Legislature(2019 - 2020)ADAMS ROOM 519
02/04/2020 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Department of Administration |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 205 | TELECONFERENCED | |
| += | HB 206 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HOUSE BILL NO. 205
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
HOUSE BILL NO. 206
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:33:57 PM
^DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT
1:34:01 PM
MICHAEL JOHNSON, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, introduced himself.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, shared that until two weeks prior
he had served as the administrative services director for
the department.
1:34:56 PM
Commissioner Johnson provided a PowerPoint presentation
titled "Department of Education and Early Development
(DEED): FY 2021 Budget Overview House Finance Committee,"
dated February 4, 2020 (copy on file). He briefly
highlighted slides 2 and 3:
Our Mission
An excellent education for every student every
day.
Our Vision
All students will succeed in their education and
work, shape worthwhile and satisfying lives for
themselves, exemplify the best values of society,
and be effective in improving the character and
quality of the world about them. Alaska Statute
14.03.015
Purpose
DEED exists to provide information, resources,
and leadership to support an excellent education
for every student every day.
Commissioner Johnson moved on to discuss slide 4 titled
Alaska's Education Challenge. He read from the slide:
An excellent education for every student every day.
Cultivate Safety and Well-Being
All schools will be safe and nourish student
well-being.
Increase Student Success
Success will be identified using multiple
measures as part of a rich and varied curriculum.
Support Responsible and Reflective Learners
Families, tribes, educators, and communities will
provide relevant learning opportunities.
1:36:48 PM
Commissioner Johnson turned to slide 5 titled DEED FY 2021
Operating Budget: Leadership. He briefly addressed the
department's organizational structure that was depicted on
the slide. He offered that the department reported to the
State Board of Education.
1:37:14 PM
HEIDI TESHNER, DIRECTOR, FINANCE AND SUPPORT SERVICES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, reviewed
slide 6 titled FY 2021 Operating Budget Comparison. She
explained that the chart and graph showed the overall
snapshot of the departments budget and broad categories of
funding. She pointed to the table at the bottom of the
slide that showed the approximate $15.4 million reduction
from FY 19 through FY 21. She commented that the one-time
funding outside of the foundation formula appropriated in
FY 19 was not included in the FY 21 budget. She listed the
Significant Items contained in the FY 21 budget:
• The foundation formula was fully funded with a Base
Student Allocation (BSA) of $5,930.
• Additional federal authority for the Comprehensive
Literacy State Development Grant.
• The Residential Schools Program added two new schools.
• The budget discontinued the Online With Libraries
Video Conference Network (OWL).
• Outsourced Federal Family Education Loan Program
(FFELP) Loans.
Ms. Teshner expounded that the literacy grant was a five
year grant worth about $25 million. She noted that the two
new residential schools added approximately $9 hundred
thousand in Unrestricted General Funds (UGF).
Co-Chair Foster asked if the $30 million in one-time
funding was included in the slide. Mr. Steininger replied
that the funds were not included in the slide. Co-Chair
Foster asked why the slide did not contain the spending
difference between the FY 20 and FY 21 budget yet compared
FY 19 to FY 21. He assumed the information was readily
available. Mr. Steininger answered in the affirmative. He
was uncertain why the slide did not contain the FY 20 to FY
21 comparison.
1:40:08 PM
Representative Sullivan-Leonard referred to the Department
of Health and Social Services (DHSS) budget presented the
previous day. She noted the budget included early education
funding. She asked whether the funding originated in DEED
and was transferred to DHSS. Commissioner Johnson believed
she was referencing the Parents as Teachers program. The
program was not changed, it was just moved. He deferred the
answer to Ms. Teshner that was addressed in a later slide.
Representative Wool asked whether Mt. Edgecumbe was
considered a residential school. Ms. Teshner replied that
Mt. Edgecumbe was a state run residential school. The two
additional residential schools were administered by their
districts.
1:41:49 PM
Ms. Teshner turned to slide 7 titled FY 2021 Fund Source
Breakdown by Fund Category. She highlighted that the bulk
of DEED funding was UGF mostly expended on the foundation
formula. She pointed to the agency operating formula line
on the upper table. Included in the formula line were
payments for special schools, youth in detention, student
transportation, and residential schools. She relayed that
the chart also included duplicated funds that helped track
expenditures assigned to two different budgetary
categories. The Higher Education Investment Fund
represented the majority of the Other Funds category and
was noted under Designated General Funds (DGF) funding the
Alaska Performance Scholarship awards and the Alaska
Education Grants that were administered by the Alaska
Commission on Postsecondary Education (ACPE). In addition,
DGF was used for School Broadband Assistance (BAG) grants.
She moved to slide 8 titled Department of Education and
Early Development Budget and reported that District
Support represented 80 percent of the entire budget at over
$1.3 billion. The entirety of the department's operation
was accomplished through the remaining 20 percent amounting
to approximately $324 million. She indicated that the
largest division in the department was the Division of
Innovation and Education Excellence containing most of
DEEDs federal programs. Child Nutrition and the Alaska
Commission on Postsecondary Education (ACPE) were the
second and third largest budgetary components. She
indicated that DEEDs overall budget totaled over $1.6
billion.
Vice-Chair Ortiz asked where school construction and major
maintenance fell in the department's budget. He asked if it
was in the capital budget and whether there was money
appropriated. Ms. Teshner answered that the items were
typically in the capital budget. The governor's budget did
not include any funding for the items. She added that
school debt reimbursement was funded through Debt Service
and was not included in the DEED budget.
1:45:20 PM
Vice-Chair Ortiz asked if there would be an opportunity to
address school maintenance at another meeting. Co-Chair
Foster deferred the answer to the Capital Budget co-chair
[Rep. Johnston].
1:45:51 PM
AT EASE
1:47:00 PM
RECONVENED
Vice-Chair Ortiz asked what the average spend on
construction and major maintenance had been in past years.
Ms. Teshner answered that she did not have the information
with her. She offered to follow up. She remembered that for
a number of years the cost had been around $25 million but
declined over recent years. Vice-Chair Ortiz asked for
verification that currently nothing was appropriated in the
budget for construction and major maintenance. Ms. Teshner
answered in the affirmative.
