Legislature(2019 - 2020)SENATE FINANCE 532

03/05/2020 09:00 AM FINANCE

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09:01:21 AM Start
09:02:20 AM SB154
02:31:46 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 154 APPROP: CAPITAL; SUPP; OTHER APPROP. TELECONFERENCED
Heard & Held
by Office of Management & Budget
Deferred Maintenance Update by:
- Office of Management & Budget
- Department of Transportation & Public
Facilities
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 154                                                                                                           
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,       supplemental      appropriations,                                                                    
     reappropriations,  and   other  appropriations;  making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:02:20 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof directed members' attention to SB 154.                                                                       
                                                                                                                                
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE  OF   THE  GOVERNOR,  stated  he   would  review  the                                                                    
governor's  proposed   capital  budget;  both   the  amounts                                                                    
included in SB  154 as well as capital  projects included in                                                                    
the mental health bill and  the supplemental budget bill. He                                                                    
discussed   the   presentation    "FY2021   Capital   Budget                                                                    
Overview," (copy on file).                                                                                                      
                                                                                                                                
Mr.  Steininger looked  at slide  2, "FY2021  Capital Budget                                                                    
and  Supplemental Overview  - SB  153, 154  and 174,"  which                                                                    
showed a table that gave  a high-level overview of the major                                                                    
fund  categories used  to fund  capital projects  across the                                                                    
three  bills.  He highlighted  that  the  FY 21  amount  for                                                                    
capital  projects  totaled  $140.3 million  in  Unrestricted                                                                    
General Funds  (UGF). When  all other  funds were  added in,                                                                    
the total was about $1.3  billion in capital spending. There                                                                    
were projects intended  to start in the  current fiscal year                                                                    
and  were included  in the  FY 20  supplemental budget.  The                                                                    
total for  the FY 20  supplemental budget was  $25.5 million                                                                    
UGF, and with  all funds it was $81.9 million.  The total of                                                                    
all  proposed capital  projects  being  proposed during  the                                                                    
current legislative session was  about $1.4 billion in total                                                                    
spending.                                                                                                                       
                                                                                                                                
Mr. Steininger showed slide 3, "FY2021 Capital Budget."                                                                         
                                                                                                                                
Mr. Steininger referenced slide  4, "FY2021 Capital Budget -                                                                    
SB 153 and 154":                                                                                                                
                                                                                                                                
     FY2021 Capital Project Priorities                                                                                          
     ? Prioritize life, health, and safety issues                                                                               
     ? Leverage Federal receipts                                                                                                
     ? Address deferred maintenance                                                                                             
     ? Strategic investment in future efficiencies                                                                              
                                                                                                                                
Mr. Steininger addressed the table  on slide 4, which showed                                                                    
a  high-level  overview  of funding  for  the  projects.  He                                                                    
pointed out the difference  between FY 20's capital proposed                                                                    
(inclusive of  supplementals) and the FY  21 proposal. There                                                                    
was  a decrease  of about  $32.4 million,  $29.6 million  of                                                                    
which  was UGF.  He  noted that  the  following pages  would                                                                    
cover  all  the  projects  included in  the  FY  21  capital                                                                    
budget, some of which he would highlight.                                                                                       
                                                                                                                                
9:06:08 AM                                                                                                                    
                                                                                                                                
Mr. Steininger turned to slide  5, "Capital Budget Five Year                                                                    
Overview  FY2017      FY2021,"  which  showed   a  five-year                                                                    
lookback  of capital  spending.  He pointed  out the  yellow                                                                    
bar, which showed federal receipts.  A significant amount of                                                                    
capital spending  had come  from federally  funded projects.                                                                    
The  blue  at  the  bottom  showed  the  General  Fund  (GF)                                                                    
projects as well as the match for the federal projects.                                                                         
                                                                                                                                
Co-Chair von Imhof noted that  there was about $286,000 less                                                                    
in  federal dollars  from 2017  to  2021. She  asked if  the                                                                    
state was  maximizing federal funding  each year.  She asked                                                                    
about a chunk of money the state received for five years.                                                                       
                                                                                                                                
Mr.  Steininger  explained  that  when  trying  to  maximize                                                                    
federal receipts, the state primarily  looked at things like                                                                    
federal highways receipts where there  was a 90/10 match. He                                                                    
noted that in  the current year there was $65  million in GF                                                                    
spending  to  match  $650 million  in  federal  funding.  He                                                                    
relayed  that departments  could  leverage federal  receipts                                                                    
through  using  state funds  solely  for  projects, and  the                                                                    
amount  of available  funds varied  year to  year. He  noted                                                                    
that there were a handful  of recurring yearly projects with                                                                    
a fairly advantageous federal match.                                                                                            
                                                                                                                                
Co-Chair  von Imhof  had seen  the Statewide  Transportation                                                                    
Improvement Program  (STIP) list and thought  there was well                                                                    
more  federal dollars  than  were shown  on  the slide.  She                                                                    
wanted  to  make  sure  the  state  was  maximizing  federal                                                                    
funding.  She   anticipated  that  Co-Chair   Stedman  would                                                                    
discuss the  Alaska Marine Highway  System (AMHS).  She knew                                                                    
that there was  maintenance needed on the  system and wanted                                                                    
the state to maximize the available funding.                                                                                    
                                                                                                                                
Co-Chair Stedman wanted to wait  to make his comments on the                                                                    
AMHS  for  the  Department   of  Transportation  and  Public                                                                    
Facilities (DOT)  portion of the presentation.  He explained                                                                    
that Alaska  was normally prepared  to secure  other states'                                                                    
federal  monies  for  shovel-ready  projects  if  the  other                                                                    
states did  not have the  ability to absorb all  the federal                                                                    
monies. He asked  if the state had picked  up any additional                                                                    
federal  funds  that  from  other  states'  allocations.  He                                                                    
wanted to  clarify whether any  federal funds had  been left                                                                    
on the table.                                                                                                                   
                                                                                                                                
Mr. Steininger  did not know  whether or how much  the state                                                                    
had  picked up  in federal  receipts that  were left  on the                                                                    
table  by  other states.  He  offered  to  get back  to  the                                                                    
committee with a response to the question.                                                                                      
                                                                                                                                
Co-Chair von  Imhof asked  about federal  funds left  on the                                                                    
table by the state.                                                                                                             
                                                                                                                                
Mr. Steininger  stated he would  look at  historical capital                                                                    
spending and get back to the committee with the answer.                                                                         
                                                                                                                                
Senator Bishop assumed that the  information provided by Mr.                                                                    
Steininger  would be  comprehensive across  all departments.                                                                    
He wanted to ensure no funds were left on the table.                                                                            
                                                                                                                                
Co-Chair von  Imhof thought it  was smart to  hold questions                                                                    
for  DOT, but  wanted to  discuss  AMHS. She  saw there  was                                                                    
money in  the STIP list for  the ferries. She wanted  to see                                                                    
what type  of matching funds  were available, that  could be                                                                    
used to  amend the capital  budget and get the  ferries back                                                                    
online within the year to the extent that it was possible.                                                                      
                                                                                                                                
Mr. Steininger  considered slide 6, "Capital  Budget History                                                                    
FY2010     FY2021," which  showed  a  bar graph  looking  at                                                                    
capital budget funding  going back to FY 10  to provide more                                                                    
context for the current capital budget.                                                                                         
                                                                                                                                
9:11:28 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked for a definition of "Other" Funds.                                                                       
                                                                                                                                
Mr.  Steininger explained  that Other  Funds were  generally                                                                    
non-General  Fund,  non-federal   receipts  that  came  from                                                                    
outside sources.  Many of  the funds  in the  capital budget                                                                    
came  from  outside  sources.  He  detailed  that  Statutory                                                                    
Designated  Program   Receipts  funded  a  handful   of  the                                                                    
project;  and were  monies  received as  a  gift, grant,  or                                                                    
bequest used for  a specific purpose. There  was also Alaska                                                                    
Mental Health  Trust Authority Authorized  Receipts (MHTAAR)                                                                    
that funded  projects in  the AMHTA  budget that  were given                                                                    
for  a specific  purpose by  the  trust. He  noted that  the                                                                    
sources  described were  the two  primary  sources of  Other                                                                    
Funds  within  the capital  budget,  and  there could  be  a                                                                    
handful of other smaller sources as well.                                                                                       
                                                                                                                                
Co-Chair von Imhof thought the  bar graph was interesting in                                                                    
that there was  a wide variation of spending  over the years                                                                    
shown. She pondered  what amount of spending  was right. She                                                                    
observed that  2013 had  saturated the  market, particularly                                                                    
with  the   workforce.  She  mentioned  the   2021  deferred                                                                    
maintenance list of  270 pages. She mused  about the correct                                                                    
level  of  funding for  the  total  capital budget  to  fund                                                                    
deferred  maintenance projects  in a  timely manner,  and to                                                                    
create infrastructure projects to  attract new investment in                                                                    
the state.  She stated that ideally,  the legislature wanted                                                                    
a recommendation  from the administration of  more than $140                                                                    
million.                                                                                                                        
                                                                                                                                
Mr.  Steininger displayed  slide 7,  "FY2021 Capital  Budget                                                                    
Snapshot,"  which showed  a table  depicting an  overview of                                                                    
the FY  21 capital  budget broken out  by department  to see                                                                    
the  relative allocation  of  capital  spending across  each                                                                    
department.  Further slides  would go  into more  detail for                                                                    
each agency.                                                                                                                    
                                                                                                                                
Mr.  Steininger highlighted  slide  8,  "FY2021 Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Administration                                                                                                             
     1.  Automated  Performance Evaluations  and  Onboarding                                                                    
     System Setup $320.0 UGF                                                                                                    
     2. Electronic Timekeeping $1,000.0 UGF                                                                                     
     3.  Integrated   Resource  Information   System  (IRIS)                                                                    
     Upgrade $7,100.0 UGF                                                                                                       
     4. OIT Upgrade to Cloud  Servers - Phase I $1,250.0 UGF                                                                    
     5.   Public   Building   Fund   Deferred   Maintenance,                                                                    
     Renovation,   Repair  and   Equipment  $5,946.0   Other                                                                    
     (Public Building Fund)                                                                                                     
     6.  Retirement System  Server Replacement  $230.4 Other                                                                    
     ($162.0  Public  Employees Retirement,  $67.0  Teachers                                                                    
     Retirement, $1.4 Judicial Retirement)                                                                                      
     7.  Software   for  the  Shared   Services  Initiatives                                                                    
     $1,800.0 UGF                                                                                                               
     8. Service Management System $1,000.0 UGF                                                                                  
                                                                                                                                
     Commerce, Community & Economic Development                                                                                 
     1. National Petroleum Reserve - Alaska Impact Grant                                                                        
     Program $11,300.0 Fed                                                                                                      
     2. Alaska Energy Authority - Bulk Fuel Upgrades                                                                            
     $13.000.0 ($5,500.0 DGF (Power Cost Equalization                                                                           
     Endowment), $7,500.0 Fed)                                                                                                  
                                                                                                                                
Mr. Steininger referenced  a spreadsheet that gave  a one to                                                                    
two  sentence explanation  of each  project (copy  on file).                                                                    
The two  projects listed under  the Department  of Commerce,                                                                    
Community  and  Economic  Development  (DCCED)  were  annual                                                                    
recurring projects.                                                                                                             
                                                                                                                                
Co-Chair von  Imhof asked  about the  project funded  by the                                                                    
Power Cost  Equalization (PCE) Endowment.  She asked  if the                                                                    
fund was sweepable.                                                                                                             
                                                                                                                                
Mr. Steininger answered "yes."                                                                                                  
                                                                                                                                
Co-Chair von Imhof noted that  the governor proposed to fund                                                                    
$5.5 million and then wanted to sweep the fund.                                                                                 
                                                                                                                                
Mr. Steininger  stated that the proposed  budget in December                                                                    
included  language to  reverse the  impact of  the sweep  so                                                                    
that  money  would   be  available  in  the   fund  for  the                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Co-Chair  von Imhof  asked if  the administration  supported                                                                    
reversing the sweep.                                                                                                            
                                                                                                                                
Mr. Steininger  answered "yes"  and that  the administration                                                                    
had  included  the  reverse  sweep  in  the  budget  it  had                                                                    
presented in December.                                                                                                          
                                                                                                                                
9:16:52 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski asked  if any  of the  projects listed                                                                    
were for transfer  of the payroll system  from bi-monthly to                                                                    
bi-weekly.                                                                                                                      
                                                                                                                                
Mr.  Steininger  explained  that within  in  the  Integrated                                                                    
Resource  Information  System   (IRIS)  project,  there  was                                                                    
activity that would affect the  payroll systems. The cost of                                                                    
the project  would go up  if there  was not a  transition to                                                                    
the  bi-weekly payroll  system. He  stated that  maintaining                                                                    
two  payroll  systems  required a  modification  within  the                                                                    
software, which would increase the cost.                                                                                        
                                                                                                                                
Co-Chair von Imhof thought  that various administrations had                                                                    
been  looking  at  going   to  electronic  timekeeping.  She                                                                    
thought  the bi-weekly  payroll was  a different  issue. She                                                                    
asked for  a description of  item 8 under the  Department of                                                                    
Administration (DOA) projects.                                                                                                  
                                                                                                                                
Mr. Steininger explained that  the Service Management System                                                                    
was initially called the ticketing  system for the Office of                                                                    
Information Technology.  The idea  had expanded and  the new                                                                    
system would coordinate the efforts  and get the information                                                                    
to  the right  person. The  system  would be  used for  more                                                                    
global management.  The name had shifted  since the original                                                                    
proposal.                                                                                                                       
                                                                                                                                
Senator  Hoffman referenced  Mr.  Steininger's comment  that                                                                    
the PCE Fund  was sweepable. He had not been  able to get an                                                                    
opinion  from  the  administration, including  the  attorney                                                                    
general,  that indicated  the fund  was sweepable.  He asked                                                                    
for Mr. Steininger  to provide a document  from the Attorney                                                                    
General's Office  that asserted the PCE  Fund was sweepable.                                                                    
He  did not  believe the  fund was  sweepable, and  recalled                                                                    
that no other  administration had claimed that  the fund was                                                                    
sweepable. He thought once the  opinion was presented, there                                                                    
could  be legal  challenges  regarding the  position of  the                                                                    
administration. He did not  believe the administration would                                                                    
come  forward  with  a  written   opinion  to  back  up  its                                                                    
statement regarding sweeping the fund.                                                                                          
                                                                                                                                
Mr. Steininger agreed to respond in writing.                                                                                    
                                                                                                                                
Senator Wielechowski asked about item  4 for DOA on slide 8.                                                                    
He asked  if Mr.  Steininger anticipated  a loss  of Alaskan                                                                    
jobs  because of  the  project.  He asked  if  the item  was                                                                    
subject to collective bargaining issues.                                                                                        
                                                                                                                                
