Legislature(2007 - 2008)HOUSE FINANCE 519
02/11/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB343 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 194 | TELECONFERENCED | |
| += | HJR 2 | TELECONFERENCED | |
| += | HB 343 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 11, 2008
1:40 p.m.
CALL TO ORDER
Co-Chair Chenault called the House Finance Committee meeting
to order at 1:40:01 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
Representative John Harris
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget;
Mike Maher, Director, Division of Administrative Services,
Department of Environmental Conservation; Craig Tillery,
Deputy Attorney General, Department of Law; Richard
Svobodny, Deputy Attorney General, Criminal Division,
Department of Law; Mark Lewis, Director, Administrative
Services, Department of Education and Early Development; Tom
Lawson, Director, Administrative Services, Department of
Fish and Game; Gail Fenumiai, Director, Division of
Elections, Office of the Lieutenant Governor; Guy Bell,
Assistant Commissioner and Director, Division of
Administrative Services, Department of Labor and Workforce
Development Labor; Leta Simons, Director, Division of
Support Services, Department of Natural Resources; Dan
Spencer, Director, Division of Administrative Services,
Department of Public Safety; Jerry Burnett, Director,
Division of Administrative Services, Department of Revenue;
Chris Christensen, Deputy Administrative Director, Alaska
Court System; Larry Cohen, Executive Director, Alaska
Judicial Council; Nancy Slagle, Director, Division of
Administrative Services, Department of Transportation and
Public Facilities.
PRESENT VIA TELECONFERENCE
Tom Chapple, Director, Division of Air and Water Quality,
Department of Environmental Conservation; Bill Griffeth,
Facilities Program Manager, Division of Water Public Safety,
Department of Environmental Conservation; Pat Pitney, Vice
President, Planning and Budget, University of Alaska.
SUMMARY
HB 194 "An Act relating to fines for certain offenses
involving aeronautics, alcoholic beverages, boats,
fish and game, health care records and public
health, medical review organizations, public
restroom facilities, smoking, shelter cabins,
refrigerators and similar equipment, radiation
sources, high voltage lines, child labor,
employment in underground mines, marriage
licenses, motor vehicles and driver's licenses,
ignition interlock devices, pipelines, use of the
state seal, and emissions requirements; relating
to the maximum fine provided for violations and
infractions and to the definition of 'minor
offenses'; redesignating certain fish and game
misdemeanor offenses as class A misdemeanors;
relating to violations and offenses that are
committed on state land, water, and land and water
or that are related to water management or dam and
reservoir safety; amending Rule 8(b), Alaska
District Court Rules of Criminal Procedure; and
providing for an effective date."
HB 194 was POSTPONED.
HB 343 "An Act making supplemental appropriations,
capital appropriations, reappropriations, and
other appropriations; amending certain
appropriations; ratifying certain expenditures;
making appropriations to capitalize funds; and
providing for an effective date."
HB 343 HEARD and HELD in Committee for further
consideration.
HJR 2 Proposing an amendment to the Constitution of the
State of Alaska requiring an affirmative vote of
the people before any form of gambling for profit
may be authorized in Alaska.
HJR was POSTPONED.
HOUSE BILL NO. 343
"An Act making supplemental appropriations, capital
appropriations, reappropriations, and other
appropriations; amending certain appropriations;
ratifying certain expenditures; making appropriations
to capitalize funds; and providing for an effective
date."
1:40:20 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF MANAGEMENT AND BUDGET (OMB), oriented the
committee and began the process.
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Section 7-9. Support for the Climate Change Work Group
Support for the Climate Change work group process,
with an extended lapse date through June 30, 2009.
$230,000
MIKE MAHER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC), explained
the item as a result of Administrative Order 238 for a
climate change task force process at $230,000 General Fund
(GF) with an extended lapse date through June 30, 2009.
There have been discussions at the sub-committee level.
1:42:34 PM
Co-Chair Meyer wondered if the item, as an administrative
order, should be funded through the Governor's office rather
than through DEC. Mr. Maher responded that the request was
in DEC's budget because the commissioner, as chair of the
task force, would be formulating costs and expending funds.
Co-Chair Meyer asked if the program is ongoing. Mr. Maher
was not certain, which was the reason for the extended lapse
date. He explained that when the Alaska Climate Impact
Assessment Commission provides recommendations, there may be
other needs identified for a variety of agencies, including
DEC.
Co-Chair Chenault asked if the department's uncertainty
explained why the funds are not in the operating budget. Mr.
Maher said that any remaining balance would be carried over.
He acknowledged uncertainty regarding additional requests.
Co-Chair Chenault asked when the department would know if
they intended to request additional funds.
TOM CHAPPLE, DIRECTOR, DIVISION OF AIR AND WATER QUALITY,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (Testified via
Teleconference), explained that work groups are forming to
meet for nine months to one year in order to draft a
strategy for addressing climate.
Section 13. Village Safe Water Study
13(b) Transfer unused balance ($120,671 GF) from
Stebbins - Water and Sewer Improvements (38) (Sec.
135, Ch. 103, SLA 1995, Pg 58, Ln 11) to a new
Village Safe Water Study, Design and Construction
Projects allocation.
13(c) Transfer unused balance ($1,945,738 Fed)
from Environmental Protection Agency Indian Set
Aside Grants (ED 99) (Sec. 135, Ch. 103, SLA 1995,
Pg 58, Ln 35) to a new Village Safe Water Study,
Design and Construction Projects allocation.
13(d) New allocation: Village Safe Water Study,
Design and Construction Projects $2,066,409 - Sec.
135, Ch. 103, SLA 1995.
13(e) Transfer unused balance ($55,000 GF) from
Engineering/Feasibility Studies (ED 99) (Sec. 100,
Ch. 123, SLA 1996, Pg 47, Ln 25) to a new Village
Safe Water Study, Design and Construction Projects
allocation.
13(f) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 100, Ch.
123, SLA 1996.
13(g) Transfer unused balance ($49,503.69 GF Match
+ $49,503.70 Fed) from Lower Kuskokwim School
District - Tuntutuliak School Sewage Disposal
Feasibility Study/Design (ED 39) (Sec. 82, Ch.
100, SLA 1997, Pg 46, Ln 14) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(h) Transfer unused balance ($59,662.26 GF Match
+ $59,662.25 Fed) from Village Of Kipnuk - Aquifer
Storage and Recovery Demonstration Study (ED 39)
(Sec. 82, Ch. 100, SLA 1997, Pg 46, Ln 32) to a
new Village Safe Water Study, Design and
Construction Projects allocation.
13(h) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 82, Ch.
100, SLA 1997. Scope change needed to allow for
Village Safe Water Design and Construction
Projects.
13(i) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 131, Ch.
139, SLA 1998. Scope change needed to allow for
Village Safe Water Design and Construction
Projects.
13(i) Transfer unused balance ($21,000 Fed +
$21,000 AHFC Rcpts) from Kwethluk Housing Water
Systems Improvement Study (ED 39) (Sec. 131, Ch.
139, SLA 1998, Pg 43, Ln 3) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(j) Transfer unused balance ($68,140.59 Fed +
$68,140.58 AHFC Rcpts) from Gulkana Water
Modernization Project (ED 36) Sec. 131, Ch. 139,
SLA 1998, Pg 44, Ln 17) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(k) Transfer unused balance ($379,101.15 Fed +
$6.07 AHFC Rcpts) from Badger Richardson Water
Supply Design (ED 29-34) (Sec. 131, Ch. 139, SLA
1998, Pg 45, Ln 10) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(k) New allocation: Village Safe Water Study,
Design and Construction Projects $515,382 Sec.
131, Ch. 139, SLA 1998.
13(l) Scope change needed to allow for match by
any federal agency, not just RDA.
13(m) Transfer unused balance ($11,837.60 Fed +
$5,915.42 AHFC Rcpts) from Crooked Creek Johnny
John Sr. School Sewer System Feasibility Study (ED
36) (Sec. 100, Ch. 2, FSSLA 1999, Pg 41, Ln 7) to
a new Village Safe Water Study, Design and
Construction Projects allocation.
13(m) Transfer unused balance ($9,299.99 Fed +
$4,639.98 AHFC Rcpts) from Crooked Creek Master
Plan (ED 36) (Sec. 100, Ch. 2, FSSLA 1999, Pg 41,
Ln 10) to a new Village Safe Water Study, Design
and Construction Projects allocation.
13(n) Transfer unused balance ($11,966.07 Fed +
$5,982.95 AHFC Rcpts) from Old Harbor Sanitation
Improvements Feasibility Study (ED 6) (Sec. 100,
Ch. 2, FSSLA 1999, Pg 42, Ln 15) to a new Village
Safe Water Study, Design and Construction Projects
allocation.
13(n) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 100, Ch.
2, FSSLA 1999. Scope change needed to allow for
Village Safe Water Design and Construction
Projects.
13(o) Scope change needed to allow for match by
any federal agency, not just EPA.
13(p) Transfer unused balance ($526,635.57 Fed +
$263,364.43 AHFC Rcpts) from Tununak Flush Tank
And Haul (ED 38) (Sec. 100, Ch. 2, FSSLA 1999, Pg
44, Ln 10) to a new Village Safe Water Study,
Design and Construction Projects allocation.
13(p) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 100, Ch.
2, FSSLA 1999. Scope change needed to allow for
any federal agency and to allow Village Safe Water
Study Projects.
13(q) Scope change needed to allow for match by
any federal agency, not just RDA.
13(r) Transfer unused balance ($58,378.07 GF) from
Rampart Water And Sewer (ED 36) (Sec. 100, Ch. 2,
FSSLA 1999, Pg 45, Ln 21) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(r) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 100, Ch.
2, FSSLA 1999.
13(s) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch.
135, SLA 2000. Scope change needed to allow for
Village Safe Water Design and Construction
Projects.
13(s) Transfer unused balance ($28,614.57 Fed +
$9,538.19 AHFC Rcpts) from Akhiok Water And Sewer
Improvements Feasibility Study (ED 6) (Sec. 1, Ch.
135, SLA 2000, Pg 6, Ln 12) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(t) Transfer unused balance ($25,179.02 Fed +
$8,393.01 AHFC Rcpts) from Ivanof Bay Landfill
Water Quality Protection Study And Preliminary
Design (ED 40) (Sec. 1, Ch. 135, SLA 2000, Pg 7,
Ln 10) to a new Village Safe Water Study, Design
and Construction Projects allocation.
13(t) Transfer unused balance ($43,895.02 Fed +
$14,631.68 AHFC Rcpts) from Kaltag Master Plan (ED
36) (Sec. 1, Ch. 135, SLA 2000, Pg 7, Ln 13) to a
new Village Safe Water Study, Design and
Construction Projects allocation.
