Legislature(2003 - 2004)

02/25/2003 10:02 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     SENATE FINANCE COMMITTEE                                                                                 
                         February 25, 2003                                                                                    
                             10:02 AM                                                                                         
SFC-03 # 9, Side A                                                                                                              
SFC 03 # 9, Side B                                                                                                              
CALL TO ORDER                                                                                                               
Co-Chair Lyda Green convened  the meeting at approximately 10:02 AM.                                                            
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice-Chair                                                                                                   
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
Also Attending:   DAN SPENCER, Director, Division  of Administrative                                                          
Services,  Department  of Administration;  DAVE  STEWART,  Personnel                                                            
Manager, Division of Personnel,  Department of Administration; JERRY                                                            
BURNETT, Director,  Division of Administrative Services,  Department                                                            
of  Corrections;   KATHRYN  DAUGHHETEE,   Director,  Administrative                                                             
Services Division, Department of Law;                                                                                           
Attending via  Teleconference:  From Anchorage: BRANT  MCGEE, Public                                                          
Advocate, Office  of Public Advocacy, Department of  Administration;                                                            
BARBARA  BRINK,  Director,  Public Defender  Agency,  Department  of                                                            
SUMMARY INFORMATION                                                                                                         
SB  75-SUPPLEMENTAL APPROPRIATIONS: FAST TRACK                                                                                  
SB  76-SUPPLEMENTAL APPROPRIATIONS                                                                                              
The  Committee  received   overviews  of  the  supplemental   budget                                                            
requests from  the Department of Administration,  the Department  of                                                            
Corrections  and  the Department  of  Law. The  bills  were held  in                                                            
     SENATE BILL NO. 75                                                                                                         
     "An Act making supplemental  and other appropriations; amending                                                            
     appropriations; and providing for an effective date."                                                                      
     SENATE BILL NO. 76                                                                                                         
     "An Act making supplemental  and other appropriations; amending                                                            
     appropriations; making  appropriations to capitalize funds; and                                                            
     providing for an effective date."                                                                                          
Department of Administration                                                                                                  
     SB 76                                                                                                                      
     Section 1(a)(1)                                                                                                            
     Finance Budget Request Unit (BRU)                                                                                          
     $400,000 general funds                                                                                                     
     The Division  of Finance is incurring substantially  more costs                                                            
     for  accounting and  payroll  data processing  charges, due  to                                                            
     conversion  from  ADABAS to  DB2.  (Savings in  general  relief                                                            
     program offsets $300,000.)                                                                                                 
DAN  SPENCER,   Director,  Division   of  Administrative   Services,                                                            
Department of Administration,  delineated $300,000 of this amount is                                                            
"general  processing costs"  of the accounting  and payroll  systems                                                            
and $100,000  is related  to converting  the payroll  system  into a                                                            
"new  platform", which  requires  additional time  and subsequently                                                             
incurs a higher cost. He  informed that these "charges" are "due" to                                                            
the  Division   of  Information  Technology   Group  for   mainframe                                                            
     SB 76                                                                                                                      
     Section 1(a)(2)                                                                                                            
     Pioneers' Homes BRU                                                                                                        
     $390,700 general funds                                                                                                     
     Cost  of the  certified  nurse aide  and assisted  living  aide                                                            
     reclassifications  which were  effective December 1,  2002. The                                                            
     classification  study found that  the positions were  underpaid                                                            
     by one range  compared to other similar positions.  Affects 323                                                            
      positions at approximately $175 per month per position.                                                                   
Mr. Spencer  emphasized that this  is a classification study  rather                                                            
than  a salary  study.  He  reminded  of a  salary  study  conducted                                                            
several  years prior  to review  Pioneer Home  nurses' salaries  and                                                            
noted that  salary adjustments were  made as a result. In  contrast,                                                            
he  explained  this  study  reviewed  the  duties  assigned  to  the                                                            
