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: 9:45 a.m. Tape(s): SFC-99 #45, Side A and B 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 Management and Budget; KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources, KATHRYN DAUGHHETEE, Director, Division of Administrative Services, Department of Law; NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Safety; MARY MARSHBURN, Acting Director, Division of Administrative Services, Department of Revenue; BARBARA MIKLOS, Director, Child Support Enforcement Division, Department of Revenue; WENDY REDMAN, Vice-President for University Relations, University of Alaska; aides to committee members and other members of the Legislature. LOG SPEAKER DISCUSSION 000 Co-chair Parnell Convened the meeting at approximately 9:45 a.m. starting with Section 12, insurance and bond claims. Nico Bus Administrative Services Manager, Division of Support Services, Department of Natural Resources was invited to join the committee. Co-chair Parnell Section 13. Kathryn Daughhetee Director, Division of Administrative Services, Department of Law was invited to join the committee. Some monies going to pay outside counsel. It varies with the firms. Co-chair Parnell What percentage has been expended to date? Ms. Daughhetee Will have to get back to the committee. Has not looked at the up-to-date specifics. Perhaps sixty to seventy percent. Nico Bus Section 14, Department of Natural Resources Explained an unseasonably high work load. Recording office could not keep up and get documents recorded within 24 hours and returned to the client. Senator Wilken Fairbanks Recorder's Office had no backlog for the first 100 years. Mr. Bus Responded briefly. January 4 started new computer system which allowed them to catch up. Fairbanks Recorder's Office was for the first time caught up temporarily. Palmer is approximately six weeks behind and Anchorage is approximately two weeks behind. Senator Leman Increase charge back by Department of Administration in memo dated 12 February 1999. Mr. Bus Two types of charge backs. He explained how this worked. Co-chair Parnell Section 15 Ken Bischoff Director, Division of Administrative Services, Department of Public Safety. This section deals with Alaska State Troopers. Section (a) decreases. Section (b) increases Senator Adams Asked Mr. Bischoff for clarification of these. Mr. Bischoff Responded. Senator Torgerson Making any effort to sell? Mr. Bischoff Trying to make arrangements to sell. Cannot consummate the sale in one year Senator Torgerson Do you have another request in? Mr. Bischoff Another request to replace a 50 foot vessel. Senator Donley Clarification of item (c). Mr. Bischoff Academy costs. He explained this was to train twenty recruits. Senator Donley Asked what the communication costs were? Mr. Bischoff Briefly explained. Senator Donley "What happens if we don't pay this?" Mr. Bischoff Department of Military and Veterans Affairs would have to absorb this or they would have to come in for a supplemental. Senator Donley Referred to purchase of helicopter. What was the plan if they did not get supplemental for $112,000? Mr. Bischoff Explained this was charge for the Anchorage helicopter. Suffered damage and needed to be repaired. Senator Donley Did you get an increase in FY99 from FY 98? Also FY 98 from FY97? Mr. Bischoff Does not have the information here but can supply for the committee. Senator Donley The department has not received any cuts. Mr. Bischoff Continued to Section 20, miscellaneous claims. $93.00 for bills they have no authorization for prior years. Senator Torgerson Collections are down? Mary Marshburn Acting Director, Division of Administrative Services, Department of Revenue was invited to join the committee. She introduced Barbara Miklos from Child Support Enforcement Division. Senator Torgerson How much needed for their budget and how much passed to other Department of Health and Social Services programs? Ms. Marshburn None of those dollars will be passed to any other agencies. Senator Torgerson Explained that monies were being passed on to other agencies and then themselves are coming in for supplemental monies. CSED may have to be dealt with in another supplemental. Ms. Marshburn Explained that the shortfall was unexpected. CSED monies they collect next year will go directly to their own budget. Senator Green Changes to the Federal law? Co-chair Parnell Called the Department of Transportation and Public Facilities, Section 18. Nancy Slagle Director, Division of Administrative Services, Department of Transportation and Public Facilities was invited to join the committee. Monies for Anchorage International Airport. Potential for additional Federal dollars associated with this project. Subsection C title change for Anchorage Airport. Senator Torgerson What is the source of funding? Ms. Slagle International Airport funds. Can provide further information. Subsection D, fiber optic cable increase. Have dealt with this in the past by a shift in program receipt authority within the department. Budget structure this year does not allow these transfers. Will take care of it for year 2000 budget so this request will not be seen again. No money to cover maintenance on facility in Valdez. Administration reached agreement with the City of Valdez. They will take facility over at the end of the year. Money covers maintenance, snow removal to keep facility from degrading. Department of Transportation has never maintained this facility before. Was handed this project the first of July. No money in the 2000 budget for maintaining the facility. This is a one-time effort. Administration is continuing to talk to the City of Valdez to take this over. Senator Torgerson Asked who made the agreement? Ms. Slagle Department of Administration, City of Valdez and the Department of