GENERAL SUBJECT(S): SB 83 Supplemental/Capital 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: 9:05 a.m. TAPE(S): SFC-99 #42, Side A (000 - 589) Side B (589 - 000) PRESENT: x SENATOR PARNELL x SENATOR ADAMS x SENATOR TORGERSON x SENATOR P. KELLY x SENATOR DONLEY x SENATOR GREEN x SENATOR LEMAN x SENATOR PHILLIPS x SENATOR WILKEN ALSO PRESENT: DAN SPENCER, Chief Budget Analyst, Office of Budget and Management; ALISON ELGEE, Deputy Commissioner, Department of Revenue; SHARON BARTON, Director, Division of Administrative Services, Department of Administration; JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services; ROBERT LABBE, Director, Division of Medical Assistance, Department of Health and Social Services; THERESA TANOURY, Administrator, Family Services, Division of Family and Youth Services, Department of Health and Social Services; KATHRYN DAUGHHETEE, Director, Division of Administrative Services, Department of Law; KIMBERLY METCALFE-HELMAR, Special Assistant, Office of the Commissioner, Department of Community and Regional Affairs; aides to committee members and other members of the Legislature. LOG SPEAKER DISCUSSION 000 Co-Chair Parnell Convened committee meeting and outlined schedule. Sharon Barton Director, Division of Administrative Services, Department of Administration was invited to join the committee. She advised the committee that Alison Elgee would be joining her before the committee. Alison Elgee Deputy Commissioner, Department of Administration was invited to join the committee. She explained section 6(f) of the bill. Problems requiring one on one staffing at the homes. $500,000 necessary to get us through the remainder of the year and maintain staff. Senator Donley General understanding they have evolved into more and more intensive care operations than originally begun. What other states have program like this? Alison Elgee Actually ahead of other states in ability to provide care through the Pioneer Homes. Alzheimer's related directly to longevity. Eighty-five percent incident of Alzheimer's in the elderly. Trying to decide the best method to address care for Alzheimer's. Not a psychiatric problem. Need good healthy environment for these individuals. They are attempting this in the Pioneer Homes. Senator Donley Trying to figure out original mission of the Pioneer Homes and in comparison to what other states are doing. Looks for advice from other members working on subcommittees. Co-chair Parnell Asked Senator Wilken to explore this question of Senator Donley more directly in subcommittee. Co-chair Parnell Asked Ms. Elgee what the Administration is doing to address the concerns regarding this matter. He was hearing from others, why do they need more money? Ms. Elgee Personally has met with families directly concerned. Also Commissioner Poe is addressing this matter. Interested in trying to improve the immediate care of these individuals. Need extra staff to provide care...referred to incident in Anchorage Pioneer Home last year. Individual had caused harm to others in the facility. Individual was sent to API for help and will not be replaced in the home. Another similar situation in Sitka that the individual is manageable, but required one on one staffing. Problems with limited staffing to conduct specific care. Not interested in warehousing individuals. This is the worst nightmare of these kinds of programs. Several areas of concern they have looked into. Have ascertained what is going on and how it can be corrected. She said they want to treat concerns as legitimate. By end of week they hope to have something in written form to be able to present to the committee. Senator Green Question regarding mechanics of this section. All staffing would go through designated line items after this? How would this be resolved? Ms. Elgee Suggesting be recognized as designated receipts. Senator Green Will this be another piece of legislation? Ms. Elgee Responded yes. Senator Wilken Stated there was an ongoing effort in the subcommittees to address these issues. Senator Green Asked if this addressed the Anchorage Pioneer Home only? Senator Wilken Yes? Co-chair Parnell Focus of claims from the Pioneer Homes. Senator Wilken Only place heard complaints was from Anchorage Pioneer Home. Co-chair Parnell Cautions Senator Green if she has any questions on other residents at other Pioneer Homes should direct them to Ms. Elgee. Ms. Elgee Section 6(g) Replacement of boiler system at the Fairbanks Pioneer Home. Needed to put another mechanic on to assist with boiler at Fairbanks Pioneer Home. Have evacuation plan for frail, elderly patients, but boiler must be replaced. Section 6(h) Reappropriation of funds for the replacement of the boiler system at the Fairbanks Pioneer Home. Co-chair Parnell Why could money not be spent from Risk Management rather than wait for a supplemental? Ms. Elgee This has been on the capital project list for several years. Have only received small sum to address needs of all six homes. Replaced roof at Palmer Pioneer Home that was badly leaking and causing structural damage. There was concern that they can meet Risk Management demands, other than direct claims. Co-chair