Legislature(1995 - 1996)
04/09/1996 04:10 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 290 APPROPRIATIONS: CAPITAL & OTHERS CHAIRMAN RIEGER called the Senate Transportation meeting to order at 4:10 p.m. and introduced SB 290 as the first order of business before the committee. ANNALEE MCCONNELL, Director of the Office of Management & Budget, suggested that a hearing on the Governor's six year capital plan would be valuable in order to establish a context for the annual capital budget that is before the committee. She informed the committee that communities have commented that a longer term capital plan would be very helpful. She recommended that the legislature adopt a six year capital plan which is required by statute, although it is not observed or practiced. This would provide a planning guideline. Ms. McConnell indicated that the legislature should consider holding public hearings regarding the infrastructure needs of the state in the reality of decreasing budgets. Number 060 Ms. McConnell noted that she had copies of the 1997 budget. She suggested that there be some intent language at the beginning of the capital budget which could adopt the guidelines contained in the six year plan. Over the years, some of the items in the capital budget have been determined to be more appropriate in the operating budget such as license plates, manuals, and some marine highway maintenance. She noted that the House and Senate Finance Committees were asked to let her know if any of the items proposed to be moved into the operating budget did not belong. House Finance moved the items placed in the operating budget back into the capital budget. Ms. McConnell proposed that once the committees' deal with the capital budget and make recommendations about the funding level, the previously mentioned items could be permanently moved into the operating budget. These items total $7 million. Ms. McConnell informed the committee of the proposal for revenue bonds for technology and equipment improvements. The state leases equipment frequently, but Ms. McConnell believed that the state could receive a better deal through consolidated purchasing. The proposal is for $6 million with an annual debt service of $1.4 million. By the end of the week, there will be a final recommendation of the candidates for those projects and their ranking. Ms. McConnell emphasized that some of these are very critical projects such as the Criminal Justice System and new computers for the Department of Labor. The revenue bond proposal seems to be a good way to stretch the dollar. Ms. McConnell stated that Alaska is falling behind in its technology and many of these projects could not only improve services but could also reduce the cost of operations. Number 160 NANCY SLAGLE, Director of the Division of Budget Review, began with Section 1 of SB 290. Section 1, the capital matching grant program, provides $15 million for distribution to communities throughout the state for capital projects. Of that $15 million, $13.3 million is allocated for municipalities and $1.7 million for unincorporated communities. Section 1 also provides appropriations for the interest accrued on the monies being held in the general fund for those communities. This mechanism allows communities to cover larger sized projects than the original allocation. Section 2 of the bill provides the authority to go to Legislative Budget & Audit if additional federal funds or program receipts are received for capital projects. Ms. Slagle noted that this does not happen often. Section 3 is the technology equipment lease which is the revenue bonding. The debt service on that amounts to $1.4 million which is the annual amount over five years on the $6 million of equipment. Ms. Slagle informed the committee that there is a list of potential projects which could be provided to the committee. There should also be a prioritized listing of the projects forthcoming this week. CHAIRMAN RIEGER read this section to mean that the $1.4 would be borrowed and paid back in fiscal year 1997; why is the $1.4 not appropriated directly to the projects that are funded for that year? NANCY SLAGLE understood that during that year, the debt service would begin on those certificates of participation. The intent is to begin as soon as possible. Ms. Slagle believed the timing to be such that debt service would need to be paid sometime in that year which would allow more projects to begin. There is almost $3 million in need for the Criminal Justice Information System as well as $900,000 for imaging in the Recorder's Office, and various other critical projects. Number 229 NANCY SLAGLE continued with Section 4 which is the lapse statement. Section 5 begins with the Department of Administration. The first project is for $350,000 for the Division of Information Services (DIS) data network modernization. Basically, this project would modernize the hardware used by DIS, the network that most departments rely upon for information processing. She noted that Mark Badger, the Director of DIS, was present for specific questions. CHAIRMAN RIEGER asked if the $350,000 was part of the