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November 12, 2007
U.W. Outreach Center 951 N. Poplar
Casper, Wyoming
Senator John Schiffer, Chairman
Representative Roy Cohee, Vice Chairman
Senator John Hastert
Senator Tony Ross
Senator Kathryn Sessions
Representative Rosie Berger
Representative Pete Illoway
Representative Marty Martin
Representative Lori Millin
Representative Monte Olsen
Senator John Hines
Kelley
Pelissier, Senior Program Evaluator; Karla Smith and Michael Swank,
Program Evaluators.
Other legislators present:
Senator Rae Lynn Job
Representative Jack Landon
Please refer to Appendix 1 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.
The Management Audit Committee met to consider follow-up information relative to three previously released reports: State-Level Education Governance (December 2005), Foster Care (September 2005), and A&I HRD Role in State Hiring (December 2006). Officials from the departments of Education, Family Services, and Administration and Information provided the Committee with current information on these topics and responded to members’ questions. In addition, a representative from the Governor’s Office briefed the Committee on executive branch strategic planning efforts which are required by W.S. 28-1-115. The Committee considered two pieces of legislation that had been drafted relating to the Wyoming Retirement System (WRS), the topic of its most recent study (August 2007). The WRS director and two WRS legislative liaisons provided testimony during this discussion. The Committee voted to sponsor legislation to clarify personal liability of WRS board members, Volunteer Firemen’s Pension Board members and other retirement fiduciaries. It voted to table further consideration of the second bill draft, to increase employer WRS contribution rates. It also selected topics for which staff will prepare scoping papers for consideration as possible study topics. The Committee set no additional meetings for this interim, and will next meet after the 2008 Budget Session.
All meeting materials and handouts provided to the Committee by the Legislative Service Office (LSO) and public officials are referenced in the Meeting Materials Index, attached to the minutes. These materials are on file at the LSO and are part of the official record of the meeting.
Chairman Schiffer called the meeting to order at 8:30 a.m. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.
Representative Martin moved to approve the minutes from the August 27, 2007 meeting. The motion was seconded and it carried unanimously.
State-Level Education Governance Follow-up
Kelley Pelissier summarized the Committee report, State-Level Education Governance (Dec. 2005). This study identified structural issues contributing to tension between the State Superintendent and the State Board of Education (SBE) in developing and implementing education policy. The report offered options for addressing this tension, and in response, the Committee sponsored successful legislation that implemented two of those: providing funding for a staff position to do research and analysis for the State Board, and giving the Superintendent a vote on the State Board.
Mary Kay Hill of the Department of Education reported that the relationship between the Superintendent and the SBE is a good one, marked by open communication, but that there still exists a healthy tension between the two. The appropriation for a half-time research position has not been used because the position has not attracted candidates with the skills necessary to provide the intended staff support. As required by statute, the SBE has just begun its review of state education standards in nine content areas, which informs the state assessment and graduation requirements. As a result, the SBE is requesting in its budget request to move the authorized funding into a professional services contract category so that it may contract for the specific expertise it needs to provide research and analysis for this effort. Regarding the Superintendent’s vote on the Board, Ms. Hill said it is believed this will have a long-term impact but that so far, no SBE votes have been close enough for the Superintendent’s vote to have made a difference. Both the Superintendent and the SBE have been working toward building consensus on issues. In response to another report recommendation, the orientation for new SBE members has improved and the most recent two new board members seem satisfied with the process.
Foster Care Follow-up
Karla Smith summarized the Foster Care report (Sept. 2005) for the Committee. She noted that the study found that there had not been an increase in the DFS base stipend for foster care in decades, and that stipends were not based upon a uniform schedule linked to actual costs of care. This resulted in a recommendation to DFS to develop a foster care payment methodology based upon updated actual costs of caring for children of different ages and needs, and apply it consistently. The report also recommended that DFS enhance state-level foster care administration because the study indicated that foster care administration maintained a county-based approach that meant quality in and access to foster care varied across the state.
DFS Director Tony Lewis reported that, beginning July 1, 2006, the department had implemented a rate structure with three levels of monthly payment based upon the ages of the children: $645, $654, and $732, with additional payments for therapeutic needs. DFS officials reported that approximately 80 percent of foster homes were filled, and that it could use more families so that it could demographically better match children with foster families. There are only two areas of the state in which the foster care coordinators say that numbers of foster homes are adequate.
