Committee on Appropriations A/V — 2018

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Call To Order and Roll Call00:00:36
Office of the Governor Budget Presentation00:02:57
Nathan Sanderson and Travis Dovre presented a brief overview of the Governor's Office00:03:12
Governor's Office Organizational Chart00:04:58
Governor's Office has requested limited budget increases in the past00:06:54
22 FTE, which are not always filled, especially now with the end of the Governor's term00:07:12
Annie Mehlhaff, LRC Fiscal Staff reviewed the following 3 budget units: Office of the Governor, Contingency Fund and Lt. Governor00:07:56
The Governor's Office is funded entirely with general funds and has no recommended changes for FY19.00:08:15
The Governor's Office has 22.0 FTE with 2.0 unutilized FTE00:08:50
Page 2 details Actual Expenditures for FY16, FY17, budgeted FY18 and recommended FY19 with budgets broken down by unit.00:08:58
Page 3 - The FY19 recommended budget for the Office of the Governor is $2,370,938 and 21.5 FTE, $1,939,969 in personal services and $541,436 in operating expenses.00:09:19
Page 4, Line 9 - Details the budget transfer of $88,026 from personal services to operating expenses.00:09:41
Page 5 - The FY19 recommended budget for the Governor's Contingency Fund is $75,000 and has been for many years.00:10:40
The Contingency Fund is used for emergency and unanticipated concerns of the Governor. Expenditures as of December 31, 2017 total $734.00:10:57
The FY19 recommended budget for the Lt. Governor is $35,467 in general funds and 0.5 FTE.00:11:10
Page 7 - National Organization Memberships, which have no requested increases and Other Fund Balance History of the Private Activity Bond Fees Fund.00:11:30
Governor is recommending a transfer of $480,743 from the Private Activity Bond Fund to the General Fund in the current fiscal year. Similar transfers have been done to balance the budget in FY09, FY11 and FY17.00:11:50
Beginning in FY19, the Governor is recommending ongoing transfers of $400,000 from this fund to the General Fund to support the new design of the Building South Dakota Program.00:12:10
Mr. Sanderson explained Contingency Fund expenditures.00:12:37
Representative Howard question regarding vacant FTEs.00:13:28
Mr. Sanderson explained the unutilized/vacant FTE.00:13:35
Representative Howard question on the consistency of vacant positions.00:15:00
Mr. Sanderson said they have never gone over, always less than the allocated FTE.00:15:11
Senator White question on planning for retirement of employees.00:15:48
Ms. Mehlhaff said the agencies have to manage the FTE.00:16:16
Representative Peterson question on Redesign of the Building South Dakota fund.00:16:45
Mr. Sanderson said there will be an ongoing transfer of $400,000 to the General Fund to supplement the Building South Dakota fund.00:17:05
Mr. Sanderson said the $400,000 is not part of the Governor's general fund budget.00:17:45
Senator Partridge question on the various Governor's associations.00:18:00
Mr. Sanderson explained the various associations: Midwest Governor's Association, Western Governor's Association and the National Governor's Association. 00:18:26
Senator Haverly spoke to the value and importance of the associations and the importance of Governor Daugaard being the Chair of the Western Governor's Association00:21:22
Jason Hancock, Executive Director of the Legislative Research Council00:22:55
Legislative Research Council Organizational Chart00:25:50
Mr. Hancock spoke to projects the senior staff has been working on currently or has plans to work on.00:26:53
Annie Mehlhaff spoke to 3 budget units: the Legislative Research Council, the Auditor General and the Legislative Contingency Fund00:35:00
The Legislative Branch budget is .6% of the total budgeted General Funds.00:35:25
Sources of funds 91.9% is General Funds and 8.1% Other.00:35:32
Legislative Audit receives 39%, Legislative Session receives 24%, the LRC Office receives 29% and Legislative Interim receives 8%.00:35:41
Page 2 details Actual Expenditures for FY16, FY17, budgeted FY18 and recommended FY19 budget request00:35:53
Page 3 is a rollup of all three budget units.00:36:18
Legislative Operations begins on Page 4 - The FY19 recommended budget is $6,002,395 and 31.6 FTE. This includes an increase of $952 in general funds. This budget funds the annual legislative sessions, any special legislative sessions and the full-time LRC staff.00:36:25
Page 5 - in FY17 LRC reverted $164,807 in Personal Services and $79,948 in Operating Expenses. There were no unutilized FTE.00:37:10
Page 6 - Operating Expense Inflation includes dues for 5 national organizations totaling $10,203 in General Funds.00:37:45
Page 6 - Executive Board Approved Salary Package was not recommended by the Governor.00:38:22
