Legislature(2015 - 2016)HOUSE FINANCE 519
01/21/2016 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Update on Interim Results Based Budgeting | |
| 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 21, 2016
1:32 p.m.
1:32:40 PM
CALL TO ORDER
Co-Chair Neuman called the House Finance Committee meeting
to order at 1:32 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Pete Ecklund, Staff, Representative Mark Neuman; Craig
Holt, Director, Outlook Associates; Mark Luiken,
Commissioner, Department of Transportation and Public
Facilities.
SUMMARY
PRESENTATION: UPDATE ON INTERIM RESULTS BASED BUDGETING
CRAIG HOLT, DIRECTOR, OUTLOOK ASSOCIATES
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES
Co-Chair Neuman discussed the meeting agenda. The committee
would hear a presentation from the Department of
Transportation and Public Facilities (DOT) on work it had
done over the interim to incorporate results-based
budgeting into its management and budget processes. He
noted that the Department of Health and Social Services
(DHSS) had undergone the same process several years
earlier.
PETE ECKLUND, STAFF, REPRESENTATIVE MARK NEUMAN, elaborated
that approximately three years earlier DHSS had undertaken
work with Craig Holt [director of Outlook Associates] to
incorporate results-based budgeting (RBB) into the
department's budgeting and management processes. He
reiterated that DOT had begun the process during the past
interim. The two departments combined represented about $4
billion of the state's budget (including state and federal
funds). He noted that Mr. Holt would hold a training on
Saturday for anyone interested in a more in-depth look at
results-based budgeting and how it had helped the two
departments to work towards improved outcomes.
Co-Chair Neuman remarked that the training was the upcoming
Saturday.
Mr. Ecklund relayed the details on the meeting time and
location. The purpose for RBB was an effort to change the
culture of government (moving away from just getting
dollars) to a management approach in order to get better
outcomes. The goal was to change how the legislature
interacted with the departments. He detailed that the
finance committee members were investors who invested in
the departments' activities and in outcomes and results. He
furthered that it represented a philosophical and culture
change in the relationship between the legislature and the
executive branch agencies; it also represented a culture
change within the departments.
^PRESENTATION: UPDATE ON INTERIM RESULTS BASED BUDGETING
1:36:27 PM
CRAIG HOLT, DIRECTOR, OUTLOOK ASSOCIATES, provided a
PowerPoint presentation titled "2016 House Finance Briefing
Results Based Budgeting/Alignment (RBB/RBA)" (copy on
file). He underscored that a more detailed presentation
would be provided on Saturday. He noted the training would
utilize examples from DHSS and DOT in more detail. He
explained that the departments [DHSS and DOT] had taken two
similar but different approaches. He elaborated that DHSS
had really focused on trying to get a sense of how its
money was flowing (its former $2.8 billion budget had been
reduced). He would discuss how the money was flowing to
direct services. Additionally, he would address cuts and
funding sources. He added that DHSS was currently in the
process of bringing its measures along; whereas DOT had
focused on getting its measures started. He explained that
the presentation would address measures and alignment. He
furthered that DOT had begun the process of aligning its
monies and budget with the outcomes. He expounded that the
legislature would be able to see what the final picture
should look like - it would demonstrate accountability for
how the dollars flowed and how well the investment was
doing.
Co-Chair Neuman asked members to provide questions
throughout the presentation.
Mr. Holt addressed slide 3 titled "Key Concept: Mission
Statement." He reiterated that the legislature acted as
investors on behalf of Alaskans. He noted there were 15 or
16 agencies in addition to various boards and commissions.
He relayed that the first focus should be on the mission of
the agencies; it would set the framework for how all of the
agency services flowed down. He cautioned that if the
legislature did not agree with the mission it should stop
because everything else would be a surrogate conversation
for not agreeing on the mission. He read from slide 3:
SHOULD:
· Briefly state WHY department exists,
· Highlight UNIQUE contribution of department,
· Unify the core services/service groups,
· Be memorable and usable
Mr. Holt elaborated that the mission should be memorable
and usable because it was supposed to bring focus to the
people involved in the organization. He continued
addressing slide 3:
SHOULD NOT:
· Be list of everything we do,
· Include statements of values,
· Include "qualifiers" of who, how well, how good, or
· Contain language that is vague and unclear.
Mr. Holt moved to slide 4 titled "Mission Statement -
Examples." The first mission statement example on the slide
pertained to the Department of Fish and Game:
To protect, maintain, and improve the fish, game, and
aquatic plant resources of the state, and manage their
use and development in the best interest of the
economy and the well-being of the people of the state,
consistent with the sustained yield principle. (DFG)
Mr. Holt elaborated that in addition to the department's
mission, the statement included what the department would
do, how well the department would do it, and who the
department would do it for. He addressed the second mission
statement example on the slide that pertained to the
Department of Corrections:
Provide secure confinement, reformative programs, and
a process of supervised community reintegration to
enhance the safety of our communities (DOC)
Mr. Holt remarked that the DOC mission statement language
sounded like three core services the department delivered
to enhance the safety of communities. He believed the
statement indicated the importance of the focus on the
enhancements to increase the safety of Alaska's
communities. He remarked that the focus would enable the
department to measure how well it was doing. The third
mission statement example was the Department of Education
and Early Development:
To ensure quality standards-based instruction to
improve academic achievement for all students (DEED)
Mr. Holt pointed out that when focus was placed on the
first part of the statement versus the latter it could mean
something different. The fourth mission statement example
was for the Department of Transportation and Public
Facilities:
Keep Alaska Moving through service and infrastructure
(DOT)
Mr. Holt remarked that the DOT mission statement was clear.
The last mission statement on the slide was for the
Department of Labor and Workforce Development:
Provide safe and legal working conditions and to
advance opportunities for employment (DLWD)
Mr. Holt spoke to the importance of mission clarification.
He believed the department's mission statements had a good
foundation to start with.
1:41:52 PM
Mr. Holt addressed slide 5 titled "Why Mission
Clarification is IMPORTANT" that addressed the Alcohol
Beverage Control Board as an example. He read from the
slide:
Alcohol and Beverage Control Board
Is the "Mission"……..
· Public Protection
· Facilitation of Commerce
· Revenue Collection / Disbursement
· All of the above
· None of the above
Does it make a difference what the Mission is?
