MINUTES SENATE FINANCE COMMITTEE 13 February 1997 9:05 a.m. TAPES SFC-97, #35, Side 1 (000 - 592) Side 2 (592 - 000) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:05 A.M. PRESENT In addition to Co-chair Pearce, Senators Sharp, Phillips, Donley, Torgerson and Adams were present when the meeting convened. Senator Parnell arrived shortly thereafter. ALSO ATTENDING: Senator Jerry Ward; Annalee McConnell, Director, Office of Management and Budget, Office of the Governor; Sharon Barton, Director, Division of Administrative Services, Department of Administration; Dugan Petty, Director, Division of General Services, Department of Administration; Robert Cole, Director, Division of Administrative Services, Department of Corrections; Janet Clarke, Director, Division of Administrative Services, Department of Health and Social Services; Mike Greany, Director, Division of Legislative Finance; Susan Taylor, fiscal analyst, Division of Legislative Finance; and aides to committee members and other members of the legislature. VIA TELECONFERENCE: Brant McGee, Public Advocate, Office of Public Advocacy, Department of Administration; Barbara Brink, Acting Director, Public Defender Agency, Department of Administration; George Buhite, Director, McGlaughlin Youth Center; Greg Thompson, Director, Fairbanks Youth Facility; Mark Johnson, Chief, Community Health & Emergency Medical Services, Division of Public Health, Department of Health and Social Services. SUMMARY INFORMATION FY 97 supplemental requests for Departments of Administration, Corrections and Health and Social Services were discussed by the above-listed individuals. Co-chair Pearce announced the meeting would be recessed until Monday morning at 8:30 a.m. The committee will continue hearings on the supplemental requests. SENATE BILL NO. 83 "An Act making an appropriation for management fees for the constitutional budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska); and providing for an effective date." Co-chair Pearce convened the meeting at 9:05 a.m. She explained the use of SB 83 as the working vehicle to fold supplementals into. Annalee McConnell, Director, Office of Management and Budget, was invited to join the committee. She felt there had been significant changes both in terms of how the Legislature has viewed the supplementals and the Administration throughout all the departments. They do realize however there will have to be some supplemental items. There still are some issue areas to be addressed in whether they are funded in the spring as part of the main budget bill or in the supplemental process; and an issue of timing. Part of the concerns she heard from legislators was not wanting to see departments continue to expend during the first part of the year on the assumption there would be supplementals received to allow them to keep up that level of spending. It is important to clarify for departments and the public whether or not it is expected to have a level of supplemental funding for some items or not. She referred to a back-up sheet in the form of a transmittal letter which organized the areas of the supplemental request in several categories. Type one were the items they knew would be underfunded by choice in the legislative process last year; type two were the judgments and claims typically handled in the supplemental; type three were items they were not aware of where the urgency changed between what was known last May and the present time. Under the first group, the ones acknowledged to be reading supplementals to carry out the full year; the leasing budget, public defender, adult public assistance, etc., totalled about $8.5 million. These were areas based on projections that would require a higher level of funding. In some case the Legislature chose to put intent language into the bill to acknowledge there would be a need for additional funding later on. The information coming back does confirm where we are and what the estimates have been in the prior part of the budget process. There are two areas, disaster relief and fire suppression where there has been a pattern of only partial funding in the main budget bill. The Legislature appropriately felt there was a need for some real heavy duty work on close-out of old disaster accounts. That has now happened. Most of the costs of the southcentral flood were handled by closeouts of old disaster accounts. The next stage in the process, is taking a look at whether there is a need for dealing with disasters in a different manner in the main operating budget. It would be appropriate to consider in the FY '98 process whether the basic costs of disaster and fire should be covered as part of the regular GF budget. As mentioned, there is no need to change the process in judgments and claims as it is appropriately handled in a supplemental process. On the sectional handed out today, it has been noted that additional judgments and claims have been received in the amount of $25,900 and formal documents will be submitted later. "Cleary" has been estimated through the end of the fiscal year and as the Governor indicated in his transmittal letter it was their recommendation that appropriation could best be handled in a fashion that would address the underlying problem which is overcrowding. This is not an actual settlement but could be held in some sort of an account. New information was had this year that suggested a reason to speed up the schedule and not just wait until the FY '98 process. An example was the boiler in Fairbanks at the correctional facility and the issues of security at the juvenile facilities both McGlaughlin in Anchorage and in