Local News Politics

Audit Recommends Retirement Agency Make Changes

State Auditor Crit Luallen found no evidence of wrongdoing in an audit of the Kentucky Retirement Systems, but the report raises several areas of concern.

The audit primarily focused on the use of placement agents, who act as middlemen to secure investments from entities like the KRS.  Placement agents have been at the center of “pay-to-play” scandals in other states, but Luallen says that does not appear to be the case in the commonwealth.

However, Luallen says placement agent Glen Sergeon of New York had “an unusually close working relationship” with former KRS chief investment officer Adam Tosh, who no longer works for KRS.

“That placement agent received a high percentage of the investment contracts – more than all of the other placement agents combined,” she says.

Findings from the audit have been referred to the Securities and Exchange Commission, which is conducting an informal inquiry into the use of placement agents at KRS.  The audit makes 92 recommendations, which the KRS board has already started implementing.

Responding to the report, Governor Steve Beshear sent the following statement praising the auditor’s work and looking forward to the necessary changes for additional transparency.

From the governor’s office:

Last August, I asked the Auditor of Public Accounts to conduct this audit because of my concerns regarding the management and accountability of the retirement system.  I am pleased that she found that the substantial investments that support city, county, and state employees as well as thousands of retirees are secure.

However, as I suspected, there are improvements which can and should be made to this system.  The auditor’s recommendations to improve transparency and accountability are well-reasoned and should be implemented quickly to assure the hundreds of thousands of Kentuckians who depend on this system that their retirement funds are handled in a wise and ethical manner.

I am encouraged that the new board chair has already agreed with the audit’s findings and has begun implementing many of the audit’s recommendations.

My ultimate objective for the system continues to be the protection and satisfactory growth of the funds for the benefit of hundreds of thousands of current and retired public employees.

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Sandhill Crane Hunting Season Continues Forward Movement

The legal hunting of sandhill cranes in Kentucky has moved another step closer to becoming a reality, but final approval is still pending. 

Earlier this month, the Kentucky Fish and Wildlife Commission unanimously approved a sandhill crane hunting season in Kentucky.  The season, with a mid-December start, would last for 30 days, or until 400 of the huge, migratory birds have been killed, whichever comes first.

The plan also needs federal approval, and has cleared its first hurdle.

“The U.S. Fish and Wildlife’s Service Regulations Committee approved the Kentucky hunt proposal, which is considered a three-year, experimental hunting season,” Brian Blank of the Kentucky Department of Fish and Wildlife Resources told Kentucky Public Radio.

Blank says the hunt is still months away from final approval on both the state and federal levels.

“The next step is that the U.S. Fish and Wildlife Service will publish the regulation in a federal register, for approximately a two-week period, for public comment,” said Blank.  “The public comment period is from July 1st to August 1st.  There would be public hearings, if requested.  They would probably occur between July 21st and July 29th.”

The proposed hunting season regulation also must be weighed by oversight committees of the Kentucky General Assembly.  A hearing on the state regulation  is scheduled for 9:00 a.m., EDT, July 21 at the KDFWR office in Frankfort.

The hunt has strong opposition from numerous environmental groups, including the Sierra Club, the Audubon Society, the Kentucky Resources Council and the Kentucky Coalition for Sandhill Cranes.

Sandhill cranes have been legally hunted for years west of the Mississippi River, but this would be the first time in 100 years they could be hunted in the eastern United States.  Kentucky is the first eastern state to seek permission for such hunts. 

Sandhill cranes were nearly hunted into extinction in the early 1900’s, but rebounded through federal protections.

Local News Politics

University Officials Start Lobbying for Capital Projects Early

Kentucky public colleges and universities are already compiling their capital project wish lists to get ready for next year’s legislative session.

A $33 million Engineering-Physics building tops the projects list at Murray State University, but President Randy Dunn says the school also badly needs a new $62 million library. And with online technology rapidly replacing books, Dunn knows the facility must be different from traditional libraries.

“It’s not what we think of a library when we went to school,” said Dunn. “It’s much more areas where, yes, books are stored. But you also have meeting rooms–electronic libraries that exist.”

At Kentucky State University, officials are lobbying for funds to build a $2 million pedestrian bridge, among other projects.

U.S. 60 slices right through the middle of the campus in Frankfort.  There’s a tunnel under the road, but Jack McNear, of KSU facility operations, says students don’t like to use it.

“It’s dark.  It’s lit, but it’s a 1969-style tunnel,” said McNear (photo, right).  “And so, they cross the street. Though the speed limit is 45 on U.S. 60, it does tend to be a hazard for our students.”

 The pedestrian bridge is KSU’s third priority, behind a new nursing building and a central boiler plant.  Lawmakers approved the nursing building in 2006, but then-Gov. Ernie Fletcher vetoed it.

The 2012 legislative session is still seven months away, but university officials are already letting lawmakers see their capital project needs.  In these tight budget times, public colleges may be lucky to get even one project funded through the general fund.  Bonded projects sometimes fare better, but even those need legislative approval.

Local News Politics

Beshear Again Selling Surplus Property

Kentucky Gov. Steve Beshear is selling surplus state property again. This time it’s a vacant lot in Frankfort.

Since taking office in 2007, Gov. Beshear says his administration has generated nearly $7.5 million through surplus real estate sales.  Included in that figure is nearly $79,000 Beshear says the state got for a vacant, two-acre industrial lot in Frankfort.

“We’re not using it, and we don’t need it,” said Beshear.  “So we sold it recently to someone who did need it – the Franklin County Fiscal Court.  And we sold it at its appraised value of $78,750.”

Franklin County Judge Ted Collins says the land will be used as a staging area for the county’s new courthouse project.  

