Legislature(1999 - 2000)

07/20/1999 08:15 AM House PRI

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  COMMISSION ON PRIVATIZATION AND DELIVERY OF GOVERNMENT SERVICES                                                               
                        Anchorage, Alaska                                                                                       
                          July 20, 1999                                                                                         
                            8:15 a.m.                                                                                           
                                                                                                                                
                                                                                                                                
COMMISSION MEMBERS PRESENT                                                                                                      
                                                                                                                                
Representative Cowdery, Co-Chair                                                                                                
Senator Ward, Co-Chair                                                                                                          
Representative Brice                                                                                                            
Senator Adams                                                                                                                   
Bill Allen, Former Mayor of Fairbanks                                                                                           
Tom Fink, Former Mayor of Anchorage                                                                                             
Helvi Sandvik, President - NANA Development Corporation                                                                         
Kathryn Thomas, Former Chair of Alaska State Chamber of Commerce                                                                
George Wuerch, Alaska Municipal League                                                                                          
Don Valesko, Business Manager of Public Employees Local 71                                                                      
                                                                                                                                
COMMISSION MEMBERS ABSENT                                                                                                       
                                                                                                                                
William Prosser, Chairman of the Board - Cook Inlet Region, Inc.                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
Privatization of State Government Services                                                                                      
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
No previous action to record.                                                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
MARCO PIGNALBERI, Legislative Assistant                                                                                         
     to Representative Cowdery                                                                                                  
Alaska State Legislature                                                                                                        
716 West 4th Avenue, Suite 320                                                                                                  
Anchorage, Alaska 99501-2133                                                                                                    
Telephone:  (907) 268-0222                                                                                                      
POSITION STATEMENT:  Provided the commission with information and                                                               
answered questions.                                                                                                             
                                                                                                                                
MIKE ABBOTT, Economic Development Special Assistant                                                                             
     to Governor Knowles                                                                                                        
3601 C Street, Suite 758                                                                                                        
Anchorage, Alaska 99505-5990                                                                                                    
Telephone:  (907) 269-7461                                                                                                      
POSITION STATEMENT:  Offered his services and answered questions.                                                               
                                                                                                                                
ANDY CLARY, Staff                                                                                                               
     to Senator Ward                                                                                                            
Alaska State Legislature                                                                                                        
716 West 4th Avenue, Suite 450                                                                                                  
Anchorage, Alaska 99501-2133                                                                                                    
Telephone:  (907) 269-0106                                                                                                      
POSITION STATEMENT:  Reviewed the commission's website.                                                                         
                                                                                                                                
BRIAN HARRIS                                                                                                                    
7151 Chester Court                                                                                                              
Anchorage, Alaska 99504                                                                                                         
POSITION STATEMENT:  Discussed technology.                                                                                      
                                                                                                                                
ANDREE McLEOD                                                                                                                   
Address not provided.                                                                                                           
POSITION STATEMENT:   Suggested an anonymous mechanism  for public                                                              
input.                                                                                                                          
                                                                                                                                
JOSEPH HENRI, Former Commissioner of Administration                                                                             
9921 Mar Point Drive                                                                                                            
Anchorage, Alaska 99507                                                                                                         
POSITION STATEMENT:   Discussed the need to continue  the momentum                                                              
of the commission.                                                                                                              
                                                                                                                                
LEO MARK ANTHONY, Prospector and Miner                                                                                          
Address not provided.                                                                                                           
POSITION  STATEMENT:  Commented  that this  is about  cost-benefit                                                              
analysis.                                                                                                                       
                                                                                                                                
DONN LISTON, ASEA                                                                                                               
400 Willoughby, Number 201                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Commented on honoring contracts.                                                                           
                                                                                                                                
DAN PATTERSON                                                                                                                   
PO Box 512                                                                                                                      
Palmer, Alaska 99645                                                                                                            
POSITION STATEMENT:  Discussed privatization.                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-1, SIDE A                                                                                                               
                                                                                                                                
CO-CHAIR WARD called the Commission  on Privatization and Delivery                                                              
of Government  Services  meeting to  order at  8:15 a.m.   Members                                                              
present at the  call to order were Representatives  Cowdery, Brice                                                              
and Senators Ward,  Adams and Commissioners Allen,  Fink, Sandvik,                                                              
Wuerch,  Thomas,  and  Valesko.    Commissioner  Prosser  was  not                                                              
present.                                                                                                                        
                                                                                                                                
CO-CHAIR COWDERY  explained that the  purpose of the  committee is                                                              
to   review   government   overall   with   the   possibility   of                                                              
privatization in  mind.  Co-Chair  Cowdery commended  Senator Ward                                                              
on his work.  He announced that the  commission would be reviewing                                                              
many  departments  through  various  subcommittees  that  will  be                                                              
formed.                                                                                                                         
                                                                                                                                
CO-CHAIR WARD  noted that his  legislation was practically  copied                                                              
word for  word from the  Alaska State  Chamber of Commerce.   This                                                              
legislation is not  new, similar legislation was  worked on during                                                              
the  Thirteenth  Alaska  State  Legislature  and  therefore.    He                                                              
thanked  everyone for  their part  in this issue.   The  committee                                                              
members introduced themselves and noted their affiliations.                                                                     
                                                                                                                                
CO-CHAIR   COWDERY  pointed   out  that   Mike  Abbott,   Economic                                                              
Development  Special Assistant  to Governor  Knowles was  present.                                                              
He noted that Mr. Abbott would be  the contact person for those on                                                              
the commission needing information from the Administration.                                                                     
                                                                                                                                