Fairbanks. There have been some serious problems just within the last couple of months. With legislative approval now, the procurement process could begin as soon as possible. Another example was the Perseverance Trail, which will be very heavily used by tourists and residents alike in a couple of months. She referred further to Venetie that will be coming forward to deal with the price increases that have resulted in a significant change in how much of the power cost equalization program will be funded. At the time the Legislature took action last spring it was estimated that PCE would be pro-rated by 85% and based on the fuel prices it looks like about 67%. Another area being looked at that is not yet ready for introduction but should be flagged is the area of the southeast initiative specifically problems in southeast communities that have been hard hit by the changes in the timber industry. She had no final details but just wanted them noted. The ratifications do not have an actual dollar impact on the budget for '97 but they are introduced here as part of the package. She said this was just a rough overview of the process of how what was determined to be recommended in a supplemental process, with the hope that the supplementals would move well ahead of the regular FY '98 so they could be clear with the departments about funding levels for the remainder of the year. Senator Adams asked if there were any federal receipts or unanticipated revenue increases that we should be looked in to at this particular time from any of the agencies. Ms. McConnell said there were things going through the LB&A process and there would be more items coming up at the next meeting. The only one presently, that is strictly a federal issue, is the Indian Health Service. Senator Adams asked if that could be handled in a supplemental rather than LB&A. Ms. McConnell said that it certainly could be. The process had been followed where LB&A was authorized to handle various issues which had been approved at prior meetings. It was assumed to follow the current practice. Sharon Barton, Director, Division of Administrative Services, Department of Administration was invited to join the committee. She explained that section 1(a) was a request for $1,018.7 million for the leasing budget. When it was closed out last spring a shortfall of approximately that amount was predicted. Having exhausted the opportunities for making lease-by-lease cost savings the Division of General Services had focused its' attentions this year on the opportunities for greater savings, long- term savings in the lease budget, mainly in a lease-purchase opportunity, mainly in Anchorage to cut down on the high rental costs. For FY '97 there will be a shortfall of just over a million dollars. Senator Adams asked if the leasing for trooper housing was covered under this particular section. Dugan Petty, Director, Division of General Services, Department of Administration was invited to join the committee. In response to Senator Adams, he advised it was covered under their BRU for lease payments on their housing. Senator Adams asked if it was preferred that this was done under their own housing supplemental. Mr. Petty said that over a decade ago authority was delegated to the agencies to enter into their own housing agreements and pay their own rental payments. There are no housing or lease payments in their budget. Senator Adams asked about the lease/purchase of the Bank of America building in Anchorage. Mr. Petty said this supplemental request had no impact on the lease/purchase agreement. Senator Sharp asked about the Frontier Building acquisition. Mr. Petty said the strategy in managing down this fiscal year's budget at the time the budget was prepared was to focus on the high costs leases in the largest increments of space. The averages are in the neighborhood of about $1.50 per square foot. That particular lease was $2.15 to $2.17 per square foot. It is a consolidation of a significant amount of space that is coming due for replacement in a couple of years. The strategy in reducing the leasing obligation was to try and reduce that one in particular in order to make some significant reductions in the leasing budget. The focus at the time in preparing last year's budget was in negotiations with the owners of the Frontier Building to reach a lease/purchase agreement that would allow reduction of the lease budget and to bring a package back to the Legislature. They were not successful and could not get significant savings. Senator Sharp further inquired which building it was in November that there was a hot deal on. Mr. Petty advised that it was the Bank of America building in Anchorage. Co-chair Pearce asked if there was a ten-year lease schedule showing what year which leases and how many square feet were coming up for lease that could be made available. Mr. Petty said he would provide it. She further asked whether in the cost estimates that have been developed on the possible Bank of America purchase have the penalties for getting out of any current leases been included in those cost estimates that are being forwarded. Mr. Petty said they had included project development costs, which would be tenant improvement, remodeling costs necessary to make the space built out for State agencies coming in, and there are some contingency costs in there that would help negotiate some buy-outs. Co-chair Pearce asked if any actual penalties had been figured into those costs. Mr. Petty said they had not. The strategy would be to be out when the leases expire. Senator Phillips referred to 1(e) and settling of this matter. The State of