State government's reorganized agencies must demonstrate better service to customers, engage state employees in the transformation efforts, and effectively communicate successes to Arkansans and lawmakers, Gov. Asa Hutchinson said Monday.
"There is always going to be critics out there," the Republican governor said during his first Cabinet meeting under Act 910. The new law, which took effect July 1, reduced the number of agencies reporting to him from 42 to 15 and realigned more than 200 boards and commissions under the departments.
"There is always those that have a better idea. There is always those that are hoping that this will not work, so we can go back to the old way of doing things. I challenge you that we have to effectively communicate our successes and challenges in metrics as well," Hutchinson said.
"Our communication should be directly to Arkansans because they are the customers. They are the ones that ultimately decide that this is a success or we need to change things," Hutchinson said, after referring to Walmart Inc. founder Sam Walton's emphasis on putting the customer first.
Hutchinson's reorganization is the most sweeping overhaul of state government since then-Gov. Dale Bumpers, a Democrat, consolidated the number of state agencies from 60 to 13 under Act 38 of 1971. Hutchinson has estimated that his overhaul will save the state at least about $15 million a year starting in fiscal 2021, which starts July 1, 2020.
Hutchinson said the reorganization will be reviewed both in Arkansas and across the nation and will be written about for decades.
"This was not something we borrowed from another state and said, 'Let's make it work in Arkansas,'" he said, adding that some Cabinet agencies have singular characteristics. "While other states have departments of commerce, this Department of Commerce has a unique combination of entities within it."
The new Commerce Department is led by Arkansas Economic Development Commission Director Mike Preston and includes that agency, the Department of Workforce Services, the Waterways Commission and the departments of securities, insurance and banking.
The governor initially met with secretaries with reporters present, then privately after a break.
Hutchinson spokesman J.R. Davis emphasized that "there are no new positions and no new money" for the governor's Cabinet secretaries.
The secretary of the newly created Department of Transformation and Shared Services is Amy Fecher, who previously served as chief transformation officer in the governor's office and executive vice president of operations at the Arkansas Economic Development Commission.
Fecher said in an interview that a deputy director at the state Department of Health, Ann Purvis, will be chief of staff, chief financial officer and chief legal counsel at the transformation department in a transition that could take anywhere from six months to a year.
Former state Rep. Charlie Collins, R-Fayetteville, who has been budget and policy manager for the Department of Finance and Administration, will become the transformation department's chief innovative officer and legislative liaison, Fecher said.
"Charlie has a unique skill set," she said. "I think he is a great person to fit in and bring out all of the innovation that we want in transformation and help us implement that with his experience."
Fecher said Alex Johnston, who has served as director of the Arkansas Economic Development Commission's Division of Rural Services, will start work Aug. 12 as the transformation department's chief communications officer and special projects director. And Brooke Woodward, who has been an aide to Hutchinson, will become assistant transformation officer and executive assistant.
Purvis' salary will increase from $141,260 to $151,000 a year; Collins' pay will increase from $95,381 to $98,142 a year; Johnston's salary will increase from $71,729 to $83,000 a year; and Woodward's pay will increase from $40,997 to $45,096 a year, based on information from Fecher and the Arkansas transparency website.
"The identified staffing for the secretary's office does not represent additional positions or funding for the Department of Transformation and Shared Services," Fecher said later in a written statement. "The positions and salaries represented ... are drawn from within the existing appropriated positions and funding of the department. We simply used vacant positions and repurposed them to support the department."
Fecher's department includes the Department of Information Systems, Geographic Information Systems, the Office of Transformation and the Department of Finance and Administration's former Employee Benefits, Building Authority, Procurement and Personnel Management offices.
In a report dated Monday to the chairmen of the House and Senate State Agencies and Governmental Affairs committees, as required under Act 910, Fecher provided a four-page summary of the 16-member transition team's work.
"The work of transformation is just beginning," she wrote, "but because of the efforts of the Transformation Transition Team, the trail has been marked. Cabinet secretaries now have a path to follow and, more importantly, clear direction of where to lead their team."
Fecher also provided a 90-day action plan for the secretaries under which a report on "shared services opportunities" is due to the governor on Sept. 2. The Cabinet secretaries will review all agencies' budgets, contracts, information technology structure, personnel and vacancies and recommend to the governor when using "a shared services model" for a department can provide efficiencies.
On Oct. 3, a report on department vehicle fleets is due to the governor, according to the 90-day action plan. Secretaries will review vehicle inventory and spending per agency on mileage and then recommend ways to be more efficient.
On Nov. 1, a report on the analysis of property is due to the governor, according to the action plan. Secretaries will review all leases, lease expirations and possible ways for agencies to share space. They will then recommend changes to the governor.
In February this year, the Arkansas Development Finance Authority paid $26 million for an office building and parking lot at 1 Verizon Drive in Little Rock, the Arkansas Democrat-Gazette reported in March.
State government will use the building for additional office and administrative space, Derrick Rose, a spokesman for the finance authority, told the newspaper in March.
Asked about Rose's remarks, Davis, Hutchinson's spokesman, said Monday: "It is my understanding there still is an opportunity for a prospective company to come in. But I don't think any decisive direction has been given on that."
On March 16, a report on identified efficiencies is due to the governor and the Legislature under Act 565 of 2019, according to the action plan. The fiscal session begins April 8 to set fiscal 2021 general revenue budgets.
In his remarks to the secretaries, Hutchinson said that when his term ends in January 2023, a new governor and the new General Assembly will be tempted to tinker with this reorganization.
"We have got to make sure that we are successful and communicating as well as to what we are doing, why we are doing it, the challenges and our successes," he said.
A Section on 07/09/2019