Legislature(2019 - 2020)SENATE FINANCE 532
04/05/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Deferred Maintenance Update: | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 5, 2019
9:01 a.m.
9:01:11 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Peter Micciche
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Click Bishop
ALSO PRESENT
Shelley Willhoite, Capital Coordinator, Office of
Management and Budget; Neil Steininger, Chief Budget
Analyst, Office of Management and Budget, Office of the
Governor; Senator Cathy Giessel.
PRESENT VIA TELECONFERENCE
Mark Davis, Director, Division of Facilities Services,
Department of Transportation and Public Facilities;
Christopher Hodgin, Project Manager, Statewide Public
Facilities, Department of Transportation and Public
Facilities.
SUMMARY
DEFERRED MAINTENANCE UPDATE:
OFFICE OF MANAGEMENT and BUDGET
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
Co-Chair von Imhof discussed housekeeping.
Co-Chair von Imhof stated that as the keeper of the capital
budget, she was looking closely at the deferred maintenance
backlog. She was concerned that the weak capital budgets of
previous years had compounded the problem of deferred
maintenance. She thought it was important for the state to
take care of its assets.
^DEFERRED MAINTENANCE UPDATE:
OFFICE OF MANAGEMENT and BUDGET
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
9:03:06 AM
SHELLEY WILLHOITE, CAPITAL COORDINATOR, OFFICE OF
MANAGEMENT AND BUDGET,
9:04:48 AM
Ms. Willhoite discussed the presentation "Deferred
Maintenance Update," (copy on file).
Ms. Willhoite looked at Slide 2, "Deferred Maintenance:
Explained":
? Deferred Maintenance is maintenance and repairs
postponed due to lack of resources,
construction/repair schedules, etc.
o Maintenance and repairs are activities that
keep assets in safe, effective, working condition
? Deferred maintenance projects are most often items
that cannot be addressed through preventative
maintenance
o Preventative maintenance is important to
managing growth and severity of future deferred
maintenance
o Currently, most entities manage maintenance
independently
o Legislature appropriates funding for
preventative maintenance annually - facilities
management allocations; Public Building Fund
o Maintenance decisions must consider changing
business needs
9:06:24 AM
Ms. Willhoite spoke to Slide 3, "Deferred Maintenance:
State Maintained Facilities":
? Over 2,200 facilities
? 14 entities including University of Alaska and
Courts
? 19 million square feet of space
? Combined replacement value of $8.6B
Ms. Willhoite addressed the bar graph on slide 3, entitled
'Number of Facilities by Entity.' She noted that DOT had
the most facilities with 645, followed by the University
with 426.
Ms. Willhoite referenced Slide 4, "Deferred Maintenance:
Facility Types":
? Types of facilities vary by entity
o UA manages classroom, laboratory, research,
residential, and office space
o DOA manages general office space
o DOC and DHSS both manage 24 hour facilities
o DMVA manages military and other facilities and
statewide armories
o DNR oversees park service cabins, shelters, fire
suppression and preparedness shops
Ms. Willhoite noted that the graph charted total square
feet by entity; the University had the most square footage,
which included a variety of facilities.
9:08:29 AM
Ms. Willhoite turned to Slide 5, " Deferred Maintenance:
Statewide Totals":
? Total of $1.97 billion, including
o Executive agencies and Courts $1.84 billion
? Agency DM total is comprehensive
o School District Major Maintenance $134.7
million*
? School Major Maintenance total is only
district's highest priorities
*($113.8 million is State's share of the total)
9:09:26 AM
Senator Shower asked whether there were state facilities
that were rented, or leased, that the state was responsible
to maintain.
Ms. Willhoite offered to provide the information later.
9:10:22 AM
Senator Micciche looked at Slide 4 and asked whether the
departments had gone through an exercise to determine which
facilities were no longer critical to operations and could
be sold to the private sector.
Ms. Willhoite noted that the governor had issued a Property
Disposal Directive in February 2019. She said that the
topic would be covered in a later slide.
Senator Micciche asked whether there was a chance that some
of the facilities on the list would be surpluses when the
study was complete.
Ms. Willhoite answered in the affirmative.
9:11:27 AM
Co-Chair von Imhof asked when the study would be complete.
Ms. Willhoite stated that June 30, 2019.
