Legislature(1997 - 1998)
02/05/1998 03:35 PM Senate STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE
February 5, 1998
3:35 p.m.
MEMBERS PRESENT
Senator Lyda Green, Chairman
Senator Jerry Ward, Vice-Chairman
Senator Jerry Mackie
Senator Mike Miller
MEMBERS ABSENT
Senator Jim Duncan
COMMITTEE CALENDAR
SENATE BILL NO. 261
"An Act relating to the Special Olympics World Winter Games to be
held in Anchorage in the year 2001; establishing a reserve fund for
the games; providing certain duties and authority for the Alaska
Industrial Development and Export Authority regarding financing for
those games; and providing for an effective date."
- MOVED SB 261 OUT OF COMMITTEE
SENATE BILL NO. 224
"An Act relating to operating appropriations for annual maintenance
and repair and periodic renewal and replacement of public buildings
and facilities; and providing for an effective date."
- MOVED SB 224 OUT OF COMMITTEE
SENATE BILL NO. 225
"An Act making a special appropriation under art. IX, sec. 17(c),
Constitution of the State of Alaska, from the constitutional budget
reserve fund to the build Alaska fund; and providing for an
effective date."
- MOVED SB 225 OUT OF COMMITTEE
SENATE BILL NO. 226
"An Act relating to preventive maintenance programs required for
certain state grants; and providing for an effective date."
- MOVED CSSB 226 OUT OF COMMITTEE
SENATE BILL NO. 227
"An Act relating to the Public Facilities Financing Corporation;
authorizing an advisory vote on whether the legislature should
appropriate $1,500,000,000 from the constitutional budget reserve
fund to capitalize the build Alaska fund; and providing for an
effective date."
- MOVED CSSB 227 OUT OF COMMITTEE
SENATE BILL NO. 228
"An Act authorizing projects of the Public Facilities Financing
Corporation and the amount of the cost of the projects that may be
borne by the Public Facilities Financing Corporation; and providing
for an effective date."
- MOVED SB 228 OUT OF COMMITTEE
SENATE BILL NO. 76
"An Act relating to long-term plans of certain state agencies and
recommendations regarding elimination of duplication in state
agency functions."
- BILL POSTPONED TO 2/19/98
PREVIOUS SENATE COMMITTEE ACTION
SB 261 - No previous action to record.
SB 224 - No previous action to record.
SB 225 - No previous action to record.
SB 226 - No previous action to record.
SB 227 - No previous action to record.
SB 228 - No previous action to record.
WITNESS REGISTER
Senator Tim Kelly
State Capitol
Juneau, Ak 99801-1182
POSITION STATEMENT: Commented on deferred maintanence bills
Mr. Dennis DeWitt
Staff to the Deferred Maintanence Task Force
State Capitol
Juneau, Ak 99801-1182
POSITION STATEMENT: Commented on deferred maintanence bills
Mr. Forrest Browne
Department of Revenue
11th Floor, State Office Bldg.
Juneau, Ak 99801
POSITION STATEMENT: Commented on deferred maintanence bills
Mr. Jack Krienheder
Office of Management and Budget
Court Plaza Bldg.
240 Main Street ste 801
Juneau, Ak 99801-0200
POSITION STATEMENT:Commented on deferred maintanence bills
Mr. Mike Morgan
Department of Education
801 W. 10th Street ste 200
Juneau, Ak 99801-1894
POSITION STATEMENT: Commented on deferred maintanence bills
Ms. Mary Gore
Staff to Senator Mike Miller
State Capitol
Juneau, Ak 99801-1182
POSITION STATEMENT: Presented SB 261
Ms. Melissa Anderson
Special Olympics World Winter Games 2001
PO Box 102219
Anchorage, Ak 99510
POSITION STATEMENT: Supported SB 261
ACTION NARRATIVE
TAPE 98-4, SIDE A
Number 001
CHAIRMAN GREEN called the Senate State Affairs Committee to order
at 3:35 p.m., and noted the presence of Senators Ward, Miller and
Green.
