SOCIAL EQUITY COUNCIL | Finance Committee
October 21, 2021
Special Meeting of the Finance Committee of the Social Equity Council
1:00 AM – 2:00 PM
Meeting materials:
Cannabis 2022
Cannabis Fiscal Note
Cannabis Social Equity Approved Budget FY2022
AGENDA
- Call to order
- Review of Goals & Objectives of Finance Committee
- SEC Budget Preparation, Timeline
- Revenue Assumptions, Projections
- Expenditure Assumptions, Projections
4. Recommendations to the Full Council
5. Adjournment
Chair: Christine Shaw
Members: Melissa McCaw, David Lehman, Edwin Shirley, Joe Williams, Christine Shaw
____
Minutes:
ATTENDEES: Christine Shaw, Secretary McCaw, Ed Shirley, Joe Williams
0:00:00.000 --> 00:00:02.240
Shaw, Christine
We've established a regular meeting time.
00:00:03.660 --> 00:00:12.030
Shaw, Christine
Uh and which is typically 2:00 o'clock. We push this up to 1:00 o'clock to accommodate secretary macaws schedule so I do expect her.
00:00:12.760 --> 00:00:16.770
Shaw, Christine
Uh momentarily so we'll just wait another minute and dumb.
00:00:17.990 --> 00:00:18.930
Shaw, Christine
Then we'll proceed.
00:00:20.080 --> 00:00:20.670
Ed Shirley (Guest)
OK.
00:00:26.990 --> 00:00:27.780
Gallion, Cassandra
I love the second.
00:00:28.820 --> 00:00:30.320
Gallion, Cassandra
Yeah, how are you?
00:00:31.630 --> 00:00:32.560
Shaw, Christine
I think I hear her.
00:00:32.290 --> 00:00:32.810
Gallion, Cassandra
CM.
00:00:32.610 --> 00:00:32.840
Shaw, Christine
Right.
00:00:35.990 --> 00:00:37.720
Shaw, Christine
Sounded like the secretary anyway.
00:00:41.400 --> 00:00:41.900
Shaw, Christine
OK.
00:00:57.130 --> 00:01:09.300
Shaw, Christine
So before we begin I would just ask if there are any committee Finance Committee members on the call. If I don't recognize your number if you could just identify yourself because we?
00:01:09.970 --> 00:01:11.930
Shaw, Christine
We are awaiting one more from warm.
00:01:19.930 --> 00:01:20.440
Shaw, Christine
OK.
00:01:21.260 --> 00:01:23.860
Shaw, Christine
So I'm I'm going to call the meeting to order.
00:01:24.920 --> 00:01:40.020
Shaw, Christine
This is the meeting of the Finance Committee of the social Social Equity Council. It is currently 105 on Thursday, the 21st. Thank you to members of the public and.
00:01:40.080 --> 00:01:46.890
Shaw, Christine
Uh our colleagues across state government have joined this call. I'm joined by my fellow committee member and Shirley.
00:01:47.890 --> 00:01:54.320
Shaw, Christine
And we have page recede who is with DCD, helping us with the administrative aspects of this work.
00:01:55.010 --> 00:02:06.350
Shaw, Christine
So we do not have a quorum. This is a 5 person committee, therefore quorum requires 3 members and we have just 2.
00:02:07.390 --> 00:02:16.100
Shaw, Christine
But I I'm hopeful that members of the committee can join if not, we'll just map out the work that we have. We do not have any action items before us today.
00:02:16.910 --> 00:02:33.360
Shaw, Christine
But we do want to ensure that this committee has its eye on the timelines that are relevant to the task that is before us and so I'll turn to agenda item number 2 review of the goals and objectives of the Finance Committee.
00:02:34.450 --> 00:02:48.380
Shaw, Christine
Our committee mandate, which was established by the Council during its formational early stages. In August, just a few months ago. The primary task for this committee is the development of the annual budget.
00:02:48.450 --> 00:02:53.970
Shaw, Christine
Uh uh, including the budget for our job and so we now have a quorum.
00:02:55.380 --> 00:02:56.670
Shaw, Christine
Welcome Joe nice to see you.
00:02:56.930 --> 00:02:57.600
Williams, Joseph
You do.
00:02:58.590 --> 00:03:07.140
Shaw, Christine
So uhm I just open the meeting called it to order now we have a quorum so we can proceed with the business of this committee meeting.
00:03:08.130 --> 00:03:20.590
Shaw, Christine
I mentioned Joe that there are no formal action items, but it is important that we, as committee understand the various timelines that are that are in place, which guide.
00:03:20.950 --> 00:03:37.250
Shaw, Christine
Uh and autoguide the preparation of the budget, which is our primary task so the task was laid out for this committee by the Social Equity Council during the August meeting and thereafter. So our primary task is to develop the budget for fiscal year 2023.
00:03:38.480 --> 00:03:46.470
Shaw, Christine
And we must also ensure that expenditures are appropriate and that they further. The mission of the Social Equity Council.