Alaska is a big target and this is probably one of the most sue-happy states in the country and he said he is getting tired of funding every wrong that has been done. He said they should stop encouraging lawsuits. Mr. Petty said both cases were perfect examples of where the State was trying to hold the line. They believed the prudent thing to do was reduce their obligation and the cost to the State and to reach a settlement. The first of the two, Juneau One Stop consolidation was a variety of half a dozen agencies with a new concept of having public assistance programs from the Department of Labor, programs from Vocational Rehabilitation aggregate together in one location. This was part of the welfare reform initiative to service customers in terms of job training and programs they provide in one stop instead of them being referred to a number of agencies through the state. This building was an existing lease occupied predominately by the Department of Labor, one of the key groups that would be part of this consolidation. It was also occupied by the Department of Health and Social Services, Family and Youth Services. The strategy to put them under one roof was to take the existing lease and put them in that lease, requiring us to bid out replacement space for Family and Youth Services. That is where the claim occurred. An RFP was put out. The first to move out was Family and Youth Services and then we had to go from the Wildmeadow Building. Mr. Petty answered said they would have to go in and do floor by floor renovation to pull the consolidation together. The final two were some additional leases that were at expiration. The people from public assistance would move into the new lease in the Wildmeadow Building. An RFP was put out to acquire space for Family and Youth Services. There were a couple of competitors and one even had a foundation in the ground. They basically designed the building based upon the RFP. He further explained there was a protest and the ensuing developments. After a review of the protest it was denied and the commissioner upheld the appeal. After several hearings and delays that side of the equation when added up looked like it was a larger number than reaching a settlement. There were various opportunities to settle but they were not chosen. At some point it was thought it was not going to be in the best interest of the State and be more costly to pursue. Senator Phillips said he did not know all the details but this sounded like a ransom was being paid for the kidnapping. Mr. Petty said he would be happy to provide any necessary information for the Senator. Senator Phillips asked if that was the same situation with the Environmental Conservation land. Mr. Petty said the Environmental Conservation Lab was a different circumstance and proceeded to explain. There were some bonds issued by the developer but this was not a lease/purchase agreement. It was an operating lease and when it expired we were out. There were a variety of issues but some of them had to do with the fact that a haylon fire suppression unit was specified for the building because it was designed that way by Environmental Conservation. The contractor, after bidding, came back and said he wanted to put another system in. There is State has a strong case even though there may be some liability. There has been no supplemental because we have been taking this on through our purchasing budget. The costs associated with fighting this include RSA's to the Department of Law for the attorney, expert witness costs and hearing officer costs. There has been a hearing officer on this case for several years. He further advised Senator Phillips that several changes had been made in the procurement law; one being to put a statute of limitations on claims against the State so there is not a situation where five years later someone comes in with a claim. This was one of the issues that caused us to do that. It is expected to bring this to conclusion this fiscal year. Senator Torgerson asked if the contract for the Kenai area had been awarded. Mr. Petty said his understanding was the RFP's had not been awarded. Senator Torgerson asked if there had been a lawsuit filed yet in this matter. Mr. Petty said to his knowledge there had been no lawsuit filed over that. Lease procurements, particularly large ones, typically do not receive an award without being contested. They are more complicated and complex and there are usually greater dollars involved. There are more dollars invested by the preparers of the proposal for the bids to respond to one of these. Senator Torgerson said the Kenai lease was let out for square footage. The four or five agencies that were combining were quite a bit in excess of what they actually needed with the downsizing of the Department of Labor. The end result was that the only buildings that could be bid on this were facilities located in the City of Kenai and it left out all the other areas in Soldotna unless they were willing to kick out renters. He said he protested this approximately a year ago. Three of those individuals are probably going to file lawsuits. There will be a lot more of these if the State continues to do business like that in his district. Senator Phillips requested Mr. Petty provide a list of lawsuits for particular situations during the last five to ten years. Mr. Petty said he would prepare a summary document. Sharon Barton continued with section 1(d) requests $317,500 for the Office of Public Advocacy. Last spring a shortfall in this budget of something over $500,000 was estimated. It is always a challenge to accurately predict what the