Legislature(2013 - 2014)HOUSE FINANCE 519

01/29/2013 01:30 PM FINANCE


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01:32:33 PM Start
01:32:52 PM Fy 14 Governor's Budget Overview: Alaska Mental Health Authority
02:34:09 PM Fy 14 Governor's Budget Overview: Department of Administration
03:35:16 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 65 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 66 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Governor's FY14 Budget Overview: TELECONFERENCED
- Alaska Mental Health Trust Authority,
Trustee Presentation
- Dept. of Administration
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     January 29, 2013                                                                                           
                         1:32 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:32:33 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Austerman called the House Finance Committee                                                                           
meeting to order at 1:32 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lindsey Holmes                                                                                                   
Representative Scott Kawasaki, Alternate                                                                                        
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative David Guttenberg                                                                                                 
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Mike Barton, Trustee, Alaska  Mental Health Trust Authority;                                                                    
Paula  Easley,   Secretary/Treasurer,  Board   of  Trustees,                                                                    
Alaska  Mental Health  Trust Authority;  Jeff Jessee,  Chief                                                                    
Executive  Officer, Alaska  Mental  Health Trust  Authority;                                                                    
Becky Hultberg, Commissioner, Department of Administration.                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
FY 14 GOVERNOR'S BUDGET OVERVIEW:                                                                                               
                                                                                                                                
     Alaska Mental Health Trust Authority                                                                                       
     Department of Administration                                                                                               
                                                                                                                                
HB 65     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          HB 65 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 66     APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          HB 66 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HOUSE BILL NO. 65                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs,    capitalizing   funds,   amending                                                                    
     appropriations,   and   making  reappropriations;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
HOUSE BILL NO. 66                                                                                                             
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
^FY 14 GOVERNOR'S BUDGET OVERVIEW: ALASKA MENTAL HEALTH                                                                       
AUTHORITY                                                                                                                     
                                                                                                                                
1:32:52 PM                                                                                                                    
                                                                                                                                
MIKE BARTON, TRUSTEE, ALASKA  MENTAL HEALTH TRUST AUTHORITY,                                                                    
introduced  various  members  of the  Alaska  Mental  Health                                                                    
Trust Authority. He pointed out  that the first subcommittee                                                                    
meeting was scheduled for February 18th.                                                                                        
                                                                                                                                
Mr. Barton introduced slide 2: "Trust Beneficiaries."                                                                           
                                                                                                                                
   · People with mental illness                                                                                                 
   · People with developmental disabilities                                                                                     
   · People with chronic alcoholism and other substance                                                                         
     related dementia                                                                                                           
   · People with traumatic brain injury                                                                                         
                                                                                                                                
1:36:58 PM                                                                                                                    
                                                                                                                                
Mr. Barton discussed slide 3: "Guiding Principles."                                                                             
   · To improve the lives of Trust beneficiaries, The Trust                                                                     
     is committed to:                                                                                                           
        o Education of the public and policymakers on                                                                           
          beneficiary needs;                                                                                                    
        o Collaboration    with   consumers    and   partner                                                                    
          advocates;                                                                                                            
       o Maximizing beneficiary input into programs;                                                                            
        o Prioritizing services for beneficiaries at risk                                                                       
          of institutionalization;                                                                                              
        o Useful and timely data for evaluating program                                                                         
          results;                                                                                                              
        o Inclusion of early intervention and prevention                                                                        
          components;                                                                                                           
        o Provision of reasonably necessary beneficiary                                                                         
          services based on ability to pay.                                                                                     
                                                                                                                                
PAULA  EASLEY,   SECRETARY/TREASURER,  BOARD   OF  TRUSTEES,                                                                    
ALASKA  MENTAL HEALTH  TRUST AUTHORITY,  explained that  the                                                                    
scorecard was assessed annually  since 2008. She stated that                                                                    
a  comparison  of last  year  and  this year  displayed  the                                                                    
effective determination  of figures and how  key issues were                                                                    
impacting  beneficiaries.  The   information  was  carefully                                                                    
refined.                                                                                                                        
                                                                                                                                
Mr. Barton  offered to  provide a copy  of the  scorecard to                                                                    
the committee.                                                                                                                  
                                                                                                                                
Mr.   Barton  discussed   slide  4:   "Trust  Advisors   and                                                                    
Partners."                                                                                                                      
                                                                                                                                
   · Advisory Board on Alcoholism & Drug Abuse                                                                                  
   · Alaska Mental Health Board                                                                                                 
   · Governor's Council on Disabilities & Special Education                                                                     
   · Alaska Commission on Aging                                                                                                 
   · Commissioners of Health and Social Services, Revenue,                                                                      
     Natural Resources and Corrections                                                                                          
   · Alaska Brain Injury Network                                                                                                
   · Statewide Suicide Prevention Council                                                                                       
                                                                                                                                
1:40:27 PM                                                                                                                    
                                                                                                                                
Mr.  Barton discussed  slide 5:  "Trust Funding  FY 14."  He                                                                    
noted that  the great bulk  came from the fund  pay-out. The                                                                    
trust fund  payout at 4.25 percent  equaled $18,090,000. The                                                                    
payout  was  based  on a  four-year  average  principal  and                                                                    
reserve balances of $426 million.                                                                                               
                                                                                                                                
1:41:30 PM                                                                                                                    
                                                                                                                                
Mr.   Barton  detailed   slide   6:   "The  Trust   Resource                                                                    
Portfolio." He explained that the  trust had approximately 1                                                                    
million  acres  of trust  land  that  was  the result  of  a                                                                    
settlement. The acres were divided  by region. The trust had                                                                    
full fee  ownership for  55 percent of  the land.  The trust                                                                    
owned coal,  oil and gas  rights for  one third of  the land                                                                    
and  full mineral  rights  for 11  percent.  The Trust  Land                                                                    
Office (TLO) contributed a total  of $138 million since 1994                                                                    
when the settlement was achieved.                                                                                               
                                                                                                                                
1:43:03 PM                                                                                                                    
                                                                                                                                
Mr. Barton detailed slide 7: "Formula for Success."                                                                             
                                                                                                                                
   · Committed partners + Strategic thinking = Results for                                                                      
     Trust beneficiaries                                                                                                        
        o Identify a problem or community need                                                                                  
        o Collaborate with governmental agencies, advisory                                                                      
          groups,     nonprofits,     service     providers,                                                                    
          philanthropic organizations and private sector                                                                        
        o Develop strategic, sharply focused solutions                                                                          
        o make lasting system improvements                                                                                      
                                                                                                                                
Mr. Barton explained slide 8: "Five Program Focus Areas."                                                                       
                                                                                                                                
   · Bring the Kids Home                                                                                                        
        o reforming Alaska's mental health care for                                                                             
          children and adolescents so they are diagnosed                                                                        
          earlier and treated as close to home as possible                                                                      
   · Disability Justice                                                                                                         
        o reducing the involvement and recidivism of Trust                                                                      
          beneficiaries in the criminal justice system                                                                          
   · Affordable Appropriate Housing                                                                                             
        o increasing a continuum of housing options for                                                                         
          Trust beneficiaries                                                                                                   
   · Workforce Development                                                                                                      
        o creating an available and competent workforce for                                                                     
         Trust beneficiaries and service providers                                                                              
   · Beneficiary Projects Initiative                                                                                            
        o supporting grassroots, peer-to-peer programs for                                                                      
          Trust beneficiaries                                                                                                   
                                                                                                                                
1:45:42 PM                                                                                                                    
                                                                                                                                
Mr. Barton detailed slide 9: "Alcohol Initiatives."                                                                             
                                                                                                                                
   · Recover Alaska                                                                                                             
        o initiative lead  by Rasmuson  Foundation, includes                                                                    
          The  Trust,  Mat-Su  Health Foundation,  DHSS  and                                                                    
          other stakeholders                                                                                                    
        o goal   to    help   individuals,    families   and                                                                    
          communities  in Alaska  "recover" from  impacts of                                                                    
          alcohol                                                                                                               
        o focus on  systems, policy, statutory  and practice                                                                    
          changes that will lead to long-term improvements                                                                      
   · Title 4 review                                                                                                             
        o partnership with  Alcohol Beverage  Control Board,                                                                    
          which  is  convening  stakeholders to  review  and                                                                    
          possibly  recommend  changes to  Alaska's  alcohol                                                                    
          beverage control statutes in Title 4.                                                                                 
                                                                                                                                
