Legislature(1999 - 2000)
02/24/1999 09:05 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
February 24, 1999
9:05 A.M.
TAPES
SFC-99 # 36, Side A (000 - 593)
Side B (593 - 000)
CALL TO ORDER
Co-chair Sean Parnell convened the meeting at approximately
9:05 A.M.
PRESENT
In addition to Co-chair Parnell, Senators John Torgerson,
Randy Phillips, Dave Donley, Loren Leman, Gary Wilken, Al
Adams, Pete Kelly and Lyda Green were present when the
meeting was convened.
Also Attending: ANNALEE MCCONNELL, Director, Office of
Management and Budget; BOB POE, Commissioner, Department of
Administration; MARGARET PUGH, Commissioner, Department of
Corrections; DWAYNE PEOPLES, Director, Division of
Administrative Services, Department of Corrections; BARBARA
J. RITCHIE, Deputy Attorney General, Civil Division,
Department of Law; NANCY SLAGLE, Director, Division of
Administrative Services, Department of Transportation and
Public Facilities; DAVID TEAL, Director, Division of
Legislative Finance; aides to committee members and other
members of the Legislature.
Attending via Teleconference: MARY LOU BURTON, University
of Alaska and STEVE SMITH, Director of Information
Technology, University of Alaska from Anchorage.
SUMMARY INFORMATION
Co-chair Parnell convened the meeting at approximately 9:05
a.m. and outlined the schedule for the morning meeting. He
said he would continue SB 83, judgments.
SENATE BILL NO. 83
"An Act making and amending capital, supplemental, and
other appropriations, and appropriations to capitalize
funds; ratifying certain expenditures; and providing
for an effective date."
ANNALEE MCCONNELL, Director, Office of Management and
Budget was invited to join the committee. She introduced
Margaret Pugh.
MARGARET PUGH, Commissioner, Department of Correction was
invited to join the committee. She explained the
overcrowding situation of the prisons. They will never be
able to have complete control over what happens in the
prison settings due to this situation. She said the amount
requested was needed to complete this fiscal year.
It was explained that prisoners were often in need of
medical care because they were coming from outlying areas,
especially at the Cook Inlet Pretrial facility. Because of
the volatility of a pretrial institution the situation is
less stable. It is necessary to hold staff at these
institutions at a specific level and to not reduce them.
Inmate health care was requesting $500,000 in the
supplemental.
DWAYNE PEOPLES, Director, Division of Administrative
Services, Department of Corrections was invited to join the
committee. He explained that the medical needs have
doubled since last year. The cost for providing medical
services are continuing to escalate.
Co-chair Parnell asked about pharmaceutical costs. These
were also continuing to rise.
Commissioner Pugh advised the committee that they had done
a mental health inmate assessment. It was found there were
special mental health cases in the probation and parole
program.
Senator Phillips asked about the bed count and what it was
at presently. Commissioner Pugh said that the bed count
was approximately four thousand two hundred sixty beds.
There have been some interesting trends in prisoner
population this year. At the peak difference from last
year, 1997 - 1998, there were about four hundred twenty
inmates. Then it leveled off towards the end of the year.
Senator Phillips asked about the inmates outside Alaska in
Arizona. Commissioner Pugh advised the out-of-state count,
including Federal facilities and alcohol treatment related
institutions.
Senator Phillips asked about the health care request. "If
the population hasn't increased what is happening?"
Commissioner Pugh said there were approximately 400 more
prisoners at the peak time. "We are seeing older inmates
and also an incoming population of younger prisoners."
They were taking in more young people. At last week's
count there were about four hundred inmates, age twenty-one
and younger. For the record she noted two sixteen-year
olds and two seventeen-year olds. This younger population
is growing and presenting special needs. They were also
seeing an increasing number of patients with heart ailments
and other gastro ailments.
