Legislature(2017 - 2018)BUTROVICH 205

03/01/2018 03:30 PM STATE AFFAIRS

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03:34:27 PM Start
03:35:00 PM SB212
04:58:52 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 212 PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         March 1, 2018                                                                                          
                           3:34 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Kevin Meyer, Chair                                                                                                      
Senator David Wilson                                                                                                            
Senator Cathy Giessel                                                                                                           
Senator John Coghill                                                                                                            
Senator Dennis Egan                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 212                                                                                                             
"An Act relating  to participation of certain  peace officers and                                                               
firefighters  in the  defined  benefit  and defined  contribution                                                               
plans  of  the Public  Employees'  Retirement  System of  Alaska;                                                               
relating to  eligibility of peace  officers and  firefighters for                                                               
medical benefits; and providing for an effective date."                                                                         
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 212                                                                                                                  
SHORT TITLE: PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS                                                                          
SPONSOR(s): SENATOR(s) KELLY                                                                                                    
                                                                                                                                
02/19/18       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/19/18       (S)       STA, FIN                                                                                               
03/01/18       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR PETE KELLY                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 212, provided an overview.                                                                  
                                                                                                                                
JOSEPH BYRNES, Staff                                                                                                            
Senator Kelly                                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of SB 212.                                                                           
                                                                                                                                
DOUG SCHRAGE, Advocate                                                                                                          
Alaska Fire Chiefs Association                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
COLONEL HANS BRINKE, Director                                                                                                   
Alaska State Troopers                                                                                                           
Alaska Department of Public Safety                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Did not provide a position on SB 212.                                                                     
                                                                                                                                
MAJOR BERNARD CHASTAIN, Deputy Director                                                                                         
Division of Alaska Wildlife Troopers                                                                                            
Alaska Department of Public Safety                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Offered to answer questions on SB 212.                                                                    
                                                                                                                                
PAUL MIRANDA, Vice President-South Central                                                                                      
Alaska Professional Firefighters Association                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
ALEX BOYD, Assistant Chief of Training                                                                                          
Anchorage Fire Department                                                                                                       
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
AMANDA WRAITH, representing self                                                                                                
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
LANE WRAITH, representing self                                                                                                  
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
BRYAN BARLOW, Deputy Director                                                                                                   
Alaska State Troopers                                                                                                           
Alaska Department of Public Safety                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Offered to answer questions on SB 212.                                                                    
                                                                                                                                
DEREK DEGRAAF, Supervisor-Trooper Recruitment                                                                                   
Alaska State Troopers                                                                                                           
Alaska Department of Public Safety                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Offered to answer questions on SB 212.                                                                    
                                                                                                                                
CHIEF JUSTIN DOLL, Chief of Police                                                                                              
Anchorage Police Department                                                                                                     
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
SERGEANT MIKE JENSEN, Recruiter Supervisor                                                                                      
Anchorage Police Department                                                                                                     
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
HUNTER BOMAR, representing self                                                                                                 
Boise, Idaho                                                                                                                    
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
TYLER STUART, representing self                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 212.                                                                           
                                                                                                                                
KATHY LEA, Deputy Director and Chief Pension Officer                                                                            
Alaska Division of Retirement and Benefits                                                                                      
Alaska Department of Administration                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Addressed the fiscal note for SB 212.                                                                     
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:34:27 PM                                                                                                                    
CHAIR  KEVIN  MEYER  called the  Senate  State  Affairs  Standing                                                             
Committee meeting  to order at 3:34  p.m. Present at the  call to                                                               
order  were Senators  Wilson, Giessel,  Coghill, Egan,  and Chair                                                               
Meyer.                                                                                                                          
                                                                                                                                
        SB 212-PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS                                                                    
                                                                                                                                
3:35:00 PM                                                                                                                    
CHAIR MEYER announced the consideration of Senate Bill 212 (SB
212).                                                                                                                           
                                                                                                                                
3:35:30 PM                                                                                                                    
SENATOR PETE KELLY, Alaska State Legislature, Juneau, Alaska,                                                                   
sponsor of SB 212, read the first paragraph of his sponsor                                                                      
statement as follows:                                                                                                           
                                                                                                                                
     SB  212  would create  a  new  defined benefit  pension                                                                    
     option  for  state  and municipal  peace  officers  and                                                                    
     firefighters   under  the   Alaska  Public   Employees'                                                                    
     Retirement System  (PERS) with new protections  for the                                                                    
     state against unforeseen future pension liabilities.                                                                       
                                                                                                                                
