Legislature(1999 - 2000)
11/18/1999 09:12 AM Senate PRI
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
COMMISSION ON PRIVATIZATION AND DELIVERY OF GOVERNMENT SERVICES
Anchorage, Alaska
November 18, 1999
9:12 a.m.
COMMISSION MEMBERS PRESENT
Representative Cowdery, Co-Chair (via teleconference)
Senator Ward, Co-Chair
Representative Brice (via teleconference)
Senator Al Adams
Emil Notti
Mike Harper, President, Kuskokwim Corporation (via teleconference)
Kathryn Thomas, Former Chair of Alaska State Chamber of Commerce
(chairing meeting)
George Wuerch, Alaska Municipal League
COMMISSION MEMBERS ABSENT
Bill Allen, Former Mayor of Fairbanks
Tom Fink, Former Mayor of Anchorage
Don Valesko, Business Manager of Public Employees Local 71
COMMITTEE CALENDAR
Reports from the following Privatization Subcommittees:
Department of Natural Resources
Department of Transportation and Public Facilities
Department of Community and Economic Development
Office of the Governor
Department of Law
PREVIOUS ACTION
See Commission on Privatization minutes dated 7/20/99, 8/16/99,
9/20/99, 10/28/99, 11/04/99 and 11/10/99.
WITNESS REGISTER
MARCO PIGNALBERI, Commission Director and
Legislative Assistant to Representative John Cowdery
POSITION STATEMENT: Answered questions and presented information
on behalf of the commission and various subcommittees.
HUGH ASHLOCK, Member
Subcommittee on the Department of Natural Resources (DNR)
POSITION STATEMENT: Briefly addressed land development; presented
portion of DNR subcommittee report on Parks and Recreation.
BOB MOTZNIK, Member
Subcommittee on the Department of Natural Resources
POSITION STATEMENT: Presented portion of DNR subcommittee report
relating to the State Recorder's Office (Information and Data
Management).
RON ANDERSON, Member
Subcommittee on the Department of Natural Resources
POSITION STATEMENT: Asked questions and presented portion of DNR
subcommittee report relating to Agricultural Development.
DALE URICH, Member
Subcommittee on the Department of Natural Resources
POSITION STATEMENT: Briefly addressed land development; presented
portion of DNR subcommittee report on Forest Management and
Development.
BOB LOEFFLER, Director
Division of Mining, Land and Water
Department of Natural Resources (DNR)
POSITION STATEMENT: Attended at request of DNR subcommittee member
Marty Rutherford to discuss subcommittee report; agreed to pass
requests on to Deputy Commissioner Rutherford.
JIM STRATTON, Director
Division of Parks and Outdoor Recreation
Department of Natural Resources
POSITION STATEMENT: Attended at request of DNR subcommittee member
Marty Rutherford to discuss DNR subcommittee report; spoke briefly
about camping passes.
RANDY RUEDRICH, Member
Subcommittee on the Department of Natural Resources
POSITION STATEMENT: Presented portion of DNR subcommittee report
relating to Oil and Gas.
KURT PARKAN, Deputy Commissioner
Department of Transportation and
Public Facilities (DOTPF)
POSITION STATEMENT: Responded to questions about DOTPF's
operations and the recommendations included in the DOTPF
subcommittee report.
JOHN D. HORN, Regional Director
Central Region
Department of Transportation and
Public Facilities
POSITION STATEMENT: Responded to questions arising from DOTPF
subcommittee report about contract possibilities for road
maintenance.
STEVE LEVI, Member
Subcommittee on the Department of Community and
Economic Development (DCED)
POSITION STATEMENT: Presented and discussed recommendations in the
DCED subcommittee report.
JEFF BUSH, Deputy Commissioner
Department of Community and Economic Development
POSITION STATEMENT: Replied to questions about the department's
response to the DCED subcommittee report.
ANDREE McLEOD, Member
Subcommittee on the Office of the Governor and
Staff to the Commission on Privatization and Delivery of
Government Services
POSITION STATEMENT: Presented report of the Subcommittee on the
Office of the Governor.
MARK JOHNSON, Member
Subcommittee on the Department of Law
POSITION STATEMENT: Presented and discussed DOL subcommittee
report.
CYNTHIA COOPER, Deputy Attorney General
Criminal Division
Department of Law
POSITION STATEMENT: Answered questions about performance
measurement indicators relating to DOL subcommittee report.
BARBARA RITCHIE, Deputy Attorney General
Civil Division
Department of Law
POSITION STATEMENT: Answered questions relating to DOL
subcommittee report, including DOL's procurement policy, management
information system and the collections section.
PETER KINNEEN, Member
Subcommittee on the Department of Law
POSITION STATEMENT: Participated in discussion of DOL subcommittee
report; addressed rates charged for attorney fees by DOL.
ACTION NARRATIVE
TAPE 99-13, SIDE A
COMMISSIONER THOMAS called the Commission on Privatization and
Delivery of Government Services meeting to order at 9:12 a.m.
Members present at the call to order were Representative Brice;
Senator Adams; and Commissioners Thomas, Harper, Notti and Wuerch.
Representative Cowdery and Senator Ward joined the meeting in
progress. Marco Pignalberi, Commission Director, was also present.
Commissioners Allen, Fink and Valesko were not in attendance.
APPROVAL OF PREVIOUS MINUTES
COMMISSIONER THOMAS announced that the first order of business
would be to approve the minutes from the meetings held November 4,
1999, and November 11, 1999.
COMMISSIONER WUERCH made a motion to approve the November 4, 1999,
minutes and to bring the November 10, 1999, minutes before the
commission at the next meeting; he noted that the latter had just
been distributed and that he had suggested changes to the staff.
There being no objection, it was so ordered.
COMMISSIONER THOMAS informed members of a correction on Davis-Bacon
information, provided as an attachment to the November 10, 1999,
minutes, in reference to remarks on pages 11 and 12 of those
minutes. She proposed that it be addressed at the following week's
meeting.
COMMISSIONER THOMAS welcomed Co-Chair Ward to the meeting and
offered to turn over the gavel to him.
CO-CHAIR WARD suggested that Commissioner Thomas continue chairing
the meeting.
SENATOR ADAMS informed Commissioner Thomas that he had to leave at
10 a.m. for Fairbanks.
OLD BUSINESS
COMMISSIONER THOMAS next addressed old business. First, comments
by the Department of Environmental Conservation were still pending.
Second, comments by the Department of Labor were included in that
day's package; Commissioner Thomas asked whether any action on that
was required.
MARCO PIGNALBERI, Commission Director and Legislative Assistant to
Representative John Cowdery, answered that no action was necessary.
When the commission votes on the Department of Labor's
recommendations, however, members should have those comments for
reference.
COMMISSIONER THOMAS noted that comments from the Alaska Court
System, requested by the commission, were included in packets. She
confirmed that the information would become part of the
commission's packet on the Alaska Court System.
NEW BUSINESS - Reports by Subcommittees
[Most of the information contained in subcommittee reports will be
available at the commission's website at www.privatizealaska.org.]
Subcommittee Report on the Department of Natural Resources
COMMISSIONER THOMAS announced that the commission would first hear
the Subcommittee Report on the Department of Natural Resources
(DNR). A written copy was provided that included recommendations
but no department comments.
MR. PIGNALBERI informed the commission that the subcommittee
chairman, Leo MarkAnthony, was in Mexico and had asked members of
his subcommittee to present the report. Mr. Pignalberi suggested
inviting them to the table, along with DNR representatives, to go
through the recommendations.
REPRESENTATIVE BRICE, speaking via teleconference from Fairbanks,
advised the commission that he didn't have the appropriate
materials, which had apparently been e-mailed late the previous
evening.
COMMISSIONER THOMAS noted that subcommittee member Del Moss of
Fairbanks was on teleconference. She asked the presenters to
introduce themselves.
HUGH ASHLOCK, Member, Subcommittee on the Department of Natural
Resources, introduced himself as the U.S. Forest Service and U.S.
Fish and Wildlife campground concessionaire for Alaska; he advised
listeners that he had addressed Parks and Recreation in the report.
BOB MOTZNIK, Member, Subcommittee on the Department of Natural
Resources, introduced himself next, noting that he had addressed
the portion of the report relating to the State Recorder's Office
(Information and Data Management).
RON ANDERSON, Member, Subcommittee on the Department of Natural
Resources, introduced himself and advised listeners that he had
addressed Agricultural Development in the report.
DALE URICH, Member, Subcommittee on the Department of Natural
Resources, introduced himself next, saying he had chaired the
subcommittee on Forest Management and Development.
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources, introduced himself. He noted that
Marty Rutherford, Deputy Commissioner of DNR and a member of the
subcommittee, had requested his presence that day because of a
scheduling conflict. Mr. Loeffler said he was quite familiar with
the subcommittee's recommendations on mining, land and water,
although he wasn't as familiar with the rest of the report.
JIM STRATTON, Director, Division of Parks and Outdoor Recreation,
Department of Natural Resources, introduced himself and noted that
he was also there at the request of Marty Rutherford, who herself
would provide comments at the commission meeting on November 24,
1999.
MR. PIGNALBERI expressed his understanding that they would go
through the DNR subcommittee report section-by-section. To the
extent that the person who had worked on a particular section was
present, that person would discuss the recommendations.
COMMISSIONER THOMAS welcomed Co-Chair Cowdery, who had joined the
meeting via teleconference from Washington, D.C.
CO-CHAIR COWDERY indicated he had to meet with U.S. Senator Ted
Stevens in about a half-hour, but would try to rejoin the meeting.
MR. MOTZNIK presented the portion of the DNR subcommittee report
relating to the State Recorder's Office, set forth under
"Information and Data Management." Recommendation 1, pages 3 and
11, read: "Establish some sort of punishment procedure for
deliberate lies/distortions made on budget request documents." Mr.
Motznik mentioned examples where the State Recorder's Office had
made misrepresentations in trying to get more money in its budget.