00:03:47.330 --> 00:04:17.220
Shaw, Christine
So uh toward these ends the Finance Committee held its first and only other meeting on August 31st. So we kind of got a general sense of this charge and we discussed at a very high level. Some of the timing issues. I'll be reporting. Some of the progress that and and additional information that I've gathered. This is a committee that you know will benefit from the involvement of its members and other committees so whatever you find and discover it.
00:04:17.370 --> 00:04:30.830
Shaw, Christine
In the course of the work that you're doing through other committees. It will inform this work and and and and we ask that you kind of share anything that we need to know as it relates to the budgeting process.
00:04:32.380 --> 00:04:59.820
Shaw, Christine
So with that I'm going to turn to agenda item number 3, which by the way this will be a standing format for the agendas for the Finance Committee. If any member wants to have a more focused discussion of any aspect of the budget and in particular, if any, Finance Committee member recommends that we bring in any additional expertise, please by all means.
00:05:01.290 --> 00:05:07.380
Shaw, Christine
Please let me know, and I'll make sure that we have an opportunity to formally discuss those.
00:05:08.400 --> 00:05:15.930
Shaw, Christine
So with that I'll turn to the 3rd item on our agenda, which is the the SEC budget preparation and timeline.
00:05:16.440 --> 00:05:47.110
Shaw, Christine
A general matter, you know will have to undertake 2 very distinct tasks of updating revenue assumptions that are already set forth in the fiscal 2022 budget as well as laid out in the fiscal note for the cannabis bill so just to to to comment on just generally and the budget itself, so, so there are 2 components as I understand it. There's the operational budget for.
00:05:47.670 --> 00:05:56.770
Shaw, Christine
The work of the Social Equity Council and specifically the expenses associated with standing up the administrative framework so that includes.
00:05:57.320 --> 00:06:03.060
Shaw, Christine
I'm the executive director and the various positions that she is currently.
00:06:03.510 --> 00:06:09.780
Shaw, Christine
Uh looking to fill up so there already is a budget in place for fiscal 2022.
00:06:10.580 --> 00:06:12.620
Shaw, Christine
And UM thankfully.
00:06:13.960 --> 00:06:20.400
Shaw, Christine
Where where we stand and where Allstate agencies stand we're in the middle of a biennial budget process so?
00:06:20.460 --> 00:06:21.160
Shaw, Christine
Uhm.
00:06:22.560 --> 00:06:37.880
Shaw, Christine
In in this even what we're approaching an even numbered year. This is where there will be adjustments to the budget that was already in place and so included in the materials is the approved budget for the cannabis related expenditures.
00:06:39.460 --> 00:06:44.440
Shaw, Christine
Rather, the administration piece and so for fiscal 2022.
00:06:44.990 --> 00:06:53.360
Shaw, Christine
Uh there's been an appropriation of 1,000,000, 540, $2830.00 with a modest increase.
00:06:53.420 --> 00:07:02.780
Shaw, Christine
Uhm of about $80,000.00 to 1.6 roughly 1.6, $1,000,000.00 for fiscal 23, so.
00:07:02.830 --> 00:07:28.780
Shaw, Christine
So you know it strikes me that what our committee has to really focus on is the extent to which there needs there need to be any adjustments to that fiscal 23 budget and that will come. I'm not sure that will change materially. It really does. I think depend on the pace with which our executive director is able to fill you know key positions.
00:07:30.210 --> 00:07:38.280
Shaw, Christine
So you know, we'll we'll stay tuned on that, but that is one area that we, as a committee should be tracking as a general matter.
00:07:39.670 --> 00:07:43.900
Shaw, Christine
Because that will impact whether there will be funds. You know that can be carried over.
00:07:44.770 --> 00:07:47.040
Shaw, Christine
Uh for fiscal 2023.
00:07:47.550 --> 00:07:48.090
Shaw, Christine
Uhm.
00:07:49.530 --> 00:07:59.910
Shaw, Christine
So so that's the the first major component of I think the budgeting and the cannabis related expenses and revenues deals with what has already been approved for.
00:08:00.500 --> 00:08:06.410
Shaw, Christine
Uh they the councils administrative staff so any comments or questions about that.
00:08:09.070 --> 00:08:09.560
Williams, Joseph
No.
00:08:10.810 --> 00:08:29.680
Shaw, Christine
I will note that is folks know the Social Equity Council administrative staff is housed within DCD for administrative purposes. So I did connect with the budget analyst yesterday, thanks to the introduction of Glen Fames, Deputy Commissioner of DCD.
00:08:31.310 --> 00:08:48.560
Shaw, Christine
And so just got confirmation that the DCD budget analyst is tracking the expenditures as positions are filled so there is someone who is kind of assuming those responsibilities that is a temporary scenario as I understand it.
00:08:50.460 --> 00:09:03.640
Shaw, Christine
I I I further understand that the positions that have been identified as necessary for the full functioning of the council 's work include a fiscal analyst in a budget analyst.