Representative Knopp cited slide 6 showing the FY 19 and FY
21 budget comparison. He asked about the one-time funding.
He recounted that in FY 19 the one-time funding amount was
$20 million but an additional one-time funding in the
amount of $30 million was outstanding. He asked whether he
was correct. Ms. Teshner answered in the affirmative adding
that there had been $20 million appropriated in FY 19 and
the department recently received the $30 million in the
current week.
Representative Knopp asked if the $30 million was included
in the overview numbers. Mr. Steininger answered that the
slide had been produced prior to the funding distribution.
1:47:00 PM
Ms. Teshner followed up on Vice-Chair Ortiz's question. She
clarified that the school debt reimbursement funded at 50
percent had a small amount of funding for school
construction and maintenance included in the Regional
Education Attendance Area (REAA) category that was
available to small municipal school districts and REAAs.
Co-Chair Foster believed that the amount was about $19
million and was tied by formula to the school bond debt
program, which amounted to nearly $50 million. He asked
whether his recollection was correct. Ms. Teshner responded
in the affirmative.
Representative Sullivan-Leonard asked for information about
how the administration was looking at reducing the budget.
She highlighted that the bulk of the budget was over $1.3
billion for K-12 district support. She noted that DEEDs
budget was the states largest. She wondered how to bring
the spending down to a more sustainable level. Commissioner
Johnson answered that school districts were continually
going through a budget process and finding ways to be more
efficient. He offered that the districts understood the
state's budget pressure. He added that one way to make the
system more efficient was to improve reading proficiency.
Students with reading problems after the third grade
required extra supports and interventions that became more
expensive to the system.
1:53:06 PM
Co-Chair Johnston asked whether efficiencies would be
created as districts began cooperating more and exchanging
their centers of excellence with each other to improve
outcomes and lower costs. She noted the importance of
examining how the state was funding education in order to
meet future needs. Commissioner Johnson answered in the
affirmative. He relayed that the department was looking at
being more efficient, but the budget did not include a
reduction to education funding. School districts were
currently sharing services for things like vocational
studies and teaching. Each year brought more examples of
districts working to increase efficiency and innovation
that delivered an increased quality of instruction. Co-
Chair Johnston remarked that at some point it would be
necessary to adjust the current formula to meet future
needs rather than maintaining outdated modes of
instruction. Commissioner Johnson agreed. He stated that
any time changing the formula was mentioned people got
nervous; however, the current formula was developed in
1999. He thought it would benefit students if the state
improved the formula that included innovative ways to
deliver educational services.
Co-Chair Foster spoke to keeping the budget at a manageable
level. He identified the foundation formula as an element
that was not something the department currently had control
over. He mentioned the 650 decrease in the number of
students but an increase in costs due to a growth in
special needs students.
1:57:07 PM
Commissioner Johnson confirmed that there were fewer
students in the state but a significant increase in
intensive needs students using 13 times the Base Student
Allocation (BSA), which offset the potential savings of the
reduction in overall students.
Co-Chair Foster thought that the increase was $15 million
or $19 million. He asked for clarification. Ms. Teshner
answered that the difference in basic projected need was
$19.7 million.
Representative Merrick asked what qualified as an intensive
student. Commissioner Johnson answered that seven different
categories comprised the criteria used to evaluate a
student by an Individual Education Plan (IEP) team that
included the teacher, special education teacher, principal,
and parent; if a student met all the criteria they were
identified as an intensive student. Representative Merrick
asked if all the intensive students were calculated at the
full 13 times the BSA regardless of the level of need.
Commissioner Johnson answered in the affirmative and noted
that it was the way the model was currently set up.
1:59:13 PM
Representative Wool asked about intensive students. He
wondered if the classification had existed for some time
and whether it required a new level of staffing
requirements. Commissioner Johnson answered that the model
had been in place for some time. The seven criteria
included things like needing assistance with a personal
need or transportation. He explained that criteria did not
necessarily mean an autistic student would be identified as
an intensive student. However, if identified as an
intensive student, the student received a staff person to
act as an assistant. Representative Wool used autism as an
example and noted the large increase nationally. He asked
if the special needs increase was more recent through
increased diagnosis and an increased awareness that more
intervention and resources should be allocated.
Commissioner Johnson answered that the department could
follow up with details regarding the increase. He added
that the department audited the records and could share the
data with the committee.
2:02:00 PM
Vice-Chair Ortiz highlighted the concern about pressures to
drive down costs in education. He cited the presenters'
mention of the governor's desire to attract and retain
teachers. He deduced that the effort worked in the opposite
direction of the goal to drive down costs. Commissioner
Johnson answered that one could argue both perspectives;
that retaining more teachers was a cost increase or that
retention was more cost effective. He commented that no
one wanted to work in ineffective schools. He observed that
if the state wanted to retain more teachers, providing more
supports was necessary to create an environment where
people wanted to work. He did not believe providing
supports required an increase in funds; it ensured that the
current funding was spent effectively.
Ms. Teshner examined slide 9 titled Department of
Education and Early Development Budget containing a pie
chart that broke out the department's budget by line item.
She shared that 95 percent of the departments budget was
comprised of pass through grants to school districts and
other educational entities. She explained that the
remaining 5 percent was spent on the department's needs. On
average $5.8 million in grants was distributed per DEED
employee and for every dollar in operational costs about
$18.50 was dispersed to communities.
2:04:41 PM
Ms. Teshner turned to slide 10 titled FY 2021 Budget -
Notable Items in the K-12 Aid to School Districts:
• Foundation Program Fully Funded
o BSA $5,930
• Public School Trust Fund (PSTF) Appropriation
Structural Change
o Percent of Market Value (POMV) draw from the PSTF
is now directly deposited into the Public
Education Fund.
o This provides more predictability for investment
management and potentially greater returns.
o Appears as a $21.5M decrement but is matched by
an appropriation in the language section of the
bill. No change to the funding level.
Ms. Teshner elaborated that the change from the numbers to
language section of the Operating Budget bill helped the
Department of Revenue (DOR) better manage the fund by
eliminating the need to manage the cash flow daily. The
funds would be deposited once a year directly to the Public
Education Fund, which allowed for greater returns.