Information about those distortions had come out in the last
legislative session in the finance committee, he said, suggesting
punishment for attempting to lie might discourage such behavior.
MR. MOTZNIK summarized the three examples under Recommendation 1 on
page 11. First, submitted as Attachment S-2, was a Y2K-related
request for $225,000 to convert some of the mainframe network to
personal computers (PCs). However, because the mainframe network
is "dumb" and doesn't know what day it is, it has nothing to do
with problems in the year 2000. Although the office didn't get the
money and had "back-pedaled" when confronted with this in the
finance committee, there was no punishment involved.
MR. MOTZNIK discussed the second example, submitted as Attachments
S-3 and S-4 to the report. In the FY00 budget, an increase of
$300,000 was requested for additional personnel because the volume
of documents recorded had increased yearly from 1995 through 1998,
with the same number of front-line employees. However, the 1994
volume, not included, was higher than any year on the chart, and
with fewer total employees. Mr. Motznik suggested that not
including 1994 distorted the data.
MR. MOTZNIK addressed the third example, submitted as Attachments
S-5 and S-6. A supplemental budget request of $92,000 from the
previous session had said the size of recorded documents had
increased 158 percent in the last five years. However, Mr. Motznik
had calculated the average number of pages for documents over the
last twenty years, and he found the average size in the last five
years had gone up by only 1/100th of a page [from 2.54 pages in
1994 to 2.55 pages in 1999]. He restated concern about the lack of
a penalty for putting misleading arguments into budget requests.
REPRESENTATIVE BRICE asked whether the State Recorder's Office had
received the requested money.
MR. MOTZNIK said no, but if it weren't for a lot of volunteer
effort, they would have gotten away with it.
REPRESENTATIVE BRICE replied that that's democracy.
MR. MOTZNIK countered that there is no discouragement from trying
it again the next year, and it perpetuates the game.
CO-CHAIR COWDERY asked whether his understanding is correct that in
the past the State Recorder's Office processing was done for free,
but that a couple of years ago the DNR had decided to do it on its
own, at quite an increase in cost to taxpayers.
MR. MOTZNIK explained that Motznik Computer Services, Inc. (MCS),
his own company, had done the processing for free since June 1986.
As of January 1999, it was brought in-house over the objections of
the legislature. He commented that maybe it is coincidental timing
that they then requested $200,000 in capital money, $300,000 in
operating money, and $92,000 in supplemental funds. He believes
there was no justification for those increased requests because the
volume had not increased.
CO-CHAIR COWDERY asked how MCS had received fees if they did it for
free.
MR. MOTZNIK answered that the state had been using a system he
himself wrote in 1971. In 1986, when he was putting files online,
the state was still on that old, slow system, using keypunch cards
and mailing items all around the state. He had offered to take
over the processing and programming at no charge, to get up-to-
date, usable data.
CO-CHAIR COWDERY asked how many new employees were requested, at
least approximately, because of doing away with the free service
and performing it in-house. He said he didn't want to hold up the
meeting but thought that should be stated. He recalled that
someone from the State Recorder's Office was in his own office in
Juneau several times lobbying for funds.
MR. MOTZNIK informed Co-Chair Cowdery that it wasn't on the chart
he had.
REPRESENTATIVE BRICE suggested someone from the DNR could provide
the information.
CO-CHAIR COWDERY asked that it be given to his staff, Annette Deal
or Marco Pignalberi.
MR. LOEFFLER advised the commission that he would ask DNR Deputy
Commissioner Rutherford to provide, at the next meeting, the number
of positions requested by the State Recorder's Office. In response
to Commissioner Wuerch, he also agreed to convey the request for a
response to the following: Why would the state take on the cost of
doing a service that has been provided for free?
MR. MOTZNIK informed listeners that the original agreement in 1986
was that he would do the programming and processing on the MCS
machine. The file remained public, he had no priority rights, and
anyone wanting a copy could get one that night. In fact, MCS sent
copies of the daily data to the state for public release.
Mentioning competitors, he said Geonorth, Inc., provides online
access to the State Recorder's Office and got their data from that
office. It worked great for years. By putting information online,
the state didn't have to transfer reports and data between
Fairbanks and Juneau, for example, and it was much less time-
consuming.
MR. MOTZNIK continued. With the last Recorder, the drive came to
bring the system in-house. An update was needed, and they wanted
more things in the system. It got beyond what his company could do
for free, Mr. Motznik said, although he believes MCS could have
done it for considerably less than it cost the state. In 1997 the
State Recorder's Office requested $1.2 million to purchase a new
system that involved imaging. However, the legislature denied the
request, saying it didn't make sense to provide $1.2 million to
replace something they were getting for free. At that point, the
State Recorder wrote Mr. Motznik a letter, signed by Commissioner
Shively, saying they weren't going to process with MCS anymore; it
was to end July 1, 1997. However, the State Recorder's Office
didn't have anything else to run; the State Recorder wrote the
title companies predicting disaster on July 1 and asking them to
contact legislators for money for the office. Representative
Rokeberg, chairman of the House Labor and Commerce Standing
Committee, then put together an oversight hearing in the last two
days of the session. In the next year, MCS gradually got another
agreement with the state, although they operated six months without
one.
MR. MOTZNIK continued. In 1998, after session was over, there were
two oversight hearings in which the State Recorder's Office said
they wouldn't bring it in-house but wanted a backup system in case
MCS's system failed. Following the 1998 special session, however,
Mr. Motznik said he was called in and told, "That's it: We're
taking it in-house, and we're going to have it in-house on November
1." That was despite the agreement's requirement of six months'
notice. Mr. Motznik told the commission there has been much
bickering and it has been "a mess" for years. He concluded by
saying the State Recorder's Office made a lot of enemies by pulling
this in-house. He mentioned a letter signed by 12 legislators,
included in packets, that advised against it.
MR. MOTZNIK concluded that this system, privatized for 12.5 years,
obviously could be privatized again. However, because the office
risked so much bringing it in-house, he doubts that it could be
"extracted" again. Furthermore, he isn't sure he would even want
to bid on it if it were privatized again, because of the present
personnel. Trying to force someone who doesn't want to be a
customer into being one, and doing it for free, wouldn't work. He
suggested it would require a different State Recorder.
CO-CHAIR COWDERY asked whether Mr. Motznik or the committee has a
recommendation now.
UNIDENTIFIED SPEAKER noted that it used to be in the Alaska Court
System. Adding that he has known every State Recorder, he said
they had much preferred being in the court system rather than DNR;
it was not nearly as political, and they could operate more
efficiently.
COMMISSIONER THOMAS asked whether part of the recommendation is
that it go to the Alaska Court System rather than DNR.
MR. MOTZNIK said he thinks it would take some studying. As far as
privatization, it obviously can be privatized because it worked
fine that way for 12.5 years. He asked how they can get back to
that situation with people who don't want it privatized, however.
He suggested the three choices are to change the people, move it to
a different department or forget about privatizing it.
CO-CHAIR COWDERY suggested it could also be done through the budget
process.
COMMISSIONER WUERCH pointed out two recommendations in the summary:
Recommendation 3, to re-privatize the recorder's office index
processing (page 11), and Recommendation 4, to consider contracting
out the entire recorder's office process. He told Co-Chair Cowdery
the subcommittee is making recommendations to privatize these
functions.
UNIDENTIFIED SPEAKER responded, "We're recommending it, but I'm not
sure how you're going to accomplish it."
COMMISSIONER THOMAS asked if Mr. Motznik wished to comment on the
two other items in this area.
MR. MOTZNIK explained that a title company, to maintain a plant and
do title searches, needs a copy of every document going back 20-
some years. For example, Western Microfilm Services, Inc., is a
representative of the title companies and had microfilm equipment
in the State Recorder's Office. This whole process of recorded
documents is duplicated over and over. Each title company
maintains its own plant that duplicates what the State Recorder's
Office does. The State Recorder's Office microfilms every
document, and Western Microfilm microfilms every document again in
that office, then distributes that data to the title company. Mr.
Motznik mentioned that he had provided a letter indicating Sharon
Young had written Western Microfilm, telling them they couldn't do
that anymore, stopping their access to microfilmed documents.
Whereas a title company could get a copy of a document from Western
Microfilm for 35 cents or 30 cents a document, that company now has
to pay the State Recorder's Office $3 a document. He characterized
it as holding the documents hostage for a large fee. Furthermore,
that state office now makes more copies and therefore needs more
employees and microfilming equipment. He suggested they are making
their own business out of copying this data by blocking private
enterprise from doing it at a fraction of the cost.
CO-CHAIR WARD asked how other states do it.
MR. MOTZNIK said he isn't sure. Reiterating that this has all
happened in the last few years, he recounted how Sharon Young, the
new State Recorder, had decided that the way documents were indexed
for the last 25 years was wrong. She believed they needed to be
indexed exactly as they were on the documents, he explained. This
created several situations. One function her office performs is to
scrutinize every document coming in for recording to make sure it
is acceptable; without a valid legal description, Ms. Young
considers it unacceptable. Now, thousands of documents in the
system were accepted, but when it came to indexing them, the office
put in a comments card that says "Incomplete legal description, not
indexed." This has bad ramifications, and Mr. Motznik believes
those documents should have been rejected to begin with.
MR. MOTZNIK cited an example. The recording districts in Kenai,
Homer and Anchorage are all on the Seward Meridian; if a warranty
deed for a house there comes in, listing the property location
including section, township and range but not "Seward Meridian,"
the office may accept the document but not index it. However, it
is known to be the Seward Meridian; prior recorder just added that
language and indexed it. Now, however, thousands of these
documents are not indexed.
