P - Present
E - Excused
A - Absent
Roll Call
P Apa, Chair
P Bartling
P Dennert
P Earley, Vice-Chair
P Gant
P Glenski
P Greenfield
P Hanson (Gary)
P Haverly
P Hunhoff
P Klaudt, Vice-Chair
P Napoli
P Peters
P Rausch
P Smidt
P Sutton (Duane)
P Tidemann
P Putnam, Chair
OTHERS PRESENT: See Original Minutes
The meeting was called to order by Chairman J. E. “Jim” Putnam
Mr. Nelson addressed two areas of change in the budget. One change is the increased
appropriation in federal funds for $5 million to purchase voting machines for every polling place
in the state. This is to comply with the Help America Vote Act which says that by 2006 every
polling place in America will have a voting assist terminal, a touch screen type voting machine.
This type of voting machine will allow people who, because of a physical disability can not vote
on a paper ballot, to vote privately. South Dakota is on track to comply with this Act. Mr.
Nelson's office has set criteria in place in deciding which machines South Dakota will purchase.
1 *
The system must maintain the integrity of our voting systems. It must have a paper
component.
2 *
The system must be easy for our election workers to set up, operate and take
down.
3 *
The system must be as economical as possible, both to purchase as well as on-
going costs to operate the system.
4 *
The system will serve the target population.
Senator Apa asked if the Diebold Company was out. Mr. Nelson responded yes, Diebold has
never come to South Dakota asking to do business. Mr. Nelson said before a company can do
business here they must be certified by the State Election Board and Diebold is not certified.
Discussion followed on the companies that are likely to bid. Senator Apa reported that Lawrence
County has problems with their machines from ESS, one of the companies that will likely bid
their machines.
Mr. Nelson told the Committee that the federal government provides the $5 million on a 95/5
match which leaves South Dakota needing approximately $440,000. Mr. Nelson is currently
working with county governments to provide the 5% match. Each county was asked to set aside
their portion of the $440,000 based on the number of voters in their county. Mr. Nelson said all
counties are participating. The money will be set aside in a special reserve fund within county
government that can only be spent on certain election expenses. Mr. Nelson said this $440,000 is
going to leverage approximately $8 million in federal funds. An estimated $5 million will go to
buy the voting machines. The remaining $3 million will be set aside within state government and
as counties spend money on qualifying election expenses, the state will reimburse the county out
of the $3 million.
Representative Putnam asked who will hold or control the $3 million. Mr. Nelson said it would
be deposited in the state government Election Fund. Each county will be allocated an amount
based on the number of voters and as counties incur election expenses, they will ask for
reimbursement. This is the spending authority the Secretary of State needs. Interest on the $3
million will be credited back to the counties.
Representative Dennert asked if the Secretary of State's Office could have accessed the $3
million if they would have paid the $440,000 from their office instead of asking the counties for
it and wouldn't it have been simpler, with less book keeping. Mr. Nelson said yes they could
have and it may have been simpler; however, the Secretary of State's Office didn't want to come
to the Committee to ask for the special appropriation. Mr. Nelson said election expenses are
typically the counties responsibility so he went to them first.
Senator Bartling asked if the Secretary of State's Office anticipates another round of funding or is
the $8 million the end. Mr. Nelson said they do not expect more.
Mr. Healy said there were clarifications and corrections needed to the figures listed on page 487
under Revenue in the budget book. The -25.1% Under Land Contract Payments is because
School and Public Lands no longer sells land on contract for deed. Over time, as contracts are
paid off, the revenue depletes. The decrease in Interest on Contract Payments is also related to
no longer selling on contract for deed. There was a 34.9% increase in Mineral Monies and Mr.
Healy reminded the Committee that those revenue figures should be times two. Part of this
money goes to a permanent fund and part is available to apportion to schools. Escheated
property shows a negative figure and is hard to budget. Mr. Healy said escheated property is
property that comes to School and Public Lands when there is no will or descendants. Some
years there is a lot and other years not. The figures shown for Return on Investments were also
incorrect. Mr. Healy will provide the Committee with corrected figures. Mr. Healy reported that
as of December 31, 2004 the Investment Permanent Fund was at $158.3 million and is currently
returning about 7%.
Mr. Healy said the most important aspect they deal with is the apportionment returned to schools.
He said the estimated numbers listed in the report are a little high. Mr. Healy believes the
apportionment to school districts for FY 2005 will be about $4.5 million. The School and Public
Lands Office is currently returning about half the amount to schools as it used to. This is a result
of the changes to the investment strategy made in 2000.
Representative Peters asked Mr. Healy to provide written data to the Committee explaining this
investment strategy. Mr. Healy said the information was sent out in December but he will
provide it to the Committee again.
