Legislature(2013 - 2014)SENATE FINANCE 532
04/04/2013 02:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB88 | |
| SB74 | |
| HB22 | |
| HB26 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 22 | TELECONFERENCED | |
| + | HB 26 | TELECONFERENCED | |
| += | SB 88 | TELECONFERENCED | |
| += | SB 18 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 4, 2013
2:43 p.m.
2:43:50 PM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 2:43 p.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Angela Rodell, Deputy Commissioner, Treasury Division,
Department of Revenue; William Streur, Commissioner,
Department of Health and Social Services; Valerie Davidson,
Alaska Native Tribal Health Consortium (ANTHC); Heather
Shattuck, Staff, Senator Pete Kelly; Patrick Gamble,
President, University of Alaska; Kit Duke, Associate Vice
President for Facilities, University of Alaska; Anna
Latham, Staff, Representative Kurt Olsen; Kris Curtis,
Division of Legislative Audit; Cecile Elliott, Staff,
Representative Mike Hawker;
SUMMARY
SB 74 UNIVERSITY OF ALASKA BUILDING FUND
SB 74 was HEARD and HELD in committee for further
consideration.
SB 88 ALASKA NATIVE MEDICAL CENTER HOUSING
SB 88 was REPORTED out of committee with a "do
pass" recommendation and with a fiscal impact
note from the Department of Administration, a
fiscal impact note from Department of Health and
Social Services, and a fiscal impact note from
the Department of Revenue.
CSHB 22(L&C) BOARD OF MARINE PILOTS
CSHB 22 (L&C) was REPORTED out of committee with
a "do pass" recommendation and with a previously
published fiscal impact note from the Department
of Commerce, Community and Economic Development.
HB 26 EXTEND BOARD OF PUBLIC ACCOUNTANCY
HB 26 was REPORTED out of committee with a "do
pass" recommendation and with a fiscal impact
note from the Department of Commerce, Community
and Economic Development.
SENATE BILL NO. 88
"An Act authorizing the state bond committee to issue
certificates of participation to finance the
construction and equipping of residential housing to
serve the Anchorage campus of the Alaska Native
Medical Center; and authorizing the Department of
Administration to enter into a lease-purchase
agreement for the benefit of the Alaska Native Tribal
Health Consortium."
2:44:46 PM
Co-Chair Meyer noted that the bill had been previously
discussed in committee. He believed that the question that
remained before the committee was whether the project
should be paid for up front with capital dollars, or should
it be bonded for, with interest being paid on the bond. He
admitted that the state was short funds for capital
projects, but that the project proposed in the legislation
was financially feasible because of solid revenue sources.
2:46:37 PM
Co-Chair Meyer queried whether the department assigned to
fiscal note number 1, for $35 million in estimated capital
costs, should be the Department of Administration (DOA) or
the Department of Revenue (DOR).
2:47:25 PM
ANGELA RODELL, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, replied that the state would sell
certificates of participation by DOR through the State Bond
Committee. She relayed that the certificate represented the
sale of participation in a lease agreement. She furthered
that DOA would then take the proceeds of the transaction
and hold them; the department would receive invoices as the
project was under construction and would be in contact with
the Department of Health and Social Services to ensure that
the expenses were what had been agreed upon in the lease
agreement. She stated that once the facility was open DOR
would lease the building from DOA for 15 years; the lease
payments made would be used to repay the certificates of
participation. She stressed that the amount of Medicaid
savings generated through use of the facility would reflect
positively on the state's general fund.
