Legislature(2021 - 2022)ADAMS 519

03/01/2021 01:30 PM FINANCE

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Audio Topic
01:34:06 PM Start
01:34:06 PM HB69 || HB71
01:35:02 PM Presentation: Coronavirus Aid, Relief, and Economic Security (cares) Act Funding Update
04:18:54 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Presentation: Cares Act Funding Update by TELECONFERENCED
- Commissioner Kelly Tshibaka, Dept. of
- Leslie Isaacs, Administrative Service
Director, Dept. of Administration, Office of
Management & Budget
- Neil Steininger, Director, Office of Management
& Budget, Office of the Governor
- Paloma Harbour, Fiscal Management Practices
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 1, 2021                                                                                            
                         1:34 p.m.                                                                                              
1:34:06 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:34 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Ben Carpenter                                                                                                    
ALSO PRESENT                                                                                                                  
Neil Steininger, Director, Office  of Management and Budget,                                                                    
Office of  the Governor;  Paloma Harbour,  Fiscal Management                                                                    
Practices Analyst,  Office of Management and  Budget, Office                                                                    
of   the    Governor;   Leslie   Isaacs,    Ts'aang   Gaa'y,                                                                    
Administrative     Service    Director,     Department    of                                                                    
Administration, Office  of Management and Budget,  Office of                                                                    
the Governor.                                                                                                                   
PRESENT VIA TELECONFERENCE                                                                                                    
Lacey Sanders, Administrative  Services Director, Department                                                                    
of  Education and  Early Development,  Office of  Management                                                                    
and   Budget,  Office   of   the   Governor;  Dom   Pannone,                                                                    
Administrative    Services     Director,    Department    of                                                                    
Transportation and  Public Facilities, Office  of Management                                                                    
and Budget, Office of the Governor; Kelly Tshibaka,                                                                             
Commissioner, Department of Administration.                                                                                     
HB 69     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
          HB 69 was HEARD and HELD in committee for further                                                                     
HB 71     APPROP: MENTAL HEALTH BUDGET                                                                                          
          HB 71 was HEARD and HELD in committee for further                                                                     
PRESENTATION: CORONAVIRUS AID, RELIEF, AND ECONOMIC                                                                             
Security (CARES) ACT FUNDING UPDATE                                                                                             
Co-Chair Foster reviewed the meeting agenda.                                                                                    
HOUSE BILL NO. 69                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;    making   reappropriations;    making                                                                    
     supplemental   appropriations;  making   appropriations                                                                    
     under art.  IX, sec.  17(c), Constitution of  the State                                                                    
     of  Alaska,  from  the  constitutional  budget  reserve                                                                    
     fund; and providing for an effective date."                                                                                
HOUSE BILL NO. 71                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive    mental    health    program;    making                                                                    
     supplemental  appropriations;  and   providing  for  an                                                                    
     effective date."                                                                                                           
1:34:06 PM                                                                                                                    
^PRESENTATION: CORONAVIRUS AID, RELIEF, AND ECONOMIC                                                                          
Security (CARES) ACT FUNDING UPDATE                                                                                           
1:35:02 PM                                                                                                                    
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE   OF   THE    GOVERNOR,   introduced   a   PowerPoint                                                                    
presentation titled  "State of  Alaska Office  of Management                                                                    
and Budget: House Finance  COVID-19 Funding Overview," dated                                                                    
March 1,  2021 (copy on file).  He began with a  timeline of                                                                    
the  state's fiscal  response  to COVID-19  on  slide 2.  He                                                                    
detailed that  there had been  four separate bills  on three                                                                    
separate events related to COVID  relief. He elaborated that                                                                    
on  March 16  [2020]  the legislature  had  passed, and  the                                                                    
governor had  signed the mental  health budget, HB  206. The                                                                    
budget  had  included an  estimated  $9  million in  federal                                                                    
receipts  and $4.1  million  in  undesignated general  funds                                                                    
(UGF). He expounded  that at the time the  state thought the                                                                    
response  to  COVID  would  be   quarantining  a  couple  of                                                                    
travelers coming into the state  or other smaller activities                                                                    
with lower  costs such  as renting some  hotel rooms  out to                                                                    
put  people up  and some  smaller measures  for cruise  ship                                                                    
traffic that had been expected during the summer.                                                                               
Mr. Steininger  continued to address  slide 2.  He explained                                                                    
that   by  April   6  [2020]   there  had   been  a   better                                                                    
understanding that the initial  cost estimates had been very                                                                    
low. He expounded that at  that point the state had received                                                                    
some federal  receipts from  housing and  urban development,                                                                    
which  were put  into  the supplemental  budget for  housing                                                                    
relief.  He  elaborated  that  $8.5  million  had  been  put                                                                    
forward  specifically for  coastal communities,  while still                                                                    
anticipating   a  cruise   ship  season.   Money  had   been                                                                    
appropriated that  would allow  communities to  mitigate the                                                                    
spread of  COVID-19 as a  result of cruise ship  traffic and                                                                    
workers  coming into  the state.  Additionally, $15  million                                                                    
had  been  added to  the  Department  of Health  and  Social                                                                    
Services (DHSS)  emergency programs  budget related  to what                                                                    
the state  thought would be  the need for  pandemic outreach                                                                    
and activities  to be undertaken  by emergency  programs and                                                                    
epidemiology.  The  operating   and  capital  budget  passed                                                                    
slightly later  than the  supplemental budget  contained $75                                                                    
million UGF  (from the Constitutional Budget  Reserve (CBR))                                                                    
for DHSS  emergency programs. The  disaster relief  fund had                                                                    
also been  capitalized with $5  million from the CBR  and an                                                                    
estimated $9 million in  what the administration anticipated                                                                    
from the Federal Emergency Management Agency (FEMA).                                                                            
Mr. Steininger  continued with  slide 2.  On April  9 [2020]                                                                    
the state  had a much better  idea of what was  going on and                                                                    
things  were changing  constantly. The  disaster declaration                                                                    
bill, SB 241,  had been implemented. The  bill had contained                                                                    
the authority to  draw $10 million from  the disaster relief                                                                    
fund  and  a  handful  of   references  to  funding  in  the                                                                    
previously  mentioned bills,  predominately $9  million from                                                                    
HB  206  in estimated  federal  funding.  He explained  that                                                                    
because it had  been appropriated as an  estimate, the state                                                                    
was  able to  expand the  funding to  include a  substantial                                                                    
amount of  federal funding  that came  to DHSS  for response                                                                    
mitigation.  He  highlighted  that the  situation  had  been                                                                    
rapidly  changing between  March 16  and April  6. He  noted                                                                    
that  the dates  shown on  slide 2  reflected the  dates the                                                                    
bills  were  signed. When  the  legislature  had passed  the                                                                    
supplemental  and  operating  budgets there  had  been  very                                                                    
different information  about what  federal funding  would be                                                                    
available when the governor had signed the bills.                                                                               
Co-Chair Foster  noted that  Representative Wool  had joined                                                                    
the meeting.                                                                                                                    
1:39:53 PM                                                                                                                    
Mr. Steininger turned  to slide 3 and  discussed the federal                                                                    
fiscal response.  On March 6  [2020] the  federal government                                                                    
similarly had considered the event  would be much smaller in                                                                    
cost  and activity.  The first  federal relief  package, the                                                                    
Coronavirus    Preparedness   and    Response   Supplemental                                                                    
Appropriations Act,  was $8.3 billion, which  covered things                                                                    
like vaccines, smaller  grants, and humanitarian assistance.                                                                    
The Families First Coronavirus Response  Act had been passed                                                                    
on March 18  [2020] allocating $105 billion  for paid family                                                                    
leave (for  individuals who  caught COVID),  expanded family                                                                    
medical leave, and an increase  in the federal participation                                                                    
for  the Medicaid  program (collections  by  6.2 percent  of                                                                    
federal match).                                                                                                                 
Mr.  Steininger  continued  to  review  the  federal  fiscal                                                                    
response  on  slide  3. The  Coronavirus  Aid,  Relief,  and                                                                    
Economic Security (CARES) Act was  passed on March 27 [2020]                                                                    
allocating $2.3 trillion. He explained  the passage of bills                                                                    
over the  time period showed the  evolution of understanding                                                                    
of the pandemic. The bulk  of the programs discussed resided                                                                    
in the CARES Act  including the Paycheck Protection Program,                                                                    
Pandemic  Unemployment   Assistance,  and   the  Coronavirus                                                                    
Relief Funds  (CRF). The  act granted  $1.25 billion  to the                                                                    
State  of Alaska  with fairly  loose  spending guidance.  He                                                                    
noted most  of the funding  for the state response  had come                                                                    
from the  allocation. He  highlighted that  a couple  of the                                                                    
provisions were extended in  the Paycheck Protection Program                                                                    
(PPP) and  Health Care Enhancement  Act, which  had expanded                                                                    
some  programs   and  replenished  associated   funding.  On                                                                    
December  27  [2020]  the Coronavirus  Response  and  Relief                                                                    
Supplemental Appropriations  Act (CRRSAA) had  passed, which                                                                    
contained a substantial  amount of money for  areas like the                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
and  contained similar  provisions to  the CARES  Act (money                                                                    
for school  districts and the  university had  been expanded                                                                    
under  CRRSAA). Additionally,  CRRSAA  changed  some of  the                                                                    
terms  of  the CRF  and  extended  the expenditure  deadline                                                                    
through another calendar year.                                                                                                  
1:43:16 PM                                                                                                                    
Representative  Josephson  asked  if the  $1.25  billion  in                                                                    
federal  CARES Act  funds allocated  to Alaska  was the  RPL                                                                    
[revised program  legislative] portion  of the  $5.2 billion                                                                    
[shown on slide 3].                                                                                                             
Mr. Steininger  answered that the  RPLs covered many  of the                                                                    
different  components.  He detailed  that  the  bulk of  the                                                                    
discussion on  community assistance payments and  the Alaska                                                                    
CARES  small  business  program  had  come  from  the  $1.25                                                                    
Representative  Josephson asked  about the  remaining [CARES                                                                    
Act]  funds  of  close  to  $4  billion.  He  asked  if  the                                                                    
remainder  included  funding  for   PPP  and  other  related                                                                    
Mr.  Steininger  replied   that  the  presentation  included                                                                    
slides with further detail on the subject.                                                                                      
Vice-Chair Ortiz  asked about  the $683.8  million allocated                                                                    
to Alaska under  CRRSAA. He asked for  verification that Mr.                                                                    
Steininger had stated much of the money went to DOT.                                                                            
1:45:27 PM                                                                                                                    
Mr. Steininger  responded affirmatively. He  elaborated that                                                                    
the large portion  of discretionary funds had  come from the                                                                    
Federal   Transit  Authority   (FTA)  and   Federal  Highway                                                                    
Administration (FHWA) to DOT.  Additionally, a large portion                                                                    
of the  funding came in  for education related  purposes. He                                                                    
detailed that  $130 million [$159.7 million]  went to school                                                                    
districts and a substantial amount went to the university.                                                                      
Vice-Chair  Ortiz asked  if the  committee  would hear  more                                                                    
about the breakdown and how the funds would be spent.                                                                           
Mr. Steininger replied in the affirmative.                                                                                      
Mr. Steininger turned to a  pie chart showing a breakdown of                                                                    
all  of  the  funding  coming  to  Alaska  on  slide  4.  He                                                                    
referenced a spreadsheet in members'  packets that broke out                                                                    
the different  grants by each  federal act,  titled "Federal                                                                    
Funding  to Alaska  for  COVID-19  Response," dated  2/27/21                                                                    
(copy  on  file).  He  remarked that  due  to  the  numerous                                                                    
federal acts  and different  programs, tracking  and sorting                                                                    
the incoming funding could be  complicated. He detailed that                                                                    
the  state  had  received   $1.25  billion  in  unrestricted                                                                    
funding in addition  to funding that had  passed through the                                                                    
state to  public and private organizations  and individuals.                                                                    
Approximately $1.5  billion went to  public/private entities                                                                    
and individuals had received  approximately $1.3 billion. He                                                                    
elaborated that  the funding [for  individuals] came  in the                                                                    
form of employment assistance and  tax rebates. The paycheck                                                                    
protection was  included in the  $1.7 billion  to businesses                                                                    
and  about   $500  million  went  to   tribal  organizations                                                                    
throughout the  state. The individual grants  totaling about                                                                    
$6.3 billion were included on the spreadsheet.                                                                                  
Mr. Steininger  clarified that the information  was based on                                                                    
what  the administration  currently  knew.  He explained  it                                                                    
would take  time to determine  how much money had  come into                                                                    
Alaska  for things  like the  PPP or  unemployment insurance                                                                    
benefits due  to a lag  in reporting between when  the grant                                                                    
happened  and when  an individual  received  it because  the                                                                    
funding ran  through the state  budget. He noted  the number                                                                    
