Legislature(1997 - 1998)
10/08/1997 09:30 AM House BUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET & AUDIT COMMITTEE
October 8, 1997
9:30 a.m.
Legislative Information Office
Anchorage, Alaska
TAPES
LBA-97, #10, Side 1
LBA-97, #10, Side 2
LBA-97, #11, Side 1
CALL TO ORDER
Chairman Randy Phillips convened the meeting of the Legislative
Budget and Audit Committee on October 8, 1997 at approximately 9:30
a.m. in the Legislative Information Office Conference Room in
Anchorage, Alaska.
PRESENT
Representatives Senators
Rep. Martin Chrm. Phillips
Rep. Bunde Sen. Donley
Rep. Therrault Sen. Adams
Sen. Halford
Sen. Pearce
Sen. Torgerson
ALSO PRESENT
Mike Greany, Director, Legislative Finance Division; Bill Mailer,
Department of Community & Regional Affairs; Rod Cavalik, KGTS,
Fairbanks; John Bitney, Alaska Housing Finance Corporation,
Anchorage; Peter Kremer, Division of Energy, Department of Community
and Regional Affairs; Jeff Jessee, Executive Director, Alaska Mental
Health Trust Authority; Jane Demmert, Executive Director, Alaska
Commission on Aging; Jim Nordlund, Director of Public Assistance,
Department of Health and Social Services; Yvonne Chase, Department
of Community & Regional Affairs; Randy Welker, Director, Legislative
Audit Division; Jim Kelley, Director of Communications, Alaska
Permanent Fund; Mr.Burnett; Mr. Mailer, Department of Community and
Regional Affairs.
REVISED PROGRAM REQUESTS
RPL 02-8-0010 DOA $51.025 in federal receipts
for Office of Public
Advocacy-Training Project
Grant.
Approved.
Mr. Greany recommended approval of the request for Federal Funds to
train volunteer Guardian ad lidems. The use of volunteers to carry
out some of the Office functions could reduce pressure from the
budget.
Sen. Adams MOVED to approve RPL 02-8-0010; there being NO OBJECTION,
the MOTION was APPROVED.
RPL 21-8-0046 DCRA $11,100 in Federal Receipts
for Child Care-Block Grant
Approved.
RPL 21-8-0047 DCRA $185,600 in Federal Receipts
for Day Care Assistance --
Block Grant
Approved.
MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION, asked to
discuss both grants, as they were block grants for child assistance.
He recommended approval.
Sen. Donley requested clarification of a block grant.
Mr. Greany stated that his understanding was that separate childcare
grants had been placed under the umbrella of a larger grant. In the
future, the money will go to the Department of Health and Social
Services and the money would be sent back to the Department of
Community & Regional Affairs.
Sen. Donley said that he was not used to the term "block grant"
being applied to Federal Funds.
MR. MAILER, DEPARTMENT OF COMMUNITY & REGIONAL AFFAIRS, stated that
block grant funds used to come to that Department until last year
when Child Care and Development Funds were established by Congress
as part of the Federal Welfare Reform Package. These block grant
funds are no longer made available to the State, this being the last
of those particular funds that are available.
Sen. Donley asked if in the future those monies would he designated
as a lump sum from the federal government to the Department of
Health & Social Services.
Mr. Mailer responded that in future years the money would he
designated as the Child Care Development Fund which would go to the
Department of Health & Social Services. The money is intended
primarily for childcare assistance to people on Public Assistance
and for those people at risk for needing Public Assistance.
Sen. Donley asked if future allocations would be made through the
State and would not be earmarked with one grant for ChildCare and
one grant for Day Care.
Mr. Mailer stated that in the future, a portion of the ChildCare
monies would come to the Department of Community & Regional Affairs
to cover some administrative purposes and child care assistance for
families with children.
Sen. Donley clarified that in the future, the money would not be
designated from the federal government. Mr. Mailer replied that the
State would determine how much of the money would go to the
Department of Community & Regional Affairs. Sen. Donley asked who
would determine the amount of funding allocated to the separate
components.
Mr. Mailer stated that the Day Care Assistance component is for
direct services to families and children. The mount in the Child
Care Assistance is to be used in improved quality, grants to
different agencies as well as administration of the program. Sen.
Donley questioned who sets the dollar amounts for each grant.
Mr. Mailer said that the dollar amounts in the original allocations
had been established through federal regulations.
Sen. Donley clarified that next year it would not be in effect and
that a general grant would be given within the State to determine
how much would be given. Mr. Mailer affirmed that information.
Sen. Donley asked if next year the Governor would have some kind of
allocation for the two parts of the grant?
Mr. Mailer confirmed that an allocation would determine how much
would be given to Day Care Assistance or to the Families and
Children Program. The new ChildCare & Development monies would he
allocated to the ChildCare component to improve childcare quality in
the State and a portion for administrative expenses.
Sen. Donley MOVED approval for both RPL's.
Rep. Therriault asked if this money would he in addition to the
funding currently in the budget for Day Care. He also inquired if
it would ultimately increase the total amount spent on Day Care.
Sen. Donley MOVED for APPROVAL of both RPL 21-8-0046 and RPL 21-8-
0047; NO OBJECTION raised, the MOTION was APPROVED.
RPL 07-8-40 13 Labor $131,700 in Statutory
Designated Receipts for
Employment Security -
Employment Program contracts
Approved.
Mr. Greany stated that $121,700 of the funds are from the City of
Sitka and that $10,000 of the funds were from a postal village
cooperative. He recommended approval of the RPL.
Rep. Therriault requested clarification that the City of Sitka had
applied for and received funds from the federal government, and then
subcontracting to the Department of Labor to do the work.