2:49:20 PM
WILLIAM STREUR, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, commented that approximately 40 percent of
the services currently provided to Alaska Natives were done
through a native run system, which left 60 percent on the
table. He said that assuming that 20 percent of specialty
services were not available within the tribal system, or in
Alaska, a 40 percent doubling of services could be provided
by the tribal system. He thought that by moving as many
services as possible over to the tribal system, the state
would receive a 100 percent match from the federal
government, resulting in less spending of general fund
dollars. He noted that that the bill was a step towards
getting tribal members medical help within the tribal
system. He shared that receiving services consistently
within the tribal system would result in continuity of care
for recipients. He pointed out that there was a $1.1
million projected savings for general child health. He
relayed that many surgeries currently being performed could
be done through the tribal system, and would allow for
better care prior to and immediately after surgery. He
noted that ear, nose, and throat problems were prevalent in
rural communities. He thought that the expanded capacity
could result in a savings of $650,000. He spoke to
telemedicine, which he believed was underutilized. He said
that travel expenses were ever increasing in the state and
that the memorandum of understanding had to include the
continued development of telemedicine capabilities.
2:54:51 PM
Co-Chair Meyer queried what was included in the memorandum
of understanding.
Commissioner Streur listed the items in the memorandum:
cost based reimbursement for Medicaid recipient's room and
board, preferential status for Medicaid recipients to
assure priority access, required necessary transport, pre-
maternal Medicaid services. He believed that the best
Benefit to the state would be to ensure that the next
generation received the best possible care.
2:55:31 PM
Co-Chair Meyer inquired if the committee had a copy of the
memorandum of understanding.
Commissioner Streur replied that he could provide the
document to the committee.
2:55:43 PM
Commissioner Streur continued to discuss the memorandum of
understanding. He said that the designated use of the
facility must be maintained for the term of the bond. He
stated that access and utilization of the services must
continue to be developed under the terms of the bond.
2:57:39 PM
Co-Chair Meyer reiterated his desire for a copy of the
memorandum of understanding. He requested further
clarification concerning the $35 million in capital funds
under DOA, rather than DOR, as reflected in the fiscal
note.
2:57:54 PM
Ms. Rodell replied that once the bonds were sold, DOR would
not administer the proceeds; the proceeds would be turned
over to DOA because DOA would be entering into the lease
agreements on the state's behalf.
2:59:05 PM
Co-Chair Meyer welcomed Senator Bishop and Vice-Chair
Fairclough to the committee table.
2:59:33 PM
Co-Chair Kelly inquired whether Alaska Native Tribal Health
Consortium (ANTHC) would be able to pay for additional
costs if the project ran over budget.
Ms. Rodell referred the question to representation from
ANTHC.
3:00:03 PM
Vice-Chair Fairclough queried how the state would ensure
that contractors received their payments.
Ms. Rodell replied that the invoices of payment would come
to DOA, which she expected would coordinate with the
Department of Health and Social Services (DHSS).
3:01:14 PM
Vice-Chair Fairclough wondered how the cost estimation of
the project had been determined before the project
contractor had been selected.
Commissioner Streur referred the question to ANTHC.
3:01:59 PM
Vice-Chair Fairclough asked if the commissioner had
reviewed the cost estimate documents associated with the
project.
Commissioner Streur replied yes. He added that the
department would continue to review blueprints and cost
estimates along with DOR and DOA.
3:02:37 PM
VALERIE DAVIDSON, ALASKA NATIVE TRIBAL HEALTH CONSORTIUM
(ANTHC), testified that the ANTHC would be responsible for
operation and maintenance of the facility once construction
was complete. She shared that the facility design included
six floors; 5 of the floors would be financed by the state,
but ANTHC would finance the 6th floor for patient education
with a particular emphasis on well-baby and well-mother
care. She relayed that tele-medical services would be made
available in order to help homesick patients during longer
hospital stays far from home. She stated that ANTHC
recognized the need for a meaningful partnership with the
state and was currently financing part of the facility. She
highlighted that ANTHC had a positive track record of
building facilities on-time and under budget. She shared
that she had negotiated a number of agreements for services
that had been clear and effective. She noted Commissioner
Streur had been a diligent advocate for the state in
negotiations. She stated that the issue of access to care
came up at every board meeting; the key to better access to
healthcare for people living outside of Anchorage was
housing.
