Legislature(2011 - 2012)HOUSE FINANCE 519
01/31/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Budget Overview: Department of Transportation and Public Facilities | |
| Budget Overview: Department of Administration | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
January 31, 2012
1:38 p.m.
1:38:41 PM
CALL TO ORDER
Co-Chair Thomas called the House Finance Committee meeting
to order at 1:38 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative David Guttenberg
ALSO PRESENT
Marc Luiken, Commissioner, Department of Transportation and
Public Facilities (DOT/PF); Mary Siroky, Director, Division
of Administrative Services, Department of Transportation
and Public Facilities; Becky Hultberg, Commissioner,
Department of Administration (DOA).
SUMMARY
BUDGET OVERVIEWS:
Department of Transportation and Public Facilities
Department of Administration
^BUDGET OVERVIEW: DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES
1:39:36 PM
MARC LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES (DOT/PF), introduced department staff. He
provided a PowerPoint presentation titled "Alaska
Department of Transportation and Public Facilities
Overview." The mission of the department had been developed
over the past year and was based on statute, which was to
"get Alaska moving through service and infrastructure." The
objective of the mission statement was met by providing for
the safe and efficient movement of people and goods,
providing access to state services, and opening
opportunities for exploration and development of Alaska's
resources (slide 2).
Co-Chair Thomas shared that there had been some discussion
regarding who had authority to change the mission
statement. Further discussions regarding mission statement
changes would occur at a later time.
Commissioner Luiken pointed to the statutory requirements
related to the department's mission on slide 3.
Commissioner Luiken highlighted slide 4, "Vision: Expand
Alaska's Transportation System."
-We will become the premier state organization known
for transparency, accountability, innovation, superior
service and employee retention.
-We will create more efficiencies in our current
system and develop new corporate and public partners.
-We will achieve service based management of our state
owned transportation assets and facilities.
-We will expand the reach of our surface
transportation system.
-We will provide access to Alaska's undeveloped
resources.
Representative Edgmon pointed to the uncertainty attached
to the department's funding sources. He opined that it
would be good for the department to state that it would do
the best it could with the funding services that were
available. Commissioner Luiken replied that he would
discuss the point later in the presentation. The assumption
had been included in the vision of the department.
1:45:31 PM
Representative Joule remarked that there were some areas of
the state that sought some level of connectivity with each
other. He wondered how that desire fit into DOT/PF's
vision. Commissioner Luiken replied that the second to the
last bullet on slide 4 related to the question - the
department will expand the reach of our surface
transportation system.
Representative Gara was surprised that "improving safety"
was not included in the vision statement of the department.
He also expressed concerned that the department would bring
forward funding requests for expansion on an annual basis.
He felt that bringing expansion requests every year,
increased maintenance and operation costs. Commissioner
Luiken answered that ultimately the vision was created for
the internal utilization of DOT/PF. The budget parameters
may or may not allow for expansion. The general goal was to
expand the highway system at 15 miles per year.
1:50:12 PM
Commissioner Luiken relayed that DOT/PF drew its
performance measures from the department's core services.
He stressed that, like the mission vision values statement,
DOT/PF had begun to identify its performance measures for
the organization. He relayed that many of the DOT/PF
employees attended training, to help develop measures that
are more meaningful and results-oriented. An additional
goal was to work with legislators, agencies, and customers
with integrity, excellence, and respect.
Commissioner Luiken moved on to slide 5, "Airports and
Maintenance Stations." He explained that the pink dots
represented the state-owned airports. He noted that there
were a couple in Dead Horse in Barrow that were not marked
on the map. There were 252 rural airports and two
international airports that DOT/PF oversaw. He emphasized
that the two international airports in Alaska made up the
largest self-sustaining enterprise fund that was managed by
the State. Ted Stevens International Airport in Anchorage
was the second largest cargo airport in the United States;
and it was the fifth largest cargo airport in the world.
Both international airports in Alaska were huge economic
drivers for their local communities and for Alaska.
