GENERAL SUBJECT(S): SB 30 Operating Budget Appropriations SB 83 Supplemental/Capital Appropriations SB 72 Constitutional Budget Reserve Fund Appropriations The following overview was taken in log note format. Tapes and handouts will be on file with the Senate Finance Committee through the 21st Legislative Session, contact 465-2618. After the 21st Legislative session they will be available through the Legislative Library at 465-3808. Time Meeting Convened: 9:10 A.M. Tape(s): SFC-99 #39, Side A (000 - 589) Side B (589 - 000) PRESENT: x Senator Parnell Senator Adams Senator Torgerson Senator P. Kelly x Senator Donley x Senator Green x Senator Leman x Senator Phillips Senator Wilken ALSO PRESENT: ALISON ELGEE, Deputy Commissioner, Department of Administration; SHARON BARTON, Division of Administrative Services, Department of Administration; BRUCE BOTHELO, Attorney General, State of Alaska, Department of Law; BARBARA RITCHIE, Deputy Attorney General, Civil Division, Department of Law; KATHRYN DAUGHHETEE, Director, Division of Administrative Services, Department of Law; KAREN REHFELD, Director, Division of Education Support Services, Department of Education; KEN BISCHOFF, Director, Division of Support Services, Department of Public Safety; NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Facilities; DWIGHT PERKINS, Deputy Commissioner, Department of Labor; VIRGINIA STONKUS, Financial Services, Division of Administrative Services, Department of Environmental Conservation; DAVID TEAL, Director, Division of Legislative Finance; JIM HAUCK and GINGER BLAISDELL, Fiscal Analysts, Division of Legislative Finance; aides to committee members and other members of the Legislature. LOG SPEAKER DISCUSSION 000 Co-chair Parnell Called the committee to order and set out the schedule for SB 83. It was noted that SB 30 and SB 72 would not be heard today. Barbara Ritchie Assistant Attorney General, Civil Division, Department of Law was invited to join the committee. She noted also the presence of Kathryn Daughhetee. Kathryn Daughhetee Director, Division of Administrative Services, Department of Law was invited to join the committee. Senator Donley Referred to Kachemak Bay, item #4 and said that it had not been responded to. Barbara Ritchie Explained the Department of Law memorandum, judgements and claims, dated 26 February 1999. Senator Donley Does not feel judgment should be paid with regards to item #5. Co-chair Parnell Item #6, Robert Boyd vs. State DOTPF, Chitty and Campbell. Barbara Ritchie With reference to Senator Donley's comment on item #5, reversal of Judge Hart's decision. She gave a brief background of the case and explained Mr. Boyd's employment with the State from 1983 to 1993. The major difficulty in the case was the process used for evaluation and termination of Mr. Boyd. There is a covenant of good faith and agreement for employment with the State. These are judicially created documents. An employer must treat you with good faith. This situation usually comes up with non- bargaining unit employees. Problems with how Mr. Boyd's evaluations were handled. On evaluation he was initially rated as mid-acceptable; later the evaluation was changed and a new one put in without notice to the employee. Explained wrongful discharge claim in the amount of $175,000.00. Main issue was how this was handled with Mr. Boyd. There should be more training on state evaluation and supervision issues in order to prevent this kind of litigation. Senator Phillips Asked Ms. Ritchie if she ever looked at evaluation policies? He also asked if she thought the policy was flawed? He felt the situation was costing the State money. Barbara Ritchie Personally, she felt the evaluation process does not include changing evaluation in files or rating down an employee without notice to the employee. There were also ADA complaints. In discussion with the committee she said that unfortunately, errors are made. Senator Phillips "Once you really have a bad apple it is difficult to get it out of the bushel." He understands the necessity to protect the rights of the worker, but also the general rights of the people of Alaska and the State of Alaska. Perhaps the training method is flawed. Co-chair Parnell Read a portion of Commissioner Campbell's comments into the record regarding this case. He said the Commissioner could have made a better decision. Is there any kind of systematic training of supervisory personnel on evaluation policies. Ms. Ritchie There are a variety of courses that are offered. They try to do training of human resource managers and common issues and matters that are seen and stop them. However, in particular, this matter was not handled very well. Co-chair Parnell Asked if the training was required? Ms. Daughhetee She advised that training is not required. Agencies can ask that it be required. Co-chair Parnell Item #7 Muhammed Khan vs. State Ms. Ritchie Explained this matter. It was alleged that Mr. Khan suffered from discrimination due to race. He is a