Legislature(1997 - 1998)

02/13/1997 09:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                        13 February 1997                                       
                            9:05 a.m.                                          
                                                                               
                                                                               
  TAPES                                                                        
                                                                               
  SFC-97, #35, Side 1 (000 - 592)                                              
               Side 2 (592 - 000)                                              
                                                                               
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Drue  Pearce,  Co-chair, convened  the  meeting  at                 
  approximately 9:05 A.M.                                                      
                                                                               
                                                                               
  PRESENT                                                                      
                                                                               
  In  addition to Co-chair  Pearce, Senators  Sharp, Phillips,                 
  Donley, Torgerson and  Adams were  present when the  meeting                 
  convened.  Senator Parnell arrived shortly thereafter.                       
                                                                               
  ALSO  ATTENDING:   Senator  Jerry  Ward; Annalee  McConnell,                 
  Director, Office  of Management  and Budget,  Office of  the                 
  Governor;    Sharon    Barton,    Director,   Division    of                 
  Administrative Services, Department of Administration; Dugan                 
  Petty, Director, Division of General Services, Department of                 
  Administration;   Robert   Cole,   Director,   Division   of                 
  Administrative Services,  Department of Corrections;   Janet                 
  Clarke,  Director,  Division  of   Administrative  Services,                 
  Department  of  Health  and  Social Services;  Mike  Greany,                 
  Director,  Division of  Legislative  Finance; Susan  Taylor,                 
  fiscal  analyst, Division of  Legislative Finance; and aides                 
  to committee members and other members of the legislature.                   
                                                                               
  VIA TELECONFERENCE:  Brant McGee, Public Advocate, Office of                 
  Public  Advocacy,  Department  of   Administration;  Barbara                 
  Brink, Acting  Director, Public Defender  Agency, Department                 
  of  Administration;  George  Buhite,  Director,  McGlaughlin                 
  Youth Center;    Greg Thompson,  Director,  Fairbanks  Youth                 
  Facility; Mark Johnson, Chief,  Community Health & Emergency                 
  Medical Services,  Division of Public  Health, Department of                 
  Health and Social Services.                                                  
                                                                               
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
                                                                               
  FY   97    supplemental   requests   for    Departments   of                 
  Administration, Corrections  and Health and  Social Services                 
                                                                               
                                                                               
  were discussed  by the  above-listed individuals.   Co-chair                 
  Pearce announced the meeting would  be recessed until Monday                 
  morning at 8:30 a.m.   The committee will continue  hearings                 
  on the supplemental requests.                                                
                                                                               
                                                                               
       SENATE BILL NO. 83                                                      
       "An Act making an appropriation for management fees for                 
  the  constitutional budget  reserve fund (art.  IX, sec. 17,                 
       Constitution of the State of Alaska); and providing for                 
  an   effective date."                                                        
                                                                               
  Co-chair  Pearce convened  the  meeting at  9:05  a.m.   She                 
  explained the use of  SB 83 as the  working vehicle to  fold                 
  supplementals into.                                                          
                                                                               
  Annalee  McConnell,  Director,  Office   of  Management  and                 
  Budget, was invited to  join the committee.  She  felt there                 
  had  been  significant  changes  both in  terms  of  how the                 
  Legislature   has   viewed   the   supplementals   and   the                 
  Administration throughout  all  the departments.    They  do                 
  realize  however  there will  have  to be  some supplemental                 
  items.  There still are some issue areas to be addressed  in                 
  whether they  are funded in the  spring as part  of the main                 
  budget bill or in the supplemental  process; and an issue of                 
  timing.  Part of the concerns she heard from legislators was                 
  not wanting to see departments continue to expend during the                 
  first part  of the  year on  the assumption  there would  be                 
  supplementals received  to allow them to keep  up that level                 
  of spending.  It is important to clarify for departments and                 
  the public whether or not it is expected to have a  level of                 
  supplemental funding for some items or not.  She referred to                 
  a back-up sheet  in the form  of a transmittal letter  which                 
  organized the areas  of the supplemental request  in several                 
  categories.   Type one  were the  items they  knew would  be                 
  underfunded by choice in the  legislative process last year;                 
  type two were the judgments and claims  typically handled in                 
  the supplemental; type three were items they were not  aware                 
  of where the urgency changed between what was known last May                 
  and the present time.                                                        
                                                                               
  Under  the first group, the ones  acknowledged to be reading                 
  supplementals  to  carry  out  the  full year;  the  leasing                 
  budget,  public  defender,  adult  public assistance,  etc.,                 
  totalled  about $8.5  million.   These were  areas based  on                 
  projections that would  require a  higher level of  funding.                 
  In some case  the Legislature chose  to put intent  language                 
  into  the  bill to  acknowledge there  would  be a  need for                 
  additional funding later  on.   The information coming  back                 
  does confirm where we  are and what the estimates  have been                 
  in  the prior  part of  the budget process.   There  are two                 
  areas, disaster relief and fire  suppression where there has                 
                                                                               
                                                                               
  been a pattern  of only partial  funding in the main  budget                 
  bill.  The  Legislature appropriately felt there  was a need                 
  for some real heavy  duty work on close-out of  old disaster                 
  accounts.  That has now happened.   Most of the costs of the                 
  southcentral flood were handled by closeouts of old disaster                 
  accounts.  The  next stage in the process, is  taking a look                 
  at whether there is a  need for dealing with disasters in  a                 
  different manner in the main operating  budget.  It would be                 
  appropriate  to consider in  the FY '98  process whether the                 
  basic costs of disaster  and fire should be covered  as part                 
  of the regular GF budget.  As mentioned, there is no need to                 
  change  the  process  in  judgments  and  claims  as  it  is                 
  appropriately handled  in a  supplemental process.   On  the                 
  sectional  handed  out   today,  it  has  been   noted  that                 
  additional judgments and  claims have  been received in  the                 
  amount of  $25,900 and  formal documents  will be  submitted                 
  later.  "Cleary" has  been estimated through the end  of the                 
  fiscal year and as the Governor indicated in his transmittal                 
  letter it was their  recommendation that appropriation could                 
  best  be  handled  in  a  fashion  that  would  address  the                 
  underlying  problem which is  overcrowding.  This  is not an                 
  actual  settlement  but could  be held  in  some sort  of an                 
  account.  New information was had this year that suggested a                 
  reason to speed up the schedule and not just  wait until the                 
  FY '98 process.   An example was the  boiler in Fairbanks at                 
  the correctional facility and the issues of security  at the                 
  juvenile facilities  both McGlaughlin  in  Anchorage and  in                 
  Fairbanks.    There  have been  some  serious  problems just                 
  within the last couple of months.  With legislative approval                 
  now,  the  procurement  process  could   begin  as  soon  as                 
  possible.  Another example was the Perseverance Trail, which                 
  will be very heavily used by tourists and residents alike in                 
  a couple of months.                                                          
                                                                               
