Legislature(1999 - 2000)

03/03/1999 01:55 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE FINANCE COMMITTEE                                                                                                         
March 3, 1999                                                                                                                   
1:55 P.M.                                                                                                                       
                                                                                                                                
TAPE HFC 99 - 32, Side 1.                                                                                                       
TAPE HFC 99 - 32, Side 2.                                                                                                       
TAPE HFC 99 - 33, Side 1.                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Mulder called the House Finance Committee meeting                                                                      
to order at 1:55 P.M.                                                                                                           
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Co-Chair Mulder    Representative G. Davis                                                                                      
Co-Chair Therriault   Representative Grussendorf                                                                                
Vice-Chair Bunde   Representative Foster                                                                                        
Representative Austerman  Representative Kohring                                                                                
Representative J. Davies  Representative Williams                                                                               
                                                                                                                                
Representative Moses was absent from the meeting.                                                                               
                                                                                                                                
ALSO PRESENT                                                                                                                    
Barbara Ritchie, Deputy Director, Department of Law; Dean                                                                       
Guaneli, Chief Assistant Attorney General, Criminal                                                                             
Division, Department of Law; Kathryn Daughtee, Director,                                                                        
Division of Administrative Services, Department of Law;                                                                         
Alison Elgee, Deputy Commissioner, Department of                                                                                
Administration; Sharon Barton, Director, Division of                                                                            
Administrative Services, Department of Administration.                                                                          
                                                                                                                                
TESTIFIED VIA TELECONFERENCE                                                                                                    
Barbara Brink, Director, Public Defender Agency; Brant                                                                          
McGee, Public Advocate, Office of Public Advocacy.                                                                              
                                                                                                                                
SUMMARY                                                                                                                         
                                                                                                                                
HB 100 "An Act making and amending capital, supplemental,                                                                       
and other appropriations, and appropriations to                                                                                 
capitalize funds; ratifying certain expenditures;                                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
 HB 100 was HELD in Committee for further                                                                                       
consideration.                                                                                                                  
HOUSE BILL NO. 100                                                                                                              
                                                                                                                                
"An Act making and amending capital, supplemental, and                                                                          
other appropriations, and appropriations to capitalize                                                                          
funds; ratifying certain expenditures; and providing                                                                            
for an effective date."                                                                                                         
                                                                                                                                
Members were provided with a memorandum dated March 3, 1999,                                                                    
from the Office of Management and Budget, requesting three                                                                      
amendments to HB 100 (copy on file).                                                                                            
                                                                                                                                
Amend Section 4 as follows to reflect two cases removed                                                                         
because of appeals and three cases added:                                                                                       
                                                                                                                                
*Sec. 4. JUDGMENTS AND CLAIMS. The sum of $1,883,30                                                                             
[$2,110,200] is appropriated to the                                                                                             
Department of Law to pay judgments and claims against                                                                           
the state for the fiscal year ending June 3 0, 1999,                                                                            
from the following sources:                                                                                                     
 General fund 1,868,00                                                                                                          
 [2,094,900]                                                                                                                    
 Public employees retirement fund  15,300                                                                                       
                                                                                                                                
Amend Section 7 to read                                                                                                         
.                                                                                                                               
*Sec. 7. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS.                                                                          
The sum of $1,400,000                                                                                                           
[$1,700,000] is appropriated from the power cost                                                                                
equalization and rural electric capitalization fund (AS                                                                         
42.45. 100) to the Department of Community and Regional                                                                         
Affairs for the power cost equalization program for                                                                             
the fiscal year ending June 30, 1999.                                                                                           
                                                                                                                                
Amend Section 20, page 22, and line 17 as follows:                                                                              
 MISCELLANEOUS CLAIMS.                                                                                                          
 DEPARTMENT  APPROPRIATION                                                                                                      
 Fish and Game $1,600.40                                                                                                        
 [$1,120.40]                                                                                                                    
                                                                                                                                
Section 4. JUDGMENTS AND CLAIMS.                                                                                                
                                                                                                                                
BARABARA RITCHIE, DEPUTY DIRECTOR, DEPARTMENT OF LAW                                                                            
discussed judgments and claims. Ms. Ritchie provided members                                                                    
with a list of the judgements and claims against the state                                                                      
of Alaska, as of 3/2/99 (copy on file). She noted that most                                                                     
of the judgments are out of the Civil Division. A few items                                                                     
are from the Criminal Division. A memorandum from Annalee                                                                       
McConnell, Director, Office of Management and Budget, Office                                                                    
of the Governor, dated 3/3/99 clarified that two cases are                                                                      
being removed because they are under appeal and three small                                                                     
child support cases were added (copy on file). She noted                                                                        
that the amended number is $1,868,000 million dollars.                                                                          
                                                                                                                                