Mr. Greany confirmed that. As a result of the Tongass Forest issue
of timber supply and mill closure, the federal government saved
several southeastern communities Federal Funds Appropriations/Grants
to mitigate the impacts of the actions.
Rep. Therriault stated that the program was expected to run two and
a half years from April 1997 to FY99. He asked if the money not
expended in the current fiscal year would anticipate to continue to
address the need for the remainder of the program.
Mr. Greany stated that the City of Sitka anticipates coming back for
authority through the regular budget process.
Rep. Therriault asked if in FY99, there would designated program
receipts.
Mr. Greany replied that if the funds were the same and the same
agreement was in effect, then there would be designated programs
receipts required.
?? MOVED for APPROVAL of RPL 07-8--4013; NO OBJECTION raised, the
MOTION was APPROVED.
RPL 09-8-0033 DMVA $12,000 in Federal Receipts
for Emergency Services -
Arson Prevention Grant
Approved.
Mr. Greany recommended approval of the $12,000 grant from FEMA.
Sen. Adams MOVED for APPROVAL of RPL 09-8-0033; NO OBJECTIONS
raised, the MOTION was APPROVED.
RPL 10-8-4013 DNR $20,000 in Statutory
Designated Receipts for Land
Development- Muni Land
Entitlements
Approved.
Mr. Greany recommended approval of the RPL as appropriate use of the
Statutory Designated funds source.
?? MOVED for APPROVAL of RPL 10-8-4013; NO OBJECTIONS raised, the
MOTION was APPROVED.
RPL 10-8-4014 DNR $57,000 in Federal Receipts
for Info Resources Mgmt -
Mapping Projects
Approved.
Mr. Greany recommended approval of the RPL.
?? MOVED for APPROVAL 10-8-4014; NO OBJECTIONS raised, the MOTION
was APPROVED.
RPL 10-8-4015 DNR $343,700 in Federal Receipts
for Info Resources
Management
Mapping Projects
Approved.
Mr. Greany recommended approval of the RPL.
Sen. Donley asked if the RPL would have effect on State
expenditures, requiring more mandated money.
Mr. Greany stated that there would be no impact on the General Fund.
They will be stand-alone funds and if there are matching funds
required, they would be met from the existing budget. The State
would not be obligated to use general funds beyond the terms of the
grants.
Rep. Bunde requested clarification regarding how funds would be
spent.
MR. CAVALIK, KGTS, FAIRBANKS, stated that four different projects
would be funded with the RPL. The largest project is for the State's
participation in the Alaska Volcano Observatory. Two projects are
for the evaluation of natural hazards and their impact on human and
economic activities in the State Map Program. The other two are
resource assessment projects. One of which is the State Map Program
that was mentioned earlier. He confirmed that the State has been
receiving grants from the U.S. Geological Survey for the last seven
years for this program. The projects conducted under the program are
determined by priorities established by the Alaska Geologic Mapping
Advisory Board in conjunction with the mineral industry to identify
areas that need better mapping for the assessment of mineral
resources. There was an authorization in FY97 for a portion of the
program; the rest became part of the request for FY98. The reason
for the request is in anticipation of the grant that the State will
probably receive for fieldwork to begin next June, FY98. The
Mapping and Advisory Boards have not indicated their priorities for
mapping at this time, and the proposal has not been written. The
agency anticipates that the project will cost approximately $70,000
dollars in federal receipts from the government for work that would
take place in June 1998.
Rep. Bunde suggested that providing "advance warning of volcanic
eruptions" was not possible.
Mr. Cavalik replied that AVO has been successful in giving advance
warnings for several of the last eruptions. Most notable of these
predictions was Mt. Redoubt eruption in 1989 and Mt. Spur in 1992.
AVO anticipated the eruptions to the extent that air traffic over
Alaska was forewarned to avoid those areas.
Rep. Bunde asked confirmation that AVO could predict volcanic
eruptions.
Mr. Cavalik replied that AVO could not predict the exact time and
magnitude of the eruptions, but there are a number of indicators
that tell if an eruption is imminent and could provide warnings from
hours to days prior to an impending eruption. This could be enough
time to be able to warn those concerned of the upcoming eruption.
Rep. Bunde clarified that "predict" at this time means that once
seismic activity begins warnings are sent out, however, AVO is not
able to predict a volcanic eruption.
Mr. Cavalik confirmed that AVO still couldn't predict the exact time
and magnitude of a volcanic eruption. Seismic indicators are the
predictors currently used. The main reason for the grant from the
Federal Aviation Administration was to expand the seismic monitoring
and geologic mapping efforts in the Aleutian Chain. The seismic
monitoring extends down to Dutch Harbor, which monitors all the
active volcanoes along the Alaska Peninsula.
Rep. Bunde questioned if a monitor had been available during the
last eruption on the Alaska chain.
Mr. Cavalik replied that the last large eruption on the Alaska Chain
was Pavlov Volcano. At that time, an array of seismic instruments
was not on the volcano. He thought that the volcano is either
instrumented now or that is in the plan for the upcoming year. The
other volcano with a lot of seismic activity, but no major eruption
was at Akutan.
Rep. Bunde asked for clarification on how the $25,000 for the
National Earthquake Hazards Reduction Program would reduce the risk.
Mr. Cavalik explained that $25,000 was approximately half of a grant
that the agency received notification in August, which will be for
calendar year 1998 and will begin in January. It anticipated that
about half of the grant will be spent in FY98. The project is
currently located in the Anchorage area in order to collect geologic
data around Anchorage proper for the estimation of earthquake
efforts in Anchorage, and has nothing to do with earthquake
prediction. However, proper analysis of geological data allows
evaluation of where the effects of major earthquakes are likely to
be, which is the purpose of this project.
Rep. Bunde asked who would receive the information collected from
the project.