  She referred further to Venetie that will be  coming forward                 
  to deal with  the price  increases that have  resulted in  a                 
  significant  change   in  how   much  of   the  power   cost                 
  equalization  program  will be  funded.    At the  time  the                 
  Legislature took action  last spring  it was estimated  that                 
  PCE would be pro-rated by  85% and based on the fuel  prices                 
  it looks like about 67%.  Another area being looked  at that                 
  is not yet ready  for introduction but should be  flagged is                 
  the area of the  southeast initiative specifically  problems                 
  in  southeast communities  that  have been  hard hit  by the                 
  changes in the  timber industry.   She had no final  details                 
  but just wanted them  noted.  The ratifications do  not have                 
  an actual dollar  impact on the budget for  '97 but they are                 
  introduced here as part of  the package.  She said  this was                 
  just  a  rough  overview of  the  process  of  how what  was                 
  determined to be recommended in a supplemental process, with                 
  the hope that the supplementals would move well ahead of the                 
  regular FY '98 so  they could be clear with  the departments                 
  about funding levels for the remainder of the year.                          
                                                                               
                                                                               
  Senator Adams asked  if there were  any federal receipts  or                 
  unanticipated revenue increases that we  should be looked in                 
  to at this particular  time from any  of the agencies.   Ms.                 
  McConnell  said  there were  things  going through  the LB&A                 
  process and there would  be more items coming up at the next                 
  meeting.  The only one presently, that is strictly a federal                 
  issue, is the Indian Health Service.     Senator Adams asked                 
  if that could be handled in a supplemental rather than LB&A.                 
  Ms. McConnell said that it certainly  could be.  The process                 
  had  been  followed  where  LB&A  was authorized  to  handle                 
  various issues which  had been  approved at prior  meetings.                 
  It was assumed to follow the current practice.                               
                                                                               
  Sharon   Barton,   Director,   Division  of   Administrative                 
  Services, Department of Administration  was invited to  join                 
  the  committee.    She explained  that  section  1(a) was  a                 
  request  for $1,018.7 million for the  leasing budget.  When                 
  it was closed  out last spring a shortfall  of approximately                 
  that   amount  was   predicted.      Having  exhausted   the                 
  opportunities  for making  lease-by-lease  cost savings  the                 
  Division  of  General Services  had focused  its' attentions                 
  this year on  the opportunities  for greater savings,  long-                 
  term savings in the lease budget, mainly in a lease-purchase                 
  opportunity, mainly  in Anchorage  to cut  down on  the high                 
  rental costs.  For FY '97 there  will be a shortfall of just                 
  over a million dollars.                                                      
                                                                               
  Senator  Adams asked if the  leasing for trooper housing was                 
  covered under this particular section.                                       
                                                                               
  Dugan  Petty,  Director,   Division  of  General   Services,                 
  Department  of  Administration  was  invited  to  join   the                 
  committee.  In response to Senator  Adams, he advised it was                 
  covered under their BRU for lease payments on their housing.                 
  Senator Adams asked if  it was preferred that this  was done                 
  under their own  housing supplemental.  Mr. Petty  said that                 
  over a decade ago authority was delegated to the agencies to                 
  enter into  their own housing  agreements and pay  their own                 
  rental payments.  There are no  housing or lease payments in                 
  their budget.                                                                
                                                                               
  Senator Adams asked about the  lease/purchase of the Bank of                 
  America  building  in  Anchorage.     Mr.  Petty  said  this                 
  supplemental request  had  no impact  on the  lease/purchase                 
  agreement.                                                                   
                                                                               
  Senator Sharp asked about the Frontier Building acquisition.                 
  Mr.  Petty said the  strategy in  managing down  this fiscal                 
  year's budget at  the time  the budget was  prepared was  to                 
  focus on the high costs leases  in the largest increments of                 
  space.  The averages are in  the neighborhood of about $1.50                 
  per square foot.   That particular lease was $2.15  to $2.17                 
  per square foot.   It  is a consolidation  of a  significant                 
  amount of  space that  is coming  due for  replacement in  a                 
                                                                               
                                                                               
  couple  of  years.   The  strategy in  reducing  the leasing                 
  obligation was to try  and reduce that one in  particular in                 
  order to  make some  significant reductions  in the  leasing                 
  budget.   The focus  at the  time in  preparing last  year's                 
  budget was in negotiations  with the owners of the  Frontier                 
  Building  to  reach a  lease/purchase  agreement that  would                 
  allow reduction of the  lease budget and to bring  a package                 
  back to the Legislature.  They were not successful and could                 
  not get significant savings.  Senator Sharp further inquired                 
  which building it  was in November that there was a hot deal                 
  on.   Mr.  Petty advised  that it  was the  Bank of  America                 
  building in Anchorage.                                                       
                                                                               
  Co-chair Pearce asked if there was a ten-year lease schedule                 
  showing what year which leases and how many square feet were                 
  coming up for lease that could be made available.  Mr. Petty                 
  said he would provide it.   She further asked whether in the                 
  cost estimates that have been developed on the possible Bank                 
  of America purchase  have the penalties  for getting out  of                 
  any current  leases been  included in  those cost  estimates                 
  that are being forwarded.  Mr.  Petty said they had included                 
  project   development   costs,   which   would   be   tenant                 
  improvement,  remodeling costs necessary  to make  the space                 
  built out for State  agencies coming in, and there  are some                 
  contingency costs in  there that  would help negotiate  some                 
  buy-outs.  Co-chair Pearce asked if any actual penalties had                 
  been figured into those costs.  Mr. Petty said they had not.                 
  The strategy would be to be out when the leases expire.                      
                                                                               