Pakistani Moslem. Dr. Khan sought compensatory and punitive damages. Facts were quite difficult for the State of Alaska. $190,000 lost wages. Also filed grievance for layoff. Arbitrator found that the State did not have a legitimate case to layoff Dr. Khan. Case went to Federal Court. Parties, however, entered into settlement talks. The plaintiff also claimed damages for emotional distress and future lost wages. Had he prevailed he would have been able to collect his attorney fees also. Senator Phillips Is Dr. Khan in California? It had been noticed that his checks were going to an individual in California. Ms. Ritchie Explained that he had obtained out of State attorneys from California to participate in conjunction with attorneys from Alaska. Senator Donley Commented on discrimination and probable cause. Has the State done anything to identify these individuals? Anything done to address the culpability of these individuals? Ms. Ritchie There were witnesses willing to come forward and say there was discrimination against Dr. Khan. Layoff decisions need to be carefully documented. People are unhappy and will see lawsuits. Senator Donley Department of Law is doing its job and feels they have to solve the case. He wondered if there was a letter put in anyone's file representing the settlement or award. He felt they were not getting the proper accountability for these issues. The Department of Law cannot be held accountable but the individual departments should be held accountable. The problem was not getting fixed because there was no accountability. The private sector does not have this problem because they would never tolerate this kind of situation. There was no representation that anyone was ever even admonished for this kind of behavior. Senator Green She noted that the judgment precluded any talking or discussion about the matter by anyone. Co-chair Parnell Asked if they were prohibited from taking any action against the supervisor? Ms. Ritchie Responded that as far as the issue of letter of reference related to Dr. Khan they were and that he was concerned about this. Dr. Khan did not want the issues to be held against him at some later date. She further explained the release against the State as they only wanted to resolve this case in total which would then prevent Dr. Khan from coming back at a later date and bring up another issue. The reason for the settlement and release was to get the matter behind us. Senator Green Asked if there was not a blank record? As if it had never happened? Ms. Ritchie Will have to do further follow up with the particular attorney who handled the matter. Co-chair Parnell Asked to work on judgments and claims so they can get to other department heads. Ms. Ritchie Explained that the appropriation was to the Department of Law. Try to get judgements paid so no further interest accumulates. Co-chair Parnell Was this a consolidation effort by all departments? Ms. Ritchie Yes. This made it easier to deal with. Was continually asked why they were not all in one place. Refers to Department of Health and Social Services case. Senator Donley At the last meeting you went to in the executive branch did you talked about accountability for judgements? Ms. Ritchie Comes up with Office of Management and Budget. Senator Donley Does not mean from a financial point of view but the holding to accountability of the departments. Barbara Ritchie Comes up in the context of individual cases. Departments are concerned with these kinds of activities. Senator Donley Have you ever discussed changes in personnel laws? Ms. Ritchie Some cases are "whistle blower" cases. She explained what constitutes a violation of the "whistle blower" act. Senator Donley Is there any process of establishing who is responsible? Ms. Ritchie Does not know the answer to this. Senator Donley Feels that the matter is being ignored. Senator Phillips Lawsuits are dealing with symptoms rather than the disease. Not only need to stabilize the patient but also stop the disease. Ms. Ritchie Employment area has seen a dramatic increase of lawsuits. Realizes this is a large one but it represents a small percentage per State employees. Senator Donley If it is a small number they should be able to invoke accountability. Senator Leman This case in particular troubles him. Half of the settlement is going to the plaintiff's attorneys. He is not going to realize any of the settlement. Feels this is going to happen again and no one is going to be held accountable. Explained his concept of religious and racial discrimination. Has not found anything relating to religious persecution in this case. However, racial epithets were spoken in his presence. Used himself as an example. If he could collect every time something was said in his presence he would be wealthier than Dr. Khan. Going to have to do something about this. Senator Donley Good role for Department of Law would be to suggest legal changes to develop exactly what Senator Leman is talking about. Co-chair