The Fine Print

Does Rick Scott has a stimulus problem?

Here's what Gov. Rick Scott said last summer when it comes to the federal stimulus:

"It's not free money,'' Scott told reporters during a campaign bus trip across North Florida.

Scott, who was then a candidate running against Attorney General Bill McCollum, also said at that time that he would not have balanced the state budget with any money from the controversial federal stimulus package.

"I would have figured out how to balance the budget without it," Scott said. "We have to live within our means, governments have to live within their means. There’s a day of reckoning."

Scott also said then that "stimulus spending didn't help us."

Let's flash forward to now. Scott last week signed a sweeping executive order that froze new rules - and suspended for up to 90 days any contract that is worth more than $1 million.

None of the contracts can go forward until the newly created Office of Fiscal Accountability and Regulatory Reform reviews them. Some of the contracts - including a $450 million sole source contract with Bank of America - have been approved. The Scott administration has also let loose nearly $90 million worth of road-building projects.

But some of the road projects - and just as importantly - some of the pending contracts were funded with federal stimulus dollars.

Example: Scott has held up nearly $117 million worth of contracts that would take stimulus money and give it local groups around the state in order to do weatherization grants for low-income families. This is stimulus money that is intended to be used to help people lower their utility bills while also helping create jobs. The contracts now held up would go to organizations stretching across the state from Miami-Dade County to Orange County to Northeast Florida to Bay County. This program came under a little bit of scrutiny as some wondered why stimulus money was going to help people lower air-conditioning bills instead of helping their homes withstand winter weather. But information provided to Scott's office contends that the weatherization grants have created or saved 800 jobs as of the final quarter of 2010.

When asked about Scott's past comments regarding the stimulus, Brian Burgess, a spokesman for the governor said in an e-mail that this does not mean that the governor would halt the pending contracts. He said that the governor "thought it was wrong to use federal stimulus dollars (i.e. one time cash grants) to balance the state budget."

UPDATE: The Scott administration on early Friday evening announced it had approved a whole long list of contracts, including the contracts for weatherization grants that were funded with federal stimulus dollars.

 

 

 

Up in smoke: Firms battle over multi-million dollar campaign

A fierce battle has broken out over who should be in control of the state's multi-million campaign to keep teenagers from smoking.

And one of the companies seeking that $25 million a year contract contends the winning ad firm failed to disclose that its parent company once worked for the tobacco industry. Florida's well-known anti-smoking campaign comes from money the state won in a settlement with tobacco companies.

The state agency responsible for choosing the ad firm refuses to comment, although Department of Health officials told members of an advisory council earlier this week that it checked out the allegations and “didn’t find anything there.’’

Yet the Florida Tribune was able to quickly discover that one of the top executives at the Coral Gables firm that won the contract once worked for British American Tobacco. British American Tobacco manufactures brands such as Lucky Strike and Pall Mall.

Keep reading here.

So what do you have to do to earn nearly $121,000 from the state?

Here's a belated posting of some of the documents that have provided by state agencies in connection to the hiring of George Rekers, one of the two expert witnesses hired by Attorney General Bill McCollum to defend Florida's ban on gay adoptions. Rekers as most people now know has become linked to the words Rentboy after it was revealed he hired a young man associated with the site to accompany him on a trip to Europe.

Download Rekers document

Rekers got paid at a rate of $300 an hour - or twice the rate paid to the other expert used in the trial. He eventually was paid close to $121,000 for his work.

These documents spell out what Rekers did for some of his money and what Walter Schumm did to earn his money from the state.

Rekers said he worked 402.31 hours on behalf of the state.

The first part of his work - which cost $60,900 - is documented here and includes: 30 hours of conducting research on books and journal articles pertinent to the case, 90 hours to "read relevant publications" and evaluate and critique methodological quality and reported findings of newer research, 18 hours to meet with McCollum's staff to prepare for deposition, 20 hours for being present at the actual circuit court trial on the ban (which the state lost).