Mr. Cavalik responded that the information will be distributed to
the public. The end result will be better earthquake hazard maps
and in Anchorage for planning emergency responses.
Rep. Therriault asked if the airborne geophysical project was part
of the mapping project.
Mr. Cavalik confirmed that the airborne geophysical project was
separate and would be funded through Capital Improvement Projects
(CIP). However, he stated that sometimes, the State map funding
provides the ability to do the accompanying ground mapping. The two
provide strong tools for the assessment of mineral potential.
Rep. Therriault asked if the two types of data were linked for each
area.
Mr. Cavalik confirmed that, however, it depended upon the extent of
the mapping done previously. The Advisory Board will take this into
account when determining priorities on where the mapping should take
place.
?? MOVED for APPROVAL of RPL 10-8-4015; NO OBJECTION were raised,
the RPL was APPROVED.
RPL 04-8-0008 DOR $300,000 in Federal Receipts
for AHFC-Federal Energy Pro.
Approved.
Mr. Greany recommended approval of the proposed RPL.
Sen. Torgerson stated that the preamble sounded like a data entry
position with changes in codes being entered. He pointed out that
$27,000 dollars in travel had been delineated and requested
clarification of how that amount of funding would be spent.
MR. BITNEY, ALASKA HOUSING FINANCE CORPORATION (AHFC), ANCHORAGE,
stated that part of the code would be for the building energy
efficiency standards which are currently under review. It is a
public concern issue and, therefore, a public hearing process will
be held before the codes are adopted. Some will require staff and
travel time to be able to go to some of the communities to meet with
home building organizations and other concerned parties.
Sen. Donley asked if there would be a 20% State match for this fund.
Mr. Bitney confirmed that that was correct.
Sen. Donley asked if it would be provided from the existing budget.
Mr. Bitney responded that corporate receipts already pay for a large
portion of the budget. Existing effort and resources put into it
qualify for the match for the grants.
Sen. Donley asked if anything different would have to be done in
order to qualify for the 20% match requirement.
Mr. Bitney stated that as part of the application for the grants,
the level of the ongoing effort would demonstrate through agency
corporate receipts for the agency costs. This would be accepted as
part of the annual effort done. Therefore, the agency would be
using what it has already been done to qualify for the acceptance.
Sen. Donley suggested that language delineate that the agency's
existing expenditures qualify as a match sufficient for the Federal
government. Otherwise, the explanation is misleading since it
implies that something will be taken from the existing budget to
qualify for the match instead of only continuing the status quo.
Chrm Phillips stated that the wording of the RPL could always be
amended to reflect the change.
Mr. Greany believed that Sen. Donley was referring to the staff
analysis, which he took responsibility for wording. The intention
was to augment what the agency was already doing with the additional
Federal funds. Analysis will be changed to more accurately reflect
how the match to the Federal funds will be met. He noted that if
additional legislatively approved activity would have been required,
the staff analysis would have very clearly stated that action.
Sen. Donley noted that given the clarification, he would approve the
RPL.
Chrm. Phillips asked if the monies would be used for data gathering.
Mr. Bitney commented that data gathering would be one of the
purposes.
Chrm. Phillips asked if new poles would need to be built.
MR. KREMER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS (DCRA),
confirmed that an estimate of the costs of installing the wind
monitoring equipment found that four monitoring stations could be
put up. If there were other equipment available locally, it would
be used instead and that each village would be considered on a case
by case basis.
Chrm. Phillips stated that there must be some ham-operators in the
villages. He suggested that he had some practical experience and
felt that it would be a huge expense to install the towers.
?? asked if the federal grant was specifically designated for rural
communities.
Mr. Kremer replied that the grants were part of the State's annual
State Energy Program, an annual ongoing program applied for each
year. A large part of the funding is part of the ongoing efforts in
rural Alaska to monitor energy uses. DCRA' s portion is part of the
Rebuild America Program (RAP). The energy auditing function is on
schools, commercial building, State office and public buildings,
etc. He did not think it was designated particularly to rural
Alaska.
?? asked if there are other funds in the program that goes to urban
areas.
Mr. Kremer commented that this is a statewide program, not confined
to rural Alaska.
?? stressed that the $300,000 dollars is being earmarked by the
Administration for rural purposes.
Mr. Kremer responded that the $300,000 dollars is placed under the
Rural Housing component, however, it is a statewide effort. For
example, the Building Energy Efficiency Standard is a statewide
standard with the effort focused more on the urban areas.
Sen. Adams asked for a breakdown of employee housing.
Mr. Kremer replied that employees are housed entirely in Anchorage.
Sen. Adams asked why the employees are not housed in the village
areas also so to provide equity in hiring outside Anchorage.
Chrm. Phillips reminded the agency that he hoped that they would
seek to utilize the existing structures available around the
villages before building new tower structures.
?? asked why the State Energy Program(inaudible due to coughing)
needed to be updated.
Mr. Kremer stated that current standards are five years old. It
contains a provision stating that after five years, a review and
update would be done. The standard is a statutory requirement of
the House Finance Committee (HFC) as part of minimum standards for
making mortgage loans.
77 asked for additional analysis on the case since it will be spent
from contractual services.
Mr. Kremer responded that most of the functions that will be paid
for this are contractual functions outside of the corporation,
although, RSA's to DCRA or contracts for software upgrades for
ACTMORE Energy Rating Program. Apparently, last fiscal year, the
Department of Energy was late receiving its annual federal dollars.
Additionally, the Division of Energy (DOE) partnered up with DCRA,
resulting in more money, although, was required to spend additional
funds. With DOE late in getting congressional authorization,
additional dollars from the prior year were unspent. Currently
requested is authority in this fiscal year to pick up the activities
and use the federal dollars.
Sen. Donley did not believe that this was the best use of the
federal dollars.