He explained  that one  of the  reasons the  Legislature has                                                                    
not changed any  portion of the retirement system  back to a                                                                    
defined  system is  that there  never have  been appropriate                                                                    
safeguards  that would  keep the  system whole.  He remarked                                                                    
that  herculean  efforts  have  been  made  to  improve  the                                                                    
liability in  the retirement system and  the peace officers'                                                                    
proposal  to  initiate safeguards  within  a  new system  is                                                                    
worthy of a look.                                                                                                               
                                                                                                                                
He referenced  his sponsor statement  to explain  details in                                                                    
the bill that might give  the Senate State Affairs and other                                                                    
committees a  level of confidence  to carve out a  piece for                                                                    
public  safety  while   maintaining  safeguards  within  the                                                                    
retirement system:                                                                                                              
                                                                                                                                
     Since  ending defined  benefit plans  in  2006, one  of                                                                    
     Alaska's greatest  public safety challenges  has become                                                                    
     employee retention  and recruitment.  Alaska is  one of                                                                    
     the few  jurisdictions that does not  presently offer a                                                                    
     defined benefit  type retirement for new  public safety                                                                    
     employees.   Additionally,    many   municipal   public                                                                    
     employees do not participate in  Social Security or the                                                                    
     Supplemental Annuity Plan (SBS-AP).                                                                                        
                                                                                                                                
     Since 2011,  126 Alaska State Troopers  have left state                                                                    
     service,  and   72  percent  of   them  moved   to  law                                                                    
     enforcement  agencies  with  better pay  and  benefits.                                                                    
     Recruitment  remains  one  of the  greatest  challenges                                                                    
     facing the  Department of Public Safety  today. With an                                                                    
     average  cost  of  $190,000  per  trooper  to  recruit,                                                                    
     train,  and  send  out   into  our  communities,  these                                                                    
     separations   have   an   enormous  cost   to   Alaska.                                                                    
     Similarly, in  Fairbanks the average length  of service                                                                    
     for each new firefighter is 1.9 years.                                                                                     
                                                                                                                                
     SB 212 is  crafted to retain and  attract quality peace                                                                    
     officers  and firefighters  while protecting  the state                                                                    
     from undue financial risks in  the future. The proposed                                                                    
     option   would   allow   future  peace   officers   and                                                                    
     firefighters  under the  PERS system  and current  ones                                                                    
     under  the  PERS  Tier  IV plan  to  join  the  defined                                                                    
     benefit plan. The  proposal includes several safeguards                                                                    
     modeled after  the most  fiscally responsible  plans in                                                                    
     the  nation.  These  safeguards provide  stability  and                                                                    
     would  help  protect  the state  from  undue  financial                                                                    
     risks  in  the  future.   These  provisions  include  a                                                                    
     minimum retirement age of 55  with 20 years of service,                                                                    
     flexibility   setting   employee  contribution   rates,                                                                    
     minimum   12-percent   employer   contribution   rates,                                                                    
     mechanisms  to prevent  costly  "pension spiking,"  and                                                                    
     the   ability  to   withhold  post-pension   retirement                                                                    
     adjustments  should the  plan's funding  drop below  90                                                                    
     percent. The  plan mirrors  much of  the PERS  Tier III                                                                    
     benefits  for  public  safety, though  it  retains  the                                                                    
     current Tier IV  defined contribution retirement plan's                                                                    
     health reimbursement  arrangement (HRA) and  absence of                                                                    
     cost  of  living  adjustments   as  an  important  cost                                                                    
     savings measures.                                                                                                          
                                                                                                                                
     Alaska smartly  ended the defined benefit  plan in 2006                                                                    
     after  we  discovered  how underfunded  those  accounts                                                                    
     were to  meet anticipated retiree  obligations. Knowing                                                                    
     that Alaska  must meet our  obligation to  retirees, we                                                                    
     cannot afford to return  to defined benefit retirements                                                                    
     workforce wide;  however, the nature  of the  jobs that                                                                    
     peace  officers  and  firefighters  hold  are  uniquely                                                                    
     physically  demanding and  hazardous compared  to other                                                                    
     public  employees, and  all Alaskans  pay the  cost for                                                                    
     understaffed public safety agencies.                                                                                       
                                                                                                                                
SENATOR KELLY noted that he  referenced the Alaska State Troopers                                                               
in his sponsor  statement but affirmed that the bill  is a public                                                               
safety  carve-out. He  asserted that  the state  has a  retention                                                               
issue in  public safety and the  issue is a problem  that must be                                                               
addressed. He said  there is an overarching moral  mandate in the                                                               
state  constitution  to  provide   for  Alaska's  public  safety;                                                               
however,  he pointed  out  that there  are  financial reasons  as                                                               
well. He  stated that the $190,000  cost per trooper and  2 years                                                               
lost in training is something that the Legislature must address.                                                                
                                                                                                                                
