[Senate Hearing 106-88]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 106-88


 
                          THE MILLENNIUM BUG:
                          IS OREGON PREPARED?

=======================================================================

                                HEARING

                               before the

                        SPECIAL COMMITTEE ON THE
                      YEAR 2000 TECHNOLOGY PROBLEM
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   on

         THE Y2K EMERGENCY PREPAREDNESS OF THE STATE OF OREGON

                               __________

                           FEBRUARY 19, 1999

                               __________

                  Printed for the use of the Committee


                               


 Available via the World Wide Web: http://www.access.gpo.gov/congress/senate


                              ----------
                      U.S. GOVERNMENT PRINTING OFFICE
 55-220 CC                   WASHINGTON : 1999
------------------------------------------------------------------------------
 For sale by the Superintendent of Documents, U.S. Government Printing Office
                          Washington, DC 20402


                        SPECIAL COMMITTEE ON THE
                      YEAR 2000 TECHNOLOGY PROBLEM

         [Created by S. Res. 208, 105th Cong., 2d Sess. (1998)]

                   ROBERT F. BENNETT, Utah, Chairman

JON KYL, Arizona                     CHRISTOPHER J. DODD, Connecticut,
GORDON SMITH, Oregon                   Vice Chairman
SUSAN M. COLLINS, Maine              JOHN EDWARDS, North Carolina
TED STEVENS, Alaska, Ex Officio      DANIEL PATRICK MOYNIHAN, New York
                                     ROBERT C. BYRD, West Virginia, Ex 
                                     Officio

                    Robert Cresanti, Staff Director
              T.M. (Wilke) Green, Minority Staff Director

                                  (ii)



                            C O N T E N T S

                                 ------                                

                     STATEMENT BY COMMITTEE MEMBERS

Gordon Smith, a U.S. Senator from Oregon.........................     1

                    CHRONOLOGICAL ORDER OF WITNESSES

Hon. John A. Kitzhaber, M.D., Governor, State of Oregon..........     3
Donald F. Mazziotti, Chief Information Officer, State of Oregon..     6
Vera Katz, Mayor, City of Portland, Oregon, accompanied by Dick 
  Hofland, Year 2000 Project Manager.............................    10
Joan H. Smith, Commissioner, Public Utility Commission of Oregon.    14
Myra Thompson Lee, Director, Office of Emergency Management......    17
Adella Martell, Executive Director, Oregon Trail Chapter, 
  American Red Cross.............................................    22
Roger Harris, Controller, KOBI-TV, Medford, Oregon...............    24
Sherry Patterson, Director, Oregon Earthquake Preparedness 
  Network........................................................    27
Lynn Peabody, Program Manager, Global Action Plan for the Earth..    28
Carolyn Palmer, Special Concerns Ministries......................    29
Gordon Anderson, Mayor, Grants Pass, Oregon......................    31
Michael Cross, Citizen...........................................    32
Pete Zambetti, Citizen...........................................    33

              ALPHABETICAL LISTING AND MATERIAL SUBMITTED

Anderson, Gordon: Statement......................................    31
Cross, Michael: Statement........................................    32
Harris, Roger:
    Statement....................................................    24
    Prepared statement...........................................    35
Katz, Vera:
    Statement....................................................    10
    Prepared statement...........................................    36
Kitzhaber, Hon. John A.:
    Statement....................................................     3
    Prepared statement...........................................    37
Lee, Myra Thompson:
    Statement....................................................    17
    Prepared statement...........................................    39
Martell, Adella:
    Statement....................................................    22
    Prepared statement...........................................    42
Mazziotti, Donald F.:
    Statement....................................................     6
    Prepared statement...........................................    44
Palmer, Carolyn: Statement.......................................    29
Patterson, Sherry: Statement.....................................    27
Peabody, Lynn: Statement.........................................    28
Smith, Hon. Gordon:
    Opening statement............................................     1
    Prepared statement...........................................    46
Smith, Joan H.:
    Statement....................................................    14
    Prepared statement...........................................    48
Zambetti, Pete: Statement........................................    33



                THE MILLENNIUM BUG: IS OREGON PREPARED?

                              ----------                              


                       FRIDAY, FEBRUARY 19, 1999

                               U.S. Senate,
                 Special Committee on the Year 2000
                                        Technology Problem,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 1:30 p.m., in 
hearing room A, Oregon State Capitol Building, Salem, Oregon, 
Hon. Gordon Smith presiding.
    Present: Senator Smith.

  OPENING STATEMENT OF HON. GORDON SMITH, A U.S. SENATOR FROM 
                             OREGON

    Senator Smith. Good afternoon and welcome to our State 
Capitol for the first 1999 field hearing of the Senate 
Committee on the Year 2000 Problem. I would like to discuss a 
problem with you today that could affect all Oregonians--the 
readiness of Oregon's State and local governments and how their 
emergency services may be affected by the year 2000 technology 
bug.
    To begin, I would like to thank all the distinguished 
witnesses who have prepared reports to present today. Each 
person here plays a vital role in finding a solution to the 
year 2000 computer problem. It is only through the combined 
efforts of the Federal Government and the citizens of this 
great State that Oregon will be insulated from the widespread 
impact of the Y2K problem.
    As many of you know, the problem I refer to is a technology 
bug found embedded in chips. The bug may cause many computers 
to shut down when we reach the year 2000, ultimately affecting 
many segments of our society.
    To assess the potential impact of the bug, the Senate Year 
2000 Committee was formed almost a year ago to help the 
Government better understand and prepare for its inevitable 
problems. As a member of the committee, I have participated in 
several meetings in Oregon and in Washington, DC., to determine 
the preparedness of our State and of our Nation.
    While awareness is growing, research by the Senate 
committee indicates that many organizations critical to 
Americans' safety and well-being are not fully engaged in 
finding a solution.
    While the Senate Y2K Committee has assembled no data to 
suggest the United States will experience nationwide social or 
economic collapse, the challenges posed by the year 2000 
problem are numerous and daunting, both at home and abroad. 
Therefore, our committee concludes that disruptions will be 
significant. Those who suggest that it will be nothing more 
than a bump in the road are misinformed.
    The Internet is bursting with rumors. Web pages and chat 
rooms assert that Y2K will be TEOTWAWKI, cyber-speak for ``the 
end of the world as we know it.'' Others claim the problem is a 
hoax designed to sell information technology.
    The bad news is that the Y2K problem is real, caused by an 
outmoded, two-digit dating system in computer software and 
hardware that may knock vital systems offline on January 1, 
2000. The good news is that it is far from the end of the 
world.
    But Y2K is about more than the failure of an individual's 
personal computer or incorrect dates on a spread sheet. The 
complexities surrounding the problem and the lack of serious 
national assessments are indicative of larger, looming issues. 
The interdependent nature of technology systems makes the 
severity of possible disruptions virtually impossible to 
predict.
    There are reasonable steps individuals may take to prepare 
for the year 2000. Consumers should keep copies of financial 
statements and ask local banks what efforts are being made 
toward Y2K compliance. Employers, local elected officials, and 
utilities should be contacted. Individuals should also research 
companies' levels of compliance before making investment 
decisions. Above all, Americans should prepare for Y2K based on 
facts and reasonable predictions about the problem's effects on 
vital services.
    Let me briefly outline our findings to date. I am now more 
optimistic than I once was, but a lack of data in numerous 
areas leads me to continue to be wary of the unknown. Nearly 
all affected industries and organizations started the Y2K 
remediation too late. Even the sectors that started early and 
appear to be in the best shape, such as the financial services 
sector, include individual companies that lag in their Y2K 
planning. There are exceptions to both good and bad, and we can 
only speculate what will actually happen. The details of what 
our committee has learned so far are contained in a report we 
plan to issue publicly by the end of the month. Our work, 
however, is far from over, and hearings will continue through 
the end of the year.
    Due to the lack of assessments about the status of certain 
industry sectors, we are not yet sure of the scope or the 
nature of Y2K disruptions. I suspect that we will have a better 
idea as time goes on, but we will not know for certain what the 
difficulties will be until they are actually upon us.
    As of today, there are only 316 days remaining until 
January 1, 2000.
    With this in mind, I want to express my confidence that we 
will continue to progress in every major sector in preparation 
for the year 2000 problem over the next 10 months. It will take 
the efforts of responsible leaders at every level of government 
to engage in planning for such an event. At this point, it 
appears that there is a greater likelihood of small, diffuse 
disruptions than large-scale shutdowns. Nevertheless, we must 
be prepared for every type of scenario.
    Unfortunately, there is a misconception pervading corporate 
board rooms that Y2K is strictly a technical problem and that 
executive attention is unwarranted. On the contrary, we must 
ensure the participation of executives at all levels of 
business and government. This problem will not simply go away. 
Each of us must do our part to make certain that this problem 
is adequately addressed.
    Overall, I am optimistic about our progress in solving the 
Y2K problem. I believe that we can meet out goals and prepare 
effectively for the coming year; however, we must all recognize 
that we have significant work to accomplish in the coming 
months. As we work together, I am sure that we will develop a 
greater understanding of this problem and forge effective 
solutions. It is our cooperation which will bring us together 
and allow us to reach our final goal.
    Again, I appreciate the opportunity to chair this hearing 
in Salem and look forward to all of the information that our 
distinguished witnesses have to share.
    Our discussion today will focus on the Y2K emergency 
preparedness of the State of Oregon. The preparedness of State 
and local governments are vital because their services will 
most directly impact most Americans.
    Our first witness today will be the Governor of the State 
of Oregon, John Kitzhaber. Then we will have a panel of 
witnesses: Mr. Don Mazziotti, the chief information officer of 
the State of Oregon; Ms. Joan Smith, a commissioner of the 
Oregon Public Utility Commission; and Ms. Vera Katz, the mayor 
of the city of Portland.
    Our second panel includes: Ms. Myra Lee, the director of 
the Office of Emergency Management; then Ms. Adella Martell, 
Executive Director of the Oregon Chapter of the American Red 
Cross; finally, Mr. Roger Harris of KOBI-TV in Medford will 
address the role of the news media in the Y2K problem and the 
media's potential impact on public perceptions.
    I appreciate the efforts of all of those who have come to 
share with us their work, and I look forward to their comments 
and thank them for their contributions.
    Governor, the podium is yours, and we thank you again.

 STATEMENT OF HON. JOHN A. KITZHABER, M.D., GOVERNOR, STATE OF 
                             OREGON

    Governor Kitzhaber. Mr. Chairman, for the record, my name 
is John Kitzhaber, Governor of the State of Oregon. I am joined 
here by Don Mazziotti, the State information officer. There is 
a certain element in my staff who recognizes the fact that my 
disclaimers--I am a Governor who still doesn't use e-mail, and 
they wonder why I was being asked to testify here today. I can 
tell you, though, Mr. Chairman, that my chief of staff, Bill 
Wyatt, who I think you are familiar with, has, as far as I can 
tell, bought every electronic gadget that has come down the 
line in the last 4 years. He is the Y2K problem. [Laughter.]
    Governor Kitzhaber. Mr. Chairman, I do want to thank you 
very much on behalf of the citizens of this State for chairing 
this committee and particularly for giving me the opportunity 
to speak very briefly about what the State is doing to prepare 
for meeting this challenge. I also want to commend the Senate 
Special Committee on the Year 2000 Technology Problem for your 
efforts to investigate this issue and for the tremendous 
service I think you have rendered in raising the awareness of 
this problem in a very constructive fashion among businesses 
and Government and the news media and Oregonians in general.
    Three years ago, we realized here in State government that 
it would take thousands of hours of work and millions of 
dollars in order to adequately prepare for the consequences of 
moving from 1999 into the year 2000. We set targets and we 
budgeted very carefully for the costs of doing what was 
necessary to get ready for meeting this date change.
    What we didn't know at that time was how rapidly this issue 
would shift from a relatively simple but time-consuming 
technology problem into a real business management challenge. 
In Oregon State government, we have responded by adding 
additional resources and redoubling our efforts to ensure that 
our citizens receive the critical State services that they 
depend on beyond the year 2000.
    Now in 1999, with, I believe, about 315 days left before 
the end of this year, this problem promises to become not just 
Oregon's problem but society's problem. And I think that is why 
what you are doing here is so terribly important, because 
talking about and preparing for the Y2K problem I think is in 
our collective community interest as Oregonians and certainly 
as Americans.
    The more people can actually learn about Y2K, the more they 
come to understand, I think, that our computers are largely 
connected to other people's computers. So it is not a matter of 
just fixing your own computer system. Home computers share 
electronic information with Internet service providers, with 
online catalogue stores, automated bank services, and even the 
Internal Revenue Service. Similarly, the computers here in the 
State of Oregon that run our government and provide services to 
our citizens share electronic information with cities and 
counties and Federal agencies and businesses as well. So the 
point, I think, that people need to understand is that in order 
to address your own Y2K problem, you have to also figure out a 
way to address the other guy's Y2K problem as well.
    The way computers interact, I think, can also serve to 
remind us that we have got to interact with our neighbors to 
solve problems in the larger arena. I think if you view this 
from that standpoint, that you can't solve your problem without 
solving your neighbor's problem, it offers us a tremendous 
opportunity. And I prefer to look at it as an opportunity, not 
as a threat.
    From a business point of view, because of Y2K hundreds of 
dedicated public employees are in the process of replacing 
older inefficient computers with more efficient, cost-effective 
information technologies. So, as a result, they are creating a 
better way to do business that will not just handle the year 
2000 problem but will improve service delivery and reap 
benefits for Oregonians well beyond the millennium.
    From an individual standpoint, I think Y2K presents another 
kind of an opportunity to come together and create better and 
more friendly communities throughout the State of Oregon. And 
let me just use an analogy. For the last 4 or 5 years, there 
hasn't been a year that some part of Oregon hasn't been 
adversely impacted by floods, by fires, by windstorms, by a 
whole host of natural system changes that have disrupted the 
way we do business. And we have always dealt with it. Or I 
should say that the people who have the responsibility to go 
out and fight our forest fires and fix our highways and keep 
the roads open day in and day out have gone out and done that 
for us.
    I think in a way the Y2K problem is very, very similar, or 
at least is not dissimilar. In the coming months, what we are 
really facing is the possibility of a technology system, rather 
than a natural system, disrupting the way that we do business 
here in the State of Oregon. And I have great confidence that 
the people who we have charged to get out and fix that and get 
ahead of it and deal with those disruptions are going to be 
able to do that. And I also have every confidence that 
Oregonians will respond to the Y2K technology disruption just 
as they have responded to natural disruptions in the past--
calmly, quickly, and pulling together as a community.
    Senator as you know, earlier in this century an American 
President said, ``The only thing we have to fear is fear 
itself.'' And I really believe that knowledge is the antidote 
to fear. The people need facts about the situation, whether you 
are running a State service or whether you are running a 
business.
    As Governor, I am committed to doing what I can to inform 
Oregonians of our readiness for the year 2000. Since 1997, when 
I issued an executive order that required every agency of this 
State to find and fix its own 2000 problems, we have been 
making progress, and we have been reporting that progress on a 
regular basis to Oregonians through their elected 
representatives in the legislature. You will be hearing more 
about the State's Year 2000 Project from Don Mazziotti, our 
chief information officer, who oversees our project office, and 
as you mentioned, Mr. Chairman, from Joan Smith, a member of 
the Public Utility Commission.
    I am also committed to working with the cities and counties 
of the State of Oregon to do what we can to help them prepare 
their communities for this challenge as well.
    Finally, I am committed to cooperating with the print media 
and the electronic media who are going to play an extremely 
important role about how Oregonians view the challenge of Y2K 
depending on how they choose to report this and cover this. 
They can choose either to fan the flames of fear or they can 
choose to encourage people to take positive actions in their 
own communities to address this issue. And I would encourage 
the media very, very strongly to consider the importance and 
the responsibility of how this message is crafted and its 
impact on our State.
    I would also issue the same challenge to the business 
community not to contribute to the anxiety but, rather, to step 
up and do their part to try to quiet people's fears.
    I think that, in closing, if we commit ourselves 
collectively, regardless of what sector we are in, to sticking 
to the facts, we can build trust among people throughout the 
State, and it is that kind of trust, I think, that ultimately 
builds stronger communities, working together for the best 
quality of life we can, but prepared for the worst when 
emergencies come our way.
    I would close by simply adding we need to prepare, not 
panic.
    Senator Smith. I couldn't have said it better. In fact, I 
think I did say it.
    Governor Kitzhaber. That is where I got it. [Laughter.]
    Senator Smith. I wonder if there is anything you see at 
this point in the Federal response or preparation that gives 
you concern. If not, I hope you will let me know if you do 
something as we get on it. But perhaps there is already 
something you are aware of that we are not doing that gives you 
heartburn.
    Governor Kitzhaber. Not at the moment, at least not in this 
area. [Laughter.]
    Governor Kitzhaber. But I do believe that the committee of 
which you are a member and the hearings that you are holding 
are just extraordinarily important, above and beyond the 
technological details of how we fix this. I think this effort, 
this concerted effort by yourself and others to inform the 
public of what this is and what it isn't I think is very 
beneficial.
    Senator Smith. I think it is also important to point out to 
people that during the 1980's and early 1990's and ever since 
that period of time, America has been retooling, and a lot of 
the retooling is with Y2K-compliant equipment and computers. 
And so we could easily overblow this. It doesn't mean it isn't 
a problem, but it is going to be a bigger problem for other 
countries, and we hope it won't be a problem at all for us.
    Governor, does the National Guard in Oregon have--will it 
have any Y2K consideration in its preparation to respond to 
emergencies?
    Governor Kitzhaber. My understanding is that General Reese 
and the Guard are doing their part to make sure that that unit 
will be available to us and that it won't be--should not be 
disabled by this.
    If I may just say, Mr. Chairman, that when your next panel 
comes up, Mr. Mazziotti is in much closer contact with the 
various individual elements that are working on this and I am 
sure could elaborate.
    Senator Smith. Terrific. Thank you, Governor, for your 
leadership and for being here today.
    [The prepared statement of Governor Kitzhaber can be found 
in the appendix.]
    Senator Smith. Mr. Mazziotti, we welcome you and your 
testimony, and the two others on this panel, please come right 
up.
    Don, go right ahead.