Senator Leman said he was concerned in the meteoric rise in
mental health costs for the inmates. "Are we becoming
smarter about what our mental health needs are or are we
somehow getting billed for services? What can we do to
manage this?" Commissioner Pugh said they were concerned
about the same things. The department was working on how
to contain and control these costs. They were also
exploring either how to reduce them or at least keep them
at the same level. It had been ascertained that medical
care services seem to be delivered at the lowest level in
the outlying communities. She explained that they were
tending to revolving door inmates. This involved trying to
help these individuals get stabilized, however then they
are released and go back to the outlying areas where no
services are provided to help them continue in their
rehabilitation and/or medical care. Judge Rhodes in
Anchorage handles the mental health cases so that these
individuals do not become nameless.
Senator Leman outlined an experience he personally had with
an inmate from the Cook Inlet Pretrial facility. The
medical condition suffered by the inmate was not uncommon,
however, medication was expensive. Commissioner Pugh
responded, noting that this problem was nation-wide. The
medication was expensive and therefore drives up their
costs.
Senator Leman said perhaps it should be considered whether
or not these individuals should be institutionalized.
Commissioner Pugh explained what services could be provided
at the level they were presently budgeted at. At this
point Ms. McConnell spoke specifically to the budget for
beds. They were trying to transfer inmates in several
large trips to Arizona as contracted with the Federal
marshals. She felt this was a successful undertaking.
Mr. Peoples' also commented and said there had been one
consolidated supplemental request from the Department of
Public Safety and the Department of Corrections for the
transport of prisoners.
Senator Leman asked if there was any contract with the
airlines for prisoner transportation. He wanted to know if
top dollar was being paid for these transports? Mr.
Peoples said he did not feel there was any special rates.
For security reasons these transports are kept secret.
They try to do them in small batches and if airlines are
used these are done at full fare.
Commissioner Pugh said they are still looking for the most
inexpensive way to transport the prisoners out of state and
felt that contracting with the Federal marshals was the
best. For instate flights they try to make sure they have
several inmates at once so they can use charter.
Senator Phillips asked about the airline tickets. "Do we
pay full fare?" Mr. Peoples said they did not have a fare
arrangement with the airlines. Senator Phillips asked if
it was possible to negotiate a possible book fare for the
transportation of the prisoners. Commissioner Pugh said
she would check into this matter. Ms. McConnell said that
Commissioner Boyer had looked extensively into this last
year but Alaska Airlines was unwilling to provide any
negotiated rates for State employees or for State use.
Senator Phillips said that Alaska Airlines should provide
better fares for such a big user as the State, or else find
someone else.
Senator Green asked for a breakdown regarding the health
and medical requests of the inmates. Commissioner Pugh
said it was all out of state requests in this supplemental
portion. (Out of state inmates) She said they did try to
screen the inmates regarding their health and medical
problems and special needs. In addition, probation and
parole officers also monitor these.
Senator Adams asked about the balance. Mr. Peoples did not
know but said he would provide it.
Vendors concerned about furniture contacted Senator Leman.
Furniture was being purchased at a premium rather than on a
competitive market. Therefore, there were no benefits.
Commissioner Pugh said that a commission had been appointed
to oversee this matter. They had to insure there was a
minimum impact regarding this. The commission had contact
with various office supply companies in the State who meet
quarterly and then advertise their needs. She will provide
a breakdown to the committee.
Mr. Peoples noted three reductions included in the
supplemental. They were a reduction of beds in CRC, known
culture reductions and delays in obtaining a bid in Nome.
There was also delay in obtaining permits through the City
and the Courts.
In response to a question from Senator Leman, Mr. Peoples
said there had been difficulty in obtaining the beds in
Fairbanks. This resulted in the whole procurement of beds
being delayed. Senator Adams asked about the beds for the
Bethel facility? Commissioner Pugh said they were working
on this matter.
Co-chair Parnell directed the Commissioner's attention to
the memo from Senator Ward. He asked her to please address
these questions. With respect to the committee she said
she had not had time to look the memo over but will respond
in writing to the committee as soon as possible.
Co-chair Parnell then turned to section four of SB 83,
judgments and claims.
BARBARA RITCHIE, Deputy Attorney General, Civil Section,
Department of Law was invited to join the committee. She
gave a short overview of judgments and claims in general.
(Tape #36 switched to Side B at log 593.)
Senator Donley briefly commented and said he would like a
little more detail regarding these. He referred to item
these matters in writing.