MIKE ABBOTT,  Economic Development  Special Assistant  to Governor                                                              
Knowles,  offered his  services to  those on the  commission.   He                                                              
commented that the  Governor is interested in the  outcome of this                                                              
process.                                                                                                                        
                                                                                                                                
CO-CHAIR   WARD  noted   that  Ketchikan   and   Juneau  were   on                                                              
teleconference.                                                                                                                 
                                                                                                                                
MARCO   PIGNALBERI,   Legislative  Assistant   to   Representative                                                              
Cowdery, Alaska  State Legislature, reviewed the  information book                                                              
provided to  the commission members.   The first item in  the book                                                              
is the  authorizing legislation which  in Section 5  specifies the                                                              
duties of the commission  to be carried out by January  2000.  The                                                              
book  also includes  an address  section  for commission  members.                                                              
There  is  a copy  of  the  solicitation  that  was faxed  to  700                                                              
individuals  across  the  state.    The  response  from  that  fax                                                              
resulted in  the member composition  of the various  subcommittees                                                              
of the commission.                                                                                                              
                                                                                                                                
MR.  PIGNALBERI  turned   to  Tab  4  of  the  book   which  is  a                                                              
bibliography  list  of  a  few of  the  many  articles  discussing                                                              
privatization.    The  first  article  discusses  "the  depth  and                                                              
breadth of privatization  activity not only in  the United States,                                                              
but  elsewhere in  the world."    The article  entitled, "What  is                                                              
Privatization?"   includes  the   commonly  accepted   definitions                                                              
regarding privatization.   There is also an article  discussing 12                                                              
types of  privatization.  Privatization  is most  commonly thought                                                              
of  as  contracting  out  such  as is  the  case  with  the  radio                                                              
maintenance for the state troopers.   There is a variation of that                                                              
called management  contracts which would  be a situation  in which                                                              
the state  maintains ownership of  a facility while  its operation                                                              
is  contracted out.   There  is also  public-private  competition.                                                              
For example, the Department of Transportation  & Public Facilities                                                              
(DOT/PF) could  farm out  its design functions.   In such  a case,                                                              
the in-house  engineers of DOT/PF  would have to compete  with the                                                              
private sector engineering firms  for the design work on projects.                                                              
This is  being done  in the  Lower 48  and with  the Army  Corp of                                                              
Engineers.   The Alaska  Army Core of  Engineers was not  aware of                                                              
management contracts,  but will forward information  regarding the                                                              
areas where such is practiced.                                                                                                  
                                                                                                                                
MR.   PIGNALBERI  moved   on  to   the   franchise  variation   of                                                              
privatization.    With a  franchise,  a  firm is  given  exclusive                                                              
rights to provide  a service in a geographical area.   It could be                                                              
utilized  with road  maintenance.   Internal  markets  are also  a                                                              
variation  of privatization.   Internal  markets  involve a  state                                                              
agency competing against  the private sector.  Vouchers  is a form                                                              
of privatization which is being debated  statewide with regards to                                                              
education.  Commercialization,  another form of  privatization, or                                                              
service  shedding  can  result in  the  elimination  of  services.                                                              
Another  variation  of  privatization  is  self-help  in  which  a                                                              
nonprofit or  neighborhood organization  takes over a  service the                                                              
government now  provides.  He cited  the Alaska State Fairs  as an                                                              
example of where  such self-help privatization could  be utilized.                                                              
Volunteerism is also a form of privatization  which is illustrated                                                              
in the  litter pickup programs in  the state.   Corporatization is                                                              
another  type   of  privatization   which  the  Alaska   Aerospace                                                              
Development  Corporation will ultimately  be an  example of  as it                                                              
will be funded privately.  Mr. Pignalberi  stated that the sale of                                                              
assets or long-term leases is another  way in which the government                                                              
can eliminate assets  that it shouldn't have.   For example, there                                                              
has been  controversy surrounding  whether  Alaska should  own the                                                              
Alaska Railroad or  other businesses such as Matanuska  Maid which                                                              
the state  inherited due  to defaulted state  loans.  He  moved to                                                              
the   final   type  of   privatization,   private   infrastructure                                                              
development  in which a  private entity  does something  the state                                                              
would do such as the Knik Arm Crossing.                                                                                         
                                                                                                                                
MR.  PIGNALBERI  continued with  his  review of  the  commission's                                                              
book.    The   book  contains  several  articles   from  the  1999                                                              
Privatization Magazine  which summarizes privatization  activities                                                            
at federal,  state, and  local levels.   This would be  helpful in                                                              
performing the  commission's charge to discover  what other levels                                                              
of  government  are  doing.   The  book  also  includes  a  report                                                              
requested from  the National Council  of State Governments.   That                                                              
report is  the most comprehensive  article on the trends  in state                                                              
government  privatization.    The report  includes  sections  with                                                              
regard  to  cost savings  and  the  decision making  process  that                                                              
should  be   followed  by   governments  in  determining   whether                                                              
privatization  is the  best course  of  action.   The report  also                                                              
addresses  the  barriers  to  privatization.   There  is  also  an                                                              
article included which speaks against privatization.                                                                            
                                                                                                                                
MR. PIGNALBERI  pointed out that  the book includes a  report from                                                              
Commonwealth North  which did a  state-owned asset study,  about a                                                              
year  ago.   The  study  intended to  develop  a set  of  unifying                                                              
principles  in order to  guide the  management of Alaska's  public                                                              
assets  while  maximizing  the  returns  for  Alaskans.    In  the                                                              
process,  an appendices  was developed which  lists each  discreet                                                              
state asset   which  should be  helpful for  the commission.   The                                                              
book includes several  articles of general interest and  a list of                                                              
those who have volunteered for the various subcommittees.                                                                       
                                                                                                                                