00:09:04.540 --> 00:09:17.720
Shaw, Christine
So I'm I'm not sure if Jimmy Raison. This call but one outstanding question that I think for for our purposes would be helpful to understand is the timing of bringing on that.
00:09:19.410 --> 00:09:24.060
Shaw, Christine
That brick filling that role and and getting that function kind of up and running.
00:09:25.210 --> 00:09:27.340
Shaw, Christine
So the DCD.
00:09:28.100 --> 00:09:28.550
Shaw, Christine
Uh.
00:09:29.690 --> 00:09:32.930
Shaw, Christine
Role I think is meant to be a temporary one as it relates to the budget.
00:09:37.620 --> 00:09:52.080
Shaw, Christine
OK, so turning to the second aspect at the budget and this is where it's it's a little less clear how it is the Finance Committee is going to weigh in on this process.
00:09:52.510 --> 00:10:12.070
Shaw, Christine
Uhm I will follow up, I will definitely follow up with Secretary of a con her team. But if there's anyone on the call happens to know this feel free to to to offer your insights. But there are a broader array of costs labeled as cannabis related costs that are apportioned across.
00:10:12.530 --> 00:10:43.110
Shaw, Christine
Uh a state government and you know attributed attributed to various agencies, including DRS DMV. DCP and a number of other departments. The there is a schedule, which summarizes fiscal 2022, cannabis related costs that is a second attachment in the email that I sent along with the meeting notice and that estimates that the total cannabis related costs for fiscal 2022 stands.
00:10:43.390 --> 00:10:48.240
Shaw, Christine
Stand at 16:00, 0.9, $1,000,000.00, so uhm.
00:10:49.550 --> 00:11:19.420
Shaw, Christine
You know, I've had some very preliminary conversations with opium and I understand that their internal team is working to kind of identify and track the flow of revenues associated with some of the cannabis work and that will impact the expenditure side of the budget. Obviously so that is an aspect of the budgeting that not quite clear how it is this committee is gonna is going to weigh in.
00:11:19.470 --> 00:11:37.640
Shaw, Christine
Although I do believe it is part of our charge given that portions of the revenues associated with cannabis sales and the licenses are to be directed to specific purposes, including substance abuse prevention workforce training and the like.
00:11:38.730 --> 00:11:46.080
Shaw, Christine
I don't know if either add or or Joe given your work. Oh, they're secretary macaw. I invoked you Secretary Madam Secretary nice to see you.
00:11:46.950 --> 00:11:48.760
McCaw, Melissa
Good to see you it's awkward to be here.
00:11:50.200 --> 00:11:59.500
Shaw, Christine
So I was just commenting on the the there are 2 distinct components of the cannabis budget, the first relates to the.
00:11:59.970 --> 00:12:17.330
Shaw, Christine
Uhm to to what is already put in place for both fiscal 2022 and 23 and the primary task of this committee which is to kind of finalize the budget for fiscal 23. We really need only focus on adjustments to what is in place as I understand it?
00:12:18.570 --> 00:12:45.270
Shaw, Christine
It's a beauty of a biennial budget process. We don't have to create it out of whole cloth. But I do think that there will be some monitoring that should be undertaken by this committee and and in collaboration with both oh PMDCD&DCP obviously because the rate that positions are filled will impact. I'm not sure Madam Secretary and if you don't mind. I'm going to put you on the spot, you're the best person asked budget questions.
00:12:46.280 --> 00:12:56.570
Shaw, Christine
But to the extent that positions aren't filled as quickly as is assumed in the current fiscal 2022 budget. I assume that there will be a carryover refunds for 23.
00:12:57.240 --> 00:12:58.420
Shaw, Christine
Is that a safe assumption?
00:12:59.500 --> 00:13:28.950
McCaw, Melissa
Well, well, let's just step back the the the budget bill acknowledged expenses for startup that were North of $15,000,000.00. But it only provided a $5,000,000.00 carry forward so you know, obviously you know, there are a lot of questions on how fast will be able to operationalize the program. The number of staff that would be needed until the Legislature just put in place.
00:13:16.910 --> 00:13:17.400
Shaw, Christine
OK.
00:13:29.010 --> 00:13:59.200
McCaw, Melissa
A small amount of funds to kind of get things started and we have been very clear that we believe the cost will exceed the $5,000,000.00 there's also the possibility that there will be some revenues in year, one that go into the cannabis regulatory and investment account and based on the bill that account can be used to fund all cost associated with implementation so with the 5,000,000 plus whatever revenues actually go into that account.
00:13:59.490 --> 00:14:31.470
McCaw, Melissa
Bill only establishes that account for year, one and the revenues that would go into that account would be all license fees, except for the conversion fees and you'll remember in year one. The bulk of what we expect our the conversion fees. That's the $3,000,000.00 for the expanded producer license for the existing growers if they want to get into the adult use cannabis space and then if there's a social equity joint venture then that conversion fee is reduced to 1.5, 1,000,000.
00:14:24.840 --> 00:14:25.260
Shaw, Christine
Uh-huh.
