01/31/2023 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB22 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 22 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
January 31, 2023
8:03 a.m.
MEMBERS PRESENT
Representative CJ McCormick, Chair
Representative Kevin McCabe, Vice Chair
Representative Tom McKay
Representative Justin Ruffridge
Representative Rebecca Himschoot
Representative Donna Mears
MEMBERS ABSENT
Representative Josiah Patkotak
OTHER LEGISLATORS PRESENT
Representative Andrew Gray
COMMITTEE CALENDAR
HOUSE BILL NO. 22
"An Act relating to participation of certain peace officers and
firefighters in the defined benefit and defined contribution
plans of the Public Employees' Retirement System of Alaska;
relating to eligibility of peace officers and firefighters for
medical, disability, and death benefits; relating to liability
of the Public Employees' Retirement System of Alaska; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 22
SHORT TITLE: PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/19/23 (H) PREFILE RELEASED 1/9/23
01/19/23 (H) READ THE FIRST TIME - REFERRALS
01/19/23 (H) CRA, STA, L&C, FIN
01/24/23 (H) CRA AT 8:00 AM BARNES 124
01/24/23 (H) Heard & Held
01/24/23 (H) MINUTE(CRA)
01/31/23 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
REPRESENTATIVE ANDY JOSEPHSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
22, as the prime sponsor.
CHRISTOPHER WRIGHT
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 22.
SARAH CANNARD, Firefighter/EMT
Capital City Fire/Rescue
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 22.
RYAN FROST, Senior Policy Analyst
Pension Integrity Project
Reason Foundation
Portland, Oregon
POSITION STATEMENT: Testified during the hearing on HB 22.
MICHAEL JENSEN
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 22.
CHRIS WIGNER, Lieutenant
Bethel Police Department
Bethel, Alaska
POSITION STATEMENT: Testified in support of HB 22.
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PATRICK MESSMER
Seward, Alaska
POSITION STATEMENT: Testified in support of HB 22.
TAYLOR ELBERT
Utqiagvik, Alaska
POSITION STATEMENT: Testified in support of HB 22.
ALLAN HEINEKEN
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 22.
TYLER BELK
Alaska Professional Fire Fighters Association
Eagle River, Alaska
POSITION STATEMENT: Testified in support of HB 22.
DARRELL EVANS, President
Anchorage Police Department Employees Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 22.
ACTION NARRATIVE
8:03:37 AM
CHAIR CJ MCCORMICK called the House Community and Regional
Affairs Standing Committee meeting to order at 8:03 a.m.
Representatives McKay, Ruffridge, Himschoot, Mears, McCabe, and
McCormick were present at the call to order.
HB 22-PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS
8:03:48 AM
CHAIR MCCORMICK announced that the only order of business would
be HOUSE BILL NO. 22, "An Act relating to participation of
certain peace officers and firefighters in the defined benefit
and defined contribution plans of the Public Employees'
Retirement System of Alaska; relating to eligibility of peace
officers and firefighters for medical, disability, and death
benefits; relating to liability of the Public Employees'
Retirement System of Alaska; and providing for an effective
date."
8:04:36 AM
CHAIR MCCORMICK invited questions from the committee members.
8:05:12 AM
REPRESENTATIVE MCCABE recalled that Representative Josephson had
stated that there was no fiscal note for HB 22 and that the bill
was conservative. He inquired about the lack of a fiscal note
and the analysis from Buck Global LLC.
REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, urged
Representative McCabe not to misquoting him. He clarified that
he had stated the opposite, reiterating that there was a $6
million cost to the bill. He indicated that the fiscal notes
would be forthcoming.
REPRESENTATIVE MCCABE apologized for the misstatement. He
shared his understanding that during the initial bill hearing,
the bill sponsor had suggested that the legislation was
conservative and would have zero cost to the state.
