SENATE COMMITTEE ON GENERAL GOVERNMENT

 

 

February 10, 2005                                                                                                   Hearing Room B

3:10 P.M.                                                                                                                     Tapes  14 - 15

 

 

MEMBERS PRESENT:         Sen. Frank Shields, Chair

Sen. Bruce Starr

Sen. Vicki Walker

 

MEMBER EXCUSED:          Sen. Gary George, Vice-Chair

                                                Sen.  Joanne Verger

 

STAFF PRESENT:                 Judith Callens, Committee Administrator

Gary Roulier, Committee Assistant

 

MEASURES/ISSUES HEARD:        

HCR 3 – Public Hearing and Work Session

HB 2255 – Public Hearing and Work Session

HB 2263 – Public Hearing and Work Session

SB 155 – Public Hearing

SB 156 – Public Hearing

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 14, A

002

Chair Shields

Opens the meeting at 3:17 p.m. and opens a public hearing on HCR 3.

HCR 3 – PUBLIC HEARING

010

Sen. Rick Metsger

State Senator, District 26. Testifies in support of HCR 3, which celebrates the 100th anniversary of the town of Welches, Oregon.

024

Chair Shields

Discusses some of the history of the area of Welches with Sen. Metsger. Closes the public hearing and opens a work session on      HCR 3.

HCR 3 – WORK SESSION

040

Sen. B. Starr

MOTION:  Moves HCR 3 be sent to the floor with a BE ADOPTED recommendation.

 

 

VOTE:  3-0-2

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  2 - George, Walker

 

Chair Shields

The motion CARRIES.

SEN. METSGER will lead discussion on the floor.

057

Chair Shields

Closes the work session on HCR 3 and opens a public hearing on      HB 2255.

HB 2255 – PUBLIC HEARING

059

Judith Callens

Administrator. Explains the provisions of the bill.

069

Chuck Taylor

Legislative Counsel. Explains that the bill is a technical correction which deletes a reference to a repealed statute.

076

Sen. Verger

Declares a potential conflict as she owns a manufactured home.

083

Chair Shields

Closes the public hearing and opens a work session on HB 2255.

HB 2255 – WORK SESSION

084

Sen. B. Starr

MOTION:  Moves HB 2255 to the floor with a DO PASS recommendation.

 

 

VOTE:  3-0-2

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  2 - George, Walker

 

Chair Shields

The motion CARRIES.

SEN. B. STARR will lead discussion on the floor.

091

Chair Shields

Closes the work session on HB 2255 and opens a public hearing on HB 2263.

HB 2263 – PUBLIC HEARING

092

Callens

Explains the provisions of the bill.

101

Taylor

Comments that the bill corrects the date in the landlord-tenant statutes.

112

Sen. Verger

Declares a potential conflict

125

Chair Shields

Closes the public hearing and opens a work session on HB 2263.

HB 2263 – WORK SESSION

126

Sen. B. Starr

MOTION:  Moves HB 2263 to the floor with a DO PASS recommendation.

 

 

VOTE:  3-0-2

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  2 - George, Walker

 

Chair Shields

The motion CARRIES.

SEN. SHIELDS will lead discussion on the floor.

141

Chair Shields

Closes the work session on HB 2263 and opens a public hearing on     SB 155.

SB 155 – PUBLIC HEARING

149

Callens

Explains the provisions of the bill.

154

Roy Turnbaugh

State Archivist. Presents written testimony (EXHIBIT A) and testifies in support of SB 155.

187

Chair Shields

Asks what it means when the agency says that they are paying rent.

191

Turnbaugh

Responds that the agency pays uniform rent on the Archives Building to the Department of Administrative Services (DAS).

201

Sen. B. Starr

Asks if the agency has the ability to make this rent payment part of the biennial budget process.

217

Turnbaugh

Answers that the archives are one hundred percent funded by the Central Government Service Charge (CGSC). Adds that the CGSC also funds the legislative assembly and the Governor’s office, and the federal government does not allow state assemblies or governors to assess federal funds.

231

Chair Shields

Asks if the issue of enabling the assessment of federal funds is the most significant issue.

240

Turnbaugh

Agrees and explains that the agency can assess federal funds either through direct billing for services or through a direct cost allocation agreement.

252

Sen. B. Starr

Asks if the agency would save on rental costs if the bill is passed.

254

Turnbaugh

Answers that during times of budget decreases in the general fund, they are forced to take the cuts out of program areas because of the high cost of rent.

263

Chair Shields

Asks how much the federal government would be paying.

267

Jeff Morgan

Director, Secretary of State Business Services Division. Answers that the agency would assess based on the percentage of federal funds relative to the total state budget. Discusses the effect on rent with Chair Shields.

298

Sen. B. Starr

Asks if this assessment would be for federal funds that are already being accessed by the state.

303

Turnbaugh

Answers that this is not “new money.” Explains that it takes money from federal funds and puts it into the general fund. Adds that 23 states use this process for their archives.

324

Sen. B. Starr

Asks if it is “fair” to assess based on full time employees, rather than the work generated by particular agencies.

334

Turnbaugh

Explains that those agencies with requirements to maintain federal records have needs that are “extraordinarily complex.”

351

Sen. B. Starr

Asks whether they could assess fees based on a “service rendered” basis.

377

Turnbaugh

Answers that every agency creates records, and generally the more employees,  the greater the number of records generated.

388

Sen. Verger

Asks for a clarification on where the “money shift” takes place.

402

Turnbaugh

Responds that, at the moment, it comes from the General Fund. The proposal is to replace that general fund money with federal funds.