 STATEMENT OF DONALD F. MAZZIOTTI, CHIEF INFORMATION OFFICER, 
                        STATE OF OREGON

    Mr. Mazziotti. Good afternoon, Senator. My name is Don 
Mazziotti. I am the chief information officer for the State of 
Oregon, and I am the individual accountable for finding and 
fixing Oregon's Y2K problem, or at least coordinating that 
effort among the 126 State agencies who have that 
responsibility.
    I want to give you an overview of where State government is 
because I think that would help you to understand how we have 
tackled the problem. Commissioner Smith can fill in the other 
aspects of State government activity, and obviously Mayor Katz 
can speak for and will talk about the city of Portland's 
outstanding efforts. But let me talk about State government 
first.
    The State government's Y2K efforts really began in 1996 and 
in that time have focused on six areas of activity:
    The first is finding, fixing, assessing the nature of the 
problem, which is a widespread and complex problem, but one 
which requires in-depth assessment and evaluation;
    Second, work to remediate software and hardware 
applications and systems which support them;
    Third, to tackle the so-called embedded microchip problem. 
These are chips primarily found in control systems, buildings, 
and machinery, that sort of thing;
    Fourth, to address the electronic data interchange or 
interface problem where data from one source crosses a boundary 
and exchanges information with another, with the potential to 
corrupt that other system;
    Fifth, business continuation plans or figuring out how to 
construct a plan which can be implemented to work around a 
given failure. Assuming a failure occurs, how can we continue 
our business even in the absence of support from a Y2K-
vulnerable system?
    And, finally, emergency preparedness measures, which Myra 
Lee, the head of OEM, will describe to you a little bit later 
today.
    These are the six primary areas of activity. They are the 
province, to a lesser or greater degree, of all of the agencies 
and all branches of government, and all have been working on 
them steadfastly since 1996.
    We are guided by three sources of authority that I think 
are useful for you to know about. First, the Department of 
Administrative Services, which is the central service agency of 
Oregon State government, issued a policy in 1996, November 
1996, directing all agencies to find and fix the problem. That 
was followed in April 1997 by an executive order from Governor 
Kitzhaber which outlined further the responsibility of those 
agencies and which established the statewide Y2K office, the 
office, which is part of my organization, responsible for the 
coordination, monitoring, evaluation, and reporting activity. 
And that was followed by signing into law in July of the same 
year ORS 184.305-345 passed by the Oregon Legislature further 
outlining and detailing our responsibilities with regard to the 
Y2K problem.
    The point that I make here is that virtually every branch 
of government has been involved at some level in developing its 
pronouncement, its policy, its law on the subject of Y2K, and 
these are largely well coordinated and have worked well 
together.
    Oregon's efforts, like that of many other States, is 
supported by an organization of many departments, many 
agencies, and committees, and each one of them has a specific 
role to perform. And I have provided you with information 
attached to my testimony which describes graphically the 
organizational structure of our Y2K effort. It involves 
literally hundreds of people: decisionmakers, executive-level 
individuals, as well as folks who are working in the trenches 
to remediate the code that they find in computers that are non-
compliant.
    In addition to these efforts, the Joint Legislative 
Committee on Information Management and Technology, chaired by 
Dave Nelson, Senator Dave Nelson, the Senate Information 
Management and Technology Committee, chaired by Senator Vern 
Duncan, and the House Commerce Committee, chaired by Jim Hill, 
have maintained oversight of Y2K issues, and we work closely 
with them and, in fact, rely upon them for not only our 
authority but guidance and good advice. And they have provided 
that.
    Let me tell you where I think we are at in our effort. 
Notwithstanding attempts by a variety of authorities to 
simplify the problem to a single percentage expression of work 
completed--the problem doesn't admit to that kind of 
treatment--I need to tell you where we are with respect to each 
of these kinds of systems or each of these kinds of effort.
    First, we have completed nearly 100 percent of our 
evaluation efforts of all systems, all hardware, all chips, all 
interfaces. That work is virtually done. The increment that 
remains is an increment which will be completed either this 
month or certainly before the drop-dead date, which is July 1.
    Second, about 80 percent of all the correction work is 
underway for systems and the hardware part of our activity. And 
so we are on schedule--in fact, we are ahead of schedule. When 
I speak of rewriting lines of code, we are ahead of schedule 
with our systems.
    With regard to testing, about 70 percent of all of our 
software and hardware systems have now been tested. Where 
problems have been found, those problems have been corrected. 
None of this which have failed any tests have been put back 
into service. They will be retested after further work is done.
    And in terms of returning to service, a little more than 60 
percent of the software systems, large-scale applications, and 
hardware which run them, about 63 percent are now back in 
service. That means that except for interfaces they are 
probably invulnerable to Y2K problems. And as I reported to 
you, we are ahead of schedule.
    Our embedded chip issue affects about 10 million square 
feet of space, maybe 36 million square feet additional that is 
privately leased space, and we have contacted all of our 
vendors, all of our landlords from whom we rent space, and 
confirmed or had them confirm the fitness of their buildings, 
their structures, their control systems. And we have verified 
the control systems of all of those which are part of the 
Facilities Department of the Department of General Services and 
are satisfied that we have found virtually all of them 
microchip process systems. In those cases where there is any 
kind of uncertainty, security systems, for example--and they 
are particularly vulnerable to Y2K--we know how to work around 
them. We know what will happen should there be failures, and we 
have plans in place to secure buildings and the like should 
that occur.
    Our greatest vulnerability and the greatest vulnerability 
of virtually any large-scale organization dealing with Y2K, 
including the Federal Government, are interfaces. These are the 
data exchanges where complex data, bits and bites, cross 
boundaries between partners, sometimes many partners, and if I 
take data from you and that data has Y2K problems in it, it is 
possible for me then to be corrupted by your data, much like a 
virus can be spread. And in that sense, this is our greatest 
point of vulnerability.
    Any organization that has more than 50 interfaces is judged 
to have a 95 percent probability of failure of some part of 
that system, and we have on the order of 17,000 interfaces, we 
believe, that have been documented at this point. Maybe 700 of 
those have been confirmed as a subject of Y2K problems, and now 
we are working on each of them. It requires also that we 
contact all of our trading partners to make sure that they have 
Y2K-fit systems, and if they don't, we will have to cease 
trading with them or cease communicating with them.
    We are not at that point yet, but I expect we will get 
there by July. We will know where we stand, and there will be 
parties, all types of parties, whether it is private business, 
other governments, or even internal exchanges, that will be 
prohibited, and we will have to take that action.
    A final point that I would make--and then I would be happy 
to answer any questions you might have--we have recently gone 
to a real-time reporting and reading system for our Y2K status. 
This is done in response to a Wall Street Journal article which 
said that we had completed zero work in Oregon. Nothing could 
be further from the truth, and I am embarrassed for the Wall 
Street Journal and the report that was provided.
    Putting that aside, however, we have identified 78 systems 
which are critical to the continuation of our government in 
Oregon, State level. That is reported on our Web page every 
day, and it is updated every day. Of those 78 systems, 39 
systems are now what we call green, meaning no problem, on 
schedule, work done, or ready to be completed. Thirty-four of 
them are yellow, which means in a caution stage, on schedule in 
general, documentation is there and satisfactory, and we are 
reasonably comfortable that we will hit the July 1 deadline for 
those. Five systems are red alert systems, and those are held 
by a variety of agencies. I have in my own division one of 
those red alert; it is the telecommunications system. And we 
are working very hard to fix the problem, but it is not a 
simple one and not one that we will be done with until 
September, which gives us a good deal of indigestion but that 
is the way it is. We have to pull five very large switches 
using overhead cranes and the like out and replace them with 
new ones that cost millions of dollars. And so that work is 
underway now and will be completed on time.
    We are working closely with Mr. Koskinen. Frankly, it is a 
useful dialog, but it also has its limitations. We don't have a 
single point of contact in the Federal Government, and that 
would be highly useful to us. Although Koskinen attempts to 
play that role, he plays that role largely for the White House 
and not necessarily for the independent regulatory agencies or 
other entities, and it would be useful to be able to turn to a 
single source and communicate with a single source.
    The second thing--and I called this to the attention of 
your staff yesterday, and I included it in my testimony--like 
so many organizations who have been told that they need to 
report back to somebody of greater authority on the status of a 
problem, in their haste they frequently oversimplify the nature 
of the problem. The report may portray a picture that is 
inaccurate. I think the GSA is in that process now.
    We have been working closely with the General Services 
administration to respond to their questioning on the status of 
our interfaces with the Federal Government, and we have told 
them repeatedly that we have a policy of complete reporting. 
They want us, Senator, to report in the boxes that they have 
provided to us, and those boxes do not allow for complete 
reporting. And so should you hear that Oregon is in some way 
defective on the interface side, I would ask you to ask more 
questions, ask for the full documentation that we have provided 
to them, which is not necessarily going to be part of their 
report.
    I call this to your attention because it is not unusual as 
we deal with Federal agencies who frequently have left-hand, 
right-hand coordination problems. I don't want to suggest that 
it is only the Federal Government. Respecting the fact that you 
in part, however, are our principal way of communicating with 
them, I wanted to call that to your attention.
    In the final analysis, it is my judgment that Oregon State 
government will complete all of the scheduled Y2K actions by 
September 1. That will afford us time to retest where necessary 
to make all other preparations that are necessary. There is 
certain to be some failures. There will be failures. We are 
assuming that. We are assuming perhaps a 72-hour period of 
failures of one kind or another. We have teams in place to fix 
those problems should they arise. I intend to be watching the 
Rose Bowl on January 1, and I think that other people can, too.
    I appreciate very much the opportunity to present this 
testimony.
    Senator Smith. Thank you very much, Don. Very helpful, and 
I will see if we can't--I will take back to Chairman Bennett 
the idea of a single point of contact. That is a very good 
suggestion.
    Mr. Mazziotti. Thank you.
    Senator Smith. And I hope as we go along, if there are 
other things you see that the Federal Government needs to do to 
get the left and the right working together, please holler. We 
will help.
    Mr. Mazziotti. Will do.
    [The prepared statement of Mr. Mazziotti can be found in 
the appendix.]
    Senator Smith. Vera Katz.

   STATEMENT OF VERA KATZ, MAYOR, CITY OF PORTLAND, OREGON, 
     ACCOMPANIED BY DICK HOFFLIN, YEAR 2000 PROJECT MANAGER

    Ms. Katz. Senator, good afternoon, and it is nice to have 
you back.
    Senator Smith. It is nice to be back.
    Ms. Katz. Would it be all right if I called my expert from 
the city of Portland, Dick Hofland?
    Senator Smith. Of course.
    Ms. Katz. Thank you. I can operate the e-mail, but I am not 
sure I can explain all the intricate details if you have any 
questions.
    Senator Smith. OK.
    Ms. Katz. You have a copy of our draft plan and the 
analysis that was prepared by Mr. Hofland and the progress of 
all of our bureaus and departments. That will be updated, and 
we will forward that to you as soon as it is completed.
    The situation that is facing us at the local level, the 
phone calls and e-mails and letters certainly represent the 
fact that there is a lot of misinformation. There are a lot of 
rumors. There are a lot of predictions. There is also 
speculations about a total social breakdown, a lot of concerned 
citizens, and my fear is that whatever paranoia and panic is 
out there could increase if we don't do what you are doing here 
this afternoon and if we don't pass along the hard work of our 
State government as well as the Federal Government and local 
municipalities.
    I see the role of the largest city in this State is to be 
prepared to err on the side of caution to safeguard the 
community. We do an annual survey of all of our citizens, and 
we found to the question, Are you prepared if there would be a 
natural disaster?--we were really referencing floods and 
volcanic eruptions and earthquakes. And we discovered that more 
than 50 percent of the citizens in the city of Portland are not 
prepared, don't know what to do. So I see this as a wonderful 
opportunity to prepare for an emergency. That doesn't mean that 
it will happen, but there is always the possibility. It is like 
buying fire insurance or car insurance or life insurance. Be 
prepared just in case.
    Senator Smith. That is good advice, with or without Y2K, 
isn't it?
    Ms. Katz. Exactly. And so we see this as our opportunity to 
educate citizens about what their responsibility is in the 
community, not only to prepare their families but to prepare 
their neighbors.
    What we want to share with the citizens is the kind of 
contingency plans we are making in the city, to explain to them 
the fact that there probably won't be any problems with getting 
their funds out of the ATM machines, or when they switch on the 
light, the light will be there, when they turn on their gas or 
electric stove, the power will be there to heat their food.
    We also want to tell our citizens what they can do for 
themselves, and many of our citizens have already exhibited the 
willingness to help their neighbors in time of natural 
disasters and what they can do with the community and for the 
community.
    They expect us, the local leaders, the people that are on 
the line, to show that kind of leadership in responding to 
whatever may or may not happen, and they will hold us 
accountable. So it is very nice to hear that the State and the 
Federal Government are our partners in this because we can't do 
it ourselves.
    We have analyzed what we need to do in all of our service 
areas, specifically 911 and communications, our public safety 
needs, both fire and emergency medical needs, police needs, our 
water and sewage systems, traffic signals, street lights, our 
own financial systems, and whether our vendors are ready. With 
Mr. Hofland's help, we are following a rigorous project 
management review. We have told all the bureaus that I am going 
to hold them accountable, and I have told my city council that 
I will hold their commissioners and their bureaus accountable 
to make sure that we are all Y2K compliant.
    It is important, though, that our private partners do the 
same. It is important that our county, State, and Federal 
partners continue that kind of same work plan.
    What is next for us? We have worked hard internally. There 
is still work to be done. Mr. Hofland can tell you when we 
think we will be ready with all of our systems and have all the 
back-up systems prepared and ready to go.
    But what we now want to do is go out into the community. We 
have citizens who are ready to receive the information and, 
quite frankly, I have spent a couple of days on the Internet, 
and there isn't very much there yet that will calm people and 
will provide them the information they need. So I hope that we 
will be able to produce that work as well.
    We will distribute materials to every household--I hope we 
can do it more than once--and discuss with them in the event of 
a potential interruption of service. We will use the existing 
community infrastructure to reinforce our message--churches, 
schools, our 92 neighborhood associations, and our global 
action plan partners who we have already contracted on 
environmental issues to work with families and train them, who 
will then train others, to discuss and to plan what they can do 
on January 1, or before January 1 to get ready for January 1, 
2000.
    We will then coordinate with other governments to clearly 
understand where their vulnerabilities are, as well as our 
utility companies, our telephone, cellular, and page services, 
our emergency management teams, public safety medical services, 
and our financial institutions.
    Our message will be the following: This is how our 
infrastructure works, this is how technology is involved in the 
workings of the infrastructure, so they clearly under the nexus 
between the service we provide and the technology bug that we 
have been talking about for years and years.
    We will discuss with them what happens if something fails. 
We will also tell them that we are testing all of our systems, 
and we will fix them before our deadline. And we continue 
sharing with them the status of our work.
    What still needs to be done is understand where our 
partners are: the port, our metro government, the county, and 
the State. We need to also take a look at existing emergency 
plans and see if they are enough or do we need to build 
contingency plans. We need to decide what our workforce needs 
are going to be for December 31. I know where I am going to be. 
I will be at the emergency center, but we need to make sure 
what message we send to our workforce.
    We will be conducting city Y2K simulation drills in April, 
and my hope is that we also invite the media to come along so 
that they can provide that information to our citizens that 
things are OK, because I fear, just like the Governor fears, 
that the media could be either a very important help or a 
problem.
    We will complete our materials that we want to distribute 
to the community. We will create a Web page on Y2K readiness. 
And it is my intent to call the media together and ask them to 
be partners with us and help us share the information that we 
have developed with the rest of the community as well as with 
the rest of the State.
    We will be ready. Thank you.
    Senator Smith. Thank you, Ms. Mayor. We appreciate all that 
you are doing. It is a remarkable story that Portland is 
developing.
    I wonder if in your contact with other cities in Oregon, do 
you find an equal sense of urgency and efforts being done to 
prepare? I mean, you can't speak for them, but does it give you 
confidence that local officials take this seriously and are 
taking steps to fix it?
    Ms. Katz. Quite honestly, it is uneven. In the last two 
conferences with mayors, other issues have been discussed, some 
discussion on Y2K. There are some communities that have 
experienced natural disasters that are taking this very 
seriously and see this, especially in California, northern 
California, see this as an opportunity to educate their 
citizens and get them ready for the 72 hours, which is the norm 
for emergency services.
    Senator Smith. I appreciate that response. I think it 
points out one of the vulnerabilities in all of this, simply 
that our whole system is interconnected, and it is no stronger 
than the weakest link. And so that is why it behooves everyone 
with a public responsibility to help their neighbor here, 
whether that is a city or a county or the State or the Federal 
Government.
    I hope, Vera, that you will not be shy about pointing out 
areas where you think the Federal Government is missing in its 
contacts with you on this issue, or any other, for that matter.
    Ms. Katz. Nobody has ever accused me of being shy. 
[Laughter.]
    Senator Smith. I certainly wouldn't begin.
    Ms. Katz. I will be more than happy to do that. One of the 
things that I always like to look for are best practices. Some 
communities are giving the local municipalities as well as the 
State report cards, some kind of measurement to share with the 
community. There may be other examples of best practices around 
the State. It would be nice if that information would be 
available to the Federal Government as well. And the only thing 
that I would urge you to do is make sure that the Federal 
Government is ready so that recipients of Medicaid and Social 
Security and our electric grids are functioning so that major 
disruptions don't occur.
    Senator Smith. Thank you so much.
    Speaking of electric grids, I guess we should hear from 
Joan Smith now, unless you have something you want to add to 
what the mayor said.
    Mr. Hofland. For the record, I am Dick Hofland. I am the 
Year 2000 project manager for city of Portland.
    The testimony offered thus far from Governor Kitzhaber and 
Don Mazziotti, of course, and for sure Mayor Katz, I just need 
to amplify that. The story you are getting here is that a lot 
of responsible people in responsible organizations are doing a 
lot of work on this stuff. This isn't something that has just 
come up on our view screen. All of us, I think, in these 
organizations, have been spending a lot of time on it, and it 
is now time to give the public more access to the information 
about why it is we feel content.
    We don't feel content just because that is the way we want 
to feel. We have a base of information that causes us to feel 
that way. It is now our job to make sure we communicate that 
well to the public so that they, too, can share in that 
contentment.
    Senator Smith. Well said. Thank you both very much.
    [The prepared statement of Ms. Katz can be found in the 
appendix.]
    Senator Smith. Joan, we welcome you, and thank you for 
participating. Obviously, if we don't have energy, we don't 
have jobs or the ability to have light at night or heat in the 
winter. So we are anxious to hear how our electrical and other 
services will fare under Y2K.

