HOUSE FINANCE COMMITTEE February 12, 2003 2:36 PM TAPE HFC 03 - 18, Side A TAPE HFC 03 - 18, Side B CALL TO ORDER Co-Chair Harris called the House Finance Committee meeting to order at 2:36 PM. MEMBERS PRESENT Representative John Harris, Co-Chair Representative Bill Williams, Co-Chair Representative Kevin Meyer, Vice-Chair Representative Eric Croft Representative Richard Foster Representative Mike Hawker Representative Reggie Joule Representative Carl Moses Representative Gary Stevens Representative Bill Stoltze Representative Jim Whitaker MEMBERS ABSENT None ALSO PRESENT Tom Irwin, Commissioner, Department of Natural Resources; Kevin Jardell, Assistant Commissioner, Department of Administration; Dan Spencer, Director, Division of Administrative Services, Department of Administration; GENERAL SUBJECT(S): The following overview was taken in log note format. Tapes and handouts will be on file with the House Finance Committee through the 23rd Legislative Session, contact 465- 2156. After the 23rd Legislative Session they will be available through the Legislative Library at 465-3808.   LOG SPEAKER DISCUSSION   DEPARTMENT OF NATURAL RESOURCES  000 TOM IRWIN, Introduced staff.  COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES 051 Commissioner Irwin Expressed support for the Governor's  policies. Emphasized the need for a vital healthy resource economy to generate new wealth.  249 Commissioner Irwin The mission is to develop, conserve, and maximize the use of Alaska's natural resources consistent with the public interest.  330 Commissioner Irwin Noted that there are seven divisions in the Department of Natural Resources.  422 Commissioner Irwin Discussed the issue of investment vs. spending. Net present value will be considered in order to set priorities.  513 Commissioner Irwin Stressed the obligation to do the correct thing for the State. If we are not spending money, we must be sure that we are investing in the State.  613 Commissioner Irwin Maintained that the Department would be run with integrity and honesty. He stressed that they will operated professionally with teamwork.  819 Commissioner Irwin Complimented the legislature for it's work on missions and measures and emphasized that priorities with sound business judgment allows a mark to be set.  935 Commissioner Irwin Acknowledged the fiscal climate but emphasized the need to "do it right".  1028 Co-Chair Harris Observed that part of the political debate revolved around park closures. He questioned if the intent is to manage the budget in order to keep all parks open.  1116 Commissioner Irwin Responded that the parks have been prioritized. They are also looking at the use of volunteers. He acknowledged that 80 percent of the visitors are Alaskans. He explained that savings do not occur from closing random unconnected parks because regional rangers cannot be deleted. The Department is looking into the issue.  1325 Co-Chair Harris Stated his support for keeping all parks open regardless of what means are used.  1400 Co-Chair Harris Referred to the Division of Agriculture and expressed concern that the Division would become irrelevant if combined with another division.  1507 Commissioner Irwin Clarified that he had reviewed the audit and has received opposing opinions. He noted that he would be in Anchorage to meet on the issue February 14.  1616 Representative Commended the Department's missions and Stevens measures. He referred to the transfer of  other divisions to the Department.  1720 Commissioner Irwin He stressed that the best of the best from fish and game, habitat, law and other areas in DNR have meet on the issue of making permitting more efficient. He qualified his remarks with the fact that he cares about the environment. The goal is for consistency and efficiency.  1910 Commissioner Irwin Observed that research is coming in with the Division of Habitat. Referred to the Division of Governmental Coordination and emphasized that it is the start of a lot intensive hard work with a lot of good people.  2030 Commissioner Irwin The intent is to make the system work for the people of Alaska.  2048 Representative Questioned asked if the executive branch Stoltze is committed to RS 2477.  2122 Commissioner Irwin Stressed that the State has the right to lands and will work to ensure it.  2203 Representative Expressed support for the commissioner.  Whitaker 2336 Representative Joule Questioned if the voice of the rural community would be diminished by the changes incorporated in the Governor's Executive Order.  2442 Commissioner Irwin Assured him that the voices would be heard. The Governor has had representatives in the northern region. The EO transferring the Coastal Zone Management Program was critical for efficiency. He maintained that the transfer brings efficiencies.  