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^S. Hrg. 104-505 REFORMING AND RESTRUCTURING THE FEDERAL GOVERNMENT Y 4. G 74/9: S, HRG. 104-505 Reforning and Restructuring the Fed... HEARINGS BEFORE THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED FOURTH CONGRESS SECOND SESSION FAIRBANKS, ALASKA—FEBRUARY 13, 1996 ANCHORAGE, ALASKA—FEBRUARY 14, 1996 JUNEAU, ALASKA—FEBRUARY 15, 1996 Printed for the use of the Committee on Governmental Affairs mm® S£p f 8 1996 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON 1996 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice.Washington,DC 20402 ISBN 0-16-052872-0 ^S. Hrg. 104-505 REFORMING AND RESTRUCTURING THE FEDERAL GOVERNMENT Y 4, G 74/9: S. HRG. 104-505 Reforning and Restructuring the Fed... HEARINGS BEFORE THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED FOURTH CONGRESS SECOND SESSION FAIRBANKS, ALASKA—FEBRUARY 13, 1996 ANCHORAGE, ALASKA—FEBRUARY 14, 1996 JUNEAU, ALASKA—FEBRUARY 15, 1996 Printed for the use of the Committee on Governmental Affairs oamm SEP f 8 1996 " . U.S. GOVERNMENT PRINTING OFFICE WASHINGTON 1996 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-052872-0 COMMITTEE ON GOVERNMENTAL AFFAIRS TED STEVENS, Alaska, Chairman WILLIAM V. ROTH, Jr., Delaware JOHN GLENN, Ohio WILLIAM S. COHEN, Maine SAM NUNN, Georgia FRED THOMPSON, Tennessee CARL LEVIN, Michigan THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas JOHN MCCAIN, Arizona JOSEPH I. LIEBERMAN, Connecticut BOB SMITH, New Hampshire DANIEL K. AKAKA, Hawaii HANK BROWN, Colorado BYRON L. DORGAN, North Dakota Albert L. McDermott, StaffDirector John Marshall, Professional Staff Leonard Weiss, Minority StaffDirector Michal Sue Prosser, ChiefClerk (II) CONTENTS Opening statements: Page Senator Stevens 1, 81, 143 WITNESSES Tuesday, February 13, 1996 Hon. Jim Sampson, Mayor, Fairbanks North Star Borough, Alaska 3 Hon. James C. Hayes, Mayor, City ofFairbanks, Alaska 6 Hon. Lute Cunningham, Mayor, CityofNorth Pole, Alaska 8 Joan K. Wadlow, Chancellor, University ofAlaska, Fairbanks, Alaska 10 William R. Wood, Executive Director, Festival Fairbanks, Alaska 12 David O. Porter, Dean, School of Management, University of Alaska, Fair- banks, Alaska 15 Paul J. Massey, Publisher, Fairbanks Daily News-Miner, Fairbanks, Alaska .. 21 Bart LeBon, National Bank of Alaska, and Chairman, Greater Fairbanks Chamber ofCommerce, Fairbanks, Alaska 23 Earl F. Romans, President, Alaskan Battery Enterprises, Fairbanks, Alaska .. 25 Bonnie Williams, Member, Joint Borough-City Chena Riverfront Commission, Alaska 34 Harold J. Noyes, Manager, Resources Development, Doyon, Ltd., Fairbanks, Alaska 41 Ronald L. Ricketts, Executive Director, Fairbanks Industrial Development Corporation, Fairbanks, Alaska 45 Mary A. Nordale, Attorney, Birch, Horton, Bittner and Cherot, Fairbanks, Alaska 46 Barbara Schuhmann, Attorney, Cook, Schuhmann, Groseclose, Inc., Fair- banks, Alaska 56 Rodney Perdue, Member, Greater Fairbanks Chamber of Commerce Board, Fairbanks, Alaska 64 Bill Robertson, President and Chief Executive Officer, Greater Fairbanks Chamber ofCommerce, Fairbanks, Alaska 65 Althea St. Martin, Past President, Greater Fairbanks Chamber ofCommerce, Fairbanks, Alaska 70 Gary R. Wilken, President, Wilken-Alaska, Inc., d/b/a Fairbanks Distributors and GreatAlaskan Food Company, Fairbanks, Alaska 74 Wednesday, February 14, 1996 Hon. Rick Mystrom, Mayor, Anchorage, Alaska 83 Tom Fink, Former Mayor, Anchorage, Alaska 91 Sheila Ann Selkregg, University ofAlaska, Anchorage, Alaska 95 George A. Geistauts, University ofAlaska, Anchorage, Alaska 97 Barbara J. Sokolov, Director, Anchorage Consortium Library, University of Alaska, Anchorage, Alaska 103 Lee Gorsuch, Chancellor, University ofAlaska, Anchorage, Alaska 108 Judith M. Brady, Executive Director, Alaska Oil and Gas Association, Anchor- age, Alaska 119 Jim Mills, Support Industry Alliance, Anchorage, Alaska 122 Bill J. Allen, ChiefExecutive Officer, VECO Corporation, Anchorage, Alaska .. 