Legislature(1997 - 1998)

03/04/1997 01:43 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        HOUSE BILL NO. 113                                                     
                                                                               
             "An Act extending  lapse dates  for certain prior  year           
             appropriations;  making   supplemental,  capital,   and           
             special appropriations; and providing  for an effective           
             date."                                                            
                                                                               
        ALASKA COURT SYSTEM                                                    
                                                                               
        Section 14                                                             
                                                                               
             $32. thousand dollars    -    Trial Courts                        
                                                                               
        ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT           
        SYSTEM observed that the Nineteenth Alaska State Legislature           
        passed  SB  98.   Senate Bill  98  allows the  Child Support           
        Enforcement  Division  (CSED) to  revoke  driver's licenses.           
        After receiving a finding from CSED, the obligor has 30 days           
        to request judicial review.   The Court must hold  a hearing           
        within 20 days after the opposing party has been served.  He           
        estimated that  this provision will  have a major  effect on           
        the  court  system.    He  stressed  that hearings  will  be           
        centralized  in  Anchorage to  allow  a reduction  of costs.           
        Telephone  hearings  will  be  used  for  areas  outside  of           
        Anchorage.  Part-time  employees will also be  utilized.  He           
        observed that positions  will be hired  within the next  two           
        weeks.  He  added that  these positions will  be the  Alaska           
        Court System's number one priority for the coming year.                
                                                                               
        In  response  to a  question  by Representative  Martin, Mr.           
        Snowden observed  that  the CSED  provisions  in SB  98  are           
        having  an   effect  on   collections.     He  stated   that           
        professional obligors are making arrangements with CSED.  He           
        noted that CSED just started revoking driver's licenses.  He           
        stressed that there  will be  a major impact  to the  Alaska           
        Court System from the revocation of driver's licenses.                 
                                                                               
        Co-Chair Hanley referred to a similar  program in Maine.  He           
        noted  that  only 5  licenses  were  actually revoked.    He           
        emphasized that obligors  were able to reach  agreement with           
        child enforcement agencies in Maine.  Mr. Snowden noted that           
        there are 43,000 active cases, in Alaska.  He estimated that           
        50 percent  of these  cases involve  arrearage.   He assumed           
        that 15,000 of those in arrearage would want a hearing.   He           
                                                                               
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        maintained  that the  Court is  approaching the  issue  in a           
        conservative manner.                                                   
                                                                               
        In  response  to a  comments  by Representative  Martin, Mr.           
        Snowden  noted that  obligors have  to pay under  a schedule           
        promulgated by Rule 90.3.  He  observed that the schedule is           
        very  specific.   Alaska's  requirements  for  child support           
        payments are in the national average.  Schedules set by CSED           
        can be modified.   Court schedules  cannot be modified.   He           
        maintained that the  Alaska Court  System would welcome  the           
        Legislature  to address  the issue  by statute.   The  Court           
        feels that the issue should be addressed by the Legislature.           
        He  asserted that  if the Legislature  passes a  statute the           
        Court  will  sunset the  Rule.   He  stressed that  a simple           
        majority could change the Rule.  He emphasized that the Rule           
        should be addressed in whole.                                          
                                                                               
        DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                            
                                                                               
        Section 9(b)                                                           
                                                                               
             $330.0 thousand dollars  -    Veterans Land Discount              
                                                                               
        NICO  BUS,  ACTING   DIRECTOR,  DIVISION  OF  ADMINISTRATIVE           
        SERVICES, DEPARTMENT OF NATURAL RESOURCES observed that  the           
        request would  pay for  the recalculation  of the  Veteran's           
        Land  Discount,  authorized  in  1991.   The  Department  of           
        Natural  Resources'  interpretation   of  the  statute   was           
        challenged.  An Ombudsman investigation recommended that the           
        discount be recalculated.   There  are 36 veteran  contracts           
        involved.    He  explained that  interest  payments  are not           
        included.  All 36 contracts have  not been recalculated.  He           
        referred  to  Mr.  Glenn Sisson's  contract.    The original           
        contract  was  for  $26.5  thousand   dollars.    Under  the           
        recalculation he would receive an  additional $14.4 thousand           
        dollar payment.    If interest  were  include the  he  would           
        receive  an additional  $3.3 thousand  dollars.   He  gave a           
        brief history of the  discount.  He noted that  the discount           
        was found  to be unconstitutional,  but that  interpretation           
        was later overturned.                                                  
                                                                               
