HB 60 "An Act making appropriations for capital projects; and providing for an effective date." OVERVIEWS: Department of Health and Social Services Department of Administration Department of Labor Department of Military and Veterans 1 Affairs Members were provided with detailed descriptions of the Department's Capital Improvement Projects (CIP) request as described in the Office of Budget and Management's detailed budget books (copy on file). DEPARTMENT OF HEALTH AND SOCIAL SERVICES JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES noted that the Department employs over 2,000 employees and covers a large range of projects and programs. The Department has 25 state owned facilities and is in 88 sites across the State. Ms. Clarke noted that the Department's CIP budget revolves around: * Transforming the mental health system; * Improving operating efficiency; and * the Harbor Developmental Center - steam heat system. Ms. Clarke discussed prioritization of deferred maintenance projects. She noted that projects are reviewed at the start of every fiscal year. She provided members with the Department of Health and Social Services's FY 94 Capital Budget priority list (Attachment 1). She also presented members with information entitled, "API (Alaska Psychiatric Institute) 2000, Mental Health Alaska," (Attachment 2). Ms. Clarke noted that the Department's first CIP priority is $1.557.3 million dollars for Renovation/Repair/Replacement, Equipment and Deferred Maintenance. She noted that clinic repairs, roof replacement, asbestos abatement and kitchen equipment replacement will be provided for under this request. Ms. Clarke commented on the Department's $1 million dollar request for Americans with Disabilities Act (ADA) Response. She noted that the Department of Health and Social Services would not be seeking funding for ADA projects within the Department of Transportation and Public Facilities's budget. Representative Navarre asked if the deferred maintenance was actual or anticipated. Ms. Clarke replied that the deferred maintenance is actual. Ms. Clarke discussed the Department's $300.0 thousand dollar request for completion of the McLauglin Youth Center's electrical fire control system. She noted that the project was begun in FY 93 under a $250.0 thousand dollar 2 appropriation. Ms. Clarke referred to the Department's CIP request of $100.0 thousand dollars for Ketchikan Secure Modular Completion. Representative Navarre asked for an update of expenditures. NEWTON CHASE, FACILITIES SECTION CHIEF, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES clarified that the first appropriation to the Ketchikan Youth Facility was in FY 84. The original plan was for a 12 bed facility. Current funding will complete two holding cells for juvenile offenders. The department has spent $100.0 thousand dollars on site in connection with the Ketchikan Health Center. The Department has $90.0 thousand dollars to put the project to bid. The $100.0 thousand dollar request will ensure completion of the award. Ms. Clarke clarified that the Department's projects are prioritized as listed. Ms. Clarke discussed the Department's CIP request of $250.0 thousand dollars for the Disabled Vocational Training Center roof replacement. She noted that the building has been returned to the State. Ms. Clarke noted that the Department's second priority is $4,476.6 million dollars for Computers/Communication. She relayed that the Department is operating from the Department of Health and Social Services Management Information Plan. She assured members that the Department intends to integrate its data systems. Representative Martin asked if the Department's requests have received approval from the Information Systems Projects Review Committee in the Department of Administration (ISPRC). Ms. Clarke clarified that many of the projects received approval in their phase one form. The Committee has not met to approve FY 94 projects. Representative Navarre asked for statistics of state v. federal caseloads. He noted that regional field offices' computer and data systems are not being updated as quickly as the central offices. Ms. Clarke recognized the problem. Ms. Clarke discussed the Department's CIP requests of $2,988.2 million dollars for EIS Redesign (This project is a component of the Department's second priority request). She observed that the total project will cost $30 million dollars over five years. Half of this will come from state general funds. The Department estimates that there will be a net savings in non-payment of benefits. She emphasized 3 that the complications of the current system have made it "almost unworkable". The Department estimates that the system, once completed, will serve for 15 years or more. She clarified that the current eligibility information system will remain on the Anchorage mainframe. Representative Brown observed that 10 positions are included in the request. She asked if the redesign will allow welfare and public assistance programs to share information. MARGO NASH, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES stressed that the feasibility study looked at the involvement of ancillary divisions and agencies that interface within the Department. Ms. Clarke reviewed the Department's CIP request of $412.5 thousand dollars for Harborview Data and Communications, Developmentally Disabled Section Information Management System and the API Information System (This is a component of the Department's priority two request). Ms. Clarke referred to the Department's CIP request of $620.4 thousand dollars for Office Automation and Network Expansion for the Division of Family and Youth Services. The Department has included a Imaging Pilot System in this request (This is a component of the Department's priority two request). Ms. Clarke noted that the Department's number three priority is $500.0 thousand dollars for the Public Health Lab - Design and Replacement. Mr. Chase explained that the Department received $25 thousand dollars in FY 93 for a feasibility study. Preliminary information indicates that replacement will be needed. Co-Chair MacLean asked if the Department has looked into alternatives to replacement. Mr. Chase indicated that the feasibility study will address privatization. Representative Brown asked if the Department of Environmental Conservation, Palmer Lab