Legislature(2021 - 2022)SENATE FINANCE 532
02/03/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB50 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 50 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SENATE BILL NO. 50
"An Act making appropriations, including capital
appropriations, reappropriations, and other
appropriations; making supplemental appropriations;
making appropriations to capitalize funds; and
providing for an effective date."
9:02:32 AM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the presentation, "FY2022
Capital Budget Overview, SB 50 and SB 51 - February 2,
2021" (copy on file). He noted that the capital budget
coordinator for the Office of Management and Budget (OMB)
was available via teleconference. He noted that there was a
summary spreadsheet document entitled "Capital Project
Summary" (copy on file) that would provide more details.
The first column tied to the slide numbers of the
presentation, and the second column tied to the line
numbers on the slides. The document was a brief summary of
the capital project write-ups that were available on OMB's
website.
Mr. Steininger looked at slide 2, "FY2022 Capital Budget
and Supplemental Overview," which showed a data table of
proposed capital appropriations. The projects were for FY
22 and were in SB 50 (the governor's capital budget) as
well as SB 51 (the mental health budget inclusive of
capital items). He noted that there were also FY 21
supplemental projects that were under consideration and
were spread across three different bills. The projects had
effective dates in the current fiscal year and were broken
across three bills: SB 50, the fast-track supplemental
bill, and the "regular" supplemental bill.
Mr. Steininger detailed that the Unrestricted General Fund
(UGF) for the capital budget was significantly lower than
previous years as a result of utilization of Alaska Housing
Finance Corporation (AHFC) bonding. He commented that the
interest rate and cash position of the state were factors
in considering bonding as a way to maintain liquidity. a
lot of what would have been UGF capital projects were
represented in the "Other funds" column. There was about
$101 million worth of bonding proposed in SB 50.
Mr. Steininger noted that the Mental Health Capital Budget
included mostly annual recurring items that were
recommendations from the Alaska Mental Health Trust
Authority (AMHTA). He stated he would go into detail on all
the projects that made up the numbers.
9:06:52 AM
Co-Chair Bishop inquired about negative spending in the
supplemental as shown on slide 2. He pointed out a
decrement $12.7 million in the UGF column under the "SB50
Supplemental in Gov" row.
Mr. Steininger explained that in SB 50 there were repeals
of leftover funds from projects and the authority would be
removed, which was reflected as a negative appropriation.
Elsewhere in the operating budget, the funds had been
utilized to capitalize the Alaska Capital Income Fund. The
funds showed a positive spend in the operating budget,
resulting in a net zero.
Senator von Imhof asked if the fund adjustments described
by Mr. Steininger were merely accounting or represented
cash flow.
Mr. Steininger relayed that the slide reflected a bit of
both accounting and cash flow. He explained that tracking
operating and capital budget items were separate in the
state's accounting and budget systems. He stated when
appropriation authority was moved from one area to the
other, it created a negative in one and a positive in the
other. The item questioned by Co-Chair Bishop signified an
accounting method of reflecting a cash flow need and future
appropriation.
Senator von Imhof thought it sounded as though some surplus
cash was moving from completed projects into the Capital
Income Fund and could be redeployed as the legislature saw
fit.
Mr. Steininger agreed with Senator von Imhof's assessment.
9:10:08 AM
Senator Hoffman looked at the $12.5 million in negative
funds shown on the slide and asked if all the projects with
remaining funds were state projects or were projects from
specific districts.
Mr. Steininger stated that the funds represented projects
throughout the state, including some from specific
districts. There was a handful of transportation projects
that would be for specific road projects. All the projects
had been completed under budget.
Co-Chair Stedman informed that he had asked staff to
consolidate the supplemental items spread over the three
pieces of legislation as mentioned by Mr. Steininger in
order to have a clear demarcation in current and past year
spending. He discussed ways of formatting the supplemental
items for clarity.
Co-Chair Bishop thought it could be debated that the
funding could be shown as revenue instead of a negative
balance.
Mr. Steininger thought there was a difference in the way
the Legislative Finance Division (LFD) and the Office of
Management and Budget (OMB) had historically looked at the
type of transfer being discussed. The administration felt
that showing the $12.7 million as a reduction in the amount
available for capital (rather than a positive in revenue)
better reflected the action being performed.
Mr. Steininger spoke to slide 3, "Capital Budget Five Year
Overview FY2018 FY2022," which showed a bar graph
depicting a five-year lookback in capital budgets. He
pointed out the column on the far right which showed the
difference between the capital budget in FY 21 and what was
proposed for FY 22. The FY 21 numbers were reflective of
the supplemental appropriations discussed earlier. He made
note of a dramatic decrease in UGF, which he contended had
to do with the utilization of bonding to cover UGF needs in
the capital budget. He noted that there was an overall
slight increase of about $30 million in total capital
appropriations proposed, primarily coming from the $52.9
increase in federal revenues.
Co-Chair Bishop asked if there were Other fund sources
other than AHFC funds.
Mr. Steininger stated there were plenty of other fund
sources utilized for capital projects. He mentioned
community partners or other arrangements as ways of finding
other groups to assist in meeting federal matching fund
requirements.
9:14:10 AM
Mr. Steininger referenced slide 4, "Capital Budget History
FY2011 FY2022," which showed a bar graph giving a more
long-term view of past capital budgets. He pointed out the
UGF capital spending had been stable but low over the
previous several fiscal years, since the higher capital
budgets appropriated in FY 12 and FY 13, and lower but
still high capital budgets in FY 14 and FY 15.
Senator von Imhof thought Alaska had been fortunate in
having consistent annual federal match for highways and
airports. She asked about a five-year bill passed by the
federal government several years previously. She wondered
about the timing and if the federal match would continue.
She wondered if there was another upcoming federal bill
that would result in Alaska getting more funds.
Mr. Steininger acknowledged he was not an expert in the
federal appropriations process. He agreed that the state
had a fairly generous match on the Surface Transportation
Infrastructure Program, that brought in a lot of the
federal receipts shown on the slide in light blue. he did
not want to speculate about what might happen at the
federal level. He thought there might be staff at the
Department of Transportation and Public Facilities (DOT)
that tracked such developments more closely.
Senator von Imhof thought the committee should query DOT to
hear what to expect in the future and where the state was
in the cycle of federal allocation.
9:16:19 AM
Co-Chair Stedman thought the committee should consider the
significant capital coming into the state via the
Coronavirus Aid, Relief, and Economic Security (CARES) Act,
as well as through a federal highway bill. He recalled a
$30 million increase per year. He thought it might be
interesting for the committee to know how much of project
funding was built into specific years. He thought DOT, OMB,
or LFD could put together a document that showed how much
capital funding was spent in each year. He discussed bond
issuance and expenditure of funds over time. He mentioned
the need for economic stimulus around the state and thought
it would be interesting to see how much DOT had expended in
the previous two or three years.
Co-Chair Bishop informed Mr. Steininger that the committee
would request a list of projects going forward. He
mentioned a potential bond package. He wanted to ensure
that the legislature did not "overheat" the economy. He
emphasized that the goal was to put Alaskans to work rather
than hire many out-of-state contractors. He reiterated that
the committee would want to see a detailed list of the
governor's proposed projects by district.
Co-Chair Bishop noted that when OMB put out the deferred
maintenance list and capital project list, he was
interested in seeing how much funding would be put on the
street versus how much of the work was proposed to be done
in-house.