        Co-Chair  Hanley  asked how  the  Department  calculated the           
        estimated amount needed.  Mr. Bus stated that the Department           
        looked at the  principle and  averaged the amount  due.   He           
        stressed  that  the   Department  no  longer  has   all  the           
        contracts.  He  stated that any  surplus would be lapsed  to           
        the General Fund.  He noted  that the money would be in  its           
        own account.  The legislation  specified that interest would           
        not be paid.   The ombudsman agreed that interest  would not           
        be paid.                                                               
                                                                               
        In response to  a question by  Co-Chair Therriault, Mr.  Bus           
                                                                               
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        noted that  the recalculation  process will be  complicated.           
        The  Department  has  included  $20  thousand   dollars  for           
        administrative costs.  Estimates are based on three days per           
        contract.                                                              
                                                                               
        JEFF  SISSON,  ANCHORAGE  testified via  the  teleconference           
        network  in  support  of  the  request.   He  discussed  the           
        overpayment made  by his  brother, Glenn  Sisson.   Co-Chair           
        Hanley observed that  there are  several ways that  interest           
        can be calculated.  Mr. Bus  stressed that the request would           
        pay the principle amount agree to by both parties.  Interest           
        payments can be debated separately.                                    
                                                                               
        Co-Chair Hanley asked  for the Department's analysis  of how           
        the $300 thousand dollar request was calculated.                       
                                                                               
        Co-Chair  Therriault noted  that  the Department  originally           
        estimated that  they would  need $6.4  thousand dollars  for           
        research of the contracts.   Mr. Bus explained that  this is           
        the amount to  research contracts held by  the Department of           
        Natural Resources.  Some contracts  were sold or transferred           
        to  the  University of  Alaska  and First  National  Bank of           
        Alaska.  Researching these contracts will be more expensive.           
                                                                               
        Co-Chair Therriault  agreed that repayment  should be  made.           
        He  quested  further  justification  for  the  appropriation           
        request permitting to research and  recalculations.  Mr. Bus           
        observed that  the Department's  estimate was  based on  the           
        number of contracts  multiplied by  three employee days  per           
        contract.  He reiterated that any excess will be lapsed.               
                                                                               
        Co-Chair Hanley stressed  that the  principal will be  paid.           
        He emphasized  the need  to consider  interest payments  and           
        administrative costs.                                                  
                                                                               
        Co-Chair Therriault asked if plaintiffs  would agree that no           
        further  legal  action will  be  taken after  repayments are           
        made.   Mr. Bus  stated that  the Department  would like  to           
        reach an  agreement  that there  will  be no  further  legal           
        action.                                                                
                                                                               
        DEPARTMENT OF CORRECTIONS                                              
                                                                               
        Section 2                                                              
                                                                               
             $2.3 million dollars     -    Cleary Fines                        
                                                                               
        DAN  SPENSER,  SENIOR  ANALYST,  OFFICE  OF  MANAGEMENT  AND           
        BUDGET, OFFICE OF  THE GOVERNOR  stated that the  Department           
        would like to appropriate this amount for capital project in           
        lieu  of  paying  the  fines  to  the  General  Fund.    The           
        Administration hopes  that this agreement would  satisfy the           
                                                                               
                                      4                                        
                                                                               
                                                                               
        Court and plaintiffs.                                                  
                                                                               
        Co-Chair  Hanley noted that  fines that have  been paid have           
        been redeposited into the General Fund.  The Legislature has           
        chosen not  to pay the  fines in the  past two session.   He           
        observed that there are two issues.   The Court has assessed           
        $2.3 million dollars in fines through June, 1997.  The first           
        issue is whether the fine will be paid.  If the fine is paid           
        it can be deposited into the General Fund.  The second issue           
        would be to partially fund  a women's correctional facility.           
                                                                               
                                                                               
        JOE   REEVES,   DEPUTY  DIRECTOR,   DIRECTOR,   DIVISION  OF           
        ADMINISTRATIVE  SERVICES,  DEPARTMENT  OF CORRECTIONS  noted           
        that there is a $2.3  million dollar federal capital request           
        to  build  additional  beds  for  violent offenders.    This           
        request   could  encompass   additional   beds  for   female           
        offenders.                                                             
                                                                               