SENATOR KELLY  set forth that  SB 212 is  an option to  start the                                                               
conversation  in how  the state  deals with  retention issues  in                                                               
public safety. He  said he is willing to  discuss modification to                                                               
SB 212  to meet the best  interest of the state,  law enforcement                                                               
employees,  and to  keep peace  officers and  firefighters for  a                                                               
longer time.  He summarized  that a retirement  change is  one of                                                               
the  tools  that  can  be  used  to  address  the  public  safety                                                               
retention issue.                                                                                                                
                                                                                                                                
3:41:15 PM                                                                                                                    
CHAIR MEYER noted Senator Kelly's  reference to the high turnover                                                               
rate in  public safety and asked  if retirement is the  reason or                                                               
due to  a preference to  work in an  urban versus rural  area. He                                                               
pointed  out that  Anchorage continues  to  hire police  officers                                                               
with the current retirement program.                                                                                            
                                                                                                                                
SENATOR KELLY conceded that the problem  is a little bit of both.                                                               
He opined that  some conclusions can be drawn that  if the people                                                               
are quitting  and going to  work in other law  enforcement areas,                                                               
they  are  going with  training  and  a certification  that  they                                                               
received on the  "state's dime." He opined that the  issue is not                                                               
necessarily  related to  the difference  in  work, but  something                                                               
else  going  on.  He  admitted  that  he  did  not  know  if  the                                                               
Department  of  Public  Safety  will  be  completely  behind  the                                                               
legislation  and conceded  that  there are  a  lot of  unanswered                                                               
questions in  the bill. He  reiterated that the  legislation gets                                                               
the  conversation started.  He noted  that preliminary  actuarial                                                               
analysis indicated  that the proposal  is "not too bad."  He said                                                               
there is a  benefit in the legislation over Tier  III, much of it                                                               
because  a  medical  issue  is   addressed.  He  summarized  that                                                               
answering some  of the specific  questions will be  difficult for                                                               
him because not all the answers are known.                                                                                      
                                                                                                                                
3:45:02 PM                                                                                                                    
CHAIR MEYER  pointed out that Senator  Egan had a bill  that made                                                               
defined contributions  an option. He noted  that retired military                                                               
personnel that  join law enforcement typically  are interested in                                                               
defined contributions. He asked if  the bill would have an option                                                               
for defined contribution or defined benefit.                                                                                    
                                                                                                                                
SENATOR  KELLY replied  that Senate  State Affairs  is the  first                                                               
committee  of referral  and referenced  the Legislature's  recent                                                               
history  in   addressing  the   state's  retirement   system.  He                                                               
emphasized that his intent is not  to introduce a bill that would                                                               
usurp  the previous  work done  by  the Legislature  to create  a                                                               
healthy retirement system. He asserted  that SB 212 will keep the                                                               
state's  retirement   system  healthy  while   addressing  public                                                               
safety's retention issue.                                                                                                       
                                                                                                                                
CHAIR  MEYER agreed  with  Senator Kelly.  He  asserted that  the                                                               
biggest part  of the state's  unfunded liability is  the medical-                                                               
side  and he  likes  SB 212  because it  deals  with the  medical                                                               
issue.                                                                                                                          
                                                                                                                                
SENATOR  EGAN pointed  out that  his bill  was "still  alive." He                                                               
noted that HB 83 was in the other  body and the bill had a lot of                                                               
public hearings with no opposition.                                                                                             
                                                                                                                                
3:48:05 PM                                                                                                                    
CHAIR MEYER opened public testimony.                                                                                            
                                                                                                                                
3:48:19 PM                                                                                                                    
JOSEPH BYRNES,  Staff, Senator  Kelly, Alaska  State Legislature,                                                               
Juneau,   Alaska,   clarified   that  the   Alaska   Professional                                                               
Firefighters  Association  brought  the issue  forward,  not  the                                                               
peace officers.                                                                                                                 
                                                                                                                                
CHAIR  MEYER   announced  that  the  committee   will  forgo  the                                                               
sectional analysis for SB 212.                                                                                                  
                                                                                                                                
3:49:23 PM                                                                                                                    
DOUG   SCHRAGE,  Advocate,   Alaska   Fire  Chiefs   Association,                                                               
Fairbanks, Alaska, testified  in support of SB 212.  He set forth                                                               
that the Alaska  Fire Chiefs Association has  long recognized the                                                               
growing trend  of experienced, trained fire  fighters leaving the                                                               
state's  departments for  similar  departments  in other  states,                                                               
particularly   in   the   Pacific  Northwest.   He   noted   that                                                               
firefighting  jobs  in Alaska  have  historically  been a  "dream                                                               
job." He said departments with  better retirement packages in the                                                               
Lower  48 have  increasingly resorted  to lateral-hiring  because                                                               
there  is  a pool  of  well-trained  firefighters in  Alaska.  He                                                               
summarized that  recruiting, training and  equipping firefighters                                                               
is expensive.                                                                                                                   
                                                                                                                                