   STATEMENT OF JOAN H. SMITH, COMMISSIONER, PUBLIC UTILITY 
                      COMMISSION OF OREGON

    Ms. Smith. Thank you, Senator. Good afternoon. I am Joan 
Smith from the Public Utility Commission of Oregon, and we 
really appreciate the opportunity to get this story out as 
well.
    If our utilities ignore the Y2K problem, we could have a 
major crisis on our hands. They haven't, and we won't.
    OPUC staff began discussions with investor-owned energy 
companies about 2 years ago, and those companies include 
Portland General Electric, Pacific Power and Light, Idaho 
Power, the gas companies Northwest Natural, Cascade Natural 
Gas, and WP Natural Gas. And over a year ago, we began 
discussions with the investor-owned telecommunications and 
water utilities, and the telecommunications utilities include 
U.S. West, BTE, Century Tel, Sprint United, and 30 smaller 
companies.
    The commission has held three special public meetings to 
review reports and discuss progress toward Y2K remediation with 
all the companies. We have also invited the Bonneville Power 
Administration, the Western States Coordinating Council, which, 
as you know, is the grid assurance outfit in the West, and the 
interstate natural gas pipelines serving Oregon. Those 
pipelines are Williams, Northwest Pipeline, and PG&E 
Transmission Services.
    The commission tracks and evaluates the utilities' testing, 
remediation, customer education, and business continuation 
plans. Water utilities are not computer-dependent, by and 
large, and are not expected to encounter difficulties, except, 
as you noted, if there are troubles with the electric grid. We 
have invited publicly owned utilities to participate in our Y2K 
process and share information with us, if they wish. And they 
have.
    The PUD's--we have heard from the People's Utility 
Districts--say that they can deliver power and communications 
to their customers as long as they receive it upstream.
    To my testimony I have attached a report from January 1999. 
This is the kind of summary report we have been putting out 
based on the information we get from the utilities. There is a 
page for each system. There is a gas utility, electric utility, 
and telecommunications. And if you and the audience want to see 
specifically how folks are doing, all they have to do is look 
down and they will see the dates when we have expectations of 
things being done, and things that have already been completed 
are on the list.
    But we do have a schedule going into the future as well. 
Three items. We have asked the utilities to coordinate customer 
education in two phases, that is, coordinate utilities-wide, no 
matter whether it is electric, telephone, or natural gas, and 
the first phase of that coordination will end in June and the 
second in October.
    I must point out that many utilities are way ahead of that. 
PGE sent out a bill stuffer in September and another one in 
January. I think they are excellent. And the other utilities 
have done that or are going to do that shortly.
    To date, all utilities have made significant useful 
efforts, and for their larger customers, they have been in 
personal contact.
    PGE, as I mentioned, has used the monthly bills, and as I 
also said, everybody is going to do that if they haven't 
already. All these companies have Y2K Web sites that can be 
accessed through the commission's own Web site. We keep our 
reports up on the Web site and notices of our next meetings on 
Y2K on that Web site. I will mention it, but if anybody wants 
to know it, I would be glad to tell them afterwards. Our Web 
site is www.puc.state.or.us.
    All of the final testing results are due at the commission 
by March 1st, and continuation of business reports are due in 
the spring quarterly report. We will probably have a meeting on 
that sometime in April or early May.
    If you look at the matrix, you will find that virtually 
every company that we know of and that we have worked with 
should be done with about everything no later than August. And 
if things are going south by August or July, we will know that, 
and there will be time to fix it.
    Customer preparedness. Each utility has committed 
significant resources to Y2K issues. Utility reports suggest 
that it is highly unlikely that there will be any disruption of 
services, unless, of course, the New Year's holiday is 
accompanied by severe wind or ice storms. Utilities have begun 
to advise their customers that their Y2K plans should be 
similar to those that they might make for a plan for a winter 
storm, and I think you have heard a little bit about that 
already. As a consequence, customers should check that whatever 
emergency preparations they usually have in place for such 
events are in place. And as Mayor Katz said, watching out for 
your neighbors and helping neighbors is always a good idea. But 
we in Oregon are used to wind, rain, floods, and ice storms.
    What government actions are going on or should go on? The 
PUC has taken a collaborative approach and found excellent 
cooperation among all the utilities. We have neither the 
authority nor the resources to certify Y2K programs, nor should 
we. We thought at first we might want to go ahead and do that, 
but we were advised early on--back in 1997, I believe--that by 
certifying we were putting the Good Housekeeping Seal of 
Approval on and, therefore, opening not only the utilities up 
but ourselves as well to all sorts of litigation.
    We recommend that the legislature and the Congress take 
whatever steps are necessary to reduce Y2K liability exposure 
for utilities and for their vendors and for their downstream 
customers. The ``Good Sam'' law that was passed in the last 
session of the Congress helps. In fact, that made things speed 
up significantly. The SEC's requirement for Y2K readiness 
reports is also helpful.
    But the fear of litigation can be a very real barrier to 
keeping Y2K solutions on track. I would recommend that the 
Congress and anyone else who keeps track of these things, 
especially your committee, Senator Smith, check back about June 
1999 with all of us. And if anything is going wrong, we will 
know it by then, and there will also be time to fix it.
    Finally, public leaders, like Mayor Katz and the Governor 
and you, should use the bully pulpit to inform, educate, 
prepare, and assure constituents that the Apocalypse is not 
arriving along with the new millennium.
    Senator Smith. Thank you, Joan.
    Can you tell me, are there any legal or regulatory 
impediments that are in your way federally that we need to get 
out of the way?
    Ms. Smith. None.
    Senator Smith. OK.
    Ms. Smith. And I might point out that the FCC and the FERC 
have been very active using their bully pulpits as well in 
coordinating the interstate energy services and interstate 
communications. I would point out that communications 
especially has been very, very active in making sure 95 percent 
of their systems are where they need to be with Belcor's help.
    Senator Smith. Very good. Do you notice any difference in 
small versus large utilities focusing on this and preparing for 
this? Do small ones lack funds and, therefore, are lagging 
behind?
    Ms. Smith. We don't find that any utility lacks funds to 
remediate Y2K problems. However, we were initially very 
concerned that some of the smaller telephone companies were not 
progressing or were as aware as they might have been with the 
problem. But I suspect and I expect, by the second quarter of 
this year and no later than the third quarter, that all of 
their systems should be Y2K ready. They were just a little bit 
slower off the mark.
    Senator Smith. Could you say at this point that electricity 
versus gas versus telecommunications, is there some part of 
what you oversee that is weaker than another part at this 
point?
    Ms. Smith. I can't say that any is weaker than another, but 
gas is a more mechanical utility and is the least likely of the 
three to have computer-generated problems.
    Telecommunications, since things are changing so quickly, 
except, as Don pointed out, with the switches that need to be 
removed in the State, most utilities themselves have very 
state-of-the-art equipment because that is how they will 
compete. It is entities like the State that own some fairly old 
stuff that are most at risk, but the utilities themselves are 
much less at risk.
    Finally, electricity is probably the No. 1 thing to watch. 
If electric power is there, most of the rest of this is not as 
worrisome.
    Ever since the blackout in 1968 in New York, there has been 
nationwide a Reliability Council, and it has divided the 
country up into a number of regions. Ours is the Western 
States. And that council, its utilities, public and private, 
have for years made the reliability of the grid their first 
priority.
    This is no different. As someone just said, it may not be 
weather this time or trees falling on lines. It may be 
something computer-related. But they do have ways to choke off 
that piece of the grid and bypass it and still deliver 
electricity, and that goes for Bonneville as being a key player 
in the grid as well.
    Senator Smith. And they give me assurance, and I assume 
you, too, that they are on top of this and they are going to be 
OK.
    Ms. Smith. And, remember, hydro is a pretty old-fashioned 
technology, and they are planning to use hydro resources here 
for back-up.
    Senator Smith. Well, I think we would find out--should 
there be a problem, we would find out what dam removal really 
means to this State. [Laughter.]
    Senator Smith. And it doesn't mean good things, folks.
    Ms. Smith. It doesn't mean good things.
    Senator Smith. I wonder, Joan, if you can give assurance to 
the people that if--and I really do focus this on you because 
you are at ground zero on Y2K. If you lose energy, you pretty 
much begin losing it all. If everything checks out September 1, 
or when we check back with you in July and you say OK, are you 
going to still take some precautionary measures to get at this 
if there is an embedded chip somewhere along the line that you 
can quickly correct it? Are you going to have forces and 
resources in play to respond quickly?
    Ms. Smith. Each utility--the answer is yes. Each utility 
and the commissions, especially in this region but throughout 
the country, all have Y2K working groups, teams. They are used 
to being in touch on a daily basis. If we see anything that 
looks problematic in the summer, of course, there will be 
heightened attention. But we are not just going to say, gosh, I 
think everything looks good, we will get back to you about 
Thanksgiving and hope for the best.
    Our first test will probably be September 9, 1999. Some 
people fear that 9/9/99 is the date. But we will be----
    Senator Smith. Isn't that in the Bible somewhere? Just 
kidding. [Laughter.]
    Ms. Smith. Well, I mentioned the Apocalypse, but I wasn't 
going to go for Revelations.
    We will be in constant contact. No one wants to leave 
anything to chance in this regard. And our history of 
cooperation throughout the region and throughout the country in 
reliability will have stood us well in that regard.
    Senator Smith. You have been very helpful, and thank you 
very much.
    [The prepared statement of Ms. Smith can be found in the 
appendix.]
    Senator Smith. With that, we will call up our next panel, 
and our next panel consists of Ms. Myra Lee, director of the 
Office of Emergency Management; Ms. Adella Martell, executive 
director of the American Red Cross; Mr. Roger Harris, the 
controller for KOBI-TV in Medford. We welcome you all.
    We will begin with Ms. Lee.

