Legislature(2017 - 2018)ADAMS ROOM 519
05/08/2018 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB284 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 284 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 8, 2018
2:08 p.m.
2:08:07 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 2:08 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Steve Thompson
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Paul Labolle, Staff, Representative Neal Foster; Julia
Caufield, Self, Juneau; Alison Kulas, Executive Director,
Alaska Mental Health Board, Advisory board on Alcoholism,
Juneau; Don Habeger, Community Coordinator, Juneau Reentry
Coalition, Juneau; Richard Benville, Mayor, City of Nome,
Nome; Aliza Kazmi, Self, Juneau; Chris Dimond, Carpenters
Union and Building Trades, Juneau; Jeff Rogers, Division of
Administrative Services, Department of Environmental
Conservation; Kristin Ryan, Director, Spill Prevention
and Response, Department of Environmental Conservation;
Jeff Rogers, Director, Division of Administrative Services,
Department of Environmental Conservation; Pat Pitney,
Director, Office of Management and Budget, Office of the
Governor; Representative Justin Parish; Representative
Chuck Kopp.
PRESENT VIA TELECONFERENCE
Brett Carlson, Coldfoot Camp, Coldfoot; Lisa Vonbargen,
Borough Manager, City and Borough of Wrangell, Wrangell;
Deborah Hansen, Pike's Waterfront Lodge, Fairbanks; Janeen
Hutchins, Alaska Wildland Adventures, Girdwood; Vivian
Mork, Tlingit Nation, Sitka; Brett Woodbury, B.W.
Enterprises, Wrangell; Jamie Roberts, self, Wrangell; Kim
Wickman, Wrangell Cooperative Association, Wrangell; Ester
Ashton, Wrangell Cooperative Association, Wrangell; Angie
Flickinger, self, Wrangell; Polly-Beth Odom, Daybreak Inc,
Mat-Su; Kate Finn, Self, Homer; Caroline Venuti, Kachemak
Bay Campus of UAA, Homer; Kyan Reeve, Transit Director,
Ketchikan; Sarah Leonard, President, Alaska Travel Industry
Association, Anchorage; Kory Eberhardt, Alaska Travel
Industry Association, Fairbanks; Doreen Lorenz, Chair,
Friends of Jesse Lee Home, Anchorage; Tiffany Hall, Recover
Alaska, Anchorage; Colleen Dushkin, Association of Alaska
Housing Authorities, Anchorage; Chris Kolerok, Bering
Straits Regional Housing, Nome; Serene Rose O'Hara-Jollie,
Self, Fairbanks; Michael Fernandez, Williwaw Neighborhood,
Wasilla; Brenda Moore, Chair, Advisory Board to Mental
Health Trust, Anchorage; Gerald Hope, The Ride, Public
Transit, Sitka; Jay Bechtol, South Peninsula Health
Services, Homer; Jessica Cler, Planned Parenthood,
Anchorage; Besse Odom, Self, Anchorage; Jan Wrentmore,
Chair, Skagway Marine Access Commission, Skagway; Fernando
Salvador, Alaska Coalition, Anchorage; George Pierce, Self,
Kasilof; Allison Lee, Alaska Association for Personal Care
Support, Fairbanks; Jim Jager, Director, External Affairs,
Port of Alaska, Anchorage.
SUMMARY
HB 284 APPROP: CAPITAL BUDGET
HB 284 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the agenda for the day. He
indicated the committee would be adopting a committee
substitute and taking public testimony for HB 284.
HOUSE BILL NO. 284
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
2:08:51 PM
Co-Chair Foster explained to the public that the committee
substitute reflected the changes made by the Senate in the
amendment process. The committee last heard the bill on
April 30, 2018. He indicated that his staff would review
the changes from the previous work draft, version D.
Co-Chair Seaton MOVED to ADOPT proposed committee
substitute for HB 284 (FIN), Work Draft 30-GH2565\J,
(Martin, 5/7/18).
Representative Wilson OBJECTED for discussion.
Co-Chair Foster invited Mr. Labolle to the table.
2:10:08 PM
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, explained
that the first change the Senate made was adding $2 million
for the Alaska Travel Industry Association for tourism,
marketing, and development. The governor had asked for $3
million. The change could be found on page 3, line 18. The
next change was an addition of $2.5 million for the
Wrangell junkyard contaminated site clean-up. It could be
found on page 4, line 31. He noted that the governor's
original request was for $5 million.
Co-Chair Foster reported that he understood the funding for
the Wrangell site clean-up was an all-or-nothing funding
request. It was not recommended to do the project
partially. He asked if he was correct. Mr. Labolle
responded in the affirmative according to the Office of
Management and Budget (OMB).
Representative Wilson noted that $15 million had been spent
on the project. She wondered why that money could not be
used to move the contamination off of the island. Mr.
Labolle did not understand the representative's question.
Representative Wilson repeated her question. She indicated
that $15 million from the clean-up money had been allocated
for the junkyard in Wrangell. She understood that the
additional $5 million being requested could not be taken
from the clean-up fund and wondered why. She also wondered
why there was not a site on Wrangell. She asked what was
preventing the additional $5 million from coming out of the
clean-up fund rather than the general fund.
Mr. Labolle understood that since the project would be
removing materials from the island it would not fit under
the appropriation originally granted. The amount of $5
million was the additional amount needed to barge the
materials off the island. Originally, a local site had been
chosen, but residents opposed having the contaminated
material left on the island.
Representative Wilson asked if Wrangell had contributed any
matching funds.
Vice-Chair Gara hoped the Department of Environmental
Conservation (DEC) would be able to clarify the need for
the $5 million appropriation.
2:13:27 PM
Mr. Labolle reviewed the change on page 7, line 33 in the
amount of $750,000 to the Department of Revenue for due
diligence on the Alaska Liquified Natural Gas (AKLNG)
project. It was a part of the governor's original request.
Another addition was on page 8, line 29 for the Department
of Natural Resources for due diligence on AKLNG. He turned
to page 9, line 23 for money for weatherization in the
amount of $6 million. The addition was a correction. The
governor had requested $10 million in his contingency
budget. However, the senate funded only $6 million; $3
million in general funds and $3 million in federal funds.
The change was originally intended to be in the previous
committee substitute by the Senate but did not end up in
the bill. He continued to the change on page 17, line 10 in
the amount of $75,000 within the Department of Commerce,
Community and Economic Development for Community and
Neighborhood Watch. The next change was on page 17, line 14
for a financial review and analysis of the City of Nenana
for $60,000. He continued to the next change on page 17,
line 20 for $250,000 for the Alaska Healthcare
Transformation Project. It was the next step in the
healthcare authority feasibility study. Another change
could be found on page 17, line 25 for $500,000 to the City
of Anchorage for the Hillcrest subdivision clean water
improvements. It was to address a contaminated water
situation.
Representative Wilson asked why the clean-up money could be
used for this particular project but not on the Wrangell
junkyard project. Mr. Labolle would have to get back to the
committee with an answer.
Representative Wilson commented that when the bill came
from the other body there was no back-up materials provided
explaining the changes.
Co-Chair Foster asked if Mr. Labolle had any updates on the
backup material. Mr. Labolle had back-up material in the
form of a Total Project Snapshot (TPS) report that he could
provide to members. Representative Wilson replied, "That
would be great. Thank you."
Mr. Labolle relayed the next change on page 17, line 28 for
$2 million for the Anchorage Police Department for crime
prevention response and equipment. Representative Wilson
asked, "So, why Anchorage?" Mr. Labolle responded that
there was no back-up available on the project.
Representative Wilson suggested the allocation be changed
to a statewide expenditure. Co-Chair Foster believed there
was another allocation of $2 million later in the bill. He
reiterated that the committee was reviewing the additions
made to the capital budget by the Senate through the
amendment process.
2:17:34 PM
Mr. Labolle continued to the addition on page 18, line 11
of $2 million to the Alaska State Troopers with the
Department of Public Safety for crime prevention response
and equipment. It was a statewide appropriation.
Representative Wilson wanted to find out why one city
police was receiving $2 million and the other $2 million
was being shared statewide. She supposed she would wait for
the back-up.
Mr. Labolle continued that the next change was back-stop
language for the Department of Transportation and Public
Facilities appropriation for a federal highway match on
page 35, line 10. The legislature had similar language from
the previous year's capital budget projects. It stated:
"If the reappropriations used in this section fall
short of the calculation, then it will be back stopped
with general funds."