3:52:30 PM                                                                                                                    
COLONEL  HANS BRINKE,  Director,  Alaska  State Troopers,  Alaska                                                               
Department  of Public  Safety, Anchorage,  Alaska, detailed  that                                                               
the Alaska State  Troopers and the Alaska  Wildlife Troopers have                                                               
a  combined total-authorized  positions  of 389  with a  combined                                                               
position vacancy of  45. He disclosed that over the  past 2 years                                                               
the department  has lost  30 to  40 troopers  per year  and hired                                                               
only 12,  a net loss  of 15 to 20  trooper per year.  He provided                                                               
retirement statistics as follows:                                                                                               
                                                                                                                                
   • 38 percent of all troopers are eligible for retirement                                                                     
     within the next 5 years.                                                                                                   
   • 80 percent of the command staff are eligible to retire in                                                                  
     the next year.                                                                                                             
   • 94 percent of command staff are eligible to retire within                                                                  
     the next 5 years.                                                                                                          
   • An average of 15 to 20 retirements are expected per year                                                                   
    through 2026, a total of 120 to 160 trooper retirements.                                                                    
                                                                                                                                
COLONEL  BRINKE addressed  non-retirement trooper  separations as                                                               
follows:                                                                                                                        
                                                                                                                                
   • 2014 to 2017 combined separations have averaged 24 troopers                                                                
     per year, totaling approximately 126 troopers.                                                                             
   • Reasons for leaving:                                                                                                       
        o Lack of a defined benefits package.                                                                                   
        o Being overworked.                                                                                                     
        o Pay disparities compared to other agencies throughout                                                                 
          the state and the Lower 48.                                                                                           
        o Poor internal communications.                                                                                         
                                                                                                                                
He disclosed that feedback from  exiting-trooper interviews as to                                                               
what would keep them in their previous positions as follows:                                                                    
                                                                                                                                
   • Defined benefit package.                                                                                                   
   • Wages that are comparable to other agencies.                                                                               
   • Restoration of a training budget.                                                                                          
                                                                                                                                
He said  he emphasizes trooper retainment  versus recruitment. He                                                               
disclosed that the  department will have to hire  40 troopers per                                                               
year  for the  next 8  years just  to get  back to  even for  the                                                               
authorized positions.                                                                                                           
                                                                                                                                
3:58:23 PM                                                                                                                    
SENATOR WILSON  asked if  the Alaska  State Troopers  support the                                                               
bill.                                                                                                                           
                                                                                                                                
COLONEL BRINKE  replied that the  department is not at  the point                                                               
to endorse  the bill but  added that the department  supports the                                                               
concept of defined benefit packages.                                                                                            
                                                                                                                                
SENATOR  GIESSEL addressed  Colonel  Brinke's staffing  challenge                                                               
and noted  that her  district had  included the  Kenai Peninsula.                                                               
She  noted  that  she  had  discussions  with  the  Alaska  State                                                               
Troopers  on staffing  challenges  in remote  areas and  remarked                                                               
that the  Alaska State Troopers  have been hurting  from staffing                                                               
issues for a number of years.                                                                                                   
                                                                                                                                
4:00:32 PM                                                                                                                    
MAJOR  BERNARD  CHASTAIN,  Deputy Director,  Division  of  Alaska                                                               
Wildlife   Troopers,   Alaska   Department  of   Public   Safety,                                                               
Anchorage,  Alaska, announced  that  he was  available to  answer                                                               
questions on SB 212.                                                                                                            
                                                                                                                                
4:00:56 PM                                                                                                                    
PAUL MIRANDA,  Vice President-South Central,  Alaska Professional                                                               
Firefighters   Association,  Anchorage,   Alaska,  testified   in                                                               
support of SB 212. He detailed  that Alaska began placing all new                                                               
state and municipal employees into  the defined contribution plan                                                               
known  as  PERS   Tier  IV  in  2006;  however,   the  state  has                                                               
experienced many  unintended consequences.  He asserted  that the                                                               
clearest consequence  is the  competitive disadvantage  the state                                                               
is  now   facing  in  recruiting  and   retaining  public  safety                                                               
employees. He pointed  out that Alaska is one of  the only states                                                               
to only  offer a defined  contribution retirement plan  to public                                                               
safety  employees. He  noted that  several  jurisdictions in  the                                                               
Lower 48 have  switched from a defined contribution  plan back to                                                               
a defined benefit plan specifically  to address the same problems                                                               
that  Alaska in  now  facing. He  added  that another  unintended                                                               
consequence from the switch to Tier  IV is the lack of retirement                                                               
security provided  for public  safety employees.  He said  SB 212                                                               
will  make  Alaska  competitive   in  public  safety  hiring  and                                                               
retention. He  addressed benefit details  and noted that  Tier IV                                                               
medical benefits  will be provided  as opposed to  providing full                                                               
pre-Medicare coverage.                                                                                                          
                                                                                                                                