Certified Nursing Aides  (CNA) and Pioneer Home Aides in relation to                                                            
other employees  in the State  of Alaska system  and found  that the                                                            
Aides  perform duties  equivalent  to other  employees  paid at  one                                                            
salary  range  higher. Therefore,  he  said  the CNA  salaries  were                                                            
increased  from Range  9 to Range  10, and Pioneer  Home Aides  were                                                            
reclassified  as Assisted  Living Aides at  Range 9, increased  from                                                            
Range 7. He qualified that  some individual positions did not change                                                            
and others  were "classed  down", although  the employee's  salaries                                                            
would not change for two years.                                                                                                 
Mr. Spencer noted that  as a result of these changes, the Department                                                            
would  incur  approximately  $700,000  additional  payroll  expenses                                                            
annually. The amount requested  in this supplemental, he said is for                                                            
the  salary  increases  effective   December  1,  2002  through  the                                                            
remainder of the fiscal year.                                                                                                   
Co-Chair Green recalled  a determination that "No money appropriated                                                            
in this  Act  may be  used to  pay costs  for personnel  due to  job                                                            
reclassification."    She   asked    the   difference   between    a                                                            
classification study and a salary study.                                                                                        
Mr. Spencer explained  the classification study examines  the nature                                                            
of specific  duties performed,  compared to  other duties to  ensure                                                            
that  employees are  compensated  "appropriately"  in comparison  to                                                            
other positions  within State government.  He characterized  this as                                                            
"equal pay  for equal work".  A salary study,  by contrast,  he said                                                            
examines  a specific  type of position  and compares  the salary  to                                                            
similar  positions  in  the  public and  private  sectors  within  a                                                            
certain geographical area.                                                                                                      
Mr.  Spencer then  informed  that  the Attorney  General  under  the                                                            
Knowles Administration  found that  the statutory language  Co-Chair                                                            
Green   referred  to,   infringed   upon  the   "administration   of                                                            
administering   government."   Mr.   Spencer  explained   that   the                                                            
classification  of State employees  is an administrative  matter and                                                            
not subject to a legislative appropriation.                                                                                     
Mr. Spencer stressed the  statutory and constitutional obligation to                                                            
classify State employees appropriately.                                                                                         
Co-Chair Green asked when the study began.                                                                                      
Mr. Spencer  replied the study commenced  during the summer  of 2002                                                            
and was  completed  with reclassifications  enacted  on December  1,                                                            
Co-Chair  Green then  asked the  timeframe of  implementation  after                                                            
such a study is completed.                                                                                                      
DAVE STEWART,  Personnel Manager, Division of Personnel,  Department                                                            
of Administration,  testified to the  personnel rules adopted  under                                                            
the State Personnel  Act as well as  contractual agreements  reached                                                            
with employee  bargaining units. He stated that these  rules provide                                                            
that the effective  date of a classification study  is the first day                                                            
of the pay period following completion of the study.                                                                            
Co-Chair  Green pointed out  this was implemented  during the  final                                                            
week of the prior gubernatorial administration.                                                                                 
Senator Hoffman  spoke of the difficulties  in hiring and  retaining                                                            
qualified  nursing  staff  and asked  whether  this applies  to  CNA                                                            
positions as well.                                                                                                              
Mr. Spencer  responded that a salary  study conducted several  years                                                            
prior resulted  in salary increases for nurses, which  has partially                                                            
alleviated  the  problem.  However,  he  stated the  State  has  not                                                            
encountered  significant difficulties  in  recruiting and  retaining                                                            
CNAs. He  remarked this issues  was not the  "driving force  behind"                                                            
the recently conducted classification study.                                                                                    
Co-Chair Wilken did not  oppose the outcome of the reclassification;                                                            
however, he opposed the  method considering Section 6, Chapter 94 of                                                            
the  FY 03  operating  budget. He  asked  the consequences  if  this                                                            
request were not funded.                                                                                                        
Mr.  Spencer responded  that  funds  appropriated to  the  Pioneers'                                                            
Homes operations would be transferred.                                                                                          
