ALASKA STATE LEGISLATURE  SENATE STATE AFFAIRS STANDING COMMITTEE  March 14, 2017 3:31 p.m. MEMBERS PRESENT Senator Mike Dunleavy, Chair Senator David Wilson Senator Cathy Giessel Senator John Coghill Senator Dennis Egan MEMBERS ABSENT  All members present COMMITTEE CALENDAR  CONFIRMATION HEARINGS Alaska Public Offices Commission Adam Schwemley Robert Clift - CONFIRMATIONS ADVANCED Alaska Police Standards Council Bryce Johnson - CONFIRMATION ADVANCED SENATE BILL NO. 31 "An Act relating to compensation, merit increases, and pay increments for certain public officials, officers, and employees not covered by collective bargaining agreements; and providing for an effective date." - MOVED SB 31 OUT OF COMMITTEE PREVIOUS COMMITTEE ACTION  BILL: SB 31 SHORT TITLE: NO STATE EMPLOYEE PAY INCREASE FOR TWO YEARS SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR 01/20/17 (S) READ THE FIRST TIME - REFERRALS 01/20/17 (S) STA, FIN 03/14/17 (S) STA AT 3:30 PM BUTROVICH 205 WITNESS REGISTER ADAM SCHWEMLEY, Appointee Alaska Public Offices Commission Alaska Department of Administration Anchorage, Alaska POSITION STATEMENT: Testified as appointee to the Alaska Public Offices Commission. ROBERT CLIFT, Appointee Alaska Public Offices Commission Alaska Department of Administration Anchorage, Alaska POSITION STATEMENT: Testified as appointee to the Alaska Public Offices Commission. BRYCE JOHNSON, Appointee Alaska Police Standards Council Alaska Department of Public Safety Juneau, Alaska POSITION STATEMENT: Testified as appointee to the Alaska Police Standards Council. LESLIE RIDLE, Deputy Commissioner Alaska Department of Administration Juneau, Alaska POSITION STATEMENT: Provided an overview for SB 31. JAKE METCALFE, representing self Anchorage, Alaska POSITION STATEMENT: Testified in opposition to SB 31. KATE SHEEHAN, Director Division of Personnel and Labor Relations Alaska Department of Administration Juneau, Alaska POSITION STATEMENT: Answered questions regarding SB 31. WILLIAM MILKS, Senior Assistant Attorney General Civil Division Labor and State Affairs Section Alaska Department of Law Juneau, Alaska POSITION STATEMENT: Answered questions regarding SB 31. ACTION NARRATIVE 3:31:34 PM CHAIR MIKE DUNLEAVY called the Senate State Affairs Standing Committee meeting to order at 3:31 p.m. Present at the call to order were Senators Giessel, Coghill, Egan, and Chair Dunleavy. ^Confirmation Hearing: Alaska Public Offices Commission ^Confirmation Hearing: Alaska Police Standards Council CONFIRMATION HEARINGS    Alaska Public Offices Commission  Alaska Police Standards Council    3:31:51 PM CHAIR DUNLEAVY announced that the committee will review the governor's appointees for the Alaska Public Offices Commission (APOC) and the Alaska Police Standards Council. 3:33:02 PM ADAM SCHWEMLEY, Appointee, Alaska Public Offices Commission, Alaska Department of Administration, Anchorage, Alaska, revealed that his background is in fire and emergency medical services. He disclosed that he was appointed to the commission's Libertarian seat and explained that he has been trying to get more involved with politics to address financial transparency for lobbyists. 3:33:46 PM At ease. 3:34:17 PM CHAIR DUNLEAVY called the committee back to order. He requested Mr. Schwemley provide the committee with a better understanding as to how many seats there are for APOC. He asked Mr. Schwemley to provide background as to how he decided to apply for the APOC position and why he thinks his qualifications lends itself to the appointment. MR. SCHWEMLEY answered that there are two seats for the Libertarian Party and two seats for the Republican Party. He explained that the appointment is based on how many votes the gubernatorial candidates received from the previous election. He said he considered the Libertarian Party to be more of a belief system rather than an actual party and disclosed that the party fits closest to his belief system. He expressed that he looks at everything based off an individual candidate's policies rather than what party they are with. He said he did not have any direct experience for the APOC seat, but noted that he has investigative experience when working for an oil company. CHAIR DUNLEAVY asked what his interest was in being appointed for the APOC seat. MR. SCHWEMLEY explained that he wanted to get experience in the process. He added that he also wanted to revive the trust in the whole process for the everyday citizen regarding financial transparency from lobbyists and candidates. 