Sen. Pearce voiced that she was on line.
Rep. Adams MOVED for APPROVAL of RPL 04-8-0008; there was an
OBJECTION raised.
A roll call vote was taken on the MOTION. The MOTION was APPROVED
with 6-yeas and 1-nay vote.
ALASKA MENTAL HEALTH TRUST AUTHORITY REQUESTS
RPL 02-8-0044 DOA $500,000 in MHTA Receipts
for Senior Services -
Palmer Adult Day Care Cntr
Approved.
Mr. Greany noted that the next three RPLs are part of a package of
grants under the Alaska Mental Health Trust (AMHT). This is
essentially the balance of the package before the Committee. One
request is for the Department of Corrections (DOC) resubmitted from
the last meeting addressing the Women's Mental Health Unit at the
Hiland Correctional Center. Since the last meeting, the Finance
Subcommittees have reviewed the request recommending approval. The
issue arises in that this fiscal year, 100% of the funding would
come from the AMTA, but, in the out-years, its involvement would be
phased out and State general funds would be most likely replacing
it. A recommendation for approval came with that caution.
Mr. Greany noted that this is a piece of funding for a Palmer Senior
Citizens Center with a facility cost projection of $3.8 million
dollars. The actual construction will depend on all the pieces
coming together in a financing plan. Mr. Greany did not feel that an
obligation toward additional State funds would arise. A portion of
the funding has been covered through the Legislature grants. Some
participation would be through private means. Presumably, the
financing would cover the cost of the facility. Obviously, if the
funding does not cover the cost of the facility, the project would
be called off until the money was available.
Rep. Therriault requested confirmation that the Senate and House
Finance Committees had approved this expenditure. (inaudible)
MR. JEFF JESSEE, ALASKA MENTAL HEALTH TRUST AUTHORITY, ANCHORAGE,
clarified that this particular RPL on the Senior Center had not gone
through either finance committee. The reason for the participation
structure is that this project was the recipient of AHFC funds
during the last Legislative session. AHFC felt strongly that it
needed to go through the competitive process to prove that the
project would make it through the tests that AHFC would it through
in their competitive bidding process. He added that he was
confident that the AHFC process would determine if it was a viable
funding project, which could be completed with, funding presented.
AMHT income component would be a factor in AHFC' s evaluation.
Rep. Therriault (inaudible)
Mr. Jessee apologized that he had misspoken and that the project
would be for an adult day care center.
Rep. Therriault asked what components would make up the $3.8 million
dollars.
MS. DEMMERT, ALASKA COMMISSION ON AGING, responded that the funding
works off of the designated grant awarded to the Division. The
foundation piece was $675,000 dollars. The second piece is an
additional $625,000 dollars in work to date, through the Housing &
Urban Development (HUD) Program. Another element is $1,840,000 in
deeds of trust which depend on the final determination of the grant
awarded. An additional amount of $1.5 million dollars is through a
tax credit program that AHFC operates.
?? asked if this would be the first facility of its type in the
State.
Ms. Demmert confirmed it would be, adding, this is the type of
project supported by the Commission on Aging because it works with
an array of funding sources, not using solely State funds, and will
result in independent senior housing. As an arm of that utility, an
Adult Day Center will be derived that will support the people in
senior housing as well as those seniors in the Palmer area.
Sen. Donley asked how many housing units would be involved.
Ms. Demmert stated that 24 apartments would be built.
Rep. Bunde voiced concern that support of this funding should not be
construed to obligate the Legislature to continue funding for the
center in 1997.
Ms. Demmert explained that the program would be operated through the
Palmer Senior Services. In other senior housing programs around the
State, there are application processes that are open.
?? MOVED for APPROVAL 02-8-0044; NO OBJECTION raised, the MOTION was
APPROVED.
RPL 20-8-0011 DOC $314,000 in MHTAA Receipts
for Combined Hiland Mtn.
CC-Women's Mental Health
Unit
Approved.
Mr. Greany recommended approval with caution. He suggested that if
the Committee approved this RPL, that it be with the understanding
that that issue must be reviewed by the next entire Legislature and
that the LBA Committee was not committing the Legislature in this
regard.
?? MOVED for APPROVAL 20-8-0011; NO OBJECTION0N raised, the MOTION
was APPROVED.
WELFARE REFORM PROGRESS REPORT
MR. NORDIUND, DIRECTOR OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES, spoke about the caseload and the two-parent
benefit cuts. He noted that Ms. Chase would speak to federal grants
available to the State as well as problems that are occurring with
childcare funding.
Mr. Nordlund directed attention to the handout, which talks about
the caseload. After three months of data, if the caseload reduction
is used as a measure of welfare reform success, there are early
signs of success. Page #3 in the handout, a line chart indicates
what is happening with the caseload. For consistency and to anchor
comparison between month or years, FY94 through FY96 average
caseload per month will be used. Particularly in Alaska, there are
seasonal fluctuations given the nature of the economy. The dotted
line indicates what was happening in FY97. For the first 7 or 8
months of FY97, the caseload was actually above the average for the
previous four years. Beginning in February, the line crossed and
went below the average. This year, the caseload continues to go
down. The caseload is about 11% below where it was a year ago. The
trend is downward, and is expected to go up again due to the
seasonal nature.
The next page shows the actual numbers for four programs. The first
decline is seen in the ATAP Program, which is the AFDC replacement
program. The Adult Public Assistance (APA) caseload continues to
rise at steady rate, which shows that the caseload goes down, the
food stamp program goes down, but Medicaid continues to grow.
