HOUSE STATE AFFAIRS STANDING COMMITTEE February 21, 1998 10:05 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Ivan M. Ivan, Vice Chairman Representative Ethan Berkowitz Representative Fred Dyson Representative Kim Elton Representative Mark Hodgins Representative Al Vezey MEMBERS ABSENT All members present COMMITTEE CALENDAR CONFIRMATION HEARING: Personnel Board Charles H. Parr - Fairbanks - CONFIRMATION ADVANCED HOUSE BILL NO. 313 "An Act relating to preventive maintenance programs required for certain state grants; and providing for an effective date." - MOVED CSHB 313(STA) OUT OF COMMITTEE CONFIRMATION HEARINGS: Alaska Public Offices Commission Philip R. Volland - Anchorage - CONFIRMATION ADVANCED State Commission for Human Rights Ruth Gronlid Benson - Fairbanks - CONFIRMATION ADVANCED Alaska Public Offices Commission Kathleen Harrington - Anchorage - CONFORMATION ADVANCED Select Committee on Legislative Ethics Dennis E. "Skip" Cook - Fairbanks - CONFIRMATION ADVANCED HOUSE BILL NO. 315 "An Act relating to operating appropriations for annual maintenance and repair and periodic renewal and replacement of public buildings and facilities; and providing for an effective date." - MOVED CSHB 315(STA) OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 313 SHORT TITLE: PREVENTATIVE MAINTENANCE REQUIREMENT SPONSOR(S): RULES BY REQUEST OF DMT Jrn-Date Jrn-Page Action 1/12/98 2026 (H) READ THE FIRST TIME - REFERRAL(S) 1/12/98 2026 (H) STATE AFFAIRS, FINANCE 2/05/98 (H) STA AT 8:00 AM CAPITOL 102 2/05/98 (H) MINUTE(STA) 2/07/98 (H) STA AT 10:00 AM CAPITOL 102 2/07/98 (H) MINUTE(STA) 2/17/98 (H) STA AT 8:00 AM CAPITOL 102 2/17/98 (H) MINUTE(STA) 2/21/98 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 315 SHORT TITLE: OPERATING APPROPRIATIONS FOR MAINTENANCE SPONSOR(S): RULES BY REQUEST OF DMT Jrn-Date Jrn-Page Action 1/12/98 2027 (H) READ THE FIRST TIME - REFERRAL(S) 1/12/98 2027 (H) STATE AFFAIRS, FINANCE 2/05/98 (H) STA AT 8:00 AM CAPITOL 102 2/05/98 (H) MINUTE(STA) 2/07/98 (H) STA AT 10:00 AM CAPITOL 102 2/07/98 (H) MINUTE(STA) 2/17/98 (H) STA AT 8:00 AM CAPITOL 102 2/17/98 (H) MINUTE(STA) 2/21/98 (H) STA AT 10:00 AM CAPITOL 102 WITNESS REGISTER CHARLES PARR, Appointee to the Personnel Board 909 John Kalinas Road Fairbanks, Alaska 99712 Telephone: (Not provided) POSITION STATEMENT: Answered questions pertaining to his appointment to the Personnel Board. DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99801 Telephone: (907) 465-2647 POSITION STATEMENT: Provided sponsor statements for HB 313 and HB 315. MICHAEL MORGAN, PMP Manager Facilities Section Education Support Services Department of Education 801 West 10th Street, Suite 200 Juneau, Alaska 99801-1894 Telephone: (907) 465-1858 POSITION STATEMENT: Provided testimony on HB 313. PHILIP R. VOLLAND, Appointee to the Alaska Public Offices Commission 211 "H" Street Anchorage, Alaska 99501 Telephone: (Not provided) POSITION STATEMENT: Answered questions as appointee to the Alaska Public Offices Commission. RUTH GRONLID BENSON, Appointee to the State Commission for Human Rights (Address not provided) Telephone: (Not provided) POSITION STATEMENT: Answered questions as appointee to the State Commission for Human Rights. KATHLEEN HARRINGTON, Appointee to the Alaska Public Offices Commission Gotthard Avenue, Suite 1242 Anchorage, Alaska 99508 Telephone: (907) 561-8654 POSITION STATEMENT: Answered questions as appointee to the Alaska Public Offices Commission. DENNIS E. "SKIP" COOK, Appointee to the Select Committee on Legislative Ethics 431 Birch Hill Road Fairbanks, Alaska 99712 Telephone: (907) 456-6994 POSITION STATEMENT: Answered questions as appointee to the Select Committee on Legislative Ethics. JACK KREINHEDER, Senior Policy Analyst Office of Management and Budget Office of the Governor P.O. Box 110020 Juneau, Alaska 99811-0020 Telephone: (907) 465-4676 POSITION STATEMENT: Answered questions on HB 315. ACTION NARRATIVE TAPE 98-21, SIDE A Number 0001 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 10:05 a.m. Members present at the call to order were Representatives James, Dyson, Hodgins, Ivan and Vezey. Representatives Elton, and Berkowitz arrived at 10:06 a.m. and 10:09 a.m., respectively. CONFIRMATION HEARING Personnel Board CHAIR JAMES announced the first order of business was the confirmation hearing of Charles Parr to the Personnel Board. CHAIR JAMES asked Mr. Parr to give a brief statement of his qualifications and why he would like to be appointed to the board. Number 0094 CHARLES PARR, Appointee to the Personnel Board, stated that as far as qualifications are concerned, the committee members have a copy of his resume that shows his service to the state. The Personnel Board is important for people who have problems with the personnel system. It is for a final recourse while at the same time it protects the interest of the state and tax payers. He said he believes he can do the job. CHAIR JAMES called for a motion to move Charles Parr's nomination to the Personnel Board forward. Number 0201 REPRESENTATIVE AL VEZEY made a motion to move the nomination of Charles Parr to the state Personnel Board to the floor of the House of Representatives for consideration by the full body. There being no objection, it was so ordered. CHAIR JAMES called for a brief at ease at 10:09 a.m. She called the meeting back to order at 10:10 a.m. HB 313 - PREVENTATIVE MAINTENANCE REQUIREMENT CHAIR JAMES announced the next order of business would be HB 313, "An Act relating to preventive maintenance programs required for certain state grants; and providing for an effective date." CHAIR JAMES called on Dennis DeWitt, staff to Representative Eldon Mulder, sponsor of the bill. Number 0327 DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder, Alaska State Legislature, stated last year he served as the chief of staff for the Deferred Maintenance Task Force. House Bill 313 is an attempt to ensure the entities that receive a capital grant or financing have reasonable preventative maintenance programs in place prior to receiving funds from the legislature. The task force found that there are a significant number of facilities built by municipalities, for example, with state funds that are not being cared for. The same facilities are being presented back to the legislature regularly for funds for improvements. The language in HB 313 is consistent with language in HB 312, a bill that the House State Affairs Committee passed out of committee last week. MR. DeWITT further stated there is a proposed committee substitute for HB 313, Version 0-LS1217\F, Cook, dated 2/9/98. The most significant change is the effective date from July 1, 1998, to July 1, 1999. It would give recipients a little over a year to get their maintenance programs in order. The bill considers most of the requests from the Department of Education. The department suggested using the language "building" instead of "all buildings" to allow for flexibility and to not include sheds