HOUSE BILL NO. 72 "An Act making appropriations for the operating and loan program expenses of state government and for certain programs, capitalizing funds, making reappropriations, and making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HOUSE BILL NO. 73 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." 1:32:15 PM Co-Chair Neuman discussed the agenda for the day. ^FY 16 BUDGET OVERVIEW: DEPARTMENT OF ADMINISTRATION 1:32:22 PM SHELDON FISHER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION (DOA), provided a PowerPoint presentation titled "Alaska Department of Administration Department Overview" dated February 3, 2015 (copy on file). He addressed slide 2 that included the department's mission and an organizational chart. He noted that the department provided services to the public and other state agencies. Divisions offering services to the public included the Division of Motor Vehicles (DMV), the Division of Retirement and Benefits (DRB), the Public Defender Agency (PDA), and the Office of Public Advocacy (OPA). Other services to the public were provided by independent agencies housed within DOA. There were seven divisions within the department that provided services to state agencies. He turned to slide 3 that showed DOA service areas statewide; the department's statewide services were primarily the Division of Motor Vehicles and the Public Defender Agency. Other agencies were represented in core markets. 1:34:24 PM Commissioner Fisher addressed performance measures on slide 4. He noted that under the department's three core services areas different divisions were represented more than once, which recognized that DOA services provided to other agencies touched different topics. For example, the Division of General Services (DGS) provided leasing services to a host of other government departments across the state. He looked at the groupings of core service areas that the department inherited; he would continue to assess whether the measures made sense going forward. He looked at slide 5 that included performance measures related to legal, advocacy, and regulatory services. The slide showed a chart of the Public Defender appellate backlog; the backlog had increased substantially in the past year. He relayed that the felony caseload the PDA was facing had increased 60 percent since 2009; appeals had increased by 82 percent between FY 10 and FY 14; and sentencing appeals had increased 100 percent. The substantial increase in the department's workload was driving the rising backlog. He noted that in prior years there had been an increase in funding, but the department had not been able to keep up. 1:36:08 PM Commissioner Fisher moved to slide 6 related to a family support performance measure. The slide showed a chart pertaining to predisposition reports filed with the courts by the due date for OPA. There had been a substantial increase in workload in recent years; currently the department had the highest ward to guardian ad litem ratio in the country, which was in excess of twice the recommended level. He communicated that the department was facing increasing workloads in a shrinking budget environment, which was challenging for the division. Commissioner Fisher highlighted the Enterprise Support Services on slides 7 through 9. Slide 7 included a chart representing annual savings below market value for leases of up to 10 years; the department had been able to save close to $400,000 in the prior year. Slide 8 related to the percentage of growth; funding to Enterprise Support Services grew slightly in FY 15. He relayed that the department attempted to measure its performance in a variety of categories; slide 9 pertained to services provided to other agencies. Generally the department was doing well; some divisions were performing better than others. He shared that the department was discussing how to make improvements in divisions on the lower end of performance such as DGS. Commissioner Fisher addressed slide 10 related to DOA services to the public. He relayed his intent to go into additional detail on agency budgets. The Public Defender Agency was funded almost exclusively with general funds; there were a few interagency fees collected from the Court System and some clients. The Office of Public Advocacy was similarly funded primarily with general funds; it did receive a modest amount from HNS for services provided. The Division of Motor Vehicles was funded by program receipts. The Division of Retirement and Benefits was mostly funded by the retirement fund, with a small amount coming from general funds associated with EPORS [Elected Public Officers Retirement System]. 1:39:49 PM Commissioner Fisher continued to highlight services to the public on slide 11. The Alaska Public Broadcasting Commission and the Alaska Public Offices Commission received a substantial amount of general funds, whereas the Violent Crimes Compensation Board and the Alaska Oil and Gas Conservation Commission (AOGCC) were largely self- funded. He moved to slide 12 and addressed divisions providing services to state agencies. The services were funded with a combination of receipts from other agencies and general funds. He detailed that the general funds reduced the rate charged to other departments. He addressed slide 13 and relayed that the bulk of the divisions' funding was made up of interagency transfers of one category or another. Slide 14 included a pie chart showing the department's budget by fund source: undesignated general funds represented 25 percent, designated general funds (receipts collected primarily by DMV and AOGCC) accounted for 7 percent, other funds (mostly transfers from other agencies) accounted for 66 percent. Slides 15 and 16 included charts showing the department's budget by division (all funds). He noted that the slides began to illustrate the challenges facing the department as it dealt with the first round of budget cuts. He pointed to the department's divisions with the highest budgets including the DRB, DGS, Enterprise Technology Services (ETS), and Risk Management; however, out of $88 million in general funds, $50 million was associated with OPA and PDA. He explained that DOA did not feel it was appropriate to make full budget cuts to the two divisions given the challenges they had in meeting their mandates and due to increasing backlogs. He furthered that as a result, the department had made larger reductions to other divisions. Additionally, as the administration's overall budget became clear, DOA would have a better insight into its own budget; DOA did not yet know what services other agencies were planning on procuring from the department. 1:43:43 PM Co-Chair Neuman noted that Representative Pruitt had joined the meeting. Commissioner Fisher progressed to slide 17 showing the department's share of total agency operations. He relayed that the department's overall budget was declining for the third year in a row. Slide 18 addressed appropriations within the department (general fund only). He pointed out that OPA and PDA were well above the rest of the divisions. He noted that some of the other divisions fell into a different order than on previous slides. For example, DMV was number two due to receipts collected. He turned to slide 19 showing appropriations within the DOA (all funds). The highest cost was attributed to Centralized Administrative Services, followed by DGS, OPA, PDA, ETS, and etcetera. Slide 20 related to unallocated general funds; the department planned to provide detail shortly on how a $7.6 million unallocated budget category would be spread across the divisions. 