ALC Peer: Jan. 13, 206

Representative Jon Eubanks All right, members, if you’ll take your seats, we’ll go ahead and get this meeting started. I call the Peer Subcommittee of Council to order. Chair sees a quorum. Let’s begin with Item B.

Temporary appropriation requests overview

Staff Thank you Mr. Chair. We’re in Section B. These are various temporary appropriation requests. The first item is a letter from the Department of Education, Division of Elementary and Secondary Education. This is for $32 million in appropriation. It’s to cover the total expected need of eligible students for the 25-26 school year in the Educational Freedom Account Program. This is to be supported by a restricted reserve fund transfer that will be requested later in the agenda.

 For the committee’s information, this is the second transfer for the program. A $90 million transfer was approved at the beginning of the year from a set-aside account that was created for this purpose. Today’s transfer would come from the various general discretionary accounts. 

Next item, B2, is a letter from the Department of Public Safety State Crime Lab. This is for $476,000 in appropriation. This is to purchase health and laboratory supplies. It’s supported by fines paid to the DNA Detection Fund. 

Last item is B3. This is from DFA Assessment Coordination. This is for $90,000 in spending authority. This is to cover cost increases in contracts. It’s supported by ad valorem taxes. Mr. Chair, those are the three various temporary appropriation requests on the agenda. 

Representative Jon Eubanks All right, members. As has been the routine here in the past, I’ll just go to each one of those items. If you have a question, hit your light at that time. Are there any questions on B1? B2? Representative Garner. Representative Garner, do you have a question? B3? Representative Cavenaugh, you’re recognized for a question. 

Representative Frances Cavenaugh Thank you. If I could have the agency come down, please. 

Representative Jon Eubanks Someone from DFA come to the table, please. If you would please identify yourself for the record. 

Sandra Cawyer Mr. Chair, members of the committee, I’m Sandra Cawyer. I am the Director for Assessment Coordination Division. 

Representative Jon Eubanks Rep. Cavenaugh, you’re recognized for your question. 

Representative Frances Cavenaugh Thank you, Mr. Chair. The request for this transfer states that it’s because of the higher contract cost. And so my question is, it’s a contract and you have a set price. How did we go over that contract price? 

Sandra Cawyer  It is a scaling contract. And we purchase data for all the counties to use to value vehicles and also to use on real property values. And it scales up. And we actually had to renew the one for Cotality this past two months ago, and it just came in a little bit more than what we were expecting. 

Representative Frances Cavenaugh Did that contract have to come through Review? 

Sandra Cawyer I do not believe so. I believe it’s considered a commodity. 

Representative Frances Cavenaugh And on these contracts like you’re paying to value vehicles, how much is that contract? 

Sandra Cawyer Representative Cavenaugh, I do not know the number, but I’ll be happy to get that for you this afternoon. 

Representative Frances Cavenaugh If you can get that for me, I’d appreciate it. 

Sandra Cawyer I certainly will. Absolutely.

Representative Jon Eubanks Seeing no other questions, without objections, these items will be approved. Item C. 

Staff Thank you, Mr. Chair, we’re in section C. These are American Rescue Plan Act requests. There’s one item on the agenda for Department of Health, epidemiology and laboratory capacity. It’s just for $1. This is to return unused funds to the CDC. 

Representative Jon Eubanks All right, members, any questions on C1? All right, seeing none, do I have a motion? Senator Irvin, you’re recognized for a question. 

Senator Missy Irvin I’m just curious on the $1 that we need to return, how much money is that going to cost us to return the $1? You don’t have to answer that. Never in my life had seen something come before us for $1. So appreciate that. Got it, thanks. 

Representative Jon Eubanks All right, seeing no other questions, do we have a motion to approve this item? Have a motion. A second? And a second. All those in favor, say aye. Opposed, say nay. Item is approved. 

Restricted Reserve Fund transfer overview

Staff Thank you, Mr. Chair. We’re in section D of the agenda. This is a restricted reserve fund transfer request. The first one is D1. It’s a letter from the Department of Education, Division of Elementary and Secondary Education. This is $32 million transfer. It’s from the various general discretionary and majority vote set aside. The appropriation was requested earlier in the agenda. This is for the Educational Freedom Account program. 

The next item is D2. This is a letter from the Department of Energy and Environment, Division of Environmental Quality. This is a $2.5 million transfer. It’s from the various general discretion majority vote set aside account. 

According to the letter, these funds will support used tire program reimbursements and other costs associated with the Used Tire Program. This is the same request as last month. However, the letter has been updated to stipulate that funding will not be used to reimburse or remediate any tires at the Jefferson County processing facility. 

Representative Jon Eubanks Alright members, any questions on D1? Representative Cavenaugh, you’re recognized for a question. Who do you need? 

Representative Frances Cavenaugh I need the agency please. 

Representative Jon Eubanks Can we have somebody from the Department of Ed come to the table. Please identify yourself for the record. Then, Representative Cavenaugh, you are recognized for your question. 

Courtney Salas Ford Courtney Salas Ford, Department of Education. 

Darrell Smith Darrell Smith, Department of Education. 

Greg Rogers Greg Rogers, Department of Education. 

Education Freedom Account: $32 million

Representative Frances Cavenaugh Thank y’all for being here. My question is, how many students are we currently funding through these accounts? 

Darrell Smith 44,137, I believe. 

Representative Frances Cavenaugh 124,000, did you say? 

Darrell Smith 44,000. 

Representative Frances Cavenaugh 44,000. I couldn’t hear you. 44, 000. I’m like, 124,000? Okay. When we were first talking, and I support the education funds. I mean, people need to go where they can best get their child educated. But in the same breath, I’m going to say we do have a budget. We do have limited funds. 

And when we first started talking about these education funds, personally, I was told that we were never going to hit 28,000. That just never was going to happen. It was never going to be, we were going to have to fund more than 28,000 students. And that’s kind of where we set our money, that we were looking at in the budget. I was told that repeatedly by the agency on numerous times. 

You’re now saying it’s at 44,000 and it will continue to grow. And my biggest concern is how we’re going to fund this going forward. I realize we’re currently funding it outside the RSA, but I realize that that can’t continue. It has to be part of the RSA going forward. We can try to take it out of restricted reserves, like I think in 24 after this request, we have taken out $122 million out of different reserves to go ahead and pay for these accounts. 

As someone looking at the budget and worrying about the budget and how we’re going to fund these things, and we all have different priorities that we want to fund, how are we going forward to be able to fund this amount of money through the RSA? What are we going to cut out of the RSA to be able to fund this? Or are we just going to fund these for one year and say, I’m sorry, I don’t have the money? 

Courtney Salas Ford Thank you, Representative Cavenaugh, for the question. I mean, I really feel like that’s probably a little bit outside the scope of our ability to speak on. I don’t know if you would like Secretary Hudson to come up. 

Representative Frances Cavenaugh Whoever can answer will be great. 

Senator Jonathan Dismang And just one thing, if I might add, because I don’t want to agree to any precedent that we’re going to punt the rights to draft RSA to the executive branch. So in a lot of ways, that’s going to be a question for ourselves on what we do and what we include in RSA. 

Speaking to the 90 million that was in restricted reserve, that was intentionally outside of RSA, but also well within anticipated revenues in that year. So we weren’t going to be needing to cut something else. That was intentional. The 32 million that we’re talking about today is on top of that as additional funding for the program, just based on participation. 

But as a body, and again, not to take away from anyone else’s authority, we draft RSA. And I do not want anyone to have a misconception that we would ever forego the ability to draft RSA. They’re going to propose to us a budget and we look at that budget and dispose of that budget. But ultimately what comes out will be something from the legislature. 

Representative Frances Cavenaugh Thank you, Senator. I understand we’re in charge of RSA, but we fund so much stuff out of RSA. And when we tell ourselves that we’ve got a balanced budget, we’re lying to ourselves and to our constituents. So if you could answer that, Secretary, if you can give me some light on how we’re going to move forward. 

Jim Hudson Yeah, I don’t agree with the statement that our budget is not balanced. Our budget is balanced. I don’t know how one can say that it’s not. It is balanced. So the governor will be submitting a proposed balanced budget according to the timeline that’s been set out. We’ll get that to you well ahead of the fiscal session. 

She will include the EFAs in her proposed balanced budget and will follow the same process we always saw in terms of going through the legislative process and deciding what ultimately will get funded for the state’s budget. This is a priority for the governor. And it will be reflected in that. We have one-time money for this fiscal year. We’re not proposing to use one- time money next year. It’ll be in the RSA. 

Representative Frances Cavenaugh That’s what I’m asking. So you’re looking at a way that you’re going to take these counts and move them from one-time budget out of reserves into the RSA. I mean, that’s what I’m asking. A lot of times we’ll take and set aside this money for special fundings or whatever, but this is not special funding. 

This, as you said, is a priority for the governor. And it really should be, in my opinion, part of the RSA because it’s going to be a continual spend that we have to look at funding in the state. 

Jim Hudson So 187 million currently is in the RSA. So most of it is already in the RSA. An additional 122 is coming in through the one-time funds for FY26. That additional one-time funds, 122, will be imported in the RSA for the next fiscal year. 