1:46:29 PM                                                                                                                    
                                                                                                                                
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH                                                                      
TRUST AUTHORITY, detailed slide 10: "Bring the Kids Home."                                                                      
                                                                                                                                
   · Problem                                                                                                                    
        o FY 06: 743 Alaskan  children with severe emotional                                                                    
          disturbances  received   out-of-state  residential                                                                    
          psychiatric treatment services                                                                                        
             ƒseparated from families and communities                                                                          
             ƒdifficult transitions back to Alaska                                                                             
             ƒlength of stay varied from several months to                                                                     
               multiple years                                                                                                   
             ƒcosts peaked at $40+                                                                                             
   · Committed partners                                                                                                         
        o DHSS, behavioral health  service providers, parent                                                                    
          and youth advocates,  Trust partner boards, Alaska                                                                    
          Native  health  providers,   Dept.  of  Education,                                                                    
          Denali Commission and others                                                                                          
   · Strategic thinking                                                                                                         
        o intervene earlier, more  intensively, and with the                                                                    
          family                                                                                                                
        o use residential resources carefully                                                                                   
        o expand implementation of effective practices                                                                          
        o develop in-state treatment  for youth with complex                                                                    
          needs                                                                                                                 
                                                                                                                                
1:49:19 PM                                                                                                                    
                                                                                                                                
Mr. Jessee  detailed slide 11: "Results  for Beneficiaries."                                                                    
Less than 100 Alaskan children  were located in out of state                                                                    
facilities. He  noted that the  recidivism rate  was reduced                                                                    
from  20 percent  to  5 percent.  The  15 percent  reduction                                                                    
translated   into   significant   savings  to   the   state,                                                                    
particularly with the Medicaid program.                                                                                         
                                                                                                                                
Mr.  Jessee discussed  slide 12:  "Shifting Expenditures  in                                                                    
State."  He   explained  that  the   Bring  the   Kids  Home                                                                    
initiative was  a reinvestment strategy.  He noted  that the                                                                    
reduction  of  the  out  of  state  Residential  Psychiatric                                                                    
Treatment Centers (RPTC) costs  was expected. He stated that                                                                    
a  continuation  of the  path  would  have doubled  the  $40                                                                    
million spent out of state.                                                                                                     
                                                                                                                                
1:51:55 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 13: "Results for Beneficiaries."                                                                     
                                                                                                                                
   · Developing in-state treatment options for children                                                                         
     with co-occurring and complex disorders                                                                                    
        o Complex Behaviors Collaborative                                                                                       
        o in-state RPTC unit                                                                                                    
        o resources for youth who experience FASD                                                                               
                                                                                                                                
Mr. Jessee stated that some  kids would always travel out of                                                                    
state for  specialized programs because  the AMHT  could not                                                                    
provide  for  every  need.  He  stated  that  children  with                                                                    
intellectual    disabilities     and    serious    emotional                                                                    
disturbances typically left the state  for an average of 400                                                                    
days. He  spoke about  an in-patient treatment  program that                                                                    
was  closely tied  to community  based family  services that                                                                    
took the same  population and reduced the  average length of                                                                    
stay to between 45 and 90  days. The trust funded a group of                                                                    
Alaskans  from both  the state  department and  providers to                                                                    
review the program.  He stated that North Star,  a core RPTC                                                                    
program  in Anchorage,  believed that  they could  duplicate                                                                    
the  program.   He  worked   with  community   providers  to                                                                    
integrate the  necessary level of  care. The Bring  the Kids                                                                    
Home  initiative  was winding  down  allowing  the Trust  to                                                                    
focus on other areas. Indicators  would be in place to alert                                                                    
the Trust and the legislature if the numbers began to rise.                                                                     
                                                                                                                                
Mr. Jessee discussed slide 14: "Results for Beneficiaries."                                                                     
   · Working with young children to prevent severe                                                                              
     disturbances                                                                                                               
   · Working with families to keep/return children to their                                                                     
     homes                                                                                                                      
        o expanding early childhood services                                                                                    
        o increasing delivery and quality of family therapy                                                                     
          services                                                                                                              
        o expanding trauma training                                                                                             
                                                                                                                                
Mr.  Jessee informed  the committee  that most  of the  kids                                                                    
exhibiting  serious  issues  were multiply  traumatized.  He                                                                    
commented  on Adverse  Childhood Experiences  (ACE) and  the                                                                    
effect on children and adults.  A direct correlation existed                                                                    
between a  child's negative experiences  and their  need for                                                                    
exceptional care.  He spoke about  Department of  Health and                                                                    
Social Services  and the  Department of  Corrections budgets                                                                    
and the  need to contain  them. He spoke to  targeting funds                                                                    
appropriately by intervening in  children with multiple ACE.                                                                    
He  mentioned research  to offset  the negative  experiences                                                                    
such as  mentoring with  adults. He  stated that  AMHT would                                                                    
continue to  monitor ACE scores to  focus prevention efforts                                                                    
to  enable  a  long-term  sustainable  plan  for  the  state                                                                    
budget.                                                                                                                         
                                                                                                                                
1:58:30 PM                                                                                                                    
                                                                                                                                
Mr. Jessee  discussed slide 15:  "Ahead in FY 14."  He noted                                                                    
the   incorporation  of   Mental  Health   Traits  Authority                                                                    
Authorized   Receipts  (MHTAAR).   He  mentioned   that  the                                                                    
authority grants  were made directly by  the trust authority                                                                    
that was  not processed  through state government.  He noted                                                                    
the importance of education because  the schools provided an                                                                    
early-warning system for kids  beginning to have difficulty.                                                                    
The trustees  recommended a  one-to-one match  between trust                                                                    
funding  for FY  14 and  general funds.  He stated  that the                                                                    
governor's  budget  reduced  the state  match  for  evidence                                                                    
based  family  therapy models  from  $600  thousand to  $270                                                                    
thousand.                                                                                                                       
                                                                                                                                
2:00:43 PM                                                                                                                    
                                                                                                                                
Mr.  Jessee  informed  the  committee  that  evidence  based                                                                    
family  therapy  was the  most  cost  effective strategy  to                                                                    
prevent future issues.                                                                                                          
                                                                                                                                
Mr. Jessee discussed slide 16: "Looking Toward FY 15."                                                                          
   · FY 15 BTKH increments, if any, will transition on-                                                                         
     going successful projects from MHTAAR to GF/MH for                                                                         
     long-term sustainability                                                                                                   
   · BTKH  efforts  will   continue,  using  existing  GF/MH                                                                    
     resources  to  sustain  planning and  to  maintain  and                                                                    
     build on success                                                                                                           
   · The  AMHT  believes  further progress  will  require  a                                                                    
     shift in focus to  earlier intervention, prevention and                                                                    
     family-based services  to decrease long-term  costs for                                                                    
     behavioral  and  health  while improving  outcomes  for                                                                    
     children and families.                                                                                                     
                                                                                                                                
Mr.  Jessee discussed  slide  17:  "Disability Justice."  He                                                                    
recommended  a shift  of  focus from  symptoms  of a  poorly                                                                    
designed  system   to  focus   on  early   intervention  and                                                                    
prevention.  He  stated that  43  percent  of youth  in  the                                                                    
juvenile justice  system were  trust beneficiaries,  as were                                                                    
42 percent of people in  Department of Corrections (DOC). He                                                                    
expressed  concern that  beneficiaries in  both systems  had                                                                    
higher rates of recidivism.                                                                                                     
                                                                                                                                
2:02:35 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 19: "Strategic Thinking."                                                                            
                                                                                                                                