Mr. Holt explained that the question "does it make a
difference what the mission is?" was rhetorical. He
furthered that it could lead to frustration if the mission
was public protection, but the agency thought that its
focus was revenue collection and disbursement. He believed
it underscored the importance of having clarity and
agreement on the mission. He turned to slide 6 titled
"Shifting from Inputs to OUTCOMES." He pointed to images on
the left side of the slide showing bags of money,
positions, and technology, which were the input side of the
equation. He detailed that there could be significant
conversation about the input side of the equation, but the
real issue for the legislature as investors was how the
items contributed to the safe movement of people and goods;
statewide access and connectivity; and access to
exploration and development. The shift represented the
conversation away from how much the state had to what the
state was getting with it. He stressed that even in dire
fiscal times Alaska still had money that was being
invested. He recalled being told in the past that the less
money a person had, the more important it was to ensure the
money was going to the right things.
Mr. Holt further illustrated the point on slide 7 titled
"Investing in RESULTS, not Activities." He spoke about
construction and asked rhetorically if spending all of the
money or underspending a budget constituted success. He
explained that if there was a focus on the activities that
went in, it was possible to have the conversation.
Alternatively, one could consider how construction spending
helped improve the safe movement of people and goods;
statewide access and connectivity; and access to
exploration and development.
1:45:12 PM
Mr. Holt turned to slide 8 titled "What's IMPORTANT to
Measure." He spoke to the importance of what was measured
once the focus on the mission and outcomes was clear. He
quoted a friend who had stated that "many things are
measurable, few were meaningful." He expounded that it was
not about having "lots of stuff," but about measuring the
right thing. For example, the outcome of a jobs training
program should be people getting jobs. He addressed a
number of activities that went into accomplishing the job
outcome:
Activities
· Person's case is established
· Person is trained
· Person receives child care assistance
· Person is taught interviewing skills
Mr. Holt elaborated that the items were important, but it
was important to not lose sight of whether the outcome was
achieved. He questioned whether it was good if an agency
was successful at three out of its four programs. He
answered that it depended. He asked if a mission was
successful if the focus was on a person getting a job and
more people obtained jobs. He stated that it was a good
thing, but questioned if it could get better. He remarked
that in difficult fiscal times it was important to know
whether a person placed in a job was receiving adequate
training. He furthered that it was important to know
because it provided an opportunity for improvement. He
reiterated that the focus should be on the results and
activities. He stated that there would be an example
pertaining to DOT.
Representative Gara pointed to slide 8 related to a job
training program. He discussed that although the current
job market was poor, individuals who had gone through a job
training program were employable and much better off than
before. He asked why the right result was a person getting
a job. He remarked that it could take a person six months
to get a job due to the poor economy.
Mr. Holt replied that it was a great question. He stated
that it was important to not lose sight of the fact that
the purpose of the program was to get people jobs. He
furthered that there were many things that could impact a
person's ability to get a job. He stated that if the
economy continued to do poorly and there continued to be
fewer and fewer jobs, it became a decision for investors on
whether to continue investing in life-skills or if there
were other options. The measurement only specified what
happened and not whether a good or bad job had been done.
He noted that a person could prepare themselves as much as
possible, but if there was not a job, there was not a job.
Investors needed to monitor in order to determine whether
the type of skills needed to be adjusted in order to ensure
that when the job market bounced back that people were
ready for employment.
1:49:57 PM
Co-Chair Neuman spoke to his personal educational
experience. He noted that the state had five or six
vocational education entities between DLWD, the University,
the DEED, and the Department of Military and Veterans
Affairs. He asked whether the state was training in the
right things if it took a person six months to get a job.
Mr. Holt replied that the topic was to stimulate the
conversation.
Representative Kawasaki remarked that the result was the
metric being used. He detailed that childcare assistance
was one of the core activities within DHSS but not DLWD. He
reasoned that a metric for DOC was the recidivism rate. He
stated that 33 percent of offenders returned to jail within
two years after their release; many returned because they
could get access to healthcare in the prison system. He
wondered how to measure an outcome or result when it
pertained to several agencies.
Mr. Holt answered that the information highlighted the
point. He believed that when legislators focused on the
results it would probably involve multiple agencies. He
relayed that when DHSS had conducted the process it had
involved multiple divisions with real core outcomes and had
taken a consolidated effort to get it done. He referred
back to the outcome example of a person getting a job
(slide 8). He detailed that the method would be to
determine which agency had the lead and to then determine
which agencies contributed to the activities and who should
be held accountable for the outcome. Whether the outcome
was a person getting a job or gaining life skills, someone
had to be in charge of carrying the measurement forward. He
noted that he had worked in the field for 30 years and it
was not uncommon to have multiple agencies contributing to
an outcome. He intended to provide examples to illustrate
his point.
1:52:49 PM
Representative Wilson discussed that she was in charge of
the University budget and believed the outcome to measure
should be graduates. She provided an example and used a low
graduation rate. She asked if legislators should drill down
into all of the reasons students may not be graduating if
it was basing its funding on the graduation level.
Mr. Holt replied that he strongly advised investors in a
large organization such as the legislature to stay at a
high level. He furthered that it was right for them to ask
questions if the result was not being achieved. He believed
it was appropriate to get further into the details if
satisfactory answers were not provided. He encouraged the
legislature to avoid trying to solve the issues itself. He
added that it may be that the legislature and the agency
have a disagreement on what success was.
Representative Wilson provided a scenario where the mission
was for a person to get a job, get a degree, or get a
diploma and it was determined that $5,000 would cover
getting the right pieces in place for one of the three. She
asked about results being achieved at a later time for less
funding. She thought it would be back on the agency to
determine how to get more from the funding because it knew
what the goal was. She opined that if the legislature was
going to stay at a 10,000-foot level it was necessary to
know what the goal was. For example, she believed the
legislature should know the amount of money it required to
obtain the goal of graduation. She stated that if a
graduation rate decreased from 30 percent to 20 percent the
agency would get less funding until it determined why goals
were not being met. She reasoned that the agencies were
large and it was difficult for the legislature to drill
down to figure out what had happened. She believed the
legislative finance subcommittees got into trouble when
they got into the weeds and began micromanaging versus
setting an attainable goal.
Mr. Holt agreed. He recommended that the legislature remain
at a high level as investors and agree to the results it
would receive; if the results were not being achieved the
legislature could ask the agency to come speak with them
during the interim.
1:56:07 PM
Mr. Holt addressed slide 9 titled "Example Results."