Senator Donley referred to Trustees for Alaska, Kachemak
Bay Conservation Society vs. State of Alaska. He said the
committee should be examining a modification of this case.
Ms. Ritchie said it was now pending before the Supreme
Court. She explained the central issues of this case. The
case was remanded to the agency. Senator Donley said the
rules had evolved over time. She explained the Supreme
Court's interpretation of the case. Senator Donley
interrupted saying perhaps a statutory change was needed
here. Senator Leman concurred. Senator Torgerson asked if
the State assumed they were going to win the appeal? Ms.
Ritchie said they hoped they would win it. She went on to
explain that in the event the State loses, it may be at a
lesser attorney fees amount.
Senator Phillips asked what happened if the Legislature
refused to fund any of these cases? "Isn't there a
separation of powers? What would the Courts do?" Ms.
Ritchie said there would be a "separation of powers" issue.
Senator Phillips said in that case, then, the Legislature
would win because they were the ones appropriating the
money for payment of the judgments. Ms. Ritchie felt the
matter would end up being litigated, however, if the
Legislature refused to fund the judgments.
Senator Donley referred to the apportionment of fees
regarding item #5. Perhaps the statute should be tightened
up. He strongly stated that someone should be held
accountable. There was no accountability by the
individuals involved and further, no one was being held
accountable for the payment of these huge judgments. He
did not want to see this situation continuing in the
future.
Co-chair Parnell asked if there were any more questions on
Kachemak Bay as he wanted to continue on to the Y2K
section.
There followed a brief at ease approximately 10:05 a.m.
until 10:15 a.m.
Co-chair Parnell called HB 64.
HOUSE BILL NO. 64
"An Act making appropriations for year 2000
assessment, compliance, and remediation projects;
making appropriations under art. IX, sec. 17(c),
Constitution of the State of Alaska; and providing for
an effective date."
CS FOR HOUSE BILL NO. 64(FIN)
"An Act making and amending appropriations; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska; and providing for an effective
date."
CS FOR HOUSE BILL NO. 64(FIN)(title am)
"An Act making and amending appropriations for year
2000 assessment, compliance, and remediation projects
and modification of the Offender Base State
Corrections Information System and the Offender
Financial Accounting System in the Department of
Corrections; making appropriations under art. IX, sec.
17(c), Constitution of the State of Alaska; and
providing for an effective date."
Senator Donley explained that SCS CSHB 64, version "M",
dated 2/23/99, had been distributed by him on behalf of
Senator Jerry Ward.
BOB POE, Commissioner, Department of Administration was
invited to join the committee. He explained the requests
for Y2K. They will not know all the numbers until they
really get in. He felt that once all the appropriate
investigations were completed that the numbers would drop
considerably. He briefly outlined changes under the Alaska
Marine Highway, Kennicott assessment and said the
assessment had always been included.
Senator Donley asked if they were still paying for the
Kennicott?
NANCY SLAGLE, Director, Division of Administrative
Services, Department of Transportation and Public
Facilities was invited to join the committee. In response
to Senator Donley's query, she said they were working
closely with the Department of Law regarding the issue that
they were still paying for the Kennicott even out of this
year's budget.
Senator Donley said he was not going to vote for this Y2K
non-compliance matter if it was not going to be repaired
under warranty. Ms. Slagle indicated that at present the
system does work but the question remains would it work in
the year 2000? Commissioner Poe advised that they were not
allowed to talk about this matter right now. They just
have to make sure there is not a Y2K problem, which is the
overall challenge.
Senator Donley asked to see any correspondence relating to
this matter. He stated that if the vessel was brand new it
should be working correctly. Commissioner Poe said he did
not have any good answers at this time. Senator Donley
wondered if perhaps the manufacturer should be looking into
this matter and not the State. The Commissioner said he
could not guarantee this suggestion. He can only pursue
the matter himself now, and then ask for legal remedy
later.
Barbara Ritchie said Douglas Gardner, Assistant Attorney
General, Department of Law was handling this matter. Co-
chair Parnell asked that Mr. Gardner contact Senator Donley
and any paperwork be provided his office. Senator Donley
will see that the committee gets the information.
