Interim Committee on Appropriations

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Good morning. I'd like to welcome everyone to our April 30th Joint Committee on Appropriations. We are on a Teams meeting, and we do have a few people online that will be responding to the letters of intent. Just protocol, make sure all testimony and questions will be addressed through the chair. And I'd like to welcome all of our internet listeners and everybody on South Dakota Public Broadcasting. At this time, I'd like to ask the secretary to call the roll.

Senators and representatives, Miss Skimmens, Alk.

Here.

Kassin.

Here.

Perfect. Moore.

Here.

Vilhauer.

Here.

Carley. Voita.

Here.

Jorgenson.

Here.

Howard.

Here.

Foster.

Here.

Sjaarda.

Here.

Muckey.

Here.

Sjikmund.

Wait on that. I heard Zikmund earlier.

Here.

Yeah, I'm here.

Perfect.

Norstrup?

Here.

Lapka?

I think he was here.

Otten?

Here.

Derby?

Here.

You have a quorum.

Okay, try Senator Lapke again. I see him online.

Senator Lapke?

Okay, very good.

Mr.

Chair, Mr. Chair, this is Representative Julie Auch. I am also here. I apologize for being a few minutes tardy.

Very good, thank you. We have no minutes to approve. And at this time, I would open it up. Are there any personal privileges or announcements to be made at this time? Okay, well, we're going to move on to— we have 2 letters of intent to deal with today, and hopefully you've got and seen them all online and read them, but I will have the LRC staff review each letter of intent, read it, read the important parts, and we'll discuss it. I know the first one is the letter of intent regarding Richmond Lake Dam progress update. LRC, would you like to go through that? And then we'll have, I believe, Representative Jorgenson was the sponsor of this.

All right. Jocelyn Jessup, LRC staff. The first letter is the Richmond Lake Dam progress updates.

Mm-hmm.

We do have the commissioner in the room, too, who can probably answer questions better than I can. But the idea behind this was the committee would get an update in July and December. Of every year until all funds have been expended regarding the Richmond Lake Dam project. Representative Jorgenson can probably also elaborate, if at all.

Representative Jorgenson, would you like to add to this?

Thank you, Mr.

Chair.

There were just concerns from other legislators about ensuring that as we go through this process that we get regular updates, and this just formalizes it.

Thank you. And did I hear Commissioner Greenfield is in the room? Is that correct? I have a question.

Good morning, Mr. Chair.

I am here.

Good morning, Commissioner. I guess you can remark on this, but also I think we'd like to take the opportunity to have you give us an update While we've got the chance.

Sure, Mr. Chair. This this is Brock Greenfield speaking. I'm the Commissioner of School and Public Lands. For the record, I live in Pierre. As far as the letter of intent goes, I don't have any real concerns about that. Gives us a chance to see one another's smiling faces on a. A couple different times throughout the year. I don't mean to be flippant, but we also are required to report to Danner with respect to the high hazard potential dam. I've mentioned that to a number of you. I think I mentioned it in testimony as well that, you know, they they sent us a letter back in November that said we have six months to complete the project according to state statute. They said because of the scope of the project, they recognized that 6 months was not an appropriate timeframe, but they've required that we provide quarterly updates now going forward. So this does not put any real burden on me or, or my office as far as I'm concerned. We had a preconstruction meeting yesterday. A number of parties were on that talking about the timeline. They have since provided some notes from the meeting. The way it's looking, they're going to start right away next Monday, May 4th, with the road closure and prep work and, and what have you. And, you know, if everything works out in an ideal situation, they'll be able to wrap this up over the course of 2 construction seasons. I did notice as I was reading a prior document that they've allowed a contingency if, if because of inclement weather they're not able to finish the bridge, they would be able to go out in May of 2028 and, and begin that or finish that project. The ultimate completion date Again, with the contingency for extra time built in is July of 2028, but it's hoped and expected that it could be done during the construction season of 2027. I'd be available to answer any more questions. That's the high-level synopsis.

Thank you, Commissioner. Questions from the committee? I guess, Commissioner, I do have a question. The residents around the lake, have you had meetings with them, and what's the tone and temperature of meeting with the local residents?

Um, thank you, Mr. Chair. I've had meetings A few times in the past, nothing of late. However, I was at the Brown County Commission meeting on April 8th, at which time there were a couple members from the Lake Association there and a ton of people online. I might add that there were 15 little boxes on the screen and only one of those was the Brown County Commission room. So Keen interest, obviously. I'm not going to say that it's— oh, we're getting feedback here. Just one second.

One second.

