Legislature(2009 - 2010)SENATE FINANCE 532
01/27/2009 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SR3 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SR 3 | TELECONFERENCED | |
SENATE RESOLUTION 3
Relating to the federal stimulus package.
9:13:07 AM
Co-Chair Stedman introduced the resolution.
9:14:01 AM
Co-Chair Hoffman MOVED to ADOPT the resolution. There being
NO OBJECTION, it was so ordered.
9:14:28 AM
JAY LIVELY, STAFF, SENATOR LYMAN HOFFMAN, provided an
overview of the resolution. The purpose of the federal
stimulus package is to provide working families with
continued employment and income in order to stimulate the
economy. The second purpose of the package is to complete
projects in a timely manner that will make the economy more
efficient and effective in the long run.
Mr. Lively pointed out that the recession in the U.S.
economy was affecting Alaska's economy. The projected
potential job loss in the state could be in the 700 to the
3400 range. Economists have noted that this is the first
time in 22 years that the Alaska economy was forecast to
lose jobs.
9:17:14 AM
Mr. Lively discussed the effect of lower prices for oil and
other commodities. Lower prices cause job loss, a decline in
gross state product, and fewer tourists.
Mr. Lively noted that the stimulus package is still being
deliberated in Congress. The number that has been discussed
regarding money that will go to the states is $550 billion;
the package itself is $8 billion, the first $3 billion of
which is projected as tax relief. Each state's share of the
$550 billion is considerable. A per capita distribution
would exceed $1 billion for Alaska. Congress and the
president's administration have discussed broad economic
areas that may be included in the package, including
Medicaid, food stamps, unemployment insurance, COBRA,
infrastructure projects such as highways, airports, school
construction, education, energy and weatherization projects,
and broadband and telecommunications changes. Broad sectors
of the economy could be impacted by the stimulus package.
9:20:38 AM
Mr. Lively reported that the purpose of the resolution is to
recognize that the economic downturn will cause hardship in
the state and that no part of Alaska's economy will escape
the recession. The resolution encourages benefit packages to
ensure that Alaskans will capture their share of the funds.
9:22:20 AM
Co-Chair Stedman acknowledged the seriousness of the
economic downturn and stated that the committee would do
what it could to minimize the impact.
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
(OMB), reported that OMB has been working closely with the
congressional delegation to understand the elements of the
stimulus package. The package apparently will be formula
driven. Alaska will be eligible to receive a broad range of
programs and grants. There will be a high level of oversight
and accountability for the funds and some critical timing
challenges.
Ms. Rehfeld stressed that all departments have been asked to
devote resources to understanding how to implement the
package once it passes. She expected that a supplemental
bill would be brought before the committee to address
authorization issues in order to receive and expend funds in
a timely manner. She thought the strong capital budgets of
the past three years would help keep jobs in Alaska.
9:25:50 AM
Co-Chair Stedman queried the evolution of the process. Ms.
Rehfeld described early speculation about the package.
Indications from Washington, D.C., made it clear that Alaska
should identify areas that would be of national interest.
The administration presented gasline infrastructure
projects, such as the Dalton Highway project, to the
delegation. It became clear that Congress and the new
administration would not include earmarked projects in order
to fairly allocate funds across states.
9:28:03 AM
Co-Chair Hoffman asked for a definition of an earmarked
project. Ms. Rehfeld described the evolving understanding of
earmarked projects at the state level, but did not know if
that same understanding applied at the federal level. She
stated there was not an intention to include earmarked
projects in the federal package.
Co-Chair Hoffman asked if the gasline projects submitted to
the delegation were considered earmarked. Ms. Rehfeld
answered that the projects were submitted because they would
be of interest nationally and also because they had been
publicly vetted.
Co-Chair Hoffman reflected on prior conversations concerning
the stimulus package. He questioned what would be required
to expedite getting projects going in communities. He
thought the legislature should have an understanding of
what an earmarked project is.
9:32:52 AM
Senator Elton questioned the meaning of "formula driven." He
asked if the gasline projects would continue to be promoted.
Ms. Rehfeld responded that there would not be opportunity
for the gasline projects in the stimulus package. However,
the administration will continue to work for funding for the
projects through the legislature. The congressional
delegation understands that the projects are a priority.
Senator Elton did not understand whether the gasline
projects would be part of an economic stimulus package. Ms.
Rehfeld answered that she anticipated funding for certain
formula programs, including the federal highway funds. There
will be specific requirements for projects to qualify, such
as being bid ready. If the Dalton Highway project fits those
criteria, a bill would come before the legislature for
authorization to receive and spend the federal funds.