REPRESENTATIVE JOSEPHSON contended that the bill itself was
conservative for the following reasons: it would only cover 7.5
percent of all public employees; the proposal was vetted by
multiple actuaries and stakeholders; the plan included levers to
increase the employee contribution rate; and the plan had a
"high five" rule, as opposed to a "high three." He asserted
that HB 22 was a net cost-saving mechanism. He explained that
the annual $6 million price tag was due to the decision to
marginally slow the new cohort's contribution to the unfunded
liability. Nonetheless, he estimated that it would only take
six months longer to pay off the unfunded liability if the bill
were to pass. He emphasized that the legislation was not being
rushed, as it had come before the legislature numerous times in
previous years.
8:08:40 AM
REPRESENTATIVE MCCABE expressed concern about the information
that had been provided to the committee by the Department of
Public Safety (DPS). The DPS survey, he said, indicated that a
defined benefit retirement package was of concern to 9 percent
of employees. He suggested that the results of the survey did
not support the bill sponsor's position that the retirement and
benefits system was the reason people were leaving the state.
Further, he expressed concern about the numbers provided by the
Anchorage Police Department Employees Association (APDEA) in a
spreadsheet titled, "Copy of New Officer Costs APDEA Sgt Darrell
Evans" [included in the committee packet], which listed a patrol
car in the costs of training a new recruit. He characterized the
numbers as erroneous and claimed that it did not cost $100,000
to $200,000 to train a new employee. He requested "real
numbers," as opposed to "fake numbers," so the committee could
make an intelligent decision.
REPRESENTATIVE JOSEPHSON opined that Representative McCabe had
attacked, in a derogative way, every state agency with his
comments. He asked whether that was Representative McCabe's
intent.
REPRESENTATIVE MCCABE emphasized that the decision to advance HB
22 would affect the lives of Alaska for decades to come. He
maintained his belief that the numbers provided to the committee
were incorrect.
REPRESENTATIVE JOSEPHSON stated that one set of numbers was
provided by Commissioner James Cockrell, DPS, who was appointed
by the governor. He urged Representative McCabe to take it up
with him. Further, he disagreed with the contention that only 9
percent of employees had expressed concern about the retirement
and benefits system. He directed attention to a chart that
showed a returned to a defined benefit system as a 22 percent
factor. He posited that although the employee exit interviews
were somewhat ambiguous, invited and public testimony would show
otherwise.
8:12:28 AM
REPRESENTATIVE HIMSCHOOT expressed her interest in learning
about pensions in general. She requested an example of a
profession in which pensions were offered.
REPRESENTATIVE JOSEPHSON answered the U.S. Military, postal
workers, and judges. He further noted that public safety
employees received pensions in 49 of the 50 states citing all
but Alaska.
REPRESENTATIVE HIMSCHOOT sought to confirm that a pension was a
method for distributing the risk of retirement.
REPRESENTATIVE JOSEPHSON confirmed. He pointed out that the
decision to take bullets and die in fires was unique to the
public safety cohort.
8:15:35 AM
REPRESENTATIVE HIMSCHOOT shared her understanding that should
the bill pass, the state would be burdened for decades to come.
She inquired about the 17.74 percent vacancy rate within DPS and
asked how that impacted the state.
REPRESENTATIVE JOSEPHSON answered, "It's an enormous burden."
He stated that the cost of training each new officer was between
$100,000 and $200,000; therefore, the state, as well as
municipalities, were suffering from the constant need to retrain
new hires as employees left the state. Further, he highlighted
the cost of overtime to cover vacant shifts in addition to the
cost of inexperience. He added his belief that a $6 million
burden was insubstantial in comparison.
REPRESENTATIVE HIMSCHOOT asked whether the training expenses
were inclusive of the trainee's salary.
REPRESENTATIVE JOSEPHSON said it could be. He offered to follow
up with the answer.
REPRESENTATIVE HIMSCHOOT expressed her interest in further
clarifying the components of the training expenses.
REPRESENTATIVE HIMSCHOOT asked whether Alaska could afford this
pension proposal if half the state's population were to leave,
similar to Detroit.
REPRESENTATIVE JOSEPHSON said he could not envision that
scenario, nor did he foresee it happening. He opined that the
comparisons to Detroit held little value and were "lacking in
sufficient basis." He noted that a previous version of this
legislation, House Bill 55, passed the House last year by a vote
of 25-15. He posited that the bill offered a $6 million-dollar
chance at retaining the DPS workforce.
