Legislature(1993 - 1994)
04/06/1994 08:25 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 6, 1994
8:25 a.m.
TAPES
SFC-94, #59, Side 1 (250-end)
SFC-94, #59, Side 2 (end-000)
SFC-94, #61, Side 1 (000-end)
CALL TO ORDER
Senator Steve Frank, Co-chair, convened the meeting at
approximately 8:25 a.m.
PRESENT
In addition to Co-chair Frank, Senators Jacko, Rieger,
Sharp, Kelly, and Kerttula were present. Co-chair Pearce
did not attend the meeting.
ALSO ATTENDING: Jon Sherwood, and Kevin Henderson, Medical
Assistance Administrators, Division of Medical Assistance,
Department of Health & Social Services; Nancy Bear Usera,
Commissioner, Department of Administration; Tim Wilson,
Executive Director, Alaska State Council on the Arts; Loren
Rasmussen, Chief, Design, Construction Standards, Department
of Transportation & Public Facilities; Josh Fink, aide to
Senator Kelly; Sherry Goll, Lobbyist, Alaska Women's Lobby;
Mary Gay, Director, Child Support Enforcement Division,
Department of Revenue; Judith DeSpain, Deputy Executive
Director, Alaska Housing Finance Corporation, Department of
Revenue; Susan Miller, Manager, Special Projects, Alaska
Court System; Donna Page, Senior Hearing Officer, Department
of Revenue; David Skidmore, aide to Senator Frank; Jo
Fenety, aide to Senator Pearce; Fred Fisher, Jetta
Whittaker, Dana LaTour, and Mike Greany, Director,
Legislative Finance Division; aides to committee members and
other members of the legislature.
TELECONFERENCE: Mike Hostina, Deputy Ombudsman, Fairbanks;
David Rose, financial advisor to the Alaska Municipal League
Investment Pool and former chair of the Permanent Fund,
Anchorage; and Kit Duke, Facilities Manager, Administration,
Alaska Court System, Anchorage.
SUMMARY INFORMATION
CSSB 190(JUD): An Act relating to income withholding and
other methods of enforcement for orders of
support; and providing for an effective date.
The committee ADOPTED CSSB 190(FIN) work
draft "U" which incorporated amendments 1 and
2 ADOPTED in a previous meeting. Mary Gay,
Director, Child Support Enforcement Division,
Department of Revenue; Josh Fink, aide to
Senator Kelly; Mike Hostina, Deputy
Ombudsman, via teleconference Fairbanks;
Sherry Goll, Lobbyist, Alaska Women's Lobby;
Susan Miller, Manager, Special Projects,
Alaska Court System; and Donna Page, Senior
Hearing Officer, Department of Revenue, all
testified on the bill. On page 11, line 5,
the word "intentionally" was added to work
draft "U", and amendments 3, 4, 5, 6, and a
letter of intent were also ADOPTED. CSSB
190(FIN) was REPORTED OUT of committee with
individual recommendations, and new fiscal
notes for the Department of Revenue - $109.0,
and the Alaska Court System - $33.7.
SB 359: An Act relating to investment pools for
public entities; and providing for an
effective date.
SB 359 was HELD in committee. (HB 450,
companion bill to SB 359, was REPORTED OUT of
committee.)
SB 363: An Act making appropriations for capital
project matching grant funds and for capital
projects; and providing for an effective
date.
Scheduled but not heard. Rescheduled for
Saturday, April 12, 1994.
SB 366: An Act relating to medical support for
children; allowing a member of the teachers'
retirement system or the public employees'
retirement system to assign to a
Medicaid-qualifying trust the member's right
to receive a monetary benefit from the
system; relating to the effect of a
Medicaid-qualifying trust on the eligibility
of a person for Medicaid; relating to the
recovery of certain Medicaid payments from
estates and trusts; requiring persons who
receive Medicaid services to be liable for
sharing in the cost of those services to the
extent allowed under federal law and
regulations; and providing for an effective
date.
David Skidmore, aide to Senator Frank, spoke
to the bill. Jon Sherwood, Medical
Assistance Adminis-trator, Division of
Medical Assistance, Department of Health &
Social Services, answered questions regarding
the bill. Amendments 1 and 2 had been
ADOPTED in a previous meeting. Amendments 5,
6, 7, and a letter of intent were ADOPTED.
SB 366 was REPORTED OUT of committee with
individual recommendations and three fiscal
notes for the Department Health & Social
Services: Claims Processing - $130.0,
Medicaid Facility - $(550.0), and Medicaid
Non-Facility - $(799.1).
SB 369: An Act relating to the maintenance of and art
requirements for certain public buildings and
facilities and to the art in public places
fund; and providing for an effective date.