Focusing on welfare reform, shows the most change is seen due to
effects of the new law and implementation that agencies have been
doing. While the caseload is 11% down, the actual amount of money
that is being appropriated for benefits is down 19% from that of
last year. The largest contribution to that decrease is the benefit
cuts made to two parent families in the summer. That guarantees
that the 19% decrease will remain when full benefits are reinstated
in October 1997. Another reason the payment of benefits is lower
than the caseload reduction is because a number of people are now
working while still on benefits. This replaces some of the welfare
benefits with wages, but does not remove them from the caseload. The
agency is seeing fewer people applying for welfare, more people are
going to work.
The next page illustrates the application volume compared to last
year. The type of work activities provide information regarding
childcare are shown.
Mr. Nordlund continued, updating on the two-parent benefit cuts and
on what happened in Bristol Bay and the Y-K Delta area with the
fishing disaster. Under law, the DHSS Commissioner is allowed to
waive the two-parent benefit reduction if families are not able to
find work due to economic downturn. Because of the Governor' s
disaster declaration, the Commissioner did initiate the waiver
process. As a result of that, 108 families had their seasonal
reduction restored to full benefits. Those benefits cost
approximately $120,000 dollars for the three months, which should
not cause a budget problem due to the dramatic reduction in payments
that have been made.
Sen. Pearce noted that while the Governor did declare a State
disaster for the Bristol Bay area and the Y-K Delta, he never went
forward with a request for federal aid through the Federal Disaster
Relief Program. She asked why.
Mr. Nordlund replied that the Governor did answer an inquiry from
Commissioner Irwin, which was a request to the Federal government to
receive some emergency assistance. The DCRA Commissioner did
presumably make that request to the Federal government.
Sen. Pearce understood that the President was never. She stated
that there may have been a request for aid, but did not believe that
the next step had been taken for a full declaration of emergency
disaster. She stated that she would check with the Governor on that
point.
Sen. Torgerson wondered whether the targets may need to be adjusted
since some areas were declared disaster areas this summer.
Mr. Nordlund affirmed that the target would remain unchanged.
Although individuals had limited opportunity to find work, there is
no provision in the law that relieves us from having to still the
targeted work participation rates. Particularly in rural Alaska, if
individuals cannot find wage paying employment, the agency still
tries to find work situations that will provide the skills that will
help them find a job and provide value to the community. There are
problems in finding jobs all over rural Alaska in spite of what
happened in Bristol Bay and the Y -K Delta area.
?? assumed that the urban areas will be required to reach higher
targets if the rural areas fall behind.
Mr. Nordlund reiterated that there was no plan to make any target
adjustments this year.
?? responded that last year there was a move to make an amendment
that would exempt the areas with 50% unemployment or greater. He
asked if the amendment was made into law.
Mr. Nordlund acknowledged that the original law said that only those
villages with populations over a 1,000 and had unemployment over 50%
qualified for the exemption from the five-year limit. The
modification under the amendment passed in the balanced budget bill
did remove the 1,000 threshold so that the law reads that any
Alaskan Native village with over 50% of the adult population
unemployed is exempt from the five-year limit.
?? asked if that amendment changed the targets.
Mr. Nordlund said no, noting that it pertains to the five-year limit
not the work requirements or the two-year limit, which would limit
anyone on assistance in Alaska that they must be involved in work
activity within two years.
Sen. Adams addressed the work activity targets for FY98. He asked if
the State would be penalized with loss of Federal funds due to
noncompliance with the work targets.
Mr. Nordlund responded that since Alaska was one of the last States
to implement a welfare reform plan, it does not come under the
provisions of Federal law until January, next year. The first
report to the Federal government will be in April or May.
Essentially, the 25% all family rate does not apply to Alaska for
FY97, but the 30% for FY98 will apply. By the middle of next month,
the data will available on the work participation rate. The
information indicates that Alaska will do well and make the 30%
family rate. The threshold for two-parent families is 75% with an
uncertain outcome.
Sen. Torgerson asked what the penalty would be if the target was not
met.
Mr. Nordlund replied that the penalty in a single year would be 5%
of the Federal block grant, with a maximum over the period of 5
years for 21%. Five percent of the block grant amount would amount
to about $3.5 million dollars.
Sen. Torgerson stated that he was confused about the 50% exemption
and the five-year, two-year situation. He asked to have that
addressed at another meeting. He did not see any benefit to meeting
the 50% goal. The other request was for a breakdown of unemployment
rates further than census blocks, particularly community by
community. He lost sight of the Department of Labor' s involvement.
Mr. Nordlund responded that the official unemployment rate does not
measure the level of unemployment in rural Alaska. The Department
of Labor is currently attempting to derive a means of measuring
unemployment in rural Alaska that simultaneously remains cost
effective.
Sen. Torgerson asked if the Department of Labor had established a
baseline.
Mr. Nordlund stated that the baseline used is from the 1997 census
data, however, he was not fully informed.
Sen. Halford asked the progress on child care Pass I and Pass II and
where the supplemental will end up. He asked what is happening with
the spending rate in regard to supplementals.
MS. CHASE, DEPARTMENT OF COMMUNITY & REGIONAL AFFAIRS, responded
that the responsibility for the childcare program was shared with
the Department of Community & Regional Affairs (DCRA) and the
Department of Health & Social Services (DHSS). She pointed out Page
As part of the Welfare Reform effort, DHSS created the Pass Program,
which stands for Parents Achieving Self-Sufficiency.
Ms. Chase delineated the three levels within the Pass program. The
first level, Pass I, is for individuals who are currently receiving
public assistance, but who are engaged in a non-paid work activity
of some type. This is to meet the needs of the 4,000 ATAP families
with open cases. She anticipates full expending of the $7.8 million
that was allocated for Pass I.
The Pass II program is for transitional childcare, for individuals
moving into a work setting and off from welfare, but still need some
assistance in the transition process. People are moving from Pass I
to Pass II, utilizing the $2 million dollars budgeted for Pass II.
