COMMISSION ON PRIVATIZATION AND DELIVERY OF GOVERNMENT SERVICES Anchorage, Alaska July 20, 1999 8:15 a.m. COMMISSION MEMBERS PRESENT Representative Cowdery, Co-Chair Senator Ward, Co-Chair Representative Brice Senator Adams Bill Allen, Former Mayor of Fairbanks Tom Fink, Former Mayor of Anchorage Helvi Sandvik, President - NANA Development Corporation Kathryn Thomas, Former Chair of Alaska State Chamber of Commerce George Wuerch, Alaska Municipal League Don Valesko, Business Manger of Public Employees Local 71 COMMISSION MEMBERS ABSENT William Prosser, Chairman of the Board - Cook Inlet Region, Inc. COMMITTEE CALENDAR Privatization of State Government Services PREVIOUS ACTION No previous action to record. WITNESS REGISTER MARCO PIGNALBERI, Legislative Assistant to Representative Cowdery Alaska State Legislature 716 West 4th Avenue, Suite 320 Anchorage, Alaska 99501-2133 Telephone: (907) 268-0222 POSITION STATEMENT: Provided the commission with information and answered questions. MIKE ABBOTT, Economic Development Special Assistant to Governor Knowles 3601 C Street, Suite 758 Anchorage, Alaska 99505-5990 Telephone: (907) 269-7461 POSITION STATEMENT: Offered his services and answered questions. ANDY CLARY, Staff to Senator Ward Alaska State Legislature 716 West 4th Avenue, Suite 450 Anchorage, Alaska 99501-2133 Telephone: (907) 269-0106 POSITION STATEMENT: Reviewed the commission's website. BRIAN HARRIS 7151 Chester Court Anchorage, Alaska 99504 POSITION STATEMENT: Discussed technology. ANDREE McLEOD Address not provided. POSITION STATEMENT: Suggested an anonymous mechanism for public input. JOSEPH HENRI, Former Commissioner of Administration 9921 Mar Point Drive Anchorage, Alaska 99507 POSITION STATEMENT: Discussed the need to continue the momentum of the commission. LEO MARK ANTHONY, Prospector and Miner Address not provided. POSITION STATEMENT: Commented that this is about cost-benefit analysis. DONN LISTON, ASEA 400 Willoughby, Number 201 Juneau, Alaska 99801 POSITION STATEMENT: Commented on honoring contracts. DAN PATTERSON PO Box 512 Palmer, Alaska 99645 POSITION STATEMENT: Discussed privatization. ACTION NARRATIVE TAPE 99-1, SIDE A CO-CHAIR WARD called the Commission on Privatization and Delivery of Government Services meeting to order at 8:15 a.m. Members present at the call to order were Representatives Cowdery, Brice and Senators Ward, Adams and Commissioners Allen, Fink, Sandvik, Wuerch, Thomas, and Valesko. Commissioner Prosser was not present. CO-CHAIR COWDERY explained that the purpose of the commission is to review government overall with the possibility of privatization in mind. Co-Chair Cowdery commended Senator Ward on his work. He announced that the commission would be reviewing many departments through various subcommittees that will be formed. CO-CHAIR WARD noted that his legislation was practically copied word for word from the Alaska State Chamber of Commerce. This legislation is not new, similar legislation was worked on during the Thirteenth Alaska State Legislature. He thanked everyone for their part in this issue. The committee members introduced themselves and noted their affiliations. CO-CHAIR COWDERY pointed out that Mike Abbott, Economic Development Special Assistant to Governor Knowles, was present. He noted that Mr. Abbott would be the contact person for those on the commission needing information from the Administration. MIKE ABBOTT, Economic Development Special Assistant to Governor Knowles, offered his services to those on the commission. He commented that the Governor is interested in the outcome of this process. CO-CHAIR WARD noted that Ketchikan and Juneau were on teleconference. MARCO PIGNALBERI, Legislative Assistant to Representative Cowdery, Alaska State Legislature, reviewed the information book provided to the commission members. The first item in the book is the authorizing legislation which in Section 5 specifies the duties of the commission to be carried out by January 2000. The book also includes an address section for commission members. There is a copy of the solicitation that was faxed to 700 individuals across the state. The response from that fax resulted in the member composition of the various subcommittees of the commission. MR. PIGNALBERI turned to Tab 4 of the book which is a bibliography list of a few of the many articles discussing privatization. The first article discusses "the depth and breadth of privatization activity not only in the United States, but elsewhere in the world." The article entitled, "What is Privatization?" includes the commonly accepted definitions regarding privatization. There is also an article discussing 12 types of privatization. Privatization is most commonly thought of as contracting out such as is the case with the radio maintenance for the state troopers. There is a variation of that called management contracts which would be a situation in which the state maintains ownership of a facility while its operation is contracted out. There is also public-private competition. For example, the Department of Transportation & Public Facilities (DOT/PF) could