Relative Family Foster Care
DFS provided data indicating that as of September 1, 2007, 36 percent (610) of all children placed in foster care were in relative family foster care (see Appendix 3). DFS officials noted that when children need to go into placement outside their immediate families, the primary preference is relative family foster care, because research indicates that children do better in these settings. They said that with this emphasis, DFS has made significant progress since 1999 in achieving permanency for children by placing them with relatives. Financial assistance is available if DFS is involved in the placement, but not necessarily in situations where grandparents or other relatives assume responsibility for grandchildren without DFS involvement.
In response to a question about why grandparents with whom the court placed children would receive a POWER payment for each child rather than the higher foster care stipend, Director Lewis responded that this represents a balance between the philosophy that families have an obligation to support their members and the need to limit government responsibility. He said DFS is no longer involved in families’ lives and there are no continuing court reviews in relative placements receiving POWER payments as opposed to foster care stipends. Also, to receive a foster care stipend, a home must become certified as a foster care home.
Monitoring providers
DFS Financial Administrator Paul Yaksic responded to questions about the performance-based contracts in place with some providers as noted in the DFS handout (Appendix 3). He said these contracts applied to placements of youth in residential treatment centers and involved a third-party pre-certification review required by Medicaid that determined the appropriate level of care. Under the contract, the placement rate decreases after 180 days. If a child is re-placed in a residential treatment center within 30-60 days of release, the lower rate is still in effect. If a child is re-placed later than 60 days, the contract is for an entirely new placement.
With respect to the extent to which DFS monitors child placing agencies (CPAs), which recruit, train, and supervise foster families as a supplemental resource to DFS, Mr. Robb stated that the department’s primary means of monitoring is caseworkers’ face-to-face contacts with the children in placement, and that this visitation has significantly increased. He said this is also the means through which DFS monitors the performance of residential treatment providers. If there are concerns about quality or intensity, DFS tools for addressing them are the foster care licensing structure and its contracts with providers. However, Mr. Robb noted that DFS immediately addresses all safety issues.
Ensuring children are safe when returned to their homes
Committee members had questions regarding the decision-making related to returning children to their families and homes. Director Lewis responded that reunifying a child with parent(s) is a most important decision that DFS caseworkers make in conjunction with the multidisciplinary teams (MDTs) based upon all the circumstances, including policy, training, resources available to the family, quality assurance and caseworker visitation. He also said the caseworker must have supervisor support to recommend reunification.
Committee members questioned what standards were in place to assure that reunification is warranted, and whether there was enough DFS staff to make the necessary home visits. Mr. Robb reported that Gillette is a particularly difficult community for such visits now, but that DFS is diligent in having CASA and Lifenet assistance in making them, with checklists to ensure safe conditions. An issue for DFS is that both foster parents and grandparents who have cared for the children do not want them to go back into less than ideal homes. Mr. Robb said that DFS is mandated to ensure that the homes meet basic safety levels and needs, always balancing safety and permanency. In the past, he said, DFS had put too much emphasis on reunification, but now the department is more often working through the courts to terminate parental rights and find adoptive homes for children. He said DFS is paying close attention to balancing the two approaches.
Director Lewis also noted that caseworker CORE training had been overhauled three years ago with a national curriculum. DFS has the perennial problem of caseworker turnover, with an average tenure of 3½ years. To address this, DFS is continually training and in some offices, there is specialization in family preservation and investigation. Mr. Robb added that DFS has particular concerns with caseworker turnover in Casper and Gillette, and that DFS has focused upon supervision to assist its inexperienced staff, as well as solid consultation from the state office. He noted that there is trust that caseworkers will make the best judgments.
Caseworker caseloads
In response to questions about caseloads, Mr. Robb said that DFS has established a staffing model of 18-21 total cases to allow a family-centered model. The Legislature approved additional positions to bring DFS to that level in 2004. In Cheyenne, Gillette, and Casper (because of open positions), caseloads are above that level, while in some areas of the state, they are lower. DFS is attempting some internal adjustments to allocate resources to the needs when possible. The Child Welfare League of America recommends a caseload of 8 investigation cases and 12 ongoing cases, but DFS has been advised that its 18-21 level is acceptable. Mr. Robb said that a DFS review found that the main driver of frequent caseworker visitation is strong supervision, rather than caseload size. He added that DFS has retained supervisors over the years, and compensation did not appear to be an issue. Director Lewis indicated that DFS intends to enhance training and expectations for supervisors to ensure accountability for implementing policy and rules.