   · Prevent and  reduce inappropriate or  avoidable arrest,                                                                    
     prosecution, incarceration  and criminal  recidivism of                                                                    
     juvenile and adult AMHT beneficiaries                                                                                      
   · Increase   criminal   justice   system's   ability   to                                                                    
     accommodate,  support,  protect and  provide  treatment                                                                    
     for victims and offenders who are AMHT beneficiaries                                                                       
   · Reduce use  of jails and prisons  to provide protective                                                                    
     custody  of  adult   AMHT  beneficiaries  under  Alaska                                                                    
     Statute 47.37.170 (protective custody hold)                                                                                
   · Improve  community  re-entry   planning  from  juvenile                                                                    
     detention   and  treatment,   and  adult   correctional                                                                    
     facilities back into Alaska communities.                                                                                   
                                                                                                                                
2:04:06 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 20: "Outcomes Driven Results."                                                                       
                                                                                                                                
   · Working  together  state,  local agencies  save  lives,                                                                    
     improve public safety                                                                                                      
        o 75 percent reduction in non-criminal Title 47                                                                         
          protective custody holds at Yukon Kuskokwim                                                                           
          Correctional Center from 2010-2012                                                                                    
        o Individuals screened, referred to appropriate                                                                         
          treatment                                                                                                             
   · Therapeutic Courts                                                                                                         
       o Juneau Mental Health Court opened May 2012                                                                             
        o Anchorage Mental Health Court combined savings                                                                        
          almost 2.5 times program annual operating cost                                                                        
          (293,000)                                                                                                             
                                                                                                                                
2:06:46 PM                                                                                                                    
                                                                                                                                
Mr.  Jessee  discussed  slide  23:  "Affordable  Appropriate                                                                    
Housing." He  commented on recent discussions  regarding the                                                                    
safety  of people  with mental  health  issues. He  resisted                                                                    
enforcing  the stigma  that mentally  ill  people were  more                                                                    
dangerous  than anybody  else.  Statistically, mentally  ill                                                                    
people are not  more violent, although they  are more likely                                                                    
to be victims.  He stated that the lack  of safe, affordable                                                                    
housing was  the largest challenge facing  beneficiaries. He                                                                    
pointed out  the chart on  slide 23 detailing that  a person                                                                    
receiving  a  state   supplement  earned  approximately  $12                                                                    
thousand per year. He added  that a person working a minimum                                                                    
wage job earned  $16 thousand. A studio  apartment in Alaska                                                                    
required  an   income  of  $28  thousand.   Historically,  a                                                                    
dividend was  taken from Alaska Housing  Finance Corporation                                                                    
(AHFC)  and  not returned  into  the  housing industry,  but                                                                    
instead placed in the general fund for appropriation.                                                                           
                                                                                                                                
2:09:33 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 24: "Committed Partners."                                                                            
                                                                                                                                
   · Alaska Council on the Homeless: Alaska Housing Finance                                                                     
     Corporation, the departments of Health and Social                                                                          
     Services, Corrections, Labor and Public Safety, and                                                                        
     the Veterans Administration.                                                                                               
   · Housing development organizations                                                                                          
   · Social service agencies                                                                                                    
   · Local affordable housing and homeless coalitions                                                                           
   · Private business owners                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 26: "Strategic Thinking."                                                                            
                                                                                                                                
   · Adapting programs for sustainability - replicating                                                                         
     successful strategies through AHFC                                                                                         
        o Special Needs Housing Grants (SNHG)                                                                                   
        o Homeless Assistance Program (HAP)                                                                                     
   · Collaborating on creating "no wrong door"                                                                                  
        o coordinating  services statewide  through homeless                                                                    
          coalitions                                                                                                            
        o assessment of housing barriers                                                                                        
   · Collaborating on creating "no wrong door"                                                                                  
        o DHSS  Divisions of  Behavioral  Health and  Senior                                                                    
          and Disability Services                                                                                               
        o Assess needs by region and beneficiary group                                                                          
   · Effective program models implemented                                                                                       
        o Trust/DHSS/AHFC   collaboration   on   HUD   pilot                                                                    
          (reducing General Relief participants through                                                                         
          supported housing)                                                                                                    
        o program   development:   Bridge  Home   and   more                                                                    
          intensive community outreach models                                                                                   
                                                                                                                                
Mr. Jessee discussed slide 27: "Results for Beneficiaries."                                                                     
                                                                                                                                
   · Working the Plans                                                                                                          
        o Alaska  Council  on  the Homeless  Ten-Year  Plan,                                                                    
          Anchorage Ten-Year Plan on Homelessness, other                                                                        
          community plans                                                                                                       
   · Replicating Housing First                                                                                                  
        o targeting the most vulnerable and costly homeless                                                                     
   · Anchorage and Fairbanks on-track to replicate Outside                                                                      
     results:                                                                                                                   
        o Seattle  decreased  drinking  by  30  percent  and                                                                    
          reduced costs by $4 million in 12-month period.                                                                       
        o Anchorage  tenants   are  becoming  stable   -  78                                                                    
          percent retention compared to 80 percent in                                                                           
          similar programs                                                                                                      
   · Karluk Manor phase II - expansion and design                                                                               
     improvements                                                                                                               
        o working   with   Municipality  of   Anchorage   to                                                                    
          identify land to relocate                                                                                             
        o new  facility will  allow more  individuals to  be                                                                    
          served and will create space and staffing                                                                             
          efficiencies                                                                                                          
   · New projects under consideration: Anchorage, Juneau,                                                                       
     Nome                                                                                                                       
                                                                                                                                
2:11:22 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 28: "Ahead in FY 14"                                                                                 
                                                                                                                                
   · Policy - Governor's Council on the Homeless                                                                                
        o state   interagency   collaboration   modeled   on                                                                    
          federal agencies                                                                                                      
             ƒ10-year    homeless     plan    and    budget                                                                    
               recommendations being implemented                                                                                
   · Budget - $10 million annual recommendation for 10-year                                                                     
     plan ($8 million allocated)                                                                                                
        o The Trust, AHFC, GF/MH and other funding sources                                                                      
   · Effective program models implemented                                                                                       
        o Trust/DHSS    collaboration    to    serve    most                                                                    
          challenging individuals cycling through API and                                                                       
          DOC (Bridge Home and more intensive community                                                                         
          outreach models)                                                                                                      
        o replicating  Housing First  for beneficiaries  who                                                                    
          are chronically homeless with alcohol addiction                                                                       
          and low income people with disabilities                                                                               
        o services  located on-site  using housing  projects                                                                    
          large enough to make programs sustainable and                                                                         
          robust                                                                                                                
   · Long-term care strategic planning for Alaska                                                                               
        o planning  that makes  use  of  right resources  at                                                                    
          right time                                                                                                            
        o continuum  of care  for people  with disabilities,                                                                    
         Alzheimer's disease and related dementia.                                                                              
                                                                                                                                
Mr. Jessee stressed that the lack of housing opportunities                                                                      
in the state affect many different departments. He planned                                                                      
to work with various subcommittees on the issues.                                                                               
                                                                                                                                
2:12:31 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 30: "Workforce Development."                                                                         
                                                                                                                                
   · Problem                                                                                                                    
        o growing   need  for   workforce  to   serve  Trust                                                                    
          beneficiaries, especially Alaskans 65+ (fastest                                                                       
          growing population segment)                                                                                           
       o high vacancy rates in many health care jobs                                                                            
        o high turnover, especially in rural areas                                                                              
             ƒmany are temporary workers from Outside                                                                          
             ƒlack of housing                                                                                                  
        o lack  of  in-state   training/education  for  some                                                                    
          fields                                                                                                                
        o lack   of   continuing  education   required   for                                                                    
          licensure and certification for some professions                                                                      
                                                                                                                                
Mr. Jessee detailed slide 31: "Health Care Job Growth."                                                                         
                                                                                                                                
