C.L. "Butch"
Otter
Governor
Lawerence
Denney
Secretary of
State
Lawrence
Wasden
Attorney
General
Brandon D
D Woolf
State
Controller,
Secretary
SCO > Board of Examiners > Board of Examiners Minutes
STATE BOARD OF EXAMINERS
MINUTES– Regular Meeting
December 16, 2008 – 9:55 a.m.
Borah Post Office Building, 204 N. 8th Street, 2nd Floor Courtroom

The regular meeting of the State Board of Examiners was called to order at 204 N. 8th Street, Boise, Idaho, at 8:55 a.m. pursuant to Idaho Code §67-2002 and by the order of the chair.

The following board members were present: Governor C.L. “Butch” Otter; Secretary of State, Ben Ysursa, and Attorney General, Lawrence Wasden. Controller, Donna M. Jones, Secretary to the Board of Examiners recorded the proceedings of the meeting.


Ms. Jones introduced the consent agenda items.
Mr. Wasden moved to remove item 3.a. from the agenda and transfer it to the January agenda in order to research the matter further. The motion passed on unanimous consent.

CONSENT AGENDA

1. Minutes – Approved
Approval of official minutes for the meeting of the Board of Examiners on November 18, 2008.


2. Department of Administration – Approved
Request for recognition of assignment pursuant to Idaho Code §67-1027 from Langly Kimco Nampa, LLC to TMV Centercal, LLC.


3. a. Bureau of Homeland Security, Division of Military – Removed from the agenda and deferred until January
ID #
Description
Amount
Comments
Date to Board
2008-00289
Drug Lab
$1,424.26
Meth lab in private house
12/1/2008
2008-00307
Drug Lab
$1,306.71
Meth lab in motel room
12/1/2008
TOTAL
$2,730.97

4. Division of Financial Management – Approved
Request to consider a reduction to the State Travel Policy current mileage reimbursement rate from 58.5 cents to 45.5 cents effective January 1, 2009.

Discussion: Mr. Ysursa asked whether the IRS has changed their rates yet.

Mr. Hammon answered that the IRS has not published a new rate yet. He explained that there is procedure in the federal tax code to address if an employee is reimbursed at a different rate than what the IRS allows. If the employee is reimbursed at a rate higher than the IRS rate, then the employee is taxed on the difference. If the employee is reimbursed at a lower rate, then they can claim the difference as an unreimbursed business expense and receive a tax benefit. Typically when DFM has brought this request to the Board, it has been because there has been a federal change. However, with the price of gas changing, the higher rate is putting a burden on several state agencies, and so DFM is acting before the IRS has published their new rate.

Resolution: Mr. Wasden moved to approve the consent agenda. Mr. Ysursa seconded the motion and the motion carried on a unanimous voice vote.


REGULAR AGENDA

3. b. Bureau of Homeland Security, Division of Military
Quarterly update regarding overtime costs and progress on collection presented by Colonel Shawver.

Discussion: Colonel Shawver introduced himself and thanked the Board for the opportunity to give an update on the cost recovery efforts as they apply to the Hazardous Substance Emergency Response Act. Since last January the Bureau of Homeland Security has made substantial procedural improvements in the internal processes in addition to aggressively pursuing responsible individuals to ensure all previous qualifying costs within the statute of limitations are recovered in accordance with title 39 chapter 71 of the Idaho Code. Using this statute for the period of time between June 2006 and December 2007, the Bureau, with the assistance of the Attorney General’s Office, has collected $85,278.25 from responsible spillers and those responsible for clandestine drug labs. An additional $47,149.04 is in various stages of collection from responsible parties. The unrecoverable costs for the 18 month period ending in December of 2007 total $58,730.89. Unrecoverable costs are defined as those costs in which a party cannot be identified or is exempt from liability by statute. With the support of the Attorney General’s Office and county prosecuting attorneys, the Bureau is now vigorously pursuing individuals responsible for drug labs subject to the Hazardous Substance Emergency Response Act. State cost recovery is now a routine condition for probation and parole for responsible individuals. Several inmates are currently making monthly payments to the state to satisfy cost recovery responsibilities. Since January 2008, the aggressive pursuit of recovery costs enhanced by the support of the Office of the Attorney General have resulted in $108,254.87 in billed recovery costs with only $14,811.20 identified as unrecoverable. As a tool of last resort, the Bureau has entered into a contractual agreement with Action Collection Service, Inc. to pursue collection efforts when warranted. Prior to the February 1st deadline, Colonel Shawver will present the Bureau of Homeland Security’s annual report to the Governor and Legislature concerning emergency response to hazardous substance incidents.


