CONTROLLING BOARD

OHIO OFFICE OF BUDGET AND MANAGEMENT

MINUTES OF THE MARCH 22, 2010 MEETING

President, Joe Secrest, called the Controlling Board meeting to order at 1:40 p.m. Serving on the
Controlling Board were Senator John Carey, Representative Ted Celeste, Senator David Goodman,
Representative Clayton Luckie, Senator Ray Miller and Representative Jay Hottinger.

The minutes of the March 8, 2010, meeting were distributed. A motion to approve the minutes was made
by Senator Carey, seconded by Representative Luckie and approved by the Board members.

Attached is the March 22, 2010, meeting agenda. President Secrest said Item 24, DEV0101005-10 has
been revised to change the amount for FY10 from $8,661,040 to $8,779,699 and FY11 from $2,165,260
to $2,194,925 and also to replace the contract with a signed contract. Item 28, EDU0100095-10, revised
the fund code and line item to fund 3EF0, line item 200694, National School Lunch Program Equipment
and Item 35, LOT0100021, replaced the contract with a revised contract.

A motion for blanket approval of all items not held for questions was made by Representative Luckie,
seconded by Senator Goodman and approved by all Board members.

The following Items were discussed and acted upon as stated.

Item 13, BOR0100124-1011 was held by Senator Carey. Senator Carey asked for background
information on the request. Matthew Smydo, Legislative Liaison, Ohio Board of Regents (BOR) said
House Bill 1 directed the BOR to provide oversight of teacher education programs offered by the state’s
colleges of education. Before these reviews were done by the Ohio Department of Education but House
Bill 1 moved this requirement to BOR and unfortunately there was no appropriation included. The BOR
has been working on these reviews by using funds from their operating line item which is also used to
pay for administrative salaries and a lot of other expenses. They have used money out of this line item
the entire fiscal year and are now nearing the end of the fiscal year and realized that they do not have
enough money in the line item to complete the reviews for fiscal year 2010 and 2011 and also pay for
the things that have been appropriated from House Bill 1 out of that operating line. The item was
approved without objection.

Item 23, DEV0100986-10 was held by Representative Hottinger and Senator Carey. Representative
Hottinger questioned the level of funding for the Advanced Energy Fund. Ed Jerse, Legislative Director,
Department of Development said this increase was calculated based on $8.2 million appropriated this
year with about $6 million in the queue of projects. In the past, appropriation has been in the $17 million
range but it was reduced for this budget. Senator Carey questioned the Advanced Energy applications
and asked for a list of approved projects. Mr. Jerse said the Advanced Energy Fund is paid for by a rider
on the electric rates of customers of investor-owned electric distribution companies in the State and is
designed to promote advanced energy projects. They do not have the list of approved projects today but
will provide it later. Senator Carey asked whether clean coal is a part of Senate Bill 221 list of
technologies for advanced energy. Nadeane Howard, Department of Development said yes, but they
currently have not done any clean coal projects with the Advanced Energy Fund. The item was
approved without objection.
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CONTROLLING BOARD
OHIO OFFICE OF BUDGET AND MANAGEMENT

Item 24, DEV0101005-1011 was held by Senator Goodman, Representative Hottinger, Representative
Celeste, Representative Luckie and Senator Miller. Senator Goodman questioned the selection of Parago
for this contract instead of one of the two Ohio companies. Ed Jerse, Legislative Director, Department of
Development said one Ohio company came in ninth and would have to purchase equipment to do the job
so they scored the lowest of the bidders. The other Ohio company scored in the middle range and was a
call center in Ohio which was coupled with an Illinois company to do the rebate processing. This was a
competitive process, bids were taken, and there was a scoring and evaluation of the nine applicants. The
department estimated that the number of rebates taken by the number of people who could apply
(90,000) by the internet would be about $171,000. Then they realized that there would be people who
are in areas that aren’t served by the internet so they added a component that would allow them to call-in
and have direct customer service. This addition increased the amount to $357,000 and if they go beyond
the $357,000, then they will have to come back to the department for approval which the total amount
for administrative costs can go up to $505,000 for this particular contract.

Representative Celeste asked whether the department made any effort to get the message out in terms of
Ohio companies. Mr. Jerse said there was a notice of funds available and two companies from Ohio bid.
Parago scored the best and is one of three companies that do rebate programs for fortune 500 companies.
Parago has done work for Home Depot, General Electric, and Verizon so they are very experienced in
this and they have been hired by California to do their rebate program and given the amount of volume
of requests that are going to be coming in we felt it would be best to go with an experienced company.

Representative Luckie asked whether the company is going to sub-contract any of the work out to
minority firms. Nadeane Howard, Department of Development said it is not anticipated that Parago will
need to sub-contract any of this work out because it will all be done in-house. Representative Luckie
asked whether the department can go back to the vendor and ask them to live up to the Governors
Executive Order regarding 15% minority business participation. Mr. Jerse said the program is set to roll
out on Thursday and Parago has the staff in-house to do the work but they will take a look into it.

Representative Hottinger said his questions had been answered.