9:11:53 AM
Co-Chair Stedman thought that the legislature should be at
the table when discussion occurred over the liquidation or
the surplusage of equipment or facilities. He thought the
legislature might be interested in having a discussion on
the outcome of the study. He believed members might want to
review policy decisions before they were executed. He
mentioned the Alaska Marine Highway System (AMHS).
Co-Chair von Imhof added that she would like to see a plan
concerning School Bond Debt Reimbursement.
9:13:20 AM
Senator Wielechowski disclosed a conflict of interest.
Senator Wielechowski asked for a definition of deferred
maintenance. He wondered about a depreciation schedule and
urgency of the funding for deferred maintenance.
Ms. Willhoite stated that deferred maintenance was
maintenance that had been postponed due to lack of funds.
She understood that a list had been sent out to members
that listed deferred maintenance by department, prioritized
by need. The issues included leaky roofs, old HBAC systems,
leaking windows, and pluming and electrical issues. She
added that the department was working to implement a
software package that would allow for statewide
prioritization.
9:15:17 AM
Senator Micciche relayed that he had worked on the issue
when he was a mayor. He thought that departments were
reluctant to dispose of property because the property could
be used for storage.
9:16:50 AM
Ms. Willhoite continued to address Slide 5:
? Total peaked at $2.3 billion in FY2012
o Reduced significantly through a five-year
funding plan beginning in
FY2011
o DM was $1.6 billion in FY2017 & $1.7 billion in
FY2018
? FY2018 and FY2019 show an upward trend
9:17:39 AM
Ms. Willhoite considered Slide 6, "Deferred Maintenance:
Backlog by Entity":
• The majority of deferred maintenance backlog is
within the University of Alaska ($1.2B) and the
Department of Transportation and Public Facilities
($301M)
• School District Major Maintenance requests total
$135M
• All other entities total $300M
9:18:20 AM
Ms. Willhoite displayed Slide 7, "Deferred Maintenance:
Backlog by Entity," which showed a bar graph that offered
the backlog amounts by agency. The University has the
highest amount at approximately $1.2 billion, DOT followed
with $301,483.3.
9:18:52 AM
Senator Hoffman asked whether Ms. Willhoite had a deferred
maintenance schedule broken down by region or city.
Ms. Willhoite agreed to provide the information requested.
9:19:23 AM
Co-Chair Stedman asked for a breakdown of the components.
He thought that it would be illuminating to see which areas
of the state had the greatest need.
Co-Chair von Imhof appreciated Co-Chair Stedman's comments.
She thought a total list and an annual plan would be
helpful as well as a rubric by which the decisions had been
made.
9:21:19 AM
Senator Micciche wondered whether there was information
available on the criticality and importance of repairs. He
wondered whether a list that prioritized repairs could be
shared with the committee.
Ms. Willhoite stated that testifiers from DOT would address
the question.
9:22:13 AM
Senator Wilson referenced the FY19 DM Distribution Detail
(copy on file). He pointed out that there were facilities
that had been mothballed that ranked higher on the priority
list. He requested information on how the priority list was
crafted.
Co-Chair von Imhof thought Senator Wilson had made a good
point.
9:23:03 AM
Senator Shower thought that some of the items on the list
should be viewed as operating costs rather than capital
expenditures.
Co-Chair von Imhof hoped that the department would consider
the states short building season, workforce, and mobility,
within the rubric used when crafting the prioritization
list.
9:24:34 AM
NEIL STEININGER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF THE GOVERNOR, highlighted Slide 8,
"Deferred Maintenance: Funding History":
? From FY1998 to FY2010, DM funding was sporadic and
inconsistent
o Spikes in 1999 ($53M), 2006 & 2007 ($33M), 2009
($127M)
o Low years 2000-2005 averaged $6.5M
? FY2011 began a five-year initiative to address DM
backlog
o Initiative of $100M annually for five years
o Actual average funding of $123M for DM; $18.6M
for School Districts
Mr. Steininger looked at Slide 9, "Deferred Maintenance:
Funding History," which showed a bar graph of the
appropriation history of deferred maintenance.
Mr. Steininger addressed Slide 10, "Deferred Maintenance:
Backlog (excluding school major maintenance)," which showed
a bar graph that revealed the impact of the 5-year
initiative. The peak backlog in 2012 of deferred
maintenance had decreased as significant amounts of money
were put into deferred maintenance.