could preform the functions. Ms. Clarke noted that the option has been studied. She observed that it was not deemed possible to combine the functions of the Department of Health and Social Services and the Department of Environmental Conservation. She added that the Department is pursing the possibility of building adjacent to the Anchorage Crime Lab. Representative Toohey asked if the Lab could be combined with the new Indian Health Hospital. Mr. Chase replied that the Department of Health and Social Services would not be able to locate in the same building. He stressed that they would be accessible to the Indian Health Hospital. Ms. 4 Clarke added that the feasibility study will review whether the Department of Health and Social Services' three current labs can be combined. Co-Chair MacLean asked the total project cost. Mr. Chase noted that a new laboratory would cost $15 - $17 million dollars. Representative Martin asked what additional operating costs would be involved. Ms. Clarke promised to supply him with the information. Ms. Clarke discussed the Department's fourth CIP priority request of $8,873.7 dollars for API Design and Site work. Ms. Clarke reviewed Attachment 2. She observed that API 2000 will replace a failing facility. It will also down size the facility. She noted that API was not built for mental health. There are problems with breaking pipes and asbestos. (Tape Change, HFC 93-21, Side 2) Ms. Clarke stressed that the Department has looked at financial alternatives to reduce costs. She concluded that it will cost less to replace than to repair the facility. She referred to page 7, Attachment 2. She noted that the replacement cost is $251 dollars per square foot. She emphasized that the new facility will be smaller that the current facility. The current facility is licensed for 133 beds the new facility will contain 114 beds. Twenty-four beds in the new facility will be used by the Department of Corrections. Mr. Chase observed that page 9, Attachment 2, shows cost comparisons with other facilities. Representative Toohey observed that part of the cost will be paid by the Mental Health Trust Account (MHTA). Ms. Clarke clarified that 6 percent of unrestricted revenues are deposited into the General Fund Mental Health Trust. The Mental Health Trust Account will contribute $7.7 million dollars. Representative Toohey asked if MHTA will pay for operations. Ms. Clarke did not know if operations could be paid for by MHTA. She assure Representative Toohey that the Department has worked extensively to contain operational costs. She noted that MHTA dollars pay for the current API operations. She anticipated that they would continue to pay for the new facility. Mr. Chase clarified that operation costs for the new facility will be similar to FY 92. Representative Parnell asked how long the new facility will meet Alaska's mental health care needs. Mr. Chase stated that the building should last 30 to 40 years. He 5 anticipated that API will be used for specialized care. Community hospitals and community based programs will provide for secondary care cases. Ms. Clarke clarified that, based on conservative population growth estimates, API should suffice until the year 2000. Representative Martin asked where the new facility will be built. Ms. Clarke observed that the new facility would fit on the current API site. Representative Navarre referred to cost comparisons on page 7, Attachment 2. Mr. Chase clarified that the New Hampshire State Hospital has 235 beds. Ms. Clarke discussed page 10, Attachment 2. She stressed that the current situation will result in more clients in the hospital costing more per client, $1 - $1.4 million in repairs and a risk of catastrophic building failure. Ms. Clarke noted that the Department has submitted a letter of intent, through the certificate of need program, regarding the number of beds. She emphasized that the Department will be conducting public hearings. Ms. Clarke commented on the Department's number five priority, $5,776.6 million dollars for Mental Health Trust Beneficiaries Grants. She pointed out that grants would be given to build up the community based mental health system. Grants will be competitive. Ms. Clarke noted that the Department's number six CIP priority request is $1 million dollars for API stop gap repairs. Ms. Clarke summarized the Department's number seven CIP priority request of $800.0 dollars for the Harborview steam plant, phase II. She noted that estimates by the Department of Transportation and Public Facilities in FY 92 were inadequate to complete the project. This request will complete the project. She noted that the Department currently pays $500.0 thousand dollars annually to the Department of Transportation and Public Facilities in heating costs. DEPARTMENT OF ADMINISTRATION NANCY BEAR-USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION provided members with an outline of the Department's CIP requests (Attachment 3). She emphasized that the Department has attempted to increase delivery efficiency. She spoke in support of consolidation of leasing public facilities 6 Commissioner Usera outlined the Department's CIP requests: * Computerized Hiring Forms - $250.0 to design and implement an integrated forms management system for personnel, payroll, finance and retirements and benefits. * Procurement System Automation - $71 9 to implement an automated system for processing procurement actively. This will maximize larger order purchases. * Public Defender Voice Mail System - $53.8 to purchase a new 42 station phone system. * Pioneers' Home Repair & Renovation - $3,001.3 thousand dollars. This request is the result of an audit. Projects will be brought into compliance with ADA. * Anchorage Warehouse Services Building Improvements -$58.0 thousand dollars - program receipts will be used to provide a heated storage warehouse for surplus property. * Anchorage Warehouse Materials Handling Vehicle - $65.0 thousand dollars - program receipts will be used to buy a fork lift. Co-Chair MacLean noted that the FY 93 capital budget included $18 million dollars for data processing projects. She asked how the Department of Administration is overseeing these projects. Commissioner Usera relayed that the Telecommunications Information Council (TIC) is progressing in its goal to review all projects. She noted