Representative Frances Cavenaugh So we’re looking at what about 300 million, somewhere around that? 

Jim Hudson 310, 310-ish. 

Representative Frances Cavenaugh In the beginning of all this,again, we kept being told that this was going to be controlled by the budget. And my frustration is it has not been controlled by the budget. We have still expanded and still expanded, and we’re asking it to come out of one-time funds. 

And although I support this 100%, I just want to make sure that we don’t get the state into an area where we– and quite frankly, we’re going to be there anyway, that we have to make some really tough choices. As you said, what are we going to prioritize to be able to fund? And we’re fast approaching that. 

And I just want to make sure that as we go forward, that we realize that those choices have to be made, that taking money out of one-time restricted funds to fund something that’s an ongoing expense is not the way for the state to stay in a balanced budget. And that’s my biggest concern with this. 

Jim Hudson I don’t disagree. I mean, that’s what a budget’s all about is having conversations about what priorities are and how you’re going to meet your priorities. And so again, I think as we get into the fiscal session, we’ll be very transparent about what the governor thinks her priorities are. I think she’s been talking about them. There will be nothing new there really. And we’ll talk about what will be in the budget from her perspective going into the next fiscal year. 

Representative Jeff Wardlaw Senator Hickey, you’re recognized. 

Senator Jimmy Hickey Thank you, Mr. Chair. Mine’s for the agency. Just a question here in the Arkansas Democrat Gazette, I believe they reported some questionable items, I believe that audit found. I’m not going to go into that. However, it made me start thinking and I’d just like to see how we’re handling this. So if a parent, student, if they request a computer, would that be like an approved use for these funds, I assume, for technology? 

Darrell Smith Yes, sir. Obviously, the law states what the qualifying items are. And then the rules kind of expand on that a little bit. So certainly computers and those type of supplemental items that would enhance a student’s education would be included as an eligible item.  

Senator Jimmy Hickey Okay. And this is my question because of what we’ve seen with some of those suspicious items. Whether or not they were mistakes or not, again, it led me to start thinking. Of course, if you’re a, I guess, a public school or even any type of state agency, you’re required to document, I believe, and to keep your serial number so that inventory can be done on those particular things. 

What safeguards– and it would seem hard to me– what safeguards do we have in place that if somebody goes, we approve them to do a $2,000 computer, they go to XYZ retailer and buy that, we approve it, they get the money. What keeps them from returning that and just putting that money in their pocket? 

Darrell Smith It’s an excellent question. And certainly we were put as many of the controls as we can on those type of items. Would we find out immediately when a student returns it? Probably not, right on the first end, immediately But we do have new reporting in place that has come through this body and some reporting through the Class Wallet platform that will allow us to start looking for those types of things where if a family chooses to buy another item or multiple items. 

So that’s what we’re doing, we’re looking for anomalous activity or things that are out of the ordinary so that if a student would buy another computer. So we see a system or a pattern of a family or a student buying multiple computers that would flag on our end, which would then lead to an investigation of whether or not the items are being used appropriately. 

Senator Jimmy Hickey And in that particular case for that particular item, capital item, whatever we want to call it, whenever the money does flow to them, at that point, that’s no longer the property of the state or anything like that. That is just automatically their property, is that correct? 

Darrell Smith That is correct, sir. 

Senator Jimmy Hickey Okay, Mr. Chair, whenever it’s time to vote, whenever it is time to vote on this, and I’ll have some questions on the next, I would appreciate a minimum of a voice vote. 

Representative Jeff Wardlaw Senator Love, you’re recognized.

Senator Fred Love Thank you, Mr. Chair. Thank you for allowing me to ask some questions since I’m not on the committee. But I wanted to just get a clarification from Mr. Hudson in regards to some of the numbers he said moving forward in funding the EFA accounts. Mr. Hudson, did I understand you to say that it was going to be, once we fund the EFA accounts and RSA, it’s going to be about $310 million moving forward? 

Jim Hudson The sum of the transfers plus what’s in the RSA for FY26 is about $310 million. As to what the amount will be for FY27, we’ll have to go through that analysis. It will be something like that. But there’ll be some people who probably come out of the program. Some new people will come in the program. 

There’ll be, in terms of the category fundings as well, it will change. So the exact number for next year’s RSA, I can’t give you at this point, but that will be in the governor’s proposed budget in the next few weeks. 

Senator Fred Love Alright, thank you. Thank you, Mr. Chair. 

Representative Jeff Wardlaw Senator Irvin, you’re recognized. 

Senator Missy Irvin Thank you, Mr. Chair. Thank you. Last week in Joint Audit in the Education Subcommittee, we had a report. University of Arkansas systems had done an internal audit and had found where students had falsified FAFSAs and received federal funding that weren’t enrolled. So I have two questions. Number one, I know that we passed legislation to tighten up on some of the EFAs. Have you seen any change in utilization due to that legislation? That’s my first question. 

Darrell Smith Well certainly, we verify every student that comes through. So once the application is done, no money is received by a student unless they are verified enrolled in a private school or they have a verified notice of intent to home school. And so we verify that every quarter to make sure there’s still an active notice of intent or that they’re still actively enrolled in a public school. If one of those two conditions exist, then we fund. So we always fund after we verify. 

Senator Missy Irvin So if you verified and they’re notified of being homeschooled, then is that all that’s required? Or is there a curriculum purchase that’s required to trigger the reimbursement? 

Darrell Smith Well, every submission is reviewed by our staff. So any time any reimbursement submission or invoice comes in, we will review those expenses based on the eligibility of the items that are on the receipt itself, as well as they apply to the ordinary necessary criteria that we have employed to determine whether or not an item, even though it may be an eligible item, it may or may not be ordinary and necessary based on a reasonable cost. And so we look at both a cost framework as well as does it actually supplement or enhance the education of that particular student. 

Senator Missy Irvin Right, but my question was, as it relates to a child that is homeschooled, I realize that if they’re in private school, it’s easier, right? It’s a direct line of sight that we know that that tuition is getting submitted and used for private school education. My question was on homeschool. You said when they file notice of intent to homeschool is what then allows for the release of the funds. Is that correct? 

Darrell Smith Well, it allows for a lease of the funds into their account. But funds aren’t then distributed from their account unless it’s been for an approved item. And we do keep track of the type of items. So if we see a homeschool student spending a significant portion outside of core curricular activities, whether that’s curriculum or supplements to that curriculum, then that’s going to flag on our end, which will then trigger at least some questions to the family of how that money’s being spent and why that money’s not being spent necessarily on core academics. 

Senator Missy Irvin Miss Salas Ford, did you have something to say? 

Courtney Salas Ford Well, and I was just going to add, once a student is deemed eligible through their notice of intent, just like if it is with a private school, there are no required purchases, to Mr. Smith’s point. They have that amount of funds available in their account and they can then best decide how they want to expend those funds as long as they’re an eligible use. Most of the expenditures are through the marketplace. 

So there are no funds going directly to the parent and it’s not even a reimbursement. The funding goes directly from the account to the vendor that the parent has selected that item from. There are some instances where we will reimburse. 

And again, as Mr. Smith stated, there’s a process for the parents to submit all of the documentation as to what the purchase is for, why they needed that for their student’s education, and why it needed to be in a reimbursement and not a direct payment to the vendor. 

Senator Missy Irvin Okay. So there’s no requirement for a curriculum to be purchased if they are homeschooled? 

Courtney Salas Ford That is correct. 

Senator Missy Irvin Okay. And are you checking on the back end, my case that I brought up from Audit, as to any kind of, as it relates to fraudulently applying for it?

Courtney Salas Ford Yes, we have many safety precautions and guardrails in place through the administration system, through Mr. Smith’s staff review of expenditures. We are constantly cross checking to make sure that there’s not duplicate enrollments between the EFA program and public school. Can we say that we’re going to prevent every instance of potential fraud? That’s not possible. It’s not possible with any program, but we have multiple guardrails in place and continuously checking and auditing to try to avoid and catch any of those. 

Senator Missy Irvin And the last question is, did you see any utilization change as it related to the legislation that was just recently passed that changed some of those restrictions and made them set a little bit more tighter parameters? Did you see any change in utilization? 

Courtney Salas Ford We really didn’t. And that was kind of difficult to do because this was the first year for full implementation. The first two years, not only was eligibility restricted, but use of the funds was restricted. And so the parameters that were put in statute really did not come into effect until this third year when eligibility became universal. 

Senator Missy Irvin Right. That makes sense. Thank you. 

Representative Jeff Wardlaw Representative Cavenaugh. 

Representative Frances Cavenaugh Thank you, Mr. Chair. My question is, we’re all hearing these crazy stories about what got funded through the education accounts. You hear new stories on them. You hear people talking about them. In your audits of what they’re asking for being reimbursed, how much are you catching that are really just outside that they’re asking for this? Because we hear all kinds of crazy stuff. They’re paying for vacations, paintball, whatever. How much of that is really going on and how much of that do y’all actually see? 

Darrell Smith Well, we see everything that comes through because nothing comes through the office without it going through an approval process. And so I would also, I guess, encourage you not to believe everything that you read. Because there are some things that certainly have been misrepresented maybe in some of the some of these articles that have been presented here recently. 

