Minutes for the Legislative Budget Section Meeting in North Dakota

NORTH DAKOTA LEGISLATIVE MANAGEMENT
Minutes of the
BUDGET SECTION
Tuesday, September 15, 2009
Senate Chamber, State Capitol
Bismarck, North Dakota
Senator Ray Holmberg, Chairman, called the
meeting to order at 9:00 a.m.
Members present: Senators Ray Holmberg, Bill
Bowman, Tom Fischer, Tony S. Grindberg, Ralph L.
Kilzer, Karen K. Krebsbach, Elroy N. Lindaas, Tim
Mathern, Carolyn Nelson, David O'Connell, Larry J.
Robinson, Rich Wardner; Representatives Larry
Bellew, Rick Berg, Merle Boucher, Al Carlson, Mark A.
Dosch, Eliot Glassheim, Kathy Hawken, Lee Kaldor,
Matthew M. Klein, Gary Kreidt, Joe Kroeber, Bob
Martinson, Ralph Metcalf, Shirley Meyer, David
Monson, Kenton Onstad, Chet Pollert, Bob Skarphol,
Blair Thoreson, Francis J. Wald, Alon C. Wieland,
Clark Williams
Members absent: Senators Randel Christmann,
Aaron Krauter, Tom Seymour, Bob Stenehjem, John
Warner; Representatives Jeff Delzer, Mary Ekstrom,
Keith Kempenich, James Kerzman, Jon Nelson, Ken
Svedjan, Don Vigesaa
Others present: Jim W. Smith, Legislative
Council, Bismarck
See attached appendix for additional persons
present.
It was moved by Senator O'Connell, seconded
by Senator Robinson, and carried on a voice vote
that the minutes of the June 23, 2009, meeting be
approved as distributed.
STATUS OF THE STATE GENERAL FUND
Chairman Holmberg called on Ms. Pam Sharp,
Director, Office of Management and Budget (OMB), to
present a report on the status of the general fund,
including turnback and use of deficiency
appropriations, and the state's economy, including
information on economic sectors showing growth. A
copy of the information presented is on file in the
Legislative Council office.
Ms. Sharp said the consumer price index (CPI) is
expected to decline an average of .7 percent during
2009 and then increase by 1.6 percent during 2010
and 2 percent during 2011. She said the CPI for
July 2009 was a negative 2.1 percent, down from a
negative 1.4 percent in June 2009 and significantly
lower than the 5.6 percent of one year ago. She said
the average yield on a three-month Treasury bill
during the second quarter of 2009 was .18 percent,
four basis points lower than the previous quarter and
substantially lower than the 1.39 percent average for
2008. She said North Dakota's unemployment rate for
July 2009 was 3.9 percent, considerably lower than
the national rate of 9.7 percent, but up slightly from
the July 2008 rate of 3.1 percent. She said North
Dakota oil production increased to nearly 215,000
barrels per day in June 2009 and continues to
increase. She said the average price for North
Dakota crude oil was $43 per barrel in April 2009, $51
per barrel in May 2009, and $61 per barrel in
June 2009. She said the current oil price is $62 per
barrel and the rig count is 50.
FINAL 2007-09 BIENNIUM GENERAL
FUND REVENUES AND EXPENDITURES
Ms. Sharp presented the following information on
the final status of the general fund for the 2007-09
biennium:
Unobligated general fund
balance - July 1, 2007
$295,541,176
Add
General fund collections
through June 30, 2009
$2,715,263,379
Cash certifications and
adjustments
42,793
General fund balance
obligated for authorized
carryover from 2005-07
17,108,049
Total general fund revenue for
the 2007-09 biennium
2,732,414,221
General fund turnback for the
2007-09 biennium
70,949,621
Total available 3,098,905,018
Less
2007-09 biennium general fund
ongoing appropriations
(2,317,447,307)
2007-09 biennium general fund
one-time appropriations
(139,526,649)
Contingent appropriation
(Section 50 of SB 2200)
(5,000,000)
Authorized carryover
expenditures from 2005-07
(17,108,049)
Emergency and supplemental
appropriations
(127,156,319)
Adjustments 80,750
Total appropriations (2,606,157,574)
Transfers and adjustments
Adjustments 119,034
Nonappropriated transfers (6,086,416)
Transfer to the budget
stabilization fund
(124,936,548)
Total transfers and adjustments (130,903,930)
Ending general fund balance -
June 30, 2009
$361,843,514
Budget Section 2 September 15, 2009
Ms. Sharp said after the transfer of $124,936,548
from the general fund to the budget stabilization fund
in July 2009, the balance in the budget stabilization
fund is $324,936,548. She said the balance in the
budget stabilization fund is limited to 10 percent of the
total 2009-11 biennium appropriations. She said the
transfer made from the general fund to the budget
stabilization fund was the maximum allowed.
Ms. Sharp presented the following information on
the final status of the permanent oil tax trust fund for
the 2007-09 biennium:
Permanent oil tax trust fund balance - July 1, 2007 $143,270,662
Add
Revenue collections through June 30, 2009 484,256,596
Total available for the 2007-09 biennium 627,527,258
Less expenditures and transfers
Authorized by the 2007 Legislative Assembly (137,550,241)
Authorized by the 2009 Legislative Assembly (250,000)
Permanent oil tax trust fund balance - June 30, 2009 $489,727,017
2007-09 Biennium General Fund Turnback
Ms. Sharp presented information on the 2007-09
biennium unspent general fund appropriations by
agency. She said 2007-09 unspent general fund
appropriation authority totaled $70.9 million. She said
the Department of Human Services had the largest
unspent amount of $54.4 million, of which
$33.2 million was the result of additional funding
received due to the increase in the federal medical
assistance percentage (FMAP) and child support
pursuant to the American Recovery and Reinvestment
Act of 2009.
Representative Carlson expressed concern that
2009-11 biennium general fund appropriations are
less due to the receipt of federal stimulus funds. He
asked OMB to provide information at the next Budget
Section meeting on the estimated effects that the
anticipated reduction in federal fiscal stimulus funds
will have on general fund appropriation requirements
for the 2011-13 biennium. Representative Skarphol
requested the information be updated periodically and
reported to the Budget Section throughout the interim.
Chairman Holmberg asked OMB to provide this
information to the Budget Section at future meetings.
2007-09 Biennium Emergency and
Supplemental Appropriations
Ms. Sharp presented information on the 2007-09
emergency and supplemental appropriation amounts
by agency. She said 2007-09 emergency and
supplemental appropriations totaled $127.2 million, of
which $81.9 million was spent by June 30, 2009,
including $59.9 million provided for weather-related
grants pursuant to Senate Bill No. 2012. She said
$45.2 million of the 2007-09 emergency and
supplemental appropriations will be continued in the
2009-11 biennium.