1:45:58 PM Commissioner Fisher turned to slide 21 that showed DOA line items. He detailed that services, including contracts, leases, software, and personal, dominated the department's budget. The department saw a need to focus on the areas across the state as a whole. Slide 22 pertained to salary adjustment increases and personal services costs. He explained that the majority of the growth was associated with an increase in salaries from 2006 to present. He noted that a blue box on the right of the chart represented additional headcount incurred by the department. Slide 23 showed the incremental headcount; on a permanent, full-time basis from 2006 to present, there had been an increase of 69 employees within OPA and PDA and an additional 15 associated with the IRIS project. He elaborated that when the IRIS project launched, the positions would be reduced. Co-Chair Neuman asked what IRIS stood for. Commissioner Fisher relayed that the acronym stood for Integrated Resource Information System (IRIS). He detailed that the first phase of the system would go live in July [2015]; the phase would provide more and improved information for the state and would provide increased insight into how resources were utilized and where the money was spent. The bulk of the increase in headcount was related to the OPA and PDA due to an increase in workload. 1:48:56 PM Commissioner Fisher moved to slide 24. The department currently had a building maintenance request in the budget for approximately $3 million; historically, it had spent about $7.25 million to maintain its buildings, which he believed was close to what would continue to be required to maintain and preserve buildings over the long-term. He noted that the department would be looking to reduce costs in other areas and try to do the same maintenance at a lower cost. He looked at slide 25 pertaining to the department's core initiatives and challenges. The department recognized that while its budget was slightly under $350 million, many of its decisions impacted other agencies and departments as well. He detailed that personnel costs were impacted by the contract negotiations with labor unions and healthcare costs the state provided. Additionally, DOA believed there was a need in the state to address improved productivity and looking for ways of capitalizing on some initiatives that had already been undertaken. The slide addressed healthcare costs and the reduction of the unfunded liability; there had been a substantial effort and some success in reducing healthcare costs in the past year or so, which the he believed needed to continue. The department saw a need to provide savings in its procurement areas; IRIS would provide the information needed to drive additional savings, but some consolidation, centralization, or focus would be needed to improve savings. He addressed Information Technology (IT) and detailed that it was currently widely decentralized; the state spent approximately $220 million on IT services. He detailed that about $30 million of the figure resided in DOA; the department saw an opportunity to consolidate and improve the service and cost. He spoke to improving facility management, utilizing space better, negotiating better leases, and examining whether the state should own rather than lease buildings. 1:52:42 PM Co-Chair Neuman pointed to slide 25 related to how items would affect the budget. He addressed significant potential savings he believed could result from IRIS. He noted that the project had begun four years earlier and phase one related to procurement would come out in July. He explained that procurement for all agencies would be centralized through DOA. He discussed that the state spent $2 billion to $3 billion on procurement per year; savings of 10 percent would equal $200 million to $300 million. Phase two would come out in July 2016 related to payroll and efficiencies in personnel costs. Commissioner Fisher agreed on the timeframe. Co-Chair Neuman addressed where efficiencies could be found. He looked at IT and relayed that an IT report had been commissioned by DOA the prior year and an executive summary was expected shortly. He discussed that typically IT services were spread out because departments wanted autonomy, but the state was in the process of consolidating the services to improve efficiency. He believed there would provide a marked improvement. He stated that the change would take the labor costs off of state employees and would create better IT services between the departments. He addressed facility management and asked the commissioner to speak about a Department of Transportation and Public Facilities building. 1:55:42 PM Commissioner Fisher shared that DOA was currently in a dispute with the landlord of a DMV building related to building maintenance. The department was examining whether it should own a building rather than leasing and whether it could save the state money. Co-Chair Neuman elaborated that the state had been leasing a building for 20 to 30 years and could have bought it three times for what it was paying for the lease. He wondered why the state would continue to lease the building because DMV was not going anywhere. He asked about fee schedules for legal services. He wondered if the department charged separate fees for legal services. CHERYL LOWENSTEIN, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, shared that the Office of Administrative Hearings charged fees. She noted that OPA and PDA provided free legal services. She added that DOA created a rate for the Office of Administrative Hearings annually. She explained that disputes and mediations generally went through the office. The department did not charge any other legal fees. 1:58:07 PM Representative Gara asked for verification that guardians ad litem were appointed to children in need of aid (e.g. foster youth and other) to recommend to a court what the child's needs were and what the best outcome could be. Commissioner Fisher agreed that Representative Gara's synopsis was largely correct. He elaborated that there were guardians for elderly people with needs as well. Representative Gara asked for verification that Alaska had the highest caseloads in the country. Commissioner Fisher responded in the affirmative. Representative Gara surmised that the high rate damaged the state's ability to steer youth towards success and opportunity. Commissioner Fisher believed the high workload was a barrier to effectively meeting the state's needs. Representative Gara contended that it was not just the state's needs, but the kids' needs as well. He pointed to the department's core initiatives and challenges on slide 25. He did not see anything on the slide related to improving services provided to children needing the help of a guardian ad litem during a court process. Commissioner Fisher took the point. He explained that the slide portrayed areas where the department could substantially reduce costs in the current environment. He believed the slide included a number of items that could drive significant cost savings. He had tried to shield OPA and PDA from the current fiscal challenges to the greatest extent possible. He would take Representative Gara's comments under advisement. 2:01:23 PM Representative Kawasaki remarked that the state was looking at substantial budget deficits in the near and potentially long-term. He wondered if there was a better way to deal with some of the agencies within DOA's purview. For example, he believed the Department of Natural Resources could be a more appropriate place to house AOGCC. He did not know what the Division of General Services, but he had observed that every other agency had a procurement specialist and significant administrative services staff. He wondered if it would be more efficient for the department to provide all procurement, IT, and other services. He asked if facilities management would be more appropriately placed under the Department of Transportation and Public Facilities. Co-Chair Neuman noted that the department was working on the issue. Commissioner Fisher believed there was a broad question about the appropriate strategy for centralization versus decentralization. He referred to the examples provided by Representative Kawasaki and stated that a fairly fact- specific analysis needed to be done. He opined that the answer to the question should be driven by efficiency. He furthered that there were times where centralization was the most efficient way to get things done, but there were also times when some expertise was needed in the various departments. For example, there were certain core commodity IT services that were the same for all departments and should be centralized; however, there were instances where services were unique to an individual department and it made more sense keep the expertise within the department. He agreed that there was an opportunity to centralize procurement or other to increase cost savings, but in a way that minimized the disruption on other departments. He noted that some minor functions may remain within the departments. 