that all departments are required to develop plans in compliance with the overall statewide plan. She anticipates that TIC will review FY 95 data related CIP requests prior to inclusion. Representative Martin expressed concern that the State of Alaska not develop a condition which would create a surplus of jobs to attract out-of-state residents. Representative Brown spoke in support of the TIC review process. Co-Chair MacLean asked if development of the computerized form could be accomplished within the Department. Commissioner Usera replied that the Department does not have the needed software. Co-Chair MacLean asked if the 7 Governor's audit management team could complete a form study. Commissioner Usera questioned whether the Governor's audit management team would have the needed expertise. DEPARTMENT OF LABOR JOHN ABSHIRE, DEPUTY COMMISSION, DEPARTMENT OF LABOR noted that the Department's total CIP request is $1 million dollars. He reviewed the Department's CIP requests: * Labor Standards & Safety Program Automation - $186.0 thousand dollars to establish a computer network; * Workers' Compensation Records Automation - $495.7 thousand dollars for an imagining project; Representative Brown asked the status of the Imaging Study to be completed by the Department of Administration. DAVID TEAL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR stated that a RFP has been prepared by the Division of Information Services, Department of Administration. He noted that the RFP will ask for a consultant to develop a statewide view in regards to future technology and to exam the needs of departments for an imaging system. He assured Representative Brown that the Department will follow the guidelines which will be developed. Mr. Abshire continued to outline the Department's CIP requests: * Mechanical Inspection Equipment Purchase - $78.60 thousand dollars for a photo licencing system and other equipment; * Occupational Safety & Health Equipment - $67.6 thousand dollars for office, training and personnel protection and electronic testing equipment; * Economic and Demographic Information Equipment Upgrade - $172.0 thousand dollars for computer upgrades. PAUL ARNOLDT, DIRECTOR, WORKERS' COMPENSATION, DEPARTMENT OF LABOR clarified that the Workers' Compensation Fund can only be used to fund grants. Co-Chair MacLean asked for information concerning the FY 93 $1.7 million dollar appropriation. Mr. Teal clarified that 8 the funds were spent in the Division of Employment Security for an integrated data base. Representative Martin asked if user fees could be instigated. Mr. Abshire observed that the Department is researching a claims fee or a surcharge. (Tape Change, HFC 93-21, Side 1) Co-Chair MacLean informed the Department of Labor that requests for furniture replacements will be scrutinized by the House Finance Committee. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS JEFF MORRISON, DIRECTOR, DIVISION OF ADMINISTRATIVE AFFAIRS, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS noted that the Department has four CIP requests. Mr. Morrison noted that HB 60 contains authorization for $3 million dollars in federal funds for environmental compliance projects. He explained that this is authority to receive and expand federal funds. The funding will be used to restore and replace land around storage tanks on armory land. Mr. Morrison noted that the Department is asking for $2 million general fund dollars and $3.1 in federal funds for deferred maintenance of Armory Guard facilities. He noted that there is a $6 million general fund dollar backlog in deferred maintenance. He emphasized that this is the Department's number one priority. Mr. Morrison discussed the Department's request for $100.0 thousand general fund dollars and $100.0 thousand federal dollars for maintenance of the Fairbanks Armory. He explained that the Legislature appropriated $450.0 thousand dollars for design of this project in 1991. The request would complete the design, begun by the Department of Transportation and Public Facilities, and make the project eligible for federal construction funding. Construction funding will be a 75/25, federal/state match. Construction will cost $1.3 million general fund and $3.9 million federal dollars. Mr. Morrison noted that the Department's second CIP priority is $1.5 million dollars for Emergency Operation Center Enhancements. He noted that the following projects are included in this request: * Relocation of the Alaska State Troopers Detachment B Communications and Dispatch Center to the SEOC; * SEOC Furnishing and Equipment; 9 * Emergency Power Generator; * Armory Modem Pool Mr. Morrison clarified that state general funds are required for all federal matching grants. Co-Chair MacLean noted that there is $8.8 million dollars for Armory Guard maintenance in the operating budget. Mr. Morrison clarified that the operating budget includes both federal and state funds. He emphasized that this amount covers utilities, operations and preventative maintenance. He noted that the Department is not keeping up with the deferred maintenance schedule. Mr. Morrison noted that the federal government will provide 75 percent of the construction cost of the Fairbanks Armory and 100 percent of the cost of the organizational maintenance shop. The bulk of the design cost must be paid for by the State of Alaska in order to receive federal funding. Co-Chair MacLean noted that $1.3 million dollars was appropriated in FY 92 for four armory expansion designs. She noted that the Fairbanks Armory was listed as 22,840 sq ft. The Fairbanks Armory is currently planned at 28,500 sq ft. Mr. Morrison clarified that the increase in square footage corresponds to federal requirements based on units assigned to the facility. Co-Chair MacLean asked why funding for the relocation of the Alaska State Troopers is included in the Department's SEOC request. HUGH L. COX, III, COMMISSIONER, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS responded via teleconference that the State of Alaska is responsible for equipping the State Emergency Center. The Center was moved in 1991. Commission Cox discussed the State Emergency Center. He noted the importance of working with the State Troopers during a state emergency. He emphasized that the State of Alaska's emergency response capability needs to be improved.