Legislature(2013 - 2014)CAPITOL 106
01/22/2013 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Overview: Department of Administration | |
| Overview: Alaska Public Offices Commission (apoc) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
January 22, 2013
8:04 a.m.
MEMBERS PRESENT
Representative Bob Lynn, Chair
Representative Lynn Gattis
Representative Shelley Hughes
Representative Doug Isaacson
Representative Wes Keller
Representative Jonathan Kreiss-Tomkins
MEMBERS ABSENT
Representative Charisse Millett
COMMITTEE CALENDAR
OVERVIEW: DEPARTMENT OF ADMINISTRATION
- HEARD
OVERVIEW: ALASKA PUBLIC OFFICES COMMISSION (APOC)
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
BECKY HULTBERG, Commissioner
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Presented an overview of the Department of
Administration.
PAUL DAUPHINAIS, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Via teleconference, presented an overview
of APOC through a PowerPoint presentation.
ACTION NARRATIVE
8:04:18 AM
CHAIR BOB LYNN called the House State Affairs Standing Committee
meeting to order at 8:04 a.m. Representatives Keller, Gattis,
Kreiss-Tomkins, Isaacson, Hughes, and Lynn were present at the
call to order.
^Overview: Department of Administration
Overview: Department of Administration
8:08:37 AM
CHAIR LYNN announced that the first order of business was the
overview of the Department of Administration.
8:09:26 AM
BECKY HULTBERG, Commissioner, Department of Administration, gave
a PowerPoint presentation, slide 2 of which shows a map of
Alaska. She stated that the department's two primary roles are
to provide support services to state agencies and to provide
direct services to the public. She said the bulk of the
department's staff is in Anchorage and Juneau, but related that
the Division of Motor Vehicles (DMV), the Public Defender Agency
(PDA), and the Office of Public Advocacy (OPA) have a statewide
reach. She said the map shows where those offices are located.
MS. HULTBERG turned attention to slide 3, which shows an
organizational chart of the department. She relayed that the
department is comprised of approximately 1,100 employees and
operates on a budget of about $300 million. She explained that
the entities listed in blue boxes on the chart provide services
to state agencies; the entities listed in green boxes provide
services to the public; and those in red boxes are department
management. Regarding the entities listed in the blue boxes,
she said the Office of Administrative Hearings is an independent
body that was formed 5-6 years ago by consolidating hearing
officers from various departments into a panel; it adjudicates
administrative claims. The Division of Finance, she said, puts
out a financial report, aggregates the state's financial data,
manages state travel, and is currently working to replace the
state's accounting and payroll systems. She stated that while
each department has its own Internet Technology (IT) shop, DOA's
Enterprise Technology (IT) Services provide bandwidth, network
services, and telecommunications to the entire state government.
She said the Division of Risk Management manages insurance and
worker's compensation.
8:14:29 AM
MS. HULTBERG said the Division of Personnel & Labor Relations is
the entity that takes care of human resources issues, with Labor
Relations addressing labor bargaining units and labor contracts.
The Division of General Services manages statewide procurement,
leases, the public building fund, and central mail.
8:15:20 AM
REPRESENTATIVE ISAACSON asked if Department of Transportation &
Public Facilities (DOT&PF) maintains the buildings and then DOA
leases those buildings.
MS. HULTBERG responded that the Division of General Services
manages a portfolio of buildings within the public building
fund. The fund was established a number of years ago to allow
the division to charge leases to tenant agencies and use the
money for ongoing maintenance. Prior to that, she said,
maintenance on those buildings was subject to annual
appropriations, and many of the buildings began falling into
disrepair. She estimated there are 14-16 buildings included
under the fund, including the Atwood Building in Anchorage, the
Fairbanks Regional Office Building, and the State Office
Building in Juneau. She said the money managed through the
leases is approximately $47 million. She said it can be
confusing to determine which buildings are within DOT&PF's
portfolio and which are within DOA's and to determine the
procurement and construction authority of each. Furthermore,
she related that she is not certain why certain buildings were
assigned to the public building fund while others were not. In
response to a follow-up question, Ms. Hultberg confirmed that
the buildings that are in DOA's fund are distinct from those
managed by DOT&PF. She added that through a delegation from
DOT&PF, DOA manages the construction of its buildings, as well,
which includes remodeling and replacement of boilers and roofs.
8:17:32 AM
REPRESENTATIVE ISAACSON requested a list.
MS. HULTBERG, in response to Representative Isaacson, indicated
that the Capitol Building is managed by DOT&PF, while the Court
Plaza Building and the State Office Building are managed within
DOA's public building fund.