1:53:23 PM
Representative Wilson asked about DOT/PF plan if federal
airport funding was reduced. Commissioner Luiken replied
that the maintenance and operation of the airports was
funded by the State. He stated that the federal airport
improvement program funding was intended for capital
projects. If the federal funding was reduced, it would
merely slow the program. He stressed DOT/PF would continue
to work on the quality of Alaska's rural airports with or
without funding.
Co-Chair Stoltze wondered how the Anchorage and Fairbanks
international airports subsidized each other. Commissioner
Luiken did not know.bs wondered if the figure was over $1
million. Commissioner Luiken replied that the figure was
more than likely over $1 million. He furthered that DOT/PF
had worked hard to create an international airport system,
and market it as such. He stressed that the Anchorage and
Fairbanks airports needed a symbiotic relationship. Co-
Chair Stoltze asked for a firm number to be provided at a
later time.
Representative Joule wondered how the price of fuel
factored into maintaining Alaska's status as a prominent
cargo airport. Commissioner Luiken replied that "the price
of fuel was the price of fuel." He explained that the
Alaska Fuel Consortium that worked to find the best price
for fuel, and bring that fuel to the Ted Stevens Airport.
Representative Joule stressed that the international
airports were critical to Alaska's economy, and wondered if
the high price of fuel would have a negative impact on
Alaska's economy. Commissioner Luiken responded that what
sells Alaska's international airport system was its
strategic location. Anchorage was roughly half way between
Asia and North American markets. He remarked that potential
threats were the other airports along the west coast of the
United States. For instance, Portland International Airport
had offered a discount for cargo aircraft to use the
airport.
1:59:23 PM
Representative Doogan discussed a snow storm that occurred
in Anchorage in early December. He was unhappy about how
DOT/PF had handled the snow storm. He had written two
letters to the department and had received dissatisfactory
answers. He discussed the importance of the safety for his
constituents to travel throughout the community. He
believed the snow plows had not been sent out early enough.
Commissioner Luiken replied that the maintenance operation
employees had worked that entire night and the plows had
been deployed early. There had been some unusual snow
events in Alaska during the winter and it had created
significant challenges for DOT/PF. When DOT/PF anticipated
a significant snow event, other assets were moved from
throughout the state to allow the maintenance crews to
operate 24/7.
2:04:10 PM
Representative Doogan appreciated the response, but felt
that DOT/PF did not respond in an appropriate manner at the
time of the snowstorm. He requested that the department
talk to him if it needed more money to handle snow removal.
He wanted to avoid the issue from happening in the future.
Vice-chair Fairclough thanked the department for its
responsiveness, and wondered whether Flint Hills was
currently providing the majority of aviation fuel to the
state's airports. Commissioner Luiken responded in the
negative. Flint Hills provided some fuel to the airports,
but Flint Hills had elected to not put up a third tower,
which had provided a large amount of fuel.
Vice-chair Fairclough wondered whether the issue had
anything to do with the premium required on North Slope
crude oil. Commissioner Luiken responded that he did not
know.
Vice-chair Fairclough wondered if there was a disadvantage
to a local business by charging them extra money to take
Alaska's crude oil through a pipeline in its community. She
felt that decision may have decreased jobs in that
particular market, and moved those jobs overseas. She
expressed that she would like more discussions about that
problem.
Commissioner Luiken expressed that Flint Hills had been
using the majority of oil to bring the potential oil up to
the appropriate temperature to be harvested using the
fracking method. Therefore, it had increased their costs.
Vice-chair Fairclough wanted to understand why local
businesses would be charged more than outside companies.
Co-Chair Thomas remarked that the State must purchase oil
at market value.
Vice-chair Fairclough understood and recognized that the
issue was battled in the media. She did not understand why
the product was sold at a higher cost in Fairbanks, but at
a lower cost overseas.
Co-Chair Stoltze had visited the DOT/PF maintenance
facility, and remarked the crew had been working hard and
were excited to get a new grater machine. He remembered
volunteering on Christmas day in a snow storm, and the
department had faced a significant amount of challenges
that they could not predict. He respected and appreciated
the work done by the snow removal crews that were working
with inadequate equipment. He discussed the importance of
providing the department with funding for needed equipment.
