Legislature(1999 - 2000)
11/04/1999 09:10 AM Senate PRI
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
COMMISSION ON PRIVATIZATION AND DELIVERY OF GOVERNMENT SERVICES
Anchorage, Alaska
November 4, 1999
9:10 a.m.
COMMISSION MEMBERS PRESENT
Representative Cowdery, Co-Chair
Representative Brice (via teleconference)
Senator Ward, Co-Chair (via teleconference)
Senator Adams
Bill Allen, Former Mayor of Fairbanks (via teleconference)
Tom Fink, Former Mayor of Anchorage
Emil Notti
Kathryn Thomas, Former Chair of Alaska State Chamber of Commerce
George Wuerch, Alaska Municipal League
Don Valesko, Business Manager of Public Employees Local 71
COMMISSION MEMBERS ABSENT
Mike Harper, President, Kuskokwim Corporation
OTHER HOUSE MEMBERS PRESENT
Representative Gail Phillips
COMMITTEE CALENDAR
Reports from the following Privatization Subcommittees:
Department of Labor
Department of Environmental Conservation
Department of Corrections
PREVIOUS ACTION
See Commission on Privatization minutes dated 7/20/99, 8/16/99,
9/20/99 and 10/28/99.
WITNESS REGISTER
VALERIE BAFFONE, Chair
Department of Labor Subcommittee
POSITION STATEMENT: Presented the subcommittee's report.
DWIGHT PERKINS, Deputy Commissioner
Department of Labor & Workforce Development
PO Box 21149
Juneau, Alaska 99802-1149
POSITION STATEMENT: Provided additional information with regard to
the Department of Labor.
VIRGIL NORTON, Chair
Department of Environmental Conservation Subcommittee
POSITION STATEMENT: Presented the subcommittee's recommendations.
MARY SIROKY, Manager
Information Education & Coordination
Division of Statewide Public Service
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, Alaska 99801
Telephone: (907) 465-5355
POSITION STATEMENT: Provided information with regard to when the
Department of Environmental Conservation would have its final
comments to the subcommittee's recommendations.
GREG MAGEE, Member
Department of Environmental Conservation Subcommittee
POSITION STATEMENT: Provided additional information.
BOB GILFILIAN, Member
Department of Environmental Conservation Subcommittee
POSITION STATEMENT: Provided additional information.
BILL LAWRENCE, Member
Department of Environmental Conservation Subcommittee
POSITION STATEMENT: Provided additional information.
MIKE ABBOTT, Economic Development Assistant
Office of the Governor
500 West 7th Avenue, Suite 1700
Anchorage, Alaska 99503
Telephone: (907) 269-7450
POSITION STATEMENT: Provided comments from the Administration.
GREG HORNER, Member
Department of Environmental Conservation Subcommittee
POSITION STATEMENT: Provided additional information.
JERRY BROOKMAN, Member
Department of Environmental Conservation Subcommittee
POSITION STATEMENT: Provided additional information.
SHARON ANDERSON, Chair
Department of Corrections Subcommittee
POSITION STATEMENT: Presented the DOC Subcommittee's
recommendations.
GREG PEASE, Member
Department of Corrections Subcommittee
POSITION STATEMENT: Provided additional information.
GARLAND WARREN, Member
Department of Corrections Subcommittee
POSITION STATEMENT: Provided additional information.
BRUCE RICHARDS, Program Coordinator
Department of Corrections
4500 Diplomacy Drive, Suite 207
Anchorage, Alaska 99508-5918
Telephone: (907) 269-7394
POSITION STATEMENT: Provided additional information.
BILL PARKER, Deputy Commissioner
Department of Corrections
4500 Diplomacy Drive, Suite 207
Anchorage, Alaska 99508-5918
Telephone: (907) 269-7397
POSITION STATEMENT: Provided additional information.
ACTION NARRATIVE
TAPE 99-8, SIDE A
CO-CHAIR COWDERY called the Commission on Privatization and
Delivery of Government Services meeting to order at 9:10 a.m.
Members present at the call to order were Representatives Cowdery
and Brice, Senators Ward and Adams, and Commissioners Allen, Fink,
Notti, Wuerch, Thomas, and Valesko. Commissioner Harper was not
present.
CO-CHAIR COWDERY announced that the first order of business would
be to approve the minutes from the October 28, 1999, meeting.
MARCO PIGNALBERI, Legislative Assistant to Representative Cowdery,
Alaska State Legislature, informed the commission that a copy of
the minutes had been sent to the chairman of the Department of
Revenue Subcommittee for review. Since he had not yet received
word from that subcommittee, he requested that approval of the
minutes be held until the Department of Revenue Subcommittee has
reported back. Therefore, the approval of the minutes from the
October 28, 1999, meeting was postponed.
MR. PIGNALBERI informed the commission that the packet includes a
summary of recommendations taken from the report from the
Department of Revenue Subcommittee. He noted that the commission
did not vote on the Department of Revenue Subcommittee
recommendations at the last meeting in order to have more time to
review those recommendations.
Number 068
COMMISSIONER FINK suggested that the commission could take action
on the recommendations after all the reports have been provided.
MR. PIGNALBERI explained that the idea was to vote on the
recommendations while the subcommittee was present, while
information was fresh in the minds of the commissioners.
COMMISSIONER FINK commented that adopting all the recommendations
would be terribly bulky. Perhaps after hearing from all the
subcommittees, the commission could decide on some of the
recommendations and leave the remaining to be supplemental
recommendations.
COMMISSIONER THOMAS stated that she would like to wait until all
the information from the Department of Revenue Subcommittee was
available before deciding on that subcommittee's recommendations.
MR. PIGNALBERI reminded the commission that the Alaska Housing
Finance Corporation is being treated as a separate subcommittee.
He informed the commission that additional information has been
provided regarding the Child Support Enforcement Division (CSED)
and a report on CSED should be arriving this morning. Returning to
approval of the recommendations, the recommendations could be
preliminarily approved today and [addressed formally] at the final
meeting.
COMMISSIONER WUERCH commented that the commission, by endorsement,
could simply forward all the recommendations. He indicated the
need, near the end of the process, to focus on a priority list of
recommendations. Therefore, Commissioner Wuerch agreed with
Commissioner Fink with regard to the need to adopt a strategy that
would lead to some focus at the end.
COMMISSIONER FINK suggested that it may mean that at the last two
hearings the commission would digest each report and make decisions
on the recommendations.
Number 145
SENATOR ADAMS noted that he would like to see each agency's
response to the corresponding subcommittee recommendations. He
hoped that the commission doesn't lose focus with regard to what
privatization is about. He emphasized the need to remain focused
on effective government and cost-savings measures as well as good
service to Alaska. Senator Adams didn't object to returning to any
recommendations at the end of the process.
CO-CHAIR COWDERY recalled Commissioner Thomas' point at the last
hearing in which she cautioned everyone to stick to Section 5 of
SB 33.
MR. PIGNALBERI discussed the difficulty in providing all the
information to all the commissioners at the same time. The
complete record will not always be available at the time the
recommendations are offered, especially for these early reports.
That would seem to support having a final vote at the end in order
to obtain and digest all the information. If that were the case,
commission members could move to accept a particular recommendation
thought worthwhile. If a recommendation is not moved by a member,
then that particular recommendation would die. Mr. Pignalberi
offered that as a suggestion.
COMMISSIONER FINK moved that the commission not finalize the
content of the report, until the commission has received all the
subcommittee reports.
UNIDENTIFIED COMMISSIONER seconded the motion.
COMMISSIONER VALESKO spoke in favor of the motion. He commented
that there is little time left. He pointed out that other states
have taken years to deal with privatization. At best, he believed
that the commission would have to look at a few of the
recommendations.
CO-CHAIR WARD said that he didn't object to the motion.
THEREFORE, THE MOTION CARRIED.
REPRESENTATIVE BRICE stated that he believed [that approach] is
appropriate. However, he expressed concern that there hasn't been
agency response to some of the recommendations. Representative
Brice echoed Senator Adams concern with regard to the need for
those agencies to respond.
CO-CHAIR COWDERY commented that, for the most part, the agencies
have been responsive to requests by the commission.
MR. PIGNALBERI informed the commission that the Department of
Revenue's response is being faxed to the commission. The
commission packet should include responses from the Department of
Environmental Conservation and the Department of Corrections. He
believed the Department of Labor's response has been submitted.
REPRESENTATIVE BRICE clarified that his concern with the Department
of Revenue was in regard to CSED information as well as some of the
other recommendations.