STATUS OF THE 2009-11 BIENNIUM
GENERAL FUND
Ms. Sharp presented the following information on
the status of the state general fund for the 2009-11
biennium based on revenue collections through
August 2009:
Unobligated general fund
balance - July 1, 2009
$361,843,514
Add
General fund collections
through August 2009
$505,208,957
Forecasted general fund
revenue for the remainder of
the 2009-11 biennium
2,468,679,065
Total estimated general fund
revenue for the 2009-11
biennium
2,973,888,022
Balance obligated for authorized
carryover from the 2007-09
biennium
76,383,528
Estimated total available 3,412,115,064
Less
2009-11 biennium general fund
ongoing appropriations
(2,970,380,754)
2009-11 biennium general fund
one-time appropriations
(278,984,727)
Balance obligated for
authorized carryover from the
2007-09 biennium
(76,383,528)
Estimated deficiency requests (3,823,000)
Total appropriations and
estimated deficiency requests
(3,329,572,009)
Estimated general fund
balance - June 30, 2011
$82,543,055
Ms. Sharp said the Tax Department anticipates
2009 Senate Bill No. 2402 relating to the homestead
tax credit program will result in a 2009-11 deficiency
request of approximately $3.8 million.
Ms. Sharp presented the following information on
the status of the permanent oil tax trust fund for the
2009-11 biennium:
Beginning permanent oil tax trust fund balance -
July 1, 2009
$489,727,017
Add
Forecasted revenues for the 2009-11 biennium
(based on 2009 legislative forecast assumptions for
oil price and production)
323,092,000
Total estimated funds available for the 2009-11
biennium
812,819,017
Less expenditures and transfers
Transfer to the general fund pursuant to
2009 HB 1015
(140,000,000)
Transfer to the general fund for mill levy reduction
program pursuant to 2009 HB 2199
(295,000,000)
Transfer to the property tax relief sustainability fund
pursuant to 2009 HB 2199
(295,000,000)
Appropriations pursuant to 2009 HB 1015, 1305,
and 1394 and SB 2003 and 2020
(16,175,100)
Estimated permanent oil tax trust fund balance -
June 30, 2011
$66,643,917
Budget Section 3 September 15, 2009
In response to a question from Representative
Wald, Ms. Sharp said the 2009 Legislative Assembly
provided for a transfer of $295 million from the
permanent oil tax trust fund to the property tax relief
sustainability fund. She said the transfer will be made
in July 2010, but the funds will not be spent until
appropriated by the 2011 Legislative Assembly.
Ms. Sharp presented information on general fund
revenue collections for August 2009 and the 2009-11
biennium to date. She said revenues collected for the
biennium to date are 3.3 percent more than the
legislative forecast. She said the increase is primarily
due to increases in oil and gas production tax and oil
extraction tax collections, which exceeded the
biennium-to-date legislative forecast by $9.5 million
and $9.1 million, respectively. She said biennium-todate
motor vehicle excise tax collections also
exceeded estimates by $3.1 million, or 51.3 percent.
She said sales tax collections were $8.5 million, or
15.6 percent less than the legislative forecast for the
month of August. She said biennium-to-date sales tax
collections were $7.9 million, or 7.4 percent less than
the legislative forecast.
In response to a question from Representative
Carlson, Ms. Sharp said the Attorney General's office
deposits lottery revenue in the general fund in June of
each fiscal year.
ECONOMIC SECTORS SHOWING GROWTH
Ms. Sharp presented information on the state's
economy, including information on economic sectors
showing growth. She said the state's gross domestic
product is the value added in production by the labor
and capital located in the state. She said all of the
state's industry sectors grew as the state gross
domestic product increased from $17.8 billion in 2000
to $31.2 billion in 2008.
In response to a question from Representative
Skarphol, Ms. Sharp said three industry sectors--
agriculture/forestry/fishing/hunting, manufacturing,
and mining--increased as a percentage of the total
state gross domestic product while other industry
sectors either stayed the same or decreased slightly.
IRREGULARITIES IN THE FISCAL
PRACTICES OF THE STATE
Pursuant to North Dakota Century Code (NDCC)
Section 54-14-03.1, Ms. Sharp presented information
on irregularities in the fiscal practices of the state. A
copy of the information presented is on file in the
Legislative Council office. She said the state
agencies with fiscal irregularities include:
Agency Amount Reason
Office of Management
and Budget
$500 Additional workload to run
extra payrolls for activated
National Guard members
during spring flooding
Department of
Commerce
$625 Temporary additional
workload
North Dakota Vision
Services - School for the
Blind
$3,450 Additional work performed
in June by two teachers at
the School for the Blind
outside of their nine-month
teaching contracts
Council on the Arts $5,400 Additional work performed
by two employees related
to a book on North Dakota
folklore to be used as a
textbook for various
anthropology classes
State Department of
Health
$13,782 Severance package
EMPLOYEE BONUSES
Ms. Sharp presented information on the number of
employees receiving bonuses above the 25 percent
limitation pursuant to NDCC Section 54-06-30 and
Section 1 of 2009 House Bill No. 1030. She said
agencies may not give bonuses to more than
25 percent of their employees except in special
circumstances approved by Human Resource
Management Services (HRMS). She said HRMS is
required to report any exceptions to the Budget
Section. She said the law became effective August 1,
2009, and since then no agency has exceeded the
25 percent limitation on the number of employees
receiving bonuses.
MAJOR TRUST FUNDS
Ms. Sharp presented information on the status of
the state's major trust funds, including information on
each fund's current balance compared to two years
ago and the effect of any investment gains or losses
on each fund during the past two years. She
presented a schedule providing the beginning
balance, revenues, expenditures, transfers, and
ending balance of the permanent oil tax trust fund,
foundation aid stabilization fund, budget stabilization
fund, common schools trust fund, and the lands and
minerals trust fund. A copy of the information
presented is on file in the Legislative Council office.
Ms. Sharp said the principal of the permanent oil
tax trust fund ($489.7 million) and the foundation aid
stabilization fund ($65.8 million) on June 30, 2009, are
invested by the State Treasurer's office in certificates
of deposit and the earnings are credited to the general
fund. She said these funds have not experienced
investment gains or losses.
Ms. Sharp said the budget stabilization fund
principal ($324.9 million) on June 30, 2009, is
invested by the State Investment Board in a low-risk
portfolio consisting of certificates of deposit, cash
equivalents, bonds, and bank loans. She said
investment earnings of $1.7 million were credited to
the general fund during the 2007-09 biennium, and
the fund experienced a $9.9 million market decline in
the last 18 months of the 2007-09 biennium. She said
most of the losses were unrealized and would not
affect the principal balance of the fund if the assets
are held until maturity.