2:13:29 PM
Co-Chair Thomas commented that Haines and Cordova had been
very dependent on DOT/PF during the current winter storm,
because the local grater broke down. He told a story about
driving in Juneau during a snowstorm on city streets.
Representative Neuman pointed to fuel issues related to the
Ted Stevens International Airport. He discussed the lack of
fuel, and declared that 25 flights per week flew over the
airport because the it could not purchase fuel at a
reasonable price. Therefore, it had a huge impact on
Alaska's economy. He believed that Vice-chair Fairclough
had discussed a crucial issue, and felt marketing and
transportation of goods was critical to Alaska's economy.
Without appropriate, low fuel costs, the airport may not be
considered a point of entry, and could potentially give
Alaska a significant disadvantage. He wondered what the
state could do to make sure it communicated to the airlines
that the fuel would be available.
2:18:19 PM
Commissioner Luiken replied that there was ample fuel in
Anchorage and that no one had been turned away due to lack
of fuel. The only reason a carrier may overfly the Ted
Stevens International Airport was because of the type of
cargo they were carrying. Meaning, if a plane is carrying a
small amount of cargo, it might not need to refuel before
venturing to its destination. He shared that the storage
capacity would be increased to provide an additional 20
million gallons of fuel.
Representative Neuman stated that he was restating
information that he heard from Jim Hence through Alaska
Industrial Development and Export Authority. He agreed to
provide that information to the committee in writing. He
wondered if there was a contingency plan, should Flint
Hills go offline. Commissioner Luiken replied that the
Anchorage Fueling and Service Company (AFSC) found
suppliers who were willing to supply 100 percent of the
fuel, if there was a need to purchase it on the open
market. He remarked that Flint Hills provided 30 percent of
the total amount of fuel to the airports.
2:22:07 PM
Representative Wilson wondered if Flint Hills was at a
disadvantage, because was responsible for oil-related tasks
other than selling fuel. She relayed that oil was becoming
more difficult to obtain, and needed to be heated more
often, so she felt that Flint Hills was at a disadvantage.
She wondered if it was DOT/PF or the Department of
Revenue's (DOR) responsibility to determine if Flint Hills
was at an economic disadvantage. Commissioner Luiken
responded that DOT/PF was not in the fuel business. The
department supplied lease space for AFSC storage tanks.
Commissioner Luiken continued to discuss slide 5. He stated
that Alaska had 5,714.6 state owned center lane mile; and
18,098 maintenance lane miles. He explained that a
maintenance lane was 12 feet wide. He stressed that the
maintenance was not only for the highway, but also for the
shoulders and enhancements that were part of the highway
system. He remarked that there were 80 maintenance stations
in the state, and were identified with the green dots on
the displayed map.
Commissioner Luiken displayed slide 6, "FY 13 Operating
Budget." He stated that the graph on the left hand side of
the slide, displayed the DOT/PF budget related to the
entire State's general fund budget. The budget for DOT/PF
is FY 13 was approximately $347,493.9 million, which was
about 4 percent of the total general fund (GF). He looked
at the chart on the right side of the slide, and stated
that DOT/PF had an additional $264,524.4 million in other
funds, and $3,986.6 million in federal funds. The total
operating budget for DOT/PF was $616,004.9 million.
Commissioner Luiken looked at slide 7, "FY 13 Operating
Budget Funding Sources." He highlighted the sources that
contributed to the budget labeled, "other funds." Other
funds included Uniform Commercial Carrier Registration
Fees, $318.4 thousand; Whittier Tunnel Toll, $1,753.4
million; Vehicle Rental Tax (Designated General Funds
"DGF"), $4,115.6 million; Statutory Designated Program
Receipts, $604.3 thousand; CIP Receipts, $146,349.7
million; International Airport Revenue Fund, $77,984.5
million; Highway Equipment Working Capital Fund, $32,772.0
million; I/A Receipts, $4,742. 1 million; Marine Highway
System Fund (DGF); GF/Program Receipts (DGF), $9,002.5
million.
