IV. Discussion

A. Summary

As is clear from our discussion thus far, we do not believe it would be appropriate to completely revamp the DDTP or its Committees at this time. The consensus both in comments, at public hearings and during the workshop was that the program and Committees work well, but need fine tuning. Thus, in keeping with our discussion of the record of this proceeding in previous sections, our decision:

· Retains telephone companies, equipment vendors, Relay Service providers and Commission staff on the Committees, but without a voting role.

· Increases representation on the Committees of the disabled community,

· Recommends that the Commission seek an increase in staffing to accommodate the transfer of DDTP funds to the State Treasury,

· Suggests that the Commission study the feasibility of establishing a revolving fund for payment of small DDTP vendors, and adopting an electronic funds transfer system to expedite payments, and

· Recommends an examination of how to increase program outreach and technological innovation.

B. Committee Structure

We believe the following Committee structure will best accomplish the goals of SB 669. That is, it will meet the legislative mandate for a Committee structure "to advise the commission regarding the development, implementation, and administration of programs to provide specified telecommunications services and equipment to persons in this state who are deaf or disabled . . . ."³⁵ The structure will also allow the Committees to "achieve appropriate representation by the consumers of telecommunications services for the deaf and disabled.³⁶

1. DDTPAC

Based on the record of this proceeding, we make the following changes to the DDTPAC (italicized items represent changes):

Current	Voting?	New	Voting?
1. Hard-of-hearing	Yes	1. Hard-of-hearing	Yes
2. Disabled	Yes	2. Disabled	Yes
3. Late deafened adult	Yes	3. Late deafened adult	Yes
4. Deaf community at large	Yes	4. Deaf community at large	Yes
5. Statewide deaf organization	Yes	5. Statewide deaf organization	Yes
6. Pacific Bell	Yes	6. Pacific Bell	No
7. GTE California/Verizon	Yes	7. GTE California/Verizon	No
8. California Telephone Assn.	Yes	8. California Telephone Assn.	No
9. Relay Service Provider	Yes	9. Relay Service Provider	No
10. Commission Executive Director appointee	Yes	10. Commission Executive Director Appointee	No
		11. Disabled	Yes
		12. Speech-to-Speech	Yes

2. CRSAC

We make one change to the CRSAC to remove the CRS provider's vote:

Current	Voting?	New	Voting?
1. Hard-of-hearing	Yes	1. Hard-of-hearing	Yes
2. Disabled	Yes	2. Disabled	Yes
3. Late deafened adult	Yes	3. Late deafened adult	Yes
4. Deaf	Yes	4. Deaf	Yes
5. Deaf	Yes	5. Deaf	Yes
6. Pacific Bell	No	6. Pacific Bell	No
7. GTE California/Verizon	No	7. GTE California/Verizon	No
8. California Telephone Assn.	No	8. California Telephone Assn.	No
9. Relay Service Provider	Yes	9. Relay Service Provider	No
10. Commission staff person	No	10. Commission staff person	No

3. EPAC

We make no changes to the EPAC:

Current	Voting?	New	Voting?
1. Hard-of-hearing	Yes	1. Hard-of-hearing	Yes
2. Disabled	Yes	2. Disabled	Yes
3. Late deafened adult	Yes	3. Late deafened adult	Yes
4. Deaf	Yes	4. Deaf	Yes
5. Senior citizen	Yes	5. Senior citizen	Yes
6. Pacific Bell	No	6. Pacific Bell	No
7. GTE California/Verizon	No	7. GTE California/Verizon	No
8. California Telephone Assn.	No	8. California Telephone Assn.	No
9. Relay Service Provider	No	9. Relay Service Provider	No
10. Commission staff person	No	10. Commission staff person	No
11. Disabled	Yes	11. Disabled	Yes

C. Commission Staffing

We believe the transfer of DDTP funding to the State Treasury will necessitate the establishment of new positions at the Commission. We therefore direct the Commission to seek approval for these positions. We anticipate the need for 13 additional positions to perform the following functions across all six programs affected by SB 669: creation of accounts in the State accounting system, establishment of lock box functions for receipt of remittance payments, posting of remittances to the proper accounts, review of claims for payment from the funds, and scheduling of payments from the program funds by the State Controller.

It appears unlikely that the creation of these new Commission staff positions will necessitate a concomitant reduction of accounting personnel within the DDTP. The lock box functions currently are handled at the Bank of America, where the trust account resides, rather than by DDTP staff. Similarly, the Bank of America handles fund remittances. The DDTPAC, rather than DDTP staff, reviews claims for payment from the funds. We suspect the DDTPAC will continue some involvement in this process, but that Commission staff will perform most invoice review functions. The creation of accounts in the State accounting system will be a new function not currently performed by DDTP staff. Thus, we do not recommend any DDTP accounting staff reductions at this time.

There is no support in the record for transferring program responsibility to the Commission. Indeed, the record suggested a desire for less, rather than more, Commission involvement; hence our decision to take away the Commission staff vote on the advisory Committees. Rather, the record suggested that Commission staff is not close enough to the deaf and disabled community to enter the business of providing direct social services. Thus, we make no changes to current DDTP staffing at this time.

