Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> January 11, 2012


Call to Order and Roll Call

The<MeetNo2> meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> January 11, 2012, at<MeetTime> 8:15 AM, in<Room> Room 129 of the Capitol Annex. Senator Paul Hornback, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Paul Hornback, Co-Chair; Representative Wilson Stone, Co-Chair; Senators David Givens, Dennis Parrett, and Joey Pendleton; Representatives Royce W. Adams, Tom McKee, Fred Nesler, and Tommy Turner.


Guests: Roger Thomas, Joel Neaveill, Bill McCloskey, Angela Blank, and Jennifer Hudnall, Governorís Office of Agricultural Policy.


LRC Staff: Lowell Atchley and Kelly Blevins.


The December 7, 2011, minutes were approved, without objection, by voice vote, upon motion made by Representative Nesler and second by Senator Pendleton.


Governorís Office of Agricultural Policy

The committee received the monthly report from Mr. Roger Thomas, Executive Director, Mr. Joel Neaveill, Chief of Staff, and Mr. Bill McCloskey, Director of Financial Services, Governorís Office of Agricultural Policy (GOAP), regarding project funding decisions made by the Agricultural Development Board (ADB) in its December meeting.


Mr. Neaveill summarized the funding allocations made under the County Agricultural Improvement, Deceased Farm Animal Disposal Assistance, and Shared-use programs from the previous month. He also recapped amendments approved for previously funded projects.


Mr. McCloskey reviewed the projects approved by the board at the previous meeting. Those included: Garrard County Board of Education, approved for $30,000 in Garrard County funds to implement a forage management program for youth and adult education attendees; Nonprofit Dynamics, Hickman and surrounding counties, $55,782 in state and county funds to undertake a wild pig control program in the Obion Creek Watershed area; and Bluegrass Stockyards of Albany LLC, $35,000 to erect a stockyard facility in Albany. The board had delayed action on one project, Louisville-Jefferson County Metro Government.


Regarding the Garrard County project, the GOAP officials responded to committee membersí questions about the scope of the acreage involved in the project and size of the building. According to their testimony, the Garrard County Board of Education will assist if there are cost runovers.


The Nonprofit Dynamics project prompted discussion about the growing wild swine problem in the state. Co-chair Hornback wondered aloud if the animals could be eradicated. Co-chair Stone mentioned the extensive testimony on the subject during a House Agriculture and Small Business Committee meeting earlier in the day. He related that Department of Fish and Wildlife Resources officials would strive toward eradication.


During discussion of the Bluegrass Stockyards project, Co-chair Stone expressed his approval of a requirement that if the recipient of the agricultural development funds sells equipment bought with the funds during a five-year period, any money earned from the sale shall be returned to the board of a pro-rated basis.


Mr. Neaveill summarized the Louisville-Jefferson County Metro Project which sought $350,000 to fund two segments of the project including the Farm to Table program and revolving loan program for small businesses. The board pended the project until questions are resolved, including seeking Kentucky Agriculture Finance Corporation (KAFC) loans.


Co-chair Hornback noted that he has heard a great deal about the Farm to Table program and believes it is a good promotion for agriculture.


In response to a question by Senator Givens, Mr. Thomas responded that the Farm to Table program has received funding in the past. Senator Givens asked if the Louisville-Jefferson County Metro Government plans to contribute to the program. Mr. Neaveill responded that the project is fully matched with federal funds with no contribution from local funds.


Senator Givens inquired how many state funds are available, to which Mr. Neaveill responded $16.5 million is available to the board. Mr. Thomas asked the members to keep in mind there are $8 million in recurring expenditures (e.g. Kentucky Proud, Kentucky Beef Network, Kentucky Beef Council, Kentucky Horticulture Council, and The Kentucky Center for Agriculture and Rural Development) that are sought every two years, which reduces the $16.5 million to $8.5 million in funds actually available.


Senator Givens responded that the rigor used to evaluate projects will need to become stronger.


Mr. Thomas said staff took another program that was funded with federal funds, the On-Farm Energy Production and Efficiency Program, and suggested that the board reconsider setting aside state funds to continue the program for two years. The board agreed and set aside $2 million. He noted that in 2011, more than $750,000 in state funds were awarded across the state. Those investments result in more than $800,000 in energy savings in one year; he noted those savings will be achieved every year going forward.


Senator Givens said he applauds that the board is changing the culture and introducing new practices. He cautioned that routine has been to not re-fund from another cycle so the standard of measurement is higher when applicants come back seeking funds again.


Mr. Thomas noted positive press regarding the Farm to Table program saying the board felt that this was worthwhile to continue for another two year cycle. He mentioned another investment in that area, Capstone Produce Auction, which plays a part in the Louisville Metro area.


Senator Parrett noted that he could not see any impact in Hardin County by the Farm to Table program. Mr. Thomas noted that he would contact Ms. Sarah Fritchner with the program and report back.


Representative McKee shared appreciation to the GOAP staff and board members from a Harrison County Magistrate for the deceased animal removal program. He also noted Tamara Sandberg with the Farms to Food Bank Program, who was present in the audience; he said the money provided to the program has reaped enormous benefits and mentioned the value of the program.

Mr. Thomas returned the accolades mentioned by Representative McKee to the General Assembly and to Governor Beshear for putting money into agricultural development. He noted the food bank funding last year and the fact that money was leveraged to obtain money from Wal Mart.


In response to a question by Senator Givens, Mr. Thomas responded that it is hard to report how much money has been withheld due to arbitration.


There being no further business the meeting was adjourned.