2:28:52 PM
Co-Chair Stoltze queried long-term plans to turn around
costs into revenues from leasing and rentals. Commissioner
Luiken working to lease facilities and bring in tenants. He
explained that DOT/PF was given the authority to spend
airline's money.
Co-Chair Stoltze pointed out that, in years prior, airline
revenues had been higher than current revenues.
Commissioner Luiken spoke to service based highway and
aviation systems, which were managed by private contractors
that are coming due. Those contractors were required to be
insured to operate and maintain the airports and equipment.
He stated that there was work with risk management to
determine a policy that would cover the contractors,
however, it would make for higher costs. He relayed that
the cost of maintenance for the Whittier Tunnel grew higher
every year.
2:32:08 PM
Representative Gara looked at slide 9, "FY 13 Operating
Budget Changes." He pointed out the $480,000 decrease in
one-time items. He wondered if it was a decrease from the
last year's one-time items.
MARY SIROKY, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES,
explained that they were FY 12 one-time items. None of the
increases were identified as one-time items. She clarified
that there were no items that were identified as increases
were considered one-time items for the current year.
Representative Gara wondered if there was a one-time item
category anywhere in the proposed operating budget for FY
13. Ms. Siroky replied that there were no one-time items in
the FY 13 Operating Budget.
Representative Doogan queried the definition of "MSCVE."
Commissioner Luiken replied that MSCVE stood for
Measurement and Standards Commercial Vehicle Enforcement.
2:33:51 PM
Commissioner Luiken looked at slide 10, "FY 13 Capital
Budget." He noted that 68 percent of the capital budget
came from federal receipts: $702,943. million.
Co-Chair Thomas wondered if the federal receipts were "in-
hand" or "expected." Commissioner Luiken replied that the
federal receipts were what was expected for FY 13.
Co-Chair Stoltze wondered if the federal receipts were
still operating under a continuing resolution Commissioner
Luiken affirmed, and furthered that it would remain under
the current resolution until Congress passes a new one.
Commissioner Luiken highlighted expected general fund
revenues: $27 million for deferred maintenance; $31 million
for safety improvements; $8.1 million for the Roads to
Resources program; and $22.1 million for the Municipal
Harbor Grant match.
2:35:51 PM
Representative Edgmon acknowledged that there was no way of
knowing when the Federal Highway Act would change, but
questioned what at range the state should expect that
change. Commissioner Luiken responded that it would be
based on the federal government but could be as much as 30
percent decrease. Roughly one-third of the budget was from
the federal receipts.
Representative Edgmon declared that it would have a
significant impact to the state if that fund source was
shifted, decreased, or disappeared.
Co-Chair Thomas noted that a specialist would come to
address the legislature regarding the potential loss of
federal funds.
Co-Chair Stoltze commented that there had been some
adjustments, because of the stall of the highway bill at
the federal level. He remarked that Alaska was lucky,
because it did not have as many highways as other state,
but it was still facing a potential impact of loss of
federal dollars.
Co-Chair Thomas noted that a primary concern of committee
members was that the supplemental budget could be "huge"
the following year, because of the expectation of federal
funds.
2:41:03 PM
Commissioner Luiken shared the concerns related to the
potential loss of federal funds. He moved on to slide 11,
which showed projects that had been awarded in 2011 and
tentative projects for 2012. He hoped that the map was able
to demonstrate that the projects had been evenly
distributed across the state. He remarked that there were
over $1 billion in projects.
Commissioner Luiken looked at slide 12, "Roads to
Resources." The slide highlighted the roads to resources
program and proposed amounts for the FY 13 budget. He
pointed out the four projects. He emphasized that there was
a valuable roads to resource project in Southeast Alaska:
the Klondike Highway. The mines in Yukon used the Klondike
Highway to bring ore to the Ore Terminal in Skagway. It was
a valuable benefit, because it was defined as an industrial
use highway in statute. Therefore, the State could collect
a toll from the heavier than normal ore trucks. That
revenue was used to maintain and sustain the highway. He
pointed out that the mining industry in the Yukon was very
significant, so the Klondike highway proved valuable. He
hoped to expand the Klondike Highway's capability, because
the mining industry was looking to expand the amount of ore
that was carried on the highway.
