Legislature(1993 - 1994)
03/31/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSHB 345: "An Act relating to the maintenance of and art requirements for certain public buildings and facilities and to the art in public places fund; and providing for an effective date." CHAIRMAN VEZEY opened HB 345 for discussion. He asked if there was a motion to adopt CSHB 345, version E. Number 588 REPRESENTATIVE PETE KOTT so moved. Number 589 CHAIRMAN VEZEY asked the committee secretary to call the roll. IN FAVOR: REPRESENTATIVES VEZEY, KOTT, G. DAVIS, SANDERS. OPPOSED: REPRESENTATIVE ULMER. ABSENT: REPRESENTATIVES B. DAVIS, OLBERG. MOTION PASSED Number 595 REPRESENTATIVE JEANNETTE JAMES, prime sponsor of CSHB 345, gave a brief statement. She commented the committee had heard HB 345 two other times. She expressed there really is a problem with the deferred maintenance of public facilities, therefore it was her intent to gain awareness for the problem. She noted 1,717 buildings with a value of $2.3 billion, excluding the University of Alaska, will estimate $251 million in deferred maintenance. She believed this number was conservative. The problem is critical. REPRESENTATIVE JAMES explained CSHB 345 is simple, easy to digest, and workable, as compared to her original HB 345. She stated CSHB 345 would set up a fund for deferred maintenance, whereby one percent of construction costs, on a one time basis, would be put into it. A committee is then set up to determine life costs and criteria to make up a six year plan. CSHB 345 would determine an amount, per foot, of assessment on those agencies who are in state facilities owned by the state. That allocation would then go to take care of the deferred maintenance. CSHB 345 would repeal the statutes affecting the one percent for art program. She stated this is because buildings are falling down around us and the luxury of art cannot be afforded when the roof is leaking. The proceeds of the general obligation and revenue bonds would also go into the fund. Any federal funds, additional appropriations and interest on the fund would remain in the fund. She noted the appropriations into the fund would be continuing; therefore, they would not lapse. She proposed in the future, enough money would be in the fund so as not only regular maintenance could be taken care of, but also a portion would be set aside for components. She offered to review the sectional analysis for the committee. Number 636 CHAIRMAN VEZEY noticed the committee did not have the sectional analysis in their packets. He clarified HB 345 had a zero fiscal note because it is all subject to appropriation. Number 638 REPRESENTATIVE JAMES corrected there was a small fiscal note of $151,300 from the Department of Administration (DOA) because they would be assigned the task of putting together the criteria to establish the six year plan and the administrative duties of the committee. She noted the DOA fiscal note would not be for the current year. Number 650 CHAIRMAN VEZEY asked where the duties of the committee were spelled out. Number 653 REPRESENTATIVE JAMES replied it is defined that the committee will establish the criteria on the life costs system. Number 657 CHAIRMAN VEZEY asked under which duty of the committee would the establishment of a maintenance fund fee formula be. The per square foot formula. Number 660 REPRESENTATIVE JAMES answered under establishing the criteria for the major maintenance needs of the state buildings. She noted number 7 in the list of duties is to review the life cycle costs. Number 662 CHAIRMAN VEZEY recognized the sectional analysis was distributed and stated REPRESENTATIVE JAMES could go through it. Number 663 REPRESENTATIVE JAMES outlined the sectional analysis. She began with Section 1. Section 1 creates the state building major maintenance fund consisting of appropriations and bond proceeds. This fund operates separately and parallels the system set up for the university, as stated in AS 35.50.020. Nonlapsing appropriations are addressed so the appropriations are not for one year. One percent of construction costs of a state building are put into the fund. The review committee is created consisting of the Commissioners of Administration, Transportation and Public Facilities, and three other departments selected by the Governor on a two-year rotating basis. The Commissioner of Administration would serve as the chair, reviewing all covered entities except the university. The committee of the Board