MR. MOTZNIK recounted how Pacific Rim Title (ph), some time ago,
had issued title insurance on a piece of property, missed the
document, and the recorder had to write an affidavit that said the
State Recorder's Office had indexed it under the wrong name and
property description. There was no way to find that document, nor
any way Pacific Rim Title could know that document had anything to
do with this piece of property on which they were issuing title
insurance. Therefore, the bankruptcy judge ruled they weren't
liable. Mr. Motznik commented, "Well, that says that these
thousands of documents that people have brought in - the recorder's
office accepted the money, put the document in the system, didn't
tell them that there was anything wrong, did not index - that those
documents are the same as not recorded. To me, that's just a
horrible situation."
MR. MOTZNIK cited a further example. He had come across a document
the previous day with a little information in the index, plus a
comments card saying "handwriting illegible." However, the office
is supposed to refuse a document if it is illegible. He emphasized
that the last couple of years the indexing has deteriorated
horribly. He has known all the prior recorders, some of whom have
contacted him, upset about what is going on, he said. To him, the
worst thing about the State Recorder's Office is that the quality
of the data is deteriorating considerably. However, that has
nothing to do with privatization, he added.
COMMISSIONER THOMAS asked how to go back and correct this, and
whether there is some way the DNR is going to be able to take care
of that.
MR. MOTZNIK replied that some previous oversight hearings, which
Co-Chair Cowdery had attended, addressed some of these concerns.
This spring he himself had brought them up to Marty Rutherford, who
met with representatives from some of the title companies.
However, there was only one meeting; Deputy Commissioner Rutherford
and Commissioner Shively just met with the title companies, got
them interested, and then "disappeared." Mr. Motznik also
indicated he can't get Deputy Commissioner Rutherford to return his
monthly telephone calls.
CO-CHAIR WARD referred to the beginning of Mr. Motznik's
presentation, agreeing there is probably nothing quite as
frustrating as misinformation in a budget process. Specifically
referring to the desire for a penalty, as well as numbers 7 and 8
of Mr. Motznik's attachment regarding the cry to have the
legislature lobbied, Co-Chair Ward commented that almost any
sanctions, however, other than requiring good government, would
penalize the people who own the government. He then asked whether
Mr. Motznik believes there would be any takers, in Alaska or in the
computer industry, if the entire procedure were put out to a
request for proposals (RFP).
MR. MOTZNIK answered that the recorder's office, in toto, is a
filing job: "Here's a document. Make a copy of it. Index it so
I can find it. And if anybody wants a copy of it, make the copy
for them." Emphasizing that it isn't a complicated procedure, he
noted that each title company does exactly the same thing.
Furthermore, every county in every state has its own recording
system. Mr. Motznik said he isn't sure why somebody wouldn't want
to try it. Mentioning a pilot project, he noted that Homer's
recording office has one employee, as does Kotzebue's. "If you fly
to Nome to search title, and you get to Nome and that employee is
sick that day, then you [sit] until she gets well, or you fly
back," he said. "It's quite costly because the office has no
backup, because there's only one employee there. I would think
that if the Kotzebue recording office was a contract office, there
has got to be some business in Kotzebue that has a business with
two employees that could operate that."
MR. ANDERSON mentioned that, during subcommittee hearings, it was
suggested that if a person presenting facts at a budget hearing
were under oath, that person's statements would more likely be
true; if a person lied, there could be some legal recourse.
COMMISSIONER THOMAS referred Mr. Motznik to the DNR's official
departmental recommendations, items 1 and 2, found on page 5 of the
subcommittee report; she asked whether he had any comments on those
items. [Item 1 read: "Film old recording books currently located
in 14 different offices. (Page 66)." Item 2 read: "Implement
imaging technology. (Page 66)."]
MR. MOTZNIK responded that until 1971, all documents were
photocopied. Microfilming started in 1971. Indexes were written
... [ENDS MID-SPEECH BECAUSE OF TAPE CHANGE]
TAPE 99-13, SIDE B
MR. MOTZNIK said they are old documents, not used a lot. Imaging
gets cheaper over time, he pointed out. The main cost is holding
all the documents. However, a computer image is not as secure as
a microfilm image. Images scanned into a computer digitally can be
altered. If the official record of a deed to a piece of property
were a computer image, there would be a worry that someone could
change it in the computer, thereby changing the deed. Right now,
to his knowledge, a computer image won't legally stand up in court
in Alaska. It would require legislation before the savings could
occur, because a microfilm system would have to maintained too, and
they wouldn't really be saving much money.
COMMISSIONER THOMAS asked whether anyone wished to comment on
resource development; there was no discernible response. She then
asked whether anyone wished to comment on land development.
MR. ASHLOCK addressed land development from his own experience in
talking with DNR representatives. He acknowledged that DNR is
encumbered with a number of different processes, saying he doesn't
have a specific solution but believes something needs to be done to
streamline the state land leasing process. He believes the DNR
staff is, for the most part, somewhat frustrated too because the
process is so lengthy. Millions of acres are under DNR
stewardship, and the process is cumbersome. Even to get it to the
point of a competitive bid notice for the newspaper, money must be
spent on surveying and whatnot. Although streamlining is needed,
he doesn't know if it is necessarily an area for privatization.
MR. URICH also briefly addressed land development, adding that
there was a bill, a "family entitlement land Act," pertaining to
putting up a certain amount of land every year; however, that bill
had gone nowhere. He indicated Fran Ulmer wouldn't sign off on it
because the DNR would be selling off the state's assets. To his
understanding, it will be presented again in a different manner,
under leasing. He asked why that never went anywhere, and whether
Co-Chair Ward had ever looked at it.
CO-CHAIR WARD replied that it was one of many introduced. The
particular bill he himself was thinking of was part of a
combination of six bills introduced by Senator Taylor to try to
free up some 2 to 5 million acres of the state's 103 million acres.
Co-Chair Ward said the bills will be reintroduced. He added that
Senator Taylor's thought process was to move existing state lands
into private ownership so they could be taxed. The Municipality of
Anchorage, the City of Kenai and others rely on property tax
revenues. The state doesn't pay property taxes, nor should it.
But if the land could be transferred to private parties in some
fashion, that money would be on the tax rolls and there would be no
budget deficit problem.
CO-CHAIR WARD pointed out that some people are reluctant to develop
the state's resources and adamantly oppose that. He doesn't know
whether that exactly fits under privatization, but if talking about
funding essential government services through privatization, he
believes there can be no purer way than to transfer resources from
the people of Alaska to [private entities] so that the state or
local municipalities could tax them through property taxes.
UNIDENTIFIED SPEAKER commented, "As long as somebody's paying for
the transfer."
CO-CHAIR WARD replied, "Yes, and that's part of what Mr. Ashlock
was talking about, the cost of transferring. And I don't know that
anybody wants to go back to the just-metes-and-bounds of the 1940s,
when we transferred homesteads, but it did work well, and most of
our cities are developed because of those homestead Acts at this
time. But there are ways to transfer properties fee simple without
going through all the hoops that we now are going through. It
worked well since the 1800s, and I'm sure it'd work well again
without a bureaucrat under every tree."
UNIDENTIFIED SPEAKER responded that the good old days weren't
always that good, as there were tremendous numbers of land
disputes, fights and "wars" about trying to keep track of who owned
what. He added, "Let's get that land out in the public hands;
that's not a problem. But let's make sure we're not selling it to
three different people. And I think that comes into question, and
you need a state agency ... that's adequately funded that can
ensure that the land's only sold once."
COMMISSIONER THOMAS returned the commission's attention to the DNR
subcommittee report. She called on Dale Urich to address Forest
Management and Development.
MR. URICH advised the commission that it was hard to unravel this
budget and establish costs that are fair to the forest management
section. Fire pre-suppression is mixed in, for example, with $4.3
million going to that, whereas about $8 million goes to fire
suppression on its own. Mr. Urich wants to see breakdowns about
costs per board foot, road costs, production costs and the costs of
putting the sales up; however, they [the state agency] could never
come up with that, and they weren't compelled by the legislature to
have checks and balances in that area. He questioned how a
business could be run without such cost breakdowns, adding that he
wouldn't expect the production of raw materials to cover the road
crew, for example, when maybe somebody else could build that road
for half the cost.
MR. URICH continued, saying at this point the only thing he really
sees is that the mission statement says they are to develop,
conserve, enhance and manage the state's forests. Noting the $1.4
million in gross receipts, Mr. Urich said if they don't get serious
about putting up some sales, maybe they should get out of the
business. Noting that 4.7 million acres of classified forest land
probably could be boosted to 20 million acres, he attributed that
statement to DNR Deputy Commissioner Rutherford. He asked: Why
don't we get it classified? The biggest problem is opposition from
some environmentalists about putting up these sales, he said, then
acknowledged there are a lot of hoops to jump through.
MR. URICH characterized the forest as a renewable resource, like a
crop, noting that he has managed his own tree farms and has seen
large ones. He acknowledged that they might not look good when
first harvested, but suggested thinking about the long term, 100
years. He referred to cutbacks in the Tongass National Forest,
then mentioned putting up 140 sales. As for small operations with
crews of four or five people and little sawmills, he said those
people should be taken care of, and it appears they are covering
the bases pretty well there as far as sales. However, he expressed
concern about larger firms that would be interested in entertaining
the idea of coming in to the area, because there aren't enough raw
materials. He stated, "When I questioned that, they said ... what
they're working on now is value-added sales."
MR. URICH noted that value-added sales would include a veneer
plant, for example, which would require one or two lathes turning
a log to create one thin layer of face stock or filler. Although
there wouldn't be the expense of establishing a plywood mill, even
a veneer plant takes a lot of raw materials. Mr. Urich stated,
"The ones I've talked to would like to look at, maybe, like a 20-
year commitment. This value-added sale program ..., they're
talking of 10 years. And providing they meet all the criteria and
... fair-market value and all the other criteria that goes along
with it, and reforestation, et cetera, then ... these sales would
be continually put up for them. But this still is not enough.
It's not enough. It should be extended to 20 years ... if they
meet ... all the criteria." He suggested an industry could be
enticed into the area.
MR. URICH pointed out the two different types of forests in Alaska.