contractual costs will be. This contractual money is entirely for attorneys, expert witnesses and those associated with the cases referred to the Public Advocate that the Public Defender cannot handle. The number was somewhat reduced from the original projection of something over $500,000. Co-chair Pearce, referring to that section, asked when the Governor's request would come over and Annalee McConnell characterized some of the sections in this bill, including the fire suppression section and the leasing section that had been deliberately underfunded with the expectation from the Legislature, through either intent language or some indication that indeed they did expect to see a supplemental. Quite honestly it had never been heard that the Office of Public Advocacy or the Public Defender Offices were to be included in that category. What happened either on the House or Senate side or the floor when the budget passed that led to belief that a supplemental this year on that section was expected. Ms. Barton said in the materials that were provided in close-out and conference committee on the lease/budget, the Public Advocate and the Public Defender was documented that they were underfunded to such an extent that it was beyond means to reduce costs in the next fiscal year. As to agreements by anyone or promises made about supplementals this year she was not aware of any such commitments by the Legislature except to say that every opportunity has been taken to advise that in spite of best management efforts these are budgets driven by factors beyond control and there would be need for a supplemental this year. Senator Donley said a better justification was needed. He said he wanted to know why it was thought the Legislature had that state of mind when they passed the budget. Annalee McConnell said she was the person who put those words in. Going through the last legislative session and special session, as indicated by Sharon Barton, this was presented as an item felt to be unreasonable and impossible to keep within the amount which was in the initial bills put together by the Legislature. In some cases there was intent language, as Senator Pearce mentioned there was the rather humorous exchange about the leasing budget with Senator Frank saying "trust me". There were also a lot of conversations regarding negotiations through the end of the session to come to a conclusion with respect to the budget. These were items that were discussed quite considerably with the chairs of the House and Senate Finance Committees on the operating sides, Senator Frank and Representative Hanley where it was discussed to come back for supplementals. Certainly it is understood about the wording here, in terms of the expectation. It was very clearly communicated the necessity for supplementals and the possibility the number would change slightly. As Ms. Barton indicated it is a little less than thought. There was very considerable discussion about the fact that there are some areas of obligations and the targets that the Legislature hopes to set cannot always be met. Senator Donley asked if Senator Frank or Representative Hanley said it would be o.k. to come back for a supplemental in these areas. Ms. McConnell said they obviously did not ask for permission from the Legislature about what to submit. They submitted what they believed was necessary to submit. It was discussed with them on several occasions that there would be items that they would have to come back for with supplementals. (Tape #35 switch to side 2 at log #592.) Senator Donley asked if anyone conveyed to her they would support a supplemental. Ms. McConnell said the need to come back for a supplemental was understood. Senator Donley said he felt the document was inaccurately worded and the request was very misleading. Referring to the memorandum that was attached to the backup the department says the managers of those programs made every effort to contain or reduce the costs and asked what was the basis for this statement. Sharon Barton responded saying in the case of the Public Advocate Mr. Brant McGee was on teleconference and would answer questions relating to that office. Senator Donley said he would prefer Ms. Barton to answer the question because he wanted to know what her understanding was when she signed the document representing this matter. She said her understanding was the Public Advocate had strictly administered contracts with his private attorneys and with others in his office who make obligations on behalf of their agency for expert witnesses, travel, for whatever contractual costs are associated with the cases. The Public Advocate does not have the opportunity to make up these costs by way of holding vacancies within staffing, etc. His costs are in the contractual line item. With respect to the Public Defender she indicated it was a different situation. Those costs were personal services costs. In spite of the fact the budget was substantially underfunded and an increasing caseload of 19% for felonies, which affects both Public Defender and Public Advocate, overworked staff held positions vacant in eight different offices throughout the State causing considerable problems and hardships on the rest of the staff in order to reduce, what they believed at the beginning of the fiscal year, was a potential supplemental of $475,000 down to $268,000. These managers have worked these issues very hard. The average cost per case in the office of the Public Advocate is substantially reduced over the years. Senator Adams said he was not here to debate wording of what someone said but rather have a constructive debate on