HOUSE TRANSPORTATION STANDING COMMITTEE February 2, 1993 5:00 p.m. MEMBERS PRESENT Representative Richard Foster, Chair Representative Gary Davis, Vice-Chair Representative Al Vezey Representative Eldon Mulder Representative Bill Hudson MEMBERS ABSENT Representative Jerry Mackie Representative Curt Menard COMMITTEE CALENDAR EO 87: Moving state facility leasing and management functions from the Department of Administration and other agencies to the Department of Transportation and Public Facilities. HEARD AND HELD IN COMMITTEE WITNESS REGISTER Frank G. Turpin, Commissioner Department of Transportation and Public Facilities 3132 Channel Dr. Juneau, AK 99801-7898 465-3900 Position Statement: Available for answering questions on EO 87. Kit Duke, Assistant Commissioner Department of Transportation and Public Facilities 3132 Channel Dr. Juneau, AK 99801-7898 465-3900 Position Statement: Project Director for EO 87. Provided an overview of EO 87. ACTION NARRATIVE TAPE 93-2, SIDE A Number 006 CHAIR FOSTER called the meeting to order at 5:14 p.m. FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (DOT/PF), introduced KIT DUKE, ASSISTANT COMMISSIONER OF THE DOT/PF, and indicated that she had been assigned as the Project Director for the merge of the leasing and management functions. Number 020 KIT DUKE began her testimony by indicating that committee members had the fact sheets in their packets and that they saw the executive order so she would begin her overview as to why the Department felt EO 87 was important and critical to the state. She said the state currently owns approximately 1700 buildings in 60 communities around the state, and that represents approximately eleven and one-half million square feet, which is valued at $2.3 billion replacement value. This does not include the university system or rural schools. She stated that the condition of the buildings was critical to provide productive environments for people to work. The state has a responsibility to safeguard and improve its buildings so that the public and executive branch agencies can get their work done. In the next few years the state will be facing some critical requirements. The state buildings are getting older; most were constructed in late 70's and early 80's. MS. DUKE said there are several new regulatory requirements, including the American Disabilities Act, that will have a substantial cost attached. New technologies are available, especially in the area of energy conservation. Budget constraints will continue to exist. She noted that the DOT/PF has been working for the last few years on this problem to solve it. She stated that EO 87 was step one in that process. MS. DUKE explained that approximately two years ago the departments formed an organization called the Alaska State Facility Administrators, made up of facility managers from about 11 or 12 executive branch departments as well as someone from the court system and the legislature. Forms have appeared in prior year budgets which documented the deficit of maintenance funding for those facilities. The Governor's Efficiency Task Force prepared a report last year that indicated more attention needed to be focused on the management of buildings. MS. DUKE said last June she was assigned the responsibility of coming up with a solution. This included funding mechanisms, organizational changes, and looking at the bigger picture as to what could be done. The Governor's Efficiency Report gave several suggestions, including merging functions under a single administration, creating a funding mechanism, and charging these agencies rent so there would be funding to do the necessary maintenance necessary. MS. DUKE sated that many of the task force ideas had been pursued in Executive Order 87. Number 098 MS. DUKE noted that a transition committee had been appointed which consisted of nine members from different departments representing different interests. This gets the merge started, merging it all together under one authority, in this case the DOT/PF. This gives focus to the responsibility and allows an asset inventory from a statewide prospective. Number 110 MS. DUKE explained several things that were not included under this merger: rural schools, university system, legislative space, court system leases, fish hatcheries managed by local nonprofit organizations, and buildings that are part of existing corporate assets, such as the Alaska Industrial Development Authority or the Alaska Railroad Corp. MS. DUKE said energy management has been one of the main focus areas. Last year in the Capital Budget the DOT/PF and the Department of Military and Veterans Affairs received money for this purpose. They are currently implementing those now. A project has been started in Bethel to merge maintenance staff together in order to do work where more than one person is needed to provide more efficiency on the job. Number 178 CHAIR FOSTER asked how the Department of Military and Veterans Affairs (DMVA) felt about the merge. MS. DUKE indicated that the DMVA had agreed to become a part of the merge. They currently have maintenance management systems in place and are working towards conserving energy. CHAIR FOSTER then asked about a contract with Bettisworth and asked Ms. Duke for the amount and what the organization does. MS. DUKE responded that the contract was just under $100,000. She explained that about two years ago this organization came before the legislature with a report as to the condition of the state's buildings inventory. Ms. Duke noted that about $150 million of deferred maintenance had accrued to the buildings. The organization put this amount together using a formula. They took a sample of buildings types around the state and included this into the terms required under the American Disabilities Act Survey to try and get a more accurate estimate. Number 250 REPRESENTATIVE BILL HUDSON asked how this was reflected in the budget at the present time. MS. DUKE indicated that approximately 75 percent is in the Department of Administration budget, and about 25 percent of the money used towards leases is in other departments. She noted there will be a budget amendment to the FY 94 budget at the end of February that will reflect the transfer of the monies from the Department of Administration to the Department of Transportation (DOT) for leasing purposes. She explained that in FY 95 there will be new budget instructions that will reflect the other changes of activity of merged maintenance activity out of other departments. It will reflect having a rent structure. Number 232 In answer to a question by REPRESENTATIVE HUDSON, COMMISSIONER TURPIN stated that the next step would be the legislation which proposes that the buildings be managed by an authority within the DOT. The authority will have seven to nine members who have experience and expertise in property management, real estate, maintenance, and building. The primary management will be by this group and the DOT will just be a carrier for their budget and other things. He did not feel it would be an additional burden. CHAIR FOSTER indicated that Executive Order 87 would be held in the committee for further study. The meeting was ADJOURNED at 5:33 p.m.