Legislature(2003 - 2004)
03/18/2003 01:47 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 18, 2003
1:47 P.M.
TAPE HFC 03 - 35, Side A
TAPE HFC 03 - 35, Side B
TAPE HFC 03 - 36, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:47 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
Representative Jim Whitaker
ALSO PRESENT
Representative Jim Holm; Representative Tom Anderson; Zach
Warwick, Staff, Senator Gene Therriault; Robert Winter,
Captain, Southeast Pilot, Anchorage; Pat Davidson, Director,
Division of Legislative Audit; Captain Dale Collins,
President, Southeast Alaska Pilot Association, Ketchikan;
Kate Tesar, Alaska Yacht Services and Provisioning, Juneau;
Peter Christensen, Board of Marine Pilots; Jeff White,
Manager, Seadrome Marine Complex, Goldbelt Hotel, Juneau;
Mike Fox, Public Safety Employees Association (PSEA),
Anchorage; Mark O'Brien, Contract Officer, Commissioner's
Office, Department of Transportation and Public Facilities
PRESENT VIA TELECONFERENCE
Guy Bell, Director, Division of Retirement and Benefits,
Department of Administration, Anchorage; Captain Graham
Hayes, Seattle; Mike Couturier, Anchorage Police Department,
Anchorage; Dan Colang, Correctional Officer, Department of
Corrections, Fairbanks; Mike Davidson, Anchorage Fire
Department, Anchorage; Adam Benson, Alaska State Troopers,
Ketchikan; Dr. Gene Sanders, Clinical Director, Police
Stress Institute
SUMMARY
HB 67 An Act relating to construction of highways by the
Department of Transportation and Public
Facilities.
HB 67 was HEARD and HELD in Committee for further
discussion.
HB 91 An Act relating to a cost-of-living allowance and
medical benefits for retired peace officers after
20 years of credited service.
HB 91 was HEARD and HELD in Committee for further
consideration.
CS SB 20 (FIN)
An Act relating to the Board of Marine Pilots and
to marine pilotage; extending the termination date
of the Board of Marine Pilots; and providing for
an effective date.
CS SB 20 (FIN) was HEARD and HELD in Committee for
further consideration.
HOUSE BILL NO. 91
An Act relating to a cost-of-living allowance and
medical benefits for retired peace officers after 20
years of credited service.
REPRESENTATIVE TOM ANDERSON testified that the State
troopers, firemen, correctional officers, and others known
as "peace officers" employed by the State of Alaska are an
invaluable resource. These employees risk their health and
safety in their service to the citizens of Alaska.
Until 1986, all Public Employee Retirement System (PERS)
benefit recipients were eligible to receive major medical
insurance benefits after becoming vested in the retirement
system. In addition, peace officers were eligible to
receive an Alaska Cost-of-Living-Allowance (COLA) upon
retirement. In 1986, the requirements for medical benefits
and COLA were modified to reduce the number of benefit
recipients eligible to receive those benefits.
Currently, the participants may receive major medical
insurance benefits upon their normal retirement after 30
years of service. Normal retirement for peace officers is
after 20 years of service, however, current law requires
peace officers to have 25 years of service before they are
eligible to receive medical benefits. That system
undermines the intent of the peace officer normal retirement
by withholding their medical insurance benefit until an
additional 5 years of service are given.
Representative Anderson pointed out that HB 91 would correct
the existing benefit delay by allowing peace officers to
receive major medical insurance at their normal retirement.
Alaska COLA is currently payable to non-disabled PERS
benefit recipients, age 65 or older, who remain in Alaska
after retirement. HB 91 would provide the COLA benefit to
peace officers upon normal retirement after 20 years of
service, offering an incentive to those citizens to remain
in Alaska, where they may continue contributing to the
public good.
The legislation would end the requirement that peace
officers work beyond their normal retirement in order to
obtain their medical benefits. By offering the COLA benefit
upon retirement, the legislation also encourages retired
peace officers to remain in the State.