128 Joe Sprague, Director ofMarketing, Era Aviation, Anchorage, Alaska 131 Richard Harding, General Manager and Director of Operations, Peninsula Airways (PenAir), Anchorage, Alaska 136 Thursday, February 15, 1996 Hon. Gail Phillips, Speaker ofthe House, Alaska State House ofRepresenta- tives, Juneau. Alaska 145 (III) IV Page Hon. Drue Pearce, President, Alaska State Senate, Juneau, Alaska 148 Hon. Dennis Egan, Mayor, Juneau, Alaska 151 Tom Briggs, City Manager, Craig, Alaska 155 Annalee McConnell, Director, Alaska Governor's Office of Management and Budget, Juneau, Alaska 162 Mark Boyer, Alaska Commissioner ofAdministration, Juneau, Alaska 170 Alphabetical List of Witnesses Allen, Bill J.: Testimony 128 Prepared statement 129 Boyer, Mark: Testimony 170 Prepared statement 177 Brady, Judith M.: Testimony 119 Briggs, Tom: Testimony 155 Prepared statement 158 Cunningham, Hon. Lute: Testimony 8 Egan, Hon. Dennis: Testimony 151 Prepared statement 153 Fink, Tom: Testimony 91 Prepared statement 93 Geistauts, GeorgeA.: Testimony 97 Prepared statement 100 Gorsuch, Lee: Testimony 108 Harding, Richard: Testimony 136 Prepared statement 139 Hayes, Hon. James C: Testimony 6 Prepared statement 7 LeBon, Bart: Testimony 23 Prepared statement 24 Massey, Paul J.: Testimony 21 Prepared statement 22 McConnell, Annalee: Testimony 162 Prepared statement 168 Mills, Jim: Testimony 122 Prepared statement 125 Mystrom, Hon. Rick: Testimony 83 Prepared statement 86 Nordale, MaryA.: Testimony 46 Prepared statement 48 Noyes, Harold J.: Testimony 41 Prepared statement 43 Pearce, Hon. Drue: Testimony 148 Prepared statement 150 Perdue, Rodney: Testimony 64 Prepared statement 65 Phillips, Hon. Gail: Testimony 145 Prepared statement 147 Porter, David O.: Testimony 15 Prepared statement 18 Ricketts, Ronald L.: Testimony 45 Prepared statement 45 Robertson, Bill: Testimony 65 Prepared statement 68 Romans, Earl F.: Testimony 25 Prepared statement 27 Sampson, Hon. Jim: Testimony 3 Prepared statement 5 Schuhmann, Barbara: Testimony 56 Prepared statement 59 Selkregg, SheilaAnn: Testimony 95 Sokolov, Barbara J.: Testimony 103 Prepared statement 106 Sprague, Joe: Testimony 131 Prepared statement 134 St. Martin, Althea: Testimony 70 Prepared statement 73 Wadlow, Joan K.: Testimony 10 Prepared statement 11 Wilken, Gary R.: Testimony 74 Prepared statement 76 Williams, Bonnie: Testimony 34 Prepared statement 37 Wood, William R.: Testimony 12 Prepared statement 13 APPENDIX Additional prepared statements and letters submitted for the record: John D. Lyle, Fairbanks, Alaska 187 Ginny Hill Wood, Fairbanks, Alaska 189 Beverly Reitz, Fairbanks, Alaska 190 Stuart Pechek, Fairbanks, Alaska 190 Frederick C. Dean, Fairbanks, Alaska 191 Sylvia Ward, Executive Director, Northern Alaska Environmental Center, Fairbanks, Alaska 195 Teri S. Camery, Fairbanks, Alaska 196 Roxane Ronca and Jack Herring, Fairbanks, Alaska 197 Celia Hunter, Fairbanks Daily News-Miner Columnist, Fairbanks, Alas- ka 197 Sherry Lewis, Fairbanks, Alaska 198 Richard Mandsager, M.D., Alaska Native Medical Center, Anchorage, Alaska 199 REFORMING AND RESTRUCTURING THE FEDERAL GOVERNMENT TUESDAY, FEBRUARY 13, 1996 U.S. Senate Committee on Governmental Affairs Washington, DC. The Committee met, pursuant to notice, at 9:30 a.m., at Fair- banks North Star Borough Assembly, 809 Pioneer Street, Fair- banks, Alaska, Hon. Ted Stevens, Chairman ofthe Committee, pre- siding. Present: Senator Stevens. OPENING STATEMENT OF CHAIRMAN STEVENS Chairman Stevens. Thank you for coming. We will be starting the first panel here in just a moment. Let me say that these hearings really are hearings that we originally scheduled last fall in Oc- tober. It was not possible to come at that time. We thought there were several senators that would come along. At this time, now, with the primaries going on in the South 48, there is obviously no other senator here, but I decided to continue to hold the hearings because their original intent was for me, now, as Chairman of the Governmental Affairs Committee, to have information from Alaskans that I have known in the past to have views that I would like to have on the record that as we proceed now with legislation go to deal with the restructuring of the Fed- eral Government. There has been some comment about the fact that these hearings were scheduled very quickly. I want you to know, we didn't know until last Thursday when we finally got the telecommunications bill passed. That was an enormous breakthrough for Alaska and for