Representative Joule asked whether the community Anaktuvuk
Pass community had changed its opposition to the proposed
project. Commissioner Luiken responded that he had not
heard any opposition from that area.
Representative Doogan asked for a listing of the total
costs for each of the projects listed on slide 12. He also
requested information regarding what had been spent so far
and what the final cost would be for the projects.
2:45:52 PM
Vice-chair Fairclough wondered if there was analysis on
road investments, related to the operating costs for some
of the small communities in Alaska. She stated that there
were some communities in Southeast that could be connected
by road, but there was opposition from the local
communities. She expressed concern regarding prioritizing
investments relating to maintenance of two airports and
connecting educational facilities. Commissioner Luiken
answered that the department was currently looking at the
issue.
Vice-chair Fairclough was not advocating for the road
connections if communities were opposed; she was just
trying to understand the potential savings.
Commissioner Luiken directed attention to slide 14 related
to highways and aviation. He focused on completed capital
projects including the Akiak airport (upper left); that
runway at Ted Stevens International Airport had been
brought up to a class 6 code in order to increase the use;
delineators were installed along the Dalton Highway to
improve for commercial truck use; and the Tongass Avenue in
Ketchikan had been greatly improved. He stated that the
missions and standards worked to concentrate around
population centers. Had looked at fuel dispensing devices
in the state, and remarked that there had been some
significant errors found and places had been receiving up
to 10 percent less or 4 percent more than what they had
paid for. The department worked to ensure that fair trade
was occurring.
2:52:48 PM
Commissioner Luiken addressed the marine highway system on
slide 15. The Malaspina ferry currently was currently
undergoing significant repairs, and the Matanuska needed
similar attention. He remarked that those two ships were
good representation of the deterioration of the overall
fleet.
Co-Chair Thomas commented that "hopefully the wheel would
not be reinvented with new ferries." Commissioner Luiken
replied that the technology had significantly increased for
planes, and technology for marine ferries was continuous,
and complicated. He remarked that DOT/PF would work to use
the best technological design.
Co-Chair Thomas stressed that it was not necessary to
change something that worked.
Vice-chair Fairclough echoed the concern. She stressed
appropriate warrantees on any new projects were essential.
2:57:09 PM
Commissioner Luiken discussed challenges for the department
on slide 16. He remarked that operating under the federal
continuing resolution kept the funding levels at a standard
level, it was difficult to program projects, because the
funding was provided at unknown times. He stressed that
there was no guarantee of the federal funding through the
end of fiscal year. He stated that the maintenance and
operating costs of old ships in the AMHS was expensive, and
noted that there were several interesting challenges
related to maintenance of the boats in the AMHS. He stated
that the photo on the top left corner of the slide,
displayed the snow that was piled in Valdez. The photo in
the top right corner displayed an avalanche that flowed
from Mt. Roberts onto Thane Road. The bottom left photo was
taken in Kodiak and the bottom right photo was of a road in
Petersburg.
Commissioner Luiken pointed to slide 17, "Strategic Use of
GF Capital Investment."
-On complicated projects use general fund to avoid
difficult and time consuming federal processes.
-Use federal funds on easier projects like pavement
overlays.
Commissioner Luiken displayed slide 18, "Project
Prioritization."
Safety
Asset Management System
-Pavement, bridges, airports, ferries, transit,
maintenance
2030 Long Range Transportation Plan
-Regional Transportation Plans
Aviation Improvement Program (AIP)
State Transportation Improvement Program (STIP)
Representative Gara did not believe that there were any
signs recommending that people pull over if there were cars
behind, and no pullout signs on the road. He understood
that the signs would not solve the entire problem, but
would certainly help. He concluded that lanes needed to be
added to the entire highway system. Commissioner Luiken
responded in the affirmative and would provide detail on
projects that were coming up in future years related to
safety corridors.
