Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> July 11, 2006


The<MeetNo2> meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Tuesday,<MeetMDY2> July 11, 2006, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Representative Carolyn Belcher, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Vernie McGaha, Co-Chair; Representative Carolyn Belcher, Co-Chair; Senators Charlie Borders, David E. Boswell, Dan Kelly, Joey Pendleton, and Richie Sanders Jr; Representatives Adrian K. Arnold, James R. Comer Jr, Charlie Hoffman, Thomas M. McKee, and Tommy Turner.


Guests:  Keith Rogers, Executive Director, Governor’s Office of Agricultural Policy; Brian Furnish, Deputy Director, Governor’s Office of Agricultural Policy; Dr. Kim Townley, Executive Director, Early Childhood Development Initiative, Kentucky Department of Education; Robert Illbach, PsyD, Evaluation Researcher, Louisville, Kentucky; Dr. Jennifer Grisham Brown, University of Kentucky; Dr. Steve Davis, Deputy Commissioner, Department of Public Health, Steve Meredith, Agriculture Communications Foundation.


LRC Staff:  Tonya Monsanto, Lowell Atchley, Clark Baird, and Susan Spoonamore, Committee Assistant.


Minutes of the May 9, 2006, meeting were approved, without objection, by voice vote, upon motion made by Senator Boswell and seconded by Senator McGaha.

Chairman Belcher noted that Kelly Blevins, Committee Assistant, was on maternity leave, having given birth to Ty Samuel Blevins, and that Susan Spoonamore would be filling in for Mrs. Blevins.

Chairman Belcher asked Mr. Keith Rogers and Mr. Brian Furnish, Executive Director and Deputy Director respectively of the Governor’s Office of Agricultural Policy (GOAP), to present their monthly report of state and county projects reviewed at the previous Agricultural Development Board (ADB) meeting.

Mr. Rogers recognized the legislative accomplishments of Representative Adrian Arnold with a resolution signed by the Governor. The resolution highlighted Representative Arnold’s work on the original House Bill 611 and HB 669 in the 2006 session.

Mr. Rogers proceeded through the list of projects that were approved for funding by the ADB in June. Representative McKee asked about the area to be served by Katelyn’s Honey Inc., which proposed to use surplus vegetables, produce, and herbs in processing value-added products. Mr. Furnish said the company would be purchasing foodstuffs from throughout the state, but primarily in Grant and Scott counties. Representative McKee indicated the concept of using the surplus food was a good idea.

Co-chair McGaha questioned the ADB grant of $892,500 to the Kentucky Community and Technical College Systems for continuation courses in computer and welding for farmers. He also asked about the objectives of giving class participants computers and welders. Mr. Rogers explained that the computers would be refurbished machines obtained at a reasonable cost, and the welders would be obtained under a good deal. Also, the welding classes would require a fee of $50 or $100. Mr. Rogers said the board did discuss the wisdom of giving the equipment to class participants, mainly the welders. He said the ADB vote was split.

Mr. Rogers went on to explain the final list of county projects involved in setting up model programs under a menu approach. He stated that the menu approach would allow applicants to apply for matching funds from several categories instead of just a single category. During questioning from Chairman Belcher and Representative Arnold, Mr. Rogers said the menu concept was becoming more popular at the local level.

Mr. Rogers also mentioned the pending status of the Kentucky Five Star Energy ethanol plant project from Hopkins County. Mr. Rogers said the board had requested more information on the project, particularly considering there would be three ethanol plants potentially operating in that part of western Kentucky.

Chairman Belcher asked the committee to review the request by the Livingston County Conservation District to “appeal” an ADB no-funding decision in April.  She noted that the appeal and supporting documentation was sent to the committee for discussion. The original application sought $2,650 in Livingston County funds to help pay for an annual Progressive Agriculture Safety Day for fourth grade students.

According to testimony, the project had been funded twice in the past; thus it was an annual event. During the on-going discussion, Mr. Rogers said the tobacco settlement funds would have been used to buy bicycle helmets, safety glasses, first aid kits and the like for the students. He told the committee they did not believe the project met the intent of House Bill 611.

Representative McKee asked Mr. Rogers to explain why the project was not funded this year, but had been funded twice in the past. Mr. Rogers said he did not know about the previous years because he was not with the GOAP at that time. But he said the board had taken the position that such projects did not comply with the intent of House Bill 611. He later said he had been cautioning county councils to not refer such projects to the board.

Various members of the committee mentioned the Department of Agriculture’s farm safety programs that would be available to communities. In addition, Senator Pendleton indicated that communities were sometimes able to persuade local sponsors to underwrite part of the costs of the field days. Representative Arnold said he was concerned about the board setting a precedent of funding similar projects, which might not be in keeping with the tenets of House Bill 611.

Mr. Rogers mentioned that he planned to meet with district representatives in Henderson later in the month.

 Chairman Belcher concluded that the issue should be placed in a pending status until after the meeting between the GOAP and the district.