I will say, to the question directly, though, that our staff looks at every invoice, every marketplace purchase, every direct pay vendor purchase. And within the best that we can do, with the best of our ability, ensure that those things that are purchased are to benefit the student’s educational outcomes. And so we work really hard at that. Again, to Courtney’s statement earlier, are we going to catch 100% of everything that comes through? Probably not. But it’s certainly our goal to, to make sure that we justify every approval that we make in this program. 

Representative Frances Cavenaugh Okay, thank you. 

Representative Jeff Wardlaw Representative Painter. A little technical difficulties there, but you’re good now. 

Representative Stetson Painter You’re fine, Mr. Chair. Thank you very much. Secretary Hudson, really quick, if this $32 million request is approved, how much is the total balance of the Restricted Reserve left? I’ve seen some different figures, so I just wanted. 

Jim Hudson Checking for the last number. 35, I think.

Representative Stetson Painter That’s after the 32, correct? 

Jim Hudson That’s correct.

Staff Mr. Chair, so this is coming out of the discretionary majority vote set-aside account. Within that account, the current balance is 65.8 million. This would pull from that 32 million. We have another request for 2.5 million for used tire. If both of those were approved, the new balance for that set-aside account will be 31.3 million. 

Representative Stetson Painter Appreciate it. Thank you, Mr. Chair. 

Representative Jeff Wardlaw Senator Love, I’m going to give you a little bit of leeway here. 

Senator Fred Love Well, give me a little bit of leeway. I wanted to follow up though on the home school accounts. All right. So you said once they make the purchase, I guess according to the guidelines, what I want to verify with you all though is, so are we making sure, so once they purchase the item, are we making sure, like, is anybody going out to the home and checking? Or is it just, it’s kind of like on an honor system that they’re going keep the item. They’re going to make sure that they have it. 

Darrell Smith Well, we’re certainly not going into their homes and checking their items. Obviously, from a parent choice and a parent empowerment standpoint, we’re trusting the parent to  educate their child, to do what’s best for that, what they feel like is best for their child. So to your question, I guess it would be on the honor system. 

Senator Fred Love All right, thank you. 

Representative Jeff Wardlaw Seeing no further questions, do I have a motion on D? I have a motion. Do I have a second? Have a second. All those in favor, say aye. All those opposed, no. Ayes have it. Motion passes. So with that, members, we’ll move on to D2. And we’ve already explained it. So any questions on D2? 

And I would highlight that the last sentence of the item says this would not be used for Jefferson County’s tire remediation. I think that’s important for the members to understand. Senator Hickey, you’re recognized. 

Senator Jimmy Hickey Yes, and I’ll try to be quick, but I would like to have the agency down just for some quick clarification.  

Representative Jeff Wardlaw Anyone here from ADEQ? If you guys would introduce yourself for the record, and Senator Hickey, you’re recognized. 

Lauren Ballard Lauren Ballard, Chief of Staff, Energy and Environment. 

Bailey Taylor Bailey Taylor, Chief Administrator of Environment and DEQ Director. 

Used Tire program stipulation

Senator Jimmy Hickey Okay, I thank y’all for working on this over the month. So I want to make sure, and I understand what’s been said. So we are going to still be funding District 4 but Jefferson County in no way shape or fashion can receive any of those funds about that. So that’s correct, right? 

Bailey Taylor Correct. 

Senator Jimmy Hickey My other thing to say is this. Of course, after the last meeting, as always happens, and I’m not accusing anybody of anything, but people start calling and saying, I know this, I know that. And of course, I give those to the appropriate officials, which I have done. Myself, the whole thing with Jefferson County is a huge red flag or red flags everywhere, as I assume it is with you all and a lot of the other members that I’ve talked to. 

So my only thing is, I think that there should be– and maybe some of them are here listening or whatever. But the District 4 board of directors should understand that those things have come into question. And I don’t know if any of the same players are involved with District 4 that were involved with Jefferson County, but I think those Board of Directors, they need to be cognizant of that fact. 

Just until we get to the bottom of all this and see where we were, because I’ve heard things that would run up a red flag, more than a red flag, I’ve heard things such as possibly co-mingled funds and things like that. Don’t know if that’s happened. Not accusing anybody. But you know, all these behind the scenes conversations need to be checked out. So I think that the board needs to be cognizant of that and to be very wary that there is a possibility those can be looked at. 

Senator Jonathan Dismang Thank you. Members, do we have any other questions? Seeing no other questions, what’s the will of the committee? We’ve got a motion to approve. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. We are at E1. 

Reallocation of Resources overview

Staff Thank you Mr. Chair. We are in section E. This is a reallocation of resources for the Department of Human Services. Special language allows the department to make four reallocations. This is the first reallocation for fiscal year 26. On the last page, page 5, our table showing all transfers. The second table on that page shows transfers between divisions. 

The Division of County Operations is requesting $180,000 in salaries and match for positions. Those positions will also be requested for transfer on this table. The next table shows fund transfers. The department is requesting total General Revenue Fund transfers of $4.27 million among the divisions to meet client needs. 

The largest of the transfers is $2.1 million to the Division of County Operations for administrative support, and the next largest is $1.9 million to the Secretary’s Office. The remaining transfers are for the Division for Children and Family Services. 

And that’s to other divisions to support activities performed by those divisions on behalf of DCFS clients. And then the next table shows four position transfers between divisions. And they will go into more detail in the Personnel Subcommittee. 

Senator Jonathan Dismang All right, thank you. Members, do we have any questions on E1? All right. Seeing none, we have a motion to recommend approval to the ALC Personnel Committee. We’ve got a motion. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. We are to our review items. 

Members, I’m just going to draw your attention to the reports here. I’m not sure if we said it earlier in the meeting, but if you’ve got questions on the reports, go ahead and be getting those ready. And then I’ll ask if there’s any questions for report and we’ll take those. And if not, then those items will just stand as reviewed. All right, with that, F1. 

Staff Thank you Mr. Chair. We’re in section F. This is Appropriation of Fund Transfer Request. This is a letter from the Department of Shared Administrative Services, Division of Building Authority. It is for 1.4 million to make a loan to the Office of Technology to replace the power supply for the Data Center West facility in Little Rock. 

The appropriation funds were made available by the Sustainable Building Design Revolving Loan Fund Program. The letter says the project is expected to net a 23% energy reduction. 

Senator Jonathan Dismang All right, thank you. Members, do we have any questions on F1? Seeing none, what’s the will of the committee? We’ve got a motion to review. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. Members, we’re going to go through G1 through 5 and then we’ll take questions on each, one at a time. 

Cash fund requests overview

Staff Thank you, Mr. Chair. We’re in section G. These are cash fund appropriation requests. The first item is a letter from the Department of Education, Division of Elementary and Secondary Education. This is for 2.4 million in appropriation. It’s to create a real-time data dashboard to help address a persistent teacher shortage. It’s supported by a grant from the Walton Family Foundation. 

G2 is a later from Parks, Heritage and Tourism, Outdoor Recreation. It’s for 750,000 in spending authority. This is to make grant payments related to the All Kids Bike Program. It’s supported by funds passed through from the Minority Health Commission. 

G3 is a letter from Public Safety State Crime Lab for $74,800 to provide for toxicology tests and sexual assault kit outsourcing. It’s supported by funds from the Office of the Attorney General. 

G4 is a Letter from Veterans Affairs, State Veterans Cemetery Division. It’s for $40,000. It’s to cover operating costs including realigning headstones and general maintenance by the Cemetery Division. It is supported by federal reimbursements and private burial funds. 

G5 is the last item. It’s a letter from the Health Board of Podiatric Medicines for $2,000. This is to support collaboration with other agencies in conducting licensing investigations and is supported by their fees and fines. 

Senator Jonathan Dismang All right, thank you, members. We’ll go through these one at a time. Any questions on G1? Senator Irvin? All right, no questions on G1. G?. Senator Irvin, you’re recognized for a question on G2.

Senator Missy Irvin I just wanted to see about the Department of Health. Thanks. 

Jamie Fisher Jamie Fisher, Parks, Heritage and Tourism, CFO. 

Senator Missy Irvin Okay, thank you. 

Katherine Andrews Katherine Andrews, Director, Office of Outdoor Recreation. 

Senator Missy Irvin Hey guys. Thanks. Quickly, so this is going from your department through to the Department of Health Minority Health Commission to. 

Jamie Fisher Other way around. 

All Kids Bike program

Senator Missy Irvin Okay, I got you. Thank you. Okay. All right. And then you’re going to work with the schools, is that correct, to get this out to as many schools as possible? Or what’s the approach there? I mean, I’m supportive of this. I thought it was the other way around and that didn’t make any sense to me. 

Katherine Andrews Yeah, so we are going to be passing this to the schools who have self selected into the program via the Arkansas Game and Fish Education Initiative. So they currently have about 70 schools that are in the program this year. And so we’ll give those funds to the schools that have been selected through that program and then ongoing throughout the years that follow. 

Senator Missy Irvin And they have a plan to engage schools to try to get them enrolled? 

Katherine Andrews Yes, correct. 

Senator Missy Irvin Alright, thank you. Appreciate it. Thank you, Mr. Chair. 