and other kinds of buildings. CHAIR JAMES asked for a motion to adopt the proposed committee substitute. Number 0620 REPRESENTATIVE FRED DYSON made a motion to adopt the proposed committee substitute for HB 313, Version 0-LS1217\F, Cook, dated 2/9/98. There being no objection, the committee substitute was adopted. Number 0642 REPRESENTATIVE KIM ELTON asked Mr. DeWitt whether there were any recommendations from the Department of Education that were not adopted. Number 0660 MR. DeWITT replied, "Yes." He said the recommendation to match Section 37.05.315, 316 and 317 with Section 37.06.010 and 37.06.020 was considered redundant and not necessary. The request to move eligibility considerations to the ranking arena was considered a policy call (Section 14.11.011 to 14.11.013(b)). In other words, should a preventative maintenance program be a prerequisite or considered lower in the process. Number 0850 MICHAEL MORGAN, PMP Manager, Facilities Section, Education Support Services, Department of Education, stated Section 14.11.011 has a requirement for a preventative maintenance program for school districts. It is considered an eligibility requirement. The department suggested the requirement move to the scoring arena because of the additional requirements to allow for a judgement on the full range of the implementation of a program. Number 0886 REPRESENTATIVE ELTON asked Mr. Morgan whether there is already a requirement in place for a maintenance program. MR. MORGAN replied there is a statutory requirement for school districts to have a preventative maintenance program in place. REPRESENTATIVE ELTON asked Mr. Morgan whether that makes this redundant. MR. MORGAN replied not exactly. This expands the scope of what is required within the preventative maintenance program. It requires it to be a formal program. It includes a renewal replacement schedule for components of facilities and adds energy management - two very big issues. Number 0955 REPRESENTATIVE ETHAN BERKOWITZ stated the term "preventative maintenance" is not defined anywhere in statute. MR. MORGAN stated he thinks there is a statutory definition. If there isn't a statutory definition, there is a regulatory definition. REPRESENTATIVE BERKOWITZ stated the term "regular maintenance" is defined to protect the school's structure. Number 1033 REPRESENTATIVE BERKOWITZ asked whether the language "evidence acceptable" in the bill is acceptable to the department. Anytime there is a requirement like that without a standard, it can vary depending on the individuals involved. Number 1060 MR. DeWITT replied that is true. It doesn't really matter how tight the language is because there will be some difference from person-to-person. The extent of its preciseness is a regulatory definition. The folks that reviewed the bill from the Department of Military and Veterans Affairs think it is consistent with the kinds of programs recognized by maintenance professionals and are comfortable with the requirement. Number 1100 REPRESENTATIVE BERKOWITZ stated, "The question I have would be like telling the jury, 'Well, if the evidence is acceptable to you, you can convict.'" That is not an implementation of a standard to provide a good direction. Number 1117 REPRESENTATIVE DYSON stated he has spent half of his life as a maintenance engineer. There couldn't be a standard drawn tight enough to satisfy what Representative Berkowitz is after and have it be applicable to the incredible range of facilities out there. It is a shame that it is even necessary. Any professional manager of any facility that has a sense of responsibility ought to be doing these sorts of things. REPRESENTATIVE DYSON asked Mr. Morgan what is currently being done now to audit the present statutory conformance. Number 1270 MR. MORGAN replied currently school districts submit to the Department of Education on a yearly basis requests for capital projects on existing facilities. They have to inform the department of any preventative maintenance programs and how they have been implemented. They also have to demonstrate their effectiveness. The department then evaluates the full range of information presented. REPRESENTATIVE DYSON asked Mr. Morgan whether the department is auditing the paper trail and not the actual facility on the ground. MR. MORGAN replied, "Yes." REPRESENTATIVE DYSON asked Mr. Morgan whether the department has considered the energy management required in the bill. MR. MORGAN replied the department has not throughly considered how it may be implemented. Number 1357 REPRESENTATIVE DYSON stated that as the legislature goes forward with deferred maintenance and transfers huge amounts of cash, he is sure that it will be rewarding communities that are doing a poor job. It is a public policy dilemma. He asked Mr. DeWitt whether the issue was discussed in the task force. Number 1400 MR. DeWITT replied, "You hit the toughest issue that the task force tried to grapple with right on the head." The task force ultimately decided that there should be some punishment for schools in bad shape and some reward for schools in good shape, but the people who suffer are the kids, not the people who make the mistakes. In terms of public buildings, there is enough finger pointing and blame to go around between the administration, legislature, and everybody who is part of the problem. The task force decided that the best thing to do is to try to put these things into place so that we don't have to revisit them. Number 1475 REPRESENTATIVE DYSON stated fire is still one of the scourges of the Arctic and sub-Arctic. He asked whether there should be a requirement for a fire prevention/suppression plan. Number 1503 MR. MORGAN replied the state fire marshall about one and a half years ago passed emergency regulations requiring a sprinkler system in all schools. Thus, any new school or one undergoing renovation needs a sprinkler system in order to get the plan approved by the state fire marshall. Number 1535 REPRESENTATIVE VEZEY asked Mr. Morgan whether the requirements under Section 14.11.011 are working. MR. MORGAN replied they appear to be working. He said he has seen an improvement in the plans offered and an incremental process in the evidence to show that the school districts are doing a better job. Number 1568 REPRESENTATIVE VEZEY stated the objective is for better public facilities, not a better process. Are we or are we not doing a better job? Are we or are we not doing a good job under the existing statute in maintaining our facilities? MR. MORGAN replied in many instances we could be doing a better job. REPRESENTATIVE VEZEY stated one of the proposed changes results in better public facilities. MR. MORGAN stated over the long term they will. REPRESENTATIVE VEZEY asked Mr. Morgan how is that. MR. MORGAN replied primarily because of (B) on page 2, line 21 of the bill. It starts to address the full range of the components of a building. Typically, people think of the mechanical side of deferred maintenance