Representative Gara believed the projects could fit in the
budget.
3:04:43 PM
AT EASE
3:12:42 PM
RECONVENED
^BUDGET OVERVIEW: DEPARTMENT OF ADMINISTRATION
3:13:04 PM
BECKY HULTBERG, COMMISSIONER, DEPARTMENT OF ADMINISTRATION
(DOA), introduced staff from the department. She discussed
the diversity of the department. She presented a PowerPoint
titled "Alaska Department of Administration Department
Overview" and highlighted the department's strategic plan
on slide 2.
Mission: The mission of the Department of
Administration is to provide consistent and efficient
support services for state agencies.
Vision: As employees of the Department of
Administration, we will provide innovative, cost-
effective and responsive service.
Department Goals.
-Service Excellence: Provide excellent program
delivery through clear communication and respectful
and responsive actions.
-Spending Growth Reduction: Reduce the rate of
spending growth to sustainable levels.
-Effective and Efficient Delivery of Services:
Implement strategies to achieve operational
efficiencies.
-Employee Development and Support: Encourage employee
growth and development by providing leadership,
training and resources in an atmosphere that fosters
mutual trust and respect.
Core Values.
-Integrity: We will be honest, transparent, and
ethical.
-Service: We will provide excellent service.
-Accountability: We will take responsibility for and
ownership of the services we provide.
-Balance: We will honor our commitments to our work
and personal lives.
She pointed to an organizational chart on slide 3. She
discussed the divisions and commissions under the
department.
3:16:19 PM
Co-Chair Stoltze wondered about the Anchorage motor vehicle
tax increase. Commissioner Hultberg would follow up on the
answer at a later date.
Co-Chair Stoltze wondered whether there had been dialogue
from the Division of Motor Vehicles.
Commissioner Hultberg continued on with the presentation
related to divisions and commissions on slide 4.
Direct Services
-Division of Motor Vehicles
-Public Defender Agency
-Office of Public Advocacy
Independent Commissions
-Alaska Oil and Gas Conservation Commission
-Alaska Public Offices Commission
-Violent Crime Compensation Commission
-Alaska Public Broadcasting Commission
-Office of Administrative Hearings
Business Operations
-Division of Personnel & Labor Relations
-Division of Administrative Services
-Division of General Services
-Division of Risk Management
-Division of Finance
-Enterprise Technology Services
-Division of Retirement and Benefits
Representative Gara asked about the Office of Public
Advocacy. He noted that part of the agency helped to defend
the rights of children with inadequate parents, and felt
that the cases were well beyond what the division could
handle. He asked the commissioner to look at the children
advocacy to determine whether caseloads were too large.
Commissioner Hultberg agreed with Representative Gara. She
explained that growing caseload was a problem. The
department could be open to conversations related to
relieving the case load, but added that she had heard the
same feedback that Representative Gara had mentions.
Representative Gara understood that the department could
not control the caseload. He wanted the department to
examine it and help reduce it.
Co-Chair Stoltze commended the department for hiring Rick
Richard Allen, Director, Office of Public Advocacy, for his
work regarding the easing of case loads.
3:21:12 PM
Commissioner Hultberg expressed confidence in the
leadership of the divisions.
Commissioner Hultberg discussed service across the state on
slides 5. She moved on to slides 6 and 7, and discussed
major accomplishments.
-AKSAS/AKPAY replacement (IRIS project): obtained
funding and PCNs necessary to commence and complete
project; project now underway.
-Progress on unfunded liability: worked with the ARMB
to identify funding approaches to address unfunded
liability.
-AlaskaCare wellness initiative: began initiative to
add wellness and disease management features to health
plans.
-DOA spending growth: implementing plan to reduce
long-term rate of spending growth within DOA.
-ETS customer service: worked to improve relationships
with agency customers and reprioritize work based on
department needs.