Representative Jeff Wardlaw Seeing no further questions on G1, G2, we’ll move on to G3 without objection. Oh, questions? Any further questions on the other items under G? I forget Senator Dismang’s procedures. Seeing none, do I have a motion? I have a second. All those in favor, say aye. All opposed? Ayes have it. With that, we move on to H. And just go ahead and explain H1 through 3 and then we’ll take questions. 

Federal grant requests overview

Staff Thank you, Mr. Chair. We’re in section H. These are miscellaneous federal grant appropriation requests. The first one is an item from the Department of Veterans Affairs. This is for 5.5 million. They have a grant from the Department of Veterans Affairs to expand the North Little Rock Veterans Cemetery. 

H2 is the Department Of Agriculture. This is for 7 million. They have received a grant from USDA Forest Service to make an award to Central Arkansas Water to acquire 1,300 acres in the Maumelle watershed. Members, this is an item that’s been on your agenda for the past two months. Also at your desk is a resolution that was passed last night by the Perry County Quorum Court. 

Now we’ll move to the last page of the packet. That’s H3. H3 is a request from DFA Disbursement Officer. This is for 6.35 million. They have a grant from the Center for Medicare and Medicaid Services for the Rural Health Transformation Program. This first request is to provide for administrative expenses in order to establish the program, which will award over 200 million in the next four years. Mr. Chair, those are all the MFT requests. 

Representative Jeff Wardlaw Senator Davis, you’re recognized for the question. 

Senator Breanne Davis Thank you, Mr. Chair. At the appropriate time, I have a motion for item H2. 

Representative Jeff Wardlaw Any questions on the items before I take the motion? Senator Hickey, you’re recognized. 

Central Arkansas Water land purchase

Senator Jimmy Hickey Of course, I don’t know what the motion is. My question on H2, and, again, it may could be in discussion, is I guess what I was wanting to see with this is with whatever counties that this is located in, and I’m not even for sure if there’s any municipalities, have we had any resolutions from the– and I’ve been told we don’t. 

But do we have any resolutions from like the quorum court or any municipalities involved in support of this, so from a local standpoint? Again, I don’t know where the appropriate time is, but that’s of great importance to me. Thank you. 

Representative Jeff Wardlaw Yeah, I got it. I’m reading this. All right, Representative Bentley, you’re recognized. 

Representative Mary Bentley Thank you, chairman. And just to Senator Hickey’s point, there is a resolution from Perry County in your packet. It was just put there. Is it okay if we have Central Arkansas Water up for some questions, please? 

Representative Jeff Wardlaw Yes.

Bryan Rupar Thank you, Chair. 

Representative Jeff Wardlaw If you would, go ahead and introduce yourself for the record. And then Representative Bentley, you’re recognized. 

Bryan Rupar My name is Bryan Rupar. I’m the Watershed Protection Manager for Central Arkansas Water. 

Representative Mary Bentley Thank you for being here today. My first question is to you. Throughout this entire process that you’ve been working on this land grant, has anybody ever reached out or worked with the Perry County Quorum Court, the Perry county judge, myself, or Senator Rice that covers Perry County? Have you worked with them in any form or fashion during this process? 

Bryan Rupar Thank you for the question. I did attempt to meet with the county judge on several different occasions. I met yourself and the county judge out at Lake Sylvia, not specifically on this, during their dedication event and spoke about some of the protection efforts we’re trying to partake. But I did not reach out directly beforehand before the grant application was submitted to you. 

Representative Mary Bentley My next question, are you aware of the land that you received in 2024, the 2,000 acres that you got through this land grant that you removed the potential from Perry County for $1.5 million annually in property taxes? 

Bryan Rupar I’m sorry. What was the figure of property taxes? 

Representative Mary Bentley In Perry County in 2024, you got 1,935 acres through this land grant. That 1,935 acres, if we had been able to build houses on five acres plots in that area, we could have gotten $1.5 million in property taxes in Perry County, something that we desperately need. 

At this point, Perry County’s road budget is only $900,000. So when you receive that 1,935 acres of prime, as we have in testimony heard, prime acreage for development, you took away the potential for Perry County to get 1.5 million in property taxes, which they now will get minimal amount of forestry land. I just want to know if you were aware of that when you were working on that project and did not in any way work with Perry County, the Quorum Court, or the county judge on that grant. 

Bryan Rupar Thank you for the question. We did not analyze potential future tax revenues if there was a full build out scenario. I do know that several Perry County customers benefit from CAW water. And that purchase of about 2,000 acres was about 0.06% of the land in Perry County, yet we serve almost 10% of the population in Perry County clean water. So it was really an investment in clean water for Perry County as much as anything else. 

Representative Mary Bentley Are you aware that the Perry County residents for centuries have taken care of the Lake Maumelle, of the river, Maumelle River. We have residents beyond the land that you purchased on either side of the river and for centuries have taken care of this land. And the water coming into the Lake Maumelle from Maumelle River has been pristine during that time, has it not? 

Bryan Rupar The water is pristine. That doesn’t mean every action taken has not in some way led to the degradation of the river system. There have been several incidents of machinery even recently, gravel mining in the river, which on navigable waterways, I believe, falls under the Commissioner of State Lands and is state property, and all that sediment eventually flows downstream into the lake. Now the lake is still in pristine condition. But it can only handle so much nutrient loading over time. And so that’s what we’re concerned about is long term nutrient loading and sediments into Lake Maumelle. 

Representative Mary Bentley I would just counter that we’ve been for centuries taking care of that land and done a phenomenal job and in return my county is being hurt. We have a small, very small fraction receiving water from Perry County, but nothing in this grant brings more water structure into Perry County or benefits my county whatsoever. 

But my county’s being hurt immensely, and I’m just wanting Perry County to be completely removed from any further land purchases. You’ve already gotten 2,000 acres from our county. I think enough is enough. Thank you, Chairman, for the time. 

Representative Jeff Wardlaw Representative Eubanks, you’re recognized. 

Representative Jon Eubanks Thank you, Mr. Chair. I guess I’m curious how this resolution might impact the sale of the piece of properties. Is there somebody here from Potlatch or from Department of Ag that could possibly answer that question? 

Kyle Cunningham Kyle Cunningham, State Forester, Department of Agriculture. 

Inoussa Zaki Inoussa Zaki, Department of Agriculture. 

Scott Corley Scott Corley, Potlatch Deltic. 

Representative Jon Eubanks Do I need to repeat my question? 

Kyle Cunningham Your question was about making an adjustment? 

Representative Jon Eubanks Yes. How would this possible adjustment maybe impact the overall sale of the remaining portion of the property? 

Kyle Cunningham Yes, sir. I know with the adjustments we’ve made in the past, they weren’t removing parcels. But when we try to change or alter any acquisitions, the National Forest Legacy Panel and Forest Service can be hesitant to do that. 

I believe on the reduction we could probably pursue that, but I don’t know for sure what the ramifications of that would be. I would say, if you look at the packet we gave you, there’s two pieces to this purchase. This piece has been approved. 

The second round is still waiting to be approved at the national level. And so there are very strict timelines on some of those things to occur for approval. And so that would be my concern, would be the full completion of this Forest Legacy project could be impacted from a timeline perspective. But we could check into it if you want to. 

Representative Jeff Wardlaw All right, members, I’m trying to stay with committee members. First, Representative Beaty, you are recognized. 

Representative Howard Beaty Thank you, Mr. Chair. I just have a question because I heard Representative Bentley mention the property tax implication of this acquisition to the county, but she used the word ‘if’ in her estimate. So I was wondering, does someone have the actual property taxes that are paid on this property right now and what that impact would be? Because I remember that number being a rather small number last time that we were here. 

Kyle Cunningham So I can speak to the property tax on if the land stays in forest land. And I know for the Perry County portion of the Creeks tract it was only like $48 or $50 a year in property tax. I believe her question was what if it were developed. And one of the things I would like to, if I can, follow up on, the Forest Legacy program is based on potential for development in the long term and what consequences that could have on a waterway. 

And so when you start talking about migration from other states, from other countries, and that type thing coming in, you’re really opening the door for a higher level of impact on waterways. And so that was the justification for us pushing this particular purchase in a Forest Legacy program request. 

Representative Howard Beaty Well, that answered some of the question because that number would have a significant impact on most of us if it were going to hit the county for over a million dollars in property tax. But you said that number, again, was how much? 

Bryan Rupar So the 2,000 acre purchase that was done previously on our closing statement, it showed a tax liability of $4,150 a year is what the county is losing in revenue from taxes. 

Representative Howard Beaty And this would protect the waterways in that 2,000 acres for the foreseeable future under good conservation efforts? 

Bryan Rupar Correct. And we’re working with the Game and Fish Commission to have that open for the residents of Perry County to recreate on as well. 

Representative Howard Beaty So the residents of Perry County would benefit from this for the indefinite future? 

Bryan Rupar Yes, even those that aren’t served by our water system. As I said earlier, about 10% of them are in the Wye Mountain area. The rest could benefit from the public access opportunities. 

Representative Howard Beaty Alright, thank you. 

Representative Jeff Wardlaw Representative Cavenaugh, you’re recognized. 

Representative Frances Cavenaugh Thank you, Mr. Chair. You mentioned the second purchase. How much land is going to be purchased, both this purchase and the secondary? 