9:20:14 AM
Mr. Steininger spoke to Co-Chair Stedman's comment and
noted that the previous day OMB had posted its capital
appropriation status report, which included information on
the status of historical projects and informed about the
amount of funds that had been appropriated versus what was
still unobligated. He encouraged members to look at the
document, which provided details about individual prior
projects.
Co-Chair Stedman thought the document Mr. Steininger
mentioned would be a good baseline for the committee to
consider. He appreciated the information and thought the
document would make putting the requested information
together much easier.
Mr. Steininger turned to slide 5, "FY2022 Capital Budget
Snapshot," which showed a data table with proposed capital
projects broken down by department. He pointed out that the
Department of Environmental Conservation (DEC) had $24
million in the "FY 22 Other" column, which was one area
where the administration had utilized AHFC's bonding. In a
normal year, the bulk of the funds would appear in the UGF
column and were for the Village Safewater Project. He
pointed out the $19.8 million in UGF and $144.7 in the
Other column for DOT. He added that the $144.7 million
signified the other location AHFC bonds were utilized, in
this case to cover the Surface Transportation
Infrastructure Program.
Senator von Imhof asked about the $49 million shown under
the Office of the Governor on slide 5.
Mr. Steininger explained that the $49 million in the Office
of the Governor was for deferred maintenance in FY 22.
Several years previously the administration had
transitioned to a shared pool of deferred maintenance
allocated through a process with the Statewide Facilities
Council and the Division of Facilities Services.
Senator von Imhof wondered if there was a rubric used to
vet projects.
Mr. Steininger stated that there were many different
factors used in the decision process. He recounted that in
the past every agency had its own way of ranking projects,
and the administration was working towards a more
standardized method. He noted that one capital request in
the bill was for a maintenance management system, which was
an ongoing project that tried to combine the disparate
tracking methods into one location. He commented on the
large volume of projects that needed tracking, and the
time-intensive process to prioritize across all agencies.
9:24:23 AM
Senator Wilson referenced AHFC bonding for the Village
Safewater Program for DEC. He asked if Mr. Steininger had a
list of other bonding projects.
Mr. Steininger explained that there were two different
bonding proposals that had been put forward. In the
traditional capital budget, there was bonding through AHFC
in the amount about $100 million. The $350 million general
obligation (GO) bond package was not yet released and there
was not a project list ready to be publicly released. He
affirmed that when the list was released it would be shared
with the committee along with information on the projects
and how the list was determined.
Senator Wilson asked when Mr. Steininger expected the
information to be available.
Mr. Steininger did not have an estimated date but thought
the list would be ready as soon as the administration was
able.
Mr. Steininger considered slide 6, "FY2022 Projects by
Department":
Commerce, Community & Economic Development
1. Community Block Grants $6,060.0 ($60.0 GF Match,
$6,000.0 Fed)
2. National Petroleum Reserve $9,100.0 Fed - Alaska
Impact Grant Program National Petroleum Reserve Fund
3. AMCO Enforcement Case Management and Investigations
Report Writing System $200.0 ($100.0 UGF, $100.0 DGF -
Program Receipts)
4. Alaska Energy Authority - Alaska Cargo and Cold
Storage $21,000.0 Fed
5. Alaska Energy Authority - Alternative Energy and
Energy Efficiency Programs $5,000.0 Fed
6. Alaska Energy Authority - Bulk Fuel Upgrades
$13,000.0 ($5,000.0 DGF - PCE Endowment, $7,500.0 Fed)
7. Alaska Energy Authority - Rural Power Systems
Upgrades $17,500.0 ($5,000.0 DGF - PCE Endowment,
$12,500.0 Fed)
8. Alaska Travel Industry Association $5,000.0 DGF
Vehicle Rental Tax
9. Inter-Island Ferry Authority $250.0 UGF
Mr. Steininger referenced an additional document titled
"Capital Project Summary," (copy on file); which would have
further details that corresponded with the item numbers of
the projects listed on the slide. He pointed out standard
recurring projects and a new project.
Senator Hoffman relayed that he had been excited when the
governor had asserted that he was making Alaska a more
affordable place to live. He had expected to see more
capital projects focused on the issue. He observed that the
vast majority of the Alaska Energy Authority funds going
towards the Alaska Cargo and Cold Storage, which he
supported. He asked if there was another place in the
budget or part of the bond package that signified the
governor's support for making the state more affordable. He
discussed high energy costs, which he thought were a large
part of Alaskan's expenditure of disposable income.
9:29:13 AM
Mr. Steininger thought there was a couple of projects that
could address the matter, but the projects were ongoing
rather than additional investment. He could not speak to
what would be included in the bonding package. He asserted
that the administration was open to looking at ways that
could reduce energy costs in the state. In addition, he
thought part of the matter was looking at state regulations
and other changes that could assist in lowering energy
costs outside capital appropriations.
Senator Hoffman thought one of the most effective and
successful projects reducing energy costs in the state was
the weatherization program, which had resulted in lowering
heating costs by 40 to 60 percent. He commented that the
state had spent hundreds of millions but had saved millions
of dollars for Alaskans. He expected something of the same
magnitude given the comments made by the governor.
Co-Chair Stedman remarked that he had worked on energy
projects with Senator Hoffman. He wanted the administration
to consider debt relief, which he thought would provide
immediate economic response. He did not think a bond
package was immediate enough. He thought if the legislature
could come up with mechanisms to immediately lower energy
costs in homes it would be beneficial for the state. He
discussed targeted debt reduction on utilities. He
recognized there were numerous utilities of various sizes,
and thought it was important to help citizens sooner rather
than later.
9:33:01 AM
Senator von Imhof thought the legislature and the
administration faced the challenge of balancing the present
and the future that Co-Chair Stedman alluded to. She agreed
that citizens of Alaska needed to see immediate relief. She
thought CARES Act funding should provide some immediate
relief in various areas. She did not want to ignore future
needs of rural energy and Railbelt energies that included
new technologies. She recalled Senator Hoffman had provided
information on a hydro project in Dillingham. She thought
such projects needed planning and strategy but were
meaningful to the state when completed.
Co-Chair Bishop thought the state should take a serious
look at getting the Susitna project to a Federal Energy
Regulatory Commission (FERC) application and building out
the intertie. He mentioned hydro projects in Southeast
Alaska and in Kodiak and thought the projects would free up
funds for alternative energy projects in rural areas.
Co-Chair Bishop mentioned item 7 on slide 6, which used
Power Cost Equalization (PCE) Endowment funds for rural
power systems upgrades. He asked if the proposed spending
overdrew the PCE fund by leveraging the dollars.
Mr. Steininger did not believe that the $5 million from PCE
for the rural power system upgrade overdrew the fund.
Co-Chair Stedman asked if the PCE Fund was in overdraw.
Mr. Steininger did not believe the fund was overdrawn.
Co-Chair Bishop asked for confirmation.
Mr. Steininger agreed to provide a definitive answer.
Co-Chair Stedman was under the impression the PCE Fund was
under strain and wanted more information. He thought the
PCE Fund had been mentioned in the context of sweepable
funds. He thought there was a lot of pressure on the fund
already. He wondered if Mr. Steininger had a comment on the
matter.
Mr. Steininger recalled that the PCE Fund had lower
earnings in the prior years, which had impacted the deposit
into the Community Assistance Fund. He agreed to get back
to the committee with a more detailed accounting of the
appropriations from the PCE Fund and the earnings of the
fund.