farm out its design functions. In such a case, the in-house engineers of DOT/PF would have to compete with the private sector engineering firms for the design work on projects. This is being done in the Lower 48 and with the Army Corp of Engineers. The Alaska Army Core of Engineers was not aware of management contracts, but will forward information regarding the areas where such is practiced. MR. PIGNALBERI moved on to the franchise variation of privatization. With a franchise, a firm is given exclusive rights to provide a service in a geographical area. It could be utilized with road maintenance. Internal markets are also a variation of privatization. Internal markets involve a state agency competing against the private sector. Vouchers is a form of privatization which is being debated statewide with regards to education. Commercialization, another form of privatization, or service shedding can result in the elimination of services. Another variation of privatization is self-help in which a nonprofit or neighborhood organization takes over a service the government now provides. He cited the Alaska State Fairs as an example of where such self-help privatization could be utilized. Volunteerism is also a form of privatization which is illustrated in the litter pickup programs in the state. Corporatization is another type of privatization which the Alaska Aerospace Development Corporation will ultimately be an example of as it will be funded privately. Mr. Pignalberi stated that the sale of assets or long-term leases is another way in which the government can eliminate assets that it shouldn't have. For example, there has been controversy surrounding whether Alaska should own the Alaska Railroad or other businesses such as Matanuska Maid which the state inherited due to defaulted state loans. He moved to the final type of privatization, private infrastructure development in which a private entity does something the state would do such as the Knik Arm Crossing. MR. PIGNALBERI continued with his review of the commission's book. The book contains several articles from the 1999 Privatization Magazine which summarizes privatization activities at federal, state, and local levels. This would be helpful in performing the commission's charge to discover what other levels of government are doing. The book also includes a report requested from the National Council of State Governments. That report is the most comprehensive article on the trends in state government privatization. The report includes sections with regard to cost savings and the decision making process that should be followed by governments in determining whether privatization is the best course of action. The report also addresses the barriers to privatization. There is also an article included which speaks against privatization. MR. PIGNALBERI pointed out that the book includes a report from Commonwealth North which did a state-owned asset study, about a year ago. The study intended to develop a set of unifying principles in order to guide the management of Alaska's public assets while maximizing the returns for Alaskans. In the process, an appendices was developed which lists each discreet state asset which should be helpful for the commission. The book includes several articles of general interest and a list of those who have volunteered for the various subcommittees. ANDY CLARY, Staff to Senator Ward, Alaska State Legislature, informed the commission that he was responsible for building the web page for the commission. Mr. Clary demonstrated and reviewed what can be found on the web page which can be accessed at www.privatizealaska.org. CO-CHAIR WARD invited every commissioner to review the website and make any suggestions for changes. MR. PIGNALBERI commented that the website has been designed such that one link can lead to another. He requested that commission members inform Mr. Clary of sites that they find so that those sites can be added to the website. CO-CHAIR WARD announced that now would be the appropriate time for comments and questions. SENATOR ADAMS turned to the laws pertaining to privatization. He asked if there is enough political strength to change labor laws which he believed to be a large issue. He suggested that there should be a review of what activities being done by state departments should be done by municipalities and the success and failure with privatization in other states. Senator Adams expressed concern with regard to the delivery of services under privatization. He was also concerned with the politics of privatization and hoped that if there is to be action with privatization that it be done in the next legislative session. TAPE 99-1, SIDE A REPRESENTATIVE BRICE expressed the need to maintain the ability to contact a commissioner when the needs of his constituents are not met. Furthermore, the money must be spent in the best possible way. He noted that the delivery of service, public accountability, and the recognition that certain areas should be maintained by the state should be addressed. There should also be review of those areas in