3:36:22 PM CHAIR DUNLEAVY asked that Mr. Schwemley expound on issues that other Alaskans have confided with him regarding issues that need to be reviewed or discussed regarding APOC. MR. SCHWEMLEY answered that he will be focus on conflicts of interest and where the money comes from that is spent on campaigns. SENATOR GIESSEL referenced a description of APOC as follows: The commission exists of five members appointed by the governor, two from each of the two political parties whose candidate for governor received the highest number of votes in the most recent proceeding general election. She surmised that the party designation was determined because the governor ran as an independent and the other candidate was a Republican. She added that the fifth member is nominated by majority vote from the commission's members itself as well as electing the chair. CHAIR DUNLEAVY recalled that since Governor Walker ran as an independent and not on the Independent Party, the next party that garnered the most votes for governor was the Libertarian Party and therefore two APOC seats were reserved for the party. 3:38:28 PM SENATOR COGHILL concurred that many people feel the same way regarding accountability. He conceded that accountability measures have been hotly debated at the capitol as well as during the campaign season. He asked how many APOC meetings Mr. Schwemley has attended. MR. SCHWEMLEY answered that he has not been to an APOC meeting. SENATOR COGHILL noted that APOC has staff that assists council members with requirements, laws and regulations. He asked Mr. Schwemley if he will take the time to understand the laws and regulations. He opined that some of APOC's laws and regulations are somewhat arcane, but are still important for public accountability. MR. SCHWEMLEY answered that he was going to volunteer some time at the local APOC office to get a better grasp before the first meeting in June. SENATOR COGHILL thanked Mr. Schwemley and said he appreciated his willingness to step up with "fresh eyes" and the idea of accountability. He reiterated that the APOC laws that Mr. Schwemley referenced have been hotly debated by the Legislature and the political process. CHAIR DUNLEAVY noted that Mr. Schwemley was appointed to his seat on March 1, 2017 and expires on March 1, 2022. He detailed the committee does not confirm an appointee during the meeting, but his or her name moves on to a joint-legislative-floor session for a vote in April. He announced that the committee would address the appointment of Mr. Robert Clift, appointee for APOC. He detailed that Mr. Clift was appointed on March 23, 2017 and his term expired on March 1, 2020. 3:41:44 PM ROBERT CLIFT, Appointee, Alaska Public Offices Commission, Alaska Department of Administration, Anchorage, Alaska, disclosed that he is an appointee for the Libertarian seat and will be replacing Mark Fish who resigned. He divulged that he came to Alaska in 1979 and worked as a school administrator in the "bush." He noted that he has some political experience from serving as a city council member and as mayor. He set forth that he wanted to serve on APOC because the experience will allow him to participate in a process where he will be able to deal fairly with some of the people that run afoul with APOC. He stated that APOC's mission is to have transparency for the lobbyists and elected officials, and to make sure their financial concerns are in keeping with the statutes that have been written. MR. CLIFT concurred with Senator Coghill that some statutes are ambiguous with multiple interpretations, but that is where APOC comes in. He explained that APOC usually makes their decisions based on an array of statutes as well as how much harm was done. He added that the commission is a hearing for appeals with the ability to issue advisory opinions to the Legislature to correct some ambiguities. 3:45:22 PM SENATOR GIESSEL pointed out that an advisory opinion has the force of law. She referenced Mr. Clift's APOC application and noted that he had run for office at least four times, possibly more. She asked if he had reviewed APOC's membership prohibition that states, "May not hold or campaign for elected office or make contributions." MR. CLIFT confirmed that he ran unsuccessfully three times for office. He admitted that he has become somewhat disillusioned with party politics and serving on APOC would suit him better. SENATOR GIESSEL asked if he was retired. She noted that on APOC's board description that the commission had met for 24 days in 2011 and asked if the time commitment would interfere with any work commitments. MR. CLIFT replied that he has been retired since 1997 and serving on APOC would not be onerous for him. CHAIR DUNLEAVY corrected his opening remarks regarding Mr. Clift, and asked if he was appointed on January 23. MR. CLIFT answered correct. He added that he did attend one meeting and was impressed with the professionalism of the people at the meeting. He said serving on the commission is an important job and one that he could perform well. 3:48:10 PM SENATOR COGHILL pointed out that APOC has struggled with both holding people accountable with penalties as well as preemptive work to keep people out of trouble. MR. CLIFT replied that one of his greatest fears while running for public office was running afoul of APOC. He noted that he appreciated APOC making itself available to assist him to keep him out of trouble. 