Ms. Ritchie noted that the Committee also received a letter                                                                     
from Senator Parnell, dated 2/26/99 in response to questions                                                                    
asked in the Senate Finance Committee (copy on file).                                                                           
                                                                                                                                
Co-Chair Mulder asked Ms. Ritchie to discuss claims or                                                                          
judgements over $10 thousand dollars.                                                                                           
                                                                                                                                
Ms. Ritchie discussed item 6, Robert Boyd v. State,                                                                             
Department of Transportation and Public Facilities - $175                                                                       
thousand dollars. She explained that the complaint occurred                                                                     
as the result of a dismissal. She explained that the issue                                                                      
was not the actual discharge of the employee, but the manner                                                                    
in which it was handled. He was removed from two different                                                                      
jobs. The performance evaluation process was a problem with                                                                     
how the employee was treated. He was a senior level                                                                             
employee. One of the significant legal issues was the                                                                           
evaluation process. She discussed the employees' evaluation                                                                     
process. Mr. Boyd was unemployed for 90 weeks. His total                                                                        
claim was $1.8 million dollars. The case was settled at $175                                                                    
thousand dollars. Interest was added to this amount.                                                                            
                                                                                                                                
Co-Chair Mulder asked if steps have been taken to make                                                                          
commissioners aware of how employees should be terminated.                                                                      
Ms. Ritchie noted that training is being provided to                                                                            
eliminate similar problems in the future. She noted that                                                                        
employment law is an area of growth. There is an array of                                                                       
laws that cover employee issues.                                                                                                
                                                                                                                                
Representative Bunde questioned what the state policy is for                                                                    
a manager that does not follow state policy.  Ms. Ritchie                                                                       
explained that individuals are sometimes sued, along with                                                                       
the state, in their official capacity or individual                                                                             
capacity. Punitive damages cannot be granted against the                                                                        
state of Alaska. The state, as a rule, does not compensate                                                                      
someone if they are awarded punitive damages against them.                                                                      
The facts are reviewed. If the defendant took action toward                                                                     
someone that was not within the scope of their employment                                                                       
the state would not defend them or compensate them for any                                                                      
action taken against them.                                                                                                      
                                                                                                                                
Co-Chair Mulder asked for information on claim number 4,                                                                        
Trustees for Alaska Kachemak Bay Conservation Society v.                                                                        
state of Alaska. Ms. Ritchie noted that this was a challenge                                                                    
to oil and gas lease sale 85(a). She explained that the                                                                         
Superior Court issued a decision on lease sale 78, while                                                                        
this case was pending. This decision concluded that the                                                                         
Department of Natural Resources needed to take a closer look                                                                    
at accumulative effects of oil and gas leases. The                                                                              
Department of Natural Resources did not take an accumulative                                                                    
look at the effect of lease sale 85(a). The local coastal                                                                       
policy council had looked at accumulative effects. The                                                                          
Department of Natural Resources took the determination from                                                                     
the local coastal body and applied it in making a                                                                               
consistency determination and a best interest finding. The                                                                      
plaintiffs were found to be public interest litigants. They                                                                     
were awarded 100 percent of their legal fees. They sought                                                                       
$60 thousand dollars in attorney fees. The Department of Law                                                                    
negotiated this amount down to $39 thousand dollars by                                                                          
agreeing outside of court to an apportionment of the fees to                                                                    
the different issues.                                                                                                           
                                                                                                                                
Co-Chair Mulder asked how the statutes could clarified the                                                                      
state's intent in regards to public interest litigants and                                                                      
the overall impact to the state of Alaska. He pointed out                                                                       
that future lease sales could be endangered. Ms. Ritchie                                                                        
noted that the Department of Natural Resources would make                                                                       
their own independent consistency determination to make sure                                                                    
they comply with the court ruling.                                                                                              
                                                                                                                                
Representative Williams asked how the interest is paid. Ms.                                                                     
Ritchie clarified that it would be from the general fund.                                                                       
                                                                                                                                
Co-Chair Therriault explained that if money was taken out of                                                                    
the general fund and put into a note for interest it would                                                                      
still be a general fund appropriation. The general fund does                                                                    
incur interest.                                                                                                                 
                                                                                                                                
Co-Chair Mulder asked what would happen if the state did not                                                                    
pay one of the claims. Ms. Ritchie explained that the                                                                           
settlement would fall apart and the case would be re-                                                                           
litigated. She observed that someone holding a judgement                                                                        
cannot execute against state property. She noted that                                                                           
departments do not have funding set aside to pay judgements.                                                                    
                                                                                                                                