Bryan Rupar The total for the two parcels together, the two tracks together, would be 3,471 acres. 

Representative Frances Cavenaugh And how much is the secondary purchase going to be? How much money? 

Bryan Rupar It will also be a $7 million federal award. 

Representative Frances Cavenaugh And how much is the water having to put with it, Central Water. 

Bryan Rupar Well, we’re estimating approximately $3 million. 

Representative Frances Cavenaugh So Central Water has $6 million they can put approximately toward this purchase. So why don’t they just purchase one and not use federal dollars, tax dollars? 

Bryan Rupar Because it’s a future investment. It’s a federal investment. These are non-discretionary federal funds that we seek out to protect that green infrastructure. Our forests are our first drinking water filter. And if this helps protect 500,000 Arkansans that are served by Central Arkansas water, we feel that that’s a great federal investment. 

And it’s a great investment of our rate payer funds, because we’re only using 25%, maybe up to 30%, with our additional match on this grant to provide that same quality of protection by leveraging federal funds along with our own funds. 

Representative Frances Cavenaugh And you also happen to mention that Arkansas Game and Fish was going to be involved in this. How is Arkansas Game and Fish going to be involved in this? 

Bryan Rupar We’ve been discussing the possibility of expanding our current lease acreage. We lease our acreage around Lake Maumelle to the Game and Fish Commission at a reduced rate. I believe it was 52 cents an acre per year to lease the property for 99 years to open it up for public fishing and hunting opportunities. 

We would want to expand our agreement with them. It allows them to provide enforcement, open up those recreational opportunities and provide also technical expertise to help with forest management, public recreation, access points and help develop those. It’s been a great partnership and they’d like to continue that and expand those opportunities. 

Representative Frances Cavenaugh Okay, so the land that you’re purchasing– thank you, Mr. Chair– does it actually touch the lake? 

Bryan Rupar This land does not. It touches other properties we already own and major tributaries running into Lake Maumaulle. 

Representative Frances Cavenaugh Okay, what I’m trying to figure out is, Game and Fish, how they would actually provide opportunities for Arkansans in being able to use this land if it doesn’t touch the lake and can’t get to the lake on it. How would this land with Game and Fish provide opportunities for Arkansans? 

Bryan Rupar So there are other roadways that connect to the property, that it’s not accessed directly from the lake, but from access points along public roads. Some of the land, especially the 200 acres in Perry County, touches existing forest service lands, which is already open for public access. 

And so if we’re able to acquire that additional acreage in Perry County on the southwest side of the tract, that’ll also physically connect to additional properties that Central Arkansas Water already owns that has difficult public access. They have to cross the Maumelle River to get to it. And this would allow the opportunity to cross over land to access existing holdings as well as the new 200 acres. 

Kyle Cunningham Representative Cavenaugh, could I follow up also on that? You’re correct. This purchase does not touch the lake, but it is in a very important– I want to make this point– it’s in a very important or critical area because it’s in the headwaters. There’s three or four streams that feed into Maumelle or Maumelle River there, and then it also touches the Maumelle River itself or near it. 

The 2,000 acres, I do want to go back, the 2,000 acres or so that were bought in 2024, the Maumelle River runs the length of that property. And so I’m really speaking more from the Forest Legacy standpoint. I’ll let CAW talk about the development of the entire watershed. Those areas are important because they buffer those streams. 

And where I was headed with that was if you think of it from a timber harvest, and I’m a forester so I always relate to timber harvesting, we do streamside management zones on timber harvest. And we buffer the entire stream along that way that we’re doing the harvest on. 

And so from a Forest Legacy standpoint, trying to put this in perspective, that’s really what we’re seeing here. If you look at the map, figure 1-7, it shows that these areas are buffering that watershed or that waterway, whether it’s the river or the lake immediately adjacent to that. Does that make sense? I just want to make sure I’m getting out that we’re focusing on this particular area within the watershed for the Forest Legacy. I wanted to talk about our reasoning for this. 

Representative Jeff Wardlaw Is there anything Potlatch would like to add to that? 

Scott Corley Yeah, I’d say we’re always looking across our ownership. We have about 935,000 acres in the state. We’re always looking for what’s the highest and best purpose of each property we own. And almost all the time that’s sustainable forestry management for us. And that’s what we do. Occasionally, that’s development.

 But there are cases where conservation is what wins out, and this is one of those cases. And for us, we’ve always viewed this property’s highest and best use as a conservation outcome. And that’s why we’re so supportive here. You remove the possibility of conservation from this, then we have to move on to the next thing. 

And I can’t say what that would be. It could be a form of development. It could anything that might not, after a sale, have the water quality impact that’s trying to occur here. So that’s why we’re fully on board. We’re trying to do what we think is best for the citizens of Central Arkansas, and that’s to protect this watershed. But we can’t say what tomorrow will bring if that possibility is removed. So I would just add that. Thank you. 

Representative Jeff Wardlaw Can you walk me through, from a Potlatch perspective, what that would look like if housing was to be built in an area that’s that high of a value of conservation, and what that would mean to the conservation world in Central Arkansas? 

Scott Corley Yeah, there’s certainly some properties there that– I’d start by saying, I view conservation on this as being a ways out. Obviously, we have Chenal properties in West Little Rock and we have a good bit more acreage before you even get to the lake. But certainly, if you get in that area and you think about the amount of dirt that has to be moved, I mean, the hills are not very conducive to just build houses as it sits right now. So you’re going to have to think about the amount of dirt work that goes into this and what that does downstream in this watershed. 

I think it could have a pretty large impact and we probably– I can’t sit here today and say we’d be the developer. We have Chenal properties. It’s more likely that somebody approaches us, another developer approaches us about building in that area. And we’d have no control over that. 

And I’d hate to look back and see this opportunity pass us by and 10 years from now, we’re all looking back and saying, Man, I wish we had done what we could to protect this watershed. So yeah, that would kind of be the impact. 

Representative Jeff Wardlaw So give me more lines– I guess you kind of missed my question a little bit. But give me of the lines of what that means for water quality. And maybe Central Water could answer that. 

If all this dirt movement had to take place on the side of these hills with the tributaries at the bottom, what does that look like long term? Because we’ve heard the impact of a million dollars on the property taxes if it was developed. So obviously people in Perry County want it developed. So what does it look like for the other 500,000 water users? 

Bryan Rupar So along with development comes more than just the initial slog of dirt and erosion and sediment that washes off a job site. There’s not currently any wastewater treatment in that area either. So if you’re talking 5-acre lots, there’d be at least one or more septic tanks on every lot. 

There’d be however many pharmaceuticals those households are taking that aren’t filtered out in typical septic systems and winding up downstream and eventually in the lake. The more and more sediments and future contaminants, some that may not even be on our horizon, are in the lake, the higher the treatment costs are at our treatment plants. And then those are going to get passed to the rate payers in the future. 

That’s why these investments on the front end to protect those areas, especially along major tributaries– it’s like the old cliche, an ounce of prevention is worth a pound of cure. It’s just much cheaper to protect it in a forested state, keep it in natural vegetation instead of lawns that are fertilized and people changing their own oil and all those additional nitrogen and phosphorus inputs from housing developments, keep it a forest that can cycle those nutrients instead. 

Representative Jeff Wardlaw Thank you. Senator Irvin, you’re recognized. 

Senator Missy Irvin Okay. Thank you. Appreciate the conversation. I’m looking at page 3 of the handout under threatened, and there it talks about the real estate development projects you’ve got with Chenal Valley, and then another one and then Lakeview West, the picture that is presented here. Do you know how much in property taxes that one Lakeview West subdivision produces? I’m assuming that’s for Pulaski County. 

Bryan Rupar I am not aware of what the property tax is on those properties. 

Senator Missy Irvin But the Lakeview West development here, that’s in this picture, the land that you’re wanting to purchase is around that development, is that correct? Or near that development? Touches that development? 

Bryan Rupar It is nearby. It’s about a half a mile west of that, I believe. I’d say it would be the closest parcel to it, but it does not have the same overlook of the lake that these parcels do. 

Senator Missy Irvin Okay, so your parcels would be of higher value if it were developed. 

Bryan Rupar No, no. Our parcels do not have the same overview of the lake, the same scenic overview. 

Senator Missy Irvin Okay, as these do? 

Bryan Rupar Yeah, especially over the proportion of them. You may get a glimpse of the lake from certain ridge tops, but nowhere near like Lakeview West has. 

Senator Missy Irvin And then, I guess, when you talk about watershed, I mean, I live in the part of the state where if you want to talk about a watershed and issues with watersheds and runoff and sediment and all of that kind of stuff, then you’re talking about the entire portion of north central Arkansas. 

And so I think for me, I understand the perspective. I understand your perspective. I also understand Perry County’s perspective particularly. And I just feel like y’all are not sensitive to that issue. And you’re not like hearing that, like you’re not sensitive to the fact that when you take properties out of the public domain for development, you are absolutely affecting these budgets of these very poor counties. And you’re worried about water sediment downstream and all that. 

Well, when you don’t have a road budget, and you can’t pave roads. Then you have dirt roads. And then those dirt roads are not built correctly, guess what happens to the lakes and the rivers and the creeks? The sediment and all the gravel and everything gets dumped downstream because of the runoff and the washes because of a heavy rain or whatever.