9:26:22 AM
Co-Chair Stedman looked back to Slide 9. He recalled that
from 1998 through 2006, budgets had been flat funded, which
had contributed to the deferred maintenance backlog. He
said that in 2006, the state found itself with more money
allowing for increased appropriations for deferred
maintenance of school district facilities. He said that the
committee had worked from 2006 to the present to decrease
the deferred maintenance backlog in the state. He warned
that as the state prepared for several years of flat and
declining budgets the backlog should monitored so that the
pent-up demand did not end up absorbing future surplus
funds.
Co-Chair von Imhof referenced Slide 8. She asked whether
OMB planned to put forward a deferred maintenance plan that
would recommend a specific amount be spent on deferred
maintenance for FY 2020, and beyond, or if it would be up
to the legislature to land on a number.
9:29:40 AM
Mr. Steininger advanced to Slide 11, "Deferred Maintenance:
What We Have Learned & A Plan Forward":
Pattern of funding DM backlog coincides with years
of high revenues
The SLA 2010-2014 initiative reversed the trend of
growing DM backlog
o Gave entities predictability and confidence
Without a consistent level of funding, entities
cannot effectively execute planned renewal
o Funding uncertainty leads to emergency only
spending
In a constrained fiscal environment, a statewide
approach provides DM attention to highest priority
needs across multiple agencies
Mr. Steininger looked at Slide 12, " Deferred Maintenance:
Alaska Capital Income Fund":
SLA2018 SB107 designated Alaska Capital Income Fund
for Deferred Maintenance
? Supplemented by Large Passenger Vessel Gambling
taxes in Governor's proposed budget
? Provides steady baseline funding for Deferred
Maintenance
? Approximately $35-40 million annually
Mr. Steininger agreed that a plan would be beneficial to
solving the problem.
9:30:48 AM
Co-Chair von Imhof asked about the second bullet on Slide
12.
Mr. Steininger replied that the bullet reflected a fund
transfer of revenue from Large Vessel Passenger Gambling
Tax, into the Capital Income fund; the Capital income fund
funded the deferred maintenance. Essentially, $27 million
was deposited into the Capital Income fund from the ERA,
through the Amerada Hess account, and an additional $10
million per year could come from the Large Passenger Vessel
Gambling Tax.
9:32:04 AM
Co-Chair von Imhof asked whether the fund sources and level
of funding were in the governor's proposed budget.
Mr. Steininger answered in the affirmative.
9:32:13 AM
Co-Chair Stedman thought it might be helpful to have a
historical accounting of the gambling tax in order to
understand how it had been spent since its creation.
Co-Chair von Imhof agreed with Co-Chair Stedman. She asked
for Mr. Steininger to provide the historical information on
the tax.
9:33:09 AM
Senator Wielechowski asked whether there was an average of
how much deferred maintenance was added to the backlog
yearly.
Ms. Willhoite specified that FY 2017 to FY 2018 showed a
growth of $58 million, while FY 2018 to FY 2019 showed a
growth of $169 million.
Senator Wielechowski understood that it would take 47.5
years to pay down the $1.9 billion in backlogged deferred
maintenance if the plan was to spend approximately $35 to
40 million annually; simultaneously, $58 to $100 million
would be added per year to the backlog.
Mr. Steininger thought the math sounded correct.
Senator Wielechowski asked whether this payment plan
sounded viable to the department.
Mr. Steininger thought it was a first step towards a plan.
He asserted that consistency in funding was important, as
was the amount of funding. He said that DOT could provide
further detail. He lamented that currently each department
was looking into deferred maintenance independently, which
made it difficult to gain a consistent look at the true
deferred maintenance needs across the state using similar
objective standards for every facility.
9:35:29 AM
Co-Chair von Imhof thought $35 to $40 million was the bare
minimum of a credit card balance. She wondered why a higher
amount was not being suggested, considering the governor's
agenda to decrease the budget.
Mr. Steininger stated that these were the amounts available
when the budget was being developed.
Co-Chair von Imhof pointed out that it had been two months
since the budget was released.
9:36:08 AM
Senator Shower asked about a federal match for deferred
maintenance.
Mr. Steininger explained that there was no federal match
associated with the deferred maintenance appropriations
that had been put forward. He said that some of the
projects on the backlog list could be eligible for federal
match dollars, if that were the case, OMB would encourage
seeking the federal match.