funds received from the telecommunications charge back or part of the technology revenue bond. NANCY SLAGLE explained that this is a charge back from the charges each department pays into the information services fund. The departments pay a rate for the services that are provided by DIS. NANCY SLAGLE stated that the data network modernization project and the high speed printers replacement project will help find efficiencies wherever possible in order to reduce costs to the departments. The appropriation for high speed printers in DIS is $30,000. Ms. Slagle continued with the Department of Commerce and Economic Development which has a $400,000 appropriation for the Economic Development Matching Grant Program in order to provide state funds to nonprofit corporations, cities, boroughs, and other eligible applicants to match the federal, nonstate agencies, or private sector agencies' funding. CHAIRMAN RIEGER asked if there was a list of projects or would the $400,000 be spent at the discretion of the department. Number 279 TOM LAWSON, Section Chief of the Division of Trade & Development, explained that the detailed budget contains a list of projects that have been funded over the last few years. The projects are done on a first come first serve basis. For fiscal year 1997, the department does not yet have any projects. CHAIRMAN RIEGER asked if such a list could be provided. TOM LAWSON informed the chair that the list changes almost weekly. Mr. Lawson said that he could provide the committee with a list, but the list would not be meaningful. SENATOR LINCOLN inquired as to how the $400,000 amount was arrived at. TOM LAWSON noted that in the past, the appropriation has been more. The demand typically exceeds the amount of money available. In response to Senator Lincoln, Mr. Lawson said that in the last couple of years the appropriation has been $500,000. At its highest a few years ago, the appropriation was $800,000. SENATOR LINCOLN asked if regional representation is reviewed when awarding these grants. TOM LAWSON explained that there are guidelines which specify that one region can not receive more than one grant or a certain amount of money in any one grant year. This spreads the money evenly. NANCY SLAGLE continued with the Four Dam Pool Divestiture appropriation of $725,000 which is corporate receipts for the transfer of the Four Dam Pool Hydroelectric Projects. This appropriation would provide funding for the upfront transfer costs such as land titles, permits, environmental, and legal services. Once the projects are sold, the costs will be reimbursed. Number 321 In response to Chairman Rieger, GUY BELL, Director of Administrative Services for the Department of Commerce, believed that the corporate receipts would be a combination of AIDEA and AEA corporate receipts. Mr. Bell said that he would have to obtain the numbers from AIDEA. AIDEA and AEA share the same board while the AIDEA staff manages the energy authority. The AEA cannot employ staff, therefore, AEA contracts with AIDEA to supply staff services. Mr. Bell offered to provide more information regarding where the upfront money would come from. Mr. Bell reiterated Ms. Slagle's point that these costs would be reimbursed to AIDEA/AEA once the projects were sold. CHAIRMAN RIEGER asked if it was specified in an existing agreement between the purchasing utilities that the transfer cost would be reimbursed; is it merely a payment of a cash sum that the executive branch would be responsible to replace in AIDEA's account. GUY BELL explained that the transfer cost initial agreement specifies that the upfront costs would be shared and the proceeds of the bond issue will include the reimbursement of the transfer costs. Mr. Bell said that this agreement is a precondition for negotiations. CHAIRMAN RIEGER clarified that he was referring to the level of assurance that the money would return to AIDEA upon the transfer to the utilities. GUY BELL explained that AIDEA and AEA do not want to incur expenses unless there is significant progress and an agreement. There was a meeting in February and another meeting is to be held. Mr. Bell pointed out that the value issue has not yet been agreed upon. AIDEA will not continue with land surveying, permitting, environmental expenses, etc. until an agreement is developed. This appropriation would be used after reaching an agreement with the utilities. NANCY SLAGLE continued with the next project which fell under the Department of Community and Regional Affairs. She explained that the Rural Power Systems Upgrades/Alaska Rural Energy Initiative will provide repair and upgrade of power systems in rural Alaska. This appropriation will provide grants and contracts for upgrades and new construction. Ms. Slagle informed the committee that the division has received 541 requests from utilities which total $54 million in requests which illustrates the large amount of need. Number 371 SENATOR LINCOLN inquired as to how such a large volume of requests would be prioritized. NANCY SLAGLE assumed that the requests would be ranked by priority by the department. Many of the grant programs, such as