 I feel like y’all just are completely disconnected to rural Arkansas and what actually is happening in rural Arkansas as it relates to how vast and big a watershed is actually defined and the control that you want over a watershed for the greater good. And that’s what bothers me about this is that there’s just really no recognition of what Representative Bentley is talking about. 

You don’t even acknowledge it. And that, quite frankly, for somebody who grew up in this area out in west Little Rock, but I live in very rural Arkansas, I live in the Buffalo River watershed. So, yeah, we have a septic tank. We’re those rural poor people that change our own oil. I guess I’m a polluter. I guess you just look poorly on me. I don’t know. But that bothers me. I’m just going to be frank with you.

 And so, under threatened, you’re talking about me. You’re talking about people that are trying to build in a rural part of the state of Arkansas that’s really beautiful. I get your arguments, but just a little bit of recognition would kind of go a long way here, in my opinion. And I just don’t find that from Central Arkansas Water. 

You can respond if you like, but is that ever in your calculation of what you’re doing to these rural counties? Pulaski County doesn’t seem to matter here because they got plenty of property tax. They got plenty of county road budget. Do you ever give back? Does Potlach ever donate to the unpaid roads program that the state of Arkansas set up? Have you ever contributed money towards that? Has Central Arkansas Water?

 If you’re that concerned about sediment and water quality and water control, have you ever put money towards the unpaved roads program that the state of Arkansas set up legislatively with state funds and private funds to be able to help out  these county roads. Have you ever done that? Both of you can answer. 

Bryan Rupar Sure. Thank you for your question. And one, I apologize. I didn’t mean to insinuate any offense to you. I change my own oil. I have a septic tank. I’m saying compared to a forest, there’s a difference between a residential development and a forest, as far as drinking water qualities. 

And the meetings that I mentioned earlier with the Perry County judge were specifically, I was trying to talk to him about the unpaved roads program. We’ve reached out to the county road department and invited to go with them to the unpaved road trainings, which is a prerequirement to getting that funding. They have to have a representative go through the training. 

Senator Missy Irvin I know. I wrote the bill. 

Bryan Rupar Well, thank you for that. I’ve attended the training myself so I could learn more about how to identify problem areas. So those are some aspects we work at. And there are several other outreach opportunities. I’ve just been focused on the subject at hand here but we’d love to discuss more about how we can better serve Perry County with the properties we do currently own as well. 

Senator Missy Irvin Potlatch, you want to respond? 

Scott Corley Unfortunately, I’m not in our group that handles our donations, so I’m unable to speak about that. But I can get that information and let you know. 

Senator Missy Irvin Well, it’s just the understanding and recognition of being able to say, we’re going to be good neighbors here. We recognize that there’s issues here and there’s perhaps ways to work with these rural communities and these rural counties in a way that would be beneficial to them versus them looking at this. 

Because when I look at Lakeview West development, that’s a ton of property taxes that’s going to Pulaski County, undeniable. So you can say what you want about forestry land and what you’re paying in property taxes versus if it were sold to a developer, or if you as yourself developed it like you have in Chenal, the property taxes there are tremendous. They’re extraordinary. Yes? 

Scott Corley Yes. 

Senator Missy Irvin So you understand the issue, when you take that much money out of the public domain. We face this and we deal with this with the national forest. You know, that’s a lot of land, particularly in Searcy County, that they can never collect any kind of revenue off of. 

But they’re always on the hook for taking care of those roads and they don’t get paid for it because there’s not the federal funding to support. I could go down that whole path. So I guess I would love to have some recognition from Potlatch and Central Arkansas Water that these kinds of issues do exist and that there is real concern amongst us that are rural legislators that represent these areas of the state of Arkansas. 

And a little bit of recognition would just go a long way. So I’d appreciate if you want to look into that and I’d be happy to talk with you offline. Thank you. 

Representative Jeff Wardlaw Alright, members, I’ve got two, three more committee members, then I’m going to go to the non-members. Representative Beaty is the first in line. 

Representative Howard Beaty Thank you, Mr. Chair. I guess my question is, if we hold this project up, what are the drawbacks in delaying? And what do you think the feds will do on this? 

Kyle Cunningham Yeah, again, I think we could potentially look at the Creeks tract purchase, which is the one you’re approving today. But again, this is a two-part purchase. And so the streams on your map, the streams is the whole area. And this is just my initial thoughts. 

We’ll have to talk with U.S. Forest Service Region 8 with our contact there. I don’t want to speak for them. But my concern is that it could impact the timeline on that remaining acquisition because it’s still going through the national process. We’ve received these funds. These are IRA funds. They’re not the traditional Forest Legacy Program funds, and so that’s another concern I have is we did a lot of work to get these into place. 

And I can promise you if we return these funds, they’re gone. We’re not going to get them back. And so it’s an opportunity to protect this area. This is a watershed that is experiencing forest loss. Most of the watersheds in Arkansas actually are increasing in forested area. The Maumelle watershed is not increasing in forested area. It’s losing forested area. It’s experiencing population increases. 

And so it’s a little bit unique. Lake Maumelle itself is a little unique. I’ll let CAW speak to that. That’s not my area. But again, it is just, when you talk about going back to the drawing table and you’re dealing with, this goes through on the president’s budget, it goes through Congress, it goes through the USDA, Secretary Rollins has to approve these. And when you start messing with those timelines, that does concern me. 

Representative Howard Beaty All right, well, I mean, first of all, I want to say on the record, I’m sympathetic to Representative Bentley representing– she’s taking care of her district. She’s taking care of our folks, taking care of Perry County. And I think that’s what all of us are here to do. 

Overall it looks like, if I’ve got the numbers right, if I heard the numbers right, there are 200 acres out of this 1,325 acres that are in Perry County. So roughly 15% of this project is in Representative Bentley’s district, in her county in Perry that she’s referenced. But the other 85% are outside Perry County. So I’d hate to see that the whole project be held up over that 15%, 200 acres there in Perry County. 

And the deal is, I wish you guys would have expended a little more time on the front end while you’re trying to get the money from the feds to reach out and work with the local folks there in Perry County and with Representative Bentley. I’d encourage you to do that in the future. That could probably forego a lot of what we’re discussing here today. 

But with that said, I just think if we hold this up, just what you said, we’re sending the message back to the feds. This is fed money that we can take and utilize here in the state to protect this land, protect conservation. And so that’s why I’ll be in support of this issue. But I am respectful and appreciative of Representative Bentley protecting her district. So thank you. 

Kyle Cunningham Yes, sir. And if I may, this is just from us at the department, we obviously support private forest landowners in Arkansas. That’s our mission. And so we’re certainly not trying to do anything to impede private landowners’ rights or anything like that. These are willing sellers that we work with in Forest Legacy, and I want them using Arkansas wood to build homes and to expand. But I think we also have to look at areas that are sensitive like this that could have a broader impact for decades on both Perry and Pulaski County. 

Representative Jeff Wardlaw Representative Eubanks, you’re recognized. 

Representative Jon Eubanks Thank you, Mr. Chair. I’m trying to remember our other meetings, but I thought that an issue came up, that this portion of land that we’re talking about would connect a trail. Is that correct? 

Bryan Rupar That is correct. A portion of the purchase connects the Ouachita National Trail, a 223-mile trail that goes all the way from Talimena State Park in Oklahoma to Pinnacle Mountain State Park, and I believe it’s about a half mile. I’d have to look back through the proposal, cross some private Potlatch-Deltic lands. This acquisition project would protect those. 

Representative Jon Eubanks I think one of the reasons that I’m supporting this purchase is that it affords the people that live in Little Rock area, mainly an urban area, some sort of recreational avenues for them that they don’t have to drive a great distance to in order to be able to avail themselves of it. 

Kyle Cunningham That’s correct, sir. I’ll just follow up with that. Haven’t really hit on the multiple use aspects of the Forest Legacy. And again, I’m speaking to this specific purchase. I’m not talking about the broader development in the watershed or in Perry County. The fact that this would be a WMA, there would be hiking, bird watching, hunting, all of those things that anybody would want to do. 

The land would continue to be a productive forest. It’s one of the big things with the Forest Legacy Program is that they can continue to harvest timber off of it and manage those timberlands to keep them healthy. Don’t want to get too far off on the side, but from a state forester standpoint, managing those areas to reduce fuels and wildland fire potential could play into this as well. Again, I’m getting off a little bit here, but there are multiple benefits to this other, I know we’re focusing on water quality today, but there’s multiple benefits to the people in both counties. 

Representative Jeff Wardlaw Senator Hickey, you’re the last one in the queue that’s in the committee. 

Senator Jimmy Hickey All right, thank you, Mr. Chair. Whenever we first heard about this and time gets away, I don’t know if it was a month or two months ago, I started asking. I said, well, I want to know what the local people think. I’d like to see a resolution in support of it. And then I started that off because I was told we didn’t have those. 

And it wasn’t stapled in the package, but they were right. It was in there. But I hope all the members do understand that this resolution is not in support of. It’s against from the local folks in Perry. And it’s also, I don’t know where Pulaski County is because I don’t have one for or against. So I am getting to a question, Mr. Chair. 