        Co-Chair  Hanley asked for the Department's priority listing           
        of new projects for the Department of Corrections.  He noted           
        that the funding  to pay the fines could be  placed into the           
        General  Fund  and  projects paid  for  out  of  the capital           
        budget.    He asked  if  an additional  women's correctional           
        facility would be built  if the Department does  not receive           
        the fines.   Mr. Reeves  emphasized that  the Department  is           
        reviewing every option  available to expand facilities.   He           
        noted  that  the  only  funds  currently  available  to  the           
        Department are federal.  He  clarified that the supplemental           
        request would not be sufficient to construct a new building.           
        He explained that the funding would allow male population to           
        be shifted in  order to free beds  for female inmates.   The           
        request would provide the Department  with flexibility.  The           
        request  will  be used  to start  the  expansion system.   A           
        portion  of  the funding  would  be  used to  enter  into an           
        agreement with the Department  of Transportation and  Public           
        Facilities for engineering review and  expansion plans.  The           
        balance  would  wait  for  the  construction  phase  of  the           
        project.                                                               
                                                                               
        Co-Chair Therriault  summarized that  the request  is for  a           
        capital project in lieu of paying  the fines.  He questioned           
        if a capital expenditure would meet  the order of the Court.           
        Mr. Reeves noted  that the Department  of Law will argue  in           
        support of the  capital expenditure  in lieu of  fines.   He           
        acknowledged that there  is no guarantee that  the agreement           
        will be acceptable.                                                    
                                                                               
        Co-Chair  Hanley  spoke  in  support   of  paying  the  fine           
        separately from the capital project.  He suggested that this           
        request should  be prioritized  with other  projects on  the           
        Department's list.                                                     
                                                                               
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        DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                            
                                                                               
        Section 3                                                              
                                                                               
             $1 million dollars  -    Disaster Relief Fund                     
                                                                               
        NICO BUS, COORDINATOR, DEPARTMENT  OF MILITARY AND  VETERANS           
        AFFAIRS   observed  that  no   money  was  appropriated  for           
        disasters in FY  97.  Disaster  funding was carried  forward           
        into FY 97.  There is  $50 thousand dollars remaining in the           
        Disaster Relief  Fund.   The request  would cover  disasters           
        between February 1997 and June 1997.                                   
                                                                               
        Co-Chair Hanley observed that the FY 97 supplemental request           
        contains $585 thousand dollars in operating funds for FY 98.           
        Mr.  Bus  explained  that  this  amount  covers  core FY  98           
        administrative functions.  There is no carry-forward to fund           
        this function.  The Division of Emergency Services operating           
        budget is  charged against  the Disaster  Relief Fund.   Co-           
        Chair Hanley pointed out that the  FY 98 request is $3,377.5           
        million dollars.  Mr. Bus clarified that this contains  $1.2           
        million dollars from  the Oil  and Hazardous Response  Fund,           
        and $1.1 million  dollars in federal receipts.   The balance           
        is from the General Fund, general fund match or the Disaster           
        Relief Fund.                                                           
                                                                               
        (Tape Change, HFC 97-44, Side 2)                                       
                                                                               
        Mr.  Bus  agreed  that  the  supplemental request  for  this           
        component could be reduced by $585 thousand dollars.  The FY           
        98 operating  budget would be short by $585 thousand dollars           
        if the  supplemental request  is reduced.   Co-Chair  Hanley           
        noted that it is hard to  ascertain actual expenditures.  He           
        observed that  the Legislature's  intent is  to not  provide           
        funding in one  fiscal year  to be spent  in another  fiscal           
        year.  He spoke in  support of reducing the request  by $585           
        thousand  dollars and  adding  this amount  into  the FY  98           
        operating budget base.  Discussion ensued regarding  funding           
        for Division of Emergency Services.  He clarified that there           
        is no request for FY 98 funding to the Disaster Relief Fund.           
        Co-Chair Hanley summarized  that if  the request is  reduced           
        that a  general fund  appropriation to  the Disaster  Relief           
        Fund would be needed to cover the inter-agency receipt.  Mr.           
        Bus   added   that  no   funding   is  available   from  old           
        appropriations.                                                        
                                                                               
        DEPARTMENT OF CORRECTIONS                                              
                                                                               
        Section 4(a)                                                           
                                                                               
             $632 thousand dollars    -    Fairbanks    Correctional           
                                                                               
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             Center                                                            
                                                                               
        Mr.  Reeves  explained  that  this   request  would  fund  a           
        replacement boiler at the Fairbanks Correctional Center.  He           
        read a  memorandum from Ted Kinney, Facilities Manager II to           
        Commissioner  Pugh,  dated  1/28/97  (copy  on file).    The           
        memorandum gives a brief history of the boiler.                        
                                                                               