  Senator  Phillips  referred  to 1(e)  and  settling  of this                 
  matter.  The  State of Alaska  is a big  target and this  is                 
  probably one of the most sue-happy states in the country and                 
  he said he is getting tired  of funding every wrong that has                 
  been done.  He said they should stop encouraging lawsuits.                   
                                                                               
  Mr. Petty said both cases were perfect examples of where the                 
  State  was  trying to  hold  the  line.   They  believed the                 
  prudent thing to do was reduce their obligation and the cost                 
  to the State and to reach a  settlement.   The first of  the                 
  two, Juneau One Stop  consolidation was a variety of  half a                 
  dozen  agencies  with  a  new  concept  of    having  public                 
  assistance programs from  the Department of Labor,  programs                 
  from  Vocational  Rehabilitation aggregate  together  in one                 
  location.  This was part of the welfare reform initiative to                 
  service customers in terms of job training and programs they                 
  provide in  one stop  instead of  them being  referred to  a                 
  number of agencies through the state.   This building was an                 
  existing lease occupied  predominately by the  Department of                 
  Labor, one  of the  key groups  that would  be part of  this                 
  consolidation.   It was also  occupied by the  Department of                 
  Health and Social Services, Family  and Youth Services.  The                 
  strategy to put them under one roof was to take the existing                 
  lease  and put them in  that lease, requiring  us to bid out                 
  replacement  space for Family  and Youth Services.   That is                 
                                                                               
                                                                               
  where the claim occurred.  An RFP was put out.  The first to                 
  move out was Family and Youth Services and then we had to go                 
  from the Wildmeadow Building.  Mr. Petty  answered said they                 
  would have to go in and do floor by floor renovation to pull                 
  the  consolidation  together.    The  final  two  were  some                 
  additional leases that were at  expiration.  The people from                 
  public  assistance  would move  into  the new  lease  in the                 
  Wildmeadow Building.   An RFP was  put out to acquire  space                 
  for  Family  and Youth  Services.   There  were a  couple of                 
  competitors and  one even  had a  foundation in the  ground.                 
  They basically designed the building based upon the RFP.  He                 
  further  explained  there  was  a  protest and  the  ensuing                 
  developments.  After a  review of the protest it  was denied                 
  and  the  commissioner  upheld the  appeal.    After several                 
  hearings and delays that side of  the equation when added up                 
  looked  like  it  was  a  larger   number  than  reaching  a                 
  settlement.  There were various  opportunities to settle but                 
  they were  not chosen.  At some point  it was thought it was                 
  not going to  be in the  best interest of  the State and  be                 
  more costly to pursue.                                                       
                                                                               
  Senator Phillips said  he did not  know all the details  but                 
  this  sounded  like  a   ransom  was  being  paid  for   the                 
  kidnapping.  Mr. Petty said he would be happy to provide any                 
  necessary  information for  the  Senator.   Senator Phillips                 
  asked if that was the same situation with  the Environmental                 
  Conservation   land.    Mr.  Petty  said  the  Environmental                 
  Conservation Lab was a different  circumstance and proceeded                 
  to explain.  There were some  bonds issued by  the developer                 
  but this  was not  a lease/purchase  agreement.   It was  an                 
  operating lease and when it expired we were out.  There were                 
  a variety of issues but some of them had to do with the fact                 
  that a  haylon fire suppression  unit was specified  for the                 
  building because it  was designed that way  by Environmental                 
  Conservation.  The contractor, after  bidding, came back and                 
  said he wanted to put another system in.  There is State has                 
  a  strong  case even  though  there may  be  some liability.                 
  There has been  no supplemental because we  have been taking                 
  this on through our purchasing budget.  The costs associated                 
  with fighting this  include RSA's to  the Department of  Law                 
  for the attorney,  expert witness costs and  hearing officer                 
  costs.   There has been  a hearing officer  on this case for                 
  several years.   He  further advised  Senator Phillips  that                 
  several changes  had been made  in the procurement  law; one                 
  being to put a statute of  limitations on claims against the                 
  State so there  is not  a situation where  five years  later                 
  someone comes in with a claim.   This was one of the  issues                 
  that caused us  to do that.  It is expected to bring this to                 
  conclusion this fiscal year.                                                 
                                                                               
  Senator Torgerson asked  if the contract for  the Kenai area                 
  had been awarded.  Mr. Petty  said his understanding was the                 
  RFP's  had not  been  awarded.   Senator Torgerson  asked if                 
  there  had been  a lawsuit  filed yet  in this matter.   Mr.                 
                                                                               
                                                                               
  Petty said to his knowledge there  had been no lawsuit filed                 
  over that.    Lease procurements,  particularly large  ones,                 
  typically do not  receive an award without  being contested.                 
  They are more complicated and complex and there are  usually                 
  greater dollars involved.   There are more  dollars invested                 
  by the preparers of the proposal  for the bids to respond to                 
  one of these.   Senator Torgerson  said the Kenai lease  was                 
  let out for square footage.  The four or five  agencies that                 
  were  combining  were quite  a bit  in  excess of  what they                 
  actually needed  with the  downsizing of  the Department  of                 
  Labor.   The end  result was  that the  only buildings  that                 
  could be bid on this were facilities  located in the City of                 
  Kenai and it left out all the other areas in Soldotna unless                 
  they  were  willing to  kick  out  renters.     He  said  he                 
  protested this  approximately a  year ago.   Three  of those                 
  individuals are probably going to file lawsuits.  There will                 
  be a lot more of these if the State continues to do business                 
  like that in his district.                                                   
                                                                               
  Senator  Phillips  requested  Mr. Petty  provide  a  list of                 
  lawsuits for particular  situations during the last  five to                 
  ten  years.   Mr.  Petty  said  he would  prepare  a summary                 
  document.                                                                    
                                                                               