 STATEMENT OF MYRA THOMPSON LEE, DIRECTOR, OFFICE OF EMERGENCY 
                           MANAGEMENT

    Ms. Lee. Thank you. Good afternoon, Senator Smith. For the 
record, I am Myra Thompson Lee. I am the director of Oregon 
State Police Office of Emergency Management, and I am really 
pleased to be here today to provide you with an overview of our 
agency and also some of the activities that have been occurring 
related to the Y2K problem.
    This issue has had a significant impact on the State and 
local agencies as well. It has given rise to many concerns 
about the communications and electronic systems and power 
source, and most of those questions have been answered and are 
continuing to be answered as we go along. A lot of the routine 
work efforts of agencies have been redirected to be able to 
deal with this issue and to mitigate any potential consequences 
that we can identify of what may happen.
    The Oregon State Police is following the risk management 
guidelines for business continuation planning. Contingency 
plans for all of the division within the department are being 
consolidated into a single plan, and those will be centralized 
in a Y2K project file.
    The process includes mission-critical systems that have 
already been identified by the Department of Administrative 
Services. The business continuation plans for these functions 
will be completed this month, and those for the non-critical 
systems will be completed in June of this year. So things are 
moving along very well.
    Oregon Emergency Management is a division of the Department 
of State Police, the Intergovernmental Services Bureau. The 
department as a whole has taken this very, very seriously. The 
diverse services provided by this department are critical to 
the safety of the citizens of Oregon, and they must be viable 
at all times. They are not things that we can just let drop. 
They have to be there.
    The role of the division is to coordinate the consequence 
management planning activities by providing technical 
assistance and consultative services. These activities include 
providing training on developing consequence management plans 
and developing exercises to test those plans.
    There is a difference between business continuity planning 
and consequence management planning. As Don Mazziotti 
indicated, the business continuity plans are really for working 
around a lot of the technical problems. Consequence management 
plans are those plans developed to actually deal with the 
impacts on people if services aren't there. The ones that we 
are most concerned about are those that if the services weren't 
there, a life-threatening situation could occur. So that is 
where a lot of our efforts are going, to develop plans to deal 
with those.
    We are one agency in the State that uses an emergency 
operations plan probably most of the time. That is unlike most 
of the other State agencies, which is probably good. But that 
will serve both as our business continuation and our 
consequence management plan.
    Our emergency operations plan is constantly being reviewed 
and updated. It is just a living document, we work on it all 
the time. When we make improvements in the system, then we 
enhance our plan and continue to change it so it meets the 
needs.
    Emergency coordination and operations are primary 
functions. We would, in fact, be able to operate the State's 
Emergency Coordination Center even under emergency conditions 
with limited capabilities.
    The communications and other electronic systems in OEM are 
Y2K ready. If they fail for some reason, we do have procedures 
to utilize all available means to communicate among the various 
agencies. Certainly one of the things that we do is to 
congregate key agencies in the Emergency Coordination Center at 
any time that a major emergency happens, and we communicate 
face to face. If it got down to that, we would be hand-
delivering messages to people, but we do not think that the 
systems are going to be in that kind of shape.
    There would be really little difference between this and 
other emergency situations in which similar conditions exist. 
If there were a winter storm that is as severe as some of the 
ones that we get, it could cause exactly the same kinds of 
things that we would encounter for Y2K. So it doesn't really 
matter whether we have an outage related to a storm of some 
kind or Y2K. It is an outage, and it is something that people 
have to deal with. In this particular case, it would be an 
outage during the middle of winter, and we have already had 
those kinds of situations in the past as well.
    All of our technologies have either been proven or 
certified as Y2K operational. We can provide some 
communications and coordination activities in the absence of 
any support from telephone and power company utilities, and we 
have a wide variety of radio services to be able to work with.
    As far as external utility threats, we do not believe them 
to be very likely with all of the information that we have been 
able to glean from the utility and telecommunications 
companies. And, again, if we have other systems that are 
affected, we have back-up systems to take their place.
    The National Guard has also completed the required internal 
and external threat assessments, and they have identified all 
the computers and computer applications and facilities that 
have some type of embedded chip problem. They are in the 
process of fixing those that they have found need to be fixed. 
At this point, none of the items that are affected by Y2K and 
the Guard will degrade their ability to provide essential 
service. They will be able to do that.
    All of the units of the Guard are ensuring that their radio 
systems are functional, and they have radios in the armories; 
and while they still have a few gaps there, they are going to 
have those filled in the next 60 days.
    The National Guard does have a plan that can and will be 
adjusted based upon current events or needs which are 
presented, and all planning activities are routinely 
coordinated between our agency and their agency. So we don't 
have any doubt that we will be able to function well together.
    Again, I think the thing to stress, particularly in a 
situation where people do anticipate the Guard to be ready and 
available for response, is that they would respond in exactly 
the same manner that they do currently for any major disaster. 
It wouldn't change. We follow the same process, and they are 
very available to us now. We would continue to be ready in this 
event. We will all be on standby. We will all have our 
facilities open. So we are going to be ready to go.
    Senator Smith. So Y2K is factored into the Guard's 
preparation?
    Ms. Lee. Absolutely. Absolutely.
    Senator Smith. Could I ask you on that issue--there is a 
rumor on the Internet right now that the Federal Government 
plans to impose martial law in response to Y2K breakdowns. I am 
wondering, how do you respond to such things?
    Ms. Lee. Well, that is a myth that has been around for so 
long I don't respond to it much anymore. We have seen and heard 
those kinds of things for many, many years. Unless there is 
something happening that we don't know about, we certainly 
don't believe that that is a possibility, and it is not their 
purpose.
    Senator Smith. Well, if there is, it is news to this 
Senator.
    Ms. Lee. Yes. They are here to serve the citizens of their 
State, and that is what they do, and they do it extremely well.
    In coordination with other efforts of the Oregon Year 2000 
Project Office, OEM is the lead for activities related to the 
consequence management, and we fully support all of the 
activities of Don Mazziotti and his staff on taking care of the 
other issues related to Y2K.
    We have developed and conducted five of 6 day-long training 
sessions on consequence management, and this two-part training 
provides a methodology and assistance for the development of 
agency plans as well as guidance for the development of 
exercises to test those plans. To date, we have trained 194 
mid- and upper-level management personnel. We have stressed 
that the management personnel are the ones that need to be 
involved in this because they need to understand the total 
impact of what could happen if systems did go down, and they 
need to be ready to deal with how their agency is going to 
handle that.
    The planning phase for State agencies is expected to be 
completed by July 1, and the plans will focus on the specific 
life/safety-threatening consequences that could occur if the 
systems fail or are disrupted in some way. Each agency will 
identify the consequences that could occur for the people that 
they serve, and they will develop their plans around what they 
identify those impacts would be.
    OEM cannot develop the individual agency plans. We can 
coordinate their activities. We can provide guidance and 
consult with them, and we can help train them. But every agency 
has the specific expertise that they need in-house to be able 
to develop those plans.
    We do expect that all of the mission-critical agencies will 
develop their consequence management plan and exercise it 
within the next few months. We also are planning--in June of 
this year that Don Mazziotti and I will be working with the 
Governor's Cabinet and conducting a table-top exercise. And 
that is really to get at additional policy issues that maybe we 
have overlooked for some reason. So we are looking forward to 
that.
    In addition to that, we are working with FEMA on the 
planning activities and coordination activities that they have 
underway, and there will be a regional meeting in March in the 
Seattle area that will bring a lot of the State and Federal 
agencies together.
    Senator Smith. Myra, are you satisfied with FEMA's efforts 
and contingency plans?
    Ms. Lee. I think they are doing very well. They have 
involved a lot of the State agencies, State emergency 
management agencies in that effort, and they have taken to 
heart our concerns and our expressions of modifications that 
they need to make. And we will continue to work with them.
    We don't think that what is available right now is all that 
needs to be available. They have been very open to working with 
us and making sure that they are being able to provide what we 
need.
    Senator Smith. Would you alert me if they cease being open?
    Ms. Lee. I certainly will. We have not had that problem.
    Senator Smith. I would appreciate that.
    Ms. Lee. I will do that.
    Many of the other State agencies that are key to our 
operation also are very active, and there is the Office of 
Energy, the Health Division, Department of Agriculture. The 
Department of Transportation is very aggressively seeking to 
make sure they do not have problems, and they are very good 
about developing plans to deal with emergency situations. They 
will also be testing their plans during this summer. So those 
are all very good signs. They do this really on a regular basis 
as well. They keep their emergency capabilities right at top-
notch.
    Local government, as you heard, is in various stages of 
this, and we will be providing guidance to them, and also 
trying to find resources that they believe that they might need 
ahead of time and making sure that they can reduce any 
potential impacts that they might have.
    We do not have a good assessment yet of how far along their 
consequence management plans are, but we do anticipate that we 
will know by early summer about where they stand on that.
    One of the things that I do want to address, too, is that 
in all of this there really is a personal responsibility for 
everybody, every person. The millennium bug problem is well-
known around the globe. It is probably one of the better known 
hazards, if you want to call it that. And there is more 
information available from more sources than probably any other 
of the hazards that we have to deal with. So there is 
information readily available to help them in their individual 
and family planning and agencies that are also very willing to 
help with that.
    It is really incumbent upon every person to prepare 
themselves and their families and their friends for any of 
these possible impacts. There is plenty of time to do that. 
There is lots of good information. It is not expensive to do 
that.
    Each family, each individual needs to take the time to 
identify what they believe to be important and prudent for 
their safety and what they think they need in the way of 
provisions and to start getting ready for that. We would really 
like to see that stressed as much as possible.
    All of us, individuals and families, whether we work for 
government or whether we work for business, we all need to take 
that step and make sure that we are individually prepared for 
these things.
    The fact that an emergency might occur that could be 
related to a Y2K problem is really no more relevant than an 
emergency caused by anything else. You have the same types of 
things to deal with. And if people are prepared, then they will 
not have to depend upon emergency services--community services, 
that might not be available as soon as they need them. So we 
hope that people will take that to heart and be ready for this.
    Oregon is very aggressively addressing this issue and has 
made great strides in determining their overall capability for 
emergency and disaster response. The Y2K problems presents some 
unique conditions that have already provided tremendous 
opportunities for us to ensure general readiness of government, 
businesses, and the public, and this can only be good for the 
State as a whole and ultimately for the Nation.
    If you have any questions, I would be happy to answer them.
    Senator Smith. You have answered them all. I thank you very 
much, Myra, for your presentation.
    [The prepared statement of Ms. Lee can be found in the 
appendix.]
    Senator Smith. Adella, please, tell us whether the Red 
Cross is going to be ready.

 STATEMENT OF ADELLA MARTELL, EXECUTIVE DIRECTOR, OREGON TRAIL 
                  CHAPTER, AMERICAN RED CROSS

    Ms. Martell. Well, everything Myra said I would like to 
reiterate.
    My name is Adella Martell. I am executive director of the 
Oregon Trail Chapter of the American Red Cross. I am going to 
speak today on behalf of all of the Red Cross chapters in the 
State of Oregon.
    With all the talk about Y2K, the American Red Cross 
programs in community education and preparedness have become 
very visible. Our challenge, like everyone else's here today, 
is that the effect is unknown. So it runs from annoyance to 
Armageddon and everywhere in between.
    Like everyone else, we can't predict the future. But we do 
know our mission. And we are using Y2K as an opportunity to 
further that mission, which is to help individuals prevent, 
prepare for, and respond to emergencies. And I want to share my 
comments in that context and talk about Red Cross response 
plans, our preparedness activities, and, finally, just make a 
couple of recommendations.
    For more than 120 years, the Red Cross has responded to 
disasters. We have heard about them here today--floods and 
earthquakes and wind storms and fires--and all of those caused 
major disruptions in people's lives, and they caused major 
disruptions in the delivery of services to the community. Red 
Cross delivers disaster services in three stages.
    The first is called emergency mass care, and that is, 
immediately after a disaster, Red Cross provides immediate 
needs for large groups of disaster-affected people, including 
emergency shelter, food, medicine, and first aid.
    Then beyond that, say within several days of an emergency, 
we expand our service to include emergency assistance to 
individuals and families. This is in an attempt to get people 
back to their normal life, so it may include temporary housing, 
groceries, new clothing, emergency home repairs, 
transportation, basic household items, medicine, and tools.
    Finally, we step in for long-term recovery for individuals 
and families when all other sources, such as insurance benefits 
and Government assistance, are not available or adequate to 
meet disaster-related needs.
    We don't do this in a vacuum. We maintain collaborative 
relationships with emergency management, other officials, and 
other social service agencies. It is a large network that we 
work within.
    I am giving you this as background because our response 
planning for Y2K is the same as our planning for other disaster 
events. As in every emergency, we also encourage families to 
prepare to take care of themselves for at least 72 hours. We 
have a name for this. We call it sheltering in place. In the 
event of prolonged disruptions, Red Cross is prepared to open 
what we assume at this point would be warming shelters. And as 
we always do, Red Cross chapters have prepositioned disaster 
supplies and sheltering supplies throughout the State.
    Importantly, we continue to build our numbers of volunteer 
responders. We are working with local organizations such as 
churches, businesses, and other organizations to increase the 
number of available trained volunteers.
    A lot has been said in this line, and I am going to get 
sort of specific about preparedness.
    We believe that the first and best line of defense is 
individual and family preparedness. The best way communities 
can recover is when individuals are ready to take care of 
themselves. Because of the concern over Y2K, we have stepped up 
our community education efforts to meet the demand for 
relevant, practical preparedness information. Chapters in the 
State are educating community members on how to prepare for and 
stay safe in any kind of emergency, including Y2K-related 
events.
    We brought two documents with us today. One is specific to 
Y2K. The other is called ``Before Disaster Strikes.'' And 
everyone has said be prepared. This says how to be prepared for 
families and individuals.
    Our key message in these publications and elsewhere is that 
individuals and families can control their own level of 
preparedness to respond and cope with any emergency.
    The Y2K issue has been used to hype news coverage. We have 
heard this a couple of times today, and as a result, people are 
starting to panic and prepare sort of for the end of time. We 
get calls every single day from people who absolutely do not 
know what to do. We believe this is the worst thing that they 
can do. Our long experience tells us that general home 
preparedness, outlined in our printed materials, should be 
enough to support families during any service interruption or 
disruption. And I have just a couple of recommendations, having 
been asked, always willing to comply.
    We find that in any emergency situation, the most 
vulnerable populations are at the greatest risk. Additional 
attention and resources need to be directed to programs that 
assist the elderly, disabled, and other special needs 
populations in their preparedness activities. I am talking 
specifically about group homes, adult foster care, subsidized 
or other assisted living facilities.
    Second, I think that there needs to be a stronger effort to 
coordinate activities between the many organizations that are 
planning for response. Everyone needs to understand their own 
relationships in these circumstances to one another--agencies, 
municipalities, cities, States, counties.
    Finally, Joan said it before me, but all government 
agencies need to make a concerted effort to reassure the public 
that by working together everyone can survive Y2K or any other 
disaster.
    Preparedness is the key, and as you get to the end of this 
hearing, you keep hearing it and hearing it. But prepare 
yourself, prepare your family, help prepare your neighborhood, 
and then look around your community and volunteer to help 
somewhere else. It is not difficult, and we know that the 
results of small efforts make a tremendous difference on the 
other ends of any big disaster.
    As I said when I started, the Red Cross knows our mission 
and will fulfill our mission. But we want everyone to know what 
they can do to help themselves prevent, prepare for, and 
respond to emergencies.
    Senator Smith. Adella, I appreciate your testimony very 
much. I wonder as you think of preparedness, while you don't 
speak for the medical community, you clearly have an overlay 
with the medical community, doctors and hospitals. do you have 
any fear that they will be ready in a Y2K sense?
    Ms. Martell. My sense is that they will be ready because 
they are the institutions that participate regularly in large-
scale planning exercises for back-up power generation, 
evacuation, and helping their patients. I think they are very 
alert and in tune and ready.
    Senator Smith. At this point you have alerted us to be 
careful with the elderly, disabled, special needs communities. 
Is enough being done in those small business sectors, large 
business sectors that service these people that we need to 
redouble our efforts to the most vulnerable?
    Ms. Martell. I think that would be a very good idea. I 
think that there are a lot of small activities going on in 
group homes where people are receiving medical attention and 
oxygen and other things where not just Y2K but any large power 
outage situation or ice storm or anything like that has a 
tremendously exaggerated impact on those people.
    Senator Smith. I know we are all trying to foster 
responsible responses to this, and I am told that the Red Cross 
put out one of its things to be prepared to buy gas on New 
Year's Eve and then withdrew that publication. Do you know 
anything about that? Was that thought better of after it went 
out?
    Ms. Martell. I think that the message was that you should 
have gas in your car.
    Senator Smith. That is a good idea.
    Ms. Martell. Probably the message was don't wait until New 
Year's Eve.
    Senator Smith. All right. Well, thank you very much. I 
appreciate your testimony.
    [The prepared statement of Ms. Martell can be found in the 
appendix.]
    Senator Smith. Roger, good to see you again.