what the new crime legislation that passed has on both of the agencies. He wants to hear why they need money. Brant McGee, Public Advocate, Office of Public Advocacy, Anchorage testified before the committee via teleconference. He indicated that their costs were mainly driven by caseload increase involving every category; abused and neglected children, incapacitated adults and criminal cases. The volunteer guardian ad litem program in Anchorage has been expanded in terms of profiting measures to over 120 volunteers. New volunteer guardian ad litem programs have also been opened in Mat-Su and Kenai Peninsula. With respect to criminal cases they have continued their profiting measures with respect to the use of expert witnesses, travel and witness travel. There is a cost associated with that, especially in terms of service to individuals in rural areas. Lawyers are not travelling as much as they did, but are handling cases telephonically. There are a significant number of cases folks are able to pay for services. In that regard the intake of public guardian cases has been reduced although there are still substantially increases in that area primarily because of the aging of the Alaskan population and the increased awareness among institutions and agencies of the public guardian option. Senator Donley asked what percentage of the supplemental costs reflected increases for criminal services versus non- criminal. Mr. McGee said he did not know. These were projected on the basis of different cost categories but they were not broken down under criminal or civil. In regards to an earlier statement by Ms. Barton he said they projected increases associated with caseload increase some $617,00 a year ago. They have substantially reduced that estimate and feels that the savings has been through the realization of cost saving efforts in FY '96 that they have applied to the FY '97 operation. Senator Donley further asked if any comparison had been done in the criminal area of representation with how other states provide their criminal representation. Mr. McGee said he was very well aware of how other defense operations manage case loads in other states, both through contact with managers in other states and also through national organizations. The office of the Public Advocate is a hybrid agency providing a substantial portion of its representation in major population centers through staff representation. Most outlying area representation is handled through contractor services. The differences are dictated principally by geography and by the fact that population centers are outside the major cities in Alaska are not big enough to support the creation of staff offices. He said that every single case needing criminal defense representation is a case that comes to them because the Public Defender Agency has a conflict of interest. Like the Public Defender all of their cases come to them by Court orders of appointment. Most of the criminal cases are handled in Anchorage and Fairbanks by staff lawyers. They also provide representation in major criminal cases and in particular homicide cases, throughout the state because they have found and demonstrated it was cheaper for them to provide the representation from the central office rather than hire local contractors for the big cases. For more routine cases they do have contract attorneys in each Superior Court location throughout the State. It is through them representation in the criminal arena is provided. Senator Sharp said he recalled last year the finance committee did in fact show strong indications of reluctance to supplemental funding and some areas were reduced. It was very clear the intentions of the Legislature to control and not expand any further the increased costs over the last five or six years of the Public Defender. It was very clear as far as this committee was concerned as to what the direction was regarding the office of the Public Defender and the Public Advocate. He recalled Senator Donley stressing his concern about how that had grown in proportion to the funds available to the District Attorney's office for prosecutors compared to the increased staffing for the Public Defender. He wanted to know where the philosophy came that they were going to entertain supplementals in this area and encouraged them to come forward with it if it was required. He said his constituents were increasing concerned about the Public Defender's office making available to convicted criminals two public defenders for appeal cases. He cited specifically an individual convicted of a heinous crime and the Public Defender provided two defenders to go all the way to the Supreme Court. These results were published in a Fairbanks newspaper about a month ago. Mr. McGee said he could not recall when two attorneys were assigned to an appeal. Typically, one lawyer is sufficient to handle an appeal. Co-chair Pearce said that Barbara Brink from the Public Defender Agency in Anchorage was on teleconference and could respond to Senator Sharp's specific questions. Barbara Brink, Acting Director, Public Defender Agency, Department of Administration testified before the committee via teleconference. Specifically, concerning appeals she explained that it was the policy of the Public Defender Agency to assign one attorney. Two appellate lawyers are not assigned. It was typical when a brief was filed the name of the attorney who actually wrote the brief along with the name of the attorney who is the head of the agency are named as required by the appellate rules. She said they handled less than 300 appeals last year. Senator Sharp said he would send the