Legislature(1999 - 2000)
02/23/2000 09:02 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
February 23, 2000
9:02 AM
TAPES
SFC-00 # 35, Side A and Side B
36, Side A
CALL TO ORDER
Co-Chair Sean Parnell convened the meeting at approximately
9:02 AM.
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,
Senator Al Adams, Senator Dave Donley, Senator Lyda Green,
Senator Loren Leman, Senator Randy Phillips and Senator Gary
Wilken.
Also Attending: ALISON ELGEE, Deputy Commissioner,
Department of Administration; DAN SPENCER, Director,
Division of Administrative Services, Department of
Administration; KEITH GERKIN, Architect, Facilities Section,
Division of General Services, Department of Administration;
YVONNE CHASE, Director, Division of Early Development,
Department of Education and Early Development; EDDY JEANS,
Manager, School Finance and Facilities Section, Education
Support Services, Department of Education and Early
Development; JANET CLARKE, Director, Division of
Administrative Services, Department of Health and Social
Services.
Attending via Teleconference: From Anchorage: MARLA
GREENSTEIN, Executive Director, Alaska Commission on
Judicial Conduct, Alaska Court System; BRANT MCGEE, Public
Advocate, Office of Public Advocacy, Department of
Administration; BARBARA BRINK, Director, Public Defender
Agency, Department of Administration.
SUMMARY INFORMATION
SB 250-APPROPRIATIONS: CAPITAL/SUPP/REAPPROP
The Committee heard from the Alaska Court System, the
Department of Administration and the Department of Education
and Early Development about items requiring a supplemental
appropriation. The bill was held.
SENATE BILL NO. 250
"An Act making and amending capital, supplemental, and
other appropriations and reappropriations; making a
reappropriation under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; making appropriations to capitalize
funds; ratifying certain expenditures; and providing
for an effective date."
ALASKA COURT SYSTEM
Alaska Commission on Judicial Conduct - $18,917.80
MARLA GREENSTEIN, Executive Director, Alaska Commission on
Judicial Conduct, Alaska Court System, testified via
teleconference from Anchorage. She explained the Commission
is charged with the responsibility of enforcing the code of
judicial conduct, which is the code of ethics for judges.
She noted the limited budget provided to the organization
and the occasional need for additional funds when a serious
matter arises.
Ms. Greenstein spoke to the total cost of attorney fees of
$28,917.80 but pointed out that the Commission is able to
apply $10,000 from the previous year's appropriation to the
balance. She explained this debt is owed to one attorney,
most of which is to cover the costs of one matter and the
remainder is to cover costs of a matter from the previous
year but argued before the Alaska Supreme Court in July
1999. She noted the Commission is still awaiting a decision
in that case.
Senator Donley asked for the specifics of the two matters.
Ms. Greenstein replied that the matter before the Supreme
Court involves an administrative hiring situation in which
the Commission determined that Karl Johnstone failed to
follow proper hiring procedures in selecting a coroner for
Anchorage. The Commission found the action to be an ethics
violation and recommended a public sanction to the Alaska
Supreme Court, according to Ms. Greenstein.
Ms. Greenstein then told the Committee that the second
matter is currently in the "probable cause" stage, which
means the specific details are not yet public information.
She was able to provide a generalized account of a judge's
action regarding a court proceeding.
Senator Donley asked the amount of disciplinary actions that
were not made public. Ms. Greenstein replied that no public
sanctions where given last year out of six cases where
disciplinary action was taken.
Senator Donley wanted detail on how the commissioners voted
on the issue of whether to make the sanctions public. He
asserted that the Commission is comprised of three judges
and three lawyers and only three members of the public. He
compared this makeup to that of the Legislative Ethics
Committee that has a majority of non-legislative members. He
wanted to know if the other members voted down the public
members of the Commission.
Ms. Greenstein replied that she would provide vote sheets.
She noted however that Senator Donley's concern did not seem
to be the case because most votes are unanimous.
DEPARTMENT OF ADMINISTRATION
Leases - $891,200 general funds
DAN SPENCER, Director, Division of Administrative Services,
Department of Administration testified about this request
for additional funds for the leasing program, which he
stated has been historically short-funded. He referred to a
memo he authored that identified the original reductions and
the savings the department has realized. He noted that this
request is less than the supplemental request of $1 million
needed the previous fiscal year.
Co-Chair Torgerson asked for identification of the savings
in moving state offices from the Frontier Building to the
Atwood Building in Anchorage.
KEITH GERKIN, Architect, Facilities Section, Division of
General Services, Department of Administration explained how
most of the move from the Frontier building into the Atwood
building occurred the previous year. He noted that the
Department of Health and Social Services negotiated a
reduced rent lease with the Frontier Building manager and
would remain in that location.