      STATEMENT OF ROGER HARRIS, KOBI-TV, MEDFORD, OREGON

    Mr. Harris. Thank you, Senator, and thanks for letting me 
come here to testify.
    My name is Roger Harris. I am with KOBI television in 
Medford, Oregon, and I am going to speak to the potential 
impact and the role of the news media, specifically the 
broadcast news media, although I feel many of my points I will 
make would apply to print, radio, and all forms of news media.
    The first question I am going to address is the potential 
impact of the news media on public perception about the Y2K 
problem. I contend the broadcast news media has had a 
tremendous impact on the broadcast perception as to the 
magnitude of the Y2K problem. But we are already seeing the 
tenor of many of these stories be changing right now.
    About a year and a half ago, a lot of the real extreme 
preparedness people got a lot of news, and that is still 
happening. But that is changing, and I will use an example. We 
are an affiliate of the NBC network, and we are in the process 
right now of running a two-part news series regarding Y2K. And 
I found it very interesting. The first part deals with people 
who are at different levels of preparedness from moderate to 
extreme. The second part talks about all the people who are 
planning these exotic trips, flying, cruises, et cetera, 
because they feel that this New Year's of the year 2000 is a 
one-time event and they want to have something special, and the 
travel agencies are actually overbooked in many places, which I 
found kind of fascinating.
    The ``sky is falling'' type stories that started at first 
did serve a purpose, and the public became very energized and 
concerned, and the private business sector responds to public 
demand much as elected officials. And I would say that right 
now we are hearing from both government and private businesses 
who have stated here today that positive strides are being 
reported toward Y2K compliance activities, and many of the 
first thoughts, fears, probably will not come to pass.
    For the news media, the most important element is the 
availability of information so that we can disseminate the 
process and progress toward Y2K compliance. As January 1, 2000, 
gets closer, it will be vitally important for providers of 
vital services to continue to be open and honest in regards to 
what the public should expect. Misinformation will be quickly 
discovered come New Year's Day.
    I would summarize as far as the potential impact of the 
news media on this issue. It will be dictated by two issues: 
the commitment and the discipline of the news-gathering 
organizations to cover the facts; and, second, the ability to 
receive timely and accurate information from providers of vital 
services.
    The second point, the role of the news media in Y2K 
emergency preparedness within local communities. I said in my 
statement that broadcasters have two responsibilities in Y2K 
emergency preparedness. The first is a broadcaster must be Y2K 
compliant to be able to react should it be necessary after New 
Year's Eve the year 2000--like every entity, we all have to be 
compliant ourselves before we can help any others--and also 
must cover stories which are of import to our communities. 
There may be specific issues, and we must be diligent in 
covering the ones that are the most important to our 
communities. But I would state that the role will be limited by 
the information that is available and the validity of the 
information.
    The news media responds to emergency situations. When early 
warnings are available, preparation can be effected that will 
improve the coverage and information as the emergency unfolds. 
And this, of course, will lessen the impact of any emergency.
    The type of activity that broadcasters can provide as far 
as dissemination of information and options has been 
demonstrated many times in the course of natural disasters, 
such as floods and hurricanes, and others have addressed this 
often today also, that should something come, it will be much 
like any other emergency needs we have had before.
    Specifically regarding Y2K, information, or the lack 
thereof, will drive the emergency preparedness in the broadcast 
news media. One example would be if a local power company were 
to report, say, for some reason there was some small area--I 
will use that analogy--was going to have a power outage, brief, 
what have you, Y2K or otherwise, the news media is able to 
gather information, what options, are there going to be 
churches or armories available for these people to move into. 
But the important thing is that if a situation is known, we 
must know it beforehand before we can really help the public in 
this regard.
    Conversely, an information vacuum would create a 
significantly different story. If we do not receive information 
from Federal or State agencies of concern, Social Security, 
different State agencies, power companies, if we are unable to 
report the status toward Y2K compliance, that will become a 
story in itself, the lack of information. And I contend this is 
a dangerous situation. It was the lack of information that 
started some of the more threatening stories initially.
    Finally, the potential role of broadcast news media in 
facilitating communications to the public in the event of Y2K-
related problems. Broadcasters have repeatedly demonstrated the 
ability and willingness to facilitate communications to the 
public. It is actually what broadcasters do best. If we think 
of most natural disasters, we have learned a lot about it 
through TV. It would be difficult for me to state specific 
applications at this time for a number of reasons. The analogy 
I use is that we are like watching an approaching hurricane. We 
prepare for what may be the worst. We are prudent, and we 
prepare for it. But if it hits, hopefully we are prepared, but 
if it doesn't and sails off to sea, it is kind of an 
interesting non-event. So I can't really say this is exactly 
what broadcast news can do.
    Rest assured, though, that broadcasters are well prepared 
to react, if necessary, and will if we have the information. We 
are more than willing as broadcasters to provide the necessary 
information to our respective communities. We have a social 
contract between the communities that is constantly open to 
scrutiny.
    I can't reiterate enough that news reacts to information or 
lack of it when it comes to something like this. And we have 
heard from different people the concern on how the media will 
respond to the Y2K issue. Well, we just need a steady stream of 
good, solid, open information, good and bad. That is the only 
way we can really serve the communities. And that is what I 
would like to leave with you, is anything that you could help 
do to ensure that open, honest communication remains available 
to the public and the news media, that is where we can serve 
the best.
    As far as steps, I was asked to make a couple suggestions. 
The first step is every entity, government or private, must 
ensure they are Y2K compliant. Open and honest information. The 
truth will be very visible January 1, 2000. Monitor government 
and non-government compliance activities, prepare contingency 
plans, and also make this information available.
    Thank you.
    Senator Smith. Roger, there is news, and then there is 
tabloid news. I wonder if you would critique your own station. 
Are you news or tabloid on this issue?
    Mr. Harris. On this issue?
    Senator Smith. Yes.
    Mr. Harris. I would say it is news. We have covered 
information. We have covered a couple of big gatherings of 
people that could be extremist, you know, buy a cabin out in 
the desert. But when there are a couple hundred people in a 
local community attending this, this is news.
    Senator Smith. Yes.
    Mr. Harris. We didn't create this environment for them to 
come, but we did cover that. But we have gone a long ways 
toward having people on, power companies, officials of 
agencies, and we are running a lot of ongoing series trying to 
show both sides of this issue. And I believe the hype is coming 
down.
    You know, Americans are pretty optimistic. I think we 
believe we are going to handle it and get by it. Sometimes we 
are at our best in bad situations. I fear for complacency in 
that regard.
    Senator Smith. I just hope peas grow after this year. 
[Laughter.]
    Senator Smith. I have asked you to be honest critiquing 
your station. Let me give you a shot at your competitors. Are 
there some out there that you think border on the tabloid? You 
may not want to identify them, or you may.
    Mr. Harris. Well, on a local news basis, I see primarily 
just the local stations, and they have been covering a lot--I 
mean, if it is news for us, typically it is news for them. 
There have been some specific maybe syndicated programs that 
have been somewhat on the tabloid side. But there is a lot of 
following for this.
    Senator Smith. Oh, there is.
    Mr. Harris. I mean, I really sat down and thought about 
this, and I thought it is not a case of people making this news 
up. These activities are taking place. And without the lack of 
information such as has been disseminated here today and the 
statements of preparedness, those sorts of fear-driven 
activities will only get larger.
    Senator Smith. Thank you. You have been very helpful. All 
of you, I am grateful for your participation today.
    [The prepared statement of Mr. Harris can be found in the 
appendix.]
    Senator Smith. We do have some time left. There may be some 
who have come who have a strong feeling and would like to make 
a comment for this Federal record we are creating. I would 
invite you to come up. We are going to call it off at 3:15. We 
will have to call it off, but we are delighted that you are 
here. We would ask that you state your name and where you are 
from in Oregon and your feelings about this.

  STATEMENT OF SHERRY PATTERSON, DIRECTOR, OREGON EARTHQUAKE 
                      PREPAREDNESS NETWORK

    Ms. Patterson. Senator, thank you for having us. I am 
Sherry Patterson. I am director of the Oregon Earthquake 
Preparedness Network, and I have been working on Y2K a long 
with additional multi-disaster emergency planning. I am also an 
elected water commissioner with a small water district, the 
River Grove Water District. I am not here representing the 
board, but I am here just as an individual expressing some 
concerns about the lack of oversight by the State for water 
districts.
    The PUC oversights about eight small water districts, and 
other than that, when I contacted the Oregon State Water 
Resources Department to try and get some idea if they had any 
written guidelines on their minimum preparedness efforts for 
Y2K, they said virtually no, you are on your own. Fortunately, 
our water district does belong to the American Water Works 
Association, and this February issue has done a wonderful job 
on Y2K preparedness. Also, the American Water Utilities, 
Metropolitan Water Utilities, they both have Web sites.
    But when I have been interviewing a lot of water operators 
throughout the State, my concern is this: that many of these 
operators do not belong to AWWA or the other professional 
groups. Many of them do not understand the necessity of even 
preparing for Y2K, let alone planning on contingencies. And it 
is the level of contingency planning that is really critical 
because most of us have enough water with our reservoirs that 
we can operate for a week or so. But after that, we need 
electricity to fill those reservoirs. Our water source is from 
two wells. So we are dependent on electricity to fill those 
wells.
    I have been asking for an emergency generator for years now 
just as part of our earthquake preparedness, and they have 
always been putting it off because it is too expensive. With 
this Y2K issue, this is now more in the forefront, so we are 
now evaluating this. Water districts very much need financial 
assistance from the Federal Government for emergency 
preparedness items, and emergency generations are a very high 
ticket item. Even in order to install the ability to use an 
emergency generator, we are talking anywhere from $15,000 to 
$18,000 just to get a quick couplet set up.
    One of my concerns also in helping the elderly is that they 
have not had the ability to have some additional medications 
that are critical to them because their medical insurance will 
not cover this. We need this, and individuals should be able to 
have a tax write-off for emergency preparedness, whether it is 
for flood or Y2K or earthquakes.
    The other message is that in Y2K information, public 
information, there is a huge void in making sure that people 
secure their resources so that they are not lost if we have an 
earthquake and we have to deal with Y2K.
    Senator Smith. Thank you for your input. We are grateful to 
you.
    Please, state your name, your organization, if you have 
one, and where you are from.

STATEMENT OF LYNN PEABODY, PROGRAM MANAGER, GLOBAL ACTION PLAN 
                         FOR THE EARTH

    Ms. Peabody. My name is Lynn Peabody, and I am the program 
manager for Global Action Plan for the Earth, which is the 
organization that is in contact with the city of Portland to 
assist in the neighborhood-based community preparedness plan 
for the city. And we are also in a position where Portland is 
the pilot project for what we would like to make available at a 
national level. We are a nonprofit organization that has been 
around for about 10 years, and we do community organizing at a 
level that is unparalleled in terms of actually moving people 
beyond just having the information and actually acting on it.
    I realize that you are in a tricky position as a leader and 
a spokesman because, on the one hand, you want to absolutely 
reassure people that everything is being done to take care of 
potential breakdowns due to Y2K; on the other hand, what we 
could use at the city level is a level of legitimization that 
this is something, in fact, to prepare for. And that sort of 
leadership from the Federal level will go a long way to making 
our job easier to actually have people open to us knocking on 
their doors and inviting them to join a neighborhood team.
    Senator Smith. You stated our dilemma very well.
    Ms. Peabody. Yes.
    Senator Smith. It really is summed up. We are trying to 
urge that this is a legitimate problem. We are trying to say 
don't panic, set about preparing. And I think you are saying 
the same thing.
    Ms. Peabody. Very good. And the other piece in that is what 
we find is to communicate at the level of opportunity, which I 
hear a lot of in this room--and it is wonderful to hear; it 
makes me really proud to be a citizen of this State--is to 
present it as an opportunity way beyond year 2000; that as many 
people have said, it is just a good idea to be prepared should 
there be weather problems or economic fallout from Y2K or any 
of the other possible crises, environmental crises that we will 
be facing over the decades to come; that being prepared 
personally, but then also to have resilient communities that 
are in communication person to person and government to citizen 
is so key; and that that can be included in the message which 
will, in fact, inspire people not from a place of fear or 
panic, but, wow, we have an incredible opportunity here, and 
what are we going to do with it.
    Senator Smith. Thank you. Very helpful.

    STATEMENT OF CAROLYN PALMER, SPECIAL CONCERNS MINISTRIES

    Ms. Palmer. Carolyn Palmer, Special Concerns Ministries, 
and we deal with the elderly and disabled and low-income 
working families on different issues.
    Y2K preparedness is certainly an issue that churches have 
been talking about, both preparedness for our buildings, in-
home cell groups where we could have--moving people that have 
alternate heat sources.
    There are three areas that maybe you can assist us with: 
how to reassure elderly and disabled that Social Security 
payments are really going to be in the mail come January 1, 
2000.
    Senator Smith. I can tell you Social Security is, yes.
    Ms. Palmer. OK.
    Senator Smith. It is yes now.
    Ms. Palmer. You don't think there is going to be a glitch 
as far as down to the local banks?
    Senator Smith. I have asked a lot of anchors that question, 
and they tell me they are Y2K compliant. I already checked out 
my bank.
    Ms. Palmer. I have been doing that, too.
    Senator Smith. I actually heard a horror story at lunch of 
a fellow who was told, you know, pull out some cash, and he 
pulled out $30,000. Somebody knew he did it and robbed him. And 
so you may think you are safe to pull it out. You may be just a 
lot less secure than you realize. So check with your bank and 
make sure you are comfortable with it. But some people are 
getting burned by responding to some of the alarmist messages 
that are not wise.
    Ms. Palmer. Yes. Well, in connection with that, do you have 
particular advice, like how much cash a person should have? A 
month's income, say, to cover emergencies?
    Senator Smith. I think I would want you individually to 
make that choice. I would hate to be your financial advisor and 
be wrong. [Laughter.]
    Ms. Palmer. Well, we were asking because we are trying to 
find a way from doomsday and a way from kind of smoke in the 
wind to a middle ground and recommendations. We feel 
responsible to make some kind of recommendation, but must be 
careful in how we do that.
    Senator Smith. I think it is fair to say that--and I don't 
think I am telling a secret. When the bank gets your money, 
they lend it out. If everybody goes and pulls out $1,000, there 
is not going to be enough money there to cover that. There will 
be cash shortages. But that is the nature of our economy, and 
it is working, folks. It won't work if everybody goes into a 
panic.
    Ms. Palmer. Right. We have advised strongly against that, 
and yet just sensible like you would have to have for a natural 
disaster.
    The other aspect is that in-home care in the State of 
Oregon, currently we have about 11,000-plus who are receiving 
in-home care. They have a lot of fears and concerns, and I am 
not comfortable right now believing that for every in-home care 
person that they are fully provided for by their families. A 
lot of them don't have families, and social agents, that is 
still in process and not totally in place.
    I don't know how you could possibly facilitate, but if you 
could be checking with State or other agencies and make sure 
that this is not falling through the cracks?
    Senator Smith. We will do that.
    Ms. Palmer. OK. One other, and that is, I want to agree 
with the previous person. A great concern and difficulty is 
having a 30-day emergency supply of medications. We are 
concerned about--I have checked with Medicaid. There is not 
still the OK to do this. Pharmacies are trying to encourage 
this. The best we have at the moment is like a 5-day supply. 
You can fill 5 days early. That is not sufficient if there was 
going to be, say, 2 or 3 weeks, which could easily happen.
    Is there some way the Federal Government can facilitate--I 
don't know. I hope you don't have to go to a mandatory kind of 
thing, but we would like some assurances this could happen.
    Senator Smith. We are talking to the right people, I think, 
on those issues, and we will keep pushing and take whatever 
necessary steps there are.
    I am afraid we are running out of time. We want to hear 
from the last two that are up here, and I apologize if I am 
cutting anyone off. But we are pleased to have the mayor of 
Grant's Pass with us. Gordon, please.

    STATEMENT OF GORDON ANDERSON, MAYOR, GRANTS PASS, OREGON

    Mr. Anderson. Thank you, Senator. I would caution you to 
take----
    Senator Smith. You might state your name and----
    Mr. Anderson. Gordon Anderson, mayor of the city of Grants 
Pass. Thank you, Senator, for coming out here.
    I would caution you to listen carefully to the testimony 
you have heard here because of some this that was before your 
committee in the last hearing just about a week and a half ago. 
The gentleman who is the farm director for the Arizona Farm 
Bureau came and spoke, essentially saying that in 1988 they 
started checking their systems, got full compliance and 
certification of compliance last year. And yet when they turned 
the switch for 2000, they just fried a bunch of the electronics 
on much of their major irrigation equipment.
    His point was that no matter how much we did, there are 
going to be some breakdowns, and the interfacing of all of our 
cities and counties and State and Federal Governments, we are 
going to have breakdowns. And what I heard today was 
individually we are OK, everything is going fine. There was 
some mention of networking being a problem. And that is the 
problem, I think.
    We have got to be careful that there are going to be some 
glitches and breakdowns, and if it is global, over the State, 
over the Nation, we are going to have more problems than we 
heard here today.
    Therefore, I think we need to be very careful that we don't 
just say we individually are taken care of, our computers are 
OK, and everything is going to be fine, when, in fact, we may, 
in fact, have some major problems. It is a little like me 
saying, well, you know, I have taken care of all my wiring at 
the house, everything seems to be fine, I don't think I am 
going to have a fire so I won't get any fire insurance.
    What I would ask of you is, we need to tell people--and I 
thought Ms. Martell from the Red Cross was excellent. We need 
to be talking to people about taking self-sufficiency, self-
preparation on an individual basis. Our Neighborhood Watch 
groups, our churches, our schools need to start getting this 
information out that each individual, each family needs to be 
getting some food or some water or what they think is necessary 
for a week, 2 weeks, or whatever they think.
    Along that line, we have talked in the past a little bit 
about seeing that the USDA actually gets food out to different 
areas. I think the Willamette Valley, the metro area, southern 
Oregon, eastern Oregon needs to have maybe in the hands of the 
Red Cross supplies so that if there were to be a fire in our 
house, we would have something for those people that cannot 
prepare for themselves, because Access Food Share and many of 
the volunteer programs that feed the homeless, the transients, 
and those who have fallen on hard times, they depend on 
volunteer-given food. That food may not be there if we, in 
fact, did have a major catastrophe.
    Thank you for your time.
    Senator Smith. Thank you, Mr. Mayor.