Mr. Labolle reported the next change on page 37, line 3 was
a reappropriation of about $1 million from the Jesse Lee
Home to the City of Seward for site clean-up and
remediation.
Representative Wilson asked if the money would help in
tearing the historic building down versus giving it to the
Jesse Lee Home to preserve it. Mr. Labolle indicated that
the money was not for the Jesse Lee Home but for the City
of Seward to mitigate asbestos by tearing down a building
that would otherwise collapse and become a public safety
hazard.
Representative Wilson wanted assurance that the city would
be using it for its intended purpose. It was her
understanding that the city would be using it to tear down
the Jesse Lee Home in its entirety. She indicated that many
historic buildings were going away and once they were torn
down, the action could not be reversed. Mr. Labolle
understood Representative Wilson's question more than
earlier regarding the money sitting somewhere then going
somewhere else. He explained that there was $1 million
allocated for the Jesse Lee Home. The grant was lapsing. In
the previous version of the Senate bill, they had used the
money for a federal highway match. In the current version,
the money was being reappropriated to the city.
2:21:00 PM
Representative Wilson spoke to the importance of preserving
the history of Alaska. She wanted to make sure that if the
legislature was going to give the money to a different
entity, the entity would be honest about what they were
going to do with it. She thought it would be prudent in
this instance to ask for a letter of intent from the
community. Mr. Labolle offered that he had a TPS report
available on the reappropriation that he could share with
the committee.
Mr. Labolle indicated that there were some technical
corrections for reappropriations. The Senate found that
there were insufficient funds in the previous version of
the bill. The Senate increased the federal highway match
and decreased the amounts reappropriated in the language
section totaling about $850,000. He asked if the committee
wanted him to go through the reappropriation clean-ups or
skip over them. Co-Chair Foster indicated he could skip
that detail.
Mr. Labolle continued to coding changes in statewide
appropriations. There were four coding changes: The
Community Resources went from statewide to Districts 7-31;
Klutina Road went from statewide to House District 6;
Municipal Harbor Facility Grant Fund went from statewide to
District 35; and the Newtok relocation went from statewide
to District 38.
Co-Chair Foster announced that the committee would be
hearing public testimony on the Capital Budget.
Representative Wilson WITHDREW her OBJECTION.
Co-Chair Seaton wanted to clarify that the committee was
reviewing version J.
There being NO OBJECTION, committee substitute for HB 284
Work Draft 30-GH2565\J, (Martin, 5/7/18) was ADOPTED.
^PUBLIC TESTIMONY
2:24:22 PM
Co-Chair Foster reviewed the time limit for public
testimony. The public would be allowed to sign-up to give
public testimony until 3:30 PM.
2:25:34 PM
JULIA CAUFIELD, SELF, JUNEAU, asked members to remove the
funding for the University of Alaska Anchorage (UAA) Long-
Acting Reversible Contraception (LARC) study from the FY 19
capital budget. She was a full supporter of Alaskans having
access to whatever birth control method they were most
comfortable with. She believed quality reproductive
healthcare should be affordable and easily accessible to
all people. She thought the LARC study was unethical and an
attempt to control women's bodies through the guise of
providing care. The study would result in contraceptive
coercion that would primarily effect already-marginalized
women in Alaska. Alaska was facing a health crisis, but the
funding for the LARC study would do nothing to address the
problem. Long-Acting Reversible Contraception was already a
proven and effective form of birth control. She suggested
the money currently allocated for the study could be put to
better use through substance use disorder treatment
programs and Medicaid services. She thanked the committee
for hearing her testimony.
2:27:09 PM
BRETT CARLSON, COLDFOOT CAMP, COLDFOOT (via
teleconference), spoke about his business operation and the
importance of supporting the tourism industry. He discussed
the positive affect of marketing on tourism. He noted that
marketing was the only lever that Alaskans had collectively
to increase the growth curve of the travel industry in the
state. He argued that the travel industry allowed small
businesses such as his own to sit at the economic table at
the ownership level. He opined that it was critical for
small businesses in Alaska to pull together to market
Alaska. He noted that businesses invested $18.7 million of
the $100 million that the travel industry provided to the
coffers of the State of Alaska. Marketing had dropped
considerably in recent years. He spoke of a plan designed
by a group of small businesses called the Tourism
Improvement District (TID). The plan had been introduced as
legislation but had not reached the finish line. He sought
support of $3 million in the capital budget to serve as a
band aide for marketing for the following year.
Representative Kawasaki thanked the testifier. He asked if
Mr. Carlson was aware of the amended version having $2
million. He asked about the $1 million reduction and how it
would affect the industry. Mr. Carlson responded that an
additional $1 million would make a significant difference.
Co-Chair Foster acknowledged Representative Justin Parish
in the audience.
2:32:33 PM
LISA VONBARGEN, BOROUGH MANAGER, CITY AND BOROUGH OF
WRANGELL, WRANGELL (via teleconference), spoke in favor of
funding the shipping costs for the contaminated soil and
other materials in Wrangell. Two years ago, the Department
of Environmental Conservation took on the challenge of
cleaning up what should have been an Environmental
Protection Agency (EPA) super fund site in her community.
Lead contaminated soil from the property was initially
planned for shipment off of the island. Underestimated
quantities of contaminated soil ballooned from 4,000 to
more than 18,000 cubic yards. The project budget was unable
to absorb the additional costs related to moving the
increased material to an appropriate disposal site in the
Lower-48. The Department of Environmental Conservation
formed an alternate disposal plan on Wrangell Island.
Unfortunately, the determined location was an area used by
the local tribe for generations for hunting and gathering.
Additionally, the site sat directly adjacent to the most
widely used community recreation area, Pats Lake. The
concern was that over time the now treated material could
become bioavailable entering into the eco system. The city
supported the governor's request for $5 million in the
capital budget to fully fund the project allowing for the
material to be moved off the island.
Vice-Chair Gara thanked Ms. Vonbargen's testimony. He asked
what would happen if the legislature accepted the Senate's
number and waited another year to provide the full $5
million. Ms. Vonbargen responded that the location of the
18,000 cubic yards of material was stabilized on the site
where the clean-up took place. The site was unsuitable for
the material to stay on because of the slope of the land.
It far exceeded what was allowed by regulatory standards.
The material had to be moved to a different location. The
liner covering the material was being damaged from time to
time from wind and other things and had to be patched. It
was checked daily by contractors. If additional funding
were to come a year later, the material would have to be
restabilized in its existing location. Additional funds
from the project budget would have to be used taking away
from a final solution.
2:35:44 PM
DEBORAH HANSEN, PIKE'S WATERFRONT LODGE, FAIRBANKS (via
teleconference), spoke in favor of funding tourism
marketing in the amount of $3 million. She thought the
funding would make a huge difference in the tourism
industry. She appreciated the legislature's efforts.
Co-Chair Foster requested that Mr. Labolle come to the
table to discuss the changes to the Juneau Access Project.
Mr. Labolle had skipped over the Juneau Access project
during his review of the work draft changes. He conveyed
that the $21 million that had been appropriated for the
upper Lynn Canal improvements was reappropriated by the
Senate to the Juneau Access Road. It could be found on page
36, line 3.
Vice-Chair Gara asked if the money would be spent within
the year or held in an account. Mr. Labolle responded that
the amount would be held in an account. There was a
significant amount of work to be done before the project
could forward.
2:38:50 PM
JANEEN HUTCHINS, ALASKA WILDLAND ADVENTURES, GIRDWOOD (via
teleconference), spoke in favor of supporting the tourism
marketing program at the level of $3 million. She suggested
that $3 million was the minimum needed to do anything of
value in the marketplace. She pointed to the correlation
between her business' success and the level of marketing
dollars invested by the state. Her business flourished most
following when statewide spending for the statewide tourism
marketing program was at its highest. She reported a
decline in trip inquiries and website visits for the first
time in years. She also noted a decline in revenues even
while investing in her own marketing budget. She thought
her decrease in revenue was directly related to the
severely reduced marketing programs over the last couple of
years. She thought that because the state had not
reinvested in tourism marketing to a greater degree, the
effects were starting to show. She reemphasized that $3
million was the minimum needed to do a good job.
2:41:47 PM
VIVIAN MORK, TLINGIT NATION, SITKA (via teleconference),
urged funding for the contaminated Byford Junkyard site in
Wrangell. She provided some information about her family
lineage. She spoke to the challenges around finding
additional contaminated soil. She was heartbroken about
having to fight for funding to remove the lead contaminated
soil and urged the legislature to restore it.