2:05:41 PM Co-Chair Neuman noted that DOA touched every agency within the state. He remarked that $50 million of the department's $88 million budget went to OPA; the remainder went to administering state services, contract negotiations, and other. Representative Kawasaki observed that each agency had its own administrative or support services division with its own procurement and IT employees. He believed there was a significant amount of duplication in the departments. Co-Chair Neuman asserted that there was no way to consolidate the director of administrative services positions, given that they were specialized within each department. Commissioner Fisher believed Representative Kawasaki's question was right. He believed there needed to be a bit more centralization IT. For example, DOA currently managed all of the core telecommunications contracts and had secured fairly favorable rates for large wide-area network contracts. He noted that costs would be dramatically more expensive if each division tried to procure its own contract; tremendous efficiencies were gained by consolidation. Representative Kawasaki stated that even within DOA there was a Divisions of Administrative Services and General Services that had their own procurement officers. Commissioner Fisher agreed. He stated that DOA needed to set the example and demonstrate savings that could be generated. 2:08:56 PM Vice-Chair Saddler stated that everyone would like to find big savings by consolidation somehow. He wondered if savings had resulted from consolidating the personnel function within the Division of Personnel in the past ten years. He asked for examples of unique services that could not be consolidated or centralized. Commissioner Fisher replied that any service could be centralized, but whether it should be was a different question. For example, there may be a particular system that was unique to a single department. He detailed that IRIS was housed under DOA and he did not believe the individuals administering the program should be centralized due to the specific skills required. On the other hand, there were a host of commodity services that were the same for every department; he believed these services should be centralized and would result in great savings. He believed that commodities should be centralized, but unique skills would typically benefit from decentralization. He would follow up on Vice- Chair Saddler's question pertaining to personnel. Vice-Chair Saddler remarked that if the department could verify that savings had resulted from the personnel consolidation he would be all for moving ahead with the consolidation of other functions. He referred to the chart related to customer service on slide 9. He wondered how the data had been complied, what the response rate had been, and whether any surprises had resulted. Commissioner Fisher deferred the question to his colleague. Ms. Lowenstein replied that DOA annually surveyed the administrative services director in each department; DOA did not generally receive a 100 percent response, but seven to ten directors replied. Vice-Chair Saddler asked if the department was gratified with the results and if there were ever surprises. Ms. Lowenstein responded that the department had found that the numbers were sometimes driven by the activities that DOA was doing. As an example, she pointed to space saving standards DOA had implemented. Another example was the partial-decentralization of personnel. Commissioner Fisher added that the figures were very high; any business would be pleased. He was more interested in the relative numbers than in the absolute numbers. He believed that the relative number showed places the department did not do as well as others. 2:12:57 PM Representative Wilson referred to cost growth in the PDA. She was interested in recent historical data and where the growth was occurring in the division (e.g. child in need, felony cases, or other). She wondered if there was a reason the department could not charge on a sliding scale or based on the number of repeat offences a person had. Commissioner Fisher would follow up with relative and absolute numbers. He relayed that the felony trial rate had increased 60 percent, appeals between 2010 and 2014 had increased by 82 percent, and sentencing appeals had increased by 100 percent during the same timeframe. He detailed that the public defender was for indigent individuals; the state had a constitutional mandate to provide representation services for people who could not afford to represent themselves. He had not attempted to determine whether there was some charge the state could impose. Representative Wilson countered that she understood, but she believed it said something that the individuals repeatedly got into trouble. She referred to a scale of people with some money versus no money who received services. She stated that it may not mean a lot on the scale of money the state needed, but she thought it may send a message. She remarked that the state offered a public defender to fathers seeking custody of their children, while adoptive parents paid $10,000 to $15,000. She also requested figures related to the increasing guardian ad litem costs. She wondered what would happen when the department was not able follow its mandate because of the high workload. She asked how the department would look at the issue in the future. Commissioner Fisher answered that currently there were 88 wards per guardian ad litem, whereas the recommended level was 40. He believed guardians attempted to make contact with their wards on a monthly basis, but did not have as much time as they needed. Representative Wilson discussed the entities that went into the cost of a child when they are a ward of a court. She believed there was no way the state could ask a guardian ad litem to see a child once a month when their caseload was so high. She stated that if the guardian ad litem could not make it once a month the state needed to determine a new timeframe until the caseload number was reduced. Co-Chair Thompson turned to slide 6 related to family support. He asked what percentage of the data accounted for youth and senior protective services. Commissioner Fisher would follow up with the data. 2:17:10 PM Representative Guttenberg remarked on Commissioner Fisher's testimony that DOA was the coordinating agency for IT and telecommunications for the state. He discussed that the Department of Commerce, Community and Economic Development had done a broadband taskforce that had been completed a couple of years earlier and had shown that the state was far behind the curve. He remarked that the state's ability to deliver telecommunications and broadband across the state was one of his personal issues. He noted that all departments complained about a lack in broadband access. He referred to testimony from the Office of Children's Services that it took 20 minutes to fill out a page and another 20 minutes to change pages due to slow service. He remarked that broadband was under DOA's purview. He furthered that school