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 Co-Vice Chair Klaudt
The Governor's budget recommendations for the Bureau of Personnel is an overall increase of
two FTE and $105,600 in other fund authority in personal services. One FTE will be used for
competency development areas. The second FTE will be assigned to the Workers Compensation
program.
Overview: The Bureau of Personnel is a central human resource agency for the executive branch
of the government. Currently budgeted for 68.5 FTE, the majority of employees are located in
Pierre. The mission is to develop and to build a high quality workforce. The workforce is often
challenged to do more with less. Efforts are concentrated on competency-based human resources.
Sandy Jorgensen addressed the specific area of HR. Document 2 was distributed which explains
the reasons for the requested 1 FTE. The challenge is to determine success in people that is,
behavioral attributes rather than their backgrounds, and educational experiences. In July 2000,
the agency began to overhaul selection services and started teaching behavioral interviewing.
Competencies are different ways of looking at qualifications for jobs. Competencies are like a
child's report card. (Refer to page 3 in Document 2).
Competency models focus on how the individuals use knowledge, skills, and abilities to produce
results. Selection methods were changed based on the best behavior type for the job.
Representative Klaudt asked who determines competencies. Sandy Jorgensen replied that it is
done using a focus group of outstanding employees and an expert panel (those with excellent
supervisory skills). The whole process takes about four hours in the focus group and then is given
to the expert panel.
The logical steps are to develop a model and then start appraising, based on that model.
The research is very labor intensive; an individual is needed to intently focus on the research
position.
Representative Haverly asked where the supervisor fits in. Ms. Jorgensen said that the supervisor
is needed to have the tools to select and to train others as to what to look for and how to function.
Correctional officer tools are needed to communicate and manage better. Ms. Jorgensen used the
department of corrections as an example. Before, the department made a selection of applicants
that had military training. A competency model will give the tools to better match a person with a
position. Managerial training process is in place, but the systems need to be linked together. A
competency model system should also have metrics with it. Looking at the competence-based
system, implementation metrics shows that disciplinary actions in the Corrections Deparmtent
have reduced since FY01 from 31% to 19% in FY04. Less turnover occurs when the individual
is fit for the job.
Representative Rausch asked if the program will expand throughout all of the state government.
Agency personnel said the intent is to start with occupational modeling, but it needs constant
remodeling. Without having a dedicated person, it takes a year or two to get these programs up
and running. Specific job classes will be. This is a different way of thinking about how hiring is
done and is also being done in the private sector.
Representative Hunhoff asked what the average turnover rate of correctional officers is. The
response was that it is around 30%, but this number will drop. When training, an applicant is
shown a video to see the awareness.
Senator Smidt stated that if competency training really worked, there would be a great deal of
savings for the state and wondered if that is the idea behind the matrix. Other areas will be
measured to as it becomes longer term. The model is not developed unless the matrix can be put
in.
Representative Tidemann asked what would the reward be. Ms. Jorgensen stated that this is part
of the issue. Bonuses could be done, but that would depend on the amount of funds within the
department. An advantage of this system is less turnover. It is possible that a model could be so
successful, in that the savings could be used for bonuses.
Classification and training, presented by Ellen Zeller.
In the executive branch there are 47% of employees classified at job worth. After an individual
had been in the position for six months, they would receive a 5% increase in pay range. Job
worth is nothing more than what the state can afford at that time. The job worth represents a
well-established individual for the job.
Representative Tidemann asked if employees pay 100% of the dependence coverage in
insurance. Ms. Zeller replied that no, the employees do not. The decision was made 11 years ago
to fund a part of the dependence coverage. The co-payment has changed over the years.
Senator Smidt wanted to know what the premium rates for vacant positions. The response was
that it depends on what position is vacant. If a lower-level position is vacant, it would be a lot
less than if a higher paid positions was vacant.
Senator Apa inquired about the consideration of market value difference. The per employee
insurance rate for each employee is $4,888. The best way to figure it is by looking at the
surrounding areas and the Midwest region along with private insurance companies information.
South Dakota is paying a considerable amount less per employee than surrounding states.