  Sharon Barton continued with section 1(d) requests  $317,500                 
  for the Office of Public Advocacy.   Last spring a shortfall                 
  in this budget of something over $500,000 was estimated.  It                 
  is  always  a  challenge  to  accurately  predict  what  the                 
  contractual  costs  will  be.    This contractual  money  is                 
  entirely   for  attorneys,   expert   witnesses  and   those                 
  associated with the  cases referred  to the Public  Advocate                 
  that the  Public Defender  cannot handle.    The number  was                 
  somewhat reduced  from the original projection  of something                 
  over $500,000.                                                               
                                                                               
                                                                               
  Co-chair Pearce, referring  to that section, asked  when the                 
  Governor's  request would  come over  and Annalee  McConnell                 
  characterized some of  the sections in this  bill, including                 
  the fire suppression  section and  the leasing section  that                 
  had  been deliberately underfunded with the expectation from                 
  the  Legislature,  through either  intent  language  or some                 
  indication   that   indeed  they   did   expect  to   see  a                 
  supplemental.   Quite honestly it had  never been heard that                 
  the Office of Public Advocacy or the Public Defender Offices                 
  were to be included in that  category.  What happened either                 
  on  the House or  Senate side or  the floor when  the budget                 
  passed that led to  belief that a supplemental this  year on                 
  that section was expected.                                                   
                                                                               
  Ms.  Barton said  in  the materials  that  were provided  in                 
  close-out and conference committee  on the lease/budget, the                 
  Public Advocate and the Public  Defender was documented that                 
  they were underfunded to  such an extent that it  was beyond                 
                                                                               
                                                                               
  means  to  reduce costs  in  the next  fiscal year.    As to                 
  agreements  by anyone or  promises made  about supplementals                 
  this year she  was not aware of any  such commitments by the                 
  Legislature except to  say that  every opportunity has  been                 
  taken  to advise  that in  spite of best  management efforts                 
  these are budgets driven by factors beyond control and there                 
  would be need for a supplemental this year.                                  
                                                                               
  Senator Donley said  a better  justification was needed.  He                 
  said he wanted  to know why  it was thought the  Legislature                 
  had that state of mind when they passed the budget.                          
                                                                               
  Annalee McConnell  said she  was  the person  who put  those                 
  words in.   Going through  the last legislative  session and                 
  special session,  as indicated  by Sharon  Barton, this  was                 
  presented as an item felt to  be unreasonable and impossible                 
  to keep within the amount which was in the initial bills put                 
  together by the Legislature.  In some cases there was intent                 
  language, as Senator  Pearce mentioned there was  the rather                 
  humorous  exchange  about the  leasing  budget with  Senator                 
  Frank  saying  "trust  me".    There  were  also  a  lot  of                 
  conversations regarding  negotiations through the end of the                 
  session to come to a conclusion  with respect to the budget.                 
  These were items that were discussed quite considerably with                 
  the chairs of the House and Senate Finance Committees on the                 
  operating  sides, Senator  Frank  and Representative  Hanley                 
  where  it  was  discussed to  come  back  for supplementals.                 
  Certainly it is  understood about the wording here, in terms                 
  of the  expectation.  It  was very clearly  communicated the                 
  necessity  for supplementals and  the possibility the number                 
  would change  slightly.   As Ms.  Barton indicated  it is  a                 
  little  less  than  thought.   There  was  very considerable                 
  discussion  about the  fact  that there  are  some areas  of                 
  obligations and the  targets that  the Legislature hopes  to                 
  set cannot always be met.                                                    
                                                                               
  Senator Donley  asked  if Senator  Frank  or  Representative                 
  Hanley said it would be o.k. to come back for a supplemental                 
  in these areas.                                                              
                                                                               
  Ms. McConnell said they obviously did not ask for permission                 
  from the Legislature  about what to submit.   They submitted                 
  what  they  believed  was  necessary  to  submit.    It  was                 
  discussed with them on several occasions that there would be                 
  items   that  they  would   have  to  come   back  for  with                 
  supplementals.                                                               
                                                                               
  (Tape #35 switch to side 2 at log #592.)                                     
                                                                               
  Senator Donley  asked if anyone  conveyed to her  they would                 
  support a supplemental.  Ms. McConnell said the need to come                 
  back for a supplemental was understood.  Senator Donley said                 
  he felt the document was inaccurately worded and the request                 
  was very misleading.   Referring to the memorandum  that was                 
                                                                               
                                                                               
  attached  to the backup the  department says the managers of                 
  those programs  made every effort  to contain or  reduce the                 
  costs and asked what was the basis for this statement.                       
                                                                               
  Sharon  Barton responded  saying in  the case of  the Public                 
  Advocate Mr.  Brant McGee  was on  teleconference and  would                 
  answer questions relating to that office.                                    
                                                                               
  Senator Donley said he would prefer Ms. Barton to answer the                 
  question because he  wanted to  know what her  understanding                 
  was when she  signed the document representing  this matter.                 
  She  said  her  understanding was  the  Public  Advocate had                 
  strictly administered contracts  with his private  attorneys                 
  and with others in his office who make obligations on behalf                 
  of their agency  for expert witnesses, travel,  for whatever                 
  contractual costs are associated with the cases.  The Public                 
  Advocate  does not  have  the opportunity  to make  up these                 
  costs by way of holding vacancies within staffing, etc.  His                 
  costs are in the contractual line item.                                      
                                                                               
  With respect to the  Public Defender she indicated it  was a                 
  different  situation.   Those costs  were  personal services                 
  costs.  In  spite of the  fact the budget was  substantially                 
  underfunded and an increasing caseload  of 19% for felonies,                 
  which  affects both  Public  Defender and  Public  Advocate,                 
  overworked staff held  positions vacant in   eight different                 
  offices throughout  the State causing  considerable problems                 
  and hardships on  the rest of the staff in  order to reduce,                 
  what they believed at the beginning  of the fiscal year, was                 
  a  potential  supplemental  of  $475,000  down to  $268,000.                 
  These managers  have worked  these  issues very  hard.   The                 
  average cost per case  in the office of the  Public Advocate                 
  is substantially reduced over the years.                                     
                                                                               