would increase  over time as  some of the  programs impacted                                                                    
Alaskan businesses and individuals.                                                                                             
1:48:46 PM                                                                                                                    
Representative Wool  referenced the $6.3 billion  [in grants                                                                    
shown on the spreadsheet] reflected  how the amount had been                                                                    
distributed throughout the state.                                                                                               
Mr. Steininger replied in the affirmative.                                                                                      
Representative Edgmon  asked if the Department  of Commerce,                                                                    
Community and Economic Development  (DCCED) or the Office of                                                                    
Management  and Budget  (OMB)  provided  oversight over  the                                                                    
spending of  funds. He looked  at the  pie chart on  slide 4                                                                    
and  believed most,  but not  all, of  the funding  had been                                                                    
distributed. He  asked who was tracking  the information. He                                                                    
stated his  understanding that Alaska  was one of  a handful                                                                    
of states that would be audited  in terms of how the funding                                                                    
was expended.                                                                                                                   
Mr.  Steininger responded  that  the  administration of  the                                                                    
funds  varied  by grant.  He  elaborated  that some  of  the                                                                    
grants  were administered  by DCCED  such as  small business                                                                    
grants under  the Alaska  CARES programs  and grants  out to                                                                    
municipalities. He elaborated that  the Department of Health                                                                    
and Social  Services (DHSS) managed  a large portion  of the                                                                    
$1.25 billion  reserves specifically  for health  and impact                                                                    
mitigation.   The   Department   of  Education   and   Early                                                                    
Development (DEED)  managed a large  amount of the  funds in                                                                    
terms   of   funding    allocated   to   school   districts.                                                                    
Additionally,  DOT managed  a large  amount of  the funding.                                                                    
All of the different pots of  money and grants listed on the                                                                    
spreadsheet  had distinct  criteria for  record keeping  and                                                                    
Mr. Steininger  shared that  early on  in the  pandemic, the                                                                    
administration  had  started  to  establish  coding  in  the                                                                    
state's accounting  system in order  to track  dollars spent                                                                    
from  any  source on  COVID.  There  had been  some  lessons                                                                    
learned and  shared by  individuals who  had worked  for the                                                                    
state  during the  American  Recovery  and Reinvestment  Act                                                                    
(ARRA) [in 2009],  the last large federal  relief effort. He                                                                    
highlighted the  importance of upfront  expenditure tracking                                                                    
and  established  reporting   processes.  He  remarked  that                                                                    
fastidious  recording in  the  coding  system was  important                                                                    
because the  state had  been selected for  a desk  review of                                                                    
its  reporting.   He  explained  that  Paloma   Harbour  was                                                                    
responsible for coordinating with  all of the state agencies                                                                    
on a  daily basis  to ensure the  state was  meeting federal                                                                    
regulation  guidelines.  He shared  that  much  of the  $6.3                                                                    
billion  did not  flow  through  the state  and  it did  not                                                                    
necessarily have  responsibility for  how it would  be spent                                                                    
because  it went  straight to  recipients. He  clarified the                                                                    
state's  exposure  in  reporting  was not  the  entire  $6.3                                                                    
billion. He stated that each  grant had its own tracking and                                                                    
reporting  criteria.  Additionally,  OMB also  produced  and                                                                    
provided expenditure  reports to the legislature  and on the                                                                    
OMB website.                                                                                                                    
1:52:47 PM                                                                                                                    
Representative Edgmon  asked for  verification that  OMB was                                                                    
the place to go for the information.                                                                                            
Mr. Steininger  replied in the affirmative.  He relayed that                                                                    
OMB was trying to aggregate the information in one place.                                                                       
PALOMA HARBOUR, FISCAL  MANAGEMENT PRACTICES ANALYST, OFFICE                                                                    
OF MANAGEMENT  AND BUDGET, OFFICE OF  THE GOVERNOR, answered                                                                    
that  OMB was  trying to  capture everything  it could.  She                                                                    
added the money  that did not go through  state agencies was                                                                    
more  difficult  to track  and  capture.  For example,  some                                                                    
money  had gone  directly from  FTA to  the Municipality  of                                                                    
Anchorage  for transportation  that she  did not  capture in                                                                    
the $6.3  billion and  still needed to  add. She  noted that                                                                    
the numbers were continuously changing.                                                                                         
Representative  Edgmon remarked  there  was  plenty to  talk                                                                    
about,  especially in  anticipation of  the next  tranche of                                                                    
funding  coming to  Alaska.  He thought  there  may be  some                                                                    
lessons  learned along  the  way to  capitalize  on. He  was                                                                    
trying to  get a better  idea of who  to contact to  get the                                                                    
information  about how  much of  the funding  was encumbered                                                                    
but  unexpended. He  referenced  Mr. Steininger's  statement                                                                    
that  the deadline  for the  end of  calendar year  2020 had                                                                    
been  extended  for $528  million  or  $560 million  of  the                                                                    
original $1.2  billion in CARES Act  funding for communities                                                                    
that had not spent their money.                                                                                                 
Representative  Edgmon stated  that House  Finance Committee                                                                    
would have a  larger discussion because it had  to build the                                                                    
budget for the coming year  in addition to factoring in many                                                                    
of the one-time payments that  may have some relationship to                                                                    
the  budget being  constructed. He  furthered that  what was                                                                    
happening and who was coordinating  the information and what                                                                    
information  was available  would  require a  more in  depth                                                                    
conversation.  He   could  see  the   legislature  hopefully                                                                    
playing some role  in terms of overseeing  what happened and                                                                    
where  the next  tranche of  money would  go in  association                                                                    
with its relationship to the budget.                                                                                            
1:55:45 PM                                                                                                                    
Representative Josephson  stated it would be  useful to have                                                                    
a  document  reflecting   the  administration's  opinion  of                                                                    
monies that  backfill. He  had been  frustrated by  the June                                                                    
28, 2019  and April  7 [2020] vetoes  [by the  governor]. He                                                                    
stated to  the extent  the vetoes  and FY  22 cuts  had been                                                                    
ameliorated in  some way  by the CARES  Act funding,  it may                                                                    
change  his position.  He stressed  that $6  billion was  an                                                                    
enormous sum.  He remarked it  was difficult enough to  do a                                                                    
budget during  non-COVID times. He  stated that  the current                                                                    
situation  added  another  wrinkle  in terms  of  trying  to                                                                    
understand. He used  public radio for an  example, which had                                                                    
$3  million and  then  $1 million,  which  was important  to                                                                    
rural Alaska. He asked if  something came in and covered the                                                                    
issue.  He stated  if  so, it  may change  his  view of  the                                                                    
Mr. Steininger responded that there  were reports laying out                                                                    
how  the  $1.25  billion  had been  distributed,  which  was                                                                    
included   in   members'   packets  specifying   where   the                                                                    
allocations  were made.  He noted  the  information did  not                                                                    
cleanly  specify  whether   funds  backfilled  other  costs;                                                                    
however, the information  was shown in some  cases. He added                                                                    
that  a  presumption  of eligibility  for  CRF  dollars  was                                                                    
expenditures  on  public   safety  personnel  including  the                                                                    
Department of  Public Safety and Department  of Corrections.                                                                    
The  administration  had  used   some  CARES  Act  money  to                                                                    
backfill  costs  in  those agencies  to  avoid  supplemental                                                                    
needs in the  current fiscal year and to allow  the state to                                                                    
lapse money in  the prior fiscal year (FY  20). He explained                                                                    
that  there had  been some  actions backfilling  costs where                                                                    
there was eligibility  to COVID or the  CRF. One eligibility                                                                    
stipulation was  the cost could  not be  previously budgeted                                                                    
with some exceptions like corrections  and public safety. He                                                                    
stated  there was  some difficulty  in backfilling  with CRF                                                                    
dollars;  however, the  administration had  backfilled other                                                                    
areas  particularly  within  DOT  where  the  aforementioned                                                                    
restrictions did  not apply. Within DHSS,  Medicaid utilized                                                                    
some money  that was displaced  by additional  federal funds                                                                    
to cover future costs. He noted  it was not as direct as the                                                                    
method used for DOT, but it was a similar idea.                                                                                 
Mr. Steininger  addressed the question  about what  had been                                                                    
vetoed  compared to  funding  available  at present  through                                                                    
distributions. He stated that  some of the comparisons could                                                                    
be made.  He explained that  when the vetoes had  been made,                                                                    
on education for example, the  state had possessed a certain                                                                    
amount of knowledge. The administration  had known money was                                                                    
coming  in  and  had  thought  it may  have  fewer  or  more                                                                    
restrictions than it  did, and veto decisions  had been made                                                                    
based  on the  limited  information. He  furthered that  the                                                                    
state  had been  able to  utilize  the money  mostly how  it                                                                    
anticipated, but not perfectly.  He explained that the money                                                                    
may  have  covered one  cost  that  enabled a  community  or                                                                    
school district to free up  funds within their own operating                                                                    
general funds  to cover costs  that may have  been supported                                                                    
by  a vetoed  program.  He  remarked that  there  was not  a                                                                    
perfect tie or one-to-one, but  $6.3 billion coming into the                                                                    
state in one  form or another had certainly  offset some but                                                                    
not all of the problems occurring due to COVID.                                                                                 
2:01:00 PM                                                                                                                    
Representative Wool  asked about the $600  and $1,200 checks                                                                    
(depending  on the  number of  kids in  a family)  that came                                                                    
from the federal government to  individuals. He asked if the                                                                    
checks were included in the $6.2 billion.                                                                                       
Mr. Steininger  pointed to the $1.3  billion for individuals                                                                    
shown in the orange section of the pie chart on slide 4.                                                                        
Representative Wool  observed that $1.3 billion  out of $6.3                                                                    
billion  went  to individual  checks.  He  reasoned that  $5                                                                    
billion went  to things other private  and public businesses                                                                    
or agencies.  He remarked  that $6.3  billion was  twice the                                                                    
statutory   Permanent   Fund   Dividend  (PFD)   amount   of                                                                    
approximately $3.1 billion.                                                                                                     
Representative Wool  asked if  the approximately  $6,000 per                                                                    
person was large compared to other states.                                                                                      
Mr.  Steininger  replied  that  it was  large  in  terms  of                                                                    
population perhaps. He  did not know what  other states were                                                                    
receiving per  capita. He  highlighted an  analysis released                                                                    
the previous  Monday that looked  at the impact of  COVID on                                                                    
various  states' economies  and  the impact  when offset  by                                                                    
incoming  federal  relief. He  reported  that  the State  of                                                                    
Alaska was  the most  impacted even  net of  federal relief.                                                                    
When  access to  reserve  balances was  factored in,  Alaska                                                                    
dropped to  fifth or  sixth on the  list. He  explained that                                                                    
some of the  other greatly impacted states did  not have the                                                                    
same  reserves  as  Alaska.  He   noted  that  the  analysis                                                                    
included  the  corpus  of the  Permanent  Fund.  He  advised                                                                    
looking  at  the  analysis  net  of  federal  benefits  pre-                                                                    
reserves  when compared  to other  states, which  showed the                                                                    
impact on Alaska greatly exceeded that in any other state.                                                                      
2:04:24 PM                                                                                                                    
Representative  Wool  thought  that  he had  just  seen  the                                                                    
analysis, which showed Alaska was  -42.5 percent in revenue.                                                                    
He believed the number pertained  to tax revenue. It was his                                                                    
understanding  that some  states  had not  taken  a big  hit                                                                    
because stimulus money helped  local economies, which helped                                                                    
sales  tax.  He stated  that  Alaska  had  taken a  big  hit                                                                    
because oil tax and other  revenues had been impacted due to                                                                    
the absence  of a sales tax.  He asked Mr. Steininger  if it                                                                    
was the same analysis he had referenced.                                                                                        
Mr. Steininger agreed  and relayed that the  analysis was by                                                                    
Moody's. He  elaborated that  oil and  tourism had  been hit                                                                    
the  heaviest by  the pandemic.  He  explained that  because                                                                    
Alaska's  state revenue  was reliant  on  oil and  community                                                                    
revenues  were  reliant  on  tourism, it  put  Alaska  at  a                                                                    
disadvantage on a national scale  when looking at the impact                                                                    
of the pandemic.                                                                                                                
Representative   Wool  stated   that   $6   billion  was   a                                                                    
significant stimulus  to the state's economy.  He noted that                                                                    
many  other  states realized  a  stimulus  in their  revenue                                                                    