So my next question is, as it relates to the title, and if somebody’s already said this, I apologize, but I want to hear. So money’s coming in, who’s going to close and who’s going to hold title to the property? 

Bryan Rupar The title would be held under Central Arkansas Water’s name and it would have a notice of credit grant agreement attached to that as well stating that funding came from US Federal Forest Legacy funds and the property needs to be managed according to the rules of that program or those funds have to be returned, the current value of those funds would have to returned. 

So if they paid for 75% of the property, 75% of the current value if it was ever sold– let’s say in 500 years, Lake Maumelle is too polluted to drink. Central Arkansas Water decides to sell it. 75% of that revenue would have to go back to the federal government. 

Senator Jimmy Hickey Okay, so there are going to be some restrictions on the deed and those are going to be listed as exceptions and everything’s going to be done correctly whenever they do the title policy or whatever. Is that correct? 

Bryan Rupar That is correct. It’s filed with the deed or shortly after as part of the closing package. 

Senator Jimmy Hickey Okay. Just just one more and then that will be good. So in the event Central Water wanted to sell 500 acres of this later, they’re not limited. They just have to return the funds on the 500. Is that correct? 

Bryan Rupar Not entirely. It does have to go through a series of approval, even through, I believe it’s the Secretary of Agriculture of the United States. So it wouldn’t be up to us. There would be other decision makers involved. 

Senator Jimmy Hickey Okay, so it’s not allocated to like whatever the total price is divided by the acreage. If there was some other property that was of greater value, they couldn’t just go in and sell this on the per acre price and then get an increased value that they’re going to put in their pockets. Is that correct? 

Bryan Rupar That is correct. 

Senator Jimmy Hickey Thanks for those explanations. 

Representative Jeff Wardlaw Are there any other questions from any members before I go to non-committee members? Seeing none, Senator Johnson, you are first in the list. 

Senator Mark Johnson Thank you, Mr. Chairman. I hardly know where to begin. But let me first thank all of you for being here and your expert testimony. To kind of respond to Senator Hickey’s very important point in question, this resolution that we got stuffed in our packet was passed yesterday so we haven’t seen a lot of eyeballs on this. 

And I want to say two things about my friends in Perry County. Before redistricting I had 98% of Perry County in my Senate district. I love the county. I love the people. I love Representative Bentley. I think most of you in the legislature know she is one of my dear friends. Now I don’t have that area in my district, but I have the 85% that’s in Pulaski County. 

I can tell you that my constituents in Roland, Natural Steps, Little Italy, and that area almost to the person support this because we’ve been under threat from inappropriate developers. I’m for developers. I want to compliment Potlatch-Deltic. They’ve done a lot of work close to my house. Might have had a couple things. I’d rather you made that second round-about a little smaller. But otherwise they are a responsible developer. 

And the Deltic part of that, in case you don’t know, this came from a merger. The Deltic timber, that’s the Murphy family from El Dorado. And I believe they bought this property 90 years ago or something crazy like that. They’ve had it forever. And they’ve been good stewards of the land, not just here but wherever they’ve been operating. Now, so they passed this yesterday. 

Now I get the point about development and inappropriate development, but I also get the part– and my friend Mary Bentley says we need development in Perry County. I absolutely agree with her. But you also, to get development, you need water and you need to recognize that the kind of people that would want to come there and live there and build a house there want those things too. They want to be able to hunt and fish and hike and ride their bikes or whatever else they want do. This is extremely important. 

But again, 85% of this area is in my district. We’ve been working on this for some time. And I acknowledged in the last month when this came up a very important point that Senator Irvin made about some past indiscretions by CAW, totally unrelated to this project, really unrelated to water. They kind of got out of their lane and I’ve chastised them for that. And their board responded by passing a motion to– they’re not going to do those kinds of things anymore. 

And I’m grateful for that, because when people make a mistake and they admit it and they in effect apologize, I appreciate that very much. But what we’re talking about here is what’s the appropriate use and what’s the long-term benefit. Now long-term, this property’s development– but to develop that $48 a year on a property tax, yes, it would probably go up, but at what cost on the other side? There’s always a net cost to these things. 

So I just, I want to thank everyone, and I especially want to thank the gentleman from the Department of Agriculture for clarifying this. In fairness to your department and to Secretary Ward, I think maybe we had the wrong guy last month down here speaking to try to explain this and we probably wouldn’t be sitting here today. No disrespect to him, but I believe that the secretary acknowledged to me personally that he was miscast. He said he’s a great nuts and bolts guy, but he didn’t quite have the overview that’s very important for all of us doing this. 

But I ask every one of you out there, when I hear from my friends in this room and throughout the General Assembly about an issue in their district, I listen to them. And philosophically, I might have some problems. The very idea that we’ve got all this privately– publicly owned land all around the country that keeps private development from happening, that bothers me. I mean, you go out to Nevada, the federal government owns most of the state. That’s ridiculous. 

But when we’re protecting water, not just my drinking water– and this is my drinking water now– but also it’s drinking water for some people in Perry County and maybe more in the future because CAW was chartered by state law to be a regional water provider. And their influence will continue to grow. And so far when they stay in their lane I’m comfortable with the job they’re doing. And I think they’re going to continue to stay in their lane. 

This has been vetted by our Congressional delegation, by Senator Cotton, Senator Bozeman, and Congressman Hill. I pledge to my friends in Perry County, I will do everything I can to make sure that their concerns are met and that everyone that I have any influence with brings them in the loop into the table when there’s anything that affects their county. And I feel bad that that didn’t always happen in this case. 

But let’s don’t throw the baby out with the bathwater because we have some people trying to do their job and they dropped the ball on a couple of things. But would you agree that what I’ve said applies to this situation appropriately? 

And would you believe that if we don’t do it, we could find ourselves, not just in some things we regret as far as polluting Lake Maumelle, but also some water quality issues that absolutely affect our future economic development in central Arkansas? I ask our forester that question. 

Kyle Cunningham Yes, sir. I agree with everything you said. Water quality and quantity are an ever growing concern, and that’s not going to go away. It’s only going to worsen. And so that’s why those projects ranked so highly in the Forest Legacy program area. We look at those here before we send them up the line. 

And if it has water quality in there with the combination of preventing forest loss, because there’s been multiple studies performed that show that forest cover provides the best land use for both water quantity and quality. And so that’s why we got behind this. And it’s not to prevent anyone from developing land in the area, but these specific tracts are deemed important from the water quality standpoint.

Senator Mark Johnson Thank you, sir. And thank you, Mr. Chairman, for letting me ask these questions. 

Senator Jonathan Dismang And a heck of a question it was, Senator. If we could, I think we actually need to probably mark the tape and call Guinness World Book of Records and that may almost make it in there as the longest question I think I’ve been here for. So members, here’s what I want. We are in the question phase. 

And I understand that y’all have some points you want to make and we do take some latitude when we do that, all of us do, I think, when we’re asking questions to make sure it’s got kind of the background we want as we’re trying to get to an answer. Again, we are in the question phase. And so if you have a question, let’s do that right now. And at some point, there’ll be a debate phase and we’ll enter into that later on. 

So with that, I’m going to recognize– or if you’re just simply wanting to state, like, Hey, I’ve talked to Mayor Scott, Mayor Scott is in support of the program; I’ve talked to count judge Barry Hyde and he supported the program, say that. But I don’t think we have to– I think Senator Johnson’s handled it for you otherwise. So Representative Keith Brooks, you’re recognized for a question. 

Representative Keith Brooks That’s a tough one to follow. Thank you, Mr. Chairman, with the latitude to speak. Not on this committee. So I’ll echo Senator Johnson. About 3,000 of the 3,400 acres is in my district and overwhelmingly they are in support of this. But I’ll pivot to a question, a couple of questions. First on the Forest Legacy Program, as you look into the future, are there additional plans to purchase additional tracts that are not included here? 

Kyle Cunningham Not at this time. 

Representative Keith Brooks Second question, and I’ll editorialize and thank my friend and colleague Representative Bentley because she is a strong advocate for her community and her district, as she should be. So I really appreciate that. Relative to the question about usage of the land specifically not necessarily just in Perry County, but Pulaski County as well, and this is for the Potlatch representative, have there been overtures or offers to purchase land to utilize for development? 

Since that’s a question relative to tax revenue, have there been offers and have you entertained offers to utilize it for development? And if not, would that even be a question in your mind that you would consider in the future? 

Scott Corley To my knowledge, we have gotten offers and have sold what I would call rural home sites, single homes in the area, nothing on a large scale development basis. That hasn’t come to us yet. If it did come to us, will we consider it? We have to. I mean, as a publicly traded company, we have to do what’s best for our shareholders as well. So we have to consider all aspects. So, we would certainly give it a look. 

Representative Keith Brooks Thank you. And again, I appreciate Mr. Chair, the latitude and appreciate the work that y’all are doing this. 

Senator Jonathan Dismang Thank you for the question. Representative Collins, you’re recognized for your question. 

Representative Andrew Collins Thank you, Mr. Chair. I also appreciate the latitude. And like Representative Brooks, this is part of something that also affects my district because I represent part of West Little Rock that goes out to Pinnacle. And I understand that water quality is probably the most important thing we’re talking about here. 