Representative Anderson listed the number of bi-partisan co-
sponsors for the legislation: Representative Guttenberg,
Representative Gara, Representative Crawford, Representative
Heinz, Representative Lynn, and Representative Dahlstrom.
The bill also has the support of the Public Employees
Retirement System (PERS) Board, the Anchorage Police
Department, the Anchorage Fire Fighters Union, Public Safety
Employees Association and numerous police officers
throughout the State.
Representative Anderson acknowledged that there have been
questions regarding the cost of the legislation for the City
of Anchorage. That amount would be the annual PERS employer
contribution increase of $44,544 dollars.
MICHAEL FOX, PUBLIC SAFETY EMPLOYEES ASSOCIATION (PSEA),
discussed the merits of the proposed legislation. He listed
the people that would be affected by the legislation:
· Police officers
· Fire fighters
· Peace officers
· Public safety officers
· Chief of police
· Correctional officers
· Probation officers
Mr. Fox pointed out that the PERS mission is to attract and
retain qualified people into public service employment. It
is not the PERS mission to provide a living wage for life.
Mr. Fox addressed the history of the program. Tier 1
consists of employees hired between 1961-1986 with COLA
payable to all benefit recipients. HB 252 passed in 1986 by
Senator Duncan changed that to Tier II. Tier II clarified
that COLA would be payable after the age 65 and that major
medical would be provided at age 60. HB 242 by
Representative Kott passed in 2001 created the Tier III
system. The Alaska COLA will be paid after the age 65,
major medical at age 60 and/or at normal retirement for all
others, except normal retirement plus five years for peace
officers. Mr. Fox continued, HB 91 changed that to an
Alaska COLA payable after the age 65 years or to peace
officers at normal retirement and major medical at age 60
years or at normal retirement for all others and peace
officers.
Mr. Fox addressed the increase of $1.2 million dollars to
the fiscal note of which approximately $600 thousand would
be taken from the general fund. The current employer
contribution is 8.42% with an increase of 0.18%. The
employer contribution is a percent of salary. In 1990, the
employer contribution was approximately 12%, in 1994, it
peaked at about 17% while, this year it is at 8.42%. The
proposed fiscal note would change that percentage to 8.60%.
All other employees contribute about 6.7% and peace officers
contribute 7.5%.
Mr. Fox stated that the justification for change rests in
the fact that current law undermines retirement for peace
officers by denying benefits requiring an extra five years
of work. That requirement inhibits recruitment, lowers
morale and inhibits retention.
Mr. Fox pointed out that the graph indicates turnover by the
percentage of Troopers per year class, who are still working
compared to those separated from service. The following
graph illustrates turnover by using the number of Troopers
by groups of year class. There are 237 Troopers out of 315
who have ten years or less of service. The following graph
indicates turnover using the number of correctional officers
by years of service.
Representative Anderson stated that the concern rests in
year #9 when up to 40% are leaving the force. Part of the
reason for that turnover is the lack of medical and
benefits. He added, it is difficult to recruit the number
of people needed when so many in the force are leaving. He
emphasized that the chart indicates that separation is due
to lack of guaranteed medical benefits and other concerns.
Mr. Fox commented that there is great potential for savings
through improved retention. There is a direct savings in
recruiting and retaining troopers. It costs $104,871
thousand dollars for each trooper trained and hired. He
added that the improved retention equals experience and that
makes for better decisions. Better decisions make for
better savings for the State. Peace officers are called
upon to make life and death decisions and that experienced
officers are more likely to make better decisions.
Mr. Fox mentioned the problems associated with peace
officers working past normal retirement:
· Increased health problems
· Increased risk of injury
· Low morale
He continued, the next graph indicates the limited
opportunity for peace officers to promote into
administrative positions. The graph compares the number of
patrol-level officers to the number of administrative-level
positions.
Mr. Fox listed the benefits of Alaska COLA. It is not the
intention of PERS to provide a living wage upon retirement.
The base benefit for a peace officer at normal retirement is
45% before deductions. Peace officers have to work after
normal retirement. He stressed that it is in the State's
best interest to keep the peace officers working here in
Alaska.