such as motors and pumps. Subsection (B) asks people to consider the mechanical systems, as well as the walls, floors, roofs, interiors and exteriors, for example. It asks for preventative maintenance on the full range of the components and because many of those components have been left out of traditional preventative maintenance programs it should help in the long run. REPRESENTATIVE VEZEY asked Mr. Morgan whether it would help prevent some of the major problems. MR. MORGAN replied that's correct. Maintenance problems would be caught before becoming too aggravated. He cited a leaky roof as an example. REPRESENTATIVE VEZEY asked Mr. Morgan whether he is saying there needs to be more resources put into maintenance. There is a big difference between studying it and doing it. The only thing that he has seen come from the task force is setting a new record for studying the problem. He has not seen any commitment to fix a single thing. Representative Vezey said, "If we're going to write a directive that's going to improve maintenance, let's not direct it at the people who are trying to do the maintenance. From my experience traveling all over the state, there are some pretty competent people working at these facilities, and given the resources they would do an incredible job and know when to ask for help when they need it. But, what about the school boards and the legislature and the municipal assemblies that act to provide the means to do this. Are we giving them guidelines? Are we giving them mandates? It just doesn't do any good to berate the facility's manager because he works out of the budget." MR. MORGAN agreed one of the problems with the maintenance issue is funding. Number 1772 REPRESENTATIVE VEZEY asked how this ties into the proposal for a prototypical design. Number 1784 MR. DeWITT replied a prototypical design is getting a quality facility that is easier to maintain including implementation of a maintenance program. Number 1814 CHAIR JAMES stated one method to make maintenance easier is the choice of components that go into a school. In other words, the components should be uniform and the parts should be available in the state. In addition, there is a problem because some schools are owned by boroughs and some schools are owned by the state. She believes, personally, that the legislature has a bigger responsibility for the schools owned by the state. The legislature, therefore, has the authority to require components that work well for a better overall plan. Number 1892 REPRESENTATIVE VEZEY stated he doesn't understand requiring a plan for a prototypical design when there isn't anything in the bill that mandates the authority to fund a maintenance program. Number 1916 MR. DeWITT stated HB 315, addresses the issue of accomplishing what Representative Vezey is driving at - operating appropriations for maintenance. The task force heard a lot about whether or not the legislature intends for the money that it has appropriated to be used for building maintenance or program implementation. An administrator can look at the money and decide where to spend it. Number 1968 CHAIR JAMES stated the same amount of money under the foundation formula for maintenance has been given to the bush schools. Some are doing a good job while some are not. There is the issue of making sure that schools focus on maintenance. In addition, there has been a suggestion for a line-item in the budget on maintenance. She agrees that there is no point in putting in a plan if it is not funded. Number 2011 REPRESENTATIVE IVAN M. IVAN asked whether the department provides technical guidance for the folks in the Rural Education Attendance Areas (REAAs). He said he doesn't believe that they should not have a preventative maintenance program in place. Number 2064 MR. MORGAN replied the department published a handbook on preventative maintenance last year. The department also forwards the best programs to requesters for ideas to improve their own programs. Number 2102 REPRESENTATIVE IVAN asked Mr. Morgan whether a program gets funded if the department doesn't agree with its preventative maintenance plan. MR. MORGAN replied currently that is not the case. There are two aspects involved - a statutory requirement for a preventative maintenance program in order to be eligible for funding, and a ranking based on effectiveness. Thus, if there is a program but it is not very effective, it means it might not be ranked as high as a program that is very effective. Number 2133 REPRESENTATIVE IVAN asked whether the proposed committee substitute caps the matching grant program. MR. DeWITT replied, "Yes." REPRESENTATIVE IVAN stated he doesn't have a problem with that. It has worked well in his community. The blueprints and building plans have to be reviewed by the fire marshall. Number 2155 REPRESENTATIVE DYSON stated there are a limited number of tools and he sees the bill as a precondition as a good steward for a new facility. Number 2206 REPRESENTATIVE ELTON asked, for clarification, whether Sections 2 and 3 refer to capital grant programs. Number 2227 MR. DeWITT replied, "Correct." The bill requires the same from grants made to municipalities, not just schools. The task force found that there are a lot of municipalities that get facilities through state grants that are coming back to the legislature for repairs and maintenance. The intent is for a broad coverage so that when state funds go out, they go to folks who have a commitment to maintain facilities to save money over the long term. Number 2266 REPRESENTATIVE VEZEY wondered how the bill would apply to an obsolescent facility. Number 2284 MR. DeWITT replied the notion of a preventive maintenance program applies to all facilities. It probably wouldn't save a building that is obsolete. There would probably be a request for a new grant at which time the bill would require a preventative maintenance program. The bill doesn't mandate a maintenance program in every building today, but it does mandate one when additional money is being asked for through grants. Number 2359 REPRESENTATIVE MARK HODGINS asked when did the task force figure the money would get in the mail. Number 2368 MR. DeWITT replied through the appropriation process. The next bill scheduled today, HB 315, will help clarify the appropriation process and focus dollars on maintenance. REPRESENTATIVE HODGINS asked whether that would be this year or next year. MR. DeWITT replied that with the changing price of oil and to the extent that there are limited operational funds, there will probably be limited capital funds as well. Number 2397 REPRESENTATIVE BERKOWITZ stated that there seems to be a good carrot-and-stick approach for the state to use vis- -vis the municipalities, but he doesn't see a reciprocal requirement on the state. There isn't conditional language for the state to fund any maintenance. Number 2421 CHAIR JAMES stated the funds are all part of the appropriation process. Funding cannot be mandated. REPRESENTATIVE