REPRESENTATIVE HIMSCHOOT discussed the vacancy rate and drew a
comparison to the education sector. She inquired about the 17.4
percent vacancy rate within DPS and asked how that impacted
Alaska communities.
REPRESENTATIVE JOSEPHSON addressed an ongoing problem in rural
Alaska and urged the legislature to invest more in housing for
public employees in those small communities. He conveyed
frustration on behalf of rural Alaska. However, he declined to
speak on behalf of individual agencies.
8:23:05 AM
REPRESENTATIVE MCKAY established that states were allowed to
default but could not file for bankruptcy. He reported that
eight states were approaching default, driven by their defined
benefit programs. He described what he believed to be an
unintended consequence of implementing HB 22: poaching from
local workforces to staff public safety agencies at the state
level. He claimed that the new hybrid retirement plan would
entice local police and fire officers to apply for positions
within DPS, thus hurting the local communities. He mentioned
that federal employees with a defined benefit plan in Alaska had
an attrition rate of 7.5 percent, indicating that the 6 percent
attrition rate [for nonretirement separations] within DPS was
tolerable. He addressed the declining population in Alaska. He
pointed out that Alaska had borrowed $16 billion from state
savings since 2016 to pay for state government; further, he
touched on cuts to the Permanent Fund Dividend (PFD). He
expressed hesitancy towards increasing the state's cost burden
to pay for a new retirement plan. He requested an analysis of
this proposal from the Division of Retirement and Benefits,
Department of Administration (DOA) and additional time for
considering the bill. In closing, he opined that a defined
contribution plan was favorable due to the portability and
flexibility it offered employees.
REPRESENTATIVE JOSEPHSON, in response to Representative McKay's
concern about the state poaching from local governments, said he
had never heard of that. He contended that municipal public
safety workers received better pay; nonetheless, HB 22 would
cover both local police and the state troopers. He acknowledged
that the state had spent $16 billion from savings; however, he
pointed out that no taxes had been implemented during that time
to offset spending. He explained that drawing from savings was
the only option to pay for the government, as there was no new
source of revenue. In response to concerns about depleting the
Earnings Reserve Account (ERA), he expressed support for
enforcing [the 5 percent of market value (POMV] draw.] He
further noted that the actuarial analysis from Buck Global LLC
was, in fact, conducted on behalf of DRB. He assured the
committee that DRB had been engaged in every phase of the
process.
REPRESENTATIVE MCKAY pointed out that many Alaskans equated a
PFD reduction to a tax. For that reason, he argued that
Alaskans had been taxed.
8:30:42 AM
REPRESENTATIVE MCCABE suggested that numbers may have changed
since the Buck Global LLC survey was conducted two years ago.
He expressed an interest in hearing from Alexei Painter,
Legislative Finance Division, on the potential impacts to
Alaska's economy. He cited an article that reported a national
resignation rate of 18 percent and, among all responding police
departments, a 45 percent increase in retirement rates. He
opined that, while the issue should be addressed, a 6 percent
vacancy rate was not a "bell ringing emergency." He pointed out
that individuals had more control over the management of a
defined contribution system, as opposed to a defined benefit,
which would "vaporize" upon the death of the employee and
his/her spouse. He remarked, "I can't think of a worse entity
[in] the world to control my retirement than the State of Alaska
legislature."
REPRESENTATIVE JOSEPHSON understood that Representative McCabe
did not want the government controlling his pension; however,
many senior citizens disagreed, he said. He suggested that
there was a real misunderstanding about the bill. He described
the new retirement plan as "being in its own silo."
8:35:19 AM
CHAIR MCCORMICK opened public testimony on HB 22.
8:36:23 AM
REPRESENTATIVE JOSEPHSON, in response to Representative McCabe's
assertion that the actuarial reports were two years old,
clarified that they were conducted seven months ago.