Village Safe Water, are in similar situations where the need far exceeds the money available. CHAIRMAN RIEGER asked Ms. Slagle if she could provide a specific list of the projects that would be funded. NANCY SLAGLE offered to check with the department on this question and relay the information to the committee. NANCY SLAGLE continued with the $50,000 request for the Head Start Program. Many of the Head Start facilities across the state need health and safety repairs and upgrades. She informed the committee that OMB has been provided with a list of potential projects that amounts to $500,000 in needs. Again the most critical needs must be determined in order to decide which projects would be funded. SENATOR LINCOLN expressed concern with the Head Start appropriation in that $50,000 does not amount to much. It seems that the facilities housing the small children are not receiving the necessary attention. NANCY SLAGLE noted that the same amount of money was provided for Head Start last year. Ms. Slagle agreed that there is much need. SENATOR LINCOLN inquired as to what would happen if a fire marshall or a DEC inspector came in and said that the system must be corrected in order to continue housing a Head Start Program. Are all of these facilities up to code for the fire marshall and DEC? NANCY SLAGLE did not know. She offered to provide any information that may be related to fire code violations or requirements. SENATOR LINCOLN expressed interest in anything relating to any code requirement. Number 423 SENATOR GREEN asked if these facilities were owned or leased by the state. NANCY SLAGLE explained that these are nonprofit organizations. The Association of Village Council Presidents, Rural CAP, and various other nonprofit organizations run these programs. Ms. Slagle did not know if the nonprofits owned or leased the facilities; however, the facilities are not state owned. NANCY SLAGLE continued with the federal receipts for energy projects which totals $1 million. This provides pass through federal grants in order to assist communities, electric utilities, or other eligible entities by performing functions that others cannot. This is a way for the state to save money so that the money can be used for energy projects such as the Institutional Conservation Program pass through grants. The Institutional Conservation Program provided the installation of waste heat systems in schools, the extension of transmission lines for federal public health services, etc. CHAIRMAN RIEGER asked if the money received for federal grants was project specific or is it a grant for energy projects left to the discretion of the department. NANCY SLAGLE was unsure if these pass through grants were project specific, but offered to find that information for the committee. NANCY SLAGLE continued with the rural development grants that is a $1,280,000 request of which $480,000 are federal receipts and $800,000 are inter-agency receipts from AIDEA. This is the Governor's coordinated approach to economic development. She noted that the rural development grants used to be in the operating budget. This appropriation supports community and economic development activities in rural communities which lead to the request for the appropriations to be transferred to the capital budget. These are small grants with a long duration and moving the grants into the capital budget would eliminate the need to pursue extensions every year. Ms. Slagle listed the following as examples for possible grants in fiscal year 1996: product development, business expansion to increase production in tourist novelty items, a museum gift shop, and the development of a cooperative artist training and retailing facility. CHAIRMAN RIEGER asked if these grants were left to the discretion of the agency. He also asked Ms. Slagle to provide a list of the projects slated for fiscal year 1997. NANCY SLAGLE said yes, those grants are left to the discretion of the agency. She agreed to provide the committee with a list of proposed projects. NANCY SLAGLE continued with community block grants which is $9 million in federal receipts. This includes several block grants. The community services block grant is required by federal regulation to be passed through to community action agencies, to provide services to low income and homeless persons throughout the state, and to alleviate the conditions of poverty. She informed the committee that Alaska has one community action agency to which these funds are passed through and that portion totals about $5 million. There is $4 million from the community services block grant, the homeless grant, and the food and nutrition grant. The emergencies shelter grant provides funds to local communities and nonprofits for homeless service providers and for renovation payment of maintenance operations, insurance, utilities, furnishings, etc. which is part of the community block grant. In response to Chairman Rieger, Ms. Slagle believed that the $5 million for the community development block grant was at the discretion of the department. She explained that the community development block grant awards approximately 