  Senator Adams said he was not here to debate wording of what                 
  someone said but  rather have a constructive debate  on what                 
  the new crime  legislation that  passed has on  both of  the                 
  agencies.   He wants to hear why they need money.                            
                                                                               
  Brant  McGee, Public  Advocate, Office  of Public  Advocacy,                 
  Anchorage testified before the committee via teleconference.                 
  He indicated that their costs were mainly driven by caseload                 
  increase  involving  every  category;  abused and  neglected                 
  children, incapacitated  adults  and criminal  cases.    The                 
  volunteer guardian ad  litem program  in Anchorage has  been                 
  expanded  in  terms  of  profiting   measures  to  over  120                 
  volunteers.  New  volunteer guardian ad litem  programs have                 
  also  been  opened  in  Mat-Su and  Kenai  Peninsula.   With                 
  respect  to  criminal   cases  they  have  continued   their                 
  profiting  measures  with  respect  to  the  use  of  expert                 
  witnesses,  travel and  witness  travel.   There  is a  cost                 
  associated  with  that, especially  in  terms of  service to                 
  individuals  in rural areas.  Lawyers  are not travelling as                 
  much as  they did,  but are  handling cases  telephonically.                 
                                                                               
                                                                               
  There are a  significant number of  cases folks are able  to                 
  pay  for  services.   In that  regard  the intake  of public                 
  guardian cases  has been  reduced although  there are  still                 
  substantially increases  in that area  primarily because  of                 
  the  aging  of  the  Alaskan  population and  the  increased                 
  awareness  among  institutions and  agencies  of the  public                 
  guardian option.                                                             
                                                                               
  Senator Donley  asked  what percentage  of the  supplemental                 
  costs reflected increases for  criminal services versus non-                 
  criminal.     Mr. McGee said  he did  not know.   These were                 
  projected on the basis of different cost categories but they                 
  were not broken down under criminal or civil.  In regards to                 
  an earlier statement by   Ms. Barton he said  they projected                 
  increases associated with caseload  increase some $617,00  a                 
  year ago.  They have substantially reduced that estimate and                 
  feels  that the savings has been  through the realization of                 
  cost saving efforts in FY '96 that they  have applied to the                 
  FY '97 operation.                                                            
                                                                               
  Senator Donley further asked if any comparison had been done                 
  in the criminal area of representation with how other states                 
  provide their criminal  representation.   Mr. McGee said  he                 
  was very well  aware of how other  defense operations manage                 
  case  loads  in  other  states,  both through  contact  with                 
  managers  in   other  states   and  also   through  national                 
  organizations.   The  office of  the  Public Advocate  is  a                 
  hybrid  agency  providing  a  substantial   portion  of  its                 
  representation  in major  population  centers through  staff                 
  representation.    Most   outlying  area  representation  is                 
  handled through  contractor services.   The  differences are                 
  dictated  principally  by  geography and  by  the  fact that                 
  population centers are  outside the  major cities in  Alaska                 
  are not big enough to support the creation of staff offices.                 
  He  said  that every  single  case needing  criminal defense                 
  representation  is a  case that  comes  to them  because the                 
  Public Defender Agency has a conflict of interest.  Like the                 
  Public Defender all  of their  cases come to  them by  Court                 
  orders of  appointment.   Most  of  the criminal  cases  are                 
  handled in  Anchorage and Fairbanks by staff  lawyers.  They                 
  also provide representation  in major criminal cases  and in                 
  particular homicide cases, throughout the state because they                 
  have  found  and demonstrated  it  was cheaper  for  them to                 
  provide  the representation from  the central  office rather                 
  than hire local  contractors for the big  cases.   For  more                 
  routine  cases  they  do  have  contract attorneys  in  each                 
  Superior Court location throughout the State.  It is through                 
  them representation in the criminal arena is provided.                       
                                                                               
  Senator  Sharp  said  he  recalled  last  year  the  finance                 
  committee did in fact show  strong indications of reluctance                 
  to supplemental funding and some areas were reduced.  It was                 
  very clear the intentions of the Legislature to  control and                 
  not expand  any further  the increased costs  over the  last                 
                                                                               
                                                                               
  five or six  years of  the Public  Defender.    It was  very                 
  clear as far as this committee was concerned as  to what the                 
  direction was regarding  the office  of the Public  Defender                 
  and  the  Public  Advocate.    He  recalled  Senator  Donley                 
  stressing his concern about how that had grown in proportion                 
  to the funds available to the District Attorney's office for                 
  prosecutors  compared  to  the  increased staffing  for  the                 
  Public Defender.   He wanted  to know  where the  philosophy                 
  came that they were going to entertain supplementals in this                 
  area and encouraged them to come  forward with it if it  was                 
  required.     He  said  his   constituents  were  increasing                 
  concerned   about  the   Public  Defender's   office  making                 
  available  to convicted  criminals two public  defenders for                 
  appeal cases.  He cited specifically an individual convicted                 
  of  a heinous  crime and  the Public  Defender provided  two                 
  defenders to go  all the  way to the  Supreme Court.   These                 
  results  were  published in  a  Fairbanks newspaper  about a                 
  month ago.     Mr. McGee said he  could not recall when  two                 
  attorneys were assigned to an appeal.  Typically, one lawyer                 
  is sufficient to handle an appeal.                                           
                                                                               
  Co-chair  Pearce  said that  Barbara  Brink from  the Public                 
  Defender Agency in Anchorage was on teleconference and could                 
  respond to Senator Sharp's specific questions.                               
                                                                               
  Barbara Brink,  Acting  Director,  Public  Defender  Agency,                 
  Department of Administration  testified before the committee                 
  via teleconference.   Specifically,  concerning appeals  she                 
  explained  that it  was the  policy of  the Public  Defender                 
  Agency  to assign one  attorney.  Two  appellate lawyers are                 
  not assigned.   It was  typical when a  brief was filed  the                 
  name of the attorney who actually wrote the brief along with                 
  the name  of the attorney who is the  head of the agency are                 
  named as required  by the  appellate rules.   She said  they                 
  handled less than  300 appeals  last year.    Senator  Sharp                 
  said  he  would send  the article  to  Ms. Brink  because it                 
  clearly stated there  wee two  public defenders involved  in                 
  the case.     Whether it was a supervisor or  not he did not                 
  know.                                                                        
                                                                               