00:14:31.790 --> 00:14:39.430
McCaw, Melissa
I'm so uhm those conversion fees are going to go into these social equity and innovation account, but any other license type.
00:14:40.100 --> 00:14:51.920
McCaw, Melissa
Where there are revenues like the cultivator license that will be for those entities that now wanna newly supply to the medical and adult use market or the most micro cultivator license type that.
00:14:51.970 --> 00:14:58.660
McCaw, Melissa
Uhm would allow for supply to medical adult use but has a smaller amount of grow space or.
00:15:00.250 --> 00:15:14.670
McCaw, Melissa
I'll let's see the Food and beverage manufacturer. The product manufacturer, the product. Packager any of those types of license revenue that will go into that regulatory account and that will help pay for year, one costs a lot of that depends on.
00:15:15.300 --> 00:15:20.560
McCaw, Melissa
The lottery process, which the take rate? How many folks you know how many entities are we able to get.
00:15:21.970 --> 00:15:26.980
McCaw, Melissa
Uh you know license that are interested in her license and how much revenue ultimately comes in.
00:15:27.640 --> 00:15:53.970
McCaw, Melissa
And the other thing that goes into that regulatory investment account would be any cannabis tax revenues in the year. One so that all depends on the timeline of of you know how quickly we get the program rolling and then any sales tax collected so as we go throughout the fiscal year. We're going to be monitoring the revenues that come in the $5,000,000.00. We have and if there's a short long. We will likely take care of that in the general fund.
00:15:54.420 --> 00:15:54.850
Shaw, Christine
Uh-huh.
00:15:55.180 --> 00:15:55.620
McCaw, Melissa
Your what?
00:15:56.200 --> 00:16:03.450
McCaw, Melissa
And then as we go into year 2 as I finalize this. The the mid term budget. We're going to have to make a decision.
00:16:03.510 --> 00:16:24.090
McCaw, Melissa
And on the appropriating of these expenses because if we're gonna have 16 + $1,000,000.00. You were going to Finance Committee. And then through the board will advise if they think there needs to be adjustments. But those dollars are going to have to be fully accounted for so I call year one a transition year.
00:16:24.480 --> 00:16:24.850
Shaw, Christine
Right.
00:16:25.380 --> 00:16:39.680
McCaw, Melissa
Yeah, here, too, as we build that we're going to have to make sure the appropriation for all the salary and related expenses are fully covered so that's an open item. The bill and the budget do not fully accomplish that yet.
00:16:41.480 --> 00:16:57.550
Shaw, Christine
Thanks, ma'am, secretary for that explanation and I I just wanted direct members of the committee to one of the attachments. It's actually the first attachment to the meeting notice and agenda and it includes the OFA, cannabis fiscal note.
00:16:58.000 --> 00:17:02.250
Shaw, Christine
Uhm and I I guess I would just as a general matter about him secretary.
00:17:03.260 --> 00:17:23.650
Shaw, Christine
Do you think do you think that we are on track with the estimate for 23. I know that timing may impact the 2022 but 23 is a you know it. It looks as if total revenues are assumed to be in the neighborhood of 20.4, 1,000,000 and then the subsequent year 2024.
00:17:24.220 --> 00:17:34.530
Shaw, Christine
Uhm revenues are assumed to be 33.4 there. There hasn't yet come a point where those estimates have been revisited have halfway.
00:17:35.350 --> 00:17:37.170
McCaw, Melissa
So it's premature decide.
00:17:37.320 --> 00:17:37.700
Shaw, Christine
Yeah.
00:17:38.200 --> 00:17:57.440
McCaw, Melissa
Obviously we I think what's most important for the work of the Finance Committee and the work of the board is to make sure we're standing up the licensing and the process of properly. You know, making sure you know the Social Equity Ventures and and those partnership and and how they should be established to comply with the law.
00:17:49.980 --> 00:17:50.310
Shaw, Christine
Right.
00:17:57.500 --> 00:17:57.960
McCaw, Melissa
Ah.
00:17:59.870 --> 00:18:05.690
McCaw, Melissa
And and the timing of this is done in a way that it has the utmost of integrity and ensures access etc.
00:18:06.360 --> 00:18:06.890
McCaw, Melissa
Uhm.
00:18:08.240 --> 00:18:36.370
McCaw, Melissa
I would say this there are differences in the methodology of the OFA versus the opium fiscal note the OFA fiscal note, particularly in estimating the excise tax revenues on the cannabis tax. They really looked at New York and they looked at the volume of sales and they just adjusted it for the fact that there's a difference in size between the population between New York and Connecticut.
00:18:37.300 --> 00:19:08.850
McCaw, Melissa
When opium produced the regional estimate we did something that was far more detailed. We went back and looked at Washington, Colorado, Oregon and Massachusetts and we looked at their year. One sales there. You your 2 sales. We looked at their population sizes and we took that information and we averaged the sales for each year. We adjusted it for our population size. We then went and looked and got some information from external sources to figure out what percentage of the market would be edible? What percentage would be Flowers and?
