SHES - 3/22/95 SB 121 APPROP: U OF A DEFERRED MAINTENANCE   Number 002 CHAIRMAN GREEN called the Senate Health, Education and Social Services (HESS) Committee to order at 9:04 a.m. and noted that in the interest of time the meeting would begin as a work session until a quorum arrived. She introduced SB 121 as the first order of business before the committee. WENDY REDMAN, Vice President for University Relations for the Statewide University of Alaska System, handed out information to the committee members regarding deferred maintenance. The deferred maintenance booklet is not specifically geared towards SB 121. She stated that the deferred maintenance problem currently totals $157 million. Number 045 CHAIRMAN GREEN noted that a quorum was present and the meeting was officially called to order. WENDY REDMAN felt that most would recognize the great need for repair and maintenance of all the state facilities. The University of Alaska (U of A) makes up approximately 50 percent of the state's facilities. She noted that 85 percent of the state facilities that are over 30 years old belong to U of A. She spoke to the following problems that have come up in dealing with this deferred maintenance problem. First, many people believe this is a Fairbanks problem which has created a problem in receiving funding in the past. The Fairbanks campus is the oldest campus in the system; Fairbanks contains 65 percent of all the facilities in the system although those facilities are spread throughout Alaska. She also pointed out that the Fairbanks campus has 92 percent of the facilities in the system that are over 20 years old. Ms. Redman stated that the second issue relates to the myth that this problem has been created due to the systematic mismanagement or a misappropriation of maintenance funds over time. That issue has been audited. She explained that in 1986, the university took a 20 percent budget cut. At that time, $1 million was taken from the operating maintenance budget at the Fairbanks campus in order to allow for the continuation of programs that had already begun. That $1 million was replaced the next year. She emphasized that there had been no movement of money from the operating maintenance accounts since that time. Ms. Redman explained that the operating maintenance budget was below the level of funding needed to stay ahead of this problem. She acknowledged that buying paint is unattractive for legislatures to fund. The Board of Regents passed a policy last year that requires each campus to reallocate existing funds in order to raise maintenance budgets up to the formula within a three year period. The Fairbanks campus did a reallocation of $2 1/2 million of existing funds to the maintenance funds this year. She pointed out that this reallocation takes money from other programs. She informed the committee that the Anchorage campus has approximately $40 million in deferred maintenance. Number 120 SENATOR LEMAN inquired as to her reference to the Anchorage campus; does that mean the campus itself or the entire Anchorage system? WENDY REDMAN explained that she was referring to the Anchorage system. Of the $40 million needed, $30 million would be needed for the Anchorage campus. She offered to provide a list of the exact projects that are necessary. SENATOR LEMAN asked if these maintenance projects would be contracted or would they be done by existing maintenance staff. WENDY REDMAN noted that would be a mix, but the majority of the maintenance would be contracted. Ms. Redman pointed out that almost all of the bidding would be local hire, within Alaska. SENATOR SALO asked if the student's of these campuses had the same priority list as the university. WENDY REDMAN recognized that the two would not perfectly match. Last year the package had $45 million in classroom facilities and $35 million in dormitory projects. Ms. Redman noted that system wide there is $35 million of housing maintenance needed. Student housing should be one of the university's highest priorities. Ms. Redman pointed out that some research facilities, which also generate income, are unavailable for use due to maintenance problems. SENATOR MILLER inquired as to how much of the requested $35 million would be used this summer. WENDY REDMAN specified that the bid ready projects for this summer would be approximately $7 million. Time for planning would be necessary. For example, many of the dorms have already been programmed for the summer with elder hostels and such. Number 195 SENATOR MILLER assumed that if the funding was approved before the end of the fiscal year, some maintenance projects could be done during the school year. Then by the next summer, the remainder of the $35 million would be planned for use. WENDY REDMAN said yes, the university hopes to be able to set up a planning fund with a portion of that $35 million in order to get projects bid ready. CHAIRMAN GREEN asked if there was a mix on locations. WENDY REDMAN directed the committee to page 9 of the deferred maintenance booklet which contained lists for residential and non-residential for a $75 million package. The $45 million non-residential is the highest priority of the non-residential project listed by site. CHAIRMAN GREEN asked if this amount of money would give the university a good chance at achieving the projects listed on page 9. WENDY REDMAN clarified that page 9 referred to a $75 million fund, therefore the $35 million fund of SB 121 would allow the achievement of at least half of the projects. Currently, there is not a detailed list of how the $35 million would be spent. SENATOR MILLER moved that SB 121 be moved out of committee with individual recommendations. Hearing no objections, it was so ordered.