   · 38,749 new jobs in all Alaska sectors                                                                                      
        o 12 percent increase from 2010-2020                                                                                    
   · Health care and social service jobs expected to grow                                                                       
    31 percent by 2020 or one-third of total job growth                                                                         
   · Ambulatory health care - practitioners, outpatient                                                                         
     care, home health services - will gain 5,860 jobs or                                                                       
     28 percent increase by 2020                                                                                                
   · Alaskans age 65+ expected to increase 89 percent by                                                                        
     2020, contributing to rising demand for health care                                                                        
     workers                                                                                                                    
   · Aging population will boost social service sector,                                                                         
     adding about 2,400 jobs, up 25 percent by 2020                                                                             
                                                                                                                                
2:13:34 PM                                                                                                                    
                                                                                                                                
Mr. Jessee highlighted the necessary partnerships in slide                                                                      
33: "Alaska Health Workforce Coalition."                                                                                        
                                                                                                                                
   · Core Team                                                                                                                  
        o The Trust, departments of Labor, Education,                                                                           
          Health and Social  Services; University of Alaska,                                                                    
          Alaska   State    Hospital   and    Nursing   Home                                                                    
          Association,  Alaska  Workforce  Investment  Board                                                                    
          and Alaska Native Tribal Health Consortium                                                                            
   · Coalition                                                                                                                  
        o Health    Commission,   AFL/CIP    Alaska   Nurses                                                                    
          Association,  U.S.  Dept.   of  Labor;  Providence                                                                    
          Health and Services,  Fairbanks Memorial Hospital,                                                                    
          Laborers Local  341, Alaska Area  Health Education                                                                    
          Centers, Trust Training  Cooperative, Alaska Rural                                                                    
          Behavioral   Health   Training   academy,   Alaska                                                                    
          Behavioral Health  Association, service providers,                                                                    
          non-profit  agencies,   faith-based  organizations                                                                    
          and Alaska Native Health Board                                                                                        
                                                                                                                                
Mr. Jessee discussed slide 35: "Results for Beneficiaries."                                                                     
                                                                                                                                
   · 1,684 providers across Alaska attended 2,126 distance                                                                      
     delivery and on-site training sessions on behavioral                                                                       
     health related topics through the Trust Training                                                                           
     Cooperative in FY 12.                                                                                                      
   · 695 professionals attended Training and Technical                                                                          
     Assistance    for    Providers   program,    increasing                                                                    
     providers' capacity to respond to disability-related                                                                       
     abuse cases                                                                                                                
   · 2,618 individuals received distance delivery and on-                                                                       
     site training on autism through Autism Resource Center                                                                     
   · 1,521 students enrolled in behavioral health training,                                                                     
     of which 295 received a degree, through University of                                                                      
     Alaska in 2011 (2012 data not available)                                                                                   
   · 850+    healthcare    providers,    stakeholders    and                                                                    
     policymakers attended presentations and educational                                                                        
    events about the Alaska Health Workforce Coalition                                                                          
                                                                                                                                
2:14:20 PM                                                                                                                    
                                                                                                                                
Mr. Jesse discussed slide 36: "Ahead in FY 14."                                                                                 
                                                                                                                                
  · Funding Alaska Health Workforce Coalition Coordinator                                                                       
   · Analyzing and applying results of the 2012 Vacancy                                                                         
     Study                                                                                                                      
   · Supporting development of a Graduate Certificate in                                                                        
     Marriage and Family Therapy (LMFT) program at                                                                              
     University of Alaska                                                                                                       
   · Securing a permanent home within UA system for non-                                                                        
     academic training and professional development for                                                                         
     health careers                                                                                                             
                                                                                                                                
Mr. Jessee continued with slide 37: "Ahead in FY 14." He                                                                        
stated that he would work with subcommittees to increase                                                                        
funding.                                                                                                                        
                                                                                                                                
Mr. Jessee discussed slide 38: "Beneficiary Projects                                                                            
Initiatives."                                                                                                                   
                                                                                                                                
   · Community need:                                                                                                            
        o peer-based recovery support programs and peer                                                                         
          workforce to provide support to others with                                                                           
          similar experiences                                                                                                   
        o community-based peer support and other peer-based                                                                     
          recovery programs to help prevent need for more                                                                       
          expensive, intensive levels of service, including                                                                     
          hospitalization and/or incarceration                                                                                  
        o recovery support for persons with high severity                                                                       
          and complex social and behavioral health issues                                                                       
          who do not fare well in traditional services                                                                          
   · Partners:                                                                                                                  
        o 27 beneficiary grantee organizations since 2006                                                                       
        o Alaska Peer Support Consortium                                                                                        
        o Divisions   of   Behavioral   Health,   Senior   &                                                                    
          Disability Services Vocational Rehabilitation                                                                         
        o Trust Training Cooperative, Center for Human                                                                          
          Development                                                                                                           
        o Advisory Board of Alcoholism an Drug Abuse,                                                                           
          Alaska Mental Health Board, Governor's Council on                                                                     
          Disabilities   and   Special   Education,   Alaska                                                                    
          Commission on Aging                                                                                                   
                                                                                                                                
2:16:03 PM                                                                                                                    
                                                                                                                                
Mr. Jessee discussed slide 39: "Strategic Thinking."                                                                            
                                                                                                                                
    · Funding and technical assistance to support safety,                                                                       
      effectiveness and sustainability of peer programs and                                                                     
      services throughout Alaska                                                                                                
    · Effective  collaborations   across   service   system,                                                                    
      advocacy groups and coalitions                                                                                            
    · Training and education for peer support workforce                                                                         
    · Integration of peer support specialists across service                                                                    
      delivery systems                                                                                                          
    · Mini Grants to improve beneficiaries' quality of life                                                                     
    · Small Project Grants for small, beneficiary-focused                                                                       
      projects                                                                                                                  
                                                                                                                                
Mr.  Jessee  discussed slide  40:  "FY  12 Beneficiary  Mini                                                                    
Grants."  He  explained that  the  Trust  continued to  fund                                                                    
$1,058,146 in mini  grants. The grants were up  to $2500 per                                                                    
person  to improve  their quality  of life.  He pointed  out                                                                    
that  a  significant  amount of  funds  were  requested  for                                                                    
dental services that were not met by Medicaid.                                                                                  
                                                                                                                                
2:17:17 PM                                                                                                                    
                                                                                                                                
Mr. Jessee detailed slide 41: "FY 12 Small Project Grants."                                                                     
                                                                                                                                
   · $250,000 budgeted annually                                                                                                 
   · 25 grants in FY 12 totaling $191,361                                                                                       
   · Up to $10,000 each                                                                                                         
   · Innovative new projects or enhancements to existing                                                                        
     projects of direct benefit to beneficiaries                                                                                
   · Organizations in Anchorage, Chugiak, Eagle River,                                                                          
     Homer, Juneau, Kodiak, North Pole, Palmer, Scammon                                                                         
     Bay, Sitka and Tanacross                                                                                                   
                                                                                                                                
Mr. Jessee slide 42: "Results for Beneficiaries."                                                                               
                                                                                                                                
   · Promotes recovery, stability and wellness                                                                                  
   · Provides sense of empowerment and connection                                                                               
   · Reinforces consumer choice in managing recovery                                                                            
   · Wide range of beneficiary-led programs statewide                                                                           
        o peer-support services                                                                                                 
        o recovery-community support programs                                                                                   
        o housing                                                                                                               
        o clubhouses                                                                                                            
        o drop-in centers                                                                                                       
        o community outreach and engagement                                                                                     
        o illness self-management                                                                                               
        o alternatives to residential treatment                                                                                 
        o supported employment                                                                                                  
        o training and education                                                                                                
                                                                                                                                
Mr. Jessee concluded his presentation  with slide 44: "FY 14                                                                    
Joint Legislative Priorities."                                                                                                  
                                                                                                                                
   · Shared with all beneficiary advisory boards                                                                                
        o long-term support services for people with                                                                            
          disabilities                                                                                                          
        o Complex Behaviors Collaborative                                                                                       
                                                                                                                                
2:19:02 PM                                                                                                                    
                                                                                                                                
Mr. Barton  apologized for his voice.  He recently underwent                                                                    
surgery that affected his throat.                                                                                               
                                                                                                                                