Mr. Steininger did  not think there was an  intention to lay                                                                    
off people related to moving  to cloud servers. He explained                                                                    
that  as  the  state   looked  at  centralizing  information                                                                    
technology  (IT),  it  looked at  modernizing  the  way  the                                                                    
services were  provided to departments to  make the delivery                                                                    
and all  back-office functions  more efficient.  He pondered                                                                    
that there would  be a benefit to the state  if the delivery                                                                    
of services  could be done  while expending  less resources.                                                                    
He  thought  using cloud  services  could  result in  better                                                                    
reliability and  a more efficient IT  infrastructure for the                                                                    
state. He could  not comment as to whether there  would be a                                                                    
collective bargaining impact.                                                                                                   
                                                                                                                                
9:22:18 AM                                                                                                                    
                                                                                                                                
Mr.  Steininger  spoke  to  slide  9,  "FY2021  Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Commerce, Community & Economic Development, continued                                                                      
     3.  Alaska Energy  Authority  - Electrical  Emergencies                                                                    
     Program $200.0 UGF                                                                                                         
     4.  Alaska  Energy  Authority   -  Rural  Power  System                                                                    
     Upgrades   $17,500.0   ($5,000.0    DGF   (Power   Cost                                                                    
     Equalization Endowment), $12,500.0 Fed)                                                                                    
     5. Alaska Energy Authority  - Statewide Railbelt Energy                                                                    
     Plan $3,000.0 UGF (Railbelt Energy Fund)                                                                                   
     6.  Alaska Railroad:  Seward Dock  Replacement $3,100.0                                                                    
     Other (Commercial Passenger Vessel Tax)                                                                                    
     7. Blood  Bank of  Alaska $2.3  UGF 8.  Community Block                                                                    
     Grants $6,060.0 ($60.0 UGF, $6,000.0 Fed)                                                                                  
     9.  Alaska  Travel  Industry Association  $5,000.0  DGF                                                                    
     (Vehicle Rental Tax)                                                                                                       
     10.  Hope  Community  Resources,  Inc.  -  Upgrades  to                                                                    
     Housing to Meet State  & Federal Licensing Requirements                                                                    
     $78.0 UGF 11. Inter-Island Ferry Authority $250.0 UGF                                                                      
                                                                                                                                
Co-Chair von Imhof asked about  the $250 thousand listed for                                                                    
the Inter-Island Ferry Authority (IFA).                                                                                         
                                                                                                                                
Mr. Steininger  explained that the  $250 grant to  IFA would                                                                    
support running a handful of  routes in Southeast Alaska. If                                                                    
IFA were  to step  away from the  routes, the  Alaska Marine                                                                    
Highway System (AMHS) would have to  step in and pick up the                                                                    
routes.                                                                                                                         
                                                                                                                                
Co-Chair Stedman  recalled that several years  ago the state                                                                    
was subsidizing  IFA for  about $500  thousand per  year. He                                                                    
recalled that  IFA submitted financial documents  for review                                                                    
by the  Office of  Management and  Budget (OMB).  He thought                                                                    
the $250,000  proposed on the  slide was  significantly less                                                                    
than  it  would  cost  for  AMHS to  operate  the  run  from                                                                    
Ketchikan to Prince of Wales Island.                                                                                            
                                                                                                                                
Co-Chair Stedman  addressed item  6. He understood  that the                                                                    
railroad was  exempt through the  Executive Budget  Act, and                                                                    
thought it was capable of  financing its own project through                                                                    
revenues. He  asked if the  commercial passenger  vessel tax                                                                    
funds could  be redirected to  help with COVID  issues faced                                                                    
by  the  state.  He  suggested  that  there  were  shoreside                                                                    
facilities that  might need to  be upgraded. He  thought the                                                                    
matter should be given consideration.                                                                                           
                                                                                                                                
Co-Chair von Imhof had visited  the Seward dock the previous                                                                    
summer. She had looked closely  at the dock and reviewed the                                                                    
project expansion  ideas. She noted  that the dock  was also                                                                    
used by the military. There  were several fund sources being                                                                    
considered,  including  cruise  ship  passenger  taxes.  She                                                                    
thought  the   project  could  be  considered   a  strategic                                                                    
investment  for alternative  ports  in Southcentral  Alaska.                                                                    
She thought each  time money was pulled  away from strategic                                                                    
investments,  the cost  became higher  for the  consumer and                                                                    
Alaskan users. She was hesitant  to take the funds away from                                                                    
a  project that  was already  underway and  could provide  a                                                                    
much-needed  port for  distribution of  goods and  services.                                                                    
She  understood  that  the Covid-19  virus  was  growing  in                                                                    
seriousness, and she thought that  the committee should look                                                                    
at all expense and needs with a holistic viewpoint.                                                                             
                                                                                                                                
9:27:49 AM                                                                                                                    
                                                                                                                                
Senator Hoffman  supported item 5.  He thought  there should                                                                    
be a Railbelt energy plan  but pointed out that rural Alaska                                                                    
probably had  twice the energy  costs than the  Railbelt. He                                                                    
asked what  the plan  was to  address the  tremendously high                                                                    
cost for  energy in rural  Alaska, or if  the administration                                                                    
believed there did not need to  be a plan. He questioned why                                                                    
there was  not investment  in some of  the poorest  areas of                                                                    
the state.                                                                                                                      
                                                                                                                                
Mr. Steininger  stated that  item 4  on the  sheet addressed                                                                    
power system  upgrades in rural  areas of the state  with $5                                                                    
million in DGF with matching funds to $12.5 million.                                                                            
                                                                                                                                
Senator Hoffman thought it was  ridiculous to say that rural                                                                    
Alaska received upgrades for 5  percent of the area, and the                                                                    
rest of the  cost would be ignored. He  strongly objected to                                                                    
Mr. Steininger's response. He  asked what the administration                                                                    
was doing  for people in  Shishmaref and other  rural areas.                                                                    
He asked  what was being  done towards a statewide  plan for                                                                    
rural Alaska.                                                                                                                   
                                                                                                                                
Co-Chair von  Imhof thought Senator  Hoffman had  provided a                                                                    
good idea for  a future presentation on  rural energy needs.                                                                    
She  thought the  Alaska Energy  Authority  (AEA) and  other                                                                    
stakeholders could  be invited  to work  towards a  plan for                                                                    
rural Alaska.                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  recalled  that several  years  previously                                                                    
there  had  been  a  document   produced  that  showed  cost                                                                    
comparisons   of   energy   across  the   state   for   oil,                                                                    
electricity,  natural gas,  and others.  He thought  AEA had                                                                    
produced a  chart. He noted  that there were  disparities in                                                                    
access. He  pointed out that  there was a big  difference in                                                                    
costs and other factors and the  matter was not as simple as                                                                    
comparing  electricity prices  around  the  state. He  asked                                                                    
that there be a request to have AEA update the chart.                                                                           
                                                                                                                                
Co-Chair von Imhof  thought the request was a  good idea and                                                                    
affirmed that the committee would  follow up on the topic of                                                                    
rural energy needs.                                                                                                             
                                                                                                                                
9:31:58 AM                                                                                                                    
                                                                                                                                
Mr.  Steininger  addressed  slide 10,  "FY2021  Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Corrections                                                                                                                
     1. Facility Body Scanners $1,310.0 UGF                                                                                     
                                                                                                                                
     Education & Early Development                                                                                              
     1. Pitka's Point K-12 Site Restoration $6,200.0 UGF                                                                        
                                                                                                                                
     Environmental Conservation                                                                                                 
     1.  Clean  Water  Capitalization Grant  $1,000.0  Other                                                                    
     (Clean Water Loan Fund)                                                                                                    
     2.  Develop Application  to  Meet  EPA eReporting  Rule                                                                    
     $1,000.0 Fed                                                                                                               
     3. Drinking  Water Capitalization Grant  $2,500.0 Other                                                                    
     (Alaska Drinking Water Fund)                                                                                               
     4.   Fairbanks  PM2.5   Nonattainment  Area   Voluntary                                                                    
     Heating Device Change Out Program $5,000.0 Fed                                                                             
     5.  Village Safe  Water  and Wastewater  Infrastructure                                                                    
     Projects   $64,830.0  ($12,080.0   UGF,  $500.0   Other                                                                    
     (Statutory  Designated   Program  Receipts),  $52,250.0                                                                    
     Fed)                                                                                                                       
          a. Existing Service Projects $25,932.0 ($4,832.0                                                                      
          UGF, $200.0 Other, $20,090.0 Fed)                                                                                     
          b.   First   Time   Service   Projects   $38,898.0                                                                    
          ($7,248.0 UGF, $300.0 Other, $31,350.0 Fed)                                                                           
                                                                                                                                
Senator Wilson  asked what facilities had  body scanners. He                                                                    
had  visited three  correctional  facilities  and had  heard                                                                    
that  the body  scanners were  not being  used because  of a                                                                    
conflict with federal regulations.                                                                                              
                                                                                                                                
Mr.  Steininger  stated  that  Goose  Creek,  Spring  Creek,                                                                    
Highland  Mountain and  Wildwood correctional  centers would                                                                    
be getting the  equipment. He stated he would  look into the                                                                    
use  of body  scanners and  get back  to the  committee with                                                                    
additional information.                                                                                                         
                                                                                                                                
Co-Chair von Imhof asked about  item 1 for the Department of                                                                    
Education and  Early Development (DEED). She  noted that the                                                                    
Capital  Improvement  Project  (CIP)  list  for  educational                                                                    
facilities  was for  hundreds of  millions  of dollars.  She                                                                    
asked  if  the administration  had  a  plan to  address  the                                                                    
matter.                                                                                                                         
                                                                                                                                
Mr.  Steininger stated  there were  funds  in the  operating                                                                    
budget  going  towards  the  Regional  Education  Attendance                                                                    
Areas (REAA) that could address  some of the projects on the                                                                    
list  that were  for  schools within  REAAs.  There were  no                                                                    
additional funds  in the FY  21 capital budget that  may not                                                                    
be in REAAs.                                                                                                                    
                                                                                                                                
Co-Chair von Imhof emphasized  that there were approximately                                                                    
40 projects listed for hundreds  of millions of dollars that                                                                    
were  waiting  to be  funded.  Some  were major  maintenance                                                                    
projects, and some were for new schools.                                                                                        
                                                                                                                                
Co-Chair Stedman  had a  question about  item 5  for Village                                                                    
Safe  Water and  Wastewater Infrastructure  Projects in  the                                                                    
Department  of Environmental  Conservation. He  asked for  a                                                                    
list of the  projects and wanted to see  the previous year's                                                                    
list  as well.  He wanted  to understand  how extensive  the                                                                    
village safe water infrastructure challenge was.                                                                                
                                                                                                                                
Co-Chair von Imhof reiterated the  request for a list of the                                                                    
Village  Safe Water  and Wastewater  Infrastructure Projects                                                                    
for FY 20, and a list  what had been funded; to compare with                                                                    
the list from FY 21 and what was funded or not.                                                                                 
                                                                                                                                
Senator  Hoffman referenced  Co-Chair  von Imhof's  comments                                                                    
about  deferred maintenance  on rural  schools and  reported                                                                    
that he had a meeting with  the commissioner of DEED and the                                                                    
administration.   Major   maintenance   items   were   being                                                                    
addressed.  He commended  efforts  towards construction  and                                                                    
maintenance of rural schools.  He thought tremendous headway                                                                    
was being made.                                                                                                                 
                                                                                                                                
9:37:18 AM                                                                                                                    
                                                                                                                                
Mr.  Steininger advanced  to slide  11, "FY2021  Projects by                                                                    
Department - Fish and Game":                                                                                                    
                                                                                                                                
     1.  Copper River  Boat  Launch Facilities  Improvements                                                                    
     $140.0 Other (Fish and Game Fund)                                                                                          
     2.  Endangered Species  Act    Protect  State Right  to                                                                    
     Manage $4,000.0 ($1,000.0 UGF, $3,000.0 Fed)                                                                               
     3.  Facilities,   Vessels  and   Aircraft  Maintenance,                                                                    
     Repair and  Upgrades $500.0  DGF (Capital  Income Fund)                                                                    
     4. Pacific  Coastal Salmon  Recovery Fund  $4,000.0 Fed                                                                    
     5. Sport  Fish Recreational  Boating and  Angler Access                                                                    
     $3,000.0 ($750.0  Other (Fish and Game  Fund), $2,250.0                                                                    
     Fed)                                                                                                                       
     6.  Wildlife Management,  Research  and Hunting  Access                                                                    
     $15,000.0  ($3,750.0   Other  (Fish  and   Game  Fund),                                                                    
     $11,250.0 Fed)                                                                                                             
                                                                                                                                
     Governor  1.  Elections   Redistricting  $95.0  UGF  2.                                                                    
     Statewide Deferred Maintenance,  Renovation, and Repair                                                                    
     $30,000.0 DGF (Capital Income Fund)                                                                                        
                                                                                                                                
Mr. Steininger explained that there  would be a presentation                                                                    
later   in  the   morning   that   would  address   deferred                                                                    
maintenance in greater detail.                                                                                                  
                                                                                                                                
Senator Wielechowski looked at the  detail on item 2 for the                                                                    
Department  of Fish  and Game  (DFG). He  thought it  seemed                                                                    
like  the item  funded the  Department of  Law to  cooperate                                                                    
with DGF,  which he  thought would  be more  appropriate for                                                                    
the operating budget.                                                                                                           
                                                                                                                                
Mr. Steininger  noted that  the item  was a  multi-year item                                                                    
that  was  in  the  capital   project.  He  noted  that  the                                                                    
department  did   other  research-type  projects   that  had                                                                    
traditionally been  funded through  the capital  budget. The                                                                    
item was similar to the  past projects and was therefore was                                                                    
in the capital budget.                                                                                                          
                                                                                                                                
Senator Wielechowski  reiterated that  the item  looked like                                                                    
an operating budget item.                                                                                                       
                                                                                                                                
Co-Chair Stedman referenced slide 11  and asked about item 5                                                                    
for DFG, and the funding for  boat ramps and other items. He                                                                    
wanted to see a list of  what the funds were being spent on,                                                                    
a list  of items for  the last  five years, and  whether all                                                                    
the funds  had been  used. He recalled  committee discussion                                                                    
the previous  year that  indicated some  of the  funds would                                                                    
not be spent.                                                                                                                   
                                                                                                                                
Co-Chair  von  Imhof  thought  the   matter  could  also  be                                                                    
funneled through the DFG subcommittee as well.                                                                                  
                                                                                                                                
Co-Chair  Stedman   agreed  that  the   subcommittee  should                                                                    
receive the information in addition  to having the documents                                                                    
being submitted to the co-chairs office and disseminated.                                                                       
                                                                                                                                
Senator  Wielechowski asked  if any  of the  funds would  be                                                                    
used  to purchase  any of  the  parcel for  Eagle Rock  boat                                                                    
launch access.                                                                                                                  
                                                                                                                                
Mr. Steininger asked to get  back to Senator Wielechowski on                                                                    
the matter.                                                                                                                     
                                                                                                                                
