HOUSE BILL NO. 76 "An Act authorizing the commissioner of health and social services to provide for the design and construction of psychiatric treatment facilities to replace the facilities of the Alaska Psychiatric Institute." Co-Chair Mulder MOVED to ADOPT proposed committee substitute work draft 22-LS0349\P, Utermohle 4/20/01. There being NO OBJECTION, it was so ordered. RUSS WEBB, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES testified in support of the legislation. He stated that the legislation would be an effective means to replace API, which has been a long-standing problem. He noted that the Department of Health and Social Services, Alaska Mental Health Trust Authority, University of Alaska, and Providence Medical Center have worked together to develop better land use in the area. The Department of Health and Social Services will not use the old facility under their site plan. He pointed out that the committee substitute reduces cost. Co-Chair Mulder explained that the objective was to provide a price tag that the state could afford. The original cost was $56 million dollars. A ranch style approach was consolidated into a two story, which dropped the cost to $45 million dollars. A competitively bid design build achieved an additional savings for a total cost of $41.744 million dollars. A little over $19 million dollars remains from a previous appropriation to the Department of Health and Social Services. The Alaska Mental Health Trust Authority has made available an additional $3 million dollars to help with construction costs. An additional $3.5 million dollars in interest earnings from the remaining $19 million dollar appropriation would be reappropriated. The remaining project cost would be $16 million dollars, which would be paid with the issuance of a 15-year note of $1.6 million dollars a year. He observed that it would not cost the state "any cash out of the pocket." Representative Hudson asked if the debt retirement on the bond issuance would be offset with reduced energy costs. RANDALL BURNS, EXECUTIVE DIRECTOR, ALASKA PSYCHIATRIC INSTITUTE noted that the current heating cost is $300 thousand dollars a year. He felt confident that these costs would be reduced. Representative Hudson suspected that the cost would be reduced. Mr. Burns observed that the boiler and mechanical systems are not very efficient. He thought that there would be significant savings within the utilities. Co-Chair Mulder noted that the proposal has brought the competing interests of the Department of Health and Social Services, Alaska Mental Health Trust Authority, University of Alaska, Providence Medical Center and the Municipality of Anchorage together. All the parties signed the memorandum of agreement. He referred to item #8 of the memorandum of agreement. Co-Chair Mulder referred to the legislation as it pertains to removal of the facility: The Memorandum of Understanding contemplates a road extension through the property presently occupied by the Alaska Psychiatric Institute facility. The road construction will be addressed separately, possibly through federal funding. Co-Chair Mulder clarified that the demolition costs were not included in the legislation and are estimated at $13 million dollars. A fiscal note would include the demolition costs. He emphasized the importance of timing. He expressed confidence that federal funding would be forthcoming for the demolition. CAREN ROBINSON, CHAIRMAN, ALASKA MENTAL HEALTH TRUST AUTHORITY provided information relating to the legislation. She discussed the memorandum of agreement, Track E. She noted that a due diligence finding would be provided. It is the intent to carry forward and utilize the land with the understanding that when the University of Alaska is ready, they would have the first right to purchase the land. Representative John Davies noted that the university's concern is that there could be some action taken in respect to the land that would make it not in the university's interest to subsequently acquire it. The university would like the Trust to work with them regarding actions that might be taken which could be negative in respect to future acquisition. Ms. Robinson stressed the importance of working with all the involved individuals. She noted that they have worked with the University of Alaska and felt that they would continue a close relationship to assure that the lands are utilized in an appropriate way. Co-Chair Mulder observed that the University is concerned that the land could be used to expand the McLaughlin Youth facility. He stressed the importance of working with the University on any future activities that utilize the property. Representative Hudson noted that there are some private landholders and questioned if they have been contacted. Ms. Robinson acknowledged that South central Foundation owns some of the adjoining property. There is also a Respite Center on parcel D. The city might want to build a health facility on parcel E. There are concerns regarding the neighborhood. Representative Croft referred to page 3, line 8 - 9: The replacement facility must include a forensic psychiatric unit. Mr. Webb responded that the state is committed to maintaining the forensic unit, but it will not be expanded. TAPE HFC 01 - 89, Side B