9:37:49 AM
Senator Hoffman was very familiar with the PCE Fund. He
thought the first call of the fund was for assistance to
lower energy costs, the second call was for community
assistance, and the third call was for projects such as
listed under item 7 on slide 6. He asked for Mr. Steininger
to provide a spreadsheet detailing how the earnings would
be spent under the three categories in order to ensure that
the fund was not being overdrawn.
Co-Chair Bishop commented that the $5 million for
Department of Commerce, Community and Economic Development
(DCCED) for the travel industry would be an item the
committee would watch due to an unknown tourist season.
Senator von Imhof asked for more details.
Co-Chair Bishop elaborated that the size of the cruise
season was unknown. He wondered about the receipt authority
and the vehicle rental tax. He wanted to know the
administration's opinion as to whether the amount would
reach the $5 million threshold.
Senator von Imhof thought that while the state might not
have a cruise industry as robust as in the past, there were
individuals coming to the state via travel. She thought
Alaska was a prime destination, and Europe was currently
more difficult to reach. She commented on the space
available in the state for social distancing. She thought
it would be in the state's interest to continue promoting
for travel just because of reduced cruise ship traffic.
Co-Chair Bishop clarified that he was not proposing to
eliminate the funding. He wanted to ensure the appropriate
fund source was used so there was not a supplemental
request in the out years.
Co-Chair Stedman agreed that the committee should continue
to examine the fund source for the appropriation. He agreed
with Senator von Imhof that it was important to bring
tourism back to the state as soon as possible.
9:41:07 AM
Mr. Steininger displayed slide 7, "FY2022 Projects by
Department":
Corrections
1. Seven New Facility Body Scanners $1,500.0 UGF
2. Point Mackenzie Correctional Farm Produce
Processing Plant $1,500.0 UGF
Environmental Conservation
1. Clean Water Capitalization Grant Subsidy $2,000.0
Other (Clean Water Loan Fund)
2. Drinking Water Capitalization Grant Subsidy
$5,800.0 Other (Drinking Water Fund)
3. Village Safe Water and Wastewater Infrastructure
Projects: Expansion, Upgrade, and Replacement of
Existing Service $30,538.0 ($9,438.0 Other AHFC
Bonds, $200.0 Other SDPR, $20,900.0 Fed)
4. Village Safe Water and Wastewater Infrastructure
Projects: First Time Service Projects $37,942.0
($6,292.0 Other AHFC Bonds, $300.0 Other SDPR,
$31,350.0 Fed)
Senator Wilson asked for a list of the usage for the
current body scanners. He understood that some of the
scanners were not being utilized.
Mr. Steininger agreed to provide more information. He noted
there were old full-body scanners that were not effective
in detecting all the types of contraband that came into
facilities. The new body scanners had shown success in
finding materials that previous scanners had not.
Co-Chair Stedman referenced slide 6. He thought the Vehicle
Rental Tax was an operating budget item, and the committee
would work to make sure the appropriation was in the budget
and keep an eye on the fund source. He mentioned item 9 and
the $250,000 for the Inter-Island Ferry Authority (IIFA).
He acknowledged that the Alaska Marine Highway System
(AMHS) had some difficulties. He noted that the IIFA went
from Ketchikan to Metlakatla. He asserted that if the IIFA
was not helped enough and was unable to provide services,
it would cost much more for the AMHS to back up the
service. He thought the $250 thousand proposed was a small
price and was not sufficient. He was concerned about the
IIFA's backup of deferred maintenance.
Co-Chair Bishop asked Mr. Steininger to provide a list of
DEC wastewater and drinking water projects.
9:44:52 AM
Mr. Steininger highlighted slide 8, "FY2022 Projects by
Department":
Fish and Game
1. Pacific Salmon Treaty Chinook Fishery
Mitigation $7,700.0 Fed
2. 2018 Sockeye Salmon Disaster - Chignik Area
$2,000.0 Fed
3. Endangered Species Act - Legal and Research
Needs to Protect State Right to Manage $4,000.0
($250.0 GF Match, $750.0 UGF, $3,000.0 Fed)
4. Pacific Cod Disaster Funding - 2018 Gulf of
Alaska $1,000.0 Fed
5. Copper River Boat Launch Facilities
Improvements $165.0 Other Fish & Game Fund
6. Facilities, Vessels and Aircraft Maintenance,
Repair and Upgrades $500.0 DGF Capital Income
Fund
7. Pacific Coastal Salmon Recovery Fund $4,400.0
Fed
8. Sport Fish Recreational Boating and Angler
Access $3,000.0 ($750.0 Other - Fish & Game Fund,
$2,250.0 Fed)
9. Wildlife Management, Research and Hunting
Access $15,000.0 ($1,250.0 Other - Fish & Game
Fund, $2,500.0 Other - SDPR, $11,250.0 Fed)
Mr. Steininger detailed that the appropriation for item 1
was related to an Revised Program Legislative (RPL) Process
Overview put forth over the previous summer. The RPL
provided access to the federal grant in the current fiscal
year but the project spanned fiscal years. The projects
were capital in nature and would allow for expending funds
over the life of the projects. He highlighted disaster-
related funding. He noted that item 3 was to ensure that
the state had involvement with what species were put on the
endangered species list, and to ensure proposer science was
being done in consideration of animals on the list. Items 8
and 9 were traditional projects.
Senator Wielechowski asked about item 3 on slide 8. He
asked if the federal government was giving the state $3
million to potentially sue the federal government.
Mr. Steininger informed that the $3 million would help
support the science and research needed to identify any
species for potential inclusion on the Endangered Species
Act list. There were state funds being expended as well as
federal funds to support the science and research.
Co-Chair Stedman asked about item 7 and the Pacific Coast
Salmon Recovery Fund. He wanted to ensure there were
matching funds. He requested that OMB highlight Dingell
Johnson and Pittman-Robertson federal fund sources. He
wondered if the state had to return funds due to lack of
matching funds and asked if the state was subject to any
return of funds for lack of matching funds or projects.
Mr. Steininger stated that the projects through the program
in item 7 were generally provided matching funds by project
partners in communities. He noted that the amount available
in the Pittman-Robertson funds and Dingell Johnson funds
had been increasing, which was a concern the department
tracked. he offered to provide information on how the
administration was avoiding sending any funds back.
9:49:01 AM
Senator Hoffman asked for a list of projects associated
with the $3 million for item 8. He wanted to know what the
projects hoped to accomplish for boating and angler access.
He asked about the split between research and hunting
access for the $50 million on item 9. He asked for a list
of projects listed as part of item 9.
Mr. Steininger did not know the split between research and
access projects within item 9. He affirmed he would get a
list of projects and the criteria for the projects.
Senator Hoffman asked for a complete list of projects that
were not being funded as well.
Senator Wielechowski asked about sport fish license fees,
which he thought had been cut by $9. He asked if there were
any impacts to the federal match because of the change.
Mr. Steininger knew that the license fee collections and
the health of the Fish and Game Fund had been addressed
with the Department of Fish and Game (DFG) to ensure it was
capable of meeting its obligations. The administration did
not have immediate concerns about the ability to retain
matching funds but thought it was an issue to be monitored.
He noted that the COVID-19 pandemic had impacted some
revenues in DFG, and was something to be tracked, but the
administration did not have concerns over the ability to
match the federal funds listed in the projects.