3:08:28 PM
Co-Chair Meyer restated the question raised by Vice-Chair
Fairclough concerning the fiscal noted for $35 million. He
asked how the contracts would be awarded.
Ms. Davidson replied that in addition to co-managing the
Alaska Native Medical Center, the consortium had a large
construction sector of its organization. She said that the
consortium had a short list of contractors that would be
meeting in the future to examine opportunities and review
proposals.
3:09:49 PM
Co-Chair Kelly queried if ANTHC would cover any cost
overruns.
Ms. Davidson replied that cost overruns were not
anticipated; however, if additional funds became necessary
to finish the project, ANTHC would not request the funds
from the state.
3:10:24 PM
Co-Chair Meyer inquired if language pertaining to cost
overruns had been included in the memorandum of
understanding.
Ms. Davidson replied in the affirmative.
3:10:34 PM
Senator Bishop directed the committee to Page 2, line 8 of
the bill. He requested assurances on the record that Alaska
hire would be at the forefront of the hiring process.
Ms. Davidson responded that hiring Alaskans was important
on all ANTHC projects throughout the state. She added that
the consortium had a tribal preference policy as well. She
stated Alaskans took pride in working on projects that
would directly benefit Alaskans.
3:12:49 PM
Senator Dunleavy inquired if there had been survey done to
highlight why patients would use the new facility rather
than receive services at already established medical
centers.
Ms. Davidson responded that conversations with
beneficiaries that had chosen to receive care elsewhere had
revealed several things: By law, Medicaid required patients
to be offered a choice as to where they received care; many
patients had requested ANTHC centers in order to be close
to family. She added that ANTHC centers allowed for
patients to be connected to their communities in ways that
other places could not provide. She pointed out that
transportation issues were one of the greatest challenges
for people traveling to Anchorage for health services. She
stressed that ANTHC would provide transportation from the
airport to the housing facility, and that all of the
services the patient would need could be provided under one
roof.
3:16:09 PM
Senator Dunleavy queried if there had ever been a formal
survey conducted that compared the services provided in
ANTHC facilities with services provided by other hospitals.
Ms. Davidson stated that she did not know of a formal
survey. She said that the consortium conducted regular
customer experience surveys, which were then compared to
surveys conducted by other facilities.
3:16:46 PM
Senator Dunleavy appreciated that the federal government
required that a choice be given to patients concerning
where they would receive their medical care. He wondered if
the people would still chose to go to Providence Hospital
if they were given the choice of the new facility.
Ms. Davidson replied that there were services that ANTHC
was not yet at capacity to provide. She stated that, even
with all of the expansion described in their business plan,
the ANTHC facility's ability to accommodate patients was
finite. She noted that there was $30 million in general
funds that went to non-tribal facilities in Anchorage in
order to provide care for Alaska Native Medicaid
beneficiaries. She estimated that building the facility
would result in an annual savings of $8.8 million. She
pointed out that ANTHC operated the only level 2 trauma
center in Alaska and was a "magnet hospital" with a high
level of quality care provided by nursing staff.
3:20:05 PM
Senator Dunleavy wondered if the facility would be able to
accommodate patients at the same rate as Providence
Hospital.
Ms. Davidson replied yes.
3:20:37 PM
Senator Hoffman queried how long it had been since Ms.
Davidson had been staff to a previous Senate Finance Co-
Chair.
Ms. Davidson replied that it had been 27 years.
3:21:23 PM
Vice-Chair Fairclough opined that more general fund dollars
would expedite the process.
3:21:46 PM
Co-Chair Kelly MOVED to REPORT SB 88 28-LS0629\N out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
3:22:06 PM
SB 88 was REPORTED out of committee with a "do pass"
recommendation and with a fiscal impact note from the
Department of Administration, a fiscal impact note from
Department of Health and Social Services, and a fiscal
impact note from the Department of Revenue.