Senator Wilken noted there is a questionable $180,000
transfer that the Department of Administration Budget
Subcommittee was currently examining. He said a report would
be made to the full Committee. He added that beginning in FY
02, the savings of the renegotiations with the Frontier
Building would appear. His figures show the cost per foot to
be lowered from $3.30 to $1.80.
Co-Chair Parnell noted that the claim was made that the
legislature short-funded leases, yet the Department of
Administration transferred approximately $184,000
appropriated for leases into administration areas.
Office of Public Advocacy (OPA) - $508,800 general funds
BRANT MCGEE, Director, Office of Public Advocacy, Department
of Administration testified via teleconference from
Anchorage that the need is caused by a dramatic increase in
caseloads, particularly with children services issues. He
noted that the legislature has consistently funded below the
requested amount because of the inability to determine
caseloads.
Senator Phillips asked what was the cause of the increased
caseload. Mr. McGee attributed it to the increase of
children in need of aid situations.
Senator Phillips then asked if the perpetrators' permanent
fund dividends were withheld. Mr. McGee spoke of the
Criminal Rule 39 that applies to dividend collections for
indigent defendants noting there is no withholding allowance
for civil cases.
Senator Phillips asked if it was possible to garnish
dividends to cover OPA costs. Mr. McGee said it was possible
but that it would take legislative action.
Senator Phillips commented that he was tired of the OPA
supplemental requests year after year and suggested that the
Legal Services Corporation pay.
Senator P. Kelly questioned whether using the permanent fund
dividends would be feasible, quoting the "robbing Peter to
pay Paul" parable. He surmised that the dividends are
already garnished from the parents at some point to cover
other state services or to pay child support.
Senator Donley asked if there was data showing the number of
meritorious cases. Senator P. Kelly answered that public
policy decisions were made by the legislature to change
laws, which resulted in increased caseloads. Another factor,
he stated were the additional frontline social workers hired
to fill the need at that level. He stressed that there would
always be some dispute over the merit of the charges made in
these cases but did not know that there was an increase in
the number of false charges.
Senator Donley expressed a desire to look into the matter of
false accusations. He stressed that while the legislature
has made a major effort with child protection, he felt it is
important to find out the percentages of cases where the
court rules there are legitimate findings of child abuse. He
felt this would be a measurement of the success of the child
protection program. Senator P. Kelly agreed it would be a
good performance measure.
Senator Wilken added that the OPA budget had increased 30
percent over the last five years and was caseload driven.
Senator Donley asked what was the average hourly rate paid
to the attorneys contracted. Mr. McGee listed the amounts as
$70-80 per hour in urban areas and $100 in rural areas where
the agency has no bargaining power. He noted the lower than
average costs were possible because the agency is able to
pay the contractors on time, unlike other clients. He
stressed that is the only advantage the agency has in the
marketplace.
Senator Donley commented that the agency does a good job at
keeping the attorney's fees reasonable to protect the
state's most valuable assets: the children. He pointed out
the irony of the Supreme Court approval of $275 per hour to
protect prisoners. He felt the court had its priorities
backwards.
Co-Chair Parnell referred to the appropriation to OPA for
the Balloon Project to move children into permanent homes.
He asked if the funds came through in FY 00. Mr. McGee
explained the two-year program noting that the funding
includes both contractual services and personal services. He
stressed the agency's dual responsibility in that it is
appointed guardian ad litum in every case, but also is
responsible for obtaining contractual representation for
some parents. He explained that some parent's interests
often differ in abuse cases with one parent being the abuser
and the other parent who may be innocent. He noted that the
"innocent" parent is also entitled to representation under
statute.
Co-Chair Parnell noted Senator Donley's request for
information to show how effective the additional
representation has been. Co-Chair Parnell also noted that
the intent of the Balloon Project is to reduce costs over
the next several years because fewer state employees would
be needed with the decreased caseloads.
Co-Chair Parnell asked if the witness had data on the
validity of the charges filed. Mr. McGee replied the best
way to determine this would be to examine the number of
cases where the state's petition is granted and the court
finds probable cause that the child was subjected to abuse
or neglect.
Senator Leman did not quarrel with the hourly rates but
wanted to know if the agency actively audited whether the
claimed hours were actually worked. Mr. McGee affirmed and
explained that he and two accounting technicians perform
reviews on each bill received and that they investigate
whenever there was question. While most of the charges are
legitimate, part of the success in this procedure, he
surmised is letting the contractors know that they will be
reviewed. He added that the agency saves money and obtains
better service by using a guardian ad litum rather than an
attorney in most cases.