00:19:08.910 --> 00:19:23.810
McCaw, Melissa
Uh cartridges and we took the sales estimate for Connecticut. We adjusted it to edibles Flowers and cartridges applied our tax rates and we came up with a higher revenue estimate so I would say timing is very important.
00:19:21.480 --> 00:19:21.770
Shaw, Christine
Yeah.
00:19:24.000 --> 00:19:31.910
McCaw, Melissa
Uhm integrity of the process is number one, I would think that we it's possible we could exceed the excise tax revenues in the first year.
00:19:33.580 --> 00:19:35.820
McCaw, Melissa
And based on the difference in methodology 's.
00:19:37.600 --> 00:20:06.230
McCaw, Melissa
It could be that the off a note where revenues are understated again. That remains to be seen. It all depends on what the market really opens up and we will continue to monitor as the Social Equity Council Council and DCP roll out the program and then we'll adjust our I will just our assumptions accordingly as far as things like the estimated revenue for licenses that would go into the social equity and innovation count they expanded producer licenses.
00:20:20.920 --> 00:20:21.420
Shaw, Christine
Uh-huh.
00:20:21.550 --> 00:20:23.500
McCaw, Melissa
We need to get a little further along in the process.
00:20:24.600 --> 00:20:34.460
Shaw, Christine
And it's always better to be ahead of the process then behind it. I say thank you for that explanation any questions or comments from members of the committee.
00:20:39.220 --> 00:20:42.760
Shaw, Christine
OK, so, so yeah, so from A.
00:20:43.500 --> 00:21:00.360
Shaw, Christine
Analytical standpoint, you know, I look at the process by which to ECD is currently tracking the fiscal 22 budget. I mentioned before you and and and Hello Generace, before you got on the call that that aspect of the work of kind of monitoring those.
00:21:00.730 --> 00:21:07.310
Shaw, Christine
Uhm expenditures is really capably in the hands of DCD and their budget analyst.
00:21:08.320 --> 00:21:14.680
Shaw, Christine
I I I am curious to know and and perhaps Jennie Ray if you're in a position to share with us.
00:21:15.770 --> 00:21:28.180
Shaw, Christine
I I know that you've been actively recruiting for key positions curious to know what your expectations are for the timing of of the recruitment of fiscal staff for the for the council.
00:21:28.620 --> 00:21:52.900
Clay, Ginne-Rae
So yeah, thank you and good afternoon, everyone so right now, we were. We were in the process and probably starting next week will begin to interview for administrative staff. So I just received the certified list for an administrative assistant for program manager. I'm expecting communications and legislative liaison to come on board as well as.
00:21:52.950 --> 00:22:16.150
Clay, Ginne-Rae
Uhm staff attorney today this afternoon. Actually, I will be speaking with HR about other positions and so one position that I know I'm definitely going to be recruiting for is an accountant position so that an accountant can help with the budget and also help with reviewing the applications for our social equity applicants.
00:22:17.100 --> 00:22:27.330
Shaw, Christine
Fantastic OK and Anna and I'm sure you'll be keeping the full council abreast of developments as you. Good luck with that it's a long process.
00:22:23.300 --> 00:22:24.010
Clay, Ginne-Rae
Absolutely.
00:22:26.520 --> 00:22:27.740
Clay, Ginne-Rae
Thank you thank you.
00:22:28.570 --> 00:22:57.750
Shaw, Christine
So so we will for now, then and you know take advantage of the generosity of DCD. The fact that the SEC administrative function is housed within to ECD and I spoke with the the budget analyst yesterday. Just background and she was fantastic, so in terms of just you know capably you know overseeing what has already been set aside for fiscal 22, so I'll I'll make sure that this committee, perhaps maybe quarterly updates.
00:22:57.810 --> 00:23:16.530
Shaw, Christine
Uh I don't think we've decided on their frequency, but it's quarterly sounds about right just to fulfill our mandate, which is to generally oversee the expenditures. But the bigger piece and what US Secretary McCaw has laid out is you know the the timing of the various licenses.
00:23:16.950 --> 00:23:42.330
Shaw, Christine
Uh and at the implications of the timing on the inflows. So we will. I just want to make sure I don't know if I have Opms Fiscal note. But if that's the one that is favored Madam Secretary that's definitely the one. I want this committee to have I did just circulate Jofa fiscal notes so that will be an an item I'll follow up afterwards.
00:23:43.120 --> 00:23:54.660
McCaw, Melissa
Yeah, I mean, we, we, we, we could share with you what we had calculated it will change based on timing to the to your point about rolling out the licenses, but at least it'll give a sense of the range.
00:23:47.530 --> 00:23:47.980
Shaw, Christine
Number.
00:23:49.380 --> 00:23:49.660
Shaw, Christine
That.
00:23:55.060 --> 00:23:55.400
Shaw, Christine
Right.
00:23:55.840 --> 00:23:57.580
McCaw, Melissa
And the methodology for how we got there.