SB 261 - SPECIAL OLYMPICS 2001
CHAIRMAN GREEN introduced SB 261 as the first order of business.
MARY GORE, staff to Senator Mike Miller who is the prime sponsor of
SB 261, noted that she is also the area director for Special
Olympics in Juneau.
Ms. Gore said the legislation is the result of hard work by a
variety of different people to guarantee that Anchorage would be
awarded the World Special Olympics Winter games in 2001. Last
summer the Anchorage organizing committee was told by Special
Olympics International that in order to be awarded the bid, the
state would need to be the financial guarantor for the games. The
money didn't need to be appropriated prior to the bid being
awarded, but the state needed to show that it was behind the
organizing committee. It was determined that the cash did not need
to be appropriated and held in an account; only that the state
needed to be on record as the "deep pocket" if private resources
didn't come up with the money.
Ms. Gore said SB 261 morally obligates the state to make up the
difference, up to four million dollars, if the organizing committee
does not raise the funds, but the likelihood of that is small.
The total budget for the games is eight million dollars, four
million dollars in hard cash and four million dollars in-kind.
Thus far, about one million of the hard cash has been raised and
the organizing committee has three years left to raise the
remainder.
Ms. Gore said the legislation has a set of checks and balances.
Primarily the Alaska Industrial Development and Export Authority
(AIDEA) will oversee the funding of the organizing committee and
report to the Legislature every January 2 on the status of the
efforts of the organizing committee to raise the money. It also
morally obligates future legislatures. In the year 2001, the
legislature would need to appropriate the dollars and then approve
the actual spending of those dollars during the legislative session
if the private sources didn't raise the money. The organizing
committee is making a statewide effort by getting people involved
and lining up corporate sponsors, and Ms. Gore doesn't think there
will be any problems in raising that money.
Number 097
MELISSA ANDERSON, Executive Director and Chief Operating Officer
for the Special Olympics World Winter Games 2001, testifying from
Anchorage via teleconference, said in their visit to Juneau the
previous week, members of the organizing committee received
tremendous support from both the House of Representatives and the
Senate. She is confident that the organizing committee will be
able to raise the money for the games. She pointed out that should
the state of Alaska at any time elect to go on the "real" Olympics
and try to bring those games to Alaska, it would be a detriment to
the state should these funds not be raised; however, she added that
it is a near guarantee on their behalf that they will be able to
raise these funds.
CHAIRMAN GREEN noted Keith Laufer of the Alaska Industrial
Development & Export Authority was listening in to the meeting at
the Anchorage LIO and was available to respond to questions.
There being no further testimony or questions on SB 261, CHAIRMAN
GREEN asked for the pleasure of the committee.
SENATOR WARD moved and asked unanimous consent SB 261, along with
the accompanying fiscal note, be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
Number 125
SB 224 - OPERATING APPROPRIATIONS FOR MAINTENANCE
SB 225 - APPROP: BUILD ALASKA FUND
SB 226 - PREVENTATIVE MAINTENANCE REQUIREMENT
SB 227 - PUBLIC FACILITIES FINANCING CORP
SB 228 - APPROP: PUB FACILITIES FIN CORP PROJECTS
CHAIRMAN GREEN stated the deferred maintenance bills before the
committee would be taken up as a package. She then invited Senator
Tim Kelly, Co-Chair of the Deferred Maintenance Task Force and
Dennis DeWitt, staff to the Deferred Maintenance Task Force, to
present the legislation.
CHAIRMAN GREEN noted the presence of Senator Mackie.
SENATOR KELLY directed attention to a memorandum from Rich
Tessandore, Executive Director of the Disability Law Center of
Alaska, in which he voices his support for the Deferred Maintenance
Task Force recommendations for a six-year plan to bring public
facilities in the state of Alaska into compliance American with
Disabilities Act which was passed in 1990.