article to Ms. Brink because it clearly stated there wee two public defenders involved in the case. Whether it was a supervisor or not he did not know. Senator Donley referred to the decade 1985 through 1995 the budget of the Public Defender's office went up an actual 47 per cent, the Public Advocacy office went up 178 percent and the budget for our prosecutors went up 4 percent. If they are filing so many more cases and they are successfully prosecuting that many more with only a four percent increase, why has it been necessary for the Public Defender's office to have a 47 percent increase and the Public Advocacy office to have a 178 percent increase over the same period of time. He said he did understand a large portion of the Public Advocacy office's job is not criminal and would like a breakdown. Mr. McGee said there was definitely a 178 percent increase but he would note, as well, the caseload had increased by more than 400 percent during the same time and they had reduced the average cost per case by some 36.5 percent over that same period. There have been significant increases in the budget but they do not come close to matching the increases being experienced in caseload. About half of their cases do not have anything to do with the criminal division or the Department of Law. They come by way of the Division of Family and Youth Services and also through other agencies and non-profit institutions around the state about petitions regarding children and conservatorships. Senator Sharp referred again to the office of the Public Defender and noted the names of the two attorneys involved in a case in front of the Court of Appeals; the conviction of a Manley Hot Springs man who beat a man and then told his teenage son to castrate the victim. The Appeals Court ruled on Wednesday that Weaver's public defenders, Marcia Holland and John Salemi failed to show Judge Hodges was biased against Weaver. He said he did not know if one of those was a supervisor or not but felt it showed there were two public defenders. Ms. Brink said that John Salemi was the former director of the Public Defender Agency and Marcia Holland was the Fairbanks appellate lawyer. She further noted that John Salemi did not have any specific input on that case because he was simply listed on the front page of the appellate brief as the director. Senator Phillips asked if there was not a responsibility to correct the newspaper on that issue. Unless it is corrected the public reading the newspaper is going to think there were two public defenders. Annalee McConnell said she wanted to recall a conversation last year before the Senate Finance Committee when there was a possibility of increasing the budgets for the District Attorney's office. One of the pleas made by the head of the criminal division was that any increase be balanced with increases in the Public Defender area because from the perspective of the District Attorney's office they felt it was necessary to be sure the Public Defender agency could keep pace. They recognized a very serious problem with the Public Defender agency not being able to move forward because of the limited budget. Another area of cost control that was discussed last year and is under review, as Brant McGee mentioned, there is no option of accepting cases as they are assigned by the Courts. There has been a review under way about indigency standards, however it is not expected to have a significant effect. In terms of the impact of the new crime bills as mentioned by Senator Adams, there have been areas where the fiscal notes for the crime bills that were passed by the Legislature were reduced and so the Public Defender office has one more element where keeping pace with the laws that are passed is very difficult if the fiscal notes are not fully funded. Senator Donley asked if there was an increase in caseload and the prosecutors were dealing with it with a four percent increase over the last decade and these two budgets show this tremendous more than ten-fold increases over what their counterparts are getting to deal with the same addition to caseload that the prosecutors are dealing with. Ms. McConnell said there have been enormous changes in the past ten years in terms of what is expected under Supreme Court rulings in terms of the level of defense. This has been a real burden and it is recognized there is a cost that goes with it. Co-chair Pearce referred the committee to section 2, Department of Corrections $2.3 million. She also advised sections 4(a) and (b) which tie into Correction's budgets would be discussed at the same time. Ms. Barton asked about the EVOS section request but Co-chair Pearce advised that there were no questions regarding that matter. Robert Cole, Director, Division of Administrative Services, Department of Corrections, was invited to join the committee. He said the Court continued to monitor overcrowding and other issues with the Department. The estimate of overcrowding fines for this fiscal year through June 30, 1997 will likely accumulate to about $2.3 million. There is an obligation to come forward with a request for supplemental appropriations, but it was thought rather than do this for a fine, a general proposition could be put before the body to appropriate an amount equal to the anticipated amount of fines to be placed in a corrections capital account pending a policy resolution by the Legislature. The Administration would ultimately be agreed to relieve overcrowding. He realized there were a lot of issues and different proposals being discussed by various parties in the Legislature. He said overcrowding and women's issues particularly