4:05:41 PM                                                                                                                    
SENATOR   GIESSEL   asked   what   the  definition   is   for   a                                                               
"firefighter." She  said her concern is  the legislation ripples-                                                               
out without  constraint and suddenly,  "Secretaries at  desks are                                                               
included."                                                                                                                      
                                                                                                                                
MR. MIRANDA  replied that  the definition is  classified as  a P-                                                               
Class  position  that is  used  for  frontline responders,  peace                                                               
officers and firefighters.                                                                                                      
                                                                                                                                
SENATOR  WILSON noted  that Senator  Egan brought  up a  point on                                                               
allowing the choice of opting in  or out and asked Mr. Miranda if                                                               
he was in support of the ability to choose.                                                                                     
                                                                                                                                
MR. MIRANDA replied  that SB 212 provides a 90-day  period to opt                                                               
into the new retirement plan versus staying in PERS Tier IV.                                                                    
                                                                                                                                
4:08:14 PM                                                                                                                    
SENATOR EGAN noted  that the state troopers  and firefighters did                                                               
endorse his  bill. He  detailed that his  bill provides  a choice                                                               
between defined  benefit and  defined contribution.  He explained                                                               
that the  reason for  providing an option  was for  families that                                                               
transfer.                                                                                                                       
                                                                                                                                
He addressed  SB 212  and pointed  out that  he likes  the bill's                                                               
conversion option  because of its  familiarity. He  detailed that                                                               
if an unfunded  liability opens, the bill has  two ways employees                                                               
help  close the  liability.  He noted  that  retirees skip  their                                                               
inflation adjustments and active employees  pay more out of their                                                               
wages.  He  asked  if  the  two ways  employees  help  close  the                                                               
liability is equitable.                                                                                                         
                                                                                                                                
MR. MIRANDA replied that Washington  state has similar provisions                                                               
in  its law  enforcement  officers  and firefighter's  retirement                                                               
plan. He  opined that  the senator's  question regarding  the two                                                               
ways employees would help close  a liability will be addressed in                                                               
an upcoming actuarial report.                                                                                                   
                                                                                                                                
4:11:00 PM                                                                                                                    
SENATOR EGAN added that there  are states that have recently gone                                                               
back to  direct benefit  or allowed  employees to  choose between                                                               
defined contribution and defined benefit.                                                                                       
                                                                                                                                
SENATOR COGHILL noted  that Senator Kelly brought up  the cost of                                                               
training  state troopers  and asked  how much  it costs  to train                                                               
firefighters. He opined  that cost recovery should be  based on a                                                               
formula  that  considers  the  number  of  individuals  that  are                                                               
trained and the number of trained employees that leave.                                                                         
                                                                                                                                
MR.  MIRANDA   replied  that  the  Anchorage   Fire  Department's                                                               
training cost is  $100,000 to $165,000 for an  individual that is                                                               
hired.                                                                                                                          
                                                                                                                                
SENATOR  COGHILL explained  that  knowing the  training costs  is                                                               
vital in getting cost recovery.                                                                                                 
                                                                                                                                
CHAIR MEYER asked  if new recruits are trained  in both emergency                                                               
medical technician (EMT) and firefighter training.                                                                              
                                                                                                                                
MR.  MIRANDA  replied  that all  firefighters  in  Anchorage  are                                                               
cross-trained in  both fire and emergency  medical services (EMS)                                                               
and other jurisdictions throughout the state do the same.                                                                       
                                                                                                                                
SENATOR  GIESSEL disclosed  that  the committee  members did  not                                                               
receive  any   cost  numeration  from  the   Alaska  Professional                                                               
Firefighters Association.                                                                                                       
                                                                                                                                
MR.  MIRANDA replied  that he  previously referenced  firefighter                                                               
cost  from  the  Anchorage  Fire  Department  but  would  provide                                                               
additional information to the committee.                                                                                        
                                                                                                                                
4:15:54 PM                                                                                                                    
ALEX   BOYD,  Assistant   Chief  of   Training,  Anchorage   Fire                                                               
Department,   Municipality  of   Anchorage,  Anchorage,   Alaska,                                                               
testified  in  support of  SB  212.  He stated  that  firefighter                                                               
recruitment and retainment has  become increasingly difficult. He                                                               
said  the  department  has  seen  an  increase  in  declines  for                                                               
employment due  to other  agencies that  offer a  defined benefit                                                               
system.  He  disclosed that  the  cost  of  training a  new  hire                                                               
employee  is  $169,000  per employee  for  initial  training  and                                                               
deployment.  He  revealed that  a  recent  survey indicates  that                                                               
approximately 38 employees in the  department are seeking outside                                                               
employment  and the  result  would be  a  potential $6.4  million                                                               
investment loss  if all  38 left the  department, an  amount that                                                               
would  have to  be  added to  the  department's annual  operating                                                               
budget to cover academy costs.                                                                                                  
                                                                                                                                