9:35:37 AM
Senator Elton referred to a previous statement that the
state has devoted significant resources to understanding the
stimulus package. He asked if resources were being used to
work with the congressional delegation and the federal
administration to shape the package. He wondered if the
state was evolving along with the situation in Washington,
D.C., in relation to how much the state would be asking for.
Ms. Rehfeld stated that the departments had been asked to
review and prioritize the various proposals on the table.
This information has been communicated through the district
office as quickly as possible. The package is moving
quickly; the administration is trying to keep up with the
various versions and new challenges.
RANDALL RUARO, DEPUTY CHIEF OF STAFF, OFFICE OF THE
GOVERNOR, stated that the administration was trying to be
proactive and have agencies provide input as soon as they
can. The bills are long and complex.
9:38:27 AM
Senator Elton asked if expectations have grown beyond the
$139 million amount for the four projects delineated by the
governor's office. Co-Chair Stedman added the Kodiak rocket
launch to the base amount.
Mr. Ruaro offered that currently, in terms of highway
projects, the Senate amount would be roughly $140 million
coming to Alaska; on the House side the amount is roughly
$240 [million] through the formulas currently in place.
Those numbers could change quickly; the state is trying to
track changes and provide input.
Co-Chair Stedman asked for further information. Mr. Ruaro
clarified that expectations are driven by both versions of
the bill and there is currently a split. The Senate amount
is $140 million and the House version amount is $240
million; it is not clear which version will prevail.
Senator Elton wanted to broaden the conversation to include
the total value of the economic stimulus package to Alaska.
Mr. Ruaro pointed out that there was significant difference
between different versions of the bill regarding the total
value. A number of the programs are loan programs rather
than grant or formula funds. There are roughly 120 different
formula and loan programs in each bill; the administration
has not run and compared the numbers for each side.
Senator Huggins stated that a written definition of earmarks
would be helpful.
9:41:51 AM
Senator Huggins requested more information about a memo
prepared by the OMB dated January 15, 2009 ("State of Alaska
Federal Economic Stimulus Package, Questions and Answers,"
Copy on File). Ms. Rehfeld replied that the memo was
prepared specifically in response to a question from the
Alaska Budget Report.
Senator Huggins quoted Question 5 of the memo:
Communities and organizations seeking funding for
projects should submit their requests directly to
Alaska's Congressional Delegation...
Senator Huggins stated that, by his definition, this would
start the earmark process. He asked if that technique were
encouraged. Ms. Rehfeld believed that communities and
organizations would try to seek federal or state earmark
dollars through a regular appropriation process, outside the
economic stimulus package.
Senator Huggins pointed out that legislators were a subgroup
of constituents and that the process [related to the
stimulus package] does not yet involve the legislature. He
highly encouraged the Senate Finance Committee to develop an
interface with the administration in order to represent
constituents. He maintained that he knew his constituents
and what they need better than the administration did.
Senator Huggins referred to a November meeting in Anchorage
by the Department of Transportation (DOT/PF) where different
governmental entities were invited to talk about
infrastructure projects related to the pipeline. A list was
generated and put forward as a starting base because of the
work done. He warned against focusing solely on pipeline
infrastructure, saying that the stimulus package is not a
pipeline preparatory package but meant to help the state as
a whole.
Ms. Rehfeld stated that many communities were asking if they
could submit projects to the administration to be passed on
to the delegation. She thought it was appropriate that
communities submit directly to the delegation and also
provide the information to their legislators and to the
administration.
9:46:19 AM
Co-Chair Stedman referred to work with DOT/PF. He reported
that a presentation was planned, along with pipeline
information. He did not want the focus to be so narrow as to
cause infrastructure issues in the state.
Senator Thomas surmised there were many projects ready to
go. The Anchorage economic summit found that although there
would be job loss in Alaska as a result of the national
recession, they thought government would mitigate the
severity. He stressed the importance of equitable
distribution of both the federal stimulus package and state
funds. He urged cooperation between the legislature and the
administration to get the proposals put together.
Co-Chair Hoffman thought energy projects could stimulate the
economy as well as provide long-term energy relief to
Alaskans and that energy projects were more important than
transportation projects in Alaska. He asked about job-ready
projects and emphasized the challenges in Alaska because of
a shorter construction season.
9:51:26 AM
Ms. Rehfeld assured the committee that the administration
had flagged the short construction season and transportation
challenges in the economic stimulus package. In terms of
job-ready projects, she pointed out that there were specific
timelines in the bill.