2:44:26 PM
BRETT WOODBURY, B.W. ENTERPRISES, WRANGELL (via
teleconference), spoke in favor of maintaining the level of
funding for dealing with contaminated soil in Wrangell. He
thought it was unnecessary to ask for additional money was
unnecessary because of the available designated site. He
thought it would be more cost effective to store the
materials at a monofill site rather than transferring it
off island. He spoke of the positive aspects of leaving the
materials on the island. He suggested that the end product
would leave the monofill area in better condition than at
the start of the project. He thought it was fiscally
irresponsible to spend the money, as Wrangell had more
pressing funding needs. He provided some examples. He urged
members to vote "No" on the amendment.
2:45:58 PM
JAMIE ROBERTS, SELF, WRANGELL (via teleconference), spoke
in favor of additional funding for the Wrangell
contaminated soil project. She spoke of the recreational
activities near the proposed monofill site in the Pat Creek
watershed. The watershed had substantial reaches of high
quality fish habitat. She named the various species of fish
that exist in the watershed. She mentioned the close
proximity of the stream reiterating her preference of
shipping the materials off-island. She asked members to
support the governor's request for $5 million to assist the
community of Wrangell in removing the lead contaminated
soil from the island. She thanked the committee for
considering her testimony.
2:47:44 PM
KIM WICKMAN, WRANGELL COOPERATIVE ASSOCIATION, WRANGELL
(via teleconference), spoke in support of adding $2.5
million to help with disposing contaminated soil off
Wrangell Island. She mentioned that the Wrangell
Cooperative Association conducted a survey pertaining to
the proposed Pat Creek monofill, which she wanted to share
with the committee. She relayed that 97 percent of the
people surveyed used the Pat Creek watershed for
recreating. She reported that 93 percent of people surveyed
were against the location of the Pat Creek monofill; 85
percent felt that the public involvement process was
inadequate; and 93 percent did not feel informed through
the initial planning and processing phase. Of those
surveyed, 65 percent were non-tribal members and 35 percent
were tribal members. The watershed was important to the
community of Wrangell. She asked members for their
consideration.
2:49:40 PM
ESTER ASHTON, WRANGELL COOPERATIVE ASSOCIATION, WRANGELL
(via teleconference), spoke in favor of additional funding
for the disposal of contaminated soil off the island of
Wrangell. She felt that Byford Junkyard was a matter of
safety and human health. She spoke of the lead contaminated
soil and its abundance at the location. She relayed that
EPA funding fell through and DEC took over in 2015.
Sixty-two shipping containers of contaminated material were
transferred off-island. The community was trying to deal
with the remainder of contaminated material equal to about
2,000 dump truck loads. She spoke of the dangers of not
removing the soil and provided additional detail about the
monofill site. She appreciated the governor's request of $5
million to assist in removing the material off the island
and hoped the legislature would support her request.
Representative Wilson asked who originally contaminated the
land. Ms. Ashton responded that the land was originally
privately owned by a family named Byford. The property was
foreclosed on by the City and Borough of Wrangell. The
Department of Environmental Conservation came in to
complete the clean-up. Representative Wilson clarified that
the city owned the land currently. Ms. Ashton responded
affirmatively.
2:52:25 PM
ANGIE FLICKINGER, SELF, WRANGELL (via teleconference),
spoke in support of additional funding for the transport of
contaminated soil off the island of Wrangell. She spoke
about the negative effects that could occur by leaving the
contaminated soil on the island. She asked members to allow
for $5 million for the project.
2:54:14 PM
POLLY-BETH ODOM, DAYBREAK INC, MAT-SU (via teleconference),
urged members to support the $18 million 4-year substance
abuse disorder grant program that the governor originally
introduced and included in his public safety action plan.
She provided details about the program and its benefits
throughout the state. She also implored the committee to
fully fund the FY 19 Medicaid supplemental request so that
providers like herself had the confidence to continue
providing services over the following month and a half. She
had three more pay cycles to meet and faced the real
possibility of having to suspend staff and services due to
the Medicaid shortfall. She thanked committee members for
their time.
2:56:36 PM
KATE FINN, SELF, HOMER (via teleconference), agreed with a
previous speaker about removing the funding for the UAA
Long-Acting Reversible Contraception study for several
reasons. She spoke about the differences between the
language of the bill versus what the people who would be
implementing the program indicated. She recommended that
the bill be vetted in the Judiciary Committee because of
potential litigation. She also argued that if people were
serious about stopping substance abuse they should not cut
out $18 million of substance abuse funding. She also opined
that if Medicaid was going to be a primary provider of
substance abuse services, there was now a reduction of $40
million in Medicaid funding. She thanked the committee for
hearing her testimony.
2:59:04 PM
CAROLINE VENUTI, KACHEMAK BAY CAMPUS OF UAA, HOMER (via
teleconference), requested that $86 million be reinstated
for renovations and deferred maintenance for the University
of Alaska. She was aware that the money was not in the
budget because it was contingent on the Alaska Recovery Act
passing. She argued against the contingency provision
because of the importance of the state taking care of its
property. She opined that the University of Alaska was a
state gem, but without maintaining the campus it would
likely lose funding and students. She thanked the
committee.
3:00:39 PM
ALISON KULAS, EXECUTIVE DIRECTOR, ALASKA MENTAL HEALTH
BOARD, ADVISORY BOARD ON ALCOHOLISM, JUNEAU, urged support
as laid out in the governor's budget of $18 million. She
relayed that her agencies were statutorily charged with
advising the governor, the legislature, and the departments
on the planning and coordinating of the State of Alaska's
behavioral health services. She provided a list of programs
and services the funds would support over multiple years.
She noted that the Alaska Psychiatric Institute (API) was
in a state of crisis and that funding was desperately
needed. She advocated that the governor's supplemental
funding request in the capital budget of $3.1 million be
supported. The funding would allow 20 nursing positions to
be filled at API and would increase salaries for existing
nurses. She strongly supported the request. She spoke of
the benefits of additional funding. She asserted that if
approved by the federal government, the department's 1115
Medicaid Waiver Demonstration Product would take pressure
off of API and other hospitals in Alaska - a lengthy
process. She believed that interim solutions were needed
during the state's behavioral health crisis. She asked for
members' support.
Vice-Chair Gara relayed that the funds were proposed by the
governor in the operating budget. The funds were limited
for a few years which was why the funds were proposed in
the capital budget. He did not mean for the funds to
disappear. He relayed that the Medicaid funding for
behavioral health would go towards helping people with
existing facilities. The funds Ms. Kulas was talking about
would be used to expand capacity which Medicaid funds could
not be used for. He asked if he was accurate. Ms. Kulas
responded, "Correct."
3:03:59 PM
DON HABEGER, COMMUNITY COORDINATOR, JUNEAU REENTRY
COALITION, JUNEAU, supported the $18 million appropriation
in the governor's version of the capital budget for
treating substance use disorders. The Juneau Reentry
Coalition was committed to reducing recidivism in the
community. He believed strongly that community supports
were necessary and asked for the committee's support the
$18 million for continued community treatment.
3:05:09 PM
RICHARD BENVILLE, MAYOR, CITY OF NOME, NOME, spoke about
the location of Nome and its proximity to the Arctic Ocean.
He noted the importance of building infrastructure to
provide accessibility to the Arctic Ocean. He had just
returned from Norway and indicated that the governments of
Finland, Norway, Sweden, and Russian were prepared for the
future. He emphasized infrastructure further North was
necessary. He asked the committee to place $1.6 million for
the preliminary engineering and design work for a port that
would open up the Northwest Passage. He stated that Nome
worked directly or indirectly with 53 ports. He thanked the
committee for its time and wanted to keep Alaska at the
forefront of the world.
Representative Wilson asked if the second part of the plan,
which he was requesting funding for, allowed for design
paperwork to provide to other entities including the
federal government to build the port. Mr. Benville answered
in the affirmative. He elaborated that it would give Nome
the material to request and get the port built. Previously,
the matching funds allowed the city to have a charrette
with several entities to explore the possibilities and
pitfalls of the project. The Pre-Construction Engineering
and Design (PED) would provide the ability to do the work.
Representative Wilson asked if the cost of the port would
be included. Mr. Benville answered that the costs would be
discussed. He indicated that the finished project would be
in the hundreds of millions. There were several designs
being considered. He stated that the reality was it was
happening. It was about Western Alaska and the US; Alaska
had more than half the US coastline. Representative Wilson
thanked him.