Senator Torgerson said there were millions of dollars in
back claims to the original building of the Kennicott. The
reverse is that the vessel be tied up until it is proven
Y2K compliant. Perhaps the Marine Highway director and the
Department of Law should come before the committee and
advise them the status of this matter. Commissioner Poe
said he would try to answer Senator Donley's questions as
closely as possible.
MARY LOU BURTON, University of Alaska testified before the
committee via teleconference from Anchorage. She explained
the University request. Most costs could be covered under
the deferred maintenance they requested last year.
Senator Green referred to their subcommittee presentation.
Ms. Burton responded. She said they were doing a post
audit program. They had established certain criteria some
months ago. Senator green asked about a similar process in
place regarding pre and post audits. Commissioner Poe said
he goes through each budget with the budget manager and
asks for status reports so he can keep up-dated. He would
like to visit the University to see what they are doing.
The departments have tried to share their suggestions and
comments as to their budgets.
Senator Green said perhaps all this should be included in
the letter of intent.
Senator Adams MOVED SCS CSHB 64, version "W" be adopted as
the working draft before the committee. Co-chair Parnell
OBJECTED.
Senator Wilken said there was a technical amendment for
items #4 and #15. He explained that a general fund column
for these two items needed to be added.
Senator Green asked about page 2, line 16, Y2K Alaska
Public Utilities Commission. Senator Wilken said he
appreciated the agencies' work on this matter. With
reference to the spread sheet entitled, "Appropriations for
Y2K Fix" he identified the following items:
Item #3, Department of Administration, Mainframe Test
Environment.
Item #7, Department of Corrections, Review of Jails. He
said it was the responsibility of those we contracted with
to make sure that they were Y2K compliant.
Item #8, Department of Corrections, Replace Hardware.
Item #9, Department of Corrections, Cook Inlet Pre-Trial
Control System.
Item #10, Department of Corrections, OBSCIS & HOFA Systems.
This item was not Y2K compliant and would require some
general fund monies.
Item #11, Department of Environmental Conservation, Data
Software. He noted a fund change in their request.
Item #20, Department of Transportation, Statewide
Facilities. Senator Wilken applauded the department's
efforts to become compliant. Most Y2K problems had been
identified to date. He said he was comfortable with the
$2.5 million request.
Item #24, University of Alaska, Assessment & Remediation.
This was a request for prioritization. He referred to the
University spread sheet, entitled "Y2K Budget Projection -
Revised January 1999".
At this time, Co-chair Parnell excused any members of the
audience who may have remained to testify in SB 83.
Senator Wilken continued his explanation. Co-chair Parnell
asked for an explanation between "A" and "B" priority as
listed on the University's spreadsheet. Senator Wilken
suggested the question be posed directly to Ms. Burton.
Ms. Burton explained those classified in the "A" column
would bring the University to a screeching halt. The "B"
column items were a priority matter.
Senator Wilken continued with item #4, Department of
Administration, Public Guardian and item #15, Department of
Health and Social Services, Public Health Lab Server. With
this he concluded his brief explanation of the spreadsheet.
Co-chair Parnell REMOVED his objection to version "W" being
adopted as a working draft. WITHOUT OBJECTION SCS CSHB
64 ( ), "W" was ADOPTED.
Senator Wilken MOVED the technical amendment to item #4
and item #15. WITHOUT OBJECTION the technical amendment
was ADOPTED and incorporated into the working draft.
Commissioner Poe said Statewide Facilities under Department
of Transportation had cause for some concerns. He was
afraid they would run out of money and not be able to fix
the matter. He was more comfortable with the House number
as this would give some leeway.
(Tape change from #36, Side B to #37, Side A (000).)
In continuation, Senator Torgerson asked if there was an
on-going effort to get the proper numbers and when would
they be available?
Commissioner Poe said he was working on the matter and they
would have solid numbers soon. He also felt that with
further investigation the numbers would go down. Village
Safe Water was a good example of a request having gone
down. However, he is concerned about having enough monies
to fix whatever might be wrong.
Co-chair Parnell asked if there was anyone in the public
who wished to testify on this bill. There was none.