  Senator Donley  referred to the decade 1985 through 1995 the                 
  budget of the Public Defender's office  went up an actual 47                 
  per cent, the Public Advocacy office went up 178 percent and                 
  the budget for  our prosecutors went up 4 percent.   If they                 
  are  filing so  many more  cases  and they  are successfully                 
  prosecuting  that  many  more  with   only  a  four  percent                 
  increase,  why  has   it  been  necessary  for   the  Public                 
  Defender's office  to  have a  47 percent  increase and  the                 
  Public Advocacy  office to have a 178  percent increase over                 
  the same period  of time.  He said he did understand a large                 
  portion of the Public Advocacy  office's job is not criminal                 
  and  would  like a  breakdown.    Mr. McGee  said  there was                 
  definitely  a 178  percent  increase but  he would  note, as                 
  well,  the caseload had  increased by more  than 400 percent                 
                                                                               
                                                                               
  during the same time  and they had reduced the  average cost                 
  per case by some 36.5 percent over that same  period.  There                 
  have  been significant increases  in the budget  but they do                 
  not come close  to matching the increases  being experienced                 
  in caseload.  About half of their cases do not have anything                 
  to do with the  criminal division or the Department  of Law.                 
  They  come  by  way of  the  Division  of  Family and  Youth                 
  Services  and  also  through other  agencies  and non-profit                 
  institutions  around  the  state about  petitions  regarding                 
  children and conservatorships.                                               
                                                                               
  Senator  Sharp referred again  to the  office of  the Public                 
  Defender and  noted the names of the  two attorneys involved                 
  in a case  in front of the Court  of Appeals; the conviction                 
  of a Manley Hot Springs man who beat a man and then told his                 
  teenage son to castrate the victim.  The Appeals Court ruled                 
  on Wednesday that Weaver's  public defenders, Marcia Holland                 
  and John  Salemi  failed to  show  Judge Hodges  was  biased                 
  against Weaver.  He said he did not know if one of those was                 
  a supervisor or not but felt it showed there were two public                 
  defenders.    Ms. Brink said that John Salemi was the former                 
  director of the  Public Defender  Agency and Marcia  Holland                 
  was the  Fairbanks appellate lawyer.  She further noted that                 
  John Salemi did  not have  any specific input  on that  case                 
  because  he  was simply  listed  on  the front  page  of the                 
  appellate brief as the director.                                             
                                                                               
  Senator Phillips asked  if there was not a responsibility to                 
  correct the newspaper on that issue.  Unless it is corrected                 
  the  public reading the  newspaper is  going to  think there                 
  were two public defenders.                                                   
                                                                               
  Annalee McConnell said  she wanted to recall  a conversation                 
  last year before the Senate Finance Committee when there was                 
  a possibility  of increasing  the budgets  for the  District                 
  Attorney's office.  One of the pleas made by the head of the                 
  criminal division  was that  any increase  be balanced  with                 
  increases  in  the  Public Defender  area  because  from the                 
  perspective of the  District Attorney's office they  felt it                 
  was necessary to  be sure the  Public Defender agency  could                 
  keep pace.  They recognized a  very serious problem with the                 
  Public  Defender  agency  not  being  able to  move  forward                 
  because of the limited budget.  Another area of cost control                 
  that was discussed last  year and is under review,  as Brant                 
  McGee  mentioned, there is  no option of  accepting cases as                 
  they are  assigned by the  Courts.  There has  been a review                 
  under  way  about  indigency standards,  however  it  is not                 
  expected to  have a  significant effect.   In  terms of  the                 
  impact of the new crime bills as mentioned by Senator Adams,                 
  there have been areas  where the fiscal notes for  the crime                 
  bills that were  passed by the Legislature  were reduced and                 
  so the Public  Defender office  has one  more element  where                 
  keeping pace with the laws that are passed is very difficult                 
  if the fiscal notes are not fully funded.                                    
                                                                               
                                                                               
  Senator Donley  asked if there  was an increase  in caseload                 
  and the prosecutors were dealing with it with a four percent                 
  increase  over the  last decade and  these two  budgets show                 
  this tremendous more than ten-fold increases over what their                 
  counterparts are getting  to deal with the  same addition to                 
  caseload  that  the  prosecutors  are  dealing  with.    Ms.                 
  McConnell said there have been enormous changes in  the past                 
  ten years in terms  of what is expected under  Supreme Court                 
  rulings in terms of  the level of defense.  This  has been a                 
  real burden and  it is recognized there is a  cost that goes                 
  with it.                                                                     
                                                                               
  Co-chair  Pearce  referred  the  committee   to  section  2,                 
  Department of Corrections  $2.3 million.   She also  advised                 
  sections 4(a) and  (b) which  tie into Correction's  budgets                 
  would be discussed at the same time.  Ms. Barton asked about                 
  the EVOS section  request but  Co-chair Pearce advised  that                 
  there were no questions regarding that matter.                               
                                                                               
  Robert Cole, Director,  Division of Administrative Services,                 
  Department  of   Corrections,  was   invited  to  join   the                 
  committee.    He   said  the  Court  continued   to  monitor                 
  overcrowding  and  other issues  with  the Department.   The                 
  estimate of overcrowding fines for  this fiscal year through                 
  June 30, 1997 will likely accumulate to about  $2.3 million.                 
  There is an  obligation to come  forward with a request  for                 
  supplemental appropriations, but it was  thought rather than                 
  do  this  for a  fine, a  general  proposition could  be put                 
  before  the  body  to  appropriate an  amount  equal  to the                 
  anticipated amount of  fines to be  placed in a  corrections                 
  capital  account   pending  a  policy   resolution  by   the                 
  Legislature.  The Administration  would ultimately be agreed                 
  to relieve overcrowding.   He realized  there were a lot  of                 
  issues and different  proposals being  discussed by  various                 
  parties  in  the  Legislature.    He said  overcrowding  and                 
  women's issues  particularly needed  to be  dealt with.   He                 
  asked the Legislature's  consideration to make a  good faith                 
  down payment to be  held in abeyance until an  agreement was                 
  reached on how to proceed with relieving these issues.                       
                                                                               