Senator Leman suggested sharing that process with the
Department of Law, commenting that the department has not
been managing costs as well as he would like.
Co-Chair Parnell commented that "the other edge of the
sword" was that many talented private attorneys no longer do
this type of work because the private fees are twice the
amount paid by OPA. He stressed there is a reasonable
balance.
Mr. Spencer then addressed a $62,000 stale dated warrant for
OPA explaining the reason for the claim was because the
agency did not have the funds to pay the contractor in the
previous fiscal year.
Mr. McGee explained this was the first time this situation
had arisen in the agency. He was concerned because of how
old the bills were. He stressed that small firms are unable
to carry great amounts of accounts receivables. He also
noted that it would not be good for the agency to gain a
reputation of not paying bills on time.
Co-Chair Parnell asked if the contractor submitted the bills
late. Mr. McGee affirmed that many of the bills were
received after July 1 but that the agency is legally
obligated to pay bills received by August. He stressed these
were legitimate claims.
Co-Chair Parnell then wanted to know about the $2,495 claim
charged by the Department of Law. Mr. McGee answered this
was for discovery charges that the agency was unable to pay
last fiscal year due to lack of funds. He reminded the
Committee that state agencies charge each other for services
and that the OPA pays between $40,000 to $50,000 per year to
the Department of Law for documents.
Senator Phillips commented that this was one of the few
areas were the legislature takes action retroactively for
individual Alaskans.
Public Defender - $250,000 general funds
BARBARA BRINK, Director, Public Defender Agency, Department
of Administration testified via teleconference from
Anchorage and spoke about the FY 99 allocation versus the
smaller FY 00 Budget. She stressed that the Public Defender
Agency (PDA) has no discretion whether to take cases
assigned by the court or whether to do certain kinds of work
on a given case. This was due to both the constitution and
Rules of Professional Responsibility.
Ms. Brink told the Committee about a budget advisory group
formed within the agency to review the budget and identify
areas of savings. She stated that despite the group's
efforts, the budget was still short. She told of one
identified cost reduction to eliminate a vacant attorney
position in the Kodiak Office. However, she said the
remaining attorney was unable to meet all the obligations
and the investigator position was eliminated instead. She
listed other reductions, such as the elimination of
statewide on-call services, computerized legal researching
and distribution of legal opinions, reduced office hours,
limitation of travel to only jury trials, withheld
promotions, hiring new attorneys at lower pay ranges and
maintained vacancies in most offices. As a result, she said
the turnover rate was very high this year and she was
concerned the agency was losing the ability to retain
qualified attorneys.
Ms. Brink stressed she did not consider these reductions to
be long term solutions, only emergency measures. She gave
examples of the impact of the budget cuts noting that
changes to one area of the judicial system affect all areas.
She told of a new phone system installed by the Department
of Corrections to reduce that department's costs, which
raised the long-distance rates from 15 cents a minute to 75
cents a minute. She added that because of cuts made to the
Department of Law's budget, that department no longer allows
witnesses to testify telephonically and the PDA must pay to
transport witnesses. She continued the Alaska Court System
is beginning to charge the PDA for interpreter costs.
Ms. Brink told of mentally disturbed clients who have been
creating serious safety issues in the Palmer office. She
stressed that it is the state's responsibility to provide a
safe work environment for PDA staff and that the office will
need to be reconfigured to protect employees from clients.
She stated "we are skating on thin ice" with regard to the
reduction of services. She was concerned that a client could
go through their entire case without ever meeting their
attorney. She said judges, district attorneys and clients
are complaining about the inability to reach the public
defenders.
Senator Donley said the Committee had heard the argument
that the PDA has no control over the appointment of cases
while the prosecutors did have that control. He thought that
was an unfair argument noting that there was no supplemental
request for the prosecutor's office and that the prosecutor
must deal with every serious crime.
Senator Phillips asked how much money in permanent fund
dividends was collected by the PDA. Ms. Brink replied that
the agency was awarded $190,000 but that the Civil Section
of the Department of Law was responsible for collection and
collected a significantly greater amount.
Senator Phillips asked if the PDA was going to request the
dividends from their clients. Ms. Brink responded that the
Department of Law is doing a good job and that the PDA does
not have the expertise or facilities to collect dividends.
Senator Phillips challenged that if the agency required each
client's dividend the workload would be dramatically
reduced. Ms. Brink countered that no individual can walk
into the office and request representation. She explained
that the court appoints the cases and ensures that part of
the client's dividend will be used to pay for the services.
She noted that there are defendants who don't request
services for that reason.
