Legislature(2003 - 2004)

03/08/2004 09:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     SENATE BILL NO. 353                                                                                                        
     "An  Act relating  to repealing  a requirement  for a  day-care                                                            
     facility  in the  Fairbanks courthouse;  and  providing for  an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This was the first hearing for this bill in the Senate Finance                                                                  
Committee.                                                                                                                      
                                                                                                                                
CHRIS CHRISTENSEN, Deputy Administrative Director, Alaska Court                                                                 
System, gave the following testimony.                                                                                           
                                                                                                                                
     SB 353 was introduced at the request of the Supreme Court.                                                                 
                                                                                                                                
     Back  in 1986,  Senator  Don Bennett  of  Fairbanks  introduced                                                            
     legislation  giving the Supreme  Court the authority  to lease-                                                            
     purchase  a  new  court  facility   in Fairbanks.   The  amount                                                            
     authorized was $29,900,000.  It was understood at the time that                                                            
     construction  of a  new Fairbanks  courthouse  would not  begin                                                            
     immediately,  but would  instead follow  construction of  a new                                                            
     courthouse in Anchorage                                                                                                    
                                                                                                                                
     During the committee  process, language was added that required                                                            
     the  project to include  a private  licensed day-care  facility                                                            
     rented to a provider at market rate.                                                                                       
                                                                                                                                
     In 1997, following  completion of the Anchorage courthouse, the                                                            
     legislature    reauthorized    the   Fairbanks    project    by                                                            
     appropriating  planning and design funds. Construction  finally                                                            
     began  in 1999,  and the Rabinowitz  Courthouse  opened to  the                                                            
     public   in   August  2001,   15   years  after   its   initial                                                            
     authorization.                                                                                                             
                                                                                                                                
     During  the  planning  process   for the  courthouse,   several                                                            
     approaches  to  providing  a day-care  facility  were  studied,                                                            
     taking  into account  the  need to  ensure the  reliable,  safe                                                            
     operation  of  such  a  facility and  state  ownership  of  the                                                            
     building.  It was  decided to  set aside $350,000  of the  bond                                                            
     proceeds  for a stand-alone day-care facility  in the immediate                                                            
     vicinity  of the courthouse.  A request for proposals  would be                                                            
     issued in  which respondents could offer a property  within two                                                            
     blocks of  the courthouse for the court system  to purchase and                                                            
     renovate. This facility  would then be leased to the respondent                                                            
     for  the operation  of day-care  services.  Standards for  that                                                            
     operation would be set out in the RFP.                                                                                     
                                                                                                                                
     Since   provision  of   daycare  services   is  not  a   normal                                                            
     procurement  activity for the  court system, research  was done                                                            
     with  other government  agencies (Department  of Education  and                                                            
     Early  Development  and Fairbanks  North  Star  Borough) and  a                                                            
     consultant  was hired to develop  an RFP to solicit  proposals.                                                            
     The  consultant  performed  extensive   research  to  determine                                                            
     whether properties  and providers were available  for response,                                                            
     and  to determine  what  criteria should  be  used to  evaluate                                                            
     proposals. A meeting  was held with potential providers in mid-                                                            
     2003 to discuss  the process and solicit interest.  Using input                                                            
     gathered at that meeting, the RFP was finalized and issued.                                                                
                                                                                                                                
     While  several suitable  properties were  available within  two                                                            
     blocks of the courthouse,  only one proposal was received. This                                                            
     proposal  was non-responsive,  in  that if  offered to  provide                                                            
     day-care services  in a facility five blocks away. This outcome                                                            
     was  undoubtedly influenced  by two things.  First, there  is a                                                            
     private day-care facility  already located within two blocks of                                                            
     the courthouse. Second,  the consultant we hired surveyed court                                                            
     employees  and  persons who  had served  as  jurors, and  found                                                            
     little or no demand for daycare services.                                                                                  
                                                                                                                                
     The courthouse  construction project will be  completed by July                                                            
     1. At  that time, the $350,000  set aside for day-care  will be                                                            
     all that  remains of the bond proceeds. There  are two possible                                                            
     methods of  dealing with these funds. First,  the trust account                                                            
     containing  the bond proceeds could be kept open  and the court                                                            
     system  could periodically  reissue  and RFP,  in an effort  to                                                            
     find a suitable  property and a day-care provider.  However, as                                                            
     long as a  private day-care facility is already  located in the                                                            
     immediate  vicinity   of  the  courthouse  and  demand  is  not                                                            
     demonstrated  to  exist,  it  is unlikely  that  the  RFP  will                                                            
     receive a responsive  bid. Moreover, there is no guarantee that                                                            
     a successful bidder  would remain in the State facility once it                                                            
     was  purchased. If it  did not, heating  and maintenance  money                                                            
     for the empty structure  would become the responsibility of the                                                            
     State.                                                                                                                     
                                                                                                                                
     Alternatively,  as proposed  by SB 353,  the legislature  could                                                            
     repeal the requirement  that a day-care facility be included in                                                            
     the  project. This option  would allow  $350,000 from  the bond                                                            
     proceeds  to be transferred  from the  construction account  to                                                            
     the bond redemption  account held by the State's trustee. These                                                            
     funds  would then be  available to offset  $350,000 in  general                                                            
     fund spending  from the State's  Debt Retirement Fund.  Because                                                            
     the  private  sector  is  already  providing  day-care  in  the                                                            
     immediate  vicinity of  the courthouse,  this option would  not                                                            
     disadvantage the public.                                                                                                   
                                                                                                                                
Co-Chair  Green offered  a motion  to report SB  353 from  Committee                                                            
with individual recommendations and a new fiscal note.                                                                          
                                                                                                                                
Without objection  SB 353 MOVED from Committee with  new fiscal note                                                            
from the Department of Revenue for $350,000 dated 3/1/04.                                                                       
                                                                                                                                

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