ANDY  CLARY, Staff  to  Senator  Ward, Alaska  State  Legislature,                                                              
informed the commission  that he was responsible  for building the                                                              
web page for the commission.  Mr.  Clary demonstrated and reviewed                                                              
what  can be  found  on the  web  page which  can  be accessed  at                                                              
www.privatizealaska.org.                                                                                                        
                                                                                                                                
CO-CHAIR  WARD invited  every commissioner  to review the  website                                                              
and make any suggestions for changes.                                                                                           
                                                                                                                                
MR. PIGNALBERI commented  that the website has  been designed such                                                              
that one link  can lead to another.  He requested  that commission                                                              
members inform  Mr. Clary  of sites that  they find so  that those                                                              
sites can be added to the website.                                                                                              
                                                                                                                                
CO-CHAIR WARD  announced that  now would  be the appropriate  time                                                              
for comments and questions.                                                                                                     
                                                                                                                                
SENATOR ADAMS turned to the laws  pertaining to privatization.  He                                                              
asked if there  is enough political strength to  change labor laws                                                              
which he believed  to be a large  issue.  He suggested  that there                                                              
should  be  a  review  of what  activities  being  done  by  state                                                              
departments should  be done by municipalities and  the success and                                                              
failure  with  privatization  in  other  states.    Senator  Adams                                                              
expressed concern  with regard to  the delivery of  services under                                                              
privatization.    He  was  also concerned  with  the  politics  of                                                              
privatization  and  hoped  that if  there  is  to be  action  with                                                              
privatization that it be done in the next legislative session.                                                                  
                                                                                                                                
TAPE 99-1, SIDE B                                                                                                               
                                                                                                                                
REPRESENTATIVE BRICE  expressed the  need to maintain  the ability                                                              
to contact a  commissioner when the needs of his  constituents are                                                              
not  met.   Furthermore,  the  money must  be  spent  in the  best                                                              
possible  way.   He noted  that the  delivery  of service,  public                                                              
accountability, and  the recognition that certain  areas should be                                                              
maintained by  the state should be  addressed.  There  should also                                                              
be review  of those areas in  which the state has  been successful                                                              
with privatization.                                                                                                             
                                                                                                                                
COMMISSIONER  ALLEN inquired  as to how  the subcommittee  members                                                              
were selected.                                                                                                                  
                                                                                                                                
CO-CHAIR COWDERY reiterated  that more than 700  e-mails were sent                                                              
out seeking subcommittee volunteers.   Anyone who is interested in                                                              
serving  should contact  the  staff.   He  commented  that he  was                                                              
pleased with  the current turnout.   He hoped that  the commission                                                              
members  will attend  subcommittee  meetings of  interest to  them                                                              
because the subcommittee  will make a report to  the commissioners                                                              
who will pen the final report to the legislature.                                                                               
                                                                                                                                
CO-CHAIR WARD pointed out that the  vast majority of those present                                                              
today have volunteered for subcommittee  work and he believed more                                                              
would volunteer.   He thanked all  the volunteers.   Co-Chair Ward                                                              
noted that this process is copied from other states.                                                                            
                                                                                                                                
COMMISSIONER  ALLEN  expressed  interest  in  the  state  services                                                              
provided  by   sources  other  than   local  residents   in  rural                                                              
communities.   He cited the  various circuit writers  that provide                                                              
services to rural  communities. Commissioner Allen  inquired as to                                                              
the  possibility of  out  sourcing or  contracting  such to  local                                                              
village corporations or training and employing local residents.                                                                 
                                                                                                                                
COMMISSIONER SANDVIK  said that it would be worthwhile,  early on,                                                              
to   begin  with   some  views   and   recommendations  from   the                                                              
Administration.                                                                                                                 
                                                                                                                                
CO-CHAIR COWDERY noted  that he had spoken with the  Governor.  As                                                              
the process  proceeds,  he expected the  subcommittee members  and                                                              
the  commission  members to  make  comments  and requests  of  the                                                              
Administration.    He  reiterated  that  Mr. Abbott  will  be  the                                                              
contact for the Administration.                                                                                                 
                                                                                                                                
MR.  ABBOTT   indicated  agreement  with  Commissioner   Sandvik's                                                              
comments.  He said that the departments  are prepared to work with                                                              
the subcommittees.   Therefore, he expected such  conversations as                                                              
eluded to  by Commissioner  Sandvik to  occur at the  subcommittee                                                              
level.  He noted that there has already  been discussion regarding                                                              
a possible overview of the budget for the full commission.                                                                      
                                                                                                                                
CO-CHAIR  COWDERY referred  to  Tab 3  of  the commission  booklet                                                              
which  includes  a  memorandum  from   Representative  Cowdery  to                                                              
Governor  Knowles regarding  the development  of this  commission.                                                              
The  memorandum requested  a list  of the  agencies with  services                                                              
that are already  privatized.  The memorandum  also suggested that                                                              
the Governor designate  a single point of contact  as a liaison to                                                              
the commission which is Mr. Abbott.                                                                                             
                                                                                                                                
CO-CHAIR WARD noted  that there is information  available from the                                                              
legislative branch as well.  He acknowledged  that this is a large                                                              
task.                                                                                                                           
                                                                                                                                
COMMISSIONER  THOMAS commented that  some subcommittees  have lots                                                              
of volunteers while others do not.                                                                                              
                                                                                                                                
