October 17, 2024

by Michael R. Wickline | Arkansas Democrat-Gazette

This week, the Bureau of Legislative Research contracted with the London-based consultant Olsberg/SPI Limited for up to nearly $100,000 to help a legislative panel conduct a study about the motion picture industry in Arkansas and whether to change the state’s tax incentives for the industry.

In addition, the Legislative Council’s Executive Subcommittee on Thursday authorized a contract between the bureau and Perr & Knight of Boca Raton, Fla., for about an estimated $950,000 for consulting services to aid with the implementation of recommendations aimed at more efficiently providing property insurance for public schools and higher education institutions.

The subcommittee also authorized a contract between the bureau and Ikaso Consulting of Berlingame, Calif., for up to $331,500 for information about compliance of state procurement rules and procedures with the state’s procurement laws, and for recommendations and training to bring those rules and procedures into compliance with these laws.

According to the bureau’s contract with Olsberg/SPI to provide assistance for a study of the motion picture industry in Arkansas, the Legislative Council’s Executive Subcommittee’s study will include:

* A review of issues related to the economic impact of the motion picture industry in Arkansas.

* A review of existing Arkansas laws incentivizing motion picture production within the state.

* Recommendations for increasing motion picture production within the state.

* Best practices and recommendations related to state government organization and oversight of the motion picture industry.

The contract is for up to $97,200, and it started on Monday and will continue until June 30, 2025.

On Sept. 4, state Sen. Jonathan Dismang, R-Searcy, told the Executive Subcommittee that there are a very limited number of consultants that do this type of work, and he recommended the Bureau of Legislative Research contract with Olsberg/SPI for the study.

He told lawmakers that some of their constituents believe that the state needs to have “a more robust tax incentive system” to be able compete and have the workforce needed to attract films into Arkansas.

“I think we have made some good changes to our laws in the last couple of sessions, but it’s not as strategic as I would like it to be,” Dismang said.

“I just think we need to know what direction we should be heading in,” he said, and also look into whether Arkansas’ Film Commission is properly housed at the Arkansas Economic Development Commission.

On Sept. 19, the Legislative Council’s Executive Subcommittee authorized the bureau to enter into negotiations with Olsberg/SPI for a consulting services agreement to assist the subcommittee with its study of the motion picture industry in the state, and authorized Legislative Council Co-Chairs Sen. Terry Rice, R-Waldron, and Rep. Jeff Wardlaw, R-Hermitage, to approve the final agreement by emergency action, Rice and Warden said in a written report.

Expedited approval of the agreement was required due to the time constraints requiring the work to be performed by the consultant to provide recommendations regarding economic analysis and tax incentives prior to conclusion of the 2025 regular session, Rice and Wardlaw said.

Olsberg/SPI said Arkansas currently offers two incentive structures for film and television production through the Arkansas Digital Product Motion Picture Incentive — a transferable tax credit and a rebate.

“However, in the rapidly shifting global screen production landscape it is important that Arkansas ensures that its incentive and industry servicing offer is at the cutting edge,” the consultant said. “This is underlined by the fact that recent years have seen improvements or increases in incentives or other measures among several competitor jurisdictions such as Oklahoma, Texas, Utah, New Mexico and others.”

Property Insurance Consultant

On Oct. 3, the Legislative Council’s Executive Subcommittee approved Perr & Knight’s recommendation to consolidate the insurance operations for three programs in Arkansas that provide property insurance for public schools and colleges into one insurance operation, and for the state to form its own special-purpose insurance company, called a captive, to self-insure property coverage provided by the three programs.

At that time, The Legislative Council’s Executive Subcommittee also approved the consultant’s other recommendation for annual consultations with an independent strategic risk consultant and annual independent actuarial analyses.

Forming a captive would allow the state to pool the risk between the three main programs the state uses for facility insurance, according to Perr & Knight. The consultant recommended the state incur more risk and create a captive to help alleviate the costs from rising premiums for public schools and colleges. With rising costs for premiums for facility insurance in recent years, state lawmakers have sought ways to find savings with the existing programs and hired two consulting firms to provide advice and guidance.

The Executive Subcommittee on Thursday authorized a new consulting contract with Perr & Knight to conduct a captive feasibility study, to form and set up a captive, provide semi-annual actuarial loss and loss adjustment expense reserve estimates and upcoming funding estimates, and strategic risk consulting services.

The contract starts Friday and ends on Dec. 31, 2025, with an option to renew for six more months. The initial setup fees would total $450,000 over a seven-month period and the reoccurring and ongoing fees would be $505,000 a year starting in 2025, Perr & Knight estimated.

State Rep. Keith Brooks, R-Little Rock, questioned whether there are other ways to obtain these consulting services in a more cost effective manner and whether the bureau should issue a request for proposals for these consulting services.

State Rep. Jeff Wardlaw, R-Hermitage, said Perr & Knight understands its recommendations and understands how best to implement its recommendations.

State Sen. Missy Irvin, R-Mountain View, said it would be more efficient to retain Perr & Knight as a consultant on this project rather than to hire a new consultant.

The Executive Subcommittee on Thursday also authorized a consulting contract between the bureau and Ikaso Consulting, starting on Friday and ending May 1, 2205, with an option to renew for an additional six-month period.

Ikaso provides state government procurement consulting services.

The bureau desires to hire Ikaso to “provide detailed and accurate information concerning compliance of Arkansas Office of State Procurement rules and procedures with Arkansas Procurement Laws and to provide recommendations and training to bring those rules and procedures into compliance,” for the use and information of the Legislative Council’s Executive Subcommittee and other state lawmakers, according to the agreement.

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