These documents also show that McCollum's office in Feb. 2009 requested that the Department of Financial Services - which is under Chief Financial Officer Alex Sink - reimburse Rekers a total of nearly $60,000 "absent a written document."  That letter states that McCollum's office "accepts responsibility" for not obtaining a written document but that it is the state's best interest to "settle this claim."

There is a settlement agreement dated February 20, 2009 that notes that there was not a written agreement executed for the rest of the money due "to unforeseen circumstances" and that invoices were rejected because there was no formal contract in place.

It also notes that "this agreement is contingent upon approval of the Chief Financial Officer."

Last week Sink was highly critical of McCollum's decision to hire Rekers when she appeared on a Tampa Bay radio program. She called McCollum a "typical politician" who tried to "lay the blame" on someone else when he was responsible for hiring Rekers.

Sandi Copes, a spokeswoman for McCollum, explained that it was "not unusual" for estimated costs to require adjustment and that the second payment was made because Rekers exceeded his contracted hours and that "extra hours were decided merely by discussion, hence the necessity of the settlement agreement."

House could scuttle a Jeb Bush legacy

A key component of Gov. Jeb Bush’s One Florida Initiative could be eliminated under a proposal that has been suggested by a House budget panel. But the move is already drawing fire from some legislators and the NAACP.

Rep. Alan Hays, R-Umatilla and chairman of the House budget committee that wants to eliminate the Office of Supplier Diversity and hand over some of its work to another part of state government, says that the current office isn't doing it's job.

 He cites a decline in minority spending levels in state government over the last few years. The office was set up by Bush at the time he ended the use of racial preferences in state contracts.

Bush, while not commenting directly about the cut, told the Florida Tribune that "supplier diversity takes work."

Read more about this and some other state budget-related news here.

State's personnel system taken over by foreign company

Here's an item from today's Current produced by the Florida Tribune:

The company that handles the People First human resources system for the state has sold off the unit that handles the work to a company based in London, England.

Convergys Corp. announced last week that it had sold its HR unit to NorthgateArinso for $85 million in cash and $15 million in cash over the next three years. The move, however, comes just three months after the Department of Management Services inked a five-year extension with Convergys worth $248 million.

Sen. JD Alexander, R-Lake Wales, said Thursday that he had just heard about the deal and added “I’m not sure what I think about it.” But Sen. Dave Aronberg, D-Greenacres and a critic of past outsourcing deals, said that he had a "skeptical eye" about the deal.

"Whenever foreign companies are in control of sensitive personal information it raises concerns for me,'' said Aronberg, who said he wants to get more information about the transaction.

Linda McDonald, a spokeswoman for DMS, said that state officials “expect the contract to be honored.” McDonald noted that while NorthgateArinso is based in the United Kingdom that the contract has “clear language” that personal information does not leave the United States. McDonald also noted that Northgate is controlled by a United States private equity firm, Kohlberg Kravis & Roberts.

But a controversy arose several years ago when a subcontractor hired by Convergys sent work on People First overseas to India. While Convergys said it knew nothing about the data being shipped overseas, the incident prompted DMS to warn more than 100,000 state employees to take precaution against possible identity theft.

JD's revenge? Senate to take up bill to break up state agency

The Department of Management Services could be broken up and placed under the control of the Governor and Cabinet under a far-reaching proposal that will be taken up on Wednesday.

The Senate Governmental Oversight and Accountability Committee will consider a nearly 400-page amendment to a shell bill – SB 1238 - sponsored by Sen. Jeremy Ring, D-Margate. The amendment was made public a day before the meeting.

Under the proposal DMS would be renamed the Department of Personnel Management and placed under the Governor and Cabinet. The aircraft pool would be placed under the governor’s office, facilities management would be handed over to the Department of Environmental Protection, while state purchasing would be given to the Department of Financial Services.