3:49:14 PM SENATOR WILSON joined the committee meeting. SENATOR COGHILL responded that he appreciated Mr. Clift's perspective because setting up a campaign is an enterprise to itself with some being huge in detail. CHAIR DUNLEAVY noted that Mr. Clift mentioned that he became disillusioned in party politics. He pointed out that Mr. Clift is going to be immersed to some extent in party politics in the sense that he will be looking at contributions and expenditures. He asked Mr. Clift how his disillusionment might carry over in some form of bias. MR. CLIFT concurred that "disillusionment" is too strong a word. He asserted that the point of APOC is to make sure all parties are on an even playing field without penalties that are so egregious that people are discouraged to enter politics; however, at the same time the statutes cannot be taken lightly. He set forth that the process is improved knowing that APOC is watching out for Alaskans with public records where people can make determinations for themselves about whether candidates or lobbyists are being wise stewards of the monies they have been entrusted with. 3:53:16 PM CHAIR DUNLEAVY noted that Mr. Clift had mentioned that he was glad to see the Libertarian Party advance and asked what he meant by that statement. MR. CLIFT answered that the obvious reason for having a party is to get people elected. He admitted that he would love to see some Libertarian candidates be elected. He added that he would like to see options on the ballot where every office has a Libertarian candidate. He disclosed that he has become burnt-out from working on Libertarians running for office and would not have a problem to take a vacation from the process. CHAIR DUNLEAVY asked that as a non-libertarian if Mr. Clift could assure the committee and the public that he will have no bias carried over in his decisions. MR. CLIFT replied that he is quite sure that he can be impartial. He set forth that his greatest interest is that individuals get a fair hearing. CHAIR DUNLEAVY announced that the committee would next address the governor's appointee for the Alaska Police Standards Council and provided an overview as follows: The mission of the Alaska Police Standards Council is to produce and maintain a highly trained and positively motivated, professionally capable of meeting contemporary law enforcement standards of performance. He detailed that Bryce Johnson, appointee, was first appointed to the council on December 11, 2015 and reappointed on March 1, 2017 with a term expiration of March 1, 2021. 3:56:45 PM BRYCE JOHNSON, Appointee, Alaska Police Standards Council, Alaska Department of Public Safety, Juneau, Alaska, disclosed that he has been the chief of the Juneau Police Department for the past four years and has been in law enforcement for 25 years. He added that he has enjoyed his time on the Police Standards Council. He said he cares deeply about his profession and cares deeply about the men and women of law enforcement. He admitted that law enforcement has had a rough several years where some things were their fault and other things were done right but were painted wrong. He stated that he cared deeply if someone in law enforcement is going to be a part of his profession and does something they should not be doing that they be held accountable as well as people that do it right should be supported. SENATOR COGHILL noted that Mr. Johnson gets to look at law enforcement both as a boss as well as a council member. He asked how the council deals with situations where confidential information is released by the press. MR. JOHNSON replied that an officer's department will deal with a situation first and the council gets involved afterwards. He noted that the council's decisions are public. 3:59:29 PM SENATOR COGHILL asked that Mr. Johnson address some of the things that the public needs to know to better inform police officers. MR. JOHNSON answered that the council looked at implementing industry best practices for hiring with the use of polygraph tests and psychological evaluations. He disclosed that the council sought out public comment. He pointed out that the council has a civilian member and continuously seeks out public input before making decisions. SENATOR COGHILL asked Mr. Johnson to address the council's involvement with the Village Public Safety Officers (VPSO) Program. 