districts had a problem with E-rate and village councils located next to schools had a problem not having E-rate. He wondered if the department could keep expanding the service across the entire state. He stressed that Alaska clearly lagged behind. He elaborated that he barely got 1 megabit, whereas the broadband taskforce recommended a speed of 100 megabits. He observed that the price was expensive, but the price of not being able to function in rural areas was dragging the state down. He wondered about the commissioner's perspective on increasing bandwidth for the state and allowing other entities to take advantage of what the state was doing. Commissioner Fisher replied that he had an appreciation for the challenges related to broadband access. He detailed that in the past he had worked for various communications companies. He stated that there was a difference in the challenges in rural versus urban areas; the cost of providing broadband services to every Alaskan, especially at 100 megabits, would be quite astronomical. He believed there were some things that could be done to improve access, but the question was about how much the state was willing to invest. He asserted that the current economics did not support industry making large investments to take broadband to more rural communities. He believed it would require working together to decide what the state could afford. Representative Guttenberg referred to other possibilities including fiber optics. He pointed to the state's current budget crisis and remarked that when five OCS officers dropped down to four and it took them 20 minutes to change pages online, the state was hampering itself by not doing what it needed to do. He believed it was a simple efficiency the state could create that would enable workers to be more efficient. He reasoned that it would take $1 to save $10. 2:22:31 PM Commissioner Fisher took note of the example. He believed it may be possible to provide a more efficient interface for OCS employees that would enable the information to transmit without the background and template. He would work to determine whether at an application layer a more efficient service could be provided. Co-Chair Neuman stated that the bottom line was the implementation of the recommendation in the broadband report would be $2.2 billion. He did not know where the funds would come from given the state's $3.5 billion deficit. He did not believe finding the funds would come to fruition given the needs for other services such as education and public safety. Representative Gara spoke to the problem related to guardians ad litem and a concern about keeping unemployment down. He discussed trying to make the choices that caused the least harmful impact as possible. He asked if the department had considered trying to save jobs by increasing the health insurance employee charge for higher income non- union employees or taking a look at the policy of charging the same price for a single family versus a larger family. He believed that regardless of the number of family members a state employee paid the same amount for health insurance. He wondered if the department had thought about the issue as a way to save jobs. Commissioner Fisher replied in the affirmative, but believed the department needed to examine the issue further. The department recognized that healthcare represented a huge cost to the state and was committed to continuing recent work to reduce the costs. He would consider some of the issues outlined by Representative Gara. Representative Wilson wondered how much the state saved by contracting with an out-of-state vendor for driver licenses. She was unhappy with the change and reasoned that the service could be provided by the local DMV. Commissioner Fisher would follow up on the question. Co-Chair Thompson remarked that the state had been working to privatize a significant number of services; however, taking the items out-of-state was not always the most beneficial. He reasoned that the state's university system could provide some of the services. He wondered why some of the items were not done in state. He spoke to a cigarette stamp on the back of packets to indicate that state tax was collected, but the work was contracted with a vendor in Seattle for $300,000 per year. He questioned why the wholesaler was not including the cost of the stamp in the price of cigarettes. He summarized that much of the significant privatization that took money and jobs out of Alaska was unnecessary. 2:27:37 PM Commissioner Fisher replied that Governor Bill Walker believed the state should spend as much money inside Alaska as possible. Representative Munoz asked whether one spouse could opt out of health insurance coverage if a couple both worked for the state. She wondered if there was any incentive in the system to recognize the option. Commissioner Fisher answered that "we are self-insured in our medical plan"; therefore, even if an employee opted out of coverage, he did not believe the cost to the state would change. He would look further into the question. 2:28:56 PM AT EASE 2:31:43 PM RECONVENED Co-Chair Neuman specified that the budget that was being reviewed was not a work-in-progress and was closer to official numbers. ^FY 16 BUDGET OVERVIEW: DEPARTMENT OF PUBLIC SAFETY 2:33:29 PM GARY FOLGER, COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY (DPS), introduced department staff. He relayed that DPS was one of the older departments in the state. He remarked that the troopers were on the front page of the newspaper close to daily. He asked the committee to remember that the department provided an important core function of government. TERRY VRABEC, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY, provided a PowerPoint presentation titled "Department of Public Safety Department Overview" dated February 3, 2015 (copy on file). The department's mission was to ensure public safety and enforce fish and wildlife laws throughout the state. He listed core services on slide 2: · Law enforcement patrol and investigations · Rural law enforcement services · Domestic violence and sexual assault programs · Statewide public safety programs · Resource protection · Highway safety Mr. Vrabec addressed the department's organizational chart on slide 3. He relayed that he served under Commissioner Folger. The department was divided into five division that he and the commissioner oversaw. Additionally, DPS housed three councils including the Alaska Fire Standards Council, the Alaska Police Standards Council, and the Council on Domestic Violence and Sexual Assault (CDVSA). He noted that the department also included the Crime Lab and the DPS Training Academy. The department was currently made up of 885 permanent employees. He highlighted statewide impact on slide 4; DPS was the primary statewide law enforcement agency. He elaborated that DPS assisted many other state and federal agencies on a regular basis with investigative assistance, search and rescue, training, the Alaska Public Safety Information Network (APSIN), and the crime lab. Mr. Vrabec spoke to four performance indicator graphs on slide 5. He addressed the top left chart related to the percentage of homicides solved by Alaska State Troopers. He detailed that in FY 14 there had been 18 homicides; 16 (88 percent) of the cases had been solved. He highlighted property crimes that had been investigated and closed with the identification of a suspect or offender. He specified that in 2014 there had been 3,855 incidents; 1,358 (35 percent) of the suspects or offenders had been identified. He discussed domestic violence and sexual assault programs, specifically related to shelter nights provided by victim service providers (chart on the lower left). He remarked that the number may seem high, but he asked members to keep in mind that each person in a family staying in a shelter would count as a shelter night; in FY 14 there were over 98,000 shelter nights. He looked at the chart related to unintentional fire fatalities on the lower right of the slide. He stated fire fatalities had been reduced from 23 to 12 since 2013, which represented a 47 percent reduction. 