Mr. Andrew Canham, Noxious Weed Control Manager presented and reviewed the 2005
Noxious Weed Control Projects Report (Document 3). Mr. Canham told the Committee that Salt
Cedar is the newest invasive weed in western South Dakota.
Representative Putnam asked Mr. Canham if the program was working well with all the various
agencies. Mr. Canham said yes.
Representative Putnam asked if School and Public Lands spends money on land other than their
own. Mr. Canham said the in-kind money is for School and Public Lands, the grants and
matching funds are spent on other land.
Representative Hunhoff asked if the $465,000 listed as grant money had been awarded and what
is in-kind. Mr. Canham said no, the $465,000 was grant fund that have been applied for. Mr.
Canham explained “In-kind” is contractual spraying, supplies, the actual killing of weeds. The
In-Kind funds are listed under contractual services.
Representative Klaudt asked if the School and Public Lands Office works with the Tribes on
weed control issues. Mr. Canham said they have worked with the Tribes in the past on prairie
dogs and now with the Cheyenne River Sioux Tribe on salt cedar.
Representative Peters asked if the $465,000 was general funds. Mr. Canham answered no, it was
grant funds. Mr. Canham said no, none of the money is general funds.
Representative Glenski asked if the biggest problem with salt cedar is the amount of water or the
fact that it takes over the range land. Mr. Canham answered the taking over of range land is the
biggest problem; however, water is also a problem. Mr. Canham said the salt cedar plants can
take up to 200 gallons a day.
Representative Glenski asked what the estimated payment per student is today. Mr. Healy
responded about $47.00/student.
Meeting recessed until 9:00 a.m.
Meeting was reconvened.
FY06 Recommended budget for SD Housing Authority $54,908,046 and 181.6 FTE.
Income and service prices are established by the internal revenue code under which they operate.
Mutual funds investors buy SDHA bonds. Seven member housing teams are responsible for the
housing and community development plan. SDHA participates in the council on homelessness
and coordinates mainstream funding.
Thirteen member asset and compliance team is responsible for oversight, loan management, etc.
There is one person employed as a sales person, the rest of the staff is involved in either full-time
or part-time seasonal work in moving the governor's houses.
Program eligibility is limited to a two- person household with incomes of $33,506 or below or
three person household with an income of $36,750 or less. The smallest house sells for $27,500
and the day care sell for $35,000.
Under the government accounting standards, we must depreciate the equipment that we purchase.
Monthly, the SDHA provides a financial report to a board of commissioners, which includes a
monthly budget analysis and evaluation.
SDHA is working on a Governor's 2010 Initiative goal to end homelessness. Now they have a
television, radio and print campaign to increase the marketing awareness.
SDHA offers tax credits on the reservation in support of generating private development into
affordable rental property.
In the FY05 budget, the administrative cost was 1.06 cents for every dollar invested in SD.
Representative Dennert wanted to know if the projected number of Governor's House Program
houses will remain stable with a decrease in dollars. How does this work as materials have not
gone down? The response was that SDHA has hit a plateau, stabilizing at 175 homes, so they
have backed off of the projections.
Senator Apa asked if the house transport positions were filled, to which the answer was "yes",
they have three transport movers. Representative Peters wanted more clarification on moving and
transport, and asked if bids are taken to find the best rate, as there are companies that do that in
state. Ms Baum said the goal is to charge the same amount in every area so, they developed a
system that would be fair in urban and rural areas.
Senator Apa inquired about when someone buys a Governors House if they have to hold it for a
certain amount of time? The reply was that they were expected to own it themselves for 3 yrs,
and then they never have the opportunity to buy a second one. SDHA reviews all complaints.
Representative Haverly asked if the day care centers are tracked and what happens when they are
no longer child care centers? Ms Baum said that she does not have the info today but can get it.
Representative Haverly asked if there were some restrictions as to the size of the community with
the ability to buy. The communities need to be smaller than Rapid City, Sioux Falls, Aberdeen,
and Watertown. Representative Glenski asked how many homes were sold this past year? The
response was 165 with a projection of 175.
Governors Office of Economic Development, presented by Jim Hagen
The Governor has recommended no change for the FY06 budget.
Sales & Project Development
Six representatives will assist companies, businesses and individuals interested in creating,
developing, expanding or relocating to SD; expand the job opportunities in the state and diversify
the economy; and assist communities in their economic development efforts and programs.
Their job is to get out into the community, visit the companies, and to be aggressive in the
community.
Research and Marketing
The mission of this division is to coordinate, promote and direct research and marketing services
for the office and assist local development organizations and communities.