13(u) Transfer unused balance ($63,717 Fed +
$21,239 AHFC Rcpts) from Nuiqsut Sewage Lagoon
Closure Feasibility Study (ED 37)(Sec. 1, Ch. 135,
SLA 2000, Pg 8, Ln 3) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(v) Transfer unused balance ($73,500 Fed +
$24,500 AHFC Rcpts) from Saint George Water And
Sewer System Planning Study (ED 40) (Sec. 1, Ch.
135, SLA 2000, Pg 8, Ln 11) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(w) Transfer unused balance ($20,684.79 Fed +
$6,894.93 AHFC Rcpts) from Saxman Water Storage
Design Study (ED 1) (Sec. 1, Ch. 135, SLA 2000, Pg
8, Ln 16) to a new Village Safe Water Study,
Design and Construction Projects allocation
13(x) Scope change needed to allow for match by
any federal agency, not just EPA.
13(y) Transfer unused balance ($225,000 Fed +
$75,000 AHFC Rcpts) from Savoonga Water And Sewer
Project (Sec. 1, Ch. 135, SLA 2000, Pg 9, Ln 13)
to a new Village Safe Water Study, Design and
Construction Projects allocation.
13(y) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch.
135, SLA 2000. Scope change needed to allow for
any federal agency and to allow Village Safe Water
Study Projects.
13(z) Transfer unused balance ($94,393.63 Fed +
$31,464.54 AHFC Rcpts) from Allakaket Sanitation
Facilities Improvement Plan (Sec. 1, Ch. 61, SLA
2001, Pg 11, Ln 29) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(aa) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch. 61,
SLA 2001. Scope change needed to allow for Village
Safe Water Design and Construction Projects.
13(aa) Transfer unused balance ($56,200 Fed +
$18,800 AHFC Rcpts) from Rampart Solid Waste and
Water Quality Protection Plan (Sec. 1, Ch. 61, SLA
2001, Pg 13, Ln 18) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(bb) Transfer unused balance ($10,682.06 Fed +
$3,560.69 AHFC Rcpts) from Chistochina Facility
Plan (Sec. 1, Ch. 1, SSSLA 2002, CH 1, Page 29,
Line 28) to a new Village Safe Water Study, Design
and Construction Projects allocation.
13(cc) Transfer unused balance ($17,160.79 Fed +
$5,720.26 AHFC Rcpts) from False Pass Wastewater
Treatment and Disposal Feasibility Study (Sec. 1,
Ch. 1, SSSLA 2002, Pg 29, Ln 28) to a new Village
Safe Water Study, Design and Construction Projects
allocation.
13(cc) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch. 1,
SSSLA 2002. Scope change needed to allow for
Village Safe Water Design and Construction
Projects.
13(dd) Transfer unused balance ($182,000 GF +
$1,200,000 Fed + $218,000 AHFC Rcpts) from
Tuluksak Water and Sewer Project - Phase I (Sec.
1, Ch. 1, SSSLA 2002, Pg 31, Ln 9) to a new
Village Safe Water Study, Design and Construction
Projects allocation.
13(dd) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch. 1,
SSSLA 2002. Scope change needed to allow Village
Safe Water Study Projects.
13(dd) Transfer unused balance ($1,042,500 Fed +
$347,500 AHFC Rcpts) from Tuntutuliak Water and
Sewer Project (Sec. 1, Ch. 1, SSSLA 2002, Pg 35,
Ln 11) to a new Village Safe Water Study, Design
and Construction Projects allocation.
13(ee) Transfer unused balance ($525,000 Fed +
$175,000 AHFC Rcpts) from Alatna Water Supply and
Sewage Collection and Treatment Project Phase 4
(Sec. 1, Ch. 82, SLA 2003, Pg 20, Ln 23) to a new
Village Safe Water Study, Design and Construction
Projects allocation.
13(ff) Transfer unused balance ($66,000 Fed +
$22,000 AHFC Rcpts) from Egegik Water and Sewer
Improvement Project Phase 4 (Sec. 1, Ch. 82, SLA
2003, Pg 21, Ln 22) to a new Village Safe Water
Study, Design and Construction Projects allocation
13(gg) Transfer unused balance ($1,473,750 Fed +
$491,250 AHFC Rcpts) from Tuluksak Sanitation
Facilities Construction Phase 2 (Sec. 1, Ch. 82,
SLA 2003, Pg 23, Ln 28) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(gg) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch. 82,
SLA 2003. Scope change needed to allow for
Village Safe Water Study Projects.
13(hh) Transfer unused balance ($16,500 Fed +
$5,500 AHFC Rcpts) from Delta Junction Downtown
Water and Sewer Master Plan (Sec. 1, Ch. 82, SLA
2003, Pg 24, Ln 26) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(ii) Transfer unused balance ($9,025.56 Fed +
$3,008.52 AHFC Rcpts) from Port Protection
Wastewater Engineering Study (Sec. 1, Ch. 82, SLA
2003, Pg 25, Ln 21) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(ii) New allocation: Village Safe Water Study,
Design and Construction Projects $34,034 - Sec. 1,
Ch. 82, SLA 2003. Scope change needed to allow for
Village Safe Water Study Projects.
13(jj) Transfer unused balance ($847,500 Fed +
$282,500 AHFC Bond Proceeds) from Hyder Sewer
System Development Phase 1 (Sec. 1, Ch. 159, SLA
2004, Pg 22, Ln 27) to a new Village Safe Water
Study, Design and Construction Projects
allocation.
13(kk) Transfer unused balance ($531,000 Fed +
$177,000 AHFC Bond Proceeds) from Kivalina Sewer
and Water Haul System (Sec. 1, Ch. 159, SLA 2004,
Pg 23, Ln 5) to a new Village Safe Water Study,
Design and Construction Projects allocation.
13(ll) Transfer unused balance ($687,000 Fed +
$229,000 AHFC Bond Proceeds) from Koyukuk
Sanitation Improvement Project Phase 2 (Sec. 1,
Ch. 159, SLA 2004, Pg 23, Ln 11) to a new Village
Safe Water Study, Design and Construction Projects
allocation.
13(mm) unused balance ($2,190,000 Fed + $730,000
AHFC Bond Proceeds) from Tuluksak Sanitation
Facilities Construction Phase 3 (Sec. 1, Ch. 159,
SLA 2004, Pg 24, Ln 18) to a new Village Safe
Water Study, Design and Construction Projects
allocation.
13(mm) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch.
159, SLA 2004. Scope change needed to allow for
Village Safe Water Study Projects.
13(nn) Transfer unused balance ($798,750 Fed +
$266,250 GF Match) from Brevig Mission Water and
Sewer Connections (Sec. 1, Ch. 3, FSSLA 2005, Pg
48, Ln 20) to a new Village Safe Water Study,
Design and Construction Projects allocation.
13(nn) New allocation: Village Safe Water Study,
Design and Construction Projects - Sec. 1, Ch. 3,
FSSLA 2005. Scope change needed to allow for
Village Safe Water Study Projects.
Mr. Maher explained the net zero supplemental closing out a
number of village safe water projects and making balances
available for other priority items.
Co-Chair Chenault asked if the money was being reallocated
because the projects were complete. Mr. Maher answered that
that was correct for most projects. Other projects have been
canceled and those monies transferred as well, including to
finished projects that have come up short on funding.
1:47:36 PM
Representative Thomas asked if the villages were notified of
cancelled projects.
BILL GRIFFETH, FACILITIES PROGRAM MANAGER, DIVISION OF WATER
PUBLIC SAFETY, DEC (Testified via Teleconference), specified
that existing allocations would be reduced for projects
completed for less than the allocated amount, projects for
which federal funding has been withdrawn, and cancelled
projects. Those communities are aware of the reductions.
Some communities are trying to meet requirements for
projects to move ahead. If the projects cannot proceed,
those communities will be notified of the reallocation of
funds and how the projects can be gotten back on track.
Representative Thomas emphasized the need to let people know
if projects are cancelled.
1:49:57 PM
Representative Nelson assumed the projects mentioned are not
the complete list of village safe water projects, but those
that need a reallocation of funds. She referenced the Denali
Commission report regarding certain projects that are not
feasible due to energy costs.
Mr. Griffin confirmed the assumption. He added that there
were two reasons for the request: first, completing projects
so federal funds are not lost, and second, previously funded
projects need additional funding.
Co-Chair Chenault asked if the department prioritizes
funding with the newly allocated funds.
1:52:04 PM
Mr. Griffin answered that the new allocations will only be
awarded to projects approved through the priority list
process, and to projects that are allowable under federal
guidelines for grants to the state. He elaborated that funds
have not been reallocated yet, but communities have been
notified that more funds may be available for projects.
Those requests will be reviewed by the same state and
federal agencies that used the original project request. The
department will make sure they will be able to complete the
projects with any additional funding provided.
Co-Chair Chenault asked for more detail regarding the Ocean
Ranger Program.
Section 13(a). Water Quality Implementation of the Ocean
Ranger Program
The contract needs to be established early enough
to allow the contractor to hire and train Ocean
Rangers prior to the season beginning in May 2008.
The contractor will incur substantial expenditures
for hiring, training, and purchasing equipment in
preparation for the upcoming season. In addition
to the contractor's costs, the department is
incurring expenditures for paying staff and other
expenditures for implementation of the program.
Mr. Maher explained that the request is for $2.8 million
from the Cruise Ship Vessel Fund. He reminded the finance
committee that after conference committee the previous year
the department ended up with $1.2 million in the base
budget. The additional $2.8 million reflected in the request
brings the total to $4 million, which is the projected berth
tax per year. It maximizes the revenue available to put the
program together.
Co-Chair Chenault asked if the Ocean Ranger program can be
completed with the $4 million from the berth tax.
1:54:22 PM
Mike Maher stated that the department put together the best
program possible within projected revenue. The department
does not intend to seek further funds for the program.
Representative Kelly voiced concern that ineffective but
high-costing technology has been applied to waste management
monitoring. He hoped that better, lower costing technology
would be researched and considered to manage the program.
Representative Joule emphasized that some communities are
facing significant challenges related to climate change. He
asserted that requests would need to come through the
supplemental process before fall in order to get the work
done in a timely manner. He asked for comment.
Mr. Maher noted there are funds in the Department of
Commerce budget to address some of the issues.
Ms. Rehfeld elaborated that there was a request under the
Department of Commerce for $1.2 million (Line 84, Climate
Change Impact Mitigation). She explained that a planning
component needed to occur in order to address needs of the
impacted communities. Various federal and state agencies
need to coordinate to come up with a request.
1:58:41 PM
Representative Joule emphasized the critical nature of the
problem. He hoped the issue would be addressed through an
amendment process or some other means.