Ms. Sharp said the common schools trust fund
balance on June 30, 2009, was $856.5 million. She
said the fund is invested by the Land Department in
Budget Section 4 September 15, 2009
stocks, bonds, farm loans, and other investment
assets managed to preserve purchasing power and
maintain stable distributions to fund beneficiaries.
During the 2007-09 biennium, she said, the fund
experienced net realized capital losses of
$42.5 million and net unrealized capital losses of
approximately $184.8 million. She said the fund
provided schools with $66.8 million during the
2007-09 biennium and anticipates providing the
estimated $77.2 million for the 2009-11 biennium.
Ms. Sharp said the lands and minerals trust fund
balance on June 30, 2009, was $32.1 million. She
said the fund is invested by the Land Department in
short-term, low-risk, fixed income investments, such
as money market accounts, Bank of North Dakota
certificates of deposit, and an operating loan to the
Mill and Elevator. The fund did not experience any
investment losses during the 2007-09 biennium.
FEDERAL FISCAL STIMULUS
FUNDING FOR ADMINISTRATION
Ms. Sharp presented information regarding federal
fiscal stimulus funds retained by agencies for
administration purposes. She provided a schedule of
American Recovery and Reinvestment Act of 2009
funds appropriated by agency for the 2009-11
biennium and an estimate of the portion of the funds
appropriated retained for administration. A copy of
the information presented is on file in the Legislative
Council office. Of the $571.3 million in federal fiscal
stimulus funds appropriated for the 2009-11 biennium,
she said, approximately $6.1 million, or 1 percent will
be retained for administration by the various agencies.
She said administrative costs for some agencies are
allowed based on a percentage of the funds awarded.
She said $289,494 of federal fiscal stimulus funding
was appropriated to OMB for general administration of
federal fiscal stimulus funds.
Chairman Holmberg asked OMB to provide the
Budget Section with details of how the $1.2 million
provided to the Department of Commerce for the
administration of the state energy program is being
used.
In response to a question from Representative
Skarphol, Ms. Sharp said Job Service North Dakota
may still accept certain stimulus funding previously
unclaimed by the agency. She said she would
provide information to the Budget Section regarding
stimulus funding available to the state that was not
accepted.
In response to a question from Representative
Boucher, Chairman Holmberg said the Employee
Benefits Programs Committee receives reports on the
retirement funds of the Teachers' Fund for Retirement
and the Public Employees Retirement System.
Chairman Holmberg asked the Legislative Council
staff to provide the most recent minutes of the
Employee Benefits Programs Committee to the
members of the Budget Section.
In response to a question from Representative
Wald, Ms. Sheila Peterson, Director, Fiscal
Management Division, Office of Management and
Budget, said the state receives stimulus funding on a
reimbursement basis. She said expenditures for
federal fiscal year 2009 are exceeding estimates. She
said the majority of the stimulus funds were
anticipated to be spent in 2010 and 2011.
Chairman Holmberg requested OMB and the
Legislative Council staff to compile information
regarding federal fiscal stimulus funding provided
directly to political subdivisions for the next Budget
Section meeting.
VETERANS' HOME SPECIAL
FUND BALANCE
Ms. Sharp presented information regarding the
Veterans' Home July 1, 2009, special fund balance
compared to the amount anticipated in the Veterans'
Home 2009-11 budget. A copy of the information
presented is on file in the Legislative Council office.
She said the Veterans' Home special fund balance of
$3.6 million exceeded the amount anticipated in the
Veterans' Home 2009-11 budget by $322,774. She
said the additional funds were due to the timing of
revenues and expenditures and an increase of $4 per
day in the Veterans' Administration per diem.
2007-09 CAPITAL CONSTRUCTION
AND INFORMATION
TECHNOLOGY CARRYOVER
Ms. Sharp presented information on 2007-09
capital construction and information technology
project funding authorized by the Capital Construction
Carryover Committee to continue to the 2009-11
biennium. A copy of the information presented is on
file in the Legislative Council office. She said
authorization to continue funding for projects totaling
$63.7 million has been approved by the Capital
Construction Carryover Committee. Of this amount,
she said, $6.8 million is from the general fund,
$36.9 million is from federal funds, and $20 million is
from special funds. She said the Department of
Human Services' Medicaid management information
system project carryover totaling $31.7 million, of
which $2.4 million is from the general fund, represents
nearly one-half of the capital construction carryover.
DISTRIBUTION OF
GENERAL SALARY INCREASES
Ms. Sharp presented information regarding a
summary of general salary increase methods used by
agencies to distribute salary increases among
employees and the effect these distribution methods
have had on salary compression issues of agencies.
She provided a summary by agency of the number of
employees receiving a general salary increase,
including the minimum, maximum, and average
percentage increase received per employee. A copy
of the information presented is on file in the
Legislative Council office. She said 6,848 of the 7,266
employees at state agencies receiving the general
salary increase received increases ranging from
.10 percent to 13.7 percent.
Budget Section 5 September 15, 2009
EMPLOYEE PAY AND
MARKET EQUITY CONCERNS
Ms. Sharp presented information on selected
agencies that have had pay and market equity
concerns, including specific information on how salary
equity increases have affected the salaries of the
affected employees and how the general salary
increase funds were distributed to these and other
employees within the agency, including the range of
percentage increases provided. She provided a
summary by agency of the number of employees
receiving equity pool increases. A copy of the
information presented is on file in the Legislative
Council office. She said 34 agencies received salary
equity funding, and of the 6,681 employees in the
agencies receiving the funding, 4,474 employees
received salary equity increases ranging from
.02 percent to 24.28 percent.
In response to a question from Representative
Carlson, Ms. Sharp said agencies applied the
5 percent general salary increases before awarding
salary equity increases.
In response to a question from Representative
Skarphol, Ms. Sharp said because agencies with
market equity concerns were targeted, OMB
determined the salary equity increases were not
subject to the administrative rule limiting salary
increases to 20 percent. She said certain employees
in targeted agencies, such as the Parks and
Recreation Department and the Department of
Mineral Resources of the Industrial Commission,
received the highest average percentage salary equity
increases of 22.48 percent and 24.28 percent,
respectively.
Ms. Sharp provided a summary of classified
employees by quartile for selected agencies for 2008
and 2009. She said the chart demonstrates the
effectiveness of the equity increases since the
percentage of employees in the middle and upper
quartile of their pay range increased subsequent to
the general salary and salary equity increases.
RISK MANAGEMENT WORKERS'
COMPENSATION PROGRAM
Mr. Tag Anderson, Risk Management Director,
Office of Management and Budget, presented
information regarding the status of the risk
management workers' compensation program
pursuant to NDCC Section 65-04-03.1(5). He said the
2001 Legislative Assembly established a single
workers' compensation account for all state entities.