Co-Chair Bishop thought all the members were interested in
item 1 on slide 8. He asked for more background. He was
curious how the fishery mitigation money was being spent.
He thought people had suffered from poor king salmon
returns.
Mr. Steininger stated that the department had begun the
work and could update the committee on the progress to
date.
Mr. Steininger looked at slide 9, "FY2022 Projects by
Department":
Governor
1. Statewide Deferred Maintenance, Renovation, and
Repair $49,250.0 DGF (Capital Income Fund)
Health and Social Services
1. Ketchikan Pioneer Home HVAC Intake Damper Assembly
$76.5 UGF
2. Palmer Alaska Veterans and Pioneer Home Safety
Fencing $61.2 UGF
3. Health Information Exchange $4,080.9 ($480.1 UGF,
$3,600.8 Fed)
4. Juneau Pioneer Home ADA-Compliant Courtyard $424.0
UGF
5. Emergency Medical Services Match for Code Blue
Project $500.0 GF Match
6. MH: Assistive Technology $500.0 DGF - MH Trust
Reserve
7. MH: Home Modification and Upgrades to Retain
Housing $1,150.0 ($900.0 DGF MH Trust Reserve,
$250.0 Other MH Trust Authority)
8. MH: Deferred Maintenance and Accessibility
Improvements $500.0 ($250.0 DGF MH Trust Reserve,
$250.0 Other MH Trust Authority)
Mr. Steininger noted that slide 9 covered all state
facilities that were generally not within the Public
Building Fund, which would be addressed in a later slide.
He explicated that the administration had generally gone
from directly funding within departments to comparing
facilities across departments to ensure the most urgent
needs were met.
9:54:28 AM
Senator von Imhof noted that one of the members was also
the chair of the Senate Health and Social Services (HESS)
Committee. She referenced item 3 and the Health Information
Exchange. She was curious if the Senate HESS Committee
would be interested in looking at the effectiveness of the
exchange. She discussed the $480,000 to leverage federal
funds.
Co-Chair Bishop stated he would work on the matter with
Senator von Imhof after the meeting.
Co-Chair Stedman asked about item 1 under the Department of
Health and Social Services. He disclosed that he had two
family members in the Sitka Pioneer Home. He was concerned
about the status of deferred maintenance in Pioneer Homes
in Alaska and asked for more information to be brought to
the committee. He mentioned a project at the Ketchikan
Pioneer Home that involved the HVAC intake damper assembly.
The description mentioned inadequate airflow and rusted
parts. He was curious if the state was getting behind on
Alaska Pioneer Homes. He asked for a status report on
deferred maintenance on all of the facilities.
Co-Chair Bishop thought there was a theme of members
wanting to see lists of agency action items.
Senator Wilson referenced item 1 and asked if the state had
looked at leveraging some additional COVID-19 funding.
Mr. Steininger explained that the requirements of CARES Act
funds required that expenditures had to be tied directly to
an impact of COVID-19. He thought it would be difficult for
some of the projects to establish a direct link and satisfy
the federal requirement. He thought in the case of an HVAC
system, there could be a connection to air quality. He
thought the project description clearly showed that there
was a long-time need that did not arise because of COVID-
19.
9:58:26 AM
Senator Wilson wanted to clarify whether DEC had reviewed
the items to ensure that COVID-19 was not exacerbating any
of the issues. He wondered if the department had examined
the deferred maintenance and considered if the items
qualified for the COVID-19 funding.
Mr. Steininger affirmed that the department had spent a lot
of time to ensure that Pioneer Homes residents were cared
for during the pandemic. He noted the difficulty of the
situation due to the congregate setting. He assured that
the department had considered at those areas where things
like air filtration could be approved or worked on. He
thought the department could elaborate on COVID-19
mitigation efforts in the Pioneer Homes.
Co-Chair Bishop had heard Mr. Steininger note that there
were three items that were recommended by AMHTA. He
referenced a letter from the trust authority. He wanted to
distribute the letter for consideration.
10:00:11 AM
AT EASE
10:03:00 AM
RECONVENED
Co-Chair Bishop passed out a letter from Chief Executive
Officer Mike Abbott of AMHTA (copy on file). The letter was
addressed to the committee co-chairs and expressed concern
with the proposed direct appropriations of more than $16
million in AMHTA budget reserves in the governor's FY 22
budgets and FY 21 supplemental budget proposals.
Co-Chair Bishop was glad to see that Neil Steininger had
stated the items on slide 9 were recommended by AMHTA.
Mr. Steininger addressed slide 10, "FY2022 Projects by
Department":
Military and Veterans Affairs
1. State Homeland Security Grant Programs $7,500.0 Fed
2. Mass Notification System - Joint Base Elmendorf
Richardson (JBER) $5,000.0 ($2,500.0 GF Match,
$2,500.0 Fed)
3. Joint Base Elmendorf Richardson (JBER) Digital
Control, Generator, and Preventative Maintenance
$7,850.0 ($3,812.5 UGF, $4,037.5 Fed)
4. Kotzebue Tarmac Repair and Maintenance $5,200.0
($4,812.5 UGF, $387.5 Fed)
Co-Chair Stedman asked about item 4 and wondered why the
funds were not mostly federal funds rather than the small
matching funds shown.
Mr. Steininger clarified that Co-Chair Stedman had asked a
good question. He referenced whether the additional federal
money coming from the Federal Aviation Administration (FAA)
could be utilized. He agreed to look into the matter. He
noted that when the project proposal was put together, the
FAA funds had already been obligated through an RPL. He
discussed state versus federal responsibility for the
facility.
Co-Chair Bishop asked if Senator Olson had any comment
about item 4, which concerned an item in his district.
Senator Olson noted that Kotzebue only had one main runway,
which was necessary to get in and out. He proposed that in
light of the fact that there were a number of COVID-19
infections in the area, it was very important to maintain
the runway. Additionally, there were transportation needs
from the Red Dog Mine. He felt very strongly about making
sure the tarmac was repaired.
10:07:38 AM
Mr. Steininger advanced to slide 11, "FY2022 Projects by
Department":
Natural Resources
1. Agriculture Specialty Crop Block Grant $4,500.0 Fed
2. Critical Minerals Mapping - Earth MRI (3DEEP)
$2,200.0 ($500.0 GF Match, $200.0 Other SDPR,
$1,500.0 Fed)
3. Abandoned Mine Lands Reclamation Federal Program
$3,200.0 Fed
4. Geological Mapping for Energy Development (USGS
STATEMAP) $900.0 ($300.0 GF Match, $600.0 Fed)
5. Cooperative Water Resource Program Pass-through to
USGS for Stream Gaging Projects $300.0 Other SDPR
6. Federal and Local Government Funded Forest Resource
and Fire Program $7,000.0 Fed
7. Land Sales - New Subdivision Development $500.0 DGF
- State Land Disposal Income
8. Land and Water Conservation Fund Federal Grant
Program $5,652.7 ($2,152.7 GF Match, $3,500.0 Fed)
9. National Historic Preservation Fund $800.0 ($200.0
Other - SDPR, $600.0 Fed)
Co-Chair Bishop noticed that the $250,000 for SnowTRAC
grants was not included. He wondered if there had been a
typo.
Mr. Steininger affirmed that the item was not in the
proposed budget.