8:18:42 AM
MS. HULTBERG returned attention to the organization chart, to
the entities in the green boxes. She said the Division of
Retirement & Benefits (DR&B) serves the public by providing the
retirement function for the State of Alaska, as well as by
providing retirement services for political subdivisions and
school districts. She said it is a complex division, which
manages several health plans and addresses the unfunded pension
liability. The PDA, she said, is the primary agency that
defends the rights of the accused. Ms. Hultberg stated that if
the agency has a conflict, the case is "conflicted over" to the
OPA, which also provides criminal defense services in addition
to providing a public guardian function. The OPA also oversees
the Guardian Ad Litem program and the court appointed special
advocate (CASA) program. The Violent Crimes Compensation
Commission, she relayed, has a small staff and board, which
provide compensation through a fund to victims of violent
crimes.
MS. HULTBERG said the Alaska Oil & Gas Conservation Commission
is an important regulatory body for the state's oil and gas
resources, and is administratively housed within DOA. The
commission is an independent body, with three commissioners who
provide management responsibility and regulatory guidance. She
said the Alaska Public Offices Commission (APOC) is also
administratively housed within DOA, but management authority for
the commission resides within its board. The same applies to
the Alaska Public Broadcasting Commission (APBC), for which DOA
serves primarily as a conduit to the public budget the
commission uses. The last public serving entity shown on the
chart, she noted, is the DMV. Ms. Hultberg stressed the
importance of customer service in that division, and remarked
upon the good leadership that has run it in the past and
currently, with a new director on board.
8:22:35 AM
CHAIR LYNN shared that his experience with the DMV in Alaska has
been positive.
MS. HULTBERG stated the department's intent to continue
providing good customer service through the DMV. She said the
division is complex, with a significant level of
intergovernmental coordination.
8:23:29 AM
MS. HULTBERG moved on to slide 4, which highlights the
department's strategic plan. She stated the following goals of
the department: service excellence, spending growth reduction,
effective and efficient delivery of services, and employee
development and support. She showed slide 5, which relates to
spending growth reduction and has a graph depicting DOA
expenditures. She said the department does not think a 5
percent rate of growth is sustainable over the long term, so a
goal of the department is to figure out how to "bend that cost
curve down" to be more in line with general inflation. She
noted that the graph shows that the department has been
successful in the last couple years in slowing down the rate of
[spending] growth.
8:25:16 AM
MS. HULTBERG directed attention to slide 6, regarding services
to the public. She said the services that DOA provides drive
the cost of state government and the operating budget.
Regarding the DMV, she said driver's license and identity (ID)
card security is an ongoing issue. She indicated that Alaska's
statute prevents the state from complying with the Real ID Act;
however, she said the state can ensure that the driver's
licenses and ID cards of its residents are secure. In response
to the chair, she reviewed that the Real ID Act had been passed
in the wake of the September eleventh terrorist attacks in an
effort to make identifications more secure nationally. Under
the Act, states must send their data to a national database, a
requirement which raised legitimate concerns about whether or
not the Real ID Act was the first step toward creation of a
national ID card. She explained that the State of Alaska passed
a law, which prohibits the DMV from spending state money for the
sole purpose of implementing the Real ID Act provisions. She
further explained that the deadline for compliance with the Real
ID Act has been extended several times, most recently from
January to September 2013. She said there is concern whether an
Alaska driver's license could be used at a federal facility if
the Department of Homeland Security implements the Act and
requires compliance. Ms. Hultberg said there are many other
states, like Alaska, whose statutes do not allow compliance with
the Real ID Act, and the ongoing issue is whether or not there
will be another extension. She stated that the focus of the DMV
has been to determine how to use best practices to secure an ID
rather than to comply with the Real ID Act.
8:28:32 AM
MS. HULTBERG, in response to a request from the chair for
clarification on the meaning of best practices, said she could
provide a list of the "18 or more" aspects of the Act which
require compliance. For example, she said the state will not
spend money to link up to a national database, because to do so
would be for the sole purpose of complying with the Act.
However, she stated that a best practice the state could engage
in is to provide central, secure issuance of IDs, rather than
having people come to various offices to get them. She offered
her understanding that facial recognition may be an aspect of
that. She offered to supply the committee with "a summary of
the major provisions ... where we're implementing best practices
and the major provisions where we're not going to be able to
comply."
CHAIR LYNN suggested that some of the best practices of the
state may overlap with requirements of the Real ID Act.
MS. HULTBERG responded that is correct.
8:30:37 AM
REPRESENTATIVE KELLER asked Ms. Hultberg to watch for any
requirements from the federal government that Alaska needs to be
aware of in order to protect the privacy of Alaskans.
MS. HULTBERG suggested that the committee might like to hear
directly from the Director of the DMV regarding the security of
identifications.
8:31:52 AM
REPRESENTATIVE HUGHES asked who determines best practices versus
what would be solely compliance with the Act.