Jo Fenety, aide to Senator Pearce; Nancy Bear
Usera, Commissioner, Department of
Administration; and Loren Rasmussen, Chief,
Design, Construction Standards, Department of
Transportation & Public Facilities, testified
in support of SB 369. Kit Duke, Facilities
Manager, Administration, Alaska Court System,
testified via teleconference from Anchorage
regarding the Court System's art projects.
Tim Wilson, Executive Director, Alaska State
Council on the Arts, was opposed to the
section in SB 369 that repealed the 1 percent
for arts. Extensive discussion was had
regarding the building maintenance fund and
how moneys would be appropriated and
designated for departments/ agencies. SB 369
was HELD in committee for further discussion.
HB 450: An Act relating to investment pools for
public entities; and providing for an
effective date.
Dave Rose, financial advisor to the Alaska
Municipal League Investment Pool and former
chair of the Permanent Fund, testified via
teleconference from Anchorage. HB 450 was
REPORTED OUT of committee with a "due pass"
and a zero fiscal note for Department of
Commerce & Regional Affairs. (Companion bill
SB 359 was held in committee.)
CSSJR 36(JUD): Proposing amendments to the Constitution of
the State of Alaska requiring a runoff
election when the candidates for governor and
lieutenant governor obtaining the greatest
number of votes at the general election do
not receive more than 40 percent of the votes
cast, and changing the term of office of the
governor and the lieutenant governor.
Scheduled but not heard.
SENATE BILL NO. 359:
An Act relating to investment pools for public
entities; and providing for an effective date.
SB 359 was HELD in committee. (HB 450, companion bill to SB
359, was REPORTED OUT of committee.)
HOUSE BILL NO. 450:
An Act relating to investment pools for public
entities; and providing for an effective date.
CO-CHAIR FRANK announced that SB 359 and its companion bill,
HB 450 were before the committee. He invited David Rose to
testify via teleconference.
DAVID ROSE, financial advisor to the Alaska Municipal League
Investment Pool, and former chair of the Permanent Fund,
testified via teleconference from Anchorage. He said that
AS 37.23 empowered cities and boroughs within Alaska to be
able to pool their money and co-invest. Some reasons were
to preserve principle, enhance yield, provide liquidity, and
secure some professional funds management. Currently, there
was one pool in existence and that was the Alaska Municipal
League Investment Pool. Currently 28 cities and boroughs
belong to the pool and 19 have money currently under
investment, with a balance of approximately $32M. SB 359
and HB 450 attempted to make some technical changes in order
to enhance the yield for cities and boroughs. He assured
the committee it would not involve the state nor any funds
via a fiscal note.
Mr. Rose went on to say that the bill had three active
sections. Section 1 qualified AS 37.23.020 to permit the
purchase of floating rate securities provided there was an
annual rate reset. These floating rate securities would
allow the pool to earn additional money. Section 1 also
qualified language which permitted the purchase of "Yankee"
securities, or purchases from unrated branches of rated
banks.
Section 2 was a new section and explicitly authorized the
lending of securities provided that collateral was received.
There had been a request that the legislation specifically
authorize this although it seemed to be covered under the
prudent investor rule.
Section 3 removed a restriction that limited the amount of
bank paper that may be held at the 30 percent level. The 30
percent restriction severely restricted the pool when
investing in banks.
Mr. Rose felt the amendments were technical but allowed the
pool to increase earnings on its money.
In answer to Senator Kerttula, Mr. Rose said that the
existing legislation was created about three years ago and
the restrictions were based more on a mutual fund basis and
needed to be adjusted for the existing market.
In answer to Co-chair Frank, Mr. Rose confirmed that on page
3, line 11, those items would not be contained in the pool
portfolio.
Senator Kelly MOVED for passage of HB 450 from committee
with individual recommendations. No objection being heard,
it was REPORTED OUT of committee with a "do pass," and a
zero fiscal note for the Department of Commerce & Regional
Affairs. Co-chair Frank, Senators Sharp, Jacko, Kelly,
Rieger and Kerttula signed "do pass."
SENATE BILL NO. 366:
An Act relating to medical support for children;
allowing a member of the teachers' retirement system or
the public employees' retirement system to assign to a
Medicaid-qualifying trust the member's right to receive
a monetary benefit from the system; relating to the
effect of a Medicaid-qualifying trust on the
eligibility of a person for Medicaid; relating to the
recovery of certain Medicaid payments from estates and
trusts; requiring persons who receive Medicaid services
to be liable for sharing in the cost of those services
to the extent allowed under federal law and
regulations; and providing for an effective date.
Co-chair Frank announced that SB 366 was before the
committee. He noted that amendments 1 and 2 had previously
been ADOPTED in a prior meeting. He invited David Skidmore,
his aide, to speak to the bill and several new amendments.