Page 6 - Other Adjustments: a salary package of $6,044 in general funds for salaries of session employees was not recommended by the Governor. 00:38:36
Page 6 - Legislative Information Technology Adjustments resulted in a net decrease of $9,251 in general funds. The Governor recommends this request.00:39:06
Page 8 - Budget Unit: Legislative Contingency Fund. This fund is the only source of Other funds in the budget and is used to fund priority pilot programs. Expenditures to date $145,960 for the BIT Lean Management Review, $8,582 for expenses of the Government Accountability Taskforce, and an outstanding payment of $99,000 for Lean Review currently underway in the Department of Labor and Regulation.00:39:35
Senator Cronin question regarding travel expenses.00:40:43
Ms. Mehlhaff said in FY17 funds were reverted in Legislative Travel. In FY18 $80,000 was cut from Legislative Travel.00:41:45
Senator Cronin question on how much money was saved by restricting travel.00:42:15
Ms. Mehlhaff said funds were reverted but was unsure how much was due to travel restrictions.00:42:38
Kris Schneider, Business Manager for LRC, told the Committee she was still processing out-of-state vouchers from November and December. 00:43:35
Comments by Senator Cronin regarding savings from travel.00:44:36
Comments by Mr. Hancock regarding travel expenses.00:45:09
Senator Tidemann commented on Senator Peters being Chair of the NCSL and attendance at the NCSL meetings.00:46:20
Senator Nesiba question on how LRC compares in staff size and compensation to other states.00:47:20
Mr. Hancock said South Dakota's legislative staff size is 50th out of 50.00:47:42
In terms of compensation, Mr. Hancock said South Dakota is behind those of compariable size and length of sessions.00:48:48
Senator Nesiba question regarding money in the Legislative budget for "move to market" increases.00:52:48
Mr. Hancock responded regarding "move to market" funding.00:53:15
Senator Nesiba requested information on what the "move to market" would cost.00:55:25
Mr. Hancock said a $39,212 salary package had been included in the FY19 budget request but was not recommended by the Governor.00:55:50
Representative Howard question Legislative Contingency Fund.00:56:31
Chair Anderson explained the Legislative Contingency Fund is used for projects authorized by the E Board. It is one-time money with no other money going into the fund.00:57:55
Representative Hunhoff requested information regarding the revised travel policy, such as how much was expended and how much is projected in the current budget for expenses.00:58:57
Marty Guindon, Legislative Audit, briefed the Committee on the accomplishments and challenges of the office. 00:59:39
Mr. Guindon thanked the Legislative Audit staff for completing the audit of the state's financial statements by December 31st. 00:59:57
Mr. Guindon reported they are behind in the county audits primarily due to the challenges of recruiting and retaining staff.01:00:47
Legislative Audit Organizational Chart01:01:02
Mr. Guindon spoke to the Internship Program.01:02:18
Mr. Guindon said it is not available at the present time.01:02:55
Senator Tidemann question on providing a signing bonus.01:03:20
The FY19 recommended budget for Auditor General is $3,718,584, an increase of $8,795 in general funds and 40.0 FTE.01:04:10
Page 10 - Prior Year budget detail - $20,000 was transferred from Personal Services to Operating Expenses. General Fund reversions in FY17 totaling $224,804. 6.3 FTE were unutilized.01:04:42
Page 11 - Maintenance of Current Operations: Items A & D were recommended by the Governor. Items B & C were not. 01:05:28
A recommendation for an increase of $2,000 for software licenses was approved.01:06:18
Page 12 - Revenues and Statistics. All revenue goes into the General Fund.01:06:25
Page 13 - Other Fund Balance History. The Legislative Contingency Fund began in FY15 with a $1 million balance with a current unobligated balance of $747,610..01:06:38
Senator Nesiba question on past uses of Contingency Fund.01:07:17
Ms. Mehlhaff referred the Committee to page 8 to explain the use of the Legislative Contingency Fund.01:07:31
Representative Anderson question on funding for the PEPL fund.01:08:04
Mr. Guindon responded regarding the PEPL fund.01:08:35
Representative Hunhoff explained the history of the Contingency Fund.01:08:58
Representative Anderson commented on travel expenses and state rates.01:10:01
Public Utilities Commission01:12:00
Kristie Fiegen, Chair of the Public Utilities Commission introduced the PUC staff.01:12:08
Commissioner Fiegen presented a brief overview of the office.01:13:20
Commissioner Fiegen reminded the Committee that Congress had recently implemented the tax reform and corporate income tax change that will impact the 9 companies and 6 utilities regulated by the PUC.01:14:48
PUC budget includes the One Call Board; however, PUC has no authority over the Board.01:15:50