· Ensure sustainability and harvestable surplus of fish
and wildlife resources (DFG)
· Workforce Development to support Alaska hire and
economic development (DWLD)
· Foster responsible commercial development and use of
state land and natural resources (DNR)
· Provide access to state lands for public and private
use, settlement, and recreation (DNR)
· Strengthen Alaska Families (DHSS)
· Protect vulnerable Alaskans (DHSS)
Mr. Holt elaborated that the last two points on slide 9
were included because they were short and brought quick
focus to their goal. He noted that long sentences tended to
not bring focus. Providing a clear and concise focus made
it possible to have a discussion on the expected level of
performance. Mr. Holt turned to slide 10 titled "'Balanced
Set' of Measures." He emphasized the importance of
sequencing. He stated that something could be measured once
there was agreement on the focus. He stated that
measurement had added two fundamental elements including
efficiency and effectiveness. He detailed that efficiency
included cost indicators (i.e. cost per unit), which were
contrasted against the quality of the services provided. He
stated that the efficiency figure was used to compare how
well the agency was doing with total costs. He juxtaposed
efficiency with the effectiveness (i.e. how timely and
accurate the service was). He turned to a construction
academy example on slide 11. He elaborated that a
construction academy had been implemented due to the need
for construction workers. He reiterated the importance of
simplifying the mission. He furthered that if the mission
was to increase the number of qualified construction
workers, the measures were fairly easy to determine. The
slide showed the efficiency as the cost per client that
gets a job (in construction) compared to the average time
it took to get a construction job and the percentage of
post graduates employed in the construction field. He noted
that the three items were not a complete list, but would
provide a good indication about whether the academy was
moving in the right direction. He added that it was
important to discuss the items with the agency; it was
important to have agreement on the mission and core
services and how success was measured.
1:59:52 PM
Representative Gara addressed slide 11. He provided an
example of a woman going through the construction academy
who secured a job on the North Slope, but not in
construction. He wondered why the scenario would not be
counted as success.
Mr. Holt replied that it depended on the way success was
defined by those measuring the results. He detailed that
the measurement could easily be modified to remove the
words "in construction" from the measurement. He elaborated
that it illustrated the importance of the definition and
agreement with an agency. He furthered that if the real
focus was ensuring that individuals were employable, he
advised removing the words from the intended outcome.
Representative Gara asked for verification that the slide
was not trying to specify the way the measurement should be
done.
Mr. Holt agreed and explained that it was merely an
example. In the example the outcome was very clear that the
goal of the construction academy was to train people for
employment in the construction field. He stated that the
legislature could discuss whether to broaden the
measurement. Alternatively, it was possible to look at a
couple of measures (i.e. what it cost for a student that
got a job and what was the subset of the number that got a
job in construction).
Representative Gara referred to conversations he had with
agencies about measuring outcomes. For example, he had
asked the Office of Children's Services for years about the
high school graduation rate and the agency had not known
the answer for many years. The agency had told him that
with the staff it had it would need to take staff away from
kids to do the data compilation. He remarked on the state's
$3.5 billion budget deficit. He observed that it would not
improve without measures, but on the other hand, to do the
work would mean taking employees from direct jobs to do the
data compilation.
Mr. Holt responded that he had personally done the work
inside of government for the State of Oregon; they had been
directed to have no net increase in administrative cost.
The investors had also given the departments the ability to
report back that they needed relief from certain reporting
in order to work towards another goal. He advised letting
the State of Alaska departments come back to the
legislature for relief if departments thought they needed
more. He stated that it should not result in an increase or
take away from direct service. He asked if he had answered
Representative Gara's question.
Representative Gara replied in the affirmative, assuming
there were areas that employees could be taken away from to
provide the work.
Representative Edgmon shared that he had read recently that
it was a rule of thumb that any organization had at least
20 to 30 percent waste. He asked for Mr. Holt's thoughts
and wondered if the number was even higher in governmental
organizations.
Mr. Holt replied that he was not familiar with the rule of
thumb Representative Edgmon had referred to. He stated that
10 percent was not an unreasonable number. He furthered
that government did a lot of processing; some was self-
inflected and some was not. He furthered that it required a
minimal amount and number of people to set up something
like the measures. He explained that much of the raw data
that comprised the indicators was already being gathered.
2:04:44 PM
Representative Edgmon asked if undertaking the process -
that went back to the constitution and core values - would
be advisable when the legislature was considering making
difficult budget cuts.
Mr. Holt replied in the affirmative, beginning with the
missions. He stated that the advantage was that the state
only had 16 agencies in addition to boards and commissions
and had only been around for 56 years. He had worked on the
East Coast where governments had been in business for 200
years and did not know where to find enabling legislation.
He believed Mr. Ecklund had stated that together the DHSS
and DOT budgets accounted for about $4 billion. He noted
that DOT had four core services and DHSS had seven. He
thought the entire state may have 25 or so core services,
which was not too many to have a framework to take a look
at.
Representative Edgmon observed that by not using the
process it appeared that the legislature was cutting the
budget in a random manner.
Representative Guttenberg stated that there were nuances in
programs. He detailed that the construction academy was not
designed to get people jobs in construction, but to enable
people to determine whether they want jobs in construction.
He elaborated that the number of people who graduate and
want to work in construction was different from the number
of people who graduate. He provided the dental hygiene
program in Fairbanks as another example. He elaborated that
an individual did not require a certificate, but needed to
be competent. He stated that when an instructor knew an
individual was ready they called a dental office and the
student got a job. He stated that they never graduated. He
spoke to figuring out a way to nuance the effectiveness. He
noted that it also brought up another issue related to the
number of people who are competent at the end of the course
and would be recommended by the instructor for a job. He
provided another example of five people in a welding class
one year who were certified and recommended by the
instructor and others in the class who were not recommended
the following year. He stated that the nuances played an
important part in influencing the numbers.
2:08:17 PM
Mr. Holt answered that the purpose of the current
conversation was three measures and a clear mission. He
noted that they had quickly arrived at a conversation about
what constituted success in a mission. He furthered that
once success was determined it was possible to create the
measures and get everyone "marching to the same direction."
He stressed the importance of having the conversation prior
to allocating money to an item. He explained that otherwise
the agency may be thinking one thing while the legislature
was thinking another, which could cause frustration on both
sides.
Representative Gattis noted that different people could
have different perspectives on what a state agency should
or could be doing even if the employees understand what
their role is. She remarked on people being on the same
page and understanding what their roles and end missions
were. She opined that sometimes there was a disconnect and
she believed the current topic was a great conversation to
have. She thought it was great for employees to know they
were all on the same page.
Mr. Holt agreed. He stated that the alignment piece was the
most important part going forward in government. He stated
that if nothing was measured, but everyone was pulling
towards the same mission it was 10 to 15 percent; the
number increased when measurements began. He believed the
commission would have some powerful things to share related
to employee understanding and alignment.