              STATEMENT OF MICHAEL CROSS, CITIZEN

    Mr. Cross. Good afternoon, Senator. My name is Michael 
Cross. I am not representing anyone in particular. Nice to see 
you again this afternoon.
    Senator Smith. Nice to see you, Mike.
    Mr. Cross. Thank you. I heard--and I don't know if it is 
true--that Canada as well as some other governments are openly, 
publicly advising people to store food, and that is not 
happening yet in this country. So I just--had you heard 
anything about that?
    Senator Smith. I have not. I just hope peas are what they 
are recommending.
    Mr. Cross. Me, too. [Laughter.]
    Senator Smith. No, seriously, I think everybody has some 
food storage irrespective of Y2K. But, you know, I think that 
is up to your family to make the judgment as to how much. But 
it shouldn't have anything to do with Y2K. You just ought to 
have some.
    Mr. Cross. Yes, but depending on where you live, from what 
I understand, you could be breaking the law in what is 
considered hoarding food. Are you familiar----
    Senator Smith. Well, let me put it this way: Most cities in 
this country have a 72-hour supply of food for their 
populations on their shelves. Seventy-two hours. That is how 
vulnerable, potentially, the food supply is because most food 
processors and retailers operate on a just-in-time inventory. 
So the way you make profits in the food industry is to turn it 
and turn it a lot. And they don't keep a lot real close to you. 
It is on the way to you. So that is why transportation, 
refrigeration, electricity, all of these things are so 
fundamental.
    So whether or not there is Y2K or not, you ought to have 
some food supply. You have to have enough for your family to 
last for a little while. But we don't want to create a run on 
the grocery store, though the grocers might like it. We don't 
want you to panic.
    Mr. Cross. Right. And I watched a program a week ago, 
``Louis Rukeyser Report,'' and one of their guests stated that 
assembly line, anything that is produced on an assembly line is 
most susceptible to these types of things. And that could be 
food.
    But, you know, what Don Mazziotti said I thought was 
interesting. Each department could be completely 100 percent 
compliant, but yet it is the interface that could bring the 
whole thing down like a virus. That scares me. But probably 
more than that is public fear. You know, that scares me a 
little more.
    In 1968, when New York had the power outage--I thought they 
had one a couple years ago, too, but depending on where you 
live in New York, the power outage was between 4 and 24 hours. 
And in that time period, there were 200 businesses--or 2,000 
businesses were looted. There were 200 fires, lots of problems 
going on, people panicking, and just in a small--you know, so 
that probably is more of a concern for my family, as I think it 
is for a lot of people. You know, what will people do if 
something like that, you know, even a minor issue, say a run on 
the bank could, you know, create something?
    Back to the media, I think what they could do to alleviate 
a lot of these fears would be to, you know, get regular--
perhaps on a weekly basis--reports from these different 
agencies at this level, and then it kind of gets away from the 
tabloid type of reporting, more of the hard--you know, ``this 
is where we are at'' type of situation.
    Also, generally--and I want to congratulate you on your 
vote of conscience with regards to President Clinton. A lot of 
people don't trust the guy, you know, and I think that is 
probably where, you know, maybe some of those things--I am a 
Republican. We have some Democrats in the office, but----
    Senator Smith. Let me just say, whether you trust him or 
not, I hope we will all forgive him and then do our duty and 
get back to the work----
    Mr. Cross. Exactly. It is our job to pray for him.
    Senator Smith. I am being told I need to leave. I wonder if 
you have a comment you want to make.
    Mr. Cross. That is all I have.
    Senator Smith. Thank you.

              STATEMENT OF PETE ZAMBETTI, CITIZEN

    Mr. Zambetti. I just wanted to say one thing, Senator 
Smith. I am Pete Zambetti, and I am representing myself. 
Basically, I was running the dry pack counting for our Mormon 
Church. I know how important it is for people to have food 
storage. We have been in a problem where people haven't done 
enough. We can't supply it all. I look to the government, 
either the State or Federal Government, both to get together 
and set up some type of systems where food can be gotten. I 
know there is food in the fields and food on the trees and 
stuff that isn't being picked because we can't send it to Asia 
and other countries, or it isn't being sold.
    I think it is time for the State and county and the Federal 
Government to come together and try to set up some storehouses 
in some way for people to be able to receive some of this food 
or to be able to get help in putting together some type of food 
storage program. I have heard a lot today about preparation, 
but I think it is important, also.
    The other thing is water storage. That is another thing 
that is important, to have good water and good drinking water 
for our families.
    Senator Smith. I thank you, sir, and all of you who 
attended. I think you are here out of concern, and I appreciate 
your civic-mindedness, and just know that we are anxious at 
every level of government to make sure that if there is a bump 
in the road, it is a small one, not a big one, and you are a 
part of making sure it is small.
    Thanks so much. We are adjourned. [Applause.]
    [Whereupon, at 3:15 p.m., the committee was adjourned.]
                            A P P E N D I X

              ALPHABETICAL LISTING AND MATERIAL SUBMITTED

                                 ______
                                 

                   Prepared Statement of Roger Harris

    The potential impact of the news media on public perceptions about 
the Y2K problem.
    The broadcast news media has had a tremendous impact on the public 
perception as to the magnitude of the potential problem that Y2K may 
create. Already we are seeing the tenor of the stories beginning to 
change. Broadcast news is driven by public interest--if the public is 
interested in a subject it has news value. The nature, and content of 
news stories, following the Y2K story the past eighteen months has 
followed a well-trodden path. This path is simply an education process. 
Initially the nature of the problem was dramatically overshadowed by 
the doomsayer prophets that were getting exposure. The worst case type 
stories that began early last year were largely due to the lack of 
public knowledge about the problem, the correction process, and the 
lack of information. The ``sky is falling'' stories did serve a purpose 
in that the public became energized and concerned. Private business 
responds to public demand much like elected officials. Currently both 
government and private business are reporting positive strides towards 
resolving the potential problems that could result from the Y2K 
computer bug. More importantly, for the news media, is the availability 
of information for dissemination on the process and progress. As 
January 1, 2000 gets closer it will become vitally important for 
providers of vital services to continue to be open and honest in 
regards to what the public should expect. Misinformation will be 
quickly discovered come New Years Day. Summary: The ability of the news 
media to impact public perception will be dictated by two issues: 1. 
The commitment and discipline of the news gathering organization to 
cover the facts as the new century approaches. 2. The ability to 
receive timely and accurate information from providers of vital 
services.
    The role of the news media in Y2K emergency preparedness within 
local communities.
    Broadcasters have two primary responsibilities in Y2K emergency 
preparedness.
    1. Insure that the station stays on the air and can cover stories 
important to the communities they serve. This requires much more than 
it seems at first blush--as is the case with most business entities.
    2. Be diligent in covering stories that are important to the 
community. Journalists are limited by what information is available, 
and then must make a decision as to the validity of the information 
provided. The news media responds to emergency situations. When early 
warnings are available, preparation can be effected that will improve 
the coverage and information as the emergency unfolds. This type of 
activity has been demonstrated many times in the course of ``natural 
disasters'' such as floods, hurricanes, etc.
    Regarding Y2K; Information, or the lack of it will drive emergency 
preparedness. A couple examples: Should a provider of vital services, 
such as the Social Security Administration release information that 
checks are going to be late; or the local power company report that 
outages are likely to occur, the news media will respond. Local news 
organizations will research options available and this information will 
air accordingly. The flip side that could result in stories of concern 
would be a lack of Y2K information from vital service providers. An 
information vacuum will be a significant story and will trigger action 
on the part of news organizations--this is a dangerous situation.
    The potential role of the broadcast news media is facilitating 
communications to the public in the event of Y2K related problems.
    Broadcasters have repeatedly demonstrated the ability and 
willingness to facilitate communication to the public--this is what 
broadcasters do best. It would be difficult for me to state specific 
applications at this time for a number of reasons. Y2K is like an 
approaching hurricane, if it hits a populated area a disaster will 
occur--if it turns out to sea it will be an interesting non-event. We 
will monitor the progress and direction then provide information of 
what preparatory actions the public should take based on the 
information that is available. However, rest assured broadcasters are 
well aware of the potential consequences of misinformation regarding 
Y2K.
    Summary: Broadcast news will be more than willing to provide the 
necessary information to our respective communities. The social 
contract between the community and the broadcaster is constantly open 
to scrutiny.
    Steps we believe the State Legislature, the U.S. Congress, or 
others should take to help minimize the risks for Year 2000 
Disruptions.
    The most important step for any entity, government or private is to 
insure your own house is in order. At the very least all ``vital'' 
services must be Y2K compliant.
    Provide honest, and complete, information as to level of compliance 
and/or expected consequences. The truth will be visible January 1, 
2000.
    Monitor government, and non-government, compliance activities and 
prepare contingency plans. Provide this information to the news media.
                               __________

                    Prepared Statement of Vera Katz

    Chairman Bennett, Senator Smith, other members of the Committee.
    Thank you very much for the opportunity to speak with you here 
today.
    The Year 2000 presents significant challenges for the City of 
Portland and for other local, state and federal government 
organizations.
    These challenges are, as you know, at their root, a technology 
problem.
    But it has become apparent to me that the challenges we now face 
with Y2K are actually more social in nature than technological.
    But before I focus on the social nature of the Year 2000 situation, 
and offer what I hope you find to be some constructive observations 
about how both the State Legislature and the federal government can 
help with these challenges, let me spend a moment to describe for you 
the City of Portland's own Year 2000 situation.
    City staff has been working on internal Year 2000 issues, 
literally, for years.
    In the mid-1990's we began replacing financial systems that were 
already bumping up against the Year 2000, such as lien accounting and 
internal systems in the Bureau of Environmental Services.
    By 1996 we determined that we needed to have a concentrated 
citywide effort to make sure absolutely everything possible was 
evaluated, repaired as necessary and tested.
    As I speak with you here today, we are confidently optimistic that 
all of our internal systems will continue to function through and well 
after the century date change.
    We intend to remain ``The City That Works.''
    While that does not mean that we are ready today--because we are 
still very hard at work--we know where our issues are, have plans and 
priorities, and have staff devoted to finishing work on all critical 
systems.
    And, as a City we are also investigating the Y2K status of our 
business partners and providers of other critical community 
infrastructure.
    As you know, critical community infrastructure is provided by an 
overlapping network of government agencies, non-profit organizations 
and private businesses. What that means is that everybody has to do 
their part of this to work.
    The power companies, phone companies and other utilities must do 
their part, and we are well aware of the tremendous work the Oregon 
Public Utility Commission and this Committee have been doing in 
following Y2K issues on this front.
    The banks and financial institutions must do their part, and we are 
similarly thankful for the help and leadership this committee and the 
federal government has exercised in this area to make sure Y2K issues 
are being adequately addressed.
    And last but not least we recognize that State Agencies must do 
their part, and we are similarly grateful that Governor Kitzhaber has 
made sure that Y2K is a priority for all State Agencies.
    Someone observed to me recently that Y2K may not be the end of the 
world as we know it, but it is sure going to show us how we are all 
connected.
    But despite all our discussions, investigations and preparations, 
what if we are wrong, or haven't done our job as well as we should 
have?
    I want to assure the public that the City of Portland does have 
contingency plans, as do our partners.
    Before the public gets the wrong idea here, though, I want to 
remind them that the city has always had contingency plans. We are in 
the business of planning for the unexpected, whether that is a 
windstorm, a flood or any other sort of event that could potentially 
disrupt public services.
    What we are doing in the City is reviewing those existing 
contingency plans to make sure they are adequate for the kinds of 
events that could be triggered by Year 2000 failures. The City's 
emergency managers are working very hard on this right now.
    But contingency planning is more than something that only 
organizations like the City need to do. Our best hope as a community 
for weathering any kind of public service disruption is to have 
residents who are prepared to take care of themselves for a period of 
time.
    With only 315 days to go before Y2K, while we inside City 
government believe the turn of the century will not be a significant 
disruption to our citizens, we also recognize that the public needs to 
have the same information we have.
    For example, in the City we advocate--and not just because of Year 
2000--that every resident be prepared, in his or her own household, for 
at least 72 hours. We think that makes good sense; we think that is 
part of what makes us a resilient community.
    If people have all the facts, it has been my experience that they 
make responsible decisions and take responsible actions. My fear is 
that if people do not have good information, they will fill that void 
with fear and inappropriate activity.
    I am proud to announce--and you may have seen some advance news of 
this in the New York Times last week--that we are moving forward with a 
comprehensive community preparedness strategy for our residents.
    We are putting materials together now that explain how Portland's 
community infrastructure works, how technology is involved, what we 
know about potential Y2K impacts, and what has and is being done about 
it.
    These materials, however, will also include reminders about what we 
think residents should do to be prepared for ANY disruption of 
services; steps we think they should take with or without any thought 
about the Year 2000.
    We will try to get those materials into, literally, every household 
in Portland.
    We think that when the public has the same information we have they 
will come to the same basic conclusion: cautious optimism that the 
services they rely on will continue to work.
    Here are some steps I would like to see State and Federal 
governments taking to help us all in this effort to both squash the Y2K 
bug, and to help make sure the public understands we have done that.
    1. Do your part in fixing your own systems. Make sure this work 
remains a priority, as we have done. Remember, we rely on you and we 
are counting on you. We are all in this together.
    2. Recognize that it is local government that is on the firing line 
here. If anything fails, it is local officials who will bear the brunt 
of public unhappiness, and it is local police, firefighters and 
maintenance personnel who will have to keep order and clean up.
    3. Provide visible leadership and encouragement for responsible Y2K 
preparedness actions by individuals, businesses and communities. Help 
carry the message that community preparedness makes sense with or 
without Y2K, and that it is just good insurance in an uncertain 
environment.
    4. Encourage collaborative partnerships among all the 
infrastructure providers in communities to communicate about Y2K 
issues. The public needs to know comprehensively, and will, I think, 
appreciate consolidated efforts that combine information from all of 
the different organizations that provide the infrastructure they rely 
upon.
    Fund compilation and distribution of ``best practices'' for 
community preparedness and technical assistance to local governments.
    Thank you for your time.
                               __________

                Prepared Statement of John A. Kitzhaber

    Good afternoon Mr. Chairman and members of the Subcommittee. I am 
John Kitzhaber, Governor of the State of Oregon.
    Senator Smith, I want to thank you for chairing this even on behalf 
of the citizens of Oregon. Thank you for inviting me to appear before 
you today to discuss the efforts that we have undertaken to address the 
Year 2000 problem. I would first like to commend the Senate Special 
Committee on the Year 2000 Technology Problem for its efforts to 
investigate the effects of the Year 2000 problem. I think this 
Committee has done a good job of raising awareness of the issue among 
businesses, governments, the news media and the American public.
    Three years ago we knew in state government that it would take 
thousands of hours of work and millions of dollars to adequately 
prepare for the consequences of moving from 1999 into the Year 2000. We 
set targets and budgeted carefully for the costs of doing what was 
necessary to get ready for the century date change.
    What we didn't know was how rapidly the nature of the project would 
shift from a simple but time-consuming technology problem into that of 
a business management problem. In Oregon state government we have added 
resources and redoubled our efforts to ensure that our citizens receive 
the critical state services they depend upon.
    But now, in 1999, with only 315 days left to go, the Year 2000 
problem promises to become society's problem. And that is why this 
hearing is so important. Talking about and preparing for the Year 2000 
problem, or Y2K, is in our collective community interest.
    The more people learn about Y2K, the more they come to understand 
that our computers are largely connected to other computers. 
Increasingly, our home computers share electronic information with 
Internet Service Providers, with online catalog stores, with automated 
banking services, even with the IRS. Similarly, the computers that help 
run state government share electronic information with cities, 
counties, federal agencies and businesses. In order to address your own 
Y2K problems, you need to be concerned about the other guy's Y2K 
problem as well.
    The way computers interact can serve to remind us that we too must 
interact with our neighbors to solve problems. The Y2K problem is 
actually a tremendous opportunity.
    From a business point of view, because of Y2K hundreds of dedicated 
public employees are replacing older inefficient computers with faster, 
more secure information technologies. They are creating a better way to 
do business that will not just handle the Year 2000 issue for our 
state's systems, but will also serve the citizens of Oregon well beyond 
January 1, 2000.
    On the individual's perspective, Y2K presents an opportunity to 
come together and create safer, friendlier communities. Every year, 
some part of our state must deal with the disruptions caused by wind, 
ice, floods or some other natural system that goes awry. And we deal 
with it. I should say: the brave men and women whose job it is to 
repair power lines and roads and the other things we depend on .  .  . 
who come out in the dead of night, in the worst of weather, leaving 
their families behind on holidays .  .  . whose job it is to restore 
our normal way. They deal with it for us.
    In the coming months we are facing the possibility that a 
technology system may cause things to go awry. But I do have confidence 
that the people whose job it is to prevent such disruptions will 
succeed. I also have confidence that Oregonians will deal with any 
problems resulting from Y2K the same way we deal with ice storms or 
temporary brown-outs .  .  . quickly and calmly.
    Senator, as you well know, earlier in this century a great 
president told the American people, ``The only thing we have to fear is 
fear itself.'' Then, as now, knowledge is the antidote to fear. People 
need the facts about the situation whether you are running a business 
or providing a public service.
    As governor, I am committed to informing Oregonians of our 
readiness for the Year 2000. Since 1997, when I issued an Executive 
Order that directed each agency of the state to find and fix the Year 
2000 problem in their essential systems, we have reported our progress 
regularly to the people via their elected representatives in the 
Legislature. You will hear more about the state's Year 2000 Project 
from Don Mazziotti, our state's Chief Information Officer, who oversees 
the Statewide Year 2000 Project Office, and from Joan Smith, a member 
of Oregon's Public Utility Commission.
    I am committed to working with our state's cities and counties to 
help them prepare their communities for the consequences of Y2K.
    And I am committed to cooperating with the newspapers and 
television media who play an extremely important role in educating the 
public about Y2K. Depending upon how the media choose to play that 
role, they can either fan the flames of fear or encourage people to 
take positive action in their communities. I encourage the media to 
consider very carefully the importance of the message they carry to our 
citizens in the coming months.
    By sticking to the facts, we can build trust among people, the kind 
of trust that builds stronger communities: working together for the 
best quality of life, yet prepared for the worst when emergencies come 
our way.
                               __________

                Prepared Statement of Myra Thompson Lee

    Senator Smith, I am Myra Thompson Lee, Director of the Department 
of State Police, Office of Emergency Management. I am pleased to be 
here today to provide you with an overview of our Division and our 
activities related to the ``Year 2000 Problem''. This issue has had a 
significant impact on all state and local agencies. It has given rise 
to numerous concerns about emergency power, communications, and 
electronic systems. Most routine work efforts in many agencies have 
been reprioritized in order to dedicate time to mitigating the 
potential impact and preparing for the consequences if mission critical 
systems fail.