DEPARTMENT OF LAW
Section 7 - 9. Oil, Gas, and Mining
During FY2008 the Department of Natural Resources
(DNR) requested that Law allocate $3.0 million of
Law's $21.5 million Oil, Gas, and Mining
supplemental (Sec 1, Ch 6, SLA07, Pg 1, Lns 4-6)
to pay a contractor to do a financial analysis of
the TransCanada proposal to evaluate that the
state's financial interests are being met. Law
has entered into a Reimbursable Services
Agreement (RSA) with DNR to pay the costs of the
valuation expert. The $3.0 million RSA to DNR was
not included in the costs Law anticipated at the
time of the $21.5 million request. Law is
requesting that part of these funds be replaced
for their original purpose. Law is requesting
only $1,750,000 (and not the full $3 million)
because one large case recently settled and Law
spent $1,250,000 less than originally anticipated
on that case.
CRAIG TILLERY, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW (LAW),
reminded the committee that the previous year the department
received a combination of supplemental and FY 08 funding for
the Division of Oil and Gas for the natural gasline. They
recently become aware of an unfunded need to provide a
financial analysis of the gasline proposal. Because of the
timing, LAW requested a reimbursable services agreement
(RSA) for $3.0 million to DNR to conduct the analysis. The
Department of Law will need to recover the money for other
cases and is requesting that part of these funds be replaced
for their original purpose. Only $1.75 million (not the full
$3 million) is being requested because one large case
recently settled and LAW spent less than originally
anticipated on that case.
Section 25(a). Deputy Attorney General's Office
Judgments and Settlements, $587,910.81 as of
January 28, 2008.
Mr. Tillery said the items were more limited than in past
years. There are four cases, judgments for attorney's fees.
He noted they are all reductions from the amount requested;
in three of the four cases the basis for the reduction is a
result of legislation regulating judgments for public
interest litigant fees.
Section 25(b). Deputy Attorney General's Office
The amount necessary for additional judgments
awarded on or before June 30, 2008 is
appropriated.
Mr. Tillery explained that the next item is an appropriation
for any subsequent judgments and claims related to the
previous item. One of the judgments could be approximately
$800,000.
Co-Chair Chenault asked about a $2 million claim.
Representative Nelson noted the $2 million may be the
settlement for Office of Children's Services.
2:03:28 PM
Section 25(c). Administrative Services: Unpaid FY06 bills
Contractor was very late in submitting final
bills to Law. Bills were submitted in May/June of
2007 so they were not included in the FY06
supplemental for Law. The actual amount in hand
as of January 28, 2008 is $3,109.36.
Section 25(d). Criminal Division
Additional federal authorization is needed for
the U.S. Department of Justice, Office of
Violence Against Women grant to "Encourage Arrest
Policies and Enforcement of Protection Orders"
for $937,000, as allocated below. The grant term
is for 15 months, so a lapse date of June 30,
2009 is requested.
Second Judicial District - $127.8
Third Judicial District: Anchorage - $399.2 and 1
new PFT (Paralegal)
Fourth Judicial District - $410.0 and 2 new PFTs
(Attorney and Paralegal)
RICHARD SVOBODNY, DEPUTY ATTORNEY GENERAL, CRIMINAL
DIVISION, DEPARTMENT OF LAW, described an unpaid bill from a
2006 murder case. The bill was submitted by an expert
witness late and therefore was not included in the
appropriate billing cycle. The next item authorizes
$937,000, part of a federal grant for violence against women
to assure arrests and provide for enforcement of protective
orders. The amount funds a half-time paralegal in Barrow,
and a full-time attorney and paralegal in Bethel. The
appropriation would also fund a paralegal for the rural
prosecution unit providing services to communities off the
road system, and one attorney in the appellate section to
deal specifically with violence against women issues. A
small portion of funds would support two attorneys currently
working in the Anchorage District Attorney's office.
Representative Gara asked if the presence of Village Public
Safety Officers (VPSOs) in areas with no law enforcement
could save money. Mr. Svobodny hoped increasing personnel
would have some deterring effect but said there is no
empirical data to support that.
Representative Hawker pointed out that appropriations in
several items relate to FY 09 and questioned the breaking up
of fiscal years in the operating and supplemental budgets.
2:07:32 PM
Co-Chair Chenault responded that the issue would be taken up
in committee.
Section 25(e). Human Services and Child Protection: Native
Village of Curyung v. State DHSS, Office of Children
Services
This is a complicated case involving four tribes
suing the state over alleged violations of
various state and federal laws. The Department of
Law estimates that there are roughly 120 children
who are part of this case. It is anticipated that
litigation and/or trial costs are expected to be
at least $200.0 in FY08 with another $300.0
needed in FY09, so an extended lapse date through
June 30, 2009 is requested.
$500,000
Mr. Tilley explained that the request addresses a complex
case relating to a challenge by four native villages filed
in Dillingham regarding Child Protective Services. The case
challenges state and federal laws and requests that the
court appoint an ombudsman to oversee protective services
for the state. The case involves 120 children and is fact
intensive. The department anticipates the case to last over
two fiscal years and decided to put it in one request to
clarify the ultimate cost.
Representative Gara queried the status of the law regarding
LAW liability. Mr. Tillery said he did not know the answer
but would find out and report back.
Representative Nelson asked when the increment would be
available for the settlement from the 1998 Office of
Children's Services (OCS) case. Mr. Tilley said the
settlement is being paid out of the Division of Risk
Management.
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT
Section 8 - 9. Student and School Achievement
Correction of late session transactions for TRS
solution that erroneously cut the component twice
for the GF reduction desired. This is reflected
in section 8, the departmental fund source list.
$388,000 GF
Section 8 - 9. Head Start Grants
Correction of late session transactions for TRS
solution that erroneously cut component twice for
the GF reduction desired. This is reflected in
section 8, the departmental fund source list.
$6,000
Section 8 - 9. Mt. Edgecumbe High School
Correction of late session transactions for TRS
solution that erroneously cut component twice for
the GF reduction desired. This is reflected in
section 8, the departmental fund source list.
$331,200
MARK LEWIS, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF
EDUCATION AND EARLY DEVELOPMENT (DEED), explained that
during the 2007 legislative session a series of transactions
were recorded to adjust funding related to the teacher's
retirement system with the Student and School Achievement,
Head Start, and Mt. Edgecumbe High School components. These
transactions inadvertently removed GF from the base numbers.
The three supplemental items correct those transactions and
the associated funding sources.
Representative Nelson asked what other early education
programs are run through DEED.
Mr. Lewis responded that most early development programs
moved to the Department of Health and Social Services (DHSS)
in 2004. Head Start and early learning programs remain in
DEED.
2:13:49 PM
Representative Nelson asked what percentage of the
department's budget was allotted for early development. Mr.
Lewis replied less than one percent.
Representative Nelson asked if there was any interest in
amending the supplemental request to include funds for Head
Start. She noted increased energy costs.
Karen Rehfeld remarked that there was no amendment for Head
Start. The Administration has been focusing on K-12
education. She added that the Best Beginnings report was due
out and hoped recommendations could be made for additional
funding as a result of that.
Co-Chair Meyer noted that there has been much discussion in
the education subcommittee about early learning. He noted
that the Head Start program is not a state program; the
state just provides matching funds for local community and
federal funding. He further noted difficulty overseeing the
program.
Mr. Lewis confirmed Co-Chair Meyer's assessment.
2:16:41 PM
Representative Hawker noted the provision was in the
supplemental with continued effects in the FY 09 budget
cycle. He asked if there were similar increments in the FY
09 operating budget. Ms. Rehfeld answered that the
corrections have been made in the operating budget request.
Representative Gara stated for the record that the Best
Beginnings program already has a recommendation for Head
Start funding. He asked the administration to take a look at
that. Ms. Rehfeld said she was not aware of a dollar amount
for recommendations. Several components of a statewide
system are being discussed, including Head Start.
Representative Gara stated that Head Start serves less than
half the children eligible. The recommendation is to serve
all eligible children.
Section 22. School Performance Incentive Program
If the amount necessary to pay school performance
incentives exceeds the amount appropriated for
FY08, the additional amount necessary is
appropriated. The department won't know the final
amount until after the legislature has adjourned.
Similar language is included in the FY09
operating budget.
$1.6 million
Mr. Lewis explained that the School Performance Incentive
Program was established under AS 14.031.26 as a three-year
pilot program. The program is currently in its second year
with a budget of $2.5 million. The FY 08 request of $5.8
million was reduced the previous session by $3.3 million
because as a new program the actual costs associated with
the School Performance Incentive Awards could not be
accurately projected. Finance subcommittees recommended
reviewing the request in the FY 09 budget cycle. The
language section provides the mechanism to fund the pilot
program in order to distribute the awards as intended within
the established statutory limits. The estimated additional
funding required is projected to be $1.6 million.
2:18:49 PM
Co-Chair Meyer expressed concern about the open-ended nature
of the request. He pointed out that some people consider the
item controversial and asked if the amount could be limited.
Mr. Lewis explained that by statute only 850 certified
teaching staff can receive the award, which limits the
appropriation. In order to limit it further by short-funding
the program, he recommended paying down the full amounts but
providing the award to fewer teacher and fewer schools. He
also pointed out that there was no way to know exactly how
much the program would cost.
Co-Chair Chenault asked if the request is short-funded, why
not pro-rate to each teacher eligible. Mr. Lewis stated that
the intention is provide a higher amount to adequately
compensate those awarded. The higher amount also provides
incentive to perform at a higher level, which in turn
nurtures student achievement.
Representative Hawker echoed Co-Chair Meyer's comments
regarding open-ended appropriations. He felt there should be
some limitations to the appropriation.
Representative Gara asked about the former commissioner's
statement regarding the teacher incentive grants statute.
The funding provided did not allow all of the teachers who
qualify under the standards to receive bonuses. He asked if
a certain percentage would qualify and what percentage of
schools would qualify for making progress under the grant
program for which funding was provided.
Mr. Lewis did not have precise numbers but offered to supply
the information. He added that if there were no statutory
limitation, the program for 850 teachers would cost $6.2
million.
2:22:18 PM
Representative Gara commented that if the administration
believed the program is effective and the point is to
encourage teachers through a grant to do better, the program
would be undermined by not providing the funds.
DEPARTMENT OF FISH AND GAME
Section 23. Carry Forward Receipts
Carry forward of federal indirect cost plan
receipts to include the FY07 unexpended and
unobligated balance. Similar language is included
in the FY09 budget.
TOM LAWSON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF
FISH AND GAME (ADF&G), explained the language in the section
corrects a cash flow issue by allowing for unspent indirect
revenue to be carried forward into the next fiscal year
without an increase in authorization. The language would
help spread indirect revenue more evenly throughout the
fiscal year. He commented that indirect funds cover general
administrative overhead costs. A certain percentage of each
federal grant can be charged with these costs. An annual
federal indirect plan has to be completed. During the field
season, late in the fiscal year, ADF&G spends large amounts
of federal funds. Because the indirect rate is based on the
actual expenditure of the funds, the department does not
know how much federal funding will be received. The language
allows the unexpended balance to be rolled forward.