2:10:55 PM
Mr. Holt advanced to slide 12 titled "Cascading and
Aligning - the Picture." He stated that there were
different levels to measure including the mission, core
services, and programs. He drew attention to the left and
right sides of the slide and noted that the arrows were
purposefully one directional. He emphasized that the
mission should drive the core services; and the core
services should drive the programs. He remarked that the
investors should remain in the mission and core service
levels when making investment decisions; staff within the
agencies were responsible for implementing the programming
component. The right side of the slide related to
contribution measurement (arrows were directed up); if
alignment was done correctly on the left side of the chart,
the measures should be validating the contribution the
programs were making to the mission. He referenced the
earlier discussion he had with the committee related to
jobs. He stated that if only three out of four activities
were done well by an agency the legislature should take a
look at the issue. He reiterated his belief that the
legislature should remain at the mission and core service
level. He discussed the frequency of measurement, which
tied directly to the type of work being done and the window
of decision making based on the data. He remarked that the
legislature was in session once a year and needed data
appropriate to enable it to make investment decisions that
were appropriate for the next year. He noted that the
legislature should not be involved on programmatic measures
that were examined on a monthly or semi-weekly basis; at
that point he believed the legislature would be
micromanaging the agencies.
Co-Chair Neuman believed the legislature needed to look at
programs to determine whether to fund them. He did not want
to partially fund programs. He wondered why the legislature
should not look at them and asked if Mr. Holt was looking
at programs in a different sense. Mr. Holt replied that he
was referring to a different context. He agreed that
programs should not be partially funded. He explained that
the chart on slide 12 was speaking to three different
levels. He detailed that in the context he was speaking to,
program meant front line services and not programmatic
budgeting.
Representative Wilson noted that the legislature was not
funding programs, it was funding core services to provide
the results it was looking for. She furthered that how a
department chose the programs to achieve the desired
results was up to the department.
Mr. Holt agreed. He intended to use DOT as an example to
illustrate the point later on. He moved on to slide 13 and
provided an example related to the Las Vegas fire
department titled "Alignment - Fire Dept. (LV)." He spoke
to two core missions for firefighters including minimizing
the loss of life and loss of property due to fire. He
detailed that there was a six-minute window where a
multitude of things occurred. At the department level they
had two measures including lives lost to fire and estimated
dollar value of loss due to fire. The core service level
included the percentage of calls responded to within six
minutes and the percentage of fires contained within "room
of origin." He had learned that the core service components
directly tied to the core mission of the department. He had
been told by firefighters that if a fire could be contained
to the room of origin, the result in loss to life and
property was almost a factor of 10. He stated that once the
fire hit the duct work it meant absolute destruction. He
addressed the programmatic level:
Program
•Average maintenance cost/truck
•Average time for fire truck response
•Average time for containment, once on site
Mr. Holt elaborated on the importance of maintaining the
fire trucks. He stated that the fire station worked on
measures at the programmatic level. The core service level
looked at all of the fire stations across the city and at
the department level the core mission related to minimizing
lives lost to fire.
2:16:26 PM
Mr. Holt turned to slide 14 titled "Alignment - DOT/PF." He
discussed that DOT's mission was to keep Alaska moving
through service and infrastructure. He noted that the
following core services of the department corresponded with
those in the program level:
Core Services:
A. Average Time to Re-establish Service
B. Change in Road/Runway Condition Rating / Dollars
Invested
C. Number of Miles Meeting Goal & Target/ Total
Miles
Program:
A. Average time from notification to repair
B. Dollars spent/ lane mile maintained
C. Redo's ($'s) / Total Budget ($'s)
Mr. Holt pointed to core service C - the number of miles
meeting goal and target versus total miles; and program
level C - redo versus total budget. He appreciated when
anyone willing to admit when something was not done right
the first time. He furthered that if a certain amount of
work was planned under a limited budget and a mistake was
made, it would prevent the plan from coming to fruition. He
turned to a DOT maintenance chart on slide 15 titled
"DOT/PF - Maintenance (Core Service)." He pointed to the
first column on the left that included core and direct
services. For example, surface maintenance was listed as a
core service and underneath were the corresponding direct
services including routine maintenance and incident
response. The chart also included four other columns
including conformance to plan, timeliness, accuracy, and
cost; for each one of the services the department measured
whether it adhered to the plan accurately and in a timely
way and how much it had cost.
Mr. Holt turned to slide 16 titled "DOT/PF - 4 Core
Services." He explained that DOT had developed a tool to
accomplish a certain set of measures. He furthered that the
department had involved various regional employees to
verify that it had selected the appropriate measures and
had developed a matrix of services that had been assigned
to work teams. For example, regardless of where a person
was employed within the department, if a person was doing
snow removal, there was an expectation on how it would be
accomplished. Services had been identified and a work team
carried the services out. Subsequently measures that had
been carried out statewide were populated into a
performance matrix for each work team (slide 17). He
continued to discuss the work team related to snow and ice
removal. He emphasized that there was no question for the
work group on its mission, how to measure it, and how it
aligned. The department was currently implementing the
matrix measurement structure and would probably have good
measurement data in six to nine months. He believed it was
elegant in its simplicity and that it brought consistency
to what was important. He appreciated DOT's focus on
improvement. He recalled the DOT commissioner's comment
about working to do things better. He stated that DOT had
really focused on implementing the measurement
infrastructure; DHSS was starting the process at present
and had put its initial focus on the budget. He advanced to
slide 21 titled "DOT&PF Core Service Alignment." He stated
there were four core services for the department; the
teardrops below the core service sections indicated
divisions and which core services they contributed to.
2:22:34 PM
Representative Gattis asked about timeliness and wondered
who determined whether a customer had been served.
Mr. Holt answered with slide 19 titled "DOT/PF - Example
'front line.'" He elaborated that the agencies and the
legislature should agree on the measures and the definition
to ensure clarity. He furthered that DOT had consulted its
staff to determine which measures would not be applicable.
He used avalanche mitigation as an example - staff had
considered what would constitute a measure of timeliness.
Representative Gattis referred to snow plowing on the Glenn
Highway. She believed the department and the customers had
a different idea on whether a job had been done and in a
timely manner. She wondered how to include the customers as
part of the determination on whether the department could
do better and where its strengths and weaknesses resided.
