Legislature(1993 - 1994)
02/05/1993 09:00 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 50 - Act making appropriations for capital
projects;
and providing for an effective date.
FY 94 Capital Budget Overviews were conducted
for:
Dept. of Law
Dept. of Natural Resources
Dept. of Environmental Conservation
DEPARTMENT OF LAW
DICK PEGUES, Director, Administrative Services, Dept. of
Law, came before committee. He advised of two capital
projects for the department: one for the civil division and
one for the criminal division. The projects, totaling $1.2
million, would establish local area networks and extend the
network between Juneau and Anchorage to Fairbanks.
Most of the department's attorneys, paralegals, and
secretaries use word processors. At this time, however,
there is no networking like in other departments and the
legislature. The proposal will make information sharing and
transfer automatic. As an example of need, Mr. Pegues said
that the department is currently handling eight major and a
dozen minor subsistence cases. The cases are being handled
by attorneys in Anchorage and Juneau. A happening in one
case impacts the others. The transfer of information has
not been smooth nor timely.
Mr. Pegues directed attention to a handout (Attachment A)
setting forth the local networks and number of users in each
office.
In response to a question from Senator Rieger concerning the
number of terminals, Mr. Pegues advised of "in excess of
300." They are primarily 286 models with servers to
transfer information to 386 and 486 models. Senator Rieger
requested a more detailed breakdown, and Mr. Pegues agreed
to provide it.
(Senator Sharp arrived at the meeting at this time.)
DEPARTMENT OF NATURAL RESOURCES
GLENN OLDS, Commissioner, Dept. of Natural Resources; and
NICO BUS, Chief, Financial Services, Dept. of Natural
Resources, came before committee. The Commissioner observed
that by virtue of both the constitution and the statehood
covenant, natural resources are the state's capital. They
have generated the permanent fund and 80% of the operating
budget revenues. The irony is that while natural resources
represent the state's chief assets, the tending of those
assets has not been a major effort. Over the last ten
years, the department budget has been reduced by
approximately $50 million.
The department operating budget represents 2% of "our
investment," while the capital budget represents 4%. That
strategy in the private sector would lead to a loss of
assets.
Directing attention to a list of capital projects,
Commissioner Olds explained that the department's strategic
plan is characterized by four missions:
1. Consummation of the state compact.
2. Enhancement of state resources through economic
development.
3. Streamline the bureaucracy and reduce impediments
and restrictions that make management and
enhancement of resources difficult.
4. Empower local communities as partners in
development.
The first four capital projects all relate to the top
priority of consummating the statehood compact. As of last
July, the state had not yet filed for 22 million acres in
land selections. Those claims have since been made. That,
however, is only the first stage. Refinement of the owner-
state assertion and land selection is the largest item of
capital expenditure.
The state land selection audit relates to the foregoing
project.
A critical part of the statehood compact is the question of
possession of land under water. Approximately 62 million
acres are tideland or submerged. Commissioner Olds
explained that under the navigability determination of the
compact, the state has ownership of all navigable waters.
A further element of the compact is state assertion of
ownership of right of ways and/or traditional roads and
access under RS 2477.
The second priority is seismic data acquisition and
evaluation. With respect to its resource base, Alaska has
mapped only 7% of the state. Seismic measuring is one of
the cheapest and most swiftly accessible methods of
determining resources in Alaska's fourteen fossil fuel
basins. Only one basin has been systematically explored.
Additional information is needed to effectively lease land
and develop exploration.
The request for basin analysis packets relates to
utilization of seismic information for attracting potential
exploration.
The energy basin assessment will be equally important to
future exploration. In addition to Alaska's resource base
of gas and oil, the state has enormous energy potential in
its water and geothermal resources. The department intents
to assert more graphically and effectively the extent to
which Alaska is key to the new, federal administration's
emphasis on energy independence. Senator Kerttula asked if
the department intended to conduct a lobbying effort in
Washington, D.C. Commissioner Olds answered affirmatively.
He said that the department is working closely with the
Dept. of Commerce and Economic Development office of
international trade. In the course of further comments on
the issue, Commissioner Olds voiced his belief that "Money
is not a clue to the access of educating Washington." What
is required is to provide Washington with an understanding
of the critical role of Alaska in a broad spectrum of energy
capability.