Parnell Asks severity of this matter. Ms. Elgee Said they are managing this situation, but doing it with crossed fingers. Senator Wilken Referred to 6(h). Ms. Elgee Will generate a little over half a million dollars. Combination of (g) and (h) is just over a million. Senator Wilken Asked if this was AHFC money? Ms. Elgee Indicated it was. Co-chair Parnell Asked to continue. Ms. Barton Section 20, Stale Dated Warrants. Presented to State after expiration date for payment, which the State must honor. Senator Donley Question on 6(h) about the source of funds. Is this competitive grants? What program is this? Ms. Elgee Not familiar with the AHFC appropriations that have been used. They identified this money as being available for reappropriation. Co-chair Parnell Back-up does not provide additional information. Dan Spencer Budget Analyst, Office of Budget and Management was invited to join the committee. Will get information from AHFC. Co-chair Parnell Asked Ms. Barton to continue. Ms. Barton Section 22, Ratifications She explained this was an accounting procedure of over expenditures from the prior year. Needed ratification by the Legislature of the expenditure. (1)(b) OPA Computerization was explained. Too late to cover this with year's operating funds. (1)(c) Central Duplicating/Mail was explained. Total shortfall was $195.6 approximately. Senator Donley Does item (c) have anything to do with arbitration involving Central Duplicating? Ms. Barton Said this matter only has to do with expenditures already made in Central Duplicating up to closing for staff and operating. Ms. Elgee Further responded. Correct in relating to arbitration because the arbitration was the reason for the closure, however, this cost is not related to the arbitration itself. Appropriation was sufficient but they fell short on the revenue side. This would correct that situation. That is why they need ratification of the over expenditure from the Legislature. Senator Donley Is this the same for Telcom Services? Ms. Elgee Indicated that was correct. Ms. Barton Only over expenditures in the Department of Administration that she is aware of. Senator Donley Section 6(b) What is the source of funding? Ms. Elgee Explained the surplus property program. Collection of funds through their intermediary efforts of surplussing Federal property. Co-chair Parnell Asked for further clarification. Ms. Elgee Further explanation. Act as intermediary to get property to someone who can use it. Revenues pay the cost of operating this program. These are the funds referenced here. Senator Donley Asking for additional authority to expend the funds? Ms. Elgee Replied that was correct. In response to Co-chair Parnell she said the amount is approximately one half million dollars. Senator Donley Add to half million they authorized it could be anticipated they would need about $600,000 for next year? Ms. Elgee Explained that this particular effort was a one time issue. Not an ongoing one. Asked to assess damage done to land in Bethel. Will provide environmental assessment in the amount of $100,000. Senator Donley Surplussing land that the City of Bethel purchased and there is a question of an oil spill on the property? Ms. Elgee Had been acting as intermediary in surplus fuel oil. Acquired the fuel, sold to City of Bethel. However, at time of transfer tap on fuel oil tank was inadvertently left open and some of the fuel oil spilled onto the ground. Bethel Native Association now looking for cleanup costs and sued State, Federal and City of Bethel for adequate cleanup. Senator Donley State being sued because they were an agent for the Federal Government? Ms. Elgee Indicated that was correct. Co-chair Parnell Asked for clarification of the litigation. Ms. Elgee Will not know what the total exposure is for the State until they move forward. There are no guarantees in an ongoing lawsuit such as this. Co-chair Parnell Is the Department of Law working on this case? Or will it be handed over to an adverse case? Ms. Elgee Advised that this was at the request of the Department of Law. Senator Wilken How many gallons of fuel? Ms. Elgee 106,000. Will get additional information. Suggested that perhaps the attorney handling the case could come before the committee. Senator Donley "This $100,000 is this additional money coming in? Or money raised from some unrelated sale to this particular problem?" Ms. Elgee Not a direct relationship between the fuel oil and the property. The fund represents all the monies the State has earned in conducting this program. Co-chair Parnell The ten cents per gallon the City of Bethel paid went into the fund? Ms. Elgee Yes. Senator Donley Does any balance go to the Federal Government? Ms. Elgee Explained they have no obligation beyond the revenues that belong to the State as they are collected. Senator Donley Direct impact on our State budget in addition to helping out the Federal Government. His concern was that $37,000 sale equaled to $100,000 for cleanup plus litigation costs. Ms. Elgee Does not know all the mechanics involved in this incident. Special provisions for municipalities acquiring surplus properties. Senator Donley Employee leaving