Ms. Ritchie discussed Muhammed Khan v. State - $500 thousand                                                                    
dollars. She noted that this is a judgement that was entered                                                                    
by federal court. Mr. Khan claimed that his layoff was not                                                                      
legitimate and that he had been discriminated against while                                                                     
employed by the Department of Military and Veterans Affairs.                                                                    
There were a number of workers that submitted depositions                                                                       
which detail instances of discrimination. He was laid off                                                                       
during reductions. She observed that layoffs due to budget                                                                      
cuts need to be documented in regards to why the position                                                                       
was reduced. Mr. Khan had also entered a grievance. The                                                                         
arbitrator found that the department had failed to                                                                              
demonstrate that it had a legitimate financial reason for                                                                       
laying off Mr. Khan. He also had a proceeding pending before                                                                    
the Human Rights Commission. The Human Rights Commission                                                                        
substantiated his complaints. The case was brought to                                                                           
federal court since it was a discrimination case. The trial                                                                     
had begun when a settlement was reached. He received full                                                                       
attorney fees since it was a discrimination case. The                                                                           
judgement is not contingent on other funding.                                                                                   
                                                                                                                                
Representative Bunde asked if the defendant is still                                                                            
employed by the state. Ms. Ritchie stated that none of the                                                                      
defendants in the case are employed by the state.                                                                               
                                                                                                                                
Representative Bunde referred to the letter by Attorney                                                                         
General Bruce Botelho, dated 2/26/99.  He observed that the                                                                     
letter states that it might be helpful for managers to                                                                          
receive more training. Ms. Ritchie explained that the letter                                                                    
reflects that there is no way to ensure against employment                                                                      
cases.                                                                                                                          
                                                                                                                                
Ms. Ritchie discussed item 8, Earthjustice Legal Defense                                                                        
Fund Inc., Weiss v. State - $456,225.08 thousand dollars and                                                                    
item 9, Earthjustice Legal Defense Fund Inc., Alaska                                                                            
Environmental Center v. Weiss - $1,299.61 thousand dollars.                                                                     
She observed that Weiss v. State was the Alaska Mental                                                                          
Health Trust lands case. The settlement is payable to a                                                                         
group of environmental organizations that filed in the Weiss                                                                    
case as intervenors. She discussed the history of the case.                                                                     
She observed that the intervenors opposed the first                                                                             
settlement. The judge denied approval of the settlement and                                                                     
did not award attorney fees to the environmental groups                                                                         
because they were not the prevailing party. She explained                                                                       
that the new settlement was approved in 1994 and the Weiss                                                                      
case was dismissed. The Superior Court denied attorney fees.                                                                    
There was an appeal to the Alaska Supreme Court. The Supreme                                                                    
Court reversed the Superior Court's ruling. It found that                                                                       
since the settlement was denied the environmental groups                                                                        
were the prevailing party. The case was remanded to                                                                             
determine the amount of attorney fees. They were viewed as                                                                      
public interest litigants. The state argued that it would be                                                                    
improper to award fees on time spent lobbying the                                                                               
legislation. The Superior Court did not apportion fees. The                                                                     
total attorney fees were reduced by almost $35 thousand                                                                         
dollars. Attorney fees were awarded at $456,225.08 thousand                                                                     
dollars.                                                                                                                        
                                                                                                                                
Co-Chair Mulder asked if the Alaska Mental Health Trust Fund                                                                    
should pay for the attorney fees. Ms. Ritchie observed that                                                                     
it would be problematic to use that funding source.                                                                             
                                                                                                                                
Co-Chair Mulder expressed concern that the public interest                                                                      
status attorney fees were awarded to a public interest group                                                                    
that he felt had to stretch to make a public interest.                                                                          
                                                                                                                                
Representative J. Davies maintained that it is not a big                                                                        
stretch for people concerned about the disposal of large                                                                        
acres of public land to have an interest in the disposal.                                                                       
Co-Chair Mulder pointed out that they were not the affected                                                                     
party. Representative J. Davies disagreed. Co-Chair                                                                             
Therriault noted they were not the main party.  Ms. Ritchie                                                                     
stressed that the state argued that they were not the                                                                           
essential party to the case.                                                                                                    
                                                                                                                                