DAVID SKIDMORE said that amendment 5 created a new section
imposing a co-payment requirement for inpatient hospital
services of $50 a day, up to a maximum of $200. He said
that was the same co-payment policy under Alaska's general
relief medical program.
Senator Sharp MOVED amendment 5. No objection being heard,
it was ADOPTED.
Senator Rieger said he would like to propose amendment 6 but
felt it did not exactly mirror the letter of intent. In
answer to Co-chair Frank, Senator Rieger said intent
language read "to the maximum extent allowed under federal
law." Co-chair Frank supported the amendment and felt it
was not inconsistent with the intent language.
JON SHERWOOD, Medical Assistance Administrator, Division of
Medical Assistance, Department of Health & Social Services,
said that seeking a waiver would be permissible under
federal law. He felt the department would not have a
problem with either the letter of intent or amendment 6. He
said he would let the committee know this afternoon if the
department had received any waivers.
Senator Rieger MOVED amendment 6. Co-chair Frank suggested
that language be added requiring a report to the
legislature. Senator Rieger said it was his intent to
reduce reports to the legislature. Co-chair Frank withdrew
his proposed language. No further objection being heard,
amendment 6 was ADOPTED.
Senator Rieger said that there was a need on the part of the
department to use discretion in regard to waivers. He felt
the intent language would be important.
Senator Rieger MOVED amendment 7. He said the utilization
review the department used needed to be evaluated and this
amendment authorized that. It also gave a case manager
authorization to approve optional services without following
the priority listing in order to design a more cost
effective program.
Mr. Sherwood said that presently case management ideas were
being considered and evaluated. Any case management would
require case managers. Senator Rieger felt that the state
would be far ahead if it put $1M of general funds into fund
case management and, in turn, received $3M from the feds.
Mr. Sherwood agreed there was a 75 percent match when
professional case management was used.
End SFC-93 #59, Side 1
Begin SFC-93 #59, Side 2
Discussion was had by Senators Sharp, Rieger, and Co-chair
Frank regarding pre-authorization, the priority listing and
optional services. Senator Rieger informed the committee
that the legislature did not determine which items were on
the priority list, but was decided by the department after
budget funding. In answer to Senator Sharp, Senator Rieger
doubted there was any integrity to the priority list and
money could be saved by being able to choose a less
expensive service that appeared lower on the priority list.
Hearing no objection, amendment 7 was ADOPTED.
Senator Sharp MOVED the letter of intent adding language
that said "a report shall be made to include a listing of
waivers sought from the federal government and an indication
of those granted." No objection being heard, the letter of
intent as amended was ADOPTED.
Senator Sharp MOVED for passage of CSSB 366(FIN) as amended
from committee with individual recommendations. No
objection being heard, it was REPORTED OUT of committee with
individual recommendations, a zero fiscal note for the
Department of Commerce & Economic Development, and fiscal
notes for the Department of Health & Social Services as
follows: Claims Processing-$130.0, Medicaid Facilities-
$(550.0), and Medicaid Non-facilities-$(799.1). Co-chair
Frank and Senator Rieger signed "do pass." Senators Sharp,
Jacko, Kelly and Kerttula signed "no recommendation."
SENATE BILL NO. 369:
An Act relating to the maintenance of and art
requirements for certain public buildings and
facilities and to the art in public places fund; and
providing for an effective date.
Co-chair Frank invited Jo Fenety, aide to Co-chair Pearce,
to speak to the bill. JO FENETY announced that Kit Duke,
Facilities Manager, Administration, Alaska Court System,
would be testifying via teleconference from Anchorage.
In answer to Co-chair Frank, Ms. Fenety explained that the
only change made in CSSB 369(FIN) was the addition of two
non-voting members to the review committee.
Ms. Fenety explained SB 369 as a plan to get a handle on the
huge problem of deferred maintenance of state-owned
buildings. She said the word "huge" was used not only to
get the committee's attention but to impress upon them the
consequences of the continued failure to act. The state
owns 1,717 buildings, valued at $2.3 billion and their
average age is 20.7 years. For comparison, she added the
buildings' value was equal to one-fifth of the permanent
fund.
Through the years, and for a variety of reasons, the state
had chosen to put off the inevitable when it came to taking
care of the buildings owned. Budgetary restraints or other
priorities had forced operating appropriations for routine
maintenance to the bottom of the list and, in some cases,
off the list entirely. Today, the state had a documented
maintenance backlog of about $251 million, or more than 10
percent of the assessed value. Through the state's failure
to perform scheduled routine maintenance, small problems had
become large problems. The leaking roof that could have
been fixed for a few thousand dollars in an operating budget
had become a roof replacement project costing a million
dollars or more in the capital budget.