Commissioner Olds next spoke to efforts to garner Alaska
Foundation for Science and Technology support for new
technology linking coal and water to create a non-polluting
fuel. Coal reserves in Alaska are equivalent to 1,600
Prudhoe Bays. The new technology would provide a new kind
of fuel comparable to oil.
The geological/geophysical inventory is part of the
foregoing assessment. Over the past several years, the
department has requested $7.5 million a year to conduct
state mapping. The current request is related to that
strategy.
The request for $330.0 for the land status, GIS, relates to
the recent land selection. The filing on 23 million acres
is tantamount to "filing on the state of Washington." There
is need for information providing a quick and graphic
portrayal of Alaska's land status.
Funding for parks - water, toilets, and dump stations,
relates to health concerns. Many parks do not have adequate
water supply. Old water and toilet systems are in need of
replacement. Commissioner Olds stressed need to provide
basic services to visitors. He reiterated statistics
provided at an earlier meeting, indicating that Alaska
spends 75 cents per visitor (through its 131 state parks)
while the federal government spends $15.00 per visitor.
Senator Frank noted that, last year, the legislature
provided the division of parks several million dollars for
sanitation upgrades. He then voiced frustration that in his
district, where approximately $500.0 is being expended,
$200.0 to $300.0 is being spent for paving in campgrounds.
Commissioner Olds advised that he would look into the issue.
Referring to the $750.0 request for rehabilitation and
expansion of tourist facilities, Commissioner Olds advised
of $20 million in deferred maintenance needs for parks.
The OGRA system upgrade relates to royalty accounting.
Commissioner Olds noted department responsibility to account
for all royalty revenue before transmission to the Dept. of
Revenue.
The $175.0 for land settlement projects pertains to
obstacles (legal and otherwise) to the sale, lease, and
development of land. This effort will attempt to swiftly
address those problems in an attempt to move land into
revenue generating status.
The $350.0 for forest inventory represents the department's
attempt to render forests a revenue source for the state.
Alaska has not had a significant timber development program
for approximately fifteen years. Many mistake the Tongass
(a national forest program) for a state initiative. The
state does not have an inventory of its timber resources,
particularly those resources located in the interior.
Discussion followed between Senator Frank and Commissioner
Olds regarding restrictions to forest development. The
Commissioner noted requirements for a five-year plan and
advised that he did not know why the state had not
previously inventoried this resource. He suggested that
failure to do so more than likely corresponds to budget cuts
over the past ten years.
Senator Kerttula voiced his recollection that cuts were
taken in areas where redundancies occurred.
The Commissioner explained that the $450.0 for the forest
health initiative, Tanana Valley resource development, and
reforestation, relates to timber development.
Speaking to the $200.0 request for preservation of records
within the recorder's office, Commissioner Olds said that
pre-statehood records are beginning to deteriorate. They
are important to support the state's claim to certain lands
and must be permanently and properly preserved.
The $150.0 for fire radio communication equipment is a
critical safety item. The department, in conjunction with
the federal government, is responsible for forest fire
fighting. Given Alaska's vast distances, radio equipment
must be updated for critical communications.
The $100.0 for information system efficiencies involves the
department's attempt to "do more with less." In response to
a question from Senator Kelly, NICO BUS, Chief, Financial
Services, Dept. of Natural Resources, advised that funding
would cover staff time involved in designing the data base.
It does not cover hardware.
The Commissioner explained that the $250.0 for new
recreation/tourism facility development addresses need to
open access to some of the state's most heavily used parks.
Subsequent discussion followed between Senator Frank and
Commissioner Olds regarding projects to be funded by the
$250.0. Mr. Bus directed attention to pages 299-300 of the
budget detail.
Speaking to the $300.0 for coalbed methane programs,
Commissioner Olds explained that seams in coalbeds across
Alaska generate methane. It may be possible to discover a
means of accessing these reserves for utilization in nearby
villages and communities as well as providing a revenue
source for the state. Evidence points to resources in
excess of 2,000 trillion cubic feet of methane. Senator
Kerttula voiced concern that fire might spread from methane
seams back into the coal beds. The Commissioner concurred
in need for caution.
The $150.0 for commercial recreation offerings - Hatcher
Pass results from need to support development in one of the
prime recreation areas of Alaska. There is significant
private interest in development of the area. This effort
would address needed infrastructure.