Senator  Wielechowski requested  that  if there  was a  land                                                                    
purchase for any  of the projects, there  was information on                                                                    
the purchase price and assessed value.                                                                                          
                                                                                                                                
Mr. Steininger stated  that a future slide  listed a project                                                                    
that related  to the parcel  purchase within  the Department                                                                    
of Natural Resources.                                                                                                           
                                                                                                                                
9:42:36 AM                                                                                                                    
                                                                                                                                
Mr.  Steininger  looked at  slide  12,  "FY2021 Projects  by                                                                    
Department - Health and Social Services":                                                                                       
                                                                                                                                
     1. Alaska Psychiatric Institute Projects to Comply                                                                         
     with Corrective Action Plan $1,619.3 DGF (Capital                                                                          
     Income Fund)                                                                                                               
     2. Anchorage Pioneer Home Renovation $2,080.0 DGF                                                                          
     (Capital Income Fund)                                                                                                      
     3. Emergency Medical Services Match for Code Blue                                                                          
     Project $500.0 UGF                                                                                                         
     4. Mental Health Assistive Technology $500.0 UGF                                                                           
     (General Fund/Mental Health)                                                                                               
     5.    Mental    Health   Deferred    Maintenance    and                                                                    
     Accessibility Improvements $500.0 ($250.0 DGF                                                                              
     (Capital Income Fund), $250 Other (Mental Health Trust                                                                     
     Authority Authorized Receipts))                                                                                            
     6. Mental Health Essential Program Equipment $600.0                                                                        
     ($300.0 UGF (General Fund/Mental Health), $300.0 Other                                                                     
     (Mental Health Trust Authority Authorized Receipts))                                                                       
     7.  Mental Health  Home  Modification  and Upgrades  to                                                                    
     Retain   Housing   $1,050.0    ($750.0   UGF   (General                                                                    
     Fund/Mental Health), $300.0  Other (Mental Health Trust                                                                    
     Authority Authorized                                                                                                       
     Receipts))                                                                                                                 
                                                                                                                                
Co-Chair von Imhof pointed out  that the Capital Income Fund                                                                    
was swept the  previous year, and the  governor's budget was                                                                    
utilizing DGF for strategic projects.                                                                                           
                                                                                                                                
Co-Chair   Stedman   referenced   the   statewide   deferred                                                                    
maintenance listed  on slide  11. He  respectfully suggested                                                                    
that the  committee receive a  list of what the  money would                                                                    
be spent on.                                                                                                                    
                                                                                                                                
Co-Chair von Imhof asked if  Mr. Steininger made note of the                                                                    
co-chair's request.                                                                                                             
                                                                                                                                
Mr. Steininger  stated that  there was  another presentation                                                                    
that would  give more  detail on  the distribution  of prior                                                                    
deferred maintenance projects to  the Office of the Governor                                                                    
as   well  as   the   plans  going   forward  for   deferred                                                                    
maintenance.  He stated  he  would  provide the  information                                                                    
requested.                                                                                                                      
                                                                                                                                
Senator  Wilson  looked  at  slide  10  and  considered  the                                                                    
Pitka's Point K-12 site restoration.  He thought the project                                                                    
sounded more like a  deconstruction rather than restoration.                                                                    
He was  not certain the  project was a  deferred maintenance                                                                    
issue.                                                                                                                          
                                                                                                                                
Mr.  Steininger   stated  that   the  project   referred  to                                                                    
restoring  the  site to  the  condition  prior to  when  the                                                                    
building  was present,  which would  include removal  of the                                                                    
building, clean-up of the soil,  and returning the site to a                                                                    
usable condition.                                                                                                               
                                                                                                                                
9:45:56 AM                                                                                                                    
                                                                                                                                
Mr.  Steininger   showed  slide  13,  "FY2021   Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Labor and Workforce Development                                                                                            
     1.   Vocational   Rehabilitation  Business   Enterprise                                                                    
     Program Facility Development  and Equipment Replacement                                                                    
     $632.4    ($447.4   UGF,    $185.0   DGF    (Vocational                                                                    
     Rehabilitation  Small   Business  Enterprise  Revolving                                                                    
     Fund))                                                                                                                     
                                                                                                                                
     Military and Veterans Affairs                                                                                              
     1.  Alaska  Land  Mobile  Radio  and  State  of  Alaska                                                                    
     Telecommunications   System   $5,000.0   ($520.5   UGF,                                                                    
     $4,479.5 DGF (Capital Income Fund))                                                                                        
     2.  Bethel Readiness  Center  Security Upgrades  $140.0                                                                    
     ($70.0 DGF (Capital Income Fund), $70.0 Fed)                                                                               
     3.  Bethel Readiness  Center  Water System  Sustainment                                                                    
     $300.0 ($150.0  DGF (Capital Income Fund),  $150.0 Fed)                                                                    
     4.   Kotzebue   Readiness    Center   HVAC   Life-Cycle                                                                    
     Replacement $500.0  ($250.0 DGF (Capital  Income Fund),                                                                    
     $250.0 Fed)                                                                                                                
                                                                                                                                
Mr.  Steininger noted  that  there was  also  a $24  million                                                                    
project listed  later in the supplemental  budget related to                                                                    
the Alaska  Land Mobile Radio (ALMR)  system for replacement                                                                    
of equipment on towers.                                                                                                         
                                                                                                                                
Co-Chair Stedman  asked about item  1 for the  Department of                                                                    
Military and Veterans Affairs. He  was curious if any of the                                                                    
money for  ALMR would  be directed towards  consolidation of                                                                    
dispatch   centers  for   Kenai,   Mat-Su,  Ketchikan,   and                                                                    
Anchorage.                                                                                                                      
                                                                                                                                
Mr. Steininger  relayed that the funds  were not necessarily                                                                    
related  to consolidation  of 911  dispatch, but  the system                                                                    
was  used   by  first  responders  and   emergency  response                                                                    
personnel while in the field.                                                                                                   
                                                                                                                                
Senator Wilson asked about  the administration's position on                                                                    
the consolidated dispatch plan. He  asked if the project was                                                                    
still going  forth or  if the request  for funding  had been                                                                    
removed.                                                                                                                        
                                                                                                                                
Mr.   Steininger  believed   the  administration's   current                                                                    
position was that whatever system  design the state ended up                                                                    
with needed to meet the needs for 911 dispatch.                                                                                 
                                                                                                                                
Senator Wilson did  not feel his question  had been answered                                                                    
and offered  to follow  up with  the department.  He assumed                                                                    
that the total  request for the ALMR system  was about $31.7                                                                    
million, with $24 million to be spent by July 1, 2020.                                                                          
                                                                                                                                
Mr. Steininger stated that the  $24 million would not all be                                                                    
spent by July  1; however, a majority of the  funds would be                                                                    
obligated to begin  work as soon as possible  to upgrade the                                                                    
towers in a timely manner.                                                                                                      
                                                                                                                                
Co-Chair von  Imhof asked why  the funds were  not requested                                                                    
the previous year,  why was the request  in the supplemental                                                                    
budget, and why there was a rush.                                                                                               
                                                                                                                                
Mr.  Steininger was  not sure  why  the funds  had not  been                                                                    
requested the previous  year. He explained that  there was a                                                                    
rush because federal partners had  indicated that they would                                                                    
back out  of the program,  leaving the state to  operate the                                                                    
program on  its own, if  the work was  not done in  a timely                                                                    
manner.                                                                                                                         
                                                                                                                                
Senator Bishop thought there were  other areas in the budget                                                                    
that were vetoed the previous  year that shared similarities                                                                    
regarding  the  possibility  of  losing  federal  funds.  He                                                                    
mentioned cold climate housing as an example.                                                                                   
                                                                                                                                
Senator Hoffman referenced the revision  of item 1 for ALMR.                                                                    
The proposal was a request for  $520 thousand in GF, but the                                                                    
original request was  for $3,181,000. He asked  what was not                                                                    
being funded  as a result  of the $2.6 million  reduction in                                                                    
the funding request.                                                                                                            
                                                                                                                                
Mr. Steininger stated  that as the department  looked at the                                                                    
maintenance needs,  it realized the  work could be  done for                                                                    
less funds and came back with a reduced request.                                                                                
                                                                                                                                
9:50:53 AM                                                                                                                    
                                                                                                                                
Mr.  Steininger referenced  slide  14,  "FY2021 Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Military and Veterans Affairs, continued                                                                                   
     5. Mass Notification System - Joint Base Elmendorf                                                                         
     Richardson $1,600.0 ($800.0 UGF, $800.0 Fed)                                                                               
     6. State Homeland Security Grant Programs $4,500.0 Fed                                                                     
     7. Statewide Roof, Envelope, and Fall Protection                                                                           
     $1,700.0  ($850.0  DGF  (Capital Income  Fund),  $850.0                                                                    
     Fed)                                                                                                                       
                                                                                                                                
     Natural Resources                                                                                                          
     1. Abandoned Mine Lands Reclamation Federal Program                                                                        
     $3,200.0 Fed                                                                                                               
    2. Agriculture Grant Programs Funding $4,536.8 Fed                                                                          
     3. Arctic Strategic Transportation and Resources                                                                           
     (ASTAR) - Phase 2, $2,900.0 UGF                                                                                            
     4. Cooperative Water Resource Program Pass-through to                                                                      
     USGS for Stream Gaging Projects $500.0 Other                                                                               
     (Statutory Designated Program Receipts)                                                                                    
                                                                                                                                
Co-Chair von  Imhof asked  if there  was any  opportunity to                                                                    
leverage federal  matching funds for the  ASTAR project. She                                                                    
noted that Alaska was the  arctic state, with much focus and                                                                    
research  on arctic  conditions,  climate change,  strategic                                                                    
military  positions,  and  other factors.  She  wondered  if                                                                    
there was an opportunity to  leverage federal funds from the                                                                    
United   States  Department   of   Defense   or  a   federal                                                                    
environmental agency to match the state's $2.9 million.                                                                         
                                                                                                                                
Mr. Steininger was  not aware of any  federal matching funds                                                                    
for the program.  He offered to work with  the department to                                                                    
ensure it had looked into all avenues of funding.                                                                               
                                                                                                                                
Senator Olson  asked if there  were any other  entities that                                                                    
were helping  to pay  for the ASTAR  project. He  noted that                                                                    
some of the  roads would be used by  industry for furthering                                                                    
exploration.                                                                                                                    
                                                                                                                                
Mr.  Steininger  knew  the   department  worked  with  other                                                                    
entities  in the  region as  it considered  the project  and                                                                    
strategic  transportation in  the  area. He  offered to  get                                                                    
back to  the committee with more  information regarding what                                                                    
efforts had  been put into  transportation in the  region by                                                                    
other entities.                                                                                                                 
                                                                                                                                
Senator  Olson   asked  if  the  North   Slope  Borough  was                                                                    
involved.                                                                                                                       
                                                                                                                                
Mr.  Steininger stated  he would  have  to get  back to  the                                                                    
committee with the information at a later time.                                                                                 
                                                                                                                                
Co-Chair von Imhof thought more  attention could be given to                                                                    
the project to determine the  long-term vision and the goals                                                                    
for phase  two and additional  phases. She pointed  out that                                                                    
there were  lots of  projects around  the state  that needed                                                                    
money,  and  questioned  what  made   the  ASTAR  project  a                                                                    
priority considering that the governor had vetoed money the                                                                     
previous year.                                                                                                                  
                                                                                                                                
9:54:21 AM                                                                                                                    
                                                                                                                                
Mr. Steininger turned to slide 15, " FY2021 Projects by                                                                         
Department":                                                                                                                    
                                                                                                                                
     Natural Resources, continued                                                                                               
     5.  Critical Minerals  Mapping  -  Earth MRI  (formerly                                                                    
     3DEEP)  $2,450.0 ($750.0  UGF, $200.0  Other (Statutory                                                                    
     Designated Program Receipts), $1,500.0 Fed)                                                                                
     6.  Exxon Valdez  Oil Spill  Kenai River  Bookey Parcel                                                                    
     Purchase  $2,300.0   Other  (Exxon  Valdez   Oil  Spill                                                                    
     Settlement)                                                                                                                
     7.  Exxon Valdez  Oil Spill  Parks Habitat  Restoration                                                                    
     and Protection  $3,155.6 Other (Exxon Valdez  Oil Spill                                                                    
     Settlement)                                                                                                                
     8. Federal and Local  Government Funded Forest Resource                                                                    
     and Fire Program $7,000.0 Fed                                                                                              
     9.  Geological  Mapping  for Energy  Development  (USGS                                                                    
     STATEMAP) $600.0 ($300.0 UGF, $300.0 Fed)                                                                                  
     10.  Geologic Materials  Center Multispectral  Scanning                                                                    
     Equipment  $1,290.0 ($865.0  UGF,  $275.0 DGF  (General                                                                    
     Fund/Program   Receipts),   $150.0   Other   (Statutory                                                                    
     Designated Program Receipts))                                                                                              
     11.  Land and  Water  Conservation  Fund Federal  Grant                                                                    
     Program  $2,075.0  ($75.0   DGF  (General  Fund/Program                                                                    
     Receipts), $2,000.0 Fed)                                                                                                   
                                                                                                                                
Mr. Steininger considered slide 16, "FY2021 Projects by                                                                         
Department":                                                                                                                    
                                                                                                                                
     Natural Resources, continued                                                                                               
     12.  Land Sales  - New  Subdivision Development  $750.0                                                                    
     DGF (State Land Disposal Income Fund)                                                                                      
     13. National  Historic Preservation Fund  $650.9 ($70.9                                                                    
     UGF, $80.0 DGF  (General Fund/Program Receipts), $500.0                                                                    
     Fed)                                                                                                                       
     14. National Recreational  Trails Federal Grant Program                                                                    
     $1,600.0 ($100.0  DGF (General  Fund/Program Receipts),                                                                    
     $1,500.0 Fed)                                                                                                              
     15.  State  Park  Electronic Fee  Stations  $220.0  DGF                                                                    
     (General Fund/Program Receipts)                                                                                            
                                                                                                                                
     Public Safety                                                                                                              
     1. Alaska Wildlife Troopers Marine Enforcement Repair                                                                      
     and Replacement $1,000.0 UGF                                                                                               
     2. Crime Laboratory Equipment Replacement $290.0 UGF                                                                       
     3. Marine Fisheries Patrol Improvements $1,100.0 Fed                                                                       
                                                                                                                                
Co-Chair Stedman asked  about item 15. He  recalled that two                                                                    
years previously  there were fees  added for boat  ramps. He                                                                    
wanted a  status report for  the electronic fee  station. He                                                                    
wanted to  ensure that the  ramp fees were  being collected.                                                                    
He  found  it appalling  that  during  a fiscal  crisis  the                                                                    
department was not  collecting fees from the  cash boxes. He                                                                    
thought the funds were to help with deferred maintenance.                                                                       
                                                                                                                                