She pointed out that if people are to effectively transition into
the work force, childcare will continue to be necessary. Therefore,
the expenditures for Pass II are already exceeding the amount
budgeted for the year. Of the $7.8 million budgeted for Pass I,
DHSS is moving funding from the Pass I to the Pass II program with a
RSA for $650,000 to DCRA.
Sen. Halford asked confirmation that Pass I would use all of the
funding budgeted for that program.
Ms. Chase confirmed that was correct.
Sen. Halford clarified that money that was needed by Pass I was
being moved to Pus II.
Ms. Chase stated that was correct, noting that the transfer had to
do with the timing. The full mount of $7.8 million would be needed
in Pass I, however, the spending in Pass II was occurring at a
faster rate with individuals moving into transition sooner. As a
result, the Pass II program will be approximately $875,000 short.
At this point, DHSS is attempting to move funds from Pass I to Pass
II to ensure that all individuals moving into a work setting has
child care available. LBA can anticipate a supplemental request for
the $875,000 to replace funds taken from the Pass I program.
Sen. Halford pointed out that the $875,000 would not be used for
Pass I. Ms. Chase stated that was correct.
Sen. Halford asked about the situation regarding Pass II.
Ms. Chase outlined that Pass II is for individuals at risk of going
on to ATAP.
Sen. Halford clarified that the three parts consisted of ATAP, the
transitioning off and the leaning on ATAP.
Ms. Chase confirmed that Pass II consisted of low-income individuals
who remained eligible for the most part for a full subsidy. About
70% of the individuals in the DCAP program have 97% subsidies. The
DCAP program and Pass III reach out to the same populations in that
both are at risk. The difference with the funding is that the DCAP
are general funds and Pass II is a combination of State and federal
funds that can be utilized as payment to legally exempt providers.
DCAP funding is for licensed providers only. This provides some
flexibility for the same population to pay a child care subsidy if a
child is in a licensed facility or a legally exempt facility. The
authorization for Pass II was approximately $2.8 million dollars.
For the month of August, expenditures were $176,000 and for the
months of both July and August, the expenditures were $372,000. The
rate of expenditure for the Pass II program may cause it to exceed
its current funding. The DCAP program began the year with a waiting
list that remains relatively. The waiting list in July consisted of
547 children and 330 families. The cost of serving the families on
the waiting list would be an additional $1.4 million. The agency
does not anticipate serving everyone on the waiting list, however,
to meet Public Assistance targets, low income working parents who
need assistance to remain off the ATAP program will need help with
child care.
Sen. Halford asked if the first priority would be transition off the
ATAP program. He pointed out that the shortage in the programs will
be for the people currently on welfare, not the people who have
proven that they can get off of welfare if childcare is provided. He
expected that the losers will be those people who are already on
welfare.
Ms. Chase stated that in order for an individual to move into work
activity, the Pass I funding is quite critical. This gives the
individuals the opportunity to make the first move. Funding from
Pass I to Pass II is a timing issue.
Sen. Halford pointed out that Pass II individuals have proven that
they can make the transition. Pass I people on the other hand may
never get off of the program while the subsidy is there.
Mr. Nordlund clarified that in Pass I, a family does not receive
childcare unless the family is involved in a work activity.
Sen. Halford asked for the definition of "work" activity.
Mr. Nordlund clarified that a work activity for an individual living
in rural setting could be community service. Another example, a 19
year-old woman has two children and has never had a chance to really
gain work skills, may get into a job sampling placement where she
could build a resume, make contacts and learn what a work setting is
like. While the individual is not making wages, she is learning
what it is like to work on a job. Pass funding is also available for
individuals who are working for a wage, but are still on welfare.
All of these examples, fit into the definition of a work activity
and are all eligible for the Pass funding. Both the transitional
and Pass I sectors are important, but it is a matter of timing that
the Pass II funding has run short first, which creates a situation
where families must return to welfare in order to qualify for Pass I
funding for child care. Pass I has made a loan of $650,000 to Pass
II.
Sen. Halford pointed out that Pass II would be most vital area to
fund.
Mr. Nordlund confirmed that the tendency will remain to invest the
money in a person who is working and likely to stay working unless
personal circumstances intervene.
Sen. Halford asked about the goal to beef up child support
enforcement. Since last year's legislation was found to be
constitutionally questionable, he asked what can be done to get more
money without punishment before trial. He asked what "increased
child support enforcement" meant.
Sen. Halford clarified that it was not just license revocation, but
that small businesses tended to avoid hiring people with child
support issues. That is not legal, but when the small business is
threatened with liability, they will respond accordingly.
Mr. Nordlund noted that he is not qualified to provide support for
the child support enforcement laws and what the various alternatives
are. He asked the Committee if childcare and Federal Welfare work
funds could be addressed in the next session. He would request that
Barbara Nichols, the new Child Support Enforcement Director, be
present to answer questions.
Sen. Halford agreed.
Rep. Therriault suggested that the Department of Revenue (DOR) be
asked about the court case regarding the unconstitutionality] of
license revocation. He asked about the role Native Associations
play in providing childcare.
Mr. Nordlund stated that funds are no longer passed through to
Native organizations for child cares since they receive their own
separate source of funding. There currently is a grant with the
three largest Native organizations, Cook Inlet Tribal Council,
Tanana Chiefs Conference, Tlingkit Haida, and AVCP in Bethel. Part
of the grant agreement is a request to spend some of their child
care dollars to help serve ATAP recipients so they can meet their
work participation requirements. A means to assure that the funds
available to the Native organizations are spent to achieve the
outcome of getting people into work activities.
Rep. Therriault asked the number of day care needs currently being
met by these organizations.
Mr. Nordlund deferred the answer to that question.