In Southeast Alaska, roads cost more because of solid rock
requiring drilling and blasting. Production costs are also a
little higher. However, the timber is of an extremely higher
value. In the Interior, in contrast, there is smaller timber,
although the road costs per thousand probably aren't as much. "But
at this point we don't even have any costs," he added. "We don't
know."
MR. URICH concluded by again suggesting perhaps expanding the
commitments from 10 to 20 years in order to entice industry.
Furthermore, they should be mandated to break down the costs.
Restating the figure of 140 sales, he added that it doesn't cost a
whole lot more to put a big sale rather than a little one, as they
must go through the same hoops: flagging the sale, laying it out
and the engineering, for example. And it is just as easy to manage
a large sale, because the logging occurs a unit or two at a time.
There is more opposition, however. He restated the need to put up
more sales, saying $1.4 million in gross receipts is ridiculous.
Mr. Urich stated that the legislature had said it would monitor
forest management, and they should follow through on that. He then
restated that opponents to the sales are a major problem.
REPRESENTATIVE BRICE referred to the suggestions in the
subcommittee report (pages 3 and 24) and requested more written
detail, one page perhaps.
MR. URICH agreed to that, adding he hadn't devoted as much time as
he would like to, as one could spend a whole lot more time on it.
REPRESENTATIVE BRICE said he knows, as he himself has spent about
three years on it. He commented on having a regulatory system that
is identical for both large and small producers, saying it has
frustrated him not only with forestry but with mining and a lot of
other resource development as well.
MR. URICH asked whether Representative Brice felt he was leaving
out the small operations.
REPRESENTATIVE BRICE said no, not at all. He stated his
understanding that Mr. Urich was expressing frustration that small
operations face the same regulatory schemes as do large operations,
leaving small operators in a bind because of having to hold their
capital as long as large operators do, which is prohibitive. In
addition, it prohibits large operators from being interested
because the state never offers contract sales long enough to allow
them to recoup their costs.
COMMISSIONER THOMAS asked that Mr. Urich provide comments to Mr.
Pignalberi to be taken up at another meeting.
CO-CHAIR WARD requested that Mr. Urich include the amount of
product wasted yearly because of bark beetles, fire and
nonharvesting. He noted that large timber industries have related
to him personally the amount of timber being lost "because Mother
Nature won't put up with bureaucracy." He suggested it be not the
dollar amount going back into Mother Earth every year but an
estimate of what may be lost by not harvesting this product.
COMMISSIONER THOMAS next called upon Ron Anderson to address
agriculture.
MR. ANDERSON advised members that the DNR's Division of Agriculture
has 19 employees who do a tremendous variety of jobs required by
law, from inspection to ensuring grass is planted on grounds
renovated after mining. In many cases, they bring in money doing
their work. Therefore, he had found very little need for
privatization there; their costs aren't that great to the state.
MR. ANDERSON suggested that the Agricultural Revolving Loan Fund
(ARLF), however, should be done away with as a state agency. It
was given a large amount of money years ago to help develop farming
in Alaska, but almost all of the projects have fallen short of
their goals. Now the ARLF is down to about $5 million, with an
expenditure from the principal of about $750,000 per year. It
won't be too long before the state has to inject another large sum
of money if it continues this way. Mr. Anderson recommended that
it be turned over to some bank or financial organization; he
believes the banks could run this loan program in such a way that
there would be profits to be shared. Furthermore, the Office of
the Attorney General could contract out to collection agencies the
recouping of funds due the state, which are now written off for
some reason. At least four other groups make agricultural loans in
Alaska, Mr. Anderson noted.
COMMISSIONER THOMAS thanked Mr. Anderson, then called upon Hugh
Ashlock to address Parks and Recreation.
MR. ASHLOCK noted the presence of Jim Stratton, Director of DNR's
Division of Parks and Outdoor Recreation ("State Parks"); he
advised members he had met with Mr. Stratton, and he expressed
appreciation for the time and information provided by his office.
MR. ASHLOCK reported that State Parks is an agency that is really
stretched thin, with a lot of properties to take care of, including
parks, campgrounds, recreational facilities and boat launches.
Their staff is stretched all across Alaska, and with increasing
numbers of tourists coming to the state in recreational vehicles
(RVs) - especially in areas such as the Kenai Peninsula, Fairbanks
and Tok - there is particularly a need for roadside rest stops and
their maintenance.
MR. ASHLOCK restated that he is a concessionaire for both the U.S.
Forest Service and the U.S. Fish and Wildlife Service. The former
has a very successful private concessionaire program, he noted,
implemented all throughout the United States, in almost every
national forest with recreational facilities; they use a number of
different techniques that he has submitted in his report. Mr.
Ashlock indicated some parts of his own report coincide with some
U.S. Forest Service staff recommendations, such as the idea of
campground "bundling" of so-called winners and losers. For
example, Kenai Peninsula's Deep Creek has 100-some sites and is
probably full all the time. In contrast, Little Stariski Creek,
right down the road, only has 8 or 9 sites; although it loses
money, people still enjoy its different atmosphere. Both need to
be maintained for the public. Similarly, the Valdez campgrounds
aren't used as much as those in other areas of the state, yet
residents and tourists need to have those facilities maintained.
MR. ASHLOCK advised the commission that State Parks has already
gone in the direction of privatization to some extent. They have
some privatized campgrounds in and around Tok, which have met with
various degrees of success, and they are currently looking at
privatizing the Eagle River campground, for example. They are
going in the right direction, Mr. Ashlock emphasized. They have
been saddled with some systemic impediments for a long time but are
making the best situation they can.
MR. ASHLOCK reported that the state park pass is a popular program
with Alaskans and tourists from the Lower 48. According to
Director Stratton, however, they will be phasing out the pass for
out-of-staters beginning next year. Mr. Ashlock explained:
When I'm looking at a group of campgrounds, and I'm
looking at a national forest, and I go out and I
competitively bid these in the Lower 48, not just here in
Alaska - we just did a campground, the Tonto (ph)
National Forest outside of Phoenix, Arizona, that had
800-and-some-odd campsites throughout the whole national
forest - we use a calculation where we take the number of
campsites, multiply it times the season, roughly 100 days
here in Alaska. And we multiply that times the fee, an
average given fee, and then we multiply that times 50
percent occupancy, because not everything is a Russian
River - that's one of the campgrounds I operate that's
110 percent full all the time. We find that a
calculation is within 5 percent of the actual numbers
that [have] been done, both here in Alaska and in the
Lower 48.
Based on that calculation, State Parks should be taking
in about roughly $1.2 million a year ... in fees. ...
They're taking in, instead, $456,000 in fees; and I based
this upon four areas - Chugach, Kenai, Mat-Su and
northern areas - which are the biggest revenue generators
for State Parks. I think the $800,000 dollar annual
discrepancy lies mostly in the fact that there's a state
park pass, and that they're not getting the revenue
collection that they need.
MR. ASHLOCK extended credit to State Parks for going in a lot of
the right directions, and for their candor with him. However, they
need to keep phasing out the state park pass, he said, and to look
at phasing out the local park pass. With only getting $200,000 a
year in revenue for the park pass, they are missing $800,000 in
revenue out in the field. Mr. Ashlock also emphasized that those
in charge of campgrounds now have a lot of different jobs and are
stretched thin; he believes, with budget cuts, State Parks has been
doing more than less than just about any other agency. With
privatization, he suggested a reservation system could be
implemented more readily out in the field, although a reservation
system could be implemented regardless. In addition, some
campground management systems could be used. Furthermore, customer
service and staffing levels could be higher, and search-and-rescue
or first response systems could be done in conjunction with both
State Parks rangers and law enforcement such as the Alaska State
Troopers. "We provide many of those things right now in the Cooper
Landing area with the Russian River campground," Mr. Ashlock noted.
MR. ASHLOCK acknowledged that total elimination of the state park
pass may be a "political pill" about which constituents may
complain. He again mentioned doing that in conjunction with
developing a reservation system, then expressed belief that if
people are given something for their money, they don't mind as
much. He stressed the importance of a reservation system. Living
in Anchorage as he does, working five days a week, he is under a
distinct disadvantage if he wants to go down to Deep Creek on the
Kenai Peninsula for the weekend, he said, "because that blue-haired
couple from Florida that's been here all summer in their RV has
been squatting down there since last Tuesday." Mr. Ashlock
suggested that many locals in Kenai and Anchorage, as well as
locals in Fairbanks who want to enjoy the lakes, have the same
problem as well. All this can be solved by privatization, he
added.
MR. ASHLOCK recalled that Jim Stratton had also mentioned to him
that there are a number of ways that State Parks could be funded;
he asked whether Mr. Stratton wished to speak to that, but the
response was indiscernible.
COMMISSIONER THOMAS suggested sticking to the agenda somewhat,
including comments and recommendations. She also shared with the
commission that the DNR subcommittee hadn't had an opportunity to
come back together, meet and vote on the recommendations; members
hadn't reviewed each other's recommendations, which was why this
was being done a little differently. Therefore, these are
individual reports and comments. She expressed the desire to have
DNR personnel's comments, which she understood to be about the
whole report, provided all at once unless there were specific
questions to answer.
MR. STRATTON reported that the comments about the camping pass were
right on the mark. He indicated those buying out-of-state camping
passes use them a lot more than those buying in-state passes. Next
summer, as they phase out the out-of-state camping pass, which has
been identified as 30-40 percent of the total pass usage, it will
be interesting to see whether there is a commensurate rise in
revenue, he said, or whether those people, instead of basically
camping for $2 a night - which is the benefit they get now - will
start camping alongside the road or go to private campgrounds.
That may play into a decision about in-state camping passes because
3,500 Alaskans buy those, whereas only 350 out-of-state passes are
sold. He specified that he agrees with Mr. Ashlock that it might
be a difficult political pill to swallow because a lot of Alaskans
really like that program.
COMMISSIONER THOMAS asked if there were further questions of Mr.
Ashlock. She noted that comments on statewide fire suppression are
included in the DNR subcommittee report, as are DNR's
recommendations.