BERKOWITZ replied the legislature can require the Department of Education to budget for it. It is a separate issue, however, whether or not the legislature funds it. Number 2440 MR. MORGAN stated the department budgets for capital requests for department facilities such as Mt. Edgecumbe. The process for capital requests for school districts is laid out in Section 14.11 and is a separate process. It is not part of the department's request. It is part of the governor's capital program. Number 2464 REPRESENTATIVE BERKOWITZ commented that if the state says to any agency to do something then it should be required to respond at some point from the legislature. Number 2470 CHAIR JAMES stated there are a lot of unfunded mandates. She agrees that they aren't good. Having gone to the bush areas... TAPE 98-21, SIDE B Number 0000 CHAIR JAMES continued. They all have the same amount of money from the foundation formula to spend on facilities. Therefore, putting the focus on the need for it will shore up the ability to get things done. In addition, the component of simplifying maintenance and making it less expensive in the long run will also maximize the use of funds. Number 0027 REPRESENTATIVE VEZEY stated Section 2 addresses municipal facilities and the state's contribution. MR. MORGAN replied, "Correct." REPRESENTATIVE VEZEY stated Section 3 addresses state or agency facilities. MR. MORGAN replied Section 3 addresses unincorporated boroughs. REPRESENTATIVE VEZEY stated a mandate is not being put on state agencies. MR. MORGAN stated HB 312 accomplishes that. Number 0083 REPRESENTATIVE ELTON asked Mr. DeWitt what would happen if the legislature appropriated money for an unmatched grant program. He asked if the department would then have to say no if there isn't a plan in place acceptable to the department. Whose vision or statute would prevail? Would the appropriation prevail over this requirement or does this requirement prevail over the appropriation so that the department has to say no? Number 0111 MR. DeWITT replied, in his judgement, this would prevail. There are a number of conditions prior to getting dollars from the state. The legislature makes an appropriation and asks the agency to make sure that it is in proper form before it goes out. CHAIR JAMES asked for a motion to move the bill out of the committee. Number 0145 REPRESENTATIVE DYSON made a motion to move the proposed committee substitute for HB 313, version 0-LS1217\F, Cook, dated 2/9/98, out of the committee with individual recommendations and the attached fiscal note(s). There being no objection, CSHB 313(STA) moved from the House State Affairs Standing Committee. CONFIRMATION HEARING Alaska Public Offices Commission CHAIR JAMES announced the next order of business was the confirmation hearing of Philip P. Volland to the Alaska Public Offices Commission (APOC). CHAIR JAMES asked Mr. Volland to give a brief overview of his qualifications and why he would like to serve on the commission. Number 0187 PHILIP R. VOLLAND, Appointee to the Alaska Public Offices Commission, stated he is not sure why the Governor thought he would be well suited for the appointment. His background lends itself to similar quasi-judicial work that the commission does. For over six years, he was on the Board of Governors for the Alaska Bar Association which works in a similar fashion as the APOC. The association reviews staff recommendations regarding penalties for violations of the various laws it administers, disciplines attorneys, and approves ethic opinions requiring the application and judgement of the law and facts. It is also helpful that he is a lawyer for analyzing statutes and applying fact patterns for problem resolutions. MR. VOLLAND further stated that this isn't something he wanted to do. He did not grow up wanting to be a member of the APOC, but he takes public service seriously. It is important for people with experience to volunteer their services and to work on boards or commissions. He was asked to serve and has made a commitment to do that. It is a sacrifice. It takes away from his practice. It is disingenuous to say it is something that he wants to do, but he has made a commitment and will follow through on it. CHAIR JAMES stated he has at least exerted the willingness. Number 0305 REPRESENTATIVE VEZEY asked Mr. Volland whether he has any experience in political campaigns. MR. VOLLAND replied he does not have experience in campaigns other than by periodically giving money to candidates. He has experience in the political arena at large as a lobbyist. For six to eight years, until his appointment, he was a registered lobbyist and practiced for a good three to four years in Juneau. Number 0351 REPRESENTATIVE VEZEY stated he served on the APOC for a little over two years. He asked Mr. Volland whether he has a personal or professional interest in the subject of campaign finance, lobbying, or conflict of interest regulations that the commission is charged with regulating. Number 0377 MR. VOLLAND replied the issues associated with campaign finance and disclosure with the new law will be interesting and challenging. It is not something that he has done as part of his profession. Mr. Volland said he has had an interest in the regulation of lobbying because he was regulated and understands the steps that the people have to go through. Number 0403 REPRESENTATIVE VEZEY stated he is searching for whether or not Mr. Volland has an interest and willingness to devote the time it will take to become an expert in this esoteric area of the law. MR. VOLLAND replied he would not have agreed to the appointment if he wasn't willing to make the commitment. Number 0432 REPRESENTATIVE BERKOWITZ declared a conflict of interest because he knows Mr. Volland personally. CHAIR JAMES noted his conflict for the record. CHAIR JAMES called for a motion to forward Mr. Volland's name to the floor of the House of Representatives for confirmation. She noted that the motion does not necessarily indicate support of the confirmation. Number 0450 REPRESENTATIVE VEZEY wondered what part of the board makeup is Mr. Volland fulfilling - two members from the party that received the most votes, two members from the party that received the second most votes, and one appointed by the four members. CHAIR JAMES asked Mr. Volland to indicate his political affiliation. MR. VOLLAND replied he understands he was appointed for one of the vacant Democrat positions. REPRESENTATIVE VEZEY stated there is no requirement that the individual be affiliated with any party or be nonpartisan. CHAIR JAMES asked Mr. Volland whether he knows who recommended him to the Governor. MR. VOLLAND replied, "I do not know." Number 0525 REPRESENTATIVE IVAN wondered how the APOC is executing the new disclosure law effective January 1, 1998. Number 0545 REPRESENTATIVE ELTON made a motion to move the nomination of Philip R. Volland to the Alaska Public Offices Commission forward. There being no objection, it