JAC Index 011416pm1 Thursday January 14, 2016 Agenda 085 Business Council 066 Board of tourism 044 Insurance Department 008 Public Defender Co-chair Harshman is Chairman for the Day ER means exception request. 1/14/2016 12:37:45 PM 085 Business Council Shawn Reese, CEO; Pete Illoway; Diane Joyce, CFO; Tom Johnson, Chief Performance Officer Reese: Mission is to increase Wyoming’s prosperity. 1990, Heritage Foundation needed to change projector of state’s economics: economic development must be a public and private priority, invest in oneself as a state, and redevelop economics. Agency 18 years old. Various focuses, including programs. Resources available to existing businesses, and what a great place Wyoming is to do business. 3 divisions, business council, main street and investment ready communities. $83M budget. Exception request to move main street division into business council division. $5.9M cuts to budget, governor approved. Page 5. 50 FTE and 4 PTE. Returning 1FTE and 2 PTE. 7 vacancies, permission to fill 1. Strategic partnership with UW and business resource network. Plans, programs, finance functions. Performance measures, developed in 1998. Page 7, department priorities. Also included administrative functions. State energy office federal program. Connolly: 7 regional offices? Reese: Powell, Sheridan, Casper, Cheyenne, Rock Springs, Kemmerer, Riverton Page 10, ER, reorganization. Main Street created a number of silos, which made it difficult to manage resources. Page 13, 8% budget cuts target. Focus on industrial, small business, technology, community and market development. Each sector utilizes new business recruitment, existing business development, entrepreneur development, infrastructure development, workforce development, quality of life improvement and leadership/civic development. Page 15, revenue: general fund, federal funds, agency funds associated with loans. Reduce budget by $750,000 general fund, governor approval. ER to transfer budges for units 1201 and 1202 to unit 0101. Stubson: Exactly how many employees? Joyce: unit 101, employees 46 FTE, 4 PTE, reduction to 45FTE and 2 PTE; 1201 2.5 FTE Refer to page 7. Reese: pages 18 and 19. Indicates restructuring of divisions and budget cuts. Main Street funding to communities shown in 900 series. Main Street grants $649,000 biennium, technical assistance grants. $4M payment to UW annually. Annual performance report. Wasserburger: travel, seem high? Reese: Attend a number of trade shows, with extensive display boards shipped. In state, working with local communities at 7 locations around the state and business ready application process. Professional fees in association with Main Street technical grants. Ross: why professional fees for 2 grant programs? Reese: UW partners are providing professional services. Payments to architects Page 24, ER to transfer unit 1201 budget to unit 0101, including the transfer of 3 positions. Rural Development Council, funded by a federal Farm Bill. Federal funding disappeared, but notion of councils autonomous of state government remained. Moved into business council from department of agriculture, rural development council. Terminated MOU, but still affiliated with business council. Over 15 years and many community assessments, various topics, common ones consistently arise. Return on investment has been low. Ross: cut? Reese: did provide grant training to communities, $719,000 for community assessments is a lot of money, could better allocate resources within business council Connolly: council body of people? Reese: yes, about 20. Have administered some federal funds with 501c3 status, no term limits. New group in performance and planning. Ross: what happened to 20 people? Reese: can continue to exist as self appointed board. Wasserburger: How many employees for rural development council? Joyce: 2.5FTE, 1.5 FTE Main Street, will provide salaries Hibbard: See page 27 Nicholas: travel monies to council? Reese: board travel reimbursed. Meet annually with quarterly calls and a national meeting. 1/14/2016 1:53:42 PM Break 1/14/2016 2:11:54 PM Meeting resumes Sean Reese, Wyoming Business Council, Reese: Main Street Program page 28. A little over a 1M dollar, most of which is GF. ER to move the funding into the business council main division, which will give us more authority to effectively manage. Page 31 budget breakdown Reply to Wasserburger’s earlier question: Staffing for rural development council – pg 27 Last position #870 is the only vacant position. Wyoming Main Street is on page 33. Pg. 34 Business Ready Community- 20 M was one time funding. 