A&I HRD Role in State Hiring Progress Report
Kelley Pelissier summarized the A&I Role in State Hiring report for the Committee. Released by the Committee in December 2006, this report included four recommendations aimed at enhancing the A&I Human Resource Division (HRD) strategic role in helping state agencies meet their hiring challenges, as well as improving the application process for applicants. At that meeting, the Committee directed that in addition to the regular two-year follow-up, A&I provide information in one year on the progress made with regard to report recommendations.
Dean Faussett, A&I HRD Selection, Recruitment, and Training Section manager, reviewed how state recruitment has progressed from a slow, paper-bound process to one that now can take as little as two hours to post a recruitment (vacancy announcement) online, with hiring supervisors able to review applications submitted online the same day. He provided a chart showing the status of various agencies in implementing the new recruitment process (Appendix 4).
Committee members expressed concern that applicants do not learn the status of their applications for state positions. A&I officials responded that the online system includes electronic applications and templates for hiring supervisors to use to make communication with applicants easier, but that A&I HRD is not in a position to require agency hiring supervisors to use them. However, A&I Director Ron Ommen noted that through the new agency hiring audit process, implemented in response to the second LSO report recommendation, pressure to communicate better with applicants can be emphasized.
To follow-up on other recommendations from the LSO report, Mr. Ommen reported that A&I HRD has interviewed agencies to learn where they experience bottlenecks in the hiring process and how HRD can best develop a consultative role and training. During this process, HRD’s approach to “market” was identified as an issue (covered in July 2006 LSO report, Market Pay), and that the Fox Lawson and Associates report (consultant hired for an independent professional review as recommended in Market Pay report) had identified several classification and compensation issues. Another Hiring report recommendation was to develop a hiring procedures manual and to train hiring supervisors. HRD officials reported that the manual will be submitted to agencies for draft review on December 1, 2007, and that proposed management training will be broader than just hiring. Mr. Ommen also said that A&I is developing a web site where agencies can share best practices. A final report recommendation was to use human resources data to create a useful and broadly-scoped HR management information system. A&I officials reported this is underway.
Succession planning study
A&I officials reported that a succession study is underway involving four agencies to determine how many employees are planning to retire in the next few years. This is in response to the concern that 33 percent of the state workforce can retire soon. The study is based upon one done by the Department of Employment for its own workforce. Mr. Ommen said that as long as health insurance costs remain high, there may be ways through job sharing and other options to prompt employees to delay their retirement. As A&I finds funds to do so, it will adjust the succession planning as indicated and make it available to other agencies.
Communication with state employees on HRD changes
Committee members and A&I officials discussed the importance of communicating with state employees as HRD changes are being planned and made. Mr. Ommen noted that there has been considerable nervousness among employees, but that the state will not break covenants with its employees; they will not be forced into at-will positions or lose benefits.
Consultant developing new compensation and classification systems
Mr. Foster briefed the Committee on the efforts underway to engage a consultant to develop new compensation (market) and classification systems. The Fox Lawson report identified major deficiencies with the state’s practices in these two areas. The timelines in the RFP call for the new systems to be in place by November 2008, which should be possible with an experienced consultant that has worked with other states. In addition to the consultant, state agency representatives will be involved through a policy advisory team and a steering committee. Representative Olsen noted that through the State Compensation Commission, which he chairs, employees have the opportunity to express their concerns.
Immediate HR issues
Mr. Ommen noted that nearly every agency has difficulties relating to markets for their positions and with having positions misclassified. The consultant study will address the proper markets, which may be different for each agency, depending upon the market from which they hire. Also, agencies have applied the funds available for “hot spots” to increase salaries in the parts of the state where wage competition is high. This has caused problems within the agencies, with employees unhappy when other similarly classified employees are paid more. Again, Committee members stressed the communication issue, commenting that agencies and A&I need to ensure that employees understand the reason for the salary differentials, perhaps by having a communication plan rather than letting the information filter through informal channels.
A&I HRD to present information at summer 2008 Committee meeting
Chairman Schiffer noted that the Market Pay report is due for its two-year review in the summer of 2008, and he invited the A&I officials back to talk about market pay then. Chairman Schiffer suggested that A&I officials and the Committee also discuss what is transpiring with the study on compensation and classification at that time.