portfolios  due  to  things  like  state  sales  tax,  which                                                                    
enabled them to  have a much better  post-COVID recovery. He                                                                    
reasoned that  Alaska may  have realized  some help,  but it                                                                    
did not show up on the state revenue side.                                                                                      
Mr.  Steininger  replied  that  while  the  federal  funding                                                                    
coming to Alaska was a huge  amount, it did not fully offset                                                                    
the impact to  the state. In other states that  did not have                                                                    
revenues  as uniquely  tailored towards  industries impacted                                                                    
by the  pandemic, net of  federal relief, those  states were                                                                    
financially better  off from a  state perspective.  He added                                                                    
that Alaska was not financially better off.                                                                                     
Co-Chair  Foster  noted   that  Representative  Johnson  had                                                                    
joined the meeting earlier.                                                                                                     
Representative   Rasmussen  looked   at   page   2  of   the                                                                    
spreadsheet showing  just under  $600 million. She  asked if                                                                    
the  amount reflected  the  $1,200  stimulus payment  people                                                                    
Mr.  Steininger  confirmed the  amount  was  for the  $1,200                                                                    
stimulus  payments  paid during  the  summer.  He noted  the                                                                    
amount did not include  additional stimulus payments because                                                                    
the data was not yet available.                                                                                                 
Representative  Rasmussen asked  if  OMB had  the number  of                                                                    
individuals who had received a stimulus payment.                                                                                
PALOMA HARBOUR, FISCAL  MANAGEMENT PRACTICES ANALYST, OFFICE                                                                    
OF  MANAGEMENT AND  BUDGET, OFFICE  OF THE  GOVERNOR replied                                                                    
that  she  did  not  have  the  number  of  individuals  who                                                                    
received the stimulus payment, only  the amount that came to                                                                    
individuals in the state.                                                                                                       
Representative  Rasmussen  stated  that  she  believed  many                                                                    
people  did  not  receive  the  stimulus  payment  based  on                                                                    
average household  income. She remarked that  many people in                                                                    
the oil industry  had been impacted financially  or laid off                                                                    
due  to the  pandemic. She  explained that  the individuals'                                                                    
prior  year  income  exceeded  the  guidelines  set  by  the                                                                    
federal  government [to  receive  a  stimulus payment].  She                                                                    
thought that  if money was put  out into the economy  and it                                                                    
went to  families using the funds  to stay alive and  not as                                                                    
discretionary  income, it  likely  would not  have the  same                                                                    
impact as  a dividend that  people could use as  they chose.                                                                    
She pointed out there was more  than one factor when it came                                                                    
to economic impact from the pandemic.                                                                                           
2:09:25 PM                                                                                                                    
Mr.  Steininger turned  to a  pie chart  on slide  5 showing                                                                    
federal  funding  to  state agencies.  The  chart  reflected                                                                    
funding  the state  had visibility  into and  responsibility                                                                    
for.  The  largest  portion  was  CRF  dollars  followed  by                                                                    
unemployment compensation  via the  Department of  Labor and                                                                    
Workforce  Development.  The  chart included  nutrition  and                                                                    
emergency relief  grants of slightly over  $250 million that                                                                    
ran  through DEED  and  a large  allocation  to airport  and                                                                    
transit stimulus  through DOT.  He shared that  recently the                                                                    
Alaska  Housing  Finance  Corporation (AHFC)  received  $164                                                                    
million  through   CRRSA  for  housing  relief   and  rental                                                                    
assistance programs.  Additional items  in the chart  were a                                                                    
handful  of  much  smaller items  comparatively,  but  still                                                                    
large dollars and impactful programs.                                                                                           
Ms. Harbour  added that the  amounts would grow as  they did                                                                    
not  yet  include  CRRSA  funding.  She  detailed  that  the                                                                    
Centers for  Disease Control and Prevention  funding had not                                                                    
been  increased by  funding that  would come  to Alaska  for                                                                    
CRRSA vaccinations and other things.                                                                                            
2:11:21 PM                                                                                                                    
Mr. Steininger  relayed that Ms. Harbour  would provide more                                                                    
detail about the CRF and  additional history and timing over                                                                    
the past year.                                                                                                                  
Ms. Harbour advanced to slide  6 and spoke about Coronavirus                                                                    
Relief  Fund guidance  and frequently  asked questions.  She                                                                    
detailed  that  CRF funds  were  a  part  of the  CARES  Act                                                                    
enacted at the  end of March. The CARES Act  had three broad                                                                    
parameters   for   the   expenditure  of   funding.   First,                                                                    
expenditures had  to be  necessary and  incurred due  to the                                                                    
public health  emergency. Second, expenditures could  not be                                                                    
accounted for in  the most recently approved  budget for the                                                                    
state. Third, expenditures had to  be incurred between March                                                                    
1, 2020, and  December 30, 2020. She  highlighted that CRRSA                                                                    
extended the expenditure deadline to December 31, 2021.                                                                         
Ms. Harbour shared that when  the [federal] funding had been                                                                    
enacted  there  was  a  lack of  guidance  or  direction  to                                                                    
recipients on  how funds could  be spent with  the exception                                                                    
of the three broad  parameters. She elaborated that Treasury                                                                    
released   its  original   guidance  and   frequently  asked                                                                    
questions  document on  April 22  containing four  questions                                                                    
and  answers,   which  were  essentially  the   three  broad                                                                    
categories restated.  She explained that the  state had very                                                                    
limited information  on how the  funding could be  spent and                                                                    
restrictions  beyond the  three  basic  categories when  the                                                                    
state  was  developing revised  programs  that  came to  the                                                                    
legislature for review and  approval. The administration had                                                                    
developed the  programs it  could based  on what  was known,                                                                    
including community relief grants  and small business relief                                                                    
Ms. Harbour  relayed there  were considerable  iterations of                                                                    
the guidance  from Treasury  that significantly  changed the                                                                    
administration's understanding  of the programs.  She listed                                                                    
organizations that  had been  coordinating with  Treasury to                                                                    
get   better  spending   guidance  including   the  National                                                                    
Governor's  Association, the  National Association  of State                                                                    
Budget   Officers,  the   National   Association  of   State                                                                    
Auditors,  Comptrollers, and  Treasurers,  and the  National                                                                    
Conference  of State  Legislatures. She  relayed that  there                                                                    
had been  concern by recipients  that they would  think they                                                                    
were spending  funds correctly  but end  up having  to repay                                                                    
the  money.   The  administration  had  done   its  best  in                                                                    
developing some revised  programs to help meet  the needs of                                                                    
the state that fit within the funding parameters.                                                                               
Ms.  Harbor reported  that the  guidance kept  changing. She                                                                    
explained that  the administration  had to submit  its first                                                                    
official report  to the federal  government on  September 21                                                                    
[2020], which had included all  expenditures from March 1 to                                                                    
June 30. The guidance for  the report had not been available                                                                    
until July 31.  She elaborated that at that  time, the state                                                                    
had already  received five months  of spending  reports from                                                                    
communities  and the  administration had  to make  them redo                                                                    
the  reports based  on the  updated guidance  from Treasury.                                                                    
She noted  the reporting  categories had increased  from six                                                                    
to eighteen.  The administration had worked  with the Alaska                                                                    
Municipal League and  DCCED to get the  revised reports from                                                                    
communities.  She  remarked  that communities  had  done  an                                                                    
amazing job updating the reports quickly.                                                                                       
Ms. Harbour pointed  to the September 2  date highlighted in                                                                    
purple on slide  6, which reflected the  last major revision                                                                    
to  the   guidance  and  frequently  asked   questions  from                                                                    
Treasury, which were federally registered.                                                                                      
2:15:47 PM                                                                                                                    
Representative Josephson  looked at  slide 6  and referenced                                                                    
the CRRSA  funding extension. He  used a Yupik  village with                                                                    
400 residents  that had received  $100,000 in funding  as an                                                                    
example. He  asked for verification  the village  would have                                                                    
until the end of the current year to spend the funds.                                                                           
Ms. Harbour replied in the affirmative.                                                                                         
Representative Josephson  thought state agencies  likely had                                                                    
to  hire  staff to  manage  the  monitoring  of all  of  the                                                                    
incoming funds. He asked for detail.                                                                                            
Ms. Harbour  answered that  DCCED had  tried to  establish a                                                                    
position to  help with CARES  Act funding,  specifically the                                                                    
Small Business Relief Program  to ensure adequate reporting.                                                                    
The department had  no success in filling  the position. She                                                                    
elaborated that  until the position  could be  filled, DCCED                                                                    
had handled  local government staff.  She reported  that all                                                                    
of  the  agencies including  DHSS,  DCCED,  and OMB  had  to                                                                    
absorb the  work with existing  staff. She relayed  that OMB                                                                    
had been  able to hire  a temporary  staff to help  with the                                                                    
federal reporting.                                                                                                              
Mr. Steininger added  that one piece of the  report OMB sent                                                                    
to  the legislature  included  personal  services costs.  He                                                                    
elaborated that much of the  costs pertained to time that an                                                                    
otherwise budgeted person was spending  on COVID. One of the                                                                    
frequently asked questions addressed  what point 2 [on slide                                                                    
6] - specifying  that funding could not go  to expenses that                                                                    
were accounted  for in the  most recently approved  budget -                                                                    
meant for  existing staff who  began spending most  of their                                                                    
work time on  COVID. He explained there  were numerous staff                                                                    
employed by  the state  who had jobs  and were  now spending                                                                    
most  of their  time on  COVID. For  example, many  staff in                                                                    
DHSS, DEED,  and OMB were  working on COVID  related issues.                                                                    
He  noted there  were a  couple of  non-permanent positions,                                                                    
one at  OMB, and contract  tracer positions. He  relayed the                                                                    
state was trying  to make do with what it  had and COVID was                                                                    
effectively the focus of the year.                                                                                              
2:18:55 PM                                                                                                                    
Representative  Edgmon  referenced  the  discussion  in  the                                                                    
morning  meeting  about  a  desk  review  from  the  federal                                                                    
government.  He considered  a desk  review  to be  something                                                                    
like a  management review.  He asked  for detail  about what                                                                    
was  expected   with  the  review.  He   referenced  strings                                                                    
attached  to the  $1.25 billion  the state  had received  in                                                                    
April. He asked  about the prospect the state may  be on the                                                                    
hook for money that had been mismanaged or misspent.                                                                            
Ms.  Harbour  answered  that  she  did  not  know  presently                                                                    
whether there  would be any questioned  costs. She explained                                                                    
that the desk review would  primarily look at what the state                                                                    
had reported  in supporting documentation and  whether there                                                                    
had been adequate  internal controls. She noted  it was very                                                                    
low  level.   She  elaborated  that  if   the  review  found                                                                    
something  of concern,  it could  be expanded  into a  full-                                                                    
fledged audit.  She expounded that  if the  review developed                                                                    
into an audit, questioned costs  could be identified at that                                                                    
point.   She  detailed   that  if   questioned  costs   were                                                                    
identified, the state had the  opportunity to identify other                                                                    
eligible costs  to substitute for the  questioned costs. She                                                                    
furthered  that if  a local  community received  the funding                                                                    
and  had questioned  costs, the  state would  work with  the                                                                    
community to  identify and substitute other  costs that were                                                                    
eligible. She noted that hopefully  the state would not have                                                                    
to go through the entire process.                                                                                               
Representative   Edgmon   asked   if  there   was   adequate                                                                    
infrastructure available  at the  state agency or  OMB level                                                                    
if an audit were to be required.                                                                                                
Mr.  Steininger  answered  that the  state  would  certainly                                                                    
respond  to  any requirements  that  came  forward from  the                                                                    
[U.S.]  Office of  Inspector  General  (OIG). He  elaborated                                                                    
that if questioned costs were  discovered and a community or                                                                    
the  state  had spent  money  that  did not  meet  [federal]                                                                    
guidelines or had spent the  funds prior to updated guidance                                                                    
that  changed  the  nature  of  eligible  expenditures,  the                                                                    
ability to substitute  other eligible costs gave  a level of                                                                    
insurance the state would not  necessarily have to pay money                                                                    
back to  the federal government.  He stated that one  of the                                                                    