10 M available immediately and 10m set aside for large projects. Std. budget is 54.1M. 5.2M reduction down to 48.9 M. similar to funding in FY 11-12. Ross: How much has been spent out of that? Joyce: 54 M Burns: Is the 48.9M GF? Reese: yes that is correct. Stubson: Breakdown of 5.3 M? Reese: Business ready program is the umbrella program. Business committed projects are projects that help a community to grow a business. Community enhancement component to business ready program which has higher match, lower award, lower priority. We have not decided how the money will be allocated across those categories. Allocation plan for each of our quarterly meeting. We have money for our highest category funding model. Current funding available for community business ready program is 20.2 M. Taking 8.1M worth of projects to board next week, recommending less than that. Stubson: Data center cost reduction included in the bulk of this money? Reese: yes it is. Higher priority program. Stubson: Has the legislature ever taken a role in defining how those monies are allocated. Reese: That has always been the business council’s decision. Nicholas: How did you come up with the 5.2M? Reese: We identified 8% in cuts. Non-BRC cuts first, then backed our BRAC. One time funding, reversion by Governor. Harshman: Cuts in your dept, %? Reese: All told the cuts are 6% or 6.5%. Greear: Harshman: Reese: pages 18 and 19, column 6. Business resource network contracts Greear: Where are the STIA funds. Reese: They are a standalone fund so you won’t see them in this particular budget Fund 491, 670,000 currently in the fund. Economic development fund has 18+M. Greear: My objection – Minerals to roll those into a new fund Reese; 670,000 of STIA funds, bill passed Greear; Better to put into GF and then take out? Reese; Account 491 has connection to article 16. Greear: Staff follow-up – look at that for me. Funds have been idle for quite some time. Reese: page 35 – Business Ready Communities, looking for solid, broad based community support, flexible program, performance measures, For every dollar of business ready funds about 3 dollars of private funds are leveraged. 1.43M will be recaptured to the funds. 16.5M of loans out. Anticipate 6M in revenue recapture coming back to the program. Page 36 – overview of return of principal and interest. Number does not include revenue recapture. Perkins: Is revenue recapture revolving? Reese: SF100 on 2014 – rules on revenue recapture. Perkins: No further legislation needed? Reese: Reduce budget by 5.2M which brings it to 48.9M. Governor approved. Harshman: Thank you. I am sorry for the delay. 1/14/2016 2:37:36 PM 1/14/2016 2:46:26 PM Meeting called back to order. 066 – Board of Tourism Diane Shober is Executive Director. Shober: Introductions to the Board members, Newsome, Middleton, Rudloff, Rutter, Dalton, Phillips, Waldrop. Staff is Howard, Scoon, Benton Anita Benton is at the table with Shober Shober: 3.4B direct expenditures in Wyoming, generated 168 M in state and local sales tax. 46% increase. In 2014, 10.1 M visitors. Travel generated tax receipts have grown by 69%. 94M to 168 M in 2014. In 2015, portions of the state are feeling change in energy industry. Over 50% of all overnight accommodations are in Par4k and Teton County. 1/14/2016 2:51:24 PM Page 6 of budget. 24 FT, professional fees majority is with advertising contractor. That is a pass through fund. ER 5.4M requested. Sustaining Markets and market share and International tourism development are part of ER. Listed Standard budget items and amounts. Burns: SE welcome center. Money saved in solar energy, etc. Shober: That is in MOE with WYDOT and they bill us back for their contracted services. Money is saved for DOT. Page 15 – Annual report for film incentive – 1/14/2016 2:56:54 PM ER priority #1 – Sustaining markets and market share. Data for advertising campaigns, which can influence the 3.4B direct expenditures mentioned before. Build on what we have. Asked for 5.4M. Governor Mead’s recommendation is for $5M. History of appropriations from the legislature and impact. 334% increase of guide points. Perkins: What is a mobile session? Shober: using a handheld device instead of a table top device. Strong indicators of travel. We have the money appropriated to be back in Seattle in 2016. 5.4M included cost adjustments. 1/14/2016 3:02:29 PM Ross: Governor reduced the standard budget. Where did the cuts come from? Shober: Every agency requested to provide cuts. Cowboy marketing program. Less participants by cowboy. Will utilize as PR and deep story telling components. Cut 100 series - Research manager. Development contract, some work is being done in house. Line item for advertising in programs. We consolidated all of that under the ad agency. Total of 315,000 Burns: Wyoming cowboy program? Shober: Media placement. Small stipend paid to cowboys. Incentivized by media interviews and posting. All required to wear a Wyoming approved logo. Contract with state of Wyoming. If they qualify for national rodeo finals, we have a Wyoming booth there. Burns: Elite rodeo circuit is new one. Are you looking at them? Shober: none of the cowboys from Wyoming are competing on the elite Rodeo circuit. Texas appropriated