8:36:56 AM
CHRISTOPHER WRIGHT noted that he was a law enforcement officer
with the Anchorage Police Department (APD) testifying in his
personal capacity. He requested that the committee reject a
return to a pension, which he believed, would not benefit
individual police officers. He opined that pensions were an
outdated method for providing retirement and benefits to
workers. He argued that the goals of the proposed pension plan
would stifle flexibility and career growth opportunities. He
claimed that the concept of forcing police officers to remain in
a job was "an abject outcome" that should be rejected. He
recounted his former career as an investment manager, suggesting
that the transition to a defined contribution system enabled
average-income Americans to build wealth. He shared his belief
that public safety workers deserved a cost-specific alternative
that would allow for individual responsibility and rewards. He
opined that HB 22 would not solve the retention challenges.
8:41:04 AM
REPRESENTATIVE MCCABE asked whether there was "any possible way"
that training costs amounted to $200,000 per officer.
MR. WRIGHT said he was not privy to APD's budget. Nonetheless,
he opined that the numbers [provided by DPS] did not seem
accurate.
REPRESENTATIVE MCCABE asked whether the average APDEA member
supported "what APDEA leadership was putting forward with
defined benefit."
MR. WRIGHT noted that he became involved with the board because
he didn't feel it was accurately representing the union members.
He opined that [APDEA] leadership was "off base" on this issue.
He questioned the benefit to individual police officers of
removing flexibility and career growth opportunities. He
reported that there had been a recall election that centered
around this issue. He stated that many of the officers he had
spoken with did not support a return to defined benefits.
8:43:47 AM
REPRESENTATIVE HIMSCHOOT asked how long Mr. Wright had worked in
the investment field.
MR. WRIGHT answered 20 years.
REPRESENTATIVE HIMSCHOOT asked what kind of training was
involved and whether continuing education was required.
MR. WRIGHT said, at the time, yes. He said he obtained a
master's degree in business administration (MBA) and described
his background in servicing pension plans, defined contribution
plans, and defined benefit plans.
REPRESENTATIVE HIMSCHOOT pointed out that, given his background,
Mr. Wright was particularly well positioned to manage his
personal finances. She asked whether his colleagues had the
same expertise.
MR. WRIGHT answered no. Nonetheless, he said the notion that
the average person could not manage a 401(k) plan was misguided.
He added that education opportunities were available to police
officers. He stated that long-term investments could be set up
with basic guidance and did not require daily management by the
employee.
REPRESENTATIVE HIMSCHOOT anecdotally reported that people in the
education sector had difficulty managing their investments and
often hired professionals to assist, which was an added expense.
She pointed out that under a defined contribution plan, the risk
fell on each individual. By contrast, the risk would be shared
across the cohort with a defined benefit plan.
MR. WRIGHT argued that the cost of hiring an investment
professional was much lower than the cost of a guaranteed
pension plan.
REPRESENTATIVE HIMSCHOOT asked whether Mr. Wright was referring
to the cost to the individual.
MR. WRIGHT answered yes.
8:48:00 AM
REPRESENTATIVE RUFFRIDGE inquired about the reason for the APDEA
recall election and asked Mr. Wright to share the results.
MR. WRIGHT explained that he, Christopher Wright, was the reason
for the recall election. He believed that the recall was in
response to his effort to contact senators and offer testimony
that opposed leadership's position on the proposed legislation.
However, he contended that APDEA never took an official position
on House Bill 55 until recently. He reported that he won the
recall election.
8:49:27 AM
REPRESENTATIVE MCCABE inquired about the difference between a
401(k) plan managed by the state and a 401(k) plan managed by
the individual.
MR. WIGHT asserted that that an individual had the ability to
personally tailor his/her investments better than a government
entity. He said that, although he appreciated the idea of
Social Security as a safety net, the program did not provide
enough for retirement. Similarly, the pension plan proposed
under HB 22 would not be enough for retirement, he argued.
8:52:17 AM
REPRESENTATIVE HIMSCHOOT re-emphasized that the risk of
investment and age was distributed under a pension plan whereas
mismanaged investments under a defined contribution plan could
result in difficulties if employees lived longer than they had
planned for. She asked whether Mr. Wright disagreed with that
statement.
MR. WRIGHT said he understood those risks. Nonetheless, he
suggested that the cost of a guaranteed pension plan was too
high. He indicated that portfolio performance would be better
under a well-established 401(k) system.