D. Revolving Fund and Electronic Funds Transfer System

The record is replete with suggestions to create a revolving fund to ensure that small vendors and non-profits receive prompt payment of their invoices. While state law requires payment of such vendors within 45 days of invoice submission,³⁷ we are concerned about the effect on services if small vendors drop out of the program.

There is a provision in state law allowing a state agency to request the creation of a revolving fund, so long as the fund consists of no more than 10% of the total budget for that agency.

Government Code 13332 provides the following:

The Controller, at the request of a state institution, department, board, bureau, commission, officer, employee or other agency for which an appropriation is made, may transfer, under procedures established by the Department of Finance, up to 10 percent of any appropriation made to each entity, to an account established for each entity within the State Expenditure Revolving Fund, which is hereby created for the purpose of the payment of payroll and other claims which costs are to be subsequently charged to the appropriations made to each entity in accordance with any provisions or schedule set forth in the appropriations. No transfers in excess of 10 percent from any one appropriation may be made without the prior joint approval of the Department of Finance and the Controller.

It may be that the Prompt Payment Act provides adequate assurance that DDTP vendors will receive timely payment. Nonetheless, the risk to consumers of losing services is too high to wait until the cow is out of the barn. In many ways, the DDTP is unlike other Commission programs. While the Commission sets rules for many programs provided by regulated utilities, nowhere else is it in the business of direct service delivery to consumers. If vendors drop out of the program and the DDTP is left without adequate vendor support, deaf and disabled consumers will suffer direct impacts. We cannot afford to allow this to happen.

Thus, we direct the Commission to seek the establishment of a revolving fund for the DDTP. The fund shall contain no more than 10% of the DDTP's annual budget at any time. It will be available only to pay vendors with annual DDTP contracts of no more than $24,000 and monthly DDTP contracts of no more than $2,000. All other vendors will receive payment from the State Controller pursuant to the Prompt Payment Act. We expect that the Commission staff added to assist with the implementation of SB 669 will observe the requirements of the Act and process properly submitted, undisputed invoices for payment within the required 30-day period.

We also direct the Commission to study the feasibility of implementing an electronic funds transfer system for regular DDTP vendors. In conducting this study, the Commission should examine whether other state agencies, including the Controller's office, use such systems, identify the costs and benefits of such systems, and make a recommendation to the Commission on whether such a system would be feasible and effective to expedite vendor payment. The Commission shall complete and file the study no later than 180 days after mailing of this decision.

E. No Net Loss of Program Funds

There is no indication that the legislature expected the passage of SB 669 to result in a net reduction in program funding. Nonetheless, we wish to ensure the DDTP suffers no net loss of program funds.

SB 669 provides for the payment of interest on the DDTP funds held in the State Treasury: "All interest earned by moneys in the fund shall be deposited in the fund."³⁸ We note that Government Code § 16305.7 provides that "[a]ny increment collected as the result of investment of state money shall be collected by the State Treasurer and reported by him to the State Controller for credit to the General Fund in the State Treasury." Given that SB 669 is the more specific of the two provisions, as a matter of statutory interpretation the SB 669 language controls and interest on the DDTP funds should be credited to the DDTP. However, we are committed to ensuring that the annual surcharge is set in a way to ensure no net loss of program funds. Thus, if the interest income is lower than DDTP funds earned while in a bank trust fund, we will seek to accommodate this loss in the annual budget process.

F. Additional Issues

1. Technological Innovation

During the course of the proceeding, we received input in two issues that we believe deserve comment and further evaluation. First, several commenters expressed concern at the slowness of technological innovation at the DDTP. We are required to keep abreast of technological advances in the delivery of DDTP services. Public Utilities Code § 2881(i) provides:

In order to continue to meet the access needs of individuals with functional limitations of hearing, vision, movement, manipulation, speech and interpretation of information, the commission shall perform ongoing assessment of, and if appropriate, expand the scope of the program to allow for additional access capability consistent with evolving telecommunications technology.

In view of this requirement, we direct the DDTP to provide a report to the Commission on the extent to which the program is in compliance with this mandate. The report should describe technological innovations in the last five years, planned innovations for the future, trials currently underway, impediments to further innovation, and necessary resources to enhance innovation. The DDTP shall complete and file the report no later than 180 days after mailing of this decision. If the report reveals a need for improvement, we will consider opening an Investigation into the appropriateness of DDTP services.

2. Outreach

We also had some indication from deaf and disabled participants in the proceeding that the DDTP should beef up its outreach efforts, especially in Southern California. Several commenters indicated they were unaware of the details of the program and expressed a desire for educational materials and other information. Clearly, we cannot be effective in serving the community if the community does not know we exist. Therefore, the Commission will work with the DDTP outreach staff to study whether program outreach is adequate, and if there appear to be deficits, to prepare a report suggesting improvements. The study shall be completed and any report filed no later than 180 days after mailing of this decision.