SENATOR KELLY noted SB 224 is a separate appropriation for
maintenance. He related the task force repeatedly heard from
facility managers that felt the Legislature had not adequately
funded the maintenance component of the budget. Also, Finance
committee members and staff have said that agencies were moving
funds intended for maintenance to increase program operation in
defiance of legislative intent. He added that as long as these two
portions of the budget were funded in one line item this debate
will continue.
CHAIRMAN GREEN asked if results-based budgeting could incorporate
this concept.
MR. DEWITT said this proposal was made before much of the progress
with program budgeting. He believed it was an issue the finance
committee would grapple with. He said the bundling together of
maintenance and operations budgets will continue to be a problem
with any kind of budgeting discussions. He thinks the fusion of the
two componets is what needs to be prevented. He did not see a
conflict with this concept and program budgeting.
MR. JACK KRIENHEADER, representing the Office of Management and
Budget, said the administration is pleased with this package. This
is a serious problem that needs to be addressed and he thinks the
task force did a good job identifying the problem. He stated there
are two policy issues to be decided; first, the overall level of
funding for the projects and second, the financing method that will
be used. He expressed a few concerns with technical issues and
policy questions and said he would address them if CHAIRMAN GREEN
was planning to move the bills today. CHAIRMAN GREEN said that was
her intent and asked if he had any amendments. CHAIRMAN GREEN also
said that a more substantive discussion would be taken up in
finance.
MR. KRIENHEADER noted that the Administration has been working in
the area of facilities over the past couple of years. He directed
the committee's attention to a memo titled, "Facility Update" in
their task force report, which details some of the projects already
underway. He described these projects, beginning with the
development of a rental rate methodology. He said this rental rate
is used in several other states and was generally supported by
members of the task force. MR. KRIENHEADER said the rental rate
allows the capture of additional federal funds, gives the incentive
for offices to consolidate space and increase efficiency, and helps
the state fund an internal facilities service fund. This fund would
be used for ongoing maintenance and rents collected would be
deposited into it. He said the Administration is currently working
on a pilot program to do this and they hope to move forward with it
in fiscal year 2000. He commented that this new system will help
the administration get a better handle on what is actually being
spent. Currently expenditures are not itemized in the accounting
process and tracking facility costs is difficult. MR. KRIENHEADER
explained a pilot project now underway in Nome. The project
involves several agencies and is an attempt to consolidate costs by
coordination within a computerized maintenance management system.
He said this system has been used to a limited degree with some
success and they are testing it for possible use on a statewide
basis.
MR. DEWITT said that the task force endorses the rental rate
provision but he sees a potential problem with the lapse date for
appropriated funds. One option might be to have the funds held by
the Public Maintenance Financing Corporation. The structure of such
a corporation would allow for handling funds without lapse.
SENATOR KELLY presented SB 225 as the appropriation bill for 1.5
billion dollars from the Constitutional Budget Reserve Fund to the
Build Alaska Fund. He said this would take place at the earliest
voter approved advisory vote or July 1, 1999. He said the bill will
allow the Legislature to repeal the transfer, before it becomes
law, if the voters do not approve of the proposal. He identified
the purpose of the fund as highlighting the importance of
maintaining and improving Alaska's infrastructure. He said it could
be viewed as a permanent source of funding for future capital needs
that does not limit legislative discretion. Any project would still
have to be approved by the legislature. Four factors: the new
budget method, declining oil prices, the majority's five-year plan,
and the balances projected for the Constitutional Budget Reserve
Fund are forcing this bill to be revamped. Staff is working on
reducing the figure to one billion and SENATOR KELLY anticipates
this will happen when the bill reaches the finance committee.