9:37:47 AM
Senator Micciche referenced his STIP remarks from earlier
and hoped he had not added to Senator Showers confusion.
He suggested that the backlog problem was not new. He asked
whether the administration had investigated how other
states managed their deferred maintenance.
Mr. Steininger deferred the question to testifiers from
DOT.
9:40:12 AM
Mr. Steininger spoke to Slide 13, "Deferred Maintenance:
Governor's Proposed Budget":
? FY2019
? Supplemental: $21 million DGF
? FY2020
? Statewide Facilities: $26.6 million DGF
? K-12 Major Maintenance: $7.4 million DGF
? Public Building Fund: $4.5 million Other
? University: $5.0 million DGF
Courts: $2.8 million UGF
Co-Chair von Imhof asked about K-12 Major Maintenance. She
noted there were 4 locations in the state that did not have
organized boroughs and therefore did not have the ability
to get a local match. She asked what options those boroughs
have for maintaining their buildings.
Mr. Steininger replied that he did not have an answer. He
said he would get back to the committee.
9:41:32 AM
Senator Hoffman relayed that a few years previously the
legislature passed a bill to utilize the Rural Educational
Attendance Area fund that had been dedicated strictly for
the unmet needs for the construction of new schools, the
appropriation had been opened to include deferred
maintenance for rural schools. He was unsure whether the
funds were being utilized in the proposed budget.
9:43:10 AM
Senator Wilson discussed the recent earthquake in the
Anchorage area and associated damage. He wondered whether
any of the facilities in the backlog were damaged in the
earthquake.
Ms. Willhoite stated that the administration had asked each
department to remove any items that may have been
reimbursed by insurance or other earthquake funding.
9:43:50 AM
Co-Chair Stedman agreed with Senator Hoffman that caution
was needed when making major policy changes. He worried
about rural areas that may not have the ability to fund
maintenance projects without state assistance. He warned
that a balance should be maintained by focusing on rural
areas as much as urban areas.
9:44:59 AM
Mr. Steininger referenced Slide 14, " Deferred Maintenance:
FY2018 Statewide Appropriation Status":
SB23, FY2018 Capital, funded $20M in statewide
Deferred Maintenance
? Distributed across 8 agencies, prioritizing:
o Life, health, and safety
o Assets at risk of imminent failure
o Timely project execution
o Maintenance to space to meet program mission
with demonstrated return on investment
Mr. Steininger noted that 2018 showed a shift in how the
state addressed deferred maintenance, by funding $20
million at the statewide level, which allowed projects in
different departments to be weighed against each other.
9:46:09 AM
Mr. Steininger turned to Slide 15, " Deferred Maintenance:
FY2019 Statewide Appropriation Status":
? SB142, FY2019 Capital, funded $20M in statewide
Deferred Maintenance
? 28 projects across the 13 agencies
? Common projects include:
? roof replacements
? safety compliance replacements
plumbing and
? electrical repairs
? Distributed remaining FY2018 funding
Mr. Steininger noted that the table reflected a total over
$20 million because in FY 2018 the portion of contingency
for emergent projects was withheld from the $20 million,
approximately $400 thousand, and one department had managed
to finish their projects with funds left over, leaving some
extra money to distribute in FY 2019. He said that in
making the distributions the department had been working
with the Division of Facility Services to get their input
on how finds should be distributed.
9:47:22 AM
Co-Chair Stedman noted the listed backlog by agency. He
said that in 2011, if the University had been removed from
the list, the deferred maintenance would have dropped from
$1.6 billion to $858 million. He furthered that doing that
same exercise in 2019, the number went form $1.8 billion to
approximately $600 million; he thought that the University
should be factored out when determining the aggregate
numbers for deferred maintenance.
9:48:47 AM
9:49:10 AM
Senator Shower wanted to know why the University deferred
maintenance backlog was so high.
Co-Chair von Imhof thought part of the problem was that the
University did an expansion with libraries, engineering
buildings, and museums, that were large and expensive
buildings.
