Legislature(2003 - 2004)

03/06/2003 10:15 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         March 6, 2003                                                                                          
                           10:15 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Jim Holm, Vice Chair                                                                                             
Representative Nancy Dahlstrom                                                                                                  
Representative Bob Lynn                                                                                                         
Representative Paul Seaton                                                                                                      
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Ethan Berkowitz                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW:  DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES                                                                     
                                                                                                                                
[For the regular  meeting minutes, see the 8:01  a.m. minutes for                                                               
this date.]                                                                                                                     
                                                                                                                                
TAPES                                                                                                                         
                                                                                                                                
03-18, SIDE A                                                                                                                   
                                                                                                                                
CHAIR  BRUCE WEYHRAUCH  called  the meeting  of  the House  State                                                             
Affairs  Standing   Committee  back   to  order  at   10:15  a.m.                                                               
Representatives  Weyhrauch, Seaton,  Gruenberg,  Holm, Lynn,  and                                                               
Dahlstrom were present at the call to order.                                                                                    
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                        
                                                                                                                                
JOHN    MacKINNON,    Deputy    Commissioner,    Department    of                                                               
Transportation  &  Public   Facilities  (DOT&PF),  explained  the                                                               
definition  of  "Public Facilities"  as  those  buildings in  the                                                               
state  that  are owned  and  operated  by  the State  of  Alaska.                                                               
Presently  the  Alaska  Court System  (ACS),  the  Department  of                                                               
Administration  (DOA), and  the  Department  of Transportation  &                                                               
Public Facilities  have jurisdiction over state  owned facilities                                                               
within Alaska.                                                                                                                  
                                                                                                                                
MR. MacKINNON,  in response  to questions,  said that  the Alaska                                                               
Court System often contract with  Department of Administration or                                                               
DOT&PF to  maintain its buildings  because it  is not set  up for                                                               
such; that  the Capitol  Building is  managed by  the Legislative                                                               
Affairs  Agency  (LAA); and  that  the  DOT&PF  is in  charge  of                                                               
highway  maintenance.   He went  on to  say that  the mission  of                                                               
statewide  facilities maintenance  and operations  is to  improve                                                               
the quality  of life for  Alaskans by  cost-effectively providing                                                               
environmentally-sound and  reliable public facilities.   It is to                                                               
benefit the traveling public in  Alaska communities through sound                                                               
and  effective leasing  of property  management practices  at the                                                               
state's airports and harbors.                                                                                                   
                                                                                                                                
MR. MacKINNON also  went on to say that there  are three separate                                                               
regions in the  state - Central, "Northern," and  Southeast - and                                                               
that  each  region is  responsible  for  the maintenance  of  its                                                               
respective facilities.   The facilities components  furnish basic                                                               
services,  utilities  such  as  electricity,  water/sewer,  waste                                                               
disposal,  janitorial.  The  facilities component  also  provides                                                               
preventative  and  routine maintenance,  repairs/remodeling,  and                                                               
major   maintenance   of   all  state   owned   facilities.   The                                                               
department's component  of this maintains and  operates 618 state                                                               
owned buildings with over 2.6 million square feet of space.                                                                     
                                                                                                                                
MR.  MacKINNON  said  that  this square  footage  is  only  37-39                                                               
percent of  the total square footage  of space used by  the State                                                               
of  Alaska.    Budget  appropriations  totals  approximately  $12                                                               
million  annually, and  there are  79  employees maintaining  and                                                               
operating  the facilities.    In  October of  2000,  a number  of                                                               
unoccupied,  state-owned   buildings  were  transferred   to  the                                                               
Department of  Administration for its  use and maintenance.   The                                                               
DOA,  in turn,  contracts back  to DOT&PF  for routine  and major                                                               
maintenance for  many of the  DOA's buildings, many of  which are                                                               
multi-agency use.   In addition, the DOT&PF  administers over 200                                                               
contracts  and work  orders  for  construction, maintenance,  and                                                               
janitorial projects.   If  there is  not in-house  expertise, the                                                               
DOT&PF  contracts all  construction,  maintenance and  janitorial                                                               
projects out.   Compliance with  the Americans  With Disabilities                                                               
Act (ADA) and  the Resource Conservation and  Recovery Act (RCRA)                                                               
is a major part of DOT&PF's workload.                                                                                           
                                                                                                                                