Vice-Chair Gara called it an Alaska port in Anchorage when
they wanted money. He thought they should call all ports in
Alaska, Alaska ports. Mr. Benville responded as long as
Western Alaska was not forgotten, it was important.
3:11:36 PM
KYAN REEVE, TRANSIT DIRECTOR, KETCHIKAN (via
teleconference), called in support of public and community
transportation and the appropriation of $1 million for
transportation. He stated that a state match program had
helped communities throughout the state to bring in many
millions of federal dollars. He noted that transit
supported the mobility of Alaskans and tourists to the
state. He reported that Ketchikan's transit system had been
ranked as one of the top in the world for support of cruise
visitors. The state match dollars help with the delivery of
transportation services and kept Alaska competitive in the
global tourism market. He argued that transit drove
economic development as well. Most federal transit grants
required between 10 percent and 20 percent local match. He
encouraged members to support for Alaska's transit system
in the amount of $1 million.
3:12:57 PM
SARAH LEONARD, PRESIDENT, ALASKA TRAVEL INDUSTRY
ASSOCIATION, ANCHORAGE (via teleconference), shared that
many Alaska businesses depended on the tourism industry.
The industry generated over $4 billion in economic activity
per year to Alaska including $190 million to state and
local budgets. The tourism industry represented 1 in 8 jobs
in Alaska. She stressed that Alaska needed to remain
competitive in tourism. She thanked the Senate Finance
Committee for its increment of $2 million. She encouraged
bringing the tourism marketing budget up to $3 million. She
claimed that at $2 million Alaska would remain at the
bottom of national destination marketing programs. At
$2 million the travel industry would only be able to keep a
consumer website going and do minimal media outreach.
Producing printed pieces such as the official State of
Alaska Vacation Planner" would not be available. She
relayed that with the additional $1 million the vacation
planner would likely be able to be produced. She advocated
that the money would be a good return on investment. She
thanked the committee members for their consideration.
3:15:18 PM
KORY EBERHARDT, ALASKA TRAVEL INDUSTRY ASSOCIATION,
FAIRBANKS (via teleconference), spoke in support of tourism
funds in the amount of $3 million. The statewide marketing
plan was important to his family and business. He provided
details about his company. He was concerned a $2 million
marketing budget would not be competitive. He supported the
development of a statewide vacation planner. He asked that
the funding level be increased to $3 million.
Representative Wilson asked Mr. Eberhardt to speak about
how tourism had come together even though the state no
longer gave as much funding to the industry as it had
previously.
Mr. Eberhardt answered that coming together had resulted in
a large growth in the industry in Fairbanks, particularly
during the winter. He believed it was the direct result of
the larger marketing budgets in 2012 and 2013. Fairbanks
was on the map for summer and winter tourism. He was
already seeing a few alarm signals. He reported that last
summer was flat. However, overall, the bed tax for
Fairbanks was up because of winter travel. He thought
winter travel would continue to increase. However, Alaska
was competing directly with places like Iceland and Norway.
Alaska was an international destination. He was concerned
about the market and not having funding to generate a
winter guide like the previous speaker mentioned. Two years
prior the marketing budget was $1.5 million, and for the
first time Alaska did not have a vacation planner - a
printed material that the baby boomer depended on.
Co-Chair Seaton thought he had heard Ms. Leonard say that
the ATIA could only maintain their website with a $2
million budget. Mr. Eberhardt answered that the $1.5
million would allow them to keep a website running and some
tours. The additional $500,000 would still not be enough to
produce a vacation planner. Printed materials were a costly
endeavor. However, people had one-to-relationships with
tourists they sent materials to. Every state in the Lower
48 had a vacation Plan.
3:20:11 PM
DOREEN LORENZ, CHAIR, FRIENDS OF JESSE LEE HOME, ANCHORAGE
(via teleconference), asked for a transfer of the remaining
grant fund from the Department of Commerce, Community and
Economic Development back to the Department of Natural
Resources where the project started. They had made a
request in the prior December to the DCCED Commissioner.
However, recently, Commissioner Navarre advised her that he
had no authorization and that the legislature would have to
make the transfer. The prior appropriations had been used
to stabilize the nearly 100-year-old buildings. The
organization had consulted with the top historic engineer
in the nation. She provided detail about finished
buildings. She stressed that none of the buildings were in
threat of collapse. All had been stabilized and remained
solid. Renovation costs were similar to what was spent to
build the Dimond Center Hotel in Anchorage 17 years
previously. She supplied additional information about the
project. The organization needed the remaining funds to
maintain stabilization against weather and vandal and to
complete the requirement of its purchase agreement with the
City of Seward. She mentioned a number of the requirements
in the contract. If the organization did not meet the
specified requirements, the City of Seward would demolish
the building. She continued to provide information about
the project and reiterated her support of the transfer. She
did not want the city to be able to destroy the historical
building.
3:24:01 PM
TIFFANY HALL, RECOVER ALASKA, ANCHORAGE (via
teleconference), called in support of the governor's
request for $18 million for substance use treatment and
community services. She spoke of a study by the state that
showed that Alaskans were dying at a higher rate than
anywhere else in the country. She explained the importance
of the funding. She indicated it was critical to fund and
expand Alaska 211 as a call line to provide information and
referrals. In the first year over 3400 calls came in
regarding treatment. She also spoke to the domino effect of
substance abuse. She noted that over one-third of Alaska's
households struggled with alcohol. She provided information
about the economic costs of alcohol. She argued that the
funding would not only help to reduce costs in the future,
but it would also save lives. She thanked the committee.
Vice-Chair Gara thanked Ms. Hall for her testimony. He
thought that many of the people in the behavioral health
treatment community assumed when the funds were available
they would be in the budget. He urged her to encourage
people at the conference to let the House Finance Committee
know how the funds would help.
3:28:01 PM
COLLEEN DUSHKIN, ASSOCIATION OF ALASKA HOUSING AUTHORITIES,
ANCHORAGE (via teleconference), spoke in favor of funding
the supplemental housing development grant program, the
senior housing development program, and the weatherization
program. She appreciated these programs being included in
the capital budget. She provided information and the
benefits for each of these programs. She requested that the
state allocated funding of $4.5 million to keep the
weatherization program at FY 18 levels in anticipation of
flat federal funding. She requested continued support for
all three programs. She thanked the committee.
3:30:25 PM
CHRIS KOLEROK, BERING STRAITS REGIONAL HOUSING, NOME (via
teleconference), relayed information about the association.
He spoke in support of the weatherization program and the
supplemental housing development grant program. He argued
that both programs warranted state investment even in
difficult budget times. Both programs served beneficiaries
in every corner of Alaska. He shared some statistics about
costs for heat in Alaska. Over 18,000 units had been
weatherized saving Alaskans close to $50 million annually.
He continued to supply some weatherization statistics. He
urged the committee to fully fund the weatherization
program at $4.5 million. He also supported the supplemental
housing development grant program. He provided additional
details about the program. He thanked the committee for the
opportunity to testify.
3:33:36 PM
SERENE ROSE O'HARA-JOLLIE, SELF, FAIRBANKS (via
teleconference), urged members to remove the $500,000
supplemental appropriation for the UAA long-acting
reversible contraception (LARC) study within the FY 19
capital budget. She had some deep ethical and moral
concerns regarding the study. It was already known that
LARC prevented pregnancy. There was no need to use tax
payer dollars for further study. She reported that there
was no provision in the study guaranteeing the safe removal
of LARC which would potentially put every woman in the
study at risk. She relayed that all LARCs had to be removed
and there was nothing in the budget that allowed for it.
She thought the study targeted vulnerable communities and
offered women a false choice under the guise of care. She
urged members to remove the funding of $5 million for the
dangerous study. She noted a number of issues surrounding
contraception. She urged members of the House to remove the
funding for the LARC study from the budget.
3:35:36 PM
MICHAEL FERNANDEZ, WILLIWAW NEIGHBORHOOD, WASILLA (via
teleconference), spoke in support of funding for the
Neighborhood Watch program. He read a list of funding items
in the capital budget. He thought it would be a failure on
the part of the legislature to fund $18 million for drug
addicts and not fund Neighborhood Watch made up of people
combating drug addicts from steeling in their neighborhood.
He argued that SB 91 was a large contributor to the
increased addiction cases in Alaska. He thanked members for
their time.
