Joint Committee Committee on Joint Business Affairs & Labor (01/20/2010)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON JOINT BUSINESS AFFAIRS & LABOR

Date:	01/20/2010	ATTENDANCE

Time:	01:33 PM to 04:18 PM	Balmer	X
		Bradford	X
Place:	HCR 0112	Casso	X
		Foster	X
This Meeting was called to order by		Gagliardi	X
	Senator Tochtrop	Harvey	X
		Johnston	*
This Report was prepared by		Kerr A.	X
	Jennifer Thomsen	Liston	X
		Middleton	X
		Mitchell	*
		Priola	X
		Scheffel	*
		Soper	X
		Stephens	X
		Williams	X
		Tochtrop	X
		Rice	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Joint Budget Committee Briefing Department of Labor and Employment Briefing Dept of Personnel and Administration Briefing		- - -

01:34 PM -- Joint Budget Committee Briefing

The committee was called to order by Senator Tochtrop. Members of the Joint Budget Committee (JBC) came to the table to brief the committee. Committee members were provided a summary of 2010-11 JBC budget briefings (Attachment A). Documents related to the briefings may also be accessed at http://www.state.co.us/gov_dir/leg_dir/jbc/briefing.htm.

Representative Ferrandino, member of the JBC, began the briefing by discussing the Governor's Office of Information Technology (OIT). He described the Office's budget and sources of funding. He noted that the increase in FTE and budget is due to consolidation of information technology (IT) staff from other departments pursuant to Senate Bill 08-155. He noted that there is a corresponding reduction in FTE and budget in those departments. Representative Ferrandino explained that OIT represents the largest portion of the Governor's Office.

Representative Ferrandino responded to committee questions, including a question from Representative Balmer about whether the FTE swap was 1 for 1. Representative Ferrandino explained that the consolidation of IT staff resulted in an FTE reduction of 10 percent overall.

01:38 PM

Next, Representative Ferrandino talked about the Department of Labor and Employment. He reminded the committee that the department gets no General Fund money and is mostly cash funded. He clarified that the FTE reduction shown for the department is due to consolidation of IT staff under OIT. Representative Ferrandino talked about the solvency of the unemployment trust fund, saying the department would discuss that issue further during its briefing.

01:40 PM

Representative Ferrandino spoke next about the Department of Personnel and Administration (DPA), saying it receives a very small amount of General Fund -- 0.1 percent -- and most of its budget consists of funds reappropriated from other departments. He explained that FTE is staying flat because the department's IT staff moved to OIT in the last fiscal year. Representative Ferrandino explained that some issues have been raised around total compensation and fleet and commuter vehicles. He responded to a question from Senator Williams regarding fleet vehicles. Representatives Ferrandino and Pommer responded to a question posed by Representative Middleton about negotiations around employee benefits.

01:45 PM

Representative Gagliardi asked for further information about commuter vehicles, which Representative Ferrandino provided.

Representative Ferrandino next spoke about the Department of Regulatory Agencies (DORA), saying DORA gets very little General Fund -- only about 0.02 percent. He pointed out the reduction in FTE due to the OIT consolidation. He described conversations related to the premium insurance tax and whether Pinnacol should be subject to that tax.

Representative Balmer commented on moneys spent on television advertisements for consumer outreach, saying that money should be redirected for other purposes. He also asked about DORA calendars and the funding for the calendars. Representative Ferrandino responded to Representative Balmer's comments and questions.

01:50 PM

Conversation between Representative Balmer and Representative Ferrandino on the Consumer Education and Outreach Program ensued. Representative Pommer weighed in on this conversation as well, saying DORA is implementing a law passed in a previous legislative session. Senator Foster commented on the number of constituents who are concerned about consumer fraud. Committee conversation on this issue continued.

01:56 PM

Senator Tochtrop thanked the JBC members for their work in difficult budget times.

01:56 PM -- Department of Labor and Employment Briefing

The committee took a brief recess.

01:59 PM

The committee came back to order. Donald Mares, Executive Director of the Department of Labor and Employment, came to the table to brief the committee. The department provided two handouts, a packet of information about the department and a departmental contact list (Attachments B and C). Mr. Mares introduced his senior staff.