was so ordered. State Commission for Human Rights CHAIR JAMES announced the next order of business was the confirmation hearing of Ruth Gronlid Benson to the State Commission for Human Rights. CHAIR JAMES asked Ms. Benson to tell the committee members about herself and why she is interested in serving on the commission. Number 0580 RUTH GRONLID BENSON, Appointee to the State Commission for Human Rights, stated she is at the end of a long career in public health nursing. Her work as a nurse has been entirely with human beings and she would like to continue her interest in human beings and their personal rights and political employments. It is a fascinating field to be associated with and she looks forward to working with the commission. Number 0608 REPRESENTATIVE ELTON asked Ms. Benson how an "Oly" from St. Olaf College ended up in the Presbyterian Church. MS. BENSON replied the Presbyterian Church was just two miles down the road when her family moved to Fairbanks. Number 0648 REPRESENTATIVE ELTON stated as a former Oly he will forgive her. CHAIR JAMES called on a motion to move Ms. Benson's nomination forward. Number 0659 REPRESENTATIVE IVAN made a motion to move Ruth Gronlid Benson's nomination to the State Commission for Human Rights forward. There being no objection, it was so moved. Alaska Public Offices Commission CHAIR JAMES announced the next order of business was the confirmation hearing of Kathleen Harrington to the Alaska Public Offices Commission. CHAIR JAMES asked Ms. Harrington to tell the committee members about herself and why she wants to be a member of the commission. Number 0687 KATHLEEN HARRINGTON, Appointee to the Alaska Public Offices Commission, stated she was asked by the Governor's office to consider the appointment. When she learned about the work of the commission and especially the passage of the new law, she discovered it would be interesting and challenging. She said she has an interest, in general, of electoral politics. She has given the appointment a great deal of thought in terms of the time commitment and is prepared to spend the necessary time to become educated on the new law and apply it fairly and reasonably as it evolves over the next couple of years. Number 0734 CHAIR JAMES agreed with Ms. Harrington that it will be a challenge. Number 0741 REPRESENTATIVE VEZEY asked Ms. Harrington, as an officer of the court, how she would react to the enforcement of the law if she felt it was unconstitutional. Number 0765 MS. HARRINGTON replied, as a member of a regulatory body, the obligation as a commissioner is to apply the law as written fairly and reasonably. The courts are the place for disagreement of a law in regards to its constitutionality. The staff of the commission has a great interest in providing information to all parties about the law so that there isn't any surprise and that people can comply with the law as written. Number 0812 REPRESENTATIVE VEZEY asked Ms. Harrington whether she knows who nominated her to the Governor's office. MS. HARRINGTON replied, "No." CHAIR JAMES called for a motion to move Ms. Harrington's confirmation forward. Number 0827 REPRESENTATIVE ELTON made a motion to move the confirmation of Kathleen Harrington to the Alaska Public Offices Commission forward. There being no objection, it was so ordered. Select Committee on Legislative Ethics CHAIR JAMES announced the next order of business was the appointment of Dennis E. "Skip" Cook to the Select Committee on Legislative Ethics. CHAIR JAMES asked Mr. Cook to tell the committee members about himself and why he would like to serve on the committee. Number 0846 DENNIS E. "SKIP" COOK, Appointee to the Select Committee on Legislative Ethics, stated he was born and raised in Fairbanks. He pointed out that he is a lawyer and involved in a number of community organizations. He was called by Chief Justice Warren Matthews and asked whether he would serve on the committee. He had not given it any thought previously, but is willing to serve for many of the same reasons Mr. Volland stated earlier. He informed the committee that he believes in public service and feels he can contribute something. He said he is willing to spend the time necessary to be of service. He informed the committee that he believes in ethics in all fields of endeavors - legislative, executive and judicial. Mr. Cook stated he has been involved in a highly regulated profession for almost all of his entire work life and he knows the need for ethics and the oversight of ethics. Number 0949 REPRESENTATIVE ELTON stated, for the record, he is a member of the Select Committee on Legislative Ethics. CHAIR JAMES noted it will be considered for the record. CHAIR JAMES asked for a motion to move Mr. Cook's nomination forward. Number 0959 REPRESENTATIVE BERKOWITZ made a motion to move the confirmation of Dennis E. "Skip" Cook to the Select Committee on Legislative Ethics forward. There being no objection, it was so ordered. HB 315 - OPERATING APPROPRIATIONS FOR MAINTENANCE Number 0979 CHAIR JAMES announced the last order of business would be HB 315, "An Act relating to operating appropriations for annual maintenance and repair and periodic renewal and replacement of public buildings and facilities; and providing for an effective date," sponsored by Representative Mulder. Chair James called for an at-ease at 11:16 p.m. She called the meeting back to order t 11:24 p.m. Number 0982 DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder, Alaska State Legislature, came before the committee to present HB 315. He informed the committee members that during the interim he was staff to the Deferred Maintenance Task Force. He explained that before the committee is a committee substitute for a proposed committee substitute for HB 315. REPRESENTATIVE IVAN made a motion to adopt the proposed committee substitute dated 2/16/98, Version B. There being no objection, Version B was before the committee. MR. DeWITT explained the proposed committee substitute for HB 315 focuses the need for budgeting maintenance in the annual budgeting process. Section 1 amends the Executive Budget Act to require that as part of the operational budget there should be line item requests for maintenance needs. Section 2 defines maintenance repair, renewal, replacement and operations. Section 3 provides for a July 1, 1998, effective date so that they hopefully will look at the preparation of the 2000 budget, which is done the fall of 1998. MR. DeWITT explained, "The purpose of this is to focus the debate on whether or not in the budget requests, and in the budget discussions and the enactment of the budget, proper attention is given to maintenance and that decisions are made as to whether or not appropriations to an agency are clearly defined as what's for program and what's for maintenance of facilities. Currently, many of you have seen the process we use for budgeting, and in the component that we'll look at, it'll include personnel services, travel, contractual