2:37:06 PM Mr. Vrabec moved to slide 6 and spoke to additional performance indicators. He relayed that there had been a 28 percent improvement in crime lab service requests completed in less than 30 days. He addressed resource protection and relayed that in FY 14 there had been over 75,000 contacts by wildlife troopers resulting in over 3,800 violations, which represented a 5 percent decline. He spoke to boating accident fatalities; the figure had dropped by 12 down to 10 deaths in 2013. He reported that half of the individuals had not been wearing life jackets. He communicated that there had been 5 motor vehicle accidents with fatalities involving impaired drivers in 2013; there had been 11 deaths in 2012, and 8 in 2011. Commissioner Folger discussed that the three primary calls the agency received statewide were public assist, ready reports (reports of dangerous drivers), and alarm calls. He relayed that the following portion of the presentation would be related to FY 16. Co-Chair Neuman wondered how many alarms were set off by burglaries versus false alarms. Commissioner Folger replied that very few were burglaries. Co-Chair Thompson asked if there was a fee to residents if the department had to continually respond to alarms. Commissioner Folger replied in the negative. Co-Chair Thompson remarked that most communities charged for the service. KELLY HOWELL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF PUBLIC SAFETY, relayed that she would address some of the department's proposals in the governor's FY 16 amended budget. She prefaced her comments by noting that although the governor's amended budget had not officially been transmitted, the numbers in the presentation reflected what DPS had proposed. Co-Chair Neuman asked if the figures were based on a 5 percent reduction to the department's budget. Ms. Howell replied that slide 7 showed a snapshot of the FY 15 management plan, FY 16 governor's amended budget, and the difference; the difference was a 2.7 percent reduction from the FY 15 management plan; however, it was roughly a 5 percent reduction from the work-in-progress budget. The slide depicted a $5.6 million reduction in the department's overall budget ($4 million of the amount was unrestricted general funds). The budget included a reduction of 24 permanent, full-time positions and 9 non-permanent positions. She elaborated that many of the positions were eliminated vacancies or transfers into other vacancies, with an effort to minimize the loss of jobs. Ms. Howell addressed a pie chart on slide 8 depicting the department's operating budget by fund source. She detailed that 83 percent of the department's budget was unrestricted general funds. Slide 9 showed the budget by line item; the majority of the budget went to personal services (56 percent). Slide 10 showed the budget by component. She relayed that the Alaska State Troopers and the Alaska Wildlife Troopers were separate divisions, but fell under the same budget component. The two divisions had been separated in the chart for comparison purposes; Alaska State Troopers accounted for 50 percent of the budget and Alaska Wildlife Troopers. The statewide support budget component included the Division of Administrative Services, Division of Statewide Services, the Crime Lab, the DPS Training Academy, and the Office of the Commissioner. 2:43:11 PM Ms. Howell stated that despite the reductions, the DPS priority was on its core fundamental services. Core services included police services such as responding to calls for service, enforcement of laws, patrol functions, and resource protection. She noted that the enforcement of laws included enforcement of fish and wildlife laws through the Alaska Wildlife Troopers. She addressed additional core services such as forensic science services; legal drug and alcohol interdictions across the state; providing major crime investigations and assistance to other law enforcement agencies; investigations into fires resulting in death, serious injury, or substantial loss of property; and services to individuals impacted by domestic violence and sexual assault. Ms. Howell addressed slide 11 related to significant operating changes for FY 16. The first three bullets included increment requests in the department's FY 16 operating budget. She briefly highlighted a restructuring of the department's Aircraft Section, which she planned to discuss later on. The governor's office was transferring $1.5 million for CDVSA programs to DPS. The third bullet pertained to funds for shelter services for women and children. She elaborated that the bullets related to CDVSA included increments that the council was currently receiving through other agencies; the increment requests would move the funding into the DPS budget. She referenced positions marked for deletion and relayed that many had been identified as positions that could be moved into vacant trooper patrol positions. 2:46:03 PM Ms. Howell continued to discuss significant operating changes on slide 12. The first bullet related to personal services savings through efficient management of employees pertained to overtime and premium pay (e.g. standby pay) that DPS employees received. The decrement was representative of the department's effort to reign the costs in to the extent possible, while continuing to ensure protection to the public. She spoke to a proposed deletion of funding for the K-9 Program; the department currently used highly trained canines for drug interdictions, but would discontinue the service. The slide included the proposed transfer of the patrol vessel Stimpson [from Dutch Harbor to Kodiak]. She briefly highlighted a couple of decrements to the Village Public Safety Officer (VPSO) program. Ms. Howell spoke to the capital budget increment requests on slide 13. The department was requesting a $1.2 million federal receipt increment for marine fisheries patrol improvements; the increment had been provided annually in the capital budget. Commissioner Folger elaborated that the department used the federal receipts to hire techs to conduct tank inspections for crab boats and other. He relayed that at statehood some of the fisheries had been controlled by the federal government and others had been controlled by the state (much of which was called a migratory fish). The state still patrolled for crab and salmon; the money helped the federal government identify how many halibut were being caught and other. Ms. Howell continued with slide 13. The second bullet referred to $850,000 in pass through funding the department was requesting for the Alaska Domestic Violence and Sexual Assault Intervention Program, which was run through the Municipality of Anchorage and was designed to hold offenders accountable. The third bullet was also pass through funding totaling $2 million for Rental Assistance for Victims through the Empowering Choice Housing Program. The program was administered by the Alaska Housing Finance Corporation (AHFC) and provided housing vouchers for families impacted by domestic violence. Mr. Vrabec moved to slide 14 related to the Alaska State Troopers. The division had five geographic detachments statewide, with a headquarters in Anchorage. Some of the major components included the Alaska Bureau of Investigation, which looked at major crimes including homicides and sexual assaults; the unit also assisted other departments. He highlighted the statewide Drug and Alcohol Enforcement Unit, which investigated various crimes including bootlegging and illegal drug distribution. He spoke to Judicial Services, which included the department's court service officers who provided work at the courthouse and other duties such as the transportation of prisoners. 