Number 311
VALERIE BAFFONE, Chair, Department of Labor Subcommittee, provided
copies of the subcommittee's report. She began by noting that
Commissioner Flanagan, Department of Labor, contacted her early on
and offered the full cooperation of the department. Furthermore,
Deputy Commissioner Perkins was assigned to work directly with the
subcommittee. She informed the commission that members should have
the agency responses attached to items I-IX as well as memorandums
that are responses to subcommittee member questions.
MS. BAFFONE informed the commission that the Department of Labor's
budget includes a "vast" percentage of funds which are "pass
through" dollars, funding received from the federal government.
Those funds are used to provide benefits and services consistent
with federal laws, mandates or quotas. These funds are primarily
used to pay for unemployment benefits, provide job training,
vocational rehabilitation, safety inspections, et cetera. Ms.
Baffone explained that the subcommittee first reviewed the current
contracting practices in order to determine whether federal law
would need to be enacted to move forward with privatization.
Further review occurred regarding whether federal funding would be
reduced or eliminated by contracting. At that point, the
subcommittee determined if a cost savings and/or better services
could be obtained by contracting. Although the subcommittee took
notice of areas where services could be better provided and/or
provided at a cost savings by state agencies versus current
contracting, the subcommittee determined such was beyond the scope
and intended purpose of the subcommittee. Therefore, such review
was not pursued.
MS. BAFFONE informed the commission that the subcommittee suggested
no changes in the Office of the Commissioner, the Division of
Administrative Services, Employment Securities Division, Division
of Labor Standards and Safety. Although the subcommittee had no
recommended changes in the Division of Labor Standards and Safety,
there was concern regarding the mechanical inspections backlog in
this division. She noted that improvements may occur with the
recent changes that allow plumbing inspectors to conduct some of
the boiler inspections. Furthermore, potential changes to program
receipts may help fund more inspectors by using the funds generated
by these inspections. The subcommittee found that the state's cost
for providing these inspections to be surprisingly low. The
subcommittee also found it unlikely that privatization would occur
without increasing the cost of the inspection. She stated that
recruiting and maintaining state inspectors is an ongoing concern.
MS. BAFFONE informed the commission that industry representatives
on the subcommittee expressed the need to maintain the state's
voluntary safety program. The subcommittee believed the voluntary
safety program to be a wise investment which would maximize federal
matching dollars in order for the program to achieve a safe
workplace in a cooperative and nonpenalizing manner. Such is
accomplished largely through the consultation and training sessions
of this agency. She also expressed the concern of all the
subcommittee members regarding the stability of the state's safety
compliance program. The subcommittee strongly feels that attempts
to return this program to the federal Occupational Safety and
Health Administration (OSHA) program would not be in the best
interest of Alaskan workers or Alaskan industry.
SENATOR ADAMS turned to the issue of mechanical inspections. He
asked if the subcommittee gave any consideration to recommending
that more inspectors be funded through increased program receipts
or through the state's budget.
MS. BAFFONE noted that the subcommittee heard testimony from the
Chairman of the Professional Boilers Association who expressed
concern with regard to the backlog. The testimony further
indicated that the program receipts pay for the inspectors, however
there are not enough inspectors.
REPRESENTATIVE BRICE inquired as to how much money is returned to
the state from those inspections. Is the state adequately
reinvesting those fees into inspection?
Number 378
DWIGHT PERKINS, Deputy Commissioner, Department of Labor &
Workforce Development, informed the commission that the Mechanical
Inspection Division takes in approximately $250,000 more in program
receipts than it's authorized to spend through the budget process.
He pointed out that last year legislation was passed which allowed
plumbing inspectors to perform, although to a lesser degree, some
of the boiler inspections. That legislation should help with the
backlog.
CO-CHAIR COWDERY noted that he has sat on the House Finance
Standing Committee, Department of Labor subcommittee. From sitting
on that subcommittee, he learned that state inspections achieve far
greater oversight than would be the case if the program returned to
the federal government. Would that be correct?
MR. PERKINS answered that is correct. He pointed out that last
year the House did delete OSHA funding for that, but the Senate
restored that funding. Industry and "user groups" expressed
concern regarding the possibility of the OSHA funding being
returned to the federal government. The industry and "user groups"
preferred to deal with Alaskan inspectors versus Washington, D.C.
inspectors.
CO-CHAIR COWDERY interjected that if Alaskan inspectors are
utilized, then there is an avenue for which to deal with them.
MR. PERKINS stressed that the first priority is to have workplace
safety. He explained the process in which a contractor, after the
department specifies what needs to be cleaned up, is given a
certain length of time to perform that. If that time is not met,
a fine structure is established. However, even with the fine
structure [the department] has the ability to negotiate reduced
fines for a first-time offense. In Mr. Perkins' opinion, the
federal government is present to collect fines and seems to have
real difficulties negotiating down fines.
Number 431
COMMISSIONER ALLEN requested that Mr. Perkins brief the commission
on the necessary qualifications for boiler inspectors. He informed
everyone that he represented a company that owns several buildings
for which the company inspects its own boilers annually. Then the
state inspector performs an inspection. The company pays for both
inspections. Commissioner Allen suggested that the private sector
could be turned to in order to deal with the backlog.
MR. BAFFONE informed the commission that in the State of Kansas
there was a drastic increase in property insurance rates when that
state moved away from a state-maintained program. She noted that
currently, there are mechanical inspections being performed by some
private companies and insurance representatives.
COMMISSIONER ALLEN clarified that his company has three
inspections, one inspection the company performs itself and the
insurance company and the state perform the other two inspections.
He suggested that one inspection by a certified individual should
suffice for certification under the state's criteria.
MS. BAFFONE returned to the subcommittee report. The subcommittee
had no suggested changes to the Division of Workers' Compensation.
She noted that all subcommittee members commented on the trend of
reduced workers' compensation insurance rates and thus felt no need
to delve into the program. However, Ms. Baffone, as an appointed
member of the Alaska Workers' Compensation Board, was concerned
with the high turnover being experienced with hearing officers on
the board. She explained that the hearing officer positions are
very specialized positions which require knowledge of a complex
body of laws and regulations. She emphasized that it is imperative
for the integrity of this system to recruit and maintain qualified
legal staff in these positions.
MS. BAFFONE turned to the Division of Vocational Rehabilitation
(DVR) for which the subcommittee had no suggested changes. She
pointed out that recent legislation has placed DVR in the
Department of Labor which appears to be appropriate. The
subcommittee closely reviewed the feasibility of privatizing the
duties of the vocational rehabilitation counselors. However, the
subcommittee's findings indicated that the private sector
vocational rehabilitation counselors utilized by the Division of
Workers' Compensation come at a higher cost. The hourly rate for
the state's DVR counselors is typically under $18 per hour, while
the hourly rate for the Division of Workers' Compensation private
sector rehabilitation specialists range from $90 to $140 per hour.
She specified that the private sector rehabilitation specialists
are basically paid for by insurance companies whereas within DVR
the state agency pays for the services. Even factoring in the
payroll costs, the subcommittee found no justification to pursue
privatization in this area.
MS. BAFFONE concluded by saying that the subcommittee finds the
Department of Labor to currently practice a great deal of
privatization. She provided the commission with the documents
utilized by the subcommittee, which illustrate the areas reviewed
by the subcommittee.
CO-CHAIR COWDERY noted that during Finance hearings he had inquired
and received much response from the private sector regarding
keeping the federal government out of inspections.
Number 503
COMMISSIONER WUERCH commented that one of the challenges of
reviewing a privatization decision is to cost-value the services.
He referred to the next to the last page of the report which refers
to the cost per hour and inquired as to how that hourly rate was
arrived at.
MS. BAFFONE explained that there are a couple of ranges for DVR
counselors. The $17 per hour range is where the lion share of DVR
rehabilitation counselors fall. There were a few that received a
higher hourly rate. Ms. Baffone clarified that she did not mean to
infer that to be the total cost. In further response to
Commissioner Wuerch, Ms. Baffone explained that the private sector
rehabilitation specialist wage was the amount billed to the
insurance company. She agreed that the private specialist wage she
mentioned earlier did include employee benefits, overhead and
profit.
COMMISSIONER WUERCH asked if Ms. Baffone felt the two wages were
comparable.
MS. BAFFONE replied no. She believed the state wage represents a
lower cost for a comparable service.
COMMISSIONER WUERCH emphasized that these two wages are not
comparable because the numbers are based on different assumptions.