Representative Hawker asked if something had changed from
last year to bring forth the request. Mr. Lawson answered
that it has been an issue in the past. They discovered that
the Department of Labor had similar issues and solved the
problem through a language change.
Representative Hawker asked if similar language was in the
current year's operating budget. Mr. Lawson responded in the
affirmative.
2:26:11 PM
DIVISION OF ELECTIONS
Section 16. Personnel Services
This request includes $278.2 GF and $120.1 in
HAVA CIP Rcpts for personal services for three
new base operating positions and 26 temporary
positions needed for petitions processing
relating to the FY09 primary election ballot.
Contractual includes $76.4 in printing, forms and
training costs relating to the upcoming statewide
primary election; $10.9 one-time costs for
Deltana incorporation, $12.0 for Wrangell
incorporation, and $6.0 for REAA #18 recall
elections; $20.0 for legal costs relating to the
Nick case; and increased base operating costs of
$7.0 for postage, $23.5 for maintenance and
licensing increases, and $30.1 for office and
storage space increased lease costs. The base
operating increases in personal services and
contractual are included in the FY09 operating
budget request.
$584,200
GAIL FENUMIAI, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF
THE LIEUTENANT GOVERNOR, detailed the request of $584,200,
consisting of $464,100 in GF and $120,100 in capital
improvement project (CIP) receipts from the Help America
Vote Act (HAVA). The division is requesting three new base
operating positions to assist with the increased work load,
especially to help in FY 08 to prepare for the FY 09
elections. The funding will also assist with 26 temporary
positions used to process petitions to determine
certification for the FY 09 elections. She listed other one-
time items that were unexpected expenses.
Co-Chair Chenault asked for an explanation of the Nick v.
Bethel case. Ms. Fenumiai responded that the division is
being sued by four native Alaska elders claiming the
language assistance program was not effectively implemented.
Representative Nelson clarified that the issue was under the
Voting Rights Act. Co-Chair Chenault asked when the case
began. Ms. Fenumia said the lawsuit was filed June of 2007.
Representative Hawker asked if the positions were ongoing
costs or just for the election cycle. Ms. Fenumia responded
that the division intended to keep positions ongoing. She
described an increased work load due to federal mandates and
changes in the state's voting system.
2:29:27 PM
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT
Section 24. Commissioner's Office
The $850.0 fiscal note for ch. 22, SLA 2007 ( HB
177, AGIA) was appropriated in sec. 2, ch. 28,
SLA 2007, page 44, line 22. The department will
not spend the entire amount in FY08, therefore
they request that the lapse date be extended
through June 30, 2009 in order to complete the
work with the estimated balance of $250.0.
GUY BELL, ASSISTANT COMMISSIONER AND DIRECTOR, DIVISION OF
ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT (LABOR), explained the request to extend a
fiscal note appropriation for the Alaska Gasline Inducement
Act (AGIA) training program development into next year. He
recounted the AGIA mandate to develop a training program for
the workforce needs. The department received $850,000 toward
the effort, which will continue into the next fiscal year. A
steering committee made up of largely private sector
individuals has been engaged; the committee is giving LABOR
guidance and will be meeting into the next fiscal year. The
estimated balance available at the end of the fiscal year
will be approximately $250,000. The department is requesting
authorization to spend the funds through the next fiscal
year.
DEPARTMENT OF NATURAL RESOURCES
Section 7 - 9. Oil & Gas Auditors
Cost to implement ch.1, SSSLA 2007 (HB 2001)
Alaska's Clear and Equitable Share (ACES)
legislation. Add two Oil & Gas Revenue Audit
Master exempt positions. The amount is reduced
from the original fiscal note due to later than
anticipated hiring of the positions. The FY09
budget contains a related increase of $303.5.
$110,000
LETA SIMONS, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES, addressed the request to
fund two senior level auditors as per the ACES fiscal note.
2:31:53 PM
Section 7 - 9. Fire Suppression Preparedness Resolution
over Implementation of the Forest Technician Class
Study
This supplemental request funds a Letter of
Grievance Resolution between the State and the
Alaska State Employees Association (ASEA) related
to step placement of employees during
implementation of a classification study for
Forestry-specific job classes. The retroactive
operating costs for 20 Wildland Fire Dispatcher
positions is $47.5 for FY07, and current-year
FY08 costs are $61.7, resulting in this
supplemental request of $109.2. A corresponding
FY09 budget amendment of $61.7 will be requested.
$109,200
Ms. Simons explained the supplemental covers the costs for
FY 08 and retroactive to FY 07.
Co-Chair Chenault noted that the corresponding changes would
be in the FY 09 budget.
Section 10 - 12. Capital Eagle River Nature Center
Planning and Design Study
Ms. Simons outlined the capital request is for a design
study for Eagle River Nature Center. This is statutory
designated program receipts. Friends of the Eagle River
Nature Center received a Housing and Urban Development grant
to fund the projects. The funds are being requested in the
supplemental budget due to the grant timeline. The design
phase must begin as soon as possible.
Co-Chair Chenault asked about the anticipated funding
sources for the center. Ms. Simons noted that once the
design work is done, the Friends of Eagle River Nature
Center will be seeking the construction funds for on their
own. The organization is seeking the assistance of the
Division of Parks and Outdoor Recreation only for design
work because the division has design expertise.
Section 29(a). Ratification Fire Suppression Activity
Ratification AR 37313-07 Fire Suppression
Activity.
Ms. Simons detailed the ratification of expenditures
totaling $7,550,162 for FY 07 fire activity.
2:35:03 PM
DEPARTMENT OF PUBLIC SAFETY
DAN SPENCER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF PUBLIC SAFETY (DPS), provided a general
overview regarding DPS appropriations. A number of items are
broken out by component, but many are for similar costs such
as fuel and utility costs, and operating or replacement cost
increases. In addition, the spreadsheet refers to the amount
of a similar increase included in the FY 09 budget proposal.
Some needs are expected to be on-going. Finally, the
projections are based on actual expenditures through
st
December 31. The department is currently reviewing
expenditures through January to see if there are any changes
that can be made to the supplemental requests. He expected
any change to be a decrease.
Mr. Spencer acknowledged past increases for trooper
positions. However, DPS has had difficulty filling the
positions. Appropriating additional funds for recruiting
resulted in less supplemental requests for several years.
Some of the funds for positions were used to address other
cost increases. Vacancy savings can no longer be used as the
department now expects the positions to be filled. Most
items requested in the supplemental are the result of that.
He noted that the first item is an exception.
2:37:34 PM
Section 7 - 9. Fire Prevention Operations
RSS shortfall from building plan review fees.
Division would like to make this into a straight
GF operation since revenues vary drastically.
Included in the FY09 budget at the same level of
$220.0. Additional travel of $50.0 for building
life safety inspections and to provide
inspections in rural locations. Funded in FY09 at
$105.0. Increased fuel/utility $8.3 and vehicle
$4.8 costs. FY09 fuel/utility cost increment is
$4.5.
Mr. Spencer pointed out that there were increased fuel,
utility, and vehicle costs in the item. There are two other
items, however. One is a receipt supported services
shortfall from building plan review fees that the Division
of Fire Prevention use for reviewing building plans for fire
code compliance. Over time those receipts have supported the
individual positions working on the building plan reviews,
as well as support costs. If the department projects that
the receipts from building plan reviews go down, it is not
practical to release a plan reviewer because it takes about
16 months to train the position. The appropriation is based
on a projection of revenue that does not track well from
year to year. There is a companion adjustment in the FY09
operating budget. Mr. Spencer did not expect the revenues to
increase.
Representative Gara asked if the unfilled trooper position
funds were used to pay for other needs within the
department. Mr. Spencer explained that each year the
department has attempted to fill the positions. Rather than
come to the legislature for a supplemental for increased
fuel or lease costs, funds for unfilled positions were used
for other costs.
Representative Gara thought using funds for other costs was
a disincentive to filling open positions. Mr. Spencer
pointed out that using the funds in this manner had been
discussed during the sub-committee process. He underlined
the directive from the legislature that if funds are
available from other sources they should be used rather than
making a supplemental request. He claimed the department had
been candid.
Representative Gara clarified that it was not his intention
to suggest that the department mislead anyone. He reiterated
his concern that using unfilled position funds creates a
reverse incentive for filling them. He asked if Department
of Health and Social Services (DHSS) does that with unfilled
social worker funding.
Ms. Rehfeld could not specifically speak to the particular
component within DHSS. She suggested looking at what the
department has budgeted for vacancy and other costs.
Representative Gara responded that he was advised by DHSS
that there were 19 or 20 funded but unfilled positions. He
wanted assurance that those funds were not used for other
things. Ms. Rehfeld replied that DHSS was attempting to fill
those positions. Mr. Spencer added that it was the intent of
DPS to fill the vacant positions and come back if that
causes a budget shortfall. He emphasized that the department
did not want to create a disincentive.
Vice-Chair Stoltz agreed that there should be more
restrictions.
2:43:51 PM
Section 7 - 9. Fire Service Training
Increased fuel/utility $8.3 and vehicle $9.4
costs. FY09 fuel/utility cost increment is $9.6.
Mr. Spencer said the item was a utility and vehicle increase
cost.
Section 7 - 9. Alaska State Troopers/Special Projects
Replace federal Rural Alcohol Interdiction Team
funds for part year. Fund change is included in
FY09 in the amount of $870.0.
Mr. Spencer reported that the item is to replace funds for
part of the fiscal year in the amount $150,000. There are
five or six positions that work on the program; funding is
running out. The last appropriation passed by Congress in
December has Rural Alcohol Interdiction Funds, but DPS does
not know if those funds are coming to Alaska. Senator
Stevens attempted to get federal funds. If those funds come,
the request would not be needed.
Section 7 - 9. Judicial Services - Anchorage
Assume Anchorage prisoner transport duties.
Assumes December 2007 hire date for six new
positions. Covers one-time purchases and share of
annual expenses. If one-time costs are not funded
here, additional funds will be needed in FY09. In
the FY09 budget at $656.3 for a full year's
costs, but that does not include one-time costs.
Mr. Spencer explained that the appropriation would implement
the Anchorage prisoner transport settlement agreement. The
state of Alaska and the municipality of Anchorage had an
agreement regarding prisoner transport. The municipality
sued the state. An agreement was reached over the summer
that DPS would take over the transport. The $620,000 in the
supplemental can be reduced to $477,600 GF, based on a new
assumption that the department will hire four court services
officers in March and two more around the end of the fiscal
year. There is significant cost even without the last two
because of the required equipment needed.