00:23:58.020 --> 00:23:58.350
Shaw, Christine
Right.
00:23:59.380 --> 00:24:00.130
Shaw, Christine
And so.
00:24:01.500 --> 00:24:05.650
Shaw, Christine
So the other piece about making adjustments to fiscal 23.
00:24:06.140 --> 00:24:28.920
Shaw, Christine
I'm less concerned about the operational budget for CC and I. I believe we're just going to have to wait and see as it relates to the the the $16,000,000.00 figure, which is the estimated cannabis related costs across various state agencies now as a as a process matter and it's both form and function.
00:24:29.630 --> 00:24:50.760
Shaw, Christine
Madam Secretary but will the Will, the way in which these cannabis related costs change, now that the Social Equity Council is has been formed in other words, you know, we have and it's included as an attachment. You know the listing of the various state agencies where costs will be.
00:24:52.100 --> 00:24:58.240
Shaw, Christine
Allocated 2 but will this ever be part of a centralized social Equity Council budget.
00:24:58.990 --> 00:25:02.090
Shaw, Christine
Or or will it be continued to be reported.
00:25:02.600 --> 00:25:04.850
Shaw, Christine
Uh and allocated in this fashion.
00:25:06.100 --> 00:25:16.970
McCaw, Melissa
That is a decision that has not yet been determined because when the bill passed one of the key decisions was is this going to be an appropriated fund at the state.
00:25:10.190 --> 00:25:10.480
Shaw, Christine
Hey.
00:25:17.600 --> 00:25:18.090
Shaw, Christine
Right.
00:25:18.350 --> 00:25:19.960
McCaw, Melissa
Not appropriated fund to the states.
00:25:20.710 --> 00:25:22.160
McCaw, Melissa
And so we need to.
00:25:22.710 --> 00:25:37.460
McCaw, Melissa
Uh obviously those types of decisions that relate back to our governance or spending capital liquid stuff that's one where opium is going to make that call. I think what we need from this committee is certainly their eyes on.
00:25:38.000 --> 00:25:38.640
McCaw, Melissa
Uhm.
00:25:40.440 --> 00:25:42.800
McCaw, Melissa
Will be expense budget is adequate?
00:25:43.590 --> 00:25:44.110
Shaw, Christine
Correct.
00:25:44.450 --> 00:25:56.910
McCaw, Melissa
You know the feedback from this as we're operationalizing we're implementing you know, do we have the right staff and the agencies etc. It doesn't hurt for for the committee to be engaging with some of the Department to get a sense of.
00:25:57.800 --> 00:26:08.810
McCaw, Melissa
What the needs are that's something that we you know PM will do anyhow we started that process but to the extent that the work of the Council informs the nice.
00:26:08.080 --> 00:26:08.410
Shaw, Christine
Right.
00:26:09.950 --> 00:26:18.960
McCaw, Melissa
I would expect that our director, Jenny Ray would be having those be part of those discussions and would also give some input to this particular committee and the end coordinate with opium as well.
00:26:20.860 --> 00:26:24.130
Shaw, Christine
So so we'll stay tuned for developments on that front.
00:26:25.910 --> 00:26:26.270
Shaw, Christine
OK.
00:26:27.440 --> 00:26:29.470
Shaw, Christine
Any any comments or questions.
00:26:33.880 --> 00:26:39.900
Shaw, Christine
OK, so I think we've had the general discussion about revenues and expenditure assumptions.
00:26:41.060 --> 00:27:00.450
Shaw, Christine
I think what we will continue to do is we will keep these regular monthly monthly meetings on everyone 's calendars as a standing committee meeting. Some of the meetings. Maybe shorter, which will be a gift back to you and in the form of time, but I do think that just having that.
00:27:00.500 --> 00:27:27.730
Shaw, Christine
Uhm that frequency of meetings will will keep us on track because I have a feeling that once this information becomes finalized. You know the for further refinement of the information that Secretary McCaw described that will have to move quickly folks may know that on the during the October meeting of the full council. There was information distributed which estimated future action.
00:27:28.820 --> 00:27:58.390
Shaw, Christine
And it included a you know a presentation of a final budget and approval by the council at the November meeting. I promptly piped up that that was not likely to happen. In fact would not happen, I. I felt like I could commit on behalf of the committee. I hope I didn't take too many liberties, but we we, we still are quite dependent on more information and I&I. Just want to thank Jenny Rae for you know, arranging for the deeper dive on some of the licensing.
00:27:58.450 --> 00:28:06.640
Shaw, Christine
Assumptions, which remained under development. There are a lot of different types of licenses. The timing of those licenses as as folks know.
00:28:07.060 --> 00:28:19.040
Shaw, Christine
Uh you know has been mapped out and and and various phases and it's very much a work in progress for when these revenues will hit the various accounts so.