2:06:18 PM
Mr. Steininger interjected that structural changes within
the way the appropriations were made from the fund and
simplifying the cash flow could result in better returns
over time. He delineated that currently daily expenditures
were made directly from the Public School Trust Fund,
managing the fund as a checking account. The cash flow
model limited DORs ability to manage the fund versus the
POMV model that enabled a single draw, allowing the
department to predict the draws amount and timing and
offer the management flexibility that ideally would result
in better returns over time. Although not a guarantee, the
additional flexibility could provide benefits.
Co-Chair Foster surmised that Mr. Steininger described an
accounting change in the process to simplify things that
did not require additional funds. He described the change
as pretty innocuous.
2:08:07 PM
Ms. Teshner moved to slide 11 titled "FY 2021 Budget -
Notable Items in the K-12 Support:
• Residential Schools Program Component Name Change
o Better reflects the activities performed in this
component.
• $900.2 UGF Addition of Two New Residential Programs
o $330.2, 20-bed program in the North Slope Borough
School District approved by Department in Dec
2016.
o $570.0, 50-bed program in the Lower Yukon School
District approved by Department in Sept 2019.
Co-Chair Foster wondered whether the programs reflected a
full school year for the residential programs. He
understood that one program enabled a student to travel
from a village to Anchorage for an eight-week program
versus a residential school in Galena that operated for a
full school year. Ms. Teshner replied in the affirmative.
She indicated that both programs were considered variable-
term. The two programs offered the ability for more
students to come through and take advantage of the classes
the programs offered through variable terms.
Vice-Chair Ortiz was supportive of the two residential
programs. He noted that the cost was a $900,000 increment
in a time when funds dedicated to education was decreasing.
He asked whether the funds worked mutually with the
department's overall goal and the Alaska Education
Challenge. Commissioner Johnson answered "Absolutely." He
reported that the programs directly related to the second
challenge goal of providing more Career and Technical
Education (CTE) to students. In addition, the districts
were exploring ways to offer more opportunities to students
within the existing structures. He explained that the Lower
Yukon School District program was developed and offered in
conjunction with the Anchorage School District and
benefitted both districts students. He believed that the
program accomplished the mission of the department and the
Alaska Education Challenge to improve the effectiveness of
the system.
2:11:57 PM
Representative Wool asked for verification that the items
were for programs and not for brick and mortar buildings.
Commissioner Johnson answered that the expenditure did not
fund construction of the facilities. The money went to
districts to provide education services, which may involve
facility maintenance.
Representative Wool asked whether the facilities already
existed. Ms. Teshner answered that the increment request
helped pay for the residential costs, not the facility. She
noted that the district purchased the building that
previously was a hotel.
Representative Josephson asked if the residential programs
were competitive. Commissioner Johnson was not aware of the
admission process. Representative Josephson ascertained
that the programs were not designed to operate like Mt.
Edgecumbe that offered a four-year high school education.
Commissioner Johnson agreed with the statement.
Representative Josephson wondered what the program was
designed to do that had not been done ten years earlier.
2:15:16 PM
Commissioner Johnson replied that he did not characterize
the program as addressing an inadequacy. He believed the
program represented district leaders being innovative
within the context of the geographic realities of the state
and provided robust CTE opportunities. He mentioned other
examples such as Northwestern Alaska Career and Technical
Center (NACTEC) [Nome] and Star of the North, where even
though some of the students lived in small communities the
districts provided students access to high quality
education.
Co-Chair Foster related that in his district it was
difficult to have a career and technical center in each
village. He observed that the programs granted students in
small villages an opportunity to access the education. He
trusted that educators had looked at the models to ensure
the residential programs were beneficial and offered the
village students more opportunities.
2:18:09 PM
Commissioner Johnson agreed with Co-Chair Foster. He
detailed that finding enough qualified teachers played a
role in turning to residential models. In addition,
specialized equipment was necessary as well as partnerships
with industry and businesses. He noted that NACTEC
represented a great partnership between school districts,
industry, the state, and federal government that provided
students with opportunities they would not otherwise have
access to. The Lower Yukon School District and Anchorage
School District were discussing adding additional pathways
in Anchorage in areas like pre-law, benefitting students in
both rural and urban areas. Co-Chair Foster pointed to
Commissioner Johnsons remarks regarding the difficulties
of providing CTE in small rural communities. He shared that
the NACTEC program had heavy machinery simulators that
looked exactly like the control panels on the machinery. He
pointed out the difficulty of sending simulators to rural
communities, which justified rural students travelling to
Nome for educational opportunities.
Vice-Chair Ortiz thought it sounded like a great program.
He asked whether the $900,000 was a one-time increment
outside of the BSA and if it would recur in the out years
or flow out of the BSA in the future. Commissioner Johnson
answered that when a student was enrolled in a residential
school additional funding outside the BSA supported the
residential component.
Ms. Teshner added that the $900,000 was a base budget
increment that recurred annually up to the number of beds
budgeted. The students in the programs came from home
districts that would continue to receive foundation formula
funding.
Commissioner Johnson interjected that students who
participated in these types of programs had a 20 percent
higher graduation rate.
2:21:53 PM
Representative Wool asked for clarification that the
residential programs used state school district funding.
Commissioner Johnson replied in the affirmative and noted
that Mt. Edgecumbe High School was operated by DEED.
Representative Wool asked if the department considered
operating another boarding school. Commissioner Johnson
replied that he desired 20 more NACTEC type programs and
reported that ideas were discussed, but it was an expense
that had to be balanced with the current model. He thought
that the CTE programs and early reading proficiency were an
investment in better outcomes. Representative Wool asked
whether the department was considering more charter schools
or if it was a district decision. Commissioner Johnson
answered that under the current statutes charter schools
were a district decision.
Representative LeBon recalled his experience as a school
board member from 20 years ago dealing with high school
qualifying exams. He asked what DEED did to ensure that
graduating high school students were prepared.
2:25:05 PM
Commissioner Johnson asked for clarification.
