system for evaluating personnel performance and rewarding performance. Since the pilots were field experiments it was crucial that the pilots be designed in such a way that any changes in overall performance could be attributed solely to the innovations of the pilot and not some external factor. Staff found that the design of pilots did not generally control for that. The use of comparison groups would have strengthened the pilot structure. One pilot, the Department of Social Insurance, Division of Disability Determination, was able to compare some of their performance measures with other similar offices across the nation and Kentucky's Disability Determination Office improved their productivity ranking from 23rd in the nation to 7th in the nation. However, they also used salary increments above and beyond the state salary increments for personnel, and management reported that those increases were not affordable over the long run. That pilot could not have fully been adopted as a permanent program. Another pilot that achieved some success was the Kentucky Veteran's Center in Wilmore. That pilot sought to decrease turnover. Over the course of the pilot, the turnover rate dropped from 42% to 23%. However, one of the keys of that pilot was the institution of a shift differential pay for employees working evening, nights, weekends and holidays. Since this is standard practice throughout the industry, Mr. Hewlett questioned whether it was really necessary to incorporate it in a pilot study. Other problem areas included pilot projects were just too big and, in contrast, some were too small.
The recommendations that were contained within the report were prospective. The recommendations were offered in the hope that if pilots were undertaken again in the future, they would help to structure the pilots in a that would allow conclusions to be drawn from the pilots. All the pilots had ended before the report was undertaken and no pilots have been taken up since the report. Noted earlier, most changes were to the employee evaluation system and the method of rewarding employees. HB 763 of the 2000 General Assembly authorized the Secretary of the Personnel Cabinet to develop and promulgate comprehensive administrative regulations for the revision of the state employee evaluation system and these changes are currently in development.
Sen. Stine asked who was responsible for overseeing the 1994 implementation of that legislation and how much money was spent for the pilot programs.
Mr. Hewlett stated that there was a steering committee composed of both the private sector citizens and various members of state government. It was a about a 6-to-8 member committee. Mr. Hewlett told the Committee that staff had been unable to gather data on the comprehensive costs on all pilot projects. A lot of those were enmeshed within the normal operating procedures of the different agencies that tried out these pilots. All the pilots were well intended. They were trying out ideas that would help state practices overall. It might be helpful in the future to have someone well grounded in social science research on such a board so that firm conclusions could be drawn.
Sen. Stine asked if there was a figure for the overhead and if there was a percentage.
Mr. Hewlett stated that staff was unable to obtain cost data from these pilots on just administrative overhead. Most of the administrative overhead was in the reporting mechanism. One of the recommendations was that reporting mechanisms in the future be less cumbersome.
Sen. Stine asked if there were specific recommendations for the legislature as a whole for when future legislation is passed that envision such pilots projects that we can ensure that they are actually done scientifically so that all that effort actually yields something.
Mr. Hewlett responded that the report contains seven recommendations that covers the scope of the projects, use of control groups and other items. In the future if other pilot groups are tried, those recommendations could be incorporated into the design of the pilots.
Secretary Carol Palmore, Personnel Cabinet, told the committee that one recommendation that the Cabinet has is that in the future if there are pilot projects that specifically relate to personnel that those projects be attached to the Personnel Cabinet so that the Personnel Cabinet can be more fully involved in pilot projects. The Cabinet has begun the drafting of the administrative regulations to implement the new performance evaluation system in state government. One thing that we learned not only from the pilot project but also from a survey that the Cabinet conducted with 20% percent of all state government employees, is that there is no question that the current evaluation system is not effective. Neither supervisors or employees have a great deal of respect for the system. One factor is that the supervisors have not been adequately trained on writing performance criteria. One thing that is going to be included in the regulation is the requirement for mandatory training for all supervisors so that they know how to write performance criteria, and they know how to evaluate that criteria in terms of the performance of individual employees. The second statewide problem is that the survey showed that, of the people who responded, 58% never met with their supervisor to set up the performance criteria on which they were evaluated prior to the time that they were evaluated. We have also included mandatory meetings and mandatory training so employees will be a vital part in determining the criteria on which they will be evaluated.
Sen. Stine asked if the employees were aware of what the job requirements are when they begin working.
Secretary Palmore stated that they have not had an active part in setting down with the supervisor. The employee and the supervisor have not developed the rating instrument together so both of them understand fully what the employee's job is to be.
Secretary Palmore went on to say that the second thing the Cabinet is requiring in the regulation is a signature review of the second-line supervisor of those employment criteria that the supervisor and the employee have put together and also after the evaluation requiring the signature of the second line supervisor. By this method the Cabinet hopes to make it more professional, effective and fair. The cabinet is also adding rewards for those employees who receive the very highest rating. They will receive 2 days annual leave added on to the leave balances and those who receive the next highest will receive one additional annual leave day.
Sen. McGaha asked how the second line supervision was going to make a determination whether the primary supervisor is, or is not, accurately evaluating that employee.
Secretary Palmore stated that it would show right up front whether or not the supervisor below the second line supervisor has actually met with the employee, come up with criteria which requires the signature of the employee certifying that a meeting occurred, the criteria were jointly determined, agreeing that they are the correct criteria on which he or she is to be evaluated.
Sen. McGaha asked what safety net is in place if the employee does not agree with the evaluation.
Johnny Keene, Director of Performance Evaluation, stated that, if an employee disagrees with his/her final overall evaluation or any aspect of the evaluation, he or she will have a right to go through an internal appeal process that involves appealing to the second line supervisor. The second line supervisor has so many days in which to issue a final decision in writing and if the employee still does not agree, then the employee has the opportunity to appeal the two lowest ratings in the system to the state Personnel Board.