MS. BAFFONE explained that taking the $18 per hour state wage and
attempting to equalize the assumptions, the subcommittee did review
what those additional costs would be to the $18 wage. Even with a
$20 wage, a high estimate of 50 percent more would still not arrive
near the Division of Workers' Compensation wage.
COMMISSIONER WUERCH asked if Ms. Baffone really believed that there
are counselors with a salary of $30,000 per year.
MS. BAFFONE stated that she had no reason to doubt that the
information provided to the subcommittee is inaccurate.
COMMISSIONER ALLEN commented that he didn't believe that anyone who
worked for the state made $18 per hour. He indicated that the only
way to determine what the private sector would charge would be to
"test the waters." He added that other elements, payroll and
overhead, need to be included in the wage in order to have an
appropriate comparison.
Number 552
COMMISSIONER THOMAS asked if, in the comparison of the wages, there
was a factor for the telephone, building maintenance, and
electricity which would all factor into the hourly rate for the
department.
TAPE 99-8, SIDE B
MS. BAFFONE explained that the subcommittee didn't seek an exact or
specific overhead cost per DVR counselor. The subcommittee felt
that even applying the most ludicrous measures to the state DVR
counselors would result in a more cost efficient wage. With regard
to Commissioner Allen's comment, Ms. Baffone noted, perhaps, there
is a major misconception with regard to the wages of state
employees. In response to Commissioner Thomas, Ms. Baffone said,
"So, not specifically, but yes we did include what would include
all overhead costs more than direct or indirect payroll costs - we
looked at those type of items."
MS. BAFFONE clarified that the subcommittee did take into
consideration the qualifications of both the DVR and the Division
of Workers' Compensation counselors in order to ensure the
qualifications were comparable. The subcommittee found the
education backgrounds to be comparable.
COMMISSIONER THOMAS asked the agency whether it had a total cost
allocation.
MR. PERKINS said that the agency did have that information. Mr.
Perkins informed the commission that DVR has formed strong
partnerships with the private sector. The Rehabilitation Act
requires the program to utilize services provided by the private
sector rehabilitation programs for consumers who need such services
to assist them in maintaining or obtaining employment. In federal
fiscal year 1998, DVR paid an additional $860,900 to private sector
service providers. He pointed out that the [state] rehabilitation
specialists left oversee the private sector which is required in
the federal legislation. Mr. Perkins said that he could provide
the commission with any information regarding the breakdown or
dollar value.
Number 565
COMMISSIONER VALESKO understood Commissioner Allen's earlier
comment regarding state wages to mean that he didn't realize that
anyone earned as much as $18 per hour working for the state. If
that is not the case, then the commission needs to educate itself
because there are some state employees who earn less than $10 per
hour.
COMMISSIONER VALESKO wondered whether the subcommittee had given
any consideration to a recommendation that the Division of Workers'
Compensation should perform the rehabilitation counselors' duties
in-house. He recalled that Mr. Perkins may have indicated that to
be restricted by federal law.
MS. BAFFONE said that was an area reviewed by the subcommittee with
regard to whether the state agency could provide the services at a
cost savings over the private sector. However, that was not the
scope or purpose of the subcommittee. The subcommittee was
directed to review areas in which there could be a savings through
the private sector. On that point, Ms. Baffone expressed
frustration.
COMMISSIONER ALLEN commented that there is something wrong with
this picture. He agreed that almost anything could be added to
this base hourly rate and the result would not near the minimum
wage of $90 in the private sector. With regard to the educational
requirements, he understood Ms. Baffone to say the educational
requirements are the same in reference to the counselors.
MS. BAFFONE replied that is correct. She informed the commission
that DVR counselors are primarily range 16 and are required to have
a Masters degree, a minimum of three years experience, and the
certified rehabilitation counselor credential - a national
credential. Ms. Baffone understood that the Division of Workers'
Compensation rehabilitation specialists do not have a requirement
to meet or exceed the aforementioned standards. Although the DVR
credentials may be a bit tighter, she believed the comparison to be
fair.
COMMISSIONER ALLEN commented that the state is receiving quite a
bargain.
MR. PERKINS, in response to Commissioner Thomas, offered to provide
the commission with the overhead cost of the department and the
allocation.
Number 509
CO-CHAIR COWDERY announced that the commission would now hear from
the Department of Environmental Conservation Subcommittee.
VIRGIL NORTON, Chair, Department of Environmental Conservation
Subcommittee, informed the commission that the subcommittee had 35
recommendations which would all result in cost savings and
efficiencies. He noted that the subcommittee did not have the time
to research the actual cost savings. He referred the commission to
the preface on page 17 of the subcommittee's report. Mr. Norton
commented that although the subcommittee was fortunate in that some
members work on a daily basis with the Department of Environmental
Conservation (DEC), it took time to bring everyone up to speed.
Mr. Norton pointed out that the subcommittee's recommendations did
not increase any expenditure of state general fund, with the
exception of the recommendation to perform an audit. An audit
would provide the legislature with more suggestions regarding
savings in the department.
The following subcommittee members were introduced: Greg Horner,
(indisc.) Environment; Bob Gilfilian, Gilfilian Engineering; Keith
Bucklin, Audio Video; and Jerry Brookman, Chair of Oil Spill
Prevention and Response Committee in the Prince William Sound
Region Advisory Council and member of the (indisc.) Cook Inlet
Region Advisory Council; Bill Lawrence, Government Affairs
Consultant and Contractor; Stephanie Madsen, Alaska Vice President
for the Pacific Seafood Processors Association.
MARY SIROKY, Manager, Information Education & Coordination,
Division of Statewide Public Service, DEC, noted her presence as
well.
Number 443
MR. NORTON explained that the subcommittee approached everything as
a group. Each of the six divisions of the DEC presented an
overview of the division. He reviewed those who helped make this
report possible. Mr. Norton pointed out that following the preface
is the subcommittee's general recommendations. Although the
department has responded, it has not responded to the final report.
MR. PIGNALBERI inquired as to when DEC would provide a response to
the final recommendations.
MS. SIROKY explained that the department submitted preliminary
recommendations about a week and a half ago. She estimated that
DEC could provide final recommendations by the coming Monday or
Tuesday. The department has been reviewing the report. She
appreciated the fact that the subcommittee considered the
department's preliminary recommendations.
MR. NORTON referred to Recommendation 9 which recommends that the
legislature should authorize and fund a thorough audit of DEC.
Furthermore, "The audit should include the intent of SB 33 and the
scope of work defined in Section 5." Mr. Norton informed the
commission that he had received many calls from folks within the
department. From those calls, he believed there to be many ideas
within the department to implement the intent and scope of SB 33.
MR. NORTON, in response to Representative Brice, noted that in the
Division of Spill Prevention & Response (SPAR) the department
utilizes many outside companies. To that extent, there is a
recommendation to broaden the base in order to allow more
participation by smaller Alaska companies.
REPRESENTATIVE BRICE commented that the department seems to have
more areas of privatization than recommended by the subcommittee.
Therefore, he asked whether the process was working fairly well.
MR. NORTON said that he believed the department is trying to
privatize. He referred to page 15 of the subcommittee report
entitled, "Privatization Primer."
SENATOR ADAMS referred to Recommendations 29-35, which speak to the
Division of Facility Construction & Operation. He asked if any
subcommittee members met with the Rural Sanitation Task Force to
assist in these recommendations.
MR. NORTON requested that subcommittee member Greg Magee speak to
that as he developed those recommendations.
Number 313
GREG MAGEE, Member, Department of Environmental Conservation
Subcommittee, answered that he did not personally consult with
anyone on the Rural Sanitation Task Force. However, he did review
the task force's documents and the 2005 plan.
COMMISSIONER FINK inquired as to whether any subcommittee member
suggested that any of these areas should be eliminated.
MR. NORTON replied no. He explained that by the time each division
had given its presentation, the subcommittee did not have the time
to carefully examine each program for reductions. Mr. Norton
commented that he did so, to some extent, in Recommendation 12.
Recommendation 12 states, "All employees of DEC that are classified
as information officers, or whose work involves press relations or
public information, should be transferred to the Division of
Statewide Public Service." Therefore, the Division of
Administrative Services would be left to perform only the programs
essential to it: the human resources programs, the financial
programs, and the budget programs. He commented that the
legislature may want to encourage the department to move to a
public service officer concept. With the public service officer
concept, the employees could be trained to provide one-stop
shopping and coordination with the other technical sections.
COMMISSIONER VALESKO referred to the recommendation to perform an
audit. He asked if the subcommittee reviewed the cost of such an
audit.