10:10:13 AM
Mr. Steininger looked at slide 12, "FY2022 Projects by
Department":
Natural Resources - continued
10. National Recreational Trails Federal Grant Program
$1,600.0 ($100.0 DGF Program Receipts, $1,500.0 Fed)
11. State Park Electronic Fee Stations $220.0 DGF
Program Receipts
Public Safety
1. Marine Fisheries Patrol Improvements $1,100.0 Fed
2. Fire & Life Safety Vehicles $150.0 UGF
3. Crime Laboratory Equipment Replacement $300.0 UGF
4. Replace Training Video Simulator $240.0 UGF
5. AWT Law Enforcement Equipment and Off-Highway
Vehicle Replacement $750.0 UGF
6. AST Law Enforcement Equipment Replacement $500.0
UGF
7. Vehicle Replacement $1,233.6 UGF
Co-Chair Bishop asked about item 7 and wondered if the $1.2
million was to make the Alaska State Troopers' vehicles
"street legal." He asked if the troopers had a mechanic
shop to outfit the vehicles with safety accessories or if
there would be a reimbursable services agreement back to
State Equipment Fleet (SEF).
Mr. Steininger affirmed that the SEF purchased the
vehicles. He thought some of the equipment was able to be
installed when the vehicles were purchased, and some could
not. He thought the Department of Public Safety could
address the matter in more detail. He mentioned paying down
depreciation credits over time, which ensured that much of
the cost of replacement vehicles came from credits built up
within the Highway Equipment Working Capital Fund. He noted
that the UGF in item 7 was to ensure that the vehicles were
street legal.
Co-Chair Bishop asked if the work was being done in-house
or through a reimbursable services agreement.
Mr. Steininger agreed to get back to the committee with the
information.
10:14:12 AM
Co-Chair Stedman asked about item 3 and thought the
committee could use an update on the crime lab after having
received an update a few years previously. He mentioned a
significant capital investment for the lab and wanted to
receive some data on utilization on the square feet of the
building. He thought the committee needed an update about a
backlog of rape kits in the crime lab. He mentioned
significant concerns and wanted to revisit the issue.
Senator Wielechowski thought there was other DNA analysis
from felony cases that was in backlog at the crime lab. He
agreed with Co-Chair Stedman in that the issue needed to be
revisited. He recalled that the state had spent $100
million on the lab in order to get testing done.
Mr. Steininger showed slide 13, "FY2022 Projects by
Department":
Revenue
1. AHFC Rental Assistance for Persons Displaced Due to
Domestic Violence - Empowering Choice Housing Program
(ECHP) $1,500.0 UGF AHFC Dividend
2. AHFC Teacher, Health and Public Safety
Professionals Housing $2,250.0 ($1,750.0 UGF AHFC
Div, $500.0 Other SDPR)
3. AHFC Energy Efficiency Research $500.0 UGF AHFC
Div
4. AHFC Senior Citizens Housing Development Program
$1,750.0 UGF AHFC Div
5. AHFC Housing and Urban Development Federal HOME
Grant $4,750.0 ($750.0 UGF AHFC Div, $4,000.0 Fed)
6. AHFC Housing and Urban Development Capital Fund
Program $3,200.0 Fed
7. AHFC Federal and Other Competitive Grants $7,500.0
($1,500.0 UGF AHFC Div, $6,000.0 Fed)
8. AHFC Competitive Grants for Public Housing $1,100.0
($350.0 UGF AHFC Div, $750.0 Fed)
9. AHFC Supplemental Housing Development Program
$1,500.0 UGF - AHFC Div
Mr. Steininger noted that all the projects on the slide
were associated with AHFC. He furthered that most of the
items were recurring annually and utilized AHFC dividends.
He noted that the dividends were paid to the state and
generally used for capital projects.
Co-Chair Bishop noted that the executive director of AHFC
was available for questions.
Senator von Imhof wanted to ensure that the budget would
not overspend the annual AHFC dividend with all the line
items listed on the slide. She referenced item 2 and
recalled that the CARES Act had provided something like
$150 million for housing. She wondered how the additional
funds might affect the projects and help with housing.
10:18:20 AM
BRYAN BUTCHER, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF
REVENUE (via teleconference), noted that the dividend for
the current year was a little over $42.5 million and was
not overspent in the proposed budget. He recounted that the
state had received $200 million in federal funds for rent
relief, specifically to help renters with rent and
utilities. He continued that $36 million was going to the
Municipality of Anchorage, with the remainder gong to AHFC.
The authority had worked with the municipality, regional
housing authorities, and tribal entities, which had
received approximately $95 million. The collaboration would
provide a central funding portal and would help avoid
duplication. He asserted that the primary benefit of the
funds was to prevent people becoming homeless. He relayed
that most Alaskans that had lots of jobs or income have had
multiple months of difficulty in paying rent, and the funds
would probably be able to assist any qualifying applicant.
Senator von Imhof knew that housing was very tight in the
state. She thought it was difficult for people to remain in
place. She asked if the CARES Act had provided flexibility
for creating capacity in housing.
Mr. Butcher explained that the CARES Act funds for 2021
were strictly defined as to recipients and how it could
help. The CARES Act funds from 2020 had been more flexible.
He noted that President Biden had discussed having an
additional $25 billion in housing assistance in an upcoming
stimulus bill. He would continue to work with the
congressional delegation to ensure the funding could be
broadly applied to provide help to Alaskan renters and
homeowners.
10:21:24 AM
Senator Hoffman asked about item 3 and the proposed $500
thousand for energy efficiency research. He mentioned the
Alaska Center for Energy and Power (ACEP) at the University
of Alaska Fairbanks and a focus on energy research. He
wondered if the funds were being coordinated with energy
research at UA and if not, why.
Mr. Butcher stated that the funds were focused on any
research that could be done in energy efficiencies with any
partners including ACEP. Traditionally, the majority of the
funds had gone to projects through the Cold Climate Housing
Research Center in Fairbanks. Funds received the previous
year matched between $4 million and $6 million for a little
over $500,000 in state funds.
Co-Chair Bishop asked about Item 9 on slide 13, and $1.5
million in UGF for the Supplemental Housing Development
Program. He asked if the AHFC Board had approved a higher
number than shown.
Mr. Butcher detailed that the board had requested $3
million for the program.
10:23:48 AM
Mr. Steininger referenced slide 14, "FY2022 Projects by
Department":
Revenue - continued
10. AHFC Energy Programs Weatherization $3,000.0 Fed
11. MH: AHFC Homeless Assistance Program $4,550.0
($3,600.0 UGF AHFC Div, $950.0 Other MH Trust
Authority)
12. MH: AHFC Beneficiary and Special Needs Housing
$1,700.0 ($1,500.0 DGF - MH Trust Reserve, $200.0
Other - MH Trust Authority)
Transportation and Public Facilities
1. Computerized Maintenance Management System (CMMS) -
Year 3 $1,509.5 UGF
2. Weigh Station Scale Repairs $1,000.0 UGF
3. Alaska Marine Highway System Vessel Overhaul,
Annual Certification and Shoreside Facilities
Rehabilitation $15,000.0 UGF
4. State Equipment Fleet Replacement $22,000.0 Other
Highways/Equipment Working Capital Fund
Co-Chair Stedman referenced item 3 and item 4 under DOT. He
thought the DOT subcommittee would consider the items and
get back to the committee with recommendations. He thought
Co-Chair Bishop had been working on the SEF for several
years.
