HOUSE FINANCE COMMITTEE February 18, 1998 1:45 P.M. TAPE HFC 98 - 33, Side 1 TAPE HFC 98 - 33, Side 2 CALL TO ORDER Co-Chair Gene Therriault called the House Finance Committee meeting to order at 1:45 p.m. PRESENT Co-Chair Hanley Representative Kelly Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf ALSO PRESENT Senator Gary Wilken; Michael Morgan, Department of Education; Doug Green, Architect; Alaska Professional Design Council; Marc Wheeler, Southeast Alaska Conservation Council; Juanita Hensley, Legislative Liaison, Division of Motor Vehicles, Department of Public Safety; Anne Carpeneti, Assistant Attorney General, Legal Services Section, Criminal Division, Department of Law. SUMMARY HCR 24 Relating to the use of prototype designs in public school construction projects. CSHCR 24 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Education. HJR 53 Relating to support for federal legislation providing for the continuation of the University of Alaska by the conveyance of federal land to the university. HJR 53 was out of Committee with a "do pass" recommendation and with a zero fiscal note for the University of Alaska. HOUSE CONCURRENT RESOLUTION NO. 24 Relating to the use of prototype designs in public school construction projects. SENATOR GARY WILKEN testified in support of HCR 24. He noted that several schools were built in the Fairbanks School District using a prototypical design. The use of prototypical designs for elementary schools in the Fairbanks School District was successful. The Deferred Maintenance Task Force helped to investigate the use of prototypical schools. Senator Wilken explained that, under the legislation, three prototypical designs would be created for kindergarten to 6th or 8th grade schools. He questioned why the state of Alaska should build a school that houses 260 students for $28 million dollars in Kashunamiut when a school that houses 600 students can be built in Fairbanks for $9.9 million dollars. He suggested that the use of prototypical schools would allow more schools to be built. He pointed out that the use of prototypical schools would reduce maintenance costs. He stressed that prototypical components could be used in areas where a prototypical school is not feasible. Senator Wilker referred to remarks by Len Mackler, Director, Physical Plant Department, Fairbanks North Star Borough (FNSB) School District. He noted that Mr. Mackler indicated that some individuals do not support the legislation because it is a perceived threat to their industry. Mr. Macklin stated that prototypical schools take one year less to build, which saves one year of inflation costs. Architectural and engineering designs that used to cost 10 to 12 percent cost 5 percent for prototypical schools. Competitive bids are better for each new school. There are few change orders for prototypical schools. Each school is improved. Full advantage is taken of technical upgrades. Start up problems are minimal. Standardization of machine components has lowered the maintenance in the Fairbanks School District from approximately 18 to 10 percent. He stressed that the challenge is to produce a prototypical school that works so well that school districts will want to use the Alaska standard school. In response to a question by Co-Chair Therriault, Senator Wilken observed that all of the prototypical schools in the Fairbanks School District serve 600 students. The last school was built in 1997. Co-Chair Therriault noted that most Fairbanks schools could be built on flat land. He questioned if a standard school could be built in rural areas with geographical limitations. Senator Wilken thought that there would not be a problem. He observed that one prototypical school in Fairbanks was built on pilings. He noted that three designs would be developed to accommodate other areas of the State. He suggested that different roof designs may be present. He observed that rural schools, such as Buckland, would be smaller and easier to construct. He pointed out that components would be shipped to rural areas. In response to a question by Representative Martin, Senator Wilken did not think there was a downside to the proposal. He acknowledged that architects may see it as a threat to their livelihood. He emphasized that 11 schools could be built were 10 would have been previously. He acknowledged concerns regarding local involvement. He questioned if it is incumbent on the State to produce a monument to a particular town, city or village through its education system. He stated that he supports the one-percent for arts program and emphasized that art can reflect local involvement. In response to a question by Representative Davies, Senator Wilken stated that he did not object to the deletion of "elementary". He observed that some rural schools are K - 12th grades. Representative Davies noted that there is a proposed technical change to include a statutory citation for the Bond Reimbursement and Grant Review Committee. Senator Wilken spoke in favor of the proposed change. Co- Chair Therriault clarified that the Committee has prepared a proposed committee substitute that would incorporate both of the proposed changes discussed by Representative Davies. MIKE MORGAN, Facilities Manager, Department of Education acknowledged that prototypical schools result in design savings. He noted that when there is a limited contractor pool there are savings on construction and design costs. He acknowledged that adapting to varying climates and sites would be challenging. There are problems involving roofs and varying size requirements. Another challenge is the issue of varying educational programs. He observed that there are limitations in prototypical components. He emphasized that many of the proposed school capital projects are additions to existing schools. The Department of Education supports the legislation as a cost containment measure. He pointed out that there are other cost saving measures, which might be of benefit to explore. Representative Davies clarified that a set of prototypical designs would be developed to meet varying climatic conditions. Mr. Morgan noted that designs would be developed for regional differences and sizes. Different size gymnasiums and room configurations could be designed separately and attached