Senator Adams stressed that reviewing the caseload should be
a guideline the Committee should use to consider funding the
request. He referred to the Legislative Budget and Audit
report requested by Senator Donley and urged all members to
read it. Senator Adams stated that the agency should be
appropriated twice the requested amount and exclaimed, "If
we're trying to ruin an agency, we are doing a great job of
it by short funding this agency." He cited the high
turnover of staff and poor representation for rural
residents.
Senator Wilken was surprised the supplemental request was so
low as he had anticipated a higher amount. He spoke of the
budget subcommittee's oversight of the agency and the
agency's efforts to stay within the budget. He noted a court
rule changed over the legislative interim that further
restricted how an indigent is determined. He suggested the
legislature could help by adopting legislation to define
alternate dispute resolutions and by identifying certain
crimes that can not be assigned to the PDA. He acknowledged
the increased funding given to the agency saying, "The
supply is more than what we can fund. We may want to look at
the supply line as opposed to just continuing to increase
the budget."
Senator Wilken asked for confirmation that the agency did
receive funding for the Balloon Project. Ms. Brink affirmed
and explained the $231,000 interagency receipts were used to
keep existing staff that would have been laid off, and
reassigned them to this project.
Mr. Spencer commented that even with the supplemental funds
the agency's budget would still be $250,000 less than what
was spent in FY 99 with no reduction in caseload.
Ms. Brink then rebutted Senator Donley's earlier statement
about the agency's control over the caseload. She stated
that the agency's problem was particularly egregious because
every other criminal justice agency received incremental
requests the previous fiscal year to cope with increases
while the PDA did not.
Senior Services, Protection, Community Services and
Administration (PCSA) - $118,600 general fund
ALISON ELGEE, Deputy Commissioner, Department of
Administration came to the table and explained the program
that provides emergency shelter for vulnerable adults
needing to be removed from an at-risk situation. She talked
about the protected environments provided, which are
normally assisted living homes but also hotels in some
circumstances. She stated that every effort is made to
determine whether family or friends could take the at-risk
individual and only when no other resource is available are
the adults moved into assisted living homes. She also noted
that the program funds are used as a supplement to offset
the individual's income.
Assisted living homes are operating at a daily rate that is
half of what recent studies have shown should be paid,
according to Ms. Elgee. Because of this, she said it was
becoming harder to find facilities willing to accept clients
from this program.
She qualified the supplemental request is the projected
amount needed to cover costs for remainder of the fiscal
year based on year-to-date expenditures.
Senator Phillips asked if the program has an age limit. Ms.
Elgee replied that the program covers anyone over age 21.
Senator Phillips wanted to know if the problem of vulnerable
adults in at-risk situations was increasing. Ms. Elgee
replied that the majority of adults in the program are
seniors. She stated that the program's caseload reflects the
aging population and she predicted that as the senior
population grows, the number of seniors in need would
increase.
Senator Phillips then asked if these individuals are seniors
brought into the state and then abandoned or if they are
Alaskans who have no family. Ms. Elgee replied that most are
individuals who have lived alone but are now no longer able
to care for themselves. She said the department had no
evidence to suggest these seniors were brought to the state
and then abandoned. She stressed that many seniors outlive
their family.
Senator Wilken asked if the vulnerable adult legislation
adopted the previous year was responsible for the increased
caseload. Ms. Elgee did not think it was noting that
legislation disallowed the guardian from stopping an
investigation if the guardian was the subject of the
investigation.
Senator Wilken asked if the increase was due to a specific
event.
Co-Chair Parnell asked how many people benefited from the
general relief program. Ms. Elgee answered the number varies
and added that the amount provided to each also varies since
most participants have some personal resources to help cover
the costs.
Tape: SFC - 00 #35, Side B 9:50 AM
Co-Chair Parnell clarified that almost none of the
participants are completely indigent and that most are able
to contribute a portion of their living expenses. He asked
if those who have no resources are also eligible for General
Relief Assistance from the Department of Health and Social
Services. He thought the two programs seemed similar and
wanted to avoid overlap.
Ms. Elgee responded that those with no resources are
assigned a caseworker to assist them in applying for aid
from the various public assistance programs, which is then
paid retroactively to reimburse the General Relief Program.
Co-Chair Parnell wanted one program that could provide the
same services as currently done by two.
Senator Phillips asked if there was a particular area of the
state that had an inordinate number of abandoned seniors.
Ms. Elgee answered the issue is disproportionate to urban
areas because rural communities are closer knit and provide
care to their residents.
Senator Green asked if there is any crossover with the
Mental Health Trust Authority (MTHA) that might help cover
the costs. Ms. Elgee told of a review done to identify the
number of General Relief program participants who also
qualify for mental health programs. She said the study found
that 70 percent of the Adult Protective Services caseload
were also trust beneficiaries at any given time. She said
that the department has received funding from the MHTA in
the past, but only for specific projects and not for on-
going programs.