Ariel Hammerquist, LRC Fiscal Staff spoke to the Public Utilities Commission budget.01:20:58
The PUC budget is one unit, broken down by program: Administration, Grain Warehouse, Fixed Utilities, Pipeline Safety, One Call Notification Board and the Do Not Call Registry.01:21:07
The PUC budget is 0.04% of the total state budgeted General Funds.01:21:48
Sources of Funds: 83% Other Funds, 12% General and 5% Federal01:22:02
Distribution of Agency General Funds: 41% Grain Warehouse and 59% Administration01:22:14
Page 3 - Actual Expenditures by FY16, FY17, budgeted for FY18 and FY19 recommended request.01:22:25
Page 5 - Administration Program: the recommended FY19 budget is $1,358,925 and 13.2 FTE with a net change of $0.01:22:55
In FY17 the Administration Program reverted $33,577 in personal service and $39,911 in operating expenses for a total of $71,988.01:23:25
Page 6 - Fund Swap - a decrease of $18,700 in federal fund spending authority to other fund authority.01:23:55
Ms. Kemnitz, Finance Manager explained the funding swap was because the state receives less federal funding for the pipeline safety program.01:24:14
Page 8 - Grain Warehouse Program: the recommended FY19 budget is $350,952, 4 FTE with no changes.01:25:13
Page 11 - Fixed Utilities Program: the recommended FY19 budget is $1,818,134, a reduction of $4,435 and 12 FTE.01:25:45
Page 12 - In FY17 there was a one-time budget transfer of $38,222 in other fund authority from the Do Not Call Registry to the Fixed Utilities Budget Center.01:26:20
In FY17 Fixed Utilities reverted $214,939 in personal services and $246,984 in operating expenses for a total reversion of $423,701.01:26:48
Ms. Kemnitz explained the reversions.01:27:08
Page 13 - Budget Alignment: the agency requested a decrease of $4,435, in other fund authority.01:28:25
Page 13 - Fund Swap: the agency requested a fund swap of $2,001 from other fund expenditure authority to federal fund authority.01:28:38
Page 14 - Informational Budget for Pipeline Safety: the recommended budget is $286,775 and 2 FTE with a recommended decrease of $12,206 involving $40,052 in federal funds and $27,846 in other funds.01:28:53
Page 15 - Budget Alignment: the agency requested a decrease of $12,706 in federal fund expenditure authority and an increase of $500 in other fund expenditure authority.01:29:30
Page 16 - Fund Swap - the agency requested a fund swap of $27,346 from federal funds to other funds.01:29:53
Senator Sutton question on the reduction of federal authority funds and pipeline safety.01:30:10
Commissioner Feigen explained the fees involved in pipeline safety program.01:30:44
Senator Sutton question on the Keystone pipeline spill.01:31:35
Commissioner Feigen said the Keystone pipeline is an interstate and regulated by the federal government.01:31:50
Page 17 - Informational Budget for the One Call Notification Board: the FY19 recommended budget $928,910 with a recommended increase of $66,967. The personnel in this budget are under contract.01:32:12
Senator Cronin question on the $66,697 increase.01:32:44
Page 19 - Operating Expense Inflation: the agency requested a decrease of $6,142 in federal fund expenditure authority and an increase of $44,432 in other fund expenditure authority for the executive director and deputy director contracts for a total of $38,290 and an increase of $10,000 in other fund expenditure authority due to an anticipated increase in the Joint Powers Agreement with First District. These adjustments total an increase of $48,290. 01:33:13
Representative Hunhoff question on increases to Executive Director and Deputy Director contracts.01:35:05
Larry James, Executive Director of SD One Call explained the increase was to realign the contracts with IRS guidelines.01:35:38
Page 19 - Budget Alignment01:36:00
Page 19 - One Call Public Awareness: the agency requested an increase of $5,000 in other fund expenditure authority for educational supplies.01:37:04
Representative Hunhoff question on the success of educational outreach efforts.01:37:30
Mr. James briefed the Committee on agencies they contact and incidents that have occurred.01:37:46
Page 21 - Do Not Call Registry: the FY19 recommended budget is $32,741, a decrease of $10,400 in other funds.01:41:26
Page 3 wrap-up - The one budget unit has a budget Request of $4,776,437, an increase of $39,926 and 31.2 FTE.01:42:28
Senator Tidemann question on Grain Warehouse and inspectors.01:43:24
Jim Mehlhaff briefed the Committee on the duties of the Grain Warehouse division.01:44:15
Senator Sutton question on funding for travel for grain warehouse inspections. Mr. Mehlhaff responded.01:47:43
Representative Lake question on adequacy of the present bonding requirements. Mr. Mehlhaff responded.01:49:25
Chris Nelson, PUC Commissioner spoke to the proper amount for a bond.01:52:25
Senator Sutton question regarding the bonding procedure.01:53:48
