HB 236-UA MAJOR MAINTEN. MODERNIZATION FUND  8:02:28 AM CO-CHAIR RUFFRIDGE announced that the first order of business would be HOUSE BILL NO. 236, "An Act relating to the duties of the Board of Regents of the University of Alaska; establishing the University of Alaska major maintenance and modernization fund; repealing the University of Alaska building fund; and providing for an effective date." 8:02:50 AM REPRESENTATIVE WILL STAPP, Alaska State Legislature, as prime sponsor, introduced HB 236. He provided a brief introduction and explained that his staff would give a recap of the bill and what it does. 8:03:08 AM PAUL MENKE, Staff, Representative Will Stapp, Alaska State Legislature, presented HB 236 on behalf of Representative Stapp, prime sponsor. He said the bill would be a fund in the budget dedicated to renovating and maintaining existing buildings in the University of Alaska System (UA). 8:03:44 AM CO-CHAIR RUFFRIDGE welcomed invited testifiers. 8:04:18 AM RALPH SEEKINS, Chair, Board of Regents, University of Alaska (UA) System, gave invited testimony in support of HB 236 and briefly provided his background. He reported that the university has gone from a deferred maintenance situation to a critical maintenance situation. He said 40 percent of the buildings that the state owns are on university campuses and UA is looking to preserve and modernize those buildings without unnecessary upgrades. He thanked the committee for the consideration and offered to stay online to answer questions. 8:08:02 AM PAT PITNEY, President, University of Alaska System, gave invited testimony in support of HB 236 and thanked Representative Stapp for introducing the bill. She explained that UA has prioritized deferred maintenance as the highest capital priority. She said UA's annual need is over $60 million to keep up with maintenance and it is asking for only half of that. She related that UA has many mechanisms to stay accountable with the legislature and a planned approach to address deferred maintenance. There are many aged facilities including some built in the 1960s that need structural changes. 8:12:15 AM REPRESENTATIVE HIMSCHOOT asked how other universities deal with deferred maintenance. MS. PITNEY replied that most universities have a budget structure and consistent approaches to deferred maintenance, and she provided brief examples of other states. She further noted that the last time UA's deferred maintenance did not grow was in the period of 2010 to 2015 when there was a consistent $35 million of deferred maintenance funding provided to the university. 8:13:48 AM REPRESENTATIVE PRAX communicated that he tried to understand whether $30 million for the maintenance and modernization fund is in addition to what UA allocated in its operating budget. MS. PITNEY confirmed that was correct and that the $30 million was for preventative maintenance. REPRESENTATIVE PRAX offered his belief that there is a difference between the activity of maintaining and that of modernizing. He asked whether there was a number that just focused on maintaining, such as an aforementioned ventilation system. He questioned the amount of $35 million being enough to catch up on deferred maintenance and inquired how much would be needed annually to keep up maintenance in general. MS. PITNEY replied that if UA were modeling to facility standards, the investment on the facility would be about $66 million annually on top of current maintenance and operations of the facilities. The $66 million is requested in UA's capital budget, she noted. 8:19:49 AM CO-CHAIR ALLARD asked Representative Stapp if the University of Alaska Anchorage (UAA) would build more buildings as part of its modernization. REPRESENTATIVE STAPP responded that the number one project is the replacement of the centralized heating system at the UAA campus. The priorities and project list included in the bill can clearly articulate those things, he added. CO-CHAIR ALLARD asked Ms. Pitney if UA is looking at building more buildings with a focus on modernizing. MS. PITNEY replied yes, there are modernization facilities that are priorities for UA, and UA is very much focused on non-state funding for those facilities. Public and private partnerships are crucial to new facility projects, she added. CO-CHAIR ALLARD asked whether overall enrollment had gone up or down. MS. PITNEY confirmed that UA was in the third semester of enrollment increases. Most encouraging, she said, is the category of first-time freshmen, which grew 16 percent last fall. 8:24:17 AM REPRESENTATIVE PRAX asked whether UA has a published high-level maintenance strategy. MS. PITNEY replied that UA has its preventative maintenance strategy in policy. REPRESENTATIVE PRAX expressed interest in looking into the strategy so the legislature has a better appreciation for the need for maintaining what UA has and, in addition, how decisions are made regarding a building's useful life with no point of maintaining it further. 8:26:53 AM REPRESENTATIVE STORY asked how UA takes into account those Alaskans visiting campuses and deciding whether to attend in state, noting that learning environments matter when people are choosing institutions, and she questioned whether this is considered when putting together the deferred maintenance list. MS. PITNEY replied absolutely, and that was part of the reason dorms were a priority. The view given to students on their visits is extremely important as well as program opportunities. Priorities are based on functionality and age but also a commitment to a return on investment from enrollment, she explained. 8:28:57 AM CO-CHAIR RUFFRIDGE opened public testimony on HB 236. After ascertaining no one wished to testify, he closed public testimony. CO-CHAIR RUFFRIDGE announced his intention to hold HB 236 for future amendments. 8:30:18 AM REPRESENTATIVE PRAX commented that in the legislative process, [legislators] should make a concerted effort to get the bill through both the House and the Senate than to get it perfect, as it is fairly important, he opined. 8:31:01 AM REPRESENTATIVE STAPP thanked committee members for their time and remarked that deferred maintenance may not be as exciting as ribbon cuttings, but it is important long term. 8:31:33 AM The committee took an at-ease from 8:31 a.m. to 8:35 a.m. 8:35:43 AM REPRESENTATIVE PRAX moved to report HB 236 out of committee with individual recommendations and the accompanying fiscal notes. 8:36:21 AM CO-CHAIR ALLARD objected to express her concern that because the legislature failed to address the issue years ago, the numbers have "crawled." CO-CHAIR ALLARD then removed her objection. There being no further objection, HB 236 was reported out of the House Education Standing Committee.