Some of the Marketing tools are:
5 *
Radio ads
6 *
Direct mailings
7 *
Sponsorship
8 *
Quarterly Economic Development Newsletter
9 *
Website, www.sdgreatprofits.com, including 4 searchable databases
Finance and Incentive Programs:
The financial assistance programs for new and expanding businesses include REDI, EDFA,
SDDC, APEX, Microloan, Value Added Agriculture Sub-Fund, Value Added Tourism Sub-
Fund, Workforce Development, Community Development Block Grant, and Energy
Conservation Program. (There will be a new director in February).
Senator Earley asked for details of the $3.4 million contracts with Lawrence and Schiller. The
contract has helped tourism with developing marketing campaigns, such as television and radio.
Lawrence and Schiller spends the money and places the ads, with a commission of 10% for
media and 7.5% for broadcasting. The funds come from the marketing dollars. Marty Davis said
that there is not a lot of consulting contracts. One is for research.
Senator Greenfield wanted to know if they have vacant positions in GOED. The response was
that they will be filling the positions as HUD is strongly encouraging the department to add
another person. To clarify Senator Greenfield asked if some of the "float" positions could be cut?
Mr. Davis said that actual FTE utilization in FY03 was probably low. They have three empty.
Senator Apa asked about other funds. Mr. Davis said that other fund authority does not come
from general funds.
Recessed @ 10:05 Reconvened @ 10:15
Division of Tourism, Presented by Leah Mohr, Creative Director
The mission of this division is to promote and increase the level of tourism business and related
employment by working together with businesses, other areas of government, and regional
groups to market and promote the state's natural resources, culture, attractions, history and its
people as an integrated part of economic development.
Program Summarys:
10 *
Advertising
11 *
Outdoor Marketing
12 *
Rural Tourism Development
13 *
Film Commission
14 *
Information Centers
15 *
AAA/CAA Marketing
16 *
Group Tour Marketing
17 *
Public Relations
18 *
Hospitality
Tourism activities are funded by revenues from Deadwood gaming, the tourism promotion tax,
co-op revolving funding.
Representative Hunhoff asked about the funding process and how it trickles down to the
community. Ms Mohr said that the criteria is in how we advise them to invest that money. There
are specific areas that they focus on to attract future visitors. There is an agreement at the
beginning of the year and a written summary and the results thereof, at the end of the year.
Representative Haverly asked how to answer the charge that SD is not a destination spot and
what is the plan? Mr. Hagen said that there is a need to target those states and visitors that want
to come to SD instead of throwing money out to those that do not intend to come here. Some
places include Dallas, Fort Worth area as well as Iowa. This information comes from data we
collect.
Change of chair from Klaudt to Putnum @ 10:27
Representative Haverly asked if Hagen knew if SD was spending comparable amounts to other
states. The reply was if more money was there we could spend it, Hagen would rather see us
spend the money that we have to get the best bang for our buck. He believes we need to be smart
with what we have. If our return of investment shows that those visitors are staying for 2 to 3
days, it is working for us. Senator Napoli asked if road construction was considered. The answer
was that they do provide links and information to let the tourist know. Also the staff is very well
trained in how to advise the visitors in how to get around the construction. At the information
centers there are kiosks so the visitors can view construction in the area. Senator Napoli
wondered why the department of tourism was not involved in the DOT meetings as it would be a
good idea to bring someone to these meetings to voice concern for traveling visitors. Mr. Hagen
said that in the past there has been discussions to inform, but they are open to that idea. Senator
Napoli said that the majority of some Black Hills business revenue comes during the rally and
that he was shocked with how bad the roads were during that time. Would it not be good for the
rally to have better roads and talking to the DOT about this? Mr. Hagen responded positively by
saying that he would take the recommendation and start weighing in at those meetings and be
more proactive.
Division of Research and Commerce
The new Commercial Director, Dr. Mel Useph has agreed to come on board for this office next
week and will be housed in Sioux Falls.
The Division is working to increase research and development for the betterment of SD; to serve
as the state technology transfer and innovation office by finding, protecting and marketing ideas
generated from universities and businesses; to serve as a single point of contact and liaison for
businesses seeking university research, and researchers needing business help; to coordinate the
implementation of an unified intellectual property policy for work done at universities; to aid in
the development of new research-related businesses and to coordinate additional public an
private resources available to help such businesses; and to manage state, federal and private
funds entrusted to this office for the purposes of promoting the development of new ideas and
new businesses.
Senator Greenfield said that last year appropriations budget was $3.5 million in general funds
and 2 FTEs, what amount are you expecting to expend? Mr Hagen replied that $2.7 million was
designated to develop a small number of research centers, to have a focus on commercialization
and the additional funds were used by Board of Regions. Senator Earley asked about the
commercialization office, and Governor Round's promise that in five years, the program was to
be self-funded. The Division will report to the special committee during the interim.
Tribal Government Relations, presented by Roger Campbell, Director of Tribal Government
Relations
There is no change in the Budget Request for FY2006.