2546 Representative Joule Referred to the Economic summit in the North Slope Borough and Northwest Arctic Borough. He emphasized that economic development would play a large role.  2647 Commissioner Irwin Related that it is important that he be part of the communication.  2733 Commissioner Irwin Spoke in support of pursuing mining projects.  2807 Co-Chair Harris Emphasized the importance of projects that put rural Alaskans to work. He referred to the Division of Forestry, any idea what the Division would do to enhance forest products.  2843 Commissioner Irwin Acknowledged that jobs have been lost in the forest industry. He stated that he would focus on longer contracts (10 years) to allow return on capital investments. Spoke to the Tongass National Forest.  DEPARTMENT OF ADMINISTRATION  3126 KEVIN JARDELL, Introduced Department staff. He observed ASSISTANT that the Department of Administration is COMMISSIONER, a collection point for agencies that have DEPARTMENT OF no other place.  ADMINISTRATION 3306 Mr. Jardell Noted that the Department provides services to other state agencies and the public and serves as the administrative arm for a number of different commissions and offices.  3407 Mr. Jardell Noted that there are 1,400 full-time employees and the FY 03 budget was over $300 million, with 20 separate funding sources, have of which is general fund. He discussed the eclectic role of the Department.  3439 DAN SPENCER, Reviewed functions of the Department. He DIRECTOR, DIVISION observed that the majority of non- OF ADMINISTRATIVE permanent staff is in the pioneer homes. SERVICES, DEPARTMENT He added that the Division of Motor OF ADMINISTRATION Vehicles has offices all over the State.  3705 Mr. Spencer Observed that there are a number of entities under the Department, which provide direct public services. There are also services that apply to state agencies, but also provided public services such as the Information Technology group and the Division of Retirement and Benefits.  3833 Mr. Spencer Observed that the Department also runs the state of Alaska's finances and labor relations and provides centralized recruitment.  3904 Mr. Spencer Discussed the Division of Risk Management.  3941 Co-Chair Williams Asked what has occurred on the wide area network and the increase in charges to state agencies.  4039 Mr. Spencer Explained that the issue involves a partnership with ACS. Alaska is the first state to take all of its telecommunication needs to a private vendor. There is a one-year implementation period. It is a complicated operation, which involves bringing multiple vendor billings under one roof.  4154 Co-Chair Harris Referred to the information technology system. He questioned if a lease would be offered for a new proposal.  4348 Mr. Spencer Explained that $600 thousand was  appropriated in the previous year for an evaluation and needs assessment for replacement options for payroll system. The Department expects an evaluation of the various options and policy choices by July 1, 2003.  4439 Representative Referred to rising health care costs.  Stoltze 4520 Mr. Spencer Noted that health care costs are part of the contract negotiations.  4621 Representative Referred to the privatization of the Stoltze Division of Motor Vehicles (DMV) and questioned if more would be done.  4648 Mr. Jardell Noted that the Commissioner has directed staff to identify efficiencies.    TAPE HFC 03 - 18,  Side B  4652 Mr. Jardell Continued discussions on efficiency in the DMV.  4633 Representative Noted that the State owns a number of Stoltze buildings and questioned if there were sufficient space to relocate the legislature  4620 Mr. Jardell Could not answer the question.  4607 Representative Joule Observed that there is a DMV office in Kotzebue and questioned if there are contract offices in other rural areas.  4537 Mr. Spencer Responded that there are other organizations that contract with the State, but could not answer with specifics.  4527 Representative Joule Observed that cuts are being proposed and questioned if they have discussed reductions to public broadcasting.  4404 Mr. Jardell Responded that the instructions are to evaluate programs. Everything is being looked at. The importance of broadcasting to rural Alaska will be considered. Nothing is completely off the table.  4318 Representative Joule Pointed out that cuts have already occurred. Stressed that Alaskans pay a large portion of their way in regards to public broadcasting.  4231 Representative Referred to the health of the retirement Stevens system.  4121 Mr. Spencer Acknowledged that employer contributions have increased. There is a normal adjustment based on the actuarial. The goal is to have the programs funded 100 percent.  4029 Representative Noted that the situation is partially out Stevens of the state of Alaska's control due to  the health of the stock market.   ADJOURNMENT The meeting was adjourned at 3:35 PM