Mr. Spencer informed that  classification and salary adjustments are                                                            
done  regularly, resulting  in  both increases  and  decreases.   He                                                            
stated that most  of these changes are not brought  to the attention                                                            
of the  legislature because  the number of  positions and amount  of                                                            
funds involved  is usually negligible and therefore  absorbed within                                                            
the  affected division's  budget.  The study  in  question he  noted                                                            
involved over  340 positions and is therefore unusual  in its scope.                                                            
He cautioned that if this  item were not funded, additional space in                                                            
the Pioneers' Homes must be held vacant.                                                                                        
Co-Chair  Green commented  that she  has never  seen a supplemental                                                             
request for this purpose of this amount.                                                                                        
Co-Chair Green asked if  all the positions impacted in the study are                                                            
filled or  whether the  Department is budgeting  for positions  that                                                            
would be filled before June 30, 2002.                                                                                           
Mr. Spencer replied  that all the positions are not  filled and that                                                            
the request represents  the current payroll needs  with no funds for                                                            
any additional staff.                                                                                                           
Senator Bunde  questioned the on-going  reclassification  review, as                                                            
he understood an employee  hired for a certain position at a defined                                                            
salary range could be reclassified and paid a different salary.                                                                 
Mr. Spencer  spoke to the  usual six-week  time period involved  and                                                            
how adjustments must be  made to reflect new duties assigned to some                                                            
positions,  etc.  He  stated  that in  some  instances,  duties  are                                                            
reassigned  or  classification  changes  are  made  at the  time  of                                                            
employee  turnover.  He  also  pointed  out  an  appeal  process  is                                                            
provided according to collective bargaining unit agreements.                                                                    
Senator Bunde  surmised this effort would require  significant work.                                                            
Mr. Spencer  assured  the Department  has a "long  range plan";  but                                                            
stressed the  obligation to compensate  employees appropriately  for                                                            
the duties performed.                                                                                                           
Senator Bunde  did not disagree, but suggested the  matter should be                                                            
addressed differently.                                                                                                          
Co-Chair  Green  informed  this topic  should  be discussed  in  the                                                            
budget subcommittee.                                                                                                            
     SB 76                                                                                                                      
     Section 1(a)(3)                                                                                                            
      Alaska Oil and Gas Conservation Commission (AOGCC) BRU                                                                    
     $14,300 federal funds                                                                                                      
     Increased federal grant for the Underground Injection Control                                                              
Mr. Spencer  stated  this request  is for authorization  to  receive                                                            
federal funds that supplement an existing grant.                                                                                
     SB 76                                                                                                                      
     Section 1(a)(4)                                                                                                            
     Office of Public Advocacy BRU                                                                                              
     2,473,500 general funds                                                                                                    
     Program  shortfunding was  estimated to  be $2,200,000  in May.                                                            
     Caseload   growth  has  added  an  additional  $1,100,000.   An                                                            
     additional   $826,500   is   requested   in  the   fast   track                                                            
      supplemental bill to meet the total need of $3,300,000.                                                                   
     SB 75                                                                                                                      
     Section 1                                                                                                                  
     Office of Public Advocacy BRU                                                                                              
     $826,000 general funds                                                                                                     
     Program  shortfunding was  estimated to  be $2,200,000  in May.                                                            
     Caseload   growth  has  added  an  additional  $1,100,000.   An                                                            
     additional   $826,500   is   requested   in  the   fast   track                                                            
      supplemental bill to meet the total need of $3,300,000.                                                                   
Mr. Spencer  pointed out  the initial FY  03 appropriation  was less                                                            
than the amount  expended the prior  year. At that time,  he said it                                                            
was  estimated  that  $2.2  million  supplemental   funds  would  be                                                            
necessary,  based  on  the  caseload   and  the  "intensity  of  the                                                            
caseload". He  reported that the caseload has continued  to increase                                                            