She went on to say that Co-chair Pearce believed it was the
state's duty to preserve and protect the state's assets, and
in this case, with this bill, it was public buildings. She
pointed out that SB 369 did not ask for the $251 million
estimated to fix the whole problem, nor did it ask for a
large bureaucracy. Instead, it asked for the first step in
a systematic plan by creating the Facilities Major
Maintenance Fund. Into that fund would go 1 percent of all
construction costs on a one-time basis. This bill also
repealed the statutes effecting the 1 percent for art
program.
Ms. Fenety justified this rationale by saying when the
buildings were in need of repair, the state could not afford
the luxury of art. It was better to fix the leaking roof.
She noted that SB 369 was the vehicle to accept proceeds
from general obligation and revenue bonds that were also
slated to go into this fund. Federal funds, additional
appropriations, if available, interest on the fund, and an
annual maintenance assessment fee would also go into this
fund.
Ms. Fenety went on to explain the annual maintenance
assessment fee would be an amount charged to all state
agencies that occupy state-owned buildings. This assessment
fee established annually by the committee would help link
the perceived need for space by a state agency to the real
cost for occupying that space. The University of Alaska
buildings were included in the provisions of this bill, but
all provisions were parallel and separate. Schools and
international airport facilities were not included in this
bill.
She pointed out that SB 369 had to do with buildings, not
roads, ports, or docks. She felt that the concepts
presented in the bill were no more complicated than what
would be done to protect family-owned assets. It made
sense to forego a luxury in order to preserve a family home,
and even though everything could not be fixed at once, a
plan would be created to incorporate repairs. That idea was
the substance of SB 369.
In answer to Senator Kelly, Ms. Fenety said that the
University's Major Maintenance Fund would be totally
separate from the state's Major Maintenance Fund and would
not receive any assessed money from state buildings. She
went on to say that the University wanted to be included in
SB 369 but requested a separate system within the bill.
Co-chair Frank confirmed that at the time of new
construction, one percent of construction costs would be put
into the fund. He then asked how the appropriations would
come out of the fund. Ms. Fenety said a review committee
would prioritize and recommend annually, maintenance
projects to be funded. She referred the committee to Sec.
35.50.040 that explained the State Building Major
Maintenance Review Committee would be established in the
Department of Administration and the Commissioner of that
department would be the chair. The Commissioner of the
Department of Transportation & Public Facilities (DOT&PF)
would be a permanent member of the Committee, and three
other department heads, appointed by the Governor, would
serve two-year rotating terms. CSSB 369(FIN) added two non-
voting members, the administrative director of the Alaska
Court System, and the executive director of the Legislative
Affairs Agency.
Co-chair Frank then confirmed that the Major Maintenance
assessment fee would be determined by the committee each
year by the square feet occupied. Ms. Fenety agreed that
the rate would be established by the committee which was in
addition to the 1 percent of cost at time of construction.
Co-chair Frank asked how that compared with what was
happening now. Ms. Fenety asked Nancy Bear Usera,
Commissioner, Department of Administration, and Kit Duke,
Facilities Manager, Administration, Alaska Court System, via
teleconference from Anchorage, to speak to that question.
She also referred the committee to a worksheet dated 4/5/94
(Attachment A, copy on file) showing the 1995 Capital budget
and agency requests as best determined compared to the
Governor's request. Using the Department of Safety as an
example, it had estimated $10M for capital request even
though nothing had showed up in their budget, and records
showed an additional $59M of deferred maintenance backlog.
Her point was that while there were known building
maintenance needs, they were not being taken care of in the
budget.
In answer to a prior request by Co-chair Frank, Ms. Fenety
referred to a memo from the Department of Military & Veteran
Affairs dated March 30, 1994 (Attachment B, copy on file)
showing operating shortfalls of $399,300 over the past four
years.
Again, Co-chair Frank asked how SB 369 related to the
present process of maintenance on state buildings. He asked
if DOT&PF was charged with the responsibility of maintenance
except for the University of Alaska. Ms. Fenety agreed that
DOT&PF was charged with the responsibility of maintenance,
but in reality, each department or agency was responsible
for budgeting its own maintenance.
Co-chair Frank invited Loren Rasmussen, Chief, Design,
Construction Standards, DOT&PF, to join the committee at the
table.
LOREN RASMUSSEN explained there was no integrated process
for maintaining buildings. Most of the money obtained to do
major repairs came through budgets of individual agencies.
There was always a contest between operating and
maintenance, and maintenance seemed to take the back seat.
If an agency needed a program funded, generally speaking,
maintenance would be deferred. These deferred maintenance
items accumulated so that at some point, they become
critical or the buildings were unusable. At that point,
large amounts needed to be funded through the CIP process.
He also pointed out that it was a budgetary problem. Some
agencies were better than others at getting their budgets
approved. He felt SB 369 was a good first step in creating
a new process to begin maintenance on state buildings.