We’re building a judicial center around our 1835 courthouse on Saint Clair,” said Collins. “It was a very very, tight site to do a building, so we’re hoping to be able to stage here on this property.  Our fiscal court, the full court, voted unanimously to buy this property.”

Gov. Beshear used the sale as an example of the millions of dollars the administration has saved taxpayers by renegotiating leases and contracts, and unloading surplus real estate, airplanes and state vehicles.

“Among the properties that we’ve sold are two former armories, in Frankfort and Owensboro; a parking garage in Covington; the manager’s residence at a state park in Owensboro; and numerous pieces of right-of-way along Kentucky’s highways.” said Beshear.

Local News Politics

Kentucky Lawmakers Above Average in Education

The Chronicle of Higher Education has been evaluating the education levels of state lawmakers in the United States.

The state with the most college-educated lawmakers is California, with 90 percent. New Hampshire, with 53 percent, has the least. The national average is around 75 percent, slightly lower than Kentucky’s 77 percent.

Sixty-eight percent of Kentucky lawmakers with degrees went to in-state colleges, and most of the schools they attended were public.

The University of Kentucky, with 37, wins bragging rights for the most graduates in the legislature.

The next six, in order, are the University of Louisville, Western Kentucky University, Eastern Kentucky University, Northern Kentucky University, Morehead State University and Murray State University.

Twelve percent of Kentucky lawmakers have no college education, compared to 54 percent of the state’s population as a whole.

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Hospital Partnership Formally Announced

Three major hospitals are joining forces to provide a statewide healthcare delivery system for Kentuckians.

The partnership involves University of Louisville Hospital, Jewish Hospital in Louisville and Saint Joseph Health System in Lexington. They’re still working on a name for the joint effort, but James Taylor of U-of-L Hospital says the partnership means better healthcare for Kentuckians.

“By training more physicians, sharing our academic expertise and collaborating on best practices, this partnership is poised to make a difference in many lives,” Taylor said at a press conference today in Frankfort.

Taylor says the new system will have a medical staff of more than three thousand physicians. It will involve hospitals, medical clinics and home health agencies in 91 locations statewide. Regulatory approval of the partnership could take about a year.

Local News

Statewide End-of-Course Exams Begin Next Year

End-of-course assessments were authorized in education reforms approved by Kentucky lawmakers in 2009.

The statewide tests measure student achievement in graduation-required courses of English, Algebra, Biology and U.S. History.

Rhonda Sims of the Education Department says districts are also being encouraged to base up to 20 percent of a student’s final course grade on assessment test results.

“It does allow the course work and the assessment to blend together, so the students have some ownership into this.”

State Education Commissioner Terry Holliday says districts are being encouraged to base up to 20 percent of a student’s final course grade on assessment test results.

“We wanted a requirement, but our legal staff felt like we didn’t have the authority. There’s some site-based council issues here. So, we strongly worded 20 percent because teachers all over the commonwealth told me kids need to have some accountability for this.”

Local News Politics

In-Depth: Despite Investigations and Complaints, For-Profit Colleges Have Supporters in Frankfort

Complaints about for-profit colleges in Kentucky continue to raise eyebrows in Frankfort. But the schools also have many legislative defenders.

Currently there are 141 for-profit colleges in Kentucky, which are seeing significant growth. National enrollment in proprietary colleges is nearing two million students, compared to a half-million in 1998. The schools cater mostly to students seeking employment skills. But complaints about for-profits are on the rise, especially concerning high student loan default rates, credits that don’t transfer and unrealistic employment promises.

Local News Politics

In Light of Higher Reciepts, Beshear Says No Furloughs for Next Fiscal Year

It’s been another stellar month for state revenue receipts in Kentucky. And that means no furlough days for state workers next fiscal year.

General Fund receipts in May were $750 million, a whopping 18 percent increase over May 2010 receipts. Tax collections in the first 11 months of the current fiscal year have grown 6.7 percent.

The enacted budget required a growth rate of only 4.5 percent, so revenue receipts this month could decline 17 percent and the state would still meet its budget. Road Fund receipts are up more than 10 percent.

In response to the good economic news, Gov. Steve Beshear released a statement indicating he sees no need for state workers to be furloughed in the second year of the biennium. They’ve already taken six furlough days this fiscal year.

The governor’s announcement drew immediate praise from House Speaker Greg Stumbo.

Local News

Lawmakers Debate Medicaid Management in Kentucky

Statewide Medicaid managed care is coming to Kentucky, but maybe not as fast as some lawmakers thought.

Governor Steve Beshear says the state can save millions of dollars by letting private health care organizations—rather than the Cabinet for Health and Family Services—manage services for the state’s 820,000 Medicaid recipients. The state has sent out a request for proposals from companies interested in bidding on the contract, and acting Medicaid Commissioner Neville Wise says proposals are under evaluation.

Some lawmakers aren’t convinced the Cabinet for Health and Family Services is up to the challenge of awarding the contract. Senator Jimmy Higdon of Lebanon points to a report by the staff of a legislative oversight committee he chairs and says many lawmakers have “expressed concerns that the cabinet is unprepared to take on the task of converting from fee-for-service to managed care. Whether it be inadequate administrative and financial oversight or basic lack of understanding of the program itself, many questions remain in our minds.”

Other lawmakers were under the impression statewide Medicaid managed care would begin on July 1st, the start of the state’s new fiscal year, but Wise could not make that guarantee. He says July 1st is the target date for contract signatures, with the state aiming to begin managed care “as soon as we can.”

Governor Beshear predicts that managed care for Medicaid recipients will save the state millions of dollars. The current state budget, which Beshear approved after vetoing language he didn’t like, depends on the projected savings.