MR. NORTON answered no. The subcommittee could not address that in
the specified time frame.
COMMISSIONER VALESKO asked if the subcommittee reviewed the total
budget of DEC.
MR. NORTON responded that DEC's total budget is on page 3 of the
subcommittee report. He believed that DEC had a total budget of
$47 million or so. With regard to the general fund use of money,
much of the department is being funded from the Response Fund. He
explained, "That Response Fund is a 'split the nickel' fund and its
the two cents side stops on the prevention side at $50 million and
doesn't go any further." He commented that the department exists
partly because there is big oil in the state. Mr. Norton suggested
that perhaps, the legislature may want to consider not having a cap
at that $50 million - if the department is to be funded from that.
COMMISSIONER VALESKO inquired as to how much of DEC's budget is
currently going to the private sector through various services and
contracts in order to provide a benchmark.
MR. NORTON pointed out that the department has provided a summary
of privatization activities, but there are no dollar breakdowns
attached. The subcommittee did not request such a breakdown. The
summary of privatization activities is located on page 12 of the
report. Furthermore, page 7 of the report notes how many employees
there are in DEC.
COMMISSIONER VALESKO referred to Recommendation 22 which speaks to
sanitary surveys. Part of Recommendation 12 says:
However, the Department field staff also provides the
save services at a relatively low cost to the owner of
the water system. Consequently, the Department often
finds itself in competition with the private sector. To
avoid the conflict of services, the Department should
require all public water system owners to seek services
rendered by the private sector.
Commissioner Valesko asked if the subcommittee's recommendation was
that the public water system owners should pay more to get their
systems inspected.
MR. NORTON answered yes. He deferred to Mr. Gilfilian.
Number 190
BOB GILFILIAN, Member, Department of Environmental Conservation
Subcommittee, agreed with Commissioner Valesko's assessment. He
informed the commission that the department's services cost about
$500, while the private sector charges about $750 for that service.
What the department charges, $500, is difficult to compete against.
COMMISSIONER WUERCH asked Mr. Gilfilian if the department is not
recovering other costs in that $500 charge.
MR. GILFILIAN indicated that to probably be the case. With regard
to sanitary surveys in the Bush, he commented that the private
sector simply cannot compete. He didn't know how the department
arrived at the $500, but he didn't believe that amount accounted
for overhead and other costs.
COMMISSIONER WUERCH directed the commission's attention to page 24,
Recommendation 26. He commented that one of the most far reaching
impacts on every village and municipality in Alaska is the Clean
Water Act, Section 401 [the wetland's issue]. Recommendation 25 is
surprising in that the recommendation seems to imply that DEC no
longer reviews wetland permits. Commissioner Wuerch requested
elaboration on this matter.
BILL LAWRENCE, Member, Department of Environmental Conservation
Subcommittee, stated that he made Recommendation 26. He understood
that DEC has internally decided not to perform 401 certifications
on federal permits. He explained this to be because these are
federal permits and DEC is going to reorganize its priorities. Mr.
Lawrence noted that he has been personally involved with the
regulated community. This reprioritization within DEC could have
some significant affects on the mining, the timber, and the seafood
industries through the 402 permits. There could also be affects to
the 404 permits for wetlands. He pointed out that there are two
provisions in the state's water quality standards which provide the
state with the authority to issue a mixing zone and a zone of
deposit. He explained that a mixing zone is an area at the end of
a pipe where the effluent doesn't have to meet the standards. The
zone of deposit is a small area where accumulation of materials is
allowed. Mr. Lawrence stressed that the federal government can't
do those provisions. Therefore, if the state can't issue those two
provisions, then the state can't have a mixing zone or a zone of
deposit. That will seriously affect Alaskan industry. Mr.
Lawrence explained that the recommendation grew out of his belief
that an Alaskan department regulating the environment should first
look at Alaskan concerns.
COMMISSIONER WUERCH requested that the commission keep this issue
in mind for the final wrap-up. He commented that the list of
recommendations seem to imply that DEC is putting resources in
areas that could be well served by the private sector. However,
this important issue has been neglected.
TAPE 99-9, SIDE A
MIKE ABBOTT, Economic Development Assistant, Office of the
Governor, said he did not think the Department of Administration or
the Knowles Administration would be at odds with this
recommendation in terms of the fact that the state should be doing
more in the area of Clean Water Act certification. Commissioner
Brown, as a result of unallocated budget reductions in DEC,
recently decided to prioritize DEC programs for which no federal
programs or oversight exists and she would agree that the state
should do more in regard to water quality. Mr. Abbott asserted
that the Administration will be working with the legislature next
year to find a way to get funding for DEC to get back into this
core business.
MS. SIROKY informed the commission that DEC has established a water
quality permit working group, and it has been working with industry
to identify potential solutions to this significant problem.
Number 040
MS. MADSEN stated, in response to Commissioner Fink's earlier
question regarding whether the subcommittee looked at elimination
of DEC programs, that the subcommittee did discuss eliminating
positions, primarily those of the public information office. The
discontinuance of the 401 program sparked a lot of discussion about
eliminating other DEC positions to reinstate the 401 certification
program. She emphasized that the subcommittee did discuss
reprioritizing programs within DEC to allow the 401 certification
program to continue. She noted that she is a member of the Water
Quality Stakeholder Group, which is also reviewing options and the
possibility of re-prioritizing the cuts for this fiscal year.
CO-CHAIR COWDERY asked if two DEC employees work with the press and
disseminate information to the public.
MS. SIROKY clarified that three people work in DEC's Public
Information Office: one works exclusively on DEC's website; the
other two work with DEC staff to effectively communicate technical
information to the public. She commented that the public
information officers do more than put out press releases. Ms.
Siroky explained that DEC is an organization that uses technical
lingo that is unfamiliar to others so the public information staff
help DEC staff to communicate better.
MR. NORTON stated that, in regard to 401 certifications,
Recommendation 5 suggests that federal environmental regulations
for Alaska should be DEC's top priority. That recommendation also
suggests that the legislature set DEC's priorities, particularly
how and where DEC is to cut its budget when it experiences future
budget cuts. When DEC's budget was cut last year, the Division of
Air and Water Quality took the hit.
Number 030
COMMISSIONER VALESKO expressed concern about Recommendation 28, and
in particular the last sentence which reads, "These functions have
been successfully privatized by CSRP without reducing ADEC's
responsibility to make final cleanup decisions, or in AWQ's case,
permit decisions." He asked whether "successfully privatized"
implies that the subcommittee investigated that function and
concluded that it is now privatized at a savings to the state. He
noted that "successfully privatized" could imply that the success
was in the transition to privatization itself.
GREG HORNER, Member, Department of Environmental Conservation
Subcommittee, replied that he made Recommendation 28 from direct
experience. He did not do a cost-benefit analysis as to whether
his private firm can perform the function less expensively than the
state therefore he cannot answer that question. He added that DEC
does successfully hire private firms to evaluate documents prepared
by other consultants for reviews. He said he is confident that the
private sector can evaluate documents much more quickly than DEC
because DEC project managers often have to handle multiple projects
at one time.
REPRESENTATIVE GAIL PHILLIPS joined the commission at the table.
Number 074
MR. NORTON stated that the subcommittee did not have time to
determine the actual dollars that would be saved by implementing
the recommendations, but it believes that all 35 recommendations
are valid. Subcommittee members put a lot of time and thought into
the recommendations and they are anxious to see the response of DEC
staff. He noted that Recommendation 26, which pertains to 401
certifications, responds to an issue raised by Commissioner Wuerch,
as well as many other people who called him at home. He encouraged
the legislature to direct DEC in how and where it is to take budget
cuts in the future. Mr. Norton stated that an audit of DEC would
examine each program to determine which overlap or could be
eliminated. He suggested examining the existing programs in every
department, not only DEC, and branch of government to prioritize
programs and to determine which programs are absolutely necessary.
CO-CHAIRMAN COWDERY expressed appreciation for Mr. Norton's hard
work as the subcommittee chair.
SENATOR ADAMS pointed out that subcommittee members have made
individual recommendations. He asked if all 35 recommendations
were voted on by the full DEC Subcommittee.
MR. NORTON answered the full subcommittee discussed each
recommendation at length and all voted on each recommendation.
SENATOR ADAMS said he appreciated the work done by the
subcommittee, but he was concerned about the large number of
recommendations made by individuals. Some subcommittee members may
have grudges against DEC.