The mission is to establish and maintain a positive working relationship with the Native
American citizens of SD, so as to enable the Governor and others in state government to list,
work together and cooperate in improving their quality of life and economic opportunity.
Functions:
19 *
Improve cooperative efforts with the Native American Tribes.
20 *
Assist in developing business infrastructure with the tribes, when invited..
21 *
Continue to improve rural tourism efforts with tribes.
22 *
Engage in a summit process with tribes, as invited.
23 *
Promote the establishment of cultural, no-competitive exchanges between reservations
and non-reservation schools, if invited.
Representative Klaudt asked if some headway was being made in prairie dog management. To
which Mr. Campbell replied that Game Fish and Parks is working with the Tribes. After the plan
is approved we will incorporate the Tribal management plan with the state.
Mr. Campbell said a lot of the strengthening that the state does has to be with face-to-face
contact with the tribes.
Representative Glenski wanted to know about the Tero controversy and when the taxes, that are
comparable to contractor's excise taxes are collected, where they go. Mr. Campbell said that it is
used for economic development for the tribe.
Office of the Arts, presented by Dennis Holub
Recognizing the importance of creativity in the lives of South Dakotans, the South Dakota Arts
Council makes quality arts accessible throughout the state by providing encouragement, grants,
services, and information to artists, arts organizations, schools and the public.
In the Arts Council Annual Report, there are over 500 total grants in existence. Through these
grants the Arts Council has reached virtually every county in the state. The two programs with
the most entries are the Artists in the Schools Program and Traveling Arts Program. The Artists
in the schools are endorsed by the council. Last year the residency increased and now the division
has 75 of them. There is also a joint newsletter called "Arts Alive".
Representative Peters wanted to know where the other funds came from. They use other fund
authority on occasion, if they are successful in getting private grants. They do get other small
grants and small gifts.
Office of History, presented by Jay Vogt
The State Historical Society is a state agency, created by the State Legislature in 1901.
The SD State Historical Society operates today in five program areas: archaeology, archive,
historic preservation, museum and research and publishing. They work to collect, preserve,
interpret, and promote the history of South Dakota. The archive, historic preservation, museum,
and research and publishing programs are located in the Cultural Heritage Center. The archive
also has a microfilm unit at the Mike Durfee State Prison in Springfield, and the archaeological
program is headquartered in our Archaeological Research Center in Rapid City.
Funding for the Governor's proposed State Historical Society budget consists of 55% general
funds, and 45% other funds or federal revenue.
The federal funds come from an annual grant from the Historic Preservation Fund through the
National Park Service. South Dakota's share of the Historic Preservation Fund is based on the
appropriation by Congress and an apportionment formula. The State is required to provide a 40%
match for these funds which support the work of the State Historic Preservation Office under the
National Historic Preservation Act.
Their other funds are generated from a variety of revenue sources, including membership dues
($65,000), museum admissions ($15,000), fees for archival services ($40,000), contract for
services from the City of Deadwood ($45,000), an annual disbursement from the SD Gaming
Commission fund ($100,000), and fees for archaeological services ($1,000,000).
Few changes are being recommended to the overall State Historical Society budget.
In personal services, they request an adjustment for longevity pay ($765). The state of SD is very
fortunate that they have been able to maintain a core of committed, long-term employees.
They are also seeking approval of $15,555 to pay a senior archaeologist from general funds rather
than other funds. This archaeologist is responsible for burial issues under state law and
compliance with the Native American Graves Protection and Repatriation Act (NAGPRA) for
human remains and funerary item in our custody. This is an existing FTE, and this position is
currently paid out of both general funds and other funds. However, this senior archaeologist is
working full-time on burial issues, and the work is not "billable" to a contract project. If a burial
is unintentionally discovered and, after it is cleared from being a crime scene, we are responsible
for removing the burial and handling all the issues associated with it. In addition, any American
Indian human remains or funerary material acquired through their work requires consultation
with American Indian tribes. The work requires building on-going relationships with people.
In contractual services, the Governor is also recommending and inflationary increase of $18,154
for the space billing and bond redemption for the Cultural Heritage Center ($12,059 rent and
$6,095 bond redemption). The office has annually adjusted the bond payment according the
payment schedule. For example, last year because the scheduled payment went down, they
requested the commensurate adjustment. The bond payment goes up this year.
They also request a reduction in federal spending authority for the state historic preservation
office of $11,669.
The committee asked about a contract with Kelly Temporary Services. Mr. Vogt explained that
archeological work needs to be done in a specific time frame to get the contracts completed in a
timely manner. They do some subcontracting with private archeologists, but most archeological
communities cannot spare individuals, as there are so few of them.
MOTION:
ADJOURN
Moved by: Klaudt
Second by: Gant
Action: Prevailed by voice vote.
Barb Bjorneberg and Wendy Weinert