Okay. I'm not going to say that everybody is wholly satisfied, but from the conversations I've had, the majority of people out there are. There are a lot of people who have alternate ideas, suggestions, concerns about the money that's been appropriated. But everybody is armchair quarterbacking at this point. And, but by and large, we've got really strong support up there. And frankly, have since the first time that I was up there. When I was a legislator, I met out there with Ryan Bruner and Mike Corneliuson from the Office of School and Public Lands and met with some of the homeowners and the people actually from the lake association's board. And there's been some turnover, but we've had ongoing discussions via email, text, phone. The last, the last, I guess, formal meeting was last fall, but we're planning on doing another one here in the very near future. We're also looking at trying to have a groundbreaking up there within the next 2 weeks. We were originally targeting May 6th. We're looking now at maybe an alternative date, depending on people's availability, namely the governor. So, but I would anticipate that will bring people out and there will be several questions You know, offline questions, comments, etc. And then I think it's it's our plan to try to facilitate another meeting with GFNP and some other stakeholders up there. So we've had we've had ongoing dialogues, some in an informal manner and some some more formal.

Thank you, Commissioner Representative Norstrup.

Yeah, no more sharing screen. Okay. Well, you—

There we go.

Thank you. I knew you'd get it.

They had 2 mute buttons and one worked and one didn't. The question is, on-site, what's actually happening there today?

To be honest—

Is a construction company on-site is my question.

I don't, I don't know that answer. Maybe 2 weeks ago they asked about doing some transport of some of their, some of their materials or barriers, what have you, that they would be utilizing in the road closure project or process. And they were told at that time, you need to get your certificate of insurance on file with the state before we're going to greenlight that. I presume that they have in the meantime. So there could be somebody up there. I wouldn't be surprised if there is. But May 4th is ultimately the, the first day when, when I know that there's going to be mobilization. And maybe you know better than I do what's going on right, right now.

I don't.

Suffice it to say, everybody's chomping at the bit to get going. And I do appreciate the fact that Journey, doing business as SF The DFWC has been very communicative with us and just trying to make sure that everything is properly put in place as far as the paperwork and what have you. The Office of the State Engineer and Danner have been tremendous too, tremendous help. So we have a lot of players in the game, not to mention, you know, Barr Engineering, who's shepherded this through the process for the last 5 years.

Very good. Are there any other questions from the committee? Hearing none, are there any testifiers either online or in the room regarding the Richmond Dam LOI? Okay, seeing none. Well, at this time, Jeff, what would the motion be? I would entertain a motion. Could you say what the motion would be?

Mr. Chair, it's Jeff Meloff. You would do a motion to approve if you— if the committee wants to move forward with the letter of intent.

Mr. Chair, this is Representative Kassin. I move to adopt the letter of intent.

Muckey seconds. Motion by Representative Kassin, seconded by Representative Muckey, to approve the LOI. Any further discussion? Nope.

I think it seems like a really good idea and something that seems like it's going to be done for Danner, and I think it should, with the amount of money that's involved, should also be reviewed by the Appropriations Committee. So I find it very Very appropriate, and look forward to voting yes.

Thank you. Any further discussion? Hearing none, Secretary, call the roll.

Senators and representatives: Miss Skimmens, Auk.

Yes.

Cassin.

Aye.

Moore.

Yes.

Philhauer.

Aye.

Carley. Voita.

Aye.

Jorgenson.

Aye.

Howard.

Aye.

Foster.

Aye.

Sjaarda.

Aye.

Muckey.

Aye.

Zikmund.

Aye.

Kolbeck.

Aye.

Norstrup.

Aye.

Lapke.

Aye.

Otten.

Aye.

Derby.

Aye.

Is Miskimins here? Senator McKimmons, did you hear the motion and would like to vote? Mr. Chair, otherwise it's currently 16 ayes, 2 absent. Depending on if Miss Skimmens—

All right, thank you. Motion to approve the letter of intent for the Richmond Dam hereby passes. Thank you. Thank you, Commissioner.

Thank you all. Take care.

Um, moving on to our second item of business, and this has to do with Letter of intent regarding utility budget transfers. Staff, would you like to give an update on this? And I'm assuming there's someone from the Board of Regents available to give some testimony.

Mr. Chair, Jeff Melhoff, your Chief Fiscal. I will briefly in 1 minute talk about this. So this is a yearly letter of intent that the committee typically does. If you— if the committee knows the dollar amounts, those are done and approved as a budget transfer. But when the committee doesn't know the exact dollars being transferred at the time, a letter of intent is done to approve those transfers, where they transfer the general fund utility dollars between institutions. And because those are between budget units, they have to be approved by this committee. That's all I have, Mr.

Chair.

Thank you. At this time, is there a representative from the Board of Regents that would like to comment or testify?