MS. HULTBERG said the decision is made at the division level to
enhance the security of Alaskans' IDs.
8:33:39 AM
MS. HULTBERG returned to discussion of slide 6. She said both
the OPA and the PDA have experienced significant growth in their
budgets primarily related to caseload. She stated, "We are not,
at this point, anticipating a supplemental for the Public
Defender Agency or the Office of Public Advocacy."
REPRESENTATIVE ISAACSON asked what factors predict a
supplemental will not be necessary.
MS. HULTBERG stated that there are always pressures on agencies
that provide social services, but emphasized the importance of
managing within the legislative appropriations, which - even
with some exceptions - has resulted in positive outcome. In
response to a follow-up question, she clarified that the
department believes it has an obligation to manage within the
current budget, but that does not mean it will not consider
negotiating for more money in fiscal year 2014 (FY/14) to
accommodate caseload growth.
8:37:49 AM
REPRESENTATIVE KELLER expressed gratitude for Ms. Hultberg's
stance regarding "the supplemental," and he said he hopes more
commissioners will adopt her view as the budget diminishes.
MS. HULTBERG clarified that she is not "declaring victory," but
is relating that there has been some positive outcome and the
department will continue to be diligent in managing its numbers.
8:38:25 AM
MS. HULTBERG moved on to slide 7, regarding services to state
agencies. She said the department, through the Division of
Personnel, Division of Finance, and the Division of Retirement &
Benefits, pays wages and benefits for people to perform tasks
and pays people to perform certain business processes. The
department, through Enterprise Technology Services, provides IT
services with which employees are able to do their jobs, and,
through the Division of General Services, provides commodities,
furniture, and offices in which to work. Finally, the
department's Division of Risk Management provides protection
against injury and loss.
8:40:01 AM
MS. HULTBERG, looking at slide 8, offered further details
regarding wages and personal services. She said the personal
services line on a budget contains health insurance and
retirement benefits; the former tends to grow each year, while
the latter is relatively "flat." She named two components to
wages: the negotiated cost of living adjustment (COLA); and
both negotiated and statutory merit increases and pay
increments. Ms. Hultberg relayed that employees hired at an A
through F step receive a 3.5 percent merit increase each year.
She questioned the term "merit," explaining that employees
automatically receive the step increases unless there is "a very
significant performance issue." Once above the F step, the
system changes to pay increments, which are 3.75 percent
increases annually in perpetuity, with no cap. The wage
component is negotiated for those employees under the bargaining
agreement and statutory for "non-covered" employees. She opined
that with both the pay increase and COLA, employees have a
"decent-sized, built-in annual increase every year." Ms.
Hultberg reported that the personal services line has increased
by an average of 5.45 percent a year since 2006, primarily
because of COLA, merit increase, and increases in employer-paid
health insurance.
MS. HULTBERG indicated that the department is addressing the
increase in personal line services in the following ways: by
good representative management at the bargaining table and
recognition that large changes in contracts are difficult to
achieve; and by looking at its current classification system
over the 12-18 months to determine whether it needs to be
modernized. Bringing attention to slide 9, she noted that the
list on the right side shows all the bargaining units the state
has and the number of employees in each unit. She said in 2013,
the department is negotiating with the general government unit
(GGU) and the supervisory unit (SU) - two of the largest units
in terms of members. She said the monetary terms are not
included in the governor's budget; the department has until
March 15 to bring those terms to the legislature.
8:44:06 AM
REPRESENTATIVE HUGHES asked Ms. Hultberg for the total number of
employees in all bargaining units combined, as well as the total
number of state employees.
8:44:14 AM
MS. HULTBERG offered to find out, but estimated there are 16-
17,000 employees. She said the answer depends on whether
Representative Hughes wants the total to include various
factors, such as part-time, full-time, and long-term employees.
In response to a follow-up question, she offered her
understanding that the numbers provided do not include employees
in the court system.
8:45:08 AM
MS. HULTBERG directed attention to slide 10, which shows the
State of Alaska contributions to active employee health plans.
She said the state pays 100 percent of the base of the premium
for a basic health plan, called an "economy" plan, and the cost
to the state is steadily increasing. The driver of the
inflation is the increase in health care within the state. She
noted that the state does not cover all state employees through
the Alaska Care health plan that is managed through the DR&B.
The state funds a number of union health trusts, and the state's
contribution to those trusts is dependent upon the economy plan
premium for "our health plan." She said there are four primary
union health trusts, two of which have a significant population:
the Alaska State Employees Association (ASEA) Health Trust,
which covers approximately 8,200 employees; and the Labor Trades
and Crafts [51 Health Trust].