30-35 grants of about $200,000 each to local governments. Ms. Slagle offered to provide the committee with information regarding where those grants went in the past and where the grants are anticipated in the upcoming year. Number 510 CHAIRMAN RIEGER asked if EMS service was eligible for block grants under this program. NANCY SLAGLE did not think so, but offered to provide that information. SENATOR LINCOLN suggested that it would be helpful to compare the appropriations before the committee to those from last year. NANCY SLAGLE said that could be provided to the committee. Depending upon the grant program, the grant may be awarded on a competitive basis. Therefore, the information regarding the anticipated needs for fiscal year 1997 may not be readily available. CHAIRMAN RIEGER was struck by the fact that more than half of the appropriations thus far are to be awarded at the discretion of the agency. This does not look like the capital budget that he was accustomed to seeing. As a legislator, he had no idea of where the money would go other than comparing where the money had gone in the past. Chairman Rieger was uncomfortable with awarding lump sums to be allocated at the discretion of the department. NANCY SLAGLE pointed out that the criteria the departments used in determining who would be awarded the money was reviewed. Information was gathered on that and could be provided to the committee. CHAIRMAN RIEGER inquired as to where the $4 million would go after being awarded to Rural CAP. NANCY SLAGLE explained that Rural CAP is to use that $4 million in assisting the poor, securing and retaining employment, education, housing, and emergency assistance. Those funds have annually supported the village participation conference and the rural providers conference both of which are sponsored by Rural CAP. Ms. Slagle informed the committee that those funds have been used in alcohol and drug abuse prevention programs, energy conservation strategies and child development programs. NANCY SLAGLE continued with the Department of Corrections which has 83 buildings that constantly have repair needs. Currently, the primary concerns that the appropriation would address are the security systems, the roofs, the walls, the mechanical systems, and the electrical systems. There is not enough money to deal with all of the outstanding deferred maintenance needs. In response to Chairman Rieger, Ms. Slagle said that this money would be left to the discretion of the agency. She noted that a break out of the $1.5 million had been provided and she reviewed that list. The department has determined the most critical needs and have identified those areas. CHAIRMAN RIEGER asked if any of that money could be used in order to enter into an agreement for a new facility. NANCY SLAGLE said that was not the intent. BOB COLE, Administrative Director for the Department of Corrections, said that was not the intention. The department would only move in that direction if there was a specific agreement between the legislature and the executive branch to proceed in that direction. NANCY SLAGLE pointed out that the money would be specifically appropriated for deferred maintenance as is the title of that appropriation. Ms. Slagle did not believe that could legally be used for anything other than deferred maintenance. TAPE 96-11, SIDE B NANCY SLAGLE continued with the Palmer Correctional Facility contaminated site cleanup. The $72,000 is from the oil and hazardous spill response and prevention fund in order to cleanup $20,000 worth of diesel fuel which has leaked at the Palmer Correctional Center. SENATOR LINCOLN asked if the $1.5 million in deferred maintenance included funding for Palmer's underground fuel tanks. NANCY SLAGLE clarified that was $170,000. Ms. Slagle deferred to Mr. Cole. BOB COLE explained that $170,000 in general funds was requested in the deferred maintenance of the capital budget in order to dig up and replace the underground fuel tanks. The other money comes from the cleanup fund and is available and does not come from the general fund. Mr. Cole specified that the area would be clean for the installation of the underground fuel tanks. The state pays to dig up and replace the tanks and utilizes the cleanup fund to do just that. This saves the department $72,000. Number 570 NANCY SLAGLE continued with the allocation for community jails which would deal with some of the needed fire, life, health, and safety requirements of the community jails facilities. This would provide $25,000 for a fire sprinkler installation in Unalaska, $45,000 for remote cell locks in the North Slope Borough facility, and $68,000 for the Kodiak facility. BOB COLE noted that these projects were hold overs from last year which were recommended from the community jails task force, but were not funded. NANCY SLAGLE moved on to the Fort Richardson allocation, $900,000, of which $200,000 is from the general fund and $700,000 from federal receipts. This would be used in order to renovate the U.S. Fort Richardson confinement facility to open up 40 beds for use by the Department of Corrections. She specified that the facility