Senator Green stated that discussions should be held with
the MHTA regarding funding for emergency situations and
offered her assistance.
Ms. Elgee noted that SB 73, Assisted Living Facilities,
deals with the same client group and that the MHTA has
committed to that legislation and offered to help defray the
cost.
Senator Leman asked if any serious effort has been made to
combine the emergency services with non-profit organizations
that want to offer these services, such as churches. Ms.
Elgee did not know of any formal arrangement but noted there
is a strong network of providers and that the department
looks first to family and friends.
Senator Leman did not disagree with government funding as a
last resort but did not want it to be a first resort. He
commented about the, "I would have helped if only I knew"
instances. Ms. Elgee said it depends on each situation. In
some emergency cases, she said the individual is temporarily
placed in an assisted living facility until the department
can locate a suitable family member.
Supervisor Training - $50,000 general funds
Mr. Spencer spoke to this item saying the information
required to include it in the regular operating budget was
not ready by the end of session and that this is an on-going
cost.
Co-Chair Parnell asked when the training would be completed.
Mr. Spencer explained it is an on-going program to provide
training to supervisors and is overseen by a committee that
decides what direction the program should take.
Co-Chair Parnell asked how much has been spent on the
program so far this year. Mr. Spencer did not know but said
he would provide that information later.
Group Health - $747,800 Benefit System Receipts
Ms. Elgee noted this item is for the second year of a
project to review and revise the long-term care insurance
product offered to retirees. She stated this is fully funded
by retirees served by the program and requires no state
funds. The last time the policy was updated was in the
1980s, she said and the long-term care payouts were
unrealistically low and ineffective. She explained that the
retirees requested this revision to include retirees who did
not chose long-term care insurance when they retired but now
wish to participate.
Ms. Elgee continued this portion of the project is to cover
the cost of enrollment for new participants and upgrades for
existing participants.
Senator Green asked if the enrollment option was available
to only former state employees or if those who worked for a
school district as well. Ms. Elgee replied the program is
offered to any retirees of the Public Employees Retirement
System (PERS) or Teachers Retirement System (TRS) systems
regardless of who their employer was.
Senator Wilken asked what was the total budget for
administering the retiree medical and long-term care plans.
Ms. Elgee talked about Aetna and the increased costs due to
the increased retiree population. She anticipated a need for
approximately $14 million for administration in FY 01, which
is charged on a per person-per month basis.
Retirement and Benefits - $100,000 PERS
Ms. Elgee explained this request is to cover the cost of
electing a new PERS board member. She stated that Mary Notar
resigned last year then died, leaving an unexpired vacant
seat on the PERS board. Ms. Elgee told the Committee that
the department budgets the election costs only for the years
when a term expires. She added that successful candidates
need at least 50 percent of the votes and that the current
election is in the runoff phase.
Co-Chair Parnell wanted to know why it costs $100,000 to run
this election. Ms. Elgee explained most of the cost is in
postage and that the ballots, which must comply with the
Division of Election's Accu-Vote system, are another
expense. She noted the Accu-Vote system is considerably less
expensive than contracting with an outside firm to tabulate
the ballots.
Co-Chair Parnell asked how the cost of this election
compared to previous elections. Ms. Elgee said she would
provide that information.
Senator Wilken asked when is the next normal election and if
the seat couldn't be held open until then. Ms. Elgee replied
the next scheduled election is 2002, but stressed that the
board only has two elected retirees. She added that both
terms expire in the same year and it was hoped that by
holding this election, the terms could become staggered.
Co-Chair Torgerson commented that when a vacancy arises in
the legislature a new legislator is appointed and he
determined that the PERS board could do the same. Ms. Elgee
said that would require statutory change. Co-Chair Torgerson
said he would support such a change.
Capital Improvement Project Scope Change - language change
Ms. Elgee explained this item is affects an existing capital
project and does not require additional funds. It changes
the language in the FY 00 budget bill, Ch. 2, FSSLA 99, Page
34, line 29 from "Satellite interconnection project
equipment replacement and repair" to "Satellite
interconnection project management, equipment replacement,
and repair". Mr. Spencer added that this allows some of the
funds appropriated for management costs to be used to manage
the actual project.
Co-Chair Parnell asked if this issue was anticipated when
the original legislation passed. Ms. Elgee said it was not
and explained that a state employee was handling those
duties at the time. Since then, she continued, all
responsibilities have been transferred to the organization
that is handling all aspects of the public broadcasting
system and this funding will reimburse the organization for
those costs.