Mr. Holt answered that he had been the DOT commissioner in
Oregon and had been faced with the same set of issues. He
advised that legislators as the investors should sign off
on the measures. He furthered that if legislators wanted to
have public involvement it was their purview. He
recommended being realistic; the narrative "out there" with
the state's current fiscal crisis was that people would
tank on services they delivered. He explained that an
expectation could be set too high in relation to the amount
of funding that was provided. He reiterated that it was the
legislature's purview. He remarked that he had been working
with Washington D.C. and three days before presenting
performance measures he had been asked what the citizens
thought; therefore, he had sought the information out. He
advised that the process had to be done thoughtfully
because perception of service versus reality was not always
the same thing. For example, a person could have a
perception of a service based on one negative experience,
while 99 percent of the time the service was good;
therefore, using the measures that compiled all of the data
was very important.
2:26:07 PM
Co-Chair Neuman asked about ways to measure the success of
a service. He reasoned that a result was based on actions
taken. He wondered how to know whether DOT was plowing snow
on time with the amount of money that had been allocated
for winter maintenance. He guessed they could look at any
accidents that had occurred as an indicator. He asked how
to do that without looking at a five to ten-year average of
road maintenance, winter maintenance, the number of miles,
and the number of accidents. He wondered how else to
measure results outside of looking at the data.
Mr. Holt answered "that's why these are always late to the
party." He stated that the pertinent question was "what is
the actual appropriate measure?" He stated that the
legislature was funding all state agencies at a significant
amount of money. He advised implementing the measurements
and determining whether there was agreement on their
acceptability until trends were available. He disputed any
argument that the process was worthless before five years
of data was available.
Co-Chair Neuman remarked that it was not possible to know
who would fill the legislative seats the following year. He
provided a measurement example where the legislature
allocated $10 million for the DOT snow removal budget and
within the year there were 20 accidents, 3 of which were
fatal. Subsequently the legislature provided $30 million
and the number of accidents did not improve. He observed
that in the example the basis on which the legislature
chose to provide more money did not result in improvement.
In RBB he did not see a matrix on how to measure based on
performance. He reasoned that performance could only be
based on what had been done.
Mr. Holt answered that measuring performance was one thing,
while comparing it to something else to determine the level
of success was another.
Co-Chair Neuman clarified that he was inquiring about
comparing performance to itself.
Mr. Holt agreed and clarified he was speaking to the trend.
He stated that it could take some time. But a person could
probably look at two or three seasons of the department's
activities to get a sense of a trend. He cautioned that
"these don't stand by themselves, they just tell you what
happened." He furthered that in Co-Chair Neuman's example a
person could look at the measures and ascertain that
something did not seem right if $10 million in additional
funds were allocated to snow removal but accidents did not
decline. He explained that that was the point the dialogue
should occur and the legislature should determine whether
the explanation made sense. He stated that when people
tried to measure 50 to 100 things it became meaningless
because there was no focus.
Co-Chair Neuman commented that it was meaningless if data
was not recorded and if there was no awareness to the
levers that were pulled and the cause and effect. Mr. Holt
agreed.
Co-Chair Neuman wanted a meaningful matrix to be measured.
He did not know who would serve in the legislature and he
wondered how future legislators would know decisions he had
made.
2:30:07 PM
Mr. Holt returned to slides 15 and 16 in response to Co-
Chair Neuman's question. He relayed that in a year there
would be four core service matrixes that would contain
data, which would provide a starting point. He furthered
that at that point data would need to be collected and
reported on.
Co-Chair Neuman believed it was a large problem. He
referred to frontline social workers for foster kids as an
example. The legislature had allocated funding for 15
additional social workers and had put more money into
computers and data. He wondered how to know whether the
additional items were working. He wanted to better
understand about inputs and outputs. He discussed coming up
with something the departments could do that legislators
could agree on and analyze. He surmised that there had to
be trust between the departments. He could see where the
matrix behooved the department, but he wondered how it
would be helpful to the legislature related to proving the
needed funding.
Mr. Holt answered that as departments put the tools
together the legislature would have the discussion with
them about the alignment and measures. He recommended
asking departments whether they had any data for the
legislature to look at. Subsequently, the legislature could
agree on a certain amount of funding. At that point the
framework would be set in place for the next legislature to
hold the departments accountable.
2:32:44 PM
Representative Wilson returned to the topic of Office of
Children's Services. She reasoned that legislators looked
at services at a different level when looking at issues for
constituents versus for budgeting purposes. She spoke to
the measurement of an issue such as children's services
that contained many intricacies (i.e. public defenders,
courts, guardians ad litem, and other); there was more than
one department that affected the outcome. She used how many
children were put back in their home as a measurement. She
reasoned there was a portion that the Office of Children's
Services impacted, but there were many other players as
well. She asked how to measure an organization's success if
they only played a part in the outcome.
Mr. Holt responded that it was the precise policy
discussion the legislature needed to have; whether the
legislature wanted to continue to invest in small pieces
spread out or in a different way. He stated that it was not
always necessary to reorganize to accomplish results. He
provided an example based on his experience and recalled
that whenever a new program was developed they had always
found a way that [Oregon] DOT had supported it in order to
receive funding. He stated that some of it was historical
buildup. He explained that the Oregon governor had put
someone in charge in order to accomplish the goals. He
detailed that if there were problems the commissioner -
through work with the governor - solved the issues. He
believed the process illustrated in his presentation would
highlight Representative Wilson's point.
2:34:49 PM
Representative Wilson suggested that legislator played two
roles including allocating a budget and helping
constituents navigate through issues with state agencies.
She furthered that in their role with constituents,
legislators looked further into agency details and whether
they were following their policies. She reasoned that it
was not possible to keep their role with constituents
separate from their role in the budget. She wondered if it
was possible to keep the two things divided.
Mr. Holt replied that legislators had a tough job. He
believed legislators needed to set their investment
framework. The reality was that legislators did have
constituents and he surmised they worked with them on an
exception basis where they had to go into an agency to ask
for further detail. He stated that it created problems to
take the one thing and presume that it was a problem
everywhere as opposed to considering whether the issue was
an aberration. He furthered that it was the value of the
bigger framework; even though a legislator needed to do its
diligence on a single case it also had the backup showing
that overall an agency appeared to be doing well based on
the broader indicators.
2:36:45 PM
Representative Wilson presented a hypothetical scenario in
which an agency was not working. She wondered if that was
the time to have a discussion about privatization. She
reasoned that everything did not always work as expected.
She wondered if there was a point to have a conversation
about whether the service really did not belong within
government.
Mr. Holt responded that there could be success if every
department had the mission matrix system operational. He
furthered that the results would provide the total picture.
He noted that there was not time for him to speak to how to
solve problems. He added that the legislature had many
mechanisms it could deploy. He elaborated that the process
in the presentation set up a discussion and accountability
framework that would lead into the discussions mentioned by
Representative Wilson.