2:50:37 PM Ms. Howell turned to slide 15 showing the FY 15 management plan compared to the FY 16 governor's amended budget. She pointed out that the Alaska State Troopers would take a $5.2 million reduction, which equated to the loss of 20 permanent full-time positions. She elaborated that 19 troopers in specialized positions would be shifted to vacant trooper patrol positions. She emphasized that the change would not result in layoffs; the specialized units would be transferred into vacant patrol positions to bolster the department's core law enforcement patrol service. There was a reduction to non-permanent positions; of the 6 positions proposed for deletion, 2 were vacant, and 4 were the department's cold case investigators. She expounded that the positions were long-term non-permanent positions that currently investigated cold case homicides; the workload would be shifted to permanent full-time investigators under the Alaska Bureau of Investigation. Mr. Vrabec moved to the VPSO program on slide 16. As of December 31, 2014 there were 87 grant funded positions. He relayed that the number fluctuated; there were currently 6 coordinators, 4 VPSO coordinators, and 77 VPSOs in 71 communities. Ms. Howell highlighted that the $14,332,000 was part of the overall budget of the VPSO program totaling $17,653,000 in FY 16. The changes proposed to the VPSO program were focused on restructuring. She stated that it may appear that there was a reduction in overall positions, but the department had taken recommendations from the House Finance Committee to reevaluate and reexamine the program. Despite significant funding appropriated by the legislature and efforts of the department and the nonprofit grantees responsible for hiring VPSOs, the department had yet to achieve the level of positions it had received funding for. She spoke to a reduction of 5 permanent full-time positions; currently there were 6 commission trooper positions who acted as VPSO support troopers. The troopers would shift over to a general trooper position versus focusing specifically on VPSO oversight. She elaborated that the individual positions were providing oversight to the VPSOs working in the regions they serve; those duties would shift to the troopers already based in the area. She emphasized that the desire was not to minimize the support provided to the VPSO program, but to spread the responsibility to all troopers in the given region. 2:54:51 PM Ms. Howell spoke to the FY 16 work-in-progress budget, which had included an increment request to increase the overall indirect rate that VPSO grantees were allowed to charge. The department would work with its not-for-profit grantees to compromise on the indirect rate with the existing funding the department had for the VPSO program. The department believed it could come to a compromise without needing to request additional funding from the legislature. She highlighted a reduction of $1.6 million in the grants line, which represented the difference in the positions DPS had received funding for versus positions it had filled and retained. There were currently 77 VPSOs and 4 VPSO positions who provided coordinator duties; funding had been provided for 121 positions. The department proposed to reduce the overall grants line and would be more than happy to request additional funds when the program reached the targeted numbers. Commissioner Folger addressed the Alaska Wildlife Troopers on slide 18. He detailed that the detachments were structured similarly to the troopers. There were 97 wildlife troopers and 148 total in the division. The Wildlife Investigations Unit fell within the division and focused on the more serious wildlife crimes. He highlighted the Marine Section, which encompassed approximately 40 vessels (20-feet and greater) statewide. The Aircraft Section housed 44 aircrafts, which ranged from Super Cubs to twin-engine aircrafts. He noted that the Aircraft Section was one of the increment request areas stemming from the Helo-1 helicopter crash [in 2013] National Transportation Safety Board (NTSB) recommendations. Ms. Howell spoke to a budget comparison chart on slide 19 related to the Alaska Wildlife Troopers. The chart showed an overall increase in the wildlife trooper budget of $1.3 million, which was directly related to the request for funding to restructure the Aircraft Section. The request included 8 new permanent full-time civilian positions. She noted that Alaska Wildlife Trooper staff were available to answer questions on the increment request, NTSB findings, and the outcome of an external audit conducted on the Aircraft Section. Mr. Vrabec addressed Fire and Life Safety on slide 20. He noted that the state fire marshal and division director was available for questions. The unit included a Training and Education Bureau, a Life Safety Inspections Bureau, a Plans Review Bureau, and the Office of Rural Fire Protection. Some of the deputy fire marshals were located in different regions of the state and were responsible for the investigation of major crimes related to fire, homicides, or other. He noted that the division assisted other agencies and cities throughout the state on major investigations. Ms. Howell spoke to the Fire and Life Safety budget on slide 21, which included a slight reduction of $80,000 from FY 15. The decrease was related primarily to the reductions in overtime and other staff efficiencies. There were no changes to staff for the division. 2:59:31 PM Mr. Vrabec addressed Statewide Services on slide 22. He relayed that the division housed the APSIN, the Alaska Automated Fingerprint ID System, the Sex Offender and Child Kidnapper Registration, concealed handgun permits, and security guard and process server licensing. He relayed that in FY 14 the division had taken in over 3,100 individuals that registered with the unit as sex offenders, over 62,000 finger print cards, over 7,000 handgun permits, and other. Ms. Howell provided a budget snapshot for Statewide Services. There was a loss of one permanent full-time data processing manager position, which was currently vacant. Mr. Vrabec looked at the Scientific Crime Detection Lab on slide 24. The unit handled all submissions from all law enforcement in the state (the number had been over 1,000 in the past year). He elaborated that any city police department taking in evidence sent it to the laboratory in Anchorage. Ms. Howell spoke to the Scientific Crime Detection Lab budget on slide 25. She noted there was a loss of one permanent full-time forensic scientist position in the state crime lab. She elaborated that the position was vacant and focused on fire debris. Mr. Vrabec spoke to the Division of Administrative Services. The division handled finance, budget, human resources, grants management, procurement, and facilities management throughout the state (slide 26). Ms. Howell addressed the Division of Administrative Services budget on slide 27. The department was proposing the elimination of one permanent full-time position; the position was a vacant division operations manager position. Additionally, DPS proposed the deletion of two non- permanent positions, which were also vacant. Mr. Vrabec turned to the Alaska Fire Standards Council on slide 28. He noted the division director was present and available for questions. The division was working on the establishment of professional standards for fire service personnel; the employees conducted training and certifications throughout the state; he believed thousands of certificates had been issued in the past year. Ms. Howell communicated that there was a slight reduction for the Alaska Fire Standards Council (slide 29). Mr. Vrabec restated that there had been a very slight reduction in the Alaska Fire Standards Council. He addressed the Alaska Police Standards Council on slide 30. The council was responsible for certifying all police officers and Department of Corrections (DOC) officers in the state. There were approximately 3,000 active officers between DPS and DOC. The council also handled issues of misconduct when reported. Ms. Howell relayed that the Alaska Police Standards Council was funded entirely through interagency receipts; therefore, no reduction was proposed. 