Co-Chair  von Imhof  thought ideally  the fee  stations were                                                                    
accessible to  credit cards. She had  seen a sign at  a boat                                                                    
ramp  that indicated  the  day  use fee  cash  box had  been                                                                    
removed due  to excessive vandalism. She  thought there were                                                                    
many issues with the fee boxes.                                                                                                 
                                                                                                                                
9:57:41 AM                                                                                                                    
                                                                                                                                
Senator Hoffman  considered item  11 regarding the  Land and                                                                    
Water  Conservation Fund.  He thought  many of  the projects                                                                    
were worthwhile. He wondered how  the lists of projects were                                                                    
constructed and  who made the decisions.  He considered what                                                                    
had been  spent in the past  and what was proposed,  and did                                                                    
not  think   the  list  had  a   statewide  perspective.  He                                                                    
requested a list of projects  in order to determine that all                                                                    
the  people  of Alaska  were  benefitting  from the  federal                                                                    
grant fund, which  was matched on a 50/50  basis. He thought                                                                    
there was a blind eye to Western Alaska.                                                                                        
                                                                                                                                
Senator Wielechowski  referenced number  15 on slide  16. He                                                                    
was curious  about how much  revenue was generated  from the                                                                    
state parks  electronic fee stations.  He guessed  there was                                                                    
not  much revenue  gained. He  expressed  concern about  the                                                                    
vandalism  of  the fee  boxes  and  thought money  would  be                                                                    
wasted.                                                                                                                         
                                                                                                                                
Mr.  Steininger  understood  that  electronic  fee  stations                                                                    
helped   with  revenue   collections   and   made  it   less                                                                    
burdensome.  He acknowledged  the cash  boxes saw  a lot  of                                                                    
vandalism. He  was not certain  about the  susceptibility of                                                                    
the electronic fee stations to vandalism.                                                                                       
                                                                                                                                
Senator   Wilson  requested   a   list   of  the   projects,                                                                    
specifically of public use cabins.                                                                                              
                                                                                                                                
Co-Chair  von Imhof  stated that  she loved  the public  use                                                                    
cabins. She agreed that a list would be helpful.                                                                                
                                                                                                                                
Senator  Bishop mentioned  that  there was  high demand  for                                                                    
public use cabins and that there was not enough.                                                                                
                                                                                                                                
Co-Chair  Stedman  remarked   that  the  subcommittee  would                                                                    
examine   the   cabins,   and  the   related   revenue   and                                                                    
expenditures.                                                                                                                   
                                                                                                                                
10:02:02 AM                                                                                                                   
                                                                                                                                
Mr.  Steininger  displayed  slide 17,  "FY2021  Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Revenue                                                                                                                    
     1.   Alaska   Housing    Finance   Corporation   (AHFC)                                                                    
     Competitive Grants for  Public Housing $1,100.0 ($350.0                                                                    
     UGF (AHFC Dividend), $750.0 Fed)                                                                                           
     2. AHFC  Federal and Other Competitive  Grants $7,500.0                                                                    
     ($1,500.0 UGF (AHFC Dividend), $6,000.0 Fed)                                                                               
     3.  AHFC Housing  and  Urban  Development Capital  Fund                                                                    
     Program $2,500.0 Fed                                                                                                       
     4.  AHFC Housing  and  Urban  Development Federal  HOME                                                                    
     Grant  $4,750.0 ($750.0  UGF (AHFC  Dividend), $4,000.0                                                                    
     Fed)                                                                                                                       
     5. AHFC Rental Assistance  for Persons Displaced Due to                                                                    
     Domestic Violence  - Empowering Choice  Housing Program                                                                    
     (ECHP) $1,500.0 UGF (AHFC Dividend)                                                                                        
     6.  AHFC Senior  Citizens  Housing Development  Program                                                                    
     $1,750.0 UGF (AHFC Dividend)                                                                                               
     7.  AHFC   Supplemental  Housing   Development  Program                                                                    
     $1,500.0 UGF (AHFC Dividend)                                                                                               
     8.   AHFC    Teacher,   Health   and    Public   Safety                                                                    
     Professionals  Housing  $2,250.0  ($1,750.0  UGF  (AHFC                                                                    
     Dividend), $500.0  Other (Statutory  Designated Program                                                                    
     Receipts))                                                                                                                 
                                                                                                                                
Senator Bishop spoke  to item 8 on the slide  and cited a 38                                                                    
percent  teacher turnover  in some  parts of  the state.  He                                                                    
felt that there should be  a focus on rural teacher housing.                                                                    
He  stressed that  there should  be  good living  conditions                                                                    
available for  the teachers. He  felt that the  education of                                                                    
students and teacher retention were linked.                                                                                     
                                                                                                                                
Senator Hoffman agreed  with Senator Bishop. He  asked for a                                                                    
list of unmet needs for teacher housing in the state.                                                                           
                                                                                                                                
Co-Chair von Imhof referenced  Senator Bishop's comments and                                                                    
Senator  Hoffman's previous  comments  about Village  Public                                                                    
Safety Officers  (VPSOs). She noted  that item  8 referenced                                                                    
"teacher,  health, and  public  safety." She  felt that  the                                                                    
Housing  Finance Corporation  (AHFC) should  present to  the                                                                    
committee.  She thought  it  would  be good  see  a map  and                                                                    
consider  where there  might  be  resource deficiencies,  as                                                                    
well as a plan to  address the deficiencies. She agreed that                                                                    
housing  was key  to making  teaching and  the VPSO  program                                                                    
successful.                                                                                                                     
                                                                                                                                
10:05:14 AM                                                                                                                   
                                                                                                                                
Mr.  Steininger highlighted  slide 18,  "FY2021 Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Revenue, continued                                                                                                         
     9. Mental  Health: AHFC  Beneficiary and  Special Needs                                                                    
     Housing $1,750.0 ($1,500.0  UGF (AHFC Dividend), $200.0                                                                    
     Other   (Mental  Health   Trust  Authority   Authorized                                                                    
     Receipts))                                                                                                                 
     10.  Mental Health:  AHFC  Homeless Assistance  Project                                                                    
     $7,300.0  ($6,350.0 UGF  (AHFC Dividend),  $950.0 Other                                                                    
     (Mental Health Trust Authority Authorized Receipts))                                                                       
     11. Mental  Health: Housing -  Grant 604  Department of                                                                    
     Corrections  Discharge  Incentive Grants  $100.0  Other                                                                    
     (Mental Health Trust Authority Authorized Receipts))                                                                       
                                                                                                                                
Mr.  Steininger  looked at  slide  19,  "FY2021 Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Transportation and Public Facilities                                                                                       
     1.  Joe Parent  Vocational Education  Center Demolition                                                                    
     and Clean-up $1,000.0 UGF                                                                                                  
     2.  Alaska   International  Airport   System  $74,400.0                                                                    
     ($26,700.0 Other (International  Airport Revenue Fund),                                                                    
     $47,700.0 Fed)                                                                                                             
     3. Rural Airport Improvement Program $140,000.0 Fed                                                                        
     4.  Alaska  Marine   Highway  System  Vessel  Overhaul,                                                                    
     Annual    Certification   and    Shoreside   Facilities                                                                    
     Rehabilitation  $15,000.0  DGF (Marine  Highway  System                                                                    
     Fund)                                                                                                                      
     5.   Decommissioning  and   Remediation   of  Class   V                                                                    
     Injection Wells $1,700.0 UGF                                                                                               
     6. Federal-Aid Highway Project Match Credits $6,775.2                                                                      
     ($1,500.0   DGF    (General   Fund/Program   Receipts),                                                                    
     $5,275.2 Fed)                                                                                                              
     7. Federal-Aid Aviation State Match $8,853.4 UGF                                                                           
     (remaining $1.9M funded with a FY2020 reappropriation                                                                      
     for total match of $10.9M)                                                                                                 
     8. Federal-Aid Highway State Match $54,141.7 UGF                                                                           
     (remaining    $10,858.3    funded   with    a    FY2020                                                                    
     reappropriation for total match of $65,000.0)                                                                              
     9. Surface Transportation Program $650,000.0 Fed                                                                           
                                                                                                                                
Mr. Steininger detailed  that the building in item  1 was on                                                                    
the grounds of the Aniak  airport and had been designated an                                                                    
air hazard by the  Federal Aviation Administration. He noted                                                                    
that the  decommission of wells in  item 5 was in  the final                                                                    
phase   and   the  wells   had   been   identified  by   the                                                                    
Environmental Protection Agency.                                                                                                
                                                                                                                                
Co-Chair Stedman  looked at item  4. He wondered  whether it                                                                    
pertained to the federal ferry boat program funding.                                                                            
                                                                                                                                
Mr. Steininger replied that funds  in item 4 were for annual                                                                    
vessel  overhaul   and  certification,   as  well   as  some                                                                    
shoreside rehabilitation.                                                                                                       
                                                                                                                                
Co-Chair Stedman  wondered whether  the item related  to the                                                                    
federal ferry boat program.                                                                                                     
                                                                                                                                
Mr. Steininger answered in the negative.                                                                                        
                                                                                                                                
10:07:50 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman stated  that there  was a  federal program                                                                    
for the  Alaska Marine  Highway System (AMHS).  He discussed                                                                    
declining  funding   for  the  AMHS  and   wondered  if  the                                                                    
administration would be proposing a "catch-up provision."                                                                       
                                                                                                                                
Co-Chair von Imhof  wondered if it made sense  to invite DOT                                                                    
to speak to the capital funding aspects of AMHS.                                                                                
                                                                                                                                
Co-Chair  Stedman  thought Co-Chair  von  Imhof  had a  good                                                                    
idea, and  that there  should be  a supplemental  hearing on                                                                    
the  AMHS   for  the  operating   and  capital   budget.  He                                                                    
referenced the  deferred maintenance  list assembled  by Co-                                                                    
Chair  von  Imhof's  office  (copy  on  file)  and  observed                                                                    
numerous pages of  AHMS projects. He recalled  $3 million in                                                                    
funding to  keep up with small  maintenance projects outside                                                                    
bigger appropriations, but the  funding had been terminated.                                                                    
He  thought the  lack of  funding  had resulted  in a  large                                                                    
amount  of   deferred  maintenance.   He  had   requested  a                                                                    
breakdown of regional appropriations  since 2010. He thought                                                                    
AMHS  funding  was a  significant  issue  that affected  the                                                                    
Railbelt and coastal Alaska.                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof  felt  that  it  was  good  to  combine                                                                    
discission of  operating and capital  funding for  AMHS. She                                                                    
thought the  committee could  do a  follow-up with  DOT, and                                                                    
mentioned a ferry system advisory group.                                                                                        
                                                                                                                                
Senator  Hoffman looked  at item  8, which  was a  requested                                                                    
state match of $54 million.  He wondered how much in federal                                                                    
funds was  matched. He thought  it would be prudent  for the                                                                    
committee  to dig  into  the item  further  to examine  what                                                                    
projects were  being funded throughout the  state. He wanted                                                                    
more information.                                                                                                               
                                                                                                                                
10:11:44 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof  requested a project list  of the federal                                                                    
aid  highway  program, and  some  explanation  of why  those                                                                    
projects were chosen.                                                                                                           
                                                                                                                                
Senator Bishop  commented that historically  the information                                                                    
had been in the capital budget materials.                                                                                       
                                                                                                                                
Senator Wilson looked  at the federal funding  for the Rural                                                                    
Airport  Improvement  Program.   He  referenced  the  Bethel                                                                    
airport and lack of  efficiencies with tower communications.                                                                    
He  asked  if  any  of  the funds  would  go  towards  tower                                                                    
upgrades in the area.                                                                                                           
                                                                                                                                
Mr. Steininger stated that he  did not know every project on                                                                    
the state  or federal aviation  list. He offered  to provide                                                                    
further information on the Bethel tower.                                                                                        
                                                                                                                                
Mr.  Steininger  addressed  slide 20,  "FY2021  Projects  by                                                                    
Department":                                                                                                                    
                                                                                                                                
     Transportation and Public Facilities, continued                                                                            
     10. Other Federal Program Match $1,300.0 UGF                                                                               
     11. Mental Health Coordinated Transportation and                                                                           
     Vehicles $1,300.0 Other (Mental Health Trust Authority                                                                     
     Authorized Receipts)                                                                                                       
     12. State  Equipment Fleet Replacement  $15,000.0 Other                                                                    
     (Highways/Equipment Working Capital Fund)                                                                                  
     13.   Cooperative   Reimbursable   Projects   $15,000.0                                                                    
     ($10,000.0   Other    (Statutory   Designated   Program                                                                    
     Receipts), $5,000.0 Fed)                                                                                                   
     14. Federal Emergency Projects $10,000.0 Fed                                                                               
     15.  Federal  Transit Administration  Grants  $10,000.0                                                                    
     Fed                                                                                                                        
     16. Highway Safety Grants  Program $8,037.7 ($37.7 UGF,                                                                    
     $8,000.0 Fed)                                                                                                              
     17.  Municipal  Harbor  Facility  Grant  Fund  Projects                                                                    
     $5,500.0 UGF                                                                                                               
                                                                                                                                
Mr.  Steininger detailed  that item  10 related  to matching                                                                    
funds  for  projects that  did  not  come from  the  Federal                                                                    
Highways  Administration,  or  funds  for  costs  that  were                                                                    
matched by  federal funds but  ended up not  being allowable                                                                    
costs.                                                                                                                          
                                                                                                                                
Co-Chair von  Imhof wondered whether Co-Chair  Stedman had a                                                                    
comment on the harbors.                                                                                                         
                                                                                                                                
Co-Chair Stedman  stated that  he would like  a list  of the                                                                    
harbors involved in item 17. He  noted that the state put up                                                                    
50  percent for  the Municipal  Harbor Matching  Grant Fund,                                                                    
which must be run as an enterprise fund.                                                                                        
                                                                                                                                
10:15:05 AM                                                                                                                   
                                                                                                                                
Mr.  Steininger advanced  to slide  21, "FY2021  Projects by                                                                    
Department":                                                                                                                    
                                                                                                                                
     University                                                                                                                 
     1.   UAF  US   Array   Earthquake  Monitoring   Network                                                                    
     $19,000.0 ($2,500.0 UGF, $16,500.0 Fed)                                                                                    
                                                                                                                                
     Courts                                                                                                                     
     1. Court Security Improvements $1,551.1 UGF                                                                                
     2.   Statewide   Deferred  Maintenance   $1,551.2   DGF                                                                    
     (Capital Income Fund)                                                                                                      
                                                                                                                                
Mr. Steininger  looked at slide 22,  "FY 2020 Supplemental."                                                                    
He stated that the  following slides addressed projects that                                                                    
were  in the  FY 20  Supplemental Budget,  and either  had a                                                                    
supplemental effective  date or were sufficiently  urgent as                                                                    
to need to start them in the current fiscal year.                                                                               
                                                                                                                                