Satellite Infrastructure - $100,000 general fund
Ms. Elgee told the Committee this appropriation request is
for the satellite transponder lease cost. She reminded of
last year's legislative decision to amend the appropriation
for the transponders to reflect $100,000 less in general
funds and $100,000 more in interagency receipts with the
intent was that the University of Alaska would double their
contribution for participation in the program. She stated
that the university did not have adequate funds available.
She also noted that the lease cost for the transponder is
fixed.
Co-Chair Parnell asked if the University of Alaska was using
the facility for distance education but not paying for the
service. Ms. Elgee responded that they do pay $100,000.
While Senator Wilken favored the university contributing to
the cost, he was concerned about the claim that service
would be interrupted for two months if the lease were not
paid and Alaska One, Alaska Two (Gavel to Gavel), ARCS and
Alaska Public Radio would be adversely affected. He asked if
this was correct. Ms. Elgee affirmed and stressed that
without sufficient funding the transponder lease would have
to be cancelled.
Senator Wilken requested further backup.
Longevity Bonus Program
Ms. Elgee estimated the program to be short funded between
$4.5 million and $5 million. She stated that this was due to
a number of circumstances despite the department attempt to
accurately predict the needed funding. While the program is
closed to new participants, she explained there is an
increase in usage of the program. She spoke of suspension of
benefits for those who leave the state and the difficulty in
predicting the amount of participants who will be within or
outside the state during a fiscal year. This year, she said
more participants are meeting the qualifications and
therefore collecting benefits.
Another factor in the shortfall, according to Ms. Elgee was
because the legislature took the low case estimate of
participation and reduced the amount an additional $2.5
million.
Senator Phillips wanted to know the average age of
participants in the program. Mr. Spencer referenced a chart
he had provided to the senator's office that shows the
breakdown.
Co-Chair Parnell referred to legislation offered by the
governor that would change the program to an income based
qualification and asked if the governor still supported the
bill. Ms. Elgee affirmed that the governor did.
Miscellaneous Items
Mr. Spencer referred to Section 20 (a) and (b) of the SB 250
that would change tobacco receipts to general fund receipts.
This change, he explained was due to a reduction of tobacco
settlement funds.
Co-Chair Parnell noted that other requests have been made by
the Department of Health and Social Services to make the
same funding source changes.
Mr. Spencer then addressed stale dated warrants, saying more
details would be provided later.
The final item for the department was $2.4 thousand
ratification for the Division of Personnel. He explained
this involved an employee who moved and an accounting
transaction is needed to balance the accounting system.
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT
Child Care Assistance - $1,500,000 Interagency Receipts
YVONNE CHASE, Director, Division of Early Development,
Department of Education and Early Development referred to
the original budget request to reflect the anticipated
growth in the program due to parents moving from welfare to
work. She stated that the amount funded was less and did not
meet that demand. She described the process the division
took to adjust to these reductions, noting that certain
participants were placed on a waiting list. She spoke of the
success of the welfare to work reforms and the subsequent
need to offer support for those moving to work. She shared
the average time needed for each child in the program is
three to five years. She detailed the three phases of
qualification into the childcare assistance program, titled
Pass I, Pass II and Pass III.
Co-Chair Parnell asked if the funds were to go only to those
families entering the transition to work program. Ms. Chase
responded that the childcare program was under funded and
that only ten new families were admitted into the program
who weren't on participants of the welfare to work program.
She commented that, at the start of the fiscal year, some
families were involved in the childcare program who were not
part of the welfare to work program but who's income
qualified them for childcare assistance.
Senator Green recalled a temporary assistance provision in
the welfare to work reforms that provides a lump sum to
allow the participant to maintain their lifestyle. She
wanted to know if this provision was used to provide
childcare assistance to individuals to allow them to go
directly to work rather than going on public assistance.
Ms. Chase responded that individuals who are receiving
public assistance are eligible for childcare resources under
Pass I of the Department of Health and Social Services'
welfare to work program.
JANET CLARKE, Director, Division of Administrative Services,
Department of Health and Social Services clarified that
Senator Green referred to the Diversion Program that offers
assistance to those only needing a short-term "fix". She was
unsure whether participants of the diversion program are
eligible for childcare assistance and said she would find
out for the Committee.
Senator Green asked if there is anything preventing the
diversion program participants from using the diversion
assistance for childcare expenses. Ms. Clarke said she would
look into the matter.
Senator Green wanted the state to be rewarded for helping to
prevent people from entering the welfare system. She did not
agree with the elimination of the Pass III phase, saying it
forces people to go directly to welfare. She suggested this
could be a federal issue. Ms. Clarke answered she would look
into this as well.