which the state has been successful with privatization. COMMISSIONER ALLEN inquired as to how the subcommittee members were selected. CO-CHAIR COWDERY reiterated that more than 700 e-mails were sent out seeking subcommittee volunteers. Anyone who is interested in serving should contact the staff. He commented that he was pleased with the current turnout. He hoped that the commission members will attend subcommittee meetings of interest to them because the subcommittee will make a report to the commissioners who will pen the final report to the legislature. CO-CHAIR WARD pointed out that the vast majority of those present today have volunteered for subcommittee work and he believed more would volunteer. He thanked all the volunteers. Co-Chair Ward noted that this process is copied from other states. COMMISSIONER ALLEN expressed interest in the state services provided by sources other than local residents in rural communities. He cited the various circuit writers that provide services to rural communities. Commissioner Allen inquired as to the possibility of out sourcing or contracting such to local village corporations or training and employing local residents. COMMISSIONER SANDVIK said that it would be worthwhile, early on, to begin with some views and recommendations from the Administration. CO-CHAIR COWDERY noted that he had spoken with the Governor. As the process proceeds, he expected the subcommittee members and the commission members to make comments and requests of the Administration. He reiterated that Mr. Abbott will be the contact for the Administration. MR. ABBOTT indicated agreement with Commissioner Sandvik's comments. He said that the departments are prepared to work with the subcommittees. Therefore, he expected such conversations as eluded to by Commissioner Sandvik to occur at the subcommittee level. He noted that there has already been discussion regarding a possible overview of the budget for the full commission. CO-CHAIR COWDERY referred to Tab 3 of the commission booklet which includes a memorandum from Representative Cowdery to Governor Knowles regarding the development of this commission. The memorandum requested a list of the agencies with services that are already privatized. The memorandum also suggested that the Governor designate a single point of contact as a liaison to the commission which is Mr. Abbott. CO-CHAIR WARD noted that there is information available from the legislative branch as well. He acknowledged that this is a large task. COMMISSIONER THOMAS commented that some subcommittees have lots of volunteers while others do not. MR. PIGNALBERI informed everyone that there are seven departments for which committee membership has not been filled. Those committees are the Alaska Department of Fish & Game, the Department of Corrections, the Department of Labor, the Department of Law, the Department of Military & Veterans' Affairs, the Office of Management & Budget, and the Department of Public Safety. He predicted that those committees would be filled over the next few weeks. Departments such as the Department of Transportation and the Department of Health & Social Services have a dozen or more members listed. That is allowed so that the subcommittee can divide itself further. For example, there has been a suggestion that the Department of Transportation have separate subcommittees for the Alaska Marine Highway System, airports, and one for the remainder of DOT/PF issues. The same scenario would be utilized with the Department of Health & Social Services. CO-CHAIR WARD stated that this process is now in the hands of the commissioners. As much participation as possible is necessary. MR. PIGNALBERI commented that he had a list of interested folks as well as their phone numbers. After one person requested that their phone number not be publicized, it has been decided to provide the contact list of home and work phone numbers, faxes and e-mails of the committee members only to those in the committee. CO-CHAIR WARD requested that Mr. Clary contact everyone in order to determine who would not want which particulars to be publicized. COMMISSIONER THOMAS suggested that a mailing address be added to the list because volunteers would probably prefer receiving letters of opinion versus phone calls. Commissioner Thomas commented that consideration should be given to the concern regarding "whether business in the private sector is taking an offensive position against government employees and the bureaucracy of government." She expressed the need to remember that private sector employees view this as an opportunity for jobs. Some of these jobs may not be eliminated, but may merely change ownership. There may be some shifts in the business sector due to privatization. As a contractor, Commissioner Thomas acknowledged that at times the concept of a project may be different from the scope of the work and the ability to build the project. Upon completion of this task, she emphasized the need to reflect on how it can be successfully implemented. Although the commission may determine what can be privatized, if the scope