Co-Chair Mulder stressed that the environmental groups did                                                                      
not win the court case. They were not the affected party.                                                                       
Ms. Ritchie noted that the state also made the argument that                                                                    
the environmental groups were not the prevailing party. Co-                                                                     
Chair Therriault expressed concern that the case invites                                                                        
intervenors. He asked if the environmental groups had to be                                                                     
approved as a class. Ms. Ritchie did not think that they had                                                                    
to be a class.                                                                                                                  
                                                                                                                                
Co-Chair Mulder asked if "public interest litigants" is                                                                         
defined in state or federal law. Ms. Ritchie explained that                                                                     
Court Rule 82 addresses attorney fees. The Alaska Supreme                                                                       
Court developed a doctrine regarding public interest                                                                            
litigants in 1974.  Fees are not awarded against a public                                                                       
interest litigant. However, if a public interest litigant                                                                       
wins a case they are awarded attorney fees. The intent of                                                                       
the court was to encourage lawyers to initiate cases without                                                                    
a strong economic interest that would effectuate strong                                                                         
public policies and benefit numerous people. She discussed                                                                      
the determination of public interest litigants.                                                                                 
                                                                                                                                
Representative J. Davies pointed out that the attorney fees                                                                     
do not go to the group.                                                                                                         
                                                                                                                                
Ms. Ritchie discussed item 10, Newton v. State - $100                                                                           
thousand dollars. She noted that the case was based on a                                                                        
federal whistle blower complaint brought against the state                                                                      
Department of Labor. Mr. Newton was an electrical inspector                                                                     
assigned to the joint pipeline office. He was laid off in                                                                       
1996 due to budget reasons. He alleged that his layoff was                                                                      
the result of his raising concerns regarding electrical                                                                         
hazards on the pipeline. The case was filed as a federal                                                                        
complaint with the US Department of Labor.  There were 17                                                                       
witnesses disposed in the case. The testimony demonstrated                                                                      
that there were reasons that his termination would                                                                              
problematic.  She noted that the attorney fees alone would                                                                      
have been greater than $100 thousand dollars.                                                                                   
                                                                                                                                
(Tape Change, HFC 99 - 32, Side 2)                                                                                              
                                                                                                                                
Ms. Ritchie explained that the treatment of whistle blowers                                                                     
by the Alaska pipeline was problematic.                                                                                         
                                                                                                                                
DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, CRIMINAL                                                                        
DIVISION, DEPARTMENT OF LAW discussed item 15, Perkins Cole,                                                                    
Cleary v. Smith - $17,751.75 thousand dollars and item 16,                                                                      
Rice, Volland, Taylor, Cleary v. Smith - $37,034.16 thousand                                                                    
dollars. He noted that litigation relating to the Cleary                                                                        
case is being reduced as overcrowding is reduced. He                                                                            
observed that the amount was less than previous years. The                                                                      
fact that many of the issues have been resolved, especially                                                                     
in regards to overcrowding, are reflected in lower attorney                                                                     
fees.                                                                                                                           
                                                                                                                                
Co-Chair Mulder asked how much has been paid to Mr. Volland                                                                     
and if litigation would continue. Mr. Guaneli responded that                                                                    
Mr. Volland has only been paid a few hundred thousand                                                                           
dollars.                                                                                                                        
                                                                                                                                
Mr. Guaneli discussed item 17, Verne Explained Rupright v.                                                                      
Burton - $9,497.51 thousand dollars. He explained that item                                                                     
17 was a challenge to the Sex Offender Registration Act.  He                                                                    
explained that the case was remanded to the Superior Court                                                                      
from the Court of Appeals.                                                                                                      
                                                                                                                                
Co-Chair Mulder asked what happened to the case after it was                                                                    
remanded.                                                                                                                       
                                                                                                                                
Mr. Guaneli explained that it was refilled in Superior                                                                          
Court. He noted that there is a lot of sex offender                                                                             
litigation awaiting in the Superior Court and the Alaska                                                                        
Supreme Court. Co-Chair Mulder observed that the state did                                                                      
not lose the underlying case. The state lost the case based                                                                     
on the right of the individual to file anonymously.                                                                             
                                                                                                                                
Ms. Ritchie discussed item 18, Robert H. Wagstaff, Howard                                                                       
Bess v. Fran Ulmer - $11,623.27 thousand dollars. She                                                                           
explained that the case occurred as a result of the same sex                                                                    
marriage amendment. The court awarded $11,623,.27 thousand                                                                      
dollars in attorney fees. Co-Chair Mulder asked the basis of                                                                    
the court's decision. Ms. Ritchie explained that the court                                                                      
found that there were prevailing parties. The court did not                                                                     
breakout the parties. The court was urged not to expedite                                                                       
the case. There was a simultaneous briefing schedule. The                                                                       
Alaska Supreme Court has not issued their final decision.                                                                       
The same sex marriage amendment was modified and the                                                                            
prisoner's rights amendment was stricken.                                                                                       
                                                                                                                                