Representative Wilson asked about a scenario where the
accountability not working. She elaborated that a service
to be performed could be outlined in a department, but
could not be getting done. She surmised it would bring them
to a point where other options should be discussed. She
continued that the state still may be mandated to provide
the service, but it could consider where else the service
could be provided. She asked there were several years where
the missions and measures were not accomplished it would be
a point for the next conversation to happen.
Mr. Holt agreed that if the legislators as the investors
were not seeing the return, it needed to start asking
questions. He stated that everyone knew that the definition
of insanity was doing the same thing and expecting a
different result. He reasoned that if a change was not made
a change in the result would not occur.
Mr. Holt moved on to slide 22 titled "DOT&PF/NR Alignment."
He looked at alignment on a regional basis and focused on
the Northern region in his example. The slide contained
four core services and the operating divisions within the
region. Color coding on the chart indicated the
contribution the divisions were making to the core
services. For example, the slide indicated that the color
red representing design contributed to all of the core
services. The slide illustrated how alignment was
contributing in the division. He stated that the slide also
provided visibility into how the $106 million budget for
the region was divided across the core services and the
specific contributions of each division. He believed it
provided the power for legislators to actually begin some
"what if" scenarios. The legislature could use the results
to determine if it deemed that a reduction was necessary.
He pointed to core service 2 "operate Alaska's
transportation infrastructure" and questioned how the
service would be impacted if the funding was cut in half.
He observed that 78 percent of the core service was being
done by the Division of Highways and Aviation. He pointed
to the services provided by the division including
illumination, signals, snow and ice maintenance, surface
maintenance, and bridge maintenance. He remarked on the
significance of the services and believed the cut may be
too deep. He illuminated that without even looking at
measures, the methodology in the presentation would provide
helpful analysis tools; it would enable legislators to
quickly establish a service impact. At that point it would
be easy to see how a smaller cut, such as 10 percent, would
impact the division. He reiterated that it would be
possible to quickly see some of the impact of the potential
cuts. He stated that it would then form a good conversation
between legislators and the departments.
2:42:18 PM
Mr. Holt turned to slide 24 titled "FY2015 Budget
Alignment" related to DHSS. He noted that the slide
reflected a spending typology that enabled legislators to
see how money flowed and the potential effect to a program
based on the money. He noted that during his presentation
the upcoming Saturday he would show information updated to
2016 and 2017, in addition to cuts that had been made and
the impacts the cuts had; it would allow them to get down
to a program and do "what if" scenarios in real time to
determine the impact of different options to help
legislators with deliberations. He furthered that it would
give legislators more opportunity to analyze. He relayed
that it had taken DHSS a couple of years to get to the
current point. He reiterated his earlier statement that DOT
had put the emphasis on getting the measures going and were
currently moving towards the budget.
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, moved to the portion of the presentation
titled "Alaska Department of Transportation and Public
Facilities: How we are Using RBB/RBA" beginning on slide
25. He addressed slide 26 titled "Overview." He intended to
discuss why RBB/RBA was chosen, why the particular
methodology had been selected, and how the department had
employed the methodology. He planned to address how DOT had
used RBB/RBA to navigate through the $34-plus million
unrestricted general fund (UGF) budget cut for FY 16.
Additionally, he would speak to how the department had used
RBA to provide a clear framework for preparing its FY 17
budget and how it was using the methodology to improve how
it provided the context for ongoing department
transformation.
Co-Chair Neuman asked Commissioner Luiken to address how
the department would measure the effects internally as
well.
Commissioner Luiken addressed slide 27 titled "Why We Chose
RBA." He recalled seeing the budget alignment chart shown
earlier in the presentation (slide 24) the previous year
and wanting to develop one for DOT. He recognized that the
department needed a better way to communicate with the
legislature about how DOT's budget was managed. He
discussed his personal goal of "One DOT," which he would
discuss later in the presentation. The idea was that the
methodology provided a framework that could allow DOT to
align horizontally and vertically towards the concept of
One DOT. He furthered that the real challenge was the state
was facing enormous fiscal challenges; therefore he felt it
would be irresponsible if the department did not use a
framework to look at the best tools that would enable the
department to deliver its mission and to clearly
communicate how it would do so. He detailed that DOT had
absorbed a $34.5 million budget cut in one year and had
used results based alignment to help. He recognized there
would be additional funding challenges ahead and the
framework was helping the department look ahead to FY 17.
The department was looking for the best tools to ensure it
was delivering on its mission; the RBA tool heightened the
importance of telling the department's story to its
investors. He furthered that the department could better
explain its funding needs by linking its resources to its
core service outcomes; it could also articulate the risk of
the resource reductions to the outcomes and measure mission
accomplishment. The department was focused on the measures
supporting decision making and on the outcomes it was
trying to achieve; it would lead to accountability and
would enable the legislature to hold the department
accountable for the funding it allocated to DOT.
Additionally, the department was using the tool to operate
as a continually improving organization (creating
efficiencies, reducing costs, and providing Alaskans with
the best transportation system).
2:48:12 PM
Commissioner Luiken addressed how the tool helped DOT
navigate the FY 16 $34.6 million reduction (slide 28). The
department had looked at it as an opportunity to catalyze
cross pollination of ideas. He detailed that the department
had held eight workshops over a nine-month period, where it
had brought people in from throughout the department
related to the four core services (i.e. to operate,
maintain, expand, and provide marine transportation
services). The department recognized that it could not be a
top down exercise and had to come from within the
organization, which had allowed DOT to begin the process of
horizontal alignment (an increased understanding of how
everyone in the department had contributed to the mission).
He furthered that the process was also aiding vertical
alignment as well. The goal was for every employee to
understand how they contribute to the mission through
direct and core services. For example, his hope was that
ultimately an operator would understand that they kept
Alaska moving through service and infrastructure. He turned
to slide 29 titled "Prepare." The tools had provided a
clear framework for preparing the governor's proposed
budget. He detailed that the department's executive team
had been given scenarios and reduction targets within the
Office of Management and Budget development process and had
asked the individuals if they could support the process. He
spoke to the importance of having complete consensus as a
team. He continued that the department had taken the time
to look at its organization and had recognized that there
were some inefficiencies. The department was looking at
ways to reduce the inefficiencies; one way was to examine
how the department was organized. For example, the slide
illustrated an example of how DOT had reorganized and
streamlined the aviation structure; it had also centralized
planning.