Mr.  Steininger  spoke  to slide  23,  "FY2020  Supplemental                                                                    
Projects    SB 154 and  174." The table summarized  the list                                                                    
of  projects  by  department.  He   pointed  out  that  some                                                                    
departments  had negative  UGF, which  reflected that  there                                                                    
were  some completed  projects with  no  work remaining  but                                                                    
some  UGF was  being repealed  and returned  to the  general                                                                    
fund.  The total  of the  supplemental projects  was roughly                                                                    
$25.5 million in  UGF, and $81.9 million  total inclusive of                                                                    
federal match.                                                                                                                  
                                                                                                                                
10:16:46 AM                                                                                                                   
                                                                                                                                
Mr.  Steininger referenced  slide  24, "FY2020  Supplemental                                                                    
Projects":                                                                                                                      
                                                                                                                                
     Commerce, Community & Economic Development                                                                                 
     1.  Deposit Unexpended  Balances of  Completed Projects                                                                    
     Totaling $1,066.3 UGF to the General Fund                                                                                  
     2.  Housing  and   Urban  Development  (HUD)  Community                                                                    
     Development Block Grant  to Support Earthquake Recovery                                                                    
     Efforts $35,856.0 Fed                                                                                                      
     3.  National Petroleum  Reserve    Alaska Impact  Grant                                                                    
     Program  Addition  of  $6,670.2  Fed  for  a  Total  of                                                                    
     $13,098.9 Fed                                                                                                              
                                                                                                                                
     Governor                                                                                                                   
     1.  Help  America  Vote Act  $3,700.0  Other  (Election                                                                    
     Fund)                                                                                                                      
     2. Redistricting Board $2,500.0 UGF                                                                                        
                                                                                                                                
     Military and Veterans Affairs                                                                                              
     1.  Reappropriation for  the  Mass Notification  System                                                                    
     $900.0 ($450.0 UGF, $450.0 Fed)                                                                                            
     2. Alaska Land Mobile Radio Site Refresh $24,000.0 UGF                                                                     
                                                                                                                                
Co-Chair von Imhof  requested a breakdown of  the budget for                                                                    
the Redistricting  Board. She questioned if  the board would                                                                    
have any sole-source contracts,  if the $2.5 million request                                                                    
would go  towards lawyer fees,  and when the funds  would be                                                                    
spent.                                                                                                                          
                                                                                                                                
Co-Chair Stedman  looked at the Alaska  Impact Grant Program                                                                    
and  requested  a  list  of  the  grants.  He  thought  some                                                                    
requests came  late in the  budgetary process and  wanted to                                                                    
better understand what the funds were being used for.                                                                           
                                                                                                                                
Senator Bishop queried the shelf  life on the system of item                                                                    
2  of  the  Department  of  Military  and  Veterans  Affairs                                                                    
(DMVA).  He wondered  if annual  maintenance  of the  system                                                                    
would go down after the equipment refresh was funded.                                                                           
                                                                                                                                
Mr. Steininger agreed to provide the information.                                                                               
                                                                                                                                
Senator  Olson  asked for  Mr.  Steininger's  report on  the                                                                    
Redistricting  Board  to  include  details  about  elections                                                                    
redistricting in the amount of $95,000.                                                                                         
                                                                                                                                
10:20:51 AM                                                                                                                   
                                                                                                                                
Mr.  Steininger turned  to  slide  25, "FY2020  Supplemental                                                                    
Projects":                                                                                                                      
                                                                                                                                
     Public Safety                                                                                                              
     1. Automatic Dependent Surveillance Broadcast System                                                                       
     for DPS Aircraft Federal Mandate                                                                                           
     $398.4 UGF                                                                                                                 
     2. Radio Replacement to Outfit Incoming New Troopers                                                                       
     $500.0 UGF                                                                                                                 
                                                                                                                                
     Revenue                                                                                                                    
     1. Deposit Unexpended Balances of Completed Projects                                                                       
     Totaling $331.9 UGF to the General Fund                                                                                    
     2. Reappropriation from Revenue for Tax Analysis and                                                                       
     Refresh $454.4 UGF                                                                                                         
                                                                                                                                
Co-Chair von  Imhof asked  where the  reappropriation listed                                                                    
in item 2 under the Department of Revenue (DOR) would go.                                                                       
                                                                                                                                
Mr.   Steininger   stated   that    the   funds   would   be                                                                    
reappropriated back to DOR for tax analysis.                                                                                    
                                                                                                                                
Co-Chair von Imhof asked what taxes would be analyzed.                                                                          
                                                                                                                                
Mr. Steininger replied that DOR  anticipated that they would                                                                    
need to analyze various tax proposals in the near future.                                                                       
                                                                                                                                
Co-Chair  Stedman wanted  a more  specific answer  regarding                                                                    
the tax analysis.                                                                                                               
                                                                                                                                
Co-Chair von Imhof stated that  there were several bills and                                                                    
an  initiative  on  the  topic of  taxes  in  the  following                                                                    
months. She  asked if  the department  would still  need the                                                                    
funds if none  of the bills materialized  and the initiative                                                                    
failed.                                                                                                                         
                                                                                                                                
Mr. Steininger  stressed that the  department would  need to                                                                    
analyze  the impacts  of the  initiatives regardless  of the                                                                    
outcome.                                                                                                                        
                                                                                                                                
10:23:12 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman noted  that both  the legislature  and the                                                                    
administration hired  many consultants and thought  that the                                                                    
reappropriation sounded  like a  lot of money.  He requested                                                                    
that the chairman take a hard look at the expense.                                                                              
                                                                                                                                
Co-Chair  von  Imhof wondered  when  the  $450,000 would  be                                                                    
payed to an out-of-state consultant.                                                                                            
                                                                                                                                
Mr. Steininger replied that the  department intended to seek                                                                    
subject matter experts for some of the items.                                                                                   
                                                                                                                                
Senator Olson  looked at  the request  for DPS  and observed                                                                    
that there was no money  requested for the VPSO Program, and                                                                    
that all the funds would go to the Alaska State Troopers.                                                                       
                                                                                                                                
Mr. Steininger  affirmed that there were  no funds requested                                                                    
for the VPSO Program in the supplemental capital budget.                                                                        
                                                                                                                                
Mr.  Steininger considered  slide  26, "FY2020  Supplemental                                                                    
Projects":                                                                                                                      
                                                                                                                                
     Transportation and Public Facilities                                                                                       
     1. Scope Change: Knik Goose Bay Road $2,000.0 UGF                                                                          
     2.  Earthquake   Relief     Federal   Ineligible  Costs                                                                    
     $3,000.0 UGF                                                                                                               
     3.  Deposit Unexpended  Balances of  Completed Projects                                                                    
     Totaling $3,000.5 UGF to the General Fund                                                                                  
     4. Federal-Aid Aviation State  Match for Rural Airports                                                                    
     $1,964.6 DGF  (Capstone Avionics Revolving Fund)  for a                                                                    
     total FY2021 state match of $10.8M                                                                                         
     5. Reappropriation from  Transportation for Federal-Aid                                                                    
     Highway State  Match $10,858.3 UGF  for a  total FY2021                                                                    
     state match of $65M                                                                                                        
     6.  Alaska   Marine  Highway  System   Vessel  Overhaul                                                                    
     Additional  Needs $5,000.0  DGF (Marine  Highway System                                                                    
     Fund)                                                                                                                      
     7. State Equipment Fleet  32 Vehicles to Support New                                                                       
     Troopers $3,155.0 Other (Highways/Equipment Working                                                                        
     Capital Fund)                                                                                                              
                                                                                                                                
Senator Wilson asked  about item 4. He  mentioned the sunset                                                                    
of the  Capstone Avionics  Revolving Fund.  He asked  if the                                                                    
fund would  be wiped out  to match the project  and recalled                                                                    
only 15 loans had been given out from the fund.                                                                                 
                                                                                                                                
Mr. Steininger replied that  through the governor's proposed                                                                    
budget, there  were uses of  the fund including  state match                                                                    
for rural airports.                                                                                                             
                                                                                                                                
Senator  Wilson wondered  what  would  occur should  someone                                                                    
want to reinstate that fund.                                                                                                    
                                                                                                                                
Mr. Steininger relayed that if  the fund were not to sunset,                                                                    
the  state  would  have  to  find a  new  way  to  fund  the                                                                    
projects.                                                                                                                       
                                                                                                                                
10:26:55 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof asked about  the scope change for item 1,                                                                    
and understood that it was not  a new project, rather it was                                                                    
a change to the appropriation of existing funds.                                                                                
                                                                                                                                
Mr.  Steininger  agreed.  He  qualified  that  the  existing                                                                    
project had been specific to  a certain section of the road,                                                                    
and  there was  another section  which more  urgently needed                                                                    
repairs for  safety reasons.  He stated  that the  money had                                                                    
not been expended.  The scope had been expanded  in order to                                                                    
use the  funds across  the entire road  to address  the most                                                                    
critical needs.                                                                                                                 
                                                                                                                                
Co-Chair von  Imhof asked if the  $2 million in UGF  was new                                                                    
funds or existing funds that had been previously allocated.                                                                     
                                                                                                                                
Mr.  Steininger   stated  the  funds  were   existing  funds                                                                    
appropriated in  the past, and  the total  appropriation was                                                                    
$2 million.                                                                                                                     
                                                                                                                                
Senator Wilson thought  he could explain the  history of the                                                                    
funding.  He recalled  that in  2017,  during the  operating                                                                    
budget process,  a $4  million amendment  was added  for the                                                                    
Knik Goose Bay  Road project. In the other  body, $2 million                                                                    
was  put  toward the  project.  The  current proposal  would                                                                    
address miles 1 through 7 of the road.                                                                                          
                                                                                                                                
Co-Chair  von Imhof  asked if  $2 million  UGF would  be the                                                                    
total amount  needed from  the current year  and add  to the                                                                    
deficit.                                                                                                                        
                                                                                                                                
Mr.   Steininger  explained   that   the   $2  million   was                                                                    
appropriated in a  prior year and would not add  to the 2020                                                                    
deficit.  The  reappropriation   simply  allowed  previously                                                                    
appropriated funds  to be used  for an extended  purpose. He                                                                    
stated that  the funds were  not new  money, and it  was not                                                                    
clear on the slide.                                                                                                             
                                                                                                                                
Senator  Bishop requested  that  DOT address  the road  item                                                                    
when the  agency came to  committee. He had  heard reference                                                                    
of rut  repair. He referenced  the proposed Motor  Fuels Tax                                                                    
legislation  that was  moving  through  the legislature.  He                                                                    
wanted  to ensure  that capital  dollars were  not used  for                                                                    
maintenance. He supported fixing the road.                                                                                      
                                                                                                                                
10:30:44 AM                                                                                                                   
                                                                                                                                
Co-Chair von  Imhof asked if  school construction  and major                                                                    
maintenance was  usually funded.  She asked if  the proposed                                                                    
budget had any AHFC weatherization components.                                                                                  
                                                                                                                                
Mr. Steininger answered "no."                                                                                                   
                                                                                                                                
Co-Chair  von  Imhof thought  the  budget  had included  the                                                                    
funds the past.  She asked for further details  and a reason                                                                    
why the item was not included.                                                                                                  
                                                                                                                                
Mr. Steininger agreed to provide more information.                                                                              
                                                                                                                                
Co-Chair   von  Imhof   asked  about   snow  machine   trail                                                                    
development  that was  typically  funded  with snow  machine                                                                    
receipts, which was  DGF. She asked why the item  was not in                                                                    
the budget.                                                                                                                     
                                                                                                                                
Mr. Steininger  stated that  the item had  not made  it into                                                                    
the budget and  the prioritization of projects  was shown in                                                                    
the proposed budget.                                                                                                            
                                                                                                                                
Senator  Bishop commented  that if  the funds  would not  be                                                                    
used as  prescribed by  the user group  or used  for trails,                                                                    
the law should be changed.                                                                                                      
                                                                                                                                
Co-Chair Stedman  referenced a comprehensive  spreadsheet of                                                                    
"Statewide DM Backlog" (copy on  file) and major maintenance                                                                    
of the  state's schools.  He thought  the schools  were well                                                                    
dispersed throughout the state.                                                                                                 
                                                                                                                                
Co-Chair  von  Imhof  affirmed that  schools  needing  major                                                                    
maintenance  were all  over the  state. She  estimated there                                                                    
was  $193  million  in  major maintenance  and  about  a  $7                                                                    
million request.                                                                                                                
                                                                                                                                
10:33:31 AM                                                                                                                   
                                                                                                                                
Senator Wielechowski  thought his community had  the Port of                                                                    
Anchorage as  a priority.  He mentioned  that 90  percent of                                                                    
all  the goods  came in  through  the port.  He thought  the                                                                    
military  had identified  the  port as  a  top priority.  He                                                                    
asked  if the  administration  thought it  was important  to                                                                    
make sure the port was funded and repaired.                                                                                     
                                                                                                                                
Mr. Steininger did  not know enough on the  issue to provide                                                                    
a comment.                                                                                                                      
                                                                                                                                
Senator  Wielechowski asked  if the  administration believed                                                                    
the  Port of  Alaska needed  to be  repaired and  funded. He                                                                    
thought the state  had just received federal  funds, and the                                                                    
project had  worked to reduce  costs. He asked if  the topic                                                                    
was on the administration's radar.                                                                                              
                                                                                                                                
Mr. Steininger  stated he  would get  back to  the committee                                                                    
with more information.                                                                                                          
                                                                                                                                
Senator  Hoffman  commented  that  throughout  the  proposed                                                                    
budget there were funds being  proposed to be expended under                                                                    
the  Capital  Income  Fund.  He  asked for  a  list  of  the                                                                    
projects being funded.  He requested a list  of criteria the                                                                    
administration used to access the funds.                                                                                        
                                                                                                                                
Co-Chair Stedman  added to Senator Hoffman's  request to ask                                                                    
for  information on  the  sources of  funds  in the  Capital                                                                    
Income Fund  as compared  to where the  money was  going. He                                                                    
suggested  that  the  information  should  go  back  several                                                                    
years.  He explained  that  the Capital  Income  Fund was  a                                                                    
holding account  where small appropriations were  moved. The                                                                    
fund  had  built  up  over  the years.  He  thought  it  was                                                                    
important  to look  at the  source of  the funds,  where the                                                                    
funds were directed, and the criteria for use.                                                                                  
                                                                                                                                
Mr.  Steininger  addressed the  use  of  the Capital  Income                                                                    
Fund,  and stated  that the  administration tried  to direct                                                                    
the fund  towards projects related  to maintenance  of state                                                                    
assets  and   facilities.  He  used   the  example   of  the                                                                    
renovation  of the  Anchorage Pioneer's  Home, and  deferred                                                                    
maintenance funds that would be  spread to small facilities.                                                                    
He noted  there was an  annual distribution of  Amerada Hess                                                                    
Funds  that   came  from  the  Permanent   Fund,  which  was                                                                    
different every  year but  was about  $27 million.  He noted                                                                    
that cruise ship  gaming taxes were often  directed into the                                                                    
fund to  supplement deferred  maintenance funding.  The fund                                                                    
did not cover the total  expense of deferred maintenance but                                                                    
did offset some of the costs.                                                                                                   
                                                                                                                                