as well  as amount  of "legal  activity" required  for those  cases,                                                            
which accounts for the $3.3 million actual request.                                                                             
Mr. Spencer commented  that supplemental funding has  been necessary                                                            
for  the Office  of  Public Advocacy  (OPA)  for several  years.  He                                                            
detailed the process  of monthly reporting of expenses  and informed                                                            
that the requested amount would be adjusted accordingly.                                                                        
Co-Chair Green calculated  the total supplemental request represents                                                            
approximately one-fifth of the annual budget.                                                                                   
Mr. Spencer  explained how the requested  amount was determined.  He                                                            
stated the OPA  currently has funds adequate to pay  expenses to the                                                            
beginning  of May  and that  $826,500 contained  in  the fast  track                                                            
supplemental request would  fund operations through the month of May                                                            
with the balance  included in the  regular supplemental adequate  to                                                            
sustain  operations  through  the month  of  June. He  referenced  a                                                            
"longstanding"  opinion  issued by  the Attorney  General,  allowing                                                            
access  to  funds   once  a  supplemental  budget   has  passed  the                                                            
Legislature,  providing  there is  no indication  that the  governor                                                            
would veto the legislation.                                                                                                     
Mr. Spencer told of the  significant number of invoices from private                                                            
attorneys  received by the  OPA for services  rendered the  previous                                                            
fiscal year. He reported  that the OPA normally remits over $700,000                                                            
during the  months of July and August  for expenses incurred  before                                                            
June 30 of that calendar year.                                                                                                  
Co-Chair  Green   opined,  "That's  bizarre,"  and  instructed   the                                                            
Department provide an accounting  of the cost to operate the OPA for                                                            
12  months,  with  the "July  and  August"  invoices  included.  She                                                            
furthered this  should include "late  billings and early  billings".                                                            
She requested  similar accounting  for the  Public Defenders  Agency                                                            
(PDA) as well.                                                                                                                  
Senator Hoffman  assured he  would not object  to fully funding  the                                                            
anticipated  budget initially.  He noted that  several years  prior,                                                            
supplemental appropriations  were necessary to cover  cost overruns,                                                            
but that in  recent years the budget  was deliberately under-funded                                                             
with  the expectation  that  supplemental  appropriations  would  be                                                            
requested.  He expressed concern about  the increasing costs  of the                                                            
Mr. Spencer expounded that  the causes of the cost increases include                                                            
an increase  in the number  of Child in Need  of Aid cases  assigned                                                            
and he reminded  of guideline changes  instituted a few years  prior                                                            
that shortened  the timeframes these  cases must be resolved.  This,                                                            
he said has increased the  average amount of time spent on cases. He                                                            
stressed  the difficulty  in accurately  predicting  the number  and                                                            
types of cases that would  be assigned to the OPA, and subsequently,                                                            
the limited ability to in project the needed funding amount.                                                                    
Senator  Hoffman referenced  the 20,000  new cases  assigned in  the                                                            
current year,  which appeared substantially higher  than average. He                                                            
surmised  there must be a  reason for this  and asked if this  is an                                                            
anomaly or a change in the manner in which judges assign cases.                                                                 
Co-Chair Green  noted Senator Hoffman's comments pertain  to the PDA                                                            
and that she shared the questions.                                                                                              
Mr. Spencer  informed that  the increased  caseload pertains  to the                                                            
number of new cases assigned  each year, and applies to both the OPA                                                            
and the  PDA. He  commented that  the number of  new cases  assigned                                                            
annually continues to increase.                                                                                                 
BRANT MCGEE, Public Advocate,  Office of Public Advocacy, Department                                                            
of Administration,   testified via  teleconference  from  Anchorage,                                                            
that the "ever  larger" supplemental  budget appropriations  are not                                                            
included in the amounts  initially appropriated the following fiscal                                                            
year. He reiterated  that caseload increase and the  increased costs                                                            
of Child  in Need  of Aid cases  are responsible  for the  increased                                                            
expenses.  He  furthered  that because  of  shorter  timeframes,  "a                                                            
stronger adversarial  context" exists because "people  are much more                                                            