    Oregon State Police

    The Oregon State Police [OSP] is following the Risk Management 
guidelines for business continuation planning. Contingency plans for 
all divisions of the Department will be consolidated into a single 
Business Continuation Plan. This process is already underway. These 
plans will be fully documented and included in a centralized Y2K 
project file.

    The process will include the mission critical systems that have 
already been identified by the Department of Administrative Services 
Year 2000 Project Office. The business continuation plans for these 
functions will be completed this month (February 1999). Contingency 
planning for non-critical systems will be completed in June 1999.

    Oregon Emergency Management

    Oregon Emergency Management [OEM] is a division within the 
Department of State Police [OSP], Intergovernmental Service Bureau. The 
department as a whole has taken this issue very seriously. The diverse 
services provided by the department are critical to the safety of 
citizens in Oregon and must be viable at all times. The role of the 
division is to coordinate Consequence Management planning activities by 
providing technical assistance and consultative services. These 
activities also include providing training on developing Consequence 
Management plans and exercise to test the plans.

    OEM--Technology Impacts

    The State of Oregon Emergency Operations Plan [EOP] will serve as 
both our business continuation and consequence management plan. The EOP 
is constantly being reviewed and updated. Emergency coordination and 
operations are primary functions. We would be able to operate the 
State's Emergency Coordination Center even under emergency conditions 
with limited capabilities.

    The communications and other electronic systems in OEM are Y2K 
compliant. If they fail for some reason procedures exist to utilize all 
available means to communicate among the agencies. These include 
congregating key agencies representatives in the Emergency Coordination 
Center to deal with conditions in order to coordinate resources of 
state agencies, and to assist their response efforts. This would entail 
using amateur radio, hand-delivering messages, etc. There would be 
little difference between this and other emergency situations in which 
similar conditions exist. The Y2K technology impacts appear minor in 
their impact on our primary business operations.

    All of our technologies have either been proven or certified as Y2K 
operational. We can provide some communications and coordination 
activities in absence of any support from telephone and power company 
utilities. Our facility has a wide variety of radio services, 
government radio channels, and Amateur Radio Emergency Services [ARES] 
capabilities. The facility is powered by 150KW emergency generator with 
contracted fuel truck(s) available to keep the generator running for 
extended periods of time. The generator and our facility UPS will keep 
our radios and local network computers operational.

    External utility threats, however unlikely, may impact wide-area 
network services. These threats appear to be minimal from the 
information provided by US-West, AT&T, GTE, and Sprint telephone 
carriers regarding their services. Bonneville Power Administration 
initiated efforts in the 1980's to have the Pacific Northwest Grid 
services operable for Y2K by the first years of 1990.

    Absence of electric power to radio sites, and absence of telephone 
utility, could impact wide-area data and communications networks. The 
emergency management facilities supporting the 9-1-1 centers have 
standby electrical power capability and coordination radio capability 
that is independent of any telephone and electrical power utility 
service.

      Capitol Mall Wide Area Network
      CSEPP Wide Area Network
      CSEPP/OSP/WPUD Microwave Network
      Oregon Fire Coordination Network
      Oregon 9-1-1 Telephone Services
      Oregon EDNET Cable Services

    The local computer networks at each of our strategic emergency 
services locations have been proven Y2K operational and/or Y2K 
certified. There are radios and standby electrical power capabilities 
at each of these sites for emergency coordination in absence of power 
and telecommunications services.

          Capitol Mall Wide Area Network

    This network provides inter-agency e-mail access and internet 
service access. We can still coordinate critical emergency issues via 
radio if the State of Oregon Capitol Mall Wide Area Network fails. Our 
local computer networks can be quickly configured to operate in absence 
of the Capitol Mall Wide Area Network.

          Eastern Oregon Wide Area Network

    This network is primarily to support the FEMIS (Federal Emergency 
Management Information System) and is used as a chemical incident 
hazard decision support tool. FEMIS is not the primary means of 
notifying the public and emergency managers of an incident at the 
Umatilla Army Depot. It is a redundancy that is built into the system 
to ensure a higher degree of safety. We have a radio network with full 
stand-by power at all repeater sites that can be used during complete 
utility failures.

          OSP/WPUD Microwave Network

    In the unlikely event that a failure occurred related to contracted 
telephone links from the local telephone companies that provide access 
to the microwave network it could potentially affect a timely 
activation of sirens and highway reader-board signs. However, emergency 
services can still be contacted via radios that are independent of any 
utility power and telecommunications. All end-nodes and intermediate 
microwave radio repeater nodes have full environmental and standby 
power capability to service the radios and digital network relay 
services. All equipment at these sites has been determined to be Y2K 
operational.

          Oregon FireNet

    In the unlikely event of a failure of the Oregon Department of 
Transportation [ODOT] microwave system and T1 telecom data services 
between Oregon Emergency Management and ODOT headquarters in Salem, we 
can still relay communications via radio to the emergency services 
agencies.

          Oregon 9-1-1 Telephone Services
    These services are strictly dependent on the Y2K operability of the 
local telephone companies and the telephone call-routing switches 
amongst the telephone carrier networks. The emergency services dispatch 
capability is done via radio, and the 9-1-1 centers are serviced by 
alternate standby electrical power.

          Oregon EDNET Cable Services

    These services are used during emergencies for the reception of TV 
media broadcasts, but we also have a satellite downlink that feeds news 
to EDNET cable for other state government agencies.

    National Guard

    The Oregon National Guard [ONG] has completed the required internal 
and external threat assessments. They have identified all computers, 
computer applications, and facilities that have some type of embedded 
chip problem and are in the process of fixing these items. At this 
point none of the items that are affected by Y2K in the Oregon Guard 
will degrade their ability to provide essential support. All units of 
the Oregon Guard are ensuring that the High Frequency/single Side Band 
[HF/SSB] system is functional with power generation equipment. This is 
a type of radio that uses radio waves to bounce off the ionosphere and 
has capability to travel long distances. The National guard is 
coordinating with the National Guard Readiness Center in Arlington, 
Virginia, and neighboring states during initial tests. One of these 
radios has been deployed to all but four armories, but this is also 
being worked on to ensure this need is filled within next 60 days. 
Additionally, all units will monitor the status of equipment to ensure 
readiness. The National Guard has a plan that can and will be adjusted 
based upon current events or needs which are presented. All planning 
activities are routinely coordinated between OEM and the ONG.

    Coordination between OSP/OEM and the National Guard

    It is anticipated that the events for which National Guard 
resources would be needed would be very similar to other situations to 
which they respond under a Governor's declaration of an emergency. 
Although multiple isolated system failures could occur, it is unlikely 
that all systems would fail at the same time. OEM and ONG will continue 
to work together in the same manner that we would for any other major 
event that requires the coordination of the diverse resources of the 
state.

    Interagency Coordination Efforts

    In coordination with the Oregon Year 2000 Project Office, OEM is 
the lead for activities related to the Consequence Management planning 
and fully supports the IRMD Year 2000 Project Office in the execution 
of their Y2K lead agency responsibilities. We have developed and 
conducted five of six day-long training sessions. The two part training 
provides a methodology and assistance for the development of agency 
plans as well as guidance for the development of exercises to test the 
plans. The last scheduled class will be conducted on February 24th. To 
date 194 mid and upper level management personnel have received the 
training.

    The planning phase for state agencies is expected to be completed 
by July 1st. The plans will focus on the specific life/safety-
threatening consequences that could occur if systems fail or are 
disrupted. Each agency will identify the consequences that could occur 
if their particular services were not available for any length of time 
and a coordinated approach to response will be developed. For example, 
if traffic lights did not work a coordinated approach would address how 
the traffic flow would be managed, what information would be given to 
the public, and there would be an agreed upon interface with public 
safety agencies to provide for emergency response by police, fire and 
medical personnel. OEM cannot develop such plans for individual 
agencies, but we can provide guidance and assistance to the agencies to 
do so. The agencies have the expertise and the contacts necessary to 
both identify impacts and to develop a plan to manage them.

    All mission critical agencies are expected to develop a Consequence 
Management Plan and to exercise that plan within the next few months. 
In June of this year the IRMD and OEM directors will co-host a cabinet 
level tabletop exercise to identify and address any remaining policy 
issues.

    Office of Energy:

    ``David Stewart-Smith is the technical operations coordinator for 
the Petroleum Emergency Response Plan. He is working with USDOE and the 
Petroleum Industry and is confident that all are doing what needs to be 
done to identify and eliminate or minimize potential Y2K interruptions. 
The Oregon Office of Energy Fuel Allocation Plan addresses long term 
shortages coming into the state. The biggest problem would be related 
to a widespread topping off of fuel tanks late in the year or during 
the final few days of the year and thus causing a shortage at service 
stations. This could reduce in-state reserves. Keeping a fuel tank full 
should be a continuous individual preparedness activity in keeping with 
the policy of each person being prepared for any emergency, not just 
Y2K.''

    Health Division

    The Health Division has assigned two people to oversee its Y2K 
efforts. They will review the existing Health Division Emergency Plan 
for application to Y2K response. Both are being trained and have begun 
reviewing the Emergency Plan. The Health Division is also reviewing 
it's computer systems to ensure compatibility. The Health Division also 
plans to have a Y2K tabletop exercise late in the summer, but no date 
has been set for it. In addition to this, the Health Division has 
assigned a third person to the Governor's task force on Y2K. Other 
personnel will be contributing to this effort as needed.

    Department of Agriculture

    The Department of Agriculture is coordinating efforts through the 
state headquarters office and Barbara Jensen, at DAS IRMD. She's 
coordinating the preparedness of those systems and the readiness 
efforts of office systems. The Business Office manager has indicated 
that all departmental systems are ``Y2K Ready''.

    Department of Transportation [ODOT]

    ODOT management has determined that the ODOT Emergency Operations 
Plan dated October 1998, will serve as the agency's Business 
Continuance and Consequence Management Plan. The plan is currently 
being reviewed and an update will be issued in June 1999 to address Y2K 
specific concerns. The revision will include a cross reference to ODOT 
Critical Business Functions to show where the functions are addressed 
in the Plan. Training for agency staff on the Emergency Operations Plan 
is scheduled for March through June 1999. The Plan will be tested in a 
series of tabletop exercises in June through August 1999. ODOT plans to 
conduct a tabletop for each of the 16 ODOT Districts in the State. 
Several tabletops also will be conducted for Salem headquarters staff. 
Each tabletop will focus on a special annex to the ODOT Emergency 
Operations Plan that will deal with managing potential consequences.

    Local Government

    Local government is in various stages of preparation for the 
potential impacts. They are following much the same process as is state 
government. Several are fairly advanced in their efforts and some of 
the smaller jurisdictions are still identifying the problems they 
anticipate will occur. Training and exercises will be conducted 
throughout the year.

    Personal Responsibility

    The ``Millennium Bug'' problem is well known around the globe. 
There is more information available from more sources for this 
potential hazard than exists for almost any other hazard of which the 
public is more familiar. The times for possible system failures has 
been identified, as have potential impacts. With all of the information 
that is available it is incumbent upon each and every person to prepare 
themselves and their family and friends for these possible impacts.

    Each person/family needs to determine what they consider to be the 
most important and prudent means to protect themselves, ensuring they 
have sufficient provisions to meet those needs. There is ample time to 
make most of these preparations. It is a benefit to individuals and to 
the community for such preparations to be made in advance of any 
emergency that threatens the citizens of Oregon. The fact that the 
origination of an emergency could be due to Y2K system failures is no 
more relevant than the need to be prepared for any other emergency.

    Closing Comments:

    Oregon is aggressively addressing this issue and has made great 
strides in determining overall capability for emergency and disaster 
response. ``The Y2K Problem'' presents more unique conditions that have 
already provided tremendous opportunities to ensure general readiness 
of government, businesses, and the public. This can only be good for 
the state as a whole, and in this case for the nation.
                               __________

                  Prepared Statement of Adella Martell

    Introduction
    Good afternoon, my name is Adella Martell and I am the executive 
director of the Oregon Trail Chapter of the American Red Cross. I am 
speaking today on behalf of all of the Red Cross chapters in the state 
of Oregon.
    In light of potential Y2K service disruptions, the American Red 
Cross has emerged as a leader in community education and preparedness. 
The challenge is that the effects of the Year 2000 technology problem 
are essentially unknown, running the gamut from annoyance to 
Armageddon.
    Like almost everyone, we can't predict the future. But we do know 
our mission. We consider Y2K an opportunity to further that mission 
which is to help individuals prevent, prepare for, and respond to 
emergencies.
    In that context and, in the time I have allotted this afternoon, I 
want to share Red Cross' response plans, our preparedness activities, 
and finally make a few recommendations to the committee.
    Red Cross Disaster Services
    For more than 120 years, the American Red Cross has responded to 
disasters--floods, earthquakes, wind storms, and fires--all of which 
result in major disruptions in people's lives and the delivery of 
services to the community. Red Cross disaster relief is delivered in 
three stages:
    1. Emergency Mass Care: Immediately after a disaster, Red Cross may 
provide for the immediate needs of large groups of disaster-affected 
people, including emergency shelter, food, medicine, and first aid.
    2. Emergency Assistance: Within several days of an event, Red Cross 
expands service to include emergency assistance. This individual 
assistance is geared toward meeting specific, immediate needs of 
families. The goal is to support individuals in returning to a more 
normal and independent living situation. Assistance may include 
temporary housing, groceries, new clothing, emergency home repairs, 
transportation, basic household items, medicines, and tools.
    3. Long-term Recovery: Red Cross also helps when all other sources, 
such as insurance benefits and government assistance, are not available 
or are inadequate to meet disaster-related needs.
    While Red Cross is a leader in disaster relief, we don't respond in 
a vacuum. To effectively and efficiently support a community in 
recovery it takes the resources of government, social service agencies, 
and individuals. To enhance service delivery during times of emergency, 
Red Cross maintains collaborative relationships with emergency 
management officials and other social service agencies active in 
disasters.
    Red Cross Y2K Response Plans
    Our planning for Y2K is the same as our planning for other events 
that may cause some localized disruptions of limited duration. Red 
Cross is working cooperatively with emergency management officials in 
every community to assess the potential problems and to prepare to 
assist individuals and families. As in every emergency, we encourage 
families to prepare to take care of themselves for at least the first 
72 hours. In the event of prolonged service disruptions, Red Cross is 
prepared to open warming shelters. As we always do, Red Cross chapters 
have pre-positioned shelter supplies around the state.
    In addition to positioning supplies, we continue to build our 
capacity of volunteer responders. Red Cross is working with local 
organizations such as churches, businesses, and other organizations to 
increase the number of available trained responders.
    Red Cross Y2K Preparedness Activities
    While we are committed to continually increasing our response 
capacity, we strongly believe that, as in other disasters, the first 
and best line of defense is individual and family preparedness. The 
best way for communities to recover is by having individuals ready to 
take care of themselves.
    Because of the interest and concern over Y2K, Red Cross has stepped 
up its community education efforts to meet the demand for relevant, 
practical preparedness information and will continue to encourage 
general disaster preparedness throughout the year and beyond the year 
2000. Because the effects are unknown, concerned community members are 
turning to Red Cross for answers. In this capacity, Red Cross chapters 
around the state are educating community members on how to prepare for 
and stay safe in any kind of emergency, including Y2K-related events.
    Red Cross Y2K-related preparedness activities include creating a 
fact sheet, checklist of preparedness tips, speakers' bureau, 
participation in symposiums, forums, and town hall meetings, and 
responding to public inquiries.
    Red Cross' key message in educating the community is that no one 
can fully predict the effects of the Year 2000 problem, but individuals 
and families can control their own levels of preparedness to respond 
and cope in any emergency.
    Because the effects of Y2K are unknown, because the issue has been 
used to hype news coverage, some people are starting to panic and to 
prepare for the ``end-of-time.'' We believe that this is the worst 
thing that they can do. We have no reason to believe that Y2K-related 
disruptions will last beyond a few days. General home preparedness 
outlined in our printed material should be enough to support families 
during any service disruption.
    Recommendations
    As in any emergency situation, the most vulnerable populations are 
at greatest risk. Additional attention and resources must be 
contributed to support focused programs to assist the elderly, 
disabled, and other special needs populations in their preparedness 
activities. Existing regulatory controls are in place. Enforcing 
compliance is vital. This commitment will not only ensure response 
during any Y2K-related service disruptions, but will enhance the 
state's overall disaster response capacity.
    Secondly, the government needs to take a stronger leadership role 
in coordinating activities between the many organizations and agencies 
working on this issue. There are many planning activities taking place 
in silos. Municipalities need to clearly understand their roles and 
relationships in these circumstances.
    Finally, all government agencies need to make a concerted effort to 
reassure the public that by working together everyone will survive Y2K 
or any other disaster that is thrown our way.
    Preparedness is the key. Prepare yourself. Prepare your family. 
Help prepare your neighborhood, and then look around your community and 
volunteer to help somewhere else. It's not difficult and the results of 
small efforts make a tremendous difference on the other end of any 
disaster.
    The Red Cross will fulfill our mission. But, we want everyone to 
know what they can do to help themselves prevent, prepare for, and 
respond to emergencies.
                               __________