money for their finals to be held in Dallas. PBR was a spin-off of the PRA. Ross: Boots on the ground in other markets, like Seattle, from other countries. Shober: Explanation. Stubson: Narrative talks about one time advertising dollars. Explain more for getting to 5.4M Shober: Media plan has national focus, spot markets. Mkts. with highest propensity to give return to us. Sustaining mkts. is not a specific mkt. but a footprint across the entire campaign. Some are geo marketed and some are media type. One portion specifically geared to Seattle. Sustaining an entire media plan. Stubson: Division of dollars, proportion? Shober: On biennium, appropriation for Seattle is 1.5M so 75 per year. Buy key words. Billboards, prints, TV. Stubson: Remind us what this component was last year and supplemental Shober: Asked for 2.4M for existing and new mkt expansion. Appropriated the 2.4M, 300,000 for inflation and 1.5M for the Seattle mkt so that is Biennium 15-16. Ways to grow and expand is International Mkt. 2010 Travel promotion market Act component is brand USA. $10 Visa waiver fee, 100M from US Treasury. We have partnered with surrounding states. You can leverage those funds with Brand USA with a match from them. Canada and Mexico are number 1 and 2 mkts. Overseas mkts.include UK and Asia .With this request we want to deepen and extend time in Toronto, Canada. Invest in out of home advertising. Next component of international marketing includes translation. Chinese travelers are using Wikipedia. Our new website was funded last year. We want to do travel agent training. Brand USA has a modular for training. 3rd component is China. Websites in China look like a crazy poster, not visual. End market representation, partnering with Brand USA. Multi- channel coop. Stubson: 2.9 M breakdown between Canada and China. Annual numbers are: 670,000 for Canada, International resource development 260.000 China 460,000. Annual total for $1,490,000 Burns: In narrative, you go on about Vancouver. Largest City in NA with Chinese population. Do you have choice of stations? Shober: no. On domestic, we identify and specify locations. Last is one time opportunity for IPW in Denver. International travel tradeshow in the United States. It has not been in Denver for 38 years. June of 2018, it will be in Denver. We will get you the exact dates. Booths. 8 minute interviews with travel buyers. 3 days. Media market place for pitching to media. Familiarization tours in Wyoming. Burns: Narrative says 2017. Shober: error. Wasserburger: Front end of IPW, back end of IPW training travel agents. Shober: We would not be training them, we would be bringing them into Wyoming. We would be hosting them. Wasserburger: Training Chinese travel agents. How would that work? Shober: Brand USA would be in China. Would engage through that module. Harshman: Chinese economy is going down. First thing to go is memorabilia sale and travel. Is that factored in? Shober: large market, Harshman: You don’t think downturn will impact the tourism market. Shober: To the Wyoming component, it is not the largest mkt. Burns: Are you including Taiwan when talking about China. Shober: We are already working in Taiwan. Burns: it is in your std. budget Shober: yes 1/14/2016 3:43:33 PM FIFI – French film incentive. Passed in 2007, renewed in 2011. We are asking for an extension of this. Reauthorized just for the purpose of this biennial budget. Revenue neutral request. 245,000 in the fund. 470,000 was reverted in FY 16. Greear: numbers – some was already reverted? Shober: Report in budget book was as of July. In December 470,000 was reverted. They are restricted in a 600 series account. 245,000 is left. Disney pixar – Would like to utilize these funds instead of taking out of our advertising budget. Rare opportunities. Possibility with Red Bull in the future. Stubson: Rebates Shober: No production done in Wyoming May 19-23, 2018 is date for IPW. Break. 1/14/2016 3:54:11 PM 1/14/2016 4:09:19 PM Meeting resumes. 044 – Insurance department Tom clause is Commissioner Harshman: Welcome, explanation of procedures, Glause: Introduces Jeff Rude, Pete Greff, Denise Burke, Linda Johnson 25M generated by premium taxes, 13m from licensing fees. Domestic health insurance company failure. WinHealth placed in receivership. We operated it through the end of the year. Explanation of situation and action taken. Motion to convert to liquidation for WinHealth. 14.4M claims inventory at end of year. Expect to grow to excess of $20M. Included HMO’s to be included under association and limit of liabilities increased from 100,000 to 300,000. We expect most all of our providers will be paid to 100% under guarantee association. Stubson: Providers that might not get paid, explanation Glause: Limit of 300,000 per individual and FIFO payment (first in first out). Biggest fear is premature babies or tragic accident. Reinsurance above 250,000. Can use 50,000 difference for reinsurance so it gets it up to about 500,000 per person. There could be situations where the numbers could come in above the 500,000. 