9:50:19 AM
MARK DAVIS, DIRECTOR, DIVISION OF FACILITIES SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (via
teleconference), presented slide 16, " Deferred
Maintenance: Statewide Facilities Approach":
Timeline:
2015 EFMAC* Creation & Recommendations
2016 State Facilities Council Formed, Centralization
Analysis Recommendation & Approval
2017 Determination of lead agency for Centralized
Facilities Services DOT&PF
Advantages to centralized operations and maintenance
of state facilities
o One lead agency
o A programmatic and inclusive view of our state
building asset portfolio
o Commonality of processes, procedures and
strategies
2018 Initiation of the Division of Facilities
Services
o Facilities from DOT&PF, DOA and DEED currently
integrated
o Expansion ongoing through 2020 to include most
agencies
9:51:39 AM
Mr. Davis displayed Slide 17, "Deferred Maintenance:
Opportunities":
Develop framework for facilities maintenance,
improvements and care - built on best practices,
procedures and metrics
Strive for a systematic, objective funding program
Plan deferred maintenance improvements in a
deliberate, comprehensive manner
? Integrate energy efficiency program into the process
o Leverage financeable energy improvement project
opportunities to complement available deferred
maintenance.
Develop Facilities Condition Indexes(FCI)
o Provide holistic view of all state building
assets
o Baseline health of our assets; prioritize
deferred maintenance needs
o Analyze backlog of existing deferred
maintenance items in relation to actual needs
Implement a Computerized Maintenance Management
System (CMMS) for monitoring statewide maintenance and
facilities conditions
Mr. Davis noted that from working with facility council
representatives form each department, and OMB, the process
for prioritizing facilities deferred maintenance requests
had been refined with the goal to incorporate a Facilities
Condition Index (FCI) as an unbiased comparison of
facilities to be used as a key component for
recommendations. He said that he expected to use the FCI
assessments in FY 2021. He relayed that the division had
secured a contract with the AiM AssetWorks company and was
implementing a computerized maintenance management system
that would enable the division to deal effectively with the
2,000 plus buildings owned by the state. He said that steps
were begin taken to link the Alaska Energy Efficiency
program with future deferred maintenance projects.
9:53:24 AM
Co-Chair von Imhof asked about the last bullet on slide 17.
She wondered if the CMMS system was up and running.
Mr. Davis stated that the process of implementing the
system had begun and would take 2.5 years to complete. He
expected the first module would go live on September 1,
2019.
9:54:16 AM
Senator Wilson wondered whether implementation of the
system was being coordinated through DOA.
Mr. Davis responded that the system requirement had been
developed during the 18-month long study, done in
conjunction with the overall decision to consolidate the
maintenance function. He said that a software subcommittee
had been established with members from the 4 departments
that had made the recommendation.
9:56:04 AM
CHRISTOPHER HODGIN, PROJECT MANAGER, STATEWIDE PUBLIC
FACILITIES, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES (via teleconference), highlighted Slide 18,
"Deferred Maintenance: Strategy":
Proposed Vision Forward - A Programmatic View
Establish effective, continuous, transparent and
results based program to accomplish facilities
deferred maintenance (DM) and energy efficiency
improvements
Objective assessment and uniform analysis of
existing facility conditions, energy efficiency
and
DM needs.
Prioritization and selection integrating -
structured, consistent and predictable means of
DM and energy projects.
? Execution of the selected and funded projects
Results based, measurable Key Performance
Indicators and reporting to show progress on
project execution, facility improvement and
return on investment.
9:57:04 AM
Mr. Hodgins looked at Slide 19, "Deferred Maintenance:
Assessing Conditions & Needs":
Deferred maintenance moving forward statewide
objective approach to assess conditions and
comprehensively plan for recapitalization of assets:
? Beginning with Facility Assessments to develop
Facilities Condition Indexes (FCIs) for each facility
? Incorporate building mission and system factors
(Sf), (Mf)
? To arrive at Project Index Values that can be used
to prioritize and vet priorities
? Further Incorporate Energy Efficiency Factors to
determine opportunities to leverage a combined
deferred maintenance and financed energy improvement
project
9:58:48 AM
Co-Chair von Imhof thought the concepts had been discussed
in the private sector for years. She asked whether the
department was starting the process in 2019, or if the
process had been done in the past.
Mr. Hodgins stated that the Facilities Condition Index
(FCI) had been used by some departments in the past, such
as Department of Health and Social Services (DHSS). He
furthered that some aspects had been taken from what had
already been built and some of it was incorporating best
practices with departments that had never gone through the
process before.
Co-Chair von Imhof asked whether DOT and University had
used the process before.
Mr. Hodgins was unsure that the University had used the
process before.