Ms. Ritchie discussed item 22, Lee Holen Law Office, Minder                                                                     
v. State - $94,533.66 thousand dollars. She explained that                                                                      
it is another employment case. The issue involved a layoff.                                                                     
Mr. Minder alleged that he was discriminated against as a                                                                       
whistle blower and that he was wrongfully discharged. She                                                                       
observed that it could be difficult to prove that a                                                                             
discharge was not the result of whistle blower actions. She                                                                     
emphasized the need to carefully document that the layoff                                                                       
was the result of a specific budget reduction.                                                                                  
                                                                                                                                
Co-Chair Therriault questioned if the legislature needs to                                                                      
identify positions that would be reduced. Ms. Ritchie                                                                           
stressed that there are only 5 cases among the thousands of                                                                     
employees that are eliminated. She did not think that there                                                                     
is a huge pervasive problem. Co-Chair Therriault expressed                                                                      
concern that the five cases resulted in a cost to the state.                                                                    
Ms. Ritchie stated that training relating to how layoffs                                                                        
should be documented is the best insurance that layoffs                                                                         
would not result in liability.                                                                                                  
                                                                                                                                
Co-Chair Therriault noted that any employee that has run                                                                        
afoul of budget reductions could save himself or herself by                                                                     
becoming whistle blowers and claiming that they were laid                                                                       
off as the result.  He questioned if agencies would be                                                                          
removed from retaliation if the legislature identified which                                                                    
positions should be eliminated. Ms. Ritchie stated that                                                                         
legislative identification would not solve the problem.                                                                         
                                                                                                                                
Representative Austerman did not think the state could get                                                                      
around the problem. Representative J. Davies noted that the                                                                     
legislature is not immune from a lawsuit.                                                                                       
                                                                                                                                
Co-Chair Mulder questioned if employees are being encouraged                                                                    
to initiate whistle-blowing actions if they think their                                                                         
position is about to be eliminated. Representative J. Davies                                                                    
emphasized that the facts have to substantiate the claim.                                                                       
                                                                                                                                
Co-Chair Therriault questioned how determinations are made.                                                                     
He asked if they are based on economics or the ability to                                                                       
win the case. Ms. Ritchie stated that all factors are used                                                                      
in making a determination of which cases should go to trial.                                                                    
There is a settlement committee that evaluates cases. If a                                                                      
lawyer has a case they must go to the settlement committee                                                                      
to have the case reviewed. She referred to the Brockman                                                                         
case, item 23.                                                                                                                  
                                                                                                                                
CHRIS CHRISTENSEN, STAFF COUNSEL, ALASKA COURT SYSTEM                                                                           
discussed item 25, Claim of Gaylene's Word Services against                                                                     
the Alaska Court System. He explained that the Alaska Court                                                                     
System must transcribe a large number of proceedings. The                                                                       
transcription function was privatized. A contractor filed a                                                                     
contractor claim that they were not paid as much as they                                                                        
felt that they should be paid.                                                                                                  
                                                                                                                                
Representative Bunde questioned why they felt that they were                                                                    
not paid enough. Mr. Christensen explained that there were                                                                      
several contractors and items were moved around between                                                                         
contractors. The contractor felt that she did not receive                                                                       
the amount of work that she should have. There was also a                                                                       
dispute over accuracy.                                                                                                          
                                                                                                                                
Mr. Christensen noted that the claim was settled at .10                                                                         
cents on the dollar.                                                                                                            
                                                                                                                                
Representative J. Davies observed that there was a number of                                                                    
Child Support Enforcement Division cases and asked if there                                                                     
were any recommendations regarding these cases. Ms. Ritchie                                                                     
did not have any recommendations.                                                                                               
                                                                                                                                
Representative Austerman observed that the judgements are                                                                       
from 1998. He asked if there is an average annual amount of                                                                     
claims and judgements against the state. Ms. Ritchie stated                                                                     
that she would compared other years. She stated that lawyers                                                                    
are instructed to keep them informed about cases that could                                                                     
result in large claims or judgements against the state.                                                                         
                                                                                                                                
KATHRYN DAUGHTEE, DIRECTOR, DIVISION OF ADMINISTRATIVE                                                                          
SERVICES, DEPARTMENT OF LAW observed that the FY99 amount is                                                                    
lower than other years. In response to a question by                                                                            
Representative Austerman, Ms. Ritchie clarified that the                                                                        
appropriation amount is up to date. There are about 80,000                                                                      
open cases. She felt that the department's success rate is                                                                      
good.                                                                                                                           
                                                                                                                                