10:38:16 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof thought the  question was how much of the                                                                    
funding  went  to the  governor  to  use at  his  discretion                                                                    
rather than to the appropriating body.                                                                                          
                                                                                                                                
Mr. Steininger stated  that the $30 million that  was in the                                                                    
Office of  the Governor  was a  way that  the administration                                                                    
had  been  trying  to  address  deferred  maintenance  on  a                                                                    
wholistic basis across all state  facilities, rather than on                                                                    
a  facility by  facility appropriation.  The method  allowed                                                                    
more  flexibility  to  respond  to  emergent  needs  and  to                                                                    
prioritize.  He  mentioned  condition indexes  and  standard                                                                    
criteria  across   facilities  as  a  means   of  evaluating                                                                    
facilities.  He thought  some  departments  might have  more                                                                    
savvy  in  evaluating  needs   than  other  departments.  He                                                                    
suggested  that  working  with the  Division  of  Facilities                                                                    
Services  within   DOT  provided   more  ability   to  apply                                                                    
objective rigor as to how the funds were applied.                                                                               
                                                                                                                                
Mr. Steininger  offered to provide  a list of  projects that                                                                    
funds had  been distributed to  over the last  several years                                                                    
that the  funds had been centrally  managed. He acknowledged                                                                    
that  there  was  a  learning   process  to  centralize  the                                                                    
function as  the division  came online.  He stated  that the                                                                    
fund was  not a slush  fund but rather  a way to  manage the                                                                    
work  on  a statewide  basis  with  more fairness  to  those                                                                    
departments with only a few facilities.                                                                                         
                                                                                                                                
Co-Chair Stedman thought that there  should be a request for                                                                    
a five-year  charter of accounts  for incoming  and outgoing                                                                    
funds to  the Capital Income  Fund, in consideration  of the                                                                    
capital   budget.  He   thought   there   would  be   better                                                                    
understanding  of  the  fairness  around the  state  if  the                                                                    
committee  examined the  record.  He  thought the  requested                                                                    
items for expenditure  in the current budget  might meet the                                                                    
top of the list for the legislature, or they might not.                                                                         
                                                                                                                                
10:41:29 AM                                                                                                                   
                                                                                                                                
Senator  Wielechowski  considered  the  "Statewide  Deferred                                                                    
Maintenance  Backlog" document  and  was  curious about  the                                                                    
prioritization of items.  He asked if there  was auditing or                                                                    
assurance that the requested costs  were reasonable. He used                                                                    
the  example   of  repainting  the   second  floor   of  the                                                                    
governor's house  for a  cost of  $180,000. He  assumed that                                                                    
state workers  were doing  the labor.  He was  curious about                                                                    
the oversight that was present to keep costs in line.                                                                           
                                                                                                                                
Co-Chair von Imhof  wanted to allow the  conversation to not                                                                    
be rushed.  She suggested  the committee  take a  recess and                                                                    
resume in the afternoon.                                                                                                        
                                                                                                                                
Co-Chair von Imhof wanted to  bring the focus to the capital                                                                    
budget.  She brought  up  the coronavirus  and  the Port  of                                                                    
Alaska as previously mentioned.  She thought the project was                                                                    
important to all of Alaska.  She mentioned a project for the                                                                    
University of  Alaska/Medical (UMed) District  expansion and                                                                    
Northern  Access Road  project,  which had  been funded  and                                                                    
defunded. The previous year Northern  Lights Boulevard had a                                                                    
sinkhole  and  had  closed,  which  was  access  the  multi-                                                                    
billion-dollar  UMed District.  She  suggested  that if  the                                                                    
virus was  a "new normal," a  new road was needed  to access                                                                    
the  area  in a  timely  and  safe  manner. She  wanted  the                                                                    
governor's office to  comment on the road  and connection to                                                                    
medical care and the University for the entire state.                                                                           
                                                                                                                                
10:46:00 AM                                                                                                                   
                                                                                                                                
Senator  Wielechowski stated  that  the  committee had  been                                                                    
through the issue many times.  The funds for the project had                                                                    
been  appropriated, and  the Municipality  of Anchorage  had                                                                    
said it  did not  want the road  constructed. He  cited that                                                                    
all  the community  councils surrounding  the  area had  not                                                                    
supported the  road project. He respectfully  disagreed with                                                                    
Co-Chair von  Imhof's opinion and  thought that  the current                                                                    
road system worked fine.                                                                                                        
                                                                                                                                
Co-Chair  von  Imhof agreed  to  disagree.  She thought  the                                                                    
whole area continued to be  built up and was concerned about                                                                    
danger to students and delay  in travel to the hospital. She                                                                    
discussed  potential for  travel disruption.  She understood                                                                    
that  there were  some community  members did  not want  the                                                                    
road  but suggested  the project  would be  for the  greater                                                                    
good for the state.                                                                                                             
                                                                                                                                
Senator Olson  thought Co-Chair von  Imhof had brought  up a                                                                    
significant issue of  the Covid-19 virus, which he  saw as a                                                                    
blossoming need.  He considered costs of  quarantine and did                                                                    
not see any money being appropriated or considered.                                                                             
                                                                                                                                
Co-Chair von  Imhof noted  that there  was an  amendment for                                                                    
the operating  budget for $4  million with an  additional $9                                                                    
million  in federal  funds.  She thought  there  might be  a                                                                    
supplemental  budget with  funds for  the virus.  She agreed                                                                    
that  Alaska had  experienced very  different funding  needs                                                                    
such  as  earthquakes  and  wildfires.  She  referenced  the                                                                    
spring revenue  forecast and considered  that the  state had                                                                    
potentially less revenue coming  in, which put more pressure                                                                    
on the budget.  She emphasized that the  state always needed                                                                    
to leave headroom for things that were unknown.                                                                                 
                                                                                                                                
Co-Chair von Imhof recessed the committee until 1:30 p.m.                                                                       
                                                                                                                                
10:49:38 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
1:33:29 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  von  Imhof  explained  that  the  committee  would                                                                    
continue  the   discussion  with   the  topic   of  deferred                                                                    
maintenance  liability, which  must be  considered carefully                                                                    
while  developing the  capital  budget.  She referenced  the                                                                    
long  list  of  projects  evidenced  in  the  "Statewide  DM                                                                    
Backlog" document.                                                                                                              
                                                                                                                                
Mr. Steininger discussed  the presentation, "FY2021 Deferred                                                                    
Maintenance  Update,"  (copy on  file).  He  noted that  Ms.                                                                    
Willhoite   would  give   an   overview   of  the   deferred                                                                    
maintenance  backlog as  well as  historical funding,  after                                                                    
which  DOT   staff  would  discuss  activities   within  the                                                                    
Division  of Facilities  Services. Staff  would discuss  the                                                                    
plan that was being implemented  and future plans on how the                                                                    
department  was handling  facilities maintenance  throughout                                                                    
the state.                                                                                                                      
                                                                                                                                
1:35:26 PM                                                                                                                    
                                                                                                                                
SHELLY WILLHOITE, CAPITAL  COORDINATOR, OFFICE OF MANAGEMENT                                                                    
AND   BUDGET,  OFFICE   OF  THE   GOVERNOR,  discussed   the                                                                    
presentation.                                                                                                                   
                                                                                                                                
Ms.  Willhoite looked  at  slide  2, "Deferred  Maintenance:                                                                    
Overview":                                                                                                                      
                                                                                                                                
     Deferred maintenance is  maintenance or repair projects                                                                    
     that  have been  delayed or  postponed due  to lack  of                                                                    
     funds  within  an   entity's  normal  operating  budget                                                                    
     cycle.  Maintenance  and  repairs are  activities  that                                                                    
     keep  assets  in  safe, effective,  working  condition.                                                                    
     Postponing   needed  repairs   could   lead  to   asset                                                                    
     deterioration   and    ultimately   asset   impairment.                                                                    
     Generally, a  policy of continued  deferred maintenance                                                                    
     may result in higher costs,  asset failure, and in some                                                                    
     cases, health and safety implications.                                                                                     
                                                                                                                                
Co-Chair  von Imhof  asked Ms.  Willhoite to  read the  last                                                                    
sentence on the slide.                                                                                                          
                                                                                                                                
Ms. Willhoite  showed slide 3, "Deferred  Maintenance: State                                                                    
Owned Facilities,"  which showed  a bar graph  depicting the                                                                    
number  of  facilities by  agency.  There  were about  2,400                                                                    
facilities   throughout    the   state,    representing   14                                                                    
departments  in 20  million square  feet of  space and  $9.7                                                                    
billion in replacement value. The  chart depicted the number                                                                    
of buildings by department.                                                                                                     
                                                                                                                                
Ms.  Willhoite turned  to  slide  4, "Deferred  Maintenance:                                                                    
Facility Types":                                                                                                                
                                                                                                                                
     Types of facilities vary by entity                                                                                         
         UA manages classroom, laboratory, research,                                                                         
          residential, and office space                                                                                         
         DOA manages general office space                                                                                    
       DOC and DHSS both manage 24 hour facilities                                                                           
         DMVA manages military and other facilities and                                                                      
          statewide armories                                                                                                    
         DNR oversees park service cabins, shelters, fire                                                                    
          suppression and preparedness shops                                                                                    
                                                                                                                                
Ms. Willhoite  noted that  the bar graph  on slide  4 showed                                                                    
the total square  feet in facilities by  agency. She pointed                                                                    
out  that the  University had  over 8  million square  feet,                                                                    
while DOT had  about 2.5 million square  feet. She explained                                                                    
that the  University had  classrooms and  laboratories, with                                                                    
larger buildings.  Conversely, DOT  had a greater  number of                                                                    
smaller buildings, many of them electrical buildings.                                                                           
                                                                                                                                
Co-Chair  von  Imhof  thought  that when  the  DOT  came  to                                                                    
committee,  she  wanted  to   discuss  the  composition  and                                                                    
function of the agency's 732 buildings.                                                                                         
                                                                                                                                
1:39:13 PM                                                                                                                    
                                                                                                                                
Ms.  Willhoite  spoke  to slide  5,  "Deferred  Maintenance:                                                                    
Statewide Backlog $1.9 Billion":                                                                                                
                                                                                                                                
     Deferred maintenance backlog:                                                                                              
     ?University of Alaska $1.3 billion                                                                                         
     ?Department of Transportation and Public Facilities                                                                        
     $341 million                                                                                                               
     ?All other agencies total $313 million                                                                                     
                                                                                                                                
Senator  Wielechowski  thought  that some  of  the  projects                                                                    
seemed  extremely expensive  and  unnecessary.  He used  the                                                                    
example  of  radar and  speed  indicator  installation in  a                                                                    
parking garage for $26,300. He  recalled a cost for the same                                                                    
technology  being  $5,000.  He   mentioned  repairs  in  the                                                                    
governor's  house  and  thought the  proposed  costs  seemed                                                                    
extraordinary. He  wondered what  sort of vetting  was being                                                                    
done  for the  projects  and wondered  if  there were  state                                                                    
employees that could perform the work at a lower price.                                                                         
                                                                                                                                
Mr. Steininger thought  that Senator Wielechowski's concerns                                                                    
were part  of the  reason all  of the  departments' deferred                                                                    
maintenance projects  needed to  be considered  together. He                                                                    
thought  having  consistent  cost  estimates  and  standards                                                                    
would  hopefully start  to  address  some disparities  being                                                                    
pointed out. He thought having  experts in the state looking                                                                    
at cost  estimates and  applying consistent  standards would                                                                    
be  an  improvement. He  noted  that  the current  list  and                                                                    
prioritization  had   been  submitted  by   each  individual                                                                    
department,   and    the   prioritization    reflected   the                                                                    
department's  perception  of  priority ranking  rather  than                                                                    
looking at  projects together across departments,  which was                                                                    
the goal of the administration.                                                                                                 
                                                                                                                                
1:42:45 PM                                                                                                                    
                                                                                                                                
Senator  Olson thought  he had  heard  Mr. Steininger  state                                                                    
there was  no oversight  on the  numbers being  proposed. He                                                                    
was appalled  at the proposed  expense for the  projects. He                                                                    
was hearing that  no one vetted the numbers  before the list                                                                    
was assembled.                                                                                                                  
                                                                                                                                
Mr. Steininger  clarified that  the numbers  were done  on a                                                                    
departmental  basis, and  each department  vetted the  items                                                                    
before they were assembled into  the list. He explained that                                                                    
some  of the  projects  landed on  the deferred  maintenance                                                                    
list for  the very reason  that the project did  not involve                                                                    
health-life-safety,  as   those  that  did   were  addressed                                                                    
through the agencies' operating budget.                                                                                         
                                                                                                                                
Senator Wielechowski asked if  there were always competitive                                                                    
sealed  bids  for  construction contracts.  He  asked  where                                                                    
allocated funds went  if the project ended  up being cheaper                                                                    
than expected.                                                                                                                  
                                                                                                                                
Mr. Steininger stated  that whenever there was  a project of                                                                    
any nature,  bidding would adhere  to the  procurement code.                                                                    
There  were different  levels of  competition  based on  the                                                                    
nature and size  of the project. If a project  bid came back                                                                    
lower than estimated, the remaining  funds would be put back                                                                    
in  the deferred  maintenance pot  to be  allocated for  the                                                                    
next most critical need.                                                                                                        
                                                                                                                                
Co-Chair von  Imhof considered  a list  of projects  for the                                                                    
University  of Alaska  Anchorage (UAA)  on page  127 of  the                                                                    
deferred maintenance  backlog list,  which showed a  cost of                                                                    
$2 for  ten items to  replace pumps.  She asked if  the list                                                                    
should be getting so granular.                                                                                                  
                                                                                                                                
Ms. Willhoite  thought the amounts might  be a typographical                                                                    
error.                                                                                                                          
                                                                                                                                
1:45:50 PM                                                                                                                    
                                                                                                                                
KIM  MAHONEY,  ASSOCIATE   VICE  CHANCELLOR  OF  FACILITIES,                                                                    
UNIVERSITY OF  ALASKA ANCHORAGE,  thought the  amounts might                                                                    
be a typo.  She relayed that UAA used a  third party to help                                                                    
with the deferred maintenance list,  which totaled over $500                                                                    
million. She  stated that items on  the deferred maintenance                                                                    
list  were  not  intended  to be  individual  projects,  but                                                                    
rather were done in a  project delivery method. The items on                                                                    
the list  included contemplation that that  item costs would                                                                    
be  part of  a  biddable  job rather  than  on a  standalone                                                                    
basis.                                                                                                                          
                                                                                                                                
Co-Chair   von  Imhof   acknowledged  that   she  had   been                                                                    
incorrect,  and the  amount was  $2,000 for  each item.  She                                                                    
suggested the list combine items.                                                                                               
                                                                                                                                