slides illustrated the  amount of CRF dollars  that had been                                                                    
allocated versus unallocated  at present. The administration                                                                    
knew there were  eligible costs far in excess  of the amount                                                                    
that  had been  allocated. For  example, places  where state                                                                    
staff  had diverted  their work  to COVID  and places  where                                                                    
money  had been  spent within  the bounds  of the  operating                                                                    
cost  of  an  agency  that any  questioned  costs  could  be                                                                    
applied  to.  The  administration was  not  concerned  there                                                                    
would be a  payback necessarily. He stated  that the state's                                                                    
ability to  work through the  questioned costs  with federal                                                                    
partners was sufficient if needed.                                                                                              
2:23:14 PM                                                                                                                    
Representative Edgmon  looked ahead in the  presentation [at                                                                    
slide  7]  and  observed  that $568  million  of  the  $1.25                                                                    
billion in  CARES Act  funding had  gone to  communities. He                                                                    
considered a worst  case scenario where funds  were found to                                                                    
be spent  incorrectly. He asked  whether the  misspent funds                                                                    
would be  limited to the  $568 million portion of  the $1.25                                                                    
billion  and the  broader  $6.3  billion. Alternatively,  he                                                                    
asked if  there would  be other  categories included  in the                                                                    
Ms.  Harbour  replied that  any  of  the funding  categories                                                                    
could  be  included.  She  explained   that  the  state  had                                                                    
substitutable costs for funding  received by state agencies.                                                                    
Her   biggest  concern   with   the   funding  received   by                                                                    
communities  was  that  communities  had  to  have  incurred                                                                    
substitutable costs.  She explained that if  expenditures by                                                                    
communities   were  questioned   and  they   did  not   have                                                                    
substitutable costs, they would be in a situation.                                                                              
Mr. Steininger  added that when  the state entered  into the                                                                    
agreements  with  communities  and control  of  expenditures                                                                    
were handed over  to communities, part of  the agreement was                                                                    
the  community  was agreeing  to  spend  the money  per  CRF                                                                    
guidelines.  He stated  that the  state had  communicated to                                                                    
communities that  the guidelines from OIG  and Treasury were                                                                    
prone  to change  and it  was their  responsibility to  make                                                                    
sure they managed to the  changing guidelines. He elaborated                                                                    
that if  a community did  not have a substitutable  cost and                                                                    
had  a cost  that was  not CRF  eligible, per  the agreement                                                                    
with  the  state,  the   communities  were  responsible  for                                                                    
returning funding  to the  federal government.  However, the                                                                    
state also  had the opportunity to  find substitutable costs                                                                    
within  state  payments  because  the state  was  the  prime                                                                    
recipient of the grant. He  furthered that the $1.25 billion                                                                    
needed to  be spent  on allowable costs  anywhere underneath                                                                    
the umbrella, which included the community distribution.                                                                        
2:26:04 PM                                                                                                                    
Ms.  Harbour  added  that  the  early  review  and  extended                                                                    
deadline  to  December 31,  2021,  assisted  the state.  She                                                                    
elaborated that  if a community's current  expenditures were                                                                    
not  allowable, but  they could  make a  plan for  allowable                                                                    
expenditures  prior to  December  31, the  funding could  be                                                                    
expended on eligible costs.                                                                                                     
Ms.  Harbour moved  to slide  7  and addressed  a pie  chart                                                                    
titled  "Alaska Coronavirus  Relief  Fund Allocations."  She                                                                    
detailed that  45 percent of  the funding or  $568.6 million                                                                    
was  distributed in  the form  of  community relief  grants,                                                                    
$290  million  had  been   distributed  for  small  business                                                                    
relief,  $50  million  for  nonprofit  support  through  the                                                                    
Alaska Community Foundation, $10  million was distributed as                                                                    
housing support  through AHFC, and  $331.4 million  had been                                                                    
provided to  DHSS to  cover other  COVID related  costs. She                                                                    
elaborated that of  the funding given to  DHSS, $133 million                                                                    
went out in  the form of non-state agency  support costs and                                                                    
services  and  $153.4 million  went  to  state agency  costs                                                                    
including COVID  leave, personnel  services, and  other. She                                                                    
would provide more  detail on a later slide.  She noted that                                                                    
$45 million had not yet  been distributed and was in reserve                                                                    
for other anticipated COVID costs.                                                                                              
Mr.  Steininger added  that the  spreadsheet with  the green                                                                    
header  in members'  packets [titled  "Office of  Management                                                                    
and Budget  Alaska Coronavirus  Relief Fund  Allocations and                                                                    
Expenditures"  updated February  26,  2021  (copy on  file)]                                                                    
provided a  breakdown of the  $331.4 million in  other COVID                                                                    
relief that ran through DHSS.                                                                                                   
Ms.  Harbour   noted  that  the  sheet   showed  the  amount                                                                    
2:28:18 PM                                                                                                                    
Mr.  Steininger  noted  there were  subject  matter  experts                                                                    
available  online  to  answer   detailed  questions  on  the                                                                    
upcoming   slides.  He   turned  to   slide  8   related  to                                                                    
unemployment insurance  payment and  trust fund  details. He                                                                    
noted there  had been  a spike  in unemployment  claims over                                                                    
the  past  year.  He  detailed that  from  March  1  through                                                                    
February 4 regular unemployment  insurance payments from the                                                                    
state  UI   Trust  Fund  totaled  $323.6   million,  federal                                                                    
pandemic   unemployment  compensation   was  $530   million,                                                                    
pandemic unemployment  assistance (100 percent  federal) was                                                                    
slightly   over   $68    million,   emergency   unemployment                                                                    
compensation  (100 percent  federal)  was  $57 million,  and                                                                    
FEMA lost  wages assistance (100  percent federal)  was just                                                                    
under $59 million.  He reported that as of  February 24, the                                                                    
UI Trust  Fund had  a balance of  $286.1 million.  He stated                                                                    
that while  the balance  was within  the targeted  range, it                                                                    
was at the lower end.                                                                                                           
Representative  Josephson looked  at  the  second bullet  on                                                                    
slide   8   related   to   federal   pandemic   unemployment                                                                    
compensation.  He  asked  if   the  compensation  was  being                                                                    
considered  for  extension   and  perhaps  retroactively  to                                                                    
November or sometime when it had expired.                                                                                       
Ms.  Harbour replied  that she  believed CRRSA  had extended                                                                    
all  of  the   programs  [on  slide  8],   but  perhaps  not                                                                    
retroactively.  She  noted that  the  new  relief may  apply                                                                    
retroactively. She would follow up with the information.                                                                        
Representative  Wool  looked  at  the  regular  unemployment                                                                    
insurance cost  of $323 million  and the total  fund balance                                                                    
of $286 million.  He asked if the figures  meant there would                                                                    
not be sufficient  funding for a draw the  following year to                                                                    
cover  regular  unemployment  insurance.  Alternatively,  he                                                                    
asked if  the fund was constantly  replenished from outgoing                                                                    
paychecks.   He  understood   there  were   currently  fewer                                                                    
paychecks going out.  He asked how the UI  Trust Fund looked                                                                    
going forward for the next year.                                                                                                
Ms. Harbour replied  that there was a  subject matter expert                                                                    
available online. She relayed that  the balance was within a                                                                    
healthy range.                                                                                                                  
Representative Wool asked for  verification that Ms. Harbour                                                                    
had stated the balance was in a healthy range.                                                                                  
Ms.  Harbour  replied  that the  balance  was  healthy.  She                                                                    
elaborated that revenue  would be coming into  the fund from                                                                    
paychecks over the course of  the next year. She relayed the                                                                    
department   anticipated   regular  unemployment   insurance                                                                    
payments would decrease  because it was only  possible to be                                                                    
unemployed  for  a  given period  of  time  while  receiving                                                                    
regular unemployment insurance  payments. She explained that                                                                    
the  pandemic  emergency   unemployment  compensation  would                                                                    
extend  eligibility and  was 100  percent federally  funded.                                                                    
She elaborated  that reliance on state  funds would decrease                                                                    
as reliance on federal funding increased.                                                                                       
Representative   Wool  asked   for  verification   that  all                                                                    
assistance  and  compensation listed  on  slide  8 with  the                                                                    
exception of  the regular  unemployment insurance  was fully                                                                    
federally funded. He asked how  frequently the UI Trust Fund                                                                    
balance was replenished.                                                                                                        
Ms. Harbour answered that payments were made quarterly.                                                                         
2:33:38 PM                                                                                                                    
Mr.  Steininger  moved to  slide  9  to discuss  the  higher                                                                    
education relief  details. The  CARES Act had  included $7.9                                                                    
million to the  University of Alaska in  addition to $71,000                                                                    
for  the Alaska  Vocational  Technical  Center (AVTEC).  The                                                                    
CARES Act required that 50  percent of the funds go directly                                                                    
to  students in  the form  of direct  relief. The  remaining                                                                    
half  of  the funding  could  be  used by  institutions  for                                                                    
eligible costs.  Students had received $3.9  million through                                                                    
the university and $35,700  through AVTEC. Additionally, the                                                                    
university  received  $2.6  million  allocated  to  minority                                                                    
serving institutions.                                                                                                           
Mr.  Steininger addressed  higher  education relief  details                                                                    
under  the CRRSA  Act on  slide  9. He  reported that  under                                                                    
CRRSA the amounts  were extended, but a  larger portion went                                                                    
to  the institutions.  He stated  that the  institutions had                                                                    
been greatly impacted in terms  of revenues from enrollment,                                                                    
student  housing,  and  other areas  that  changed  the  way                                                                    
business  was   done  due  to  COVID   by  eliminating  some                                                                    
congregate  settings.  The  university  had  received  $17.4                                                                    
million from CRRSA  of which $3.9 million  went to students.                                                                    
He  stated that  rather than  50/50  a flat  amount went  to                                                                    
Mr.  Steininger highlighted  that  AVTEC  had received  over                                                                    
$250,00 of  which, $35,700 went  to students. He  noted that                                                                    
the    administration    had   included    a    supplemental                                                                    
appropriation  of  $750,000  to AVTEC  in  the  supplemental                                                                    
budget. He  remarked that  even with  relief coming  in from                                                                    
higher  education  items  as   well  as  other  cost  saving                                                                    
methods, the loss of revenue  to AVTEC had been significant.                                                                    
The  agency   required  additional  funds  to   operate  its                                                                    
facility even after the receipt  of federal funds. He stated                                                                    
that unfortunately  because CRF had restrictions  on revenue                                                                    
replacement, the state  was unable to tap  any other federal                                                                    
COVID relief efforts to satisfy  the need. He explained that                                                                    
the supplemental request was not  duplicative of the federal                                                                    
2:36:26 PM                                                                                                                    
Representative  Wool  looked  at   the  first  $7.9  million                                                                    
federal  appropriation to  the  University  of Alaska  where                                                                    
students had  received $3.9  million. He  understood funding                                                                    
had gone to  students due to the disruption  of the semester                                                                    
and  many  students had  to  go  home.  He asked  about  the                                                                    
reasoning for  the second appropriation  of $3.9  million to                                                                    
students.  He stated  his understanding  that enrollment  at                                                                    
certain campuses had even increased.                                                                                            
Mr.  Steininger   answered  that  it  had   been  a  federal                                                                    
requirement  of the  monies.  He did  not  know the  federal                                                                    
justification for the specific funding. He would follow up.                                                                     
Mr.  Steininger  turned  to  slide  10  and  addressed  K-12                                                                    
education  relief  details.  He  highlighted  two  different                                                                    
funds  related  to  education  relief.  The  first  was  the                                                                    
Elementary  and Secondary  School  Emergency Relief  (ESSER)                                                                    
that brought  in $38.4  million under  the CARES  Act, which                                                                    
was distributed  to school districts  (referred to  as local                                                                    
education  agencies   on  the  slide).   Additionally,  $3.8                                                                    
million was  allocated to the  state education  agency DEED.                                                                    
He  noted there  was a  cap of  $192,000 for  administrative                                                                    
expenses. He  explained there were rules  around the funding                                                                    
related to  how it  could be used  that were  different than                                                                    
the  rules surrounding  some of  the  other programs.  There                                                                    
were  restrictions on  use for  administrative expenses  and                                                                    
the types of grants the department could issue.                                                                                 
Mr. Steininger addressed the second  fund on slide 10 called                                                                    