valve opened.should be their liability. Ms. Elgee Believed that is what the outcome will be. Co-chair Parnell Asked to continue to Section 7 Power Cost Equalization and Rural Electric Capitalization Fund. Percy Frisby Power Project Loan Committee, Division of Municipal and Regional Assistance, Department of Community and Regional Affairs was invited to join the committee. He explained Section 7 and the PCE funding requirement. Co-chair Parnell Asked about $1.7 reduction. Mr. Frisbee Reduction of costs to rural Alaska for fuel. Senator Donley "What has the department done to reduce demand for electricity under this program?" Mr. Frisby Generation efficiencies have been successful; also eliminations in their line loss and updating their generators. Senator Donley What is the cutoff for programs when you decide a community is now self-sufficient? Mr. Frisby Have not set any cutoff at this point. Systems are very expensive to operate. Co-chair Parnell If this appropriation is not approved, what will happen to the program? Mr. Frisby Would have to notify REC. Co-chair Parnell Went to Section 10, Department of Education. Karen Rehfeld Director, Division of Education Support Services, Department of Education was invited to join the committee. Section (a) AVTEC - Maritime Vessel Simulator upgrade. Section (b) Foundation Formula Reduction, Alyeska Central School summer school program. Helping students that have basic education needs. Reduction in the amount of $1.5 million. Section (c) Vocational Rehabilitation, change funding source from statutory designated PR to the Vocational Rehabilitation Small Business Enterprise Fund. Also requested this fund source change in FY 00 operating budget. Co-chair Parnell What is the source of revenue for the small business enterprise fund. Ms. Rehfeld Commissions from vending machines on Federal properties. On State side machines in State facilities. Trying to link both programs so they can access these funds. Co-chair Parnell Back-up not sufficient. Asked for clarification. Ms. Rehfeld Blind vendors receive the benefits from this program. Senator Adams What is the budget? Ms. Rehfeld Budget authorization $106,000. Referred to stale dated warrants in section 20. These were based on human error. Would have been paid before the last two years had it been possible. Section 22(b), page 13, line 8 This was the closure of the Adak School District and legal services related to the closure of this school as paid by the Department of Education. Several issues related to the Superintendent. Senator Phillips Said he thought the Superintendent should be in prison. Has lost his teaching certificate and was limited on his retirement. Particular case is a very sore issue. Ms. Rehfeld Explained monies paid to the Department of Law for their legal services during this period of time. Co-chair Parnell Any funds collected by the Department of Law for this matter? Ms. Rehfeld Does not know all the specifics of this matter. Has never closed a school district before. Co-chair Parnell Who was the Assistant AG? Ms. Rehfeld Assistant Attorney General Tom Dahl handled the case. Co-chair Parnell Called Department of Health and Social Services. Janet Clarke Explained section ll(a) for upgrades for emergency medical equipment in the amount of $311,600. Upgrades have been delayed presently. They have five years to spend capital appropriations. Section 11(b) Vital Statistics Archive Imaging and System Replacement in the amount of $320,000 not included in Y2K fix. Section 11(c) Welfare Reform Information System and Office Automation in the amount of $2,217,200. Section 11(d) Client Date Integration. Section 11(e) Catastrophic and Acute Illness Assistance. Serves same individuals as old GF clients with the exception of abortions. Requirements are a monthly income of $300, less than $500 assets and individual must require immediate medical care. Cannot do any internal transfers due to legislation. Referred to page five of their backup there is list of how their funds have been spent. Co-chair Parnell Working with the Department to try and find the funds necessary for this request. Personally has worked to assure this request is a high priority. Spoke with the Commissioner and she had been able to get pharmacies to suspend their collections at present. Feels if they accept Medicaid reimbursement they should accept CAMA. Senator Green Appropriation from the Legislature last year was $1.9 million? Ms. Clarke Indicated that was correct. Was able to pay part of February payments. However, the request is basically for January plus. Related Commissioner's concerns regarding the pharmacies. Senator Leman In addition to pharmaceutical what other expenses are there? Ms. Clarke Would prefer Bob Labbe to respond. Bob Labbe Director, Division of Medical Assistance, Department of Health and Social Services was invited to join the committee. Senator Leman Referred to family planning and asked what services were being provided and to whom they were being provided. Bob Labbe There are some family planning providers they can reimburse. Amount of $54.00 for July very minute amount. Senator Leman Asked about the $2,400 dollar