Co-Chair Chenault requested clarification regarding
transport. Mr. Spencer replied the Anchorage Police
Department conducted transport.
Section 7 - 9. Prisoner Transportation
Increased prisoner transports costs. FY09
increment is in the same amount.
Mr. Spencer said the item for $455,000 is for increased
prisoner transport costs. Airline and fuel costs are
increasing.
2:47:11 PM
Section 7 - 9. Rural Trooper Housing
Rural housing costs of $244.2 due to unrealized
SDPR including leases without rent contribution
at Selawik and for Bethel commons. Increased fuel
and utility costs of $92.7. FY09 fuel/utility
cost increment is $147.1.
Mr. Spencer described costs of vacant trooper positions. The
department maintains housing for troopers in rural areas by
contract, whether or not the positions are filled. The
result is a revenue shortfall.
Section 7 - 9. AST Detachments
Increased trooper move costs $425.0, dispatch
contracts with Kodiak and Wasilla (MatCom)
$420.3, lease costs $60.6, fuel/utility costs
$236.2, vehicle costs $610.9, and facilities
maintenance costs $25.5. FY09 increments are:
trooper move travel $425.0; lease $60.6;
fuel/utility $164.9; and vehicle $113.9.
Mr. Spencer explained the various expenses for moving Alaska
State Troopers. Costs have increased.
Representative Hawker wondered how the large number was
overlooked in the previous funding cycle. Mr. Spencer
responded that the number did not get overlooked. The
department absorbed high costs from having vacant positions.
Now that they are not expecting to have vacant positions,
the full costs are obvious.
Representative Hawker spoke of "truth in budgeting." Mr.
Spencer stated that they were truthful. The department's
approach has been to not ask for money until it was needed.
He maintained that documentation was complete.
Representative Hawker argued that the amounts should have
been asked for in prior years. Mr. Spencer responded that if
the positions had been filled, DPS would have asked for the
money.
2:50:31 PM
Section 7 - 9. Alaska Bureau of Investigation
Increased lease costs. No corresponding FY09
increment.
Section 7 - 9. Alaska Wildlife Troopers
Increased fuel/utility $70.8, vehicle $288.6 and
facilities maintenance $17.1 costs. FY09
increments are: fuel/utility $38.6; vehicle
$145.3.
Section 7 - 9. Alaska Wildlife Troopers Aircraft
Enforcement
Increased fuel/utility $95.2 and lease $80.2
costs. FY09 increments are: fuel/utility $151.1
and lease $80.2.
Section 7 - 9. Alaska Wildlife Troopers Marine Enforcement
Increased fuel/utility costs. FY09 increment is
$66.0.
Section 7 - 9. Domestic Violence/ Sexual Assault
CDVSA received an unanticipated Rural Domestic
Violence and Child Victimization (RDVCV) grant in
October 2007. The majority of projects from
another federal grant (GTEA) fell into FY08 as
well, leading to a shortfall in federal
authority.
Mr. Spencer reported that the Council on Domestic Violence
and Sexual Assault received a grant that they had not
anticipated. As a result, DPS does not have enough federal
receipt authority; the appropriation would allow them to
spend the money.
Section 7 - 9. Training Academy
Increased fuel/utility $5.2 and vehicle $11.6
costs. FY09 increment for fuel/utility costs is
$8.2.
Section 7 - 9. Administrative Services
Increased fuel/utility $2.6, lease $9.2, and
vehicle $2.2 costs. FY09 increment is $9.2 for
office lease costs.
Section 7 - 9. Alcoholic Beverage Control Board
Increased vehicle costs. FY09 increment is $1.9.
Section 7 - 9. Laboratory Services
Increased fuel/utility $15.5 and vehicle $8.9
costs. FY09 increments are: fuel/utility $21.0
and vehicle $4.3.
Co-Chair Chenault queried the costs for operating the
Anchorage crime lab. Mr. Spencer said he did not have the
numbers but could get them as they were a separate budget
component.
2:52:40 PM
Section 29(b)(8). Ratification
Public Safety AR 46805-07 Alaska Fire Standards
Council.
Mr. Spencer concluded with the last item in the ratification
section. He explained that the money was spent but
accidentally posted to the wrong account. There was no
shortfall.
DEPARTMENT OF REVENUE
Section 7 - 9. Tax Division
Implementation of Tax Division's fiscal note for
Chapter 1, SSSLA 2007 (HB 2001), which passed
during the second special session in 2007 absent
an appropriations bill. Beginning in January
2008, the department will begin incurring costs
to immediately implement the new production tax
structure. These costs include: Personal services
- $275.8 for the new exempt class of oil and gas
revenue auditors and an additional analyst
programmer; Supplies - $6.0 for analyst
programmer's computer and software; Contractual -
$506.6 for audit assistance.
$788,400 GF
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, detailed the appropriation.
Co-Chair Chenault asked if any of the audit masters had been
hired. Mr. Burnett answered that they had not yet been
hired. He thought the paperwork for the first recruitments
was going forward. The amount in the supplemental is for an
average of three months salary for the audit masters and six
months salary for the analyst programmer. The audit
assistant contracts are filled.
Section 7 - 9. Treasury
Investment management services for the Retiree
Health Insurance Major Medical Fund. Management
costs are increasing as the assets under
management are growing (35.9% in FY2007 from
$152.4 to $207.1 million).
$15,000
Co-Chair Chenault asked if management took a cut whenever
the fund dropped. Mr. Burnett answered the fees go down
when money is lost.
Section 7 - 9. AHFC
AHFC 4% wage increase and health insurance
increase of $28.78 from $851 to $879.78.
$1.2 million
Section 7 - 9. AHFC
Wage and health insurance increase fund source
switch to 100% Corp Rcpts.
Mr. Burnett explained that the Alaska Housing Finance
Corporation (AHFC) adopts the general government unit (GGU)
negotiated wage increase. The item is retroactive to July
1, 2007. The appropriation is spread through several fund
sources. The federal funds of $417,000 are accounted as a
reimbursement and then in the corporate receipts rather
than showing in the budget as federal funds. The source of
the funds is still federal dollars.
Section 7 - 9. Permanent Fund Corporation
Custody Management Fees
$6 million
Mr. Burnett reported the item as a $6 million custody
management fee increase for the Alaska Permanent Fund
Corporation. The amount is based on increased fees under
management and also on changes in investment allocation and
the types of managers AHFC has hired.
Co-Chair Chenault asked if it were normal that the
Department of Revenue through AHFC would mirror the GGU
contract negotiations. Mr. Burnett indicated that that has
been their tradition for a number of years.
Representative Hawker referenced Permanent Fund management
fees. The fees are based on returns and market growth, among
other things. The supplemental request is based on the
assumption of median to strong market growth for the
remainder of 2008. He wondered if recent market conditions
affected the department's determination.
2:58:26 PM
Mr. Burnett thought the determination was made when the
Permanent Fund was ahead. Any funds not needed are returned
to the Permanent Fund. Representative Hawker asked if the
item were more an authority than an appropriation. Mr.
Burnett assented.
Representative Hawker wondered how pressing the situation
was. Mr. Burnett responded that he had no information that
it would not be necessary.
Section 17(a). Debt: Fund Capitalization, Oil and Gas Tax
Credit Fund
Increased oil and gas tax credits from $25
million that were appropriated in the FY08 budget
to an updated estimated maximum need of $150
million. The new oil and gas tax credit fund was
established in ACES for these credits.
$125 million
Mr. Burnett reported that the ACES bill set up the oil and
gas tax credit fund. The formula in the legislation suggests
that it would be funded with ten percent of the current
year's production tax revenues. Ten percent would amount to
around $300 million. The bill also increased the amount of
credit the state will be paying because it removed the $25
million limit on tax credits for small firms.
Section 17(b) Debt: Fund Capitalization, Oil and Gas Tax
Credit Fund
Reappropriate the balance of the $25 million tax
credit appropriation to the new Oil and Gas Tax
Credit Fund that was created by ACES. The
Department of Revenue expects a balance of
approximately $4.2 million.
Mr. Burnett relayed that the next item is related to the one
before. In the FY 08 budget, DOR had a $25 million tax
credit appropriation, of which approximately $21 million has
been spent. The $4 million remaining would go into the tax
credit fund.
Representative Gara asked if the tax credit fund was money
to reimburse people for tax credits. Mr. Burnett specified
that there are transferable and refundable tax credits in
the production tax statute. A number of companies with small
production currently do not have tax liability and are
eligible for a direct refund against the state's liability
to them. The fund is for that.
Representative Gara clarified that the fund is for
transferable tax credits. He asked about deductions. Mr.
Burnett responded that refundable tax credits are only
expenditures for budgetary purposes.
3:02:22 PM
Representative Gara did not like spending money that was not
received.
Section 18(a). Debt: Debt Reimbursement, Jail Construction
Reimbursement
Reimbursement to the Municipality of Kodiak for
expansion of the Kodiak jail. Kodiak will start
construction this season, but can't finalize
contracts without secured funding. This
reimbursement is per Ch. 160 (SB65), SLA 2004.
$2 million
Mr. Burnett remarked that the appropriation was authorized
in SB 65 in 2004.
Co-Chair Chenault asked if the item was debt reimbursement
or a grant. Mr. Burnett responded that SB 65 was written as
a grant that was intended to be done through a certificate
of participation (COP). However, the administrative costs on
a $2 million COP would be too high, so DOR would prefer to
do a GF grant instead of financing the item on behalf of
Kodiak.
Section 18(b). Debt: Debt Reimbursement, Jail Construction
Reimbursement
Reimbursement of design and site selection costs
of the Pt. Mackenzie Correctional Center to the
Matanuska-Susitna Borough through AHFC.
$2.5 million
Mr. Burnett explained that when SB 65 was passed the Mat-Su
Borough selected the site and was working on a memorandum of
agreement with AHFC. The intent was that the money would be
paid from the debt service for financing the new prison at
Pt. Mackenzie. However, so much time has passed that the
money can no longer be financed. The debt is still owed from
the state through AHFC to the borough.
3:06:09 PM
Representative Kelly asked if the last two items would be
capital or operating appropriations. Mr. Burnett believed it
would be a capital appropriation and add to the value of the
correctional facility.
Section 19. AHFC
Correct the bond authorization citation in sec.
8(b)(2), ch. 28, SLA 2007, page 65, line 20, from
ch. 2, SSSLA 2002, the FY03 GO Bond bill, to ch.
1, SSSLA 2002, the FY03 capital budget bill. The
AHFC bonds were authorized in sec. 1, page 46, of
the capital budget bill.
Mr. Burnett described the item as a simple technical
correction.