MR. PIGNALBERI informed everyone  that there are seven departments                                                              
for  which  committee  membership  has  not been  filled.    Those                                                              
committees  are  the  Alaska  Department   of  Fish  &  Game,  the                                                              
Department   of  Corrections,   the  Department   of  Labor,   the                                                              
Department  of  Law,  the  Department   of  Military  &  Veterans'                                                              
Affairs, the Office of Management  & Budget, and the Department of                                                              
Public  Safety.   He  predicted  that  those committees  would  be                                                              
filled  over  the  next  few  weeks.    Departments  such  as  the                                                              
Department  of  Transportation  and  the Department  of  Health  &                                                              
Social Services  have a  dozen or  more members  listed.   That is                                                              
allowed so that  the subcommittee can divide itself  further.  For                                                              
example,  there  has been  a  suggestion  that the  Department  of                                                              
Transportation have  separate subcommittees for the  Alaska Marine                                                              
Highway  System, airports,  and one  for the  remainder of  DOT/PF                                                              
issues.  The  same scenario would be utilized  with the Department                                                              
of Health & Social Services.                                                                                                    
                                                                                                                                
CO-CHAIR WARD stated that this process  is now in the hands of the                                                              
commissioners.  As much participation as possible is necessary.                                                                 
                                                                                                                                
MR. PIGNALBERI  commented that he  had a list of  interested folks                                                              
as well as their  phone numbers.  After one  person requested that                                                              
their  phone number  not be  publicized,  it has  been decided  to                                                              
provide the  contact list  of home and  work phone numbers,  faxes                                                              
and  e-mails  of  the  committee  members only  to  those  in  the                                                              
committee.                                                                                                                      
                                                                                                                                
CO-CHAIR WARD requested  that Mr. Clary contact  everyone in order                                                              
to  determine  who   would  not  want  which   particulars  to  be                                                              
publicized.                                                                                                                     
                                                                                                                                
COMMISSIONER THOMAS  suggested that a mailing address  be added to                                                              
the  list  because  volunteers  would  probably  prefer  receiving                                                              
letters  of  opinion  versus phone  calls.    Commissioner  Thomas                                                              
commented  that  consideration  should  be given  to  the  concern                                                              
regarding "whether  business in  the private  sector is  taking an                                                              
offensive   position   against  government   employees   and   the                                                              
bureaucracy of  government."  She  expressed the need  to remember                                                              
that  private sector  employees view  this as  an opportunity  for                                                              
jobs.  Some  of these jobs may  not be eliminated, but  may merely                                                              
change  ownership.   There  may be  some  shifts  in the  business                                                              
sector  due  to  privatization.   As  a  contractor,  Commissioner                                                              
Thomas acknowledged that at times  the concept of a project may be                                                              
different from the scope of the work  and the ability to build the                                                              
project.   Upon completion of this  task, she emphasized  the need                                                              
to reflect  on how it can  be successfully implemented.   Although                                                              
the commission may determine what  can be privatized, if the scope                                                              
of the privatization is not written  correctly it will not happen.                                                              
A third party  to review or help write contract  specifications or                                                              
consult the agencies may be a recommendation  of the commissioner.                                                              
                                                                                                                                
COMMISSIONER VALESKO  expressed the need for the  commission to be                                                              
cautious in the recommendations that  are made.  He commented that                                                              
basically  privatization  is  profitization   in  that  government                                                              
services are turned  over to someone in order to  make a profit on                                                              
those  services.   Such  will not  work  unless  the situation  is                                                              
profit-making  for private  organizations.   He stressed  the need                                                              
for  protections  to  be  written  in so  that  Alaskans  are  not                                                              
overcharged for  items.  Commissioner Valesko commented,  "My main                                                              
concern ... that  the working people of Alaska  are protected, the                                                              
people  that take  these  jobs ...  that they're  able  to make  a                                                              
living to support their family and  educate their kids and we have                                                              
a standard of  living in this state  that we can look up  to.  And                                                              
I'm  very sad  and disappointed  to say  in the  last six,  seven,                                                              
eight years the  standard of living for Alaskans,  and I'm part of                                                              
the system that  is  trying to do something about  it and failing,                                                              
has gone down  hill in comparison to  ... most of the  rest of the                                                              
states in  the United States."   He suggested  the need  to review                                                              
legislation because there are laws  that apply to public employees                                                              
such as  the requirement  for public  employees to receive  health                                                              
insurance and  retirement benefits.   If there  is to be  a change                                                              
from  public sector  employees to  private  sector employees,  the                                                              
aforementioned  benefits   should  be  protected  no   matter  who                                                              
performs the job.   Commissioner Valesko stressed that  he did not                                                              
want a  work force of  temporary employees.   He noted  that there                                                              
are those  in privatization who  profit tremendously.   Why should                                                              
one person  reap all the profits?   Commissioner Valesko  used the                                                              
snow  removal system  in  Anchorage  as an  example  of the  state                                                              
working  in  tandem  with  the private  sector.    In  conclusion,                                                              
Commissioner  Valesko  stated that  he supported  reviewing  those                                                              
places where privatization  would make sense.   Furthermore, there                                                              
should be  review of those  areas where privatization  has already                                                              
occurred in order to determine if it is working.                                                                                
                                                                                                                                
COMMISSIONER WUERCH commented that  the Alaska Municipal League is                                                              
very  appreciative of  being  included in  this  commission.   The                                                              
league  has offered  to  be a  resource for  the  commission.   He                                                              
acknowledged  the trend  of local  governments  having to  provide                                                              
some of  the services previously  provided by the state.   Through                                                              
this  commission,  there  is  the   opportunity  to  open  up  new                                                              
partnerships  between  state  and   local  government  to  deliver                                                              
services.  However, there are obstacles.   Therefore, Commissioner                                                              
Wuerch expressed the  need to uncover common solutions.   One such                                                              
solution  would be  to allow  local  governments to  bid on  state                                                              
work.                                                                                                                           
                                                                                                                                