Senator Frank subsequently raised questions regarding
proposed improvements at the Chena Pump Road House (page
320, detail budget), asking why the state would put money
into improvements for which there is no demand. The
Commissioner ultimately advised that the noted campground
was no longer part of the request now slated for projects at
Denali and Ester Island. Co-chair Pearce suggested that
detailed questions be addressed to the director of the
division of parks when he appears before either the full
committee or the subcommittee overseeing the DNR budget.
She requested that the Commissioner ask the director of
parks to be prepared to speak to the Ester Island project as
well.
Senator Frank further questioned the proposed project
designated Denali East. He attested to the shortage of
private land in the area and resulting increases in land
value. The Senator then asked why $150.0 would be needed
for an economic feasibility study, suggesting that state
land simply be leased out. Commissioner Olds noted need to
meet constitutional requirements for public hearings, best
interest findings, proper title review, etc.
Speaking to the $250.0 for hydrological network evaluation,
Commissioner Olds explained that the state is under critical
obligation to assess the water flow of Alaska's rivers and
streams. Development of this information is critically
important to state claims relating to navigability as well
as requirements for fish resources. The U.S.G.S. stream
gaging coop program is the second part of this development.
Completion of the STORET system for $125.0 relates to the
electronic storage data base for state water resources. It
is critically important to the permit process, development
of the potential water sale process, and the monitoring of
various uses.
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The $100.0 for agricultural land disposal relates to the
report from the Governor's task force. The Commissioner
acknowledged that past experience with larger projects had
not been happy. He then advised that he had instructed the
department to move half a million acres from general land
use into the agricultural category. He then told members
that the division of agriculture would henceforth work more
closely with the farming community to move "in the direction
of agricultural land disposal at a faster pace and at a more
prudent pace."
Commissioner Olds attested to ongoing research at the plant
materials center at Palmer on developmental seed for
environmental renewal in various areas of the state. The
center badly needs the $80.0 for equipment replacement.
The $60.0 for wetlands investigation and classification
relates to Alaska's exemption from national wetlands
policies and provisions which is now being challenged by the
new administration. The state must establish the difference
between wetlands in Alaska and elsewhere.
Speaking to the $50.0 for mining projects Commissioner Olds
noted that Alaska has enormous mineral resources but has
given little attention to value-added development. The
state has focused on description, inventory, and development
but has not looked at the possibility of a smelter or other
refining to keep jobs in Alaska. Crude ore income is 50% of
the value. Requested funding would explore the possibility
of adding refining as an instate industry.
Commissioner Olds next addressed reconstitution of mental
health trust lands and stressed the importance.
Senator Kelly noted a recent announcement regarding a
proposed gas line across Alaska and asked that the
Commissioner comment. Commissioner Olds explained that it
represents a private initiative to transport gas via
pipeline from the MacKenzie Delta into Fairbanks then
parallel to the Steese Highway down to the Kenai for
refinement as natural gas to be marketed in the Pacific Rim.
The proposal reflects what has happened on the worldwide
energy front. A radical shift in the world economy has led
to a widespread environmental reaction to oil, coal, and
other heavy polluting energy sources. Further, since
incidents at Three-Mile Island and Chernobyl, there has been
a dramatic "pull back from nuclear power."
In response to further questions, Commissioner Olds advised
that he would be surprised that announcement of the proposed
project would have been made without a substantial bases for
believing that a market for the liquid natural gas exists.
The proposal has potential for accelerating movement of
Alaska's gas to market. Movement of natural gas down a
pipeline through the railbelt also presents the possibility
of "taking off clean, relatively cheap fuel for the whole
railbelt area," as well as potential value-added development
of other resources that require a cheap and steady source of
energy.
Responding to a question from Senator Frank asking how
Alaska's natural gas reserves compare to Prudhoe Bay oil
reserves, Commissioner Olds observed that while he could not
respond with precision, he had heard that they are
comparable or larger.
Co-chair Pearce directed that the meeting be briefly
recessed prior to commencing review of the budget for the
Dept. of Environmental Conservation.
RECESS - 10:10 a.m.
RECONVENE - 10:15 a.m.
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
JOHN SANDOR, Commissioner, Dept. of Environmental
Conservation, came before committee accompanied by KEITH
KELTON, Director, Division of Facility Construction and
Operation, Dept. of Environmental Conservation.