Senator Earley asked for a further explanation of the health care plan given in Document 1 page
3. Jim Neiles said that BOP is billing out a little less than the cost to take into account over-
recovery. Larry Kucker responded that the contract with Healthcare Medical Technologies, Inc.,
perform medical management for BOP. Healthcare Medical Technologies gives BOP quarterly
and annual reports for the group medical program. Sioux Valley's contract is for the health
screening for the employees.
Representative Hunhoff asked if those medical professionals do any follow ups on the screening
results. The response was affirmative.
Employee benefits outside health care, presented by Larry Kucker.
The benefits program covers state employees in many areas. A cafeteria plan, life insurance, and
supplemental insurance plans for retirees. About 25,000 people are covered under the state.
Seasonal and temporary employees are covered. In theory, these 25,000 could be under the
workers compensation, about 8% of the population of which a report is given. The workers
compensations plan lasts a lifetime. This adds a complexity. Half of the money spent are spent on
a claim from a prior year. It takes 5-15 hours to process one claim. Currently there are 3 FTE
working with the claims. BOP has borrowed other FTEs to complete these claims. In FY04 of the
2000 reports, 888 of them turned into some kind of medical action. The 888 include current year
problems as well as past year problems. There is not a huge increase in claims. The budget is for
3 FTE and are using 4 FTE to do the work.
Representative Hunhoff asked for the process description. If an employee is injured at the local
level, they are required to report to the supervisor. The supervisor then fills out a claims report.
Non-serious claims are generally handled at the local level. The supervisor works with the
employee so as to not exasperate the employee. The position is a non-clinical person who has
some medical knowledge.
Risk pool, presented by the commissioner and Mr. Kucker.
Established to provide insurance coverage for South Dakotans that would loose insurance due to
no fault of their own. The Risk Pool has grown to 540 members. Not many catastrophic claims
have occurred. The fund is doing well. Gross return on investment was 6.6/1. Senator Sutton, a
member of the Risk Pool Advisory Group claimed that the process is working well, meeting
almost monthly. Senator Bartling echoes the opinions of Senator Sutton.
A couple individuals have hit the maximum benefit. No one that is covered by the state plan is
covered by the Risk Pool. Senator Apa asked how many FTE are actually working the health
department. There are 8 FTEs and 5 of them are working in the health area.
Committee recessed at 9:54
Committee reconvened at 10:05
Chairman Putnam assumed the chair.
The recommended agency budget request is $2,592,553 from the State General Fund and 36.0
FTE. This is an increase of $66,293 (2.6%) and 1 FTE from FY 05. The Governor concurs in
these requests.
1 *
A net increase of $35,558 in Personal Services for 1.0 Auditor II position salary and
benefits.
2 *
A net increase of $30,735 in Operating Expenses
3 *
$1,910 increase in Travel for increased mileage reimbursement rates
4 *
$14,755 increase in Contractual Services for increased BIT charges, and the
increased annual peer review
5 *
$1,000 increase in Supplies & Materials for professional education programs.
6 *
$13,070 increase in Capital Assets for to replace 12 computers
Question 1. What is your definition of a mandatory FTE? Mr. Guindon said the Department of
Legislative Audit's (DLA) categorizes its FTE as follows:
7 *
DLA has no positions mandated by the constitution.
Representative Peters asked if the revenue came from audits performed for political subdivisions
and outside agencies. Mr. Guindon said yes and also from non-general funded state agencies.
Representative Peters asked if the DLA tracked chargeable staff time. Mr. Guindon said the
chargeable time depended on the individual staff and their level. Representative Peters asked for
an explanation of the difference between the $2,526,260 expenditures and the projected revenue.
Mr. Guindon said it was the general fund services not billed plus services required by state law to
be provided for free. Representative Peters asked if DLA had ever considered having the A31
audit performed by contractual labor. Mr. Guindon said no, it would be difficult to find a firm in
South Dakota large enough to do the work.
Senator Apa asked how many CPA's were employed by the department. Mr. Guindon said there
are10. and 4 or 5 were working toward their CPA. Senator Apa asked if the DLA helps with the
expenses for those working toward their CPA. Mr. Guindon said yes, the department purchases
computer software and provides time off, without penalty, for those taking the tests; however,
they do not pay travel or per diem costs. The computer software program costs approximately
$400-500 per person and the software is updated every 2 years at a cost of $500.