00:28:20.320 --> 00:28:50.340
Shaw, Christine
We'll just have to come stay tuned to the work of the other committees and and of DCP and finalizing the timeline. There's the concurrent work that relates to the application process. And I look forward to hearing from my colleagues on other committees on that. But for now. I think that we have at least identified some of the broader issues. I just want to say that you know from my vantage point at the Treasury. We we've we have a multidimensional relationship with OPM at array of issues.
00:28:50.970 --> 00:29:18.950
Shaw, Christine
And so I was grateful to to communicate with your staff. Uh Madam Secretary and just on the general you know, kind of the secret sauce to projections and so I'm grateful that we've we've just had incredible support, even though we don't yet have dedicated staff for the Social Equity Council purpose. We absolutely have access to some really experienced budgeting folks who will support the work of this committee and so I'm very encouraged by that.
00:29:20.080 --> 00:29:21.360
Shaw, Christine
So uhm.
00:29:22.320 --> 00:29:29.830
Shaw, Christine
If there are no other comments. I'll turn to the the penultimate item on the agenda, which is any recommendations to the full council.
00:29:30.340 --> 00:29:44.770
Shaw, Christine
Uhm I there are no action items today. There are no recommendations to the full council other than I would be prepared to offer a brief report on the items, we discussed today, but I will.
00:29:45.670 --> 00:29:51.360
Shaw, Christine
Uh pull the members of the committee to see if there are any other matters that we should bring to the full council.
00:29:53.200 --> 00:30:21.370
Ed Shirley (Guest)
A Madam Chair this is Ed Sheeran. This is more of a question in terms of. We've we've talked about the revenue that we expect but in terms of expenditures. I know that the the expenditures. We've talked about those that are are focused on on our executive director and her staff. Are we anticipating any other expenditures that this committee will take a look at.
00:30:21.410 --> 00:30:23.490
Ed Shirley (Guest)
Uh with regard to.
00:30:23.540 --> 00:30:54.720
Ed Shirley (Guest)
Do uh I'm in a broader sense. Let's just call IT support of the social equity applicants. Once they are identified, we've talked on in other sessions about an accelerator program and other types of programs that might be. We've we've made reference to them broadly that might be useful for for those applicants. So is that something that this committee.
00:30:54.770 --> 00:30:57.540
Ed Shirley (Guest)
Will also look at or is that somewhere else.
00:31:00.260 --> 00:31:13.320
Shaw, Christine
So so I think that to the extent that there are expenses related to the work of the council. There will be some participation and oversight on the part of the Finance Committee, how that plays out. I think it remains to be seen.
00:31:13.380 --> 00:31:40.910
Shaw, Christine
And I don't think that and if anyone has a different view of please offer it. But I don't think we're in a position to pre approve or to certify the appropriateness of expenditures. But I think oversight and kind of a broader level is what we are tasked with doing the day-to-day cutoff monitoring of expenditures. I believe is vested with the executive director and so she right now has in.
00:31:41.980 --> 00:32:05.990
Shaw, Christine
Feel free to share your perspective on this, but she has at her disposal. The the budget staff within DCD. So so I imagine that day-to-day approvals and expenditures and complying with procurement. You know state procurement roles that will be in her shop. We are kind of in a kind of a macro kind of guiding kind of role.
00:32:06.860 --> 00:32:11.310
Shaw, Christine
General oversight role do you have a different point of view, Jenny on how this will all play out?
00:32:13.500 --> 00:32:15.250
Clay, Ginne-Rae
I do not have a different point of view.
00:32:15.520 --> 00:32:17.410
Shaw, Christine
OK, good, we're in accord.
00:32:18.310 --> 00:32:19.750
McCaw, Melissa
If I could just add to that.
00:32:20.390 --> 00:32:20.670
Shaw, Christine
Yeah.
00:32:21.380 --> 00:32:21.920
McCaw, Melissa
That.
00:32:23.760 --> 00:32:35.070
McCaw, Melissa
One of the funds that was created the social equity and Innovation Fund. As in you. I know that Michelle has provided this for agenda. But the intent of the monies that go into that account.
00:32:35.660 --> 00:32:59.290
McCaw, Melissa
Are to pay for administrative costs incurred by the council access to capital for businesses technical assistance for the start up and operation of a business funding for workforce education. So to the extent that there are those types of accelerated programs that are focused on achieving those objectives. The council will be able to make.
00:32:59.880 --> 00:33:29.760
McCaw, Melissa
Those recommendations on how those funds are to be used and in the bill says the council will submit expenditure requirements and recommended adjustments to the office of policy and management, so the council might say you know what we think it's important that our social equity applicants have technical assistance so that they can create these joint ventures as prescribed by the council which is still yet to be defined and I would suspect that you know, Jenny Rami or another group might bring forth that recommendation it has money attached to it, so at a macro level.
00:33:29.880 --> 00:33:45.250
McCaw, Melissa
As much as indicated this committee, you know will will want to see that and vet it and then the board would act to make to vote on it, so just want to remind you that there is a specific account or fund that would get at, I believe what you're describing at.
00:33:45.360 --> 00:33:47.430
Ed Shirley (Guest)
Like thank you very much Madam Secretary.