Co-Chair Austerman  commented that the state  was faced with                                                                    
deficit  spending because  of decreased  oil production.  He                                                                    
noticed the  Trust had $1.5 million  less in the FY  14 fund                                                                    
source. He  mentioned the increases  requested for FY  14 of                                                                    
$6 million.  He addressed  the facts  to prepare  Mr. Jessee                                                                    
for the subcommittee process.                                                                                                   
                                                                                                                                
Representative  Kawasaki  asked  about   slide  13  and  the                                                                    
Residential   Psychiatric  Treatment   Centers  (RPTC).   He                                                                    
appreciated the support for Fairbanks  and the Housing First                                                                    
model that  existed in  the district's  center. He  asked if                                                                    
available space  could be  found in  the Alaskan  RPTCs. Mr.                                                                    
Jessee responded that  there were many beds  at the facility                                                                    
in  Fairbanks.  The  facility  was   on  suspension  by  the                                                                    
department  for a  couple of  occasions. The  Trust did  not                                                                    
plan to utilize additional beds in the Fairbanks facility.                                                                      
                                                                                                                                
Representative   Kawasaki   asked   how   many   beds   were                                                                    
potentially available in the Fairbanks  RPTC. Mr. Jessee did                                                                    
not have an exact number for Representative Kawasaki.                                                                           
                                                                                                                                
2:22:06 PM                                                                                                                    
                                                                                                                                
Representative  Costello  asked  why 4.25  percent  was  the                                                                    
market value chosen by the  Trust for the fund. She wondered                                                                    
if the amount  was in statute or would the  Trust consider 5                                                                    
percent  as an  alternative. Additionally,  she asked  about                                                                    
slide 25 and  wondered why a person in foster  care was more                                                                    
likely to die on the streets.                                                                                                   
                                                                                                                                
Mr.  Jessee  responded  to Representative  Costello's  first                                                                    
question. He  explained that when  the trustees  began their                                                                    
process in  1995, they faced decisions  regarding investment                                                                    
of the original $200 million  endowment. Since the trust was                                                                    
perpetual,  the trustees  could not  go into  the principal,                                                                    
which would  violate the rights  of future  beneficiaries. A                                                                    
foundation  model   was  decided  upon  with   a  3  percent                                                                    
principal.  The need  for a  budget reserve  was discovered,                                                                    
which   led  to   an  increase   suggested  by   Callan  and                                                                    
Associates. A  decision was  made to  remain with  3 percent                                                                    
while saving any additional Permanent  Fund earnings until a                                                                    
total  of 400  percent. Within  five years  the reserve  was                                                                    
fully  funded.  Once  the  reserve  was  fully  funded,  the                                                                    
trustees  increased  the  payout   to  3.25  percent,  while                                                                    
allowing the reserve to catch up to the higher demand.                                                                          
                                                                                                                                
Mr.  Jessee   furthered  that  the  decision   was  made  to                                                                    
inflation-proof   the  principal,   which  led   to  further                                                                    
increases in  the payout. Since  the economic  downturn, the                                                                    
reserve was  used to make  the payout, and 4.25  percent was                                                                    
the peak. The maximum  sustainable payout had been discussed                                                                    
and  many experts  advocated for  5 percent,  but the  Trust                                                                    
chose to  retain the 4.25  percent payout until  the reserve                                                                    
is once again  fully funded and inflation  proofing is taken                                                                    
care of.                                                                                                                        
                                                                                                                                
2:26:06 PM                                                                                                                    
                                                                                                                                
Mr.  Jessee responded  to  Representative Costello's  second                                                                    
question about slide 25. He  explained that people in foster                                                                    
care had experienced  a break down in  the family structure.                                                                    
Even  in   the  best  foster  care   situations  a  person's                                                                    
experience  was  one of  serious  disruption  in a  person's                                                                    
healthy and productive environment.                                                                                             
                                                                                                                                
2:26:59 PM                                                                                                                    
                                                                                                                                
Representative  Gara explained  that  the legislature  faced                                                                    
long-term deficit  spending. He expressed interest  in money                                                                    
saving  tactics that  could be  presented by  the Trust.  He                                                                    
asked  if  the legislature  had  funded  Housing First.  Mr.                                                                    
Jessee responded  in the affirmative. He  noted that housing                                                                    
vouchers  through   AHFC  existed  for  the   Housing  First                                                                    
facilities in Anchorage and Fairbanks.                                                                                          
                                                                                                                                
Representative  Gara  asked  if   the  funding  was  in  the                                                                    
governor's  proposed budget.  Mr.  Jessee  replied that  the                                                                    
Special Needs Housing  Grants through AHFC could  be used in                                                                    
a competitive process for Housing First.                                                                                        
                                                                                                                                
2:28:24 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  about slide  14, which  made the                                                                    
point  that a  poor  upbringing for  a  child increased  the                                                                    
likelihood for services. He asked  if the Office of Children                                                                    
Services  (OCS) might  provide  assistance  in reducing  the                                                                    
number of  children in abusive  situations that lead  to the                                                                    
need for housing services.                                                                                                      
                                                                                                                                
Mr. Jessee replied  in the affirmative. He  explained that a                                                                    
parent seeking sobriety was eligible  to immediate access to                                                                    
substance abuse treatment.                                                                                                      
                                                                                                                                
Representative  Gara  referred  to  the  Complex  Behavioral                                                                    
Initiative,  which was  funded for  problems resulting  from                                                                    
brain injuries.  He asked if  the category was  similar. Mr.                                                                    
Jessee  answered in  the negative.  He  elaborated that  the                                                                    
Complex Behavioral  Initiative was  a specific  project, not                                                                    
yet included in the governor's budget.                                                                                          
                                                                                                                                
Representative   Gara  asked   if  the   Complex  Behavioral                                                                    
Initiative  would  serve  people with  brain  injuries.  Mr.                                                                    
Jessee replied in the affirmative.                                                                                              
                                                                                                                                
2:30:47 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:32:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
^FY   14   GOVERNOR'S   BUDGET   OVERVIEW:   DEPARTMENT   OF                                                                  
ADMINISTRATION                                                                                                                
                                                                                                                                
BECKY HULTBERG, COMMISSIONER,  DEPARTMENT OF ADMINISTRATION,                                                                    
delivered  the PowerPoint  presentation: "Alaska  Department                                                                    
of Administration Department Overview (copy on file)."                                                                          
                                                                                                                                
2:34:09 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg discussed  slide  3: "Service  Across                                                                    
Alaska."  She explained  the  department's  core purpose  to                                                                    
provide support services for  state agencies. The department                                                                    
included  the   Division  of  Motor  Vehicles,   the  Public                                                                    
Defender  Agency  and the  Office  of  Public Advocacy.  The                                                                    
department had 1,145  employees in FY 13  with 1.087 serving                                                                    
in full-time positions, 18 in  part-time positions and 40 in                                                                    
non-permanent  positions. The  department  had 30  different                                                                    
locations.                                                                                                                      
                                                                                                                                
Commissioner  Hultberg discussed  slide  4: "Strategic  Plan                                                                    
Highlights."                                                                                                                    
                                                                                                                                
   · Mission:   The    mission   of   the    Department   of                                                                    
     Administration is to provide consistent and efficient                                                                      
     support services for state agencies.                                                                                       
   · Vision:   As    employees   of   the    Department   of                                                                    
     Administration, we will provide innovative, cost-                                                                          
     effective and responsive service.                                                                                          
   · Department Goals:                                                                                                          
        o Service  Excellence:   Provide  excellent  program                                                                    
          delivery    through   clear    communication   and                                                                    
          respectful and responsive actions.                                                                                    
        o Spending  Growth  Reduction:  Reduce the  rate  of                                                                    
          spending growth to sustainable levels.                                                                                
        o Effective  and  Efficient  Delivery  of  Services:                                                                    
          Implement strategies to achieve operational                                                                           
          efficiencies.                                                                                                         
        o Employee   Development   and  Support:   Encourage                                                                    
          employee growth and development by providing                                                                          
          leadership,   training   and   resources   in   an                                                                    
          atmosphere that fosters mutual trust and respect.                                                                     
   · Core Values:                                                                                                               
        o Integrity:  We will  be  honest, transparent,  and                                                                    
          ethical                                                                                                               
       o Service: We will provide excellent service.                                                                            
        o Accountability:  We will  take responsibility  for                                                                    
         and ownership of the services we provide.                                                                              
        o Balance:  We will  honor  our  commitments to  our                                                                    
          work and personal lives.                                                                                              
                                                                                                                                