Mr. Guindon said subsequent to the time the budget was submitted, the State Board of Finance
approved increases in meal reimbursement rates for in-state travel. The DLA is requesting an
additional $3,500 in travel expenses in the operating budget to cover those increases.
Mr. Guindon told the Committee the loss of an FTE in 2002 had impacted the DLA's ability to
meet required deadlines and department goals. The DLA has spent 844 hours in the past year in
service to the Government Operations and Audit Committee and, in addition, has spent time
providing assistance to summer study committees. Due to the loss of the FTE and the increased
workload, the issuance date for the Single Audit (a federal and state audit requirement) has
slipped by 77 days for the FY 2002 report and 42 days for the FY 2003 report. Mr. Guindon said
while the DLA has requested and received approval for extensions to file the report, it is
important that it be issued on time. In addition, the loss of the FTE has affected the DLA's
ability to perform audit work in small agencies.
Representative Tidemann asked why DLA didn't use the state motor pool for travel. Mr.
Guindon answered that the department does; however, a number of the staff are located around
the state and in places where there are no state vehicles available.
Representative Klaudt commended the Auditor General and the Department of Legislative Audit
for the enhanced, quality service the agency provided the Legislature in the past few years.
Legislative Research Council (LRC)
James Fry, Director of the LRC, and Carol Huber, Finance Officer, presented the agency budget.
In response to earlier questions from the Joint Committee , Documents 4 and 5 were distributed.
The recommended agency budget request is $4,504,875 and 36.2 FTE which includes $4,469,875
from the State General Fund and $35,000 other funds. This is a decrease of $86,463 (1.9%) from
FY 05. The decrease in personal services and operating expenses is primarily due to the length
of the legislative session.
Mr. Fry told the Committee the Executive Board has considered adding an FTE to the LRC
Fiscal Staff. This person would be involved in economic forecasting and other duties as assigned.
Representative Peters asked if this person would be available to work on Medicaid issues, and
Mr. Fry said yes. Senator Greenfield asked if LRC had a plan or specific duties for this new
FTE. Mr. Fry said no, other duties would be assigned depending upon anticipated need.
Representative Glenski asked how this salary compared to the costs for work done in the past.
Mr. Fry said past costs were higher than hiring an FTE. Past estimates for this work have ranged
from $45,000 to $65,000.
Senator Earley asked about the difference between the actual FTE and the budgeted FTE. Mr.
Fry explained the 10 extra FTE were for employees hired to work during legislative session. Mr.
Fry said there is no money attached to these FTE.
Senator Smidt commented as former chair of the Executive Board. The Board has looked at the
appropriations process. The Board is requesting and getting more information now than in the
past and with the various changes being made in state government, grants and federal money
coming to South Dakota, the appropriations process has to continue to be looked at. Senator
Smidt asked if there was any flexibility in the Legislature's budget for participation in the
International Legislative Forum. Mr. Fry said yes; other legislative costs are considered when the
Interim Budget is put together.
Mr. Fry briefed the Committee on the problems being experienced with the voting machine in
House. LRC spent funds this past summer to reprogram the software to operate with the new
operating system. Daktronics did the work, but then it sold that portion of their company to
International Roll Call. Unfortunately, WindowsXP is not compatible with the new software,
and the system is back to operating with the old software. LRC would like to buy the
International Roll Call System at an estimated cost of $50,000. Mr. Fry told the Committee that
LRC will go back to Daktronics to let them know the work done has not solved the problem and
will attempt to retrieve some of the money paid out.
Mr. Fry briefed the Committee on the possible acquisition of additional committee room space
on the 4th floor of the Capitol. No formal request for funding is made in the 2006 budget as it
appears the space will not be available until FY 2007 at the earliest. Mr. Fry said $15,000 from
current available funds may be used for design work on the proposed space.
MOTION:
ADJOURN
Moved by: Tidemann
Second by: Earley
Action: Prevailed by voice vote.
Barb Bjorneberg and Wendy Weinert