8:54:24 AM
SARAH CANNARD, Firefighter/EMT, Capital City Fire/Rescue, said
she was testifying on behalf of the International Association of
Fire Fighters (IAFF) and the Alaska Professional Fire Fighters
Association (AKPFFA). She recounted her experience attending an
IAFF conference for new members from departments across the West
Coast region, during which time she was made aware of how the
pay and benefits for firefighters in Alaska paled in comparison
to other states. She recalled the members' disappointment when
House Bill 55 failed to advance. She emphasized the importance
of a dignified retirement after a career in public service. She
highlighted the need for firefighters and EMTs across the state
and the inability to retain employees. Furthermore, she
reported that she stood a 68 percent change of contracting some
form of cancer, which was the leading cause of death for
firefighters across the country, in addition to the risk of
breast cancer. She indicated that the majority of firefighters
understood that other investment solutions were needed to
diversify their retirement; further, that a pension was a
crucial part of that diversity. She said neither she, nor her
partner, who was also a firefighter, wanted to leave Alaska;
however, they may run out of options. She added that, for now,
she was willing to stay with the hope that firefighters in
Alaska would someday soon be afforded the same protection and
security as their peers in the Lower 48.
8:58:33 AM
REPRESENTATIVE MCKAY said he was not denying that firefighters
should have a pension. Instead, he questioned what kind of
pension they should have. He suggested that there were
significant benefits to a defined contribution plan, as opposed
to a define benefit plan. He emphasized the respect and he held
for Alaska's public safety officers while reiterating his
concern about how to tackle the issue.
MS. CANNARD noted that she was representing the majority opinion
in her department [Capital City Fire/Rescue].
8:59:49 AM
REPRESENTATIVE MCCABE pointed out that the military had
transitioned from a pension plan to a "blended retirement
system." He asked whether the City and Borough of Juneau
offered any kind of retirement benefit for its firefighters.
MS. CANNARD shared her understanding that yes, some retirement
was received from the city; however, it was not enough. She
shared a personal anecdote about her mother, who was a Tier I
retiree.
9:01:46 AM
REPRESENTATIVE MEARS asked whether Ms. Cannard was taking
personal responsibility for her financial planning and
retirement.
MS. CANNARD said, emphatically, yes. She conveyed that
retirement and financial planning was a popular topic of
discussion at the fire house. She noted that, although
firefighters were fiscally minded, they would welcome additional
help.
9:04:38 AM
RYAN FROST, Senior Policy Analyst, Pension Integrity Project,
Reason Foundation, briefly discussed the work he engaged in at
the Reason Foundation. He acknowledged the difficulty of
designing a retirement system. He highlighted the risk involved
in year one of the hybrid plan proposed in HB 22, noting that
the risk was higher than the average defined benefit plan.
Further, he believed that additional funds would be needed in
the future if any "bad experience" were to occur, as the benefit
was guaranteed. He reported that the investment return
assumption utilized in HB 22 was higher than the national
average; however, lowering it, he said, would make the plan more
expensive. He related to the committee what would have happened
had House Bill 55 passed last year. Had the plan been
implemented, he explained, presumably all public safety workers
hired after 2006 would have transferred their assets from the
defined contribution plan into the new tier of the Public
Employees' Retirement System (PERS) defined benefit plan. He
suggested that all the recently transferred liabilities, priced
at the discount rate of 7.3 percent, would have resulted in tens
of millions of dollars in unfunded liabilities before the plan
even reached one year old, as PERS earned -6 percent last year.
He indicated that the rate of 7.3 percent was too high with
regard to current market forecasts. Currently, he said, pension
systems across the country were racing to get below 5.5 percent.
He questioned the decision to start the new tier well above
that. He informed the committee that he used to work for the
public safety pension system in the state of Washington, arguing
that it was the higher salary, not the pension plan, that was
encouraging employees to leave Alaska for the Lower-48.
9:08:40 AM
REPRESENTATIVE MCCABE asked Mr. Frost to discuss the risk
associated with the high return assumption in HB 22.
MR. FROST shared his understanding that the current PERS assumed
rate of return was 7.25 percent, which was too high. He
explained that the expected rate of return was, actually,
between 5 and 6 percent according to the 10-to-15-year market
forecast for institutional investors, like public pension plans.