COMMISSIONER  WUERCH  thanked all  the  volunteers  and the  staff                                                              
recruiting these volunteers.   He offered his  services in helping                                                              
to fill in  the gaps.  He asked  if there would be  a point during                                                              
which the commission would meet with each subcommittee.                                                                         
                                                                                                                                
MR. PIGNALBERI  noted that there is  a sign up sheet  for advisory                                                              
councils.  It is anticipated that  each commissioner will be on at                                                              
least one of  the subcommittees.  Therefore, there  should be some                                                              
continuity  between   the  work  of  the  subcommittees   and  the                                                              
commission.   With regard to  Commissioner Wuerch's  question, Mr.                                                              
Pignalberi  believed  that  to be  up  to  the discretion  of  the                                                              
commission.   He  turned to  the outline  of subcommittee  reports                                                              
which is fairly standard, but can be changed by the commission.                                                                 
                                                                                                                                
COMMISSIONER  ALLEN  inquired as  to  the role  the  commissioners                                                              
would play sitting on the subcommittees.                                                                                        
                                                                                                                                
MR.  PIGNALBERI  clarified  that  the  commissioners  would  be  a                                                              
working member of the committee.                                                                                                
                                                                                                                                
CO-CHAIR WARD  noted that a  proposed schedule was  being provided                                                              
to  the  members  and that  teleconferencing  is  available.    He                                                              
explained the need  to begin work in the subcommittees  as efforts                                                              
continue  to  fill  up  those subcommittees  not  yet  full.    He                                                              
announced that  the next proposed  meeting of the  full commission                                                              
is  on  August 16,  1999.    He  explained  that there  should  be                                                              
subcommittee  work  that  happens  between this  meeting  and  the                                                              
proposed  August  16, 1999  commission  meeting.   The  individual                                                              
chairs of  the subcommittees will  decide upon a meeting  time and                                                              
utilize   the  room  and   teleconference   network.    Then   the                                                              
subcommittee representatives  would present the commission  with a                                                              
progress report at the August meeting.                                                                                          
                                                                                                                                
CO-CHAIR COWDERY  clarified that there  are a few  rooms available                                                              
to the subcommittees,  but those rooms must be  scheduled ahead of                                                              
time.  He urged  the commissioners to attend as  many subcommittee                                                              
meetings as possible.                                                                                                           
                                                                                                                                
COMMISSIONER  WUERCH inquired  as to how  the subcommittee  chairs                                                              
will be chosen.                                                                                                                 
                                                                                                                                
CO-CHAIR WARD informed everyone that  names are being accepted for                                                              
more  volunteers.    He  explained  that  the  first  person  that                                                              
requested to be the chair of a subcommittee was made so.                                                                        
                                                                                                                                
CO-CHAIR COWDERY interjected that these positions may change.                                                                   
                                                                                                                                
CO-CHAIR WARD  explained that the  chair of the  subcommittee will                                                              
decide when meetings  occur and conduct those meetings.   The only                                                              
vote that determines  what will be recommended  to the legislature                                                              
will come from the commission.                                                                                                  
                                                                                                                                
TAPE 99-2, SIDE A                                                                                                               
                                                                                                                                
UNIDENTIFIED  SPEAKER  expressed the  need  to include  topics  of                                                              
interest for  the subcommittee on the  home page in order  to spur                                                              
subcommittee discussion on those.                                                                                               
                                                                                                                                
CO-CHAIR WARD agreed  that would be appropriate and  noted that it                                                              
would be up to the subcommittees.                                                                                               
                                                                                                                                
COMMISSIONER  THOMAS suggested  that  the chairs  of the  advisory                                                              
councils be  used for organizational  purposes.  This  would allow                                                              
them to  choose their  own chair  which would  be advantageous  to                                                              
all.                                                                                                                            
                                                                                                                                
CO-CHAIR WARD  stated that nothing  precludes the  commission from                                                              
anything.   The  subcommittees  can break  down  further, but  the                                                              
current structure allows  for the process to begin.   He indicated                                                              
that the subcommittees have much flexibility.                                                                                   
                                                                                                                                
COMMISSIONER  THOMAS  asked  if  the  commission  would  have  the                                                              
capability to have listen-only teleconference hook-ups.                                                                         
                                                                                                                                
CO-CHAIR COWDERY  answered yes.   He mentioned  that the  need for                                                              
those  interested  in  the  Alaska   Marine  Highway  to  be  from                                                              
Southeast Alaska.                                                                                                               
                                                                                                                                
COMMISSIONER FINK  inquired as to  when the commission  would meet                                                              
again.                                                                                                                          
                                                                                                                                
CO-CHAIR WARD announced that the  intention was for the commission                                                              
to meet once a month.                                                                                                           
                                                                                                                                
SENATOR ADAMS  clarified that  the commission  will be  meeting as                                                              
will the  subcommittees.   Each commissioner will  sign up  for an                                                              
agency for which  he/she will attend those  subcommittee meetings.                                                              
He  hoped that  time would  be spent  on  the subcommittee  report                                                              
outline in order to develop an outline format for each agency.                                                                  
                                                                                                                                
The committee took a brief at-ease to 9:50 a.m.                                                                                 
                                                                                                                                