Co-chair Frank asked how much of the maintenance money in
DOT&PF was allotted for building maintenance not including
operational expenses like heat and lights. Mr. Rasmussen
said he did not know that amount. Co-chair Frank felt a
clear picture of what the state was now spending was
necessary in order to compare the old process with the new
one created in SB 369. He wanted to know what existing
revenues could be redirected to this fund for the important
purpose of maintenance. He requested that Mr. Rasmussen
report to the committee with at least an estimate of the
amount currently being spent on building maintenance. He
asked if there was any money elsewhere within the individual
agencies in the operating budget available for maintenance.
Mr. Rasmussen said that Co-chair Frank had keyed into one of
the major problems of building maintenance. Some agencies
or departments do very well at maintaining their buildings
and others (because of the buildings, their budget, or
location in outlying areas) found it very difficult.
Senator Rieger asked if the agencies/departments that had
taken good care of their buildings would feel resentful
about paying an assessment that might bail out another
department that had done poorly. He felt there should be
some kind of incentive for those departments that had done
well. Mr. Rasmussen agreed and said this legislation should
provide a way to gear the assessment in relationship to how
the building was being maintained. He also noted that there
would never be a completely level playing field. There also
could be different rates set for warehouses, courthouses,
etc. but details had not been worked out as yet.
Senator Rieger blamed the legislature in part because
deferred maintenance was a way to make certain budgets fit
and he could predict that happening to this fund also. He
felt the legislature was trying to resolve a management
issue by revising statutes. He felt DOT&PF or the Governor
should enforce management responsibility for building
maintenance rather than passing new legislation.
Mr. Rasmussen said that there were state models to follow
such as the state equipment fleet and it had been put in
statute. Senator Sharp noted that the Governor had
attempted an executive order to set up a separate building
group last year and it did not pass. Mr. Rasmussen
reiterated that SB 369 was a good first step even though he
agreed that it would not happen instantaneously. The fund
also could be funded by GO bonds beside the one percent
construction assessment.
Co-chair Frank voiced his preference for taking care of
existing buildings by using existing levels of
appropriation. His concern was that the committee would ask
for x-number of dollars to take care of buildings from the
budget and that amount of money would not be there. He
wanted to know how the bill language could be strengthened
so moneys could be allocated from existing levels of
appropriation.
Mr. Rasmussen cited the process that was being implemented
with the Americans with a Disabilities Act as an example of
the fund in this bill. He said it was a very complex
process and the state needed to get buildings up to
accessibility levels, etc. A fund, an oversight committee,
and a prioritizing system was in place to inventory and
prioritize the buildings that needed work. This process had
not been completely successful but it was a start towards
addressing the problem and matching moneys available to the
program. He reiterated that money was not available for
complete ADA compliance but it was a good first step toward
compliance.
Senator Rieger observed that the agencies that took the
worst care of their buildings would be rewarded because they
would be placed higher on the priority list. He said that
happened when schools buildings were prioritized. Mr.
Rasmussen felt the opposite was true. He said the agencies
leasing from the equipment fleet that had not taken care of
their vehicles were charged higher rates to cover
maintenance costs.
Co-chair Frank asked if a rate per square foot had been
proposed. Ms. Fenety said there was no fiscal note and the
committee would have a year to come up with such figures.
Co-chair Frank thought he had heard 2 percent of a building
cost would be needed to cover maintenance costs. He also
asked why this was put under the Department of
Administration.
Ms. Fenety answered that the reason the responsibility was
placed under the Department of Administration was because
there was a "handshake" relationship between building
occupancy in general and leasing operations, and this was
more of a management function than maintenance. In answer
to Co-chair Frank, Ms. Usera said that DOT&PF would still be
contracted to do the work. She explained that there was a
desire to model a centralized policy development and the
responsibility of the Department of Administration was to
provide government services with a centralized approach.
Two years ago there had been much work done to accomplish a
building maintenance program. It was apparent that having
the separation of responsibilities of leasing and
maintenance functions and no centralized policy made it a
very haphazard process. She envisioned a process where
there was an inventory of work needed, and a line drawn
depending on what funding was available. At present, every
department dealt with deferred maintenance differently. She
reiterated that the Department of Administration would form
a committee to inventory, prioritize, and then direct DOT&PF
to do the work depending upon funding available.
In answer to Senator Sharp, Ms. Usera said the extent of
maintenance by the state depended upon the nature of the
lease.
Co-chair Frank asked if this would be handled with a charge-
back system as was used for computers, highway working
capital, etc. Ms. Usera said it would be a contribution
based on square footage that would be associated with
certain departments. This process would make the department
conscious of the space it was using since there would be a
cost associated with it. Anytime there was built-in
management accountability, it was helpful. She agreed that
the money would go into the fund and would not necessarily
be a direct pay-back for services. It would also be
possible that some departments could benefit more than their
assessment if their needs were greater.