MR. MacKINNON relayed that the  key issues for the DOT&PF involve                                                               
maintenance  of  the facilities.    Lack  of maintenance  in  any                                                               
facility results  in condemnation:   in the last two  years, four                                                               
maintenance  stations  were  condemned   due  to  lack  of  major                                                               
maintenance on  an aging facilities.   One of those  is scheduled                                                               
for  replacement  this  year.    The  department  has  identified                                                               
between   $45  million   and  $55   million  worth   of  deferred                                                               
maintenance  backlog,  and   include  door  replacements,  window                                                               
replacements, roof  replacements, electrical upgrades,  fuel tank                                                               
replacements, installation  of oil  and water  separators, safety                                                               
issues such as the replacement  of overhead cranes and hoists and                                                               
repair  and  replacement  of  heating   systems.    Projects  are                                                               
prioritized first by  health and safety issues, and  then by code                                                               
compliance.                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  asked about  the budget process  that should                                                               
include  maintenance of  facilities  but doesn't.   He  suggested                                                               
that  the DOT&PF's  budgeting process  should include  monies are                                                               
needed for repair and maintenance.   Rep. Holm strongly expressed                                                               
his  opinion on  the  importance of  asking  the legislature  for                                                               
annual  maintenance and  repair funding  rather than  letting the                                                               
buildings fall into ruin and require replacement.                                                                               
                                                                                                                                
MR.  MacKINNON agreed,  and  expressed a  desire  to have  DOT&PF                                                               
begin  to  include  repair  and   maintenance  in  the  budgeting                                                               
process.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG commented  that  maybe now  would be  a                                                               
good  time to  introduce  legislation requiring  that repair  and                                                               
maintenance be included in the annual budgeting process.                                                                        
                                                                                                                                
MR. MacKINNON,  in response to  a question regarding  bonding for                                                               
repair  and maintenance,  said  he  thinks it  would  be good  to                                                               
include a certain amount in  the budget for maintenance costs for                                                               
facilities.  After  building facilities, it is  the obligation of                                                               
the state to maintain them,  regardless of what department of the                                                               
state  being  discussed.    In   the  budget  process,  when  the                                                               
departments and  the legislature are  looking for places  to cut,                                                               
repair and maintenance is an easy  place to start.  The public is                                                               
not affected as much by low  maintenance as are the employees who                                                               
use the buildings.   Bonding for repair and  maintenance would be                                                               
a call for the Legislature to make.   In 1997 and 1998, there was                                                               
a deferred maintenance task force  that identified a large number                                                               
of  needs  for repair  and  maintenance  throughout the  state  -                                                               
largely for education facilities  (rural and urban schools, etc.)                                                               
Due to the high cost of this item, nothing ever came of it.                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG asked why  there are so many departments                                                               
owning  buildings.    Is  it  not  more  efficient  to  have  one                                                               
department  in   charge,  to   standardize  procedures   and  the                                                               
personnel  with expertise,  and get  the economies  of scale  and                                                               
coordination?                                                                                                                   
                                                                                                                                
MR. MacKINNON  replied that it  would make a  lot of sense  to do                                                               
something  like that.    The  department is  in  the business  of                                                               
building  and maintaining  highways and  buildings.   The largest                                                               
issues facing DOT&PF  for not funding repair  and maintenance are                                                               
safety  issues  for  employees  and  the  public  who  enter  the                                                               
buildings.    Most rural  maintenance  shops  have had  a  safety                                                               
assessment done in the recent past.   It was discovered that four                                                               
of them  were in serious  danger of collapse, totally  because of                                                               
lack of maintenance.  Some  state maintenance shops date from the                                                               
1940s.                                                                                                                          
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked  whether the aforementioned figure                                                               
stated for deferred maintenance included all facilities.                                                                        
                                                                                                                                
MR. MacKINNON  replied that the absolutely  essential life/safety                                                               
issues are  taken care  of by  DOT&PF with  funds it  scrapes up.                                                               
The  funding  needs  reflected  in  the  aforementioned  deferred                                                               
maintenance figure  is prioritized,  and cosmetic  work is  not a                                                               
priority unless it  will also extend the life of  a facility.  In                                                               
response to  the question  of whether the  state was  being fined                                                               
for  not maintaining  facilities,  he stated  that safety  issues                                                               
such as boiler  and furnace annual inspections  are completed and                                                               
rarely  do they  not pass  inspections.   He went  on to  discuss                                                               
improvements  that  have  been made  to  many  public  facilities                                                               
including energy  saving projects statewide.   Replacing lighting                                                               
fixtures in an  office building with more  efficient fixtures has                                                               
about a three-and-a-half  year payback on the  costs of materials                                                               
and labor.     There are several DOT&PF  buildings in the process                                                               
of receiving upgrades at this time.                                                                                             
                                                                                                                                
REPRESENTATIVE  GRUENBERG  suggested  looking into  the  idea  of                                                               
putting  together some  legislation  or good  public policy  that                                                               
would help the department along.                                                                                                
                                                                                                                                
REPRESENTATIVE HOLM said  he would like to reference  a letter to                                                               
Mr.  MacKinnon  with  further  questions   and  then  review  the                                                               
response, and  offered to  share that response  with the  rest of                                                               
the committee members.                                                                                                          
                                                                                                                                