3:37:18 PM
BRENDA MOORE, CHAIR, ADVISORY BOARD TO MENTAL HEALTH TRUST,
ANCHORAGE (via teleconference), understood the previous
testifier's concern regarding crime. However, she relayed
that the $18 million would benefit people from families
that were struggling to overcome addictions. She spoke of
having the opportunity to participate in a number of
community grass roots operations coalitions. She mentioned
prison reentry, the Alaska Coalition on Housing and
Homeless, and the Greater Anchorage Area Partnership, and
the Anchorage Suicide Prevention Coalition. She pointed to
the common thread in these coalitions, which was working to
increase access to substance abuse treatment. She also
asked for support for the hospital-based behavioral health
care funding of $18 million. She asked for funding for
additional nursing staff at API. She thanked the committee.
3:40:43 PM
GERALD HOPE, THE RIDE, PUBLIC TRANSIT, SITKA (via
teleconference), provided some background information. He
requested an additional $1 million for the state community
match requested in the governor's budget for public
transit. He advocated that the public transit system went a
long way in getting people commuting. He appreciated
member's listening to his testimony.
3:42:32 PM
JAY BECHTOL, SOUTH PENINSULA HEALTH SERVICES, HOMER (via
teleconference), supported the $18 million for substance
use disorders. He also wanted to see the $45 million
Medicaid short fall funded. He could not imagine the effect
without the Medicaid funding for 6 to 8 weeks. He also
urged funding the matching funds for API nurses. He noted
that May was Mental Health Awareness Month, a national
month of recognition. He thanked members for any help.
3:44:25 PM
JESSICA CLER, PLANNED PARENTHOOD, ANCHORAGE (via
teleconference), urged members to remove funding for the
UAA long-acting Reversible contraceptive study. Although
Planned Parenthood shared the legislature's interest in
improving access to healthcare for women and children in
Alaska, and strongly supported efforts to improve access to
a full range of birth control methods, the organization
rejected any efforts that coerced any one particular birth
control method because it was cost effective or more
effective at preventing pregnancy. She relayed that Planned
Parenthood had been in contact with supporters of the study
through the movement of its original bill, SB 198. The
study proposal prioritized the provisions of LARC over
other birth control measures and did not adequately
safeguard the reproductive autonomy of study participants.
It included insuring study participants having access to
LARC removal during and after the study. As written, the
study proposal did not take follow-up care to discontinue
use into account and the funding allotted in the capital
budget proposal did not included enough to put a process in
place. On Demand removal was mandatory and it could not be
assumed that this and other concerns would be addressed
later. Birth control was not a one-size-fits-all. She
argued that steering women with substance use disorders to
LARC over other methods to prevent pregnancies was
contraceptive coercion. She suggested that funding the
study would perpetuate the nation's long history of birth
control experiments and marginalized groups of women. She
urged members to instead fully fund critical Medicaid
services and substance use disorder treatment programs.
3:46:50 PM
BESSE ODOM, SELF, ANCHORAGE (via teleconference), spoke in
opposition of the long-acting contraceptive study. She felt
that the LARC study looked at women as lab rats. She
thought the study focused solely on the reproductive system
of women dealing with substance abuse disorders. She opined
that the proposed legislation simply failed to address the
issue of substance abuse within the state. She thought
supplying marginalized and vulnerable women with long-
acting contraceptives was not a long-term solution to the
state's overwhelming statistics. She brought up the notion
of coercion. She urged members not to support the LARC
study appropriation. She thanked the committee.
3:49:48 PM
JAN WRENTMORE, CHAIR, SKAGWAY MARINE ACCESS COMMISSION,
SKAGWAY (via teleconference), reported she was a business
owner in Skagway. She offered her support to a healthy
marketing budget for tourism. She highlighted page 36,
lines 9-15. she thought there was some redundancy in the
language. She reported that there was an existing
appropriation of $21 million on the books for the
enhancement of transportation and infrastructure in the
greater Lynn Canal area. She believed that Juneau was part
of the greater Lynn Canal area. There was no reason the
money could not be spent on Juneau improvements. She also
thought it was important that the language stay general
because there were significant needs in the region. Both
Haines and Skagway had transportation related improvement
needs. She mentioned the Skagway's ferry float needed to be
replaced, as it was over 30 years old. She thought the
money would sit in an account for a long time because the
project was not shovel ready. She thought the money should
remain for shovel ready projects. She relayed information
about a project that she thought would never happen. She
thanked the committee for the opportunity to testify.
3:53:26 PM
ALIZA KAZMI, SELF, JUNEAU, asked members to fully fund
community-based substance use disorder treatment and
Medicaid funding. She asked members not to support the UAA
LARC study. She relayed that she felt informed about birth
control because her doctor informed her of the choices she
had. She also noted the previously stated concerns around
reproductive coercion and removal on demand. She expressed
her her concerns about access to reproductive health care
and about expanding access to substance abuse treatment.
She asked members to invest in critical behavioral health
and other pressing health needs. She thanked the committee.
3:56:09 PM
CHRIS DIMOND, CARPENTERS UNION AND BUILDING TRADES, JUNEAU,
spoke in favor of Juneau Access funding. He spoke to the
advantage of the project regarding the labor force. The
project would employ workers from around the state. He
reported that the project was shovel ready. The only thing
holding up the project was a record of decision. He relayed
that 60 percent of District 34 and 54 percent of District
33 supported the road. He had been hearing about the road
for more than 40 years and thought it was time to build it.
He argued that infrastructure projects made Alaska strong.
He urged members to either leave the money where it was or
re-designate for the capital access project.
Representative Wilson commented that she had been waiting
for gas for 40 years. She asked Mr. Dimond if he was aware
of the number of jobs the Lynn Canal Project would bring
compared to the Juneau Access Road Project. Mr. Dimond
responded that he was not aware of a project slated for the
upper Lynn Canal. It was a potential project. Whereas, the
Juneau Access Road Project was ready to go and would have
500 jobs.
Vice-Chair Gara thought the project was estimated to be a
$600 million construction project. He asked about the
purpose of the $21 million. Mr. Dimond responded that the
$21 million would be placed in the account with an
additional $21 million, and the money would be matched with
federal dollars. As soon as the record of decision was
completed and signed off by the governor, the project could
begin. The money could sit in the account for about 9
months then be put to use to contract the project out.
Vice-Chair Gara asked Mr. Dimond if he thought the project
would go without legislative approval of the funds for the
project. He was wondering if the money would sit in an
account until the legislature decided to fund a $600
million road. Mr. Dimond responded that his understanding
was that the money sat in the account until the project was
signed-off. He noted the people in the room and the
governor needed to sign-off on the project.
Co-Chair Seaton understood that the project was not on the
State Transportation Improvement Project (STIP) list and
that funding from the federal government would not be
available without being on the STIP list. Mr. Dimond could
not answer the question.
4:00:46 PM
JEFF ROGERS, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, introduced
himself and indicated he was available for questions
regarding the Wrangell project. Representative Wilson asked
about the storage site chosen in Wrangell. She asked about
the concerns of keeping the site in Wrangell versus sending
out the contaminated soil. Mr. Rodgers responded that the
site at Pats Creek at the rock quarry was an ecologically
and environmentally sustainable site. It was a viable site
that met all of the department's requirements for a
monofill of its nature. Out of an abundance of respect for
local concerns, including recreational and subsistence use
of the area around Pats Creek, the governor advanced an
amendment to ship the soil South.
Representative Wilson asked if he could use the current
clean-up money, $15 million, if DEC was to leave the
contaminated soil in Wrangell and utilize the site that was
designated. Mr. Rogers responded that out of the $14
million that was currently authorized for the site, the
department had spent about $8.3 million to-date. The $5
million request the committee was addressing currently
would add to money that was already authorized but unspent
to complete an off-island transfer.
Representative Wilson wondered about the cost if the soil
were to remain in Wrangell. She wondered if the additional
$5 million would be needed. Mr. Rogers responded
affirmatively. He elaborated that the $14 million currently
authorized from the response fund was enough to complete
the on-island storage option.
Representative Wilson asked if he was aware of any other
junkyards that belonged to a municipality where the state
had stepped in with general fund dollars to do clean-up
versus the municipality using their own funds. Mr. Rogers
deferred to Ms. Kristin Ryan. Representative Wilson was
asking because the Fairbanks North Star Borough decided
that they would also take back a property through
foreclosure and found out it was contaminated. The borough
was able to get some federal funding but also used its own
money. She was concerned about establishing a precedent.