8:46:44 AM
REPRESENTATIVE ISAACSON talked about his experience with health
care costs as mayor of his community and the ability to
negotiate what seems to be better health care coverage for lower
rates. He questioned whether the state truly is being
competitive or whether it is constrained by contracts in some of
its health care plans.
MS. HULTBERG said the issue of health care is one of her highest
priorities. She said the state is self-insured; it does not go
out and purchase insurance in a commercial market. Timing in
terms of service could create disparate rates. She agreed that
the state has not obtained the best value for the health care
dollars it spends on behalf of its state employees. She
reiterated that it is a high priority of the department to look
at the plans to determine how to do a better job and explain to
the provider that the state can no longer sustain 9 and 10
percent annual cost increases. She said she would be happy to
discuss health care further.
REPRESENTATIVE ISAACSON said he would appreciate more
information on the health care issue, and he said he is glad to
hear it is a priority for the department. He ventured that with
a larger population being covered, the state could get a lot
more value on the dollar when providing health benefits.
MS. HULTBERG offered to set up time with Representative
Isaacson's office to discuss the matter further.
8:49:46 AM
MS. HULTBERG, in response to questions from Representative
Kreiss-Tomkins, relayed that prior to FY 11 the department was
averaging a 9 percent annual rate of growth related to employee
health benefits. She said although FY 11 was a good year, with
the rate down to about 7 percent, history has shown that years
with low rates are often followed by double digit increases;
therefore, she stressed the importance of actively managing
health care expenses. Nationally, Alaska is one of only seven
states, which continues to fund a basic health insurance plan
premium for a family at 100 percent. An average is an 80-20
premium share, where the employee would be paying the 20
percent, and Ms. Hultberg said "we don't have that right now."
The department currently has a request for proposals (RFP) out
for a third-party administrator, a pharmacy benefit manager, a
wellness vendor, and a dental network. She said the RFP process
is complicated, fraught with peril, and has resulted in
litigation numerous times in the past. She emphasized the
department's focus on ensuring a good RFP process.
8:52:38 AM
REPRESENTATIVE HUGHES asked if Ms. Hultberg has delegated anyone
in the department to sit in on the meetings conducted by the
Alaska Health Care Commission. She said she thinks some
applicable strategies to save money may have resulted from those
meetings.
MS. HULTBERG said last fall Jim Puckett, the director of the
DR&B, was appointed to the commission. Further, she said she
has spoken before the commission. She said the department is
linked with the commission, and she stated that she agrees the
work of the commission is important and should be elevated.
8:54:28 AM
MS. HULTBERG directed attention to slide 11, which lists the
following strategies taken by the department to reduce the rate
of cost growth: implementation of an employee wellness program;
improved consumerism and appropriate utilization of services by
members; plan design changes to support the above; contracting
strategies; and procurement of the third-party administrator.
She said currently the incentives for employee, provider, and
payer are not aligned, and the department needs to help educate
health care benefit recipients to be more "price sensitive."
8:55:54 AM
MS. HULTBERG turned to slide 12, which shows a graph of benefits
payments that the department will be making to its Public
Employee Retirement System (PERS) and Teachers Retirement System
(TRS) recipients. The graph shows the increase in payments
following 2012, which Ms. Hultberg said is a result of Baby
Boomers retiring. She said there are operational challenges for
the department in dealing with this influx of retirees. She
related that the current PERS/TRS account balance is $16.8
billion, and when the Alaska Retirement Management (ARM) Board
adopts the newest valuation, the unfunded liability will be
approximately $12 billion. She said retirement benefits are an
important obligation for the state to uphold.
8:57:57 AM
REPRESENTATIVE ISAACSON, regarding the state's obligation to
pay, suggested there is a "perfect storm" wherein "we're trading
the payments that a worker today has for the retirement someone
else is having." He asked Ms. Hultberg for her recommendation
how to pay down the unfunded liability.
8:59:41 AM
MS. HULTBERG recommended Deputy Commissioner Mike Barnhill as
someone who could offer remarks on this issue in more depth.
Notwithstanding that, she said the unfunded liability may not
impact the state adversely today, but the state must make
required payments to maintain the system, and those payments are
growing and consuming an increasing amount of the operating
budget. She said there are philosophical arguments as to
whether this is a hard or soft liability, but irrespective of
the answer, it is important that the payments be made. She said
actuaries look at numerous variables when evaluating the
unfunded liability, including market performance and life
expectancy. She emphasized the difficulty in predicting how
much money will be needed to meet future obligations, but it is
important to have a system that is financially solvent in order
to meet them.