REPRESENTATIVE  SEATON  raised  the   issue  of  state  equipment                                                               
leases,  and asked  whether the  equipment  lease arrangement  is                                                               
such that  all heavy equipment  is leased  from the state  for 10                                                               
years and  at the end of  that 10-year period the  state has paid                                                               
for the entire unit, but does  not have the piece of equipment to                                                               
sell or do  anything else with.  He mentioned  that there is also                                                               
a $40  per hour maintenance charge  that the agencies pay  to the                                                               
state rather  than the  standard $28  per hour.   This  seems, he                                                               
added, to be  very inefficient and costly for  the departments to                                                               
pay interdepartmentally.  Is there a  way to allow each region to                                                               
purchase their own  equipment or work it out to  pay less for the                                                               
maintenance?  This  makes for a large tap on  their budget for no                                                               
real gain.   "Davis-Bacon" requirements dictate a  higher rate be                                                               
charged on equipment  repair, and this is a big  drain on budgets                                                               
regionally.   He  also  asked  about a  fuel  contract for  state                                                               
vehicles in order for  the state not to pay a  higher rate due to                                                               
pump prices being  charged for a very large portion  of the state                                                               
fleet.                                                                                                                          
                                                                                                                                
MR. MacKINNON responded  that the state equipment fleet  is not a                                                               
moneymaker, it is  designed to be a break-even program:   pay for                                                               
the  use of  the equipment  and build  up a  replacement fund  to                                                               
replace the equipment.   Costs of new  equipment currently exceed                                                               
the  money  sitting  in  the  lease  account;  for  example,  the                                                               
original cost of a grader is  $150,00 and the replacement cost 10                                                               
years  later  is  $220,000.    By  using  a  competitive  bidding                                                               
process,  the  state ends  up  with  several different  types  of                                                               
equipment  and manufacturers  and  so there  is  a difficulty  in                                                               
maintaining parts and training maintenance staff.                                                                               
                                                                                                                                
NANCY  SLAGLE,  Director,  Division of  Administrative  Services,                                                               
Department of Transportation &  Public Facilities (DOT&PF), added                                                               
that  equipment  fleet headquarters  does  contract  with a  fuel                                                               
provider, and  this takes about  $.10 off  of the pump  price for                                                               
state vehicles.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  SEATON  said  that   last  year,  state  research                                                               
vessels  were not  able to  dovetail onto  the contract  that the                                                               
Alaska Marine  Highway System (AMHS) utilizes,  and this resulted                                                               
in a loss of about $40,000.                                                                                                     
                                                                                                                                
MS. SLAGLE  said that  the department  would look  into utilizing                                                               
the state contract with other departments.                                                                                      
                                                                                                                                
GEORGE   LEVASSEUER,   Maintenance    and   Operations   Manager,                                                               
Southcentral   District,    Northern   Region,    Department   of                                                               
Transportation &  Public Facilities (DOT&PF) ,  relayed that he'd                                                               
worked the area from Cordova to  Delta for almost 30 years and is                                                               
now  filling in  on an  interim basis  for the  State Maintenance                                                               
Engineer.                                                                                                                       
                                                                                                                                
CHAIR WEYHRAUCH  thanked everyone for coming  and speaking before                                                               
the committee.   He spoke  to Rep. Gruenberg's comment  about the                                                               
possible  need to  have the  committee get  together and  work on                                                               
legislation that would be of benefit to the DOT&PF.                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  suggested that the chairs  of the House                                                               
State  Affairs Standing  Committee and  the House  Transportation                                                               
Standing Committee and  their staff get together to  see how they                                                               
could help the  department.  He went on to  list several items he                                                               
had  concerns about:   one,  should  there be  one department  in                                                               
charge of public  facilities; two, should there  be a maintenance                                                               
component as part  of the budget requirements;  and three, should                                                               
the legislature  revisit the concept of  the Deferred Maintenance                                                               
Task Force.                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH stated  that he  would  prefer to  work on  this                                                               
project as  a whole  committee before  going to  a sub-committee.                                                               
He also  voiced his opinion  that since both  Representative Holm                                                               
and Representative  Gruenberg have  concerns, it is  important to                                                               
ask questions and get responses to  the committee in order for it                                                               
to move forward.                                                                                                                
                                                                                                                                
ANNOUNCEMENTS                                                                                                                 
                                                                                                                                
There were no announcements.                                                                                                    
                                                                                                                                
COMMITTEE ACTION                                                                                                              
                                                                                                                                
The committee took no action.                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
State Affairs  Standing Committee meeting was  adjourned at 10:50                                                               
a.m.                                                                                                                            
                                                                                                                                
NOTE:   The meeting was  recorded and handwritten log  notes were                                                               
taken.  A  copy of the tape(s)  and log notes may  be obtained by                                                               
contacting the  House Records  Office at  State Capitol,  Room 3,                                                               
Juneau,  Alaska  99801  (mailing address),  (907)  465-2214,  and                                                               
after  adjournment  of the  second  session  of the  Twenty-Third                                                               
Alaska  State Legislature  this  information may  be obtained  by                                                               
contacting the Legislative Reference Library at (907) 465-3808.                                                                 

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