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Legislative Process Committee

        

MINUTES OF THE

LEGISLATIVE PROCESS COMMITTEE

Tuesday, October 28, 1997 - 9:00 a.m. - Room 405 State Capitol



Members Present:
    Rep. Byron L. Harward, Cochair
    Sen. George Mantes
    Sen. R. Mont Evans
    Sen. Nathan Tanner
    Rep. Gene Davis
    Rep. Brent H. Goodfellow
    Ms. Ann Marie Allen
    Mr. Grant Caldwell
    Ms. Joan D. Glenn
    

Members Absent:
    Rep. Evan L. Olsen

Members Excused:
    Sen. Leonard M. Blackham, Cochair
    Speaker Melvin R. Brown
    Mr. Brent Litz

Staff Present:
    Mr. Stewart E. Smith,
        Managing Research Analyst
    Mr. John L. Fellows,
        Associate General Counsel
    Ms. Joy L. Miller, Secretary


     Note:    A list of others present and a copy of the materials distributed in the meeting are on file in the Office of Legislative Research and General Counsel.


1.    Call to Order - Rep. Harward called the meeting to order at 9:15 a.m. He introduced the citizen members of the committee. Due to the lack of a quorum, the minutes of October 14, 1997, were not approved.

2.    In-Depth Budget Review - Division of Licensing - Mr. James Behunin, Office of Legislative Auditor General, distributed a copy of the Performance Audit of the Office of Licensing. He explained that the office is responsible for licensing all providers of human services. In the past the office has been responsible for licensing child care centers as well. During the time of the audit that responsibility was transferred to the Department of Health. He noted that they did include some issues having to do with child care licensing in the scope of the audit. Mr. Behunin stated there is a significant amount of duplication in the day-to-day efforts of licensing staff and the divisions within the department in several areas. It was also discovered that there is some overlap with the local county health and fire inspectors.

    Mr. Behunin noted that licensing standards are not adequately enforced. Their review of provider files showed that 87 percent of child care centers were issued licenses even though the provider was not in full compliance with the licensing standards. He stated that 79 percent of the treatment programs and child placement agencies they surveyed were issued licenses with a letter requesting that a number of violations be corrected. Their review found that in many instances, the deficiencies were not corrected.

    Mr. Behunin outlined some recommendations for the office. The recommendations include: clearly defining a mission, strengthening enforcement of the licensing standards, and preparing better written procedures for staff to follow. He further indicated that inspections can be done more effectively by streamlining the renewal process, increasing reliance on county fire and health inspections, reducing staff specialization, and reducing the number and type of programs licensed. There are also positive and negative incentives which can be used.

    Mr. Craig Monson, Office of Legislative Auditor General, pointed out that although it was apparent that the function of child care licensing would be moved to the Department of Health, they felt a review of the process would still be helpful.

    Mr. Thor Nilson, Office of Legislative Fiscal Analyst, distributed a copy of the in-depth budget review completed by his office. The Office of Licensing was created in 1987 with seven staff members transferred from other divisions in the department. Currently the office has 64 staff members. The number of licenses issued has grown from under 1,000 to 4,000-5,000. The total revenue generated from licenses is deposited into the General Fund. The total amounts received has gone from $61,000 in 1992 to currently $164,000. The budget has grown from $281,000 in 1988 to $2.9 million in 1996. With the transfer of child care licensing to the Department of Health, the budget decreased this year to approximately $1.8 million.

    Mr. Nilson said in accompanying licensors on site visits, the analysts noted that personal vehicles are used quite often. The cost of operating state motor pool vehicles permanently assigned is $180 per month and 7 cents a mile. Significant savings would be realized if motor pool vehicles were used more.

    Mr. Nilson stated they recommend the department incorporate the following budget- impact items: 1) review the use of personal vehicles; 2) eliminate duplication of efforts between licensors and contract monitors; 3) eliminate the duplication of efforts between the office and local governments; 4) make licenses valid for longer periods; 5) streamline license renewals; 6) make licensors generalist; and 7) review qualifications necessary to perform licensing duties.

    Ms. Robin Arnold Williams, Department of Human Services, said they do not disagree with the findings of either report. She agreed that it is important to clarify the statute. She has met with all of the licensing staff and division directors to tell them that she does not want the divisions interfering in the licensing process. Staff suggested to her that the different division's be given specific assignments so that there is no mixing of staff services. She said she would be willing to report back to the committee on their progress in 1998.