needed to be dealt with. He asked the Legislature's consideration to make a good faith down payment to be held in abeyance until an agreement was reached on how to proceed with relieving these issues. Senator Phillips said he hoped a women's facility did not replace the Highland Prison. Mr. Cole said that many may remember last year the department put forth a bond bill which contained a proposal to reconfigure about 225 beds at Highland into a women's facility. Contingent on that would be building space at Palmer for men. The net effect would be that about 300 beds would be freed up around the system; Fairbanks, Lemon Creek Juneau, Sixth Avenue Anchorage, Yukon-Kuskokwim Correctional Center Bethel and other places so that there would be 176 more beds at Palmer, 225 beds at Highland for women and about 300 beds elsewhere in the system. He said they were asking the Legislature to consider making essentially a down payment on an agreement to be reached soon. This would give the Department of Law some ground to stand on when they appear before the Court and to ask both plaintiffs and the Court to recognize this down payment in lieu of fines. Senator Phillips said that this did not answer his question but he would take care of this problem. Mr. Cole said that they did recognize the present concerns on part of the Highland Mountain citizens advisory board about certain aspects of that original plan that was submitted last year. Senator Phillips said he was concerned about turning Highland Mountain into a womens' facility and would continue working with the Commissioner in trying to find another site. Co-chair Pearce asked Senator Phillips why he did not want a womens' facility when there was already a prison. Senator Phillips said the citizens advisory board, which reflected the community's values, felt the prisons and programs they had there were running very well and now the Department was coming in with a proposal to replace that facility and it's current programs with a women's facility. He also noted there were 3,000 prisoners around the State and Eagle River has 300. They have done their part and now feel other areas of the State should contribute. Senator Jerry Ward asked for clarification regarding the money that is being requested to be set aside in order to have it apply for the anticipated agreement for Cleary so the Department of Law has easy access to it. Mr. Cole said the idea was not that the Department of Law have disposition of the money but rather that the Department of Law would be able to back to the plaintiffs and the Court and say the State intends to come to grips with the overcrowding problems in the Department of Corrections regardless of the fact that the solution has not been agreed to. First, the Court would be asked not to impose the fine on the current year operating budget, which they have threatened to do; and second, to recognize on the part of both the Court and the plaintiffs that the State of Alaska is taking a step towards solving these problems. Ms. McConnell said that neither the Department of Law nor the Department of Corrections would have the authority to determine the use of that money. It would simply be set into a capital holding account for the normal legislative process of determining what facilities might be constructed or modified. There would be no discretion on the part of the Department of Law or Department of Corrections or anyone else in the executive branch to simply expend that for a plan that has not been determined to be part of the budget process. Senator Ward asked the reason for putting it there. Ms. McConnell said make clear to the Court the State is going to be addressing the underlying problem which is overcrowding in the prisons that has been part of the Court's concern. Senator Ward referred to a resolution to a revisit of the Cleary decision by the Attorney General in which the Attorney General decided not to honor the resolution and did not revisit Cleary. Now monies for the Cleary agreement should be set aside because it had not been revisited as the Legislature had requested. Ms. McConnell said this strictly dealt with the fines that have been imposed by the Court. The Department has an obligation to bring this forward to the Legislature because there is a Court order to pay these fines. That is the appropriation before the committee now. Senator Ward asked if the fines were because of the Cleary settlement and Mr. Cole said that he was not able to speak to the technicalities of the Cleary settlement. Co-chair Pearce continued on to section 4(a) regarding the boilers in Fairbanks Correctional Center and also McGlaughlin. Mr. Cole said the basic issue was that the boilers at the Fairbanks facility were installed in 1983. They have a particular configuration that causes certain kinds of leaks and over a long period of time those leaks have ruptured the bodies of the boilers. They have been repaired many times. Last year's boiler inspector's report along with the one from this year basically say these cannot be repaired further. Their recommendation was to have these replaced. The supplemental request was to avoid an emergency situation. There is about a 9 - 12 month lead time for doing all of the bid work, contracting that needs to be done to get these replaced. They should be replaced this summer before getting into another winter season. Senator Sharp said his concern was that the boilers were put installed in 1983 and the life of a commercial boiler should be longer than fourteen years unless they were of subquality when they were put in. Co-chair Pearce noted that this particular model