Rep. Therriault asked if general funds not going to Native
organizations would then go back into the State appropriations.
Mr. Nordlund confirmed that the funds then became part of the
funding used to serve all families.
Rep. Therriault requested information why if that money came back
into the welfare reform system, the child care programs are still
coming up short of funds.
Mr. Nordlund stated that the simple answer is that the population
being served is larger than it was in the past.
Ms. Chase introduced another topic for the next meeting regarding
USGOS funding in the amount of $1.4 million. The planning
guidelines for the submission of the State's plan, which must be
coordinated with another plan, is in the process of being completed
by the Federal Department of Labor.
The final guidelines are expected to be available in the next week
or so. The plan is due for submission on December 12, 1997. The
funds are available to the State for a very narrow population of the
Welfare to Work individuals. The individuals must have been on
Public Assistance for 30 months or more, must have had some
educational deficiencies such as no GED or high school diploma, etc.
These figures will be submitted at the next meeting.
?? asked that information on how the SDA's are set. He asked to be
informed of the reason that Barrow and Kotzebue are placed in with
Ketchikan and Kodiak and how the comparison between those areas to
divide the money. He asked if there would be any room to create any
more SDA's.
EXECUTIVE SESSION
Sen. Adams MOVED that the meeting go into Executive Session to
discuss Special Audits.
WAGE AND BENEFIT STUDY, SCHOOL COST STUDY
Mr. Burnett explained that on September 10, 1997 an RFP was issued
and sent to all vendors on the Alaska Bidders List for this work. A
national search was also conducted and the RFP was sent to several
nation-wide consulting firms with a return due date of October 6,
1997. The RFP was for comparative wage and benefit study for private
and public sector wages, a school cost study, and a geographical
differential study for wages.
There were four proposals received for the comparative wage and
benefit study. There were two proposals that spoke to all three of
the components of the study. After the proposals were received, Sen.
Wilkin and Rep. Hanley appointed a Subcommittee to look at the
issue. On Sen. Phillips' behalf, Duane Guilly, the former Director
of School Finance for the State of Alaska, and Tom Tierney, the
personnel manager for the Municipality for Anchorage, looked at the
proposals. Based on the response from these two groups, the proposal
rating would be the McDowell Group's proposal which speaks to all
three proposals, and the KPGM, Pete Marwick, proposal as the top
two. The differences between the two proposals are such that the
requests authority from the Committee for the chairman to enter into
a contract with one of these two based on a last and final proposal
from both groups for the whole picture and for an a mount not to
exceed $500,000. The differences are derived from the collection of
data and reporting. He continued, the people who rated the proposals
were uncomfortable without some clarification that either one of the
proposals would achieve the required information.
Sen. Pearce asked for the names of the two companies.
Mr. Burnett replied that one was KPGM, Pete Marwick and the other
was the McDowell Group.
Sen. Adams asked if the review committee had come up with a
recommendation on either one of these two companies.
Mr. Burnett replied that KPGM was rated higher for comparative wages
and benefit study by the people reviewing that proposal, whereas,
the McDowell Group methodology on the school cost study and on the
geo differential was rated better.
Sen. Pearce asked if Sen. Wilken had made a recommendation since he
knows what is needed from the study for school portion. She
suggested that if Sen. Wilken had a preference that he would honor
it
Mr. Burnett stated that Sen. Wilken was concerned and asked that a
discussion take place with each party to clarify, which is why the
request has been made for the authority to enter into agreement with
one of the groups.
Rep. Bunde stated that he was concerned about a delay. If the two
companies are considered equal, he noted that he would have no
hesitation supporting whichever company Sen. Wilken chose.
Mr. Burnett stated the nature of the differences is such that a very
quick resolution could he made.
Rep. Therriault expressed support of the McDowell Group, providing
that Sen. Wilkin could resolve concerns on the wage benefit portion
of that study. He was concerned that wages in Alaska not he compared
to Fortune 500 companies or large corporations.
Mr. Burnett replied that both studies would look at small and large
companies.
?? stated that further clarification would take only several hours
to accomplish. The Committee would authorize one of the companies.
Mr. Burnett pointed that the subcommittee's direction along with
Sen. Wilken input would get the issue resolved.
Rep. Bunde MOVED that the Chairman of LBA authorize to enter into
contract with the chosen group in order to go forward with the
study.
Sen. Donley OBJECTED that only one contract would be given. He
noted that each company has its area of expertise. He asked if
there was a possibility of dividing the contract out by the
different studies.
Mr. Burnett stated that the way the RFP was written, the contracts
can be given out by project if the company was willing to define the
price so it is within the guidelines for each separate section.
Rep. Bunde confirmed that his MOTION would give the Chairman the
discretion to break out the contract into separate proposals and
award them to separate companies if so determined.
Chrm. Phillips announced that he would try to check with the members
individually before making the final decisions.
Sen. Donley REMOVED his OBJECTION.
Rep. Bunde restated the MOTION, MOVED that the Chairman be empowered
to sign the contract depending upon further discussions both groups.
NO OBJECTION being raised, the MOTION was APPROVED.
Sen. Pearce reiterated Rep. Therriault's concern that Pete Marwick
be considered for the wage and cost study since they were clearly
considered the strongest on that portion of the RFP.
APPOINTMENT OF ACTING LEGISLATIVE AUDITOR
Rep. Martin MOVED that the Committee appoint as Acting Legislative
Auditor the name recommended by Randy Welker. NO OBJECTION being
raised, the process was started.
EXECUTIVE SESSION
Sen. Adams MOVED that the Committee return to Executive Session.
FINAL AUDITS
Rep. Therriault MOVED to release the two Final Audits; NO OBJECTION
being raised, the MOTION was APPROVED and the two Final Audits were
released.