Commissioner  Hultberg detailed  slide 5:  "Department Level                                                                    
Results."   Commissioner   Hultberg  described   the   graph                                                                    
demonstrating  the results  of the  goals listed  above. The                                                                    
graph detailed the  five year trend of  DOA expenditures and                                                                    
the  moderation  of the  growth  rate  during the  last  few                                                                    
years.  The  annual  state  average  for  personal  services                                                                    
growth was 5.45 percent, so  the department's growth of 2.14                                                                    
percent exhibited its efficiencies.                                                                                             
                                                                                                                                
Commissioner  Hultberg detailed  slide 6:  "Department Level                                                                    
Results." She noted that service  excellence was surveyed by                                                                    
the department.                                                                                                                 
                                                                                                                                
2:36:38 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg discussed  slide 7:  "Share of  Total                                                                    
Agency  Operations."  For  FY   14,  the  largest  share  of                                                                    
designated  general   funds  was   the  Division   of  Motor                                                                    
Vehicles.                                                                                                                       
                                                                                                                                
Commissioner Hultberg  discussed slide 8:  "Department Level                                                                    
Results." She  noted that the  majority of  the department's                                                                    
costs were paid for by  general funds. She explained that 66                                                                    
percent  of  the  department's  budget  was  "other  funds."                                                                    
Interagency  receipts represented  approximately 38  percent                                                                    
of  the  total budget.  Other  funds  addressed health  care                                                                    
costs and leases.                                                                                                               
                                                                                                                                
Commissioner   Hultberg   discussed  additional   slide   1:                                                                    
"Legislative Finance  Division - 10 year  plan (All Funds)."                                                                    
The  growth of  the budget  was 5.5  percent annually  since                                                                    
2005. The 10 year plan  number did not include the increases                                                                    
associated with personal services.                                                                                              
                                                                                                                                
2:38:36 PM                                                                                                                    
                                                                                                                                
Commissioner   Hultberg  discussed   additional  slide   2:"                                                                    
Legislative Finance  Division -  10 Year Plan  (General Fund                                                                    
Only)." She pointed  out that the two  largest recipients of                                                                    
general  funds included  the Office  of Public  Advocacy and                                                                    
the Public  Defender Agency. The two  agencies experienced a                                                                    
growth  rate that  was higher  than  the overall  department                                                                    
growth rate.                                                                                                                    
                                                                                                                                
Commissioner Hultberg  discussed slide  9: "Services  to the                                                                    
Public."                                                                                                                        
   · Division of Motor Vehicles                                                                                                 
   · Office of Public Advocacy                                                                                                  
   · Public Defender Agency                                                                                                     
   · Division of Retirement and Benefits                                                                                        
   · Office of Administrative Hearings                                                                                          
   · Alaska Public Offices Commission                                                                                           
   · Alaska Oil and Gas Conservation Commission                                                                                 
   · Alaska Public Broadcasting Commission                                                                                      
                                                                                                                                
2:41:11 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg  discussed  slide  10:  "Services  to                                                                    
State Agencies." She explained  that the department employed                                                                    
people  for state  agencies to  perform tasks.  Labor unions                                                                    
were negotiated  with for wages.  Benefits were  provided by                                                                    
the   department.  Roles   existed  for   the  Division   of                                                                    
Personnel,  the  Division of  Finance  and  the Division  of                                                                    
Retirement and  Benefits. The  employees were  provided with                                                                    
Enterprise  Technology  Services,   commodities  and  office                                                                    
furniture. The  employees and the  buildings they  worked in                                                                    
were  insured against  injury through  the Division  of Risk                                                                    
Management.  Office  and lease  space  was  provided by  the                                                                    
Division of General Services.                                                                                                   
                                                                                                                                
2:42:32 PM                                                                                                                    
                                                                                                                                
Commissioner   Hultberg   discussed  slide   11:   "Personal                                                                    
Services."  Personal services  increased  by  an average  of                                                                    
5.45 percent per year.  Personal services included benefits,                                                                    
merit  increases  (both  negotiated  and  statutory)  and  a                                                                    
negotiated   cost  of   living  allowance.   The  retirement                                                                    
contribution was fixed.                                                                                                         
                                                                                                                                
2:44:19 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg discussed  slide 12:  "Benefits." The                                                                    
graph  depicted the  increase  in  employer contribution  to                                                                    
employee  health plans.  The plans  included the  AlaskaCare                                                                    
plan,  ASEA Health  Trust, LTC  51 Health  Trust, PSEA,  MMP                                                                    
Health Trust and ASCEA/TEAME.                                                                                                   
                                                                                                                                
2:45:27 PM                                                                                                                    
                                                                                                                                
Commissioner   Hultberg   discussed  slide   12:   "Benefits                                                                    
PERS/TRS." The  chart depicted  the actual  benefit payments                                                                    
that would be made to  retirees in the defined benefit plans                                                                    
over the  next 70  years. She noted  that many  new retirees                                                                    
were entering the system  creating an operational challenge.                                                                    
A statewide challenge also  existed regarding the management                                                                    
of  the  ongoing  liability.   The  unfunded  liability  was                                                                    
estimated at $11.9 billion.                                                                                                     
                                                                                                                                
2:47:11 PM                                                                                                                    
                                                                                                                                
Commissioner   Hultberg   discussed  slide   15:   "Business                                                                    
Processes."    Business    processes    included    payroll,                                                                    
procurement   and   accounting.    The   department   sought                                                                    
improvements to  the business processes. She  introduced the                                                                    
Integrated  Resource  Information   System  (IRIS)  project,                                                                    
which would  replace the 25 year-old  payroll and accounting                                                                    
systems. The  IRIS system  would add  a human  resources and                                                                    
procurement system  and streamline all business  process for                                                                    
the state.  The new  system promised to  allow opportunities                                                                    
for savings.                                                                                                                    
                                                                                                                                
2:49:19 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg discussed  slide  16: "Space  Costs."                                                                    
She  explained  that  the  department  could  do  little  to                                                                    
control  the costs  that were  climbing  because of  natural                                                                    
inflation and greater space needs.                                                                                              
                                                                                                                                
2:49:55 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg discussed  slide  17: "New  Universal                                                                    
Space  Standards."   She  noted   that  the   state's  space                                                                    
standards were  loosely enforced.  The anticipation  was for                                                                    
savings of $125 million over  the next 20 years with reduced                                                                    
lease costs in  the new plan. She noted  concern and anxiety                                                                    
among  employees regarding  the space  changes, but  she had                                                                    
personally  toured facilities  implementing the  concept and                                                                    
found  them to  be  light and  pleasing.  She mentioned  the                                                                    
added productivity value of the design.                                                                                         
                                                                                                                                
2:51:27 PM                                                                                                                    
                                                                                                                                
Commissioner Hultberg discussed slide 18: "Purchasing."                                                                         
                                                                                                                                
     The Division of General Services (DGS) awards multi-                                                                       
     department contracts for use by all Executive Branch                                                                       
     agencies and various political subdivisions of the                                                                         
     state.                                                                                                                     
                                                                                                                                
     The  total  savings  realized  by  DGS  for  FY  12  is                                                                    
     $46,691,337,  with  $36,191,752  being saved  by  state                                                                    
     agencies and  the remaining $10,499,585 being  saved by                                                                    
     political subdivisions of the state.                                                                                       
                                                                                                                                