Senator Donley MOVED amendment #1, page 3, line 22. He
said the sum of "$3,718,600" should be deleted and the sum
of "$2,740,900" be inserted. Senator Adams OBJECTED.
Co-chair Parnell asked Ms. Burton to comment. She said
they had visited the outlying campuses and had gotten
feedback on remedies of Y2K problem. They had reduced the
amount at the Anchorage campus by $1 million towards
computers on desk (CPD). There had been no attempt to
replace everyone's PC. The $2 million proposition by the
amendment causes great concern that they will not be able
to meet even the basic needs.
Senator Wilken referred to page 3 and offered an amendment
to amendment #1 to include funding on page 3, desktop
systems, column B, in addition to page 5. Senator Phillips
OBJECTED.
By a roll call vote of 3 yeas (Parnell, Wilken, Adams) and
5 nays (Torgerson, Donley, Leman, L. Green, Phillips)(P.
Kelly absent) amendment to amendment #1 FAILED.
STEVE SMITH, Director of Information Technology, University
of Alaska testified via teleconference from Anchorage. He
explained the class "A" and "B" columns and their priority.
Class "A" would have a serious impact if not funded. This
involved specifically research. There were eight thousand
network connections on the Fairbanks campus. It was
difficult trying to maintain both infrastructure and
exchange.
Senator Green asked if there would be any prohibition for
the University to use the monies under column "B"? Senator
Donley indicated it would just change the net sum.
Senator Donley restated his amendment on page 3, line 22.
Senator Adams objected. By a roll call vote of 6 yeas
(Torgerson, Parnell, Donley, Leman, L. Green Phillips) and
3 nays (Wilken, Adams, P. Kelly) this amendment was
ADOPTED.
Senator Wilken MOVED the letter of intent to accompany the
bill.
Senator Green MOVED the appropriation in line two of the
letter of intent be changed to $13 million. Senator
Torgerson OBJECTED and then WITHDREW his objection.
Therefore, WITHOUT OBJECTION the letter of intent was
amended to the amount of $13 million.
NANCY SLAGLE, Director, Division of Administrative
Services, Department of Transportation and Public
Facilities was invited to join the committee.
Senator Green and Senator Torgerson briefly discussed the
direction to take regarding the assessment of whether or
not the M.V. Kennicott was Y2K compliant. As Senator
Torgerson explained, perhaps it should be stated that any
charges be referred back to the contractor. However, he
said the State is ultimately responsible.
Co-chair Parnell asked for Senator Wilken's comments.
Senator Wilken said stronger language was needed in item #2
of the letter of intent.
Senator Torgerson suggested an amendment to the letter of
intent, paragraph 2, after "compliant", delete "will" and
insert "shall be claimed against the contractor and shall
not be the responsibility of the State of Alaska." That
would clearly mean that if there was a problem between all
others, a claim could be filed against builder. WITHOUT
OBJECTION the amendment was ADOPTED. There being NO
OBJECTION to the letter of intent it was ADOPTED.
Senator Leman referred to line five of the spreadsheet for
the Department of Administration. He indicated he would
like to hear from the department. Commissioner Poe
reiterated his earlier testimony saying that he expected
the amount would be much lower.
Senator Kelly said every state is trying to get Y2K
compliant. It would be very expensive to attract this kind
of help.
Senator Donley referred to section 4 of the bill. There
are problems with this section but perhaps they should be
resolved on the Senate floor. The funding source was also
an issue concurred in by Co-chair Parnell.
Senator Leman also voiced his concern about the bill. His
biggest concern being our lack of specificity and
knowledge, including Commissioner Poe, even though he has
more knowledge than everyone. The appropriation was now
over $12 million, and they were not sure what it was going
to be used for.
Senator Wilken MOVED SCS CSHB 64 (FIN) including the letter
of intent. Senator Adams OBJECTED. By a roll call vote of
8 yeas (Torgerson, Parnell, Donley, Leman, Wilken, P.
Kelly, L. Green, Phillips) and 1 nay (Adams) SCS CSHB
64(FIN) with the letter of intent was REPORTED OUT with
individual recommendations.
ADJOURNMENT
Co-chair Parnell adjourned the meeting at approximately
11:20 a.m.
SFC-99 (1) 2/24/99
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