4:02:08 PM MR. JOHNSON answered that there is a difference between VPSOs and village police officers. He specified that the council has jurisdictions over the police officers but not the VPSOs. SENATOR EGAN thanked Mr. Johnson for serving as chief for the City and Borough of Juneau as well as serving on the council. SENATOR GIESSEL asked Mr. Johnson to address a bill that was going through the Legislature relating to a loophole that allows police officers to have sexual contact with individuals that are being investigated. MR. JOHNSON answered that sexual contact is not allowed and an officer would be fired and decertified. He noted that he has seen cases where an officer investigates a crime and a year later they meet someone at a social engagement, in those cases he has declined to take any action because there was no nexus back to their official duty. He said the way he understands the bill that Senator Giessel referenced would criminalize the situation that he previously described. He opined that the legislation would bring a whole host of new problems to law enforcement and urged committee members to look at the legislation carefully to avoid unintended consequences from how the bill is written. 4:06:01 PM CHAIR DUNLEAVY asked if the council sets standards for local police, state police, law enforcement, municipal law enforcement agencies, and if part of the standards is a profile of a potential candidate for what they should be looking for or minimal qualifications. MR. JOHNSON answered minimal qualifications. CHAIR DUNLEAVY disclosed that he received a call from a constituent regarding a modified standard that a home-school student that did not graduate from a neighborhood school did not qualify for law enforcement consideration. MR. JOHNSON replied that the intent was to address high school education equivalency. He specified that someone home schooled would have to show equivalency. He noted that his children were home schooled. CHAIR DUNLEAVY pointed out that there are no state agencies that determine equivalency for home-school programs and asked how minimum standards are determined for police officer applicants that have been home schooled. MR. JOHNSON answered that a determination is made by the information received during a personal interview. CHAIR DUNLEAVY remarked that the equivalency determination would be subjective. MR. JOHNSON answered yes. He pointed out that an equivalency is sought out so there is an objective standard for determining graduation. 4:09:16 PM CHAIR DUNLEAVY asked if there was an appeal process if a determination was made in a first screening that a person did not meet minimum qualifications. MR. JOHNSON answered that there is an appeal process. He emphasized that folks do their best to make a fair decision on what they are looking at. He said the intent is to make sure the standard was fair for everyone. CHAIR DUNLEAVY replied that he appreciated Mr. Johnson's explanation. He said he wanted to make sure that one group was not earmarked as not being potential applicants for being a police officer. SENATOR COGHILL asked if the council works with other councils across the U.S. and what is gleaned that is helpful. 4:12:30 PM MR. JOHNSON answered that the council's executive director is more involved with other councils in the U.S. He disclosed that there are national databases for decertification as well as communication between states on training requirements as officers move from state to state. He opined that the decertification database is important to make sure officers who get into trouble do not get back into law enforcement. SENATOR COGHILL asked Mr. Johnson to address recruitment in Alaska. He inquired if the state's standards and unique circumstances make it difficult to recruit. He asked what the council is doing to enlist "homegrown" recruits. MR. JOHNSON replied that recruitment is left up to the departments. He disclosed that it is difficult to recruit everywhere around the country. He noted that he always cautions against lowering standards to recruit more people because a hire may be regretted for years. He opined that the standards in Juneau are at the right level and admitted that recruiting is difficult; however, his intent is to recruit people that can meet the standard, not lower the standard. SENATOR COGHILL stated that Mr. Johnson's comments on recruitment standards is important for people to hear. He opined that Alaska's standards are pretty good, but agreed that the state has a real recruitment problem due to: distance, cost of living, and professional opportunities. He asserted that Alaska's advantages boil down to good communities and lifestyle. He noted that he has worked with Mr. Johnson in the past and has found him to be formidable when he has a point, does his homework very well, and is professional. 4:16:19 PM CHAIR DUNLEAVY opened public testimony. 4:16:32 PM CHAIR DUNLEAVY closed public testimony. He read the following statement regarding committee appointment recommendations: In accordance with AS 39.05.080, the Senate State Affairs Committee reviewed the following and recommends the appointments be forwarded to a joint session for consideration: Adam Schwemley for APOC, Robert Clift for APOC, and Bryce Johnson for the Police Standards Council. This does not reflect an intent by any of the members to vote for or against the confirmation of the individual during any further sessions. 