Legislature(1995 - 1996)
04/24/1996 09:02 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 515 am USE OF YOUTH SERVICES GRANTS CHAIRMAN GREEN introduced HB 515 am as the next order of business. Number 161 KYLE JOHANSEN, staff to Representative Bill Williams who is the prime sponsor of HB 515, read the following sponsor statement into the record: "House Bill 515 allows the recipient of an operating grant for residential services to use grant money to pay for the purchase of a building, vehicle or other assets. Residential services are defined in statute as "24-hour care and supervision of minors in residential child care facilities that are commonly known as group homes or institutions" (AS 47.40.091). Currently, recipients of these grants may not use the grant money to purchase buildings, vehicles or other assets. They may, however, use the money for rent and lease payments. Today, recipients pay rent/lease payments year after year with no chance of building equity. The residential youth home in Ketchikan has spent over $200,000 in rent over the last six years. They could own their facility today had it not been for the present statute. By changing this statute, these residential centers can, in many cases, lower monthly payments and eventually own their own asset. In the long run this will lessen their dependency on the state and allow more money for the programs that help our troubled youth. During these times of fiscal responsibility, we need to get the most out of every dollar the state spends. I believe this legislation will give these homes flexibility toward bettering their programs. I urge you to support this legislation." Number 196 SENATOR SALO expressed her strong support for the legislation. Number 204 PAT CLASBY, representing the Alaska Association of Homes for Children, said their association comprises 17 private nonprofits that provide residential care and other youth services throughout the state. Much of the use of these facilities is based on the lease payments that's found both in the statute and regulations of the department. These providers are trying to provide services in a more cost-effective manner in the face of budget constraints, and this bill would provide the opportunity to do business in a wiser way. Number 225 SENATOR SALO asked if, in addition to being able to allow the grant monies to be spent on a mortgage type payment, would it also then be possible for them to use the grant monies for maintenance projects. PAT CLASBY replied it is her understanding that this bill would be removing that part of the statute that does not allow these facilities to provide capital expenditures. They could then make minor renovations, improvements, etc., as long as it was within their grant budget. Number 263 JAMES STEELE of Wasilla, testifying from the Mat-Su LIO in support of HB 515, said in many cases this bill will allow providers of residential child care to ower monthly payments and eventually own their own facility. It will allow and provide a level of flexibility of control basically to use state dollars to the benefit of the children served, the agencies providing the services and to the people of Alaska. It also provides more stability for the children that are being served. He noted the bill is specific only to grants for residential services, as well as having a zero dollar fiscal impact. Number 295 JACK DUCKWORTH, representing Residential Youth Care in Ketchikan and testifying from the Ketchikan LIO, said there is a tremendous amount of cost to get these residential facilities on line to meet state fire codes, etc. If a landlord decides to sell the facility, it would not just be a matter of going to a new place and signing a new lease; it would also mean the additional costs of putting in sprinkler systems, fire alarm systems and updating the facility to make sure it meets the needs of the children. Mr. Duckworth advised that the Residential Youth Care program in Ketchikan has been in existence for over six years and they have spent over $200,000 for lease payments. They have two programs, and the lease payments for one of their programs totals $20,000 a year and the lease payments for the other program total $25,200 a year. The monthly lease payments total $2,100, and they have estimated that if they could buy the building, it would lower their monthly payments by approximately $400, so not only would they be lowering their monthly expenses, they would be building up an equity in the facilities as well. Number 323 There being no further testimony on HB 515 am, CHAIRMAN GREEN asked for the pleasure of the committee. SENATOR SALO moved HB 515 am be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.