Co-chair Frank asked how money would be pulled out of all
the budgets already allocated for maintenance and put in
this fund. Ms. Usera said there were two ways to fund it,
maintenance money associated with the operating budget, and
deferred maintenance as a capital appropriation. What she
envisioned was that the money appropriated through the
capital process for deferred maintenance would be put in
this fund. There would be no individual appropriations for
the Pioneer Homes or for a particular pet project. It would
be the Administration's decision to fund the most important
projects. Co-chair Frank said he must have misunderstood
the bill. He thought each agency would have a per square
foot charge within their operating budget that would be paid
into the fund. Ms. Usera said it was her understanding
there were three ways money could be appropriated into the
fund. One of the funding mechanisms would be an assessment
fee. The other two options would be bonding, and deferral
of the one percent from new construction.
Co-chair Frank asked Ms. Usera where the money comes from at
present. Ms. Usera suggested that the money being
appropriated for the Pioneer Homed deferred maintenance, for
example, instead of a lump sum based on a list of projects,
would be converted into a formula that would go into the
fund. Co-chair Frank affirmed then that the only purpose of
the assessment would be to determine the amount of money the
legislature would appropriate either by bonding or by
another mechanism into the maintenance fund.
End SFC-93 #59, Side 2
Begin SFC-93 #61, Side 1
Ms. Usera went on to explain that the fiscal note for the
Department of Administration would cover assessment of
buildings and those projects would be prioritized. A
determination of the optimal formula after this evaluation
would be submitted to the legislature. The legislature
would make the decision as to the appropriate funding level.
For example, if $2.25 square foot assessment was too high
for the budget and it approved $.75 a square foot instead,
then that amount would go into the fund and would be spent
on the top priority projects.
Co-chair Frank said he was not opposed to the idea of a fund
but did not see the mechanism that would be used to pull the
money out of the budget when money was already being
allocated for maintenance in the budget.
Ms. Fenety said that currently the allocation of money for
building maintenance did exist. In the operating budget,
beside the normal dump the trash maintenance, there was a
maintenance item for trying to keep up the building, such as
fixing the leaks, etc. That money would come into the fund.
She said maintenance was also allotted in the capital
budget. Co-chair Frank asked her what mechanism in the
budgetary process would be used to pull out the maintenance
item from individual departments and the large amount from
the Department of Transportation & Public Facilities. Ms.
Fenety said that she envisioned the same mechanism as used
in the highway working capital fund. Various departments
previously owned their own vehicles. Now an assessed rate
was put in individual department budgets for leasing
vehicles.
Co-chair Frank said that was exactly his question - how was
the money going to be taken out budgetarily and placed in
the fund? He said he did not see any mechanism in SB 369.
Ms. Usera said that if this bill passed, it would be
instructional to the Office of Management & Budget to build
their budget or the governor's budget differently so it
could scoop up that deferred maintenance money that was
currently in various places in the budget. Co-chair Frank
asked where that provision was in the bill. Ms. Usera said
this bill would establish the building maintenance fund and
the appropriation process would be used to finance it. She
said the bill did not specifically mandate this but as in
the charge-back system, if there was a mechanism, the
budgets would be built on that system.
Co-chair Frank requested the Department of Administration or
Co-chair Pearce's office to create language that would
require the Governor's budget to pull out that money for the
fund. Ms. Usera agreed to do that but she wanted the
committee to understand the power of appropriation. She
said if the deferred maintenance fund was established,
priorities would be set, and the Department of
Administration would pay for deferred maintenance. If a
department was low on the priority list and there was not
enough money, for example, to fund a need in the Pioneer
Home in Fairbanks, and that request was put in as an
appropriation specific to that project, she did not see how
the Governor or DOA could do anything to prohibit that
request short of vetoing it. She saw this bill as a
partnership between the executive and legislature branches
for a make-sense management approach on how deferred
maintenance was performed and the process associated with
the appropriations and the funds.
Co-chair Frank wanted to confirm that the money already in
the budget could be identified rather than just pulling an
amount out of DOT&PF's budget. Ms. Usera agreed to provide
figures to Co-chair Frank regarding deferred maintenance,
annual maintenance, heat & lights, etc.
KIT DUKE, Facilities Manager, Administration, Alaska Court
System, via teleconference from Anchorage, said that some of
the information Co-chair Frank was requesting was available
in the FY93 budget because of research done for that budget.
She said an the executive branch budget had been broken down
into the operating portion and annual maintenance, and it
showed how much was spent on major maintenance. She
asserted that this money needed to be collected over a
period of time so that the life of major components of a
building could be lengthened, such as a roof, or electrical
system. One of the mechanisms that would exist if SB 359
was passed was the non-lapsing feature of the fund. Every
year, an assessment of so many cents a square foot would go
into that fund so when major maintenance projects needed to
be done, the funds would be available. She felt this was
the important component in preventing deferred maintenance
in the future. The fourth component looked at how much
money was in the capital budget every year which varied
widely and went to many different agencies. She thought she
could provide a good picture of where the money was in the
budget. Every agency did not get sufficient money to do all
four of those things. Co-chair Frank agreed with that
statement.