4:19:20 PM                                                                                                                    
AMANDA WRAITH,  representing self, Wasilla, Alaska,  testified in                                                               
support of  SB 212. She  said she is increasingly  concerned with                                                               
the level of decline and the  lack of adequate support to recruit                                                               
and retain  well qualified officers. She  concurred with previous                                                               
testimony  that many  state troopers  have left  Alaska for  jobs                                                               
that offer defined benefits in the Lower 48.                                                                                    
                                                                                                                                
4:22:12 PM                                                                                                                    
LANE  WRAITH, representing  self, Wasilla,  Alaska, testified  in                                                               
support  of SB  212.  He disclosed  that he  is  an Alaska  State                                                               
Trooper. He  said state  troopers are  taking their  training and                                                               
leaving Alaska for jobs with  defined benefits. He added that the                                                               
state's academies are receiving  fewer applicants and turning out                                                               
fewer recruits.  He said  SB 212  goes a long  way in  fixing the                                                               
retirement system that  is currently not working  as an incentive                                                               
to bring people in or to keep the ones that have joined.                                                                        
                                                                                                                                
4:25:36 PM                                                                                                                    
BRYAN  BARLOW, Deputy  Director,  Alaska  State Troopers,  Alaska                                                               
Department of  Public Safety, Anchorage, Alaska,  announced being                                                               
available to answer questions on SB 212.                                                                                        
                                                                                                                                
4:25:59 PM                                                                                                                    
DEREK  DEGRAAF,  Supervisor,  Trooper Recruitment,  Alaska  State                                                               
Troopers, Alaska Department of  Public Safety, Anchorage, Alaska,                                                               
announced being available to answer questions on SB 212.                                                                        
                                                                                                                                
4:26:38 PM                                                                                                                    
CHIEF JUSTIN DOLL, Chief of  Police, Anchorage Police Department,                                                               
Municipality  of  Anchorage,   Anchorage,  Alaska,  testified  in                                                               
support of  SB 212. He  disclosed that the department  is running                                                               
an  uphill  recruitment battle  with  Lower  48 departments  that                                                               
offer a defined  benefits system. He pointed out  that within the                                                               
state, rural  departments face a  tremendous challenge  in hiring                                                               
and retaining officers. He said  his primary concern is retaining                                                               
officers that  are in their  mid-career phase. He  disclosed that                                                               
the cost  for a first-year  officer's training at  the department                                                               
is $170,000 to $200,000. He said SB  212 is the step in the right                                                               
direction and  will help  the department  recruit and  retain law                                                               
enforcement  officers across  the state,  especially in  Alaska's                                                               
rural areas.                                                                                                                    
                                                                                                                                
4:32:49 PM                                                                                                                    
CHAIR MEYER noted that the  Anchorage Police Department has hired                                                               
many  new police  officers.  He  asked where  the  new hires  are                                                               
coming from.                                                                                                                    
                                                                                                                                
CHIEF DOLL replied  that a few people have been  hired locally as                                                               
well as  individuals from out of  state. He said he  is concerned                                                               
with  training and  losing out-of-state  applicants. He  revealed                                                               
that  most  states  have officer-certification  reciprocity  with                                                               
other states where an applicant can  be hired in their home state                                                               
after receiving certification in Alaska  and that is huge concern                                                               
for the  department. He  noted that  PERS portability  is another                                                               
concern that he  has, and SB 212 would allow  departments to have                                                               
influence over departures.                                                                                                      
                                                                                                                                
CHAIR  MEYER asked  where the  local  hires are  coming from.  He                                                               
inquired if hires are coming from the Alaska State Troopers.                                                                    
                                                                                                                                
CHIEF DOLL  answered that  some hires have  come from  the Alaska                                                               
State Troopers, but not within the last year.                                                                                   
                                                                                                                                
4:36:01 PM                                                                                                                    
SERGEANT  MIKE  JENSEN,  Recruiter Supervisor,  Anchorage  Police                                                               
Department,   Municipality  of   Anchorage,  Anchorage,   Alaska,                                                               
testified  in support  of SB  212. He  concurred with  Chief Doll                                                               
that  the department  has hired  a few  officers from  the Alaska                                                               
State Troopers.                                                                                                                 
                                                                                                                                