               Prepared Statement of Donald F. Mazziotti

    Good afternoon, Senator Smith. My name is Don Mazziotti. I am the 
State of Oregon's Chief Information Officer, responsible for managing 
the state government's overall Y2K-related problems. I am here today to 
briefly describe the status of Oregon state government's Y2K efforts 
and activities.
    The state government's Y2K efforts have, since 1996, focused on six 
areas of activity:
      Condition assessment, planning, project and situation 
management, monitoring and reporting;
      Remediation of software applications and systems and the 
hardware which supports them;
      Embedded microchips found primarily in control systems, 
buildings and machinery;
      Interfaces or electronic data exchanges, where data from 
one source crosses a boundary with another;
      Business continuation alternatives and plans; and
      Emergency preparedness measures.
    These six areas of activity are the province, to a lesser or 
greater degree, of all agencies and branches of state government.
    They have been guided by statutory law, executive order and policy, 
beginning the November 1996 policy of the Department of Administrative 
Services and further defined by ORS 184.305-184.345, enacted by the 
Oregon Legislature in July of 1997.
    Executive Order 97-13, issued by Governor Kitzhaber in April of 
1997, established the Statewide Y2K Project Office within the 
Department of Administrative Services. It is that office for which I 
have direct responsibility and it is that office that coordinates the 
overall Oregon state government effort to find and fix Y2K-related 
problems.
    Oregon's efforts, like that of many states, is supported by an 
organization of departments, agencies and committees, each with a 
specific role to perform in the completion of our Y2K plan. This 
includes a statewide advisory council with liaison relationships 
established with all key sectors of the state's economy: health care, 
transportation, utilities, banking, county and local government, 
communications and business. Oregon's Y2K organization (see chart) has 
been in-place and operating for nearly two and one-half years.
    In addition to these efforts, as noted in the organization chart, 
the Joint Legislative Committee on Information Management and 
Technology, the Senate Information Management and Technology Committee 
and the House Commerce Committee have maintained oversight of the 
state's Y2K activities and have received status reports on those 
efforts for nearly two years in the case of the JLCIMT and during this 
session for our current legislative committees.
    There are a number of notable activities that operate in parallel 
with state government's Y2K efforts:
    1. The Secretary of State's Audit Division has evaluated the 
performance of the Statewide Y2K Project Office.
    2. Two independent consulting teams from Prodx and Testmasters 
conduct independent assessments of condition status as reported to the 
Statewide Y2K Project Office, to assure a check on the accuracy of our 
monthly reporting system; and
    3. Each month, the Oregon Y2K Interest Group, consisting of a broad 
mix of government agencies and Y2K coordinators, meets to discuss key 
issues and to provide problem-solving support.
    We estimate that 500 state employees are working full-time on 
various aspects of the Y2K problem within their organization. This 
number has been supplemented by 300 contract consultants. Most agencies 
have delayed, cancelled or re-scheduled information technology projects 
since 1996 in order to concentrate on finding and fixing the Y2K 
problem.
    Oregon state government, working closely with executives of the 
agencies, has identified 78 systems deemed to be critical to the 
continued operation of government and, therefore, the highest-priority 
for purposes of remediation. Another 190 systems, identified as 
critical to the mission of agencies, are also being given high priority 
for completion and are being monitored by the statewide office.
    Oregon has instituted a real-time condition status reporting system 
which is accessible on the World Wide Web. This system, based on 
reports and on-site visits--then verified by independent checks--
provides an up-to-the-day condition report on the 78 critical systems, 
ranking conditions red for alert, yellow for caution and green for on-
schedule. As of this morning, five systems are red, 34 are yellow and 
39 are green. By July 1, we anticipate all but three systems will be 
green, with those being condition green by September 1.
    At the present time, we are completing a 100% survey of all 
electronic interfaces. When complete, we will prioritize interfaces and 
begin systematic testing of those that are critical to the continued 
operation of essential government transactions and activities.
    Our agencies have been directed to contact all of their data 
exchange partners, including federal agencies, to make certain that 
their interface with the state is Y2K-ready. Where an interface partner 
is unable to assure that they are Y2K-ready, we will cease doing 
business with that partner until readiness is demonstrated. This effort 
is being coordinated by the Statewide Y2K Project Office.
    At the present time, we believe that the operation of data 
exchanges or electronic interfaces is our greatest vulnerability. This 
is so because such exchanges involve trading or exchanging data with 
external partners over whose Y2K problems we have much less control.
    Also at the present time, all state agencies are in the process of 
completing individual agency plans for the continuation of business in 
the event of a Y2K failure. This means that all government agencies 
must have in-place, by July 1, a plan which allows them to continue 
their service support and activities without the assistance of 
electronic systems, should that be necessary. This effort is being 
coordinated by the Risk Management Division of the Department of 
Administrative Services.
    As will be reported to you later today, the Office of Emergency 
Management, under the management of the Oregon State Police, is 
coordinating the state's emergency planning activities as they relate 
Y2K. Most-recently, OEM has completed day-long emergency and 
consequences management training for agencies of state government.
    In short, Oregon state government has taken deliberate steps since 
1996 to address the Y2K problem. It is an effort that spans all 
agencies and all three branches of government. It is an effort that 
will require as much as $125 million in budgeted resources for finding 
and fixing the problem.
    Perhaps my greatest concern with regard to Y2K is the proliferation 
of inaccurate, misleading, incomplete and poorly researched reporting 
by many sources. We have encountered and continue to encounter Y2K 
surveys and reports that oversimplify the nature of the problem and the 
measures being taken or appropriate to be taken in addressing various 
Y2K problems. On December 29 of last year, the Wall Street Journal, 
without consulting with our offices, published a graphic which showed 
Oregon's Y2K efforts as ``0,'' although this is clearly incorrect. The 
Journal's information was based on the results of a survey conducted by 
the National Association of State Information Resource Executives which 
would not, because of format restrictions, provide complete reports 
from the states. I can tell you that at least one federal agency, the 
General Services Administration, is conducting surveys of the states on 
the interface issue, using report formats which are misleading and 
incomplete. While we seek to cooperate with all legitimate efforts to 
report on Oregon's status, we refuse to submit information which is 
incomplete or which, if published, will mislead our citizens.
    This is why your committee's efforts and this hearing are so 
important to the State and people of Oregon.
    In the final analysis, it is my judgement that Oregon state 
government will complete all of the scheduled Y2K actions by September 
1, affording us time to re-test where necessary and to make all other 
preparations necessary.
    There are certain to be some system failures and Y2K-related 
problems; however, we continue to believe our ability to provide the 
essential services of state government will not be affected and that we 
will successfully manage the consequences of any emergency which 
arises.
    Thank you for the opportunity to provide testimony to the 
committee.


                               __________

               Prepared Statement of Senator Gordon Smith

    Good afternoon and welcome to our State Capitol for the first 1999 
field hearing of the Senate Committee on the Year 2000 Problem. I would 
like to discuss a problem with you today that could affect all 
Oregonians--the readiness of Oregon's state and local governments and 
how their emergency services may be affected by the Year 2000 
technology bug.
    To begin, I would like to thank all the distinguished witnesses who 
have prepared reports to present today. Each person here plays a vital 
role in finding a solution to the year 2000 computer problem. It is 
only through the combined efforts of the federal government and the 
citizens of this great state that Oregon will be insulated from the 
widespread impact of the Y2K problem.
    As many of you know, the problem I refer to is a technology ``bug'' 
found in embedded chips. The bug may cause many computers to shut down 
when we reach the year 2000, ultimately affecting many segments of our 
society.
    To assess the potential impact of the bug, the Senate Year 2000 
Committee was formed almost a year ago to help the government better 
understand and prepare for its inevitable problems. As a member of the 
committee, I have participated in several meetings in Oregon and in 
Washington, D.C. to determine the preparedness of our state and of our 
nation.
    While awareness is growing, research by the Senate Committee 
indicates that many organizations critical to Americans' safety and 
well-being are not fully engaged in finding a solution.
    While the Senate Y2K Committee has assembled no data to suggest the 
United States will experience nationwide social or economic collapse, 
the challenges posed by the year 2000 problem are numerous and 
daunting, both at home and abroad. Therefore, our committee concludes 
that disruptions will be significant. Those who suggest that it will be 
nothing more than a ``bump in the road'' are misinformed.
    The Internet is bursting with rumors. Web pages and chat rooms 
assert that Y2K will be TEOTWAWKI, cyber-speak for ``the end of the 
world as we know it.'' Others claim the problem is a hoax designed to 
sell information technology.
    the bad news is that the Y2K problem is real, caused by an 
outmoded, two-digit dating system in computer software and hardware 
that may knock vital systems offline on January 1, 2000. The good news 
is that it is far from the end of the world.
    But Y2K is about more than the failure of an individual's personal 
computer or incorrect dates on a spreadsheet. The complexities 
surrounding the problem and the lack of serious national assessments 
are indicative of larger, looming issues. The interdependent nature of 
technology systems makes the severity of possible disruptions virtually 
impossible to predict.
    There are reasonable steps individuals may take to prepare for the 
Year 2000. Consumers should keep copies of financial statements and ask 
local banks what efforts are being made toward Y2K compliance. 
Employers, local elected officials, and utilities should be contacted. 
Individuals should also research companies' level of compliance before 
making investment decisions. Above all, Americans should prepare for 
Y2K based on facts and reasonable predictions about the problem's 
effects on vital services.
    Let me briefly outline our findings to date. I am now more 
optimistic than I once was, but a lack of data in numerous areas leads 
me to continue to be wary of the unknown. Nearly all affected 
industries and organizations started the Y2K remediation too late. Even 
the sectors that started early and appear to be in the best shape, such 
as the financial services sector, include individual companies that lag 
in their Y2K planning. There are exceptions to both good and bad, and 
we can only speculate what will actually happen. The details of what 
our Committee has learned so far are contained in a report we plan to 
issue publicly by the end of the month. Our work, however, is far from 
over, and hearings will continue through the end of the year.
    Due to the lack of assessments about the status of certain industry 
sectors, we are not yet sure of the scope or the nature of Y2K 
disruptions. I suspect that we will have a better idea as time goes on, 
but we will not know for certain what the difficulties will be until 
they are actually upon us.
    As of today, there are only 316 days remaining until January 1, 
2000.
    With this in mind, I want to express my confidence that we will 
continue to progress in every major sector in preparation for the Year 
2000 problem over the next 10 months. It will take the efforts of 
responsible leaders at every level of government to engage in planning 
for such an event. At this point, it appears that there is a greater 
likelihood of small, diffuse disruptions than large-scale shutdowns. 
Nevertheless, we must be prepared for every type of scenario.
    Unfortunately, there is a misconception pervading corporate 
boardrooms that Y2K is strictly a technical problem and that executive 
attention is unwarranted. On the contrary, we must ensure the 
participation of executives at all levels of business and government. 
This problem will not simply go away. Each of us must do our part to 
make certain that this problem is adequately addressed.
    Overall, I am optimistic about our progress in solving the Y2K 
problem. I believe that we can meet our goals and prepare effectively 
for the coming year; however, we must all recognize that we have 
significant work to accomplish in the coming months. As we work 
together, I am sure that we will develop a greater understanding of 
this problem and forge effective solutions. It is our cooperation which 
will bring us together and allow us to reach our final goal.
    Again, I appreciate the opportunity to chair this hearing in Salem 
and look forward to all of the information that our distinguished 
witnesses have to share.
    Our discussion today will focus on the Y2K emergency preparedness 
of the State of Oregon. The preparedness of state and local governments 
are vital because their services will most directly impact most 
Americans.
    I appreciate all of the efforts these distinguished witnesses have 
dedicated toward this problem. I look forward to their comments, and I 
want to thank them once again for their contributions.
                               __________

                  Prepared Statement of Joan H. Smith

    If our utilities ignored the Y2K problem, we could have a crisis on 
our hands. They haven't and we won't.

PROCESS:

    OPUC staff began discussions with investor owned energy utilities 
in 1997 and with investor owned telecommunications and water utilities 
in 1998. The Commission has held three Special Public Meetings to 
review reports and discuss progress toward Y2K remediation with all the 
companies. Bonneville Power Association, Western States Coordinating 
Council, and inter-state natural gas pipelines serving Oregon also 
presented their status reports.
    The Commission tracks and evaluates the utilities' testing, 
remediation, customer education, and business continuation plans. Water 
utilities are not computer-dependent, by and large, and are not 
expected to encounter difficulties. We have invited publicly-owned 
utilities to participate in our Y2K process and share information with 
us, if they wish.

SCHEDULE:

    We have asked the utilities to coordinate customer education in two 
phases with the first phase ending in June and the second in October. 
To date all utilities have made significant, useful efforts. Some have 
already begun to include Y2K preparedness information with monthly 
bills. All company Y2K web sites can be accessed through the 
Commission's own web site.
    All final testing results are due by March 1.
    Continuation of business reports are due in the Spring Quarterly 
Y2K reports.

CUSTOMER PREPAREDNESS:

    Each utility has committed significant resources to Y2K issues. 
Utility reports suggest it is highly unlikely there will be any 
disruption of service, unless of course the New Year's holiday is 
accompanied by severe wind or ice storms. Utilities have begun to 
advise their customers that their Y2K plans should be similar to plans 
for a winter storm. As a consequence, customers should check that 
whatever emergency preparations they usually have in place for such 
events.

GOVERNMENT ACTIONS:

    The PUC has taken a collaborative approach to working with the 
regulation utilities to encourage Y2K readiness. We have neither the 
authority nor the resources to certify Y2K programs. Nor should we.
    We recommend that the Legislature and Congress take whatever steps 
are necessary to reduce Y2K liability exposure for utilities. The 
``Good Sam'' Law helps. Fear of litigation can be a very real barrier 
to keeping Y2K solutions on track.
    Finally, public leaders should use the bully pulpit to inform, 
educate, prepare, and assure their constituents that the Apocalypse is 
not arriving along with the new Millenium.







                                
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