Senator  Wilson asked  how  often  the deferred  maintenance                                                                    
lists were  updated. He saw  that departments  tracking went                                                                    
back to  FY 11.  He wondered if  completed jobs  remained on                                                                    
the list for a period of time.                                                                                                  
                                                                                                                                
Ms. Willhoite informed that  deferred maintenance lists were                                                                    
updated at  least annually,  usually after  the construction                                                                    
season.  She continued  that  the  administration asked  for                                                                    
updated maintenance listings  and prioritization of projects                                                                    
before deferred maintenance allocation.                                                                                         
                                                                                                                                
1:49:00 PM                                                                                                                    
                                                                                                                                
Ms.  Willhoite  displayed  slide 6,  "Deferred  Maintenance:                                                                    
Backlog  $803,011.1  (excluding University  $1.3  billion),"                                                                    
which  showed a  bar graph  of deferred  maintenance backlog                                                                    
amount per  department. She noted  that the  University data                                                                    
had been  pulled out after it  skewed the graph to  a degree                                                                    
that made  the graph  unusable. The departments  were listed                                                                    
in  order  of deferred  maintenance  total.  She added  that                                                                    
DOT's  amount   included  facilities,   highways,  aviation,                                                                    
harbors,  and  the  AMHS.  She noted  that  the  full  chart                                                                    
including the University was in the appendix.                                                                                   
                                                                                                                                
Ms.  Willhoite  discussed  slide 7,  "Deferred  Maintenance:                                                                    
Statewide Facilities Approach":                                                                                                 
                                                                                                                                
     Centralized Analysis, Recommendation and Approval                                                                          
          ?Created the Executive Facilities Maintenance                                                                         
          Advisory Committee and the State Facilities                                                                           
          Council                                                                                                               
          ?Created the Division of Facilities Services                                                                          
          within the Department of Transportation and                                                                           
          Public Facilities                                                                                                     
          ?Started     Statewide    Deferred     Maintenance                                                                    
          Appropriations                                                                                                        
                                                                                                                                
Ms.   Willhoite   noted   that  the   Executive   Facilities                                                                    
Maintenance  Advisory  Committee   (EFMAC)  was  created  to                                                                    
coordinate   and   increase   efficiencies   in   facilities                                                                    
maintenance across  all departments. Prior to  the statewide                                                                    
approach, each department had been  putting together its own                                                                    
facilities maintenance.                                                                                                         
                                                                                                                                
Co-Chair  von  Imhof  asked  if   the  positions  were  paid                                                                    
committee appointments.  She asked who was  on the committee                                                                    
and who was on the State Facilities Council.                                                                                    
                                                                                                                                
Ms. Willhoite informed that the  council was implemented the                                                                    
following year and had representatives  from the Division of                                                                    
Facilities Services as well as from each department.                                                                            
                                                                                                                                
Mr.  Steininger clarified  that  the EFMAC  was  made up  of                                                                    
existing state employees that managed  facilities as part of                                                                    
the job.  The idea was  to get  together a group  of subject                                                                    
matter experts and stakeholders from all departments.                                                                           
                                                                                                                                
Ms. Willhoite continued to address  the slide. She discussed                                                                    
creation of  the Division of Facilities  Services within DOT                                                                    
for    the   purpose    of   increased    efficiencies   and                                                                    
standardization.                                                                                                                
                                                                                                                                
1:52:45 PM                                                                                                                    
                                                                                                                                
Senator  Wilson asked  if the  management of  facilities had                                                                    
been consolidated, or if the change still in process.                                                                           
                                                                                                                                
Ms.   Willhoite  stated   that   several  departments   were                                                                    
complete, including DOA, DOT,  and DEED. Several departments                                                                    
were  in   the  middle   of  being  transitioned   to  being                                                                    
coordinated  by the  new division,  including Department  of                                                                    
Fish and Game.                                                                                                                  
                                                                                                                                
Senator Wilson  asked improvements had already  been seen as                                                                    
a   result   of   the    consolidation,   such   as   better                                                                    
prioritization of projects.                                                                                                     
                                                                                                                                
Ms. Willhoite  stated that the  division was  implementing a                                                                    
software package  that would  assist in  prioritization, and                                                                    
the  project  was  not  yet  complete.  When  complete,  the                                                                    
database  would give  a  consolidated  overview of  deferred                                                                    
maintenance projects.                                                                                                           
                                                                                                                                
Ms.  Willhoite continued  to address  slide 7.  She detailed                                                                    
that  in 2018,  the administration  started doing  statewide                                                                    
deferred  maintenance  appropriations  as a  lump  sum.  The                                                                    
Division of  Facilities Services  would help  prioritize the                                                                    
funds. She  mentioned intent language  in a bill  passed the                                                                    
previous year  that made the process  be consolidated across                                                                    
agencies.                                                                                                                       
                                                                                                                                
1:55:04 PM                                                                                                                    
                                                                                                                                
Ms.  Willhoite  reviewed  slide  8,  "Deferred  Maintenance:                                                                    
Statewide  Appropriation  Status,"   which  showed  a  table                                                                    
depicting the  amount appropriated  for each  department for                                                                    
2018,  2019,  and  2020.  She   explained  that  before  the                                                                    
administration came  up with the allocation,  the department                                                                    
had been  asked to  examine if the  top ten  priorities were                                                                    
still  the  same.  The  information  was  used  to  make  an                                                                    
allocation,  and  it  was  the  hope  that  the  funds  were                                                                    
allocated to the most critical needs in the state.                                                                              
                                                                                                                                
Ms. Willhoite continued  to address slide 8.  She noted that                                                                    
the previous  year was the  first year that the  council was                                                                    
used  to  help  allocate  funds.  The  council  had  met  to                                                                    
consider projects  and reach  consensus on  how to  make the                                                                    
allocation.  The group  had identified  the need  to reserve                                                                    
some  funds aside  for emergent  needs. Several  departments                                                                    
had emergency funds in the  past. The current fund was about                                                                    
$2 million, of which $800,000 had been expended thus far.                                                                       
                                                                                                                                
Ms.  Willhoite looked  at  slide  9, "Deferred  Maintenance:                                                                    
Governor's Proposed Budget":                                                                                                    
                                                                                                                                
     ?FY2021 Deferred Maintenance: $37.5 million                                                                                
     ?Statewide Deferred Maintenance: $30.0 million DGF                                                                         
     (Capital Income Fund)                                                                                                      
     ?Department of Administration: $5.9 million Other                                                                          
     (Public Building Fund)                                                                                                     
     ?Courts: $1.6 million DGF (Capital Income Fund)                                                                            
                                                                                                                                
Co-Chair von  Imhof asked  if there  would be  a forthcoming                                                                    
breakdown  of the  $30 million  DGF  for statewide  deferred                                                                    
maintenance from the Capital Income Fund.                                                                                       
                                                                                                                                
Ms.  Willhoite explained  that the  division director  would                                                                    
discuss  the  process  the   administration  was  using  for                                                                    
expenditure  of the  $30 million.  There was  not a  list of                                                                    
projects assembled  yet, but when  the list was  complete it                                                                    
would be provided to the committee.                                                                                             
                                                                                                                                
1:58:16 PM                                                                                                                    
                                                                                                                                
CHRISTOPHER  HODGIN,  SENIOR  PROJECT MANAGER,  DIVISION  OF                                                                    
FACILITIES  SERVICES,   DEPARTMENT  OF   TRANSPORTATION  AND                                                                    
PUBLIC  FACILITIES, ANCHORAGE  (via teleconference),  showed                                                                    
slide  10,  "FY2021  Deferred   Maintenance  -  Division  of                                                                    
Facilities Services."                                                                                                           
                                                                                                                                
Mr.  Hodgin  referenced  slide  11,  "Deferred  Maintenance:                                                                    
Statewide Approach":                                                                                                            
                                                                                                                                
      Deferred Maintenance  moving  forward  into  FY2021                                                                    
        Collaborating with OMB and the State Facilities                                                                         
        Council                                                                                                                 
      Prioritizing deferred maintenance  projects  across                                                                    
        all executive branch agencies, including the                                                                            
        University                                                                                                              
      Facilities Council deferred  maintenance  workshops                                                                    
        currently in-progress, with goal of submitting                                                                          
        Statewide prioritized list to OMB by the end of                                                                         
        April 2020                                                                                                              
      The Basic Approach  projects  are being prioritized                                                                    
        based on a combination of relevant factors to create                                                                    
        a Project Index Value (PIV)                                                                                             
                                                                                                                                
Mr.   Hodgin  showed   slide   12,  "Deferred   Maintenance:                                                                    
Statewide Approach  the Basics":                                                                                                
                                                                                                                                
     ?Project prioritization  a combination of the  below to                                                                    
     create a Project Index Value                                                                                               
                                                                                                                                
     (PIV):PIV= (MAI) x (System Factor) x (Need)                                                                                
                                                                                                                                
           MAI-Mission Alignment Index, alignment of                                                                         
             facility to an Agency's mission                                                                                    
           System Factor - Scale related to various                                                                          
             building systems and their impact on building                                                                      
           Need - The urgency                                                                                                
                                                                                                                                
     ?If  known, other  attributes are  also shared  such as                                                                    
     anticipated return on  investments, any matching funds,                                                                    
     or   eligibility   as   a   financed   energy   savings                                                                    
     performance project                                                                                                        
                                                                                                                                
Co-Chair von  Imhof wanted a  description of the  scale that                                                                    
would  be used  to assess  things like  need. She  asked Mr.                                                                    
Hodgin to explain how the scale was developed.                                                                                  
                                                                                                                                
Mr.  Hodgin advanced  to slide  24 in  the index,  "Deferred                                                                    
Maintenance:  Statewide Approach    Mission  Alignment Index                                                                    
Examples":                                                                                                                      
                                                                                                                                
     ?Critical:                                                                                                                 
          ?The Agency cannot meet its mission without this                                                                      
         facility. There are no viable workarounds                                                                              
                                                                                                                                
     ?Important:                                                                                                                
          ?Would    impact   the    Agency's   mission    if                                                                    
          unavailable. Possible workarounds                                                                                     
                                                                                                                                
      Supportive:                                                                                                               
          ?Would possibly impact the Agency's mission if                                                                        
         unavailable, but other options available                                                                               
                                                                                                                                
     ?Other / Non Mission Critical:                                                                                             
          ?Would not have an effect on the Agency's mission                                                                     
          if unavailable                                                                                                        
                                                                                                                                
Mr. Hodgin explained that the  mission alignment index scale                                                                    
was a zero  to zero-point-nine scale, with  a designation of                                                                    
zero-point-nine  indicating the  most critical  facility for                                                                    
the particular agency. He explained  that there was a margin                                                                    
above zero-point-nine  for other facilities that  would have                                                                    
statewide importance as well as agency importance.                                                                              
                                                                                                                                
Mr.  Hodgin furthered  that  the system  factor  was also  a                                                                    
decimal  scale   that  went  from   zero  to  one,   with  a                                                                    
designation  of  one  signifying  the  critical  life/safety                                                                    
repair needs  at a facility.  He made note  of corresponding                                                                    
scales   for   projects   such  as   interior   renovations,                                                                    
mechanical/electrical   upgrades,   or   building   envelope                                                                    
upgrades. He explained that the  need scale went from one to                                                                    
five, with  a rating  of five  signifying the  most critical                                                                    
need  and a  rating  of 3  signifying  projects that  needed                                                                    
attention  to  prevent  deterioration   of  a  building.  He                                                                    
surmised that  items with a  need ranking below  three would                                                                    
not make the list.                                                                                                              
                                                                                                                                
Co-Chair  von Imhof  thought the  example in  the index  was                                                                    
helpful.                                                                                                                        
                                                                                                                                
2:03:25 PM                                                                                                                    
                                                                                                                                
Mr.   Hodgin  showed   slide   13,  "Deferred   Maintenance:                                                                    
Statewide Approach    Example," which showed  table using an                                                                    
illustrative example  of an electrical system  upgrade to an                                                                    
office building. The example showed  a critical building for                                                                    
the  department. He  reviewed the  approach for  determining                                                                    
the project index value.                                                                                                        
                                                                                                                                
Mr.  Hodgin  referenced  slide  14,  "Deferred  Maintenance:                                                                    
Statewide  Approach    Example," which  showed a  table with                                                                    
illustrative  example  values.  He  posited  that  when  the                                                                    
approach  was  applied  to  all  projects  in  the  deferred                                                                    
maintenance backlog,  one could see that  the projects could                                                                    
be  ranked.  He  thought  the  slide  would  show  that  the                                                                    
projects with  the highest index value  should represent the                                                                    
state's most critical important  buildings for the state and                                                                    
respective  agencies,  where  the  repairs  fixed  the  most                                                                    
important components  of the buildings and  the repairs were                                                                    
in the most immediate need.                                                                                                     
                                                                                                                                
Co-Chair  Stedman  referenced the  idea  of  a scatter  plot                                                                    
chart, which  could be used to  show all the data  points to                                                                    
see where there might be clusters.                                                                                              
                                                                                                                                
Co-Chair von  Imhof was fond  of data and charts,  and liked                                                                    
Co-Chair Stedman's idea.  She used the example  of a project                                                                    
that was not prioritized and  as a result, systems degraded.                                                                    
She asked who  was responsible for looking at  systems on an                                                                    
ongoing basis and updating the index values.                                                                                    
                                                                                                                                
Mr. Hodgin acknowledged that if  the condition of a facility                                                                    
deteriorated,  the index  yearly  refresh  would change  the                                                                    
need metric  to a higher  value and  place the project  at a                                                                    
higher priority in  the list. If the facility  was under the                                                                    
care  of  the  Division   of  Facilities  Services  or  DOT,                                                                    
typically "maintainers"  looked at systems and  reported any                                                                    
deficiencies  to hub  managers  or  foremen. Other  agencies                                                                    
that  were not  consolidated used  maintenance professionals                                                                    
that would report to managers.                                                                                                  
                                                                                                                                
Co-Chair  von Imhof  reiterated  the request  for a  scatter                                                                    
plot to help the committee envision the trends.                                                                                 
                                                                                                                                
2:07:37 PM                                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  questioned the  amount of  a reasonable                                                                    
deferred  maintenance  savings account  in  the  event of  a                                                                    
sudden  occurrence such  as extreme  cold or  an earthquake.                                                                    
She discussed  scenarios where  property degraded  over time                                                                    
after not  receiving maintenance. She asked  what options an                                                                    
agency would have.                                                                                                              
                                                                                                                                
Mr. Hodgin deferred the question to Ms. Willhoite.                                                                              
                                                                                                                                
Ms. Willhoite  referenced a chart  that showed  a percentage                                                                    
that was recommended to set  aside for deferred maintenance,                                                                    
but  the amount  had  been  well outside  the  realm of  the                                                                    
budget.  She   thought  that  with   facilities  maintenance                                                                    
consolidation, it  would be possible  to get a  better scope                                                                    
of what a good percentage for savings would be.                                                                                 
                                                                                                                                