COMMISSIONER THOMAS next called upon Del Moss in Fairbanks,
advising him that the commission had all of his materials and
comments, which staff had reviewed; there were nine points listed.
She asked whether Mr. Moss wished to comment on those points, but
he declined unless there were questions.
COMMISSIONER THOMAS, hearing no questions, asked Mr. Ruedrich if he
wished to comment, either on the one portion of the Oil and Gas
section of the DNR subcommittee report that he had worked on, or on
the portion prepared by John Swanson.
RANDY RUEDRICH, Member, Subcommittee on the Department of Natural
Resources, indicated he had also worked on the portion prepared by
Mr. Swanson, which he would address. Specifying that he lives in
Anchorage, he first advised commissioners he would share a thought
relating to the Alaska Oil and Gas Conservation Commission (AOGCC).
The AOGCC, by its own definition, has 11 principal functions. In
thinking of not necessarily privatizing, but rather modernizing and
reflecting upon what the industry has gone through in the last
years, he said the British government had the opportunity to face
something we will never want to see, and that was a significant
tragedy. Out of that, they went back and reinvented their
regulatory regime.
MR. RUEDRICH advised members that having lived under that regime
and having seen the evolution in Alaska of quality assurance
systems on the part of the operators - and even looking forward at
the current proposed charter agreement - an operator that would
come in to run Kuparuk is going to be one of basically no more than
five worldwide oil companies, all with a similar level of
expertise. The other potential operator for running Alpine has to
be a very significant company, Mr. Ruedrich stated. Therefore, the
thoughts he is sharing here are consistent with the potential
spinoff of some assets to newcomers.
MR. RUEDRICH addressed the arena of well services and productions
services (see report, page 95). He mentioned the tasks of
approving drilling and workover operations; inspecting rigs;
witnessing the mechanical integrity of blowout preventers;
approving casing, cementing and completions operations; and
collecting and maintaining all well history and well files. On the
production side are approving and monitoring gas flaring;
witnessing of subsurface safety valves and mechanical integrity
tests of existing wells; and, ultimately, collecting and
maintaining all production data for oil and gas.
MR. RUEDRICH indicated that in thinking of where the industry has
evolved to - in terms of having programs that can be best
characterized as "define what you're going to do, do it and prove
it - the regulatory scheme in Alaska allows that to be adopted
fairly readily, because state laws give direction as to what to do
and require documentation proving what was done. For that reason,
he has concluded that the field inspection effort is somewhat
secondary verification, or reverification, and has been supplanted
by a change in business philosophy. He stated:
Now, if we were to go one step further and put out
reports in a new, modern database, where the operator can
effectively upload all the nonconfidential documentation,
then anybody could look at it tomorrow morning, we would
have achieved open disclosure, full disclosure and self-
verification.
MR. RUEDRICH indicated he believes that is the way to go. The only
state consideration other than the fundamental change would be the
need for a qualified petroleum operations professional, every five
to seven years, to review the code and adjust it for true changes
both worldwide and in our own environment here.
MR. RUEDRICH pointed out the one service he believes should be
contracted out. If the state does away with the inspector function
and some of those aspects, one remaining item is quite important,
he said: witnessing of calibration of the meters and oil quality
testing. He noted that professional firms do this worldwide. If
the operator has a quality assurance program that documents this to
a large extent, periodic certification by an outsider would be a
great concept for privatization.
MR. RUEDRICH reported that the four remaining tasks are: approval
and monitoring of oil pool development and plans for enhanced
recovery; monitoring and enforcement of spacing rules and other
production practices; issuing of pool rules and conservation
orders; and administration of the Underground Injection Control
(UIC) program. There is an agreed-to division of duties between
the DNR's Division of Oil and Gas and this organization, he pointed
out. He envisions moving all these tasks to their parallel
functions, either leaving them to stand alone or consolidating
them, as individual cases may be, to actually make the state
government more efficient.
MR. RUEDRICH noted that there is a counter-argument that this leads
to some wonderful checks and balances, but he isn't sure that would
gain the state much. Therefore, his proposal is that those four
remaining functions would be moved to the DNR's Division of Oil and
Gas, thereby eliminating at least nine state positions and reducing
costs directly by a little more than $1,050,000. Contracting out
the data management and metering functions would be an offset on
the order of $250,000, for an ultimate potential benefit to the
state - and to the industry, because many of these dollars are
billed straight back to the industry - of approximately $800,000.
Mr. Ruedrich concluded by offering his opinion that this would put
the state in the same position that other regimes, which have
needed to look at their businesses, have migrated to in the last
seven to ten years.
CO-CHAIR WARD asked whether existing firms could do that
contracting now.
MR. RUEDRICH answered that the meter proving activity clearly can
be done. As to whether there is anyone who has an Alaskan presence
today, however, he could not speak to that. Noting that they are
talking about less than $150,000 a year, he said potentially either
someone would fly in to do this work or someone locally would be
retained as a part-time employee of such a firm, operating under
their certification to do this.
CO-CHAIR WARD referred back to discussion of nonconfidential
documentation. He asked whether there is something that identifies
what "nonconfidential" is.
MR. RUEDRICH replied that virtually everything in the production
and development arena is nonconfidential. Off the top of his head,
the only documents he recalls as being confidential would be
drilling documents relative to exploratory wells and the production
testing of those exploratory wells. Those would have to be kept on
a private basis. He envisions at least one engineer who has been
involved in this side of the business "staying in the head count"
and being accountable for those types of things. He clarified that
he doesn't believe there is a question of these people not being
capable. Some of them, indeed, are very capable and might well
find other relevant positions in government, he said, adding that
some of the commissioners over the years have been outstanding, and
some of the inspectors could participate in various facets of work
in the industry.
COMMISSIONER THOMAS asked if there were further questions. She
asked whether anyone from DNR wished to speak, then thanked
participants.
MR. PIGNALBERI referred commissioners to the report prepared by
John Swanson, specifically, page 28 of the DNR subcommittee report.
He explained that Mr. Swanson's approach to this was to take each
Business Revenue Unit (BRU) relating to oil and gas, and to break
it down into four elements: the BRU name; a summary of statistics,
which was the total budget for that program or programs; the number
of people or employees involved; and the number of dollars
contracted out. Then he had an opinion section ... [ENDS MID-
SPEECH BECAUSE OF TAPE CHANGE]
TAPE 99-14, SIDE A
MR. PIGNALBERI continued:
It was one of the BRUs that he reviewed, then the amount
of the dollars that he recommended that had privatization
potential, and then I just referred you back to the page
where his opinion is because I found a bit of a
disconnect between the language in the opinion section
and the amount that he recommended be privatized. I'll
try to get with him and make that a tighter connection
for you before you get to the final deliberations.
That's the way it's laid out, and I hope it helps when
you read the whole report.
COMMISSIONER THOMAS thanked subcommittee members for their work.
She announced that the commission would be relocating to a
different conference room after 12:30 p.m.
Subcommittee Report on the Department of Transportation and Public
Facilities
COMMISSIONER THOMAS informed the commission that Mr. Pignalberi
would now begin the presentation of the Department of
Transportation and Public Facilities (DOTPF) subcommittee report.
CO-CHAIR WARD asked any members of the DOTPF subcommittee and other
participants to introduce themselves.
KURT PARKAN, Deputy Commissioner, Department of Transportation and
Public Facilities, introduced himself; John Horn, Regional Director
of the Central Region; Mike Downing, Director of Design and
Engineering Services; and Gene Darling, Manager of the Statewide
Equipment Fleet Section.
MR. PIGNALBERI distributed DOTPF's response to the subcommittee
report. He pointed out that the subcommittee had asked DOTPF for
a lot of information, which Deputy Commissioner Parkan did a great
job of providing. Mr. Pignalberi noted that he would address the
specific recommendations that he had discussed with subcommittee
members.
MR. PIGNALBERI directed attention to page 19. He explained that
the subcommittee had made an overarching recommendation that the
legislature answer the question of which functions are core
government responsibilities (CGRs). Once CGRs are identified, the
question of whether privatizing them is in the best interest of the
state can be addressed. The subcommittee had attempted to identify
DOTPF's CGRs in its report.
MR. PIGNALBERI advised commissioners that Recommendation 2 pertains
to maintenance and operations, and it suggests that ownership and
maintenance of local roads should devolve to the lowest level of
local government. A subgroup of the subcommittee had looked at the
different operating agreements between DOTPF and local governments.
DOTPF maintains some roads within the municipal boundaries of
Anchorage; the subgroup found that arrangement to be inefficient
and to cause confusion. The subcommittee believes, as a first
step, the state should get out of the business of subsidizing local
roads. They recognize that inadequate revenue sharing or the
inability of local communities to pay for maintenance could prevent
the implementation of that recommendation.
MR. PIGNALBERI pointed out that the subcommittee's report lists
each recommendation, followed by its rationale and barriers that
could impede implementation of the recommendation.
DEPUTY COMMISSIONER PARKAN apologized for DOTPF's brief response to
the recommendations but noted that the report was only distributed
to staff for review on Monday. He stated that DOTPF staff is
available for follow-up discussions at the commission's request.
Deputy Commissioner Parkan said DOTPF supports, in concept, many of
the recommendations made by the subcommittee, and that the
subcommittee was able to identify some of the challenges DOTPF
faces in its attempt to perform services less expensively.
COMMISSIONER WUERTZ said that having spent the last several years
working with the Alaska Municipal League, he has become aware that
local residents share a common problem: how to balance the
maintenance of state-owned roads with locally-owned roads. The
current situation seems fraught with inefficiencies, for example,
two sets of equipment are being used when one would be sufficient.
He asked whether there is an approach it could take whereby the
state could contract with local governments to take on that job.
DEPUTY COMMISSIONER PARKAN responded that DOTPF currently contracts
with some local governments, such as the Municipality of Anchorage
(MOA).