likely to fight about things  as they're facing deadlines", although                                                            
this  incurs  higher  costs.  He  noted  he  supports  the  stricter                                                            
Mr. McGee next pointed  out that the OPA has a "corollary" statutory                                                            
responsibility  to provide representation in cases  in which the PDA                                                            
has a conflict  of interest. He stated that in these  instances, the                                                            
OPA contracts  with  private attorneys  to represent  one parent  in                                                            
Child  in Need  of  Aid proceedings;  this  is  in addition  to  OPA                                                            
representation of the child's best interest.                                                                                    
Mr. McGee "welcomed the  opportunity" to prepare a budget that would                                                            
cover all  anticipated  expenses for  FY 04. He  noted this  was the                                                            
historical   practice   until   the  first   year   of  the   Hickel                                                            
Co-Chair  Green directed  the Department  of  Administration  Budget                                                            
Subcommittee  to address  the role  of the OPA  with senior  citizen                                                            
     SB 76                                                                                                                      
     Section 1(a)(5) and (6)                                                                                                    
     Public Defender BRU                                                                                                        
     $1,157,000 general funds                                                                                                   
     Program shortfunding was estimated to be $1 million in May.                                                                
     Caseload has added an additional $157,000. Funding is also                                                                 
      included to continue the mental health court attorney.                                                                    
Mr. Spencer commented  this situation is similar to  the OPA matter.                                                            
Co-Chair  Green asked  for  affirmation that  the  PDA was  assigned                                                            
20,000 new cases in the past fiscal year.                                                                                       
BARBARA  BRINK,  Director,  Public Defender  Agency,  Department  of                                                            
Administration,  testified  via teleconference  from Anchorage  that                                                            
the number  is accurate and noted  the prior fiscal year  the Agency                                                            
was  assigned  19,400  new  cases.  She listed  one  reason  as  the                                                            
increase in Child in Need  of Aid cases, in which the PDA is ordered                                                            
to  represent one  of the  parents.   She  also noted  that  serious                                                            
felonies have  increased 15 percent  and because of the severity  of                                                            
penalties for  conviction of such crimes, these cases  are costly to                                                            
defend. She  added that changes to  the minor consuming and  Driving                                                            
Under the Influence  statutes have  resulted in more of these  cases                                                            
being  tried before  a jury.  She stated  that the  closure of  pulp                                                            
mills in Ketchikan  has influenced the caseload by  over 80 percent.                                                            
Ms. Brink stressed that the PDA must provide these services.                                                                    
Co-Chair Wilken  calculated 20,000 in one year as  80 cases assigned                                                            
per day,  which  he had  difficulty understanding.  He  asked for  a                                                            
breakdown  of  these  assignments  ask  well as  a  comparison  with                                                            
Washington  State  and other  larger  states, surmising  that  these                                                            
states  could not  possibly  address  the issue  in  same manner  as                                                            
Ms. Brink stated  she had data compiled to indicate  the assignments                                                            
of new  cases  between 1988  and 2002  and  would submit  it to  the                                                            
     SB 76                                                                                                                      
     Section 1(a)(6)                                                                                                            
Mr. Spencer commented this  request would normally been presented to                                                            
the Legislative  Budget and Audit  Committee, but because  the funds                                                            
were not immediately necessary,  it is included in this legislation.                                                            
He noted that  currently these services are performed  and paid from                                                            
the existing budget appropriation.                                                                                              
     SB 76                                                                                                                      
     Section 1(a)(7)                                                                                                            
     Labor Relations BRU                                                                                                        
     $209,300 general funds                                                                                                     
     Arbitration settlement with ASEA union on Fair Labor Standards                                                           
     Act (FLSA) residual claims including interest of $9,238,36.                                                                
Mr. Spencer told  of the settlement of the claims  and the potential                                                            
cost to the  State of $700,000 to  $1 million, plus legal  expenses,                                                            
if those cases were not settled and subsequently the State lost.                                                                
     SB 76                                                                                                                      
     Section 1(b)                                                                                                               
     Senior Services BRU                                                                                                        