commodities, equipment, land buildings, grants, claims and miscellaneous. Within that is the issue of maintenance of facilities. The problem that the task force noted as it moved around the state was that there were many managers that felt that the legislature had not adequately funded the maintenance component. There were many legislators who felt that indeed the appropriation had been made for maintenance, but that program managers opted to use that money to enhance their program rather than for maintenance." MR. DeWITT stated that if you separate the traditional activity for the programs from the maintenance issue, then clearly the discussion would be on what should be allocated toward maintenance and what should be allocated toward program operations. When the decision is made, there will be accountability both in terms of the requests that are made and in terms of the appropriation that is made at the legislative level as to what monies are to go for program operation and what will go toward maintenance activities. MR. DeWITT informed the committee that he worked with the Department of Transportation and Public Facilities (DOT/PF). He noted that the DOT/PF is a little different than most of the state agencies because their primary function is maintenance and operation. In the process proposed in the legislation, most of their budget would be in the line item relative to maintenance and operation. He said that would be different for most of the other agencies. Mr. DeWitt stated that he appreciated the work that the department did on the draft committee substitute, and he believes that they both understand the bill. The debate that will be created as a result of this action will be most interesting to watch over the next couple of years. Number 1224 CHAIR JAMES asked if the bill only includes public buildings and not schools. MR. DeWITT responded in the affirmative. He added that the schools will continue to be funded through the foundation formula. CHAIR JAMES asked Mr. DeWitt if he has given any thought to include in the foundation formula a maintenance item. MR. DeWITT explained that during the course of the task force, there was several discussions on that issue. He said while he did not research it, he was led to believe that they had already indicated that the foundation formula included in it maintenance dollars. He said he doesn't recall broad discussion, but he does recall speaking to members of the task force at different points and his recollection of most of the discussion was that making that cut was more the responsibility of the board rather than the legislature. Number 1324 CHAIR JAMES referred to the renewal and replacement and asked if there is currently authority for a sinking fund where allocations could be made into that account for renewal and replacement so the money would be there when it is needed. MR. DeWITT explained there is real difficulty with renewal and replacement funds because of the lapse date of operating funds. That is an issue that is very difficult to get hold of when making annual budgets and the dollars lapse if they're not encumbered or expended. They don't have a sinking fund ability that he is aware of. CHAIR JAMES referred to the Administration planning to implement a Rent Program and said they have to have a fund to put the rent monies into for maintenance and so forth. She asked if that is a fund that could be used for the same thing. She said, "If there is a line item, as an example, for maintenance and it includes these things. With renewal and replacement, you know, not necessarily spend that money this year." MR. DeWITT indicated he hasn't seen the proposal. He said if it has an ability to hold those dollars beyond the lapse date, his expectation of what would happen is those funds that were allocated for long-term renewal and replacement would be, under our system, extended into that fund. He said he believes that would help with the lapse date problem. Number 1475 REPRESENTATIVE VEZEY said, "I'm still a little confused on [AS] 37.07.020. What facilities are we talking about? Facilities I was told in the unincorporated borough - unincorporated area - unincorporated borough -- I just haven't, in my mind, pictured what facilities those are." MR. DeWITT referred to [AS] 37.07.020 and said it is the section of the Executive Budget Act that articulates the responsibilities of the governor to prepare and submit to the legislature a budget. He explained that what is being talked about with HB 315 is how budgets are prepared by the Administration and transmitted to the legislature. Number 1554 REPRESENTATIVE ELTON said it seems that the requirement makes sense because it elevates the issue of annual and periodic maintenance so that they don't get to a deferred maintenance problem. He referred to the Northern Region and asked if, "Under a separate line item, are you going to expect that they will delineate, for example, how many maintenance dollars they'll need for rural airports, how many they'll need for the Parks Highway or the road to Eagle or -- or is that going to be lump sum? It seems to me that to eliminate the finger pointing, a lump sum appropriation for maintenance is not going to do it because that doesn't get you down to the facility level or the transportation infrastructure level. How do you envision that being done in a manner that really does eliminate the finger pointing?" MR. DeWITT explained that the prime mission of the DOT/PF is basically maintenance and operation. To the extent that the subcommittees, through their work and the full committee, make a decision on how definitive that's going to be will have more or less specific accountability. That is going to have to be left to them working that through. Mr. DeWitt stated, "Currently, you can as a legislature, articulate as many line items or separate appropriations as you wish or as few. Typically, that's been done with reference to different programs within an agency, different divisions, different kinds of things. Annual fee in the various budgets that are passed, one or just a few large appropriations or you may see a multitude of very small appropriations - part of the budgeting process. What we're hoping to get with this, and maybe we could focus where it is a little more clear, again, let's use the pioneer home system which clearly has buildings, which clearly has a program operation and where we can clearly draw the line so we can decide whether or not cost of care or cost of facilities has been recognized either by the budget proposal or by the budget enacted. There I think you get the clear -- you'll have six buildings, you'll have activities for six buildings outlined in components within an appropriation for maintenance and operation and you'll have the program activities outlined. When you get to the Department of Transportation, as we found in the task force report, you can get down perhaps to the substation level where you have for a general