3:03:14 PM Mr. Vrabec addressed the CDVSA on slide 32. He relayed that the division director was present for any specific questions. The council coordinated domestic violence and sexual assault programs, built awareness, and provided shelter and education for those in need. Ms. Howell relayed that the department proposed an increase to the CDVSA budget of $1.4 million given the department's focus on core services and providing assistance to individuals impacted by domestic violence and sexual assault. The proposed funding correlated to the $1.5 million transferred from the governor's office as well as $367,000 for shelter services, which had been previously received through the Department of Health and Social Services. Ms. Howell spoke to a 10-year look back on slide 34 provided by the Legislative Finance Division (LFD). The slide showed the department's overall share of the state budget. Slide 35 included an LFD chart that focused on general funds only, which included the Alaska State Troopers budget component. She elaborated that the trooper's component also included the Alaska Wildlife Troopers. Slide 36 was also from LFD and included all fund sources by budget component. Co-Chair Neuman asked for an introduction of staff in the audience. Commissioner Folger introduced Colonel Jim Cockrell, Director, Division of Alaska State Troopers, Department of Public Safety and Lieutenant Rodney Dial, Alaska State Troopers, Department of Public Safety. Co-Chair Thompson asked if there had been an increase in the budget for VPSO firearm training. Ms. Howell replied in the negative. Co-Chair Thompson asked where the Cyber Crime Division was located within the department structure. Ms. Howell answered that the section was part of the Alaska Bureau of Investigations. Representative Gattis spoke to assistance-ready reports and response to alarms. She noted that residents in her district did not feel there was an adequate response to burglaries. She believed there should be follow up provided by troopers including finger printing and other. She wondered how it fit into the picture. Commissioner Folger replied that a specialized Burglary Suppression Unit that had been bolstered in the past year. He elaborated that the unit was very successful (in large part due to social media) and had a solve rate of approximately 88 percent. Co-Chair Neuman thought there were 900 calls per year from Mat-Su. He believed about 3 to 4 percent were actual responses annually in Mat-Su. He asked for detail. Ms. Howell deferred the question to Colonel Cockrell. Representative Gattis asked about the Aircraft Section and NTSB. She was not familiar with the NTSB and what the department had done differently to receive additional funding. 3:08:34 PM Commissioner Folger replied that the NTSB report had found some shortcomings. For example, it addressed at what point a pilot should be sent out. He believed the old thought was "you can go out, but you don't have to come back." The NTSB had made recommendations and the department had brought in an external auditor to review the maintenance and safety in the Aircraft Section. The recommendations would put personnel in place with a focus on safety. He stressed that aviation safety was paramount. Representative Gattis wondered about looking to the private sector for certain things (i.e. aircraft agencies, mechanics, and other). She believed it was a conversation to explore at a deeper level. Vice-Chair Saddler wondered how many state troopers were trained as pilots, how often they flew, and how much the department paid to keep pilots current on instruments. Commissioner Folger did not have the specific numbers on hand. He believed the number of Wildlife Trooper personnel who were pilots was around 40 to 50 percent. He elaborated that helicopters and King Air planes used civilian pilots. A minimum of 200 hours of flight time was needed for a citizen to get in the door; if the department advanced the pilot further along it took steps towards the instrument flight rules rating. Vice-Chair Saddler was interested to know how many of the troopers flew for the department. He recalled that when he had taken instrument training there were approximately 24 troopers in training. On a separate note, he pointed to a $1.4 million transferred to CDVSA from the governor's office (slide 33). He wondered if the funds were the transfer of the Choose Respect funds to CDVSA. Ms. Howell replied that the funding represented 50 percent of the $3 million originally within the governor's office for the prior administration's initiative related to domestic violence and sexual assault. Vice-Chair Saddler asked about the reason for the change. Ms. Howell answered that CDVSA was previously receiving a majority (if not all) of the funding through reimbursable services agreements (RSAs) through the governor's office. The transfer would put the funding within the CDVSA budget. 3:12:17 PM Vice-Chair Saddler remarked on the CDVSA performance measure associated with the number of shelter nights. He wondered about other measures showing how successful the council was at employing the funds. Ms. Howell replied that the department had many performance indicators showing the work done by CDVSA. She offered to provide the information and noted that Lauree Morton, Executive Director, Council on Domestic Violence and Sexual Assault, was present. Vice-Chair Saddler requested the data. Ms. Howell would follow up. Representative Wilson asked for an update on the patrol vessel Woldstad. Commissioner Folger replied that the original request for proposal (RFP) had different motors; there were currently newer motors available and an engineering report was underway to develop the RFP. Representative Kawasaki pointed to the pie chart on slide 9 and asked what the benefits were under the grants and benefits portion of the chart. Ms. Howell replied that the overall budget described the category as grants and benefits. She explained that the category related to grants the department issued out. Representative Kawasaki asked what the benefits portion referred to. He thought benefits should fall under personal services. Ms. Howell replied that it was not a benefit in terms of health insurance. She would follow up with details. Representative Kawasaki looked a description of significant operating changes on slide 11. He pointed to the proposed deletion of four long-term non-permanent troopers as well as 10 other trooper positions. He wondered if the deletions were reflected in the Alaska State Troopers budget on slide 15. Ms. Howell replied that the 5 VPSO support troopers were included in the VPSO budget component. She pointed to a reduction of 20 Alaska State Trooper positions on slide 15. She detailed that 16 of the positions were Bureau of Highway Patrol troopers, 3 were domestic violence and sexual assault follow up troopers, and 1 vacant captain position. She noted that the vacant captain position was not listed on the slide showing significant changes. 