     ($300,000) general funds                                                                                                   
     Caseload for general relief program is lower than anticipated.                                                             
     (Funds to help offset Finance's supplemental.)                                                                             
Mr.  Spencer  explained  this  pertains  to  the  vulnerable  adults                                                            
program and he reminded  of the statutory obligation to assist those                                                            
in harmful situations.  He stated that the increase  has not been as                                                            
large as projected.                                                                                                             
     SB 76                                                                                                                      
     Section 16(1)                                                                                                              
     Finance BRU                                                                                                                
     $44,900 general funds                                                                                                      
     Miscellaneous Claims and Stale-dated Warrants $44,916.88                                                                   
Mr. Spencer explained these  are to cover checks cashed two years or                                                            
longer since they were issued.                                                                                                  
Co-Chair Green  asked how the Department  tracks uncashed  warrants.                                                            
Mr. Spencer  replied  that no  system currently  tracks outstanding                                                             
checks  not cashed,  primarily  due to  the large  volume of  checks                                                            
issued each month.                                                                                                              
Senator Bunde  asked about certain checks recently  cashed illegally                                                            
in Anchorage.  He  indicated  precautions  must be  taken to  ensure                                                            
against forgeries.                                                                                                              
Mr. Spencer replied that he would research the matter.                                                                          
Department of Corrections                                                                                                     
     SB 76                                                                                                                      
     Section 3                                                                                                                  
     Inmate Health Care BRU                                                                                                     
     $187,700 general funds                                                                                                     
     Prior year  bill for dialysis services for an  inmate in FY 02.                                                            
     The  vendor inadvertently  billed  a wrong  party and  recently                                                            
     discovered  the error. An appropriation is needed  in order for                                                            
     the department to pay the bill of $187,680.05.                                                                             
JERRY  BURNETT,  Director,  Division  of  Administrative   Services,                                                            
Department  of Corrections,  testified  this request  is to cover  a                                                            
medical bill for  services rendered in FY 02 but not  received until                                                            
November of 2002.                                                                                                               
Co-Chair  Green  asked  why  this  item  was  not  included  in  the                                                            
Miscellaneous Claims section of the supplemental bill.                                                                          
Mr.  Burnett  stated   that  the  amount  is  too  large   for  such                                                            
classification.  However  he noted it  could not  be paid without  a                                                            
supplemental appropriation.                                                                                                     
     SB 75                                                                                                                      
     Section 2(a)                                                                                                               
     Inmate Health Care BRU                                                                                                     
     $500,000 general funds                                                                                                     
     Costs incurred due  to the November 19, 2002 accident involving                                                            
     a prisoner  transport van at  mile 19.5 of the Seward  Highway.                                                            
     SB 75                                                                                                                      
     Section 2(b)                                                                                                               
     Anchorage Jail BRU                                                                                                         
     $500,000 Statutory Designated Program Receipts (SDPR)                                                                      
     Due to increased  negotiated contract amount  with Municipality                                                            
     of Anchorage,  the department will realize increased  mandatory                                                            
     billings   and  needs  receipt   authority  to  utilize   those                                                            
Mr. Burnett spoke of the  automobile crash in which one correctional                                                            
officer  and four  prisoners were  killed and  three prisoners  were                                                            
injured. He  stated that approximately  $900,000 of the expenditure                                                             
is direct hospital costs of the three surviving prisoners.                                                                      
Co-Chair Green  asked the status of  the investigation of  the crash                                                            
and the liability of the other driver.                                                                                          
Mr. Burnett replied  that as of the previous day,  the investigation                                                            
was still ongoing. He said  if damages were recovered from the other                                                            