Representative LeBon recounted that each of the school
districts set its own standards for graduation. However,
the state had previously set a higher bar through requiring
passing high school qualifying exams. He asked for
verification that the qualifying exams were eliminated and
wondered what had replaced the exam. Commissioner Johnson
answered in the affirmative and stated that nothing had
been implemented to replace the exams. Representative LeBon
asked what was done to ensure students were prepared as
graduating seniors. Commissioner Johnson wondered whether
he was asking if he believed the states high school
graduates were prepared for career and college.
Representative LeBon replied that he wondered whether the
state had a say regarding graduation preparedness or if
the responsibility had been decentralized and left to the
discretion of the districts. Commissioner Johnson answered
that the state repealed the qualifying exam and currently
there was not quality control measures in place to
determine if graduates from different districts met the
same standards for graduation. He communicated that
discussions were ongoing concerning implementing universal
assessments for courses. The same assessment would be
given to students in all districts. He indicated that
currently the department administered end of grade
assessments through ninth grade. He favored end of course
assessments for high school as a quality control measure.
2:28:01 PM
Representative Merrick asked if there were other state run
schools besides Mt. Edgecumbe High School and if so, how
many. Commissioner Johnson answered in the negative.
Ms. Teshner reviewed slide 12 titled FY 2020 - NOTABLE
ITEMS Division of Innovation and Education Excellence:
• Early Learning Programs Fully Funded
o Parents as Teachers has been transferred to the
Department of Health and Social Services
• $3,945.9 Fed Comprehensive Literacy State
Development Grant (FY21-25)
• $(14,700.0) Fed Federal Programs Grant Carry Forward
o Matched by an appropriation in language section
of the bill.
o No reduction in federal programs or award.
o Solves an issue causing difficulty in program
execution and grant disbursal.
Ms. Teshner elaborated that the federal title program
grants covered a period of 27 months, which allowed DEED to
operate three grants over one fiscal year and was shown as
a reduction in federal receipt authority as proposed in the
governors budget.
2:29:56 PM
Ms. Teshner moved to slide 13 related to the Mt. Edgecumbe
High School:
• $650.0 DGF Operational Cost of Mt. Edgecumbe Aquatic
Center
• Program receipt authority to support operations of the
pool will be collected through public swims and
contracts with outside entities.
• $4,639.1 fund change from Public School Trust Fund
(PSTF) to UGF
• Transfers state support for MEHS to UGF rather than
making expenditures direct from the PSTF.
• Managing fund for daily expenditures is onerous for
investment management. A structural change to the
appropriation increases predictability and potentially
increases returns.
• Increased UGF appropriation to MEHS offset by transfer
to Foundation Program.
Co-Chair Foster asked about the receipt authority for the
Mt. Edgecumbe Aquatic Center. He wondered whether the item
allowed the school to charge a fee for the activity. Ms.
Teshner replied in the affirmative. Co-Chair Foster
remembered that in the prior budget the governor vetoed UGF
that had been appropriated by the legislature. He asked for
the amount. Ms. Teshner answered that there had been one-
time funds of $400 thousand to support a multi-year
expenditure for the operational costs of the aquatic
center. She added that the governor had vetoed receipt
authority from the current budget. Co-Chair Foster asked if
there was any UGF in the FY 21 budget for Mt. Edgecumbe.
Ms. Teshner replied that there were no UGF funds in the FY
20 nor the FY 21 budget to help with the operations of the
Mt. Edgecumbe High School. Co-Chair Foster noted that the
aquatic center was part of a bond package in 2012.
2:32:20 PM
Representative Knopp asked what the funding for the aquatic
center in the Supplemental Budget was for. Ms. Teshner
responded that was for the current years operation.
Representative Knopp inquired about the amount of funding.
Mr. Steininger added that the supplemental budget would not
be introduced until the following day.
Vice-Chair Ortiz asked about the $600 thousand receipt
authority for the pool. He asked how much of the $600
thousand the school expected to collect. Ms. Teshner
answered that pool managers estimated that about $200
thousand in receipts could be collected to help pay for the
pool, leaving a shortfall of around $400,000. The school
was finding funds to help offset costs.
2:34:33 PM
Vice-Chair Ortiz noted that the supplemental had not been
officially announced. He wondered what amount may be put
forward to help offset operational costs. Ms. Teshner was
unaware of the amount. She turned to slide 14 titled
Notable Items Libraries, Archives, and Museums:
• $100.0 DGF Increase entry fee to State Museums to
Support Operational Costs
o $2 per ticket increase. Discounts for students
and seniors will be retained.
• $(232.9) UGF Discontinue OWL Video Conferencing
System
o System is underutilized despite promotional
efforts. 271 conferences occurred in FY2019 at a
cost of approximately $860.00 per call.
o System hardware is at end of life and requires
costly replacement.
Ms. Teshner elaborated that the component for OWL that
subsidized internet would continue. The decrease merely
ended the videoconference portion of the program.
Vice-Chair Ortiz asked whether there had been an assessment
about whether communities would have access to alternatives
that allowed a form of videoconference to continue.
2:37:17 PM
Commissioner Johnson replied that staff at the state
library had done an assessment. He detailed that the
average amount of megabits (Mbps) required for internet
alternatives was 1.5 Mbps for both download and upload.
All libraries were able to supply the amount. The
department concluded that any library with OWL had
internet adequate to support other available options.
Ms. Teshner highlighted slide 15 titled FY 2021 NOTABLE
ITEMS Alaska Commission on Postsecondary Education (ACPE):
• $(586.3) Other Outsource Servicing of Some Student
Loans
o The Alaska Student Loan Corporation's Federal
Family Education Loan Program loans will be
outsourced to a new servicer - the Pennsylvania
Higher Education Assistance Agency.
• $50.8 DGF WWAMI Medical Program Obligation
o Increase in the contractual obligation to
participate in the WWAMI (Washington, Wyoming,
Alaska, Montana, and Idaho) medical program.
Representative Merrick asked for the number of state
museums and whether they were all subsidized. Ms. Teshner
responded that the state operated two museums: The State
Library, Archives, and Museum in Juneau and the Sheldon
Jackson Museum in Sitka. She added that both museums had
General Fund (GF) program receipt authority for admission
fees.
^DEPARTMENT OF ADMINISTRATION
2:39:41 PM
KELLY TSHIBAKA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION,
provided a PowerPoint presentation titled "Department of
Administration: FY 2021 Budget Overview to the House
Finance Committee," dated February 4, 2020 (copy on file).