MR. NORTON acknowledged that he is the subcommittee member who was
accused by the Governor's Office of "carrying a hatchet" against
DEC. He didn't believe that any other subcommittee member has a
particular axe to grind with DEC. Mr. Norton maintained that
nothing in the subcommittee's report reflects the issue that he
would like to take DEC to task for.
SENATOR ADAMS expressed appreciation for Mr. Norton's remarks,
however he didn't want to carry the final report on the Senate
floor to be criticized because some members are accused of having
grudges. He acknowledged that the subcommittee has worked hard on
the report and he hopes that all Alaskans can appreciate it.
MR. NORTON maintained that is what the subcommittee tried to do.
Number 142
JERRY BROOKMAN, Member, Department of Environmental Conservation
Subcommittee, informed the commissioner that all subcommittee
members tried to do a fair and objective job, although they had
differing viewpoints to some extent. He noted that he originally
suggested the management audit for the specific reason that such an
audit would be performed by an outside firm with no axe to grind.
He acknowledged that an audit would be expensive, but would likely
result in a savings to the state in the long run.
CO-CHAIR COWDERY commented that he expects that some of the
subcommittee members will be asked to testify at hearings in Juneau
during the legislative session. He hoped some of the subcommittee
members will be able to participate. He noted that he has already
received requests for subcommittee information that members of the
House Finance Committee want to review.
COMMISSIONER THOMAS asked that the subcommittee give the Commission
an idea of what should be reviewed in an audit of DEC or what
should be established by doing an audit.
MR. NORTON responded that, if he were to write the criteria for the
audit, he would be looking at the intent and scope of all of SB 33,
which could be quite an undertaking when dealing with a technical
department. He also suggested examining statutes to determine
whether any can be streamlined or eliminated. He suggested doing
a thorough program review to determine whether certain programs
need to be enlarged or whether some could be incorporated into
other programs so that more focus could be put on the technical
side of the programs. He pointed out that he authored the
recommendation to consolidate all of the information in statewide
public service. He noted that good management is the key to good
government and that all management decisions should be reviewed.
He reiterated that it may be time for the legislature to mandate
where future budget cuts are taken within DEC.
Number 211
COMMISSIONER ALLEN asked Mr. Norton if the recommendations in the
report are prioritized within each division. He also asked
commissioners whether the recommendations should be short-listed
after they are prioritized.
MR. NORTON replied that the members of the DEC subcommittee would
be happy to prioritize the recommendations under each division.
Given the scope and intent of SB 33, which is to look at ways to
make government more efficient and productive, all of the
recommendations will save money.
COMMISSIONER ALLEN noted the DEC subcommittee has done an
outstanding job, however he asked the members to prioritize the
recommendations of each division in order of importance.
CO-CHAIR WARD thanked DEC subcommittee members for doing a very
thorough job.
MR. PIGNALBERI asked Mr. Norton if the DEC subcommittee plans to
meet again to prioritize the recommendations.
MR. NORTON noted he would talk to subcommittee members and get Mr.
Pignalberi a prioritized list. Mr. Norton contended that the
request for a prioritized list confirms his belief in the need for
an audit because the 35 recommendations, as well as others, would
come to light in an audit.
Number 249
COMMISSIONER VALESKO noted his appreciation for the time and effort
that all subcommittee members have put in.
The commission took an at-ease from 11:00 a.m. to 11:05 a.m.
Number 261
CO-CHAIR COWDERY announced that the commission would next hear from
the Department of Corrections Subcommittee.
SHARON ANDERSON, Chair, Department of Corrections Subcommittee,
introduced Garland Warren and noted that other subcommittee members
may arrive later. Ms. Anderson informed the commission that the
subcommittee met every Tuesday during the months of August and
September. Bruce Richards, DOC Special Assistant, participated in
all meetings and Deputy Commissioner Parker was able to attend all
meetings, but one. The Department of Corrections' (DOC) staff
participation was very useful to subcommittee members.
Subcommittee members believe a cost-benefit analysis of DOC would
be very beneficial.
MS. ANDERSON informed the commission that the subcommittee narrowed
its recommendations to 12. She pointed out that the
recommendations are not listed in any ranked order. Subcommittee
members were concerned that they had no mechanism with which to
evaluate the effectiveness of many of the DOC programs currently
privatized. The DOC information system does not provide for
measuring the recidivism rate of offenders in general nor after
prisoners have completed some of treatment programs. The department
is implementing a new system, and hopefully the Offender Based
State Corrections Information System (OBSCIS) number assigned to
each offender who comes into the system could be tracked to
determine if the person is a repeat offender. The lack of a method
to measure recidivism rates was an overriding theme in each of the
subcommittee's reviews.
MS. ANDERSON pointed out that the DOC recommendations are listed on
page 3 of the report, and the rationale for each recommendation
begins on page 4 of the report. The subcommittee first recommends
that all of the correctional industries' programs be transferred to
the Department of Community and Economic Development (DCED), and
that all contracts be privatized.
SENATOR ADAMS asked why the state should privatize something that
is successful. He noted that only one state privatizes this sort
of thing while other states keep it in-house, in their departments
of corrections or departments of public safety. He didn't buy the
location argument.
Number 334
MS. ANDERSON replied that the subcommittee felt DCED might be more
in tune with job retraining programs or businesses that would have
potential for employing offenders once they come out of the system.
Many offenders move through the corrections' system quickly because
of overcapacity. Therefore, subcommittee members felt it would
make more sense economically to place correctional industries under
DCED.
REPRESENTATIVE BRICE asked whether any discussion with DCED ensued
about that department's familiarity with security and the other
aspects of dealing with prisoners.
CO-CHAIR COWDERY noted that Section 8 of the report contains the
DOC's comments and answers.
MS. ANDERSON indicated that subcommittee members did not speak
directly to DCED staff. She asked Senator Adams to direct his
question about Recommendation 1 to Mr. Pease.
SENATOR ADAMS stated that the Alaska Correctional Industries
program is a successful one. He questioned why Alaska should
privatize that program when 49 other states keep that program in-
house. He believed Florida is the one state whose program is not
in-house. He added that he is not familiar with the Fairfax County
program so he feels unwilling to respond to that. He added that
the factor of location should not be the reason for moving the
program.
GREG PEASE, Member, Department of Corrections Subcommittee, asked
why Senator Adams considers the Alaska Correctional Industries
program to be a successful one. He noted that it only has two
businesses and that most of their efforts are aimed at eliminating
"dead" time. He added that Alaska is in the stage of corrections
where most people are transitioning out of the institutions back
into the community, and need meaningful training that could occur
in partnership with the private sector. He noted that Alaska
Correctional Industries has a laundry operation in Juneau, however
inmates could not get a job at the local dry cleaner because it has
no openings. Many private sector businesses are now moving into
the institutions and using that arena for publicly-funded jobs for
hard-to-employ people, including many who might end up on welfare.
He believes that turning it over to the Alaska Human Resources
Investment Council (AHRIC) who already has people with business
expertise, the unions, the WIC, and the JTPA at the table might
result in a program that takes inmates out of prison and places
them in meaningful jobs in the community. Therefore, Mr. Pease
believed the Human Resources Investment Council can make Alaska
Correctional Industries a viable operation.
Number 406
SENATOR ADAMS maintained that it is very difficult to find such
programs because the state has to watch out for competition within
the private sector. If technology is the focus, he suggested
setting up computers in prisons so that offenders can be trained to
run a travel agency. He noted that regarding "dead" time, Alaska
has not experienced many prison riots because prisoners' time is
occupied. He reiterated that he has concerns about privatizing the
Alaska Correctional Industries program.
MR. PEASE pointed out that the focus is not so much about
privatizing, as it is shifting the service over to people who know
how to run a business. Mr. Pease said:
As far as competition with the private sector, the reason
that they have been beat up over the years when they were
going to make office panels, et cetera, was the fact that
we did a poor job of partnering with the private sector
and seeing where everyone can benefit. I mean after all,
these individuals are only going to be, on average, in
the institutions for about 18 months, then they are going
to be riding the bus with my kids and your kids and you
and me and the rest of the community. If they don't have
a meaningful job, and they don't have a safe and sober
place to live, or a GED, or some educational advancement,
they are going to reoffend and that's the last thing we
want to do. We're not doing a good enough job with the
Chambers of Commerce and the people who run business in
the state to get these folks back on their feet and
employed. We can't keep holding up that flag of unfair
competition when they are transitioning back into the
community with us all.
CO-CHAIR COWDERY requested that further debate be saved for a later
time.