DEPARTMENT OF ADMINISTRATION                                                                                                    
SECTION 6(a)                                                                                                                    
                                                                                                                                
The sum of $35,000 is appropriated from statutory                                                                               
designated program receipts to the Department of                                                                                
Administration, division of finance, for additional                                                                             
operating costs for the fiscal year ending June 30,                                                                             
1999.                                                                                                                           
                                                                                                                                
SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE                                                                             
SERVICES, DEPARTMENT OF ADMINISTRATION discussed section                                                                        
6(a). The appropriation is for travel savings analysis. She                                                                     
stressed that travel has been kept to a minimum.                                                                                
                                                                                                                                
Representative Bunde questioned if the state could use a                                                                        
credit card that accrues mileage to pay for travel.                                                                             
                                                                                                                                
ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF                                                                                
ADMINISTRATION explained that the state of Alaska                                                                               
competitively bid credit card services in the same manner as                                                                    
other state procurement services. The state of Alaska has a                                                                     
procurement card with the 1st Bank of Chicago that was bid                                                                      
in conjunction with the University of Alaska. It is                                                                             
currently being used in a limited way, the Department of                                                                        
Administration hopes to roll out a procure card program                                                                         
later in the spring.                                                                                                            
                                                                                                                                
SECTION 6(b)                                                                                                                    
                                                                                                                                
The sum of $100,000 is appropriated from the surplus                                                                            
property revolving fund (AS 44.68.130)(c) to the                                                                                
Department of Administration, property management                                                                               
program, for additional operating costs for the fiscal                                                                          
year ending June 30, 1999.                                                                                                      
                                                                                                                                
Ms. Elgee explained that $100 thousand dollars would be                                                                         
appropriated for environmental assessment of a ground oil                                                                       
spill in the Bethel region. The spill occurred on property                                                                      
that belonged to the Bureau of Indian Affairs. The state of                                                                     
Alaska is involved as an intermediary for the federal                                                                           
government in the transfer of the surplus fuel oil. The                                                                         
surplus oil was sold to Bethel for .10 cents a gallon.                                                                          
During the transfer a valve was left open and oil spilled                                                                       
into the ground. The case is currently under litigation and                                                                     
the assessment is necessary to determine the extent of                                                                          
liability                                                                                                                       
                                                                                                                                
Co-Chair Therriault asked how much oil was sold. Ms. Elgee                                                                      
noted that the state sold 375 thousand gallons.                                                                                 
                                                                                                                                
In response to a question by Representative G. Davis, Ms.                                                                       
Elgee explained that surplus federal property was offered                                                                       
to the state. The state declined the property, but acted as                                                                     
an intermediary to the city of Bethel. The liability cannot                                                                     
be apportioned until the damage is assessed.                                                                                    
                                                                                                                                
(Tape Change, HFC 99 - 33, Side 1)                                                                                              
                                                                                                                                
In response to a question by Representative Austerman, Ms.                                                                      
Elgee stated that the state could look at the available                                                                         
contractual documentation. She reiterated that there is                                                                         
active litigation.                                                                                                              
                                                                                                                                
Representative Austerman asked if the there is a policy                                                                         
statement covering the liability aspect. Ms. Elgee assured                                                                      
him that they would make available additional information.                                                                      
                                                                                                                                
Co-Chair Mulder asked if the money could be used for other                                                                      
obligations in terms of administration if the state denied                                                                      
the appropriation. Ms. Elgee replied that it could.                                                                             
                                                                                                                                
Representative G. Davis questioned if authorization of the                                                                      
appropriation would be viewed as an indication of                                                                               
responsibility.                                                                                                                 
                                                                                                                                
Representative J. Davies questioned if any other parties                                                                        
are contributing to the assessment.                                                                                             
                                                                                                                                
Ms. Elgee did not think that the other parties had been                                                                         
asked to contribute to the assessment. The federal                                                                              
government was involved in some of the initial cleanup work                                                                     
to curtail damage.  The requested funds would allow the                                                                         
state to assess the extent of the damage. Representative J.                                                                     
Davies asked if it would be appropriate to ask the federal                                                                      
government for assistance. Ms. Elgee stressed that it would                                                                     
be appropriate to assess the degree of federal                                                                                  
participation to date. She estimated that the participation                                                                     
of the federal government in the cleanup has been                                                                               
significant.                                                                                                                    
                                                                                                                                