JOHN D. HORN, Regional Director, Central Region, Department of
Transportation and Public Facilities, explained that DOTPF has
contracted with the MOA since about 1981 for all traffic signal
maintenance. DOTPF is paying the MOA slightly over $1 million for
signal maintenance, but the MOA estimates maintenance costs to be
closer to $1.5 million. The MOA has actually asked DOTPF which
signals it should shut off. DOTPF is unable to pay more for that
service without a legislative appropriation. In Anchorage, DOTPF
swaps out routes with the MOA to improve plowing efficiency in the
winter. The MOA plows the downtown area even though 5th and 6th
Avenue actually belong to the state. One problem that occurs when
DOTPF approaches a local government about contracting is that DOTPF
cannot pay the local government more than DOTPF would spend. That
amount is not sufficient for those who want to contract, and DOTPF
does not have additional funds. DOTPF would welcome a proposal
from the MOA if it would like to pursue further contracts.
COMMISSIONER WUERTZ asked if that same scenario applies to other
areas of the state.
DEPUTY COMMISSIONER PARKAN said it does. For example, the City and
Borough of Juneau and the Matanuska-Susitna Borough cover some
state roads and vice versa. He added that many local governments
do not want to take on another responsibility because they do not
know how much they will receive in revenue sharing.
COMMISSIONER WUERTZ commented that he has a fairly pessimistic view
of what may happen next November if the tax limitation initiative
gets on the ballot. He noted that at a call-in radio show that
morning, callers unanimously supported the ten-mill limit on
property taxes. He thanked John Horn for the excellent job he
does.
CO-CHAIR WARD asked Mr. Horn if he would accept a contract proposal
from a private contractor for snow removal.
MR. HORN said he would have reservations about doing that because
he has tried that approach a number of times without success. DOTPF
went through an extensive process in 1992 to contract plowing of
the Dalton Highway; that endeavor was not successful. If the MOA
expressed interest, he would be reluctant to just go out to bid and
see what happens. DOTPF would need bids from more than one
contractor. DOTPF is involved in many contracts in Anchorage and
currently spends over $600,000 on snow hauling with the private
sector.
MR. PIGNALBERI explained that Recommendation 4 suggests that DOTPF,
in consultation with Associated General Contractors (AGC) and other
interested parties, implement a demonstration project for
privatized road maintenance. DOTPF's response is that it is
willing to discuss this recommendation further but it cites several
instances where this approach has been tried unsuccessfully. Mr.
Pignalberi noted that the subcommittee had that information when it
made the recommendation. It suggested that an RFP be developed in
consultation with AGC because of the economy of scale. This
approach might not work with a small station, such as Seldovia, but
it might work with the Anchorage station. The key point is that
the RFP must contain terms that are realistic to the contractors;
therefore, consulting with the AGC to develop the criteria could
make the proposal workable for the private sector. Mr. Pignalberi
asked DOTPF to consider that part of the recommendation and to
provide an additional response.
REPRESENTATIVE BRICE maintained that the RFP must be realistic for
the state as well.
MR. PIGNALBERI asserted that he does not think the state has ever
written an RFP that was not good for itself.
REPRESENTATIVE BRICE contended that the commission needs to make
sure it is not pushing forward an idea that is good for only one
party.
MR. PIGNALBERI agreed.
COMMISSIONER NOTTI asked what DOTPF does with its employees when it
implements a contract.
MR. HORN replied:
Sometime during the 1980s when I was assigned to the
Fairbanks office - I wasn't a part of it - the attempt
was made to line the municipality with our own forces
here. I'm going a little bit from hearsay now because I,
again, was not involved directly in it, but I believe
there were two major issues there. And one of them was
the union issue, and the other issue I think was finance.
At that time they may have gotten a little closer on the
finance than they did on the union issue, but the effort
was eventually scrubbed because there was too much
controversy over that whole thing. If we were to look
into something like that, we would certainly want the
employees to be considered, at least for some length of
time. I don't think we want to see everybody out in the
street all of a sudden, that might cause some other
problems, and certainly there is enough work to do out
there to keep everybody busy. Right now in Anchorage, as
in every place else, we're shorthanded in our ability to
respond to, for example, an average snowfall.
COMMISSIONER THOMAS thanked the participants from DOTPF.
Subcommittee Report on the Department of Community and Economic
Development
COMMISSIONER THOMAS asked for a presentation from the Subcommittee
on the Department of Community and Economic Development (DCED).
STEVE LEVI, Member, Subcommittee on the Department of Community and
Economic Development, reported that the subcommittee was faced with
dealing with two departments that had combined shortly before the
subcommittee began examining it. The subcommittee found that three
public sector services are being served by DCED: businesses
interested in international connections; economic development
within the state of Alaska; and a wide variety of services provided
to the Bush.
MR. LEVI continued. Overall, the general impression of the
subcommittee was that DCED is experiencing three problems: first,
there is a duplication of services with other departments; second,
DCED staff lack specific "nuts and bolts" business experience,
which makes interaction difficult for small businesses; and third,
economic development within the department has become a buzzword,
as a lot of people talk about it but have little experience with
it. One shortcoming of the subcommittee was that no member has
substantial experience in the Bush. Mr. Levi noted that he was
thankful to see that Emil Notti was appointed to the commission.
COMMISSIONER THOMAS commented that Senator Adams and Michael Harper
are also on the commission.
MR. LEVI continued. The recommendations provided by the
subcommittee suggest that the establishment of the Alaska Tourism
Information Association will allow for consolidation of the tourism
functions within the private sector and enable the state to have a
smaller financial position within the association as time goes on.
A second recommendation is to reestablish the Alaska Film
Commission, which is in limbo right now. Recommendations for the
Municipal and Regional Assistance Division include the elimination
of three programs which, in essence, only exist on the books: the
Alaska Products Preference Program, the Recycled Products
Preference Program, and the Forest Products Preference Program.
The subcommittee recommends that the Alaska Industrial Development
and Export Authority (AIDEA) and the Alaska Housing Finance
Corporation (AHFC) be combined. It also recommends that the
Division of Investments be placed within the Department of Revenue.
The hot issue was the recommendation that the Division of Trade and
Development should stop doing the day-to-day nuts and bolts
business dealings and be made smaller. Currently, five different
organizations are involved in helping Alaska businesses with
international development. The subcommittee believes the Division
of Trade and Development should focus on upper-level negotiations
and dealings with consulates rather than assisting businesses to
sell their products.
CO-CHAIR WARD asked whether, when the subcommittee looked at the
consolidation of AIDEA and AHFC, it looked at underlying bonding
capabilities.
MR. LEVI said the subcommittee had discussed that issue but was
assured by Jim Crawford, who is in the business, that the
consolidation would not cause a bonding problem.
REPRESENTATIVE BRICE asked what DCED's response was to that
recommendation.
MR. LEVI said DCED did not respond to that recommendation.
REPRESENTATIVE BRICE asked if DCED was involved in the discussion
about the consolidation.
JEFF BUSH, Deputy Commissioner, Department of Commerce and Economic
Development, said that particular recommendation has raised more
concern within the department than any other because AIDEA was not
consulted by any member of the subcommittee, despite repeated
efforts by AIDEA staff to set up meetings. No discussion with
AIDEA staff occurred about the bonding implications either. Deputy
Commissioner Bush noted that his response to that recommendation
was distributed to commissioners this morning. He indicated that
AIDEA staff are willing to meet with subcommittee members to
discuss the consolidation and that AIDEA believes a consolidation
will have serious bonding implications.
CO-CHAIR WARD asked that AIDEA and AHFC submit their concerns about
the bonding implications to the commission in writing.
REPRESENTATIVE BRICE asked for clarification of the recommendation
that pertains to the Division of Trade and Development.
CO-CHAIR WARD said he believes Mr. Levi was suggesting that the
Division of Trade and Development should operate on a government-
to-government basis and allow another agency to focus on helping
private enterprise acquire market shares in other countries.
MR. LEVI replied that Co-Chair Ward was correct. The subcommittee
found that there are two functions necessary to deal with
international trade. One is the nuts and bolts of dealing with
Alaska businesses and foreign businesses, which should be handled
by an organization such as the World Trade Center. The second
function is the top-level negotiations between the State of Alaska
and the consulates of foreign countries. That function should be
handled appropriately by the state. The subcommittee recommends
that the division focus exclusively on the high-level meetings.
REPRESENTATIVE BRICE remarked that the recommendation he was
looking at said that business was going well within the Division of
Trade and Development.
MR. PIGNALBERI clarified that Representative Brice was referring to
Mr. Davidge's original report and that Mr. Levi was speaking to the
recommendations that were suggested by the full subcommittee.
DEPUTY COMMISSIONER BUSH added that Mr. Davidge wrote a report on
behalf of the subcommittee but the subcommittee took that division
up independently and wrote a different recommendation.
COMMISSIONER HARPER asked whether AHFC has reacted to the
recommendation to combine it with AIDEA.
DEPUTY COMMISSIONER BUSH indicated that AHFC is not part of DCED
and it was not invited to participate; therefore, AHFC has no
comments at this time.
CO-CHAIR WARD noted that he has asked for comments from both AHFC
and AIDEA in writing.
COMMISSIONER THOMAS pointed out that the Department of Revenue
subcommittee is reviewing AHFC.
MR. PIGNALBERI mentioned that that report will be presented at the
next meeting and should be forthcoming in the next day or two. He
said that he will provide a copy to AHFC and AIDEA and ask
representatives of those agencies to appear at the meeting.
COMMISSIONER HARPER asked whether the commission has already
discussed the other quasi-state lending agencies, such as the
Commercial Fishing and Agricultural Bank (CFAB) and the lending
side of the Division of Investments. He noted that if the
Commission is looking at a comprehensive picture, it should discuss
all of those banking functions.
COMMISSIONER THOMAS replied that some of the subcommittees did not
take up those agencies while others decided to overlook them.