5. Office of the Attorney General - Approved
Request for approval of the payment of costs in the Kathleen Elliott matter.

Discussion: Steve Olsen from the Attorney General’s Office commented that they are requesting approval of costs totaling $950.00 which was incurred in a case involving a criminal contempt entered against an attorney. The case is one which was brought after a district court judge entered a criminal contempt citation against an attorney appearing before the judge. The attorney appealed that decision and the Supreme Court awarded costs against the respondent. The respondent in this case was the State of Idaho. The underlying action was a criminal action. The attorney was cited for criminal contempt by the judge and that ultimately was reversed. Under Idaho Code, the attorney was entitled to an award of attorney’s fees and costs for having to appeal this decision. The Supreme Court ultimately decided to enter an order requiring the State of Idaho to pay $950. The question posed is what budget this payment should come out of. Under Idaho Code 12-118, it states that, “When the State of Idaho is a party and costs are awarded against it, they must be paid out of the state treasury, and the State Controller shall draw his warrant therefore on the general fund.” It is a legitimate charge to the state.

Mr. Hammon explained that there are several options available to the Board. The simplest way would be to use money appropriate to the judicial branch since it was a matter that came from them. The Board of Examiners does not have a budget; the Board has expended funds in the past, but what has taken place is that if the Board decides the costs should be paid for out of money not assigned to the judicial branch, the Board could assign it as the Board of Examiners, and DFM would pursue an appropriation for that matter. It would be money above and beyond. In past years the Board of Examiners received an appropriation for the transportation of prisoners. Last legislative session the Board of Examiners pursued legislation that changed it, and now that money is put into the Department of Correction’s budget in advance so that when the bills are approved, it comes out of an appropriated account and a supplemental does not have to be asked for. But if it is not voted to assign this payment to the judicial branch budget, DFM would seek a supplemental appropriation to pay for it.

Mr. Olsen commented that he had spoken with Michael Henderson, the attorney for the supreme court, and Mr. Henderson said there was not a specific item in their budget that would be designated to handle this kind of expense.

Mr. Wasden asked that in instances in which the state has been a party, what has been the source of those funds for payment? If it is a state agency who has been ordered to pay attorneys fees or costs, that state agency from their budget is required to pay those costs.

Mr. Hammon answered that it was correct. According to history, the state agency involved in the case has been required to pay the costs incurred. Oftentimes the state agency will seek a specific appropriation for the amount—either as a supplemental appropriation or in their next year’s fiscal budget.

Mr. Wasden asked Mr. Olsen how it came to be that the Attorney General’s Office was representing the court.

Mr. Olsen said that the Office of the Attorney General has a statutory obligation to represent the Supreme Court and its officers in instances like this. When the criminal contempt charge was appealed, the office was asked to represent the district court judge.

Gov. Otter asked if the $950 was the total cost.

Mr. Wasden explained that the $950 is the costs of litigation. Attorney’s fees would not be associated with this case; these are the legal costs that are associated with litigation.

Mr. Olsen noted that for example, it would be like the costs of the transcript on appeal. None of these costs are for the attorney’s fees.