area, maintenance and operation needs and appropriation, perhaps by component or perhaps by specific appropriation. But it's very difficult to get an intersection or 'X' number of miles on the Park Highway from mile 'X' to mile 'Y' in a budget document. This doesn't solve all the problems, but I think it takes a step towards recognizing that. What I think we'll find, unfortunately, in DOT is that this line item will become their largest appropriation and however it's segregated by component. But we will begin to see a smaller line item of the program side operation of DOT. We may have some interesting discoveries in terms of what other things they're doing or what the importance is or, in terms of DOT, some program things that we have not been addressing because maintenance and operation has been their primary thrusts -- wherein I think other departments will find that the program has been the primary thrust, but maintenance and operation has not been." Number 1859 REPRESENTATIVE ELTON referred to rents where DOT/PF charges off to a different agency the amount of money necessary to do the maintenance and asked which agency will be required to delineate the maintenance cost. He asked if it would be the agency pay the rent or the agency collecting the rent. MR. DeWITT said, "We currently appropriate, for the most part, to agencies the money to deal with their facility. They then contract through a reimbursable services agreement to DOT/PF, or sometimes they do it on their own, to come in and do the work. So my expectation is that the -- if it were a perfect world and I were running it, I would suggest that the cost of operation for the agency be funded through that agency's appropriation and then they contract to have services done, whether they purchase it from DOT or an outside contractor, or do it internally with their own maintenance people." REPRESENTATIVE ELTON discussed charging costs off to several different agencies and said his concern is that he doesn't want what is being put into law to get in the way of dealing with real facility costs that might be dealt with in the rental concept. MR. DeWITT said he doesn't think that'll be the case. He said this can certainly begin to highlight the rent number to the extent that they meet their rent for space utilized in the State Office Building. He said it would include heat, lights, snow plowing, and fixing the steps as well as the parking places. He said it would be allocated as it would be for any other commercial building. Through the Administration there will be some arguments about whether the rent number is right or not right, or whether it's fair or not fair. REPRESENTATIVE ELTON stated he is less concerned about the agency end than he is about the straightjacket that may be put upon DOT who owns the State Office Building and whether or not that straightjacket will give them the latitude to institute that kind of a program. MR. DeWITT said he doesn't see that to be a problem. Number 2229 CHAIR JAMES asked Mr. DeWitt if the maintenance of these building would be in the same line item as the maintenance of roads and airports. MR. DeWITT responded that it would be a line item, but he expects it would not be the same line item. It should be separated out. Mr. DeWitt explained, "The maintenance and operation of a building can be accomplished either through the owner -- if it's the agency we're appropriating to, using that money to take care of window seals and whatever, or it can be accomplished by paying rent to the agency that owns the building." He referred to the rent concept and said he would expect that they could fund rents through this particular line item. Mr. DeWitt pointed out that it is a pilot program and he thinks those are some of the questions that will get answered. He said the money appropriated would go to the agency and be RSA(ed) either to DOT or through contractual services to someone else, or it would be done by the people that work there. TAPE 98-22, SIDE A Number 0001 MR. DeWITT stated there is some balancing that will naturally occur in the budget. REPRESENTATIVE VEZEY stated, "We have considerable difficulties in our efforts to micro manage the Administration and their budgets." He asked what the consequences would be if the agency put forth a very adequate maintenance budget and the legislature doesn't fund it. CHAIR JAMES responded, "Well then the buck stops here. That's the whole issue." REPRESENTATIVE VEZEY said, "So all the planning process just goes up in smoke and we're back where we're at now?" CHAIR JAMES responded that she thinks Representative Vezey is right. She said that is the problem the legislature has when setting the appropriation process. There is no guarantee of the appropriation until it has gone through the legislative process. REPRESENTATIVE VEZEY asked what if the legislature does appropriate the money and the Administration uses the authority that the legislature has given them to transfer that money. Number 0148 MR. DeWITT explained that when separate appropriations are used, agencies cannot move money across appropriations. They can move it across components within an appropriation. He said if there is an agreement to put $100,000 in maintenance for the pioneers home buildings, it would be inappropriate and probably illegal to hire an activities director with that money. Mr. DeWitt explained, "The way we currently budget, you can sort of have that discussion and you make the appropriation in one line item. All you have to do is move it from one component of that appropriation to another component. It's quite legal and quite easy to do and that's where the frustration is in terms of being able to assign accountability. The accountability that will be assigned will be in terms of the governor's budget coming to the legislature which will specify what they believe is necessary for programs and what they believe is necessary for maintenance. And then the legislature's response, in terms of what if (indisc.), in terms of how it responds to those numbers." Number 0338 REPRESENTATIVE VEZEY said, "Within and an appropriation for maintenance, and we see this daily around here, we don't control - part of that goes to buying a computer to do the computerized maintenance program which happens to be used for that 2 percent of the time and 98 percent for social schedules of the Administrative Department or whatever. We don't control whether that goes for bricks an mortar or whether it goes for exempt personnel or nonexempt personnel. Our ability to micro manage has been a dismal failure in the past, I'm sure it will be in the future. Where is the handle? I don't quite understand what we think we're really controlling here." MR. DeWITT responded, "There is the ability to articulate what it is the legislature would like to have done with the money spent, and if it is appropriated in a general appropriation as I showed you - how we do it now - you come back the next year and you have another fight over