COMMISSIONER VALESKO expressed concern that certain laws do not,
but should, apply to prisoners. For example, prisoners should be
paid minimum wage or more if they are going to work for a private
company. He felt that the competition must be even for companies
who contract in this area and who will be making a profit from
hiring prisoners. He stated that he could not support turning this
industry over to for-profit companies if prisoners will earn 50
cents per hour.
COMMISSIONER THOMAS reminded the commissioner that it agreed
earlier to finalize and accept reports later, and this time would
be utilized to ask questions about the content of the reports.
Debate was to be saved for later.
Number 448
MS. ANDERSON noted, in regard to Recommendation 1, that
Representative Dyson put forth the following example. The State of
Nevada Corrections' job retraining program allows inmates to learn
to restore antique automobiles. That innovative approach resulted
in jobs for trainees once they were released. She added that the
subcommittee debated the issue of wages for prisoners, but felt
that the most important aspect of job retraining is to give
offenders job skills that will allow them to mainstream back into
society when they leave the prison system.
MS. ANDERSON explained that the subcommittee's second
recommendation pertains to the Sex Offender Treatment Program, a $1
million program. The last report on sex offender recidivism rates
was done in 1996, however members learned from a recent
presentation that not many offenders are completing the entire
program. Although 88 percent of this program is currently
privatized with DOC retaining oversight, subcommittee members felt
that the entire program should be privatized in order to improve
the effectiveness of the program. The subcommittee also heard
comments that the Native population has trouble completing the
program due to some cultural differences, and that cultural
relevance is an area that could be better addressed.
MR. PIGNALBERI asked if a DOC representative was available.
MS. ANDERSON responded that DOC staff may have thought the meeting
was scheduled for noon.
SENATOR ADAMS asked if Recommendation 2 should be eliminated
because 94 percent of the Sex Offender Program is already
contracted out.
MS. ANDERSON replied that, in Section 8 of the report, DOC says
that 94 percent of the program is contracted out. However, at the
presentation to the subcommittee DOC staff said the percentage is
88. She repeated that the effectiveness and the measurement of the
programs that are being privatized are the greatest concern. She
noted that one reason that prisoners are unable to complete the
program is that they are moved from facility to facility.
COMMISSIONER ALLEN asked if the same notes would apply to domestic
violence cases.
MS. ANDERSON said she could not answer that. However, she believes
of all of the DOC programs presented to the subcommittee, DOC's
program for victims is one of the most effective.
Number 486
REPRESENTATIVE BRICE said he is not concerned about the discrepancy
between the 88 and 94 percent. However, he is concerned about the
remaining six to 12 percent of the program that the subcommittee
recommends be privatized. He asked Ms. Anderson to elaborate on
what that will entail.
MS. ANDERSON noted the subcommittee's concerns were that very few
of the prisoners enrolled in the program have actually completed
it. There was no way to determine whether they did not complete
the program because they refused to or because of cultural
irrelevance, nor is recent data available on the recidivism rate of
those offenders. The subcommittee believes that privatizing the
entire program will make the program more effective by pulling it
all together. She thought that six percent of the monies are spent
on oversight by DOC staff.
REPRESENTATIVE BRICE asked if the dispute over the discrepancy is
a question of who does the oversight.
MS. ANDERSON replied no. The subcommittee recognized that DOC
staff would need to oversee the programs being carried out in each
institution. Stability of population numbers at each facility will
help, as well as having additional beds in-state. Two programs are
in place, one at Meadowcreek and one at Lemon Creek, but questions
remain about the success rate of those programs and a large amount
of money is being spent on them.
Number 507
COMMISSIONER VALESKO commented that 88 percent of the $1 million is
contracted out, while the success rate at Meadow Creek is a dismal
20 percent of 72 inmates. He questioned whether he can infer that
the contractors who are providing the programs are doing a poor
job.
MS. ANDERSON reiterated that without an effective measurement tool
built into the contracts might have been an issue. The department
does feel that the program is successful and the names of the
contractors are listed in Section 1. Those contracts are generally
given to individual practitioners with oversight by DOC staff.
MS. ANDERSON discussed Recommendation 3. The subcommittee felt
that education is an important and essential element to prevent the
re-entry of offenders into the system. The subcommittee also felt
that there may be better ways to accomplish that. Some
subcommittee members felt the current program merely keeps inmates
occupied, and that it is difficult to determine whether inmates
complete the program when they are moved among facilities. She
noted there are effective means in the private sector for people to
complete education programs while they move to different areas of
the state.
MS. ANDERSON noted that DOC has an educational coordinator in each
of the facilities and one full-time criminal justice planner that
oversees those coordinators. Recommendation 3 has more to do with
effectiveness. The subcommittee does believe that less money
should be spent on education.
[BREAK IN TRANSMISSION]
AN UNIDENTIFIED COMMISSIONER [COMMISSIONER VALESKO] asked,
regarding Recommendation 3, whether the subcommittee reviewed what
educational programs are available in the private sector. He asked
what education programs the subcommittee is referring to and
whether the subcommittee did a cost analysis of privatizing those
services.
MS. ANDERSON replied that behind Tab 4 of the report is a detailed
description of inmate education programs in each facility. Those
programs consist of a GED program, an adult education program and
a life skills program. The subcommittee believes that numerous
agencies in the state have the ability to deliver that type of
education. Many subcommittee members felt the existing program is
a waste of money within the facilities. Ms. Anderson referred to
statistics on the percentage of inmates enrolled in education
programs and the total education budget per inmate by state.
Alaska ranks very low on the amount spent as compared to other
states. Other national studies show that education is one of the
strongest tools that can be used to keep people out of the system.
Subcommittee members felt that the money DOC spends on education
could, and should, be better allocated.
COMMISSIONER ALLEN asked whether the education programs are
mandatory or voluntary.
MS. ANDERSON answered she believes the education programs are all
taken on a voluntary basis unless they pertain to something like
anger management.
COMMISSIONER FINK stated that he has not found any information in
the subcommittee's report on the reasons that people are in jail.
He noted that in a review he once did, he found that a substantial
number of people were in prison for driving while intoxicated,
which carries a mandatory three-day prison sentence. He asked
whether the subcommittee considered removing the three-day
mandatory prison sentence for that offense. To what extent, would
such a change affect DOC's budget?
[Manual tape change, Tape 99-9, Side B is blank.]
TAPE 99-10, SIDE A
MS. ANDERSON commented that the subcommittee did not discuss
whether to make a recommendation to the court system to change
sentencing.
COMMISSIONER FINK pointed out that the mandatory three-day jail
sentence is in statute.
SENATOR ADAMS asked whether the subcommittee considered changing
the law to allow a judge to impose the three-day mandatory jail
time or to sentence the offender to one week of community service.
COMMISSIONER FINK noted that it appears that DOC has already
privatized a lot of its services, and that the big savings would
result if prisons had offenders for a shorter period of time. He
asked whether the subcommittee looked at that aspect.
MS. ANDERSON said that the subcommittee was informed by DOC staff
that most people who serve the three-day sentence for DWI are
placed in community residential centers. The cost per bed in those
centers is about $45 per day, compared to the jail system, which is
about $100 per day.
COMMISSIONER FINK noted that, according to the report, electronic
monitoring costs about $12 per day.
MS. ANDERSON said that is correct. The department has plans to
move in that direction. The department's plan for FY 2003 provides
for an electronic monitoring program that will be implemented
through the community residential centers.
COMMISSIONER [VALESKO] noted that Alaska ranks sixth in the number
of inmates who are enrolled in prison education programs, but it
ranks 36th in the amount it spends. He asked whether the
subcommittee looked into the possibility that additional funding in
education might help the program.
MS. ANDERSON replied the subcommittee was very concerned about
ranking 36th in the amount spent. The subcommittee felt that a
number of programs that are coined as "educational," but are not.
Therefore, those programs could be eliminated and their funding
could be redirected into actual education cases.
CO-CHAIR COWDERY passed the gavel to Commissioner Thomas.
MS. ANDERSON turned to Recommendation 4. The subcommittee believes
that an additional source of funding for medical care for offenders
might be available through the Alaska Native Medical Center (ANMC).
The local ANMC administration adopted a policy to not admit
offenders into their hospital. Currently, DOC has a contract with
Providence Hospital for reduced percentage office charges and yet
none of the Native offenders are being treated at the ANMC. She
mentioned that Recommendation 4 may have to be pursued at the
federal level. Tab 8 contains DOC's response to Recommendation 4.