1/14/2016 4:18:50 PM Clause: 25 employees, given two positions to deal with the ACA. One permanent and one temporary. Temporary was extended into 15-16 but not asking for extension for this budget. Licensing, financial examination. Producer licensing – 106,000 agents and agencies. 360,000 appointments that are licensed. Review of insurance policies. Budget is covered by assessments. 11000 companies licensed, assessed approximately $2500. Administration does not receive any other general funds. We have three other funds. Agent Licensing Board is funded by 60% of new resident agent’s fees, not to exceed $5000. Amount beyond 5000 reverts. Wyoming small employer health reinsurance. Funded by premium tax credit on all insurance companies doing business in Wyoming. Insurance companies receive an additional 5% credit. If they put in $100,000 receive credit for$105,000. Wyoming Health insurance pool for individuals who can’t obtain insurance in Wyoming. It is a declining population with the ACA. AKA WHIP Pool. Senate file. Burns: Got rid of 50 or so non-handicapped people. How many are in there today? Glause: 50 in non-disabled. 130 over age of 65 so eligible for Medicare supplement so dis-enrolled. So under age 65 disabled population are in the WHIP pool. No one out there selling a supplement for medicare for disabled. There is no alternative. We could mandate insurance companies provide coverage, which would be very expensive/. 1/14/2016 4:30:35 PM Glause: priorities: page 6, Administration =5.8M; Health Insurance Pool (under 240% of poverty level). Budget historically 6 M. Cut to $5M. Disabled population is increasing at 8%. Bring in sustainable cuts. WYSRP – Wyoming small employer Health Insurance is 3rd, and Gent licensing is 4th. Burns: priority 3 from non-GF. Where does it come from? Glause: assessments on insurance company. First 2 M receives 80 % tax credit, second 2M receive a 50% tax credit, 3rd two million, do not receive any tax credit. 1/14/2016 4:34:28 PM Glause: Exception requests: IT – equipment and software for $28,332. If we replace computers on an as needed basis, we would have to make up for it at some point. Administration cost for it and for position authorization. Market conduct position in 2009 was vacant and then hiring freeze, cut in prior budgets. Market conduct will become a NAIC National Association of Insurance Commissioners' criteria for accreditation, within 2 years. We are the smallest insurance dept. in the nation. Perkins: What is it about this position? Glaus: Perkins: We have examiners. Are we short? Why is this important for anticipated requirements for accreditation? Glaus: It will be an additional standard and different examiner, separate from our financial examiners. Perkins: You have financial accreditation. Anticipate market accreditation, need different person. Glaus: different skill set Stubson: What is market conduct? Glaus: Examples: 1. WinHealth. Mkt. conduct person would review contracts and determine through sampling if they were sufficient for area covered. Be more proactive. Probe into the company. 2. Insurance company not appointed to sell a certain line of business with a certain company. Mkt. conduct person would go in and review all of the appointments. 1/14/2016 4:42:15 PM ER request within the WHIP pool – reduction of standard budget by 18M. I wish I could say that would be an actual savings. Std. budget looks at the capacity of the pool. Reduction is because of reduced population. Reduction recognizes what the pool is doing and what we anticipate it will do into the future. It is not included on page 7 special exemptions. Can reduce GF by 760,000. Stubson: is that in this budget document? Glaus: page 24 – reflected in this document 1/14/2016 4:45:16 PM Page 9 Std. budget for administration Stubson: All 6m is other funds, none is GF? Glaus: correct. Correction – It is not a pro rata assessment. It is an equal assessment per each company. Greear: Asking for position back? Glaus: Essentially that is correct. We have 1 temporary position that will be lost. In earlier budgets we lost two other positions. Connolly: Because of ACA, we moved people into federal plans so we manage less federal money so savings of 760,000 in general cost? Glaus: reasonable summary from the whip pool Connolly: If Medicaid expansion was passed would there be a similar situation. Glaus: My understanding is people in 100-138% of federal poverty level would be affected so it would not affect WHIP. Connolly: no impact on WHIP program Glaus: Correct 1/14/2016 4:50:47 PM Harshman: Division 300 Glaus: Agent licensing board is antiquated. Page 19, narrative “In the alternative….contract.” We now contract with testing service. Small budget covers travel and expenses. Members appointed by the