CO-CHAIR WARD  called the  committee back  to order and  announced                                                              
that Fairbanks was also on teleconference.                                                                                      
                                                                                                                                
MR. PIGNALBERI explained the subcommittee  report outline is based                                                              
on his experience  with past reports.   The outline is  an attempt                                                              
to place  the subject before the  subcommittees in order  to think                                                              
about what the end product would be from the subcommittees.                                                                     
                                                                                                                                
SENATOR ADAMS referred to number  five on the outline which speaks                                                              
to   identifying   constitutional   and   statutorial   provisions                                                              
governing  agency operations.   He agreed  that each  subcommittee                                                              
should  understand their  agency, however  statutory changes  also                                                              
need  to be  reviewed because  that needs  to be  included in  the                                                              
recommendation from the subcommittee.                                                                                           
                                                                                                                                
SENATOR ADAMS referred to number  nine on the outline which speaks                                                              
to listing existing agency contracts  and the procurement methods.                                                              
He recommended the  need to have a time line on  the contracts and                                                              
the benefits.  He  turned to the next number nine  which speaks to                                                              
identifying  existing privatization  practices, if  any.   Senator                                                              
Adams  agreed with  Commissioner  Valesko that  review of  whether                                                              
current privatization  is working  or not  should be evaluated  by                                                              
the subcommittees.                                                                                                              
                                                                                                                                
COMMISSIONER  WUERCH  commented  that  a question  comes  to  mind                                                              
regarding the balance  of effort;  how much effort  will come from                                                              
subcommittee members and from the Administration.                                                                               
                                                                                                                                
MR. PIGNALBERI explained that each  departmental commissioner will                                                              
be given this  outline so as to provide the  subcommittee with the                                                              
information prior to its first meeting.                                                                                         
                                                                                                                                
SENATOR ADAMS  anticipated that the  co-chairs' staff  will obtain                                                              
the resource contact  for each agency.  He noted  that each agency                                                              
has  been audited  and therefore,  there  will be  a contact  with                                                              
Legislative Budget &  Audit.  He pointed out that  each agency has                                                              
a legislative liaison  that can be utilized as a  resource for the                                                              
statutory guidelines, missions, goals,  objectives, and contracts.                                                              
                                                                                                                                
CO-CHAIR WARD  said that he believed  there would be a  great deal                                                              
of cooperation between the commission and the Administration.                                                                   
                                                                                                                                
COMMISSIONER ALLEN indicated that  it would be appropriate for the                                                              
subcommittees  to ask  departmental commissioners  to provide  the                                                              
subcommittee with a briefing on the  department.  Furthermore, the                                                              
departmental commissioner  could provide any  recommendations with                                                              
regards  to  privatization.   He  also  agreed  with  Commissioner                                                              
Valesko's and Commissioner Sandvik's comments.                                                                                  
                                                                                                                                
CO-CHAIR  WARD  agreed that  could  be  part of  the  subcommittee                                                              
presentation.                                                                                                                   
                                                                                                                                
CO-CHAIR COWDERY  interjected that the Governor  fully intends for                                                              
the commissioners to fully participate with the subcommittees.                                                                  
                                                                                                                                
COMMISSIONER SANDVIK  pointed out that many agency  activities are                                                              
governed by their funding sources.   Therefore, she suggested that                                                              
the subcommittees consider the limitations  placed on the agencies                                                              
by  the  funding  sources.    That   should  be  included  in  the                                                              
subcommittee report as well as recommendations in that area.                                                                    
                                                                                                                                
COMMISSIONER  ALLEN   commented  that  those   agencies  receiving                                                              
enterprise  funds  within  a department  would  stand  out  during                                                              
subcommittee review.  He hoped those would be highlighted.                                                                      
                                                                                                                                
COMMISSIONER THOMAS suggested that  the subcommittee should define                                                              
which grant money could be administered by the private sector.                                                                  
                                                                                                                                
CO-CHAIR  COWDERY emphasized  that there  are certain mandates  in                                                              
the union  contracts which will  be honored, although  there could                                                              
be changes in future negotiations.                                                                                              
                                                                                                                                
BRIAN HARRIS  informed the committee  that he is  a Communications                                                              
Engineer  with  MicroAge  Corporation  (ph), although  he  is  not                                                              
present representing that corporation.   However, he is present to                                                              
provide the  committee with information  regarding a report  he is                                                              
doing for  Commissioner  Poe, Department  of Administration.   The                                                              
report  is reviewing  the infrastructure  of  the Anchorage  based                                                              
telecommunications  system  and   how  to  utilize  technology  to                                                              
redirect some  telecommunication costs.   One  of the items  to be                                                              
reviewed is  with regard to  who would be  the best to  manage and                                                              
run such a system.  He informed the  committee that a 1994 Wolfe &                                                              
Associates (ph)  study found that  the state is basically  its own                                                              
telephone company.   If that is  correct, the state would  need to                                                              
be prepared  to move into the  new century with the  technology to                                                              
do so.   As a private citizen,  Mr. Harris expressed  concern with                                                              
the  incredible pace  of  technology.   The  state  needs to  view                                                              
technology as a potential asset for savings or privatization.                                                                   
                                                                                                                                
ANDREE McLEOD pointed  out that this commission  is the Commission                                                              
of Privatization and  Delivery of Government Services.   She hoped                                                              
that the delivery of government services  is not over looked.  She                                                              
expressed the need  to have a nonretaliatory,  anonymous mechanism                                                              
for citizens  and employees  to provide  some information  to this                                                              
commission.   Ms. McLeod  was concerned that  this is a  "top down                                                              
type of  commission."   She suggested that  viewing this  from the                                                              
bottom  up may  be advantageous.    Ms. McLeod  stressed that  the                                                              
outline does  not include the  legislature or the  Administration.                                                              
Although some services  are statutory, some of  those services may                                                              
be  privatized.     Perhaps,  the  ombudsman's   office  could  be                                                              
privatized.                                                                                                                     
                                                                                                                                