  Senator Phillips  said he hoped  a women's facility  did not                 
  replace the Highland  Prison.  Mr.  Cole said that many  may                 
  remember  last year  the  department put  forth a  bond bill                 
  which  contained a proposal to reconfigure about 225 beds at                 
  Highland into a  women's facility.  Contingent on that would                 
  be building space  at Palmer for men.   The net effect would                 
  be that  about 300 beds would be freed up around the system;                 
  Fairbanks,  Lemon  Creek  Juneau,  Sixth  Avenue  Anchorage,                 
  Yukon-Kuskokwim Correctional Center Bethel and other  places                 
  so that there would be 176 more beds at Palmer, 225  beds at                 
  Highland  for  women and  about  300 beds  elsewhere  in the                 
  system.    He  said  they  were  asking  the Legislature  to                 
  consider making essentially  a down payment on  an agreement                 
                                                                               
                                                                               
  to be reached soon.   This would give the Department  of Law                 
  some ground to  stand on when  they appear before the  Court                 
  and to ask both  plaintiffs and the Court to  recognize this                 
  down payment in lieu  of fines.  Senator Phillips  said that                 
  this  did not answer his question but  he would take care of                 
  this problem.   Mr. Cole  said that they  did recognize  the                 
  present concerns on  part of the Highland  Mountain citizens                 
  advisory board about  certain aspects of that  original plan                 
  that was submitted last year.   Senator Phillips said he was                 
  concerned  about turning  Highland Mountain  into a  womens'                 
  facility and would continue working with the Commissioner in                 
  trying to find another site.  Co-chair  Pearce asked Senator                 
  Phillips why he did  not want a womens' facility  when there                 
  was already  a prison.   Senator Phillips said  the citizens                 
  advisory board, which reflected the community's values, felt                 
  the prisons and  programs they had  there were running  very                 
  well and now the Department was coming in with a proposal to                 
  replace  that  facility  and it's  current  programs  with a                 
  women's facility.   He also noted there were 3,000 prisoners                 
  around  the State and Eagle  River has 300.   They have done                 
  their part  and now  feel other  areas of  the State  should                 
  contribute.                                                                  
                                                                               
  Senator  Jerry Ward  asked for  clarification regarding  the                 
  money that is being  requested to be  set aside in order  to                 
  have it  apply for the  anticipated agreement for  Cleary so                 
  the Department of Law has easy access to it.  Mr.  Cole said                 
  the idea was not that the Department of Law have disposition                 
  of the money but rather that the Department  of Law would be                 
  able to back  to the plaintiffs  and the Court  and say  the                 
  State  intends  to  come  to  grips  with  the  overcrowding                 
  problems in the Department of  Corrections regardless of the                 
  fact that the  solution has not been agreed to.   First, the                 
  Court would be asked  not to impose the fine on  the current                 
  year operating budget, which they have threatened to do; and                 
  second, to recognize  on the part of both  the Court and the                 
  plaintiffs that the State of Alaska is taking a step towards                 
  solving these problems.                                                      
                                                                               
  Ms. McConnell said  that neither the  Department of Law  nor                 
  the Department of  Corrections would  have the authority  to                 
  determine the  use of that  money.  It  would simply be  set                 
  into a capital  holding account  for the normal  legislative                 
  process of determining what facilities might  be constructed                 
  or modified.   There would be no  discretion on the part  of                 
  the Department of Law or Department of Corrections or anyone                 
  else in the  executive branch  to simply expend  that for  a                 
  plan that has not been  determined to be part of  the budget                 
  process.    Senator Ward  asked  the reason  for  putting it                 
  there.   Ms. McConnell  said   make clear  to the  Court the                 
  State is going to be addressing the underlying problem which                 
  is overcrowding in  the prisons  that has been  part of  the                 
  Court's concern.  Senator Ward referred to a resolution to a                 
  revisit  of the Cleary  decision by the  Attorney General in                 
                                                                               
                                                                               
  which  the  Attorney  General  decided   not  to  honor  the                 
  resolution and did not  revisit Cleary.  Now monies  for the                 
  Cleary agreement should be set aside because it had not been                 
  revisited as the Legislature had requested.   Ms.  McConnell                 
  said  this strictly  dealt  with the  fines  that have  been                 
  imposed by the Court.   The Department has an  obligation to                 
  bring this forward  to the  Legislature because  there is  a                 
  Court order to pay  these fines.  That is  the appropriation                 
  before the committee now.   Senator Ward asked if  the fines                 
  were because of the Cleary settlement and Mr. Cole said that                 
  he was not able to speak to the technicalities of the Cleary                 
  settlement.                                                                  
                                                                               
  Co-chair Pearce continued  on to section 4(a)  regarding the                 
  boilers   in   Fairbanks   Correctional  Center   and   also                 
  McGlaughlin.  Mr.  Cole said  the basic issue  was that  the                 
  boilers at the  Fairbanks facility  were installed in  1983.                 
  They  have a  particular  configuration that  causes certain                 
  kinds of leaks  and over a  long period of time  those leaks                 
  have ruptured the  bodies of  the boilers.   They have  been                 
  repaired many times.  Last  year's boiler inspector's report                 
  along with the one from this year basically say these cannot                 
  be repaired further.  Their recommendation was to have these                 
  replaced.    The  supplemental  request   was  to  avoid  an                 
  emergency  situation.  There  is about a  9 - 12  month lead                 
  time for doing all  of the bid work, contracting  that needs                 
  to  be done to get these replaced.   They should be replaced                 
  this summer before getting into another winter season.                       
                                                                               
  Senator Sharp said his concern was that the boilers were put                 
  installed in 1983 and the life of a commercial boiler should                 
  be longer than fourteen years unless they were of subquality                 
  when they  were put in.     Co-chair Pearce noted  that this                 
  particular  model  of   boilers  has  experienced   numerous                 
  problems.  She requested the boiler inspector report and the                 
  manufacturer's  agreement.    Mr. Cole  said  that  he would                 
  provide the information.                                                     
                                                                               