Senator Hoffman looked at $3 million in federal funds
listed in item 10 under DOR. He thought the AHFC
weatherization program was well-proven., and in the past
the state had spent close to $1 billion. He thought it
seemed like the state should have some investment in the
program. He requested the administration should look
further at the program, which had a direct impact on the
citizens of the state. he thought if the state was truly
going to reduce energy costs for Alaskans as the governor
had mentioned in his State of the State address, the state
investment should approach a minimum of $250,000. He asked
the administration to take another look at the item.
10:27:00 AM
Senator Wielechowski wondered about the possibility of
federal matching funds for weatherization that the state
had not applied for. He asked Mr. Steininger to look into
the matter.
Mr. Steininger agreed to look into the matter.
Mr. Steininger turned to slide 15, "FY2022 Projects by
Department":
Transportation and Public Facilities - continued
5. Alaska International Airport System $68,722.1
($722.1 Other International Airport Construction
Fund, $20,800.0 Other Int. Airport Revenue Fund,
$47,200.0 Fed)
6. Rural Airport Improvement Program $190,000.0 Fed
7. Alaska International Airport System Reimbursable
Projects $10,000.0 ($5,000.0 Other Int. Airport
Revenue Fund, $5,000.0 Fed)
8. Surface Transportation Program $680,000.0 Fed
9. Federal-Aid Aviation State Match $14,700.0 Other -
AHFC Bonds
10. Federal-Aid Highway State Match $71,200.0 Other
AHFC Bonds
11. Other Federal Program Match $1,300.0 GF Match
12. Cooperative Reimbursable Projects $15,000.0
($10,000.0 Other - SDPR, $5,000.0 Fed)
13. Federal Emergency Projects $10,000.0 Fed
14. Federal Transit Administration Grants $10,000.0
Fed
Mr. Steininger clarified that lines 9 and 10 represented
proposed AHFC bonding for the state match for federal
aviation aid. In normal years, the funds would be UGF.
Senator Wilson asked for a list of AHFC bonding projects.
Mr. Steininger agreed to provide the information. The list
was also included with legislation that would authorize the
bonds. In short, he listed the surface transportation
matching funds, the aviation transportation funding match,
and the two village safe water projects.
Co-Chair Bishop asked for Mr. Steininger to address item 9
and item 10. He asked for further detail on why AHFC
bonding was proposed to be utilized.
Mr. Steininger explained that the reason the budget
proposed to use AHFC bonding was due to knowing state
funding would not be sufficient to meet obligations. The
administration had looked for areas in which to utilize
different fund sources to ensure that there was money
retained in the CBR and liquid assets. Since there was a
low interest rate environment, there was some advantage to
bonding. He noted that AHFC had communicated that there was
an opportunity in the bonding capacity to assist the
state's financial situation through the capital budget to
free up UGF for other state needs. He acknowledged that the
scenario was a one-time situation for the current year,
which would leave some cash in the state's accounts to
satisfy other obligations.
10:31:14 AM
Co-Chair Stedman was concerned about using one-time items
and thought it was important to consider how AHFC would be
constrained in the future. He contemplated the state's
significant expenditures such as the Permanent Fund
Dividend (PFD), K-12 education, and health and human
services. He did not think the state could continue along
with the current structure in statute. He discussed
changing the PFD amount and thought there could be more
flexibility. He thought there would be robust committee
discussion, some fund source changes and increased clarity
so that members could make the best-informed decisions
possible. He worried about putting too much strain on AHFC
so that it could not help in the future. He was skeptical
about the fund sources being presented.
Co-Chair Bishop shared that he had concerns about using
AHFC funds. He understood there were housing problems in
rural Alaska. He mentioned teachers, nursing, and the court
system. He did not want to hinder AHFC's ability to address
other important issues in the state. He mentioned deferred
maintenance and wanted the legislature and the
administration to work together towards implementing the
one percent rule for an increment to the building fund.
10:34:33 AM
Mr. Steininger considered slide 16, "FY2022 Projects by
Department":
Transportation and Public Facilities - continued
15. Highway Safety Grants Program $8,033.9 ($33.9 UGF,
$8,000.0 Fed)
16. Federal-Aid Highway Project Match Credits $1,000.0
DGF - Program Receipts
17. MH: Coordinated Transportation and Vehicles
$1,300.0 ($1,000.0 MH GF, $300.0 MH Trust Authority)
Courts
1. Courts Statewide Deferred Maintenance $2,300.0 UGF
Senator Hoffman asked for the total deferred maintenance
for the court system.
Mr. Steininger did not have a number readily available but
offered to provide a comprehensive list of all identified
deferred maintenance projects.
Senator Hoffman assumed that the list was well above $100
million. He wanted to have the number available to the
committee so members could consider the appropriation. He
thought the proposed funding was a token amount to address
the maintenance for the court system. He thought the same
was true for the University system as well as the Regional
Educational Attendance Area (REAA) maintenance list. He
knew that Co-Chair Bishop was aware of the situation.
Mr. Steininger clarified that the court system statewide
deferred maintenance amount had been requested by the court
system. He acknowledged that as Senator Hoffman had noted,
the amount was small in comparison to the overall backlog.
Senator Hoffman encouraged the court system to take a look
at the list and come up with a supplemental list to submit
to the administration as well as the chairman of the
capital budget.
Mr. Steininger displayed slide 17, "FY2021 Capital
Supplemental":
*SB 48 Fast Track Supplemental
**SB 50 Supplemental in FY2022 Governor
***SB TBD Regular Supplemental
Mr. Steininger clarified that the following slides would
address capital appropriations that had a FY 21 effective
date, which were distributed across three appropriation
bills denoted with asterisks as shown on the slide. He
noted that there was a supplemental spreadsheet (copy on
file) that gave more detail about each item. He explained
that SB 48 included items the administration thought needed
to be passed sooner, and SB 50 included items for FY 22. He
explained that "SB TBD Regular Supplemental" items were
emergent things that came up during the course of the year
and had varying levels of urgency with project timing but
fit within FY 21 as an effective date.
Mr. Steininger highlighted slide 18, "FY2021 Supplemental
Projects," which showed a data table with an overall
summary. He noted that negative numbers represented repeal
of capital projects that finished with additional money
left. The number represented a reduction in available
capital authority for the projects.
10:39:35 AM
Mr. Steininger looked at slide 19, "FY2021 Supplemental
Projects":
Administration
1. *Retirement System Server Replacement $230.4 Other
($162.0 P/E Retirement System Fund, $67.0 Teachers
Retirement System Fund, $1.4 Judicial Retirement
System)
Commerce, Community & Economic Development
1. *Blood Bank of Alaska $2.3 UGF AHFC Dividend
2. ***Alaska Energy Authority - Electrical Emergencies
Program $200.0 UGF
3. ***National Petroleum Reserve - Alaska Impact Grant
Program $17,908.8 Fed NPR Fund
Courts
1. *Court Security Improvements $1,551.1 UGF AHFC
Dividend
2. *Statewide Deferred Maintenance Courts $1,551.2
DGF Capital Income Fund Dollars in thousands
*SB 48 Fast Track Supplemental **SB 50 Supplemental in
FY2022 Governor ***SB TBD Regular Supplemental
Mr. Steininger noted that the fast-track supplemental
included a handful of capital projects that were proposed
the previous year but not appropriated because of the
shortened legislative session. He detailed that the funds
for the Blood Bank of Alaska were owed from license plate
fees.
