Legislature(1999 - 2000)
01/11/2000 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT (S): Overviews: Review Department Accomplishments
Office of Management and Budget
Department of Administration
Community and Economic Development
The following overview was taken in log note format. Tapes and
handouts will be on file with the House Finance Committee through the
21st Legislative Session, contact 465-2156. After the 21st Legislative
Session they will be available through the Legislative Library at 465-
3808.
Time Meeting Convened: 1:45 p.m.
Tape(s): HFC 00 -, Side 1
HFC 00 -, Side 2
PRESENT:
X
Representative G. Davis
X
Co-Chair Therriault
X
Representative Foster
X
Co-Chair Mulder
X
Representative Grussendorf
X
Representative Austerman
Absent
Representative Moses
X
Representative Bunde
X
Representative Phillips
X
Representative J. Davies
X
Representative Williams
ALSO PRESENT: Representative Jerry Sanders; Annalee McConnell,
Director, Office of Management and Budget, Office of the Governor;
Jeff Bush, Deputy Commissioner, Department of Community and Economic
Development; Tom Lawson, Director, Administrative Services,
Department of Community and Economic Development; Robert Poe,
Commissioner, Department of Administration; Alison Elgee, Deputy
Commissioner, Department of Administration; Deborah B. Sedwick,
Commissioner, Department of Community and Economic Development; Dan
Spencer, Director, Division of Administrative Services, Department
of Administration.
LOG
SPEAKER
DISCUSSION
TAPE HFC 00 -
SIDE 1
000
Co-Chair Mulder
Convened the House Finance Committee
meeting at 1:45 p.m.
153
Co-Chair Mulder
Discussed the upcoming budget process. He
noted that the Committee would attempt to
evaluate the value of the state's
investments and missions.
322
ANNALEE MCCONNELL,
DIRECTOR, OFFICE OF
MANAGEMENT AND
BUDGET, OFFICE OF
THE GOVERNOR
Discussed service values and what the
state derives from services. OMB will
attempt to look at goals and strategies,
performance measures, etc. She noted that
information on the web allows the public
to participate. All departments are in
the automative budget system.
503
Ms. McConnell
Introduced personnel.
515
Ms. McConnell
The largest share of the $6 billion
dollars spent by state goes to the
permanent fund dividend and the Permanent
Fund for inflation proofing. The value of
these funds is agreed upon.
567
Ms. McConnell
The 2nd largest portion of the budget is
made up of federally funded items such as
transportation, construction, and
Medicare.
642
Ms. McConnell
The third biggest share, $793 million
general fund dollars, goes to education
with the addition of the University of
Alaska. Observed that education has been
a pass through funding issue, but that
quality education measures have brought
scrutiny to education funding. The
emphasize is on assuring value.
750
Ms. McConnell
Customer satisfaction and turn around
time should be among criteria used to
evaluate dollars. Other criteria
including reduced crime rate and
unemployment are more complex and require
interagency cooperation to evaluate.
Services delivered through technology
provide better value and have increased.
869
Ms. McConnell
Important to remember that many things
cannot produce value within a fiscal
year. Some things do not show value for
decades. For example crime rates. The
Association of National Police Chiefs
recommends prevention programs as that
the best way to reduce crime. Headstart
expansion may not show value for several
years.
999
Ms. McConnell
Deferred maintenance operates in the
reverse. A lack of funds for deferred
maintenance makes this more expensive in
the future. The measure of Y2K is that
there were no major problems.
1043
Ms. McConnell
Discussed limitations on their ability to
increase value of budget due to
restrictions in response to short-term
conditions. An immediate call for budget
cuts limits investments to make more
value. Staffing restraints prevent
workload to be met in revenue increasing
positions and fee supported programs.
Need to distinguish between investments
based on value.
1161
Ms. McConnell
Noted success in comprehensive efforts
that have involved more than just the
budget. Team effort produced the best
value, such as in welfare reform, quality
education, and childcare programs.
1262
Representative
Williams
How to measure long-term accomplishments
that are difficult to measure?
1290
Ms. McConnell
Start with realistic assessment of what
can be expected and when. What factors
must come into play? Check progress along
the way and break down into smaller
units.
1403
Co-Chair Therriault
Observed that there is no control group
to compare back to. Value could be due to
factors outside of budget. No long-term
study to show that it is the state
program that causes change. Economy
affects success of value investments.
1456
Ms. McConnell
Agreed that cannot prove anecdotal
evidence is as good as statistical but it
should not be discounted. Effort should
be made. Data should be collected.
Measurements should be included in
creation.
1581
Co-Chair Therriault
Legislature is being asked to do more.