MR. PIGNALBERI said that is correct. He pointed out that CFAB was
discussed earlier today, and that the subcommittee recommended that
it be disbanded. He noted that the lending agencies are being
presented out of sequence, and that those recommendations have not
been coordinated yet. He said he would help pull the remarks of
the different subcommittees on the same subjects together for
commissioners.
Subcommittee Report on the Office of the Governor
COMMISSIONER THOMAS next requested the report of the subcommittee
on the Office of the Governor.
MR. PIGNALBERI distributed a supplement to the subcommittee's
report and explained that the subcommittee had made five
recommendations, which are in the style of problem statements. Mr.
Pignalberi noted that a serious concern expressed by almost every
subcommittee is that the format of the state budget is
incomprehensible. That concern was expressed by the subcommittee
on the Legislature, of which Mark Hanley, a former House Finance
Chairman, was a member. The Office of Management and Budget is now
within the Office of the Governor. Mr. Pignalberi turned the
presentation on the Office of the Governor over to Andree McLeod.
ANDREE McLEOD, Member, Subcommittee on the Office of the Governor,
and staff to the commission, noted the lengthy discussions on the
budget, which is very hard to understand in its current format.
The fact that the Division of Finance is within the Department of
Administration and that the Office of Management and Budget is
within the Office of the Governor causes a lot of dysfunction, she
said. The subcommittee also found that no process is available for
employees to make anonymous suggestions for improvement, which they
believe prevents employees from coming forward.
MR. PIGNALBERI stated that the subcommittee recommends that the
legislature design a process to foster employee involvement. He
referred to a second subcommittee handout, which contains more
specific information and describes a task-based budget format and
compares it to the current budget format. The subcommittee
recommends that the legislature devise a task-based budget format
and require by statute that the Governor's budget be submitted in
that format.
CO-CHAIR WARD asked if the Governor's office had responded to that
recommendation.
MR. PIGNALBERI said the report was only made available last night,
so the commissioners are the first to see it.
CO-CHAIR WARD said he thought the Governor's office may not oppose
that recommendation.
MS. MCLEOD maintained that concern about the complexity of the
current budget format has been uniform in every subcommittee.
COMMISSIONER THOMAS announced that the commission would recess
until 12:30 p.m.
Subcommittee Report on the Department of Law
COMMISSIONER THOMAS reconvened the meeting and introduced Mark
Johnson, Chairman of the Department of Law Subcommittee, and
Cynthia Cooper, Department of Law representative.
BARBARA RITCHIE, Deputy Attorney General, Civil Division,
Department of Law, and JOAN KASSON, Special Assistant, Department
of Law, introduced themselves via teleconference from Juneau.
MR. PIGNALBERI noted that Pete Kinneen, a subcommittee member, was
also present.
MARK JOHNSON, Member, Subcommittee on the Department of Law (DOL),
informed commissioners that the subcommittee had advanced ten
recommendations based on meetings it had. The subcommittee
believes its recommendations should be considered as ideas that
deserve further pursuit by the commission or by the legislature.
The subcommittee did not have extensive staff resources to flush
out more details.
MR. JOHNSON gave the following presentation. The DOL's authority
is currently constituted both by statute and, in the subcommittee's
view, by DOL by its own interpreting memoranda. DOL's authority is
almost unlimited. The subcommittee believes that broad authority
serves the best interest of the department, not the citizens of
Alaska. All professional employees of DOL, with the exception of
a handful of administrative people, are exempt and partially exempt
state employees, which the subcommittee believes may pose some
dangers. The subcommittee also believes the legislature needs to
engage in more extensive oversight of DOL, and that it should
review the authorizing legislation of DOL because a department that
believes it has extremely broad powers is likely to exercise those
powers. Mr. Johnson offered to answer questions.
CO-CHAIR WARD commended subcommittee members on the thorough job.
He referred to Recommendation 8, which pertains to the "pay to
play" issue, and asked Mr. Johnson to address that in more detail,
especially the American Bar Association's (ABA) review of the
problem in other states and its recommendations.
MR. JOHNSON drew commissioners' attention to DOL's response to
Recommendation 8. He noted that the subcommittee initially
addressed this issue with DOL in August. The extent of DOL's
response was to say they were aware of the issue. Subcommittee
members were given materials generated by a task force of the ABA.
Since that time, the ABA House of Delegates acted on a proposal for
the selection of outside counsel that its task force put together.
The ABA did not adopt that proposal for a variety of reasons. One
reason DOL gave for not adopting that proposal is that it believes
this issue is more a matter of campaign finance reform than an
issue of professional responsibility for lawyers.
MR. JOHNSON pointed out that in Alaska all outside counsel for the
State of Alaska are potentially selected by the attorney general.
In many other states, the ability to acquire the services of
outside counsel is divided up among district attorneys at the
county level. The defeat of the ABA proposal may be sound on a
national level. However, the dangers posed by the "pay to play"
issue in Alaska may be greater because of the centralization of
procurement authority.
MR. JOHNSON also pointed out constitutional issues about what kind
of restrictions could arise that can be placed on an individual.
He feels the ultimate question is whether this question is one of
professional responsibility for attorneys, and he believes the
subcommittee provided enough information for the commission to look
at that issue. Although DOL had assured the subcommittee that the
"pay and play" scheme is not an issue, DOL runs the program, which
is where the danger lies. Mr. Johnson said he does not doubt the
good faith of employees, but when they have been with DOL for many
years and are all selected by the attorney general, the
centralization of that authority poses unique dangers.
CO-CHAIR WARD asked whether the subcommittee was supplied with a
list of private attorneys who have received contracts in the last
two years and the dollar amount of those contracts.
MR. JOHNSON pointed out that DOL staff were very responsive to
requests for information by the subcommittee, and that the
subcommittee has that information but hadn't had time to review it
in detail; he offered to submit it to the commission. He noted
that the list contains the names of law firms and the dollar
amounts back to about 1994. He pointed out that although some law
firms get contracts year after year, some do not. Subcommittee
members were concerned that the same firm has been retained as bond
counsel for the state for at least the last six years, and maybe
for as long as 16 years. Continuation of that contract may be
justified by the need of expertise in that area, but in such a
case, competitive procurement ceases and it almost looks like an
entitlement for that particular firm.
CO-CHAIR WARD asked whether any other state has accepted the ABA's
model rules for professional conduct concerning political
contributions, or whether those rules are to be viewed as
suggestions.
MR. JOHNSON replied that the rules are suggestions. A task force
of the Standing Committee on Ethics and Professional Responsibility
of the ABA promulgated amendments to the model rules of
professional conduct. Alaska adopted an older version. Those
rules set forth what an attorney can do, can't do, and ought to do.
Although the new ABA rules have not been adopted at the federal
level, he suggested that commissioners look at the rules to see if
elements of them make sense for Alaska. Mr. Johnson pointed out
that the struggle between the legislature and court system over
whether or not legislative enactment would result in changing a
court rule could arise. He himself has not investigated whether
any other jurisdictions have adopted the draft rules, but he
believes this issue is a big one in New York.
MR. PIGNALBERI asked why, in Recommendations 1 and 2, the
subcommittee recommended that the Legislative Finance committees
hold hearings rather than the Judiciary committees.
MR. JOHNSON replied that the Judiciary committees might be good
initial referrals to determine whether there is a need for
substantive legislation. And to the extent that changes need to be
made to the procurement code, the State Affairs committees might
also review the legislation. The decision about whether the
functions and monies should be moved from a 100 line to a 300 line
would have to be made by the Finance committees, he added.
MR. PIGNALBERI referred to DOL's response to Recommendation 1, and
asked whether the subcommittee had talked about identifying
performance measurement indicators for DOL.
MR. JOHNSON said no. He asked commissioners to keep in mind that
the difficult cases go to trial and, as a result, there is a
tendency to lose cases that go to trial.
MR. PIGNALBERI acknowledged that the win-loss record is not the
only type of performance measurement indicator available for legal
work. He wondered whether DOL could identify performance
measurement indicators in light of the new impetus in the budget
process for them.
MR. JOHNSON said the pressure of using a win-loss record on
prosecutors is exceedingly dangerous because cases can be lost
because of what is happening at the screening level or crime
detection level. He felt it would be unwise to go down that road.
MR. PIGNALBERI suggested the legislature is going down that road.
He requested for more information on performance measurement
indicators.
CYNTHIA COOPER, Deputy Attorney General, Criminal Division,
Department of Law, said DOL is working on those and is focusing on
violent crimes and domestic violence crimes. She echoed Mr.
Johnson's concern about using a win-loss record because if one
looks at the quality of an appellate court brief, one side may have
a better written work product but the appellate court may choose to
interpret the constitution differently. Or sometimes a mistake is
made at the trial level, so no matter how good the appellate
attorney is, the mistake is serious enough to determine the outcome
of the case. She added that, in terms of actual prosecutions, the
quality of investigative work is an important factor. Ms. Cooper
said that when DOL is looking at internal reviews, it looks at
written work product; at what it hears from judges, victims and law
enforcement officers; and at numbers.
MR. PIGNALBERI asked, in regard to DOL's response to Recommendation
7, whether DOL's timekeeping system contains productivity measures
or whether it is strictly used for setting rates because of federal
requirements.
BARBARA RITCHIE, Deputy Attorney General, Civil Division,
Department of Law, spoke via teleconference from Juneau, saying
that is a function of the Civil Division. The division implemented
a new timekeeping system last year because the initial system
created by DOL was working but not Y2K compliant. The management
information that can be derived from the new system is quite vast
and useful to DOL. It can track a particular open file because the
billing goes to the file number. The number and type of attorney
hours can be specified, as can all hours spent on a particular
case. The system is helping DOL to allocate its resources to the
areas of greatest need. DOL uses it as another tool to determine
what is going on within the department.
MR. PIGNALBERI asked if DOL has an "MIS" system that generates
reports regularly.
DEPUTY ATTORNEY GENERAL RITCHIE replied that they can generate
reports which are reviewed to track where resources are going and
the amount of hours being put into different cases.
