Legislature(1997 - 1998)
04/08/1997 06:09 PM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 75(FIN) am(brf sup maj pfld)
"An Act making appropriations for the operating and loan
program expenses of state government, for certain programs,
and to capitalize funds; making an appropriation under art.
IX, sec. 17(c), Constitution of the State of Alaska, from
the constitutional budget reserve fund; and providing for an
effective date."
CS FOR HOUSE BILL NO. 76(FIN)
"An Act making appropriations for the operating and capital
expenses of the state's integrated comprehensive mental
health program; and providing for an effective date."
COCHAIR PEARCE reconvened the meeting after a few minutes.
She noted the remaining budget to close out on today's
schedule was the Information Technology Subcommittee, headed
by SENATOR PARNELL.
SENATOR PARNELL addressed the committee. He explained that
the subcommittee was charged with pulling all the
information technology expenditures out of each department,
including the university, and examining the combined budgets
that totalled between $120-140 million. The administration
had commissioned a Compass America study which conducted an
in-depth review of the state's information environment.
Some of the noted findings included random, uncoordinated
purchases of technology throughout state government, wide
disparity of available technology among departments, and the
fact that the state is comparatively more technologically
advanced, but wasn't fully utilizing equipment in many
cases. The subcommittee recommended a reduction of all
agency expenditures on computer equipment on a proportional
basis for a total reduction of $1.25 million. SENATOR
PARNELL further explained that they would like the
Department of Administration (DOA) to set up an account of
$500 thousand for new computer purchases. The next major
component was a reduction to DOA's Division of Information
Services of $350 thousand, via the reduction of rates for
services to other departments. SENATOR PARNELL summarized
by noting the total reduction by the subcommittee was $1.1
million.
COCHAIR PEARCE inquired whether the Compass America report
specifically addressed the university. SENATOR PARNELL
replied that it did not. He explained the university's
concerns about contributing to the $500 thousand account and
competing for a portion of the funds.
SENATOR ADAMS inquired how departments would justify new
technology and updated equipment when technology changes so
quickly. He also requested a copy of the Compass America
study. SENATOR PARNELL responded that the attempt was to
slow down uncoordinated random purchases of computer
equipment. As an example, he referred to the
Telecommunications Information Council (TIC) which had just
established a standard software suite for all of state
government that would allow volume purchase. It basically
changed the decision-making process.
SENATOR ADAMS requested testimony from the university
regarding a $459 thousand reduction and expressed his hope
that it did not hurt students because of insufficient
computers to handle their work load.
SHARON BARTON, Director, Administrative Services, DOA, spoke
about the departmental reductions, many of which would end
up as an unallocated reduction from budgeted amounts that
may have been for priority FY98 purchases. She suggested
they not slow down on those purchases, although the
intention was good. She agreed with the concept of buying
smarter and taking advantage of volume purchases. Regarding
the $500 thousand fund, the priority of the department and
the TIC was to set standards for state government. The fund
would be valuable to the anticipated difficult transition.
MS. BARTON elaborated on a bigger concern for her
department, that being the chargeback reduction and the
complexity of the internal service fund. She referred to a
multiplier effect of a $350 thousand reduction to the
Division of Information Services that would result in a
service level reduction of $1.4 million and provided
additional information. In response to a question from
COCHAIR PEARCE, MS. BARTON responded that the Information
Services fund was very dynamic in that money was flowing in
and out of it on a daily basis.
KAREN MORGAN, Deputy Director, Division of Information
Services, DOA, responded to the same question. She noted
that they operate the fund at a zero balance level because
of the accounting requirements to not make a profit. The
federal government disallows a balance to be carried over
sixty days. She further described the cash flow of the fund
as it related to the fiscal year.
SENATOR ADAMS asked for further explanation of the structure
of the proposed fund. SENATOR PARNELL responded by
describing the composition of the TIC. He added that it
would have oversight of a limited pool of funds as an effort
to get a handle on this area.
In response to a question from COCHAIR SHARP about rates
charged by the division, there was lengthy explanation and
discussion from MS. MORGAN and MS. BARTON.
SENATOR ADAMS restated his request to hear about the impact
of a $459 thousand reduction on the university.
WENDY REDMAN, University of Alaska (UA), stated that they
had no difficulty with the chargeback portion for provided
services, as they represented a small amount. She provided
written information to the committee (copy on file)
regarding the impact of the overall reduction, noting that
the university's share totaled 37 percent, adding that it
had been based on a study that didn't include the
university. She pointed out that the university already had
an integrated system and software standards. She called
attention to a difficulty regarding the national standard of
twenty students per computer, noting the university average
was currently closer to fifty students per computer, so they
were far behind in student computing. That was a major
concern with regard to the reductions.
End SFC-97 #87, Side 2
Begin SFC-97 #88, Side 1
MARYLOU BURTON, Director, Statewide Budget Office, UA, spoke
briefly in response to a question from SENATOR ADAMS about a
recalculation of what reduction the university could stand.
MS. REDMAN commented that they were supportive of the TIC,
but many of their discussions did not apply to the
university. In response to a question from COCHAIR PEARCE,
she further explained how they control spending through
their integrated standards.
SENATOR PARNELL requested an explanation from Mike Greany
regarding how the university number was arrived at.
MIKE GREANY, Director, Legislative Finance Division,
testified that they treated the university similar to other
agencies with regard to identifying a base amount for
equipment and explained in detail. He acknowledged that the
university didn't do their budget in the same way as other
state agencies, so they made their best attempt to fit the
university into the main scheme, purposely taking a
conservative approach. He stated there was a policy
question on whether or not the university should be included
within this type of review. In response to a question from
SENATOR ADAMS, MR. GREANY explained that the Legislature and
Court System were excluded because they were separate
branches of government with their own needs and governing
structure. SENATOR PARNELL added that another distinction
was that they were not voting members of the TIC.
SENATOR PARNELL MOVED to incorporate the subcommittee
recommendations into HB 75. SENATOR ADAMS objected.
A show of hands was taken on the MOTION.
IN FAVOR: Donley, Torgerson, Phillips, Parnell, Sharp,
Pearce
OPPOSED: Adams
The MOTION CARRIED on a vote of 6 to 1.
COCHAIR PEARCE announced upcoming committee agendas.
ADJOURNMENT
The meeting was adjourned at approximately 8:03 P.M.
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