of boilers has experienced numerous problems. She requested the boiler inspector report and the manufacturer's agreement. Mr. Cole said that he would provide the information. Janet Clark was invited to join the committee. She said the McGlaughlin Youth Center opened in 1968 and was the State's largest youth facility, having a capacity of 150 beds. It runs at an average of 180 beds since this past fall. She explained the serious overcrowding conditions and the security problems they have been having, stating that the facility had been originally built as a residential house. There is no perimeter security. This past fall there had been break-ins from the outside by those trying to get some of the youth out. A security consultant was hired to come in and evaluate the situation, however, the report being confidential is not part of their back-up. The Fairbanks Youth Center was built in 1981 and has a capacity of 40 beds, running at one hundred percent capacity. Senator Sharp asked for a breakdown between the two facilities and Ms. Clarke said it was approximately $350,000 for Fairbanks and $850,000 McGlaughlin. George Buhite, Director, McGlaughlin Youth Center testified via teleconference. He said last year there were four separate incidents at the center the most serious being a drive by shooting. Subsequently two small explosive devices were placed in the facility, one shattering a window. There was also a situation of gang graffiti or tagging in one of the cottages. They were concerned about the escalation of the boldness of gang members coming onto the campus. They feel the open perimeters of the facility are now a liability to the community. Senator Jerry Ward asked how many escapes there had been from the facility since 1969. He said there had been no escapes from the secured section of the facility. There were two escapes last year from escorts going to Court. The number of escapees from the unsecured portion of the facility has dropped to single digits. Senator Ward commended Mr. Buhite. Senator Ward further asked what the bed capacity was and Mr. Buhite said it was 150 beds however noted they were now housing 192 children. Greg Thompson, Director, Fairbanks Youth Center testified via teleconference. He also underscored a security incident at the facility whereby youth had attempted to break into the facility using a propane torch. Due to the configuration of the driveway there is ready access to the facility by the public and he further noted there was regular and on-going unauthorized contact both vehicular and pedestrian with the detainees. He said there was a strong need to keep the public out. Senator Ward commented on the new security perimeter and asked if that had to be a new dollar amount and could it be handled by restricting the road access. Ms. Clarke said that part of the recommendation was to restrict access to the facility. Ms. Clarke explained section 4(c) regarding emergency communications equipment. This request would provide different communication equipment to meet some of the gaps currently on the highway system for emergency medical services as well as the deteriorating radio situations that are on the rural highways. She specifically referred to a crash on the Seward Highway, wherein the Copper Landing Volunteer Fire Department ambulance crew responded to the scene and discovered multiple victims. Due to no radio coverage they were unable to call for additional EMS assistance or for medivac helicopter. Central Peninsula General Hospital physicians said this delay definitely cause an impact to the patients' getting care. Many lives are at risk because of lack of radio coverage. Mark Johnson, Anchorage, testified via teleconference. He said that most of the equipment in the State was purchased about 20 years ago and it is breaking down with increasing frequency. The particular concern is the volunteer ambulance services and some have been formed where there is no emergency communications within the structure. We have tried to find solutions to the problems. He noted there were possibilities through satellite communications throughout the State. They have been working with the telecommunications engineers from the Department of Administration and feel they can address the most urgent problems previously identified at least before this summer. The equipment to be purchased will be tailored to the specific situation in each area. Due to the lack of communications many lives are jeopardized. Co-chair Pearce asked if this project were to be funded would it be a competitively bid RFP for the equipment. Mr. Johnson indicated that it would. Co-chair Pearce noted for the record that her husband works for Chugach Regional Corporation which has a partly owned subsidiary which does deal in telecommunications equipment and might be a bidder on that, however, since it is competitively bid she did not believe there would be a conflict. Ms. McConnell further commented that there would be other items relating to emergency communications that would come forward as part of the FY '98 capital budget. She said there were a few items that should be sped up such as this one and the Fairbanks boiler situation. The tourist season is also fast approaching and there are liability concerns. This emergency communications request was felt to be the most urgent. Senator Phillips said he would like Mr. Johnson to give him a call later in the day to explain "dead spots" or aging equipment. He had some suggestions to provide. Co-chair Pearce said she would hold this matter over until Monday, 17 February at 8:30 a.m. ADJOURNMENT The meeting was adjourned at 10:55 a.m.