The move to break up DMS comes after legislators chastised the department on several fronts. Last fall Sen. JD Alexander, R-Lake Wales, criticized DMS Secretary Linda South for failing to do an inventory of state-owned properties as required by a new state law. Alexander was quoted as saying he thought DMS should report to the governor and Cabinet. This new bill obviously goes way beyond that.

There are political ramifications here as well with Senate President Jeff Atwater running for Chief Financial Officer. Placing state contracting under the Department of Financial Services could lead to a lot of donors who do business with the state deciding its worth their while to donate to Atwater's campaign.

House inks $105k contract to study managed care in Florida

Here's an item provided courtesy of independent journalist Christine Jordan Sexton:

A consulting group that lists WellCare Health Plans in Tampa as one of its clients has signed a $105,000 contract with the Florida House to conduct a study on Florida’s managed care delivery system including its penetration in the market and whether providers participate in the system.

House Speaker Larry Cretul signed a $105,000 contract with The Pacific Health Policy Group to analyze Florida’s Medicaid managed care program and produce an overview of the current program, including a financial overview and a study of the care, monitoring and oversight.  The report is due by Feb. 5.

According to its website Pacific Health Policy Group has worked with the Arizona Health Care Cost Containment System and Arizona Long Term Care System as clients. Arizona has implemented a large scale mandatory managed care program for the general Medicaid population as well as a managed long term care system for the aged, physically and developmentally disabled populations.

The Pacific Health Policy Group also also lists WellCare Health Plans as a client. The WellCare group of companies, Staywell  and  Healthease, are the largest Medicaid HMOs in the state.

The fate of the Medicaid program has been a source of discussion among legislators in the last few weeks with some lawmakers suggesting that one to save the state money would be to shift more patients from the traditional fee-for-service system into managed care organizations.

House Democrats appear ready to ratchet it up a notch

It's not been a big secret that Democrats and Republicans don't get along well in the Florida House.

But the prospect of a tough budget year - as well as the prospect of an angry electorate in the 2010 election cycle - has prompted the Democrats to take an even harder line during the upcoming session.

That tension has already spilled out in the last few days with Democrats taking shots at the Republicans during some of the budget hearings.

And it could get even worse. Some Democrats have decided that it makes little sense to cooperate with Republicans since they believe many of their ideas - and their bills - won't get much of a hearing from the majority party. And it's not like Republicans can use the budget as a way to create leverage since legislative leaders have all but made it clear that legislators will be cutting it.

Rep. Ron Saunders, D-Key West and a veteran legislator who once served in the House when Democrats were in the majority, said this week he is advising fellow Democrats to think about whether or not they want to file certain bills.

Why? Because House rules make it clear that a member can't offer an amendment on the House floor if there is a stand-alone bill on the same subject that has failed to pass through a single committee.

"If the bill is not going to be heard in committee, we'll at least get a chance to have it heard on the floor," said Saunders in explaining his strategy.

On Thursday, Democrats threw down another salvo. House Democratic Leader Franklin Sands, D-Weston and Saunders sent a letter to House Speaker Larry Cretul, R-Ocala, telling him that the current process outlined to deal with the budget is "fundamentally flawed." Democrats are referring to a decision by the House to ask members to list their top priorities - and their lowest priorities - as a prelude to possible budget cuts.

The letter states that Democrats "cannot participate in a futile exercise of identifying cuts" and suggested instead that the House have joint meetings between both its budget panel and the Finance and Tax Council for a more "productive" dialogue about the budget process.

So what does that mean? It means that Democrats won't be filling out forms that show what programs they like, and what programs they think could be cut. That means the only cuts that will get discussed are those proposed by Republicans.

You can expect the Republicans to criticize Democrats as obstructionists and unwilling to work together to find a solution to the state's fiscal woes. For now, consider this just Act 1.

(UPDATE -- Rep. David Rivera, R-Miami and chairman of the House budget panel, delivered his own letter to Democrats on Thursday afternoon where he blasted what he called their "obsession with raising taxes on Floridians during these tough economic times." He criticized them for refusing to engage in the budget exercise, calling it an "abdication of responsibility.")

Alexander: "Until they run over me in the street."

Sen. J.D. Alexander, R-Lake Wales and Senate budget chief, is confronting yet another dismal budget year that will likely translate into additional budget cuts, maybe layoffs, or even substantial changes to the Medicaid program.

But Alexander - who already has a history of clashing with Gov. Charlie Crist - reiterated again last week that he will still find time during the 2010 session to push another version of his state contracting bill that Crist vetoed last year.

Alexander said he will push to have more legislative oversight of state contracts "until they run over me in the street." His bill last year was opposed by Associated Industries of Florida which said it went too far, although AIF President and CEO Barney Bishop said recently that his group is willing to work with Alexander on a less onerous version.

Another key item that Alexander said could make a return is legislation that would assert more centralized control over the creation of a new accounting system for the state. State officials still desire a payroll ledger system that would enable the state to have a better idea on spending that goes across state government. But Alexander says he is convinced that the state will repeat the failure of Project ASPIRE - where the state spent nearly $100 million - unless there is one person or entity that can decide the best way to set up the new system.

Last year's version of the legislation granted more power to the office of chief financial officer, the post that Senate President Jeff Atwater is now seeking.

Is Gov. Crist's second biggest opponent in the Florida Senate?

 News from the camp of former House Speaker Marco Rubio that he raised "nearly" $1 million has set the political world abuzz that Gov. Charlie Crist could in fact have a tough road ahead in the GOP primary for U.S. Senate.

But the one-term governor may another problem brewing in the Florida Senate.

Sen. J.D. Alexander - the powerful chairman of the Senate budget committee - has made no secret in the past of his disdain for some of Crist's positions. But the Lake Wales Republican appears determined to wage a battle against the Crist administration on many fronts in the months remaining. It started last month when he pushed to have the state's long-range economic outlook include for the first time a statement that the financial condition of the Florida Hurricane Catastrophe Fund - which was expanded by state lawmakers in January 2007 - remains a potential risk for the financial health of Florida.

During a legislative committee meeting on Tuesday, he grilled Florida Insurance Commissioner Kevin McCarty over the state of Florida's property market - and then afterwards took umbrage at McCarty's statements. "He's artful to evading real answers to the questions,'' vented Alexander, although he later acknowledged that most senators knew the answers anyway.

Alexander remains steamed that Crist vetoed the insurance deregulation bill that could have kept State Farm from pulling out of Florida. He told reporters that the "consumer rhetoric" used by some was a "Trojan horse" and that he still found it inconceivable that a governor would think it was good riddance for State Farm to leave the state and potentially force hundreds of thousands of policyholders into the state-created Citizens Property Insurance Corp.

For his part, Alexander seemed ready to get back on board with a new version of the deregulation bill that lawmakers would once again potentially send to Crist.

But insurance isn't the only place Alexander could be a thorn in Crist's side. He is eagerly pushing ahead with efforts to scrutinize state government contracts even though Crist vetoed the bill that would have given the Legislature increased power to review them. Alexander directly the Senate budget staff this summer to start collecting information on contracts, with the result that he asked the Auditor General's office to look at a couple of the ones that he found.

Meanwhile, the state will soon will unveil the Transparency Florida website that will allow anyone get detailed information about anyone who gets state money. Alexander hopes the site will be ready for public consumption by sometime in November. He said on Tuesday that it would be the "most aggressive" transparency effort in the country and that he fully anticipates "gotcha" stories to emerge in the media once the information is uploaded from across the state.

Alexander said he met on Tuesday with Chief Financial Officer Alex Sink to discuss the ongoing effort, including some of the obstacles legislative staff have encountered. Alexander said one problem that they have run into is that certain travel reimbursements for anyone in state government have been treated as confidential information.