Administrative Rules Review Committee

the use of sick leave can be used for individuals less than sixty years old. In terms of the department's original rule, it separated those less than sixty years old and more than sixty years old into different categories. This led the department to change the rule to make it more equal.

    Sen. Peterson asked Ms. Okabe if she felt the rule's plain language was in harmony with the statute. She said probably not. Committee discussion and public comment followed.

    Chair Stephenson discussed the rule's fiscal impact. He requested that staff contact the Fiscal Analyst Office to determine the fiscal impact of the rule as written.     
    Mr. Robert Kob, Division of Institutional Operations, indicated that there needs to be equal treatment for retiring individuals.

    MOTION: Sen. Peterson moved to place the rule on the committee's sunset list. The motion passed unanimously.

    A short recess was taken by committee members.

3.    Access to State Employee Mailing List by Contract - (Rep. Stephens) -      Rep. Stephens presented background information on the issue and expressed his concerns. He asked if there is a fee paid to the state for the opportunity to access the state's database.

    Ms. Karen Suzuki-Okabe, Director, Department of Human Resource Management, explained five years ago the only way employees could get insurance rates as a block was through membership in the Utah Public Employees' Association (UPEA). Most payroll deductions are generated out of the Retirement Board or the Public Employees' Health Program (PEHP). Ms. Okabe explained the process used when choosing a vendor.

    Ms. Norma Middleton, Procurement Advisor, Department of Human Resource Management, (DHRM) explained the procurement process to committee members.

    Chair Stephenson asked what the state is procuring. Ms. Middleton explained that the state needed to offer employees an alternative to membership in the UPEA to obtain insurance. Mr. Judd Turner, Fred A. Morton Company said six carriers responded with written proposals.
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    Ms. Kim Thorne, Director, Division of Finance, referred to a handout showing the current 74 payroll deduction codes.

     Mr. Mark Austin, Division of Finance, referred to the handout and explained several costs. He stated that private industry does not cost account to the level they do.
            
    Ms. Yvonne Wagner, MetLife, explained the company's rates used for state employees. She explained the different discounts, retail accounts, their 12 rating tiers, and then informed the committee how quality is maintained.

    Ms Kim Thorne, Director, Division of Finance, discussed the progress that has been made regarding the employee group payroll cards.

4.    R33-3-217 Multiple Award Contracts for Human Service Provider Services -

    Mr. Layne Meacham explained his contention that the rule has no statutory basis and does not maximize competition due to its handling of rates for counseling contracts. Committee discussion followed.

    Rep. Stephens expressed concern that, from his perspective, the system does not appear to maximize competition.
            
     Ms. Chelsea-McCarty clarified the Procurement Code and indicated it is hard to follow which adds to the complications. She explained the rule itself and said the arbitrariness that seems to be built into the system is part of the problem.

        Sen. Peterson said if the compensation rate for qualified individuals to provide counseling services is predetermined, then the procurement process needs to be revisited.

    Chair Stephenson told the committee that quality is a critical issue, yet the state does not appear to be evaluating counseling services based on recidivism and other factors.
                                
    Mr. Hunsaker said Section 63-56-21 (1)(b)(2) requires the Procurement Policy Board to make rules establishing guidelines to assure maximum practicable competition and asked if the rules have been written.

     Mr. Ken Nye, Division of Facilities Construction Management and Chair of the Procurement Policy Board, briefly addressed the question and presented background information on the rule.

    Mr. Douglas Richins, Director, Division of Purchasing, distributed a packet of information and commented that this issue was raised by Mr. Meacham before the Procurement Policy Board in 1996. He then explained the contents of the handout and said the Board had asked for an audit as to how Human Services was implementing the rule. As a result of the audit, the Board tightened the rule. Mr. Richins said the Board had adopted a two tiered competition process and explained each tier. In his view, the real competition happens when the department

evaluates which of those providers is going to be the best fit for the client. The Board was concerned that the decision not be an arbitrary decision by whoever makes the determination and that there be an appeal process.

    Rep. Stephens said he did not see where there is statutory authority to set rates prior to the awarding of bids, and questioned whether a rule can say that rates can be set prior to the award.

     Mr. Richins answered that when the Legislature said the Board could adopt rules indicating the relative importance of the fee, the Board interpreted it that they could then delegate it to DHS to go through a rate setting process.

    Mr. Doug West, Deputy Director, Department of Human Services, explained the direction the rule has taken. He indicated that the issue regarding the discrepancy between the statute and rule will have to be clarified by legal counsel.

    Rep. Swallow expressed concern with the preset fees and the lack of guidelines to assure maximum practicable competition.     

     MOTION: Rep. Stephens moved to schedule this issue for a future meeting. The motion passed unanimously.

    Mr. Hunsaker distributed a letter addressed to the chairs of the Child Welfare Legislative Oversight Panel for committee members to review. The committee approved the letter.

5.    Committee Business

    Next scheduled meeting - October 23, 9:00 a.m., Room 305

6.     Adjourn - MOTION: Sen. Buhler moved to adjourn the meeting at 11:45 a.m. The motion passed unanimously.