Transportation. Senator Torgerson No one had money to handle this in their budget? Ms. Slagle Facility is still the property of the State. Agreement calls for continued negotiation for the transfer. Senator Torgerson "What would you do if we did not fund this?" Ms. Slagle The department has already expended money for maintenance. Would have to find the money somewhere in our budget. Otherwise would have to board it up and close it down. It contains the City's hospital. Senator Torgerson The State pays $235,000 and the City figures this is a good deal? Ms. Slagle She said she was not part of the negotiations. Senator Torgerson Would feel more comfortable if the City of Valdez took this facility over. Would fund this request under those conditions. Ms. Slagle Subsection (g) reduction, increase in out of state commercial vehicle permits. Fiscal note allowed them to collect up to $525,000. Amount received is substantially less. Truckers now getting instate registration. Department gets less money. Maintaining the Tok facility on 24 hour basis. Section (h) and (I) not realizing revenues nor expending the monies. Total impact of section 18 is reduction of $72,600 in Federal funds. Co-chair Parnell The Department of Transportation is slated to take a reduction and where will they take it from? Ms. Slagle Cuts would come from various parts of the department. Tried to distribute it evenly throughout the department, such as: there will be less paint being purchased to stripe the road; less salt for the roads purchased, vacant positions left open for several months, some roads throughout the northern region area will not be plowed open, looking at adjusting schedule so Columbia will stay in lay-up for additional two weeks, administrative cuts mostly in the area of not filling positions in order to make it through this year. Senator Torgerson Re $100,000 increase for design and construction. No corresponding decrease. Ms. Slagle Indicated that sections (g), (h) and (i) were all decreases. Senator Torgerson Asked if these sections should not be listed in the bill? Ms. Slagle Explained as best she could, however, she did not fully understand the question. Co-chair Parnell Advised that Senator Torgerson and Ms. Slagle discuss this further. Dan Spencer Chief Budget Analyst, Office of Management and Budget was invited to join the committee. (Tape #45 switched to side B at log number 590 at approximately 10:37 a.m.) Travel and equipment reductions. Same formula used for all departments including Department of Transportation. Senator Phillips Did you use any priority? Mr. Spencer Used belt-tightening system. Prison system, for instance, if guard resigns, that position must be filled. Not just talking about maintenance and operations. Mr. Spencer No belt-tightening to Department of Health and Social Services. Co-chair Parnell Would like listing from departments of where their savings are coming from. Mr. Spencer They do not know. He explained that the instructions given by the Governor was that the departments would find the way to save the money. Some departments individually know where the savings will come. However, other departments will not know what positions will become vacant or if they become vacant or will the cuts have to come from somewhere else within the department. There is also a hiring freeze and individual departments must decide whether positions can be frozen or not. Governor has made it clear that there is a travel cut, and hiring freeze. Co-chair Parnell Do the departments have this built into their plans? Mr. Spencer Does not know. Most of the departments probably do know where the cuts will come from but no formal procedure has been set up for the departments to follow. Co-chair Parnell Have tried to make plan to make real reductions. Need more guidance from the departments as to where they are going. Mr. Spencer Explained that they were talking about a budget that is already underway and departments do not have the lead way to make appropriate reductions. For instance, bulk of seasonal work has been done in some departments. Not much time left in the fiscal year. Much different prospect due to the lateness of the project. Co-chair Parnell Requested they get plans from the departments so they will have some idea of what the cuts are. Mr. Spencer With the understanding that these are not locked in they will be able to provide some basic information. Senator Phillips Cuts seem disproportionate. Would like to see criteria of setting up priority of cuts. Mr. Spencer Before numbers can be run, the fact of the matter is that they looked at priorities, for instance State Troopers and institutions. Co-chair Parnell Excused Ms. Slagle and Mr. Spencer. Wendy Redman Invited to join the committee. Explained section 19. Senator Phillips What percentage of money spent on research projects. Ms. Redmond Negotiated amount by the Federal Government. Varies by different research institutes. Research overhead runs approximately fifty to sixty percent. Department of Navy does this program. They do try to keep the rate lower for when they try to acquire grants. Co-chair Parnell Asked if there was anyone left from Corrections and Fish and Game, Law; Court System. Senator Donley Where is the Court system in the bill? Co-chair Parnell Section 20. (brief discussion as to where the items for the Court system are listed.) Will take this section up this evening. Outlined the schedule for this evening. Will try to get through Judgment and Claims. Senator Adams What about caucus? Co-chair Parnell Have changed caucus time and will be reconvening this evening at 6:00 p.m. Will finish overviews tonight and come back to Disaster Relief. ADJOURNMENT Co-chair Parnell recessed the committee until 6:00 p.m. this evening. SENATE FINANCE COMMITTEE LOG NOTES 03/04/99 SFC-99 -1- 03/04/99 an