PRELIMINARY AUDITS
Rep. Martin MOVED that the Preliminary Audits be given to the
respective agencies for response.
Rep. Martin recommended a 30-day time period. NO OBJECTION to
either the amendment or the motion being raised, the MOTION was
APPROVED.
Rep. Martin MOVED for approval of the recommendation of the audit by
Rep. Therriault, the two audits presented by Rep. Bunde, and the
conclusion of Rep. Hanley's request. Rep. Croft's audit request
will be delayed until the next meeting for refinement of the scope.
NO OBJECTIONS were raised.
Mr. Welker presented a request for funding to upgrade several work
stations and update software. He did not anticipate that it would
cost more than $15,000 dollars.
Rep. Martin MOVED to approve the $15,000 request; NO OBJECTIONS
being raised, the MOTION was APPROVED.
ALASKA PERMANENT FUND CORPORTATION: SUPPLEMENTAL LEGISLATION
MR. JIM KELLY, DIRECTOR OF COMMUNICATIONS, ALASKA PERMANENT FUND
CORPORATION, requested that the Committee profile two bills, one
bill for the Supplemental in the amount of $1.8 million and the
other is a House version of a Senate bill, which would increase the
Trustees' flexibility to increase to 60% the amount of the invested
stocks.
Rep. Martin stated that most of the members of the Committee had had
an opportunity to speak with the board members on this.
Mr. Welker pointed out that the proposed action did not require six
members of the Committee to be present.
Rep. Martin MOVED approval for the temporary supplemental
appropriation of $1.845 million be presented to the Legislature. He
also MOVED that the second proposal dealing with the flexibility of
the equities be evaluated by the Finance Committees as well as being
introduced as legislation.
Sen. Pearce OBJECTED to the second portion of the proposal dealing
with increasing the stock holdings to 6O%
Rep. Martin observed that in that case there would be no opportunity
to consider the possibility.
Chrm. Phillips clarified that a MOTION was on the floor encompassing
both bills proposed regarding the Alaska Permanent Fund Corporation.
He noted that an OBJECTION had been made.
Sen. Pearce asked that the OBJECTION be REMOVED pending a more
clearly stated MOTION.
Rep. Martin MOVED the introduction of a bill for supplemental
appropriations; NO OBJECTION raised, the MOTION was APPROVED.
Rep. Martin MOVED for the introduction of a bill under LBA to
explore the options for more flexibility for the Permanent Fund
Corporation in investments. Sen. Pearce OBJECTED.
A roll call vote was taken with four yeas and one nay, the MOTION
was APPROVED.
OTHER BUSINESS
Rep. Martin issued a special thanks to Mr. Welker for the tremendous
job he had done for the LBA Committee.
Chrm. Phillips noted that a fax had been received from the
Governor's Office approving "Payment in Lieu of Taxes" (PILT) money.
The money had been released today.
Sen. Pearce brought up the previous discussion to remove that
portion of the statute. She thought that the Governor had the right
to take the action he had. She suggested reinitiating the fight to
change the statute.
Mr. Greany pointed out that under the existing law, the Governor had
followed the law. He suggested looking at other remedies to avoid
such action in the future.
Rep. Martin stated that Tam Cook, Legislative Legal attorney, had
thought that the Governor was outside his legal power and was taking
away appropriations authority from the Legislature.
Mr. Greany pointed out that one condition must be met. In the front
section and the general appropriation bill specify that any
additional Federal funds beyond those that are specifically
appropriated in the Budget Act are appropriated subject to the LBA
Committee review. If that Committee approves it, it can happen.
Under 0801-1, the Governor is given an escape. In other words, if
the Committee fails to approve an appropriation, then the Governor
can make a finding and go ahead and release the money, which is the
mechanism that the Governor used to make that finding and release
that money. It does appear that the Governor is following statutory
mechanism that is available without addressing the merits of whether
it should be done that way.
Rep. Martin agreed with Sen. Pearce. He thought that there were
other departments that were finding ways to circumvent the
constitutional authority and responsibility of the Legislature over
all appropriations. The current one is the Railroad which has
received $37 million dollars from the Federal government.
Mr. Greany clarified that he is not arguing the Governor's case. As
the legislative support, he fully appreciates and defends the
Legislature's power of appropriation. The Committee does have a
remedy here for the future. They could not appropriate any
additional Federal funds in the front section, which would be a
drastic action, but it would close that door.
Sen. Torgerson asked the status of appropriations for next year
since this was an ongoing program.
Mr. Greany replied that authority for the State to spend the funds
is for this fiscal year. In FY99, it would have to be specifically
placed into the budget or it would have to he given to the LBA
Committee for review and approval.
Sen. Pearce requested that Mr. Greany pull up the legal opinions
that would allow a bill to be introduced that would disallow any
Governor to flaunt their ability by statute.
Chrm. Phillips pointed out for the record that this is the fourth
time that this type action has occurred in the last six to eight
years. It happened twice with Governor Hickel and now twice with
Governor Knowles.
Rep. Martin requested that the Division of Finance provide examples
at the next LBA meeting.
Mr. Greany pointed out that if the Administration could find some
other legal authority to bring that money back through the revised
program process, the veto could be made. It would be a case by case
dependent upon whether they could find some other authority or
appropriation that could be placed on the revised program process.
Chrm. Phillips directed Mr. Greany to come up with some possible
alternative scenarios.
Mr. Greany thought that part of this would relate to the action that
the Legislative Council had already taken to challenge the
Governor's veto of contingent language.
Chrm. Phillips concluded that this could require a Constitutional
Amendment, which the Governor can not veto, and it would be place
before the voters for approval.
ADJOURNMENT
Chrm. Phillips adjourned the meeting at approximately 1:00 p.m.
LBA 23 10/08/97
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