02:03 PM

Mr. Mares said there are just over 1,100 full-time employees in the department and the department receives no General Fund dollars. Mr. Mares provided an overview of the department, describing the work of each division, the number of employees, and funding within the department including: the Division of Labor; the Division of Oil and Public Safety; the Division of Workers' Compensation; and the Division of Employment and Training.

02:11 PM

Mr. Mares continued, describing the Workforce Programs and Centers within the Division of Employment and Training. He said there are approximately 70 workforce centers in 9 regions around the state, some of which are county run. He described the Work Ready Certificate offered by the Workforce Program.

02:17 PM

Mr. Mares spoke next about the Unemployment Insurance Program. He reminded committee members that the program is premium based, and is not a hand-out program. He talked about the work that must be done to determine if individuals are eligible for unemployment benefits. He described the levels of appeal for claimants. Mr. Mares talked about the benefits for which people are eligible and about benefit extensions passed by Congress. He said the state fund pays the first 26 weeks of unemployment benefits, and a federal fund pays for extensions beyond 26 weeks. He explained that 60 weeks have been added by Congress.

02:23 PM

Mr. Mares talked about new unemployment claims, saying the difficult situation faced in Colorado is not unique. He explained that unemployment benefit payments increased 500 percent from the 2007 end-of-year amount of $315 million, to the 2009 end-of-year amount of $1.6 billion. He provided a number of statistics on claims including: in January 1999, there were 13,000 new claims; in January 2002, there were 22,000 new claims; in January 2009, there were 28,000 new claims. After May 2009, he explained, the rate of new claims skyrocketed. He reminded the committee that although Congress has extended the time for benefits, the state continues to administer the program.

02:27 PM

Mr. Mares talked about how the department has handled the influx of new claims. He responded to a question from Senator Harvey, saying that in the last week, the division received 7,700 new claims, and for the last few months has received about 6,000 new claims each week. Representative Stephens thanked Mr. Mares and the department for their work in forecasting and staying on top of the issues. Mr. Mares highlighted a number of ways the department has sought to improve service including increasing the number of calls answered in the call center from 3,800 per week to 14,000 calls per week; having a phone line dedicated to taking new claims; getting an internet self-service project up and running that already serves about 35,000 claimants and gives people information they used to have to call to get; and allowing claimants to re-set PINs or change addresses on-line rather than requiring a phone call.

02:32 PM

Mr. Mares responded to a question from Representative Priola about direct deposit for unemployment claims.

Mr. Mares continued, talking about adding personnel, saying not just new call center people were needed, but also new adjudicators. He explained that 100 new call center employees were hired about 8 weeks ago to answer phones.

Senator Foster talked about the help provided to her constituents by the department and thanked the department for their work. Senator Tochtrop, Representative Middleton, and Representative Gagliardi thanked the department as well.

02:41 PM

Mr. Mares explained that federal unemployment law does not allow the outsourcing of unemployment calls and claims.

Mr. Mares continued his presentation, explaining that about $20 million is being paid out each week in benefits. Mr. Mares next spoke about the Unemployment Insurance Trust Fund and need to borrow money to keep the fund solvent. He talked about how the fund is funded - by experience rated premiums on the first $10,000 per employee. He explained that the department assess what the rate will be based on the mid-year fund balance. He explained how premiums would be affected going forward.

02:47 PM

Mr. Mares explained how the premium system works and how the rates are determined. He clarified that loans to the fund this year are interest-free due to the American Recovery and Reinvestment Act (ARRA), but said that may not be the case next year. He said he thinks borrowing will continue through this year and probably next year as well. Mr. Mares responded to a question from Representative Middleton about the types of people who are unemployed and collecting benefits. Representative Liston asked how much the state might need to borrow this year and next and what the interest rate would be. Mr. Mares responded.

02:57 PM

Finally, Mr. Mares talked about what the department does proactively to put people back to work including training and the Jobs Cabinet.

03:03 PM

Mr. Mares responded to final committee questions and comments. Booker Graves, Director of the Colorado Workforce Council, came to the table to respond to a question from Senator Foster about a federal grant related to workforce development. In response to a question from Representative Middleton, Mr. Graves talked about community outreach.

03:09 PM

Representative Rice thanked Mr. Mares and invited the department to continue the dialog with committee members. He commended department staff for their work.