MR. FORREST BROWNE, Department of Revenue, said this bill will
manage any funds transferred to the Build Alaska Fund as the
Constitutional Budget Reserve Fund is managed currently. He
anticipated there would be staffing needs for this facility. He
asked the State Bond Council and the state's financial advisors
about this funding mechanism and both reported a high degree of
confidence in the structure's success. He said the bonds will have
a very high rating (single A) with Moody, Standard and Poor and
Fitch and he feels this will be an efficient structure for
financing state capital expenditures. He said the staff
requirements will be minimal and this is indicated in the
comprehensive fiscal notes along with the fact that any interest
accrued would be deposited into the general fund. He suggested
there might be only one new accountant position created by this
bill for the Department of Revenue and no employees for the Public
Facilities Corporation.
SENATOR MACKIE was pleased to hear this last statement.
SENATOR KELLY commented that extensive work has been done with a
bond consultant since the introduction of the original bill.
CHAIRMAN GREEN asked if SB 227 and SB 225 were conjoined. She asked
if there was further testimony on SB 227.
MR. BROWNE said one bill was simply a financing conduit for the
other and his comments were complete.
SENATOR MILLER moved the adoption of the E version of SB 227 as the
working draft. There was no objection and it was adopted.
MR. DENNIS DEWITT explained the changes from the original bill. He
said the italicized changes were in response to suggestions from
the bond community. He said the task force's bond counsel is the
major authority in the United States and these changes in the bill
simply reflect their experience in public bonding.
SENATOR KELLY focused on SB 226 and said it came out of the task
force's realization that the best way to prevent a recurrent
deferred maintenance problem is a proactive approach requiring a
preventative maintenance program for every agency and school
district. If an agency or district does not have such a program
they are ineligible to receive any funding for deferred maintenance
or renovation.
CHAIRMAN GREEN asked if this bill could stand alone and MR. DEWITT
replied it could.
MR. DEWITT said the Department of Education had provided the
committee with some recommended amendments. CHAIRMAN GREEN said
there was not much opposition to the proposed changes so they could
deal with them as one amendment.
MR. DEWITT said the first change dealt with a computerized
maintenance management program. He said there are other formal
means of systematically tracking maintenance and all the task force
wanted was to get away from the dry-erase board and individual
possession of necessary facility knowledge. He said this provision
would expand to create more valid options. He explained that the
second change dropped the phrase "all buildings" since the
inclusion of these words required the inclusion of storage sheds
and other things that ought not be included under certain
provisions of the bill. This change removes that phrase in sections
4ii and 4iii and allows some discretion in identifying deferred
maintenance buildings. Another change limits who would be trained,
identifying only facility managers and maintenance workers rather
than "anyone who turns a wrench." The last change would drop the
inclusion of the phrase "all buildings" for the previously stated
reason. MR. DEWITT said he is concerned that this may already be
done but MR. MORGAN from the Department of Education is concerned
only that it gets done. MR. DEWITT prefers it not bb done now in
this work in progress.
CHAIRMAN GREEN clarified this would require the phrase "To match"
remains after .020. She said as an amendment to the amendment they
would delete AS 37.05.315, 316 and 317. MR. DEWITT agreed and asked
that they adopt the same change in section four and leave it as
something to be discussed with the department. CHAIRMAN GREEN
asked for MR. MORGAN's feedback on this and he said another option
would be to move the paragraph after the effective date so it would
not be a necessary criterion for a program, but a ranking criteria.
He said it would allow this criterion to be used to rank a project
but would not be totally necessary for a program to go ahead. In
this manner, it would reward progress and implementation of these
programs.
SENATOR MACKIE asked if there was a problem with this last change
and MR. DEWITT replied that there was no particular problem but
that the task force had been very adamant that preventative
maintenance programs be in place and he does not feel comfortable
accepting a change without consulting them.
SENATOR MACKIE moved amendments one thru five as stated on the memo
sent from Mike Morgan of the Department of Education. CHAIRMAN
GREEN said without objection, those amendments through section five
are adopted as amentment one.
SENATOR MACKIE moved as amendment two the change in wording to
match in AS 37.06.010, AS 37.16.020, deleting 315, 316 and 317.