would house lower custody, pre-trial prisoners, misdemeanants and felons in the Anchorage area. This would help with overflow that has occurred in that area. CHAIRMAN RIEGER asked if military people would be placed in this facility. BOB COLE informed the committee that Fort Richardson has a confinement facility that can hold about 50 people. There are 6- 12 military inmates in the facility at any given time. Fort Richardson would like to close this facility, lease it, or make use of it in some way. Mr. Cole noted that the Municipality of Anchorage brought this to the department's attention a year and a half ago. The Municipality of Anchorage is still interested as a short-term solution while the larger question of overcrowding is discussed. Mr. Cole pointed out that it would be a cheap fix; it would cost about $1 million to renovate the facility. The contingency is the $700,000 worth of federal funds. Mr. Cole discussed the possibility of allocations being tagged for this in the Defense Appropriations Bill. If this happens, then a discussion regarding the operational funding for the last quarter of fiscal year 1997 would be necessary. CHAIRMAN RIEGER said that this is not a deal yet. Is there an understanding that if the federal government comes through with $700,000, then Fort Richardson would cooperate with its portion, $200,000. BOB COLE agreed that the deal was not sealed, but stated that the Army is very eager to do this. Mr. Cole explained that the engineers reviewed the job and projected the cost to be around $900,000. NANCY SLAGLE moved on to the $250,000 in general funds to renovate and convert the Harborview Development Center to a therapeutic community for substance abusers. She informed the committee that about 85 percent of incarcerated adults are involved with substance abuse. This would help deal with this problem. In response to Senator Green, BOB COLE said that the facility could be occupied early in FY 1998. There would not be an operating budget impact this fiscal year. Number 517 SENATOR LINCOLN noted that there is a large sum of money from the Council in Valdez in order to assist with the Harborview conversion. The amount in the bill is a small amount of the total. BOB COLE mentioned that the total cost of the Harborview conversion is about $1 million or $20,000 per bed to renovate. The Fairbanks Community Council is on record in support of this project as well as the Valdez Community Council. NANCY SLAGLE continued with the Department of Education which begins with a list of the department's major maintenance projects. The last two projects deal with construction. CHAIRMAN RIEGER asked if there was a priority list for major maintenance as with school construction. Are the top five major maintenance projects listed? NANCY SLAGLE replied yes. KAREN REHFELD, Department of Education, explained that the department's major maintenance list included two roof repair projects for Juneau. The Governor's office combined those two projects, the roof repair for the High School and the Mendenhall River School, and collapsed the dollar amount. NANCY SLAGLE interjected that the remaining projects were taken off the DOE list. SENATOR LINCOLN inquired as to what was meant by the rest were taken off the list; does that mean that one of the Juneau projects was not on the priority list? NANCY SLAGLE said no, both the Juneau projects were on the priority list. The two projects were combined and a smaller dollar amount was assigned for those projects. Furthermore, the money for the Fairbanks School District is just funding for the planning portion of the project. SENATOR LINCOLN inquired as to the total amount requested for Fairbanks School District. NANCY SLAGLE informed the committee that the Fairbanks School District requested $3,194,692. The $223,600 is enough to do the planning and design for the project anticipating that the Fairbanks School District would still be at the top of the list next year for funding. KAREN REHFELD interjected that the process does allow that projects be phased when reasonable to do so. The application would specify that the project is a phase project and would be ranked accordingly. Ms. Rehfeld said that the project would receive points for being a phased project. NANCY SLAGLE pointed out that the Lower Kuskokwim School District project was the top project from the school construction grant list. This is a major portion of the money for the project, but not the full amount. The total amount is around $6.9 million. Number 455 SENATOR LINCOLN asked how the department determines how far the construction would get on a project such as this. NANCY SLAGLE explained that the entire capital budget was reviewed in order to determine the priorities while funding major maintenance. This is a balance between construction and major maintenance. SENATOR LINCOLN inquired as to what would be given up since the project lacked $2 million to be funded in total. KAREN REHFELD understood that there would be insurance proceeds, about $6 million, to help support the cost of construction of Hunter Elementary. Therefore, the total of the project would be $12 million. Ms. Rehfeld clarified that the amount the department requested was for the remaining piece, there was no phasing. Ms. Rehfeld assumed that the district would revisit its plans. NANCY SLAGLE continued with the Public Library construction grants. This federal money is received every year. KAREN REHFELD noted that the local municipality must make a match in order to receive these funds. In response to Chairman Rieger, Ms. Rehfeld believed that the community of Gustavus had requested the construction of a library. There may be others and Ms. Rehfeld offered to provide the committee with a list. NANCY SLAGLE moved on to Village Safe Water projects. She passed out copies of the priority listing for village safe water appropriations which includes the CIP project administration. There is money for clinic sanitation facilities, engineering/feasibility studies, federal sewerage grants from EPA, etc. CHAIRMAN RIEGER summarized that this was all itemized except for the $15 million for the federal sewerage grants. NANCY SLAGLE directed the committee to the Federal EPA column which identifies where the money is going. Ms. Slagle said that it is a dollar for dollar match with the state. Number 395 KEITH KELTON, Department of Environmental Conservation (DEC), explained that the EPA money is at least 50 percent of the project cost and in some cases a little more. In the case of a strict sewerage project, the match would be 55 percent federal and 45 percent state. A combination water and sewer project would be 50/50 split. A solid waste project receives 50 percent federal funding from the Rural Economic and Community Development Administration and the general fund would supply the remaining 50 percent. Those funds go directly to the project accounts, therefore, the DEC is not requesting authority to receive and expend those funds. Mr. Kelton pointed out that the EPA money does go through the DEC who is required to receive and expend the $15 million. CHAIRMAN RIEGER referred to page 6, line 17 when asking if the $15 million was strictly federal funds or the 55/45 split of the $15 million. KEITH KELTON believed the $15 million is entirely federal funding. Mr. Kelton agreed with Chairman Rieger that the $15 million would amount to 55 percent of the total sewerage grant money, unless there was a combination water and sewerage project which would then be a 50/50 split. CHAIRMAN RIEGER inquired as to why the general fund total was higher than the other funds, especially if the general fund is 50 or 45 percent. KEITH KELTON pointed out that the Rural Economic and Community Development Administration federal funds do not show in the budget as receiving and expending almost $3.8 million. This money does not come to the state, but the state provides a match to those project funds. Also the first four projects, $2.5 million, are entirely general fund projects and do not receive any federal participation. SENATOR LINCOLN thought the matching for water and sewer for last year was about $23 million. KEITH KELTON remembered that the state general fund for Village Safe Water projects was $21.3 last year while the federal funds amounted to $15 million plus a small amount of farmers' home. In the last three years, that has remained within a couple million in all funding sources. SENATOR LINCOLN mentioned the $100 million that Senator Stevens spoke about over four or five years, when asking if the state was planning for the federal amount. KEITH KELTON explained that the bill has seven year language for the authorization of the safe drinking water act which has not yet passed. Senator Stevens assumed that $15 million per year would total the $105 million. The priority list would be developed on an annual basis based on the specific appropriation that was obtained. Number 337 SENATOR LINCOLN asked if the federal amount would decrease if the state does not appropriate that amount. KEITH KELTON was unsure as to the statute of limitations on that. Other grant programs with the federal government allow two years for use of the capital construction funds. CHAIRMAN RIEGER asked if the other funds listed were federal FY 96 monies that are already in hand or is this next year's appropriation monies. NANCY SLAGLE explained that the $16.888 million consists of $15 million in EPA funds and $1.888 million of AHFC funds. KEITH KELTON interjected that the $15 million is federal funding for FY 96. The funding must still go through continuing resolutions, but all the funding will be received. CHAIRMAN RIEGER inquired as to how $1.888 million worth of AHFC corporate receipts was placed into this request. NANCY SLAGLE said that those projects specific to housing were reviewed and those projects fell under the statutory authority and mission of the AHFC. Corporate receipts from AHFC were used for a few projects. Ms. Slagle noted that some projects within the municipal matching grants, water and sewer projects are also funded by AHFC funds. The specific projects are identified on the priority list as to which are funded by AHFC. KEITH KELTON informed the committee that Alakanuk, Metlakatla, and Hooper Bay