He said the Risk Management Division administers
the program. He said for coverage periods beginning
July 1, 2001, the Risk Management Division entered
deductible contracts with Workforce Safety and
Insurance for 143 consolidated accounts. He said the
deductible amount selected was $100,000 per claim.
He provided the following results for the eight
coverage years beginning July 1, 2001, through
June 30, 2009:
Nonconsolidated guaranteed
cost program premium and
assessments
$35,565,156
Risk Management Division
deductible premium paid to
Workforce Safety and Insurance
$12,853,988
Risk Management Division paid
losses through June 30, 2009
11,437,436
Risk Management Division
pending losses (reserves)
2,556,909
Risk Management Division
combined deductible premium
and losses
$26,848,333
Estimated savings for an
eight-year period
$8,716,823
Mr. Anderson said the Risk Management Division
has implemented programs to reduce premium rates
to agencies with effective risk management strategies.
A copy of the report is on file in the Legislative Council
office.
AGENCY REQUESTS AUTHORIZED
BY THE EMERGENCY COMMISSION
Chairman Holmberg directed the committee to
consider agency requests which have been
authorized by the Emergency Commission and
forwarded to the Budget Section pursuant to NDCC
Section 54-16-04.1. The information relating to the
requests was provided to Budget Section members
prior to the meeting and is on file in the Legislative
Council office.
It was moved by Senator Wardner, seconded
by Senator Lindaas, and carried on a roll call vote
that pursuant to NDCC Section 54-16-04.1, the
Budget Section approve the following requests
which have been approved by the Emergency
Commission:
• Department of Commerce (Request #1703) -
To increase special funds spending
authority by $258,858 to accept federal
funds from the federal American Recovery
and Reinvestment Act of 2009 enhanced
government energy assurance and
resiliency grant for the creation and testing
of standardized energy assurance and
resiliency plans to use during energy
emergencies and supply disruptions.
• Department of Commerce (Request #1704) -
To increase special funds spending
authority by $615,000 to accept federal
funds from the United States Department of
Energy under the federal American
Recovery and Reinvestment Act of 2009 to
provide rebates for consumers purchasing
Energy Star appliances.
• Department of Human Services (Request
#1705) - To increase special funds spending
authority by $11,062,000 to accept federal
funds from the federal American Recovery
and Reinvestment Act of 2009 for grant
funds for the temporary assistance for
needy families (TANF) program increased
Budget Section 6 September 15, 2009
caseload from 2007 to 2008 ($510,000), onetime
funds for subsidized employment costs
to assist individuals exiting the TANF
program or to avoid entering the program
($10,345,000), and administrative funds for
the supplemental nutrition assistance
program ($207,000).
• State Department of Health
(Request #1708) - To increase special funds
spending authority by $4,920,000 to accept
federal funds from the Centers for Disease
Control and Prevention for the salaries and
wages line item ($480,000), the operating
expenses line item ($640,000), the capital
assets line item ($200,000), and the grants
line item ($3,600,000) for pandemic influenza
preparedness and a vaccination campaign.
Senators Holmberg, Bowman, Krebsbach,
Lindaas, Mathern, Nelson, O'Connell, Robinson, and
Wardner and Representatives Berg, Hawken, Kaldor,
Klein, Kreidt, Kroeber, Martinson, Metcalf, Meyer,
Onstad, Pollert, Wald, and Williams voted "aye."
Senators Fischer, Grindberg, and Kilzer and
Representatives Bellew, Carlson, Dosch, Monson,
Skarphol, Thoreson, and Wieland voted "nay."
WILLISTON STATE COLLEGE - CHANGE
IN SCOPE OF PROJECT AND INCREASE
IN AUTHORIZATION
Dr. Ray Nadolny, President, Williston State
College, presented information regarding a request for
Budget Section approval to expand the scope and
increase the authorization for the science laboratory
project from $1.61 million to $2.2 million pursuant to
NDCC Section 48-01.2-25. A copy of the information
presented is on file in the Legislative Council office.
He said the Legislative Assembly authorized
$1.61 million from the general fund to renovate the
science laboratory at Williston State College. He said
Williston State College is seeking Budget Section
approval to change the scope of the project from a
renovation to an addition and increase the
authorization from $1.61 million to $2.2 million. He
said the renovation proposal has presented serious
challenges and would cost more per square foot than
a newly constructed science center addition. He said
providing for the addition instead of renovating the
existing laboratory will not only expand current
science offerings but will maximize funds provided by
the state through additional community financial
support. He said the Williston State College
Foundation has committed its resources to the project
and with the city of Williston will conduct a capital
campaign for the additional $590,000 necessary for
the addition.
It was moved by Representative Wald,
seconded by Senator Robinson, and carried on a
roll call vote that pursuant to NDCC Section
48-01.2-25, the Budget Section approve the
Williston State College request to expand the
scope and increase the authorization of the
science laboratory project to spend $2.2 million on
the project. Senators Holmberg, Bowman, Fischer,
Grindberg, Kilzer, Krebsbach, Lindaas, Mathern,
Nelson, O'Connell, Robinson, and Wardner and
Representatives Bellew, Berg, Carlson, Dosch,
Hawken, Kaldor, Klein, Kreidt, Kroeber, Martinson,
Metcalf, Meyer, Monson, Onstad, Pollert, Skarphol,
Thoreson, Wald, Wieland, and Williams voted "aye."
No negative votes were cast.
LOCAL FUNDS - HIGHER EDUCATION
CONSTRUCTION PROJECTS
Chairman Holmberg called on Ms. Laura Glatt,
Vice Chancellor for Administrative Affairs, North
Dakota University System, to present information
regarding the sources of local funds received for
construction projects of entities under the State Board
of Higher Education pursuant to NDCC Section
15-10-12.3. A copy of the information presented is on
file in the Legislative Council office. She said four
state-funded projects--Bismarck State College,
University of North Dakota, North Dakota State
University, and Minot State University--authorized for
the 2007-09 biennium and two projects--North Dakota
State University Main and North Central Research
Centers--continued from the 2005-07 biennium
required local matching funds. She said two projects--
the 2007-09 Schafer Hall renovation project at
Bismarck State College and the 2005-07 agronomy
laboratory and greenhouse carryover project at the
North Central Research Center--were completed
during the 2007-09 biennium within the overall
appropriation authority and within the local match
requirements. She said the Schafer Hall renovation
project totaled $799,560, of which $310,860 was
provided through tuition revenues and the agronomy
laboratory and greenhouse project totaled $1,953,752,
of which $1,113,752 was from fundraising and
$440,000 from state bonding proceeds. She said the
projects at the University of North Dakota, North
Dakota State University, Minot State University, and
North Dakota State University Main Research Center
were not completed in the 2007-09 biennium and will
be continued to the 2009-11 biennium.