Representative Austerman questioned why the department is                                                                       
undertaking the assessment.  Ms. Elgee explained that the                                                                       
assessment is at the direction of the attorneys undertaking                                                                     
the lawsuit. She reiterated that liability cannot be                                                                            
apportioned until the extent of the liability is                                                                                
understood.                                                                                                                     
                                                                                                                                
Representative G. Davis observed that the assessment will                                                                       
provide that number.  He asked if there was a containment                                                                       
dike.  Ms. Elgee did not know.  Co-Chair Mulder asked for                                                                       
additional back up on section 6(b).                                                                                             
                                                                                                                                
SECTION 6(a)                                                                                                                    
                                                                                                                                
Co-Chair Mulder asked what additional operating costs are                                                                       
being requested in subsection (a). Ms. Barton explained                                                                         
that the funding would go to startup costs for implementing                                                                     
the new travel card procedure.  Co-Chair Mulder asked if                                                                        
these costs were unanticipated.  Ms. Barton stated that                                                                         
they knew that the contracts were starting. The additional                                                                      
startup costs were not factored into the FY99 budget. The                                                                       
appropriation would be from statutory program receipts.                                                                         
Co-Chair Mulder observed that the statutory program                                                                             
receipts would be available as additional general fund                                                                          
revenue if they are not authorized for this appropriation.                                                                      
Ms. Barton agreed that they would fall into the general                                                                         
fund.                                                                                                                           
                                                                                                                                
Co-Chair Mulder asked how the funding would be spent.                                                                           
                                                                                                                                
Ms. Elgee explained that it has been difficult to assess                                                                        
cost savings in the travel arena due to a lack of                                                                               
information regarding state employees' travel patterns.                                                                         
The intent of the travel card is to obtain information                                                                          
regarding state employee travel volume in order to                                                                              
establish discounts with vendors.                                                                                               
                                                                                                                                
SECTION 6(d)                                                                                                                    
                                                                                                                                
The sum of $563,000 is appropriated from the general                                                                            
fund to the Department of Administration, office of                                                                             
public advocacy, for operating costs for the fiscal                                                                             
year ending June 30, 1999.                                                                                                      
                                                                                                                                
BRANT MCGEE, PUBLIC ADVOCATE, OFFICE OF PUBLIC ADVOCACY                                                                         
discussed section 6(d). He noted that this is the agency's                                                                      
14th request for a supplemental in the last 15 years.  He                                                                       
noted the inability to predict caseload. The caseload for                                                                       
children's cases increased by 42 percent from FY97 to FY98.                                                                     
The agency spent $429 thousand dollars more in FY99 than                                                                        
was spent in the comparable period of FY98. Caseload data                                                                       
indicates that FY00 will be 10 percent more than FY98. The                                                                      
request is twice as much as last year. The funding would be                                                                     
used to pay for services from the private sector.                                                                               
                                                                                                                                
Co-Chair Mulder asked for further substantiation in                                                                             
relation to their budgeted number, actual caseload, and                                                                         
remaining balance in order to justify the additional                                                                            
request.                                                                                                                        
                                                                                                                                
Representative J. Davies asked Mr. McGee to provide the                                                                         
amount of their original FY99 budget request.                                                                                   
                                                                                                                                
SECTION 6(e)                                                                                                                    
                                                                                                                                
The sum of $297,000 is appropriated from the general                                                                            
fund to the Department of Administration, public                                                                                
defender agency, for operating costs for the fiscal                                                                             
year ending June 30, 1999.                                                                                                      
                                                                                                                                
BARBARA BRINK, DIRECTOR, PUBLIC DEFENDER AGENCY discussed                                                                       
the agency's request. She observed that their request                                                                           
breaks down into three parts. The first part is a $200                                                                          
thousand dollar personal services line request. She                                                                             
explained that an increment was requested in FY99 to fill                                                                       
vacant positions in remote bush locations. They received                                                                        
$200 thousand dollars less then the requested amount in the                                                                     
FY99 operating budget. This is the amount that is currently                                                                     
being requested in the supplemental. She stressed that                                                                          
positions could not remain vacant due to a 5 percent                                                                            
overall increase in caseload. There were almost 900                                                                             
additional new cases over the previous year. She stated                                                                         
that additional attorneys were added in Nome, Bethel and                                                                        
Kotzebue due to increased caseloads. She stressed that                                                                          
staff positions must be sufficient to cover the court                                                                           
ordered proceedings. The average cost per case has been cut                                                                     
despite increasing caseload. They are below $500 dollars                                                                        
per case.                                                                                                                       
                                                                                                                                