CHAIRMAN GREEN said since there was no objection, these changes
would be incorporated into a committee substitute.
MR. DEWITT interjected that there was another change in Section
four - the effective date to July 1, 1999. SENATOR MACKIE so moved
this change as amendment three and without objection, the effective
date was changed to July 1, 1998.
MR. DEWITT said the task force is still wrestling with how these
bills apply to the Department of Transportation. He said that
agency's mission is maintenance of roads and airports and similar
things. He has been working with the Department to apply the bills
in a helpful manner, as intended. He believes they will reach
closure in these talks soon but did not want the committee to be
surprised if the department expressed some dissatisfaction in the
meantime.
SENATOR KELLY presented SB 228 and said it authorizes funding from
the Public Facilities Finance Corporation. He said it is a big wish
list and has been considered by the Deferred Maintenance Task
Force. He said there was a conscious effort to keep this from
becoming a pork-barrel project. The task force carefully considered
the criteria listed on page 5.1 and made an attempt to balance
projects throughout the state. He said even so, only 20 percent of
the projects are in Anchorage, where 40 percent of the population
lives. He informed CHAIRMAN GREEN that the Mat-Su valley has the
most money spent per capita, mostly going toward schools due to the
increase in student population. He hoped the majority of people
could concur with the final results. He concluded by saying the
bill is subject to immense and immediate change by the finance
committee.
SENATOR MACKIE stated this is the first time he has looked at the
projects and he likes the criteria used to select them. He asked
SENATOR KELLY if the priority list submitted by the agencies was
also used in the determination of projects.
DENNY DEWITT replied that these lists were used significantly as
guides but did not control the process. He said there were two
lists to work with, a major maintenance list and a construction
list. He said the department leans more heavily toward maintenance
rather than construction. The task force tried to combine all these
factors to create a viable list. However, the task force did give
preference to specific projects that communities had previously
bonded for individually. These projects would be undertaken in the
first year due to community commitment to them and support for
them.
SENATOR KELLY said the communities of Anchorage, Sitka, Wrangell,
Mat-Su and Barrow would be reimbursed partially for projects. He
does not yet know if the level of reimbursement would be 50 percent
or 70 percent.
SENATOR MACKIE asked specifically why a school ranked number five
on the education department's new construction list would end up in
the year 2002, rather than in the first year. MR. DEWITT replied he
expected that when combining the maintenance and construction lists
they ended up farther down the maintenance list for the same
dollars. The construction list proceeded more slowly. SENATOR
MACKIE said he understood this but thought that a project very high
on the construction list should be very high on the construction
list. He asked if there was any picking and choosing going on that
may delay some projects and MR. DEWITT said the task force looked
at various components of need, including harbors, schools,
Americans with Disabilities Act compliance and others. He said they
then looked at the aggregate need and tried to determine a ratio to
carry across the funding of each particular type of project. He
added that, to the best of his knowledge, no particular school was
maliciously or arbitrarily downgraded.
SENATOR MACKIE replied he hoped no one will prove MR. DEWITT wrong
on this point and emphasized the importance of integrity within the
process and a good geographic balance of projects. He said this,
along with the absence of personal promotion of projects, lends
credibility to the entire process.
MR. DEWITT admitted that there was a $200,000 project that he
simply lost. He has since been waiting for someone to bring it to
his attention.
CHAIRMAN GREEN asked if there were further questions on any of the
bills relating to the deferred maintenance task force report.
SENATOR MACKIE asked if there had been a committee substitute
adopted for SB 227 and CHAIRMAN GREEN said yes.
SENATOR MACKIE moved SB 224, SB 225, CSSB 226, CSSB 227 and SB 228
from committee with individual recommendations. Without objection
the bills were moved out with individual recommendations and
accompanying fiscal notes. With no other business to come before
the committee, CHAIRMAN GREEN adjourned the meeting at 4:35 p.m.
| Document Name | Date/Time | Subjects |
|---|