LEGISLATIVE AUDITOR SENATORS REPRESENTATIVES State of Keenan Konopaski Jake Fey Joint Legislative 106 11th Ave SW, PO Box 40910 , Chair Olympia, WA 98504-0910 Rebecca Saldaña Audit & Review Phone: 360-786-5171 Committee Fax: 360-786-5180 , Vice Chair E-mail: [email protected] , Secretary , Assistant Secretary JLARC Twitter: @WALegAuditor Website: www.jlarc.leg.wa.gov

September 30, 2020 Joint Legislative Audit & Review Committee Regular Committee Meeting Minutes

COMMITTEE BUSINESS TVW Recording • Senator Mullet, JLARC Chair, called the meeting to order at 10:00 a.m. • Keenan Konopaski, Legislative Auditor, introduced two JLARC staff interns. Camille Hakansson and Ashley Trunnell. • Chair Mullet made a motion to approve the minutes from the June 3, 2020 JLARC meeting. Motion was seconded and approved. (See TVW recording at 4:42) • Chair Mullet noted the Proposed 2021 JLARC meeting schedule was distributed with meeting materials.

REPORTS, PRESENTATIONS, DISCUSSIONS TVW Recording Alternative Public Works Contracting Procedures Sunset Review – Preliminary Report Legislative Auditor’s Conclusion: The Legislature should continue the alternative public works contracting statute. Alternative delivery methods are widely used, and CPARB has created a forum for stakeholders to continually improve project delivery. Aaron Cavin and Melanie Stidham from the JLARC staff presented the preliminary report. In 1991, the Legislature authorized the use of alternative public works contracting methods for the Department of Corrections. Since then, the Legislature has repeatedly expanded this authority to include more public bodies and project sizes. The 2013 Legislature reauthorized RCW 39.10 with a sunset provision. The authority to use alternative contracting methods is scheduled to terminate in June 2021 unless the Legislature reauthorizes it. Alternative contacting methods allow public bodies to select contractors based on qualifications and price factors. Stakeholders and experts report advantages to using alternative methods. Rebecca Keith from CPARB and Bill Frare from DES answered member questions. (See TVW recording at 9:09) Washington State Patrol Pursuit Vehicle Replacement – Proposed Final Report Legislative Auditor’s Conclusion: Washington State Patrol continues to use a vehicle life cycle cost model, but it is not following best practices. Vehicle replacement decisions should be based on a revised analysis and also consider other important factors. Zack Freeman and Joshua Karas from the JLARC staff presented the proposed final report. The 2019 Legislature directed JLARC to update its 1999 study of the Washington State Patrol’s vehicle life cycle

Joint Legislative Audit and Review Committee | September 30, 2020 Page 2 cost model. The model is intended to determine the most cost-effective replacement cycle based on total capital and operating costs for the lifetime of the vehicle. The following agency staff responded to the report: • Walter Hamilton, Budget Manager, Washington State Patrol • Bob Maki, Chief Financial Officer, Washington State Patrol • Jenna Forty, Budget Assistant, OFM Chair Mullet called for a motion to approve for distribution the Washington State Patrol Pursuit Vehicle Replacement proposed final report. A motion was made, seconded, and carried. (See TVW recording at 55:18) 2019 Lodging Tax Expenditures Update – Briefing Report Ashley Elliott from the JLARC staff presented the briefing report. In 2013, the Legislature directed JLARC to collect and report local use of lodging tax revenues for tourism purposes. JLARC staff established a reporting system, provides reporting guidelines, and compiles the reports each year. (See TVW recording at 1:14:07) PROPOSED STUDY QUESTIONS ON FUTURE REPORTS School Employees’ Benefits Board Coverage Ashley Elliott and Melanie Stidham from the JLARC staff presented the proposed study questions. Beginning January 1, 2020, qualifying school employees became eligible for health care benefits under a consolidated program called the School Employees’ Benefits Board (SEBB). The 2020 Legislature directed JLARC to study health benefit coverage for school employees before and after SEBB. (See TVW recording at 1:22:21) Tax Preference – Renewable Energy Program Payments Rachel Murata from the JLARC staff presented the proposed study questions. The credit for renewable energy systems provides utilities a public utility tax credit for the amount they pay customers through the Renewable Energy System Incentive Program. (See TVW recording at 1:31:02) Tax Preference – Manufacturer’s Deferral Dana Lynn from the JLARC staff presented the proposed study questions. In 2015, the Legislature established a sales and use tax deferral on up to $10 million spent on new or expanded manufacturing facilities or equipment. (See TVW recording at 1:38:50) Tax Preference – Newspaper Industry Camille Hakansson and Ashley Trunnell from the JLARC staff presented the proposed study questions. The Legislature passed this preference in 2009 with the stated intent to provide temporary tax relief to the newspaper industry until its revenues and funding sources have stabilized. (See TVW recording at 1:45:57) Chair Mullet noted the I-900 subcommittee is taking place at 2 p.m.

2 Joint Legislative Audit and Review Committee | September 30, 2020 Page 3

ATTENDANCE JLARC Members Present: Senators Bob Hasegawa, Mark Mullet, Rebecca Saldaña, Dean Takko, Keith Wagoner, and Lynda Wilson; Representatives Jake Fey, Noel Frame, Larry Hoff, Christine Kilduff, Vicki Kraft, Ed Orcutt, and Gerry Pollet. JLARC Staff Present: Keenan Konopaski, Legislative Auditor; Ashley Elliott, Eric Thomas, Geneva Johnston, Liz Thomas, Marilyn Richter, Melanie Stidham, Rachel Murata, Valerie Whitener, Emily Martin, Zack Freeman, Joshua Karas, Eric Whitaker, Dana Lynn, Camille Hakansson, and Ashley Trunnell.

ADJOURNMENT The meeting was adjourned at 11:55 a.m.

CHAIR VICE CHAIR

3