Ms. Brink explained that the second part of their request                                                                       
is for a one-time remodel and expansion project. The cost                                                                       
would be $70 thousand dollars. She explained that staff has                                                                     
increased.                                                                                                                      
                                                                                                                                
                                                                                                                                
Co-Chair Mulder requested backup on section 6(e).                                                                               
                                                                                                                                
Representative Grussendorf noted that the Office of Public                                                                      
Advocacy and the Alaska Public Defenders Agency have been                                                                       
under-funded. He added that these agencies have not always                                                                      
received funding identified in new legislation. Co-Chair                                                                        
Mulder asked for backup regarding unfunded fiscal notes                                                                         
that affect their budgets.                                                                                                      
                                                                                                                                
Representative G. Davis observed that the legislature was                                                                       
aware that additional funding would be needed. He suggested                                                                     
that positions in rural areas would be more cost effective.                                                                     
He questioned how many felony cases have been related to                                                                        
felony cases resulting from a failure to stop.                                                                                  
                                                                                                                                
Ms. Brink stated that there have been a large number of                                                                         
cases regarding the failure to stop. These cases are being                                                                      
prosecuted as felonies.                                                                                                         
                                                                                                                                
Co-Chair Mulder asked if the cases stand-alone or are                                                                           
involved with additional charges.                                                                                               
                                                                                                                                
Ms. Brink stated that the cases run the gamut. Some cases                                                                       
would have been defended anyway.                                                                                                
                                                                                                                                
Representative J. Davies stressed that the law was                                                                              
promulgated to give enforcement an extra hammer and to                                                                          
recognize community concern.                                                                                                    
                                                                                                                                
SECTION 6(c)                                                                                                                    
                                                                                                                                
The sum of $678,400 is appropriated from the general                                                                            
fund to the Department of Administration for the                                                                                
leasing program for the fiscal year ending June 30,                                                                             
1999.                                                                                                                           
                                                                                                                                
Ms. Barton discussed section 6(c). She observed that the                                                                        
leasing budget is based on a projection of upcoming year                                                                        
costs. The leasing budget has been traditionally                                                                                
underfunded.  It was short-funded by $996 thousand dollars                                                                      
in FY99, relative to projections at the time the budget was                                                                     
written. She explained that the Division of General                                                                             
Services was successful in managing down the supplemental                                                                       
need through negotiations of lease costs and space                                                                              
consolidations. The supplemental need for this component is                                                                     
$678,400 thousand dollars, which includes $40 thousand                                                                          
dollars for a final hearing officer associated with the                                                                         
Department of Environmental Conservation laboratory                                                                             
dispute.                                                                                                                        
                                                                                                                                
SECTION 6(f)                                                                                                                    
                                                                                                                                
The sum of $500,000 is appropriated from Pioneers' Home                                                                         
receipts to the Department of Administration, Pioneers'                                                                         
Homes, for increased operating costs for the fiscal                                                                             
year ending June 30, 1999.                                                                                                      
                                                                                                                                
Ms. Elgee discussed section 6(f). She explained that this                                                                       
section would appropriate $500,000 thousand dollars in                                                                          
pioneers' home receipts. This funding is in excess of what                                                                      
the department projected would be available for FY99. The                                                                       
operating shortfall is primarily due to increased staffing                                                                      
needs. She explained that they were not able to leave                                                                           
positions vacant. She observed that one-on-one staffing has                                                                     
been needed during periods of aggressive behavior. She                                                                          
referred to an instance in Anchorage that resulted in the                                                                       
patient's discharge to the Alaska Psychiatric Institute. She                                                                    
noted that there is a similar situation in Sitka that is                                                                        
being handled successfully.                                                                                                     
                                                                                                                                
Representative Grussendorf noted that he has heard concerns                                                                     
regarding the resident located in Sitka. Ms. Elgee explained                                                                    
that when the Sitka incident occurred they asked the Alaska                                                                     
Psychiatric Institute to assess the gentlemen's behavior.                                                                       
Most of the resident's problems were handled with medicine                                                                      
adjustments and one-on-one staffing. The staff feels that                                                                       
they are able to manage the client without danger to the                                                                        
residents. The man also has cultural issues. They are                                                                           
looking at transferring the client to the pioneer home in                                                                       
Fairbanks.                                                                                                                      
                                                                                                                                
Representative G. Davis observed that there are problems                                                                        
associated with dementia. He stressed that dementia issues                                                                      
will be looked at in the subcommittee.                                                                                          
                                                                                                                                
HB 100 was HELD in Committee for further consideration.                                                                         
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting adjourned at 4:00  p.m.                                                                                             
                                                                                                                                
HFC 14 3/03/99                                                                                                                  

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