of Regents may employ or contract for the expertise needed to accomplish the required duties. The committee's duties are established, which the Board of Regents' duties will parallel. The Board of Regents however will apply to university buildings. By January 15 each year, the Commissioner of Administration will give the legislature the committee's list of all current major maintenance needs, a report of the committee's activities for the previous fiscal year, and a prioritized list of projects recommended for the next fiscal year. Parallel requirements exist for the Board of Regents. The major maintenance fee is addressed, existing parallel for the Boards of Regents. The rate per square foot is used by the Governor to prepare the annual budget. Section 1 includes definitions for Board of Regents, building, committee, department, state agency, state building, state fund, university, university building, and university fund. The definition for construction costs is included in AS 35.50.030(c). TAPE 94-41, SIDE B Number 000 REPRESENTATIVE JAMES continued. REPRESENTATIVE JAMES stated Section 2 states the Alaska State Council on the Arts remains in effect. However, the council's authority over the art in public places fund is deleted. REPRESENTATIVE JAMES stated Section 3 states memorials constructed under AS 44.35.030 are no longer subject to the artworks in public buildings and facilities statute. REPRESENTATIVE JAMES stated Section 4 repeals statutes relating to Art Works in Public Buildings and Facilities, the responsibility of the Alaska State Council on the Arts to manage the art in public places fund, and the fund itself. REPRESENTATIVE JAMES stated Section 5 states Art Works in Public Buildings and Facilities continues in effect for works under contract if the contract is entered into before the effective date of Section 4. REPRESENTATIVE JAMES stated in Section 6 all provisions are effective immediately except for the payment of the major maintenance assessment fee, which becomes effective July 1, 1995. Number 030 CHAIRMAN VEZEY noted REPRESENTATIVE JAMES's office had done a lot of work on CSHB 345. Number 032 REPRESENTATIVE JAMES stated she believed CSHB 345 was very important, and deferred maintenance must be addressed. Number 044 NANCY BEAR USERA, COMMISSIONER OF ADMINISTRATION, commented on CSHB 345. She noted CSHB 345 calls for the DOA to be the lead agency for implementation. The DOA believes the maintenance and protection of the state's assets have been grossly neglected, therefore a mechanism needs to be found. She stated they have been trying to find a method for several years and of all of the approaches, CSHB 345 makes the most sense. MS. USERA explained at the first sight of CSHB 345, she did not like the emphasis on the DOA as the source of implementation. She stated she now feels it makes sense. The DOA would be most suitable because of its responsibilities in providing overhead services to all state agencies. The DOA would have the most "global" view of the needs of the departments. The balance of the committee would be very representative. MS. USERA pointed out the six year plan and a funding source that transcends from year to year would aid in the long term approach. They have had difficulty with deferred maintenance projects because when the funds lapse every year, there is no carry forward. She noted with the constraint of operating budgets, people use money which otherwise might go for daily operational maintenance issues. She recollected deferred maintenance on 2,500 buildings, so an estimation of 1,700 might be low. She explained the state has buildings as small as mobile homes in Bethel that serve as the employment service office that need to be maintained. MS. USERA stated DUGAN PETTY, Director of the Division of General Services, would be the key person for developing the project work on CSHB 345. She explained their fiscal note depicted a professional project approach to assessing the needs of state buildings and devising the criteria. The DOA would be able to prioritize the $251 million worth of deferred maintenance projects. Number 113 CHAIRMAN VEZEY asked the rate of how much the list of deferred maintenance was growing each year. Number 116 MS. USERA stated she did not know specifically. Number 119 REPRESENTATIVE JAMES responded the fiscal note from the original HB 345 was $61 million a year required to just meet the life costs formula for existing maintenance of the state's buildings. Number 