     Some examples of state savings:                                                                                            
        · Software - $11,991,321                                                                                                
        · PCs, Printers, and Peripherals (WSCA) $7,123,705                                                                      
        · Industrial    Supplies   and    Equipment   (WSCA)                                                                    
          $4,368,075                                                                                                            
        · Marine Diesel Fuel - $3,835,929                                                                                       
        · Fuels: Heating, Diesel, Unleaded, Jet A, Aviation                                                                     
          - $2,517,028                                                                                                          
        · System Furniture Add-On - $2,475,082                                                                                  
                                                                                                                                
2:52:17 PM                                                                                                                    
                                                                                                                                
Commissioner Hultberg discussed slide 19: "IT Services."                                                                        
                                                                                                                                
   · Enterprise Technology Services Priorities.                                                                                 
   · Bandwidth                                                                                                                  
   · Security: Department Gap Analysis                                                                                          
   · Mobile Device Strategy and Support                                                                                         
   · Continuity of Operations (COOP)                                                                                            
   · Identity Management: myAlaksa V3                                                                                           
   · Experienced-based    rate-setting   and    rate-setting                                                                    
     alignment with budget process.                                                                                             
                                                                                                                                
2:55:33 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg discussed  slide  20: "Insurance  and                                                                    
Injury:  Risk  Mgmt."  She explained  that  risk  management                                                                    
costs  continued  to  rise.  The   budget  in  recent  years                                                                    
exceeded  the authorization.  When risk  management exceeded                                                                    
authorization, the  Catastrophic Reserve Fund  was utilized.                                                                    
The  fund was  maxed  out and  the  department requested  an                                                                    
additional authorization.                                                                                                       
                                                                                                                                
2:56:49 PM                                                                                                                    
                                                                                                                                
Commissioner   Hultberg  discussed   slide  21:   "Operating                                                                    
Increments."                                                                                                                    
                                                                                                                                
     Maintenance of Services                                                                                                    
   · ALMR: Restore one-time increment, "$1.5 million UGF                                                                        
   · ALMR: maintenance costs and receipt authority, $1.6                                                                        
     million ($600.0 UGF, $500.0 I/A, %500 statutory                                                                            
     designated program receipts)                                                                                               
   · DOA: "Core Services" Increases, $725.4 UGF                                                                                 
   · General Services: Interagency Receipts, $663.6 total                                                                       
     other ($465.91/A receipts and $197.7 PBF)                                                                                  
        o Lease costs, $100.0 I/A                                                                                               
        o Lease Administration, $265.9 I/A                                                                                      
        o Facilities operation and maintenance costs,                                                                           
          $100.0 I/A                                                                                                            
        o Facilities administration, funding for two new                                                                        
          PFT positions, $197.7 PBF                                                                                             
                                                                                                                                
3:01:07 PM                                                                                                                    
                                                                                                                                
Commissioner Hultberg discussed slide 22: "Operating                                                                            
Increments"                                                                                                                     
                                                                                                                                
     New Programs/Program Expansion                                                                                             
        · Risk Management: Rising medical and legal costs                                                                       
          of insurance premiums, $4,224.2 (I/A)                                                                                 
        · Health    Plans   Administration:    Third   party                                                                    
          administrator contract increase for new health                                                                        
          contract, $1.5 million (Group Health and Life                                                                         
          Benefits Fund)                                                                                                        
        · Enterprise Technology Services:                                                                                       
             o Additional receipt authority to accurately                                                                       
               charge user agencies for legacy systems,                                                                         
               $1.2 million (ISF)                                                                                               
             o Decrement to eliminate uncollectable federal                                                                     
               receipt authority, $1.7 million (federal                                                                         
               receipts)                                                                                                        
        · Retirement    &   Benefits:    consolidation   and                                                                    
          automation    of   division    processes:   $875.0                                                                    
          (various)                                                                                                             
        · AOGCC:    increased    overtime   for    petroleum                                                                    
          inspectors, $125.0 (AOGCC receipts)                                                                                   
                                                                                                                                
3:03:30 PM                                                                                                                    
                                                                                                                                
Commissioner Hultberg discussed slide 23: "Department Level                                                                     
Results."                                                                                                                       
                                                                                                                                
   · Continuation of partial HR decentralization from the                                                                       
     Division of Personnel: transfer 43 PFT positions back                                                                      
    to agencies for recruitment and management services                                                                         
   · Legal & Advocacy Appropriation                                                                                             
        o No anticipated supplemental                                                                                           
        o Potential increment in Governor's Amended                                                                             
   · Bargaining Unit Negotiations                                                                                               
        o General Government Unit (ASEA)                                                                                        
        o Supervisory Unit (APEA)                                                                                               
        o Confidential Employees Association (APEA)                                                                             
                                                                                                                                
Commissioner  Hultberg explained  that feedback  from agency                                                                    
customers   communicated  that   the   department  did   not                                                                    
understand the unique needs of  the divisions leading to the                                                                    
changes made. She  noted that contracts were  bargained on a                                                                    
rotating  basis.  The  two  largest  bargaining  units  were                                                                    
negotiated  in 2013.  The  cost of  the  contracts were  not                                                                    
included in  the governor's budget,  but would  be presented                                                                    
to the legislature on March 15, 2013.                                                                                           
                                                                                                                                
3:06:33 PM                                                                                                                    
                                                                                                                                
Commissioner   Hultberg   detailed    slide   24:   "Capital                                                                    
Requests."                                                                                                                      
                                                                                                                                
   · APBC:  Alaska  Rural   Communications  System:  Digital                                                                    
     Conversion, $5,300,000 UGF                                                                                                 
   · DGS: Douglas  Island Building,  $9,600,000 UGF  (year 2                                                                    
     of 2)                                                                                                                      
   · DGS:  Repair  Juneau   State  Office  Building  Parking                                                                    
     Garage, $2,000,000 UGF (phase 2 of 3)                                                                                      
   · DGS: Nome State Office Building, $3,252,170 UGF                                                                            
   · DGS:  Alaska  Geologic   Materials  Center  Replacement                                                                    
     Facility, $15,000,000 UGF (phase 2 of 4)                                                                                   
   · DGS: ADA Improvements, $192,300 UGF                                                                                        
  · DGS: Capital Asset Management System: $2,000,000 UGF                                                                        
   · DGS:   Deferred   maintenance:    $7,017.0   UGF   plus                                                                    
     $3,000,000 PBF                                                                                                             
   · DRB: Combined  Retirement System Upgrade,  $350,000 UGF                                                                    
     (phase 4 of 5)                                                                                                             
   · DRB: Document  Management System, $135,000 UGF  (year 4                                                                    
     of 4)                                                                                                                      
   · DRB:   Retirement  and   Benefits  Policy   Automation,                                                                    
     $880,000 UGF                                                                                                               
   · DRB:  Retirement  and  Benefits Identity  and  Security                                                                    
     Governance, $749,400 UGF                                                                                                   
   · ETS: Virtual Tape Systems Replacement, $500,000 UGF                                                                        
                                                                                                                                
                                                                                                                                
3:11:01 PM                                                                                                                    
                                                                                                                                
Co-Chair  Austerman   commented  on  IRIS.  He   noted  that                                                                    
multiple departments requested  modernized systems. He hoped                                                                    
that  the departments  were  communicating  with each  other                                                                    
about their upgrades. Commissioner  Hultberg stated that she                                                                    
had  discussed  the  IRIS  system  with  every  commissioner                                                                    
individually. She  stressed the  importance of  the upgrade.                                                                    
She felt that coordination about  the upgrades was a work in                                                                    
progress  and  she  promised  to make  her  best  effort  to                                                                    
communicate well with the other agencies.                                                                                       
                                                                                                                                
3:13:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman  agreed that changes in  the systems were                                                                    
necessary.   He  discussed   slide   16   and  the   graph's                                                                    
importance. He  expressed concern about the  rising costs of                                                                    
leases. He  hoped that the  department would present  a plan                                                                    
to purchase buildings in an effort to reduce costs.                                                                             
                                                                                                                                