Are we getting the benefit for the
dollars being spent? No measurement of
results.
1624
Ms. McConnell
Proposals have been brought forward for
reductions such as the longevity bonus.
Pointed out that citizens want services
and less spending. Some services are only
maintenance efforts. There are areas that
the most affective use of the dollar can
be evaluated and others where they are
not yet to the point of evaluating.
Important to shape the process in a
thoughtful way
1759
Representative Bunde
Emphasized that the discussion of quality
of life vs. dollars is important
1802
Representative
Williams
How is the amount of money available tied
into the governor's budget plan?
1826
Ms. McConnell
Noted that the state of Alaska has known
that oil is declining without an
accompanying decline in population.
Maintained that the state is not in a
surprising situation. Most states do not
begin with a higher revenue level than
what can be maintained. Alaska was
developed in a shorter period of time
than other states. Maintained that it was
not expected that expenditures would be
brought down to the current level of
revenues.
1949
Ms. McConnell
Irresponsible to propose a budget that is
not dependent on the Constitutional
Budget Reserve (CBR).
1969
Representative
Williams
Should look at the loss of funds in the
CBR and what should be done to bring the
budget down to a sustainable level.
1993
Ms. McConnell
Repeated that the level of expenditures
cannot be brought down to the level of
revenues. That was the discussion on a
long-range budget plan.
2023
Co-Chair Therriault
Questioned steps that the administration
would take if the legislature did not
pass a CBR draw.
2050
Ms. McConnell
Emphasized that it would not be a
realistic situation to have a several
million-dollar deficit. Assumed that
there would be an agreement.
2073
Co-Chair Therriault
Noted that the state would not be shut
down without CBR approval. Asked if the
Administration would go forward expecting
that the legislature would come back.
2111
Ms. McConnell
Obligation to the citizens to fully fund
the budget.
2122
Representative J.
Davies
Asked if there were a plan to underfund
FY01's budget.
2132
Co-Chair Therriault
Agreed that it is prudent to fully fund
the budget.
2140
Representative
Grussendorf
Noted that roads were closed when funding
reductions were left to be handled in a
supplemental, to no ones satisfaction.
Thought that the governor would call the
legislature back if a CBR draw was not
adopted.
2179
Representative G.
Davis
Has governor interpreted the Sept 14,1999
vote regarding the long range fiscal
plan?
2197
Ms. McConnell
Emphasized that there are many reasons
for a no vote. Maintained that it is
impossible to interpret the vote.
2264
Vice Chair Bunde
Does the Governor have ideas for
increasing revenues?
230
Ms. McConnell
Governor would enter dialog if the
legislature chose have the discussion.
2309
ROBERT POE,
COMMISSIONER,
DEPARTMENT OF
ADMINISTRATION
DEPARTMENT OF ADMINISTRATION
Commissioner Poe
Reviewed ways that the state is better
off due to its investments in the
Department of Administration
2337
Commissioner Poe
Reviewed basic services. Concluded that
basic services are well done.
(TAPE CHANGE, HFC 00
- 1, SIDE 2)
089
Commissioner Poe
Personnel and labor relations are a
significant investment. The department
supervises Risk Management. The state
self-insures.
132
Commissioner Poe
Pointed out that the department runs a
longevity program, pioneer homes and
other senior services. Pioneer homes are
a challenging issue. Average age of
resident is 87. There is an increasing
care level. Concluded that residents are
well taken care of.
236
Commissioner Poe
Discussed other senior services. Alaska
has the second fastest growing population
of seniors in the nation.
282
Commissioner Poe
Discussed the Alaska Public Defenders
Agency. It provides a public function.
Employees are hard workers under tough
conditions. Individuals must be
represented before the legal system can
address their errors.
353
Commissioner Poe
Office of Public Advocacy also a tough
job. Involved in personal issues.
399
Commissioner Poe
The department operates key functions
that are not noticed on a day to day
level, such as the Division of Motor
Vehicles. Noted improvements in
accessibility to services.
537
Commissioner Poe
Discussed public communication services.
Public radio and television connect
Alaskans. There have been strides in
reducing the cost of administration.
591
Commissioner Poe
Discussed the Office of Public Officials
Commission.
632
Commissioner Poe
Discussed the Oil and Gas Conservation
Council.
652
Commissioner Poe
Reviewed ways that Alaskans are better
off because of the state's investment in
the Department of Administration. Basic
services are done well. Time and
resources are saved through cooperation
between departments. Charges for
bandwidth endorsed by departments through
the implementation of Admin. Solution
Teams.