Section 28(b). Debt: Debt Service, GO Bonds
On April 15, 2003 the state issued the series
2003 A (Education and Museum and regular
transportation) and 2003 B (Accelerated
Transportation) general obligation bonds. These
bonds did not incur any positive arbitrage in the
first three years of the funds' lives. On April
15, 2006 (the three-year anniversary) the funds
remaining in the project accounts became subject
to yield reduction payment based on the arbitrage
yield limit plus 1/8 of a percent, which is
3.96266299 in this case. From April 15 to
November 30 there have been earnings that
correlate to a $1.5 million liability.
Extrapolating this amount forward to the five-
year computation date of April 15, 2008, there
might be as much as $4 million in yield reduction
due within 60 days of the computation date (June
14, 2008). A supplemental to appropriate up to $4
million in earnings of the 2003 A and B bond
proceeds to be paid from the funds based on
actual liability generation is necessary to pay
the yield reduction payment that is expected to
be due in FY2008.
Mr. Burnett explained the item as a general obligation (GO)
debt passed in 2002. Some of the funds have not been
expended. On the positive side, the investment earns more
than the cost of the debt; on the negative side, the surplus
has to be paid to the Internal Revenue Service (IRS). The
actual amount will be calculated April 15, 2008.
Co-Chair Chenault asked how much remained. Mr. Burnett said
he would get the figures.
3:08:29 PM
Representative Hawker wondered why the state sat on such a
large balance. Mr. Burnett replied he did not know.
Representative Hawker asked what could be learned from the
situation. Mr. Burnett said the money was earned from bonds
sold for a specific purpose. He said the question was
related to separate investment funds; it depends on how
those are managed and the connection. There was a discussion
about the limits and risks of arbitrage. Mr. Burnett said
the IRS has asked for payment because they consider the
funds taxable.
Representative Kelly asked if anything unanticipated had
occurred. Mr. Burnett responded that it was a case of bond
proceeds being invested and not spent.
3:11:22 PM
ALASKA COURT SYSTEM
Section 10 - 12. Capital
Build chambers for new Fairbanks Supreme Court
Justice and offices for staff.
$629,000
CHRIS CHRISTENSEN, DEPUTY ADMINISTRATIVE DIRECTOR, ALASKA
COURT SYSTEM, described the appropriation for construction
on the undeveloped fifth floor of the Rabinowitz Courthouse
in Fairbanks. The item was supposed to have the fast track
effective date, but was inadvertently put in the bill
without it. He related history and described the inefficient
working situation of the judge and staff. The bidding and
construction process to finish the space will take five to
six months; Courts hoped to expedite funding by not going
through the regular capital budget process.
Section 7 - 9. Judicial Council
Additional applicant evaluation costs due to
increased number of vacant judgeships. The FY09
budget has a corresponding increase of $64.5.
LARRY COHEN, EXECUTIVE DIRECTOR, ALASKA JUDICIAL COUNCIL,
impressed upon the committee that this was the first time in
25 years the council has asked for supplemental funding. The
reason is a high number of judicial vacancies, eight
vacancies through the first seven months of the fiscal year,
which is two more than their budget can accommodate. The
requested amount of $63,600 will enable the council to
increase efficiencies by filling positions.
3:14:56 PM
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
Section 7 - 9. Statewide Aviation: Funding for Southeast
Airport Leasing Officer
Funding of this existing position, located in
Juneau, will increase the direct contact with
airport tenants and on-site airport management
personnel which will lead to better oversight of
airport tenant operations. Duties of this
position include negotiating leases, permits and
concession agreements that generate revenues
sufficient to cover the costs of this position.
NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (DOT/PF),
stated the item requests $35,000 in receipt supported
services authority to add a position for a leasing officer
for Southeast region to deal with rural airport leasing
issues. The department is behind in annual rent reviews,
requiring land use agreements, and collecting state
revenues.
3:16:37 PM
Co-Chair Meyer asked if the position would be on-going. Ms.
Slagle answered that the position is on-going and is
included in budget amendments for FY 09.
Representative Hawker pointed out that change record detail
does not show associated position hires. Ms. Slagle
responded that DOT/PF added a position via revised program.
Section 7 - 9. Measurement Standards and Commercial Vehicle
Enforcement: Travel to remote sites for inspections.
Alaskan businesses are more frequently requesting
Weights and Measure Inspectors to perform an
inspection or re-inspection outside of the normal
inspection cycle. When this occurs, the business
requesting the inspection agrees to pay for all
costs associated with the trip. In the past, the
overall amount of trips was minimal, but the
number of trips has been steadily increasing over
the past several years as companies become aware
of this service.
$30,000
Ms. Slagle said the inspection program monitors weighing
and measuring devices. When DOT/PF is requested by
distributors to certify devices in rural areas and the
procedure is out of the department's regular routine, the
department would charge for the travel. She provided
examples.
Vice-Chair Stoltze noted constituent concern that aircraft
parts and certification can take a long time. He asked if
the item would address that. Ms. Slagle responded that the
request mostly address scales and weights for retailers such
as grocery stores and fuel distributors. She offered to get
more information.
3:20:18 PM
Section 7 - 9. State Equipment Fleet: Credit card payments
for increased cost of fuel.
The State Equipment Fleet (SEF) maintains
contracts which allow a vehicle credit card to be
used to purchase fuel and necessary consumables.
These charges are paid directly by SEF and
subsequently, SEF bills executive branch state
agencies for reimbursement.
$326,000
Ms. Slagle informed the committee that the $326,000 in
highway equipment working capital funds covered fuel
increases. The SEF has a contract for vehicle fuel. They
receive the money from the user agencies and pay for fuel.
Section 7 - 9. Central Region Facilities: Fuel and Utility
Increases.
Fuel prices continue to be higher than our base
funding level of $1.84/gallon and additional
funding provided through Sec 22, Ch 28, SLA 2007.
Likewise, utility rates (electricity, natural
gas, water/sewer, waste disposal) have continued
to rise and require additional funding.
Janitorial Contract Increases $58.4 - Central
Region Facilities has 12 janitorial contracts
that service 18 facilities throughout Central
Region. Numerous contracts expired and were rebid
resulting in net price increases.
$315,800
Ms. Slagle described fuel price increases and associated
utility costs in Central region, as well as increases in
janitorial contracts.
Representative Hawker asked why there was a request through
the supplemental when the governor's Fuel and Utility Fund
was set up to cover cost increases. He wondered if the Fund
had failed. Ms. Slagle responded that there was a separate
appropriation provided in the FY 07 budget to fill in the
gap between the FY 05 level of funding and utility cost
increases. The appropriation was provided in FY 08 as well,
but it was provided at the FY 07 level. Fuel and utility
costs are continuing to increase beyond what was provided.
3:23:58 PM
Co-Chair Chenault concurred and added that increases were
being considered to cover current costs.
Representative Hawker asked if the separate supplemental was
because the $24 million budgeted in the governor's office
was inadequate to cover state-wide fuel increases. Co-Chair
Chenault assented.
Ms. Slagle remarked that the next two items also address
fuel and janitorial increases, in Northern and Southeastern
regions:
Section 7 - 9. Northern Region Facilities Fuel and
Utility Increases
Fuel prices continue to be higher than our base
funding level of $1.93/gallon and additional
funding provided through Sec 22, Ch 28, SLA 2007.
Likewise, utility rates (electricity, natural
gas, water/sewer, waste disposal) have continued
to rise and require additional funding.
Section 7 - 9. Southeast Region Facilities Fuel Increases
Fuel prices continue to be higher than our base
funding level of $2.37/gallon and additional
funding provided through Sec 22, Ch 28, SLA 2007.
Janitorial Contract Increases $35.1 - The Juneau
7-Mile Complex, AMHS Reservations Building and
the Ketchikan Court and Office Building are
currently under contract for janitorial services.
In June 2006, the three year contracts for both
7-Mile Complex and the AMHS Reservations Building
were scheduled to expire. In May 2006 Invitations
to Bid were advertised for new three year
contracts. The low bid for this combined contract
came in higher than the total of the previous
contracts.
Co-Chair Chenault asked if there would be an amendment from
the governor for increased fuel costs. Ms. Rehfeld answered
that the package was forthcoming.
3:25:51 PM
Ms. Slagle commented that the next three items were related
to increased fuel costs, specific to highways and aviation:
Section 7 - 9. Central Region Highways and Aviation Fuel
and Utility Increases
Fuel prices continue to be higher than our base
funding level of $1.84/gallon and additional
funding provided through Sec 22, Ch 28, SLA 2007.
Likewise, utility rates (electricity, natural
gas, water/sewer, waste disposal) have continued
to rise and require additional funding.
Section 7 - 9. Northern Region Highways and Aviation Fuel
and Utility Increases
Fuel prices continue to be higher than our base
funding level of $2.01/gallon and additional
funding provided through Sec 22, Ch 28, SLA 2007.
Likewise, utility rates (electricity, natural
gas, water/sewer, waste disposal) have continued
to rise and require additional funding.
Section 7 - 9. Southeast Region Highways and Aviation Fuel
and Utility Increases
Fuel prices continue to be higher than our base
funding level of $1.84/gallon and additional
funding provided through Sec 22, Ch 28, SLA 2007.
Likewise, utility rates (electricity, natural
gas, water/sewer, waste disposal) have continued
to rise and require additional funding.
Skagway Lease Increase $51.0 - The Skagway
maintenance station sits on leased property. The
lease is required in order to retain legal rights
to use the property. Commodity Increases: The
harsh winter of 2006-2007 in Southeast Alaska
diminished levels of available chemicals and sand
used on roads and airports to a very low level.
This necessitated the purchase of larger
quantities of both to provide for the upcoming
2007-2008 winter season. Additionally, snow
plowing blades were used heavily and were in need
of replacement.
Ms. Slagle added that the item for Southeast region also
includes $51,000 for a new lease for the maintenance station
in Skagway. The department is looking at purchasing the land
in the future.
Co-Chair Chenault asked if there had been a lease cost in
previous years for the Skagway station. Ms. Slagle replied
that she understood there was not a cost. Co-Chair Chenault
asked for more information.
Section 7 - 9. Marine Vessel Operations
IBU [InlandBoatman's Union of the Pacific]
arbitration settlement related to the grounding
of the M/V LeConte.
$142,500
Ms. Slagle explained that when the M/V LeConte went aground
in 2004, there was no language in the union contracts
allowing the department to contract out for services
without using Marine Highway employees. Without that
language, the department was in violation of the contracts.
An arbitrator found against the state and is requiring
payment of $142,500 to the union.
Section 7 - 9. Marine Vessel Operations
MMP [International Organization of Masters Mates
and Pilots] arbitration settlement related to the
grounding of the M/V LeConte.
$251, 400
Ms. Slagle stated that the item was for the MMP settlement.