MAJOR HIGHER EDUCATION CAPITAL
CONSTRUCTION PROJECTS
Ms. Glatt presented information regarding an
update on the status of major higher education capital
construction projects currently in progress. She
provided a schedule of major state-funded higher
education capital construction projects during the
2007-09 biennium and the 2009-11 biennium,
including the original appropriation, authorization
adjustments, expenditures to date, and remaining
authority for each of the projects. A copy of the
information presented is on file in the Legislative
Council office. She said all but two of the projects
listed are within their approved authorization limits.
She said Minot State College spent $1,195 more than
authorized on its dome floor project and Dakota
Budget Section 7 September 15, 2009
College at Bottineau spent $12,921 more than
authorized on its steamline replacement project. She
said in both cases the additional costs were financed
by nonstate funds. She said Minot State College used
indirect cost-recovery funds from federal grants and
Dakota College at Bottineau used housing reserves
for the additional cost.
Chairman Holmberg asked the North Dakota
University System continue to update the Budget
Section regarding the status of major higher education
capital construction projects and that the North Dakota
University System provide the updated information at
the March 2010 Budget Section meeting.
In response to a question from Senator Mathern,
Ms. Glatt said the State Board of Higher Education
policy requires a campus that anticipates exceeding
its funding authorization on a capital project to request
additional authority from the board. In addition to
board approval, she said, NDCC Section 48-01.2-25
precludes a state agency or institution from
significantly changing or expanding a public
improvement beyond what has been approved by the
Legislative Assembly unless the Legislative Assembly
or the Budget Section approves the change or
expansion of the project or any additional
expenditures for the project. She said when the total
project cost exceeds $250,000, the campus is also
required to return to the board after receiving Budget
Section approval to provide the board with funding
details of the change. She said the approval process
for a change in the scope of a project or increased
authorization of a project is the same whether a
project is funded by state funds or private funds.
Ms. Glatt said the University System office
anticipates the presidents' houses currently under
construction on the campuses of North Dakota State
University and the University of North Dakota will
exceed their respective authorizations. She said the
projects are currently under review by the State Board
of Higher Education. She said if the board approves
increases to the authorizations for the presidents'
houses, it is likely the campuses will be requesting
approval of the increases at the next Budget Section
meeting.
Chairman Holmberg requested information
regarding the presidents' houses at North Dakota
State University and the University of North Dakota be
provided to the members of the Budget Section prior
to the next Budget Section meeting.
In response to a question from Representative
Boucher, Ms. Glatt said the ongoing repair,
maintenance, and eventual replacement of facilities
gifted to University System campuses is addressed on
a case-by-case basis. She said generally when a
facility is gifted to the state, it becomes state property
and maintenance costs are the state's responsibility.
GAME AND FISH DEPARTMENT LAND
ACQUISITION REQUESTS
Mr. Roger Rostvet, Deputy Director, Game and
Fish Department, presented information regarding
land acquisitions in Morton and Grand Forks Counties
that require Budget Section approval pursuant to
NDCC Section 20.1-02-05.1. He said the request to
purchase property in Pembina County included on the
agenda is being withdrawn because the property will
be purchased by Central Power Cooperative for
Department of Transportation mitigation. He said the
Morton and Grand Forks Counties land acquisitions
rank high on the department's list of potential land
purchases and were identified in information provided
to the Appropriations Committees of the
2009 Legislative Assembly. He said the department
pays in lieu of property tax on land and manages
property for hunting and wildlife. He said the
Governor has approved the purchase of both
properties.
Mr. Rostvet provided background information and
a map of the proposed land acquisition in Morton
County. He said the property consists of 65.35 acres
of land adjacent to and intermingled with the Oahe
Wildlife Management Area. He said the $105,000
purchase price ($1,600 per acre) is based on an
appraisal done by ALied Appraisals, Inc., of Bismarck.
A copy of the information and map is on file in the
Legislative Council office.
In response to a question from Senator Robinson,
Mr. Rostvet said the property is zoned as recreational
and potential other uses include single-family homes
and an all-terrain vehicle or motocross track. He said
either of these uses would conflict with the
department's rifle and pistol range and the wildlife
management area.
In response to a question from Senator Bowman,
Mr. Rostvet said some mining of gravel occurred on
the property prior to reclamation laws and spoil banks
exist on the property. He said areas mined
subsequent to the reclamation laws have been
reclaimed. He said the department has determined
that no additional reclamation requirements exist.
Mr. Rostvet provided background information and
a map of the proposed land acquisition in Grand Forks
County. He said the property consists of 160 acres of
land and is adjoined on three sides by Prairie Chicken
Wildlife Management Area. He said the land, in an
area locally known as the Alkali Flats, is owned by
Paul and Lula Bry and is one of only two areas in the
state that have viable populations of prairie chickens.
He said 129 acres of the property is currently under a
conservation reserve program (CRP) contract until
2018. He said the owners have offered to sell the
property to the Game and Fish department for
$80,000 ($500 per acre) based on an appraisal done
by Alerus Appraisals of Grand Forks. A copy of the
information and map is on file in the Legislative
Council office.
In response to a question from Senator Mathern,
Mr. Rostvet said the department chooses a local or
regional appraiser and in this case the seller and the
department mutually agreed upon a local appraiser
with experience in land appraisals.
In response to a question from Representative
Boucher, Mr. Rostvet said the state will retain the
CRP contract; however, because the state already
Budget Section 8 September 15, 2009
owns in excess of 50,000 acres under contract, the
department is not allowed to accept the payments.
He said the CRP contract is compatible with the
department's plan for the future use of the land, so the
department would remain in compliance with the
contract.
It was moved by Senator Robinson, seconded
by Representative Wald, and carried on a roll call
vote that pursuant to NDCC Section 20.1-02-05.1,
the Budget Section approve the Game and Fish
Department purchase of 65.35 acres in Morton
County and 160 acres in Grand Forks County.
Senators Holmberg, Fischer, Grindberg, Kilzer,
Krebsbach, Lindaas, Mathern, Nelson, Robinson, and
Wardner and Representatives Bellew, Berg, Boucher,
Carlson, Dosch, Glassheim, Hawken, Kaldor, Kreidt,
Martinson, Metcalf, Monson, Onstad, Skarphol,
Thoreson, Wald, Wieland, and Williams voted "aye."
Senator Bowman and Representatives Klein, Meyer,
and Pollert voted "nay."