-Public Defender Agency conflict procedures: developed
and implemented new policies and procedures governing
conflicts of interest.
-DMV license renewal by mail: qualified customers can
complete a driver's license or identification renewal
application online, mail it to DMV, and receive a card
through the mail with the updated expiration date.
-Office of Public Advocacy contractor costs:
instituted significant internal changes to level out
variable contractor costs.
-Labor agreements: reached voluntary agreement with
five bargaining units.
Commissioner Hultberg directed attention to the priorities
of the department (slides 8 through 9).
-Health care cost containment: develop and implement a
comprehensive health management plan for AlaskaCare
active and retiree members.
3:27:31 PM
Co-Chair Stoltze discussed health care costs. He remarked
that the legislature had seen many different intiatives
related to the relieving of health care costs. He requested
the department's guidance when determining the out year and
five-year cost projections. Commissioner Hultberg
emphasized the importance of looking at retiree health
plans in a more holistic way.
Commissioner Hultberg continued on slide 8:
-DOA rates: evaluate DOA rate-setting process,
restructure rates where necessary and align with
budget process.
-Unfunded liability: continue working with the
Legislature, the ARM Board and other stakeholders to
manage the state's obligations.
-Space utilization and planning: assist the state in
managing its $50 million.
Co-Chair Stoltze discussed the unfunded liability. The
legislators wanted the best information, DOA had to make a
lot of unpopular decisions. He requested that the
department should not be timid when addressing the unfunded
liabilities. Commissioner Hultberg replied that the
department was happy to meet with the legislators as much
as was requested.
3:31:45 PM
Co-Chair Stoltze remarked once it was in the fund, it was
gone, and could already be mislabeled as savings.
Commissioner Hultberg reiterated the department's desire to
participate in discussions with the legislators related to
any issue, especially the unfunded liability.
Commissioner Hultberg continued on slide 9, "Priorities."
-Expansion of CASA volunteer program: to provide
improved advocacy for Alaska's children in need of
aid.
-DMV database redesign: moving DMV off the mainframe.
-IRIS (Integrated Resource Information System)
project: successfully implement (on time/on budget)
administrative systems replacement project
(replacement of payroll and accounting systems,
implementation of new HR and procurement system.
-Labor relations: successfully conclude negotiations
with three bargaining units.
-ETS: continue to improve customer service.
-ALMR: conclude the acquisition of
ALMR equipment from Department of Defense and place
ALMR on a sound fiscal foundation.
3:33:35 PM
Representative Doogan stated that was on the ALMR
subcommittee and was interested in the results.
Co-Chair Stoltze believed it would be a disservice to not
point out "red-flags" on some of the costs related to ALMR.
Commissioner Hultberg was happy to elaborate or could save
the discussion for the subcommittee. She explained that
ALMR supported the day to day communication needs of the
state troopers, the DOT personnel, other State entities,
and many local governments. The challenge was that the ALMR
system was divided between operation cost and actual
maintenance of the equipment. There was a complicated cost
share between the State and federal government.
Vice-chair Fairclough wondered if the federal government
required to the state to share the costs with local
communities. Commissioner Hultberg replied that because of
federal law, the department could not choose to just bill
the federal government if it was not willing to treat it as
equals like other users.
Vice-chair Fairclough would follow up with the subcommittee
related to ALMR.
3:37:12 PM
Representative Doogan noted that it was not just that the
Department of Defense did not want to pay the bills anymore
, wanted to pay less or none at all. The funding source for
the particular program was being "squeezed at both ends."
Commissioner Hultberg agreed. She noted that the department
was in a position that it did not want to be in. The
department had been working very constructively with
various government entities, in order to solve the problem.
Representative Wilson people were concerned about how the
ALMR system would be maintained and paid for. She pointed
out that communities in Interior Alaska were strained by
the cost of maintaining the system. Commissioner Hultberg
replied that some communities had no other system. She felt
optimistic that the issue would be resolved.
Co-Chair Thomas noted that discussions had been ongoing for
over five years.