whether you should have -- and again let's use larger issues because certain the finite issues are very very difficult, whether or not the money was used to maintain a building or whether the money was used to hire an activity director. In our current strategy, we basically then go back and say, 'You shouldn't have done that,' and you try and put more line items in the budget and you could still move around because the maintenance components is still somewhat within the same budget. There is no question in my mind that there will be those times when we buy a computer that is 2 percent for maintenance and 98 percent for other. And those are the arguments that need to be had in the subcommittee and the full committee. This simply allows us, I think, a better budget tool in terms of the input that's coming in to identify what's maintenance and the output from the legislature that identifies what we intended for maintenance and we intended for programs. Is it perfect? No. Will we get into scraps and arguments about whether that maintenance item was fully maintenance or had a little program component in it. No question in my mind, we will, but I think we'll reduce the arguments and differences to an area where there is a strong focus on whether maintenance is occurring. Decisions will have to be made on whether or not we're going to fund maintenance. And there is no way we can force funding or for that matter force spending, but at least we'll be able to identify and hold folks accountable and the voters will make their choices of which folks they want to be accountable." Number 0588 REPRESENTATIVE BERKOWITZ said the way he reads the language in the bill, there will be three new line items. One is for facility operations, one is for maintenance and repair, and one for renewal and replacement. He said it seems to him that if we are trying to delineate a category of maintenance, it should say that specifically rather than having three subitems. CHAIR JAMES said it is her understanding that (8), (9) and (10) are only definitions as opposed to line items. MR. DeWITT said that is correct. He said as he reads them, they will be prepared and presented separately from the appropriation in (a). He noted that the intent was that those three things would be identified for a separate appropriation. REPRESENTATIVE BERKOWITZ asked is it is one lump or in three separate items. Representative Berkowitz said "The way it's written is 'proposed annual appropriations' and it itemizes 1, 2 and 3 - 'must be presented separately.' What we're trying to do is have a maintenance line item. Is that correct?" MR. DeWITT responded, "I think it says, 'separately from appropriations for other proposed operating expenditures by the agency.' So as I read it, as the intent was, as the drafter told me it worked, and again it's (indisc.). There are these three will be funded separately from the rest of it and I think that could read as either 1 or 3 I suppose. Frankly, from the perspective of where we're going, I'm not sure that having three separate would be disastrous, although I think at least in the early going, one would be easier to work with because we're taking a new step that's going to require some looks at new accounting and some different responses." Number 0759 CHAIR JAMES noted there is back up and an opportunity for footnotes in the budget. She stated that it appears to her that facility operations, maintenance and repair, and renewal and replacement, all being separate things that are done, it appears that the money could be used amongst them. MR. DeWITT responded that he believes that's true. CHAIR JAMES stated that she would think that the footnote would be the delineation of what those numbers are calculated and not necessarily what those number are actually. MR. DeWITT informed the committee that he envisions seeing three components in an appropriation, one for each. He said he hasn't viewed it as three separate appropriations. In listening to Representative Berkowitz's interpretation, he thinks it is valid in that they could come in three separate as in one with three components. Mr. DeWitt said he thinks the operative issue is that it is separate from the other appropriations in the operating budget. Number 0857 JACK KREINHEDER, Senior Policy Analyst, Office of Management and Budget, Office of the Governor, came before the committee. He stated he would like to express agreement with Representative Vezey about micro management of the budget and he is glad to hear that they are in agreement on that subject. He informed the committee that he has discussed the legislation with Annalee McConnell, Director of the Office of Management and Budget. Mr. Kreinheder explained that they are not taking a formal position for or against the legislation. He said they are in full support of the overall goal of the bill which is adequate maintenance for state facilities. The question is, "Is this best approach to get there?" He stated the most important problem is not how the money is budgeted, it's the lack of money. When budgets are reduced or inflation is absorbed as it has been, the most important thing is preserving services to the public. Unfortunately, building maintenance is one of those things you can get away with short funding for awhile until it catches up to you. He said the intention is to address this issue in more detail when the legislation gets to the Finance Committee. He noted they don't have an objection to moving the bill. Number 0980 CHAIR JAMES said you have to admit that for years maintenance has not been addressed in the proper way that it should be. Nowhere have they ever dealt with renewal and replacement except in the capital budget. She said she takes the position that if we can't take care of our buildings, they should be sold and we should lease them back from a private individual. MR. KREINHEDER referred to the question of would this legislation hinder our efforts on this rental structure that we're developing and said he hasn't thought of that, but he is fairly confident that it would not be a problem in that regard. Number 1085 REPRESENTATIVE HODGINS made a motion to move CSHB 315, Version B, dated 2/16/98, out of committee with individual recommendations and with the attached fiscal notes. There being no objection, CSHB 315(STA) moved out of the House State Affairs Standing Committee. HB 313 - PREVENTATIVE MAINTENANCE REQUIREMENT Number 1085 CHAIR JAMES informed the committee members that it has been brought to her attention that there was a fiscal note for HB 313, which was heard earlier in the meeting. She said the fiscal note, from the Department of Education, wasn't in her file. It is for $88.3. She said she would like a motion to make that part of the bill that was moved. REPRESENTATIVE HODGINS said, "So moved." There being no objection, the fiscal note moved with the bill. ADJOURNMENT Number 1136 CHAIR JAMES adjourned the House State Affairs Standing Committee meeting at 12:06 p.m.