Mr. Fox summarized current law:
· Undermines the normal retirement for peace officers;
· Inhibits the PERS mission to recruit and retain
peace officers in public service.
Mr. Fox suggested that HB 91 could restore retirement and
improve retention.
Co-Chair Harris referenced the handout, which states that
current law requires peace officers to work five years past
normal retirement to receive medical benefits. He asked
which tier that related to. Mr. Fox replied that Tier I
would receive the benefits at 20 years employment. He
explained that if the person was vested with five years and
was hired prior to 1986, they would receive medical benefits
if they worked beyond those five years. They would receive
the retirement benefit when they qualified for it. Other
people have to be vested for 10 years and be age sixty or
have 25 years of service. The legislation would change the
25 years of service to 20 years of service.
Co-Chair Harris commented that a peace officer would only
have to work for 20 years to qualify rather than 25. Mr.
Fox reiterated that a peace officer would not receive
medical benefits unless they worked 25 years, whereas all
other State employees only have to work 20 years to receive
the benefit. Co-Chair Harris pointed out that no matter
what their age, after working 20 years, they would receive
automatic retirement.
Vice-Chair Meyer asked if there is concern that the peace
officer would stay for only 20 years, get their retirement
and then would leave the State to find a second retirement
job. He suggested they could leave the State faster than
they currently are.
Mr. Fox commented that when a person retires, they must make
a choice as to where they will work after their retirement.
He admitted that most peace officers do retire and then go
back to work and that the hope of the bill is that it would
provide incentive to keep them in the State.
Vice-Chair Meyer thought that the incentive could keep them
in Alaska for 20-years. After that, they would have full
retirement and they could go anywhere they wanted to move.
He stated that the bill accompanied with the fiscal note
were difficult at this time.
Vice Chair Meyer questioned where the idea of the bill
originated. The people who are responsible for recruitment
and retention are the mayors of Anchorage and Fairbanks and
the Governor of Alaska. He pointed out that the files do
not contain any letters of support from those people.
Representative Anderson explained that the statistics
indicate that most fish and wildlife officers, retired
fireman, and troopers have an affinity to stay in Alaska
when they retire. The proposed bill is a supplement to
their foundational interest. There is always the risk of
providing benefits for someone that leaves, however, he
pointed out that many in officer positions have remained in
the State.
Representative Anderson emphasized that at 10 years of
service, many peace officers are leaving the force. The
certainty rests that the State is loosing good men and women
to other agencies. The State needs to revisit recruitment
and benefit issues, which is the impetuous behind this bill.
Vice-Chair Meyer agreed that there are many people leaving
at the 10-year period. He reminded Representative Anderson
that the legislation would have a financial impact on local
cities and questioned why the Mayor of Anchorage had not
publicly supported the legislation.
Representative Anderson acknowledged that concern was
warranted. He requested that teleconference testimony be
taken to address some concerns. Representative Anderson
noted that the sponsors had spoken directly with the
department staff rather than specifically to the mayors.
MIKE COUTURIER, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE
POLICE DEPARTMENT, ANCHORAGE, voiced support of the proposed
legislation. He explained that the Municipality of
Anchorage opted to place its officers under the Peace
officers PERS retirement system in 1994. The change reduced
the disability, debt and retirement benefits for officers
hired after 1993. The action resulted in making it more
difficult to recruit and retain employees.
Officer Couturier offered some basic recruiting and training
facts for consideration. He noted that it takes over 100
applicants to obtain one hired recruit. It costs $5,000 to
st
get one recruit to the 1 day of the academy and $93,400 to
fully train and recruit one officer. Those costs do not
include the patrol car. The field officer training program
is 3.5 months long. He emphasized that it is very expensive
to recruit, hire and train one police officer. The
investment is huge and it is important to keep these
officers serving Alaska for as long as possible.
Officer Couturier observed that the Anchorage police are
currently loosing early and mid career officers to other
police agencies out of state. Officers are hiring on in
order to receive their training and after receiving that
credential, they are transferring out to the lower forty-
eight. He noted that the California PERS system offers high
benefits after twenty years of service regardless of the
employees age.