CO-CHAIR  COWDERY  disagreed  with the  suggestion  that  comments                                                              
could be anonymous.                                                                                                             
                                                                                                                                
CO-CHAIR  WARD interjected  that he sponsored  the first  whistle-                                                              
blower law  in the 1980s.   There are legitimate  circumstances in                                                              
which people fear reprisal.                                                                                                     
                                                                                                                                
UNIDENTIFIED  COMMISSIONER  said  that  she did  not  believe  the                                                              
request  for  anonymous  input to  be  bad.    There should  be  a                                                              
mechanism in which people feel comfortable providing ideas.                                                                     
                                                                                                                                
CO-CHAIR   WARD   acknowledged   that   anonymous   comments   and                                                              
suggestions will  inevitably be received.   He noted that  when he                                                              
receives  anonymous  comments  and   suggestions,  he  performs  a                                                              
double-blind verification  before coming  forward.  He  also noted                                                              
that he receives  comments from those who request  that their name                                                              
not be involved.                                                                                                                
                                                                                                                                
COMMISSIONER   WUERCH  asked   if   it  was   expected  that   the                                                              
subcommittees would  have time to  take public comments  and input                                                              
or would the public comment only occur before the commission.                                                                   
                                                                                                                                
CO-CHAIR  WARD  anticipated  that  the  subcommittees  would  take                                                              
public comments and hold meetings for such.                                                                                     
                                                                                                                                
JOSEPH  HENRI  informed  the  committee  that  he  served  as  the                                                              
Commissioner of  Administration under Governor Egan's  third term.                                                              
With regard to  changing statutes, there is less  than five months                                                              
to do  this job  with volunteers.   He  doubted if  that could  be                                                              
accomplished  in the projected  time frame.   Mr. Henri  hoped the                                                              
commission would address how to continue  this work beyond what is                                                              
currently in statute.                                                                                                           
                                                                                                                                
CO-CHAIR WARD announced  that the commission will  accomplish what                                                              
the  legislature  set out  for  it  to do.    At that  point,  the                                                              
presentation  will be the  beginning of  another process  in which                                                              
the four legislators  on the commission will participate  with the                                                              
entire  legislature  on  this  matter.    This  will  provide  the                                                              
legislature with direction.                                                                                                     
                                                                                                                                
MR. HENRI  commented that there is  the danger that some  will say                                                              
that privatization  has been  reviewed and no  more time is  to be                                                              
spent  on the  issue.   He  reiterated the  need  to continue  the                                                              
momentum of the commission.                                                                                                     
                                                                                                                                
CO-CHAIR COWDERY  indicated agreement that this  process should be                                                              
ongoing.                                                                                                                        
                                                                                                                                
MR.  PIGNALBERI informed  the committee  that  other states  which                                                              
dealt with  privatization activity  had a  much longer  life cycle                                                              
than this commission.   Most privatization activity  was more than                                                              
a year, often two to three years.   For example, in Arkansas there                                                              
was a commission  for three years  and the professional  staff was                                                              
kept  for two  years in  order to  monitor  and follow  up on  the                                                              
original work.  Mr. Pignalberi believed  Mr. Henri's concern to be                                                              
legitimate, but he understood Co-Chair  Ward to say that it is the                                                              
responsibility  of  the  four legislators  on  the  commission  to                                                              
continue  the momentum  in the legislature.    He assumed that  if                                                              
more work  is necessary, there would  be another bill  to continue                                                              
these efforts.                                                                                                                  
                                                                                                                                
CO-CHAIR WARD indicated agreement.                                                                                              
                                                                                                                                
UNIDENTIFIED  COMMISSIONER asked  if there  is staff available  to                                                              
assist the subcommittees in writing the report.                                                                                 
                                                                                                                                
CO-CHAIR  COWDERY noted  that  he and  Co-Chair  Ward's staff  are                                                              
available.                                                                                                                      
                                                                                                                                
CO-CHAIR  WARD  mentioned  that   the  House  and  Senate  Finance                                                              
Committees'  subcommittee chairs  may  have staff  to help  supply                                                              
information  and  staff to  the  commission's subcommittees.    He                                                              
expected the commission  to expand, but perhaps not  to the extent                                                              
as  in Arkansas  where  the commission  was  completely funded  by                                                              
private donations.                                                                                                              
                                                                                                                                
COMMISSIONER ALLEN  indicated that  there may be  enough questions                                                              
raised and doubt  with regard to some of the  recommendations that                                                              
would result in a request for the continuance of this work.                                                                     
                                                                                                                                
TAPE 99-2, SIDE B                                                                                                               
                                                                                                                                
MR.  HENRI  commented  that  just  because  some  good  ideas  are                                                              
provided to  the legislature, does  not mean the  legislature will                                                              
take up those ideas.                                                                                                            
                                                                                                                                
LEO MARK  ANTHONY informed  the committee that  he has  dealt with                                                              
the  Department   of  Natural  Resources(DNR)  because   he  is  a                                                              
prospector and  miner.   Through his experience  he has  felt that                                                              
DNR  is  a good  organization.    However,  he realized  that  the                                                              
legislature is concerned with afford  ability.  Therefore, this is                                                              
about cost-benefit  analysis.   Mr. Anthony  understood that  as a                                                              
subcommittee, the job  will be to go through the  data and sort it                                                              
out.  He identified the technical  decisions as the responsibility                                                              
of the  subcommittees while  the political  decisions are  left to                                                              
the legislators.                                                                                                                
                                                                                                                                