Mr. Michael Henderson from the Idaho Supreme Court clarified that the underlying case is called State vs. Rice. Mr. Rice was charged with a criminal offence and Kathleen Elliott was defense council. It is important to note that the only parties of the case are the State, Mr. Rice, and Ms. Elliott. So if costs were awarded, they had to be awarded against one other party. It was not Ms. Elliot, to whom costs were awarded. It was not Mr. Rice, her client. It would have to be the State of Idaho itself. Mr. Henderson said that It is important to know that the judge, the district court, and the Supreme Court were not parties in this case. There are two statutes that come into play, one of which is Idaho Code 12-117, the statute which gives authority to take the costs out of the budget of the agency. Assuming the statute is the authority for taking costs out of the budget of an agency, the statute specifically excludes the legislative and judicial branches from that provision. The other statute that comes into play is Idaho Code 12-118 which was referenced by Mr. Olsen, and there are two different approaches depending on what sort of costs or attorney’s fees are awarded and against whom they are awarded. This statutory arrangement seems to specifically exclude the legislative and judicial branches from the provision regarding taking those costs out of the budget of that agency. The Supreme Court and the judicial branch is not an agency for the purposes of the statute. In this case, the only party costs could have been awarded to is the state. Mr. Henderson explained that this was not a case where the state was representing the judge, but this was a criminal case. There was the underlying criminal case against Mr. Rice, and within that there was the criminal contempt proceeding against Ms. Elliott. The state was not representing the judge in this case, but rather, was representing the state. Mr. Henderson said that there does not appear to be any statutory authority to take the money out of the budget of the judicial branch. There should be a warrant drawn directly on the general fund.

Mr. Wasden thanked Mr. Henderson for coming and said that there is no designation of whether the costs or attorneys fees would be under Idaho Code 12-117 or 12-118.

Mr. Henderson said that when a court issues an award of costs, sometimes they will not reference a particular statute. In this case, the court awarded costs to Ms. Elliott, and did not say against whom. But the only party it could be against is the state of Idaho itself as an entity.

Mr. Wasden asked if Mr. Henderson agreed that the Supreme Court is a part of the State of Idaho.

Mr. Henderson answered that yes, it is.

Gov. Otter asked if Mr. Henderson agreed that the Judicial Branch is a separate but equal authority of the state government.

Mr. Henderson answered that is absolutely is.

Gov. Otter asked why the Judicial Branch is not equally responsible, and how do we hold them responsible.

Mr. Henderson said that as far as holding anyone responsible, it is the same situation in any case where the state is a party without an agency being involved; there is really no one there to hold responsible. It comes down to what the legislature has said as to the circumstances to which the money is taken out of the budget of an agency. And they have excluded the judicial branch. Ultimately the party on the other side is the state of Idaho. There are cases in which the court could be a party, but this is not one of them.

Resolution: Mr. Wasden moved approval of payment of costs in the Kathleen Elliott matter. Mr. Ysursa seconded the motion. The motion carried on a unanimous voice vote.

Additional discussion: Mr. Ysursa said that a supplemental appropriation of some sort would be in order, and should be a generic appropriation of a certain limit to handle the matter.

Mr. Wasden commented that the underlying responsibility for the actions came from the judicial branch of government and they should be responsible for payment of the costs. The budget concerns are the same concerns that every agency of state government has. It would be appropriate for the judicial branch of government to shoulder these costs.

Amended Resolution: Mr. Wasden amended his motion and moved approval of payment of costs in the Kathleen Elliott matter to be paid by the judicial branch. Mr. Ysursa seconded the motion. The motion carried on a unanimous voice vote.

6. Department of Health and Welfare - Approved

Request for approval of two performance bonuses in FY2008 for Cindy Schreiner with the Council for the Deaf and Hard of Hearing.

Discussion: Mr. Humiston of the Department of Health and Welfare said that the Council for the Deaf and Hard of Hearing is an independent council that the Department provides administrative support for. Early in 2007 the executive director of the Council resigned and the Council went through an effort to find a replacement. In December of 2007 the Council requested a $2,000 bonus for Ms. Schreiner for her effort in supporting the Council while they were looking for a new executive director. Subsequent to that in June of 2007 the new director of the Council, Mr. Snow, requested an additional bonus for Ms. Schreiner in the amount of $1,600 in recognition of her support in the transition effort. It was an administrative oversight. It was recognized in October of this year that Ms. Schreiner had received two bonuses. The Council is still very supportive of the bonuses for Ms. Schreiner and they were paid out of last year’s budget.

Gov. Otter commented that the question was not whether the bonuses were deserved, but that there were two bonuses given in one fiscal year, which is a violation in practice. He asked whether the two bonuses were given for the same period of time for the same work done.

Mr. Humiston answered that the $2,000 bonus was given by the Council for Ms. Schreiner’s work up until the hiring of Mr. Snow, which was in January 2008. The subsequent bonus in June of 2007 was in recognition of her support of Director Snow after his coming on board in January. There were two different recognitions for two different periods of time. There was an administrative oversight and the Department has implemented some safeguards to make sure this situation does not happen again.