Co-Chair Parnell understood the original intent of the
program is to bring people from welfare to work. He surmised
that if the program gives funds to those who are not
otherwise on assistance, this is still a form of welfare. He
wanted to learn more about the program to see if his
perception was correct.
Ms. Chase replied that prior to the advent of welfare
reform, the childcare subsidy program was operated under the
Daycare Assistance program. She stressed that some of the
individuals in the childcare assistance program were
participants in the original program and were now classified
as Pass III in the current program.
Co-Chair Parnell asked if those Pass III families would drop
off without the supplemental. Ms. Chase affirmed that Pass
III participants would be dropped to accommodate those on
pass II.
Senator Green stressed that the bigger issue is that Pass II
parents will always have priorities over Pass III, but with
adequate funding, none would be left out. However because of
the increase of Pass II participants, Pass III participants
are getting left out, which was a "good thing", she stated.
She continued, the bubble of Pass II participants caused by
welfare to work reforms was expected to go down in the next
12 months.
Co-Chair Parnell commented that the Pass system was set up
to give priority to Pass II participants when funds are
limited.
Out-of-State Placements - $602,900 general fund
Ms. Chase explained this request is for education costs for
children in state custody who are placed in out of state
treatment centers. She stated more children have come into
foster care but that some children cannot be maintained in
foster care because of their behavior.
Co-Chair Parnell asked for the total cost for out-of-state
education expenses and why it was not part of the original
budget. Ms. Clarke replied total costs were about $600,000
and the reason it was not included was because the program
had a great increase that required examination before
funding. She detailed the process of determining the cost.
She spoke about the question of appropriateness of the
Department of Health and Social Services paying the
education cost rather than the school districts the children
originated from. She said efforts were being made to ensure
whether these children were included in the school
districts' foundation formula. She noted that while the
treatment costs were almost entirely covered by Medicaid,
education costs were not.
Senator Phillips asked how many students were involved and
where they originated from within Alaska. Ms. Clarke
answered approximately 70 students and referred to backup in
the members' binders that detailed what school districts
they were part of.
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and
Early Development told the Committee about the electronic
student data collection system the department was
implementing. He explained the system tracks the location of
students and the foundation formula funding claims made by
each school district. For this program, he said the system
would allow the department to determine which school
districts are claiming the students and therefore
responsible for the educational costs while the student is
outside the state.
Senator Phillips asked how the department would implement
payment collection from school districts. Mr. Jeans replied
if the school district claimed the student as part of the
formula funding, that district would be responsible for the
student's cost.
Senator Green asked about payment of educational services
for children who were in treatment centers within the state.
Mr. Jeans replied there were a number of children in
residential treatment inside the state and that their
educational costs were covered by the "home" school district
under the foundation funding formula.
Mr. Jeans clarified for Senator Green how the supplemental
request is only needed to those children outside of the
state.
Co-Chair Parnell asked when the department would have the
accounting of the students' school districts formula funding
data reconciled. Mr. Jeans was not sure but said he would
find out for the Committee.
Senator Phillips asked how the out-of-state schools were
selected. Ms. Clarke explained that Regional Placement
Committees existed within the Department of Health and
Social Services to determine what facility would best serve
the needs of each child. She gave details on the committee
and how their decisions are made. She gave assurances of the
oversight of the facilities.
Senator Phillips asked if the witness knew the location of
the various schools. Ms. Clarke said she would find out
specifics noting that they were in many states including
Texas and Colorado.
Co-Chair Torgerson asked what was the underlining authority
that required the State to pay the education costs: federal
law, state statute, etc. He asked why the state that the
child resides in doesn't pay the educational costs. He
stressed that when a child relocates to Alaska, the state
can't charge the child's previous home state. Mr. Jeans and
Ms. Clarke clarified that these children are residents of
Alaska and in the state's custody.
Senator Green asked if there was a prevailing diagnosis. Ms.
Clarke did not know but would find out.
Senator Phillips wanted to find a way to charge the child's
parents for the educational costs.
Tape: SFC - 00 #36, Side A 10:37 AM
Senator Phillips asked if the natural parents pay for any of
the treatment or education of these students. Ms. Clarke
replied that some receipts were collected through the Child
Support Enforcement system. She said that if a child
qualifies for Social Security Insurance benefits, those
funds are applied to the cost of treatment as well. She
qualified that she was not an expert in this area.
Senator Phillips stated that the cases that could be
prevented angered him the most.
Foundation Program - $(11,811,200) general fund
Mr. Jeans referred to a worksheet that detailed the
foundation funding program and the October results of the
foundation count.
Senator Wilken noted that the foundation showed a saving of
almost $20 million but that the supplemental budget bill
only showed $11.8 million. He asked for a reconciliation of
the difference.