of the privatization is not written correctly it will not happen. A third party to review or help write contract specifications or consult the agencies may be a recommendation of the commissioner. COMMISSIONER VALESKO expressed the need for the commission to be cautious in the recommendations that are made. He commented that basically privatization is profitization in that government services are turned over to someone in order to make a profit on those services. Such will not work unless the situation is profit- making for private organizations. He stressed the need for protections to be written in so that Alaskans are not overcharged for items. Commissioner Valesko commented, "My main concern ... that the working people of Alaska are protected, the people that take these jobs ... that they're able to make a living to support their family and educate their kids and we have a standard of living in this state that we can look up to. And I'm very sad and disappointed to say in the last six, seven, eight years the standard of living for Alaskans, and I'm part of the system that is trying to do something about it and failing, has gone down hill in comparison to ... most of the rest of the states in the United States." He suggested the need to review legislation because there are laws that apply to public employees such as the requirement for public employees to receive health insurance and retirement benefits. If there is to be a change from public sector employees to private sector employees, the aforementioned benefits should be protected no matter who performs the job. Commissioner Valesko stressed that he did not want a work force of temporary employees. He noted that there are those in privatization who profit tremendously. Why should one person reap all the profits? Commissioner Valesko used the snow removal system in Anchorage as an example of the state working in tandem with the private sector. In conclusion, Commissioner Valesko stated that he supported reviewing those places where privatization would make sense. Furthermore, there should be review of those areas where privatization has already occurred in order to determine if it is working. COMMISSIONER WUERCH commented that the Alaska Municipal League is very appreciative of being included in this commission. The league has offered to be a resource for the commission. He acknowledged the trend of local governments having to provide some of the services previously provided by the state. Through this commission, there is the opportunity to open up new partnerships between state and local government to deliver services. However, there are obstacles. Therefore, Commissioner Wuerch expressed the need to uncover common solutions. One such solution would be to allow local governments to bid on state work. COMMISSIONER WUERCH thanked all the volunteers and the staff recruiting these volunteers. He offered his services in helping to fill in the gaps. He asked if there would be a point during which the commission would meet with each subcommittee. MR. PIGNALBERI noted that there is a sign up sheet for advisory councils. It is anticipated that each commissioner will be on at least one of the subcommittees. Therefore, there should be some continuity between the work of the subcommittees and the commission. With regard to Commissioner Wuerch's question, Mr. Pignalberi believed that to be up to the discretion of the commission. He turned to the outline of subcommittee reports which is fairly standard, but can be changed by the commission. COMMISSIONER ALLEN inquired as to the role the commissioners would play sitting on the subcommittees. MR. PIGNALBERI clarified that the commissioners would be a working member of the committee. CO-CHAIR WARD noted that a proposed schedule was being provided to the members and that teleconferencing is available. He explained the need to begin work in the subcommittees as efforts continue to fill up those subcommittees not yet full. He announced that the next proposed meeting of the full commission is on August 16, 1999. He explained that there should be subcommittee work that happens between this meeting and the proposed August 16, 1999 commission meeting. The individual chairs of the subcommittees will decide upon a meeting time and utilize the room and teleconference network. Then the subcommittee representatives would present the commission with a progress report at the August meeting. CO-CHAIR COWDERY clarified that there are a few rooms available to the subcommittees, but those rooms must be scheduled ahead of time. He urged the commissioners to attend as many subcommittee meetings as possible. COMMISSIONER WUERCH inquired as to how the subcommittee chairs will be chosen. CO-CHAIR WARD informed everyone that names are being accepted for more volunteers. He explained that the first person that requested to be the chair of a subcommittee was made so. CO-CHAIR COWDERY interjected that these positions may change. CO-CHAIR WARD explained that the chair of the subcommittee will decide when meetings occur and conduct those meetings. The only vote that