the  Governor's  Emergency   Education  Relief  (GEER)  that                                                                    
brought in  $6.5 million  from the  CARES Act.  He explained                                                                    
that  the  money  was  more   open-ended  in  terms  of  its                                                                    
application  to specific  education  related  items and  was                                                                    
more at the discretion of  the state than the ESSER funding.                                                                    
He detailed  that $3.7 million  had been used for  grants to                                                                    
school  districts  to  help  fill  the  gap  between  vetoed                                                                    
education  funding and  the amount  available to  districts.                                                                    
Additionally, $1.5  million was allocated to  the university                                                                    
to  cover  added  COVID impacts  above  and  beyond  impacts                                                                    
covered by  the CARES  Act. The funding  had also  been used                                                                    
for competitive  grant awards to  education-related entities                                                                    
and the  Alaska Native  Science and Engineering  Program. He                                                                    
noted the next slide covered similar programs under CRRSA.                                                                      
2:40:05 PM                                                                                                                    
Mr.  Steininger moved  to slide  11 and  addressed education                                                                    
relief details included  in CRRSA. He relayed  that the same                                                                    
programs [shown on slide 10]  received additional funding in                                                                    
December. There was $159.7 million  in ESSER funds for local                                                                    
education agencies and the state  education agency. He noted                                                                    
he had  inadvertently misstated the  figure as  $130 million                                                                    
earlier in  the meeting.  Local education  agencies received                                                                    
$143.7  million  of  the funding  and  DEED  received  $15.2                                                                    
million  for   education-related  grants   with  a   cap  on                                                                    
administrative  expenses.  The  GEER received  another  $2.8                                                                    
million  and  emergency  assistance for  non-public  schools                                                                    
received $2.4  million [slide  11 shows  the number  at $5.4                                                                    
million] with caps on administrative expenses.                                                                                  
Representative Josephson stated that  CRRSA was the December                                                                    
27 act,  which was  very recent.  He asked  for verification                                                                    
that  the  53  local  school  districts  had  received  $143                                                                    
Mr. Steininger agreed.                                                                                                          
Representative  Josephson  asked  what the  money  could  be                                                                    
spent on within education.                                                                                                      
Mr. Steininger deferred the question to DEED.                                                                                   
2:42:03 PM                                                                                                                    
LACEY SANDERS, ADMINISTRATIVE  SERVICES DIRECTOR, DEPARTMENT                                                                    
OF  EDUCATION AND  EARLY DEVELOPMENT,  OFFICE OF  MANAGEMENT                                                                    
AND  BUDGET, OFFICE  OF THE  GOVERNOR (via  teleconference),                                                                    
replied that  all CARES Act  and CRRSA funding  [directed to                                                                    
education]  was  to  address the  impacts  of  the  COVID-19                                                                    
pandemic.  The recent  CRRSA included  an  expanded list  of                                                                    
available  activities to  address learning  loss and  summer                                                                    
programming  such as  summer school  and  school repairs  to                                                                    
prevent the  spread of  the virus  and improve  air quality.                                                                    
She summarized  that the CARES  Act and CRRSA were  aimed at                                                                    
reducing   COVID-19   impacts,   but  CRRSA   was   expanded                                                                    
specifically for learning loss.                                                                                                 
Vice-Chair Ortiz asked if there  was a breakdown showing the                                                                    
amount received by each district throughout the state.                                                                          
Ms. Sanders  answered in  the affirmative.  The department's                                                                    
website  and  documents  to be  provided  to  the  committee                                                                    
showed  a breakdown  on the  CARES  Act funds  and CRRSA  by                                                                    
school district. She noted that  the authority for districts                                                                    
to  spend  the funding  was  fairly  broad, which  gave  the                                                                    
school districts  the ability  to determine  how to  use the                                                                    
funds within the federal guidance.                                                                                              
2:44:36 PM                                                                                                                    
Representative  Wool  referenced   an  earlier  conversation                                                                    
where it had been discussed  that Alaska was deficient 2,000                                                                    
students. He  had stated  that his  district had  lost 2,000                                                                    
students to  home schooling outside the  district. He stated                                                                    
that the  enrollment loss translated  to about  $20 million.                                                                    
He asked for verification the  federal funding could be used                                                                    
to  cover  the loss.  He  asked  if  districts had  not  yet                                                                    
received the funding, which was causing some panic.                                                                             
Ms.  Sanders  responded  that the  original  CARES  Act  had                                                                    
passed  in March  [2020]. The  department  had been  working                                                                    
with school districts to get  their applications and budgets                                                                    
as early  as FY 20.  She reported that school  districts had                                                                    
been  able  to use  the  funding.  The department  had  been                                                                    
working  with  districts  most   recently  on  their  FY  21                                                                    
applications.  She noted  the funding  was available  for an                                                                    
extended  time  period  through   September  30,  2022.  The                                                                    
department had  just been able  to get the  applications for                                                                    
the CRRSA  funding in  mid-February and  it was  now working                                                                    
with school districts  to make sure the  money was available                                                                    
and approved. The CRRSA funding  had an extended time period                                                                    
through September 30, 2023. She  believed there was a lot of                                                                    
planning  that districts  needed  to do  as  they looked  at                                                                    
their  current budget  based on  the formula  and determined                                                                    
how to use the federal funds over the next several years.                                                                       
2:47:16 PM                                                                                                                    
Mr. Steininger  turned to  transportation relief  details on                                                                    
slide 12.  Under the CARES  Act the department  had received                                                                    
funding from  the Federal Aviation Administration  (FAA) and                                                                    
the Federal  Transit Administration  (FTA). Under  CRRSA the                                                                    
department  had  received  funding  from  the  FTA  and  the                                                                    
Federal Highway Administration (FHWA).  He detailed that the                                                                    
$82.5 million  from the FAA  was focused on  maintenance and                                                                    
operations  of  state  airports.   He  detailed  that  $49.4                                                                    
million had come in to aid  the state with its management of                                                                    
a large number of  rural airports. Additionally, $33 million                                                                    
went  to   the  Alaska  International  Airport   System  for                                                                    
operations and maintenance  of international airport systems                                                                    
in  Anchorage and  Fairbanks. He  detailed that  the funding                                                                    
was  fairly  open  ended  as  long  as  it  was  related  to                                                                    
operation  and maintenance  of the  airports. He  noted that                                                                    
the  funding offset  a significant  amount  of general  fund                                                                    
Mr. Steininger highlighted that  the governor's FY 22 budget                                                                    
included  use of  the  federal FAA  funding  to offset  fund                                                                    
spend in  maintenance and operations  for DOT. He  noted the                                                                    
FTA  money  was narrower  in  scope  toward transit  related                                                                    
activities  including  the   Alaska  Marine  Highway  System                                                                    
(AMHS). He detailed that money  from the grant had also gone                                                                    
to the railroad and  municipal transit throughout the state.                                                                    
Under  CRRSA the  FTA  amount had  been  increased to  $55.8                                                                    
million  directed to  communities  with transit  authorities                                                                    
and the state  transit including the railroad  and AMHS. The                                                                    
FTWA added  $124.4 million, and  the state had  received the                                                                    
federal spending  guidance the  previous week  outlining how                                                                    
the money could be utilized.  Thus far, the funding had been                                                                    
utilized to reopen some maintenance  stations on highways to                                                                    
cover snow clearing and other  related activities. A portion                                                                    
had  not  yet  been  allocated to  a  specific  purpose.  He                                                                    
informed   the   committee   that  the   governor's   budget                                                                    
amendments  included  a   capital  project  identifying  the                                                                    
amount of  money available, but  it did not  specify exactly                                                                    
where the  funds should  be spent  as the  guidance document                                                                    
had not yet been received.                                                                                                      
Representative  LeBon looked  at  the piece  for the  Alaska                                                                    
International  Airport System  of $33  million. He  recalled                                                                    
that approximately  $27 million to  $28 million went  to the                                                                    
Anchorage  airport   and  about  $5  million   went  to  the                                                                    
Fairbanks airport. He asked if his statement was accurate.                                                                      
Mr. Steininger  answered that he  did not have  the specific                                                                    
information.  He  explained  that  the  FAA  allocation  had                                                                    
included a  list of every  airport in the  country including                                                                    
an associated  dollar amount. He  detailed that  the funding                                                                    
had gone  to whoever owned  and managed the airports  and it                                                                    
could be  redistributed within the airports  they owned. For                                                                    
example, DOT  managed over 100  airports and  the department                                                                    
did not  have to spend  to the dollar what  the distribution                                                                    
had   been  for   each   airport.   Similarly,  the   Alaska                                                                    
International  Airport  System  could distribute  the  money                                                                    
between the two airports differently  than it had been lined                                                                    
out in the list.                                                                                                                
Representative  LeBon   recalled  that  Merrill   Field  had                                                                    
received  about $18  million  in funding.  He  asked if  the                                                                    
funding was from the rural  airport system allocation of $49                                                                    
Mr.  Steininger believed  Merrill Field  was outside  of the                                                                    
$49.4 million.  He noted that  DOT was available  online for                                                                    
more detail.                                                                                                                    
Representative  LeBon remarked  asked what  formula directed                                                                    
$18  million  to  Merrill  Field  while  only  directing  $5                                                                    
million to the Fairbanks International Airport.                                                                                 
2:52:34 PM                                                                                                                    
DOM  PANNONE, ADMINISTRATIVE  SERVICES DIRECTOR,  DEPARTMENT                                                                    
OF   TRANSPORTATION  AND   PUBLIC   FACILITIES,  OFFICE   OF                                                                    
MANAGEMENT  AND   BUDGET,  OFFICE   OF  THE   GOVERNOR  (via                                                                    
teleconference),  replied  under  the CARES  Act  allocation                                                                    
formula there were  a number of variables the  FAA looked at                                                                    
including debt  services, operating expenses,  and revenues.                                                                    
He explained that Merrill Field's  number had come out where                                                                    
it did  due to the  formula used by  the FAA. He  added that                                                                    
Merrill Field  was not  owned, operated,  or managed  by the                                                                    
Representative  LeBon asked  if Merrill  Field had  received                                                                    
about $18 million from the CARES Act.                                                                                           
Mr. Pannone replied  that the number sounded like  it was in                                                                    
the ballpark.                                                                                                                   
Representative LeBon  expressed his hope that  the Fairbanks                                                                    
airport  would  be  allocated  under  the  same  formula  as                                                                    
Merrill Field.                                                                                                                  
Representative Josephson  asked if  the sums shown  on slide                                                                    
12 were direct grants the  governor could allocate. He asked                                                                    
if RPLs had been done for any of the items on the slide.                                                                        
Mr. Steininger  answered that RPLs  had been done  for CARES                                                                    
Act items  to allow DOT  access to the funds.  He elaborated                                                                    
that RPLs  had been done for  CRRSA funds to reopen  some of                                                                    
the maintenance  stations. The remainder of  the funding was                                                                    
subject to legislative appropriation.                                                                                           
Representative  Josephson asked  for  verification that  the                                                                    
$122 million  [in FHWA  funds shown at  the bottom  of slide                                                                    
12] was  in the hands  of the legislature to  appropriate as                                                                    
long as  session was underway.  He stated  his understanding                                                                    
that because the governor had  not yet spent the funding, it                                                                    
was in the hands of the legislature to speak to first.                                                                          
2:55:02 PM                                                                                                                    
Mr.   Steininger  replied,   "Roughly  speaking,   yes."  He                                                                    
elaborated that OMB did not  have the information specifying                                                                    
what the  grants would be  when it had developed  the budget                                                                    
in   December.  The   administration  had   released  budget                                                                    
amendments that  would cover the continued  operation of the                                                                    
maintenance  stations  included  in  the  RPL  package.  The                                                                    
administration had  not put forward  a specific  proposal on                                                                    
the additional FHWA funding. He  explained that the guidance                                                                    
document specifying  how the  funds could  be spent  had not                                                                    
been available at the time.  The administration believed the                                                                    
maintenance station  support would be allowable,  but it had                                                                    
not  been certain  what the  other funding  boundaries were.                                                                    
The administration  had identified the amount  available but                                                                    
did  not  make  a  specific  recommendation  in  its  budget                                                                    
amendments.   The    funding   was   up    for   legislative                                                                    
appropriation.  He  stated  that   once  the  FHWA  guidance                                                                    
document  was understood,  the  administration would  likely                                                                    
come forward with a recommendation.                                                                                             