Parnell Item #8 Weiss and Alaska Center for the Environment vs. State (Superior Court) Senator Donley Not had a chance to read #8. Senator Leman Was involved in helping to settle the mental health claim. Ms. Ritchie Explained that this was a judgment. Senator Leman Continued. The State prevailed and then ended up paying the entire fee. This case also seemed to be a recurrent matter. Co-chair Parnell Covering Items #8 and #9. Ms. Ritchie Concurred. The plaintiffs put efforts into the matter also. Supreme Court identified the plaintiffs as the prevailing party. Issue as to amount of fees was also challenged by the State. Large sum of money and matter occurred in the early 1990's. Public interest litigant issue. Interpretation over the years of Civil Law 82. Co-chair Parnell Item #10 Newton vs. State Department of Labor Item #11 Vidal vs. Vidal Item #12 Waltz vs. Waltz Item #13 Planned Parenthood of Alaska vs. State Senator Leman He felt the Superior Court judge erred egregiously. Case was scheduled for hearing and judgment was entered without evidentiary hearing. This was in conflict. Believed the Judge was wrong. (Tape #39, Side A, log number 590 switched to Side B at 10:00 a.m.) Senator Leman Could share other strong feelings, also. Co-chair Parnell Senator Donley Perhaps new judges should be appointed. Senator Leman Noted that the Governor appointed this particular judge from the Department of Law. Senator Phillips Planned parenthood matter. Ms. Ritchie Court does know the settlement came from the State of Alaska. Co-chair Parnell Item #14 Planned Parenthood of Alaska vs. State Senator Phillips What if we refused to pay this? Ms. Ritchie Judgments are against the State of Alaska. Senator Phillips Who has the right of appropriation? Ms. Ritchie Legislature. Senator Phillips Perhaps we should stand up to this. Senator Donley Should be taken up in Judiciary, perhaps. Ms. Ritchie Legislators would hear from their constituents. Ultimately it would be litigated. Senator Donley Status of lower court cases being litigated. Do we still have to pay attorney fees for lower court cases if Supreme Court reverses matter? Ms. Ritchie Yes. Co-chair Parnell Status of final judgments in #13 and #14. Ms. Ritchie These are final judgments being handled by the criminal division. Issue of attorney fees was not appealed. Co-chair Parnell Are not appeals stayed? Ms. Ritchie These were final judgments and not appealed. Co-chair Parnell Said it was his understanding that attorney fees were not paid if case is on appeal. HELD SB 83 judgment and claims. Sharon Barton $35. For Finance will help defray costs of travel cards. (Brief at ease at 10:10 a.m.) Co-chair Parnell Moved to Section 6(d). Brant McGee Public Advocate, Office of Public Advocacy testified via teleconference. He explained section 6(d). $563,000 money needed to pay bills to the private sector. Problems with that number. Guardian ad litem for children need to be paid. Generating new number of cases. Forces that are going to continue to drive up costs in their office. Senator Donley What cost saving measures have you looked into during the last six month? Mr. McGee Continuing to monitor this matter. The CASA program, which is a volunteer guardian ad litem program, has been expanded. Explained savings. Senator Donley Average contracted hourly rate? Mr. McGee Rates are typically 1/3 to 1/2 of the going rate. He said, "we pay our bills on time. That's how we can survive." Senator Donley Asked how cases were separated. Mr. McGee Cases were separated into groups, adult and child. Criminal defense, abuse and neglect of children, incapacitated adults, mental incompetence, seniors suffering from dementia were the basic groups. Senator Green Asked if there was another group of advocacy attorneys for mentally disabled adults. Mr. McGee Explained there was another group called the Disability Law Center. They get their funds from the Federal government. Their duty is to take cases of mentally ill adults. He said they get these cases only if there is no available family member to take on matter. These individuals literally have no one and are at the bottom end. But they still get a substantial number of cases. Senator Green Do you refer cases to the Disability Law Center? Mr. McGee OPA are not lawyers, however, they help make decisions regarding housing, life and death matters, for instance. Not obliged to provide lawyer services. Barbara Brink Director, Public Defender Agency explains Section 6(e). Problems in Bethel and Dillingham office. Have received Smart Start money as appropriated by the Governor and have filled those positions. Additional office space was not allocated for these individuals. Anchorage office handling all children's matters. Very crowded situation. Increased travel costs and criminal funding. Handled 13 additional remote sites. Have tried to institute restrictions on travel but must travel to remote locations at least once a month. Attorneys are limited to travel to remote areas only