HB 445-RURAL SCHOOL CONSTRUCTION PROGRAM  MR. DALE ANDERSON, staff to the House Finance Committee, sponsor of HB 445, gave the following explanation of the measure. The intent of HB 445 is to provide Alaska with the best value for the dollar. The bill has recently received broad support from the construction industry, and labor and design engineering entities. A copy of the list of supporters was placed in committee members' packets. HB 445 calls for a collaboration between communities and local school districts, using the priority list from the Department of Education and Early Development (DOEED) and state financing methodologies with private sector development techniques to achieve savings. This collaboration should enable the State to offer communities school facilities more quickly and less expensively. This bill was never intended to provide for sole source contracts. When Representatives debated that issue, he spoke to the drafter in the Division of Legal Services and was told that statutes must be written in the singular but, when interpreted, they apply to the plural. The House Finance Committee then prepared a committee substitute in the plural to clarify the fact that it did not want a sole source arrangement. In addition, when the qualifications were first written, the Committee thought they were quite broad. Industry representatives, however, interpreted them to be narrow so the bill was returned to the House Rules Committee from the House floor so that a meeting with industry representatives could be held. During that meeting, the industry representatives proposed other changes to the bill which were incorporated. The House Rules Committee members considered those changes to be a matter of semantics. The intent of the bill is to build more schools for less money. SENATOR WILKEN asked whether the terms, "a planned maintenance pilot program" on page 2, lines 6-7, and "facility maintenance plan" on page 3, line 1, are defined anywhere. MR. ANDERSON explained those terms were included in the bill to ensure that when new buildings are constructed, maintenance is part of the plan. HB 334 asks DOEED, when it produces a request for proposals (RFP), to include maintenance as a component. When an entity responds to the RFP, the proposal should contain an extended date beyond the date of completion, perhaps three to five years. Ideally, the proposal would include maintenance training for local people so that they know what to do and when. SENATOR WILKEN asked if, for example, ACME Architects and Construction built the school, ACME Maintenance would then maintain the building for a period of time which would take care of any warranty work through the design-build process and get the district trained to keep it up. MR. ANDERSON replied it would. He did not know whether Acme Maintenance would be responsible for the monetary part of the maintenance but it would be involved in the training. An entity responding to the RFP would include those details in a proposal. SENATOR WILKEN referred to the RFP components listed on page 2 and asked if the sponsor would be agreeable to adding another component that speaks to prototype opportunities. MR. ANDERSON said prototype opportunities would fall under item (2), design methodologies, on page 2, line 23. SENATOR WILKEN suggested rewording item (2) to say, "design methodologies including prototype opportunities." MR. ANDERSON said he did not think the sponsor would have a problem with that but he did not know that he wanted to tie the RFP to a demand that it be a prototype. If a respondent showed that a prototype was better, that would be the way to go. SENATOR WILKEN commented if the State continues to do things the way it has been without considering ways to do better, we will continue to get the same things. If the RFP asks respondents to consider prototypes and the prototype is an improvement it should be proposed. SENATOR WILKEN moved to adopt a conceptual amendment to add the words "including prototype opportunities" on page 2, line 23. SENATOR ELTON objected and stated if the bill is amended, it will have to go back to the other house for concurrence. Second, the amendment will narrow the RFP process in a manner that constricts the ability of the respondent to determine which may be best. CHAIRMAN MILLER suggested adding prototype opportunities as a new item (7) which would require respondents to consider them. He noted that prototype schools will not work in all areas so adding item (7) will ask respondents to look at the possibility but it will not require anything more than that. SENATOR WILKEN withdrew his motion and said he would talk to DOEED officials to see if there is another way to approach his concern. MR. ANDERSON agreed that to change the bill at this late date would be dangerous. SENATOR WILKEN noted that no REAAs have supported this bill. MR. ANDERSON replied he has received responses from two REAAs; one was favorable, the other was unsure of the bill. MS. SHARON MACKLIN, representing the Alaska Professional Design Council (APDC), stated support for CSHB 445(RLS)am. She worked with Representative Mulder's staff and participated at the last meeting. APDC appreciates the change made on page 2, lines 14-16, which allows one school or up to two-thirds of the school projects to be constructed under the pilot program. APDC also felt it was important to require an evaluation process in the bill so that the State could find out if this approach saves money. Regarding the issue of prototype schools and components, APDC feels that components, such as gymnasiums, may work in certain areas. MR. ANDERSON pointed out that the design phase is complete for all of the schools on DOE&ED's list so the bill speaks to using existing plans rather than starting over. CHAIRMAN MILLER noted the bill could address future projects. MR. EDDY JEANS, School Finance and Facilities Section manager, DOE&ED, informed committee members that DOE&ED worked with Representative Mulder's staff during the preliminary stages of the bill. He pointed out that CSHB 445(RLS)am requires DOE&ED to issue one RFP for school construction in REAAs that are funded in fiscal year 2001. This is a pilot project. The bidders can bid on one or more projects but they cannot be awarded more than two-thirds of the total projects funded. It is DOE&ED's understanding that if the bid proposals do not show a savings over the projected costs or funding levels of the projects, DOE&ED may use the current process used to construct new schools. The existing projects to be funded for FY 2001 have all been through the design stage so the discussion about prototype schools is moot at this point. He offered to answer questions. SENATOR WILKEN asked Mr. Jeans to discuss his concept of the maintenance component of the pilot program. MR. JEANS said DOE&ED's understanding is that it will write into the RFP a three-year maintenance training plan so that the successful bidder will develop a maintenance plan and provide training to the district staff and do periodic inspections for a three-year period. SENATOR WILKEN asked if that would be in conjunction with or replace a former requirement for a preventive maintenance program. MR. JEANS said he believes the three-year maintenance plan will enhance it. Right now contractors turn over the keys when the building is complete. SENATOR WILKEN referred to the two-thirds number in the bill and asked how that will apply if five projects are considered. MR. JEANS thought three projects could be completed. SENATOR WILKEN asked Mr. Jeans his opinion of adding a new item (7) which would refer to prototype opportunities. MR. JEANS answered that all of the schools have been through the design phase so he does not see the benefit of adding prototypes at this point. SENATOR WILKEN commented if this pilot project is a success and it is done again, he will consider it then. CHAIRMAN MILLER asked if DOE&ED supports the concepts in CSHB 445(RLS)am. MR. JEANS replied DOE&ED supports the concepts. When he started working with Representative Mulder's staff on this concept, they talked about a much larger program. The concept interested him because he was looking at the economies of scale. He is not sure however, that efficiencies will be gained with fewer projects and different bidders. CHAIRMAN MILLER noted that efficiencies will be gained for the local school districts if they know how to maintain the new school. MR. JEANS said that is correct but one efficiency he was referring to was a developer being able to coordinate the purchase of mechanical equipment. There being no further testimony, SENATOR WILKEN moved CSHB 445(RLS)am from committee with individual recommendations and its attached zero fiscal note. There being no objection, the motion carried.