789
Commissioner Poe
Introduction of programs in pioneer homes
to combat depression help to increase
life span and health. Increase
participation by seniors to chose their
level of service results in more people
staying in their homes. Alaska received
the top award from the Association of
Chief State Administrators for Work Place
Alaska and other programs.
930
Commissioner Poe
Internet online public notice has a key
role in permanent fund dividend
applications on line and other services.
999
Commissioner Poe
Discussed the Oil and Gas Conservation
Commission database to model reservoirs
through partnership with the university.
1043
Commissioner Poe
Noted that there have not been many Y2K
problems.
1053
Commissioner Poe
Discussed facility management. Employees
are being trained on purchasing. 990
employees were trained.
1097
Commissioner Poe
Public broadcasting is leveraging state
and private money through a joint
venture.
1136
Commissioner Poe
The department is going to put together a
RFP for all state telecommunications to
go to a single contractor. This will
consolidate state use of
telecommunications. The state now spends
$26 million dollars a year. Of this $20
million dollars is contracted out to
separate vendors. A single contractor
would reduce the per unit cost of
telecommunications. The state is spending
more on telecommunications because it is
being used more.
1244
Co-Chair Mulder
Define the mission of Department of
Administration?
1256
Commissioner Poe
The mission of the Department of
Administration is to
facilitate the operations of state
government by providing cost-effective
business management and information
technology support services to state
agencies,
provide equitable legal and advocacy
services for indigent Alaskans;
provide quality programs that promote
the dignity, security, and
independence of Alaska's seniors,
provide efficient and accessible
vehicle licensing and registration
services to the public, and
provide administrative support to
those commissions assigned to the
department
1304
Co-Chair Mulder
Encouraged shortening the department's
mission. Some of the mission could be
placed under programs.
1325
Co-Chair Mulder
Referred to labor relations mission.
1347
Commissioner Poe
Observed that the department deals with
labor issues, negotiations, grievances,
etc.
1371
Co-Chair Mulder
Is the mission to create a happy labor
force? How did they do?
1386
Commissioner Poe
They achieved net zero contracts without
strikes. Maintained that employees work
hard. There are not a lot of grievances
with large settlements against the state.
Hard to negotiate with nothing to offer.
1430
Co-Chair Mulder
How many grievances?
1435
Commissioner Poe
Could not say how many grievances.
Management also has position to mediate.
1495
Co-Chair Mulder
Lawsuits could be a measure.
1504
ALISON ELGEE, DEPUTY
COMMISSIONER,
DEPARTMENT OF
ADMINISTRATION
Pointed out that grievances also come
from insufficiently trained supervisors.
Better training can lower grievances.
1553
Co-Chair Mulder
Look at the percentage of change.
Referred to the Commission on Aging.
1567
Ms. Elgee
Discussed function of the Commission on
Aging. The federal government requires
the state to have a single entity to look
at the grant process for seniors. The
state receives $7-8 million federal
dollars. The Commission was also expanded
to act as an advocate. The Commission is
the advocacy board for dementia.
1629
Vice Chair Bunde
Noted that the demographics of age is
changing. There is an increase in the
percentage of citizens over 65 yr.
1670
Ms. Elgee
Noted that there are 35,000 seniors
today. Estimates that this will more than
double in the next 10 years.
1690
Vice Chair Bunde
Questioned the department's ability to
negotiate when the Governor states that
state employees deserve a raise.
1717
Commissioner Poe
Did not think that the Governor's remarks
would affect ongoing negotiations.
1745
Representative
Phillips
Bright spot measurable results in DMV.
Not one complaint in her district this
year.
1797
Representative G.
Davis
Questioned if the purchase of the Atwood
building resulted in the estimated
savings to the state.
1821
Ms. Elgee
Have already realized some savings from
the purchase. Leasing is underfunded, so
savings are not recognized. There were
immediate savings through the Child
Support Enforcement Division move into
the building. Others are being moved
during the year.
1873
Representative G.
Davis
Are federal dollars continuing for public
broadcasting?
1885
Commissioner Poe
Noted that $52 thousand dollars in
general funds leveraged $270 thousand
dollars in federal and private funds.
1917
Commissioner Poe
In response to a question by Co-Chair
Mulder, discussed health insurance
actuarial.
2010
Commissioner Poe
Explained that additional data found that
the ASEA actuarial could do without the
extra $54 dollars being collected from
the employees.
2051
Commissioner Poe
The Department is trying to discern why
Aetna numbers are varying.
2117
Commissioner Poe
Legislators and other non-covers had been
paying more than under the Commissioner's
Plan than ASEA members.
2162
Ms. Elgee
Discussed the Commissioner's Plan
covering non-covered employees.