4:03:47 PM
KRISTIN RYAN, DIRECTOR, SPILL PREVENTION AND RESPONSE,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, responded that it
was unusual for the state to step in and provide funding to
address a contamination issue. The threshold was a serious
and imminent threat. Often junkyards did not reach that
threshold. They might be an eyesore and might have some
minor contamination issues. However, they do not usually
contain the kind of contaminants that would raise enough
concerns to where DEC felt it needed to step in. One
instance had occurred in Fairbanks in the prior winter. The
Department of Environmental Conservation utilized the
response account to clean up a privately held junkyard.
Ownership was not necessarily something DEC considered.
Risk and the potential for a responsible party to have the
funds to address the issue were factors. If a party did not
have the funds and DEC was concerned with the risks, the
department would step in. If there was a viable responsible
party, the department would often expect them to do the
clean-up.
Representative Wilson asked if money from the spill
response fund was used rather than undesignated general
funds. Ms. Ryan responded affirmatively.
Representative Wilson asked if there was a mechanism for an
entity, such as a city, to borrow money from DEC's fund.
Ms. Ryan was not aware of any other financing options by
DEC. The Department of Environmental Conservation had
municipal loans provided primarily for water and sewer
projects. Sometimes landfills were also allowed. It was a
zero-interest loan. However, she was not aware of it ever
being used in a situation like the one in Wrangell.
Representative Wilson commented that the legislature would
be setting a precedent, which she was not comfortable with.
She believed that DEC would not suggest a site unless it
could be contained. She understood the community might not
want the contaminated soil to remain in Wrangell. However,
she did not agree with the state stepping in with $5
million. She thought other entities would follow with a
similar request. She thought municipal loans might be an
alternative option.
4:06:37 PM
Vice-Chair Gara needed to better understand the $5 million
request. He asked what funds were proposed to be used. Mr.
Rodger explained that it was the department's position that
the response account allowed the department to work on the
site in an effort to address the immediate risk to human
health and the environment. Having identified a viable
option that met all of the regulatory requirements, the
department saw the amount as a limit of the department's
statutory authority from the response account.
Vice-Chair Gara wondered if Mr. Rogers was saying that the
response account allowed the department to do a limited
amount with the waste, but not ship the waste to a place
where it was safe.
Mr. Rodgers replied that there was a presumption by the
department that it would choose the lowest cost option that
met environmental standards and protected human health. The
department would certainly not spend more on a site than
was necessary to clean it up from the response account.
Vice-Chair Gara wanted to look at fund sources. He remarked
that the state was struggling to stay afloat financially.
If it would be proper to use the response fund, why would
general funds be used. Mr. Rodgers relayed that the
department did not think it was appropriate to spend from
the response fund. He clarified that DEC spent from the
response account without appropriation. The department used
the funds for emergencies to address risks to human health
and the environment. When the department spent money from
the account the legislature was notified. It was the
department's position that in all cases it would execute
the lowest cost viable plan that addressed human health
risks and not spend more than that. The department
supported the governor's request because it answered DEC's
legitimate concerns about public use of the area. However,
it was not to say that the department did not think the
Pats Creek Rock Quarry was an environmentally acceptable
option.
4:09:11 PM
Vice-Chair Gara asked Mr. Rodgers to review the funding
sources proposed for use and to explain why the response
fund could not be used. Mr. Rodgers responded that the
request proposed to use general funds. The department
thought the response fund was not the preferred source
because the response fund was there for the lowest cost
method to address an environmental risk. The department's
position was that the Pats Creek Rock Quarry addressed the
risk to environmental health and public health.
Vice-Chair Gara understood that the department was
proposing not to use the quarry and proposing to ship the
soil away. He also understood it was the department's
preference not to use the response fund. However, there
were competing needs such as drug and alcoholism abuse
prevention. Apart from the department's preference not to
use the response fund, he asked if Mr. Rogers had an
opinion whether it was legal. Mr. Rodgers responded that
"legal" was in the eye of the beholder. He reported that
the department had developed an opinion that further use of
the response fund on the Wrangell site was not appropriate.
Vice-Chair Gara rebutted Mr. Rogers' comment about legal
being in the eye of the beholder. He asked if the quarry
site was a natural quarry. Ms. Ryan indicated that it was a
natural quarry that the department had invested in to
prepare the site to receive the rock waste. She added to
the previous discussion that the response account was a
limited fund and something the department rarely used. The
legislature created the fund for the state to have an
emergency source of revenue to deal with a large event. If
the department were to spend it all, the funding would not
be available for its intended purpose. She understood the
idea of it being a competing resource. However, if the fund
was utilized for the $5 million, the fund balance would be
much lower.
Vice-Chair Gara wanted a legal opinion on whether the funds
could be used. He added that "legal in the eye of the
beholder" did not work for him. He wondered why the state
had started preparing the site, if it was not a proper
site. He asked how much money had already been spent
preparing the site. Ms. Ryan corrected Vice-Chair Gara. The
Department of Environmental Conservation thought Pats Creek
was a fine site and that either option was equally viable.
The department was not saying one option was better than
the other. The community had expressed substantial concern
that it did not want the waste rock on the site initially
pursued by the state.
Vice-Chair Gara asked how much the state had already spent.
He also wondered why the department would spend money on a
site that it later decided was a traditional area. He also
asked if people were correct that the site endangered fish
habitat and water quality.
Co-Chair Foster asked Ms. Ryan to take some time to think
about her response. In the meantime, there were three more
people standing by to provide their public testimony. There
were other members with questions, and he did not want to
hold people waiting to testify.
4:13:49 PM
FERNANDO SALVADOR, ALASKA COALITION, ANCHORAGE (via
teleconference), spoke in favor of restoring funding of
$3 million for tourism marketing dollars. He thought it was
a reinvestment in Alaska small business and in Alaskans. He
reported that 1 in 8 jobs in Alaska was tourism related. In
order to stay competitive in the global market, these
marketing funds were needed. The marketing funds had been
slashed significantly. Until those businesses in the
tourism industry came up with a plan, they continued to
need help to make Alaska a viable competitive global
partner in tourism. He asked members to reconsider
increasing the funds to the $3 million level. He
appreciated members' time and consideration.
4:15:30 PM
GEORGE PIERCE, SELF, KASILOF (via teleconference), spoke in
favor of further reducing the budget. He urged members to
weed out fraud and waste. He encouraged taxes for
corporations. He thought it was important to tax fairly. He
did not believe the state could afford the proposed
spending. He disagreed with the split for the Permanent
Fund Dividend (PFD). He did not believe new taxes had been
addressed properly. He concluded by urging the committee to
stop adding to the budget.
4:18:30 PM
ALLISON LEE, ALASKA ASSOCIATION FOR PERSONAL CARE SUPPORT,
FAIRBANKS (via teleconference), advocated for full Medicaid
funding and elder program funding. She relayed that payment
suspensions would occur without fully funding the Medicaid
supplemental. She argued that a lack of action was not the
way to deal with things. She relayed information about
personal care services and urged quick action by the
legislature. As she understood it, the remainder of the
Medicaid supplemental funding was not in any budget. She
thanked the committee.
4:22:13 PM
Co-Chair Foster CLOSED Public Testimony.
Co-Chair Foster invited Ms. Ryan and Mr. Rogers to the
table.
Vice-Chair Gara asked about whether fish habitat or water
quality would be in danger. He also asked why the site
would have been chosen with the opposition from community
members. He wondered how much had already been invested.
Ms. Ryan responded that the site was selected after a
substantial process of investigating shipping off-site and
a location on the island. The site was selected for
environmental reasons. It was one of the best places in the
state she had ever seen for a monofill. The state had
complete control of the environment - complete control of
water infiltration into the rock. She reiterated that the
department was very certain the site was a safe
alternative. However, it was located in a location the
community had concerns about. It was near a lake less than
a mile away. The community did not feel comfortable with
the location even though DEC did from a scientific
perspective. It was not an unusual situation for DEC. She
also relayed that the soil had already been treated and
there was no further risk of lead leaching out. The
department had conducted several public meetings in the
community, yet people continued to have concerns.
Mr. Rogers reported that DEC had spent $8.3 million on the
site. The department authorized $13.9 million to be spent
on the project. There was roughly $5.5 million unspent
authorization from the response account for the site. The
amount of $5 million in general funds requested by the
governor was in addition to the unspent $5.5 million. The
response account would continue to pay $5.5 million, and
the department was asking for $5 million in general funds -
the difference between finishing an on-island storage
option at Pats Creek and an off-island shipping option.
4:26:35 PM
Representative Pruitt asked, since the state had already
spent more than $8 million and was currently addressing the
community concerns, why the state had not addressed the
community concerns earlier before $8 million was spent. Ms.