126 CHAIRMAN VEZEY stated he thought $61 million had included operations. Number 127 REPRESENTATIVE JAMES clarified the $61 million did include utilities. She noted utilities are a very important part of the process because as less maintenance is done, utilities increase. She estimated a third, to a half of the $61 million might have been for utilities. She noted at least a $30 million a year deficit in deferred maintenance. Number 136 CHAIRMAN VEZEY asked if the fund CSHB 345 was creating would not pay utilities. REPRESENTATIVE JAMES answered the fund would not. Number 146 CHAIRMAN VEZEY moved to the Anchorage teleconference site. Number 150 ROGER PATCH, PRESIDENT, ALASKA STATE FACILITY ADMINISTRATORS (ASFA), commented on CSHB 345. He stated ASFA is a voluntary organization composed of facility representatives from each of the agencies, the court system and the university system. They have been studying the backlog of deferred maintenance for the past five years. Deferred maintenance is their largest common problem and biggest concern. He expressed if the backlog was not addressed in the immediate future, Alaska will be faced with rebuilding facilities, as opposed to trying to preserve them. ASFA supports CSHB 345. He stated ASFA is currently refining all of its statistics to give the committee some updates on the current value of the backlog. Number 180 KIT DUKE supported CSHB 345. She testified that she agreed with the testimony of MS. USERA and MR. PATCH. She worked on the issue of deferred maintenance in 1993 and had testified for the committee on Executive Order 89. She expressed she was disappointed EO 89 was withdrawn; however, she was pleased CSHB 345 was chosen to be addressed by the legislature. MS. DUKE stated she believed CSHB 345 was an important step towards resolving the deferred maintenance issue. Therefore, she urged the passage of CSHB 345 from committee with do pass recommendations. MS. DUKE explained CSHB 345 contains two elements address how to eliminate the backlog, and how not to continue to create it. She noted the nonlapsing fund and creating a committee to take action by developing a six year plan. She volunteered her time to ensure the six plan would be prepared, if CSHB 345 were to pass. Number 210 REPRESENTATIVE G. DAVIS inquired about AS 35.50.060, committee duties as referred to in CSHB 345. He asked how the function was performed now. Does each building have a building maintenance supervisor that submits a list of problems and cost estimates to his supervisor, or is it done on an individual basis. Number 226 MS. DUKE replied the process was not well organized. Major institutions (e.g., correctional facilities, hospitals) usually have a maintenance superintendent. A major combined office facility will have a Department of Transportation person, not responsible for only that building, that will put together information about what work needs to be done. The information will then proceed up through the chain of command, whereby it may or may not get addressed by the Governor's office or the legislature. She stated presently, there is no comprehensive plan for buildings to be evaluated by. Number 243 REPRESENTATIVE G. DAVIS questioned if current procurement policies and procedures get in the way of small repair items. MS. DUKE stated she did not believe that they need to. She felt they can work within procurement regulations to accomplish what needs to be done. Most importantly, there needs to be a single point of focus and a plan for action. She supported CSHB 345 in this effort. Number 266 REPRESENTATIVE ULMER moved an amendment to delete Section 4 from CSHB 345. Number 277 CHAIRMAN VEZEY asked the committee secretary to call the roll. IN FAVOR: REPRESENTATIVES ULMER, G. DAVIS. OPPOSED: REPRESENTATIVES VEZEY, KOTT, SANDERS. ABSENT: REPRESENTATIVES B. DAVIS, OLBERG. MOTION FAILED Number 280 REPRESENTATIVE G. DAVIS commented a lot of work had been done on CSHB 345, and there was no question that something needed to be set up. He noted the similar process he has experienced from the municipal level. CSHB 345 would save the state money in the future. REPRESENTATIVE G. DAVIS moved to pass CSHB 345 from committee with individual recommendations. Number 307 CHAIRMAN VEZEY asked the committee secretary to call the roll. IN FAVOR: REPRESENTATIVES VEZEY, KOTT, ULMER, G. DAVIS, SANDERS. ABSENT: REPRESENTATIVES B. DAVIS, OLBERG. MOTION PASSED
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