00:33:49.840 --> 00:34:00.160
Shaw, Christine
Yeah, and then looking at this, I would just add A and looking at this. The OFA fiscal note and again would love to see the the better physical note, but not better different.
00:34:01.430 --> 00:34:16.500
Shaw, Christine
Uh I I I know that there's a back loading of certain other revenue assumptions, you know the license. Revenue is you know slotted for 2022 but it's it's kind of it's not assumed for the remainder and I think that.
00:34:17.170 --> 00:34:32.730
Shaw, Christine
Is consistent with the assumption that all of the licenses would be awarded in the short term and then there will be no license fees paid, but then there's you know the first monies for the social equity and innovation counter expected in 2024, so.
00:34:34.620 --> 00:34:36.400
Shaw, Christine
Yeah, the The The typing of these.
00:34:35.050 --> 00:34:35.320
McCaw, Melissa
Well.
00:34:35.380 --> 00:34:35.680
McCaw, Melissa
Not.
00:34:36.800 --> 00:34:38.470
McCaw, Melissa
Yeah, I let me just play that.
00:34:37.240 --> 00:34:37.670
Shaw, Christine
Sorry.
00:34:39.850 --> 00:34:47.430
McCaw, Melissa
It still is complex, so when it comes to the social equity and innovation year. One it's called an account year 2. It's called the fund.
00:34:48.230 --> 00:34:48.830
McCaw, Melissa
Right.
00:34:49.130 --> 00:34:49.670
Shaw, Christine
Right.
00:34:49.960 --> 00:35:19.470
McCaw, Melissa
You're you're one we expect to see at least 12 of the 15,000,000 in and conversion fees come through because we know the existing growers are going to want to participate and then it's a question of is there anyone else that wants to join the market and do they do it within you know between now and June 30th so there will you know it seems reasonable that there will be some funds in fiscal 22, and that social equity and innovation account so as we're thinking about how to roll this out and make sure that our Equity Partners have a level playing field.
00:35:19.880 --> 00:35:23.700
McCaw, Melissa
And have the tools. It's quite possible that there will be some money in that account this year.
00:35:24.820 --> 00:35:33.820
McCaw, Melissa
And then after that, Guess Christine, it slows down. It depends on you know you're going to start to see volume of food and beverage type.
00:35:26.040 --> 00:35:26.470
Shaw, Christine
Sure.
00:35:35.010 --> 00:35:42.780
McCaw, Melissa
Licenses and all that and the question is. When does what's the timing of? When that comes in and those are certainly smaller dollar amounts much smaller.
00:35:43.240 --> 00:35:43.750
Shaw, Christine
Correct.
00:35:44.680 --> 00:35:45.650
Shaw, Christine
Thank you for that.
00:35:48.010 --> 00:35:59.500
Shaw, Christine
Alright so there will be so just to make sure just to confirm there will be no formal recommendations to the council other than a high level summary of of the matters we discussed.
00:36:00.250 --> 00:36:01.460
Shaw, Christine
Uh with that.
00:36:03.500 --> 00:36:06.410
Shaw, Christine
Are there any other comments or other business brought before the committee?
00:36:10.460 --> 00:36:10.880
Williams, Joseph
Nope.
00:36:12.630 --> 00:36:36.540
Shaw, Christine
I just don't know that I this meeting has been recorded as was the first meeting of the Finance Committee and I. I do believe in having hardcopy minutes, though, so for the next meeting will have minutes for approval for both the first meeting and this meeting presented for vote. So we'll just we'll we'll follow Roberts rules with respect to that.
00:36:37.450 --> 00:36:49.590
Shaw, Christine
And with that I appreciate seeing everyone and thank you for thank you. Madam Secretary for again that very helpful explanation of the process process is key.
00:36:51.060 --> 00:36:54.750
Shaw, Christine
Alright uh with that I'll I'll ask for a motion to adjourn.
00:36:55.410 --> 00:36:56.030
Williams, Joseph
So move.
00:36:57.880 --> 00:36:58.370
Williams, Joseph
Yeah.
00:36:58.650 --> 00:36:59.600
Shaw, Christine
Second, thank you.
00:37:00.260 --> 00:37:04.960
Shaw, Christine
All in favor aye Sam I assume by the nodding heads and learn favor great.
00:37:02.740 --> 00:37:03.170
Ed Shirley (Guest)
Alright.
00:37:03.360 --> 00:37:03.670
Williams, Joseph
Yeah.
00:37:06.430 --> 00:37:10.520
Shaw, Christine
Alright, thank you and I will see you at the the next full council meeting.
00:37:12.940 --> 00:37:13.570
Shaw, Christine
Thank you all.
00:37:15.730 --> 00:37:16.170
McCaw, Melissa
Take care.
00:37:15.840 --> 00:37:16.860
Clay, Ginne-Rae
Have a good afternoon.
00:37:17.400 --> 00:37:18.010
Williams, Joseph
Yeah, yeah.