3:22:14 PM
AT EASE
3:26:21 PM
RECONVENED
SENATE BILL NO. 74
"An Act creating the University of Alaska building
fund for the payment by the University of Alaska of
the costs of use, management, operation, maintenance,
and depreciation of space in buildings; and
authorizing the Board of Regents of the University of
Alaska to designate buildings for which the fund is to
be used."
3:26:40 PM
HEATHER SHATTUCK, STAFF, SENATOR PETE KELLY, related that
the bill would create a University Building Fund (UBF) as a
special account in the General Fund. She shared that there
was currently $1 billion in backlog maintenance for the
university's 7 million square feet of facilities. She
stated that the university was shifting to long-term
strategic planning to adequately address the ongoing
maintenance issue. She stressed that the fund would be a
tool that the university could use to do their share in
assuring that facilities were taken care of properly, while
bringing deferred maintenance costs down to a responsible
and sustainable level. She relayed that the university
could begin charging departments for rent, which would
encourage improved space utilization and operational
efficiency. She explained that before the Public Building
Fund, which the UBF was based on, state departments had
more space than was needed. The fund, along with charging
rent, had forced department's reconsider how much space
they actually needed. She said that the intent of the
legislation was to help the university take advantage of
the same process to ensure that it was implemented in the
most effective way possible. She explained that initially
the university would put buildings that were new, or under
15 years-old, into the fund; as buildings were
rehabilitated they would be added to the fund in order to
prevent them from falling into disrepair.
3:28:58 PM
Co-Chair Kelly thought the bill would alleviate the
university's deferred maintenance problem. He believed that
the legislation would highlight that space costs money,
which would prompt managers to give up space that was not
completely necessary. He felt that significant savings
would result from an aggressive space reconfiguration
program.
3:30:24 PM
PATRICK GAMBLE, PRESIDENT, UNIVERSITY OF ALASKA, testified
in support of SB 74. He understood that the university had
some catching up to do after the previous decade of funding
predominately for the purpose of growth. He shared that
growth began to level off in 2011, and he understood that
the university needed to take responsibility for the
maintenance of its infrastructure. He offered that more
funding alone would not benefit the university at this
time. He described the legislation as a tool that would
give the university the ability to take steps toward
further autonomy. He believed that the UBF would address a
large account in the university budget, which was where
efficiencies and savings would be found. He noted that the
university was the largest real estate manager in the
state. He said that the facilities managed by the
university were being examined on a building-by-building
basis to determine whether they would remain or be
demolished, which would reveal information concerning the
entire building array that had previously been unknown. He
reiterated that the legislation would provide a tool for
the university that had already proved to be successful
when used by universities in the Lower 48. He believed that
the legislation would inspire discipline in the area of
space management.
KIT DUKE, ASSOCIATE VICE PRESIDENT FOR FACILITIES,
UNIVERSITY OF ALASKA, believed that the legislation would
instill discipline in the university that would ensure the
future care of all of its facilities. She expressed the
desire to provide tools that could be used in times of
lesser revenue to maintain buildings. She noted that new
construction was sometimes necessary, but maintenance of
older buildings was equally important. She thought that the
bill would generate a cultural change in the way that
academic administrations valued physical space and the
costs associated with maintaining the space beyond first
costs.
3:40:00 PM
Co-Chair Kelly wondered how the legislation was useful when
no funds would be distributed for 2013. He asked whether
the SBF was capitalized at when it was created.
Ms. Duke replied that she did not remember the
capitalization amount.
Co-Chair Kelly asked if the money that the university was
currently spending on building maintenance and operation
would shift into the UBF.
Ms. Duke relied that that was the intent.
3:42:53 PM
Co-Chair Kelly understood that in the future the money
could be capitalized upon through donations or general fund
dollars.