The Commissioner explained that village safe water projects
represent the department's highest priority. The
administration has placed great emphasis on both village
safe water and municipal matching grants as evidenced by the
following funding:
FY 93 FY 94
Village Safe Water $24.5 million $ 2 5 . 9
million
Municipal Matching Grants $17.2 million $ 1 6 . 1
million
More recent appropriation levels are more than double the
average of prior years. The Commissioner stressed need to
upgrade water systems, particularly in rural Alaska.
Approximately 135 water systems in rural communities do not
have safe water. A new outbreak of hepatitis A is centered
in the Kotzebue region. In the period between 1986 and
1989, an outbreak of hepatitis exceeded 1,600 reported
cases. The department is fearful that the outbreak near
Kotzebue represents a new round. This has been called to
the attention of the congressional delegation as well as the
new administrator of EPA. A meeting in Washington, D.C. has
been requested to deal with the issue. A further request
has been made for comparable funding at the $25 million
level for village safe water. Federal officials have been
asked to compare Alaska's needs to those along the
Texas/Mexican border where funding totals $120 million.
Pointing to the matching grants, Senator Rieger asked if
municipalities had their required 50% and were prepared to
proceed with proposed projects. Commissioner Sandor
responded affirmatively, he added that the department
received grant requests totaling $82.6 million. In each of
those instances, the municipality is prepared to match.
For village safe water projects, proposals total $49.2
million. Department priority places greatest emphasis on
public health and environmental health needs.
Senator Rieger next inquired regarding design
standardization for village safe water projects.
Commissioner Sandor noted that projects often have to be
redesigned to meet specific community needs inherent in
arctic and sub-arctic climates. He stressed that 135
communities do not have running water in homes. The
department attempts to educate the community, identify what
the community wants, and ensure local operation and
maintenance capability. Further discussion followed between
Senator Rieger and Keith Kelton regarding application of
standardized designs as well as engineering changes.
Senator Kerttula noted past engineering inadequacies, noting
particularly the sewer system at Wasilla. Mr. Kelton
acknowledged past engineering disagreements between cities
and various consultants.
The Commissioner next spoke to solid waste planning grants.
He attested to receipt of proposals for these competitive
grants and noted that the department expects to grant up to
ten such projects.
Funding for data processing hardware and software would fund
replacements. Unlike other agencies with centralized
systems, the department has a network of personal computers.
This provides greater flexibility and ensures that the
entire system does not shut down. Approximately 65% of the
department's 511 personal computers are four to five years
old. Requested funding would replace hardware that has
become obsolete and upgrade software.
Senator Kelly noted numerous requests from departments for
new computer equipment. Co-chair Pearce advised that she
and Co-chair Frank would be tracking requests and meeting
with the Office of Management and Budget to "try to get a
handle on this."
Speaking to the $63.4 request for cooperative environmental
research and development with the University of Alaska,
Commissioner Sandor explained that the effort is directed
toward solution of the recent problem of paralytic shellfish
poisoning in crab. The state must develop a system for
identifying and dealing with PSP toxins. The above request
would provide for analysis and testing to develop a model
for regional, local, and field testing. The Commissioner
further spoke to recent labeling agreements with the
national food and drug administration.
A second component of the request seeks $97.5 for lab
instrument methodology for heavy/trace metals. This effort
will also be conducted in conjunction with the University.
The $300.0 for impaired waterbody assessment and recovery
plans relates to the national clean water act. The federal
act requires monitoring of water systems which can be
impaired by industry, urban residential development
activity, accidental events, etc. A number of waterbodies
statewide fall into this category. A third party sued EPA,
charging that Alaska had not conducted an analysis of
contaminated waterbodies. Funding will commence this
effort. While the state was not a party to the suit, the
department agreed, in the course of settlement of the suit,
to begin the process of assessment and recovery.
In response to a question from Senator Kerttula,
Commissioner Sandor pointed to contamination in Southeast
Alaska resulting from pulp mill operations at Sitka and
Ketchikan. Waters at Ward Cove and Silver Bay are regarded
as impaired because the mills discharge affluent into them.
The department has been tracking this discharge and has
noted no particular problems. These waters require analysis
in greater detail. There are approximately 90 impaired
waterbodies statewide.
Co-chair Pearce asked if the project would be applied to
Lake Hood as well. Commissioner Sandor acknowledged that it
would be covered by the process, although it may not be
acted upon this year.