Ryan answered that there had been significant dialog and
over time the attitude changed. She would not say there was
not a significant amount of involvement, the attitude had
shifted as the project advanced.
Representative Pruitt stated his understanding of the
testimony that the site was fine, and the lead was no
longer an issue. He stressed that the department had not
sold him on the need for an additional appropriation of $5
million. He would have to support the removal of the funds
if the department could not sell the idea. Mr. Rogers
answered there were very strong feelings about the issue in
Wrangell. He believed the site at Pats Creek to be
environmentally viable. However, it did not mean
individuals wanted it in their backyard. There was a higher
cost option that the governor supported.
Representative Pruitt stressed that it went back to the $8
million that had already been spent. He was concerned that
the department did not take the community feedback into
account. He thought the money had been wasted. The state
did not have the money.
Co-Chair Seaton indicated that the department had testified
where it was in the process, that it had conducted
community meetings, and that attitudes in the community had
changed. He urged Representative Pruitt not to be
accusatory.
4:30:40 PM
Ms. Ryan clarified that the money had not been wasted. It
was utilized for either option. Some of the money was spent
digging up the rock and treating it with eco-bond, things
that would have happened no matter which option was
selected. She reiterated that the money was not wasted.
Co-Chair Seaton clarified that the money that was spent was
used for digging out and treating the soil so that it could
be disposed of anywhere. It was not just preparing the rock
quarry. Ms. Ryan responded in the affirmative. She noted
that a small amount was used to prepare the quarry. The
remaining amount of money that the department was prepared
to spend was to ship it to the rock quarry.
Representative Pruitt did not believe the question was
answered. He thought the $8 million was the amount it cost
to prepare the quarry which was the reason for his concern.
If some of the funding was used to process the soil he did
not have as much frustration. He would appreciate a
separation. Ms. Ryan answered they were happy to provide
the information.
Representative Ortiz followed up on Representative Pruitt's
concerns. He relayed he had been to the site where the
original issue had occurred. He understood that a
significant amount of money had been spent on digging up
the site and there continued to be maintenance on the site
before the final removal of material. Ms. Ryan answered in
the affirmative. She detailed that there were ongoing
maintenance costs. The treated soil was on a very steep
slope. It had to be kept covered to keep it from sloughing,
which was one reason the department was pushing to complete
the project in the current year. There were ongoing state
costs to maintain the soil until a solution was decided.
Representative Ortiz believed there had been testing of the
water at the current site and thought there had been water
contamination found. Ms. Ryan answered in the affirmative.
She explained that before the soil was treated it had
leached lead across the highway into shell fish harvest
areas. The department had spent approximately $7 million in
cleaning up the site and treating the material. The
majority of the money spent so far would have been spent
with either option.
4:34:35 PM
Representative Wilson stated that the bottom line was that
DEC could have used the entire $14 million to move the
material to a safe site. She suggested that the issue was
not about safety. She opined that if the community did not
want it at the site, it should have the option to locate it
somewhere else. However, she thought the community should
be responsible for funding the balance if it wanted a
different option. She did not believe the issue was about
safety. She thought the policy call was whether to follow
DEC's plan at the lowest possible cost, or let the
community choose an alternative at no cost to the
community. She referenced backup pertaining to the
Hillcrest Subdivision Water District (copy on file). She
surmised that if the state caused a problem to someone's
drinking water, she did not know why the state would only
pay $500,000 of $2 million charging each homeowner $25,000
to participate in a water program. She brought up concerns
about liability issues. Ms. Ryan was unfamiliar with what
the representative had mentioned. Representative Wilson
asked if the department could get back to the committee.
Co-Chair Seaton thought the issue fell within the
jurisdiction of the Department of Transportation and Public
Facilities. Representative Wilson contended it was a DEC
contamination issue. The Department of Transportation and
Public Facilities might have caused to contamination. The
issue had to do with water. Co-Chair Seaton commented that
it was drainage. Representative Wilson argued that if the
wells were contaminated because of something DOT did,
someone at DEC would have had to determine the wells were
unsafe. She wanted someone to get back to the committee and
provided the name of the project.
Co-Chair Seaton asked if the Wrangell situation pertained
to batteries or mining waste. Ms. Ryan replied that Mr.
Byford was a junkyard operator and broke batteries up with
a hammer; it was the worst lead contamination the EPA had
seen.
4:39:12 PM
Co-Chair Foster REOPENED public testimony on HB 284.
4:39:33 PM
AT EASE
4:42:53 PM
RECONVENED
Co-Chair Foster asked to hear from Ms. Pitney regarding the
Wrangell issue. He wondered about the possibility of
expanding the spend authority of the Spill Response Fund by
$5 million.
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, answered that DEC's concern was
respecting the boundaries of the spill response fund. She
asserted that it was a privilege to have access to the
funds without additional appropriation. Since the request
went beyond the lowest cost option, a $5 million direct
appropriation from the spill response fund within the
budget would serve that need.
Representative Guttenberg thought the answer might be to
require an appropriation bill for any cost beyond the
lowest cost option.
Vice-Chair Gara respected that DEC did not want to spend
money out of the fund beyond what the department felt
comfortable with. He wondered if the department would be
satisfied with intent language that allowed the spending.
He wondered why an appropriation was necessary when DEC was
already authorized to access the fund.
Ms. Pitney responded that it protected the integrity of
DEC's honoring of the legislation and their accountability
to the fund source. It was imperative that DEC had access
to address and respond to spills immediately. A named
appropriation was stronger than intent language and DEC
would be better protected. It was a policy call.
4:46:26 PM
Representative Wilson heard from DEC that the fund did not
have much in it. She asked if the administration would be
concerned opening up the door to what could be paid from
the fund. She questioned how healthy the fund would remain.
Ms. Pitney answered that the fund was healthy with a
balance of approximately $42 million. The fund would be
drawn down to $37 million plus whatever was spent
throughout a year. The fund was replenished with a tax on
oil and a .95 cent fuel surcharge. There might be a time
when the fund could be over-used. If that was the case, the
legislature would be notified.
Representative Wilson was concerned about being able to
hold the person liable for the contamination. She relayed a
circumstance in Fairbanks where the city repossessed a
property and adopted the same problem as the new owner. She
thought that once the precedent was set with the property
[in Wrangell], any municipality with a junkyard would be
able to argue their case to DEC and point to the project as
a precedent. She also thought the legislature was about to
set a precedent regarding additional funding [to move the
contaminants off-island]. She suggested that if there had
been no place to put the contaminated material, it would
have been a different scenario. She believed DEC did its
due diligence. She did not want everyone throughout the
state to think they could use whatever option, no matter
the cost.
4:49:01 PM
JIM JAGER, DIRECTOR, EXTERNAL AFFAIRS, PORT OF ALASKA,
ANCHORAGE (via teleconference), spoke in support of $40
million for construction funding for the Port of Alaska
modernization project in the state capital budget. He read
from a prepared statement:
Port of Alaska is a publicly owned facility that
handles half of all of Alaska's in-bound marine
freight. Almost 3.5 million tons of fuel and cargo
passed across the Port of Alaska's docks in 2017. Half
of the cargo that moves through the port is delivered
to final destinations outside of Anchorage and
directly benefits some 85 percent of all Alaskans. The
port originally opened in 1961 and its docks played
key roles in Alaska's growth and economic development.
The half-century-old facility has exceeded its
economic and structural design life and is failing due
to corrosion and obsolescence. The dock's aging piles
have lost up to three-quarters of their original
thickness and are unlikely to survive another
significant earthquake. The existing docks will start
closing due to reduced load capacity within about 10
years regardless of repairs or anything else. For
these reasons, the Port of Alaska is moving forward
with a program to replace its aging docks before they
fail. The port modernization program will replace
aging dock and relating infrastructure to include
operational safety and efficiency, accommodate modern
shipping operations, and improve resiliency to enable
the facility to survive extreme seismic events and
Cook Inlet's harsh marine environment for at least 75
years. The dock replacement plan is optimized to meet
Alaska's cargo handling needs, reduce costs, and
maintain ongoing port operations. Shore construction
for the first new dock will start this summer, 2018,
and the overall project construction is expected to
last at least 8 years and will cost more than $700
million depending on final project scope and design.
All new state and federal funds, including funds from
the state capital budget, will be used to pay
construction costs and offset the shipping fees and
tariffs that would otherwise be levied to repay
revenue bonds that will help finance the project. I
appreciate your careful consideration and support for
funding to replace the Port of Alaska's aging docks to
benefit all of Alaska. Thank you.