10:00:18 AM
Co-Chair Stedman discussed the deferred maintenance numbers
for the University. He believed that there was a benchmark
issue that should be tracked in a linear fashion. He
queried the use of the term recapitalization and wondered
about the status of any accounts for replacing buildings.
Mr. Davis thought the slide used a poor choice of words.
The intent was to convey that the that state assets were
being taken care of and the life of those assets was being
increased to the greatest extend possible and in an
efficient manner.
10:02:21 AM
Co-Chair Stedman asked about the FCI and looked at the
formula on Slide 19. He inquired about a new facility,
which he thought should not have any of the upkeep or
repair issues factored into the equation. He asked how to
justify substantial funds expended on new buildings.
Mr. Davis understood the question. He believed that at
times the terms 'operation' and 'maintenance' were
interchangeable. He said that both words covered the work
and supplies that would be required for a building to
achieve the functionality for which it was designed.
10:04:04 AM
Mr. Hodgins addressed Slide 20, "Deferred Maintenance:
Prioritization & Selection":
Use a consistent and structured process for project
selection:
Candidate projects by priority > Vetting and Review >
Final Recommendation to OMB > Projects funded
1. Deferred Maintenance candidate projects prioritized
by Project Index Value (PIV) and Energy improvement
potential
2. Candidate projects reviewed by State Facilities
Council for any adjustments and creation of
recommended final list
3. Division of Facilities Services submits recommended
deferred maintenance projects to OMB
4. State funds projects
10:04:58 AM
Mr. Hodgins advanced to Slide 21, "Deferred Maintenance:
Results Based Performance & Reporting":
Objective measurements to determine performance and
improvements from completed deferred maintenance
projects:
Potential Key Performance Indicators:
? FCI Improvements before and after FCI values
? Energy Use Index (EUI) Improvement - before and
after values
? Value of DM projects completed per year
10:05:35 AM
Mr. Davis looked at Slide 22, "Deferred Maintenance:
Disposing of State Assets":
Property Disposal Directive
? State Facilities Council working group
investigating options for reducing State's
assets.
Broad and Complex each situation is a case-by-case
basis
Governing Federal Regulations and Rules:
? Environmental regulations for contaminated
sites and hazardous materials remediation
? Multiple Federal Agency rules Federal Highway
Administration, Transit Administration, Aviation
Administration
State Statutes
? AS 44.68.110, AS 02.15.060-070, AS 19.05.070,
AS 14.07.030, AS 38.05.035 authorizes
Departments of Administration, Education,
Transportation and National Resources over sales
and transfers of property, dependent on type
Internal Policies
? Department of Administration Property Control
Manual and guidance
Historical disposals have been limited
? Includes DHSS, DNR, DF&G building or land
assets
Mr. Davis shared that there were several regulations in
statute that governed the disposal of state owned
facilitates, and those assets that had been federally
funded could require some repayment. He said that in some
cases remediation could be required. He said that the
divisions role in the process was to collaborate with
facilities council representatives to make recommendations
to OMB. He noted that the Division of Military and Veterans
Affairs had disposed of 15 facilities since 2006 and were
in the process of divesting up to 50 more facilitates. He
said that recently DOT had sold two facilitates, bringing
$5.5 million back to the state treasury.
10:07:20 AM
Senator Hoffman wondered who was on the State Facility
Council and how often the council convened.
Mr. Davis stated that the council members were a
spokesperson from each department, and partners from OMB,
and met at least once a quarter.
Senator Hoffman asked whether there were written minutes of
the meetings that could be reviewed by the public and the
legislature.
Mr. Davis stated that council minutes were kept and could
be made available to the public.
10:08:59 AM
Co-Chair von Imhof recalled in a previous administration,
there had been a list of facilities that DOT had planned on
putting up for sale. She wondered whether the division was
planning on incorporating work done by prior
administrations.
Mr. Davis stated that he had information from prior years
that the group would be reviewing over the next few months.
10:09:48 AM
Co-Chair Stedman thought it would be helpful to receive
information on previous administration's work on potential
disposal.
Co-Chair von Imhof thought it was important that the
legislature receive updates on a periodic basis, especially
during sessions when the legislature was making allocations
in a constrained budget environment. She was eager to be
provided with an update on the work done by the previous
administration.