Mr. Couturier encouraged Committee members to support the
proposed legislation.
Representative Hawker questioned how many officers would be
affected in Anchorage if the legislation were to pass.
Officer Couturier responded that the Anchorage Police
Department presently has 318 officers, of which, 72% are in
PERS Tier II and Tier III, which means about 250 employees
would be affected.
Co-Chair Harris suggested that the bill be accompanied with
a "letter of support" from the current mayors of Anchorage,
Fairbanks and Wasilla, the largest communities in the State.
He asked what costs those municipalities would have to
absorb for the proposed fiscal note. Representative
Anderson responded that he would have that information
available for the next meeting.
DAN COLANG, (TESTIFIED VIA TELECONFERENCE), CORRECTIONAL
OFFICIER, DEPARTMENT OF CORRECTION, FAIRBANKS, spoke in
support of the legislation. He commented on his work as a
correctional officer and the pressures associated with it.
Law enforcement is stressful and to ask someone to work an
additional five years to receive their medical benefits is
not fair. Mr. Colang urged that the Committee pass the
legislation so that the peace officer workers can retain
their sanity and self worth.
MIKE DAVIDSON, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE
FIRE DEPARTMENT, ANCHORAGE, urged the Committee's support of
the legislation. He noted that the fire profession requires
long and intense hours and difficult decisions. He noted
that currently, he works 60-hour weeks due to not being able
to fill all the vacant positions. He reiterated that the
main reason for these long hours is the difficulty for the
Anchorage Fire Department to recruit successful applicants.
During the mid 1980's, the Municipality of Anchorage
provided a good pay structure, which was comparable to many
other states. Because of that benefit package, there was
not a shortage of personnel applying for these positions.
Mr. Davidson emphasized that passage of HB 91 would allow
fire fighters to better gain successful applicants.
Generally, these employees come from a group of people that
are already educated. The provisions in HB 91 would allow
Alaska to be more competitive in recruiting. He believed
that the ability to recruit new employees would offset the
costs for the fire department. HB 91 should provide better
leverage for more successful recruiting, which will allow
for filling job openings.
ADAM BENSON, (TESTIFIED VIA TELECONFERENCE), ALASKA STATE
TROOPER, KETCHIKAN, noted that the bill was extremely
important to all State Troopers and would help the State to
retain troopers. He noted that the troopers that he works
with are mostly young, well-educated professionals.
Troopers take great pride in the work that they do and take
their training responsibilities very seriously. Men and
women become troopers because they choose to. The initial
training programs are rigorous as well as are the annual
follow up training programs, in which there is constant
exposure to new and challenging situations.
Mr. Benson claimed that experience is a valuable asset to
the State and that it would be in the State's best interest
to retain these people. He explained that the challenges,
which make the work worthwhile, are not always beneficial to
his family and his future retirement. With the passage of
HB 91, there would be more incentive to stay in the force
for 20-years. However, without the bill, he and other
troopers will want and need to explore other options. Mr.
Benson stressed that HB 91 will act as an "insurance policy"
for the State of Alaska.
DR. GENE SANDERS, (TESTIFIED VIA TELECONFERENCE), CLINCIAL
DIRECTOR, POLICE STRESS INSTITUTE, urged support for HB 91.
He stated that the legislation is supported by numerous
studies done over the years. Dr. Sanders spoke to the work
and stress associated with police work and that few officers
actually make it to the retirement age. When they leave
prematurely, they think that the compensation is no longer
worth the risk. On the other hand, police respond well to
health and retirement programs that help them to do their
jobs. It is very common to see police officers spend
inordinate amount of time and energy in the face of
adversity when they believe that the work is feeding and
caring for them down the road. Reducing retirement to a
reasonable and achievable 20 years becomes and effective
approach to keeping highly trained officers on the job.
Dr. Sanders encouraged serious consideration of the facts
and a support vote for HB 91. He stressed that passage
would be a medically sound and a responsible decision.
GUY BELL, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, DIVISION
OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION,
ANCHORAGE, requested to testify on the bill.