Mr. Ruaro added that language in Congress was developing,
although the House and Senate used different terms. One side
has been using the word "obligated," which he interpreted to
mean allocated to a project within in certain timeframe. The
other side has been using the word "awarded," which
indicates requiring the project to have actually gone
through the bid process and awarded. The administration is
tracking the language. He stated that the administration had
communicated concerns about he construction season to the
delegation.
Senator Huggins referred to a geothermal project in Unalaska
and encouraged communication with them; they are frustrated
by inactivity related to the project. He asked if the
administration had been communicating with communities like
Unalaska. Ms. Rehfeld answered that she had met with
Unalaska in the past to discuss their projects. More
recently, the Alaska Energy Authority has been working with
all Alaskan communities and should have more information.
9:54:09 AM
Co-Chair Stedman requested the list of projects related to
energy and transportation that were shovel-ready. Ms.
Rehfeld reported that legislation would be brought forward
to authorize receipts from the package. Co-Chair Stedman
emphasized that the committee needed to see what projects
were ready to go, regardless of federal action.
9:55:25 AM
Co-Chair Stedman opened public testimony.
AL DWYER, MAYOR, CITY OF PETERSBURG (testified via
teleconference), stated that Petersburg had projects ready
for the economic stimulus fund.
Co-Chair Stedman reminded the committee that the cities of
Wrangell and Petersburg went to their congressional
delegation and obtained earmarks out of the last
transportation bill.
Mr. Dwyer listed various proposed projects:
· Fire and Emergency Medical Services Facility: $6.7
million needed; the city has $2.9 million
· Petersburg Indian Association Vocational Education
Business Center: $4 million needed
· Medical Center Clinic Expansion: $0.5 million needed
· Elementary School Traffic Safety Improvements: $340,000
needed
· North Harbor Dredging: $1.5 million needed
Mr. Dwyer added that the projects have been vetted by the
community and are shovel-ready.
10:01:15 AM AT EASE
10:01:53 AM RECONVENED
RICK KOCH, CITY MANAGER, CITY OF KENAI (testified via
teleconference), informed the committee that Kenai had been
involved in the process with the congressional delegation
since December. He reported that Kenai has an appropriate
project. The Corps of Engineers has been working for a
number of years on a bluff erosion project. There has been
approximately $2 million in federal appropriations to bring
the bluff erosion stabilization project through the design
and environmental documentation phases. In addition, there
is a corresponding item in the governor's state budget for
the current year which the city hoped would be the stimulus
for getting the remainder of the project funded. He
expressed concerns about the resolution regarding timing.
RICK GIFFORD, MANAGER, KODIAK ISLAND BOROUGH (testified via
teleconference), stated concerns about decreased revenue due
to poor fishing and fish prices that would affect the
borough's ability to fund education. He listed shovel-ready
projects, including road construction and repair as well as
a Department of Fish and Game fisheries research facility.
He emphasized the importance of fisheries research to the
economic base of the Kodiak community. Another project is
for a vocational-technology building for schools.
10:07:55 AM
LINDA FREED, MANAGER, CITY OF KODIAK (testified via
teleconference), identified four projects important to the
city of Kodiak and the region that the local government and
the community are committed to, and that are ready to go:
· Additional water treatment facility to meet federal
standards: $6 million needed; the city has committed $3
million. The project is designed and ready to go to
bid.
· Travel lift project, including a heavy-lift dock: $2.5
million needed; the city has committed $16 million,
along with supplemental funding from state and federal
governments. The project would provide diversification
in the local economy and bring 15 to 20 full-time jobs
in ship repair. The project has gone out to bid; a
portion has been awarded.
· New police station for the city: $3 million needed; the
city has committed $17 million, along with some state
assistance for the jail portion of the project. The
project has gone out to bid.
· Upgrading old sewer and water lines: $1 million needed;
$3.5 million has been secured.
10:11:51 AM
Co-Chair Stedman suggested submitting lists of projects to
the committee. He encouraged focusing on one or two projects
with long-term benefits.
JIM HORNADAY, MAYOR, CITY OF HOMER (testified via
teleconference), described struggles in Homer related to the
economic situation. Utility bills have gone up 100 percent
in one month, which has caused extreme hardship to citizens.