Ms. Duke related that the funding could come from many
sources and that the legislation allowed for almost any
type of deposit to be made into the fund. She related that
the money would still need to be appropriated by the
legislature from the UBF, which was why she believed the
fund would prove to be a tool for the legislature as well
as the university in the long term. She stressed that it
would take some time to implement the plan, which made
immediate funding less of a concern.
3:44:47 PM
Co-Chair Kelly wondered why the university could not
currently set up a rent charging system for the different
departments.
Ms. Duke replied that the issue was not that rent charging
could not be set up, rather, whether a system could be set
up that would survive long enough to do any real good in
the long term.
3:45:16 PM
Senator Bishop hoped that the funds authorized by the
legislature would remain in-state.
President Gamble felt that there was nothing in the intent
language of the bill that would prevent the funds from
remaining in-state.
3:48:10 PM
Co-Chair Kelly asked if the university had been in
discussion with the Office of Management and Budget (OMB)
concerning the shift of funds planned for 2014.
President Gamble replied no.
Co-Chair Kelly thought that the discussion should happen
soon and that the changes should be made at the
administrative level as the budget was submitted, rather
than have the legislature make the changes after the fact.
3:48:36 PM
President Gamble commented that extensive internal
discussions had occurred at the university with the
understanding that whatever the legislature budgeted for
2013 would inform the expected numbers for 2014.
3:49:09 PM
Ms. Duke reiterated that the plan laid out in the bill
would provide information concerning space utilization and
program cost, which would cause the university to take a
more business approach to investment decisions.
3:50:07 PM
Co-Chair Meyer wondered if federal grant monies could be
used in the UBF.
Ms. Duke thought that Co-Chair Meyer could be referring to
grants allotted for deferred maintenance projects. She
imagined that there was a possibility that the grants could
be put into the UBF.
3:51:01 PM
President Gamble offered that there were many kinds of
grants, some of which had very specific restrictions. He
added that the university generally liked to use grant
dollars for their intended purpose.
3:51:40 PM
Vice-Chair Fairclough asked why language indicating that a
dedicated fund was not being created was not in the bill.
3:52:28 PM
President Gamble referred the question the DOL.
3:52:35 PM
Vice-Chair Fairclough turned to Page 3, line 13, which
contained language specifying that any money in the fund
would stay in the fund unless it was allocated out by the
legislature.
3:53:27 PM
Vice-Chair Fairclough queried how much bonding authority
the university currently had.
President Gamble replied about 2 percent. He said that the
goal was to stay below 5 percent encumbered with debt
service. He asserted that the university was comfortable
with its ability to bond further.
3:54:16 PM
Vice-Chair Fairclough wondered whether the university could
qualify for the Alaska Housing Finance Corporation
Revolving Loan Fund to offset the deferred maintenance
costs of the university's engineering buildings. She
understood that $250 million had been capitalized through
the fund for improvements in weatherization, and at low
interest rates. She stressed the need to address the
deferred maintenance issue as soon as possible.
Ms. Duke replied that the university was taking advantage
of some of the energy monies available through AHFC. She
said that the university was looking into accessing more of
those funds for deferred maintenance work.
3:56:24 PM
Vice-Chair Fairclough reiterated her question concerning
the university's bonding authority limit.
President Gamble replied that he was not aware of the
bonding authority limit.
3:57:23 PM
Kit Duke interjected that additional information could be
provided to the committee at a later date.
3:57:30 PM
Vice-Chair Fairclough believed that the bond limit was set
in stature.
Co-Chair Meyer CLOSED public testimony.
SB 74 was HEARD and HELD in committee for further
consideration.
3:58:59 PM
AT EASE
4:21:19 PM
RECONVENED
CS FOR HOUSE BILL NO. 22(L&C)
"An Act extending the termination date of the Board of
Marine Pilots; and providing for an effective date."