        Mr. Reeves clarified  that the  boiler cannot be  maintained           
        through further welding.  The boiler will be condemned if it           
        breaks again.  Phase one would replace the boiler that heats           
        the domestic hot water system.   Phase two would replace the           
        two boilers that provide heat for the system.  Phase one was           
        funded  by  a consolidated  repair  and  maintenance capital           
        request in FY 95.  This would complete the project.                    
                                                                               
        Co-Chair Therriault asked if the  project had been submitted           
        as part  of the  Department's capital request.   Mr.  Reeves           
        noted  that it  is  in  the  FY 98  capital  request.    The           
        Institution felt that boiler  would not last that long.   It           
        would have been on the Governors' FY 98 capital request.               
                                                                               
        DEPARTMENT OF HEALTH AND SOCIAL SERVICES                               
                                                                               
        Section 4(b)                                                           
                                                                               
             $1,247.4 million dollars - McLaughlin/  Fairbanks Youth           
             Centers                                                           
                                                                               
        JANET CLARK, DIRECTOR,  DIVISION OF ADMINISTRATIVE SERVICES,           
        DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that this           
        is a capital request  that was included in the  supplemental           
        due to its  urgent nature.   She noted  that the  McLaughlin           
        Youth Center was  opened in Anchorage  in 1968.   It is  the           
        State's  largest youth center, with a  capacity of 150 beds.           
        It is currently at over 190.  It peaked at 199  in February.           
        The Fairbanks  Youth Center  was built  in 1981.   It has  a           
        capacity of 40  beds.   Approximately $860 thousand  dollars           
        would be spent for McLaughlin and $390  thousand dollars for           
        Fairbanks.  She showed aerial  photographs of the facilities           
        noting the lack of security measures.                                  
                                                                               
        Ms. Clark recounted  attempts to  break inmates  out of  the           
        facilities and drive-by-shootings.  She reiterated that both           
        facilities are over capacity.                                          
                                                                               
        Ms.  Clark  stated that  a  security consultant  performed a           
        complete analysis of  security problems at  both facilities.           
        The Department has  a confidential report that  is available           
        to  legislators.    She observed  that  if  the supplemental           
        request is approved the Department  will begin exterior work           
        this summer.                                                           
                                                                               
                                      7                                        
                                                                               
                                                                               
        In  response to  a question  by Co-Chair  Hanley, Ms.  Clark           
        noted that the request is a capital project.                           
                                                                               
        In response  to a question by Co-Chair Therriault, Ms. Clark           
        stated that the consultant's report has been paid.  The cost           
        to  the  Department   was  $10.0  thousand  dollars.     She           
        acknowledged  that a  small  amount of  design work  will be           
        needed from  the  Department of  Transportation  and  Public           
        Facilities.  The report  recommended fencing material, close           
        circuit television, gates, and locating barriers between the           
        roadway and facility.                                                  
                                                                               
        SCOTT CORSTNAGE, MCLAUGHLIN  YOUTH CENTER testified via  the           
        teleconference network.  He echoed remarks by Ms. Clark.               
                                                                               
        GREGG  THOMPSON, FAIRBANKS  YOUTH CENTER  testified via  the           
        teleconference  network.  He underscored that there is a new           
        level of teenage violence.   The facility is at  150 percent           
        capacity.    He   maintained  that  the   security  measures           
        recommended are needed.  Staff  has their hands full  paying           
        attention to overcrowded conditions.                                   
                                                                               
        Section 4(c)                                                           
                                                                               
             $200   thousand   dollars  -   Emergency  Communication           
             Equipment                                                         
                                                                               
        Ms. Clark noted that the  request is based on a crisis  that           
        has developed for emergency communication equipment on rural           
        highways.   In many areas  there is no  radio coverage.   In           
        other areas there are breakdowns occurring.                            
                                                                               
        MARK  JOHNSON, CHIEF, COMMUNITY HEALTH AND EMERGENCY MEDICAL           
        SERVICES,  DEPARTMENT  OF HEALTH  AND SOCIAL  SERVICES noted           
        that  the  problem  has  been  increasing.   The  Department           
        supports  voluntary  ambulance  services  in  rural  Alaska.           
        There are a  number of areas were  the systems are 15  to 20           
        years old and breaking down  with increasing frequency.   He           
        maintained that  a life-threatening  situation is  occurring           
        with  increased volume  of traffic and  ambulance responses.           
        The  Department  works   with  the  Division  of   Emergency           
        Services, Department  of Administration,  and the  Emergency           
        Communications Subcommittee of the  State Telecommunications           
        Information  Council.   He observed  that  it would  be more           
        costly to fix all  existing problems.  He stressed  that the           
        request  would provide  a  good start  to  address the  most           
        urgent priorities.                                                     
                                                                               