Senator Miller said I am having real difficulty with this one and it seems to me that Parago won because
they were so low. Mr. Jerse said the $357,000 additional amount is for call-in services and is an addition
to the initial $171,000 base amount for internet applications, which is an estimate based on how many
people they expect in processing the internet applications and that would be the apples to apples
comparison with the Ohio companies. There is $357,000 going to Parago for services and that all comes
out of the total amount of $505,000. Senator Miller said I am just trying to look at fairness with the other
bidders. Mr. Jerse said when you look at the quality of what Parago is providing; this is a company with
a proven track record that is coming in with the lowest bid. The add-on services which are not being
offered by any of the other companies still take Parago up to the $357,000 so this is the best and the
lowest bid. The item was approved with Senator Carey, Senator Goodman and Senator Miller objecting.

Item 26, EDU0100093-1011 was held by Representative Luckie. Representative Luckie asked for
clarification on the increase in appropriation authority. Gregory Dennis, Legislative Liaison, Department
of Education said the federal government usually updates their award amounts to states in the fall but
this award was not updated until after the passage of House Bill 1. Representative Luckie asked whether
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CONTROLLING BOARD
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the department tracks the difference of students from public school to charter school to know whether
the children are receiving the services that are being paid for. Mr. Dennis said he provide the
information later. The item was approved without objection

Item 44, DRC0100286-10 was held by Senator Miller. Senator Miller questioned the minority business
participation on this contract. James Weller, Department of Rehabilitation and Correction said the
winning bidders all consented to 5% EDGE participation which means that the winning bidders come in
with at least 5% of their construction cost which they will pay the EDGE contractors. The item was
approved without objection.

Item 46, SFC0100217-10 was held by Senator Miller. Senator Miller questioned the minority business
participation for the Commissions and particularly with this contract. Eric Bode, Chief Fiscal Officer,
School Facilities Commission said they are actively participating in the EDGE Program which is carried
out through all of their construction programs. They spend about $80 million per year on construction
manager contracts and the last three years they have averaged around 30% EDGE participation on those
contracts. The general trade contracts are awarded by the school districts but approved by the
Commission and they have made a very strong effort to spread the news to talk about what is required
under the EDGE participation. For past year the overall participation on the contracts has been about
9.1% participation. Ohio School Commission was the highest percentage in the non-cabinet agency so
they certainly have tried to be very mindful of the program. Senator Miller asked the Commission to
provide the board a list of contract awards and the amounts. Mr. Bode said he will provide the
information to the board. The item was approved without objection.

President Secrest said for the last two meetings there have been items added to the agenda because of
electronic posting problems. The requests were all submitted to the Controlling Board Office on time to
be included on the agenda but there was a malfunction in our system and that is the case for these four
add-on items today. Also, item 19, OBM0100040 will be processed with the add-on items.

President Secrest asked if there was a motion to waive the seven-day rule to add INS0100008-10,
DMR0100116-1011, DVS0100014-1011 and DVS0100015-10 to the agenda. Senator Carey moved and
Representative Hottinger seconded.

Item 51, INS0100008-10, Insurance requests Controlling Board approval to waive competitive selection
in the amount of $5,848,199.00 for FY10 to contract with the Ohio Health Information Partnership, Inc.,
Columbus, Franklin County, to provide services for the development of a statewide Health Information
Exchange. The item was approved without objection.

Item 52, DMR0100116-1011, Department of Developmental Disabilities requests Controlling Board

approval to waive competitive selection in the amount of $75,000.00 for FY10 and $67,500.00 for FY11
to contract with Wilson resources Inc., Tallahassee, Florida, to implement activities of the Medicaid
Infrastructure Grant. The item was approved without objection. The item was approved without
objection.

Items 19, 53 and 54, OBM0100040-10, DVS0100014-1011 and DVS0100015-10 were held as a group
by Representative Hottinger. Representative Hottinger questioned using funds from the Unemployment
Compensation line item. Noah Browning, Budget Analyst, Office of Budget and Management said line
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CONTROLLING BOARD
OHIO OFFICE OF BUDGET AND MANAGEMENT

item 911418, Unemployment Compensation ERI, is not connected to the state’s Unemployment
Compensation Trust Fund. This line item was set up to help small boards and commissions that were
predominantly funded by GRF pay any early retirement incentives or unemployment costs that they may
incur, and given the use for the year to date, this small amount is manageable and the temporary transfer
will leave room to aid the boards should they need it. Representative Hottinger asked when the bonds
will be issued. Mr. Browning said they are anticipating an early mid-July issuance. Representative
Hottinger questioned the annual expected cost to run the bonus program. Tom McFarland, Chief
Financial Officer, Department of Veterans Services said the requests today represents the estimated
operating cost for this program for fiscal year 2010, the start-up period and 2011, the first year of
operations. Fiscal year 2011 will represent the most expensive year as they expect a very significant
number of applications when they first accept applications for the program and after the first six months
the number of applications will decline therefore the operating costs will be less in future years.
Representative Hottinger asked if the $200 million in bonds is enough to cover future payments. Mr.
McFarland said it is difficult to say at this point because this is the first time that they have issued a
bonus program for conflicts that remain in progress and in this case the number of individuals eligible
for the bonus will continue to increase. Representative Hottinger asked that the Office of Budget and
Management provide the board information on the interest rate of the bonds, the current bond rating,
what assurance these bonds will have on the bond rating, the debt ceiling, and also any expenses
incurred as a result of the issuance of the bonds. Mr. Browning said they will provide the information as
soon as possible. The items were approved without objection.

With no further business before the board, the meeting was adjourned at 2:45 p.m.

Respectfully submitted,

Francene Johnson
Controlling Board Executive Secretary

03/22/10 Minutes approved by the Board:

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