CHAIR MEYER  asked if the  department has an outreach  process to                                                               
attract rural-area applicants, especially Alaska Natives.                                                                       
                                                                                                                                
SERGEANT  JENSEN  answered  yes.  He noted  that  the  department                                                               
recruited  at  the  recent Alaska  Federation  of  Natives  (AFN)                                                               
Convention.  He  disclosed  that  one  of  his  recruiting  staff                                                               
members  is an  Alaska native.  He  said in  addition to  target-                                                               
recruiting  Alaska natives,  the department  also target-recruits                                                               
women.                                                                                                                          
                                                                                                                                
4:38:42 PM                                                                                                                    
HUNTER  BOMAR,  representing  self, Boise,  Idaho,  testified  in                                                               
support of  SB 212. He  disclosed that  he was a  firefighter for                                                               
the Anchorage  Fire Department and  is currently working  for the                                                               
fire  department in  Boise, primarily  because  of their  defined                                                               
benefit  retirement program.  He asserted  that Alaska  is losing                                                               
more qualified candidates to states  that offer better retirement                                                               
programs. He  provided the committee with  malady statistics that                                                               
tend  to  inflict firefighters  and  stressed  the importance  of                                                               
retirement programs for firefighters.                                                                                           
                                                                                                                                
4:43:48 PM                                                                                                                    
TYLER STUART, representing self,  Fairbanks, Alaska, testified in                                                               
support of SB 212. He disclosed  that he has been an Alaska State                                                               
Trooper for six  years. He revealed that many of  his friends and                                                               
co-workers from  various state agencies have  left Alaska because                                                               
they do  not have a  defined benefit retirement program.  He said                                                               
the  current Tier  IV retirement  system  leaves uncertainty  for                                                               
future planning for  himself and his family. He said  SB 212 is a                                                               
move in  the right  direction towards  a defined  benefit program                                                               
and  would   provide  a  lot   of  confidence  to   troopers  and                                                               
firefighters.                                                                                                                   
                                                                                                                                
4:47:31 PM                                                                                                                    
CHAIR MEYER closed public testimony.                                                                                            
                                                                                                                                
He  disclosed that  he has  done ride-alongs  with the  Anchorage                                                               
Police Department  and noted his  appreciation for the  work that                                                               
the police  officers do.  He said  his eyes  have been  opened in                                                               
revisiting  the retirement  system  that is  being addressed.  He                                                               
admitted  that there  are  a lot  of questions  that  need to  be                                                               
worked out. He  asked Mr. Byrnes to address  the bill's sectional                                                               
analysis at  a future  committee meeting to  know in  detail what                                                               
the legislation does.  He added that the bill's  fiscal notes are                                                               
indeterminate awaiting an upcoming actuarial report.                                                                            
                                                                                                                                
MR. BYRNES  replied that  Kathy Lea from  the Alaska  Division of                                                               
Retirement  and  Benefits  can address  questions  regarding  the                                                               
retirement  system and  the fiscal  note. He  concurred that  the                                                               
division's  fiscal note  is indeterminate  due  to the  actuarial                                                               
report  but suggested  that the  Senate  Finance Committee  could                                                               
address a determinant fiscal note.                                                                                              
                                                                                                                                
CHAIR  MEYER asked  Ms. Lea  to address  the bill's  fiscal note,                                                               
specifically  when  the actuarial  report  will  be finished.  He                                                               
pointed out that  the legislation's cost will be  a major factor.                                                               
He said the committee members would  like to know what the bill's                                                               
financial implications are  prior to going to  the next committee                                                               
of assignment.  He admitted that  the resistance in the  past has                                                               
strictly been the unfunded liability portion.                                                                                   
                                                                                                                                
4:51:05 PM                                                                                                                    
KATHY  LEA, Deputy  Director and  Chief  Pension Officer,  Alaska                                                               
Division  of  Retirement  and   Benefits,  Alaska  Department  of                                                               
Administration,  Anchorage, Alaska,  explained that  an actuarial                                                               
fiscal  note is  generally ordered  when  a bill  gets to  either                                                               
Senate  Finance or  House Finance  due  to the  cost involved  in                                                               
producing  the actuarial  evaluation; however,  Senate leadership                                                               
can direct the division to order  an actuarial fiscal note if the                                                               
feeling is  the bill  is going  to go  forward enough  to warrant                                                               
one.                                                                                                                            
                                                                                                                                
CHAIR MEYER  replied that the  committee will be in  contact with                                                               
Senator  Kelly   and  the  Senate  Finance   Committee  co-chairs                                                               
regarding the  bill's fiscal note.  He addressed the  fiscal note                                                               
that  addressed  the  administrative  costs and  noted  that  the                                                               
legislation  would require  hiring  a full-time  person and  five                                                               
temporary people to administer the new program.                                                                                 
                                                                                                                                