Resolution: Mr. Wasden moved to approve item 6. Mr. Ysursa seconded the motion. The motion carried on a unanimous voice vote.

7. Division of Vocational Rehabilitation – Withdrawn from agenda
Request an exemption of $62,546 of state funds resulting in a holdback of 1.49 percent for IDVR.


INFORMATIONAL AGENDA

8. Office of the Attorney General
a. Notification that Howard R. Foley with the firm of Foley Freeman, PLLC, has been appointed pursuant to Idaho Code §67-1409 as a special deputy attorney general for the purpose of representing the State of Idaho, Department of Finance in matters involving securities sales and the Chapter 11 bankruptcy filed by DBSI Group of Companies, and to represent the state in any litigation commenced in connection with these matters.

b. Notification that Larry C. Hunter of the firm of Moffatt, Thomas, Barrett, Rock & Fields has been appointed pursuant to Idaho Code §67-1409 as a special deputy attorney general for the purpose of representing the State of Idaho, State Board of Accountancy, in the case of Duncan v. State Board of Accountancy.

c. Notification that Richard A. Hearn of the firm of Racine, Olson, Nye, Budge & Bailey, Chtd., has been appointed pursuant to Idaho Code §67-1409 as a special deputy attorney general for the purpose of representing the State of Idaho in the case of Blanc v. Pocatello Women’s Correctional Center.

d. Notification that Lawrence E. Kirkendall, Attorney at Law, has been appointed pursuant to Idaho Code §67-1409 as a special deputy attorney general for the purpose of representing the State of Idaho in the matter of Mary Simpson.

e. Notification that Craig Trueblood of the firm of K&L Gates, LLP, in Seattle, Washington, has been appointed pursuant to Idaho Code §67-1409 as a special deputy attorney general for the purpose of representing the State of Idaho in the matter of “Airport 7” Property/Idaho Department of Lands.

f. Notification that Mary V. York and Murray Feldman of the firm of Holland & Hart, LLP, have been appointed pursuant to Idaho Code §67-1409 as special deputy attorneys general for the purpose of representing the State of Idaho in the matter of Ralph Sletager, Waterfront Property Management, LLC and R&S Properties Limited Partnership/Idaho Transportation Department/Sandpoint North and South Project.

9. State Insurance Fund

a. Estimate of the State Insurance Fund expenses to be paid by sight drafts for the month of October, 2008.

      Estimated expenditure for workers compensation claim costs, dividends and premium refunds
$18,000,000.00
    Funds Expended in October, 2008
    Workers Compensation Claim Costs
$10,214,326.88
    Dividend
0
    Commissions
0
    Policy Refunds
405,223.75
    Total
$10,619,550.63

Estimate of the Petroleum Clean Water Trust Fund expenses to be paid by sight draft for the month of October, 2008.
      Estimated expenditure for Petroleum Clean Water Trust Fund
$750,000.00
    Funds Expended in October, 2008:
    Payroll
75,960.30
    Operations
8,897.20
    Claim Costs
25,717.82
    Total
$110,575.32

There being no further business before the board and on motion duly made and seconded, THE MEETING OF THE STATE BOARD OF EXAMINERS WAS ADJOURNED at 9:40 a.m.

__________/s/ C.L. “Butch” Otter________
C.L. “Butch” Otter, Chairman of the Board and
Governor of the State of Idaho


__________/s/ Donna M. Jones ____________
Donna M. Jones, Secretary of the Board and
Idaho State Controller

A meeting agenda will be available at the Idaho State Controller’s Office, 700 West State Street, Boise, Idaho, two (2) working days before the meeting.

If you have questions or would like to arrange auxiliary aides or services for persons with disabilities, please contact the Idaho State Controller’s Office at (208) 334-3100. Accommodations for auxiliary aides or services must be made no less than five (5) working days in advance of the meeting.

The CONSENT AGENDA addresses routine items the board may approve without discussion.

The REGULAR AGENDA addresses policy and program items the board may wish to discuss prior to making a decision.

The INFORMATION AGENDA provides information only.

The agendas are subject to change and the Board may move an item from one agenda to another.





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