DEPARTMENT OF HUMAN SERVICES
Status of Medicaid Management
Information System
Ms. Carol K. Olson, Executive Director,
Department of Human Services, presented
information regarding the status of the Medicaid
management information system project. She said
the go-live date for the new system has been delayed
to April 2011.
Ms. Jennifer Witham, Director, Information
Technology Services, Department of Human Services,
presented information regarding a request for Budget
Section approval to spend $2,172,584 of Medicaid
management information system project contingency
funds pursuant to Section 4 of 2007 Senate Bill
No. 2024. She said the 2005 Legislative Assembly, in
House Bill No. 1012, appropriated $29,188,859, of
which $3,667,820 was state matching funds from the
permanent oil tax trust fund, to the Department of
Human Services to rewrite the Medicaid management
information system. The 2007 Legislative Assembly,
in Senate Bill No. 2024, provided additional funding of
$31,072,641, of which $3,643,133 is state matching
funds from the general fund, for the project. The
department did not spend all of the state matching
funds during the 2005-07 biennium and was
authorized to continue the unspent funds into the
2007-09 biennium for the project. As a result, the
department used these funds to obtain additional
federal matching funds of $2,267,871 for the project.
Total funding available for the project is:
State
Match
Federal
Funds Total
2005-07 appropriation $3,667,820 $25,521,039 $29,188,859
2007-09 appropriation 3,643,133 27,429,508 31,072,641
Additional federal
matching funds
2,267,871 2,267,871
Total $7,310,953 $55,218,418 $62,529,371
Ms. Witham said hardware and software for the
project were purchased by the Information
Technology Department (ITD) with loan proceeds
approved by the Budget Section in October 2007.
She said the ITD loan will be repaid from collections of
a hosting fee charged to the Department of Human
Services. She said the hosting fee was initially
budgeted as an operating expense; however, due to
the delayed schedule, the fee must now be included in
project costs. She said the department must also pay
the annual software maintenance fee for the
purchased software. She said the department will
begin paying these fees in November 2009. She said
of the $2,172,584 requested, $512,550 is from the
general fund and the remainder from federal funds. A
copy of the information presented is on file in the
Legislative Council office.
In response to a question from Representative
Monson regarding the payment of an annual software
maintenance fee for software not yet placed in
service, Ms. Witham said ITD requested, but was
unable to negotiate, a waiver of the fee from IBM and
Oracle.
In response to a question from Senator Kilzer,
Ms. Witham said the project is reimbursed at
90 percent, but the hosting fee was budgeted as an
operational cost and therefore is reimbursed at
75 percent. She said project software costs are also
reimbursed at 75 percent.
In response to a question from Representative
Skarphol, Ms. Witham said the original appropriation
included a 10 percent contingency, or approximately
$5.6 million. Based on the project's 90 percent match,
she said, the general fund portion of the 10 percent
contingency is approximately $560,000. She said the
department is requesting $512,550 of the general fund
portion of the contingency funding. She said the
$512,550 is needed to match the federal portion of the
contingency.
Ms. Witham provided the following project funding
summary through June 2009:
Description Budget
Spent
Through
June 2009 Remaining
General fund $3,643,133 $2,647,098 $996,035
Federal funds 55,218,418 28,584,567 26,633,851
Other funds 3,667,820 1,063,431 2,604,389
Total $62,529,371 $32,295,096 $30,234,275
Ms. Witham said the amount remaining has been
continued into the 2009-11 biennium.
In response to a question from Representative
Pollert, Ms. Witham said the department is negotiating
with the vendor--Affiliated Computer Services (ACS)--
regarding the additional costs associated with keeping
the current system updated beyond the scheduled
project completion date included in the contract. She
said the contract does not include a penalty clause but
includes sections that address remedies.
Ms. Witham provided information regarding other
states' Medicaid management information system
implementation projects. In July, she said, the state of
Nebraska canceled a contract with its provider when it
was determined the provider could not deliver on the
product. She said both Oregon and Maine have new
Budget Section 9 September 15, 2009
systems in place but are experiencing problems with
the accuracy of the payments. She said the state of
Washington has been using a multiphased approach
to implementing its new system and has experienced
delays in each phase implemented.
In response to a question from Representative
Skarphol, Ms. Witham said ACS was not the project
vendor in the states experiencing difficulties. She said
the Enterprise System, which is the new system
brought to the market by ACS, is also being
implemented in Alaska and New Hampshire.
In response to a question from Senator Mathern,
Ms. Witham said federal changes known at the time of
the bid were included in the request for proposal.
However, she said, new federal changes would be
implemented by change orders to the contract.
In response to a question from Representative
Monson, Ms. Witham said improved edits on claims
are expected to lead to savings with the new system.
Mr. Mark Boxer, Senior Vice President of Global
Technology Services, Affiliated Computer Services,
presented information regarding reasons for the delay
in the implementation of the Medicaid management
information system, improvements ACS has made in
its management of the project, and its effort to better
communicate with the Department of Human
Services. A copy of the information presented is on
file in the Legislative Council office.
Mr. Boxer said the delays were caused by a
combination of circumstances. He said ACS
augmented its own application development group
with a partner that did not deliver code of an
acceptable commercial quality. He said ACS had to
redevelop modules not delivered by the subcontractor
which required additional time. He said the Medicaid
management information system effort also includes a
significant number of parallel activities. He said to
perform these activities, ACS has had to sequence
the work across modules and interfaces. He said due
to the complexity of the system, testing and making
corrections is taking longer than expected.
Mr. Boxer said a project of this magnitude and
complexity poses many risks. He said ACS cannot
guarantee there will not be additional delays. He said
ACS has taken steps to manage those risks that
include improved development and testing, more
rigorous program management, deliberate quality
assurance measures, and improved talent deployment
and staffing.
Mr. Boxer said ACS will work to improve
communication with the Department of Human
Services team and plans to meet with the team every
two weeks. He said the meetings will review specific
metrics and will provide the team an opportunity to
review ACS's progress.
Mr. Boxer said ACS intends to honor its
agreement. He said his appearance before the
Budget Section is to convey ACS's commitment to
completing the development and implementation of
the new Medicaid management information system.
In response to a question from Senator Mathern,
Mr. Boxer said the underlying causes for the delay in
implementation include the subcontractor's inability to
deliver quality code, the complexity of the system, and
inaccurate time estimation relating to the project.
In response to a question from Representative
Pollert, Mr. Boxer said the North Dakota project will
include additional functionality but is similar to the
projects in New Hampshire and Alaska. He said
similar factors are also causing delays in the
development of systems in those states as well. He
said there is a core set of code that is being
developed to be used by all of the states. He said
ACS will start with this core set of code and add the
additional functionality required for each state. He
said ACS is committed to meeting the April 2011
completion date. He said there continues to be risk,
but ACS has implemented methods and mechanisms
to mitigate the risk.