9:01:48 AM
MS. HULTBERG stated that the retiree health plan does not cover
preventative care and is covered by the diminishment clause in
the constitution. She stated that health plans tend to evolve
with both the science and the market place of medicine; however,
the retiree plan does not evolve, because the court has
interpreted the plan such that any benefits are added in
perpetuity and any diminishment - such as adjusting co-pay or
deductibles - means having to add a comparable enhancement to
the plan. Over time, the value to the plan to the retiree has
grown because of inflation. She said what was an 80-20 plan is
now a 95-5 plan; therefore, she emphasized that she is hesitant
to add any benefit into that plan because to do so would
obligate the state to a current and future cost that it may not
be able to manage.
MS. HULTBERG offered two solutions: to go to court and
litigate, as has been done in the past; or to develop a plan
with elements retirees want, while including cost containment
measures that will help the department better manage the plan.
She directed attention to slide 14, which shows what the plan
would look like. She then pointed to boxes on slide 15, which
show what savings opportunities there would be under a new plan,
under which are boxes listing the benefits to retirees under
that plan. She said the state has asked its actuary to figure
out how many retirees they think would need to move over into
the new plan to justify creating it. She said the department
agrees that preventative care is important and the state needs
to find a way to provide it to its employees; however, she
stated that with an unfunded liability - $4 billion of which is
health care related - the state cannot add costs into the plan
without adding in the ability to better manage it.
9:05:00 AM
CHAIR LYNN mentioned a bill he introduced before the House Labor
& Commerce Standing Committee last year, which addressed
preventative colonoscopies and generic prescription drugs for
retirees. He asked for an update on that issue.
MS HULTBERG stated that under the new plan, colonoscopies would
be covered under "free wellness," while the state would move
away from a fixed co-pay in terms of prescriptions and adopt a
co-insurance with a deductible.
CHAIR LYNN offered his understanding that currently retirees can
demand a brand name prescription drug over a generic, and he
said the cost difference is astounding.
MS. HULTBERG responded that Chair Lynn is correct. She said the
current plan is "an artifact of 30 years ago" and does not
"reflect today's reality of delivering health care."
Furthermore, there is standard coverage in modern health plans
that the current plan does not provide. She said retirees have
a legitimate reason to be concerned about their health care
coverage. The department is trying to address cost containment
and enhancement of coverage for retirees, without ending up in
litigation, but that may be unavoidable.
CHAIR LYNN asked Ms. Hultberg to keep the committee up to date
on the issue.
9:07:06 AM
MS. HULTBERG, in response to a request for clarification
regarding the term "diminishment clause," explained that the
Constitution of the State of Alaska specifically protects public
employee retirement benefits, and the court has interpreted
health care as a protected benefit under the constitution.
Therefore, to increase costs of the plan to a retiree is to
diminish the benefit. Furthermore, to penalize a retiree for
choosing one provider over another is considered a diminishment,
which Ms. Hultberg opined is crazy, because contracting is
essential to a modern health plan.
MS. HULTBERG, in response to follow-up questions from
Representative Isaacson, said she does not know the specific
statute, but can find out. She reiterated that the department
hopes to provide an alternate plan without litigation, but may
have to go to court over this issue.
9:09:28 AM
MS. HULTBERG directed attention to slide 16, which shows the
increase in lease costs within General Services [from 2003
through 2012]. She said leases tend to go up and increased
space needs to be provided, but even with those reasons Ms.
Hultberg described the increase as "pretty alarming." She
related that state-owned space is more economical than leased
space. She said the state is adopting new universal space
standards, as illustrated on slide 17, the benefits from which
include: fitting more people into a smaller space, improving
airflow by using dividers rather than walls, using fewer desktop
printers and appliances. She said [using universal space
standards] is common in the private sector. The state has
looked at BP's facility in Anchorage as a model, where 40
percent more people have been brought into the building. She
stated the department's belief that [these standards] will
provide "nicer space for the employees and will save the state
money." She said this plan is not without controversy, because
people tend to take changes to their work spaces personally.
She said, "We're going to be implementing this on buildings
where we have a positive return on investment."
9:12:08 AM
MS. HULTBERG directed attention to slide 18, which she said
gives an indication of how much money the state saves by having
enterprise agreements and shows the kind of enterprise
agreements that the state negotiates through purchasing. Slide
19, she noted, illustrates the project timeline for the
Integrated Resource Information System (IRIS), which is the
replacement of two core business systems for the state: AKPAY,
the state's payroll system; and the Alaska Statewide Accounting
System (AKSAS). She said the 20- and 25-year-old systems are
nearing the end of their useful lives. Ms. Hultberg said the
state is implementing an enterprise resource planning (ERP)
system, which will provide accounting payroll functionality, a
centralized platform for procurement, and a human resources
system, as well. She said this is a large, significantly
complex IT project, which essentially focuses on current
business processes to redesign them more efficiently.