Representative  Josephson  reasoned  that there  must  be  a                                                                    
funding  deadline. Consequently,  he  believed  it would  be                                                                    
negligent  if the  funds were  not included  in the  capital                                                                    
budget before  May. He  asked for  verification that  it was                                                                    
necessary  to find  a way  to use  the funding  on something                                                                    
meaningful that adhered with federal guidance.                                                                                  
Mr.  Steininger  agreed.  He  elaborated  that  knowing  the                                                                    
amount of money during  the legislative process provided the                                                                    
information to  have an appropriation  for the  funds rather                                                                    
than  needing to  utilize the  Legislative Budget  and Audit                                                                    
(LB&A) process.  He stated  that the  LB&A process  had been                                                                    
used heavily  the previous  year because  the administration                                                                    
did not  have information about  the money coming  in before                                                                    
the  legislature adjourned.  He noted  that it  was not  the                                                                    
case in the current situation.                                                                                                  
2:57:27 PM                                                                                                                    
Representative Johnson looked at  slide 12 related to grants                                                                    
for  airports. She  asked if  municipal  airports (e.g.,  in                                                                    
Kenai  and  Palmer)  received money  through  the  state  or                                                                    
directly from the federal government.                                                                                           
Mr. Steininger  answered that the  formula had been  done by                                                                    
the FAA  and had  been outside of  the state's  control. For                                                                    
example, the allocations for  specific airports like Merrill                                                                    
Field versus  Fairbanks International  Airport had  not been                                                                    
decided by  the state but  were based on a  federal formula.                                                                    
He  confirmed  that  other  municipalities  that  owned  and                                                                    
operated their own airports  (e.g., the Juneau International                                                                    
Airport was  run by the  city) received  allocations through                                                                    
the  formula as  well.  He relayed  the  list was  available                                                                    
Representative  Wool  recalled  from meetings  the  previous                                                                    
year  that  the  calculation  for  airports  (Anchorage  and                                                                    
Fairbanks in particular) had been  somewhat based on loss of                                                                    
revenue and loss  of airline and cargo traffic.  He asked if                                                                    
Anchorage  had  experienced  a loss  or  increase  in  cargo                                                                    
traffic during the pandemic. He  considered that many people                                                                    
had  ordered  goods  during the  pandemic  and  wondered  if                                                                    
perhaps   the   anticipated   loss  of   revenue   had   not                                                                    
Mr. Steininger deferred the question to DOT.                                                                                    
Mr. Pannone  replied that CARES  Act funding  allocated from                                                                    
the  FAA for  international  airports were  used largely  to                                                                    
keep operations  at status  quo and had  been used  for debt                                                                    
service  payments. He  shared that  the department's  deputy                                                                    
commissioner  had a  great presentation  on  an increase  in                                                                    
cargo traffic  and a decrease  in passenger traffic  and how                                                                    
the  airport   relies  heavily   on  revenue   derived  from                                                                    
passengers.  He  offered  to   present  the  information  at                                                                    
another time.                                                                                                                   
Mr.   Steininger  relayed   that  OMB   would  include   the                                                                    
statistics in its answers to questions.                                                                                         
3:00:43 PM                                                                                                                    
Ms.  Harbour  turned to  slide  13  and discussed  community                                                                    
relief  grants.  She  highlighted  that 45  percent  of  the                                                                    
state's Coronavirus  relief funds  went to  community relief                                                                    
grants to enable local governments  to meet the unique needs                                                                    
in  their  communities  for residents  and  businesses.  The                                                                    
slide included  information as of February  26. She informed                                                                    
the committee  that the January 31  expenditure reports from                                                                    
communities were not due until  the current week; therefore,                                                                    
the information in  the slide was not the  most current. She                                                                    
added that  within a week  OMB should have  more information                                                                    
from communities. She reported that  as of February 26 there                                                                    
were  26  communities that  had  not  entered into  a  grant                                                                    
agreement   with  the   state.   She   detailed  that   when                                                                    
Coronavirus relief  funds were first available,  a number of                                                                    
communities chose not to enter  into an agreement because of                                                                    
the  tight expenditure  timeline and  due to  concerns about                                                                    
eligibility   of   expenditures.  The   administration   was                                                                    
currently  working  through the  process  with  a number  of                                                                    
communities  that had  indicated  they were  ready to  enter                                                                    
into an agreement because the  expenditure deadline had been                                                                    
extended.  She noted  that  the funding  that  had not  been                                                                    
granted was  approximately $2.3 million and  OMB anticipated                                                                    
the number would shrink.                                                                                                        
Ms. Harbour  continued to review  slide 13.  She highlighted                                                                    
that 37 communities had grant  agreements with the state but                                                                    
still  had payments  pending. She  explained that  the state                                                                    
had  split  the  payments  into three  tranches.  To  ensure                                                                    
communities were  spending the  funding, they  were required                                                                    
to spend up  to 80 percent of the previous  tranche prior to                                                                    
receiving  the   next  allocation.  She  reported   that  50                                                                    
communities had fully expended their  funding as of December                                                                    
Ms. Harbour moved to slide  14 showing community spending by                                                                    
category as of February 26.  She noted that new reports were                                                                    
expected  in  the current  week  and  the numbers  would  be                                                                    
updated.  She relayed  that $504.6  million  had been  spent                                                                    
including  35  percent  on payroll  for  public  health  and                                                                    
safety,  22  percent  for   small  business  assistance,  15                                                                    
percent for  other economic support,  8 percent  for housing                                                                    
support,  7 percent  for public  health expenses,  6 percent                                                                    
for medical expenses,  2 percent for other  payroll and much                                                                    
smaller   percentages   for   other   categories   including                                                                    
facilitating  distance  learning, administrative,  improving                                                                    
telework  capabilities, food  programs, testing  and contact                                                                    
tracing, and nursing home assistance.                                                                                           
3:03:46 PM                                                                                                                    
Representative   Rasmussen   stated    that   one   of   the                                                                    
controversial   issues   in    Anchorage   was   the   local                                                                    
government's  decision  to  spend  about  one-third  of  the                                                                    
funding  on homeless  housing. She  believed the  figure was                                                                    
about $60  million. She wondered  where the  expenditure was                                                                    
reflected in the chart [on slide 14].                                                                                           
Ms. Harbour  did not believe the  expenditures were incurred                                                                    
as originally  intended; however,  if they were,  they would                                                                    
be included in the housing support category.                                                                                    
Representative  Rasmussen  looked  at   slide  7  showing  a                                                                    
breakdown  of small  business relief  and community  grants.                                                                    
She asked if  the state felt that the  small business relief                                                                    
program  was functional  and could  serve  the entire  state                                                                    
rather than  "bypassing" the  money to  various communities.                                                                    
She asked if  state was equipped to  handle distributing the                                                                    
funds  if  more money  came  in  rather than  putting  small                                                                    
business relief out to individual communities.                                                                                  
Mr.   Steininger  answered   that   under   the  CARES   Act                                                                    
distribution relief  had been given  to small  businesses in                                                                    
multiple  ways.  He  highlighted   the  state  Alaska  CARES                                                                    
program run  through DCCED by Alaska  Industrial Development                                                                    
and  Export  Authority  (AIDEA).  Additionally,  there  were                                                                    
smaller programs within communities.  He detailed that small                                                                    
business assistance  of $109  million [on  slide 14]  was in                                                                    
addition to the  $290 million that went to  Alaska CARES. He                                                                    
stated there  had been a  bit of a  mix between the  two. He                                                                    
explained that when  the state had been  making decisions in                                                                    
the spring the previous year it  had tried to send the funds                                                                    
to  smaller  political  subdivisions to  allocate  based  on                                                                    
their individual community  needs. Simultaneously, the state                                                                    
had aimed  to balance the statewide  approach through things                                                                    
like Alaska CARES. He believed  the balance had been good in                                                                    
terms  of allocating  money through  DCCED with  a statewide                                                                    
perspective,  while also  providing independent  allocations                                                                    
for personal business relief. He  thought the combination of                                                                    
the different methods  had been successful. He  added it was                                                                    
difficult to  speculate how  additional funding  coming into                                                                    
the state  would be allocated.  He noted it would  depend on                                                                    
how  much   discretion  the  state  got   from  the  federal                                                                    
government  and  what  other resources  were  available  for                                                                    
small businesses. He believed  the administration would want                                                                    
to retain the ability to balance between the two methods.                                                                       
3:07:55 PM                                                                                                                    
Representative Rasmussen  believed the more the  state could                                                                    
streamline the process  to get money out  to communities the                                                                    
better. She hoped her colleagues  shared the view. She noted                                                                    
that Southeast  Alaska would be  impacted in a major  way by                                                                    
the  decisions related  to cruise  ships. She  asked if  the                                                                    
state  could  handle  distributing more  money  directly  to                                                                    
small businesses  and bypassing communities. She  thought it                                                                    
would eliminate  confusion for small business  owners trying                                                                    
to navigate  applications. She reasoned housing  the process                                                                    
in  one   place  would  benefit   the  public   and  provide                                                                    
transparency  to policy  makers  to see  how  the money  was                                                                    
moving around.                                                                                                                  
Ms. Harbour  moved to state agency  COVID-19 expenditures by                                                                    
type  on slide  15.  She noted  that  the expenditures  were                                                                    
reported  monthly to  the legislature.  The majority  of the                                                                    
expenditures  incurred by  the  state related  to COVID  had                                                                    
been supported with federal funds  and the majority had gone                                                                    
out  in  the  form  of   grants  to  communities  and  small                                                                    
businesses. However, the state  had incurred expenditures on                                                                    
state funds  in other categories including  COVID leave. She                                                                    
elaborated that one of the  federal acts had expanded family                                                                    
medical  leave and  other leave  programs for  all employers                                                                    
including the  state. She  explained it  was a  mandate that                                                                    
CRF  funds  were able  to  cover.  There were  other  COVID-                                                                    
related payroll costs and a  number of agencies had to focus                                                                    
on  COVID  mitigation and  response  across  the board.  She                                                                    
highlighted modest  travel expenses  related to  COVID, $137                                                                    
million in  services costs, about $40  million in laboratory                                                                    
supplies,  $38  million  in other  supplies,  and  a  modest                                                                    
amount for capital outlay and equipment.                                                                                        
3:10:58 PM                                                                                                                    
Representative  Johnson   referenced  the   document  titled                                                                    
"Federal  Funding  to  Alaska  for  COVID-19  Response"  and                                                                    
highlighted the  row labeled "fisheries stimulus  thru DCCED                                                                    
(anticipate $50K  to ADFG for assistance."  She observed the                                                                    
federal  funding for  the  item was  $50  million. She  then                                                                    
pointed to an item near the  top of page 2 labeled "COVID-19                                                                    
Fishery   Relief  thru   Pacific   State  Marine   Fisheries                                                                    
Commission  - expected  AK request."  She asked  if the  two                                                                    
items were  separate amounts  for a  total of  $100 million.                                                                    
She  asked   about  the  impacts  on   fisheries  thus  far.                                                                    
Additionally,  she asked  what  the federal  funds would  be                                                                    
used for.                                                                                                                       
Ms.  Harbour answered  that the  two federal  appropriations                                                                    
for fisheries  relief were separate.  She detailed  that the                                                                    
appropriation received  under the CARES Act  was $50 million                                                                    
and  the administration  expected  the second  appropriation                                                                    
under CRRSA  to be  about the same  amount. She  pointed out                                                                    
that  the  administration  had  expected  the  funds  to  go                                                                    
through  DCCED,  but  that  had   not  been  the  case.  She                                                                    
elaborated  that the  funding  was awarded  directly by  the                                                                    
Pacific  State Marine  Fisheries  Commission and  applicants                                                                    
had  to apply  with  the commission.  She  relayed that  the                                                                    
Department of Fish  and Game (DFG) had a  guidance letter to                                                                    
fisheries participants on  how to apply. She  noted that the                                                                    
applications were available online as of the current day.                                                                       
Ms.  Harbour advanced  to slide  16  titled "State  COVID-19                                                                    
Lost   Revenue  Estimates."   The   Department  of   Revenue                                                                    