She began with an organizational chart on slide 2 titled
Dept. of Administration FY 21 Operating Budget: Mission
and Organization. The left side of the chart showed the
divisions that served state agencies. The right showed
agencies serving the public. She delineated that the
mission of the department provided for mission
dissonance. The mission only covered services to state
agencies via statute. She noted that DOAs vision was to
champion improvement in the State's performance and
results. She pointed to two divisions which the department
was consolidating. The Division of Personnel and Labor
Relations were being consolidated across the state. In
addition, the Office of Information Technology and the
Division of Shared Services of Alaska would merge to form
Alaska Administrative Productivity and Excellence (AAPEX).
She reported that the action achieved three unprecedented
goals; cost savings, consolidated services, and customer
satisfaction. The department completed an assessment and
benchmarking of the two divisions. She discovered that DOA
had partially implemented shared services across the state
and had success with travel, leasing, and centralized
printing but needed more work on accounts payable,
collections, and procurement. She noted that in the prior
year, the department took 33 days to process a travel
reimbursement and currently lowered the number to 4 days.
She reported that in the previous year each accounts
payable staff processed 3,604 invoices and in the current
year processed 4,649 invoices. In addition, the cycle time
to process and approve a payment took 9.5 days in the prior
year and was reduced to 4.6 days currently.
Commissioner Tshibaka continued with a discussion of the
Division of Information Technology. She reported that 700
positions were budgeted for Information Technology (IT) in
the state and only 42 percent resided in DOA. However, 100
percent of the performance was expected from the
department. She informed members that most of the remaining
48 percent of IT positions would be moved to DOA, except
for positions related to business applications. The state
had a 20 percent vacancy rate in IT. The total statewide IT
spend was unclear and estimated at $240 million.
2:45:31 PM
Vice-Chair Ortiz asked the commissioner to elaborate on why
the state had a 20 percent vacancy rate in the IT division.
Commissioner Tshibaka responded that it was historically
challenging to fill IT position in the state. The
department was hopping to incentivize potential IT
candidates by offering job flexibility and positive working
environments since the state could not compete with private
sector salaries. Vice-Chair Ortiz asked what the main goal
of the consolidation of Personnel and Labor Relations
services was and how it related to overall effectiveness
and goodwill. Commissioner Tshibaka specified that
consolidation of Human Resources (HR) was required via
administrative order that defined the function as a joint
shared service. The agency divisions would be centralized,
and services would be standardized. Differing functions led
to numerous inefficiencies and led to operating at a basic
level. She characterized the consolidation as
transformational rather than transactional. She intended
to maintain the relational aspect of HR but systemize
operations. She delineated that rather than customize
operations for each agency, DOA could offer HR managers the
opportunity to engage in higher performing functions like
actively recruiting top talent. Her goal was to mature the
entire HR organization while maintaining the personal
touch that DOR had with departmental HR managers.
2:49:13 PM
Representative Knopp acknowledged that the IT efficiencies
was a priority of the commissioner. He asked for a
completion timeline. He wondered whether the 20 percent
vacancy rate was proportional to DOAs vacancy rate.
Commissioner Tshibaka replied that the timeline for the
completion of AAPEX was November 2020. The 20 percent
vacancy rate was standard across all departments. She
continued with her discussion of slide 2. She elaborated
that the state currently had over 1,700 business
applications with a high number of custom applications:
over 900. She emphasized that a lot of IT time was devoted
to maintaining the applications. Similarly, the state had
77 development platforms versus approximately 24 in other
states. In addition, there were over 6,000 databases the
state paid for. She indicated that the state had 37 IT
processes, and all were below average. She reported that
the department was in stage 2 of the assessment process;
finding solutions to the findings and began stage 3;
implementing the fixes.
2:52:33 PM
Commissioner Tshibaka continued with the services to the
public. She reported that the staff positions in Juneau for
the Violent Crimes Compensation Board (VCCB) would be
transitioned to the Department of Public Safety in
Anchorage towards the end of the fiscal year in a
sequential manner. She indicated that the Public Defender
Agency (PDA) received a 5.2 percent budget increase in FY
20 that included 10 new positions [PCNs]. She noted that
the agency was working hard to fill the 31 vacancies and
had hired 15 positions. She was working with the agency to
fill the remaining positions. The focus was on increasing
money for travel and paying bar dues to help with
recruitment and retention. The agency was examining its
operations in order to optimize its budget request in the
following year.
2:54:32 PM
Commissioner Tshibaka continued to review the services
provided to the public on slide 2. She reported that in the
area of Public Communications Services, the department was
funding the satellite infrastructure for emergency
communications.
Representative Josephson asked if the administration had
seen a net outmigration of state employees from Juneau.
Commissioner Tshibaka answered that for most of the year
outmigration remained flat but ballooned to 20 at the end
of the year.
Representative Josephson recounted that the Division of
Motor Vehicles (DMV) had moved from the Department of
Public Safety (DPS) to DOA and wondered when the move
happened. Commissioner Tshibaka was unable to answer the
question.
Co-Chair Johnston remembered the DMV was under DOA for a
long time since the former Knowles administration.
2:56:30 PM
Commissioner Tshibaka moved to slide 3 titled Dept. of
Administration FY 21 Operating Budget: DOA Strategic Plan
and addressed the department's goals.