MS.  LEA answered  correct. She  specified that  the division  is                                                               
looking  at   several  non-permanent  positions  to   handle  the                                                               
conversion,  the  accounting   for  the  conversion,  counseling,                                                               
answering questions from  the police/fire group as  well as other                                                               
groups who may be wondering if  they are eligible or how they get                                                               
to  be   eligible.  She  detailed   that  the  division   is  not                                                               
necessarily anticipating that permanent  positions will be needed                                                               
other  than the  one  permanent position  for  a retirements  and                                                               
benefits   specialist  to   counsel.  She   explained  that   the                                                               
division's current  counseling services  for the  defined benefit                                                               
plan is at maximum.                                                                                                             
                                                                                                                                
SENATOR COGHILL  asked how many potential  beneficiaries would be                                                               
anticipated from the bill.                                                                                                      
                                                                                                                                
MS. LEA replied approximately 2500.                                                                                             
                                                                                                                                
SENATOR   COGHILL  commented   that  the   number  of   potential                                                               
beneficiaries  is  a concept  that  should  be addressed  by  the                                                               
committee.                                                                                                                      
                                                                                                                                
4:54:24 PM                                                                                                                    
SENATOR GIESSEL  addressed sections  3 and  33 that  provided the                                                               
definition for "peace officer"  and "firefighter." She referenced                                                               
AS 39.35.680(30) as follows:                                                                                                    
                                                                                                                                
     "Peace  officer"  or  "firefighter" means  an  employee                                                                    
     occupying  a  position as  a  peace  officer, chief  of                                                                    
     police,  regional public  safety officer,  correctional                                                                    
     officer,   correctional  superintendent,   firefighter,                                                                    
     fire chief, or probation  officer, but does not include                                                                    
     a village  public safety officer employed  by a village                                                                    
     public  safety  officer  program established  under  AS                                                                    
     18.65.670.                                                                                                                 
                                                                                                                                
She asked for  more information on the  definition of corrections                                                               
and probation officers.                                                                                                         
                                                                                                                                
She  addressed  Section  29  in   the  bill  that  referenced  AS                                                               
39.35.680(18)(C)(ii):                                                                                                           
                                                                                                                                
     On or  after July  1, 2006,  with respect  to employees                                                                
     who  are not  peace officers  or firefighters  [ASSUMES                                                                
     LIABILITY UNDER THE PLAN OF  A POLITICAL SUBDIVISION OR                                                                    
     PUBLIC   ORGANIZATION   DESCRIBED   IN  (B)   OF   THIS                                                                    
     PARAGRAPH].                                                                                                                
                                                                                                                                
She  said  that  for  the  sectional  analysis  she  needed  more                                                               
information  on   employees  who   are  not  peace   officers  or                                                               
firefighters.                                                                                                                   
                                                                                                                                
4:56:09 PM                                                                                                                    
MR.  BYRNES addressed  AS 39.35.680(30)  and said  the definition                                                               
would only  apply to  "frontline personnel."  He opined  that the                                                               
Division  of Retirement  and  Benefits may  be  able to  properly                                                               
answer   Senator  Giessel's   definition  questions,   especially                                                               
regarding  non-frontline  personnel.  He  noted  that  there  are                                                               
different benefits provided  for in Tier III  for police officers                                                               
and firefighters.                                                                                                               
                                                                                                                                
CHAIR MEYER asked Mr. Byrnes to research the definitions that                                                                   
Senator Giessel questioned and provide answers at a future                                                                      
committee meeting.                                                                                                              
                                                                                                                                
[CHAIR MEYER held SB 212 in committee.]                                                                                         
                                                                                                                                
4:58:52 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Meyer adjourned the State Affairs Standing Committee at                                                                   
4:58 p.m.                                                                                                                       

Document Name Date/Time Subjects
SB 212 Version D.PDF SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Sponsor Statement.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Sectional Analysis.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 PERS Tiers Comparison.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 NCSL State by State Government Public Safety Retirement Plans.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Pension Trustee Advisors Actuarial Cost Estimates for Public Safety Fix (Feb. 21 2018).pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 DPS Recruitment-Retention Plan Overview 2018-2023.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 DPS Commissioned Employee Engagement Survey Results Overview December 2017.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from Hunter Bomar.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from John Jones.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from Mark Stephens.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from Chief Justin Doll (Anchorage Police Department).pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from Chief Jim Styers (Fairbanks Fire Department).pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from Chief Geoff Coon (NPFD).pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Letter of Support from Brian Wilson (APDEA).pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Fiscal Note DOA45.pdf SSTA 3/1/2018 3:30:00 PM
SB 212
SB 212 Fiscal Note DOA64.pdf SSTA 3/1/2018 3:30:00 PM
SB 212