TAPE HFC 03 - 35, Side B
Mr. Bell addressed the fiscal note. He noted that the note
shows a .18% increase in payroll costs resulting from the
legislation. A dollar amount is not indicated because the
cost of the change would be spread across the personal
services line of all state agencies, which would amount to a
spread of $1.2 million dollars. He offered to answer
questions of the Committee.
Representative Croft inquired if the State would require
that the municipalities participate in the program. Mr.
Bell replied that participation by the political
subdivisions is voluntary. Those political subdivisions
designate groups of employees that will participate in PERS.
Once they participate in PERS, the statutes set the
benefits.
Representative Croft asked if there were any major
municipalities that do not have their police officers
participate. Mr. Bell responded that the only one that does
not participate is the Municipality of Anchorage. Anchorage
has a police and fire retirement system that effectively has
been closed since the mid 1990's. Any employee hired after
that date is in the PERS system.
Representative Croft inquired if a major municipality could
choose not to participate in the legislation if passed. Mr.
Bell responded that the participants choice would be to
participate or to not participate in PERS; however, they
would need to offer another retirement plan to their
employees.
Representative Croft commented that it would be interesting
to hear the various municipalities decision regarding this.
He pointed out that the legislature would establish the
State standard.
Representative Hawker noted that the fiscal note indicates
that the increased PERS accrued liability would be
approximately $13.45 million dollars. He asked if that was
unfunded pass service costs or a prospective calculation.
Mr. Bell responded that was the unfunded past service cost.
The .18% would include that and would amortize it over a
period of 25 years. In addition, it would include the
future costs, costs of benefits, which will accrue in the
future as a result of the change.
Representative Hawker asked if .18% payroll would be
amortized as $13.45 million dollars over a 25-year period.
Mr. Bell replied that was correct.
Representative Hawker advised that an $85 thousand dollar a
year trooper, at .0018 benefit cost would amount to $153
dollars a year or $13 dollars a month. He was curious if
the participants would be willing to absorb any of those
costs.
Co-Chair Williams stated that HB 91 would be HELD in
Committee for further consideration.
CS FOR SENATE BILL NO. 20(FIN)
An Act relating to the Board of Marine Pilots and to
marine pilotage; extending the termination date of the
Board of Marine Pilots; and providing for an effective
date.
ZACH WARWICK, STAFF, SENATOR GENE THERRIAULT, stated that
under AS 08.03.010(10), the Board of Marine Pilots (BMP)
will terminate on June 30, 2003. A report released by the
Legislative Budget and Audit (LBA) Committee recommended
that the Legislature extend the board's termination date to
June 30, 2007, and that HB 32 would do that.
Mr. Warwick continued, the regulation and licensing of
qualified marine pilots benefits the public's safety and
welfare. The steady increase in the tourist passenger ships
in recent years has made BMP's role increasingly more
important. The board provides reasonable assurance that the
individuals licensed to pilot passenger and cargo ships in
Alaskan waters are qualified to do so.
CAPTAIN DALE COLLINS, PRESIDENT, SOUTHEAST ALASKA PILOT
ASSOCIATION, KETCHIKAN, spoke in favor of SB 20. He stated
that he had been a pilot in Southeast Alaska for 25 years.
He noted that his association has a responsibility to
provide pilot service to foreign flagships of 300 gross tons
or more in the Dixon entrance to Southeast Alaska. The
original pilots act was created in 1970 through the
legislature and has been working well ever since. He urged
passage of the bill.
Representative Foster referenced correspondence from House
Speaker Brian Porter and asked what had happened with the
exemption request for the private motor yachts. Captain
Collins responded that there is interest in providing for
those private motor yachts and that they are exempt up to
300 gross tons. He pointed out that concerns have been
raised regarding homeland security and that no language has
yet been added to address a sunset to the bill.
KATE TESAR, LOBBYIST, ALASKA YACHT SERVICES AND
PROVISIONING, JUNEAU, commented that she represents a small
local Juneau business, which works with yacht management
companies throughout the United States, booking large
pleasure craft coming to Alaska. She stated that they fully
support the Board of Marine Pilots and support the extension
of that board. Ms. Tesar addressed recommendation #4 made
by the LBA Committee, which calls for the State to implement
a waiver system for some large pleasure craft.