DOA GOALS and OBJECTIVES
• Provide Excellent Products and Services
Recruit, develop, retain, and deploy right talent
Improve quality, efficiency, and timeliness of DOA
products and services
Increase stakeholder awareness of and satisfaction
with DOA products and services
• Promote SOA Efficiency and Cost Savings
Gain efficiencies for the State through new or
improved programs or processes
Implement processes and programs to achieve cost
savings
Improve timeliness, quality, and results of SOA
agencies
• Pursue Innovations and Initiatives
Offer proactive contributions to the SOA
Develop and implement innovations to advance the
mission of DOA or other SOA departments and
agencies
Increase SOA IT proficiency, tools, and capacity
Commissioner Tshibaka reviewed slide 4 titled Dept. of
Administration FY 21 Operating Budget: Department Summary
-$14.9M (-4%)and -34 positions (-2%) from FY20 to
FY21
FY21 proposals focus on investing in strategic
priorities, efficiencies, and structural changes
DOA FY21 Budget Proposals
• Increment to cover attorney bar dues with the Alaska
State Bar Association
• Classification Section revitalization plan: +2 PCNs
• Delete vacant OIT PCNs: -11 PCNs
• Increase capacity in OPA to cover rural and conflict
cases, absorb increase workload due to SSA changes:
+10 PCNs
• Increment in OPA to help fill Public Guardian PCNs
• Increments for PDA and OPA travel to address
workload throughout the state, avoid contracting out
cases at considerable expense, and minimize delays
in case disposition
• Automate employee onboarding system (capital
project)
• Delete HR/DOPLR PCNs: -7 PCNs
• Automate performance evaluation system (capital
project)
• Deferred maintenance, renovation, repair, and equip.
(capital project)
• Software for Shared Services of Alaska initiatives
(capital project)
• Electronic timekeeping (capital project)
• Upgrade the State's Enterprise Resource Planning
(ERP) software, IRIS (capital project)
• Upgrade to cloud servers and replace retirement
system servers (capital project)
• Upgrade service management systems and ticketing
systems (capital project)
Commissioner Tshibaka elaborated on slide 4. She believed
that the departments goals and objectives were tied to the
budget proposals that should promote and advance a
strategic plan. She briefly described each budget proposal.
She spoke to updating the states procurement system by
making procurement information centralized, easily
accessible, and transparent eliminating duplicate purchases
thus, creating savings.
3:02:57 PM
Representative Carpenter asked about the ERP upgrade
solution and wondered whether it was all encompassing.
Commissioner Tshibaka replied that the Integrated Resource
Information System (IRIS) upgrade was not adequate to cover
all the upgrades listed. She reported that procuring other
vendors was necessary to accomplish the objectives.
Commissioner Tshibaka turned to slide 5 titled Dept. of
Administration FY 21 Operating Budget: What DOA is Like.
The slide portrayed a brick wall with the names of each
state agency on the bricks, depicting her metaphor that DOA
was the mortar that held the state together through the
following six objectives" listed on the slide:
MODERNIZATION
INNOVATION
EFFICIENCY
COST SAVINGS
CENTRALIZATION
TRUST
3:05:27 PM
BRAD EWING, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF
ADMINISTRATION/DEPARTMENT OF REVENUE, OFFICE OF MANAGEMENT
AND BUDGET, addressed slide 6 titled Dept. of
Administration FY 21 Operating Budget: Budget Comparison:
• Total: -$14.9M (-4%)and -34 positions (-2%) from FY 20
to FY 21
• UGF: -$3.7M (-5%), DGF: -$2.0M (-7%), Other: -$6.3M (-
2%), Federal: -$2.9M (-72%) from FY20 to FY21
FY21 Gov. Proposed: Significant Changes
Efficiency gains: 1,264 PCNs in FY 20, 1,230
PCNs in FY 21
Reduce budget and PCNs in OIT, SSOA, and DOPLR
+$1.6M for Office of Public Advocacy: +10 PCNs,
public guardians, and travel
Classification Section revitalization plan (+2
PCNs)
Bar dues for licensed Alaska Bar attorneys
Org. structure changes
Alaska Oil & Gas Conservation Commission to
DCCED (Administrative Order #307)
Alaska Land Mobile Radio and SATS to DMVA
Continue planning, onboarding, and investments
to support consolidation efforts
Administrative Order 284 (OIT)
Administrative Order 304 (Procurement)
Administrative Order 305 (HR)
Mr. Ewing pointed to the left side of the slide that showed
a chart depicting the FY 2019 and FY 2020 Management Plan
and the FY 2021 Governor's Proposed Budget. He reminded the
committee that the management plan was the departments
spending plan developed from each years authorized budget.
He noted the increase from FY 19 to FY 20 and indicated
that a significant portion of the increase was for the
Office of Information Technology (OIT) due to
administrative order 284 related to OIT consolidation. He
explained that the increase reflected the transfer of
authority from other departments to DOA and was not an
actual increase in the states budget. He reported that as
part of the crime bill [HB 49 Crimes; Sentencing; Drugs;
Theft; Reports - Chapter 4 FSSLA 19 07/08/2019] in 2019,
both the PDA received a $1.3 million increase and the
Office of Public Advocacy (OPA) received a $700 thousand
increment. He mentioned that other organizational
structural changes occurred. The Alaska Oil and Gas
Conservation Commission was transferred to the Department
of Commerce, Community and Economic Development as part of
Administrative Order 307 and the Alaska Land Mobile Radio
was transferred to the Department of Military and Veterans
Affairs.
3:08:16 PM
Co-Chair Foster asked how many of the 34 eliminated
positions were vacant and how many were transfers. Mr.
Ewing answered that one position was filled and the
remainder were vacant. He added that some transfers from
Alaska Land Mobile Radio System (ALMR) occurred. He
reported that DOA was deleting 11 vacant positions from OIT
and 6 from the Division of Personnel and Labor Relations.
Representative Wool asked about the transfer of ALMR to
DMVA. He had heard from fire department chiefs that DMVA
did not use the ALMAR system and questioned why the
transfer was to DMVA rather than DPS; an agency that did
use the radio system. He asked what the mission alignment
to DMVA was. Commissioner Tshibaka answered that DOA had
discussions with both departments to determine the best
place to transfer the system. She elaborated that since the
system was used for statewide emergencies, it was decided
to place it with DMVA to maintain and operate the system.
3:10:08 PM
Mr. Ewing examined slide 7 titled Dept. of Administration
FY 21 Operating Budget: Funding Sources:
DOA Budget: 19% UGF, 7% DGF, 74% Other Funds, < 1%
Federal
DOA Fund Sources: 59% duplicated fund sources
Mr. Ewing reviewed other fund sources in the department's
budget. He reported that since DOA was a support agency for
other departments much of the 74 percent of other funds
were interagency receipts. He pointed to a table at the top
of the slide and noted the department had no formula
funding with most of the funding considered duplicated. He
explained that interagency receipts were an example of a
duplicated fund source.