DOC did obtain the local ANMC administration's policy of non-
eligibility of services for Native inmates. The cost of medical
care for Alaska inmates equals about $10 million per year. In
addition, the individual contracts for nursing care could be put
under a statewide bid.
Number 536
REPRESENTATIVE BRICE asked if the subcommittee looked at how DOC
deals with inmates who are developmentally disabled or with have
mental health issues.
MS. ANDERSON noted that DOC gave the subcommittee an excellent
presentation on that subject, after which the subcommittee
eliminated one of its recommendations regarding mental health. DOC
is working with the Alaska Mental Health Trust Authority to develop
programs in this area.
MS. ANDERSON reported that the subcommittee believes that non-
violent prisoners should be moved to intermediate facilities, which
may need to be expanded (Recommendation 5). Those facilities are
not "fenced in" and could be extended out into the private sector,
such as community residential centers. One subcommittee member
felt a cost savings would result, however the subcommittee did not
do a cost-benefit analysis. The subcommittee felt community
residential centers would be a better way to keep prisoners within
the state rather than sending them to Arizona.
Number 517
COMMISSIONER VALESKO questioned how the committee determined that
a 25-30 percent savings could be realized if Palmer and Pt.
Mackenzie were privatized.
MS. ANDERSON repeated that the subcommittee is aware that the cost
savings needs to be looked at. The subcommittee did not have
individual costs per facility, but was told by DOC staff that the
overall costs are $100 per day system wide. At community
residential centers, the cost is about $48 per day. The
subcommittee estimated the cost to be in-between those two amounts
which is how it calculated the 25-30 percent.
COMMISSIONER VALESKO asked whether the subcommittee, or the
commission, could provide back-up material to substantiate that
recommendation.
Number 495
CO-CHAIR WARD announced that DOC will bring those numbers forward
before the commission makes a final decision.
MR. WARREN remarked that DOC should be able to provide that
information.
COMMISSIONER THOMAS asked Mr. Abbott whether DOC would be able to
provide that information.
MR. ABBOTT informed the commission that DOC staff would arrive
momentarily and could answer that question.
MS. ANDERSON added that the subcommittee did ask DOC for that
information but it could only provide the data in aggregate.
Apparently, the department does not have an information system
available to determine costs per facility.
COMMISSIONER THOMAS asked Bruce Richards and Deputy Commissioner
Parker to join the commission at the table.
MS. ANDERSON asked Mr. Richards and Deputy Commissioner Parker to
respond to Commissioners' request for a breakdown on the cost per
bed day at each facility.
Number 463
BRUCE RICHARDS, Program Coordinator, Department of Corrections,
replied that there is a breakdown that makes up the total average
cost per day for all of the institutions, but he was unaware of
that amount for the Palmer correctional facility. He estimated the
amount to be about $75. With regard to community residential
centers (CRCs), he believes the spread is larger, depending on
their geographic location. He noted that a cost benefit analysis
has not been done, and he does not know where the 25 to 30 percent
estimate came from.
COMMISSIONER VALESKO remarked that he is trying to determine the
validity of the statements made in the report. A statement in
Recommendation 5 maintains that privatizing the Palmer and Pt.
MacKenzie could result in a 25 to 30 percent savings. He noted the
DOC response does not agree with that number and says that the cost
of care in those facilities is the lowest per bed cost in the state
and is already lower than the cost of care in privately-operated
CRC houses. He asked for the facts and whether the subcommittee is
recommending that those facilities be privatized even though it
will cost more.
MR. RICHARDS responded that the 25 to 30 percent was a key
discussion point. The department's response to the recommendation
to privatize the Palmer and Pt. Mackenzie facilities was that those
are the most cost-efficient facilities. However, because no
analysis has been done, DOC has nothing to compare the numbers to.
The department was only trying to point out that those two
facilities are efficient on a cost per day average compared to CRC
beds.
Number 427
COMMISSIONER THOMAS asked whether DOC has been able to provide the
cost per facility per day to the subcommittee.
MR. RICHARDS replied that the subcommittee asked for a comparison
of the costs between the out-of-state Arizona facility and the
average per day cost in Alaska.
COMMISSIONER THOMAS asked if it would help the subcommittee to have
those numbers.
MS. ANDERSON said the subcommittee would have found that
information to be beneficial, however the subcommittee would have
run out of time to thoroughly review it. She noted that data
retrieval was difficult for DOC and that they did provide the
subcommittee with a lot of information.
MR. RICHARDS clarified that the average daily cost per facility is
available. The department was not withholding that information
from the subcommittee, however it focussed on the out-of-state
comparison. He affirmed that DOC can provide the average daily
cost per facility numbers.
COMMISSIONER THOMAS asked that DOC forward that information to the
commission.
COMMISSIONER FINK asked for data on the percentage of inmates each
year who are incarcerated for DWI offenses.
MR. RICHARDS offered to provide that information.
Number 398
MS. ANDERSON discussed Recommendation 6 which pertains to
centralized purchasing functions. The subcommittee does recognize
that a procurement process is followed by the state, but it
believes the purchasing system should be centralized further to get
the advantage of uniform pricing.
REPRESENTATIVE BRICE asked if the subcommittee is suggesting that
one statewide office take care of purchasing food and supplies for
all prisons.
MS. ANDERSON said that is correct.
REPRESENTATIVE BRICE noted that he has heard a lot of feedback over
the years about de-centralizing the purchasing to give the small
food distributors and suppliers a chance, otherwise only Food
Services of America will get the business. He asked if the
subcommittee considered how state money can be targeted to state
and local businesses.
MS. ANDERSON said the subcommittee was primarily interested in
finding the least expensive ways of purchasing goods. The
subcommittee did not talk about having one large provider, but
rather uniform pricing.
MS. ANDERSON explained that Recommendation 7 pertains to
privatizing fines and collection activities. Although this
function is not performed by DOC, the subcommittee reviewed it and
felt it should be forwarded to the subcommittee on the Court
System.
COMMISSIONER VALESKO questioned what criteria or data the
subcommittee used to forward Recommendation 7 to the subcommittee
on the Court System.
MS. ANDERSON repeated that the subcommittee put forward its
recommendations as ideas for efficiencies within the system
recognizing that there are additional data requirements that need
to be looked at by the full commission.
Number 353
MR. PIGNALBERI commented that the Department of Law Subcommittee
was asked to look at the issue of collecting fines. He explained
that the Court System imposes the fines but the Department of Law
is charged with the collections. The Department of Law
Subcommittee did not get to that issue, however. He asked whether
the DOC Subcommittee plans to meet again and whether it could look
at that issue further.
MS. ANDERSON replied that the DOC Subcommittee has no additional
meetings scheduled at this time and given that the function is not
within DOC, the subcommittee felt the more appropriate action was
to forward the recommendation on.
COMMISSIONER THOMAS asked whether the subcommittee would
considering meeting again to further discuss that issue.
MS. ANDERSON replied the subcommittee would probably not know how
to retrieve that data.
MR. PIGNALBERI said the Department of Law could provide the data
but neither the Department of Law or Court System subcommittees
will be able to look into it. He asked Ms. Anderson if she thinks
the DOC subcommittee has the appetite to take this issue on.
MS. ANDERSON agreed to poll subcommittee members to see if interest
exists.
Number 323
MS. ANDERSON indicated that Recommendation 8 pertains to vehicle
maintenance activities. The subcommittee did not have much
discussion on this recommendation. The department thought that an
efficiency factor could be built into a more centralized system.
The subcommittee did not have time to gather facts and figures for
Recommendation 8.
COMMISSIONER VALESKO asked how the subcommittee could recommend
that vehicle acquisition and maintenance be privatized with no
criteria, information or documents to back it up.
MS. ANDERSON replied that Recommendation 8 came at the last
subcommittee hearing and given the time constraints, the
subcommittee did not have the information available to look at the
costs. She noted that the subcommittee believed that this
recommendation could provide efficiencies if explored further.
Number 301
COMMISSIONER VALESKO asked Mr. Warren if he attended the last
subcommittee meeting.
MR. WARREN stated he is not sure at which meeting this
recommendation was discussed at.
MS. ANDERSON commented that Representative Dyson brought this
recommendation up, and Mr. Pignalberi was at the meeting.
MR. WARREN said he was present at that meeting and opposed the
recommendation vigorously.
MS. ANDERSON explained that Recommendation 9 pertains to
information technology. She informed the commission that DOC is
getting a new information system which should tremendously improve
the effectiveness of DOC's programs, yet the subcommittee felt the
administration of DOC's information technology should be
privatized. The department's existing system is antiquated by
everyone's standards.