MR. CLARY suggested that he or Mr.  Pignalberi should be contacted                                                              
via  telephone  or e-mail  with  additional comments  that  people                                                              
would like to have circulated.                                                                                                  
                                                                                                                                
CO-CHAIR WARD interjected that people  could go to the website and                                                              
type their comments to circulate to the commission.                                                                             
                                                                                                                                
COMMISSIONER  THOMAS expressed concern  with having  each member's                                                              
e-mail  address on  the  website because  information  may not  be                                                              
fairly distributed  to everyone.   She suggested that it  would be                                                              
helpful  for all  information to  first go  to Mr.  Clary and  Mr.                                                              
Pignalberi  to be  distributed back  to the  commissioners.   That                                                              
would avoid time spent bringing people up to speed.                                                                             
                                                                                                                                
COMMISSIONER FINK  commented that the  purpose of this is  to make                                                              
government  more efficient not  about decisions  as to  who should                                                              
make profits.  The authorizing legislation  for this commission is                                                              
driven by  the fact that  there is not  enough money.   Therefore,                                                              
the most efficient way to provide  government services needs to be                                                              
determined.   It should  also be  determined whether a  particular                                                              
government service should  even be performed.  Still,  it is of no                                                              
concern to this commission whether a contractor makes a profit.                                                                 
                                                                                                                                
COMMISSIONER  VALESKO surmised that  Commissioner Fink  would like                                                              
to  see Alaskans  at  or below  minimum  wage.   "If  we can  take                                                              
nothing for the services and get  it done that way, then lets have                                                              
it a citizenship  here that is working  for nothing ....   I don't                                                              
believe in that.  I believe that  we have and we have laws already                                                              
that says if you're  going to do a public contract,  ..., you will                                                              
pay what  is the prevailing  wage in an area  and that is  when we                                                              
need to look  at statutory things  that say this is the  wage that                                                              
we think is sufficient  as citizens of Alaska,  as legislators you                                                              
ought  to be  thinking  about this;  that says  we  want a  decent                                                              
standard of living for the people  that live here.  I would agree,                                                              
I don't care if they make a cent  of profit off of it but lets see                                                              
that the working people, ..., have  a decent standard of living in                                                              
this state."                                                                                                                    
                                                                                                                                
COMMISSIONER  WUERCH stated  that  it is  not his  intent to  take                                                              
money from  anyone's pockets.  As  a former employer, he  paid his                                                              
employees  well and  provided them  with a  full benefits  package                                                              
because that gives an employer good  employees.  He hoped that the                                                              
commission focuses on the fundamental purposes of SB 33.                                                                        
                                                                                                                                
CO-CHAIR WARD mentioned that he has  spoken with a number of state                                                              
employees who do  fear that this is an attempt to  take away jobs.                                                              
He did not  believe any state employee  would lose their  job as a                                                              
result of  this, although there will  probably be a  hiring freeze                                                              
and reorganizational effort.  He  pointed out that the legislation                                                              
includes that the  subcommittees identify those  state  government                                                              
functions that  should be transferred to nonprofit  organizations,                                                              
regional   profit  corporations,   profit  corporations,   federal                                                              
government,  local government,  or eliminated.   That  is quite  a                                                              
charge.                                                                                                                         
                                                                                                                                
COMMISSIONER (INDISC.)  noted that  his organization did  a report                                                              
that  was distributed  to  all legislators  about  four years  ago                                                              
regarding the pitfalls and perils  of privatization.  He said that                                                              
he would like to include that in the committee book.                                                                            
                                                                                                                                
CO-CHAIR WARD said that he would be happy to distribute that.                                                                   
                                                                                                                                
CO-CHAIR  COWDERY  informed  everyone   that  he  has  information                                                              
regarding every  new program implemented  since 1980 which  may be                                                              
helpful to review.                                                                                                              
                                                                                                                                
CO-CHAIR  WARD interjected  that would  also be  available to  the                                                              
subcommittees.                                                                                                                  
                                                                                                                                
DONN LISTON, Alaska State Employees  Association (ASEA), testified                                                              
via teleconference  from Juneau.  He informed  the commission that                                                              
he  was the  business agent  for ASEA  which was  involved in  the                                                              
central duplicating  fiasco.  When there is a  contract, it should                                                              
be honored.                                                                                                                     
                                                                                                                                
DAN  PATTERSON,  testifying  via teleconference  from  the  Mat-Su                                                              
Valley,  agreed with  Commissioner Valesko  that there  will be  a                                                              
race  to  the   bottom  in  wages.    He  did   not  believe  that                                                              
privatization  of  the  correctional  system  or  half-way  houses                                                              
benefit   Alaskans.     Mr.   Patterson  emphasized   that   those                                                              
departments as well  as DOT not be privatized.   He requested that                                                              
the  information   packet  be  sent  to  the   Mat-Su  Legislative                                                              
Information Office(LIO).                                                                                                        
                                                                                                                                
CO-CHAIR WARD agreed  that the packet would be  made available and                                                              
that information forthcoming  will be made available  to all LIOs.                                                              
There being  no further comments,  Co-Chair Ward  thanked everyone                                                              
for giving their time.                                                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
There  being  no  further  business  before  the  commission,  the                                                              
Commission on  Privatization and  Delivery of Government  Services                                                              
meeting was adjourned at an unspecified time.                                                                                   
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects