Four Arkansas lottery commissioners are questioning a proposal in which the Arkansas Scholarship Lottery would pay for half of the cost of a consultant hired by the Legislative Council to review the lottery and make recommendations to improve it.
The Legislative Council on Friday passed a proposal by state Sen. Jimmy Hickey, R-Texarkana, to approve a contract with Camelot Global Services of Philadelphia for a consulting fee of $149,500, plus up to $20,000 in travel reimbursements, without seeking bids. The contract started Friday and runs through Dec. 31.
Lottery Director Bishop Woosley told the commission in an email dated Tuesday that Bureau of Legislative Research Director Marty Garrity advised him that the Legislative Council was giving the lottery commission "the opportunity to be a part of the consultant process" and help pay for the study.
Woosley told the commissioners that "unless I hear an objection from you," he would advise Garrity that the lottery commission will cover approximately half the cost -- $75,000 -- of the contract with Camelot.
"It's also my understanding [Garrity] is drafting a memorandum of understanding that I will sign documenting this agreement," Woosley wrote in an email obtained by the Arkansas Democrat-Gazette under the Arkansas Freedom of Information Act.
Woosley sent his email to the nine-member commission Tuesday afternoon, shortly after lottery spokesman Patrick Ralston notified the news media that the commission's meeting scheduled for Wednesday was canceled.
Commissioner Julie Baldridge of Little Rock told Woosley and the other commissioners in an email dated Tuesday that she endorses Woosley's pledge to cooperate with and provide working space for Camelot Global Services during its review of the lottery.
But she said she has numerous questions about the lottery's payment of funds directly or indirectly to Camelot Global Services.
"I hope we will be able to discuss this at an appropriate time and would personally request that you take no further action until then," wrote Baldridge, a former spokesman and interim director for the lottery. "I disagree with your assumption of authority on entering into a contract, even tangentially, without commission action."
Commissioner Bruce Engstrom of North Little Rock wrote in an email dated Tuesday to Woosley and the other commissioners that he would like to know more about the scope of Camelot's review of the lottery, along with its qualifications.
"Can you have them make a presentation to the commission before we make any decisions," Engstrom asked Woosley.
Camelot runs the United Kingdom's lottery and has conducted similar studies of several other state lotteries, Camelot officials have said.
Commissioner Raymond Frazier of Little Rock wrote in an email dated Tuesday to Woosley and the other commissioners that "you have no choice" if "the payment by statute requires us to pay."
"But if I have any vote, then my vote is no for payment. [Providing] space & staff is up to you," Frazier wrote.
Commissioner Mark Scott of Conway wrote in an email dated Tuesday to Woosley and the other commissioners that "I do object to you agreeing to pay this without the commission approval and am requesting the commission have an opportunity to discuss this publicly before you sign any MOU [memorandum of understanding]."
Woosley replied, "Duly noted."
Commission Chairman John C. "Smokey" Campbell of Hot Springs could not be reached by telephone Wednesday afternoon.
Ralston said Wednesday's commission meeting was canceled "because we were told that as many as four commissioners had scheduling conflicts. It's hard to take up anything substantive with a third or more absent."
Asked why the commission didn't hold a teleconference to discuss the proposal to pay for part of the Legislative Council's lottery study rather than have Woosley give the commission a chance to object via email, Woosley replied that: "This request from the Legislature is unprecedented as it relates to protocol as to who (the director or commission) approves such a payment.
"That question is a little bit fuzzy," Woosley said. "Once I received the request, I contacted the chair [Campbell] and told him about the request."
Campbell "suggested I send out an email laying out the situation to see if any commissioners objected, desired additional information or did not want to make the payment at all.
"This is certainly a step I do not want to take without their thoughts and frankly would prefer that they make the decision given that they [requested] an RFP [request for proposals] be put out for their own performance audit," Woosley explained.
In response to the lottery's request for proposals for its separate performance audit, Delehanty Consulting of Wisconsin submitted a proposal to the lottery costing $170,000, and Rhode Island-based Gtech Corp. submitted a proposal costing $30,000, lottery officials said.
The commission hasn't decided the fate of its performance audit.
Ralston told the commission in an email dated Wednesday that, "Please do not discuss your votes on current or proposed commission business in a group email.
"This is not a public meeting channel, but everything here is FOIAable. Votes, yea or nay, should be discussed in a public meeting or publicly accessible conference call with proper public notice per [the Arkansas Freedom of Information Act]," Ralston wrote.
State Rep. Kim Hammer, R-Benton, said Wednesday that he asked Hickey on Friday to ask the lottery to pay for half of the cost of the Camelot study because the lottery and Bureau of Legislative Research should each bear part of the cost.
During each of the past two fiscal years, the lottery's ticket sale revenue and net proceeds for college scholarships have declined.
The lottery has helped fund college scholarships for more than 30,000 students during each of the past five school years. The Legislature has cut the size of scholarships twice during the past several years because net proceeds for college scholarships have fallen short of initial projections and more students than originally projected received scholarships.
The amount raised for scholarships peaked in fiscal 2012 at $97.5 million. It dropped to $90.2 million in fiscal 2013 and to $81.4 million in fiscal 2014. The commission projects it will raise $78.1 million for scholarships in fiscal 2015.
A section on 09/25/2014