2189
Representative G.
Davis
Noted that the Department of
Administration is the catchall
department.
2245
Commissioner Poe
Noted that the Department of
Administration has had senior programs
since its conception.
2264
COMMUNITY AND ECONOMIC DEVELOPMENT
DEBORAH B. SEDWICK,
COMMISSIONER,
DEPARTMENT OF
COMMUNITY AND
ECONOMIC DEVELOPMENT
Spoke to the internal reorganization.
Outlined the number of positions in the
Department. Spoke to the merger and the
number of employees that left the
Department. No mandates until July 1st,
1999. The process was involved in using
the number of people remaining in the
Department
000
(TAPE CHANGE, HFC 00
-2, SIDE 1)
Commissioner Sedwick
Continued testimony. Spoke to the merger
negotiations and the relocation in the
Anchorage area. Moved Banking Securities
to the former DCRA building.
190
JEFF BUSH, DEPUTY
COMMISSIONER,
DEPARTMENT OF
COMMUNITY AND
ECONOMIC DEVELOPMENT
Testified to the philosophy of the new
merger. He stated that development takes
on all factors of addressing the
community structure. Economic
development and rural development is
linked in creating jobs at the local
level. The intent was to create an
organization that would address those
concerns. The intent is to focus more on
the rural and regional level. Want to
address the department's needs while at
the same time marketing Alaska. Those
programs are distinct from rural
programs. Reorganizing it into two
divisions instead of three divisions.
418
Mr. Bush
The first division would be the marketing
division and the other concern would be
tourism. The private sector will create
an organization that will address tourism
activity in the State. The focus of that
Division is the planning and development
function to assist in those actives.
522
Co-Chair Therriault
Observed that it is difficult to track
the fiscal note on the bill relating to
tourism that passed in the previous year
(SB107). He noted that there is a budget
item under Community and business
development for $12 million dollars.
Emphasized the need to track components
individually.
632
Co-Chair Therriault
Asked for information on the community
tourism effort.
650
Commissioner Sedwick
Observed areas of accomplishments: rural
sanitation guide, municipal assistance
work in Kalskag that turnaround the
city's finances, seed potatoes to Taiwan,
and organic labeling.
893
Commissioner Sedwick
Tourism north increased road traffic by
18 percent.
899
Commissioner Sedwick
Pointed out success in marketing Alaska
Seafood activities.
925
Commissioner Sedwick
Changes in occupational licensing to
improve data availability.
960
Commissioner Sedwick
Division of Insurance has insured new
businesses in Alaska.
986
Co-Chair Mulder
Community and business development
creation of jobs in Alaska should be a
mission. Measure actuarial tracking of
jobs.
1041
Vice Chair Bunde
Noted that the department's handout,
Community and Economic DevelopmentFY2001
Operating Budget Overview, on page 1
(copy on file) stated that one of their
goals is to "enhance the availability and
quality of basic local government
services by providing financial
assistance that supplements local revenue
generation." He questioned if the revenue
sharing is only to those with local
contribution?
1090
Commissioner Sedwick
Emphasized that municipal assistance is
to help communities with work that is
being done.
1111
Mr. Bush
Observed that revenue sharing programs,
such as fish taxes and national forests
receipts do not always have local
contributions.
1149
Vice Chair Bunde
Are federal funds used for some of the
local contributions? Referred to the
ANSCA definition of "tribes". Observed
that tourism increases demands on
services. Asked how will services
resulting from tourism be paid for?
1202
Mr. Bush
Noted that the department tries to
educate communities as to the impacts of
tourism.
1255
Representative
Williams
Questioned if the department is seeing
duplication?
1265
Commissioner Sedwick
Learned that communities need local
government support through municipal and
regional assistance. Felt some additional
efficiency could be found. Need to work
to find opportunities.
1361
Representative J.
Davies
Suggested a session to review the merger
under HB 40, which was enacted in 1999.
1409
Co-Chair Therriault
Clarified that his previous comments were
in regards to tracking fiscal notes
associated with the adoption of SB 107
and the tourism change. Agreed that there
is a need to look at transitions.
1471
Representative G.
Davis
Pointed out that some communities need
state subsidies to survive.
1570
Representative
Austerman
Bring issues to subcommittee.
1586
Co-Chair Therriault
Communities receive state funding for
incorporations. Now that state funding is
declining local communities must decide
what to support.
1630
Co-Chair Mulder
ADJOURNMENT
The meeting adjourned at 3:45 p.m.
HOUSE FINANCE COMMITTEE
LOG NOTES
January, 11, 00
House Finance Committee 11 01/11/99
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