        In response  to a question  by Co-Chair Hanley,  Mr. Johnson           
        clarified that $3 million dollars is request over 6 years to           
        replace the entire system  and expand coverage to  areas not           
                                                                               
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        already  covered.    The  Federal Communications  Commission           
        requires that all 2-way radios in the UHF and VHF bands must           
        migrate  to  narrow band  frequencies,  by January  1, 2005.           
        Most of  the State's radio systems  are in these  bands.  He           
        assumed it would be easier for  urban areas to replace these           
        systems.  He  stressed that volunteers  will not be able  to           
        afford the conversion.   He added  that the backbone  system           
        will also  have to be  replaced to meet  these requirements.           
        All  new equipment has to  meet the new  standard.  There is           
        equipment available that  can interface with the old and new           
        standards simultaneously,  to allow  a phase-in  of the  new           
        equipment.  The most urgent  problems would be addressed  by           
        the $200 thousand dollars request.                                     
                                                                               
        Mr. Johnson discussed alternative solutions.   He noted that           
        mobile  satellite  technology was  effective in  3 out  of 5           
        pilot tests.   He recounted  a crash in  Eagle, Alaska  that           
        suffered from the lack of communication.                               
                                                                               
        Section 4(b)                                                           
                                                                               
             $1,247.4 million dollars - McLaughlin/ Fairbanks  Youth           
             Centers                                                           
                                                                               
        In response  to a  question by  Representative Kohring,  Ms.           
        Clark noted that the Department would go to  competitive bid           
        for any purchases.                                                     
                                                                               
        Representative Kelly  questioned  how  much  of  Fairbanks's           
        excess capacity is  due to the  Nome facility closure.   Ms.           
        Clark clarified that  the youth facilities have  a detention           
        unit and a  long-term unit.  The detention unit is where the           
        overcrowding is occurring.  She  explained that all the beds           
        at the Nome Youth Facility were  treatment beds.  She stated           
        that overcrowding is caused, in part, by a statewide lack of           
        treatment  beds.  She observed that the Johnson Youth Center           
        has an eight bed capacity.   There are currently 26  kids at           
        the Johnson Youth Center.  The  Nome Youth Facility costs $1           
        million dollars to operate annually.                                   
                                                                               
        DONIS MORIS,  MCLAUGHLIN  YOUTH  CENTER  testified  via  the           
        teleconference network.   She observed  that the Nome  Youth           
        Facility  is  still  being used  as  a  short-term detention           
        facility.  Ms. Clark noted that  the Nome Youth Facility has           
        nine beds.    It  is  currently  being  used  for  emergency           
        detention.    It costs  approximately  $350 -  $400 thousand           
        dollars  to  run  the   facility  for  short-term  emergency           
        detention.   Representative Kelly ascertained that there are           
        kids in detention beds that belong in treatment beds.                  
                                                                               
        Section 5(a)                                                           
                                                                               
                                                                               
                                      9                                        
                                                                               
                                                                               
             $939 thousand dollars    -    Adult Public Assistance             
                                                                               
        Ms. Clark noted  that section 5,  subsections (a) - (d)  are           
        supplemental operating requests.                                       
                                                                               
        Ms. Clark noted that Adult  Public Assistance (APA) provides           
        financial  assistance  to  approximately  11,500 people  per           
        month.     There  are  approximately  4,300  elderly,  7,100           
        disabled,  and 100  blind individuals  receiving assistance.           
        The program is  closely linked  to the federal  Supplemental           
        Security  Income  (SSI)  program.    She observed  that  the           
        caseload  has remained stable.   There  has been  a caseload           
        growth of  7 to  9.1 percent,  since 1992.   The  Department           
        requested a  6 percent growth  in caseload for  the program.           
        The  Legislature  approved  a  2  percent growth  rate,  and           
        challenged  the  Department to  reduce  costs.   The payment           
        schedule is  set in  statute.   The cost  of the  program is           
        driven by caseload.  She noted  that there have been federal           
        changes  to  the  SSI program.    Approximately  300 persons           
        diagnosed with drug  and alcohol abuse have  been eliminated           
        from the program.  Of these, those that qualify for Medicaid           
        and  APA  were given  an  extra  120 days  to  receive their           
        redetermination.  Therefore, reductions from the elimination           
        of these recipients will  not occur until May or  June 1997.           
        Taking this into account, the Department is at its projected           
        amount.  She stated that the request reflects the high range           
        projection.  The  mid range  projection estimates that  $800           
        thousand  dollars will be needed.   The low range projection           
        shows that less than $500  thousand dollars would be needed.           
        A new projection for Aid to Families with Dependent Children           
        (AFDC) shows that there may be  excess funds in this program           
        that can be used to offset the request.                                
                                                                               