Ms. Tesar explained that some owners are considering other
destinations rather than Alaska because of a law that
mandates a marine pilot be aboard certain size yachts the
entire time they are in Alaska. In some cases, the cruise
time last a number of weeks. Many of the owners position
their boats in Alaska during the summer months and then fly
their guests and family back and forth. She noted the
change to the statute, which would allow vessels up to 200
feet to operate in the Alaskan waters without a pilot. She
advised that such a system has been operating in the State
of Washington for many years. She referred to an
application in member's files from the State of Washington.
(Copy on File).
Ms. Tesar indicated that the rewrites of the marine pilot
laws had been in response to the Exxon Valdez incident.
Following that, a rewrite was done in 1995. Prior to 1995,
all pleasure craft were exempt from marine piloting. In
1995, a decision was made to mandate pilots for foreign
plate vessels over 300 tons. She recalled, at that time,
there was a large private research vessel in Alaska raising
concerns regarding such activities. It was at that time
that the law was changed to mandate a marine pilot be on
board of larger vessels. She added that in 1999, there was
an extension of the board and that none of the issues
regarding marine pilotage had been addressed.
Ms. Tesar advised that the issue is an economic development
concern. These pleasure craft bring new money into shore
side communities. It is estimated that the yachts spend
about 30% over the cost of the trip in the port communities.
Because of the Gulf circumstances, this summer the United
States will be a destination of choice for many of boats.
Ms. Tesar referenced the letters of support in member's
files from the various communities and their mayors.
(Copies on File). She urged that capturing new revenue in
these communities be a major consideration.
Co-Chair Williams asked if there were any exempt yachts
being used. Ms. Tesar responded that all commercially
designated vessels are mandated to have pilots on board,
previously designated as pleasure craft only. She explained
that foreign-hulled pleasure craft up to 300 tons are exempt
and that all American vessels are already exempt from marine
pilotage. The only ones that must have pilots on board are
the foreign plate vessels over 300 tons.
Co-Chair Harris asked why the American flagged ships were
exempt from the pilotage requirement. Ms. Tesar did not
know for sure but speculated that it might have to do with
impeding commerce between states and nations. She suggested
that the Board of Marine Pilots answer that question. Co-
Chair Harris commented that his biggest concern regarding
the ships was one of "safety".
Representative Stoltze mentioned the Coast Guard waiver for
the Canadian vessels.
JEFF WHITE, MANAGER, SEADROME MARINE COMPLEX, GOLDBELT
CORPORATION, JUNEAU, testified in support of the proposed
change to the marine pilotage law concerning foreign flagged
yachts. He has observed that vessels become frustrated with
current regulations, and then leave for "friendlier ports".
This past year, 25% of Goldbelt's moorage business came from
yachts and transient vessels. Most travel from the East
Coast to visit Alaska, while others are on their maiden
voyage after leaving the boat builders in the Puget Sound
area. The limited availability of pilots is also
problematic for many vessels including yachts with the
every-changing schedules.
Mr. White suggested that the independent yacht visitors have
a comparably greater positive economic impact by spending
much time in Alaska, spreading their purchasing power over
numerous businesses and communities. Mr. White urged
consideration of the exemption to allow the market to reach
its potential in Alaska.
PETER CHRISTENSEN, MARINE PILOT COORDINATOR, BOARD OF MARINE
PILOTS, encouraged the passage of SB 20. He responded to
previous questions regarding the United States yachts,
indicating that the co-pilotage law code defines the
responsibilities for marine pilotage between the states and
the federal government. Federal government has the control
over the U.S. vessels & yachts and the State has the control
over the foreign flagged vessels.
Co-Chair Harris asked if a ship were over a certain length,
would they then require a pilot. Mr. Christensen suggested
that length could be better criterion than gross tonnage.
Representative Foster interjected that the tonnage had to be
over 300 tons to require a pilot.