Mr. Chair, good morning. My name is Ann Langdell with the Board of Regents, and I'm here to ask for your support of the FY26 utilities realignment letter of intent. As you know, there is a statute that doesn't allow the institutions under the Board of Regents to transfer amongst themselves without the permission of GCA, and as such, we are asking for this letter of intent that grants the ability to transfer general fund utility dollars amongst institutions to ensure that we can fund our utilities as fully as possible. Each year, we, like all the other agencies, complete the BFM Utilities Projection Workbook utilizing our energy cap data, which does its best to estimate what our utility needs will be for the fiscal year at each institution. However, Changes in weather rates and utilization throughout the fiscal year. We often have campuses that need a little extra funding and campuses that will not fully utilize their utilities allocation. And each year we request this ability to transfer amongst our institutions to support those that have additional utilities funding need. Per our agreement with BFM, if we have any remaining general fund utility dollars after our transfers are complete, the campuses will revert those dollars back to the general fund. Like Jeff said, we do not have an exact number for our transfers or reversions at this point because we do allow the campuses to pay as many June utility bills as possible. But if approved, we will execute the transfers to fund them as fully as possible and revert what remains. We ask for your support of this letter of intent. Thank you.

Thank you very much. Are there any questions from the committee? Questions from the committee?

Yes, Representative Auch.

Yes.

Okay, uh, um, the representative from Board of Regents, may I ask, have you ever reverted back any dollars to, um, the state of South Dakota for utilities that have not been utilized?

Yes, we have. Excuse me, Mr.

Chair.

Uh, yes, Representative Auch, we absolutely have. Um, the last couple of years, um, like I said, Weather is very— we're very weather dependent, right? And we've had cold snaps on the eastern side of the state and warm weather on the western side. And we have been affected by some of the polar vortexes that have happened throughout the country. And so as a part of that, we have reverted general fund dollars in the past when we have not utilized them.

Thank you, Chair. Thank you very much for your answer.

Thank you.

Thank you. Additional questions from the committee? Any additional questions? Okay. All right, hearing none, uh, entertain a motion to approve.

This is Kolbeck. I make a motion to approve the letter of intent for the Board of Regents transfer of money for utilities.

Muckey seconds. We have a motion by Representative Kolbeck, seconded by Representative Muckey. Any discussion on the motion?

If you need to heat your buildings and make the water run and you got to transfer a few dollars from one institution to another to get that job done, I think this is a good letter of intent. Thank you.

Thank you. Any further discussion? Hearing none, I ask Secretary to please call the roll.

Senators, representatives, Miss Skimmens.

Aye.

Auk.

Aye.

Cassin.

Aye.

Moore.

Aye.

Vilhauer.

Aye.

Carley.

Voita.

Aye.

Jorgensen.

Aye.

Howard.

Aye.

Foster.

Aye.

Charda.

Aye.

Mucky. Aye.

Zikmund. Aye. Kolbeck.

Aye.

Norstrup.

Aye.

Lapki.

Aye.

Otten. Aye.

Derby.

Aye.

17 yeas, 1 absent.

Thank you. The motion to approve the Board of Regents utility transfer hereby passes. Well, that takes care of our 2 items on our agenda. We are going to take a couple minutes. Mr. Milhoff, we had a request to get some updates on revenues to date, some snapshots, and we thought as long as we had everybody together, we would have Mr. Melhoff give us an update. And turn it over to you, and then we'll be done.

Thank you, Mr. Chair. Jeff Melhoff, your Chief Fiscal Analyst. So I'm going to cover what we have collected year to date, and that would be up through March. Next week is when we should be getting in the April revenues. And so there's 3 months of collections left, April, May, and June. And like I said, we'll be getting the April revenues in likely next week, and we'll know another month. But up through the end of March, we are running probably about where we need to be. There's a couple timing issues with insurance company tax and license permits and fees where the year-to-date revenue is below where we expected, but we believe that's a timing issue, and we believe that will be corrected here in April or May.

Great.

So year to date, I would say we're up about $10 million of where the target says we should be. Starting with sales and use tax, we are about $6 million ahead of target. So we're running about 5.6% year-to-date growth. The adopted target back in February was 5.4% growth. So we are slightly ahead with 3 months left to go of the sales tax target. So that is a good place to be. Contractors excise tax, we are running about where the target says we should be. We're within about $186,000, which is very close to target for contractors excise tax. Year-to-date collections through March, we're up 2.1%. I think the adopted target was about 2.4. Lottery, the second largest revenue source, we are literally $43,000 within target of where we should be. And we're looking at about 2% growth year to date on lottery. And the adopted was 3.9. The reason we're on target is because we get a lot of revenue in that last month of the year from the instant online. So we're doing well on the On the 3 big revenue sources, we're either on target or ahead. Bank franchise tax, we're ahead there as well, about $6 million. The smaller revenue sources, I would say, were within target, maybe slightly less, slightly more, but those are small— the smaller revenue sources overall. And I'll stand by if there's any other questions on specific ones or you want to talk about the larger ones.