amount and asked back-up be provided. Co-chair Parnell Said they would just review the supplemental as is and then come back and look at possible funding sources. Mr. Labbe Biggest disappointment was agreement they thought they had with Carr's pharmacy. They represent over fifty-percent of the business. This latest development may cause domino effect. Would have difficulty placing further requirements. Co-chair Parnell Anyone suggested pharmacies should refrain from accepting CAMA receipts? Mr. Labbe Not to his knowledge. They do not want any individual cut off, however, and have no intent of goofing this up. Senator Leman Services valid under previous terms of GF. Asked for description of these services. Ms. Clarke Would like this request withdrawn. Senator Leman Even if this request is withdrawn would like to see description. Ms. Clarke They have reviewed operating grants and budgets so they could offset supplemental requests as much as possible. Reduction in Alcohol and Drug Abuse Services and Training Services explained. Section 11 (g) and (h) contain a number of reductions. This was for Community Mental Health Grants, Psychiatric Emergency Services; Services to the Chronically Mentally Ill. Trying to meet needs in individual homes rather than placement in a facility. Section 11(I) State Health Services - Nursing Grants. Funds available but have not been spent. Section 11(j) State Health Services - Healthy Families Section 11(k) Community Health Grants Section ll(l) Public Assistance Administration Section 11(m/n) request for subsidized adoption and guardianship supplemental in the amount of $656.9. This program covers special needs children being placed for adoption. Goal has been to provide permanent placement for children in facilities. It is good for children to be in a permanent home rather than foster care. Senator Phillips How many children does this involve? Ms. Clarke 1,300 cases. Senator Phillips Is this caseload up from last year? Theresa Tanoury Administrator, Family Services, Division of Family and Youth Services, Department of Health and Social Services was invited to join the committee. Explained increased attention in moving children through the system. That is why there is an increase in the caseload. Senator Phillips Referred to broken homes, drug and alcohol situations and how we are dealing with this problem. Is there an increase in drugs and alcohol that is contributing to this increase in case-load? Ms. Tanoury There are many reason that children cannot return back to their homes. Senator Phillips What is being done to the parents? Ms. Tanoury Many have had heir parental rights terminated. Co-chair Parnell What was unanticipated from last May? Ms. Tanoury Identified children in the transition from the old law to under the new Federal laws. One of the provisions of the new law was a time limit on children that are in foster care to be identified and then create program for these children. Project Succeed - non-profit organizations and tribes have helped out greatly in the past. (Tape number 42, changed to tape number 43, side A at log #000 at approximately 10: 50 a.m.) Senator Phillips Attitude of society is going to have to change with respect to these children. Senator Green Amount in budget last year for this program? Ms. Clarke Spent a little over $6 million in FY 98. This is above and beyond the Governor's request this year, however. Co-chair Parnell Would like to get through Department of Health and Social Services before 11:00 if possible. Asked source of funds. Ms. Clarke Referred to section 11(m/n) would normally be distributed to grantees. Based on the Legislature's desire for net zero felt they had an obligation to let the Legislature know there are funds available. Co-chair Parnell Asked clarification of reductions. Is this under the Governor's belt-tightening plan? Ms. Clarke Yes, they realize this and this is the best solution they are able to come up with and suggest at this time. Co-chair Parnell Everyone knows these are tough situations and everyone is trying to help out. Ms. Clarke People actually spend less than they are authorized to spend and therefore there are funds to be returned or re-authorized. Have been able to add 60,000 some individuals under DD program. Senator Adams Referred to an issue discussed under Key Campaign. Are there over 1,000 individuals on the wait list? Ms. Clarke Are working to identify this. Senator P. Kelly Number for dental care? Ms. Clarke Division of Medical Assistance has looked into this and will provide information to the committee. Section 11(o) are looking to withdraw this supplemental request. Section 20, miscellaneous claims. Requirement they cannot pay bill more than two years old. Items total $16,600. Three are for foster children who were believed to be Medicaid- eligible at the time. In seeking care for these children they were later determined to not be eligible. Therefore, the department had to pay. Co-chair Parnell Will work on those sections they did not complete today on Friday. Adjourned at approximately 11:02 a.m., tape number 43, Side A, at log number 151. SENATE FINANCE COMMITTEE LOG NOTES 03/03/99 Page 1