3:11:17 PM
Mr. Ewing turned to slide 8 titled Dept. of Administration
FY 21 Operating Budget: Department Summary:
Total: -$14.9M (-4%)and -34 positions (-2%) from FY
20 to FY 21
UGF: -$3.7M (-5%), DGF: -$2.0M (-7%), Other: -$6.3M
(-2%), Federal: -$2.9M (-72%) from FY 20 to FY 21
Mr. Ewing pointed to the slides bar graph showing a fund
source comparison on the left and position count by
location on the right. He noted that DOAs employees were
close to evenly distributed between Anchorage and Juneau
with 71 positions in Fairbanks and 144 positions in other
parts of the state in the areas of IT, PDA, OPA, and DMV.
3:12:20 PM
Mr. Ewing advanced to slide 9 titled Dept. of
Administration FY21 Operating Budget: Appropriation|RDU
Summary:
Six of DOA's 10 appropriations (result delivery
units) have budgets > $1M
Of these six (below), Legal and Advocacy Services
(OPA|PDA) is the only one predominantly funded by UGF
Mr. Ewing delineated that Centralized Administrative
Services had a budget of roughly $14 million, the Division
of Finance had a budget totaling approximately $13 million
and the Division of Retirement and Benefits budget was $55
million. He addressed the bar graph on the slide showing
the department's budget by appropriation. He related that
Centralized Administrative Services was primarily funded
through other funds and its budget remained relatively
flat between FY 20 and FY 21. He reported that Shared
Services of Alaska had a two percent decrease from FY 20 to
FY 21 and was predominately funded by interagency receipt.
The Office of Information Technology budget declined
between FY 20 and FY 21, primarily due to the ALMR
transfer. However, $3 million was reduced in IT services
representing a 4 percent reduction. He communicated that
the Division of Risk Management's budget was almost
entirely static at $40.8 million. He noted that OPA and PDA
were primarily funded through UGF and showed a 3 percent
increase amounting to $1.8 million between FY 20 and FY 21.
The increase was on top of an increase in the past year
related to the crime bill. He commented that DMV was funded
through program receipts and increased one percent between
FY 20 and FY 21.
Representative Carpenter asked about the backlog of cases
in PDA. He was informed that PDA was overworked and
wondered whether the funding was sufficient to resolve
cases before reaching trial therefore, saving the state
money.
Commissioner Tshibaka answered that the reasons for the
backlog was complex and not simply a matter of vacant
positions. She spoke to the significant challenges with the
historical vacancy rate of 8 to 23 percent and recruiting
issues. Public defender agencies in the Lower 48 states
offer higher salaries than in Alaska. She communicated that
public defender jobs were considered pipeline jobs
preparing recently graduated attorneys to move into law
firms. However, the entire justice system contributed to
the backlog. She informed the committee that the average
PDA caseload was 145 cases per attorney in the prior year
and over 160 in the current year. The maximum caseload
standards set by the American Bar Association was one
attorney per 150 felonies or 400 misdemeanors per year,
with a mixed average of 275. She qualified that many of the
states PDAs had administrative duties in addition to
their legal duties. The agency review discovered that a
better balance between support staff and attorneys was
necessary. The department was examining how to expedite
caseloads. She believed that indigent Alaskans would be
best served by PDAs and not by private contracting
attorneys.
3:20:20 PM
Mr. Ewing highlighted slides 10 and 11. Slide 10 was titled
Dept. of Administration FY 21 Operating Budget:
Centralized Admin. Services:
-$43.1 (0%) and -4 positions (-1%) from FY 20 to FY
21
?Delete vacant positions and authority to realize
efficiencies
Mr. Ewing briefly highlighted slide 11 titled Dept. of
Administration FY 21 Operating Budget: Changes from FY 21
Adjusted Base which contained a chart related to budget
changes for Centralized Administrative Services. He pointed
to the increment for the classification section for two
additional positions and the proposed strategic investments
within the Division of Retirement and Benefits of $300
hundred thousand for actuarial services and pension system
audits. He concluded that the net effect of the changes was
a static budget ($43 thousand decrease) and a reduction of
4 positions.
3:21:57 PM
Mr. Ewing reviewed slide 12 titled: Dept. of
Administration FY 21 Operating Budget: Shared Services of
Alaska (SSOA):
-$1,732.5 (-2%) and +2 positions (+2%) from FY 20 to
FY 21
?Reduce authority to align with anticipated revenue
and expenditures
Mr. Ewing indicated that due to the consolidations, the
SSOA budget decreased by $1.6 million and deleted two
accounting technician positions for a decrement of $220
thousand. He moved to slide 13 titled Dept. of
Administration FY 21 Operating Budget: Office of
Information Technology:
-$2,831.1 (-4%) and -14 positions (-6%) from FY 20 to
FY 21
?Delete long-term vacant positions and authority to
realize consolidation efficiencies
Mr. Ewing disclosed that IT staff were found throughout the
state for a total of 238 positions. He briefly discussed
slide 14 titled Dept. of Administration FY 21 Operating
Budget: Changes from FY 21 Adjusted Base. He pointed to
the $1.6 million decrement associated with the deletion of
11 positions and the $1.5 million decrease associated with
deleting contract authority to realize contract savings.
3:23:51 PM
Mr. Ewing advanced to slide 15 titled "Dept. of
Administration FY 21 Operating Budget: Risk Management:
?+$5.2 (0%) from FY20 to FY21
?No changes in position count from FY 20 to FY 21
Mr. Ewing reported that six positions were budgeted for
risk management. He turned to slide 16 titled "Dept. of
Administration FY 21 Operating Budget: Legal and Advocacy
Services:
?+$1,797.8 (+3%) and +9 positions (+3%) from FY 20 to
FY 21
?Add positions and authority to support rural defense,
existing units, and changes in Social Security Admin.
Mr. Ewing briefly addressed slide 17 titled "Dept. of
Administration FY 21 Operating Budget: Changes from FY 21
Adjusted Base:He recapped that the request added ten
positions to increase inhouse capacity. He highlighted a
$250,000 increment request for the Office of Public
Advocacy for authority to fill and retain public guardian
positions. He noted that the request was in addition to a
$2 million increment in the prior years budget related to
the crime bill.