He emphasized the importance of the projects for the local
economy. The projects could be shovel-ready in six months,
have been vetted by the community, and are focused on
alternative energy and basic infrastructure such as water,
sewer and roads. A partial list includes:
· Town center infrastructure development: $2 million
needed
· Deep water dock expansion: $20 million needed
· Harbor float replacement: $3 million needed
· Homer intersection improvement: $10 million needed
· New city hall: $8 million needed
· Waterline turbine electric projects: $500 million
needed
· Water and sewer projects: $12 million needed
10:15:30 AM
JOHN HANDELAND, UTILITY MANAGER, CITY OF NOME (testified via
teleconference), described difficulties due to a mine
closure and rising fuel costs. He stated that the city
submitted six projects fitting the criteria of the
resolution to the congressional delegation. The top priority
project is for the completion of a new regional hospital in
Nome. Construction has begun; the foundation is in place and
materials have been ordered. The project, as an Indian
health facility, fits within federal guidelines and would
provide for improved energy and long-term employment as
well. He reported that the mayor would submit the details in
person.
10:19:12 AM
BOB WEINSTEIN, MAYOR, CITY OF KETCHIKAN (testified via
teleconference), stated concerns about disparity between
what the state is saying and doing and what members of
Congress are saying and doing with respect to the federal
economic stimulus package. He referred to a newspaper
article about other states that are compiling comprehensive
lists of priorities for projects.
Mr. Weinstein disagreed with the governor regarding
earmarks. He opined that Alaska will have a considerable
delay in getting projects underway. He stated that the
Ketchikan projects submitted were construction-ready. He
urged consideration of an amendment to the resolution that
requests the administration to develop a state-wide
comprehensive list of projects in various categories, such
as transportation, bridge and road repair, water and sewer
upgrades, and so on, so that if federal money is awarded in
excess of the amount requested, the projects are already
identified and ready to go.
10:23:33 AM
EUGENE SMITH, MAYOR, CITY OF KOTZEBUE (testified via
teleconference), pointed out that members of his region were
paying $15 per gallon for fuel. He discussed the definition
of shovel-ready. He encouraged consideration of several
projects:
· Deep-water Port Project, which needs a road.
· Airport Relocation Project.
· Northwest Arctic Energy Power Communications
Infrastructure Project. This project alone could
convert the community from diesel.
Mr. Smith stressed the importance of resolving the region's
energy problems.
10:27:10 AM
ELAINE PRICE, CITY PROJECT MANAGER, CITY OF COFFMAN COVE
(testified via teleconference), cautioned against use of the
word "earmark." Coffman Cove submitted three projects that
are project-ready, including a commercial firewood project.
She said that she would forward her projects for
distribution.
10:29:47 AM
LYNN WOODS, DEPUTY MAYOR, MATANUSKA-SUSITNA BOROUGH
(testified via teleconference), stated that the borough had
compiled a list of projects for the delegation, including an
agricultural processing center. She encouraged a united
effort to get worthwhile projects funded.
MATHEW CLAMEN, MAYOR, ANCHORAGE (testified via
teleconference), testified in support of the stimulus
package. He highlighted some of the projects from a list of
shovel-ready projects:
· Community development block grants: Anchorage
neighborhood health center, in the process of moving to
a new facility to improve the number of Alaskans that
can be served; $12 million
· Energy block grants: Landfill methane recovery; $7
million
· Port of Anchorage expansion for transit and equipment
infrastructure; $75 million
· Old Glenn Highway reconstruction, Phase II; $25 million
· Waste and waste-water infrastructure; $19.5 million
· School modernization: Fire alarm upgrades; $725,000
· Public Safety jobs and technology: Community action
policing, to help protect the public; $636 million
Mr. Clamen suggested exploring match opportunities and other
ways to supplement federal dollars with state money to make
the money go further.
BRUCE BOTELHO, MAYOR, CITY AND BOROUGH OF JUNEAU (testified
via teleconference), agreed with Mayor Weinstein that it is
important to develop a statewide priority list in each of
the stimulus package categories. He gave a sample of Juneau
projects:
· Hagevig Regional Fire Training Center
· Basin Road trestle repair
· Airport terminal improvements
· Medical surgical unit for Bartlett Regional Hospital
· Downtown transit center
Mr. Botelho said a major portion of the funding for the
projects had been found, but there has not been enough
funding to complete them. A list will be submitted to the
committee.
10:36:46 AM
PAUL DAY, CITY ADMINISTRATOR, CITY OF SAND POINT (testified
via teleconference), described Sand Point as the largest
community in the Aleutians East Borough. The city supports
the resolution. He especially supported the phrase "all
regions of the state." Funds that flow to Alaska through the
stimulus package should be available to all communities and
not be viewed as a pool of money that the state can parcel
out for favored programs or projects. The recession affects
the entire state, including small rural communities. Sand
Point has submitted a project that is fully designed and
partially funded. He asked for a fair review of the project.