        In  response  to a  question by  Co-Chair Hanley,  Ms. Clark           
        noted that the  Governor's request  includes a $1.2  million           
        dollar reduction for  the elimination of the  300 recipients           
        diagnosed  with  alcohol  and  drug  abuse  problems.    The           
        Governor's FY 98 request equals  the FY 97 authorized amount           
        with  the  addition  of  the  supplemental request  and  the           
        reduction for the 300 persons that were eliminated.                    
                                                                               
        Section 5(b)                                                           
                                                                               
             $10 million dollars      -    Indian Health Service               
                                                                               
        Ms. Clark noted that this component is 100 percent federally           
        funded.  The component pays for Medicaid recipients that use           
        Indian  Health Service facilities.   In  FY 96,  the federal           
        payment  rate was  doubled.  The  Department did  not budget           
        enough to  cover the  rate increase.   There  has also  been           
        increased utilization of this component.  She noted that the           
        Department's strategy  for long-term cost containment  is to           
                                                                               
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        look  at  better  utilization   of  Indian  Health   Service           
        facilities.                                                            
                                                                               
        Co-Chair Hanley  asked how  much of  the request  is due  to           
        increased  utilization  and  how much  is  due  to  the rate           
        increase.   He questioned  the reduction  to state  Medicaid           
        costs  due  to utilization  of  this component.    Ms. Clark           
        clarified  that  persons paid  from  this component  must be           
        Medicaid eligible.                                                     
                                                                               
        Section 5(c)                                                           
                                                                               
             $1 million dollars  -    Foster Care                              
                                                                               
        Ms.  Clark  noted that  statutes  require the  Department to           
        arrange  for  the  care  of  every child  committed  to  its           
        custody, and to  pay for  the cost necessary  to insure  the           
        adequate care of children.  "Foster  care is not the program           
        for kids that  have committed crimes,  but for kids who  are           
        victims, and have  suffered abuse or neglect."   She pointed           
        out the relationship of the program to subsidized adoptions.           
        She explained that the Governor's FY 97 request was  reduced           
        by $200  thousand dollars.  She observed that the Department           
        has been  providing care for  high cost children  at private           
        psychiatric hospitals in Anchorage.  Most  of the money goes           
        to foster care parents.  The component also funds the Alaska           
        Youth Initiative Program, contracts, and kids in the custody           
        of the  Division  of  Family and  Youth  Services  who  have           
        suffered abuse and neglect.                                            
                                                                               
        (Tape Change, HFC 97-45, Side 1)                                       
                                                                               
        Ms.  Clark  detailed a  typical  high  cost case  under  the           
        Department's  care.    "Frank" is  currently  residing  in a           
        private psychiatric hospital.  Costs  at private psychiatric           
        hospitals can be $1 thousand dollars  a day.  The Department           
        has negotiated  a rate of $350  dollars a day.   Foster care           
        runs  between $30  and $40  dollars a  day.   A  facility in           
        Montana has been located to care for  children like "Frank".           
        She observed that  there has been  an increase in high  cost           
        kids.                                                                  
                                                                               
        Co-Chair Hanley asked  for a break  down of foster care  and           
        residential care costs.                                                
                                                                               
        Representative Kelly referred to the  Fahrenkamp Center.  He           
        noted that many of  the children in foster care  have mental           
        health problems.    He asked  why  kids with  mental  health           
        diagnosis  are not  treated at the  Fahrenkamp Center.   Ms.           
        Clark noted that many children that are not determined to be           
        mentally ill have severe behavior problems.  She stated that           
        the system,  of residential diagnosis and  treatment centers           
                                                                               
                                     11                                        
                                                                               
                                                                               
        for youth,  envisioned centers  throughout the  state.   The           
        Department   is  looking  for   alternatives  to  high  cost           
        psychiatric care.                                                      
                                                                               
        Representative Kelly noted that some delinquent children are           
        in foster care.  Ms. Clark referred to the federal Title IV-           
        E  program.     She   observed  that   the  State   receives           
        approximately $700 thousand dollars for delinquent  children           
        from  this  program.   The  State receives  approximately $7           
        million  dollars for  child abuse  and neglect  cases.   She           
        noted  that foster  care  costs approximately  $10.8 million           
        dollars.  There  are approximately  $1.3 million dollars  in           
        federal funds.   She clarified that  the $7 million  dollars           
        from  the  Title  IV-E  program  is  spread  throughout  the           
        Division of Family and Youth Services.                                 
                                                                               