Thank you.

But that's really, Mr. Chair, all I had to cover. Thank you.

Thank you. Questions from the committee for Mr. Melbaugh? Mr. Chair? Yes, Senator Vilhauer. Yes, I got a question for, for Jeff.

I missed it.

You said sales tax running about 5.6% up from a year ago. What was that compared to target, though?

Sure. Mr. Chair, going back to sales tax, year-to-date growth, so year-to-date growth for fiscal year '26 over '25 through March is 5.6%. So right now, year-to-date, we're growing 5.6% over last year. The end-of-the-year target is 5.4%. So by June 30th, at the end of the year, we need to grow sales tax 5.4%. 4% to meet that target. So we are slightly ahead of target right now with 3 months left, so we could even get further ahead.

Sounds good.

Thanks, Jeff.

Yep.

Additional questions? Any additional questions? Well, I would like to make a comment. I think we can all take some pride in our work we did Over a year ago, and how close we're hitting the numbers. So I think we're going to end up the year pretty good shape, and I want to thank you all again for all of your hard work. Well done. So at this point, any anything else for the good of the cause? Any closing comments, Rep. Sam Norstrup?

Thank you, Mr. Chair. Just want to commend you for making the decision to save time and money by allowing us to do a Teams meeting instead of driving to Pierre, and that's a very good use of our time and money. Thank you.

Amen.

Yes, yes, yes, yes, absolutely.

Thank you. Yes, one of the smarter things I've done. Thank you. Mr.

Chair?

Yes, Chair, I've got a question. What is the scheduled next meeting date? Yes, Mr. Melhoff.

Mr. Chair, we are scheduled on the LRC's website for July 20th starting at 10 o'clock, and that's the July meeting that we're required by statute to have in July, and that's where we cover year-end Revenues, year-end expenditures, reversions. We look at the revenue targets for FY27 again. You'll hear revenue presentation from BFM and myself on where revenues are going to be at for fiscal year '27, and then whatever else you want to have on the agenda. Follow-up, Mr.

Chair?

Yes.

Do you anticipate that being in person, or, or could that be a Teams also? I've got a conflict that day is why I'm asking the question. That's, uh, I would anticipate in person at this time. That's a pretty big meeting.

Sure.

Okay, thank you. And Mr. Melhoft, what's the following meeting schedule?

Um, Mr. Chair, I believe the meet— the next meeting after the July one would be a possibly December 2nd meeting, is what was being discussed before, is On the Governor's Budget Address Day. And for, for like every meeting we do, there is also a Teams option available for anyone who can't be here in person. We make that available for anybody if they need it.

Very good. Anything else? Anything else for the good of the cause?

Mr. Chair?

Mr.

Chair?

Yes.

Would—

could you repeat that date again? Was it July 17th at 10 a.m.?

No, Mr.

Chair, it's July 20th.

Oh, I apologize. Okay, thank you.

Mr. Chair, this is Senator Voita.

Yes, Senator.

I have a question about the current revenue updates. Was there an email sent out with that, or could we get that if not?

Mr. Chair, I will be sending out a new revenue for the May— for the collections in April. That's the May report. That will be coming out as soon as I get those new revenues in and have time to analyze it and compile the data.

And a follow-up there. More than likely, Mr. Melhoff, there was one sent out in April. With the March numbers, correct?

I will make sure that it's out there, and I can send it again to the committee as well, Mr. Chair.

Great. Very good. Anything? Yes.

Yes.

This is Senator Foster.

Yes.

I did have a question during the regular session. I had asked. DSS, a question regarding Lutheran Social Services kinship backlog for their foster care training and evaluation. I have not yet received a response on that, so I was wondering what would the best— or one, if they maybe sent a response and I missed it, so if anyone else has seen that, and if not, what's the best route to take to, to get that information.

Mr. Melhoff.

Mr. Chair, we can, um, have staff follow up with DSS on this and get, um, back to Senator Foster.

Okay.

Okay.

Senator Foster, could you send Mr. Melhoff an email with your specific request For them to work off.

Yes, thank you.

Very good. Any anything else for the good of the cause? Okay, hearing none, would entertain a motion to adjourn. So moved, Mucky.

Seconded by Voita.

Motion to adjourn by Representative Mucky, seconded by Senator Voita. All in favor say aye.

Aye.

Opposed? Motion carries. Thanks again. Appreciate it. Good work.

Thanks, everybody.

Thank you.

Thanks, everybody.