Co-Chair Stedman commented on item 1 on the upcoming slide
20, which regarded Mt. Edgecumbe High School. He noted that
while the school was in his district, the students were
from Senator Hoffman and Senator Olson's districts. He
highlighted that there was a large-scale hospital project
being built in the area, similar to the hospital built in
Bethel. There was work being done to transfer lands from
the school to the Southeast Alaska Regional Health
Consortium (SEARHC). The lands had to be used for
educational purposes and an endowment was being considered
to provide a revenue stream for the school. He thought
there was obviously a need for updated plans and classroom
expansion. He thought the school was the only one in
Southeast Alaska that needed classroom expansion. He
thought the proposed funds would be well spent.
10:43:41 AM
Senator Hoffman thought that not only would the hospital
project provide Southeast Alaska with a stimulus package,
but there would also be additional jobs in healthcare.
Senator Olson wanted voice his support for the Mt.
Edgecumbe High School master plan update. He informed that
many of his constituents went to Sitka for high school at
Mt. Edgecumbe.
Co-Chair Bishop referenced the retirement system server
replacement. He recalled that the state had appropriated
$500,000 several years ago for the same project. He asked
if the funds were new money that was needed.
Mr. Steininger stated the funds were new and that other
funds were collected in the retirement system and could
only be used for limited purposes. The funds were in
addition to prior appropriations. He agreed to provide an
update on the prior appropriations and the status of the
funds.
10:46:02 AM
Senator Hoffman spoke to item 2 under DCCED on slide 19. He
had mentioned earlier that there was no funding to address
the REAA school construction commitment from the state. He
referenced the Kasayulie settlement and court decree [In
1997, Kasayulie and other parties brough suit against the
State of Alaska regarding the method of funding capital
projects for education. The Kasayulie Consent Decree and
Settlement Agreement addressed the violations of law and
provided remedies for these violations]. He felt that the
legislature was not in compliance with the decree and asked
Co-Chair Bishop to consult with the Legislative Legal
Department on the matter. He noted that the previous year
the administration had not proposed appropriating funds for
addressing the payment of debt to urban Alaska, while in
the current year the budget addressed urban schools but
completely ignored the needs of the children in rural
Alaska. He thought the state was addressing the needs of
urban students and ignoring rural Alaska.
Co-Chair Stedman observed that there was a mechanical tie-
in between school bond debt reimbursement for organized
areas of the state, with a calculation for rural areas. He
recalled that the committee's policy in previous years had
been for 100 percent debt reimbursement for the community.
He thought the committee was in disagreement with the
administration on the issue. He recognized that there was
50 percent funding in the proposed budget. He anticipated
that the committee would be discussing the matter and
whether or not the members wanted to fund 100 percent of
debt reimbursement along with the REAA funds as in the
past. He did not know of any legislative policy change
relating to wanting 100 percent bond debt reimbursement.
The issue affected the Mat-Su area and Western Alaska,
where school construction was needed. He failed to see how
the legislature would convince organized areas of the state
to build schools at 100 percent of the cost. He thought
there were policy differences between the legislature and
the executive branch that needed to be rectified.
Senator Hoffman wanted to clarify that he did not believe
the administration intentionally discriminated between
urban and rural Alaska. He thought the consequence of the
oversight of funding for rural schools was not intentional.
Co-Chair Bishop thought the committee would want to discuss
major school maintenance, because it was also not in the
budget.
10:50:29 AM
Mr. Steininger wanted to clarify that there was 50 percent
funding for school bond debt reimbursement included in the
governor's operating budget, as well as 50 percent funding
of the REAA Fund deposit in the fund capitalization section
of the operating budget.
Senator Hoffman wanted to verify the items in the budget.
When he had asked about the funds in a previous meeting, he
had been told there was no funds in the budget.
Mr. Steininger addressed slide 20, "FY2021 Supplemental
Projects":
Education
1. ***Mt. Edgecumbe High School Master Plan Update
$330.0 DGF School Fund
2. ***Statewide School Capital Funding Forecast
Database $240.0 DGF School Fund
Environmental Conservation
1. *** Village Safe Water and Wastewater
Infrastructure Projects: Expansion, Upgrade, and
Replacement of Existing Service $1,460.0 GF Match
2. ***Village Safe Water and Wastewater Infrastructure
Projects: First Time Service Projects Supplemental
$2,190.0 GF Match
*SB 48 Fast Track Supplemental **SB 50 Supplemental in
FY2022 Governor ***SB TBD Regular Supplemental
Mr. Steininger noted that the federal grant associated with
item 1 under DEC had increased significantly and additional
matching funds were required. The department had the
existing federal authority to collect the federal funds
associated with the match, therefore the funds were not
listed.
Co-Chair Bishop thought it would be nice to see what the
state's matching General Fund dollars were leveraging.
Mr. Steininger affirmed he would provide the additional
information related to federal funds for item 1.
Mr. Steininger advanced to slide 21, "FY2021 Supplemental
Projects
Fish and Game
1. *Pacific Salmon Treaty Chinook Fishery Mitigation
$7,700.0 Fed
2. *Facilities, Vessels and Aircraft Maintenance,
Repair and Upgrades $500.0 DGF Capital
Income Fund
3. *Sport Fish Recreational Boating and Angler Access
$3,000.0 ($750.0 Other - Fish and Game
Fund, $2,250.0 Fed)
4. *Wildlife Management, Research and Hunting Access
$10,000.0 ($50.0 Other - Fish and Game Fund, $2,450.0
Other - SDPR, $7,500.0 Fed)
Governor
1. *Primary and General Elections Security Due to
COVID-19 $3,000.0 Other - Election Fund
2. *Statewide Deferred Maintenance, Renovation, and
Repair $5,903.8 DGF - Capital Income Fund
*SB 48 Fast Track Supplemental **SB 50 Supplemental in
FY2022 Governor ***SB TBD Regular Supplemental
Mr. Steininger noted that item 1 under DFG was redundant
with a project in the FY 22 request, and would be removed
with an amendment. There was funding for much-needed
maintenance on vessels, facilities, and aircraft that was
utilized by DFG. In the Office of the Governor, there was
proposed $3 million appropriation for a grant received for
election security. He discussed the Division of Elections'
need to utilize the funds. He pointed out additional
statewide deferred maintenance and noted that there was a
much larger request for FY 22.
10:54:13 AM
Mr. Steininger looked at slide 22, "FY2021 Supplemental
Projects":
Law
1. *Prosecutor Recruitment and Housing to Address
Sexual Assault and Sexual Abuse of a Minor Case
Backlog $4,000.0 DGF Higher Ed Fund
Military and Veterans Affairs
1. *Bethel Readiness Center Security Upgrades $140.0
($70.0 DGF Capital Income Fund, $70.0 Fed)
2. *Bethel Readiness Center Water System Sustainment
$250.0 ($125.0 DGF Capital Income Fund, $125.0 Fed)
3. *Kotzebue Readiness Center HVAC Life-Cycle
Replacement $500.0 ($250.0 DGF Capital Income Fund,
$250.0 Fed)
4. *Statewide Roof, Envelope, and Fall Protection
$1,700.0 ($850.0 DGF Capital Income Fund, $850.0
Fed)
5. ***Reappropriation from Department of
Administration for Alaska Land Mobile Radio Dollars in
thousands
*SB 48 Fast Track Supplemental **SB 50 Supplemental in
FY2022 Governor ***SB TBD Regular Supplemental
Mr. Steininger pointed out key maintenance items that were
included in the fast track supplemental. The items would
benefit from the ability to start earlier rather than wait
for the next fiscal year. He explained that the Alaska Land
Mobile Radio System (ALMR) listed under item 5 was
transferred from the Department of Administration to the
Department of Military and Veterans Affairs. The item
proposed to clean up the department listing on prior
appropriation of capital projects.