        Co-Chair Hanley summarized that approval of the supplemental           
        request  would  result  in $168  thousand  dollars  over the           
        Governor's  FY  98 request  for  Foster  Care.    Ms.  Clark           
        explained that  the Department  had  anticipated that  there           
        would be alternatives in  place for care of high  cost kids.           
        She anticipated  that the Department can live  within the FY           
        98  request for  Foster  Care.   She  emphasized that  other           
        programs will take the pressure off of Foster Care.                    
                                                                               
        Section 5(d)                                                           
                                                                               
             $685 thousand dollars    -    McLaughlin Youth Center             
                                                                               
        Ms.  Clark  observed  that  staff needs  have  risen  due to           
        increased  occupancy.   She emphasized  that overtime  costs           
        have  been reduced.    On  call  staff  have  filled  vacant           
        positions.     Some  of   the  request   is  for   increased           
        commodities.                                                           
                                                                               
        Co-Chair  Hanley noted that  the FY 97  authorized amount is           
        $8.865 million  dollars.   The Governor's  FY 98 request  is           
        $8.899 million dollars.  He observed that FY 98 will be $650           
        thousand dollars short of the FY 97 total, with the addition           
        of the supplemental.  Ms. Clark noted that the Governor's FY           
        98 request  contains some diversion programs to try to limit           
        overcrowding of youth  facilities.   A budget amendment  has           
        been requested.                                                        
                                                                               
        Power Cost Equalization  (PCE)                                         
                                                                               
        REMOND  HENDERSON,  DIRECTOR,  DIVISION   OF  ADMINISTRATIVE           
        SERVICES,  DEPARTMENT  OF  COMMUNITY  AND  REGIONAL  AFFAIRS           
        stated that the Administration is requesting an amendment of           
        $1.5 million dollars for  PCE.  The Power Cost  Equalization           
        program will be at 85 percent of full funding.   The current           
        PCE funding level is at $17 million dollars.  If the request           
                                                                               
                                     12                                        
                                                                               
                                                                               
        is not funded, PCE will be prorated  at a rate of 67 percent           
        of  full  funding.   He  added  that an  amendment  has been           
        submitted to the  Office of Management  and Budget for a  $2           
        million dollar increment in the FY 98 operating budget.                
                                                                               
        Representative  Foster   questioned  why  the   request  was           
        submitted  with  the  Department's  original  request.    He           
        emphasized that  it is more  difficult to  add an  amendment           
        than to retain funding.  Mr.  Henderson assured him that the           
        request  was submitted  as soon  as the  Division  of Energy           
        received  the  information.   He  noted  that there  was  an           
        increase in fuel rates.                                                
                                                                               
        Co-Chair Hanley asked  if the  power consumption rates  have           
        changed.                                                               
                                                                               
        PERCY FRISBY,  DIRECTOR, DIVISION  OF ENERGY,  DEPARTMENT OF           
        COMMUNITY AND REGIONAL AFFAIRS explained that the Department           
        discovered when they performed their  mid year analysis that           
        problems with low  water, late  fuel deliveries, and  storms           
        had increased fuel costs.  He observed  that consumption has           
        increases by approximately 2 percent per year.                         
                                                                               
        Co-Chair Hanley asked why the  funding source is the General           
        Fund,  instead  of the  Power Cost  Equalization Fund.   Mr.           
        Henderson observed that the Power  Cost Equalization Fund is           
        estimated to run out in the year 2000.                                 
                                                                               
        Representative Foster reiterated his disappointment that the           
        request was not submitted in the original legislation.                 
                                                                               
        Representative  Kohring  emphasized that  alternative energy           
        sources need to be explored.                                           
                                                                               
        Co-Chair  Hanley summarized that the FY  98 request with the           
        addition  of a  $2 million  dollar  amendment would  be $500           
        thousand  dollars  more  than  the   FY  97  authorized  and           
        supplemental request.   He noted  that the price  of oil  is           
        dropping.   He asked  if the  estimate is  based on  current           
        prices.  Mr. Henderson clarified that estimates are based on           
        Alaska  Public  Utilities  Commission  (APUC)  rates.    The           
        request is at 85 percent of the full funding level.                    
                                                                               