determines what will be recommended to the legislature will come from the commission. TAPE 99-2, SIDE A AN UNIDENTIFIED SPEAKER expressed the need to include topics of interest for the subcommittee on the home page in order to spur subcommittee discussion on those. CO-CHAIR WARD agreed that would be appropriate and noted that it would be up to the subcommittees. COMMISSIONER THOMAS suggested that the chairs of the advisory councils be used for organizational purposes. This would allow them to choose their own chair which would be advantageous to all. CO-CHAIR WARD stated that nothing precludes the commission from anything. The subcommittees can break down further, but the current structure allows for the process to begin. He indicated that the subcommittees have much flexibility. COMMISSIONER THOMAS asked if the commission would have the capability to have listen-only teleconference hook-ups. CO-CHAIR COWDERY answered yes. He mentioned that the need for those interested in the Alaska Marine Highway to be from Southeast Alaska. COMMISSIONER FINK inquired as to when the commission would meet again. CO-CHAIR WARD announced that the intention was for the commission to meet once a month. SENATOR ADAMS clarified that the commission will be meeting as will the subcommittees. Each commissioner will sign up for an agency for which he/she will attend those subcommittee meetings. He hoped that time would be spent on the subcommittee report outline in order to develop an outline format for each agency. The committee took a brief at-ease to 9:50 a.m. CO-CHAIR WARD called the committee back to order and announced that Fairbanks was also on teleconference. MR. PIGNALBERI explained the subcommittee report outline is based on his experience with past reports. The outline is an attempt to place the subject before the subcommittees in order to think about what the end product would be from the subcommittees. SENATOR ADAMS referred to number five on the outline which speaks to identifying constitutional and statutorial provisions governing agency operations. He agreed that each subcommittee should understand their agency, however statutory changes also need to be reviewed because that needs to be included in the recommendation from the subcommittee. SENATOR ADAMS referred to number nine on the outline which speaks to listing existing agency contracts and the procurement methods. He recommended the need to have a time line on the contracts and the benefits. He turned to the next number nine which speaks to identifying existing privatization practices, if any. Senator Adams agreed with Commissioner Valesko that review of whether current privatization is working or not should be evaluated by the subcommittees. COMMISSIONER WUERCH commented that a question comes to mind regarding the balance of effort; how much effort will come from subcommittee members and from the Administration. MR. PIGNALBERI explained that each departmental commissioner will be given this outline so as to provide the subcommittee with the information prior to its first meeting. SENATOR ADAMS anticipated that the co-chairs' staff will obtain the resource contact for each agency. He noted that each agency has been audited and therefore, there will be a contact with Legislative Budget & Audit. He pointed out that each agency has a legislative liaison that can be utilized as a resource for the statutory guidelines, missions, goals, objectives, and contracts. CO-CHAIR WARD said that he believed there would be a great deal of cooperation between the commission and the Administration. COMMISSIONER ALLEN indicated that it would be appropriate for the subcommittees to ask departmental commissioners to provide the subcommittee with a briefing on the department. Furthermore, the departmental commissioner could provide any recommendations with regards to privatization. He also agreed with Commissioner Valesko's and Commissioner Sandvik's comments. CO-CHAIR WARD agreed that could be part of the subcommittee presentation. CO-CHAIR COWDERY interjected that the Governor fully intends for the commissioners to fully participate with the subcommittees. COMMISSIONER SANDVIK pointed out that many agency activities are governed by their funding sources. Therefore, she suggested that the subcommittees consider the limitations placed on the agencies by the funding sources. That should be included in the subcommittee report as well as recommendations in that area. COMMISSIONER ALLEN commented that those agencies receiving enterprise funds within a department would stand out during subcommittee review. He hoped those would be highlighted. COMMISSIONER THOMAS suggested that the subcommittee should define which grant money could be administered by the private sector. CO-CHAIR COWDERY emphasized that there are certain mandates in the union contracts which will be honored, although there could be changes in future negotiations. BRIAN HARRIS informed the committee that he is a Communications Engineer with MicroAge Corporation (ph), although he is not present representing that corporation. However, he is present