In response to a question from Representative
Skarphol, Mr. Greg Bryant, Regional Vice President
for Government Health Care Services, Affiliated
Computer Services, said core code attributable to
federal statute is generally 75 to 80 percent of the
project with the remainder of the project attributable to
individual state policies. He said the portion
attributable to the state depends on the specific
policies the state chooses to implement in addition to
the Medicaid requirements. He said federal mandates
that were unknown at the time the project was bid
would require a change order. He said ACS has
delineated the cost of the change orders and whether
the changes are attributable to federal law changes or
state requests. Representative Skarphol asked the
Department of Human Services to provide information
regarding change orders and whether the changes
are attributable to federal law changes or state
requests.
In response to a question from Senator Fischer,
Mr. Bryant said the contract includes a one-year
warranty, which will begin on the completion date of
the system in April 2011.
Representative Berg asked that ACS
representatives continue to provide periodic updates
to the Budget Section as the Medicaid management
information system project continues.
It was moved by Representative Berg,
seconded by Senator Nelson, and carried on a roll
call vote that the Budget Section approve the
Department of Human Services' expenditure of
$2,172,584 of project contingency funds, of which
$512,500 is from the general fund, pursuant to
Section 4 of 2007 Senate Bill No. 2024. Senators
Holmberg, Bowman, Grindberg, Kilzer, Krebsbach,
Lindaas, Mathern, Nelson, O'Connell, and Wardner
and Representatives Bellew, Berg, Boucher, Carlson,
Dosch, Glassheim, Hawken, Klein, Kreidt, Martinson,
Metcalf, Meyer, Monson, Onstad, Pollert, Skarphol,
Thoreson, Wald, and Wieland voted "aye." Senator
Fischer voted "nay."
Budget Section 10 September 15, 2009
INFORMATION TECHNOLOGY
DEPARTMENT ANNUAL REPORT
Mr. Mike Ressler, Deputy Chief Information Officer,
Information Technology Department, presented
information regarding a summary of the annual report
of the Information Technology Department pursuant to
NDCC Section 54-59-19. A copy of the report
presented is on file in the Legislative Council office.
He said ITD began as Central Data Processing in
1969 and over the last 40 years evolved into a
separate department. He said ITD billings for fiscal
year 2009 totaled $46.5 million. He said the majority
of revenue is generated from computer hosting and
software development service fees. He said the
2009 Legislative Assembly provided funding to
upgrade Ethernet bandwidth at kindergarten through
grade 12 school districts throughout the state. He
said a majority of school districts were connected and
many invested in video equipment to take advantage
of the increased bandwidth. He said the rates
charged for fees and services by the department
compare favorably to those charged by surrounding
states.
HEALTH INFORMATION TECHNOLOGY
OFFICE AND ADVISORY COMMITTEE
Ms. Lisa Feldner, Chief Information Officer,
Information Technology Department, presented
information regarding the Health Information
Technology Office, the Health Information Technology
Advisory Committee, and the status of health
information technology activities pursuant to 2009
Senate Bill No. 2332. She said the Health Information
Technology Advisory Committee was formed in 2006
and reauthorized by the 2009 Legislative Assembly.
She said the committee is comprised of six working
groups, including security, privacy, and policy; health
information exchange; communications; stakeholders;
standards; and finance. She said the committee has
filed a letter of intent to apply for federal fiscal stimulus
funding through the federal Department of Health and
Human Services. She said the grant would provide
funding to create a health information exchange in the
state. She said, if approved, the state could receive
from $4 million to $40 million. She said the committee
has contracted with a consulting group to assist with a
health information exchange plan. She said the
committee intends to complete the health information
exchange plan in October. She said the federal grant
is due by October 26, 2009.
STATUS OF THE GREAT PLAINS
APPLIED ENERGY RESEARCH CENTER
Mr. Paul Govig, Director, Division of Community
Services, Department of Commerce, provided
information regarding the status of the construction of
the Great Plains Applied Energy Research Center,
including the extent to which nonstate matching funds
have been made available for the project pursuant to
2009 House Bill No. 1350. He said the project is
currently in the request for proposal phase which is
being coordinated by the city of Bismarck.
Mr. Bill Wocken, City Administrator, City of
Bismarck, said the Great Plains Applied Energy
Research Center represents a link between energy
research generated in the laboratory and the
application of new energy concepts in the field. He
said the center will test energy technology
applications on a small scale so they may be more
reliably implemented in the field. He said the city of
Bismarck and project partners applied for and
received a grant from the federal Economic
Development Administration to complete a feasibility
study. He said the study will address the feasibility
and financial sustainability of the project concept and
if the project is deemed feasible, prepare a long-term
business plan. He said the grant will provide
$100,000 in federal funds to be matched by $100,000
from the city of Bismarck and six North Dakota energy
companies. He said responses to a request for
proposal for the services of an energy consultant to
complete the feasibility study are due September 18,
2009. He anticipates the feasibility study to be
completed by January 2010. He said no state funds
will be spent until the feasibility study and business
plan are completed.
ANNUAL AUDITS OF RENAISSANCE
FUND ORGANIZATIONS
Mr. Gordon D. La France, Manager, Renaissance
Zone Program, Division of Community Services,
Department of Commerce, presented information
regarding annual audits of renaissance fund
organizations pursuant to NDCC Section 40-63-07(9).
A copy of the information presented is on file in the
Legislative Council office. He said there are
45 renaissance zone cities, of which 7 have at least
one renaissance fund organization. He said the city of
Fargo has three renaissance fund organizations
having approved their second renaissance fund
organization in 2008 and third in 2009. He said the
original $2.5 million in renaissance credits approved
by the 1999 Legislative Assembly was allocated as of
June 2008 which triggered the release of the credits
authorized by the 2003 Legislative Assembly. He said
the third set of credits, authorized by the
2009 Legislative Assembly, has been allocated to
cities with populations over 30,000. He said $682,500
of the $2.5 million in renaissance credits approved by
the 2003 Legislative Assembly remain available,
$250,000 in Category 1 (0-5,000 population) and
$432,500 in Category 2 (5,001-30,000 population).
He said the entire $2.5 million in renaissance credits
approved by the 2009 Legislative Assembly remains
available in Category 3 (over 30,000 in population).
He said independent auditor's reports of all of the
renaissance fund organizations have been submitted
to the department.
In response to a question from Senator Mathern,
Mr. La France said with regard to funding and policy,
the program is working well and he has no
recommendations for changes. He said some of the
Budget Section 11 September 15, 2009
smaller communities consider the program too much
work, but the department may provide assistance with
the administration of the program.