Co-Chair Harris questioned why the length of the ship would
be a factor. Mr. Christensen responded that current statute
indicates gross tonnage, which is an old method of measuring
ships. It is a method that has many loopholes. He
acknowledged that length would be a better way to measure.
The Coast Guard establishes its regulations based on the
number of passengers on board. He concluded that if the
statute should change, it would be more helpful that it move
to something more specific such as the length measurement.
Co-Chair Harris asked if 100 feet would be a break-off
point. Mr. Christensen stated that the Board does not have
a position on that.
Co-Chair Harris asked if there were situations in which
pleasure craft could be allowed to operate in Alaska waters
without a pilot and if there were any safety devices
required to make it more amenable. Mr. Christensen
commented that there could be legal forms regarding the
captain's experience and/or that the ship could put up an
assurity bond. There are a variety of ways to mitigate
these issues.
Co-Chair Harris reiterated that his concerns are about the
safety and security of the waterways and the vessel while
maintaining their privacy.
Representative Stoltze interjected that sunsets are a good
way to handle those types of concern.
Co-Chair Williams noted that CS SB 20 (FIN) would be HELD in
Committee for further consideration.
HOUSE BILL NO. 67
An Act relating to construction of highways by the
Department of Transportation and Public Facilities.
REPRESENTATIVE JIM HOLM commented that the Alaska statute
requires that construction and maintenance contracts be
awarded to the private sector on the basis of competitive
bidding. However, statute also allows the State to fund
small projects or repairs in-house through a "force
account", meaning that the State uses its own forces to
accomplish the work.
To date, force account spending by Department of
Transportation & Public Facilities has been frequently used
to fund projects costing considerably more than $250,000
dollars. Such action takes dollars out of the private
sector and omits the checks and balance over-sight of the
competitive bidding process.
HB 67 was introduced to insure that State force accounts
continue to be allowed for smaller jobs while requiring that
projects over $250,000 dollars utilize private contractors
in the competitive bidding process. Private contractors not
only maintain an inventory of specialized equipment and
employ skilled managers, but they assume risk-costs, thus
providing the State with considerable savings.
Representative Hawker agreed that the bill makes sense,
however, the fiscal note indicates that assuming that the
forced account projects remain constant over the next six
years, the lost savings would total $25.6 million dollars.
Representative Holm responded that the analysis indicates
that potential loss. He added that he had not seen any back
up material to justify the number and that he believed it
was a "fear" tactic. He claimed that the fiscal note would
be zero and that putting a project out to bid would not cost
more.
Co-Chair Harris pointed out that the Department does not
support the bill. He acknowledged that the concept was
good, however, certain communities do have a difficult time
retaining Department of Transportation & Public Facilities
employees. If those employees were laid off in the summer,
there would be a tremendous amount of turn over. He asked
if there was a way to address this concern without affecting
the rural communities. Co-Chair Harris advised that he did
not support the bill; however, he would be willing to work
with Representative Holm.
MARK O'BRIEN, CHIEF CONTRACT OFFICIER, COMMISSIONER'S
OFFICE, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES,
stated that the effect of HB 67 would prohibit the
Department and any agency that transfers projects from using
its own employees to perform the work on projects that
exceed $250 thousand dollars. There are two categories of
projects that fall under the force account:
· Community roads
· State maintenance forces
Using capital funds, the Department is able to develop
programs within the three regions to address some of the
$200 million dollar backlog in the deferred maintenance
program.
Mr. O'Brien noted that there are four key benefits of the
program:
· Ability to transfers the cost of the winter
maintenance employees to federal aid money which
allows the Department to preserve general fund money
for severe wintertime events;
· Retain year round employees;
· Use the federal aid funds to fund a portion of the
equipment costs which then helps to defer the cost
of repair for maintenance activities; and
· Extend and utilize the money further.
TAPE HFC 03 - 36, Side A
Mr. O'Brien concluded his discussion regarding the four key
benefits.
Representative Stoltze asked if there was a definition of
"construction projects" for major capital and maintenance.
Co-Chair Williams stated that HB 67 would be HELD in
Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:27 P.M.
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