10:11:53 AM
Senator Micciche looked at Slide 22 and the bullet
regarding governing federal regulations and rules. He asked
whether the states remediation standards were excessive.
He though that the council should consider the standards
and whether they needed revision.
Mr. Davis stated there had been no changes to the
regulations. He said that the standards would be examined.
10:12:57 AM
Co-Chair Stedman had a point of concern. He referenced Mt.
Edgecumbe school and abandoned buildings in the area. He
had concern that the facilities and the associated
demolition cost would be shifted onto the school. He
thought the facilities contained asbestos, and that the
formulas used by DOT should consider the age of some of the
building on that campus.
Co-Chair von Imhof assumed there would be a list that went
with the deferred maintenance budget and that Mt.
Edgecumbe, or anything on the list, could be discussed in
more depth later.
10:15:32 AM
Senator Hoffman addressed the last bullet point on slide 22
that pertained to historical disposals. He wanted to see
the acreage of land that went along with the disposals, and
any future facility disposal being considered.
Mr. Davis acknowledged the request for information. He
added that the only land parcel that was conveyed was
approximately an acre of land near Birch Lake in Fairbanks
that had become landlocked by private owners.
10:17:11 AM
Senator Wilson considered the statewide deferred
maintenance backlog list for 2019. He asked for information
pertaining to harbor maintenance.
Mr. Davis said that depending on what was presented for
consideration, not everything would end up on the list.
10:18:17 AM
Co-Chair Stedman interjected that over a decade ago the
legislature had put together a package to deal with the
deferred maintenance of harbors. He said that a proposal
had been made that the state would pay for 50 percent of
the new construction costs, and costs would be encapsulated
in an enterprise fund at the local level. He relayed that
the program had been successful, which was why deferred
maintenance for harbors was near zero.
10:19:39 AM
Senator Shower lamented that Mt. Edgecumbe had been
designated as a historical site. He wondered whether
federal dollars were available for upgrades to state owned
buildings on the historical register.
10:20:42 AM
Senator Wielechowski asked what percentage of deferred
maintenance was capable of being done by state maintenance
workers versus the percentage that would go out to
contractors.
Mr. Davis did not have the exact percentage of the work but
said that there was a lot of work done by the state that
could be categorized as deferred maintenance.
10:21:32 AM
Senator Wielechowski asked whether there had been a cost-
benefit analysis of increasing in-house maintenance or
construction staff versus contracting the work to private
industry.
Mr. Davis answered that there had not been a specific cost-
benefit analysis done but that one could be done in the
future.
10:22:32 AM
Senator Micciche understood that there was a backlog but
did not think it was as severe when DOT and the University
were scheduled separately.
10:23:39 AM
Co-Chair Stedman was curious whether the Courts used DOT
for repairs or had any streamlined process to lower
maintenance costs.
Mr. Davis stated that DOT maintained court buildings
through RSA and other arrangements.
10:24:22 AM
Mr. Davis spoke to Slide 23, "Deferred Maintenance: Looking
Ahead":
? Develop framework for facilities maintenance,
improvements and care - built on best practices,
procedures and metrics
? DM distribution considerations based on objective
rating system to address most critical projects
statewide
? Plan deferred maintenance improvements in a
deliberate, comprehensive manner
? Build on successes and lessons learned
? Constant attention to preventative maintenance
required
? Stewardship based on consistency and predictability
Co-Chair von Imhof invited OMB to revisit their funding
recommendation for FY 2020 deferred maintenance,
considering the backlog discussed at the table. She thought
that the backlog could be broken down into parts. She
stressed that the committee was open to suggestions as it
crafted the capital budget. She discussed housekeeping.
ADJOURNMENT
10:25:53 AM
The meeting was adjourned at 10:25 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 040519 FY2019 Distribution Detail.pdf |
SFIN 4/5/2019 9:00:00 AM |
Deferred Maintenance 2019 |
| 040519 FY2018 Deferred Maintenance Distribution.pdf |
SFIN 4/5/2019 9:00:00 AM |
Deferred Maintenance 2019 |
| 040519 Deferred Maintenance Presentation OMB.pdf |
SFIN 4/5/2019 9:00:00 AM |
Deferred Maintenance 2019 |
| 040519 FY19 DM Backlog Statewide OMB.xlsx |
SFIN 4/5/2019 9:00:00 AM |
Deferred Maintenance 2019 |