In response to a question from Representative
Berg, Mr. La France said funds must remain invested
in a renaissance fund for 10 years to be eligible for a
50 percent tax credit. He said funds withdrawn early
are subject to taxation. Historically, he said, funding
from renaissance fund organizations has gone to
projects outside renaissance zones.
TOBACCO PREVENTION
AND CONTROL COMMITTEE
Chairman Holmberg called on Ms. Pat McGeary,
Tobacco Prevention and Control Executive Committee
member, to present information regarding the
implementation of the comprehensive tobacco
prevention and control plan pursuant to 2009 House
Bill No. 1015. A copy of the information presented is
on file in the Legislative Council office. She said
through September 11, 2009, the Tobacco Prevention
and Control Executive Committee has spent $10,882
of its 2009-11 biennium appropriation for advisory
committee expenses and rent. She said the
committee released the state tobacco plan in
July 2009. She said the advisory committee
prioritized the components of the state plan that will
be addressed during fiscal year 2010, reviewed
applications for the tobacco prevention and control
local grants program, and awarded nearly $3 million to
28 local public agencies or cooperating public health
agencies. She said the executive committee has:
• Signed a contract with the State Department of
Health to serve as the fiscal agent for the
committee;
• Leased office space at the North Dakota
Agriculture Foundation Building;
• Awarded contracts totaling $940,000 to 28 local
public health units to support the
implementation of Public Health Service
guidelines;
• Issued contracts for the tobacco prevention and
control local grants program;
• Worked with the State Department of Health
and local agencies to develop tools for
implementation of the Public Health Service
guidelines and the comprehensive tobacco-free
school policy; and
• Posted the job announcement for the executive
director position.
Ms. McGeary said the executive committee is
developing guidance for a special initiative grants
program to provide funding for special projects to
benefit groups with high tobacco use rates.
USE OF STATE, FEDERAL, EMERGENCY,
AND OTHER HIGHWAY FUNDING
Mr. Francis Ziegler, Director, Department of
Transportation, presented information regarding the
anticipated use of state, federal, emergency, and
other highway funding during the 2009 construction
season pursuant to 2009 Senate Bill No. 2012. A
copy of the information presented is on file in the
Legislative Council office. He said 2009
transportation programs include regular construction
projects, American Recovery and Reinvestment Act of
2009 projects, and emergency relief projects.
Mr. Ziegler said the 2009 regular construction
program includes 199 projects at a cost of
$260 million, including $69.4 million for urban road
improvement and nearly $18 million for county road
improvements, including the replacement of 11 county
bridges.
Mr. Ziegler said the department has received an
allocation of approximately $170.1 million for roads
and bridges through the American Recovery and
Reinvestment Act of 2009. He said the department
has identified 99 projects totaling $90 million for 2009,
including $60.6 million for state projects, $15.7 million
for urban projects, and $13.7 million for county
projects. He said the department anticipates the
remaining $80.1 million of federal fiscal stimulus funds
will be spent for projects in 2010.
Mr. Ziegler said the department is continuing its
review of emergency relief projects and estimates the
total cost of statewide emergency relief projects, not
including the Devils Lake Basin area, is approximately
$22 million.
EMERGENCY SNOW REMOVAL GRANTS
Chairman Holmberg called on Major General David
Sprynczynatyk, Adjutant General, to provide
information regarding emergency snow removal
grants distributed to counties, townships, and cities
pursuant to 2009 Senate Bill No. 2012. He said
grants were provided to those counties and cities that
during the first quarter of 2009 incurred costs
exceeding 200 percent of their average cost for snow
removal for the same period over the past five years.
He said the final payments have been made and a
total of $7.8 million has been distributed to 123 cities,
40 counties, and 2 tribal regions. He said 17 cities,
13 counties, and 2 tribal regions either did not request
assistance or did not qualify. A copy of the report is
on file in the Legislative Council office.
FLOOD DISASTER-RELATED
EXPENDITURES
Major General Sprynczynatyk presented
information regarding 2009 flood disaster-related
expenditures, transfers, reimbursements, and general
fund deposits pursuant to 2009 Senate Bill No. 2444.
A copy of the report is on file in the Legislative Council
office. He said disaster costs include four
components--emergency measures, public assistance,
mitigation, and individual assistance. He said
an original estimate of total disaster costs of
$166 million was provided during the 2009 legislative
session. He said current estimates total
approximately $106 million, including $33 million for
emergency measures, $50 million for public
assistance, $11 million for mitigation, and $12 million
for individual assistance. However, he said, the total
Budget Section 12 September 15, 2009
may increase based on more recent Federal
Emergency Management Agency (FEMA) estimates
of the public assistance component.
Major General Sprynczynatyk said actual costs to
date total $75.9 million, including $32.3 million for
emergency measures, $29.1 million for public
assistance, $3 million for mitigation, and $11.5 million
for individual assistance. He said FEMA has
established $78.3 million as the federal cost
requirement. He said when the federal cost
requirement is exceeded, the federal match will
increase from 75 percent to 90 percent. He said the
federal portion of the actual costs to date totals
$67.1 million, or 85.6 percent of the $78.3 million
threshold for the increased federal cost-share. He
said the department anticipates the federal match for
most of the flood response and flood recovery costs
will be 90 percent.
Major General Sprynczynatyk said other federally
disbursed funds that do not qualify as part of the
federal cost requirement for federal participation
include $13.2 million in Small Business Administration
loans and $13 million in national flood insurance
program claims.
Major General Sprynczynatyk said there have not
yet been any reimbursements to the general fund of
funds spent for emergency response by the
Department of Emergency Services, but there may be
funds returned to the general fund when costs are
finalized.
VETERANS' HOME REPORT
Chairman Holmberg announced that the
Legislative Council staff distributed to each member a
written summary report from the Veterans' Home
project manager regarding the status of the Veterans'
Home construction project pursuant to 2009 Senate
Bill No. 2007. A copy of the report is on file in the
Legislative Council office.
COMMITTEE DISCUSSION
AND STAFF DIRECTIVES
Chairman Holmberg announced future meetings of
the Budget Section are tentatively scheduled for
Tuesday, December 15, 2009, and Thursday,
March 11, 2010.
Representative Kaldor asked that additional
information be provided regarding the availability of
federal Unemployment Insurance Modernization Act
funds. Chairman Holmberg requested that Job
Service North Dakota be asked to provide information
regarding these funds at the next Budget Section
meeting.
It was moved by Representative Wald,
seconded by Senator Fischer and carried on a
voice vote that the Budget Section meeting be
adjourned subject to the call of the chair.
Chairman Holmberg adjourned the meeting at
2:09 p.m.
___________________________________________
Sheila M. Sandness
Fiscal Analyst
___________________________________________
Allen H. Knudson
Legislative Budget Analyst and Auditor
ATTACH:1