us personally since I have worked a long time on that. But once we were sure that we had that bill passed, the Senate made the decision to go out of session and not resume session until the 26th of this month, so we were able then to put the schedule back together again and to come. We did ask the other members of the Senate to come, but none of them could come on such short notice. I appreciate the fact that many ofyou are here on very short notice. We are really making a record that we intend to use as we go through these discussions on the floor ofthe Senate concerning legislation that will restructure the Federal Government. I think in the last decades, Americans have witnessed enormous change. Businesses and entire industries have restructured them- (l) selves to take advantage ofthe new technologies ofthe information age. They have become leaner, smarter and more agile to survive the rigors ofthe marketplace. We encounter the fruits ofnew technologies every day: at the supermarket, at the department store, through overnight mail services, even at the gas pump. Americans are directly accessing these new technologies in their homes through personal computers, and on-line purchasing networks. Products and services are being delivered faster and more responsibly than ever before. But government seems to be stuck in a time warp. Whether filing a Medicare claim, applying for a patent, or waiting in line at the post office, the gap between customers are treated by the best com- panies in America and Federal agencies is now enormous. It seems to be getting worse. Today, a car loan is approved in a few hours, but it can take the Federal Government 6 months to process a disability claim. The in- novations which are transforming the world have bypassed our Federal Government. And the Federal Government consumes about 20 cents out of every hard-earned dollar here in America. The government ignores the feeling that citizens are not getting their mon- ey's worth at its own peril. And that's why we are here. Many of us believe our government must be fundamentally reor- ganized to meet the needs of our citizens today and, particularly, as we go into the 21st Century. Now, there are a series of guests here today. Primarily, Alaska State and local officials, members of the higher education community, and the business community, people who know the problems of government intimately, because they have experienced the problems in their daily lives. I want to thank everyone for coming. I see there is a large crowd here. The people who have been invited were invited by me and I take full responsibility for who was not invited, but this is a Senate hearing and it's designed to try and help me represent Alaska. As a Senate hearing, there will be no demonstrations from any- body. We do not permit applause or booing or any kind ofparticipa- tion by members of the gallery in the Senate. And if such occurs, our Sergeant-of-Arms is under instruction to remove the public. I want it to be understood that this is not a political gathering. This is an official Senate hearing. And as such, I'm here to learn and I hope that everybody is willing to participate on that basis. [The prepared statement ofSenator Stevens follows:] PREPARED STATEMENT OF SENATOR STEVENS Today, the Committee on Governmental Affairs will ask distinguished citizens of Alaska to share their experiences and ideas about how to make the Federal Govern- ment work better. In the last decade Americans have witnessed enormous change. Businesses and entire industries have restructured themselves to take advantage of the new technologies of the information age. They have become leaner, smarter, and more agile to survive the rigors ofthe market place. We encounter the fruits ofnew technologies every day: At the supermarket, at the department store, through overnight mail services, even at the gas pump. Ameri- cans are directly accessing them in their homes, through personal computers and on-line purchasing networks. Products and services are being delivered faster and more responsively than ever before. Yet, to most Americans, government seems stuck in a time warp. Whether filing a Medicare claim, applying for a patent, or waiting in line at the Post Office, the