MS. HULTBERG said slide 20 lists IT services, including
bandwidth. Slide 21 addresses risk management, the costs for
which continue to climb. She said the department will be
seeking additional authorization for $4 million, because its
expenditures are exceeding its current authorization. She
explained there is a fund called a "catastrophic reserve fund,"
which the department accesses when needed; however, she
indicated that the fund was depleted in 2012 because of worker's
compensation medical costs, which she said are "killing us just
like they're killing every other large employer." She relayed
that the department manages worker's compensation from the point
of the employer - not from a policy standpoint. She listed
worker's compensation, medical, and property insurance, and
mentioned events like a tsunami, which tend to raise insurance
premiums for [property insurance]. She said some [cost
increases] are due to factors outside the control of the
department.
9:15:20 AM
MS. HULTBERG said she would follow-up on issues raised by
committee.
CHAIR LYNN thanked Ms. Hultberg for her overview of the
department.
^Overview: Alaska Public Offices Commission (APOC)
Overview: Alaska Public Offices Commission (APOC)
9:16:00 AM
CHAIR LYNN announced that committee would hear the overview from
the Alaska Public Offices Commission (APOC).
9:16:13 AM
PAUL DAUPHINAIS, Executive Director, Alaska Public Offices
Commission (APOC), via teleconference, presented an overview of
APOC through a PowerPoint presentation. He explained that a
slide showing a soccer ball with many hands on it is an
illustration of a glitch that occurred in APOC's filing system
on October 30, [2012], when many people were filing on line -
many hands on the ball - and then leaving the system - hands
removed from the ball - but the system "did not know that they
had left" and "froze because it saw all its portals taken up."
He said that was the first and only time the glitch has been
observed in APOC's electronic filing application; other
applications were running on the same server and functioning as
normal. He said someone noted the problem and restarted the
system. Mr. Dauphinais relayed that APOC has done the following
to ensure this does not happen again: split the application in
two, so that one application cannot see when people are leaving
the other application; added the "Insight" system to the state
monitoring system called, "Big Brother"; added regular checks of
its system with reports sent to IT if errors occur; updated
error of logging software with regular checks with notification
to APOC staff if there are errors; instigated monitoring of e-
mail, logs, and "Big Brother status" to preempt any unplanned
outages; looked into cashing solutions, which enable error
checking to occur faster.
MR. DAUPHINAIS, in response to a question from the chair,
estimated that at the time of the system failure, about half the
candidates running were actively trying to file. He said filers
are not penalized for being late if the reason for the tardiness
is because of a technical problem.
9:21:26 AM
REPRESENTATIVE HUGHES said she was one of the candidates
affected by the system glitch, and she posited that it would
have been helpful had APOC sent an e-mail to candidates that day
explaining that they would not be penalized, rather than waiting
until the next day to do so.
9:22:02 AM
MR. DAUPHINAIS said as a result of that incident, APOC has
modified its operations. For example, it keeps staff after
hours and automatically notifies staff when something like this
occurs. He expressed appreciation for Representative Hughes'
recommendation.
9:22:26 AM
MR. DAUPHINAIS, for the benefit of the new legislators on the
committee, stated that APOC's mission is "to encourage the
public's confidence in their elected and appointed officials by
administering Alaska's disclosure statutes." He named APOC's
four core services: to disclose information to the public, to
interpret laws and assist filers, to administer laws, and to
examine laws and compare reports. He said APOC has 14 staff
members; 11 in Anchorage and 3 in Juneau. He directed attention
to a slide of a graph showing the visits to the APOC web site by
month for the years 2010-2012; the blue lines reflect the visits
in 2012. He stated that clearly the more information posted
leads to more web visits. He said the visits shown are "normal"
visits, not "spiders," which he said are automated programs that
"go out and touch databases" to check for any changes. With the
spider visits, he said, the numbers for 2012 would be
approximately double what is shown. He said the public inspects
the information "very carefully and often."
MR. DAUPHINAIS directed attention to a slide related to
interpreting laws and assisting filers. He said in 2012, APOC
began a significant program of training and outreach. The
training was intended to directly assist filers, and it took
place in Fairbanks, Anchorage, Juneau, Wasilla, and the Lake &
Peninsula Borough. Outreach was more focused on the public and
how to use the electronic filing system, and APOC reached a
number of people from Homer to Fairbanks. He explained that
next to the name of each community named on the slide there are
two numbers in parentheses: the first number refers to the
number of activities in a particular community; the second
number reflects the number of attendees. He stated, "We think
this has paid big dividends in a number of different ways." Mr.