Scoping Papers
Chairman Schiffer invited Committee discussion of topic ideas around which staff will develop scoping papers, or background briefs, which help the Committee identify new topics and potential issues for consideration. Ms. Pelissier noted that the two scoping papers prepared for the August 2007 meeting, Office of Health Facilities and Department of Education’s Standards and Assessment, and Accountability Unit, are still available for the Committee.
After discussion the Committee requested staff prepare scoping papers on five topics as time allows before the spring 2008 meeting:
DEQ/AML. What is the process (criteria) to prioritize and determine projects?
Fire Prevention and Electrical Safety. Is the placement of these entities together in this agency appropriate and the best fit?
Highway Patrol. What is the mission statement for this program and what do statutes and rules provide vis-à-vis drug interdiction? What is the status of the newly-approved positions, and if not filled, what happens to those funds?
Juvenile program funding. What funding streams are available through various state agencies to assist juveniles in trouble? Is there a duplication of effort and services? Where are the gaps in service?
Technology interface among state agencies. Are state agency technology needs coordinated, allowing agencies to communicate in an efficient and flexible manner?
Strategic Planning
Cheryl McVay of the Governor’s Office provided an overview of the purpose, methodology, and practical uses of strategic plans the agencies are implementing in response to W.S. 28-1-115 – 116 and W.S. 9-2-1014, a requirement that dates from the mid-1990s. The executive branch adopted a new template for the plans in 2005 that shortens them and focuses agencies on their three to five most important performance measurements. Ms. McVay provided a handout outlining the new approach (see Appendix 5). After discussion and questions, Committee members suggested that LSO staff include agencies’ actual strategic plans in Committee reports and that legislators may be interested in seeing the plans to provide a perspective on what the agencies consider to be their benchmarks.
Consideration of Bill Drafts
Retirement System Director Thomas Mann, Senator Job and Representative Landon, legislative liaisons to the Wyoming Retirement System (WRS), were present for the Committee’s consideration of two bill drafts. The drafts were related to the Wyoming Retirement System: Public Employee Plan report released in August 2007.
08LSO-0184.L1 State retirement board immunity.
The bill would clarify the personal liability of WRS board members, Volunteer Firemen’s Pension Board members and other retirement fiduciaries under the “Uniform Management of Public Employees Retirement Act.” The Committee made the following technical changes to the draft.
Page 1, line 11 After “(e),” insert “35-9-610 by creating a new subsection (b),” and delete “and 35-9-610 are” insert “is”
Page 2, line 4 Delete “9-3-433(a)” insert “9-3-443(a)”
Page 3, line 17 Delete “9-3-433(a)” insert “9-3-443(a)”
Page 9, line 9 After “Retirement” insert “Systems”
Representative Illoway moved, and Representative Martin seconded, a motion to sponsor 08LSO-0184.L1 as amended as a Management Audit Committee bill. The motion carried unanimously. Chairman Schiffer directed staff to make the bill a Senate File.
08LSO-0183.L1 Retirement system-employer contributions.
This bill would raise WRS employer contributions; increased contributions might allow for a higher retirement benefit COLA. Chairman Schiffer distributed copies of a November 9, 2007 letter from Wyoming State Treasurer Joe Meyer relating to WRS investments (Appendix 6). In it, the Treasurer raised concerns about WRS’s realization of capital gains and its effect upon the actuarial calculations supporting the request for an increased WRS employer contribution. WRS officials said that the system actuary recognizes these gains by smoothing the fund’s actual market value each year. If in any year, the gains are greater than the actuarial assumption of 8 percent, a portion is smoothed to reduce the volatility of the market.
Chairman Schiffer provided some background on the COLA issue, referring to the 1996 LSO report Cost-of-Living Adjustments in the WRS Public Employees Plan. He noted that the COLA is not a guaranteed defined benefit, and that the Legislature needs to address COLAs in a logical, predictable and fiscally responsible manner, considering a number of alternatives for providing them. He noted that in 2007, granting a 1 percent COLA put the fund in an underfunded position, which was an unsustainable result. However, he noted that this bill draft did not address the broad issue of needing both to enhance the role of Deferred Compensation in preparing employees to address inflation during retirement, and to provide a reasonable, predictable COLA.