Governor. We need to update this process and eliminate the Board. Proposed legislation to update that. Comprise this with our advisory group that assists in questions given to independent contractor. Harshman: Division 400 is next Glaus: 29+M standard budget. That is capacity. Generated by premiums and assessments. There are no GF, other than in the disabled population under 250% of the federal poverty level. Reduction represents change in the population, reduction in premiums, assessments and interest. Harshman: who will be served? Glaus: Level I and 2 in the disabled population. It is much like a Medicare supplemental policy. Ratio has changed dramatically. Harshman: GF is only going to support the level II. Glaus: That is true and it has always been that way. Greear: projected increase of 8% in that section? Glaus: yes in the disable population yearly. Greear: sunsets in 2020. Future impact on the GF. Glaus: For this biennium, left a cushion in it. Wanted to reduce it but not have to come back and ask for a B-ll or special funding for it. 1/14/2016 5:00:45 PM Glaus: Wyoming small employer health insurance – designed to stabilize the small insurance group by seeding large loss individuals into the group. Eligible individuals are people on grandfathered or transitional plan. Declining enrollment in program. Only one company seeding into the program. approx. 85 lives. Will be down to 70 lives after WinHealth. Program at end of its useful life. Setting up an exit ramp. Interim topic for 2017. Would like the infrastructure in place but actual program of seeding lives has other alternatives in the ACA. Funded by premium tax credits. In 2015, 3.5M assessment. In 2013-14, no assessment Harshman: The only GF program is the WHIP program Glaus: One piece of the WHIP program which is level II folks Moniz: How many in the program? Greff: 442 Burns: Agency funded by assessments Glaus: equal assessments on all companies. Burns: rate set based on rate in other states? Glaus: I don’t believe so. Rates fluctuate yearly. Burns: assessment on each company are based on the needs of the insurance company Glaus: confined by the budget set by the legislature Burns: Was it always like this? 1/14/2016 5:08:02 PM Break. 1/14/2016 5:15:32 PM 008 Office of Public Defender Diane Lozano, Public Defender Becky Meza, Ryan Roden, Dan Wilde, Denise Herman 1978 agency created, 2012 added guardian ad litem program, 14% increase caseload, reduction of funding in 900 series. Agency budget has also had budget reductions in 900 series, contract attorneys, experts, travel for experts, investigators. 15 field offices located throughout the state. Appointment made in first court hearing, monetary guidelines to qualify. 51 attorneys, 20 contract attorneys in agency. Never exceed 100% for felonies, misdemeanors, juveniles. Allow agency to hire more attorneys when caseload exceeded for all attorneys. On verge of not be able to adequately represent clients due to excessive caseloads. Connolly: salaries and comparisons with prosecutors. Lozano. Same pay schedule as AG Office. Not aware of county prosecutor’s salary. Burns: page 9, Lozano: Counties must match by 20% of what is spent on guardian ad litem cases, not track time. Wasserburger: why have guardian ad litem? Lozano: statutory requirement. ER 1 for two attorneys and a legal assistant for Campbell County due to heavy caseload. Governor denied. Campbell County has 10 attorneys and 18 legal support staff. ER 2 Increase Converse County Trial Division Attorney Position 80 and Campbell County Trial Division Attorney position 12 from PT to FT, approved by governor. ER 3 Additional contract attorneys for Campbell, Weston/Creek, Converse and Fremont County Trial Divisions. Denied by governor. ER 4A Reclassifications as appropriate for eligible public defender attorneys. Governor denied. ER5 Capital Case Funding. Governor approved $68,000 LSRA, $12,000 special revenue for capital case training. $425,000 LSRA and $75,000 special revenue based on obligated expenditures for capital cases from county. Connolly: If no death penalty? Lozano: Would not need monies for capital cases. ER 6 Increase in 900 series funding. Expert testimony. Governor denied. ER 7 Increase Fremont county legal assistant position from PT to FT. governor denied ER 8A Technology Needs. Governor denial. Withdrew ER10. Formal move of position 7 to AandI Human Resources Division. Authority to move position. Governor approved. Page 33, ER4B, Reclassification as appropriate for eligible Guardian ad Litem Attorney. Governor denied. Withdrew ER 8B and 9. Page 40, ER 1, Court ordered funding for capital case. Governor approved $1,062,500 general fund and $187,500 special revenue from counties effective immediately. Ross: Eaton case? Lozano: Yes. Connolly: What are options if $$ not forthcoming? Lozano: Options are to prosecuting attorney. Judge would decide. 1/14/2016 6:15:37 PM Adjourned.