03:13 PM -- Department of Personnel and Administration Briefing

Rich Gonzales, Executive Director of the Department of Personnel and Administration and Jennifer Okes, Deputy Executive Director, came to the table to brief the committee on the Department of Personnel and Administration. They provided a handout about the department (Attachment D). Mr. Gonzales described the department, the number of employees, and its funding. He described the department's divisions including: the Division of Human Resources, the Division of Central Services, the State Controller's Office, the Division of Finance and Procurement, the Administrative Courts, the Independent Ethics Commission, and the State Personnel Board. Mr. Gonzales also talked about the State Ombud Office and explained how the Ombuds Program works and the issues it addresses.

03:21 PM

Mr. Gonzales continued, describing the duties of the State Architect's Office. He talked about needed repairs to the Capitol dome.

Next he talked about the State Archives and the services it provides, explaining that the State Archives is cash funded. He talked about issues faced at the State Archives, including their location and lack of modernization. Representative Stephens suggested the possibility of housing the State Archives in the new judicial complex. Mr. Gonzales explained that legislative tapes are deteriorating and said the Archives is looking into digitizing the tapes.

03:25 PM

Next, Mr. Gonzales talked about the Division of Human Resources, describing the division's duties. He talked specifically about Workforce Planning and Development, explaining that it is cash funded and staffed by one person. He went on to speak about risk management and loss control. Representative Bradford asked how many part-time employees get the equivalent of full-time employee benefits and whether there is a policy that requires part-time employees to receive the benefits of full-time employees. Mr. Gonzales described the benefits received by part-time employees and independent contractors. Ms. Okes also responded to the inquiry, referring to the total compensation report. She said the same state dollar amount contribution to benefits is given to an employee whether full- or part-time. Conversation on this issue between Representative Bradford and Mr. Gonzales ensued. Senator Harvey asked Mr. Gonzales for further information about how many part-time employees receive full-time benefits. Mr. Gonzales agreed to provide the numbers to the committee.

03:36 PM

Committee discussion with Mr. Gonzales and Ms. Okes on issues related to full- versus part-time employment and benefits continued.

03:42 PM

Representative Middleton commented on the discussion around full- and part-time employees and asked about negotiations related to benefits. Mr. Gonzales clarified that health insurance is chosen through a request for proposal process, not a negotiation process. Representative Bradford asked for further clarification about the definition of part-time employee, to which Mr. Gonzales responded. Senator Harvey asked how many people are employed at 50 percent of full-time receive full-time benefits. Ms. Okes talked about the State Employee Handbook, and clarified that job announcements detail the hours of an employee. She also talked about the health insurance plans, explaining how the self-funded plan works, explaining that utilization drives the cost.

03:49 PM

Mr. Gonzales clarified how salaries are set, saying they are in compliance with audit recommendations.

Mr. Gonzales next described the constitutionally independent entities that are housed within the department, the first being the State Personnel Board. Next he discussed the Independent Ethics Commission, clarifying that it acts completely independently of the department.

03:51 PM

Mr. Gonzales spoke next about the Division of Central Services and its services and offices, including Integrated Document Solutions (IDS), State Travel Management Program (STMP), Capitol Complex, and State Fleet Management (SFM). Senator Williams asked for more information about SFM and how the process for obtaining vehicles works. Committee discussion with Mr. Gonzales and Ms. Okes on the use of fleet cars ensued.

04:04 PM

Mr. Gonzales talked next about the office of the State Controller and its duties, speaking specifically about its duties related to the American Recovery and Reinvestment Act (ARRA). He continued with a discussion about the Division of Finance and Procurement, focusing on Central Collection Services. The next office discussed was the Office of Administrative Courts. Ms. Okes responded to a question from Senator Tochtrop about the duties of the Office of Administrative Courts.

04:09 PM

Mr. Gonzales talked about dedicated state workers who are doing more than ever with less resources. He said state employees make government work in the state of Colorado. Senator Tochtrop commented on state employees as well, talking about the concessions made by them. Senator Foster commented as well, and she returned to the issue of benefits for part-time employees.

04:16 PM

Mr. Gonzales talked about options related to the part-time/full-time issue and committee discussion ensued.

04:16 PM

The committee adjourned.