Tobacco Settlement Agreement Fund Oversight Committee


Minutes of the<MeetNo1> 8th Meeting

of the 2008 Interim


<MeetMDY1> August 6, 2008


The<MeetNo2> 8th meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> August 6, 2008, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Senator Carroll Gibson, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Carroll Gibson, Co-Chair; Representative Rick Rand, Co-Chair; Senators Charlie Borders, David E. Boswell, and Joey Pendleton; Representatives Royce W. Adams, James R. Comer Jr., Charlie Hoffman, Tom McKee, and Tommy Turner.


Guests:  Steve Shannon, Heather Wainscott, Amy Andrews, and Van Ingram, Office of Drug Control Policy; Commissioner Sharon Clark, Tonya Parsons, and DJ Wasson, Department of Insurance;  Roger Thomas, Angela Blank, Joel Neaveill, and Diane Fleming, Governor’s Office of Agricultural Policy.


LRC Staff:  Tanya Monsanto, Lowell Atchley, and Kelly Blevins.


Minutes of the July 2, 2008 meeting were approved, without objection, by voice vote, upon a motion made by Sen. Boswell and seconded Rep. McKee.


After a short discussion regarding the September meeting, the presiding chair, Senator Gibson, asked Mr. Roger Thomas, Executive Director, Governor's Office of Agricultural Policy (GOAP), to report on the projects considered for funding during the July Agricultural Development Board (ADB) meeting. Accompanying him was Mr. Joel Neaveill, Chief of Staff. Before he began, Mr. Thomas introduced the GOAP’s new general counsel, Ms. Diane Fleming.


Mr. Neaveill reviewed the listing of model programs recommended for ADB approval in July, along with statewide projects approved and projects that were denied funding.


Mr. Neaveill responded to a question from Co-chair Gibson regarding the Breckinridge County Board of Education project to offer a welding program for tobacco dependent farmers. Meade County tobacco moneys funded the $5,225 project.


The speaker said teachers were coming from a Meade County technical school. Senator Boswell, a long-time committee member, noted that multicounty applications were common. Mr. Neaveill said many education projects are regional in nature.


During discussion about projects denied funding, all which received a low priority from their county agricultural development council, Senator Boswell asked if the board ever overruled a local no-funding decision. Mr. Neaveill said he did not recall any instances of that type and indicated the board had a history of deferring to the local councils.


According to Mr. Thomas, the board, in its fall planning session, may review the issue of how county councils prioritize local projects. He also suggested that perhaps the committee could have respective county council representatives appear before the panel to discuss how they justify local funding priorities.


The witnesses next responded to questions from Co-chair Gibson regarding how the county council members are nominated, elected, and how long they serve. County council members, selected by local Farm Service Agency committees, soil conservation boards, county extension councils, and from among young farmers, serve two-year terms that are not staggered, testimony showed. Mr. Neaveill said council members can serve successive terms.


During the discussion, Senator Pendleton noted that many counties are hard-pressed to find people willing to serve on the councils. Council members are not paid for attending meetings.


Co-chair Rand said the council position is a tough job, given that council members are responsible for distributing tobacco funds on a local level.


Mr. Thomas said some councils meet monthly, while others may only meet once a year. When Co-chair Rand asked if legislation is needed on the issue, Mr. Thomas said the original legislation, HB 611, had allowed for individuality and flexibility on the part of the local councils.


Representative McKee also said it is important to maintain the integrity of the local councils.


Responding to Representative Hoffman, Mr. Thomas said county councils are not precluded from approving a project, even though they may not have an applicable model program in place.


Representative Hoffman asked if the focus or mission of county council ever conflicted with the overall state mission of the program. On that issue, Mr. Thomas said each county council must maintain a county comprehensive plan and perhaps it would be good to review the plans and then look at past funding history to see if the plans are being followed.


Mr. Thomas also acknowledged Co-chair Gibson’s suggestion that county council members get together periodically on a regional or state basis.


The GOAP appearance ended with Angela Blank, Director of Communications, briefing the committee on upcoming State Fair activities, and Mr. Thomas updating the panel on the Kentucky Agricultural Relief Effort (KARE).