For that reason, large pension systems across the country were
racing to drastically lower their assumed rate of return, which
was costly, as dropping rates made the present value of
liability more expensive.
9:10:42 AM
REPRESENTATIVE HIMSCHOOT asked whether the salary for public
safety employees in Alaska was comparable to their counterparts
in Washington.
MR. FROST estimated that employees' salaries in Washington were
nearly double that of out-of-state workers.
REPRESENTATIVE HIMSCHOOT concluded that Mr. Frost did not know
the average salary in Alaska; however, he suspected that
Washington was a high salary state for public safety officers.
MR. FROST said, "Correct."
9:12:15 AM
MICHAEL JENSEN shared that he had retired as a sergeant after 25
years with APD. He noted that he retired with a pension. He
expounded on his personal background and career in law
enforcement training. He anecdotally reported that the
challenges faced by the recruitment division were significant,
adding that filling the academy with applicants was always a
challenge. He believed that the portability of the 401(k) plan
allowed quality officers to leave the state after five years.
9:16:07 AM
REPRESENTATIVE MCCABE inquired about the pay increase from
officer to field training officer (FTO).
MR. JENSEN did not know the exact number. He recalled that the
increase in pay for FTOs was nominal.
REPRESENTATIVE MCCABE asked whether a 457(b) [deferred
compensation plan] was available to Mr. Jensen, as a public
employee.
MR. JENSEN said he had a 401(k) in addition to a 457, adding
that he was unsure about the "(b)."
9:19:29 AM
CHRIS WIGNER, Lieutenant, Bethel Police Department, said he
spent 20 years as a police officer in the state of Georgia, in
part, to ensure that he would collect a pension upon retirement.
He noted that he was speaking in favor of the pension plan. He
addressed the retention and recruitment difficulties in rural
Alaska, opining that the portability of the existing defined
contribution plan was the reason officers were leaving after the
vesting period. He argued that the promise of a pension would
help with recruitment and longevity.
9:22:22 AM
CHAIR MCCORMICK asked Lieutenant Wigner to illustrate the
retention issues in rural Alaska.
LIEUTENANT WIGNER discussed safety issues for both the community
and for the officers, as they were entering into dangerous
situations without backup due to high vacancy rates.
9:23:21 AM
REPRESENTATIVE RUFFRIDGE sought to confirm that Lieutenant
Wigner had suggested that public safety officers were moving to
Bethel with the intention of leaving after five years. He asked
whether the existing retirement plan was inherently appealing to
a certain type of person. He asked whether it was the people,
not the retirement system, who were prompting the issues with
recruitment.
LIEUTENANT WIGNER acknowledged that the current system provided
recruits with an "out" after five years. He recommended
incentivizing people to stay longer with a pension plan. He
added that [Bethel Police Department] was recruiting to the best
of its ability.
REPRESENTATIVE RUFFRIDGE asked whether the current system was
designed to recruit people who were planning to leave.
LIEUTENANT WIGNER answered yes.
9:26:20 AM
REPRESENTATIVE MCCABE asked whether Lieutenant Wigner could
survive solely on his Georgia pension.
LIEUTENANT WIGNER said he chose to move to Bethel to fulfill a
lifelong dream of living in Alaska. He did not know whether he
could live solely on his Georgia pension.
REPRESENTATIVE MCCABE provided a hypothetical scenario involving
a Bethel police officer who disliked Alaska and wanted to leave
but had to stay for 15 years to acquire his/her pension. He
inquired about the character of that police officer.
LIEUTENANT WIGNER speculated that the hypothetical officer
didn't seem to have the mindset of serving his/her community.
In contrast, he pointed out that there would also be officers
who want to do a good job and progress in the department to
retire under the pension plan.
9:28:57 AM
REPRESENTATIVE MCKAY shared a personal anecdote about his
experience working in the oil and gas industry. He opined that
it would be cruel to "force" employees to remain in a place
where they did not want to live, suggesting that morale and
motivation would be low. He pointed out that Alaska was not for
everyone. He emphasized the importance of portability.