to schools. Representative Davies expressed concern that there may be an effort to create a design that incorporates all possibilities. He noted that Fairbanks focused on building one school and augmented that design to create a prototypical design. He asked if the Department of Education could use the money that would be needed to build a particular school and augment it to create a prototypical design. Mr. Morgan observed that there is no reason a prototypical design could not be developed in conjunction with the construction of a particular school. Representative Mulder observed that several schools in the Northwest Arctic Borough School District have expressed a willingness to be the first test case. He emphasized that school districts will be expected to have a maintenance program in place. He asked if the March 15, 1998 report would include cost containment suggestions. Mr. Morgan stated that a number of cost containment ideas would be included in the report. The Legislature will be able to choose from a variety of options. He observed that British Columbia is containing costs by specifying allowable costs per square foot and requiring value analysis. DOUG GREEN, ARCHITECT, AMERICAN INSTITUTE OF ARCHITECTS AND THE ALASKA PROFESSIONAL DESIGN COUNCIL testified from Anchorage on HCR 24. He stated that most states that have attempted a prototypical design program for their school programs have not been successful. He spoke in support of standardized design components and emphasized their flexibility. He observed that classrooms, gymnasiums, locker configuration and mechanical systems could be designed as prototypical components. He expressed concern that it would be difficult to create a design that would meet a variety of conditions Mr. Green discussed liability. He observed concerns by major insurance companies. He observed that liability would be clouded if designs were modified by other architects or engineers that did not create the original design. An architect is liable for designs that he stamps. He encouraged the Committee to replace "prototypical" with "standardized design component". Co-Chair Therriault provided members with a proposed committee substitute (copy on file). He noted that the proposed committee substitute speaks to the identifying components within a prototypical design that can be standardized and incorporated into school designs when a prototypical design may not be appropriate. Multi-purpose rooms that would serve 50 - 100 students, such as gymnasiums and cafeterias, could be designed separately. Additional classrooms could be added later. Mr. Green emphasized that the use of "standardized design components" would not prevent the creation of a prototypical design composed of design components. In response to a question by Representative Davies, Mr. Green stated that he has attempted to secure the 1991, state of Georgia, Department of Education survey relating to use of prototypical designs in 49 states. He observed that the state of California had a law in the 1950's that required that all state owned buildings be conformed by their Office of Architec and Construction. Indiana mandated that elementary schools be built on a stock plan. He emphasized that many of the laws were implemented in the 1950's and 1960's and repealed in the 1970's. Representative Davies noted that the resolution is not a mandate to school districts. In response to a question by Representative Davies, Mr. Green stated that he was not aware of any insurance problems resulting from the use of prototypical designs in Fairbanks or Anchorage. He noted that the same firm that created the prototypical design replicated the design on different sites for the school district. Representative Davies observed that a primary architect reviews the design package and takes responsibility for implementation of the design at a particular site. Mr. Green noted that architects do not usually stamp a room design if it is not connected with a building project. Multiple room designs that can be utilized by another designer would not have to be stamped by the original designer. Representative Martin stressed that local school districts must be responsible for paying expenses above what the State feels is reasonable. Co-Chair Therriault pointed out that the resolution requests information from the Department of Education regarding incentives to lead school districts toward the use of prototypical designs. He stressed that the intent is to lead people to the concept and not punish them for doing something else. Co-Chair Therriault MOVED to ADOPT the proposed committee substitute. There being NO OBJECTION, it was so ordered. Co-Chair Therriault reviewed changes incorporated in the committee substitute. "State and" was added on page 1, line 12 of CSHCR 24 (STA) to reflect the fact that most schools are constructed with a combination of state and local funds. The resolves on page 2 were reordered. Language regarding prototypical schools was placed before language relating to components by moving lines 24 - 27 to line 19. The report date was moved from March 1, 1998 to March 15, 1998. Language referred to by Representative Davies was incorporated. Other changes reflect sentence structure. Representative Mulder MOVED to report CSHCR 24 (FIN) out of Committee with the accompanying fiscal note. CSHCR 24 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Education. HOUSE JOINT RESOLUTION NO. 53 Relating to support for federal legislation providing for the continuation of the University of Alaska by the conveyance of federal land to the university. Representative Kelly, Sponsor, noted that HJR 53 supports federal Senate Bill 660, by Senator Murkowski, which would convey 250,000 acres of federal land to the University of Alaska. (Tape Change, HFC 98 - 33, Side 2) Representative Kelly maintained that the state of Alaska received a smaller proportion of federal land for education than any other state. In 1913, the state of Alaska was granted 330,000 acres. Only approximately 110,000 acres were conveyed. He maintained that it is time to give the University of Alaska more money through land management. He asserted that the University has done a good job of managing their lands. Co-Chair Therriault pointed out that the state