estimated  the total  revenue loss  including petroleum  and                                                                    
other revenue  to be  approximately $500  million in  FY 20,                                                                    
closer to $600 million in FY  21, and $576 million in FY 22.                                                                    
She noted  that the  loss varied significantly  from program                                                                    
to  program. The  university had  been hit  significantly as                                                                    
students  had  to  leave  and   tuition  was  refunded.  She                                                                    
detailed that  the university  lost $9.3  million in  FY 20,                                                                    
$31.6 million  in FY  21, and  $22.5 million  in FY  22. The                                                                    
Alaska  Marine Highway  System  had  been hit  significantly                                                                    
with  revenue   losses.  The  commercial   passenger  vessel                                                                    
revenue to the  state was down due to the  absence of cruise                                                                    
ships.  She administration  assumed  cruise  ships would  be                                                                    
back online in  FY 22. She noted that  the numbers reflected                                                                    
estimates and if cruise ships  operated in 2021, the revenue                                                                    
loss would not be realized.  She noted the slide only showed                                                                    
major program losses. The full  report showing losses by all                                                                    
agencies broken out  by fiscal year was  available and could                                                                    
be provided to the committee.                                                                                                   
3:14:53 PM                                                                                                                    
Representative Josephson remarked  that the presentation had                                                                    
been enormously helpful.  He looked at slide  16 that showed                                                                    
$50  million   per  fiscal  year,  yet   the  administration                                                                    
believed was 10 times more. He asked for an explanation.                                                                        
Ms.  Harbour answered  that the  number  at the  top of  the                                                                    
slide  was from  DOR and  reflected total  estimated revenue                                                                    
[loss] including oil  and gas taxes. She  explained that the                                                                    
table  on  the lower  portion  of  the slide  reflected  the                                                                    
impacts to state agency program revenue.                                                                                        
Representative   Wool   asked   if  revenue   loss   labeled                                                                    
"petroleum and other" was mostly petroleum.                                                                                     
Ms.  Harbour  replied in  the  affirmative.  She noted  that                                                                    
petroleum  had been  the most  significantly hit  related to                                                                    
Mr.  Steininger  clarified  that  the  petroleum  and  other                                                                    
related to UGF revenue,  while the program revenue primarily                                                                    
showed up as  designated general funds (DGF)  in most agency                                                                    
budgets related to fees and  usage charges. For example, the                                                                    
Fish and Game  Fund was impacted by  tourists not purchasing                                                                    
fishing licenses.                                                                                                               
Representative  Wool  asked  for clarity  on  the  petroleum                                                                    
revenue  loss.  He  highlighted  that  production  had  been                                                                    
roughly the  same. He understood the  pipeline had throttled                                                                    
down for about one month. He  remarked that there had been a                                                                    
decrease in oil price and a  supply glut. He noted the chart                                                                    
[on slide 16]  showed fairly constant revenue  loss [from FY                                                                    
20 through  FY 22]. He wondered  how the loss was  all COVID                                                                    
related.  He highlighted  that some  of the  oil price  drop                                                                    
happened prior  to COVID.  He understood  there was  a large                                                                    
drop in  oil price,  but it  was currently  in the  $60 [per                                                                    
barrel]  range. He  asked how  the  three-year $500  million                                                                    
[per year] decline was attributed to COVID.                                                                                     
Mr. Steininger  answered that there  were many  factors that                                                                    
went into  oil price, production, and  revenues. He detailed                                                                    
the DOR released  its annual fall revenue  forecast in early                                                                    
December. He explained  that OMB had compared  the fall 2019                                                                    
revenue  forecast -  that  had come  out  just before  COVID                                                                    
started to impact  things like oil demand in China  - to the                                                                    
most  recent  revenue  estimates   from  December  2020.  He                                                                    
elaborated that most  of the impact to  revenues was related                                                                    
to price  declines in  2020 where  prices had  gone negative                                                                    
for  some  metrics on  oil.  He  relayed  that most  of  the                                                                    
impacts, while not fully tied  to the virus, were the result                                                                    
of changing global market conditions.                                                                                           
Mr. Steininger  stated that projecting volatile  revenue out                                                                    
into  the future  became  difficult and  was  more art  than                                                                    
science.  He noted  that the  2019 pre-COVID  projection was                                                                    
the last one  available to compare to. He  expounded that as                                                                    
they got further from the  event a divergence would start to                                                                    
occur  and losses  would  no longer  be  as attributable  to                                                                    
COVID. He added given that  the world was still experiencing                                                                    
COVID in a  very real way, many of the  impacts to price and                                                                    
demand  for  oil were  still  related  to the  pandemic.  He                                                                    
stated that whether or not the  full $576 million [in FY 22]                                                                    
represented on the slide was  entirely attributable to COVID                                                                    
was an academic question. He noted  it was the data that was                                                                    
3:20:31 PM                                                                                                                    
Representative Wool  remarked that the cruise  ship industry                                                                    
would be  purchasing oil as  it was expected to  bounce back                                                                    
in FY  22. He  stated there  would be a  return from  a pre-                                                                    
COVID world  in the cruise  ship industry. He  remarked that                                                                    
the 10-year forecast was fairly  flat, which he imagined did                                                                    
not only  look at the one  year of COVID. He  referenced Ms.                                                                    
Harbor's  statement about  the university  returning student                                                                    
tuition, which he surmised occurred  in FY 20. He noted that                                                                    
students were in  school in FY 21. He stated  that there had                                                                    
been  tuition reimbursement  from March  to May.  He thought                                                                    
the  funding had  been  covered in  the  money the  students                                                                    
received. He reasoned that FY 21  and FY 22 would not have a                                                                    
tuition reimbursement;  however, he  observed that  the loss                                                                    
increased in  FY 21  and remained  high in  FY 22  [shown on                                                                    
slide 16].                                                                                                                      
Ms. Harbour replied  that funding to students  did not cover                                                                    
the University  of Alaska's loss  of tuition.  She explained                                                                    
that the  funding had gone  to students to cover  their cost                                                                    
to travel home  and other. She detailed  that the university                                                                    
had received  about $7.9 million.  She elaborated  that $3.9                                                                    
million of the  total had gone to students  for their costs,                                                                    
yet  the university  still had  to  reimburse the  students,                                                                    
which resulted in  lost revenue. In terms  of cost estimates                                                                    
from   the   university   there   were   details   including                                                                    
cancelations  in   housing  and  restricted   occupancy  for                                                                    
auxiliary   services  (e.g.,   housing   and  dining),   the                                                                    
university projected continued  lost revenue associated with                                                                    
capacity  issues and  other  COVID compliance  requirements.                                                                    
She  explained that  the university  did not  know when  the                                                                    
impacts would end, which was part of the lag.                                                                                   
Representative  Josephson  looked  at   slide  9  and  $17.4                                                                    
million to  the university under CRRSA  to offset enrollment                                                                    
and  housing  losses.  He  asked if  the  funds  would  help                                                                    
ameliorate the $31.6 million [in  lost revenue] reflected in                                                                    
the current fiscal year [FY 21].                                                                                                
Ms. Harbour answered that the  university could use funds it                                                                    
did not  have to pass  to students  to cover its  costs. She                                                                    
stated there had been COVID  related costs and lost revenue.                                                                    
She explained that the university  had $31.6 million in lost                                                                    
revenue  in addition  to  any COVID  costs  incurred by  the                                                                    
university to make dorms compliant and other.                                                                                   
3:23:57 PM                                                                                                                    
Representative Josephson thought it  sounded like along with                                                                    
severe cuts that  had come from the  compact, the university                                                                    
had other losses that were not satisfied.                                                                                       
Ms. Harbour asked for clarification on the question.                                                                            
Representative  Josephson   thought  it  sounded   like  the                                                                    
university had other losses that  were not covered by all of                                                                    
the federal generosity.                                                                                                         
Ms. Harbour replied affirmatively.                                                                                              
Representative Rasmussen  referenced the  conversation about                                                                    
government agencies that had been  impacted by COVID and not                                                                    
made  whole. She  thought it  would be  interesting to  know                                                                    
whether the  state had  information on  the number  of small                                                                    
businesses impacted and  the number of Alaskans  who had not                                                                    
been able  to work.  She did not  believe Alaskans  had been                                                                    
made  whole.  She remarked  that  the  information would  be                                                                    
Mr. Steininger  confirmed that it  was definitely  the case.                                                                    
He  considered  the loss  to  the  state's GDP  compared  to                                                                    
incoming  federal  relief  funding  in  the  past  year.  He                                                                    
relayed  there was  still  a very  significant  loss to  the                                                                    
state's  overall  economy  even  with the  $6.3  million  in                                                                    
federal funds.  He stated  the loss was  in the  billions of                                                                    
dollars  and was  borne by  small and  large businesses  and                                                                    
individuals.  He  remarked  that  while  the  focus  of  the                                                                    
presentation was  on state finances,  which was  OMB's daily                                                                    
focus, it  was important not  to lose sight that  the relief                                                                    
had  not satisfied  the  loss outside  of  the state  system                                                                    
3:27:27 PM                                                                                                                    
AT EASE                                                                                                                         
3:37:33 PM                                                                                                                    
KELLY TSHIBAKA,  COMMISSIONER, DEPARTMENT  OF ADMINISTRATION                                                                    
(via teleconference), introduced herself.                                                                                       
LESLIE   ISAACS,  TS'AANG   GAA'Y,  ADMINISTRATIVE   SERVICE                                                                    
DIRECTOR,   DEPARTMENT   OF    ADMINISTRATION,   OFFICE   OF                                                                    
MANAGEMENT AND  BUDGET, OFFICE  OF THE  GOVERNOR, introduced                                                                    
himself   as   Ts'aang  Gaa'y   from   the   Koos  Gaa   Dee                                                                    
(Eagle/Frog/Beaver)  clan. He  shared  that he  is from  the                                                                    
village of  Klawock located  on Prince  of Wales  Island. He                                                                    
was honored  to testify before the  committee. He introduced                                                                    
a  PowerPoint  presentation  titled  "Pandemic  Preparedness                                                                    
Plan    Program    Allocations:   Alaska    Department    of                                                                    
Administration," dated  February 9, 2021 (copy  on file). He                                                                    
began on slide 2 titled  "CARES Act Funding." He shared that                                                                    
in  April 2020,  the governor  had asked  the Department  of                                                                    
Administration  (DOA) to  prepare a  plan to  deal with  the                                                                    
COVID outbreak. As a result,  DOA had developed the Pandemic                                                                    
Preparedness  Plan (PPP),  which included  Phases I  through                                                                    
III and a final quality  assurances (QA) phase. He noted the                                                                    
department  believed the  QA phase  was  the most  important                                                                    
phase of  the plan. He  explained that the QA  phase allowed                                                                    
DOA to set up assurances  that the state's investment in the                                                                    
plan  would be  well utilized.  The governor  had asked  the                                                                    
department  to make  certain it  could ensure  worker safety                                                                    
and   maintain  continuity   of   government  services   and                                                                    
Mr. Isaacs  continued to  review slide  2. He  reported that                                                                    
DOA had received $58,180,000 million,  which was less than 1                                                                    
percent  of   the  federal  funds   discussed  in   the  OMB                                                                    
presentation.  The expenditures  for  Phases  I through  III                                                                    
accounted  for $52,842,529,  which included  the amount  DOA                                                                    
expected to  spend in FY 21.  He stated that the  amount put                                                                    
the department under budget by  $5.3 million. The department                                                                    
had  informed  the   governor  and  OMB  that   it  had  the                                                                    
unallocated and unspent funds available  if they were needed                                                                    
Mr.  Isaacs informed  the committee  that Phase  I evaluated                                                                    
the state's  existing core  services. The  department looked                                                                    
at which  services and processes  could be  digitized. Phase                                                                    
II  looked  at  the   state's  telework  infrastructure  and                                                                    
AspireAlaska,  the  state's digital  performance  management                                                                    
system and  learning management  system for  supervisors. He                                                                    
stated  that Phase  III was  more  convoluted and  pertained                                                                    
primarily  to  the  Office  of  Information  Technology.  He                                                                    
relayed there  were numerous things  that needed to  be done                                                                    
to enable teleworking.  He noted that the  things done prior                                                                    
to his  hire date in  August allowed  him to be  a permanent                                                                    
teleworker from his  village in Klawock. He  shared that his                                                                    
eight  children  and   sixteen  grandchildren  all  attended                                                                    
school in  Klawock, which  helped with  economic development                                                                    
in  the  villages.  Phase  III  also  included  the  Service                                                                    
Management  System:  AlaskaNow.  The system  would  automate                                                                    