Next, the committee heard a report from Dr. Kim Townley, Director, Division of Early Childhood Development, and from Dr. Robert Illback, of REACH of Louisville, which assessed the impact of the HANDS program, and Dr. Jennifer Grisham-Brown, of the University of Kentucky, who led a UK-U of L evaluation of the KIDS NOW initiative, focusing primarily on child care centers.

Dr. Townley called attention to the quarterly summary of activities of the Early Childhood Development programs. She also presented an overview of the actual and projected allotments to the programs using tobacco settlement dollars from FY 2003 through FY 2007. During the discussion, Co-chairman McGaha asked Dr. Townley to provide more comprehensive financial data showing the number of employees, salaries, and costs of services. She said she would provide those figures.

Dr. Illback summarized findings of his research, noting many positive outcomes of the HANDS program.

It was pointed out during discussion that HANDS served about 10 percent of the approximately 55,000 babies born in the state each year. During discussion, Senator Kelly asked what the state was doing to reach at-risk parents. According to Dr. Illback, more than the 10 percent needed intervention, considering the high level of poverty in the state.

Senator Kelly asked why the Kids Count rankings for Kentucky were low considering the amount of funds being spent on programs for children. Dr. Townley stated that Kids Count looks at all young people, not necessarily those covered under the Early Childhood Development program.

Responding to Representative Arnold, Dr. Illback said most children were referred voluntarily to the HANDS program through local health departments. During subsequent discussion, Senator Boswell said attention should also be given to the 30,000-40,000 grandparents caring for grandchildren.

Dr. Grisham-Brown summarized her findings for the committee. She pointed out the positive findings related to childcare centers and the training involved under the KIDS NOW program.

As discussion continued, Senator Kelly had some questions about the folic acid data in quarterly summary. Dr. Steve Davis, Deputy Commissioner, Department for Public Health, joined the speakers at the table.

Senator Kelly asked why the information referred to the year of 1996 as a beginning point for comparing neural tube defect babies in Kentucky. Dr. Davis responded that 1996 might have been the first year of accurate information in that area. He said that they would provide a chart showing changes in more recent years.

Discussion turned to state immunization rates. Dr. Davis pointed out that Kentucky currently ranks third in the percentage of children immunized. Senator Kelly asked for an immunization chart similar to the one for folic acid.

Responding to questions from Chairman Belcher, Dr. Townley said there was a general shortage of programs for infants and toddlers in the state.

Finally, the committee heard comments from Mr. Steve Meredith, Executive Director, Agricultural Communications Foundation, regarding the ADB’s decision in June to deny an application for $550,000 in state and county funds to produce 26 agriculture and farm-related programs that would be offered to KET for broadcast. Earlier in the meeting, Mr. Rogers described how GOAP staff had gone about reviewing the project, meeting at one point with KET representatives to discuss how they perceived the program. As they prepared materials for the June board meeting, Mr. Rogers said they were ready to recommend a tiered funding approach for the endeavor, with the Agricultural Communications Foundation drawing funds at certain points after shows were aired. He said  “lack of communication” from the applicant prompted them to pull the application.  When it met, the board did act on the matter, voting to not allow funding.

Responding to Chairman Belcher, Mr. Rogers said he learned from KET officials that there was no contract in place between the TV network and foundation, and there was no commitment to air the shows.

Mr. Meredith explained the purpose for the program, the application process, and his fund-raising efforts. He said the application lingered over a period of months, and that he had tried to answer all the questions asked of him.  He stated that approximately 21 counties had agreed to commit their local funds to the project. He also mentioned commitments from Burley Tobacco Growers Cooperative, and county Farm Bureau groups.

Mr. Meredith said there was no contract with KET at that point in the application process, but he said KET had expressed its interest in the project. He read portions of a letter he received from a KET official.

Mr. Meredith detailed the differences he had with GOAP staff over the value of actual airtime.  He said that aspect should have been a consideration when the state agency reviewed the project application. According to Mr. Meredith, the application was repeatedly delayed, to the detriment of the project.

Responding to a question from Senator Boswell about accepting incremental funding, Mr. Meredith said to do so would have jeopardized his credibility. He said an undertaking like the one planned involved a large marketing budget. Normally, footage would be obtained simultaneously for several programs, he said. He further alleged there was “no good faith offer or good faith negotiations taking place” between him and GOAP staff.

Chairman Belcher asked about the county council involvement. Mr. Meredith said he told the councils that if they contributed some funds, there was a good chance their county would be featured in a program.

Responding to a series of questions from Representative McKee, Mr. Meredith said the Agricultural Communications Foundation continued to function and he said some programs would be produced and offered to KET, but on a scaled-back basis. He said he prepared a second application seeking ADB’s approval for the use of only county funds. He also said they had made some arrangements for funds from various other sources.

The discussion ended with the committee taking no formal action on the matter.

Documents distributed during the meeting are available with meeting materials in the LRC Library.

The meeting ended at approximately 3:30 p.m.