Co-Chair Bishop asked for a total of how much the
reappropriation for ALMR was.
Mr. Steininger agreed to provide the information.
Mr. Steininger spoke to slide 23, "FY2021 Supplemental
Projects":
Natural Resources
1. *PARKS Land and Water Conservation Fund Federal
Grant Program $4,400.0 ($900.0 UGF AHFC Div,
$3,500.0 Fed)
2. *Geologic Materials Center Multispectral Scanning
Equipment $1,290.0 ($865.0 UGF - AHFC Div, $275.0 DGF
- Program Receipts, $150.0 Other - SDPR)
3. ***Enhance Capacity at Geological Material Center
$375.0 Other SDPR
4. ***Exxon Valdez Oil Spill Outreach $49.1 Other
EVOS Settlement
5. ***Land Sales - New Subdivision Development $750.0
Other State Land Disposal Income Fund
Revenue
1. *Reapprop for Tax Expertise, Economic Impact
Analysis, and Legal Analysis - Est $484.4
2. **Revenue Collections System Enhancements $24,529.4
($10,000.0 DGF - Program Receipts, $15,529.4 Fed)
*SB 48 Fast Track Supplemental **SB 50 Supplemental in
FY2022 Governor ***SB TBD Regular Supplemental
Mr. Steininger noted that the federal funding for item 1
under DNR had gone up since the previous year.
Co-Chair Stedman asked about item 1 under the Department of
Revenue. He asked how quickly the economic analysis would
be implemented. He pointed out that the legislature was
already underway with addressing the structural deficit. He
thought the legislature might have conclusions before the
consultants had conclusions.
Mr. Steininger stated the item was proposed as part of the
fast-track supplemental because the discussions were
already happening. He suggested that access to the level of
expertise requested was critical to analyze various
proposals that might come forward.
Co-Chair Stedman asked if the analysis would be of
proposals that might come forward, or rather analysis of
proposals to be assembled and put forward by the executive
branch. He wondered if the analysis would be advocating tax
increases to the citizens.
Mr. Steininger stated that the administration had not
introduced a specific tax proposal, but it needed the
expertise to analyze any ideas or proposals that came
forward or could be brought forward.
10:59:56 AM
Senator von Imhof asked why the legislature should expend
$484,000 if the governor was not going to put forward any
tax proposals. She wondered what consultants would analyze
if the legislature did not put forward any tax proposals.
She wondered if it made sense to allocate the money and
have the governor put forward a bill or two with revenue
ideas.
Mr. Steininger did not want to speculate about what bills
might go forward but asserted that the administration
needed to investigate the impacts of various measures that
could be put forward. He asserted that having the expertise
to do the research work and understand the impacts was
critical to inform opinions on potential revenue measures
that might be proposed.
Co-Chair Stedman thought there was a $5 billion proposal to
bring gas from Point Thomsen. He asked if there had been
analysis of the potential impact that might take into
account the impact on the treasury, credits, offsets, and
impacts on royalties. He mentioned Point Thomson Settlement
Agreement issues.
Mr. Steininger thought the Point Thomson question was a
much larger topic that he deferred to DNR's analysis team.
Co-Chair Bishop thought Co-Chair Stedman's question was a
good question for the following day's meeting.
11:02:19 AM
Mr. Steininger referenced slide 24, "FY2021 Supplemental
Projects":
Transportation and Public Facilities
1. *Decommissioning and Remediation of Class V
Injection Wells $1,700.0 UGF AHFC Div
2. *Public Building Fund Deferred Maintenance,
Renovation, Repair and Equipment $5,946.0 Other
Public Building Fund
3. **Reappropriation of Unexpended Balances to the
Commercial Passenger Vessel Tax Account $-8.595 Other
Commercial Passenger Vessel Tax
4. **Reappropriation of Unexpended Balances to the
Alaska Capital Income Fund $-16,542.8 ($-9,500.0 CBR,
$-3,252.3 UGF, $-3,790.5 DGF - Capital Income Fund)
Dollars in thousands
*SB 48 Fast Track Supplemental **SB 50 Supplemental in
FY2022 Governor ***SB TBD Regular Supplemental
Mr. Steininger noted that item 3 and item 4 were reflective
of negative numbers he had mentioned earlier and signified
repeals of existing capital projects. The funds from item 3
would go back into the Commercial Passenger Vessel Tax
Account and had federal spending restrictions. The dollars
from item 4 were proposed to be deposited into the Capital
Income Fund in the operating budget to bolster the ability
to support deferred maintenance activities.
Senator Wilson asked if Mr. Steininger saw any issues or
challenges with the reappropriation proposed in item 4.
Mr. Steininger asked if Senator Wilson was referring to
challenges in terms of whether the funds were available.
Senator Wilson noted that some of the funds were from GO
bonds, and other funds were related to Constitutional
Budget Reserve (CBR) access. He mentioned the three-
quarters vote required to access funds.
Mr. Steininger stated that the GO bond mentioned by Mr.
Steininger was more of a clerical error. He relayed that
the administration had been in conversation with LFD
regarding interpretations of reappropriation mechanisms of
CBR projects. There was discussion as to how the monies
would be implemented and there were technical questions
being worked through.
Senator Hoffman noted that during the last address by the
congressional delegation Senator Lisa Murkowski had
mentioned that the federal government and her office had
looked into small-scale nuclear power as an option for
Alaska. The committee had spent several hundred thousand
dollars to get a report on the matter. He relayed that
there had been an update the previous month by the Alaska
Center for Energy and Power. He stated he would provide the
report to the committee. He quoted the letter's conclusion:
"It is imperative for Alaskans to make careful well-
informed decisions about nuclear development in our unique
state."
Senator Hoffman had received a letter the previous summer
regarding the Kasayulie case, which he would also provide
to members. The letter was from Holland and Knight and was
dated July 24, 2019 and asked for response to the
administration's decision of how it was treating the case.
The letter asked the governor to reassess his position on
the case. He did not know if the letter had been responded
to but wanted a copy of any response. The authors of the
letter were holding to the consent decree, and if the state
did not comply had planned on reopening the case. He asked
Mr. Steininger to make any written response available to
the committee.
Co-Chair Bishop discussed the agenda for the following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020321 SB 50 SFIN Capital Budget Overview .pdf |
SFIN 2/3/2021 9:00:00 AM |
SB 50 |
| 020321 FY21 Supp Capital Project Summary.pdf |
SFIN 2/3/2021 9:00:00 AM |
SB 50 |
| 020321 FY22 Gov Capital Project Summary.pdf |
SFIN 2/3/2021 9:00:00 AM |
SB 50 |
| 020321 SB 50 Mike Abbott, Mental Health Trust Authority, letter, 26 January 2021.pdf |
SFIN 2/3/2021 9:00:00 AM |
SB 50 |
| 020321 OMB Senate Finance Committee Capital Overview Response.pdf |
SFIN 2/3/2021 9:00:00 AM |
SB 50 |
| 020321 OMB Attachments.zip |
SFIN 2/3/2021 9:00:00 AM |
SB 50 |