are the three projects. Those projects are identified by the "1*" on the priority list. CHAIRMAN RIEGER inquired as to why $450,000 was being put into a system in Allakaket as this community was just relocated. Number 287 GREG CAPITO, Village Safe Water, explained that the funds requested here are to augment the Federal Emergency Management funds that have already been received. This would provide a water source, well drilling and transmission of the water into the new village which FEMA did not anticipate. FEMA paid for the new village, the state will try to buy the new water source and transmission line. CHAIRMAN RIEGER asked if the $18,456,000 was the minimum match to capture the $15 million in federal grants plus the $3.8 off budget. KEITH KELTON said that assuming the first four items of $2.5 are also included in the general fund, those would not be required to receive the federal match but without those items the program could not run. CHAIRMAN RIEGER surmised that other than the $2.5, that is the minimum. NANCY SLAGLE went to the next group of projects which begin on page 10, line 17. These are the Municipal Matching Grants Projects which amount to $7,586,000 in general funds and $5,142,000 in IA receipts from AHFC. In response to Chairman Rieger, Ms. Slagle said that the same logic used in Village Safe Water program to use AHFC funds was used here. These projects were related to housing and would qualify for AHFC's mission and statutory authority. CHAIRMAN RIEGER asked if this was a different municipal matching grant program than the front section. Is there a program on the books for these matches? KEITH KELTON informed the committee that the program had been in place since about 1970. The appropriations have averaged $10-$12 million for the last six years. The list is developed from a questionnaire sent to the communities. The questionnaire solicits information on environmental hazards, public health hazards, and the need to build a project in conjunction with other activities. A criteria system scores and ranks these projects. He pointed out that a list of projects is generated annually for the legislature to consider. In response to Chairman Rieger, Mr. Kelton said that the match percentage depends upon the size of the community. In the larger communities, the ratio is 50/50 while communities with a population under 1,000 have a ratio of 85/15. Mr. Kelton noted that the ratio is patterned after the same percentage as the Governor's matching grant program. There is also a 70/30 ratio for certain communities. CHAIRMAN RIEGER asked if Mr. Kelton had the list of matches for each project. KEITH KELTON said that information could be provided to the committee. Mr. Kelton listed some of the ratios for some communities in order to give the committee a general idea. NANCY SLAGLE moved on to the above ground storage tanks. The $1.6 million in general funds would fund surveying and identifying state owned storage tanks with a capacity of 660 gallons or more. CHAIRMAN RIEGER asked if this was discretionary on the part of the agency. Number 209 JIM HAYDEN, Storage Tank Program in DEC, said that no priority list had been established for the use of these funds. An executive cabinet between the various agencies has been established in order to develop a priority system. The form has been developed and the questionnaire is in development at this time. The capital projects speak to a survey. The survey will attempt to identify those systems that need repair. Mr. Hayden emphasized that the bulk of the funds would be spent to upgrade those facilities that are prioritized through this process. Since the priority system has not been completed, the funds would be discretionary. SENATOR GREEN inquired as to where an above ground storage tank would be located and who would own them. JIM HAYDEN informed the committee that these tanks would primarily be found in rural Alaska. The two major locations where these tanks would be are schools and utilities. Mr. Hayden predicted that above ground tanks in about 100 schools and over 60 utilities are currently in need of repair. NANCY SLAGLE went on to the Statewide Emergency Response Communication System which consists of $100,000 from the spill response prevention funds. This would provide a two-way radio repeater system for Southeast Alaska and the North Slope in order to deal with emergency spill response communication needs for DEC. This is part of a phase project. CHAIRMAN RIEGER said that the committee would stop at this point and would intend to continue on Thursday after the committee deals with the three bills of Thursday's agenda. He said that he did not intend to go through the Municipal Capital Matching Grants. NANCY SLAGLE asked if DOT needed to be present to discuss the highway and airport projects. DOT has provided some discussion on the STIP previously. CHAIRMAN RIEGER stated that he would like DOT or someone who could speak to the projects. He understood that in a budget amendment from the Governor, a lump sum is not requested. NANCY SLAGLE noted that there are a few other small amendments that address the university.