Senator Job discussed that, over the years, by establishing the COLA in statute and increasing it incrementally, the Legislature had created an expectation of a COLA. She noted that when the Legislature provided funding for large raises for teachers, the impact to WRS was not addressed. Representative Landon explained that the rapid increase in pay to the education community affected the COLA because it created actuarial losses. Mr. Mann said the plan actuary had estimated an increase in unfunded liabilities of $180 million, but the actual loss would not be known until the full impact of the raises was evident in the salary data. Legislators also noted the concern that many current retirees have not benefited from the higher salaries.
Representative Landon said the State provides a fine three-legged system comprised of the defined benefit pension through WRS, Social Security, and the Deferred Compensation Plan. He provided a handout (Appendix 7) showing that the WRS benefit multiplier is higher than that of other states also providing Social Security coverage, and that employees covered by WRS can retire at age 60 without a penalty. This is lower than in many of the other regional states presented in the handout. He suggested that more could be done to encourage participation in the Deferred Compensation Plan by increasing the amount of matching funds provided by the State (now $20 a month) and by having employees automatically enrolled in Deferred Compensation.
Representative Berger asked about the education of employees to invest in the Deferred Compensation Plan. Director Mann responded that in 2004, the Legislature approved a WRS request to move the education program in-house, and since that time, WRS has developed successful presentations on investing in Deferred Compensation.
Representative Illoway moved to table further consideration of the bill. Senator Ross seconded the motion. Motion carried with Vice Chairman Cohee, Representative Berger, Representative Illoway, Representative Olsen, Senator Ross, and Chairman Schiffer voting “aye,” and Senator Hastert, Senator Sessions, Representative Millin, and Representative Martin voting “no.”
Chairman Schiffer said that before the next General Session, Management Council will assign the Wyoming Retirement System to a standing committee as recommended in the August 2007 report on WRS, or, as an alternative, maintain the legislative liaisons. Senator Job commented that considering that WRS affects 12 percent of the state’s population, both would be in order to ensure constant communication with the WRS Board.
Chairman Shiffer asked Mr. Mann to comment upon how WRS would acquire a chief investment officer (CIO), as also recommended in the August report. Mr. Mann said that funding for a CIO was not in the 2009-2010 WRS budget request. However, he said that the WRS Board would be willing to explore adding the position. Representative Landon said the liaisons would discuss all the issues brought up in this meeting, including the CIO, with the WRS board at its December 7, 2007 meeting. Mr. Mann indicated that if it determined to do so, the WRS Board could develop an amendment to the budget bill for the CIO and seek sponsorship.
Next Meeting
Chairman Schiffer announced that the next meeting will be in the spring or early summer after the 2008 Session.
There being no further business, Chairman Schiffer thanked participants and adjourned the meeting at 5:05 p.m.
Respectfully submitted,
Senator John Schiffer, Chairman
Monday, November 12, 2007
U.W. Outreach Center 951 N. Poplar
Casper, Wyoming
All meeting materials and handouts provided to the Committee by the Legislative Service Office (LSO), public officials, lobbyists, and the public are referenced in the Meeting Materials Index. The table below provides a summary of the materials provided to the Committee. These materials are on file at the LSO and are part of the official record of the meeting. Please contact the LSO at 307-777-7881 to review these documents.
Appendix |
Appendix Topic |
Appendix Description |
Appendix Provided By |
|
1 |
Attendance summary |
Lists meeting attendees other than legislators and staff |
Legislative Service Office |
|
2 |
Committee meeting agenda |
Provides a general outline of the topics the Committee planned to address at meeting |
Legislative Service Office |
|
3 |
Foster care |
Provides information regarding DFS responses to 2005 LSO report recommendations |
Department of Family Services |
|
4 |
A&I role in state agency hiring |
A&I HRD chart of agency application review capability and results of a satisfaction survey |
Department of Administration and Information, Human Resources Division |
|
5 |
State agency strategic planning |
Information and template for agency strategic planning |
Cheryl McVay Governor’s Office |
|
6 |
Wyoming Retirement System |
Nov. 9, 2007 letter from State Treasurer to WRS officials, copied to Committee Chairman and Vice Chairman |
Chairman Schiffer |
|
7 |
Retirement benefits and benefits offered in different industries |
Comparison of WRS benefits to those provided by other states in the region, and benefits offered in different industries |
Representative Landon |
|
8 |
State retirement –board immunity |
08 LSO-0184.L1-State retirement-board immunity |
Legislative Service Office |
|
9 |
Retirement system-employer contributions |
08 LSO-0183.L1-Retirement system-employer contributions |
Legislative Service Office |