Mr.  Hodgin  did  not  have  the  number.  He  referenced  a                                                                    
recommendation  of  the  National  Science  Foundation  that                                                                    
suggested one to  four percent of the gross  asset value per                                                                    
year for  deferred maintenance. He estimated  that the asset                                                                    
value of the state was $8 billion.                                                                                              
                                                                                                                                
2:11:14 PM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof asked if  the states asset value  was $8                                                                    
billion, was the $30 million  in reserve one to four percent                                                                    
of the total.                                                                                                                   
                                                                                                                                
Mr. Hodgin answered "no."                                                                                                       
                                                                                                                                
Co-Chair von  Imhof asked  what the amount  would be  at one                                                                    
percent.  She  thought  the  amount   would  be  about  $800                                                                    
million.                                                                                                                        
                                                                                                                                
Senator  Wielechowski referenced  page 49  of the  Statewide                                                                    
Deferred  Maintenance  Backlog,  which showed  a  number  of                                                                    
projects  to replace  signage  and  rehabilitate trails  for                                                                    
what  he thought  looked  to  be about  $1  million. He  was                                                                    
curious  if there  was any  sort of  process for  soliciting                                                                    
volunteers or school groups to do the work.                                                                                     
                                                                                                                                
Mr. Hodgin was not aware of such a process.                                                                                     
                                                                                                                                
Co-Chair  von Imhof  was wondering  if Senator  Wielechowski                                                                    
was referencing  something like a  GoFundMe page  for public                                                                    
work.                                                                                                                           
                                                                                                                                
Senator  Wielechowski referenced  the rehabilitation  of the                                                                    
Mt.  Baldy trail  in Anchorage  for $75,000.  He thought  it                                                                    
would  not  be  difficult  to find  a  non-profit  group  in                                                                    
Anchorage to  take on  the project.  He mentioned  a project                                                                    
his daughter did painting electrical  boxes. He thought that                                                                    
the idea was worth pursuing.                                                                                                    
                                                                                                                                
2:13:50 PM                                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof  asked  about   the  large  backlog  of                                                                    
deferred maintenance.  She asked if the  project index value                                                                    
would be seen in small items or large buildings.                                                                                
                                                                                                                                
Mr. Hodgin  stated that the  division had started  the index                                                                    
process  building by  building on  the Deferred  Maintenance                                                                    
Backlog spreadsheet. The  backlog would be the  start of the                                                                    
process. He did  not anticipate that the result  of the work                                                                    
would show each component, but rather building by building.                                                                     
                                                                                                                                
Mr. Hodgin showed slide 15, "Property Disposal Directive."                                                                      
                                                                                                                                
Mr.   Hodgin  considered   slide   16,  "Property   Disposal                                                                    
Directive: Update":                                                                                                             
                                                                                                                                
     ? February 12, 2019 Property Disposal Directive                                                                            
          Directed Executive Branch to investigate options                                                                      
          available for reducing the State's assets by                                                                          
          identifying properties that could be divested                                                                         
     ? A multi-departmental workgroup was formed, inclusive                                                                     
     of State Facility Council members and project managers                                                                     
     from the DOT&PF Division of Facilities Services                                                                            
     ? Methodology involved departments categorizing their                                                                      
     facilities   into   'Consider'    or   'Non   Consider'                                                                    
     categories                                                                                                                 
          Consider:  These  buildings   were  identified  by                                                                    
          departments    as   candidates    for   divesting.                                                                    
          Candidate   buildings  may   be  appropriate   for                                                                    
          demolition, space consolidation, or selling.                                                                          
          Non-Consider: Identified by departments as non-                                                                       
          candidates. Departments were asked to provide                                                                         
          justifications for each non-consider building.                                                                        
                                                                                                                                
2:17:01 PM                                                                                                                    
                                                                                                                                
Mr.   Hodgin   displayed   slide  17,   "Property   Disposal                                                                    
Directive:   Consider   Candidate  Example   From   Property                                                                    
Disposal Report":                                                                                                               
                                                                                                                                
     Maintenance Shop & Warehouse Ketchikan, AK 99901 4,430                                                                     
     Square Feet State Owned                                                                                                    
                                                                                                                                
     Concept:  Southcoast  Region   currently  occupies  two                                                                    
     locations for three components  within the region which                                                                    
     includes  M&O, Construction  and SEF.  The Construction                                                                    
     office  has  been  a  trailer  which  has  deteriorated                                                                    
     beyond repair and it is  not in an acceptable condition                                                                    
     employees should  be working in. Co-locating  all three                                                                    
     within  vacant space  located at  the AMHS  Engineering                                                                    
     building will  reduce costs for both  Southcoast Region                                                                    
     and  AMHS  and  will  provide  staff  adequate  working                                                                    
     conditions                                                                                                                 
                                                                                                                                
     Advantages:  1.  Reduced  operating  costs  by  sharing                                                                    
     facility  operations  across  three areas  2.  Improved                                                                    
     efficiencies having  M&O, Construction  and SEF  in one                                                                    
     location 3. Improved working conditions for staff                                                                          
                                                                                                                                
     Disadvantages: 1.  Unknown start  up costs  2. Disposal                                                                    
     of previous location could contain Hazmat or asbestos                                                                      
                                                                                                                                
     Expected  benefit: Unknown  operating  savings will  be                                                                    
     realized,  however there  is the  assumption a  savings                                                                    
     will occur.  Utilizing existing space and  reducing the                                                                    
     building inventory.                                                                                                        
                                                                                                                                
Mr. Hodgin highlighted slide 18, "Property Disposal                                                                             
Directive: Consider Candidates & Next Steps":                                                                                   
                                                                                                                                
     Next Steps                                                                                                                 
     ? OMB  discussions with  individual Departments  on the                                                                    
     Consider   candidates,   any   further   cost   benefit                                                                    
     analyses,   and   approvals    of   selected   Consider                                                                    
     candidates                                                                                                                 
     ? Determining  proper resources and  project management                                                                    
     to implement approved selected property disposals                                                                          
     ?  Resourcing  and  implementing the  disposal  of  the                                                                    
     approved properties                                                                                                        
                                                                                                                                
Co-Chair Stedman referenced the Mt. Edgecombe Aquatic                                                                           
Center and asked if it had removed from the liquidation                                                                         
list.                                                                                                                           
                                                                                                                                
Mr. Hodgin answered in the affirmative.                                                                                         
                                                                                                                                
Co-Chair Stedman asked about the Stratton Library in Sitka.                                                                     
                                                                                                                                
Mr. Hodgin believed the library was still on the                                                                                
liquidation list.                                                                                                               
                                                                                                                                
Co-Chair Stedman  asked that Mr. Hodgin  re-review the item.                                                                    
He expanded  that the  building went  along with  the state-                                                                    
owned Sheldon Jackson Museum, and  enhanced the viability of                                                                    
the  museum  by  providing  a larger  area  for  the  museum                                                                    
collection.  He   thought  the  library  allowed   for  more                                                                    
visitors  and  thereby  less  subsidy  for  the  museum.  He                                                                    
explained  that   there  would   most  likely   be  language                                                                    
forthcoming in legislation that  would restrict the agency's                                                                    
ability to collect funds if the building was sold.                                                                              
                                                                                                                                
Co-Chair Stedman  thought the  division should  consider the                                                                    
National  Guard  Amory in  Sitka.  He  wanted to  know  what                                                                    
benefit the asset gave to the  state. He noted that DEED was                                                                    
in consideration  of liquidating or leasing  four properties                                                                    
in Sitka  to monetize the  value of the property  not needed                                                                    
for Mt.  Edgecumbe High  School. The  funds would  help fund                                                                    
the   school  and   provide   funds   for  maintenance   for                                                                    
facilities.  He did  not think  the parcels  of real  estate                                                                    
were  included in  the list  but were  under discussion.  He                                                                    
thought there were  some challenges with how  the asset list                                                                    
was being composed. He wanted  the department to get back to                                                                    
his office regarding the armory and the library in Sitka.                                                                       
                                                                                                                                
2:21:54 PM                                                                                                                    
                                                                                                                                
Mr. Hodgin affirmed that he  would get more information from                                                                    
the departments to answer Co-Chair Stedman's questions.                                                                         
                                                                                                                                
Co-Chair Stedman stated that there  had been a repair in the                                                                    
previous year's budget  that had been vetoed.  He wanted Mr.                                                                    
Hodgin and  the division to  provide a solution  rather than                                                                    
provide a standard response.                                                                                                    
                                                                                                                                
Co-Chair von  Imhof observed there was  an executive summary                                                                    
and  property disposal  directive dated  February 12,  2019,                                                                    
that  directed  all  commissioners  to  investigate  options                                                                    
available  for reducing  the state's  assets by  identifying                                                                    
properties that  could be  sold or sold  and leased  back to                                                                    
the state in order to  realize savings. She thought it would                                                                    
be helpful  to have a  list of  how many buildings  had been                                                                    
identified and sold in the almost-year since the directive.                                                                     
                                                                                                                                
Mr. Hodgin agreed to provide the information.                                                                                   
                                                                                                                                
Co-Chair  Stedman understood  Co-Chair  von Imhof's  request                                                                    
but was concerned  that the state would be  in a liquidation                                                                    
mindset. He  discussed the Stratton  Library, and  noted the                                                                    
library had  a third  of the archives  of the  State Library                                                                    
and Archives  in Juneau. He  reiterated that if  the library                                                                    
was liquidated, it would hinder  the survival of the Sheldon                                                                    
Jackson Museum.  He wanted an  expansion of the  analysis of                                                                    
the proposed liquidation.                                                                                                       
                                                                                                                                
Mr. Hodgin answered "yes."                                                                                                      
                                                                                                                                
2:24:49 PM                                                                                                                    
                                                                                                                                
Mr.   Hodgin  looked   at  slide   19,  "Property   Disposal                                                                    
Directive: The Divestment Process":                                                                                             
                                                                                                                                
      ? Executive  Branch to  follow an  established process                                                                    
     for   divesting  excess   buildings   managed  by   the                                                                    
     Department   of  Administration   (Appendix  C),   with                                                                    
     exception of:                                                                                                              
              Buildings on airport land under DOT&PF                                                                         
               authority (AS 02.15.060.070)                                                                                     
              Buildings acquired by DOT&PF from the                                                                          
               acquisition of land for highway projects (AS                                                                     
               19.05.070)                                                                                                       
              Education buildings (AS14.07.030)                                                                              
              DNR buildings which improve state lands (AS                                                                    
               38.05.035)                                                                                                       
              Federally funded buildings, in which each                                                                      
               federal  agency has  its  own  rules and  may                                                                    
               require  federal funds  to  be refunded.  For                                                                    
               example,   DMVA   federal   use   or   funded                                                                    
               armories, in which  DMVA is following federal                                                                    
               guidelines   in   their  current   facilities                                                                    
               divestment program.                                                                                              
                                                                                                                                
     ?   For  those   facilities   with   little  value   or                                                                    
     unlikeliness to  sell, other factors  for consideration                                                                    
     include  suspension  of   all  maintenance  and  repair                                                                    
     costs, liability associated  with vacant structures and                                                                    
     demolition costs.                                                                                                          
                                                                                                                                
Co-Chair von Imhof asked if  buildings the state divested of                                                                    
would be sold  on the open market to the  highest bidder, or                                                                    
if the  state would engage  with a  third party to  sell the                                                                    
properties.                                                                                                                     
                                                                                                                                
Mr. Hodgin  thought the first step  was to see if  any other                                                                    
agency  had a  need for  the facility.  He was  not familiar                                                                    
with the rest  of the process. He offered to  provide a copy                                                                    
of the guidance paper that outlined the process.                                                                                
                                                                                                                                
Co-Chair  von   Imhof  commented  that  it   made  sense  to                                                                    
consolidate  buildings   but  questioned  the   efficacy  of                                                                    
shuffling buildings between agencies,  which would not lower                                                                    
the overall  deferred maintenance backlog. She  asked to get                                                                    
more  information   about  executive   branch's  established                                                                    
process.  She reiterated  her request  for more  information                                                                    
about  what properties  had been  divested  in the  previous                                                                    
year.                                                                                                                           
                                                                                                                                
Mr. Hodgin agreed to provide the information.                                                                                   
                                                                                                                                
2:27:42 PM                                                                                                                    
                                                                                                                                
Mr. Hodgin showed slide 20, "Questions?"                                                                                        
                                                                                                                                
Co-Chair  von  Imhof  noted  that   there  was  an  appendix                                                                    
starting  on slide  21. She  asked if  Mr. Hodgin  wanted to                                                                    
highlight any more topics on the previous slides.                                                                               
                                                                                                                                
Mr. Hodgin answered "no."                                                                                                       
                                                                                                                                
Co-Chair  von  Imhof asked  to  go  to slide  26,  "Deferred                                                                    
Maintenance:  Replacement Value  of  our Facilities,"  which                                                                    
showed  a table  with data  on the  number of  facilities in                                                                    
each agency,  including the  square footage  and replacement                                                                    
value.  She  asked  about   Mr.  Hodgin's  earlier  comments                                                                    
regarding  NSF's  recommendations for  deferred  maintenance                                                                    
savings  at one  to four  percent of  the replacement  value                                                                    
annually.                                                                                                                       
                                                                                                                                
Co-Chair von  Imhof thought  1 to 4  percent of  the state's                                                                    
total  replacement  value  was  about $97  million  to  $360                                                                    
million,  while the  proposal being  considered was  for $30                                                                    
million. She referenced slide 8,  which showed the statewide                                                                    
appropriation a status  by agency for 2018,  2019, and 2020.                                                                    
She thought there was a better  amount to arrive at than the                                                                    
proposed  $30   million.  She  hoped  the   committee  would                                                                    
contemplate  what  amount  made   sense.  She  recalled  the                                                                    
previous  day  that  the Legislative  Finance  Division  had                                                                    
discussed a potential for $100  million to $200 million less                                                                    
in revenue  for 2020, and  potentially another $100  to $200                                                                    
million less revenue for 2021.  She mentioned increased cash                                                                    
needs and a dwindling balance in the Constitutional Budget                                                                      
Reserve.                                                                                                                        
                                                                                                                                
SB 154 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair von Imhof discussed the agenda for the following                                                                       
day.                                                                                                                            
                                                                                                                                

Document Name Date/Time Subjects
030520 Capital Project Summary.pdf SFIN 3/5/2020 9:00:00 AM
SB 154
030520 FY2020 Deferred Maintenance Backlog 12.31.2019 - All.pdf SFIN 3/5/2020 9:00:00 AM
Deferred Maintenance 2020
Final SFIN Capital Budget Overview 03.05.2020.pdf SFIN 3/5/2020 9:00:00 AM
SB 154
Final SFIN Deferred Maintenance Overview 03.05.2020.pdf SFIN 3/5/2020 9:00:00 AM
Deferred Maintenance 2020