COMMISSIONER NOTTI asked if any concerns about access to
information were discussed.
MS. ANDERSON said that given that computer technology allows for
users and authorization codes to be built into the system, the
subcommittee did not take that topic up. The system will probably
allow for greater confidentiality adherence than the existing
system.
Number 266
COMMISSIONER VALESKO remarked that DOC's response on the
information technology recommendation states that this information
was formally documented in a 1996 study conducted by Compass
America and that Alaska is 31 percent more efficient in this
industry than industry norms. He asked if the subcommittee is
recommending that information technology be privatized in those
places in which it is more expensive to do so.
MS. ANDERSON said absolutely not. The subcommittee was looking at
ways for more efficient and effective use of state money, not just
in the area of privatizing. She repeated that the subcommittee
believes that a cost benefit analysis is an important element to
all of the recommendations.
MS. ANDERSON noted that, with regard to Recommendation 10,
legislation has been introduced that would provide for probationers
and parolees to be charged a weekly fee. The subcommittee supports
that legislation.
MS. ANDERSON explained that Recommendation 11 pertains to the
repair of outdated equipment, which is sometimes more expensive
than purchasing new equipment. The subcommittee felt strongly that
the state should not discourage departments from being more cost
effective by purchasing new equipment.
REPRESENTATIVE BRICE asked for examples of that activity.
MS. ANDERSON said that Representative Dyson had several concrete
examples but he is not present. She offered to get that
information for the commissioner.
Number 231
MS. ANDERSON noted that the subcommittee asked DOC to recommend
functions for privatization. The information behind Tab 6 contains
DOC's plan to move from hard to soft beds, and toward electronic
monitoring. The department's second recommendation, behind Tab 7,
is that Mt. McKinley Meats be privatized. She deferred any
questions to Mr. Richards.
COMMISSIONER FINK asked Mr. Richards if DOC is moving as fast as is
appropriate toward electronic monitoring of every non-violent
prisoners.
BILL PARKER, Deputy Commissioner, Department of Corrections,
replied that prisoners eligible for electronic monitoring will have
to be classified for it. They will have to qualify for the right
security level, and have a house and job to go to. Currently there
are about 30 offenders in that program and DOC hopes to double that
number. However, DOC has to determine, case by case, whether an
individual can qualify.
Number 202
COMMISSIONER FINK asked if DOC believes that eventually, electronic
monitoring will be used on a lot more offenders.
MR. PARKER said DOC has just started the program and it has been
more labor intensive than expected. The department plans to use
electronic monitoring on 66 offenders and that number should grow
with inmate population growth.
MR. PIGNALBERI asked Commissioner Valesko to restate his earlier
question about the lack of effectiveness of the current education
programs.
COMMISSIONER VALESKO referred to the graphs on page 18 and 19, and
asked whether they indicate that Alaska is not spending enough on
the education of its prisoners. He asked what kind of education
programs are available in the private sector.
MR. RICHARDS noted that DOC's response covers all programs provided
in each institution and contains general statements about the
programs. Adult education and GED classes are available at all
institutions and each facility has additional training programs.
Number 186
COMMISSIONER VALESKO asked who provides the training now.
MR. RICHARDS answered that an educational coordinator is located in
each facility, and some facilities have two educational
coordinators, depending on the facility size. The programs are
contracted out. The educational coordinators ensure that inmates
are at the right place and that the terms of the contracts are
being carried out, with educational as well as other programs.
COMMISSIONER VALESKO asked if the majority of those programs are
already contracted out.
MR. RICHARDS said the programs are contracted out. The personnel
costs of the educational coordinators statewide is close to
$690,000 and the contracts with the private sector amount to
between $300,000 and $400,000.
COMMISSIONER VALESKO asked why the subcommittee recommended that
educational programs be transferred to the private sector if they
are already contracted out.
MS. ANDERSON referred Commissioner Valesko to Tab 4 which lists the
education programs in each institution.
TAPE 99-10, SIDE B
MS. ANDERSON continued by saying that many of those [life skills
classes] should have been directed into the GED level in order to
complete the high school education. She clarified that she wasn't
minimizing that many of these life skills classes were important.
However, much money was being spent on programs which weren't
effectively preparing people for life on the outside. Again, there
were concerns that Alaska should not rank number four from the
bottom with regard to the dollars spent on inmates. Perhaps, more
effective routing of dollars could achieve a better outcome.
COMMISSIONER VALESKO reiterated his question with regard to why the
subcommittee recommended that educational programs be transferred
to the private sector if they are already contracted out.
COMMISSIONER THOMAS asked if the subcommittee reviewed the
contractual guidelines with regard to what is privatized in
education in order to determine if they are effective. She also
asked if the subcommittee reviewed the recommendations curriculum.
MS. ANDERSON informed the commission that the subcommittee received
an extensive departmental presentation with regard to the education
component. As mentioned earlier, Ms. Anderson noted that the
subcommittee had concerns in practically each of the areas. She
explained that because of the time each offender spends in each
individual facility and the need for the department to stay under
the cap for the population per Cleary, the department is hindered
from effectively providing some of the services. In recognizing
that, the subcommittee noted that there is no way for the
department to have a true measurement as to whether these programs
are achieving the goals. Furthermore, the subcommittee felt that
as contracts went out, the contract should include a mechanism
which would require a contractor to measure the benefit of the
service or product provided.
MR. WARREN informed the commission that there was much debate with
regard to increased funding for education in all the state
institutions statewide. The subcommittee had strong feelings that
not enough money was being spent to educate the inmates during
their incarceration.
CO-CHAIR WARD noted that he served on this subcommittee. Senator
Ward addressed the measurement. He explained that the measurement
is: "Do they or do they not reoffend?" That measurement hasn't
been brought forward because the department doesn't have the
ability to tell if an inmate has returned to jail. Therefore, the
recommendation grew from the need for the private contractors to
know if an inmate has reoffended.
COMMISSIONER VALESKO asked if the subcommittee could provide one
example of an education program which should be transferred to the
private sector.
MS. ANDERSON said that the subcommittee focused on the GED program.
She informed the commission that of the approximately 961 students
in the GED program, less than 47 percent earned a diploma.
Perhaps, a better outcome could result by placing that program in
the private sector with an effective measurement tool. The better
outcome could not only save the state money, but also, possibly,
prevent offenders from returning to the system.
REPRESENTATIVE BRICE interjected that the question remains. Who is
doing that - the department or a private contractor?
CO-CHAIR WARD explained that it is in how the contract is written.
He reiterated that the contracts don't have a measurement mechanism
with regard to recidivism. The department doesn't have records
with regard to recidivism, regardless of the amount spent on
education.
Number 012
COMMISSIONER VALESKO understood the recommendation of the
subcommittee to be to transfer the education program to the private
sector. He asked if the department is performing education
programs or are all the education programs contracted out.
MR. PARKER explained that there are education coordinators who are
state employees. That education coordinator coordinates the
teachers, tutoring, et cetera which are mainly private employees.
Therefore, a state employee oversees services provided by the
private sector.
REPRESENTATIVE BRICE surmised then that currently educational
programs are contracted out with an educational coordinator
assuring that those to receive services do.
MS. ANDERSON directed the committee to Tab 4 which lists the
contracts held with the vendors for education services.
COMMISSIONER ALLEN inquired as to why the subcommittee recommended
that the education programs be transferred to the private sector
when all those programs are performed in the private sector
already.
MS. ANDERSON stated that the subcommittee didn't feel that all the
education programs were being performed in the private sector.
MR. PIGNALBERI asked if the department provided a breakdown of the
total education budget. He also asked if the department could also
provide information with regard to the cost for in-house
educational services versus private educational sector services.
Number 070
MS. ANDERSON submitted the subcommittee minutes from the September
14, 1999, meeting during which the educational component was
discussed. She indicated that would be helpful for the commission
to review. In conclusion, Ms. Anderson thanked the subcommittee
members and the department representative who attended each
subcommittee meeting. She commented that the subcommittee could
have probably come up with more data with more time.
MR. PIGNALBERI noted that Ms. Anderson stepped in at the last
minute to serve as the chair of this subcommittee. He thanked Ms.
Anderson.
MR. RICHARDS commented that the department felt that the
subcommittee meetings went well and were very productive.
COMMISSIONER THOMAS asked if there were any further comments.
There being none, the Commission on Privatization and Delivery of
Government Services adjourned at 12:30 p.m.
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