LIEUTENANT WIGNER agreed. However, he pointed out that every
person had a choice. He conveyed that a pension plan wasn't
eliminating choice; instead, it allowed officer to choose
longevity and career growth in addition to the guarantee of a
solid retirement plan. He emphasized that no one would be held
against their will.
CHAIR MCCORMICK sought to confirm that Bethel police officers
followed a two-week rotation that afforded them the opportunity
to travel home if they lived out of state.
LIEUTENANT WIGNER answered yes. Currently, he said, only two
officers on the force were residents of Bethel.
9:32:48 AM
PATRICK MESSMER informed the committee that he had worked as a
police officer for 23 years in Alaska and served on the board of
the Alaska Public Employees Association (APEA). Since 2006,
when the state switched from a defined benefit plan to a defined
contribution system, he observed workers leaving at increased
rates, which resulted in a loss of experience as Tier III
pension officers retired. He affirmed that around the five-year
mark, public safety workers were leaving Alaska for states with
a pension plan. He reported that the ability to solve and
prevent crimes was impacted by the decrease in experience and
staffing levels. He pointed out that although Tier IV officers
had a 401(k) plan, they were without Social Security. He
characterized Alaska's PERS as the worst in the country. He
discussed the negative effects of inadequate staffing and
provided anecdotal examples. He urged the legislature to "do
the right thing" and reinstate the original pension system. He
shared his understanding that the entire Seward Police
Department was in favor of making a return to a defined benefit
pension.
9:35:51 AM
TAYLOR ELBERT, stated his support for HB 22, noting that he
currently served as the deputy director of the North Slope
Borough Fire Department. He expressed concern about his
family's finances should he continue to dedicate his
professional life to the Alaska fire service. He attested to
"the great hollowing out" that Representative Josephson had
referenced. He reported that 28 of the 63 uniformed personnel
in his department had less than four years of experience as a
firefighter. By contrast, only 12 personnel had 10 years or
more of experience. He said Alaska communities deserved
experienced firefighters with the knowledge to make tactical
decisions in a timely manner. Experience, he said, comes from
longevity in the field. He emphasized the need for a retention
tool that would keep firefighters in the profession, so that new
officers would have a chance to learn from experienced
professionals. He opined that HB 22 is necessary to retain and
recruit officers who want to remain in Alaska.
9:38:47 AM
REPRESENTATIVE MCCABE asked whether the North Slope Borough Fire
Department followed a two-week rotation.
MR. ELBERT said the flight paramedics worked a rotational
schedule; however, the majority of the department did not.
9:39:38 AM
REPRESENTATIVE RUFFRIDGE asked how many officers had left the
state after five years of service.
MR. ELBERT did not know the answer and declined to speculate.
9:40:48 AM
ALLAN HEINEKEN informed the committee that he was a captain
within the Fairbanks Fire Department testifying in his personal
capacity. He anecdotally reported that people who wanted to
stay in Alaska to raise their families were leaving the state
because it was not economical to remain. He implored the
committee to focus on future public safety workers who would be
impacted by this decision.
9:43:20 AM
TYLER BELK, Alaska Professional Fire Fighters Association
(AKPFFA), noted that he was a member of the IAFF Local 1264 and
served as a firefighter/paramedic at the Anchorage Fire
Department. He emphasized his deep familial roots in Alaska,
adding that his family intended to stay in the state. He
stressed the importance of providing financial security to
public safety workers via HB 22. He reported that even the most
conservative states, like Texas and Florida, funded a public
safety pension for police officers and firefighters. He said he
was nearing a pivotal point in his career that would require
making long-term financial decisions with regard to a pension.
As a paramedic, he said he was highly sought after by West Coast
states, noting that the City of Los Angeles was offering
paramedics a signing bonus of $50,000. He opined that if Alaska
did not make a change, officers would continue to leave, and the
problem would worsen.
9:45:58 AM
REPRESENTATIVE MCCABE sought to confirm that Mr. Belk had stated
that Los Angeles was offering a $50,000 signing bonus.
MR. BELK confirmed that Los Angeles was offering a $50,000
signing bonus.
REPRESENTATIVE MCCABE asked whether the signing bonus was being
offered because the city was facing a worker shortage, similar
to Alaska.