4:22:01 PM
ANNA LATHAM, STAFF, REPRESENTATIVE KURT OLSEN, testified
that the legislation would extend the termination date of
the Board of Marine Pilots to June 30, 2014. She shared
that the Division of Legislative Audit (LB&A) had concluded
that the board had been running efficiently and should be
extended. She explained that regulating and licensing
qualified marine pilots benefited public safety and
protected the marine environment. She highlighted that LB&A
had recommended that the marine pilot coordinator should
improve procedures over the administration of operational
activities; public meeting notification, licensing
documentation and oversight of the pilot association's drug
and alcohol programs were noted. She said that when the
audit was conducted the Marine Pilot Coordinator had been
in the position for less than one-year, and was unaware of
the operational deficiencies noted by the audit. She
assured the committee that the coordinator was working on
developing the appropriate documentation to ensure an
adequate oversight process. She stated that the most recent
version of the legislation was the result of
recommendations from LB&A.
4:24:33 PM
Co-Chair Meyer observed the fiscal note attached to the
bill.
4:25:03 PM
KRIS CURTIS, DIVISION OF LEGISLATIVE AUDIT, testified that
the division had recommended a six-year extension and the
one recommendation of improving the operational activities.
4:25:18 PM
Co-Chair Meyer understood that LB&A supported the
extension.
4:25:38 PM
Vice-Chair Fairclough queried the power structure of the of
the board.
Ms. Curtis replied that the board had a Marine Pilot
Coordinator that served a similar purpose to that of an
Executive Director.
4:26:19 PM
Vice-Chair Fairclough believed that the qualifications of
the people managing various listened boards needed to be
examined. She pointed out to the committee the personal
services cost for the Marine Pilot Coordinator was $110,000
annually. She wondered what the board was doing to ensure
that the coordinator was compliant in all the necessary
qualifications for the position.
4:26:59 PM
Ms. Curtis explained that the personal services line on the
fiscal note reflected the salary of the position, as well
as health insurance and retirement contributions.
4:27:27 PM
Senator Olson stated that the board was important in his
district. He testified in support of the legislation.
4:27:59 PM
Co-Chair Meyer CLOSED public testimony.
4:29:00 PM
Co-Chair Kelly MOVED to REPORT HB 22 out of committee with
individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
4:29:31 PM
CSHB 22 (L&C) was REPORTED out of committee with a "do
pass" recommendation and with a previously published fiscal
impact note: FN2(CED).
AT EASE
4:31:04 PM
RECONVENED
HOUSE BILL NO. 26
"An Act extending the termination date of the Board of
Public Accountancy; and providing for an effective date."
4:31:21 PM
CECILE ELLIOTT, STAFF, REPRESENTATIVE MIKE HAWKER,
testified that HB 26 would extend the termination date of
the Board of Public Accountancy to June 30, 2021, as
recommended by LB&A. She relayed that the audit had
concluded that the board was serving the public's interest
by effectively licensing and regulating certified public
accountants.
4:32:31 PM
KRIS CURTIS, DIVISION OF LEGISLATIVE AUDIT, reiterated that
LB&A had concluded that the board was serving the public's
interest in licensing and regulating certified public
accountants and public accounting firms. She added that the
board had successfully monitored and regulated individuals,
and had successfully developed and adopted regulatory
changes to improve the profession. She recommended the
maximum 8-year extension. She concluded that the continuing
recommendation was associated with efficiencies within the
division of Corporations, Business and Professional
Licensing case management system.
4:34:05 PM
Co-Chair Meyer noted the fiscal note attached to the bill.
4:34:49 PM
Co-Chair Kelly MOVED to REPORT HB 26 out of committee with
individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
4:35:29 PM
HB 26 was REPORTED out of committee with a "do pass"
recommendation and with a fiscal impact note from the
Department of Commerce, Community and Economic Development.
4:36:13 PM
ADJOURNMENT
The meeting was adjourned at 4:36 p.m.
| Document Name | Date/Time | Subjects |
|---|