in the matter of a jury trial. Many times the attorneys never meet their clients. Total estimate is $297.0 of supplemental. They have consolidated all appeal matters; now handled out of Anchorage. Remote offices take more in court cases. Do not have investigators in remote areas. Senator Donley How many new attorneys added? Ms. Brink Filled vacancies as listed. Did add new child protection attorney in Anchorage, appellate attorney in Anchorage. Juneau secretary and Anchorage under Smart Start. Vacancies occurred over one year. Attorneys hired were four. Appellate attorney hired equals five. This included child protection attorney. Lawyers were hired in positions vacated by other attorneys. Ms. Barton Explains positions filled. $600,000 intended to more fully fund the agency. Would have taken $800,000. Senator Donley How many attorneys in appellate office? Ms. Brink Five and one-half. Senator Donley Case driven organization argument. Appellate division creates its own increase. There are a lot of ways to control the case load based on the types of appeals they take. He stated that the PD argued cases in an attempt to create new law not anywhere established in the U.S. Last year got initial $640,000 plus Smart Start monies. There were offices where there were two public defenders but the prosecutor has no one. Recommended they not count on getting additional money this year. The agency should have tried to live with the money they had. Ms. Brink Disagreed with the Senator that they can control the cases they pursue. Defendants no longer can contact the agency themselves, must be court appointed. There are cases where they prepare appeals on that they would prefer not to, but it is the client's constitutional right to the appeal. Do try to make whatever plausible arguments they can. They have two new lawyers hired under Smart Start and one of the positions will terminate 30 June 1999. The Department of Law, Civil Division has added under Smart Start, also. Have seen a great increase of child protection cases. Handle parole revocation hearings and child protection cases. Many functions they provide that the District Attorney does not. Prepared staffing chart indicating number of attorneys in locations, last year. Senator Donley Has asked the questions before and will submit the answers he receives to the committee. Senator Parnell Referred to section 6(a) of SB 83. Ms. Barton Explained the implementation of the new travel card program. Charge card issued to all state travelers for charging rentals, hotels, etc. for use during their travels. Benefit is one bill to pay for all travelers rather than myriad of bills to individual. Senator Green What about accountability using the charge cards? Ms. Barton This provided better accountability and tracking of costs of travel. Cards are issued to State employees. If there are problems they will deal with the employee accordingly. There is a savings as seen with the American Express corporate card. Negated the need for travel advances for employees, which are expensive to process. Senator Leman Agrees with processing. Why should we be allocating another $35.0? Ms. Barton Savings appear out in user agencies. Central agency in Finance who has to gear up to process and pay vendor do have some costs. Senator Leman Not acquainted with Master Charge? Does this reflect on purchase of tickets or any other benefits? Ms. Barton No rebates or incentives to the individual travelers. The State, however, can receive cash rebates throughout the year. Rebate depends on efficient handling of account. Hoped to process up to their standards and get into more automated handling of travel records. Co-chair Parnell Section 6(b). (Excuses all other department heads as he will not get to any other section than Administration this morning.) Alison Elgee Deputy Commissioner, Department of Administration was invited to join the committee. Explained Section (b) Property Management. City of Bethel got tremendous break in the cost of the fuel. Unfortunately a valve was left open and some fuel leaked into the ground. Bethel Native Corporation has since sued the State, City of Bethel and the Federal Government to determine clean-up costs and extent of damage. Senator Phillips Confused. Asked the sequence of events. Ms. Elgee The State was to provide for the costs of Department of Environmental Conservation conducting the investigation. Senator Phillips Was one State agency purchasing services from another agency? Ms. Elgee She indicated that was correct. This was an extraordinary activity. Co-chair Parnell Asked Ms. Barton to provide further information for Senator Phillips. (Tape change from #39, Side B to tape #40 at approximately 10:50 a.m.) Ms. Barton Explains section 6 Leases. Co-chair Parnell HELD in committee. He advised they would take up Pioneer Homes at the next meeting. ADJOURNED at approximately 10:55 a.m., tape number 40, side A, log number 030. SENATE FINANCE COMMITTEE LOG NOTES 2/26/99 SFC-99 Page 1 2/26/99