  Janet Clark was invited to join the committee.  She said the                 
  McGlaughlin Youth Center opened in 1968 and was the  State's                 
  largest youth facility, having  a capacity of 150 beds.   It                 
  runs at an  average of 180 beds  since this past fall.   She                 
  explained  the  serious  overcrowding   conditions  and  the                 
  security problems they  have been  having, stating that  the                 
  facility had been  originally built as a  residential house.                 
  There  is no perimeter security.    This past fall there had                 
  been break-ins from the outside by  those trying to get some                 
  of the youth out.  A security  consultant was hired  to come                 
  in and  evaluate the  situation, however,  the report  being                 
  confidential is  not part of  their back-up.   The Fairbanks                 
  Youth  Center was built  in 1981  and has  a capacity  of 40                 
  beds, running at one hundred percent capacity.                               
                                                                               
  Senator  Sharp  asked  for  a   breakdown  between  the  two                 
                                                                               
                                                                               
  facilities and Ms. Clarke said it was approximately $350,000                 
  for Fairbanks and $850,000 McGlaughlin.                                      
                                                                               
  George Buhite, Director, McGlaughlin  Youth Center testified                 
  via  teleconference.   He  said last  year  there were  four                 
  separate incidents  at the center  the most serious  being a                 
  drive by shooting.  Subsequently two small explosive devices                 
  were placed in the facility, one shattering a window.  There                 
  was also a situation  of gang graffiti or tagging  in one of                 
  the  cottages.  They were  concerned about the escalation of                 
  the boldness of gang  members coming onto the campus.   They                 
  feel the open perimeters of the facility are now a liability                 
  to the community.                                                            
                                                                               
  Senator Jerry  Ward asked  how many  escapes there  had been                 
  from the facility  since 1969.   He said  there had been  no                 
  escapes from  the secured section  of the  facility.   There                 
  were two escapes last year from escorts going to Court.  The                 
  number  of  escapees  from  the  unsecured  portion  of  the                 
  facility  has  dropped  to  single  digits.    Senator  Ward                 
  commended Mr. Buhite.  Senator  Ward further asked what  the                 
  bed capacity was and Mr. Buhite said it was 150 beds however                 
  noted they were now housing 192 children.                                    
                                                                               
  Greg Thompson,  Director, Fairbanks  Youth Center  testified                 
  via teleconference.  He also underscored a security incident                 
  at  the facility whereby  youth had attempted  to break into                 
  the  facility   using  a   propane  torch.     Due  to   the                 
  configuration of the  driveway there is ready  access to the                 
  facility  by  the  public  and he  further  noted  there was                 
  regular and on-going unauthorized contact both vehicular and                 
  pedestrian with the detainees.   He said there was  a strong                 
  need to keep the public out.                                                 
                                                                               
  Senator Ward  commented on  the new  security perimeter  and                 
  asked if that had to be a new  dollar amount and could it be                 
  handled by  restricting the  road access.   Ms. Clarke  said                 
  that part  of the recommendation  was to restrict  access to                 
  the facility.                                                                
                                                                               
  Ms.  Clarke  explained  section  4(c)  regarding   emergency                 
  communications  equipment.     This  request  would  provide                 
  different communication equipment  to meet some of  the gaps                 
  currently  on  the  highway  system  for  emergency  medical                 
  services as well as the  deteriorating radio situations that                 
  are on the rural  highways.  She specifically referred  to a                 
  crash  on  the Seward  Highway,  wherein the  Copper Landing                 
  Volunteer  Fire Department  ambulance crew responded  to the                 
  scene and  discovered multiple  victims.   Due  to no  radio                 
  coverage  they  were  unable  to  call  for  additional  EMS                 
  assistance or  for  medivac helicopter.   Central  Peninsula                 
  General Hospital physicians said this delay definitely cause                 
  an  impact to the patients' getting care.  Many lives are at                 
  risk because of lack of radio coverage.                                      
                                                                               
                                                                               
  Mark  Johnson, Anchorage, testified  via teleconference.  He                 
  said that most of  the equipment in the State  was purchased                 
  about 20 years ago  and it is breaking down  with increasing                 
  frequency.     The  particular  concern  is   the  volunteer                 
  ambulance services and some have  been formed where there is                 
  no emergency communications  within the structure.   We have                 
  tried to find  solutions to  the problems.   He noted  there                 
  were   possibilities   through    satellite   communications                 
  throughout  the  State.   They  have been  working  with the                 
  telecommunications   engineers   from   the  Department   of                 
  Administration and  feel they  can address  the most  urgent                 
  problems  previously identified at least before this summer.                 
  The  equipment  to  be purchased  will  be  tailored  to the                 
  specific  situation  in  each area.    Due  to  the lack  of                 
  communications many lives are jeopardized.   Co-chair Pearce                 
  asked  if this  project  were to  be funded  would  it be  a                 
  competitively  bid  RFP  for  the  equipment.   Mr.  Johnson                 
  indicated  that it  would.   Co-chair Pearce  noted  for the                 
  record   that  her   husband  works  for   Chugach  Regional                 
  Corporation which has  a partly owned subsidiary  which does                 
  deal in telecommunications  equipment and might be  a bidder                 
  on that, however, since it is  competitively bid she did not                 
  believe there would be a conflict.                                           
                                                                               
  Ms. McConnell further  commented that  there would be  other                 
  items relating to  emergency communications that  would come                 
  forward as  part of  the FY  '98 capital  budget.   She said                 
  there were a few items that  should be sped up such as  this                 
  one and the Fairbanks boiler situation.   The tourist season                 
  is also fast  approaching and there are  liability concerns.                 
  This emergency  communications request  was felt  to be  the                 
  most urgent.                                                                 
                                                                               
  Senator Phillips said he would like  Mr. Johnson to give him                 
  a  call later in  the day to  explain "dead spots"  or aging                 
  equipment.  He had some suggestions to provide.                              
                                                                               
  Co-chair Pearce said she would  hold this matter over  until                 
  Monday, 17 February at 8:30 a.m.                                             
                                                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at 10:55 a.m.                                      

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