Co-chair Frank asked Mike Greany, Legislative Finance
Division, to work with DOA & DOT&PF to provide real numbers
in those areas discussed.
Ms. Duke asked to speak to Senator Rieger's concern about
how agencies were going to feel about being assessed. She
agreed that rates should be set based on how well the
departments maintained their buildings in the past, so the
rate structure would reward people that took good care of
their buildings. She felt it was important to take that
into consideration. Co-chair Frank asked if anything in the
bill addressed that situation. Ms. Fenety said the
committee would be responsible for the assessed rate each
year. The bill did not define how the rate was established.
Co-chair Frank asked for language that would consider the
department's maintenance record.
Senator Kerttula warned about a trap that could happen. If
an assessed fee was set too high, the department could rent
more reasonably in the private sector than from the state.
He said it was already happening with vehicle rentals. Co-
chair Frank appreciated the insight and looked forward to
hearing from the departments.
TIM WILSON, Executive Director, Alaska State Council on the
Arts, said he was not opposed to SB 359 in its entirety but
to Sections 4 and 5 that appealed the 1 percent for art
program. He said he was sympathetic to the enormous job of
maintaining state buildings, but he felt repealing the 1
percent for arts would not be a big help. Last year's
capital budget generated less than $300,000 for art
projects, all of which were in public schools and would be
exempt from this bill. He could speak at length to the
importance of art and would not categorize public art as a
luxury. He defined public art as a symbolic representation
of who we were as Alaskans and that it helped us understand
our place in the world in which we live, work and study. In
recent years, the vast majority of public art had been in
schools. Currently, the state was not building public
buildings. The Arts Council believed the 1 percent for art
was a fiscally responsible program. When the state had a
robust budget and could afford to build buildings, then a
modest portion of construction costs was given to developing
public art. When the state could not afford to build
buildings, no money was put into the percent for art
program. Art would become and remain a permanent part of
the legacy of that building. He felt it was an important
program and would hate to see it repealed.
Co-chair Frank asked if there was a move to change the one
percent to one-half percent. Mr. Wilson said in rural
schools the percent was one-half and one percent in urban
areas. He said HB 311 would repeal the one percent for arts
but it had remained in House Finance. In answer to Co-chair
Frank, Mr. Wilson said that under current law any major
renovation project more than $250,000 would be eligible for
the 1 percent for art program. Co-chair Frank asked for a
report on total money spent on public art over the last few
years. Mr. Wilson said he did not have that information.
Ms. Fenety said that she had access to that information for
Co-chair Frank.
Senator Sharp asked if $450,000 had been allotted to art
from the Anchorage Court building project. Mr. Wilson said
that it was one percent of the construction costs but he
thought the court system was exempt from the art program.
Kit Duke, Facilities Manager, Administration, Alaska Court
System, via teleconference from Anchorage, said even though
the Courts had not gone through the State Council on the
Arts, one percent of the construction value of the project
had been set aside for public art and that equated to about
$350,000. In answer to Senator Sharp, she said she did not
know if it was true that the Court System was exempt from
the 1 percent for arts program. She understood that when
the Court System did a project one percent would be set
aside.
Co-chair Frank asked Ms. Fenety to provide the committee
with information about where the 1 percent for art applied.
Senator Kelly asked if the purpose of SB 369 was to shift
the 1 percent currently spent on art to the maintenance
budget. He suggested instead that the arts program be
suspended until the state caught up on its maintenance
program. Some members of the committee commented it would
take many years for that to happen.
Ms. Fenety said Legislative Finance reported $1.5M had been
spent on public art since the inception of the program. The
committee suggested that some public art was budgeted and
paid for under special projects.
Co-chair Frank announced that SB 369 would be HELD in
committee. Senator Kelly asked the bill sponsor to consider
suspending the public art project for x-number of years
rather than repealing it.
At this time the committee took a short recess. Due to a
recording machine malfunction, the next part of the meeting
was not recorded and the following minutes were done with
notes.
CS FOR SENATE BILL NO. 190(JUD):
An Act relating to income withholding and other methods
of enforcement for orders of support; and providing for
an effective date.
Co-chair Frank announced that CSSB 190(FIN) work draft "U"
was before the committee which incorporated previously
ADOPTED in the March 30, 1994 meeting.
Josh Fink, aide to Senator Kelly, spoke to amendment 3 which
imposed a $5 fee instead of $1. Senator Kelly MOVED for
adoption of amendment 3. No objection having been raised,
the amendment was ADOPTED for incorporation within a Senate
Finance Committee Substitute for the bill.