3:25:04 PM
Mr. Ewing reviewed slide 18 titled "Dept. of Administration
FY 21 Operating Budget: Motor Vehicles:
?+$88.3 (+1%) from FY 20 to FY 21
?No changes in position count from FY 20 to FY 21
He commented that the appropriation for the Division of
Motor Vehicles (DMV) increased by one percent and there
were no change records from the FY 21 adjusted base to the
governor's proposed budget. He examined the following
summary slides. Slide 19 titled Dept. of Administration FY
21 Budget: Changes from FY 21 Adj. Base to FY 21 Gov:
Operating Budget: DOA's 35 components (allocations)
8 components with proposed changes from FY21 Adj.
Base to FY21 Gov., summarized in tables above
4components transferred out of agency: AOGCC,
ALMR/SATS, VCCB (Discussed on Slide 6)
3 components are not funded: Public Broadcasting
Commission/Radio/T.V. (Discussed on Slide 6)
20 components with no changes > $10.0 from FY 21
Adjusted Base to FY 21 Gov.
Centralized Admin. Services: Office of
Administrative Hearings, DOA Leases, Office of
Centralized Human Resources, Health Plans
Administration, Labor Agreements Miscellaneous
Items
SSOA: Statewide Contracting and Property, Print
Services, Leases, Lease Admin., Facilities,
Facilities Admin., Non-PBF Facilities
Administration State Facilities Rent
Satellite Infrastructure
Risk Management
Alaska Public Offices Commission
Division of Motor Vehicles
3:26:24 PM
Mr. Ewing concluded the presentation on slide 20 showing
capital proposals and recent administrative orders titled
Dept. of Administration FY 21 Budget: Capital Proposals
and Recent Admin. Orders:
Capital Projects
$320.0 UGF Automated Performance Evaluations and
Onboarding System
?$1,000.0 UGF Electronic Timekeeping
?$7,100.0 UGF Integrated Resource Information
System Upgrade
?$230.4 Other Retirement System Server
Replacement
?$5,946.0 Other Public Building Fund Deferred
Maintenance
?$1,800.0 UGF Software for the Shared Services
Initiative
?$1,250.0 UGF OIT Upgrade to Cloud Servers
?$1,000.0 UGF Uniform Ticketing System/Service
Management System Upgrade
Administrative Orders
Administrative Order No. 284: Reorganizing
Telecommunication and IT Services within the
Executive Branch
Administrative Order No. 304: Establish
Statewide Procurement Consolidation
Administrative Order No. 305: Establish
Statewide Human Resources Consolidation
Administrative Order No. 307: Transferring the
Alaska Oil and Gas Conservation Commission
Representative Carpenter asked for verification that most
of the systems that would be upgraded were for the
department's use. Commissioner Tshibaka replied that the
systems were used statewide.
Vice-Chair Ortiz became acting chair of the meeting.
Representative Merrick asked whether the department was
addressing the problems with rural residents applying for
REAL ID. Commissioner Tshibaka answered that DOA
established a REAL ID pilot program currently operating in
rural communities where a point of contact validated the
paperwork. The program was piloted in New Stuyahok, a
village near Dillingham. The department issued REAL IDs to
80 residents. However, the department experienced an
unforeseen challenge. She elaborated that the camera was
intricate because of the digital specification requirements
for the IDs biometric identifiers. The camera was
optimized for the atmospherics in a room and needed
adjustments in every new environment. A high-level DMV
supervisor had to travel to recalibrate the camera for
every picture. The department had five more locations lined
up for the pilot program and would reassess upon
completion. She wanted to avoid setting up false
expectations. The department was trying to educate Alaskans
that a REAL ID was not needed to travel by air. She
reported that there were 15 other forms of identification,
including a passport, permanent resident card, a maritime
card, a tribal card, military card, etc. that was
sufficient for air travel on October 1, 2020. She discussed
the rigorous application process for a REAL ID that
required a passport or birth certificate, two forms of
proof of residency, a social security card, the special
photo taken and other documents like name change and
divorce decrees. She believed that obtaining a REAL ID was
a high hurdle for Alaskans to achieve.
3:32:54 PM
Commissioner Tshibaka continued that DMV in rural areas was
educating rural Alaskans about the identification other
than REAL ID that was acceptable for air travel.
Representative Merrick asked if the department was
anticipating the need for additional funding pertaining to
the REAL ID. Commissioner Tshibaka replied in the negative.
Vice-Chair Ortiz asked about the third bullet point on
slide 19 related to three components not funded including
the Public Broadcasting Commission/Radio/TV. He noted that
the slide mentioned the item had been discussed on slide 6.
He asked if he had missed something in the presentation.
Mr. Ewing answered that slides 5 and 6 did include a
discussion regarding the issue.
Vice-Chair Ortiz spoke to concern he heard from his
constituents about the lack of state support for public
radio. He felt that the concern was widespread throughout
rural Alaska. He asked the commissioner whether she
believed that public broadcasting fit under the
jurisdiction of the department. Commissioner Tshibaka
responded that public broadcasting was still under the
department's jurisdiction. The Public Broadcasting
Commission was administratively supported by DOA and
operated under statute AS.44. The commissions duties were
to meet and apply for federal grants. Despite the $2.7
million eliminated from public broadcasting and the
matching grants in the prior year there would still be 83
percent of the public broadcasting funds available. The
commission could continue to apply for federal, private,
and public funds to make up for the 17 percent loss. She
noted that the commission did not meet in the current
fiscal year.
3:36:52 PM
Vice-Chair Ortiz asked if the commission had the support of
the administration to continue to meet. Commissioner
Tshibaka replied that the department was willing to serve
as their support staff, but they had not met. She
communicated that previously the Alaska Public Broadcasting
Corporation acted as the commissions administrative support
staff.
HB 205 was HEARD and HELD in committee for further
consideration.
HB 206 was HEARD and HELD in committee for further
consideration.
Vice-Chair Ortiz thanked the presenters. He reviewed the
schedule for the following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HFIN DOA Overview 2020 02 04 .pdf |
HFIN 2/4/2020 1:30:00 PM |
|
| 2.4.2020 HFC DEED Budget Overview.pdf |
HFIN 2/4/2020 1:30:00 PM |