STATE BOARD OF EXAMINERS
MINUTES – Sub-committee Meeting
June 10, 2014 – 1:30 p.m.
Joe R. Williams Building, 5th Floor Conference Room A
The regular meeting of the Subcommittee to the State Board of Examiners was called to order at 700 West State Street, Boise, Idaho, at 1:30 p.m. pursuant to Idaho Code §67-2002 and by order of the chair.
The following members were present: Brian Kane, Office of the Attorney General; Shelby Kerns, Division of Financial Management; Tim Hurst, Office of the Secretary of State; and Brian Benjamin, Office of the State Controller, as assisting secretary to the subcommittee.
Also present by invitation were: Jeff Rylee, Bureau of Homeland Security; Josh Tewalt, Department of Correction; Laura Steffler, Office of the State Treasurer; Mark Brisson, Office of the State Treasurer; Charina Newell, Office of the Attorney General; David Simnitt, Department of Health and Welfare; Lisa Hettinger, Department of Health and Welfare; Dave Taylor; Department of Health and Welfare; Renee Holt, Office of the State Controller; Scott Phillips, Office of the State Controller; Dan Goicoechea, Office of the State Controller; and Deborah Wonch, Office of the State Controller. CONSENT AGENDA
Approval of official minutes for the meeting of the Sub-committee to the Board of Examiners on May 13, 2014.
Resolution: Mr. Hurst moved to approve item 1. Ms. Kerns seconded the motion. The motion carried on a unanimous voice vote.
2. Bureau of Homeland Security
Date to Board
Response to a diesel spill.
Resolution: Mr.Hurst moved to approve item 2 and place it on the consent agenda. Ms. Kerns seconded the motion. The motion carried on a unanimous voice vote.
3. Office of the State Treasurer
Request approval pursuant to Idaho Code 67-1210 and 67-3524 for the annual investment fee to be charged to state agencies for fiscal year 2015. The investment administrative fee would increase from .018% to .037%.
Discussion: Mr. Kane asked why the percentages were doubling.
Ms. Steffler answered that they try to charge a fee that will collect enough money to pay the direct expenses of the pool. Starting FY2015 we had an increase in our appropriation of $200,000, which was a little more than 1/3 of our existing appropriation. We’re bringing the management of the Diversified Bond Fund in-house. We were indirectly paying over $1 million per year for the management of that fund. The net impact will now be an increase in earnings to the agencies, even though we are taking out a larger administrative fee than previously.
Mr. Hurst asked how much the earnings will go up.
Ms. Steffler responded $800,000 in earnings above the prior year. The overall fee would be just under four basis points. Normal investment administrative fees for someone to manage money would likely charge between 20-50 basis points. The four basis point fee is very competitive; this is a substantial savings to the agencies.
Mr. Kane asked why the expenses for operating the Idaho pool have gone up significantly when the actual pool has remained fairly static.
Ms. Steffler said for this particular instance of bringing the Diversified Bond Fund in-house, we have to have the tools to invest in the mid-term fixed income market, which we did not have already, which is a subscription similar to Bloomberg. The subscription runs about $8,000 per month, plus we have hired an external management company to review what our investment officers are doing to make sure we have that third perspective on things.
Mr. Kane asked about the chart containing the history of expenses for operating the Idaho pool, which is marching upward. But the actual pool has remained relatively static.
Ms. Steffler explained that over the past decade, part of it is IT related, pricing subscriptions, and increase in staff.
Resolution: Ms. Kerns moved to approve item 3 and place it on the consent agenda. Mr. Hurst seconded the motion. The motion carried on a unanimous voice vote.
4. Department of Correction
Request approval to use the ONL pay code for critical security staffing needs in the South Boise Prison Complex from June 22, 2014 to November 9, 2014.
Discussion: Mr. Kane asked for a ballpark number in dollars.
Mr. Tewalt expressed that there will not be any additional funds, but to use existing salary savings to pay the overtime. Our hope is that we do not need to use ONL, and that the staffing levels are appropriate. But should we reach a point when we assume operations on July 1, and we do not have a sufficient number of staff in place, we can use ONL to pay staff from existing facilities to work on their scheduled days off and be able to pay them their overtime.
Mr. Benjamin noted that ONL is an overtime code specifically for law enforcement on a 28 day cycle.
Resolution: Mr. Hurst moved to approve item 4 and place it on the consent agenda. Ms. Kerns seconded the motion. The motion carried on a unanimous voice vote.
5. Charney and Associates, PLLC
Request reimbursement for Medicaid provider underpayment to Inclusion, Inc., Inclusion North, Inc., and Inclusion South, Inc.
Discussion: Mr. Benjamin explained that this is a claim seeking additional compensation for providing home and community based care services for Medicaid recipients from2007 to April 2012.
Mr. Goicoechea noted that for the record, the Office of the State Controller did send notice to the party that asked this to be brought before the Board of Examiners. They were duly notified, but not present.
Ms. Newell pointed out that both cases are not yet final. Both cases did look at the issue of payments for all providers of this service from 2007-2012. In the federal case, the 11th amendment to the Constitution does not allow retroactive damages against a state agency. And in the state court, they found specifically that this provider was not entitled to the higher rate for this time period. This particular provider was paid from 2007-2012 for all of the services that they did provide. When a Medicaid provider provides services, they agree and understand they are being paid at the rate Medicaid sets. Inclusion has been paid according to state law. It is also noted that Inclusion is only one provider of supported living services in the state; there are numerous other providers. Medicaid is not allowed to pay one provider more for the same service other providers have been paid.
Mr. Goicoechea added on behalf of Controller Woolf who is charged with paying all the bills for the state of Idaho, absent of an appropriation from the legislature or from the Board of Examiners, it would be unlawful for him to pay this claim.
Mr. Hurst commented that the judge said that if this were approved and paid, it would impact other services provided by the department. He asked what impact it would be if we took $8 million out of Health and Welfare’s current appropriation.
Ms. Hettinger answered that it would reduce DHW’s ability to pay providers for which there are appropriations.
Mr. Kane said there is no court order for the state to pay anything at this time.
Mr. Benjamin said there is no appropriation for this claim, neither in this fiscal year nor in FY2015. The only act the Board of Examiners could do would be to make a recommendation to the legislature for a future legislative session to make an appropriation for this kind of claim.
Resolution: Mr. Hurst moved to place item 5 on the regular agenda with a recommendation to refuse to recommend submitting this claim to the legislature for consideration of an appropriation. Ms. Kerns seconded the motion. The motion carried on a unanimous voice vote.
6. State Insurance Fund
a. Estimate of the State Insurance Fund expenses to be paid by sight drafts for the month of
b. Estimate of the Petroleum Clean Water Trust Fund expenses to be paid by sight drafts for the month of April, 2014.
Estimated expenditure for workers compensation claim costs, dividends and premium refunds
Funds Expended in April, 2014:
Workers Compensation Claim Costs
Estimated expenditure for Petroleum Clean Water Trust Fund
Funds Expended in April, 2014:
Mr. Hurst moved to adjourn the meeting at 2:01 p.m. Ms. Kerns seconded the motion.