Representative Edgmon referred to the aviation example on
slide 29. He observed there were 14 boxes in the old
aviation flow chart and 7 in the new chart. He asked about
the net result and wondered if employees had been let go or
reassigned in other areas of the department.
2:51:49 PM
Commissioner Luiken replied that part of the answer
pertained to absorbing some of the cuts. He stated that
there was probably not a significant difference in the
number of people doing the work, but a reorganization of
responsibility had taken place. He elaborated that there
had been a streamlining of decision making and response
times. He did expect the department would likely see some
reduction in personnel, but it had only been working on the
RBB process for four or five months so it had not reached
that point. From an organizational perspective, the
department was reducing the time it took to get information
up and down the chain.
Representative Gattis asked for clarification. She wondered
if the chart on slide 29 indicated that seven positions had
been removed or if the individuals had been reassigned to
another area in the department.
Commissioner Luiken replied that the number of people had
not yet been reduced, but an organizational structure
change had taken place. He advanced to slide 30 and relayed
that RBB/RBA was providing a context and lexicon for
ongoing transformation under the One DOT organizing
principal; he wanted RBB/RBA to be part of the department's
DNA. The slide included an image of the RBA website that
contained all of the matrixes shown earlier in the
presentation. Additionally, the website contained the tool
for the work teams to use to determine their departmental
roles. He continued that as DOT had undergone the process
it had begun looking at where it had experienced mission
creep away from its direct core services. The process was
allowing the department to make the decisions about whether
each service provided by the department fell within its
core service category.
Representative Munoz wondered how the Alaska Marine Highway
System (AMHS) fit into the One DOT goal. Additionally, she
asked how RBA/RBB affected AMHS.
Commissioner Luiken replied that providing marine
transportation service was one of the department's core
services. The department recognized the vast importance of
AMHS to the overall transportation system. He addressed how
AMHS fit into One DOT and explained that DOT was focused on
providing transportation service and facilities to all
Alaskans.
2:55:25 PM
Commissioner Luiken continued to address slide 30. He
pointed to another website example showing one of the
initiatives that had come out of RBA: everyday lean
intranet sites. The department was collecting input from
employees on ways it could reduce the cost of doing
business. The department's intranet site enabled employees
to communicate ideas they believed would save the
department money directly with the commissioner. For
example, the department "busted up" numerous sand spinners
each year - the spinners cost approximately $5,000 each. He
explained that a department employee had designed a guard
that cost about $400, which could potentially save $25,000
to $30,000 annually. The example included one of the ways
the department was using the framework to improve and align
as an organization and to communicate with the legislature.
The department was developing measures to determine how it
was conforming to plan, how it was doing on accuracy,
timeliness, and cost. He expounded that DOT would
ultimately look at the measures on a quarterly basis at the
leadership level; there were leadership level measures that
the department hoped to have running smoothly in one year.
He believed it would take a year to determine which
measures were meaningful and helped DOT make the right
decisions. The department had loads of data; and the goal
was to determine the important data that would enable them
to make decisions.
Co-Chair Neuman stated that he would like to see the
process in all departments statewide to enable internal
measurement across departments. He asked if DOT was seeing
comparisons between its divisions. He asked if there were
any examples where the department had started to work
"interagency" with what it had developed.
Commissioner Luiken replied that DOT was engaging with DHSS
to learn from its budget development. Simultaneously DHSS
was learning from DOT on how it had developed measures. He
believed that as other departments saw the framework, DOT
would be happy to help the departments understand how it
worked and how it could be incorporated. He continued to
address slide 30. He stated that every DOT employee would
be given the chance to attend an RBA workshop by November.
He elaborated that they wanted employees to understand the
process in order to understand how to identify which
measures were most effective to help them do their job.
The department would continue to refine its budget
presentation for efficiency and effectiveness. He explained
that ultimately DOT was rewarding efficiency and
effectiveness. Lastly, the department was telling others
what it had learned in the process.
Co-Chair Neuman shared that he had asked former DHSS
Commissioner Bill Streur how the process had worked for
him. Mr. Streur had relayed that a department employee had
told him it was the first time someone had actually asked
him what he did for the department and why it was
important. He discussed the usefulness of tool for
employees to realize they were part of a system and how
they could make the program better. He noted that the story
shared by Mr. Streur had made an impression on him.
3:00:47 PM
Representative Gattis addressed that some private
businesses tapped employees and retirees as a resource to
ask about efficiencies. She remarked on the low number of
residents in Alaska. She shared that her husband had
recently retired from FedEx. She detailed that FedEx had
financially rewarded innovative employees. She furthered
that if someone on the outside of the organization could
find savings the company would give the person 50 percent
of the savings. She surmised that if the state could save
50 percent and someone had incentive to help it would be a
win-win situation. She stated there were many ways to
incentivize individuals working for the state.
Commissioner Luiken appreciated the comments. He elucidated
that the budgeting method was based on a couple of
leadership principles. First, leaders have more influence
than they recognize and know - the method was helping
leaders to recognize and exercise the leadership. Second,
the people closest to the work often know best where
efficiencies could be found to make the job better. He
furthered that DOT received a grant from the Western
Association of State Highway and Transportation Officials
it could use to help incentivize the activity.
Representative Edgmon thought the presentation had been
good and saw the usefulness of the budgeting method. He
stated that DOT had already demonstrated results. He
addressed that it was a political environment where some
employees were classified and others were not. He furthered
that in rural Alaska the costs of services were much higher
and the economies of scale were less than in urban areas.
He wondered about some of the challenges that made the
construct more challenging to put into practice.
Commissioner Luiken replied that the geography of the state
and the magnitude of the landmass made the implementation
challenging. He detailed that the state's large size made
it difficult to get the word out to small maintenance
stations to ensure the employees understood their job and
how it contributed to the department's mission. He believed
it was one of the biggest challenges facing the department.
Representative Edgmon asked for verification that AMHS
accounted for 46 percent of the department's undesignated
general funds. Commissioner Luiken replied that the number
had been 46 percent, but based on the budget from the prior
year it was considerably lower at present.
Representative Edgmon observed that DOT had unique
challenges because its responsibility was much different
than that of DHSS. Additionally, DOT was largely funded
through federal appropriations and was responsible for
building, designing, maintaining, and keeping things
moving. He furthered that DOT's personnel costs were
probably lower than those at DHSS. He struggled with how to
even the playing field between all state agencies as he
considered how the legislature allocated spending. He
reasoned that it made for an uneven playing field if
several agencies were implementing the results based
budgeting but others were not. He stated that it would be
helpful further down the road to have other agencies
implement the budgeting method as well in order to allow
legislators to look at the issue more analytically.