MR. BELK speculated that a signing bonus of that amount was an
indication that large shortages were being forecasted. He
posited that offering a signing bonus was not an option for
Alaska. He believed that a pension plan would make the state
more competitive.
REPRESENTATIVE MCCABE said his intention was to highlight that
despite California's pension plan, a signing bonus was still
required for recruitment.
9:48:50 AM
REPRESENTATIVE MEARS asked how long Mr. Belk had served in the
Anchorage Fire Department.
MR. BELK answered seven years.
9:49:10 AM
REPRESENTATIVE MCKAY highlighted California's fiscal
instability, opining that the state was not an example of
financial responsibility.
MR. BELK agreed. Nonetheless, he pointed out that Alaska was
competing with California for recruitment. He anecdotally
reported that high-ranking officers faced challenges with
recruitment because Alaska did not offer a pension, which was
often the first question asked by candidates. He characterized
the lack of a pension plan as embarrassing.
9:50:48 AM
REPRESENTATIVE RUFFRIDGE sought to confirm that Mr. Belk had
stated that [officer] shortage was a nationwide issue, and that
Alaska was not competitive. He asked whether that was an
accurate summation.
MR. BELK confirmed that Representative Ruffridge had offered an
accurate summation.
REPRESENTATIVE RUFFRIDGE suggested that Mr. Belk was
"frustrated." He asked whether that was true.
MR. BELK answered yes. He explained that his frustration was
derived from watching successful colleagues leave this state.
He added that his departed colleagues were well-respected
pillars of the community.
9:52:36 AM
DARRELL EVANS, President, APDEA stated his support for HB 22.
In response to comments regarding the portability of a defined
contribution system, he shared his understanding that the
proposed legislation offered a vesting period, adding that a
defined benefit plan would not erase employees' portability. He
discussed officer training and return on investment. He
explained that after officers graduated from the training
academy, the basic certificate received from the Alaska Police
Standards Council functioned as a "ticket" to lateral hire in
another department, which provided officers with the ability to
easily leave Alaska for another state. He opined that Alaska
had the highest trained officers, noting that other states
actively sought out Alaska's officers for lateral hire. He
shared his personal background in law enforcement. He reported
that in 2022, 46 officers resigned from APD for various reasons,
adding that his department was unable to keep up with the rate
of attrition, as the academy only graduated 20 officers at a
time.
9:56:30 AM
REPRESENTATIVE MCCABE referred to the Microsoft Excel
spreadsheet of training costs, titled "Copy of New Officer Costs
APDEA" [included in the committee packet]. He inquired about
the list of "Uniform/Equipment" at the APD Training Center and
asked whether items, such as tasers and drug test kits, belonged
to the police department.
MR. EVANS confirmed that those items belonged to the department;
however, some equipment, like drug test kits, were one-time use
items.
REPRESENTATIVE MCCABE highlighted the Motorola Radio listed for
$5,000 under "APD IT" and argued that such items should not be
included in training costs. He characterized the numbers as
inflated and requested the exact cost of training to make an
intelligent decision.
9:59:19 AM
REPRESENTATIVE RUFFRIDGE asked how the attrition rate of 47
officers compared to prior years.
MR. EVANS declined to comment on past years, as this was his
first year in his current role as president of APDEA.
10:00:31 AM
CHAIR MCCORMICK [closed public testimony] and announced that HB
22 would be held over.
10:01:09 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 10:01 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 22 Supporting Document - FFD cost of hiring from Scott Raygor Fire Chief Fairbanks.docx |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22 Supporting Document - Copy of New Officer Costs APDEA Sgt. Darrell Evans.xlsx |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22 Supporting Document - DPS - Cost to Replace a State Trooper - January 2023.pdf |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22- Bryan Vincent Letter of Support.pdf |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22- APDEA Letter of Support.pdf |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22- ACOA Letter of Support.pdf |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22 Sponsor Statement CRA.pdf |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22 Sectional Analysis CRA.pdf |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |
| HB 22 Sponsor Presentation.pptx |
HCRA 1/31/2023 8:00:00 AM |
HB 22 |