driver the funds would be deposited into the general fund.                                                                      
     SB 76                                                                                                                      
     Section 17(a)(2)(A)                                                                                                        
     Ratification: AR 50981-01 (Noncust Fingerprints)                                                                           
     Section 17(a)(2)(B)                                                                                                        
     Ratification: AR 50982-01 (ADAM Pgm/Univ AK Anc)                                                                           
Co-Chair Green  understood the issue of inmate health  care is under                                                            
Mr.  Burnett affirmed  and  noted lower  insurance  rates are  being                                                            
negotiated  and  that a  contract  was negotiated  with  the  Alaska                                                            
Regional Hospital for the remainder of the fiscal year.                                                                         
SFC 03 # 9, Side B 10:49 AM                                                                                                     
Department of Law                                                                                                             
KATHRYN  DAUGHHETEE,  Director,  Administrative  Services  Division,                                                            
Department of Law,                                                                                                              
     SB 75                                                                                                                      
     Section 4(a)                                                                                                               
     Criminal Division BRU                                                                                                      
     $582,600 general funds                                                                                                     
     Criminal Justice Litigation - Outside counsel and experts for                                                              
     the parental consent lawsuit $432,600 and the sex offender                                                                 
     registration lawsuit $150,000.                                                                                             
Ms. Daughhettee  noted this  item involves  two major cases  and she                                                            
updated the Committee on  their status. She informed that a decision                                                            
is  expected in  the  case involving  Planned  Parenthood  and  that                                                            
regardless  of the outcome  an appeal is  expected. She stated  that                                                            
$432,600 would cover the appeal expenses.                                                                                       
Ms. Daughhettee continued  with the litigation defending the State's                                                            
sex offender  registration  statute, in which  $150,000 in  expenses                                                            
was already incurred  and additional expenses are  not expected. She                                                            
informed that  a decision from the  US Supreme Court is expected  in                                                            
the fall of 2003 on the matter.                                                                                                 
Senator Bunde  asked if the  requested amount  is anticipated  to be                                                            
the total cost to argue the parental consent issue.                                                                             
Ms. Daughhettee responded  this amount would cover the cost incurred                                                            
to  date, including  reinstating  experts  from  retirement,  hiring                                                            
other experts;  and anticipates  the expense  of a post trial  brief                                                            
and the  appeal that would  be handled by  outside counsel.  She was                                                            
unsure whether more expenses would be incurred.                                                                                 
Co-Chair  Green commented  that the Department  decided to  withhold                                                            
$250,000  of the FY 03  Department-wide  unallocated reduction  from                                                            
this  section.   She  opined  this   is  problematic  knowing   this                                                            
litigation was ongoing.                                                                                                         
Ms.  Daughhettee   countered  that   the  Legislature  directed   an                                                            
unallocated reduction  to the Criminal Division. She  qualified that                                                            
carry-over  funds  were appropriated,  but  were not  sufficient  to                                                            
offset the reduction.                                                                                                           
     SB 75                                                                                                                      
     Section 4(b)                                                                                                               
     Oil and Gas Litigation BRU                                                                                                 
     $600,000 general funds                                                                                                     
     Oil  and gas  caseload shortfall.  $500,000  is needed for  the                                                            
     reopener-specific   casework  and  $100,000  for  ongoing  D.C.                                                            
     casework primarily  regarding Federal Energy Reserve (FERC) and                                                            
     TAPS  (utility) reopener.  Extended  lapse date  thru June  30,                                                            
Ms. Daughhettee  anticipated one case would begin  shortly and would                                                            
proceed rapidly.  She stressed  that State  must as prepared  as the                                                            
oil companies.                                                                                                                  
     SB 76                                                                                                                      
     Section 9                                                                                                                  
     Deputy Attorney General BRU                                                                                                
     $1,064,300 general funds                                                                                                   
     $72,100 PERS funds                                                                                                         