3:15:26 PM Representative Edgmon spoke to the transfer of the governor's office of $1.5 million. He wondered if the figure was part of the governor's 11 percent reduction. Co- Chair Neuman believed so. Representative Edgmon wondered what the actual reduction to the governor's budget would be without factoring in the $1.5 million increment. Co-Chair Neuman noted that the governor's budget had not yet been received. He suspected the $1.5 million would be included in the reduction. Co-Chair Thompson asked if the department had been looking at any revenue generating possibilities. He noted that the City of Fairbanks was only 35 square miles. He elaborated that individuals forfeited their vehicle to the city on their second or third DUI offence; the city held two auctions per year and brought in approximately $200,000. He reasoned that the troopers had more DUIs than the City of Fairbanks. Commissioner Folger replied that the department had discussed small fees related to background checks and other; it had not discussed potential revenue from DUI forfeiture vehicles. Co-Chair Neuman asked that what happened to guns and other items that were confiscated by the department. Commissioner Folger replied that currently seized firearms were held in inventory and catalogued. He believed the department currently had about 1,800 confiscated firearms. The department hoped to process the firearms for public sale or a trade. Co-Chair Neuman asked for clarification. Commissioner Folger elucidated that the trade would be with a firearm manufacturer. 3:17:56 PM Vice-Chair Saddler pointed to a $2 million increment on slide 13 related to rental assistance to victims. He asked about the ultimate source of the funding and wondered if the voucher program was authorized by law. Ms. Howell answered that the designated general funding source was from Permanent Fund Dividend felon funds. She did not believe the program was in statute, but she would follow up. Vice-Chair Saddler looked at the number of boating accident fatalities on slide 6. He wondered why the number had significantly decreased in the past year. Commissioner Folger replied that in the course of business the department checked fishing licenses, DUI boating patrols, and other; therefore, it had begun doing safety inspections as well. He elaborated that the state had taken over many of the U.S. Coast Guard functions (e.g. ensuring passengers had lifejackets). He reasoned that it only took one large boating accident to skew the numbers. He believed the department had made a difference in the field. He had instructed troopers to have no mercy when it came to writing tickets related to safety. Vice-Chair Saddler commented on the award winning Office of Boating Safety program under Department of Natural Resources. 3:20:11 PM Representative Guttenberg looked at the department's capital budget request on slide 13. He referred to an $850,000 increment for domestic violence and sexual assault intervention programs. He wondered if the increment was the same thing as APSIN. Ms. Howell replied in the negative. She elaborated that the capital budget increment was specifically related to allow the Municipality of Anchorage to continue a program holding domestic violence offenders accountable with swift sanctions. Whereas, APSIN was the criminal history repository for the state that contained criminal history records and information about individuals with warrants and other. Representative Guttenberg wondered if the old system was being replaced. Ms. Howell replied in the negative. She detailed that the service was provided by the Municipality of Anchorage with bridge funding from various entities to maintain services. The department had provided some grant funding to the municipality to continue the program. The increment would provide funding in the DPS budget to allow the program to continue. She clarified that it was not an information system. Representative Guttenberg wondered if APSIN was new. Ms. Howell replied in the negative. She detailed that the system had been in place for many years. 3:22:39 PM Representative Guttenberg asked if the department was upgrading the APSIN system. Ms. Howell replied that there was no increment request for APSIN. Co-Chair Thompson pointed to an $875,000 information network increment for DPS in the governor's supplemental budget. He wondered if the increment pertained to APSIN. Ms. Howell replied that the $875,000 was a capital appropriation the department had received a couple of years earlier. She explained that the funds were for transitional contractor support specific to APSIN. The department had requested the ability to use the funds for other information systems within DPS. She pointed to the Alaska Records Management System and the Traffic and Criminal software program as examples. The department relied on contractors to assist with the programs; the supplemental request would enable DPS to use the funds to support contractors working on other information systems within the department in addition to APSIN. Co-Chair Thompson surmised that the increment was a reappropriation. Ms. Howell replied in the affirmative. Co-Chair Neuman asked about the success rate of a fire suppression unit in Mat-Su. Commissioner Folger deferred the question to Colonel Cockrell. Co-Chair Neuman noted that the fire suppression work had been done internally through work with the community. COLONEL JIM COCKRELL, DIRECTOR, DIVISION OF ALASKA STATE TROOPERS, DEPARTMENT OF PUBLIC SAFETY, replied that approximately one year earlier the department had begun a Crime Suppression Unit in Mat-Su; it had assigned one sergeant and three troopers to focus primarily on property crime related to drug trafficking. He remarked that property crimes in Mat-Su, Fairbanks, and the Kenai Peninsula were mainly associated with illegal drug activity. He elaborated that the success rate had been phenomenal. He noted that the department had reduced its overall property crimes by 38 percent subsequent to the implementation of the specialized unit. He was proud of the work the troopers had done. Co-Chair Neuman pointed to a 90 percent success rate in the prosecution of property crimes. Colonel Cockrell replied that the unit had a positive working relationship with the District Attorney's Office. The department had associated the Property Crime Unit to the Drug Unit due to the interrelated nature of the crimes; therefore, property crimes had been solved and impressive drug arrests had been made. Co-Chair Neuman noted that the program had been successful in Mat-Su. 3:26:31 PM Representative Kawasaki noted that many municipalities had their own police. He noted that Fairbanks and the University of Alaska had their own police. He spoke to lean budget years and wondered about ways the university, the cities, and the troopers could work together. For instance, the city would have budget cuts, which meant more for the troopers. He wondered if calls to the troopers increased when cities made cuts. Colonel Cockrell could not correlate the relationship of reductions in cities. He detailed that anytime there were reductions to police forces the trooper call volume increased. He communicated that the troopers worked closely with many of the municipalities including Fairbanks; troopers worked cooperatively with the Fairbanks drug unit and had recently met with the Juneau and Ketchikan Police Departments to coordinate some of the drug activities. Additionally, the troopers partnered with the Drug Enforcement Agency on a taskforce and with the U.S. Marshal Service. He noted that the troopers had recently made the arrest of an escapee in Tok, which had been led by the Marshal Taskforce. The troopers did significant work with the Federal Bureau of Investigation and were currently helping the Anchorage Police Department with several homicides; the troopers believed some of the individuals were entering the Mat-Su Valley, therefore, it had assigned the Criminal Suppression Unit to the case as well. Mr. Vrabec added to Colonel Cockrell's answer. He used Fairbanks as an example and explained that when police departments (e.g. City of Fairbanks, state troopers, University police, North Pole police, and airport police) did not have a high number of staff they all partnered together to assist with calls. HB 72 was HEARD and HELD in committee for further consideration. HB 73 was HEARD and HELD in committee for further consideration. Co-Chair Neuman discussed the schedule for the following day.