417

Chair Shields

Wants clarification on “where the funds come from.”

TAPE 15, A

011

Chair Shields

Desires to examine this issue with the Ways and Means Committee.

015

Turnbaugh

Notes that this issue is part of the Ways and Means process as a program option, and the requirement for the legislation is that statutes will need to be amended.

020

Sen. Verger

Expresses that it would be good to reduce this “pull on the general fund.”

030

Chair Shields

Closes the public hearing on SB 155 and opens a public hearing on   SB 156.

SB 156 – PUBLIC HEARING

039

Callens

Explains the provisions of the bill which allows the Secretary of State to conduct financial and performance audits of school districts and education service districts..

047

Bill Bradbury

Secretary of State. Presents written testimony (EXHIBIT B) and testifies in support of SB 156. Notes that K-12 education represents one of the largest budget items in the General Fund.

083

Bradbury

Stresses that while the Secretary of State’s Office can audit school districts, the issue is how those audits are funded.

111

Bradbury

Explains the reasoning behind “performance audits,” which would focus on performance in the classroom.

148

Bradbury

Notes that it is “not surprising” that some would object to performance audits, but stresses that Oregon spends over $5 billion on K-12 education.

181

Chair Shields

Asks why the agency does not audit local school districts.

187

Bradbury

Responds that they have done audits of the Department of Education but local school districts are a local form of government. Now, however, they receive over two-thirds of their education money from the state.

203

Sen. Verger

Asks about the discussion in the media of education service districts (ESD), and stresses that audits could point out positive things that are occurring.

222

Bradbury

Agrees that there is no question that audits can be beneficial.

252

Chair Shields

Asks for an example of a “typical audit.”

257

Cathy Polino

State Auditor, Secretary of State. Presents written testimony  (EXHIBIT C) and testifies in support of SB 156. Provides examples of audits conducted by the agency to include a series of audits of prison construction.

304

Polino

Stresses the ability to discover “best practices” that can be shared with all school districts.

313

Sen. Verger

Asks if the agency has the people on staff to perform these audits.

320

Polino

Responds that there is a program option package in the budget proposal for ten additional auditors. Adds that the bill contains a funding mechanism and that it is critical to have this mechanism established.

364

Chair Shields

Asks if the agency has every audited the largest school district in the state.

371

Polino

Responds that they have not, but notes that private auditing firms have done performance audits for the Portland School District.

402

Chuck Bennett

Confederation of Oregon School Administrators (COSA). Testifies in opposition to SB 156.

TAPE 14, B

009

Bennett

Notes that this bill would represent a substantial change to the law.

029

Bennett

Opines that the Secretary of State wants to do performance audits but asks “to what standard”

065

Bennett

Reemphasizes the fact that the bill needs to spell out the standards.

103

Sen. B. Starr

Notes that the Secretary of State already has the authority to do these audits so the question really is who pays the bill.

116

Bennett

Responds that Section 1 of the bill does contain language that grants authority. Discusses methods of payment with Sen. Starr.

138

Sen. Verger

Comments that she is concerned about decisions being made regarding education by people “outside the profession,” and agrees that we should have a debate about what the standards should be.

167

Chair Shields

Notes that every agency “puts up” with audits and asks why the schools would be exempt.

174

Bennett

Answers that the schools are a local government entity and that schools are “not a state agency.”

209

John Marshall

Oregon School Boards Association. Testifies in opposition to SB 156. Notes that this is “not a new issue,” and reviews the history of the “scope” of audits of school districts.

242

Marshall

States that there is an opportunity to expand the scope of required audits to look into performance issues. Gives examples of hidden costs to school districts to support audits.

282

Marshall

Talks about the Secretary of State offering an “array of services” to school districts for a fee. Restates concerns about standards.

325

Marshall

Explains the differences between allocation of funds to state agencies versus allocation to school districts.

374

Marshall

Stresses the importance of these decisions being made at the local school district level.

397

Marshall

Expresses concerns over the estimated audit costs.

413

Chair Shields

Asks if the school administrators are willing to discuss this issue.

TAPE 15, B

010

Marshall

Responds that there are discussions over how to balance these issues in a rational manner.

022

Sen. Verger

Expresses that the audits may be defined too loosely, but reemphasizes the possible benefits of performance audits.

053

Parry Ankersen

Oregon Society of Certified Public Accountants. Testifies in opposition to SB 156 and lists some technical issues with the bill.

083

Ankerson

Notes that the Portland Public School District has a full-time performance auditor. Stresses that performance audits can be performed by entities other than the Secretary of State’s office.

104

Sen. Verger

Asks for clarification on whether the witness considers the issue to be that the Secretary of State is in competition with the private sector.

118

Ankersen

Reviews the language of the bill which seems to put the Secretary of State in the “driver’s seat.”

123

Laurie Wimmer Whelan

Oregon Education Association. Testifies with “qualified support” of  SB 156.

161

Whelan

Reflects on ways to restructure the bill that would limit cost and scope.

182

Sen. B. Starr

Notes that the committee needs to have the constitutional issues clarified with regard to the Secretary of State’s authority to audit these entities.

200

Chair Shields

Emphasizes the need to examine the Attorney General’s opinion.

207

Chair Shields

Closes the public hearing on SB 156 and adjourns the meeting at 4:59 p.m.

 

 

EXHIBIT SUMMARY

 

  1. SB 155, written testimony, Roy Turnbaugh, 1 pp
  2. SB 156, written testimony, Bill Bradbury, 1 pp
  3. SB 156, written testimony, Cathy Polino, 2 pp