of Alaska would match the federal land grant, acre by acre. He observed that there is a possibility that another 250,000 acres could be traded for university land held in national parks. MARC WHEELER, SOUTHEAST ALASKA CONSERVATION COUNCIL (SEACC) testified in opposition to HJR 53. He provided members with a copy of his written testimony and a copy of SEACC's statement before the U.S. Senate Energy and Natural Resources Committee on September 11, 1997. He observed that SEACC is a coalition of fifteen local communities, volunteer conservation groups in twelve Southeast Alaska communities, from Ketchikan to Yakutat. Members include commercial fishermen, Native Alaskans, hunters and guides, tourism and recreation business owners, value-added wood product manufacturers, and Alaskans from all walks of life. He maintained that SEACC is dedicated to safeguarding the integrity of Southeast Alaska's unsurpassed natural environment while providing for balanced, sustainable use of our region's resources. He noted while SEACC supports adequate funding of the University of Alaska by the Alaska State Legislature that SEACC strongly opposes S.660. He stated that as amended by the Senate Energy Committee on September, 1997, S.660 would allow the University of Alaska to select at least 250,000 acres of National Forests and other federal land within Alaska that are not "conservation system units" (as defined in ANILCA (Public Law 96-487). These include National Parks, National Wildlife Refuges, National Monuments, and Wilderness Areas or Legislated LUD II areas protected by the Tongass Timber Reform Act of 1990 (TTRA). Up to 250,000 additional acres of National Forest and other federal land could be selected if matched by an equal acreage from State lands. Under this bill, half a million acres of public lands, including lands within the Tongass and Chugach National Forests, could be selected for clearcutting and other damaging uses. Mr. Wheeler asserted that the University has never acted as careful stewards because it has been forced to squeeze as much revenue from their lands as possible. He maintained that the University would select lands, which they can turn into fast cash. He alleged that the University would "target Tongass old-growth timberlands and level them as quickly as possible". He asserted that the University does not manage for multiple use, but instead manages "their lands much like private lands -- laying down massive clearcuts and exporting round logs, while placing the absolute minimum protections on fish and wildlife habitat." He noted that the University hired Wasser and Winters, an out-of-state firm, to log its timber holdings near Cape Yakataga. According to the Alaska Department of Labor, over 70 percent of Wasser and Winters' employees in 1995 were non-residents. Mr. Wheeler concluded that the legislation threatens all parts of the Tongass not permanently protected by Congress. He observed that 10 Southeast Alaskan communities and 2 tribal governments have gone on record opposing this legislation. Mr. Wheeler observed that the Morrill Act of 1862 created the land grant system of colleges and universities. This Act granted lands based on states' population, not size. Alaska ranks 48th in the size of federal land grants given for education. Alaska also ranks 49th in terms of population. The University currently holds roughly 140,000 acres of fee simple land and 173,326 acres of investment property in all. He maintained that "with this ample land grant and adequate funding from the State of Alaska, our University system should be able to provide quality education for all Alaskans". Co-Chair Therriault noted that the University's management has been in accordance with the state's Forest Practices Act. He maintained that the Forest Practices Act is considered to be the "Cadillac" of forest practices legislation. Mr. Wheeler replied that there are minimal buffers on fish streams and protections for wildlife habitat. He referred to helicopter logging operations in Ketchikan. In response to a question by Representative Davies, Mr. Wheeler acknowledged that the University of Alaska is not required to clear-cut lands. He asserted that "the University's land trust is required to manage for the benefit of that trust, which requires it to make the most money possible...their interpretation to that has been to clear cut and export to round logs to make the most money..." Representative Davies asked if Mr. Wheeler was maintaining that the University has never acted as a careful steward of their lands. Mr. Wheeler stated that he could only judge by the examples in Southeast Alaska. Representative Davies pointed out that in the University has entered into negotiated stakeholder processes with SEACC and other environmental communities on some Southeast operations. All parties agreed to the process that resulted. Mr. Wheeler maintained that the agreements were driven by the political realities of the time. He stressed that the legislation does not require the University to manage their lands in anyway that is more protective than the national forest. He stressed that the Tongass Plan has considerable improvements over fish and wildlife habitat protections. He maintained that these would be. Representative Davies ascertained that Mr. Wheeler had not read the Board of Regents policy with respect to public comment on land management that was adopted in 1997. He disagreed with Mr. Wheeler's assertion that the University is not a careful steward. He maintained that the University does not adopt clear cutting in a way that is inconsistent with the Forest Practices Act and careful stewardship. Representative Grussendorf expressed concern with logging operations by the University in Southeast Alaska. Representative Martin MOVED to report HJR 53 out of Committee with the accompanying fiscal note. Co-Chair Therriault noted that the House Finance Committee has submitted a zero fiscal note for the University of Alaska. He observed that the University supports a zero fiscal note. There being NO OBJECTION, it was so ordered. HJR 53 was out of Committee with a "do pass" recommendation and with a zero fiscal note for the University of Alaska. ADJOURNMENT The meeting adjourned at 2:45 p.m. House Finance Committee 1 2/18/98