3:06:46 PM
Co-Chair Neuman agreed that DOT had a complex budget given
its various funding mechanisms and all of the different
work it did. He did not believe people realized that DOT
owned and maintained most of the state buildings. He
pointed to the complexity of the University and DHSS
budgets as well and remarked on the helpfulness of breaking
them down for the legislature and the public to view.
Mr. Holt addressed Representative Edgmon's previous
question related to the geographical challenges of the
state. He had observed that due to the geographical
difference people became very insular in their thinking and
decide that something could only be done in one way. He
furthered that when employees were presented with other
ways of doing a job it opened up opportunity for
improvement. He believed that the people doing the work
were in the best position to determine quick improvements.
He shared that he had friends who worked for FedEx - the
company measured things by the second because they believed
the driver was the one who best understood the job. He
noted that FedEx had also tried to be consistent in its
focus in order to begin looking at what it cost to provide
similar services around the state. He agreed that if the
budgeting method was implemented by all agencies it may be
easier to look at the budgets; however, he stated that the
various agencies were like apples and oranges. He remarked
that the state was diversified like any investment
portfolio. He furthered that the state could choose to take
more risk in some areas and less in others - the framework
could help the legislature set up a true investment
portfolio on a statewide level. He added that the state
would not always get stellar return on everything because
that was not the nature of the business.
3:10:01 PM
Representative Edgmon had always wished for a process that
allowed state agencies to look internally at their moving
parts and to align them in a way that produced better
outcomes - that would help the legislature during session.
He believed the legislative budget subcommittees, the 90-
day session, and what was done during session and out of
session, were all worthy of examination. He thought the
legislature should make it a priority on its own.
Mr. Ecklund commented that two agencies had taken a deeper
dive into results based budgeting. He relayed that even
though they had not done results based budgeting, all of
the other agencies had core services outlined and measures
with results. He continued that the other agencies had not
realized the internal benefits realized by DOT and DHSS. He
detailed that the two agencies had benefitted from the
process at the department level and in their communication
with the legislature. He furthered that everyone heard
about the negative aspects of government including silos,
inefficiencies, and poor communication; but the process had
helped DOT and DHSS break down silos because they had a
clearer picture of their mission goals. The departments
were accomplishing effectiveness and efficiencies; whereas,
the benefits between the legislative finance committees and
the departments was the investor mentality. He reasoned
that it was a different dynamic when finance committee
members viewed funds they were appropriating as investments
into agencies and held agencies accountable. He furthered
that the conversations could still take place with
departments that had not done the deep dive into the
method. He pointed to the detailed budget books as a
resource, which included core services, missions, and
results. He added that the results based budgeting was not
a silver bullet, but provided another tool legislators
could use to evaluate core services/programs and what the
state could afford. He noted that even though some programs
may be beneficial, it may be possible that the state could
not afford to provide them any longer.
Mr. Holt addressed slide 31 titled "Key Questions for
Department Leadership." He remarked that there was a
starting point for each of the [budget] committees. He
noted that they would not have the same level of detail as
DOT and DHSS, but they did have information that provided a
starting point. He believed investors should be asking
departments what their mission is and "if you don't agree -
stop." He stated that good performing programs that did not
align with the mission caused problems. He read from the
slide:
· How do agency Core Services contribute to the Mission?
· Change the culture of government, moving away from
just getting dollars, to more of a management approach
to getting better outcomes.
· Changing how the legislature and departments talk
about investing, verses just budgeting
· This process is not a means to an end nor a means to a
pre-determined decision, rather it is a means to a
conversation: engaging policy makers in the discussion
of "what's important", "where should we invest", and
"how did we do"?
· Focus is to improve service to Alaskans -not keep
score.
· Most entities have adequate effectiveness measures,
but are light on efficiency measures. Measures must be
balanced.
Mr. Holt emphasized that asking departments how they were
using their performance measures was not micromanaging. He
provided an example of micromanaging. He concluded with
takeaways on slide 32:
· Change the culture of government, moving away from
just getting dollars, to more of a management approach
to getting better outcomes.
· Changing how the legislature and departments talk
about investing, verses just budgeting
· This process is not a means to an end nor a means to a
pre-determined decision, rather it is a means to a
conversation: engaging policy makers in the discussion
of "what's important", "where should we invest", and
"how did we do"?
· Focus is to improve service to Alaskans - not keep
score.
· Most entities have adequate effectiveness measures,
but are light on efficiency measures. Measures must
be balanced.
Mr. Holt elaborated that investing included an embedded
expectation that there would be some type of service or
improvement return.
3:17:27 PM
Co-Chair Neuman discussed that almost on a daily basis
legislators heard about the benefits of programs including
how they saved money and lives; then the legislature had to
decide whether the state could afford the programs. For
example, if the Department of Public Safety saved lives
maybe money should be put towards Alaska State Troopers
instead of DHSS or other. He wondered how to measure items
against each other. He elucidated that the state had many
great programs and many things people wanted to see funded
(e.g. broadband and public radio). He furthered that there
were great programs that helped children learn, but the
Department of Education and Early Development and schools
wanted more school funding. He wondered if there was a way
to use the results based budgeting to measure programs
against each other. He wondered how to decide what to fund
and what not to fund.
Mr. Holt answered that it was the difficult position
legislators were in and he believed it was the reason they
were elected into office. He furthered that when there were
insufficient funds to cover expenses it was necessary to
either borrow money or eliminate programs. He stated that
the RBB method was one way to help. He remarked that the
state was in a very difficult fiscal position at present.
He agreed that there was no silver bullet and the types of
things legislators had to do to determine services going
forward could not be the same as in the past. However,
there was not a formula or program that could compare
programs to determine the best return - programs became
value-based. He was not aware of any program that would
allow the decision to be easily made. The RBB could help
get some of the "flack" out of the way in order to examine
the potential impact of decisions. He believed that
information alone was worthy of undertaking the process.
The process would enable legislators to knowingly could say
that there would be hurt and the legislature could come to
a compromise on what the budget would look like for the
next year with some sense of knowledge on what the impact
would be.
Co-Chair Neuman addressed that the Saturday morning meeting
would provide a more in-depth picture. Mr. Holt replied
that the presentation would include many DHSS examples.
Co-Chair Thompson addressed the agenda for the following
day.
ADJOURNMENT
3:22:35 PM
The meeting was adjourned at 3:22 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2016 Alaska House Finance Briefing_1-19-16_FINAL.pdf |
HFIN 1/21/2016 1:30:00 PM |