Language added to the contracts allowed the state to expand
contracting. A contract was signed for additional services
to cover the M/V LeConte service while the vessel was being
worked on. Arbitration determined that inadequate
notification was provided to the union for the contracting
services. The new language required thirty days notice,
which does not apply to emergency response. The department
is still working to understand appropriate timing of
notifications.
3:30:21 PM
Representative Kelly speculated about notification in
relation to emergencies. Ms. Slagle agreed the language does
not take emergency circumstances into account. Negotiations
should correct that.
Representative Gara spoke about using the supplemental
budget to keep the operating budget artificially low. He
noted DOT/PF items that were the result of the operating
budget being based on unrealistic fuel price estimates. Ms.
Slagle responded that the finance committees wanted the base
budget to remain at FY 05 levels for fuel and utilities,
based on an assumption that costs would go down. She noted
the OMB attempt to follow that through a separate
appropriation for the increase beyond the FY 05 level.
3:33:11 PM
Co-Chair Chenault interjected that once something is in the
base, it is difficult to take it out. No one could have
guessed that oil prices would be as high as they are. There
was no intention to keep the operating budget low or
shortchange departments. The issue was trying to keep
increased fuel costs out of a base budget.
Representative Kelly wanted to know whether the navigator of
the M/V LeConte was retained or removed. He questioned the
payment of insurance for the person responsible for
grounding the vessel.
3:35:53 PM
Co-Chair Chenault asked when the current contract was
signed. Ms. Slagle thought it was signed in 2005. The vessel
went aground in 2004. Co-Chair Chenault asked if the current
contract provided for emergency situations. Ms. Slagle
responded that it did not. The old contracts were extended
and negotiations for the new ones are being negotiated.
Co-Chair Chenault surmised that if another vessel is
grounded, because of lack of proper notice there will be
another expensive arbitration. Ms. Slagle clarified that the
payment does not go to the employees but to the union.
3:37:24 PM
Section 7 - 9. Marine Vessel Operations
The Alaska Marine Highway System (AMHS) projects
fuel cost increases of $1,880.0 due to higher
than expected prices. The AMHS FY08 business
plan reflects a fuel budget based on
$2.60/gallon. AMHS is currently paying
$3.00/gallon and burning 10.2 million gallons
annually. Another 4.7 million gallons are yet to
be purchased this year.
Ms. Slagle noted that the item covers fuel cost increases
for the Alaska Marine Highway system.
Section 10 - 12. Capital Ports and Harbors: Long Range
Transportation Plan
Funding to prepare a statewide ports and harbors
plan, to be undertaken cooperatively with the
Corps of Engineers and the Denali Commission.
Supplemental funding is requested as the Request
for Proposals (RFP) to develop a long range port
and harbor transportation plan is expected to be
advertised in May of 2008.
$500,000
Ms. Slagle described the capital budget request to work
closely with the Corps of Engineers and the Denali
Commission to develop a ports and harbors long-range
transportation plan. The draft 2030 transportation plan made
it evident that this area is lacking. The Corps of Engineers
and the Denali Commission are providing matching funds. The
goal is the have an RFP around May.
Co-Chair Chenault expressed shock regarding the lack of a
long-range ports and harbors plan. Ms. Slagle noted that
DOT/PF has worked hard to divest ports and harbors. It is a
shift to focus on what the department should be doing to
develop ports and harbors, for economic reasons especially.
Co-Chair Chenault acknowledged the attempt to turn ports and
harbors over to municipalities.
3:40:05 PM
Section 15(a). Traffic Signal Management: Anchorage Traffic
Signal TORA (Transfer of Responsibility Agreement)
The Department reached an agreement with the
Municipality of Anchorage in 2005 for continued
maintenance and operation of the State's traffic
and street lights in downtown Anchorage. This
agreement allows for an increase based on the
Consumer Price Index (CPI) and additional signals
in future years.
$97,000 GF
Ms. Slagle explained that the state has had a contract with
the municipality of Anchorage for many years but the state
has not been providing the increased costs needed for
electricity and additional lights.
Section 15(b). Capital: Airport Improvement Program
Appropriation
The FY08 Airport Improvement Program
appropriation increases by $1,500.0 due to the
allocation change below:
Sec 1, Ch 30, SLA 2007, Pg 105, Ln 27
Ms. Slagle described the item as the appropriation level for
the airport improvement program line; the following item
represents the actual allocation for an increase to complete
an environmental analysis for the Unalaska airport. This is
federal receipt authority. The Federal Aviation
Administration is managing the project but has to direct the
money through the state. The project is in its second phase.
Section 15(c). Capital: Airport Improvement Program
Allocation
Amend Unalaska: Airport Environmental Analysis by
$1,500.0 from $1,500.0 to $3,000.0
Sec 1, Ch 30, SLA 2007, Pg 110, Lns 8-10
Updated planning information is needed by the
Federal Aviation Administration (FAA) for use
during the preparation of an Environmental Impact
Statement (EIS) for improvements to the airport.
The FAA would like to begin work on the EIS in
March to take full advantage of the 2008 field
season for data collection and analysis. This is
the second phase of the project and the
contractor is already on board. This project is
ready to go forward now.
Section 15(d). Capital: Surface Transportation Program
Appropriation
The FY08 Surface Transportation Program
appropriation increases by $5,000.0 due to the
allocation change below:
Sec 4, Ch 30, SLA 2007, Pg 110, Lns 15-16.
Section 15(e). Capital: Surface Transportation Program
Allocation
Amend Anchorage: Old Seward Highway
Reconstruction, O'Malley Road to Brandon by
$5,000.0 from $11,500.0 to $16,500.0
Sec 4, Ch 30, SLA 2007, Pg 111, Lns 30-33
The need for additional funding is due to
adjustments in the engineer's estimate to reflect
increased costs due to inflation. Fast track
supplemental funding is necessary to advertise
and award the construction contract in the spring
to allow for a full first season of construction.
Ms. Slagle described the paired items as the appropriation
and allocation levels for reconstructing the Old Seward
Highway. $5 million is needed for additional adjustments to
the engineer's estimate. The project is ready to go to
construction in the spring, but needs authority to move
ahead.
Co-Chair Chenault asked if the roughly one-third increase in
the cost of projects will be seen in the future. Ms. Slagle
noted that the increase is consistently being seen
everywhere.
3:43:58 PM
Representative Kelly asked how matching federal funds appear
in the budget. Ms. Slagle explained that the match number is
based on the total amount received. There is shifting back
and forth between projects, but the overall match amount
does not change.
Representative Kelly questioned what happens to matching
funds when a project costs more than expected.
Section 15(f). Capital: Airport Improvement Program
Appropriation
The FY06 Airport Improvement Program
appropriation increases by $1,880.0 due to the
allocation changes below:
Sec 1, Ch 3, FSSLA 2005, Pg 69, Ln 11.
Section 15(g). Capital: Airport Improvement Program
Allocation
Amend Ekwok: Snow Removal Equipment Building by
$680.0 from $820.0 to $1,500.0
Sec 1, Ch 3, FSSLA 2005, Pg 70, Lns 32-33
The increased construction cost is primarily due
to cost increases in fuel and building materials.
This project will be ready to advertise in April.
The Federal Aviation Administration wants the
state to use these grant funds as early as
possible so that the benefits from their use can
be achieved as quickly as possible.
Ms. Slagle covered the appropriation and allocation requests
related to the airport improvement program. The second item
is a request for an amendment to the Ekwok snow removal
equipment building, which needs replacement.
Section 15(h). Capital: Airport Improvement Program
Allocation
Amend Seldovia: Snow Removal Equipment Building
Construction by $1,200.0 from $700.0 to $1,900.0
Sec 1, Ch 3, FSSLA 2005, Pg 73, Lns 16-18
The increased construction cost is primarily due
to cost increases in fuel and building materials.
This project will be ready to advertise in
February. The Federal Aviation Administration
wants the state to use these grant funds as early
as possible so that the benefits from their use
can be achieved as quickly as possible.
Ms. Slagle turned to the next item covering increased
construction costs for a new snow removal building in
Seldovia. The Federal Aviation Administration is pressuring
DOT/PF to get the projects going as soon as possible to see
results from federal funds.
Section 15(i). Capital: Surface Transportation Program
Allocation
The FY05 Surface Transportation Program
appropriation increases by $3,000.0 due to the
allocation change below:
Sec 1, Ch 159, SLA 2004, Pg 40, Lns 12-13
Amend Haines: Ferry Terminal to Union Street
[THROUGH TOWN TO OLD HAINES HIGHWAY] by $3,000.0
from $13,000.0 to $16,000.0
Sec 15(b)(5), Ch 6, SLA 2005, Pg 24, Lns 13-14
This project is ready to bid and construction can
occur as early as this spring if supplemental
authorization is provided. This timeframe will
allow full advantage of this year's construction
season. This additional authorization is
requested to fully cover the engineer's estimate
as well as inflationary factors occurring after
the development of the estimate. In addition, a
scope change has been requested. At the start of
this project in 1996, the terminus on the town
side was identified as "Mud Bay Road". This term
proved to be confusing to community members. In
response, DOT&PF has determined that it was in
the best interest to define the terminus side of
town as "Union Street". This terminus avoids
confusion as to the limits of construction work
within the city center of Haines.
Ms. Slagle defined the allocation as a combination of a
project name change and the addition of $3 million. She
described community confusion regarding the road that a
title change would clear up.
Co-Chair Chenault noted that the road would not go as far
and yet would cost an additional $3 million. Ms. Slagle
relayed that the increase was due to rising costs.
3:48:12 PM
Representative Kelly asked if the representative from Haines
agreed to the road terminus. Ms. Slagle believed the
confusion was in the community and not within the department
and the name change would clarify it.
Section 15(j). Capital: Surface Transportation Program
Appropriation
The FY02 Surface Transportation Program
appropriation increases by $750.0 due to the
allocation change below:
Sec 1, Ch 61, SLA 2001, Pg 35, Ln 19.
Section 15(k). Capital: Surface Transportation Program
Allocation
Amend Ketchikan: Tongass - Third Avenue Extension
Completion by $750.0 from $10,000.0 to $10,750.0
Sec 1, Ch 61, SLA 2001, Pg 41, Lns 18-21
This project adds a new route for storm water to
reach tidewater, and is necessary to respond to
neighborhood problems concerning current drainage
patterns. These urgently needed changes will
prevent damage to private properties from high
water flows on the downhill side of the Third
Avenue Bypass. This funding is needed so that
construction bids can be solicited early in the
year, before heavier rainfall later in the
season.
Ms. Slagle said that the first item of the pair was the
appropriation level and the second was an amendment for
adding $750,000 in federal receipts for extension of the
Tongass-Third Avenue in Ketchikan. Third Avenue has been
completed but there are environmental issues that need to be
resolved, including a catch basin near the foot of the
retaining wall and connecting the basin to Tongass Narrows.