The $34.1 request for northern panhandle household hazardous
waste removal is a coordinated effort by the department and
the Southeast Alaska Conference. Funding would apply to
facilities and devices for collection. Each community will
collect the hazardous materials and then "feed them into
this system."
The Commissioner next spoke to the $260.0 request for the
community hazardous waste storage and transfer facility. He
explained that the department conducted two projects last
year: one in Anchorage and the other in Southeast. For the
present year the department seeks to establish fixed
transfer systems for household hazardous waste in Prince
William Sound and with the Southwest Alaska Municipal
Conference. One or two transfer stations will be set up in
specified areas within Prince William Sound for accumulation
of non-regulated waste. Two or three facilities will be
established in Southwest. Discussion followed between
Senator Frank and Commissioner Sandor regarding the working
of transfer stations. The Commissioner explained that
stations will provide temporary storage for hazardous waste
prior to shipment from the state and subsequent disposal.
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Further discussion followed between Senator Frank and
Commissioner Sandor regarding ownership of transfer
facilities and the type of household waste involved.
In response to a question from Senator Frank asking how
transfer facility projects differ from normal department
operating activities, Commissioner Sandor explained that the
department is venturing into a new area for the first time.
Household waste is exempt material and, in the past, was
simply dumped into landfills. The department is attempting
to avert future problems by collecting and properly
disposing of this material.
Senator Frank asked if grants would be provided to
communities for transfer stations. Commissioner Sandor
answered affirmatively and advised that state moneys would
only cover a part of the cost. Communities are providing
the greater amount toward collection of the materials.
Discussion followed between Senator Sharp and Commissioner
Sandor concerning permitting of commercial enterprises to
handle waste motor oil. The Commissioner spoke to certified
collection points at boat harbors, etc. The private sector
(service stations) has been encouraged to serve this
collection function as well.
The $120.0 for laboratory operations instrument acquisition
and installation relates to new equipment needed to meet EPA
and OSHA requirements dealing with regulated substances.
The safe drinking water act requires that if Alaska is to
retain primacy, the state have the ability to detect and
measure toxic substances. The detail budget lists specific
items and instruments to be purchased.
Discussion followed between Senator Sharp and the
Commissioner regarding whether private labs could be
certified by the state to perform water quality testing
instead of expansion of DEC capabilities. The Commissioner
acknowledged that testing could be accomplished in the
private sector and that the department would encourage
communities to utilize private labs. He noted, however,
that some of the equipment sought within the $120.0 capital
request would be needed to certify private facilities.
Speaking to the $125.0 for satellite data telemetry
development, Commissioner Sandor explained that soon after
becoming commissioner he learned that of the United States
and its territories, Alaska was 53rd out of 54 in terms of
meeting water monitoring and testing requirements. A major
emphasis was thus placed on testing. The proposed satellite
telemetry will be the first step toward automated water
monitoring at remote sites. It offers great promise for
collection of data needed to maintain primacy and ensure
that water systems are safe.
As an example of remote monitoring benefits, Mr. Kelton
noted a recent situation at Noatak. He explained that the
water system there had a history of operational problems
since it froze five years ago. Sensing equipment costing
$35.0 to $40.0 was installed. Through a dedicated telephone
line, the department is capable of monitoring the system
from Anchorage. During the past winter, someone siphoned
fuel from the boiler facility. Those monitoring the system
from Anchorage were able to contact the operator in Noatak
and replace fuel in the tank. The effort saved a $500.0
project. The satellite system has great potential and
flexibility. It could eliminate the need for a dedicated
telephone line. The department intent is to provide sensing
equipment on future water and sewer projects.
Commissioner Sandor next spoke to the $7.5 million request
relating to response fund support for the Alaska Marine
Highway System ferry. He noted that outfitting of the ferry
with response/command facilities, a mobile emergency
response depot, berthing, and cargo capabilities would be
conducted in conjunction with the Dept. of Transportation
and Public Facilities.
Co-chair Pearce said that the committee would be conducting
a hearing specifically for 470 funds for the front section
of the budget. She noted a call to the Senate floor session
and suggested that comments relating to 470 moneys be
rescheduled to a future hearing.
ADJOURNMENT
The meeting was adjourned at approximately 11:10 a.m.
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