4:17:10 PM At ease. SB 31-NO STATE EMPLOYEE PAY INCREASE FOR 2 YEARS    4:19:38 PM CHAIR DUNLEAVY called the committee back to order. He announced the consideration of SB 31. 4:20:04 PM LESLIE RIDLE, Deputy Commissioner, Alaska Department of Administration, Juneau, Alaska, provided an overview of SB 31 as follows: · Pay increases could occur in non-covered employees in the form of: o Cost of Living Allowance (COLA), o Merit increases (3.5 percent every year for 5 years), o Pay increments (3.25 percent every other year), o Bonuses. · Allows the governor to reduce his salary. · Effective for 2 years: July 1, 2017 - June 30, 2019. SENATOR COGHILL asked that Ms. Ridle explain "non-exempt" and the difference between "merit" and "pay increases." MS. RIDLE explained that "non-classified" is everybody in state government who is not in a union and "classified" are in a union. She specified that SB 31 would only affect the non- classified employees whereas bargaining would have to occur with classified employees and that is why through statute the state could only work with the non-classified employees. She explained that merit increases are the first-five years for every year and pay increments are every-other year. She said merit increases occur when going from one step to the next one every year for five years at 3.5 percent and pay increments occur every other year at 3.25 percent. SENATOR COGHILL commented that term "merit" should mean increased value and not automatic. He stated that he is probably going to agree with the bill, but noted that he does not always agree with the definitions. 4:23:27 PM MS. RIDLE addressed the two types of non-classified employees: exempt and partially exempt: · Exempt: o Can only be exempt through statute, (AS 39.25.110); o Exempt from Personnel Act and statutory pay plan; o Examples: Governor's Office, Legislative staff. · Partially Exempt: o Through statute or Personnel Board; o Subject to Personnel Act and statutory pay plan; o Examples: Deputy commissioners, directors. MS. RIDLE addressed who the bill includes as follows: · Employees not covered under a collective bargaining agreement in the executive branch, including: employees of boards, commissions, authorities, and executive officers; · Employees in the legislative branch; · Employees not covered under a collective bargaining agreement of the University of Alaska; · The governor, lieutenant governor, department heads, and legislators. · Does not include the court system. SENATOR COGHILL asked if corporations are included in the bill and noted that some corporations are very independent. MS. RIDLE answered that the corporations are included in the bill. She set forth that SB 31 was introduced as part of the administration's ongoing effort to lead by example to: · Reduce state expenditures, · Address serious budget shortfalls. 4:25:59 PM She detailed the estimated savings from SB 31 as follows: · Employees affected: o 5,000 state employees are in the executive and legislative branches. o 23 percent of state employees are in the executive and legislative branches. · Savings: o FY2018: $2.3 million ($1 million UGF), o FY2019: $1.9 million ($0.8 billion UGF), o Total: $4.2 million ($1.8 million UGF). SENATOR GIESSEL asked if the governor was imposing a pay freeze on the next administration through mid-2019 to capture every- other-year people. MS. RIDLE answered yes. SENATOR GIESSEL inquired if pay increases occur throughout the year on date-of-hire anniversaries. MS. RIDLE answered yes. She explained that everyday someone has a merit anniversary date. She said going from a fiscal year to the next fiscal year seemed to be the cleanest to the administration. SENATOR COGHILL remarked that his biggest criticism is the bill's intent language. He said the governor is saying the "legislature intends" rather than the "governor finds." He said he would not stop the bill, but noted that he would flag the intent language for the Senate Finance Committee to review and encouraged the administration to think of a different way of formulating the bill's intent language. 4:29:32 PM CHAIR DUNLEAVY opened public testimony on SB 31. 4:29:53 PM JAKE METCALFE, representing self, Anchorage, Alaska, testified in opposition to SB 31. He noted that he is the executive director of the Public Safety Employees Association, but emphasized that he was speaking on his own behalf. He opined that the legislation is a governor's bill which is setting legislative pay and that seemed to him to be a separation of powers issue. He added that the bill does not apply to the court system as well. He opined that the legislation will have unintended consequences such as running good people off. CHAIR DUNLEAVY closed public testimony on SB 31. He noted that constituents have asked him to address salary overrides. He asked that the concept of salary overrides be explained. 