MR. PIGNALBERI asked Ms. Ritchie to provide a copy of the regularly
generated report to the commission.
DEPUTY ATTORNEY GENERAL RITCHIE responded that she would speak to
DOL's administrative services director to get that report.
MR. PIGNALBERI noted that other subcommittee reports contained ten
items of boiler plate type information about department budgets and
BRUs. He asked Ms. Ritchie if she could provide that information
about DOL if he provides her with the outline.
DEPUTY ATTORNEY GENERAL RITCHIE said she would try.
MR. PIGNALBERI commented that the question of why DOL's billing
rate differs from its cost was raised at a subcommittee meeting.
He asked why DOL bills hours out at a higher rate than cost, and
whether it is moral to charge citizens more than the cost.
MR. JOHNSON interjected that DOL provided justification for its
billing rate in its response. DOL charges agencies about $91 per
hour, but it charges higher rates when it collects attorney fees.
DEPUTY ATTORNEY GENERAL RITCHIE replied that DOL files the standard
motion for attorney fees and the affidavit of counsel in support of
that motion. The state gets a very small portion of attorney fees
back, compared to what DOL has expended in a particular case. The
Criminal Division gets no fees back, and the Civil Division is
involved with many public interest litigants from which the state
can get no attorney fees reimbursed. If, however, the public
interest litigant prevails in the case, the state can be ordered to
pay full reasonable attorney fees. Civil Rule 82 only allows for
reimbursement of a fraction of the attorney fees expended.
Regarding market rate, the courts have uniformly approved that DOL
receive attorney fees at a rate comparable to fees charged by the
private sector. That policy was determined when a committee made
recommendations to the attorney general after it found that this
policy is standard procedure for the federal government and other
agencies.
MR. JOHNSON noted that subcommittee members were in sharp
disagreement about what the prevailing market rate is. The rates
cited by DOL in its affidavit would maintain attorneys in a style
to which they would like to become accustomed rather than one they
could realistically obtain. He concluded that there is substantial
room for discussion on this point.
PETER KINNEEN, Member, Subcommittee on the Department of Law,
pointed out that very few attorneys would take on a case for less
than $92 per hour. He maintained that DOL's rationale means that
the one citizen who gets stuck with the bill gets charged more than
anyone else.
MR. PIGNALBERI asked how DOL calculates the rates it pays to
attorneys it hires on contract.
DEPUTY ATTORNEY GENERAL RITCHIE replied that the procurement
process for selecting outside counsel is detailed in DOL's response
to the subcommittee's recommendations. She explained that the
number of cases handled by outside counsel is very small compared
to the volume of the cases handled by DOL. The rate paid depends
on the type of expertise that DOL is seeking and the particular
situation. DOL may seek outside counsel who specialize in
investment law or Federal Energy Regulatory Commission proceedings
regarding the Trans-Alaska Pipeline, for example. Attorneys submit
proposals on a competitive basis, and some firms give a discount to
the State of Alaska, which is taken into consideration.
MR. PIGNALBERI said he hears Deputy Attorney General Ritchie to say
that the process is discretionary and no formula or objective
measure is used.
DEPUTY ATTORNEY GENERAL RITCHIE explained that DOL reviews the
proposals, and cost is a big factor in the decision. DOL does not
have unlimited funds to spend on cases. She emphasized that the
proposals vary, depending on the manner in which the case needs to
be handled and the amount of expertise required.
MR. PIGNALBERI asked whether DOL has an exemption from the
procurement statute, issued by the Commissioner of the Department
of Administration.
DEPUTY ATTORNEY GENERAL RITCHIE referred Mr. Pignalberi to DOL's
response ... [END OF TAPE - ANSWER INAUDIBLE]
TAPE 99-15, SIDE A
CO-CHAIR WARD referred to Recommendation 10 and asked Mr. Johnson
if the subcommittee believes a constitutional amendment is
necessary to allow the Office of the Attorney General to continue
to function as it currently does.
MR. JOHNSON said that is a philosophical question. He noted that,
in regard to the source of powers for the attorney general, one can
find no reference to the position of attorney general in the Alaska
constitution. To the extent that the position of attorney general
does exist, it is considered as one of the heads of a principal
department, and those positions are not identified in the
constitution. Discussion about the role of the attorney general
and whether that position should be appointed had occurred during
the constitutional convention, Mr. Johnson noted; the subcommittee
report contains copies of that discussion in the appendices. The
only source of powers for the functions of the Office of the
Attorney General are contained in Title 44, except for an
additional provision in Title 9 that relates to the ability to
settle cases. The primary sections are AS 44.23.010 and AS
44.23.020. The subcommittee took a look at trying to amend those
sections. The statute identifies a number of powers given to the
attorney general but the significant section is paragraph 7, which
reads:
Sec. 44.23.020. Duties; and powers; waiver of immunity.
(b) The attorney general shall
(7) perform all other duties as required by law, or
which usually pertain to the office of attorney general
in a state; and...
MR. JOHNSON said that provision is a residual, meaning that if one
can find that an attorney general elsewhere in the country has done
something, Alaska's attorney general can do the same thing. He
feels that grant of authority is a very broad check and is rather
extraordinary. That refers to common law powers of the attorney
general. The subcommittee believes the balance has been lost and
that the state government would be better served by an attorney
general with a limited scope of powers.
CO-CHAIR WARD commented that he had not realized that the framers
of the constitution suggested establishing limitations for the
position of attorney general.
MR. JOHNSON said much of the debate during the constitutional
convention was about whether or not to elect the attorney general,
but there was also a certain amount of discussion about who the
client of the attorney general should be. To his knowledge, the
only statement that relates to who will define the authority of the
attorney general is that of delegate Davis. Mr. Johnson said he
would be fascinated to hear from anyone who could identify other
discussions on that point. He maintained that it is always a bit
unfair to extract comments made by an individual delegate and imply
that was what the group was thinking about.
CO-CHAIR WARD said he did not realize that Davis wanted the
legislature to define these powers.
MR. JOHNSON pointed out that DOL's response to Recommendation 10
cites the National Association of Attorneys General (NAAG), an
organization of 56 attorneys general from every state, the District
of Columbia and the possessions. He asked commissioners to keep in
mind that 43 of those individuals are elected. He maintained that
the goals of that association are to identify and disseminate key
information relating to the independence, scope and management of
the office of the attorney general. NAAG comes from the
perspective that its intent is to preserve the independence of the
organization, which may be great from the standpoint of the
organization and of attorneys general who are provided for in state
constitutions.
MR. JOHNSON cautioned that in Alaska's case, the materials provided
by the Department of Law are offered to prejudge and decide the
issue of what Alaska should do, when Alaska's constitution leaves
that to the legislature. Although he said he appreciates that NAAG
wants to make attorneys general as efficient, effective and
independent as possible, it is not an unbiased organization.
COMMISSIONER HARPER pointed out that no member of the subcommittee
was a former attorney general or deputy attorney general. He said
he would be curious to see if any former attorneys general would
care to respond to some of the findings and recommendations in this
report.
MR. JOHNSON responded that Mr. Satterburg, a subcommittee member,
worked for DOL's Civil Division for about five years in Fairbanks,
where he is now in private practice. Other attorneys with
governmental legal experience are on the subcommittee as well.
COMMISSIONER HARPER said he would be interested in comments from
former attorneys general, such as John Weber (ph), Charlie Cole,
John Rader and Av Gross.
COMMISSIONER THOMAS commented that Mr. Pignalberi offered to put
that portion of the report together and ask for comments from all
former attorneys general still residing in Alaska.
COMMISSIONER HARPER referred to the schedule provided by the
Department of Law in response to Mr. Johnson's request for
information about contract expenditures, which amounted to over
$100 million over five years, of which $78 million was for oil and
gas litigation. He asked the representative from the Department of
Law what benefits were derived from that schedule.
DEPUTY ATTORNEY GENERAL RITCHIE replied that the department does
have information regarding the oil and gas litigation, which she
would provide to the commission.
COMMISSIONER HARPER said he was thinking that the State of Alaska
won about $1 billion from some of the oil companies.
DEPUTY ATTORNEY GENERAL RITCHIE restated that she would provide
that information to the commission.
MR. PIGNALBERI indicated that two subcommittees have raised the
issue of the collection of fines, which falls under the purview of
the Department of Law. Those fines involve restitution, student
loan payments, and bad debts to the Agricultural Revolving Loan
Fund. The subcommittees found the collection rate in the
Department of Law to be about zero. He asked department staff to
provide the commission with written information describing how they
plan to do the state's collection work. He pointed out that the
collection function is one area that has been proposed for
privatization. He also asked for a list of the state agencies for
which the Department of Law collects.
DEPUTY ATTORNEY GENERAL RITCHIE replied that the list will take
some effort to compile, so it will not be immediately forthcoming.
She pointed out that she hadn't had an opportunity to study the
other subcommittee reports to know what is being recommended in
this area. She explained that the department has a Collections and
Support Section, for child support enforcement work for court
matters as well as a whole host of state collection matters.
COMMISSIONER THOMAS questioned whether the department uses any
criteria to determine whether it will go forward to collect a debt.
DEPUTY ATTORNEY GENERAL RITCHIE clarified that the Alaska Court
System collects restitution, and she offered to send information to
the commission.
MR. PIGNALBERI maintained that there is a difference of opinion on
the record regarding that matter.
COMMISSIONER THOMAS pointed out that the same problem was
identified in the Subcommittee Report on the Department of
Corrections.
DEPUTY ATTORNEY GENERAL RITCHIE repeated that she will provide the
commission with information.
COMMISSIONER THOMAS thanked subcommittee members for their efforts.
She asked Mr. Pignalberi whether he has received a response from
commissioners on the proposed meeting schedule.
MR. PIGNALBERI said he has, and he will distribute it to members.
He noted that the next meeting will be November 24, 1999.
There being no further business to come before the commission,
Commissioner Thomas adjourned the meeting at 1:39 p.m.
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