Next, the chair called on Ms. Sharon Clark, Commissioner, Department of Insurance, and Ms. Tonya Parsons, Director of the Kentucky Access high-risk insurance program.     


Ms. Clark updated the committee on the Kentucky Health Care Improvement Authority, listing the current members, noting the meeting schedule, and briefly reviewing the health-related agencies and programs that come under the jurisdiction of the authority.


The commissioner said it remains a challenge to achieve a quorum for authority meetings. According to her report, they have attempted to adjust the meeting schedule to come up with an agreeable meeting date, they are considering video conferencing meetings, and have developed a proxy system, which is allowed by statute. She told the committee that a quorum has been achieved only twice in the past six years.


In explaining why members are not attending authority meetings, she said the health insurance topic is not as big as it was in 2000 and 2001, and the authority itself is a repository of information, rather than a decision-making body. She said there has been some discussion regarding abolition of the authority.


In a response to Representative McKee, she said the Senate minority vacancy on the authority was created with the departure from the Senate of current Lieutenant Governor Daniel Mongiardo. Representative McKee said it was his hope the oversight of the authority remain in place.


Ms. Clark next turned to the Kentucky Access report. She said a recent audit by the Office of State Auditor revealed no material deficiencies. According to Ms. Clark, Kentucky Access will be reviewing its individual insurance plan options and will be looking at improving the drug formulary.


Ms. Parsons noted Kentucky Access lost about $76.9 million in transfers to the general fund in FY09 and FY10. In reviewing agency finances, Ms. Parsons said tobacco settlement funds accounted for 43 percent of medical claims paid in the recent reporting period. According to their report, the agency received $17 million in tobacco funds in FY 07 and $18.1 million in FY 08. Ms. Clark indicated the agency has been successful in obtaining $1.8 million in federal funding to be used in its general operations.


The demographic report given to committee members showed there were a total of 4,341 active enrollees in the insurance program as of June 30. Ms. Clark said Kentucky Access has addressed insurance needs for many Kentuckians. She said six new companies are providing health insurance plans in the state.


Next, Co-chair Gibson asked Ms. Heather Wainscott, Branch Manager, Office of Drug Control Policy, and Ms. Amy Andrews, State Coordinator, Kentucky Agency for Substance Abuse Policy (KY-ASAP) to report on the KY-ASAP program, which receives tobacco settlement funds.


Ms. Wainscott went through a report prepared for the committee, covering topics on the status of county and regional boards, the annual executive summary, state board activities, a report by the Office of State Auditor, local board reports, and media releases.


Reviewing KY-ASAP’s finances, Ms. Andrews pointed out that over $1.9 million  of funds appropriated to the agency go to  local boards. Certain counties also received a total of $112,000 in “hot spot” funding. Those counties were identified as having specific substance abuse problems. According to Ms. Andrews, communities would use the hot spot funding to help build a local substance abuse prevention infrastructure, enabling them to be in line for federal Strategic Prevention Framework State Incentive Grant (SPFSIG) grant funds.


In continuing remarks, Ms. Andrews commended the diligence and dedication of local boards in combating alcohol and drug abuse. Part of their report included a listing of programs and efforts undertaken at the local level.


The speakers said KY-ASAP has been able to join the Partnership for a Drug-Free Kentucky and state news outlets in providing a series of public service announcements on the dangers of drugs.


Responding to questions from Co-chair Rand, the speakers said they support the placement of resource persons in local schools. Usually someone from a county sheriff’s department will serve as a resource person. Local boards fund the resource people in varying amounts. They said a lot of local boards are working with teen groups, who, in turn, mentor other young people on anti-drug issues.


Responding to an additional question from the co-chair, they said they have developed a quarterly newsletter in which they discuss best practices. Also, if a board identifies an issue with which they are struggling, state KY-ASAP officials try to link the board with another local board that has dealt successfully with the same issue.


Documents distributed during the committee meeting are available with meeting materials in the LRC Library. The meeting ended at approximately 11:45 a.m.