to provide the committee with information regarding a report he is doing for Commissioner Poe, Department of Administration. The report is reviewing the infrastructure of the Anchorage based telecommunications system and how to utilize technology to redirect some telecommunication costs. One of the items to be reviewed is with regard to who would be the best to manage and run such a system. He informed the committee that a 1994 Wolfe & Associates (ph) study found that the state is basically its own telephone company. If that is correct, the state would need to be prepared to move into the new century with the technology to do so. As a private citizen, Mr. Harris expressed concern with the incredible pace of technology. The state needs to view technology as a potential asset for savings or privatization. ANDREE McLEOD pointed out that this commission is the Commission of Privatization and Delivery of Government Services. She hoped that the delivery of government services is not over looked. She expressed the need to have a nonretaliatory, anonymous mechanism for citizens and employees to provide some information to this commission. Ms. McLeod was concerned that this is a "top down type of commission." She suggested that viewing this from the bottom up may be advantageous. Ms. McLeod stressed that the outline does not include the legislature or the Administration. Although some services are statutory, some of those services may be privatized. Perhaps, the ombudsman's office could be privatized. CO-CHAIR COWDERY disagreed with the suggestion that comments could be anonymous. CO-CHAIR WARD interjected that he sponsored the first whistle- blower law in the 1980s. There are legitimate circumstances in which people fear reprisal. AN UNIDENTIFIED COMMISSIONER said that she did not believe the request for anonymous input to be bad. There should be a mechanism in which people feel comfortable providing ideas. CO-CHAIR WARD acknowledged that anonymous comments and suggestions will inevitably be received. He noted that when he receives anonymous comments and suggestions, he performs a double-blind verification before coming forward. He also noted that he receives comments from those who request that their name not be involved. COMMISSIONER WUERCH asked if it was expected that the subcommittees would have time to take public comments and input or would the public comment only occur before the commission. CO-CHAIR WARD anticipated that the subcommittees would take public comments and hold meetings for such. JOSEPH HENRI informed the committee that he served as the Commissioner of Administration under Governor Egan's third term. With regard to changing statutes, there is less than five months to do this job with volunteers. He doubted if that could be accomplished in the projected time frame. Mr. Henri hoped the commission would address how to continue this work beyond what is currently in statute. CO-CHAIR WARD announced that the commission will accomplish what the legislature set out for it to do. At that point, the presentation will be the beginning of another process in which the four legislators on the commission will participate with the entire legislature on this matter. This will provide the legislature with direction. MR. HENRI commented that there is the danger that some will say that privatization has been reviewed and no more time is to be spent on the issue. He reiterated the need to continue the momentum of the commission. CO-CHAIR COWDERY indicated agreement that this process should be ongoing. MR. PIGNALBERI informed the committee that other states which dealt with privatization activity had a much longer life cycle than this commission. Most privatization activity was more than a year, often two to three years. For example, in Arkansas there was a commission for three years and the professional staff was kept for two years in order to monitor and follow up on the original work. Mr. Pignalberi believed Mr. Henri's concern to be legitimate, but he understood Co-Chair Ward to say that it is the responsibility of the four legislators on the commission to continue the momentum in the legislature. He assumed that if more work is necessary, there would be another bill to continue these efforts. CO-CHAIR WARD indicated agreement. AN UNIDENTIFIED COMMISSIONER asked if there is staff available to assist the subcommittees in writing the report. CO-CHAIR COWDERY noted that he and Co-Chair Ward's staff are available. CO-CHAIR WARD mentioned that the House and Senate Finance Committees' subcommittee chairs may have staff to help supply information and staff to the commission's subcommittees. He expected the commission to expand, but perhaps not to the extent as in Arkansas where the commission was completely funded by private donations. COMMISSIONER ALLEN indicated that there may be enough questions raised and doubt with regard to some of the recommendations that would result in a request for the continuance of this work. TAPE 99-2, SIDE B MR. HENRI commented that just because some good ideas are provided to the legislature, does not mean