3:14:37 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg agreed  and  recalled  a proposal  to                                                                    
build  a large  office building  in Juneau  during the  time                                                                    
that the existing building's lease  was expiring. She wished                                                                    
to  optimize the  state's office  building's space  prior to                                                                    
spending the capital on a  new building. The Space Standards                                                                    
Initiative was an effort to  optimize existing office space.                                                                    
Co-Chair  Austerman  opined  that the  department's  10-year                                                                    
plan did not look very good.                                                                                                    
                                                                                                                                
3:15:51 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  about  rising  oil prices  and                                                                    
wondered  about  a  change to  pellet  stoves.  Commissioner                                                                    
Hultberg  replied that  the department  commissioned studies                                                                    
on  a couple  of  buildings to  ascertain  the savings  from                                                                    
pellet  stoves.  She  would   provide  the  results  to  the                                                                    
committee.                                                                                                                      
                                                                                                                                
3:16:26 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki commented that  DOA was comprised of                                                                    
various unique divisions. He pointed  out slide 17 and asked                                                                    
about the  space standards. Commissioner  Hultberg responded                                                                    
that   while   the   offices  seemed   small,   the   plan's                                                                    
incorporation  of  natural  light   provided  a  feeling  of                                                                    
spaciousness.  The  department's  plan  would  create  open,                                                                    
light,  collaborative spaces  for  people  to work.  Private                                                                    
meeting places and  café style break rooms were  part of the                                                                    
plan.  She added  that private  offices  were restricted  to                                                                    
directors and  their superiors with  the exception of  a few                                                                    
specific job classes.                                                                                                           
                                                                                                                                
3:19:46 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  pointed  out that  the  six-by-six                                                                    
space was very small. He  compared the space requirements of                                                                    
prisoners in  the new Goose  Creek Correctional  facility to                                                                    
those proposed  in the department's plan.  He commented that                                                                    
the  prisoner  would  receive more  space  than  the  social                                                                    
worker writing  his transition plan.  He did  appreciate the                                                                    
cost saving intention.                                                                                                          
                                                                                                                                
Representative Kawasaki  discussed the capital  requests and                                                                    
the Douglas Island Building, the  Nome State Office Building                                                                    
and  the  deferred maintenance  proposal.  He  asked if  the                                                                    
proposals would receive the same space savings plan.                                                                            
                                                                                                                                
3:21:18 PM                                                                                                                    
                                                                                                                                
Commissioner  Hultberg  replied  that she  was  planning  to                                                                    
implement  the space  savings plan  on renovated  buildings.                                                                    
She  stated that  the  capital projects  were  still in  the                                                                    
early stages before the RFP process.                                                                                            
                                                                                                                                
3:21:54 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  why agencies  were not  combined                                                                    
with  other  agencies  in buildings.  Commissioner  Hultberg                                                                    
replied that  the goal was  to best utilize the  space, even                                                                    
if the building housed multiple agencies.                                                                                       
                                                                                                                                
Representative Gara  asked if agencies would  be combined in                                                                    
buildings.    Commissioner   Hultberg    replied   in    the                                                                    
affirmative. She  noted that the Nome  State Office Building                                                                    
housed multiple agencies.                                                                                                       
                                                                                                                                
3:23:09 PM                                                                                                                    
                                                                                                                                
Representative Gara asked about slide  12. He noted that the                                                                    
medical care costs  had increased in Alaska  faster than any                                                                    
state  in  the  country.  He requested  testimony  from  the                                                                    
Health  Care Commission.  He asked  if the  commissioner had                                                                    
worked  with  other  departments to  reduce  medical  costs.                                                                    
Commissioner Hultberg  responded that  she spoke  often with                                                                    
Commissioner Streur  about the  potential for  an enterprise                                                                    
view  of  healthcare cost  to  leverage  the resources.  She                                                                    
noted that DOA  operated from a different set  of rules that                                                                    
Department of  Health and Social Services  and Medicaid. She                                                                    
spoke  about the  implementation  of  the Employee  Wellness                                                                    
Program.  She   hoped  that  members  could   become  better                                                                    
consumers. She offered to provide  the legislature with more                                                                    
information  following the  process of  choosing new  vendor                                                                    
partners.  The third party  administrator piece would play a                                                                    
large part in the department's cost-saving plans.                                                                               
                                                                                                                                
3:26:59 PM                                                                                                                    
                                                                                                                                
Representative   Gara  asked   about   slide   24  and   the                                                                    
department's capital  management system. He  understood that                                                                    
the  system  would  help   determine  when  maintenance  was                                                                    
needed.   Commissioner  Hultberg   responded  that   if  the                                                                    
necessary repair  was visible,  then yes, but  she presented                                                                    
the example of a boiler  repair, which might not be apparent                                                                    
and was  a candidate  for capital  planning. She  added that                                                                    
the  state owned  thousands of  buildings, so  the potential                                                                    
for missing a problem was  great. She advocated for a manual                                                                    
tracking system.                                                                                                                
                                                                                                                                
3:28:33 PM                                                                                                                    
                                                                                                                                
Representative   Gara   discussed  denial   of   colonoscopy                                                                    
coverage  for retired  state employees.  He understood  that                                                                    
the  recommendation by  doctors was  for people  over 50  to                                                                    
receive routine  colonoscopy. Commissioner  Hultberg replied                                                                    
that  the  issue  was complex.  Preventative  care  was  not                                                                    
available  to  retirees and  the  plan  was covered  by  the                                                                    
diminishment  clause   of  the  constitution.   Raising  the                                                                    
deductible and  copay of  the retiree plan  was viewed  as a                                                                    
diminishment. Deductibles  and copays could not  be adjusted                                                                    
for inflation.  She stated that approximately  $4 billion of                                                                    
the $12 billion in unfunded  liability was related to health                                                                    
care costs. Adding a service  like colonoscopy would further                                                                    
increase  the state's  unfunded liability.  Changes made  in                                                                    
the plan  would lead to  litigation and the  state actuaries                                                                    
were working to determine the best approach.                                                                                    
                                                                                                                                
3:31:57 PM                                                                                                                    
                                                                                                                                
Representative Gara  noted that  a supplemental  request was                                                                    
not  provided  to  the  legislature.  He  commented  on  the                                                                    
guardian  ad   litem  position  in  the   Office  of  Public                                                                    
Advocacy. The  attorneys represented  foster kids  and other                                                                    
children in need of aid.  He understood that the guardian ad                                                                    
litem  position  was   overburdened.  Commissioner  Hultberg                                                                    
clarified that while  the Office of Public  Advocacy did not                                                                    
require  a  supplemental request,  needs  did  exist in  the                                                                    
agency and the needs would be addressed by the department.                                                                      
                                                                                                                                
3:33:19 PM                                                                                                                    
                                                                                                                                
Representative  Thompson  appreciated the  presentation.  He                                                                    
discussed  the Alaska  Land Mobile  Radio  (ALMR). He  noted                                                                    
that  decreases   in  federal   funding  would   force  some                                                                    
communities to opt out of  the program, which would increase                                                                    
costs  to   the  others  remaining.   Commissioner  Hultberg                                                                    
agreed.  She  decided  not to  assess  and  bill  individual                                                                    
communities  for  that  reason. The  department  recommended                                                                    
that the ALMR payment was  made on behalf of the communities                                                                    
rather  than   by  the   communities.  She   recognized  the                                                                    
importance and value of the ALMR service.                                                                                       
                                                                                                                                
3:35:16 PM                                                                                                                    
                                                                                                                                
Representative Thompson expressed  constituent concerns that                                                                    
a portion  of a  community's revenue  sharing would  be used                                                                    
for  ALMR. Commissioner  Hultberg responded  that she  would                                                                    
not have input in the decisions regarding revenue sharing.                                                                      
                                                                                                                                
HB  65  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  66  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:36 p.m.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
MHTA HFIN Overview 1_29_13.pdf HFIN 1/29/2013 1:30:00 PM
Mental Health Budgst Overview
DOA-DeptOverview2013(01-29-13) HF.pdf HFIN 1/29/2013 1:30:00 PM
DOA Overview
DOA Response -HFIN Overview - 29Jan13.pdf HFIN 1/29/2013 1:30:00 PM
DOA Response Overview HFIN