Commissioner Hultberg pointed to DOA budget trends on slide
10. The department was happy with its rate of growth, and
remarked that DOA's long-term goal was to reduce the rate
of budget growth to between 4 and 5 percent a year by
increasing efficiency. Slide 11 showed the total dollars
spent related to the yearly management plans and FY 13
budget. there was a very small amount of general fund in
its budget. She remarked that the average annual growth was
5.6 percent. She discussed health care on slide 12. Other
states' costs were similar to those of Alaska. She noted
that costs were on pace to double every decade. The chart
did not include the federal portion of Medicaid.
3:42:41 PM
Vice-chair Fairclough wondered whether there had been
dialogue with the federal government regarding a change to
the age limit for those entering Medicaid. Commissioner
Hultberg deferred the question to the Department of Health
and Social Services.
Commissioner Hultberg pointed to big-picture items that
touched DOA. She moved to slide 13 related to the unfunded
liability. The cost was $141 billion in benefits payments
over the next 70 years. The cost would be approximately $3
billion per year.
Commissioner Hultberg moved to slide 14 and discussed FY 13
budget increments and decrements.
Health Plans Administration
-Third Party Administrator contract increases: $440.5
(Group Health and Life Benefits Fund/Other)
DMV
-Costs for server hosting: $74.5 (GF/Program receipts)
-Establish state operated office in Kotzebue: $87.5
(GF/Program receipts) plus one PFT position
General Services
-Central Mail postage increase: $80.0 (Other)
-Lease costs: $2,500.0 (Other)
-Facilities operation and maintenance costs: $750.0
(Other)
-Facilities administration: $80.0 (Other)
Office of Public Advocacy
-John R. Justice Program: $150.0 (federal)
Finance
-IRIS position authority: $1,500.0 (CIP receipts)
-Databasics decrement: ($112.5) (GF/Program receipts)
APOC
- One time personal services and travel increase:
$68.1 (UGF)
AOGCC
- Increased travel for regulatory oversight: $36.3
(AOGCC receipts/DGF)
Co-Chair Thomas felt that every public office at the state
and local level were required to maintain their own data
entry programs. He wondered why DOA did not terminate a
position, if the data entry work was conducted elsewhere.
3:48:07 PM
Commissioner Hultberg agreed to look into the issue.
Commissioner Hultberg concluded with slide 14 related to FY
13 capital requests.
-Nome State Office Building and Courthouse: $10,000.0
-Repair State Office Building Parking Garage, Phase 1
of 3: $2,500.0
-Alaska Geologic Materials Center Replacement
Facility: $4,000.0
-Douglas Island Building Renovation, Phase 1 of 3:
$9,200.0
-ETS bandwidth monitoring: $800.0
-ETS bandwidth improvement for rural sites: $1,500.0
-DMV driver knowledge testing system: $550.0
-Statewide deferred maintenance, renewal, repair and
equipment Projects: $7,250.0 UGF and $3,000.0 PBF
-Division of Retirement and Benefits capital projects:
$1,013.0
Representative Doogan asked about the Nome State Office
Building capital request. He wondered whether the project
had been included in the FY 12 budget. Commissioner
Hultberg agreed to provide that information at a later
date.
Representative Gara asked about the 10-year average annual
increase, and felt that it was the largest increase that
been related to lease payments. Commissioner Hultberg
responded that the lease component was under general
services at the top of slide 10. She explained that
maintenance had driven the growth rate.
ADJOURNMENT
3:52:23 PM
The meeting was adjourned at 3:52 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOA HFIN Budget Overview FY13-013112pdf.pdf |
HFIN 1/31/2012 1:30:00 PM |
|
| DOT HFIN-Budget OverviewFY13 01 30 12.pdf |
HFIN 1/31/2012 1:30:00 PM |
|
| HFin -DOT-Committee Response 01 31 12 meeting questions.pdf |
HFIN 1/31/2012 1:30:00 PM |
|
| HFin -DOT-Committee Response 01 31 12 meeting questions.pdf |
HFIN 1/31/2012 1:30:00 PM |