4:35:01 PM KATE SHEEHAN, Director, Division of Personnel and Labor Relations, Alaska Department of Administration, Juneau, Alaska, explained that there are misperceptions on salary overrides. She noted that an individual hired at a higher step gets confused as a salary override, but the practice is in the personnel rules and is bargained into collective bargaining agreements. She detailed various scenarios for salary overrides as follows: · People hired above the entry-level step because they have exceptional qualifications; · Recruitment difficulties; · Geographical differential rate changes, but an employee's higher salary is held harmless and frozen; · Position is reclassified to a lower range, but an employee's higher salary is held harmless and frozen. MS. SHEEHAN disclosed that in 2013, Senate Bill 95 allowed the governor's office to certify hiring at a step higher than the entry level step due to a policy reason. She noted that the hire is usually for a high-level position where a director-level salary would not be high enough to attract somebody due to the type of work that needs to be performed. CHAIR DUNLEAVY asked that Ms. Sheehan supply the committee with information on all the salary overrides that have occurred over the last two years. He asked if the number of overrides is expansive or just a handful. MS. SHEEHAN replied that she would investigate and get back to the committee. She noted that there were a lot of salary overrides, primarily due to geographical-differential rate changes. 4:37:48 PM CHAIR DUNLEAVY asked that override information be delineated over the past two years by department, division, and the governor's office that includes details on: override salaries, what the salaries would have been without overrides, and an explanation. He noted that some of his constituents are laid off and are asking him why the government is hiring with a salary override and is potentially on the verge of reaching into their pockets via an income tax. SENATOR WILSON asked why the court system was left out of the bill. MS. RIDLE answered that the exclusion was due to a separation of powers and detailed as follows: Because the governor has a chance to make a decision on this bill, if it does pass in some form, the Legislature has a chance to weigh in on the bill through the committee process and the floor process, but the courts would not have any way to have a say other than public testimony and, so we left them out because of the separations of power because they weren't able to participate in the bill. SENATOR EGAN commented that he appreciated what the governor was trying to do, but did not agree how he was going about it. He opined that targeting employees not covered under collective bargaining will drive them to get into collective bargaining. CHAIR DUNLEAVY asked for an explanation why the governor is putting his salary in the bill for a limited time. He inquired why the governor did not consider donating part of his salary back to the treasury. MS. RIDLE answered that the cleanest way was to reduce his salary rather than having to pay for benefits and taxes prior to denoting back to the treasury. 4:41:36 PM At ease. 4:43:38 PM CHAIR DUNLEAVY called the committee back to order. SENATOR COGHILL addressed page 2, line 2 in SB 31, "The legislature is 'eliminating' general pay increases." He remarked that "eliminating" seemed like a strong word to him because it is eliminating for 2 years, fiscal years 2018 and 2019. He opined that the use of the word "suspending" be considered. He asked that legal counsel provide some insight. 4:44:47 PM WILLIAM MILKS, Senior Assistant Attorney General, Civil Division, Labor and State Affairs Section, Alaska Department of Law, Juneau, Alaska, replied that perhaps the word "suspending" is a better word, but the intent was not to introduce any ambiguity that a retroactive situation creates. He said the use of the word "suspend" or another term would be taken under advisement as better than "eliminating." SENATOR COGHILL commented that the plain language in the bill is clear regarding a salary suspension for two years, but voiced that he did not like the governor speaking for the Legislature just yet. 4:46:17 PM SENATOR GIESSEL moved to report SB 31, version 30-GS1018\A, from committee with individual recommendations and attached fiscal note. 4:46:28 PM CHAIR DUNLEAVY announced that hearing no objection, SB 31 moved from the Senate State Affairs Standing Committee. 4:46:42 PM At ease. 4:47:05 PM CHAIR DUNLEAVY called the committee back to order. He reiterated that SB 31, version A, has moved out of committee with individual recommendations and attached fiscal note. 4:47:18 PM At ease. 4:47:56 PM CHAIR DUNLEAVY called the committee back to order. 4:48:35 PM There being no further business to come before the committee, Chair Dunleavy adjourned the Senate State Affairs Committee at 4:48 p.m.