     Judgments and Claims: $1,064,246.51 general funds, $72,053.97                                                              
Ms. Daughhettee  noted this annual  request is to pay judgments  and                                                            
Co-Chair  Green asked  if Committee  Members desired  to review  the                                                            
specific cases in this section.                                                                                                 
No interest was  expressed and it was determined that  members would                                                            
review the cases individually  and pose questions at a later date if                                                            
Ms.  Daughhettee  indicated she  would  prepare information  in  the                                                            
event members wanted additional details.                                                                                        
Ms. Daughhettee  pointed  out that sufficient  catastrophic  reserve                                                            
funds, which historically  paid expenses arising from settlements of                                                            
personal injury  cases, were no longer available.  She reminded this                                                            
fund is administered  by the Department of Administration,  Division                                                            
of Risk Management.  She anticipated  additional judgments  of $4 to                                                            
$5 million during the current fiscal year.                                                                                      
Co-Chair Green and Ms.  Daughhettee discussed the option of delaying                                                            
payment until  FY 04, although after  July 15, interest would  begin                                                            
to accrue.                                                                                                                      
     SB 76                                                                                                                      
     Section 10                                                                                                                 
     Fourth Judicial District BRU                                                                                               
     $95,000 general funds                                                                                                      
     Fairbanks DA office had unexpected move and lease costs due to                                                             
     the Department of Transportation and Public Facilities'                                                                    
     closure of Fairbanks court building.                                                                                       
Ms. Daughhettee  stated that due to  budget cuts, the Department  of                                                            
Transportation  and  Public  Facilities  decided  to close  the  old                                                            
courthouse and a move was  necessary. She noted that while occupying                                                            
a State-owned facility,  lease was not paid; however, the office now                                                            
occupies  space in a privately  owned facility.  She noted  that the                                                            
Department  of Transportation and  Public Facilities paid  a portion                                                            
of the  moving expenses utilizing  funds saved  from the closure  of                                                            
the courthouse.  She stated  the requested  funds are necessary  for                                                            
the remainder  of the moving expenses and the balance  of the annual                                                            
lease at the new location.                                                                                                      
Co-Chair Green asked if this is a one-time funding request.                                                                     
Ms. Daughhettee  replied that a request  for approximately  $200,000                                                            
is  included  in the  FY  04 operating  budget  proposal  for  lease                                                            
expenses  and moving expenses  above the  amount contributed  by the                                                            
Department of Transportation and Public Facilities.                                                                             
Co-Chair  Green  requested  the budget  subcommittee  research  this                                                            
matter further.                                                                                                                 
     SB 76                                                                                                                      
     Section 16(7)                                                                                                              
     $18,000 general funds                                                                                                      
     Miscellaneous Claims and Stale-dated Warrants $17,947.82                                                                   
Ms.  Daughhettee explained  this  request  is to  cover payment  for                                                            
services rendered in FY  02 but not invoiced until after the closure                                                            
of FY 02 accounting.                                                                                                            
Co-Chair  Green commented  that  this item  is not  unusual and  she                                                            
requested  the  Department  implement  a system  to  anticipate  the                                                            
receipt of late invoices.                                                                                                       
Ms. Daughhettee  stated this is the  largest claim of this  type for                                                            
the  Department.   She  explained   the  situation   in  which   the                                                            
Legislature authorized  transfer of unspent FY 02  funds to FY 03 to                                                            
cover large budget reductions.  She reported that the maximum amount                                                            
of funds  was transferred,  resulting in  insufficient funds  to pay                                                            
the late invoices.                                                                                                              
AT EASE 11:00 AM / 11:01 AM                                                                                                     
Co-Chair Wilken asked the  balance of the catastrophic reserve fund.                                                            
Ms. Daughhettee replied she would provide the information.                                                                      
Co-Chair Lyda Green adjourned the meeting at 11:02 AM                                                                           

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