10:38:29 AM
BILL ALLEN, CITY MANAGER, CITY OF PALMER (testified via
teleconference), spoke in support of the resolution. The
city has serious infrastructure deficiencies, including
water and road needs. They have been working with the
Department of Environmental Conservation and DOT/PF and the
congressional delegation on infrastructure and
transportation needs. He reported that a list of shovel-
ready projects will be submitted in a package.
10:41:12 AM
GARY HENNIGH, CITY ADMINISTRATOR, CITY OF KING COVE
(testified via teleconference), (testimony garbled due to
technical difficulties) echoed the administrator of Sand
Point. He referred to a local street project which the city
has tried to find funding for. The project could be
completed with stimulus money.
10:42:58 AM AT EASE
10:43:47 AM RECONVENED
KEVIN LYON, PUBLIC WORKS DIRECTOR, KENAI PENINSULA BOROUGH
(testified via teleconference), stated that formulas should
be based on need and not population only. He thought the
federal government should be told that Alaska is a new state
without extensive infrastructure in place. He stressed
minimizing federal requirements, as construction time
windows are limited. The borough has submitted three
categories of projects, including:
· Three fire stations
· Continued funding of the federally funded Spruce Bark
Beetle Mitigation Program
· School energy conservation project for three schools
· Water quality project
10:45:35 AM
THELMA NICHOLIE, CITY OF HUGHES (testified via
teleconference), reported that the city has submitted a
package for housing. She thought the stimulus package was a
great opportunity for Alaska to complete projects.
10:46:54 AM
SUE JEFFREY, ASSEMBLY MEMBER, KODIAK ISLAND BOROUGH
(testified via teleconference), discussed construction of
the new Fish and Game building in Kodiak. The fishery
contributes significantly to the state budget. Fisheries
science is important and the old building is outdated. The
state has funded $4.5 million towards the new building. The
city has provided the land; the borough has also
contributed.
10:48:44 AM
RICH UNDERKOFLER, CITY MANAGER, CITY OF PETERSBURG
(testified via teleconference), agreed with the testimony of
the Mayor of Petersburg.
10:49:10 AM
LUKE HOPKINS, ASSEMBLY MEMBER, FAIRBANKS NORTH STAR BOROUGH
AND VICE CHAIR, METROPOLITAN PLANNING ORGANIZATION,
testified regarding Fairbanks area projects. He reported
that the borough has four shovel-ready projects amounting to
approximately $7 million, including a bridge over the river
in the downtown area. The borough mayor is moving a project
forward for energy. He supported the resolution's resolve to
include all regions of the state. He pointed out that almost
all roads connected to a future gasline would lead to
Fairbanks.
10:52:49 AM
CHRIS HLADICK, CITY MANAGER, CITY OF UNALASKA, testified in
support of the resolution. He pointed out that Unalaska is
the number one commercial fishing port in the nation. Their
projects support commercial fishing infrastructure needs,
including:
· Diesel-generated power house: $5 million needed to
augment what the city will spend on the project
· Carl E. Moses Boat Harbor: $14 million needed to
complete the project
· Inner Harbor Improvements: $5 million needed
10:54:53 AM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, offered the help of the league to assist in the
process.
10:55:45 AM
JUSTIN THORENSTON, PUBLIC WORKS SUPERVISOR, CITY OF THORNE
BAY (testified via teleconference), described two shovel-
ready projects:
· Davidson Landing Harbor Construction: $250,000 needed
· South Thorne Bay Road Safety Improvements: $190,000
needed
10:56:48 AM AT EASE
10:57:17 AM RECONVENED
JERRY MCCUTCHEON, ANCHORAGE (testified via teleconference),
stressed the importance of jobs in the Mat-Su region.
Co-Chair Stedman closed public testimony.
10:59 AM RECESSED (Mistakenly adjourned)
11:01:10 AM RECONVENED
11:02:15 AM
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Federal Economic Stimulus Update 1 15 2009.pdf |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| Am. #1.doc |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| US House Approps 01-21-09.pdf |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| US Senate Approps 01-23-09.pdf |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| SR3.xls |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| Dave Carey Email.pdf |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| Gov Press Release Economic Stimulus 1-12-09.pdf |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |
| Letter to Delegation 1 7 09.pdf |
SFIN 1/27/2009 9:00:00 AM |
SR 3 |