Dauphinais referred to the next slide, showing advisory opinions
and complaint activity by year, from 2009-2012. He said 2010
was a gubernatorial year, 2011 had no state election, and 2012
was a year with redistricting. He suggested one would think
that 2012 would be as busy as 2010, but that clearly was not the
case. He said APOC thinks the reason is that its outreach has
helped keep down the number of complaints, while the other part
of it is attributed to the electronic filing system, which does
the math for the filer and does not allow the filer to move on
in the form until each part is done correctly. He stated a goal
of APOC is to become much more educational and much less
punitive.
9:27:48 AM
MR. DAUPHINAIS directed attention to the next slide, which
addresses civil penalties assessed from 2011-2012. He said
civil penalties are those assessed based on late or incomplete
reports; they are not complaint-related. He said the slide
shows that electronic filing has helped APOC to decrease
[penalties] in some areas, but has led to increases in others.
Lobbying shows a decrease in the number of civil penalties for
late and incomplete reports, and Mr. Dauphinais said APOC
believes that is because the lobbying module was the first to go
on line and the employers of lobbyists are a bit more
experienced. He indicated the reason for the decrease in civil
penalties assessed related to candidate disclosure is because of
the emphasis that APOC has put on that issue. Group disclosure
penalties have increased, possibly because of the higher profile
groups now have after the Citizens United decision made by the
United States Supreme Court. He said the electronic filing
system has really helped APOC staff to know who to expect
reports from and when they are due, so unfortunately APOC has
had to deal with more civil penalties for financial disclosure.
He stated that APOC's goal overall is to help filers submit
information on time by having contact with filers twice before
the filing due date.
CHAIR LYNN asked if there were any other impacts of Citizens
United.
MR. DAUPHINAIS said he thinks that because groups had different
laws applied to them under Citizens United, it brought a focus
to groups during the campaign, and APOC paid more attention to
groups as a result. Further, he suggested that people may not
have fully understood what Citizens United enabled groups to do
and still kept groups from doing. He said APOC hopes to provide
more education regarding groups to bring down the number of
civil penalties for groups. In response to the chair, he said
he would like to confer with the commission and some groups
before giving input to the legislature regarding what may or may
not make life easier for groups to work within the rules. He
said APOC believes that if the process is made clearer for
filers, then that will make APOC's job easier.
9:31:48 AM
MR. DAUPHINAIS directed attention to a slide related to
examining and comparing computer reports. He said APOC's goal
is to have better and more timely auditing, which enables staff
to contact filers and notify them of errors early enough for the
filer to amend his/her filing and avoid a complaint or a civil
penalty assessment. He said the more interest the public has in
a particular type of filer, the more APOC works to have a large
number of audits. He related that the public is extremely
interested in legislative financial disclosure reports, as well
as candidate financial disclosure reports. He said APOC can
check with the filer of the complaint to make any needed
amendments and answer questions from the public to avoid
complaints. He clarified that APOC brings less than 20 percent
of the complaints, while most are filed by members of the
public; therefore, if APOC can educate the public, then it can
avoid unnecessary complaints. He reported that as of today APOC
has 40-50 public official financial disclosure statements and
legislative disclosure statements, has audited every one of
them, has contacted the filers regarding potential errors, and
most filers have remedied any issues. The number of candidate
disclosures is low, in terms of those audited. He said APOC
typically receives candidate disclosures between 7 p.m. and 11
p.m. on the day they are due, which slows down the process.
9:34:38 AM
MR. DAUPHINAIS, in response to Chair Lynn, said a complaint is
made public as soon as it is provided to APOC staff. He added
that it is not APOC's practice to go to the media, but often the
filer of the complaint will tell others.
CHAIR LYNN said some complaints filed during an election cycle
are valid, while others are filed "just to make trouble for a
candidate and to change the results of the election." He asked
if it possible to hold the complaint until after the election
and then hear it.
MR. DAUPHINAIS responded that he wants to confer with the
Department of Law (DOL) before answering that question, but
stated that all of APOC's documents are public. He said APOC
has a process for expediting a complaint in a situation where
someone bringing a complaint thinks that immediate harm is being
done that will affect the outcome of an election. In that
situation the complaint gets brought to the attention of APOC
within 48 hours, and the commission decides if it will hear the
complaint on an expedited basis, which means it would have a
hearing within another 48 hours, or whether it will be heard on
a regular timeline, which is a 30-day window from acceptance of
the complaint to filing of a staff report.
CHAIR LYNN remarked that even when a case is heard within 48
hours, it takes time away from the candidate's campaign and
there is stress involved.
9:37:33 AM
MR. DAUPHINAIS, in response to Representative Keller, recapped
the process taken in the case of an expedited complaint. He
said this year there were four expedited complaints filed, but
"none of them passed the expedited test," so they were referred
back to the regular process. In response to a follow-up
question, he said that in the next few days he would provide the
committee with more details regarding the standard APOC sets for
expediting criteria.