Vice-Chair Gara stated that the name, Port of Alaska,
resonated with some and bothered others. He pointed out
that the port did not support the entire state and it was
owned by the City of Anchorage. He reported that the
project had gone up to a cost of $1.2 billion and, as of
about a year ago, was scaled back to a cost of about $350
million. He referenced the $750 million cost cited by Mr.
Jager. He asked for the cost of the project.
Mr. Jager was not certain what Vice-Chair Gara was
referring to when citing the costs. He explained that the
project costs would depend on the final scope of the
project and what was included. For example, there were
costs associated with repairs which had to be done after
the failed port intermodal expansion project. The
approximate costs were between $200 million to $250
million. It was possible those costs would be paid from the
MARAD [U.S. Maritime Administration, a wing of the federal
Department of Transportation] lawsuit. The total cost
depended on what was included in its scope.
Vice-Chair Gara was glad to be reminded of the MARAD
lawsuit. He remembered he had been very complimentary of
the mayor for getting the cost down to roughly $350 million
plus the settlement proceeds. He asked if the project was
possibly larger.
Mr. Jager answered that the project was larger because the
design had progressed, and the permitting was being
finalized. There were portions of the project that were
more expensive than initially anticipated. For instance,
the Corp of Engineers had requested that the port
reposition the petroleum and cement terminal of which
shoreside construction was anticipated to begin in the
upcoming summer. The repositioning would involve $18
million to $20 million worth of transitional dredging that
would not have been included in the budget the previous
summer. The price was a moving target.
4:54:43 PM
Vice-Chair Gara understood that currently the discussion
was about $40 million. However, the cost of the project had
been a moving target. He recalled that the project started
out as $175 million and went up to $1.2 billion. He asked
what the $40 million would be used for.
Mr. Jager answered that any funding would go towards the
construction of a new dock. The port had enough funds in-
hand left over from the port intermodal expansion project
and from operations to cover the anticipated design and
permitting costs. Additional money would need to be raised
to pay for construction. The funding could come from state
or federal sources or from port tariffs and fees. Any
funding the port received from state or federal sources
would be used to offset the tariffs and fees that would
eventually be added to the cost of shipping and paid by
Alaskans getting cargo shipped across the port's docks.
Vice-Chair Gara stated there had been discussion in the
capitol building that the longer the port remained in
disrepair, the more expensive the repairs would be. He
wanted to clarify that none of the $40 million would be
used for maintenance of the port. He asked if repairs would
be covered with other funds.
Mr. Jager answered that the money spent currently for
repairs, such as stabilizing the port's dock fenders and
installing pile jackets, was coming out of operational
funds.
4:57:06 PM
Representative Guttenberg spoke of some of the cynicism
about the project and the escalating costs, which did not
help the legislature. It had been awhile since he had seen
the total cost of all aspects of the project. He would like
to see what the state was getting and the future
obligations of the project.
Representative Pruitt wanted to understand the scope of the
project. The port was substantial, but the docks held the
greatest concern for him because of challenges such as
seismic issues. He mentioned the potential to cut off
outside food sources and other things. He asked if the $40
million would go to shore up the problems to ensure there
was not a cut in service.
Mr. Jager answered that the $40 million would help fund
construction for new docks to replace the aging docks that
were currently failing due to rust. The money would not be
used for new tanks. All of the fuel tanks on the port were
privately owned and operated. They were not public
infrastructure. Instead, they were infrastructure that the
dock leveraged and that leveraged the dock.
5:00:07 PM
Representative Pruitt asked if the $700 million mentioned
earlier was for the entire project or just the dock repair.
Mr. Jager corrected Representative Pruitt indicating that
the docks would not be repaired; they would be replaced. He
elaborated that a repair project had been ongoing since
2006 in which steel jackets had been placed over the piles
to reinforce the corroded piles. The port had jacketed
about half of the piles on the dock. It was a one-time fix
that lasted about 15 years. Based on calculations, he
expected the docks to start closing in about 10 years. It
was not possible to re-jacket a jacketed pile. The main
difference between the new and existing docks was that the
new docks would be built to modern seismic standards, and
they would be built to modern shipping standards. The
existing docks started opening up in 1961 when container
ships and cargo vessels were significantly smaller than
they were today. For example, the new docks would be about
100 to 150 feet farther out into the ocean. The port would
have berths that were 45 feet deep instead of the 35 feet
berths it had currently to be able to better handle modern
ships. The new docks would be set up for 100-gauge cranes
as opposed to 38-gauge cranes on the current docks. He
reiterated that it was a replacement project. It would be
replacing docks that had a long-proven economic history;
the economics of the project worked.
Representative Wilson believed Representative Guttenberg
was asking about where the repairs were; the new portion,
and the business plan. She assumed that $40 million would
not address all of the problems at the Port of Anchorage.
Mr. Jager answered that it did not take care of most of the
problems. The money would be used to offset the fees and
tariffs that would have to be charged and ultimately paid
for by Alaska residents via the cargo crossing the docks.
If the port did not receive federal or state funding, the
port would move forward with the project. However, the
project would have to be paid for with revenue from fees
and tariffs collected for cargo that crossed the port's
docks and delivered to Alaskans.
5:03:14 PM
Representative Wilson asked when the fees and tariffs had
last been adjusted. Mr. Jager replied, "We adjust them
annually."
Representative Wilson asked how the port's fees and tariffs
compared to other ports of approximately the same size. Mr.
Jager responded it depended on who a person talked to.
Generally, the port's fees were comparable or slightly
lower than many other ports. Depending on how much funding
was obtained from federal and state government, the Port's
fees and tariffs would likely be above average for a
comparable port.
Representative Wilson stated that, since the project was
not in the current budget, she wanted to see some paperwork
on the potential fees and tariffs. She wanted to know where
the monies would go and the total cost of the project to
better understand it. Presently, she was more comfortable
with the costs being covered with tariffs and fees.
Co-Chair Seaton wanted to clarify that the port was going
to build a new dock, and the funds that were being
discussed were not going to repairs and stabilization of
the existing dock. The monies would go to the new dock
which was going to be built no matter what. If funds were
allocated, they would reduce the necessity for revenue
bonds and for tariffs to cover the new dock. He wondered
about reducing tariffs to keep the state at lower tariffs
than other ports. He asked if his understanding was
correct. Mr. Jager answered that the $40 million request
would go to construction costs for the new dock (not for
repair or maintenance). The money would result in
employment of construction workers.
5:06:19 PM
Co-Chair Seaton asked when the construction of the new dock
would begin. Mr. Jager answered it would be a phased
project expected to take 8 years. One of the challenges was
to be able to maintain port operations during construction.
The initial shoreside work would begin in the upcoming
summer [2018]. Traditional dredging for the new petroleum
and cement terminal would take place in the following
summer [2019], and pile driving would occur in the summer
of 2019. The petroleum and cement terminal, the first new
dock of the project, would be constructed and finished
during the summer of 2020.
Vice-Chair Gara asked if the project would be able to go
forward in a similar way if the legislature appropriated
$20 million in the current fiscal year and $20 million in
the following fiscal year. He wondered if he needed all $40
million in the current year before July 1, 2019. Mr. Jager
commented that Vice-Chair Gara's question was challenging.
He anticipated the timing for the initial construction for
the shoreside work and the dredging would be the same with
either funding scenario. He relayed that the challenge was
the need to pre-order materials, particularly the steel for
pile. He did not know the preorder time. It could
potentially delay the in-water pile driving.
Vice-Chair Gara asked how quickly Mr. Jager could get back
to the legislature with an answer. Mr. Jager replied it
depended on what he meant by fairly quickly. He believed he
could get an idea by the following morning. Vice-Chair Gara
replied that that worked.
Co-Chair Foster CLOSED public testimony.
HB 284 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster recognized Representative Chuck Kopp in the
room. He recessed the meeting to a call of the chair [note:
the meeting never reconvened].
ADJOURNMENT
5:10:11 PM
The meeting was adjourned at 5:10 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 284 CS WORKDRAFT v.J.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 LFD CAP StatewideTotals.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 LFD CAP ProjectDetailByHD.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 LFD CAP ProjectDetailByAgency.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 ABHA Chard letter.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 Project Report Anchorage Hillcrest Clean Water.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 Project Report Seward Jessee Lee Home.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |
| HB 284 Public testimony 5.8.18.pdf |
HFIN 5/8/2018 1:30:00 PM |
HB 284 |