        BOB FOOTE, UNALAKLETT  testified in support of  the request.           
        He  maintained that rural residents should not have to plead           
        their case for PCE  funding every year.  He  emphasized that           
        the  program  is a  tremendous  help  for the  elderly.   He           
        maintained  that  the reduction  of  state support  to rural           
        areas threatens the existence of small villages.                       
                                                                               
        WALTER SAMPSON,  ALASKA VILLAGE ELECTRIC  COOPERATIVE (AVEC)           
        testified in support  of the  request.  He  noted that  AVEC           
                                                                               
                                     13                                        
                                                                               
                                                                               
        represents  50  communities.   He  emphasized  that  AVEC is           
        attempting to provide and improve service.  He observed that           
        rural residents will be hurt by welfare reform.  He stressed           
        that AVEC will be forced to reduce service if funding is not           
        provided.   He  observed that  oil delivered by  barge costs           
        $1.08 dollars a  gallon.  Oil  delivered by air costs  $2.14           
        dollars  a   gallon.     He  maintained   that  Power   Cost           
        Equalization  is not a subsidy program, but  an equalization           
        program.  He  observed that  AVEC is considering  connecting           
        communities through interties to reduce costs.                         
                                                                               
        BRENT   PETRIE,   ILIAMNA,   NEWHALEN,  NONDALTON   ELECTRIC           
        COOPERATIVE                                                            
        spoke in  support of  the request.   He  observed that  fuel           
        delivered in September 1995, cost  $1.09 dollars per gallon.           
        The  same  fuel, delivered  today,  costs $1.77  dollars per           
        gallon.                                                                
                                                                               
        GARY KESSINGER,  MIDDLE KUSKOWIN  ELECTRIC noted  that their           
        cooperative has the highest PCE  rate, the lowest income and           
        the highest use.   His users will  have a 7.3  cent increase           
        per  kilowatt  if  the  amendment  is  not  approved.     He           
        emphasized that the rural economic  environment is fragile.            
                                                                               
                                                                               
        BRAD REEVE,  GENERAL MANAGER, KOTZEBUE  ELECTRIC COOPERATIVE           
        spoke in support of the amendment.  He pointed out that some           
        of the small villages do not  have the economy to keep water           
        and  sewage systems  going.   He  emphasized  that they  are           
        putting up  the  first utility  grade  wind turbine  in  the           
        State.  They are working with AVEC to provide waste heat and           
        wind power that will allow a reduction of diesel use.                  
                                                                               
        DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                            
                                                                               
        Section 4(d)                                                           
                                                                               
             $100 thousand dollars    -    Radio Equipment, DMVA               
                                                                               
        Mr. Bus  explained that the request will  allow the purchase           
        of emergency radio equipment.   He pointed to problems  that           
        occurred during the Miller's Reach Fire.   He noted that the           
        request will fund the purchase of  a point to point portable           
        radio.                                                                 
                                                                               
        Co-Chair Hanley noted that a whole new system would cost $35           
        million dollars.                                                       
                                                                               
        JIM  HARPRING,  DIVISION  OF  EMERGENCY  SERVICES  spoke  in           
        support of the request.  The request will allow coordination           
        of responding agencies.   He observed  that a plan is  being           
        developed to address the overall problems.                             
                                                                               
                                     14                                        
                                                                               
                                                                               
        (Tape Change, HFC 97-45, Side 2)                                       
                                                                               
        Mr. Harpring  clarified that  the request  will assure  that           
        there  is  800  MHz  capability  with  the  Municipality  of           
        Anchorage's   trunking   base   station  and   the   federal           
        government's 400 MHz system.                                           
                                                                               
        In  response  to  a  question  by Co-Chair  Therriault,  Mr.           
        Harpring  noted  that   there  is  a  federal   mandate  for           
        conversion by the year 2006.                                           
                                                                               
        Section 7                                                              
                                                                               
             $220 thousand dollars    -    Emergency Alert System              
                                                                               
        Mr. Bus explained  that this  request would provide  funding           
        for the Emergency Alert System  (EAS).  The EAS system is  a           
        federally mandated system to alert every community.                    
                                                                               
        Mr. Bus clarified  that this item was not in the original FY           
        97  capital budget  request.  The  Office of  Management and           
        Budget tried to added the request as an amendment.                     
                                                                               
        Mr.  Harpring  stated  that  the  request  is  a  "turn-key"           
        operation.    The  program  was  federally  mandated  to  be           
        implemented by January 1, 1997.   He explained that EAS will           
        replace  the  old Emergency  Broadcast  System.   Currently,           
        there is no system that would allow a statewide alert.                 

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