Mr. Fink, spoke to amendment 4 which would require the
agency to immediately return overpayments to the obligator,
and the obligee would be liable to the state for any amount
overpaid.
MARY GAY, Director, Child Support Enforcement Division,
Department of Revenue, came before the committee and asked
that on page 4, line 25, the words "within five working
days" be changed to "within fifteen working days." She felt
that five days was not an adequate amount of time for the
agency to respond. The committee agreed to change "five" to
"fifteen." Senator Kelly MOVED for adoption of amendment 4
as amended. No objection having been raised, amendment 4 as
amended was ADOPTED for incorporation within a Senate
Finance Committee Substitute for the bill.
Mr. Fink spoke to amendment 5 which gave credit to the
obligor for medical and dental insurance, and educational
payments towards child support payments. He also noted that
prior to January 1992, adjustments were not made in child
support court orders for those payments.
MIKE HOSTINA, Deputy Ombudsman, testified, via
teleconference from Fairbanks, that their office had
received various complaints regarding this issue, especially
when health insurance payments were increased and court
orders had not made provisions for any adjustment.
SHERRY GOLL, Lobbyist, Alaska Women's Lobby, testified in
opposition to Amendment 5. She said that child support
orders were reviewed fairly frequently and she did not agree
that the provisions regarding the court in amendment 5
should be in state statutes.
SUSAN MILLER, Manager, Special Projects, Alaska Court
System, said that as early as tomorrow there could be a
court decision that would effect provisions in Amendment 5.
She was also opposed to the provisions in the amendment that
applied to the court. Discussion was had by Senators Kelly,
Sharp, Ms. Miller, Mr. Hostina, and Donna Page, Senior
Hearing Officer, Department of Revenue, regarding the court
and agency responsibilities as outlined in amendment 5.
The committee agreed to amend amendment 5 by removing all
reference to the courts. The words "and consistent with"
were added to Section 23 in amendment 5. (These words were
found to be redundant as legal services advised the
committee that the words "to the extent of" already found in
the amendment took care of the concern that the credit would
be consistent with the percent of the credit as allowed in
the child support order.)
Senator Kelly MOVED for adoption of amendment 5 as amended.
No objection having been raised, amendment 5 as amended was
ADOPTED for incorporation within a Senate Finance Committee
Substitute for the bill.
DONNA PAGE, Senior Hearing Officer, Department of Revenue,
said the Child Support Enforcement Division had requested
amendment 6 because there were situations where children
were given a monthly stipend because the obligor was
disabled and then his social security payments might be
attached for child support. When the child support order
was computed, it was not taken into consideration that the
children were already being taken care, for example, by a
social security payment. This amendment would require the
agency to take into consideration the fact that the
child(ren) was already being taken care of and the obligor
would not have his/her wages attached.
Senator Jacko MOVED for adoption of amendment 6. No
objection having been raised, amendment 6 was ADOPTED for
incorporation within a Senate Finance Committee Substitute
for the bill.
Co-chair Frank raised the question regarding Section 26 that
if a person would fail to honor a child support order they
would be liable to the obligee in an amount equal to 100
percent of the amount ordered withheld. He felt that was
excessive especially if it was an unintentional error.
Discussion was had by Mary Gay, Co-chair Frank, and Senator
Sharp regarding the penalty. The word "intentionally" was
added to Section 26 after the words "of the state that" as
amendment 7. No objection having been raised, amendment 7
was ADOPTED for incorporation within a Senate Finance
Committee Substitute for the bill.
Ms. Gay reiterated her concern that this bill pass this
session because of federal regulations.
Senator Sharp MOVED for passage of CSSB 190(FIN) as amended
from committee with individual recommendations. No
objections having been raised, CSSB 190(FIN) as amended was
REPORTED OUT of committee with individual recommendations,
and a zero fiscal note for the Alaska Court System, and a
fiscal note for the Department of Revenue in the amount of
$109.0. Co-chair Frank signed "do pass." Senators Jacko,
Rieger, and Sharp signed "no recommendation."
CS FOR SENATE JOINT RESOLUTION NO. 36(JUD):
Proposing amendments to the Constitution of the State
of Alaska requiring a runoff election when the
candidates for governor and lieutenant governor
obtaining the greatest number of votes at the general
election do not receive more than 40 percent of the
votes cast, and changing the term of office of the
governor and the lieutenant governor.
Scheduled but not heard.
SENATE BILL NO. 363:
An Act making appropriations for capital project
matching grant funds and for capital projects; and
providing for an effective date.
Scheduled but not heard. Rescheduled for April 12, 1994.
ADJOURNMENT
The meeting was adjourned at approximately 10:08 a.m.
| Document Name | Date/Time | Subjects |
|---|