Mr. Jeans stated that the FY 00 authorized budget contained
the school districts' estimation of 134,968 students of
which, 8,122 were in correspondence programs. He detailed
the foundation formula calculations that projected the basic
need at $835,646,000 and the state contribution at
$695,660,000.
Mr. Jeans reminded the Committee of discussions held the
previous year about the Alyeska Correspondence School
entitlement's substantial increase. He shared that the
department researched the situation and found the increase
was mostly attributed to the expansion of the summer school
program allowing students to take up to four courses. The
research also found that the completion rate of summer
courses was very low and therefore, he said, the department
took corrective action to only allow students to take summer
courses for those required for graduation. He stated that
this change resulted in a reduction of $2.6 million.
Mr. Jeans spoke of another adjustment for $3.9 million the
legislature took after telephone surveys of some school
districts.
Mr. Jeans told the Committee that the student count came in
lower than projected by approximately 3000 students with the
majority in the regular schools rather than correspondence.
Co-Chair Parnell asked about the slight increase in the
correspondence and if the department's reclassification of
alternative schools to correspondence schools was the
reason. Mr. Jeans replied there was an actual increase in
the number of students in the correspondence program,
notably the Galena and Nenana school districts.
Co-Chair Parnell next asked about the required local effort
that had gone down. Mr. Jeans explained that when the
department projects the next year's budget, estimates of the
required local effort for the North Slope Borough, Valdez,
Unalaska and Skagway are incorporated. He said the amount is
calculated at 45 percent of the prior year basic need but
that amount is not known in time to prepare the budget.
Co-Chair Parnell asked if that amount was not a function of
the assessed value of local property. Mr. Jeans answered
that was correct.
Mr. Jeans then pointed out an increase in impact aid of $9.6
million, bringing the total to $46 million, which reduced
the state general fund need.
Mr. Jeans qualified that the supplemental funding floor
appeared to have gone up but actually did not. He explained
that 1999 estimates were used to project the FY 00 budget
and were not accurate.
Mr. Jeans then noted that the Quality Schools grants were
reduced $50,000 as a result of population changes and the
Military Impact Aid and contract aids remained unchanged.
Mr. Jeans summarized that the "difference" column of the
spreadsheet showed $18 million compared to the actual
student count. He stated that amount needed to be reduced to
adjust for the Alyeska Central School and account for the
$3.9 million adjustment made the previous session. The
ending total was $11.8 million, according to Mr. Jeans
Senator Wilken clarified that the $19.9 million figure was
from the FY 01 budget.
Pupil Transportation - $2,139,700 general fund
Mr. Jeans spoke to the supplemental appropriation request to
reimburse school districts for pupil transportation costs
during FY 00. He explained that this budget component was
underprojected and the department intended to reallocate the
funds from the $11.8 million saved in the foundation-funding
program.
Senator Green wanted to know if statute contained a
requirement for actual cost reimbursement or just a minimum
percentage. Mr. Jeans answered there is no statutory
requirement for a particular level of reimbursement.
Senator Green then asked where the decision to fund the full
amount was made.
Co-Chair Parnell also asked if the allocation request was
for the full amount of costs. Mr. Jeans affirmed the request
was for 100 percent of entitlement. He said the program was
historically reimbursed contracted pupil transportation at
100 percent of cost. However, he noted that SB 36 [1998] the
district operated routes to be reimbursed at least 90
percent. He said regulations were proposed to the State
Board of Education to address the 90 percent reimbursement
but the Board retained the 100 percent rate.
Senator Wilken pointed out that in the last six or seven
years, the legislature had funded the program at 100 percent
for all but two years, in which approximately 95 percent
funding was appropriated. Mr. Jeans confirmed that statement
and noted if funding was not appropriated, the department
would have to prorate five percent.
Senator Leman asked is there was a way to calculate the
district costs versus contract costs using a "student miles"
formula. Mr. Jeans replied that the department calculates
the daily cost per bus-per route. He said statute gives the
department the flexibility to either require districts
provide pupil transportation directly or contract the
service. He noted the department had not been aggressive in
this area and that the Anchorage School District would be
impacted the most because they have both contract and
district provided routes. He said the more expensive routes
are district-operated.
Senator Leman wanted a consistent figure to calculate
reimbursement and did not understand why the contracted
routes are reimbursed at a higher percentage than district
routes. Mr. Jeans said he would provide detailed
information. He added that he would also provide historical
data for the years the districts were only reimbursed 60
percent.
ADJOURNED
Senator Parnell adjourned the meeting at 10:54 AM.
SFC-00 (20) 02/23/00
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