    Rep. Harward suggested that the Department of Health meet with the committee to state its position regarding the recommendations contained in the report.

3.    In-Depth Budget Review - Central Stores - Mike Ely, Office of Legislative Auditor General, explained Central Stores was created in 1975 as an internal service fund for the purpose of providing basic office supplies to state agencies on a cost recovery basis. The auditor agrees with the plan to eliminate Central Stores because products will now cost less for state agencies and service levels should improve. Savings from the elimination of the stores will be approximately $500,000. Mr. Ely indicated that the Division of Purchasing plans to obtain one person to administer the office supply contract. He reviewed the duties of that individual.

    Mr. Ely explained that state political subdivisions may benefit from using the new state contract. Higher education institutions can save using the state contract also. A small sample of items at the University of Utah and College of Eastern Utah indicate that departments could save roughly 40-50 percent on office supplies by using the new contract. He stated that school districts should evaluate the cost-benefit of using a stockless system. Mr. Ely noted that discussion with some cities indicate that local governments can benefit as well.

    Rep. Goodfellow pointed out that the comparisons of the auditor concerning the U of U relate to the book store. The book store is a separate entity that sells mainly to students and doesn't buy necessarily on the same basis as the institution.

    Mr. John Massey, Office of Legislative Fiscal Analyst, distributed the In-Depth Budget Review of Central Stores. Central Stores is organized under Section 63A-2-103 to operate and maintain a central store for all state agencies. Higher and public education are exempt from the services but may subscribe if they wish. Central Stores is part of the Division of Purchasing and General Services. The purchasing part of the division is a general fund agency. Mr. Massey stated that the current contract for the vendor direct operations calls for discounts and provisions. These include a 6 percent add-on for individual agency delivery and billing. The vendor will rebate 2 percent of total sales back to Central Stores to cover administrative costs.

    Mr. Massey indicated the agency is requesting $34,800 in FY 1999 for operational expenditures. Of that amount, $31,000 is to be paid back to the Administration Program within Purchasing and Division of General Services. The analyst is recommending the following level of personnel services: Program Manager, Contract Administrator, and Procurement Card Administrator for total cost of $130,600. It is recommended that the Contract Administrator also assume the responsibilities associated with the proposed PC Store Program. It is also recommended that administrative overhead charged to this program be based on actual costs.

    Mr. Massey said they are recommending that Central Stores develop procedures to identify non-contract purchases by state agencies. Central Stores should then notify the agency that these purchases are contrary to statute and future purchases must come through Central Stores or state-negotiated contracts. The analyst recommends that the internal auditor for the

Board of Regents should initiate a review of higher education Central Store type purchases.

    Mr. Massey reviewed the proposed Procurement Card program. It will allow state agencies to use a credit card at various participating vendors for purchases $2,000 and under, eliminating most of the transactional cost associated with purchase orders, invoices, and warrants. Their recommendation of the program is contingent on all operational costs being covered by the program after one year of operation.

    Mr. Richins agreed with both the auditor's and analyst's reports and recommendations. It was their analysis that they needed to have adequate contract administration to ensure that office supply and delivery functions were taken care of appropriately. They want to make sure the contractor is living up to all of its responsibilities and obligations. It will provide an easy mechanism for all state agencies and the users of the contract to effectively know what is on contract and make the appropriate procurement decision. He said there are many electronic tools available to assist them in the process.

    Rep. Harward requested staff draft legislation to bring the statute concerning Central Stores up to date.

    Ms. Patricia Crane, Utah State Office of Higher Education, said that if further review identifies potential savings, they support the recommendation to participate more completely in the state contract. Both reports have identified that the focus of the studies were not on higher education. She stated that because of their size and complicated nature, further review would be appropriate before any action is taken.

    Mr. Jim Parker, Director of Purchasing at the University of Utah, indicated a very small percentage of the purchases made on the campus are made through the book store. He noted that the finding of a 40 percent savings by using the state contract is probably not an accurate representation.

    Rep. Harward suggested inviting Rep. Haymond and the agencies involved, who will be sponsoring legislation related to the recommendations, to the next meeting. Citizen members would be invited to participate in that portion of the presentation. He recommended that licensing be scheduled for continued consideration next year.

    Rep. Harward adjourned the meeting at 11:50 a.m.

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