9:40:35 AM
REPRESENTATIVE KREISS-TOMKINS asked Mr. Dauphinais to talk about
staff turnover.
9:41:34 AM
MR. DAUPHINAIS said he has held his current position since
February 2011. He said for the most part the turnover has been
in associated attorneys, with some turnover in paralegal
positions. He reported that since 2008, ten people have passed
through two associate attorney positions. He said there are
those that object to the term "associated attorney," citing that
only those who have qualified as attorneys can use the term
"attorney" in their job titles. Mr. Dauphinais said the title
of associate attorney is used throughout state service,
including in DOL, APOC, the Office of the Public Defender, and
the Office of Public Advocacy. He relayed that many of those
who have lasted the least amount of time in associate attorney
positions have actually been licensed attorneys, because they
appear to expect "attorney-like" work. He explained that
associate attorneys in state service are well-experienced
paralegals.
MR. DAUPHINAIS said in 2011 there was a turnover in paralegals.
In two cases it was due to spouses leaving the state for job
opportunities, and in one case a family emergency took the
person away. He said APOC has reviewed its position
descriptions and worked with personnel regarding the associate
attorney classification, revising the position description to
more aptly fit the duties of the job. He noted that many
positions have changed dramatically because of the advent of
electronic filing. He said APOC is being upfront with
candidates to let them know what to expect if they are hired and
work with people so that "what they have to deal with is
reasonable." He said APOC is not the most popular state agency
and is in a no-win situation, because when people have a
complaint filed against them, they think the commission is out
to get them, whereas those who file the complaints don't think
APOC does enough. He said that situation is difficult for some
employees to deal with for long.
9:46:10 AM
MR. DAUPHINAIS, in response to Representative Gattis, said a
complaint is considered by APOC to be valid if it meets a bar
wherein the allegation, if true, would constitute a violation of
statute or regulation. He said APOC sends out notification to
both the complainant and the respondent, and often immediately
thereafter that notification the media gets involved. He
estimated that APOC has dismissed three to five complaints. In
response to a follow-up question, he stated that if a complaint
is not accepted, APOC sends out a notification letter to both
the respondent and complainant explaining why it was rejected.
In response to the chair, he said that would be a public
document, open for public inspection, but APOC would not alert
the media.
CHAIR LYNN stated that at some point he would like to return to
the idea of holding complaints until after the election cycle.
9:49:12 AM
REPRESENTATIVE ISAACSON relayed his overall experience with APOC
has been good, and he has found the commission to be helpful.
He stated that the amount and onerous and intrusive nature of
the information required from candidates may discourage people
from participating in politics. He mentioned 2007 financial
disclosure and conflict of interest forms for local government.
He said the requirement that a candidate must disclose what
his/her children make is a deterrent to running for office, and
he asked if there is a way to address that issue in order to
protect the privacy of minors.
9:51:43 AM
MR. DAUPHINAIS said the commission, in 2011, worked to lessen
the intrusive nature of filing requirements by allowing filers
to report an income range, rather than an exact amount of
income. Regarding minors, he said he would need to review the
related statutes before offering a definitive answer; however,
he indicated that the law applies to adult children living with
the candidate rather than children under the age of majority.
9:53:40 AM
CHAIR LYNN asked why it is necessary to release the name of the
person asking the question when the question itself, as it
applies to everyone, is "the only thing that we really care
about."
MR. DAUPHINAIS said he does not know, but will find out.
CHAIR LYNN clarified that he thinks the information requested
would apply to all candidates; therefore, it would be irrelevant
which candidate asked the question.
MR. DAUPHINAIS responded that an advisory opinion is specific to
the situation, the context, and the facts presented by the
requestor. He said Chair Lynn's statement in general is true;
however, a small nuance in the facts or the situation could
change the outcome of an advisory opinion. The commission
states in its advisory opinion that "this advisory opinion is
specific to this request," although he said it can be used for
guidance in other areas. He said if someone wants to do
something that has been described in a previously approved
advisory opinion, APOC requests that the person call to ensure
that the situation is very similar.
CHAIR LYNN commented on the complicated nature of looking for
information on APOC's web site, and he opined that the process
used to be simpler. He requested that APOC's software
developers consider the matter.
MR. DAUPHINAIS said that has been brought to APOC's attention
and the matter is being considered. He related that APOC staff
will be in Juneau in February to offer two brown-bag luncheon
presentations and would be available to visit legislators in
their offices to answer questions.
9:59:29 AM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 9:59
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| APOC 120419 Biennial Report draft.pdf |
HSTA 1/22/2013 8:00:00 AM |
APOC Biennial Report |
| DOA-DeptOverview2013(01-22-13)HouseStateAffairs.pdf |
HSTA 1/22/2013 8:00:00 AM |
Department of Administration Overview |