But I’m very interested in focusing on the Ouachita trail aspect of this. Because, as you mentioned, that goes from Oklahoma all the way to Pinnacle. And I think it’s pretty common knowledge among people like myself who go out to that trail a fair amount that that little stretch there toward the end, on the east side over by Pinnacle is one of the least traveled, least popular parts. 

And I think part of that is due to maybe the difference in how it’s maintained. It’s mostly the Ouachita National Forest out west. Central Arkansas Water does a great job. I will tell you, I was out there, I went in December. I parked in Perry County, drove out there, shopped in Perry county, by the way, which, I just want to make the point also that in addition to this being a property tax issue, it’s a sales tax issue. 

Because if you have tourism, if you have people coming from all over the country as they do to go in the Ouachita Trail, they have running events, they have hiking events. It drives activity in the area, and it can be a beneficial thing. It’s low impact. But my question for you is how do you maintain, CAW, what would you do differently from say a private landowner as far as how you would conserve the area? 

Because I’ll be honest, that area between Highway 9 and Highway 10, no knock on anyone, but it looks like it’s been managed differently than how CAW does it, let’s just put it that way. What are the differences that we could expect? 

Bryan Rupar Thank you for your question. Our forest management strategy differs from some of the other landowners out there who are doing short-term intensive single-age management, where we try to do an uneven-age management where we have trees of all age classes represented on a particular stand. It’s also, currently, most of it’s under management for offsite loblolly pine, which isn’t the native pine to that area. It should have been in shortleaf pine. 

And for the record, I’m also a registered forester in the state. Part of my background is forestry. And so we do a longer term rotation. We manage with prescribed fire. We do less nutrient inputs. It’s common– I did my master’s thesis on mid-rotation treatments to plantations of adding herbicides and fertilizers– at about 15 years into their growth cycle to stimulate more growth and bigger soil logs and more output. Whereas we’re also trying to maintain a herbaceous ground cover on the site too to stabilize the soil. 

So managing more for the whole ecosystem rather than just for the trees themselves as a timber commodity. And Potlatch-Deltic does meet sustainable forestry initiative standards, and we also manage to those standards above. We just try to go above and beyond those standards, increase our streamside management zone widths, increase our BMP requirements for contractors. So we try a variety of things to play again that long game for long-term management of those sites. 

Representative Andrew Collins Thank you. And I think even more than what is the current comparison to Potlatch is what is the comparison to a potential future where there’s development, private development, and homes and things all around. And I guess you can just tell me, do you think that management by CAW of property where the Ouachita Trail is passing through would be better for tourism, better for that kind of aspect of bringing people to the trail than the alternative of having it be sold for development? 

Bryan Rupar I would absolutely agree with that. And we can back that with the fact that just this past year we opened up two designated camping sites along the Ouachita National Trail where there are shelters. We worked with the Friends of the Ouachtita Trail, the organization that maintains it, and to ensure that campers had a spot to go and concentrate where that disturbance may happen, where we can monitor it, clean it up, and concentrate in one area rather than having them disperse throughout the whole property. 

Senator Jonathan Dismang Senator Clark, Alan Clark, you’re recognized for a question. 

Senator Alan Clark Thank you, Mr. Chair. I don’t have a dog in this hunt, but I’m listening intently, both from a conservation standpoint, from a property development standpoint. It would appear to me, you can tell me if I’m wrong, that no property development leads to the highest water quality. 

But I don’t think we want to go to no property development. But as I look, not at this purchase, but down the road, that the same arguments, what land in Arkansas, what property in Arkansas above sea level is not above a tributary and watershed? Surely there’s none. 

Bryan Rupar So these tracts, again, we’re focused on major tributaries and areas with a high concentration of streams running through them, which makes them least desirable for development. A developer would have to have additional culverts and drainage. And we’re not against development in the watershed. 

We just would like to have some smart development and have them in areas with the least impact to the water quality. All of it’s going to have some, but there are ways to do it less disruptive. And so we’re trying to protect these critical areas around the critical stream corridors. That gives us a buffer. So anything uphill from that, like you mentioned, would have to flow through those managed lands before it reaches our lake. 

Kyle Cunningham I’d just follow up with that, if you don’t mind. So we have had a Forest Legacy acquisition in what we call the White Rivers Headwaters Forest Legacy area that was a pass-through to the Natural Heritage Commission, I believe. 

And so we’ve done other areas, but again, they’re very specific. And not every watershed is at risk of being developed to the extent that this one is because it’s around Little Rock. And so there’s some criteria here, again, from the Forest Legacy standpoint that this specific acquisition meets that we would not apply broadly across the landscape. 

Senator Alan Clark And I’m not saying I’m against what you’re doing or that you’re wrong. I just want to make the point that all property is above a major tributary. And just a few years ago, sitting here in this room, we had the federal government wanting to control everything, every drainage ditch. And so I’m listening very carefully. The arguments you’re making may be very good for this piece of property that can be made for just about any piece of property when you get down to it and that concerns me. Thank you. Thank You, Mr. Chair 

Senator Jonathan Dismang Thank you. Representative Howard Beaty, you’re recognized for a question. 

Representative Howard Beaty Thank you, Mr. Chair. I just wanted to know, do we have any representative from Perry County or from Pulaski County here in the audience today that would like to speak on the record on this? 

Senator Jonathan Dismang I’m not seeing any. 

Representative Howard Beaty Thank you, sir. 

Senator Jonathan Dismang Thank you. All right, Senator Davis, you’re recognized. 

Senator Breanne Davis Thank you, Mr. Chair, I’d like to be recognized for my motion. 

Senator Jonathan Dismang That would be awesome. 

Motion to remove Perry County portion

Senator Breanne Davis I make a motion asking that this item be deferred to the full Legislative Council meeting this Friday and request that the Department of Ag would consider removing the purchase of property in Perry County from its request, which would therefore limit the purchase a property in the Maumelle watershed using the federal grant monies to property– I’m sorry– using that money to buy that property solely located in Pulaski County. This motion would allow the agency time to resubmit the request to include only the purchase of property in Pulaski County. 

Senator Jonathan Dismang All right. Thank you. So just to kind of restate the motion would defer it to the full Legislative Council requesting the Department of Ag to remove the purchase of property, of their Perry County portion of property, and therefore limit the purchase of property of the Maumelle Watershed using the federal grant money to property solely located in Pulaski County. Is that the motion? All right. And then with that, Representative Eubanks. 

Representative Jon Eubanks A roll call with a divided vote.

Senator Jonathan Dismang I knew that was coming. All right. So we’ve got a motion. Do we have a second on the motion? We got a second on the motion. We’ve got a request for vote by division. Need three hands. We’ve got three hands for the vote by division. And now we’re going to move on to discussion. All right. Senator Hickey, you are recognized. 

Senator Jimmy Hickey So, and I don’t know if that just has to be between us or if there can be other questions here. My only thing with this motion is, unless staff knows, of course, if we didn’t take the whole acreage and say each acre is worth X amount of dollars, if the land in Perry County is worth more, then there’s going to have to be a renegotiation with Potlatch during this time also. 

So I don’t know how that the agency could just resubmit it and restructure it unless there was a renegotiation with Perry County, which I do like the sound of, personally, as long as I can hear that Pulaski County is for it. And some of the members have told me they are. That’s the only thing. So I don’t know if y’all have enough time to do that. It’s just something to consider. 

Senator Jonathan Dismang And at this point, we’re in discussion amongst members. 

Senator Jimmy Hickey I understand. 

Senator Jonathan Dismang  So I think what he’s really doing is asking you a question. Because pass or fail, that’s probably something that needs to be answered– 

Senator Jimmy Hickey I’m asking you, Mr. Chair. 

Senator Jonathan Dismang — after committee. All right, members, do we have any other discussion on the motion? Representative Eubanks, you’re recognized for discussion on the motion. 

Representative Jon Eubanks I’m going to withdraw my request for a roll call. 

Senator Jonathan Dismang All right, that’s been withdrawn. With that, we’ve got a motion asking this item be deferred to the full Legislative Council meeting this Friday and requesting the Department of Ag remove the purchase of the property in Perry County from its request and therefore limit the purchase property of Maumelle Watershed using the federal grant monies to property solely located in Pulaski County. 

We’ve got a second. Discussion’s over. All those in favor signify by saying aye. All those opposed? All right, motion carries. All right. 

Members, I’m trying to recall where we are in this process. I don’t think we’ve taken up H1 and 3. So is there any objection to reviewing items H1 and 3? All right, seeing none, those items are reviewed without objection. Item G1. All right. Sorry. I1. Sorry.

Staff Thank you, Mr. Chairman. Section I, this is a pay plan appropriation request. It’s from the Department of Veterans Affairs for $133,000. This is to support implementation of the new pay plan. 

Senator Jonathan Dismang All right. Thank you, members. Do we have any questions on item I1? All right, seeing no questions, we’ve got a motion to review. Got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. J1. Members, we’re at reports. 

We kind of mentioned this earlier. Are there any questions on J1? All right, Senator Irvin is excited. Are there any questions on K1 through 7? All right. Seeing none, members, with that, we are adjourned. Thank you for your time today.