the legislature will take up those ideas. LEO MARK ANTHONY informed the committee that he has dealt with the Department of Natural Resources(DNR) because he is a prospector and miner. Through his experience he has felt that DNR is a good organization. However, he realized that the legislature is concerned with afford ability. Therefore, this is about cost- benefit analysis. Mr. Anthony understood that as a subcommittee, the job will be to go through the data and sort it out. He identified the technical decisions as the responsibility of the subcommittees while the political decisions are left to the legislators. MR. CLARY suggested that he or Mr. Pignalberi should be contacted via telephone or e-mail with additional comments that people would like to have circulated. CO-CHAIR WARD interjected that people could go to the website and type their comments to circulate to the commission. COMMISSIONER THOMAS expressed concern with having each member's e- mail address on the website because information may not be fairly distributed to everyone. She suggested that it would be helpful for all information to first go to Mr. Clary and Mr. Pignalberi to be distributed back to the commissioners. That would avoid time spent bringing people up to speed. COMMISSIONER FINK commented that the purpose of this is to make government more efficient not about decisions as to who should make profits. The authorizing legislation for this commission is driven by the fact that there is not enough money. Therefore, the most efficient way to provide government services needs to be determined. It should also be determined whether a particular government service should even be performed. Still, it is of no concern to this commission whether a contractor makes a profit. COMMISSIONER VALESKO surmised that Commissioner Fink would like to see Alaskans at or below minimum wage. "If we can take nothing for the services and get it done that way, then lets have it a citizenship here that is working for nothing .... I don't believe in that. I believe that we have and we have laws already that says if you're going to do a public contract, ..., you will pay what is the prevailing wage in an area and that is when we need to look at statutory things that say this is the wage that we think is sufficient as citizens of Alaska, as legislators you ought to be thinking about this; that says we want a decent standard of living for the people that live here. I would agree, I don't care if they make a cent of profit off of it but let's see that the working people, ..., have a decent standard of living in this state." COMMISSIONER WUERCH stated that it is not his intent to take money from anyone's pockets. As a former employer, he paid his employees well and provided them with a full benefits package because that gives an employer good employees. He hoped that the commission focuses on the fundamental purposes of SB 33. CO-CHAIR WARD mentioned that he has spoken with a number of state employees who do fear that this is an attempt to take away jobs. He did not believe any state employee would lose their job as a result of this, although there will probably be a hiring freeze and reorganizational effort. He pointed out that the legislation includes that the subcommittees identify those state government functions that should be transferred to nonprofit organizations, regional profit corporations, profit corporations, federal government, local government, or eliminated. That is quite a charge. COMMISSIONER (INDISC.) noted that his organization did a report that was distributed to all legislators about four years ago regarding the pitfalls and perils of privatization. He said that he would like to include that in the committee book. CO-CHAIR WARD said that he would be happy to distribute that. CO-CHAIR COWDERY informed everyone that he has information regarding every new program implemented since 1980 which may be helpful to review. CO-CHAIR WARD interjected that would also be available to the subcommittees. DONN LISTON, Alaska State Employees Association (ASEA), testified via teleconference from Juneau. He informed the commission that he was the business agent for ASEA which was involved in the central duplicating fiasco. When there is a contract, it should be honored. DAN PATTERSON, testifying via teleconference from the Mat-Su Valley, agreed with Commissioner Valesko that there will be a race to the bottom in wages. He did not believe that privatization of the correctional system or half-way houses benefit Alaskans. Mr. Patterson emphasized that those departments as well as DOT not be privatized. He requested that the information packet be sent to the Mat-Su Legislative Information Office(LIO). CO-CHAIR WARD agreed that the packet would be made available and that information forthcoming will be made available to all LIOs. There being no further comments, Co-Chair Ward thanked everyone for giving their time. ADJOURNMENT There being no further business before the commission, the Commission on Privatization and Delivery of Government Services meeting was adjourned at an unspecified time.