Commissioner Nelson spoke to proposed legislation regarding bonding and quarterly statements.01:54:22
Representative Ahlers questions on Do Not Call spending authority. Ms. Kemnitz said because the analysts were working on telecom issues, the excess operating expenditure authority in Do Not Call was transferred to personal services. The funding comes from Telephone Solicitation Fund.01:56:30
Secretary of State's Office02:01:20
Shantel Krebs, Secretary of State 02:01:25
Introduction of staff and budget presentation.02:02:00
Counties have used $1.57 million in federal HAVA grant funds to purchase upgrades to their voting equipment. 02:02:53
Senator Nesiba question on process for obtaining HAVA funds.02:04:48
Secretary Krebs said the counties apply through the Secretary of State's Office. No reimbursement is made without an invoice for the purchase.02:05:02
Senator Tidemann question on the type of voting machines purchased by the counties, did it include tabulation equipment.02:05:30
Secretary Krebs responded yes, some counties upgraded tabulating machines. 02:05:49
Senator Sutton question on which counties are allowed to use HAVA funds.02:06:25
Secretary Krebs said HAVA grant funds are available for the counties for satellite voting centers for certain counties that meet qualifications. This may be tribal areas where a number of them have applied. 02:06:33
Senator Sutton question on limits of funding available and length of grant.02:07:04
Secretary Krebs said limits depend on the type of application requested. In 2005 each state was appropriated funding by population and South Dakota received $13 million. Following the FY18 request, approximately $8.1 million will remain. The grant for satellite voting centers is $9,000/election. 02:07:18
HAVA Federal Audit was initiated in 2016 and is ongoing.02:08:55
Senator Cronin question on possible costs to the state as a result of the HAVA audit.02:10:16
Secretary Krebs said yes, South Dakota has already paid back $1,274 and possibly $20,000 more. South Dakota is currently in mediation over these issues.02:10:38
Records Management: the office requested $12,000 in the FY19 budget request.02:17:35
Representative Bartels question on microfilming.02:19:15
Ms. Mehlhaff spoke to the Secretary of State budget.02:23:12
The recommended FY19 budget for the Secretary of State is $2,985,412 and 15.6 FTE02:23:24
Page 3 - Budget Detail - Previous Budget Year Recap includes a one-time decrease in general funds of $100,000 and a one time increase in other fund expenditure authority of $250,000 for a total increase of $150,000 in the Supplemental Appropriatons Bill. The office also transferred $44,424 in general funds from personal services to operating expenses and $54,875 in other fund expenditure authority from operating expenses to personal services. These were both one-time transfers.02:24:05
The office reverted $2,223 in general funds, $1.4 million in federal authority (HAVA funds), $24,694 in other fund authority and 0.3 FTE.02:25:00
Page 4 - FY19 Budget Expansions02:25:30
Secretary Krebs explained that Personal Services Adjustments shows a requested increase; however, they are now offering a decrease of $12,243 due to the retirement of employees.02:26:05
Secretary Krebs explained the recommended request of $19,400 for Software Maintenance.02:28:55
Secretary Krebs explained the decrease of $63,500 in Bank Fees and Charges.02:29:40
Representative Ahlers question on the $19,400 request for Software Maintenance.02:30:39
Secretary Krebs said it would be an ongoing maintenance fee for the Concealed Carry Card system.02:30:52
Secretary Krebs explained the decrease of $12,000 in Postage Services.02:32:00
Senator Nesiba question on private mail service. Secretary Krebs responded.02:34:19
Representative Howard question on zero-based budgeting.02:35:40
Secretary Krebs explained the zero-based budgeting process in her office.02:35:53
Senator Tidemann question on how to handle possible increases after the budget is adopted.02:37:33
Secretary Krebs expressed her concern with late notices of increased expenses.02:38:05
State Auditor's Office02:40:00
Steve Barnett, State Auditor introduced staff and gave a brief overview of the State Auditor's Office duties.02:40:05
Ms. Mehlhaff reported the recommended FY19 budget request for the Auditor's Office totals $1,488,459 with no increases or decreases and 15.8 FTE. The Office has fully utilized the FTE.02:46:48
Senator Partridge question on the process for fielding requests for the office's procedures and accountability of government. Auditor Barnett responded there has been a slight increase in requests depending on what the public sees in the news. 02:47:40
Representative Anderson question on what information is available online. Auditor Barnett responded.02:49:10
Motion to Adjourn: Carson/Cronin02:52:25