There are concerns about the impact of drainage on private
residences. She emphasized that the work needed to be done
as soon as possible.
Section 15(l). Capital Appropriation: Susitna Valley High
School Rural Beacon System
Funds are requested to cover the emergency
installation of a temporary school crossing
beacon system at the Susitna Valley High School.
Last summer, the permanent school building
sustained catastrophic fire damage rendering the
school facility unusable. Subsequently, portable
temporary school facilities were set up at the
local senior center to house the students for the
next two school years, while the permanent
building is reconstructed. This temporary
facility is directly across the Parks Highway
from the permanent location, causing students to
cross the highway to get to and from classes.
$180,000
Ms. Slagle detailed the request for the Susitna Valley High
School beacon system. The high school burned down and the
students are temporarily housed in the senior center, which
necessitates students crossing the Parks Highway. An
emergency beacon system was set up for safety.
3:51:04 PM
Representative Kelly asked when reconstruction would be
done. Ms. Slagle believed construction would take two years.
Ms. Rehfeld added that the item was listed for funding in
the capital budget for FY 09.
Co-Chair Chenault commented that the costs for the beacon
were capital costs and he did not expect operating costs.
Section 26(a). Capital: Appropriation
Amend: Emergency and Non-Routine Repairs (Sec 1,
Ch 82, SLA 2006, Pg 85, Lns 17-18) by $128.2 from
$250.0 to $378.2 to cover the costs of the Kenai
Peninsula Flood - $48.2 and the Copper River
Highway - $80.0
Ms. Slagle pointed out that DOT/PF did not receive capital
funds in the current FY for emergency and non-routine
repairs and so was requesting the funds for Sterling Highway
and Ninilchik repairs because of Kenai flooding, and the
Copper River Highway.
Section 26(b). Capital: Scope Change
Scope Change - Pilot Station: Airport Relocation
[RUNWAY REHABILITATION] in Sec 1, Ch 3, FSSLA
2005, Pg 73, Lns 11-12.
A scope change is requested as the Pilot Station
airport rehabilitation project became a
relocation project in the Master Planning
process. The master plan recommended the airport
be relocated to a nearby ridge which is aligned
favorably with the wind, situated on excellent
material and does not have obstructions.
Ms. Slagle explained the next item as a name change request
on a previous appropriation for Pilot Station. Previously it
was identified as "Runway Rehabilitation" and it has been
determined that it is not feasible to lengthen the runway at
its current location. The master plan recommended relocating
the airport.
3:54:20 PM
Co-Chair Chenault queried costs to relocate the airport. Ms.
Slagle expected additional authority requests for more
funding before the relocation. The request allows work to
begin.
Section 26(c). Capital: Scope Change
Scope Change - Stony River Airport Relocation and
Airport Improvements [REHABILITATION] in Sec 100,
Ch 2, FSSLA 1999, Pg 63, Lns 6-7.
The initial rehabilitation project scope was to
include an extension of the runway. The project
has been revised to relocate the airport due to
the village's encroachment at the existing
facility as well as the topographical constraints
caused by the airport's current location between
meanders of the Kuskokwim River.
Ms. Slagle said the request changed the name of the Stony
River Airport. The issue is the encroachment of the village
on the existing facility; the airport will be relocated.
Representative Kelly asked if the items were federal funds.
Ms. Slagle said they were federal funds with state match.
Representative Kelly commented that some of the airports may
be overbuilding and stated concerns if the state was not
involved in the projects. Ms. Slagle responded that the
state is involved because it is doing the work; FAA has much
say in what airports they will fund, especially if there are
runway safety issues. The funds are provided with strict
requirements of needs. The funds are federal but are
matched. The state does identify projects and establish
priorities based on need, safety, and community support, but
the state works closely with FAA.
3:57:46 PM
Representative Kelly registered concern regarding small
improvements that end up being larger, as well as more
involved and costly. He commented on the size of the
population in the communities and questioned complete
relocation of the airports.
3:59:41 PM
Ms. Slagle elaborated that many of the expansions and
relocations are because of safety issues. Schools are right
next to runways. There are numerous points of consideration.
Section 26(d). Capital: Airport Improvement Program
Appropriation
The FY07 Airport Improvement Program appropriation
increases by $9,000.0 due to the allocation change
below:
Sec 1, Ch 82, SLA 2006, Pg 88, Ln 32.
Section 26(e). Capital: Airport Improvement Program
Allocation
Amend Kipnuk: Airport Reconstruction by $9,000.0
from $2,600.0 to $11,600.0
Sec 1, Ch 82, SLA 2006, Pg 91, Lns 3-4
Funding delayed to July would delay significant
draw down of the grant until the following
construction season. FAA is requiring early fiscal
year delivery dates to ensure that projects are
developed and bid early enough to take advantage
of the construction season in the year the grant
is issued.
Ms. Slagle detailed the two items as appropriation and
allocation for an amendment to add federal receipt authority
for Kipnuk Airport reconstruction. The engineer's estimate
has increased significantly.
Co-Chair Chenault highlighted the increase of 500 percent.
Representative Kelly queried if the match functions similar
to highway funding. Ms. Slagle answered that a certain
amount of money is provided in match that will support a
certain size of program. Other projects will not get done
because of the increase in this one.
Co-Chair Chenault asked if the department made the decision
regarding which projects are completed and the criteria
used. Ms. Slagle stated that there is a set of criteria that
determine how projects rank. The Aviation Project Evaluation
Board reviews each project to determine the highest
priorities, especially after receiving new engineer's
estimates. Bids on existing projects are taken into account
as well.
4:04:12 PM
Section 26(f). Central Region Support Services
The Environmental Protection Agency (EPA) has
initiated an enforcement action against DOT&PF,
alleging multiple violations of the Clean Water
Act. In addition, EPA is requesting information
regarding sand and gravel sources. EPA believes
that DOT&PF and its contractors have been
operating material sites without appropriate storm
water permits.
The EPA has proposed settling the case if the
State agrees to the entry of a consent decree(s)
that could involve the payment of significant
fines (Idaho and Hawaii have paid fines between
$500,000 and $1,000,000), be required to conduct
supplemental environmental projects, and provide
training within DOT&PF.
This funding would be used to collect evidence,
present a defense and begin negotiating a
settlement. It is anticipated that costs are
expected to be at least $500.0 during calendar
year 2008 so an extended lapse date through June
30, 2009 is requested.
$500,000
Ms. Slagle turned to the last item requesting GF for
collecting evidence, developing a defense, and negotiating
with EPA regarding violations in connection with the 2002
Kenai floods. Projects include the C Street extension
project, the Abbott Loop extension project, and the Soldotna
project. The majority of the violations identified have to
do with issues such as paperwork, permitting, or identifying
a qualified inspector. The department does not think any of
the violations are related to contamination. Costs include
legal fees, contractor costs, and hiring expert witnesses.
The department is attempting to avoid a consent decree and
fines.
Co-Chair Chenault thought that the money would be spent and
the state would still get fined.
Representative Kelly addressed the issue of matched funds.
He asked who was monitoring the way the funds are being
spent.
Ms. Slagle pointed out that the department has over $10
million dollars in the project already, so it is double, not
500 percent over. Co-Chair Chenault maintained that DOT/PF
only has the authority for $2.8 million. Ms. Slagle
disagreed, noting $10.1 million dollars in authority
appropriated by the legislature.
Co-Chair Chenault advised that the request was for $9
million more, but the sheet does not indicate the further
authority. Ms. Slagle thought there might be a misprint on
the spreadsheet.
Ms. Slagle then responded to Representative Kelly's
question. She explained that dealing with the program is a
balancing act. The project evaluation board determines the
priority of projects. Some of the project can be done later.
Representative Kelly thought that some of the items did not
make sense.
4:12:06 PM
Representative Gara asked if airport projects got the same
federal match as highway projects. Ms. Slagle answered that
the state match rate for aviation projects is four percent
and highways is closer to nine percent.
UNIVERSITY OF ALASKA
Section 7 - 9. Statewide Services: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Anchorage Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Kenai Peninsula Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Kodiak College: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Matanuska-Susitna College: Increase Fuel
Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Prince William Sound Community College:
Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Bristol Bay Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Chukchi Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Fairbanks Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Interior-Aleutians Campus: Increase Fuel
Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Kuskokwim Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Northwest Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Juneau Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Ketchikan Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
Section 7 - 9. Sitka Campus: Increase Fuel Costs
Funding received in FY08 as part of the fuel
trigger mechanism only replaced the FY07 one-time
funding, leaving UA at the FY07 funding level.
Therefore, in addition to the existing funds
received through the fuel trigger mechanism in
FY08, UA is requesting a FY08 supplemental to
cover the utility increases from FY07 to FY08.
PAT PITNEY, VICE PRESIDENT, PLANNING AND BUDGET, UNIVERSITY
OF ALASKA (Testified via Teleconference), summarized the 15
items as a campus by campus breakout for fuel cost increases
in excess of funding available through the trigger mechanism
of oil prices. She agreed with earlier comments regarding
the trigger mechanism in the current budget. She thought it
worked well, but was not sufficient, since the cap was set
at only $59 per barrel. In total, the University's items add
up to $2.3 million and cover all fuel including electrical
utilities.
Ms. Rehfeld spoke to general issues regarding the
supplemental bill. She explained that both early and regular
request items were put in the same bill for efficiency, but
acknowledged confusion. She clarified that number sections
are in the front. Sections 1 through 3 are in the front and
are called the early or fast track supplemental items.
Sections 13 through 18 in the language sections represent
fast track items, which have a higher need to be addressed
earlier.
Ms. Rehfeld pointed out an item that was missed in the
Courts presentation. The request for the Fairbanks judicial
chambers should be in the fast track section; an amendment
will be sent for that.
Representative Kelly noted the increase in supplemental
requests and asked if the process would move towards a more
normal process. Ms. Rehfeld hoped to set goals to minimize
supplemental requests and amendments. Things that the
administration believes are important and that have a
continuous on-going impact in FY 09 will be put into the
2009 budget. She noted that the fuel has worked well, but
will need to be addressed because of oil prices. The
administration was reluctant to pick what the number should
be as it will be adjusted again.
4:19:20 PM
Representative Kelly queried the final supplemental total.
Ms. Rehfeld answered the total was $257 million all funds
and $205 million general fund.
Representative Gara asked how the $205 GF amount compares to
the last to years of the prior administration and the first
two years of the present one. Ms. Rehfeld did not have those
numbers, but noted significant pieces in the $205 million:
$125 million in tax credit, $18.5 million in senior
benefits, and $13.5 million for the GGU agreements
retroactive to July 1. Bargaining unit agreements, to the
extent that they are known, should be included in next
year's budget.
Representative Kelly voiced relief in hearing the bigger
costs listed. He wanted the supplemental budget to function
as it was intended.
HB 343 HEARD and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 4:20 PM.
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