over  160  manual  processes   across  the  state  including                                                                    
onboarding, recruitment, and time sheets.                                                                                       
3:44:32 PM                                                                                                                    
Mr. Isaacs  turned to  slide 3 outlining  the six  phases of                                                                    
Alaska's PPP Plan.  He noted that because  December 30, 2020                                                                    
had been the finish line  for the initial use of Coronavirus                                                                    
Relief Funds  (CRF), Phases  IV through VI  had to  be taken                                                                    
off of  the plan to be  completed. He explained that  if DOA                                                                    
was given  additional CRF  funds to  continue it  would have                                                                    
the  ability   to  implement  Phases   IV  through   VI.  He                                                                    
highlighted that the all of  the CARES Act requests were run                                                                    
through the  department's Division of Finance  to ensure the                                                                    
state  was  adhering  to  CRF   rules.  He  noted  that  the                                                                    
expenditure rules changed frequently in the beginning.                                                                          
Mr.  Isaacs looked  at slide  5 showing  a map  highlighting                                                                    
states  with similar  CRF  expenditures  aimed at  improving                                                                    
telework and  keeping workers safe.  He noted  that Missouri                                                                    
and Oklahoma had been added to the slide deck.                                                                                  
3:47:19 PM                                                                                                                    
Mr. Isaacs  advanced to slide 6  titled "Quality Assurance."                                                                    
He discussed that QA had been  set up first as a priority to                                                                    
ensure all PPP projects  were completed and that legislators                                                                    
received value for  their investment. He shared  that one of                                                                    
the   department's  main   contractors   was  Wostmann   and                                                                    
Associates in Juneau. The firm  had been hired to ensure all                                                                    
of the work  being done was beneficial and  complete for the                                                                    
state. He noted  that DOA had established  a governance team                                                                    
to ensure  project success and effective,  realistic project                                                                    
management and  execution. He  stated it was  a new  way for                                                                    
DOA  to work  with other  departments to  make certain  they                                                                    
were  on  board  with  the   way  DOA  was  proceeding  with                                                                    
3:48:41 PM                                                                                                                    
Mr. Isaacs turned  to slide 7 and stated  that core services                                                                    
evaluation  under Phase  I was  complete.  He detailed  that                                                                    
under Phase I, DOA assessed  and analyzed what the state was                                                                    
doing and how it could  modify tasks, services, and business                                                                    
processes in  order to be  best performed from  home offices                                                                    
in a telecommuting environment.  Phase I also identified and                                                                    
prioritized  a list  of 128  tasks,  services, and  business                                                                    
processes  that  could  be modified  for  improved  function                                                                    
during the  pandemic. The initiatives were  the substance of                                                                    
the PPP Phases IV through VI.  Slide 8 highlighted 23 of the                                                                    
128 projects identified in Phase I.                                                                                             
3:50:05 PM                                                                                                                    
Mr.  Isaacs spoke  to Phase  II referred  to as  the Pathway                                                                    
Project (slide 9). He detailed  that the Pathway Project had                                                                    
enabled  the  department  to launch  AspireAlaska  aimed  at                                                                    
automating,   training,  and   performance  management.   He                                                                    
elaborated  that  the  program  offered  over  2,000  online                                                                    
training courses to  employees, facilitating remote learning                                                                    
and  professional development;  and  enabling  the state  to                                                                    
manage  employee  development, create  career  progressions,                                                                    
and  develop  mastery  paths.  He   highlighted  a  list  of                                                                    
objectives on the  right side of the slide.  He relayed that                                                                    
the  program had  allowed people  like  himself to  telework                                                                    
from  villages  that  have a  reliable  high-speed  internet                                                                    
connection.  He shared  that one  of his  coworkers reported                                                                    
meeting [virtually]  via Teams messaging more  often than in                                                                    
person during the pandemic.                                                                                                     
Mr.  Isaacs   addressed  Phase   III  focused   no  enabling                                                                    
technology including  connectivity, collaboration, security,                                                                    
productivity, and  automation (slide  10). He  referenced an                                                                    
earlier question  by a  committee member  about how  much of                                                                    
the department's budget  had been replaced by  CRF funds. He                                                                    
reported that  the department  had not  replaced any  of its                                                                    
operating expenditures  with the exception of  hiring short-                                                                    
term non-permanent  help when it  had procured  and deployed                                                                    
4,300 laptops for employees to telework.                                                                                        
3:52:56 PM                                                                                                                    
Mr.  Isaacs spoke  about the  fiscal responsibility  DOA had                                                                    
shown through Phases I through III  of the PPP plan. Phase I                                                                    
had a  total allocation of  $780,000 and the  department had                                                                    
come in  slightly under budget  with a remaining  balance of                                                                    
$3,758. Phase  II had  a total  allocation of  $11.4 million                                                                    
and  there  was  currently  a  remaining  balance  of  $3.69                                                                    
million. He explained that Phase  III had the broadest reach                                                                    
in  terms of  the  enabling technology  and  DOA planned  on                                                                    
using the full  allocation of $41.4 million.  He stated that                                                                    
according  to   the  Division   of  Office   of  Information                                                                    
Technology,  the   division  could   use  more   funding  if                                                                    
Representative  Edgmon  asked   for  verification  that  Mr.                                                                    
Isaacs did his entire job teleworking.                                                                                          
Mr. Isaacs replied in the affirmative.                                                                                          
Representative Edgmon  thought it  was impressive.  He asked                                                                    
for verification  that the concept  of teleworking  had been                                                                    
brought on  by the pandemic  and it  had grown into  a model                                                                    
that other state agencies may be able to use.                                                                                   
Mr.   Isaacs   answered   affirmatively.  He   stated   that                                                                    
teleworking  and the  ability  to hire  qualified people  to                                                                    
fill  state positions  who live  in rural  villages was  the                                                                    
silver lining to  the pandemic. He relayed  that without the                                                                    
pandemic  it  would not  have  made  his personal  situation                                                                    
Representative  Edgmon asked  if Mr.  Isaacs would  have the                                                                    
ability  to  continue working  from  his  village after  the                                                                    
Mr.  Isaacs replied  that he  had been  told he  would be  a                                                                    
permanent teleworker.  He noted  that if  leadership changed                                                                    
with an  election there was  potential for the  situation to                                                                    
change. As  things currently stood, he  would continue serve                                                                    
the people of Alaska from his village in Klawock.                                                                               
3:56:15 PM                                                                                                                    
Representative  Edgmon   asked  how  significant   the  cost                                                                    
savings could  be by  full implementation  of Phase  III. He                                                                    
was trying to understand the magnitude of order.                                                                                
Mr. Isaacs responded  that DOA was working with OMB  to do a                                                                    
space study  analysis of leased space  throughout the state.                                                                    
The  department   would  work  with  other   departments  to                                                                    
determine  how  many  of  their  staff  could  be  permanent                                                                    
teleworkers  and what  those savings  may implicate  for the                                                                    
state.  He  relayed  that  the  DOA  commissioner  supported                                                                    
teleworking.  He  added  that  supervisors  had  to  approve                                                                    
whether  a position  was teleworking  capable. He  explained                                                                    
there were  some positions within  DOA that did not  fit the                                                                    
telework model, simply because  handling paper was required.                                                                    
However,  there were  many  things  the enabling  technology                                                                    
allowed work to be digitized.                                                                                                   
3:58:27 PM                                                                                                                    
Vice-Chair  Ortiz thanked  Mr. Isaacs  for his  presentation                                                                    
and was glad to hear a  person from the community of Klawock                                                                    
could work from home. He asked  if there was a certain point                                                                    
where there was  an evaluation of the impact  on the overall                                                                    
quality and  delivery of services  from people  working from                                                                    
home.  He  wondered  if   teleworking  would  bring  overall                                                                    
positive benefits to the state in the delivery of services.                                                                     
Commissioner Tshibaka answered that  the department had done                                                                    
a survey  in 2020  to determine  how telework  was impacting                                                                    
the  departments during  the  pandemic.  The department  had                                                                    
found  across the  board  from  employees, supervisors,  and                                                                    
executive  management  that  more was  being  achieved  with                                                                    
telework;  however,  some  of the  concerns  expressed  were                                                                    
about  the loss  of  things like  trust, collaboration,  and                                                                    
values that came with culture.  She explained it was part of                                                                    
what was  sacrificed when people  did not see each  other in                                                                    
person. She stated  that with the ability to  move back into                                                                    
offices it would  be necessary to assess how  often to bring                                                                    
teleworkers in  in order  to reclaim  some of  the in-person                                                                    
values that were important to developing workforce.                                                                             
Commissioner  Tshibaka   shared  that  she   had  experience                                                                    
creating  staggered work  schedules  and in-person  meetings                                                                    
where employees worked on a  project for a specific purpose,                                                                    
while still achieving the maximum  benefits of telework. She                                                                    
reported  that DOA  intended to  continue using  surveys and                                                                    
polls to  measure what was  happening in the  workforce. She                                                                    
explained  it  was  part  of the  continued  effort  of  the                                                                    
Pathway   Program   under   the  Phase   II   implementation                                                                    
throughout 2021.  The department  was continuing  to measure                                                                    
workforce through its performance plan.                                                                                         
Commissioner  Tshibaka  noted  that the  department  had  to                                                                    
change  the  way it  did  performance  planning and  metrics                                                                    
because  previously employees  had been  measured on  things                                                                    
like number of  work hours or number of hours  in the office                                                                    
and  less on  things like  outcome. She  furthered that  the                                                                    
method  had  been changed  to  match  a telework  workforce.                                                                    
Supervisors  had  expressed they  did  not  know what  their                                                                    
employees were doing, which put  them in a tenuous spot. She                                                                    
expounded that 7,000 employees had  gone through the Pathway                                                                    
Program the past year, which  provided a much better idea of                                                                    
exactly  what  employees  were  doing  from  their  telework                                                                    
location.  The work  could be  measured  daily, weekly,  and                                                                    
throughout the performance year cycle.                                                                                          
4:01:58 PM                                                                                                                    
Vice-Chair Ortiz asked  how much telework was  being done by                                                                    
people  living   outside  Alaska  resulting   in  resources,                                                                    
salaries, and  money being circulated  in areas  outside the                                                                    
Commissioner Tshibaka  answered that  about 55 to  60 people                                                                    
across  all of  the state  departments were  working out-of-                                                                    
state.  She  relayed  that telework  agreements  had  to  be                                                                    
approved   by  commissioners.   She   elaborated  that   the                                                                    
department was almost finished  revising the telework policy                                                                    
that would  further limit out-of-state  telework agreements.                                                                    
She explained  that because of  the change in the  nature of                                                                    
COVID (i.e.,  there was a  vaccine available and  the number                                                                    
of  cases had  decreased)  the  department felt  comfortable                                                                    
limiting  out of  state telework  to individuals  needing to                                                                    
leave the  state to  care for  someone who  was sick  or for                                                                    
their own medical care. She  clarified that exempt employees                                                                    
were   required   to   get  commissioner   approval,   while                                                                    
bargaining  unit  employees  were   required  to  get  their                                                                    
union's  approval   as  well.  She  communicated   that  the                                                                    
standard  for  getting  an out-of-state  telework  agreement                                                                    
would be high going forward.                                                                                                    
Mr. Isaacs added  that one of his duties was  to sign off on                                                                    
the  telework agreements.  He  informed  the committee  that                                                                    
currently, agreements were being  approved and reviewed on a                                                                    
quarterly basis.                                                                                                                
Representative LeBon remarked that  he did not believe there                                                                    
should be any state  employees working from out-of-state. He                                                                    
understood it happened, but he  hoped the commissioner would                                                                    
take a  hard look at the  issue. He stated that  the private                                                                    
sector dealt  with worker's compensation within  the office.                                                                    
He referenced the statement that  7,000 state employees were                                                                    
working from  home. He asked  if an employee was  injured at                                                                    
home if it was a worker's compensation event.                                                                                   
Commissioner Tshibaka  answered that  it depended on  what a                                                                    
person  was  doing and  where  and  when the  activity  took                                                                    
place. She  explained there were  several factors  that came                                                                    
into  play.  For example,  she  was  currently in  her  work                                                                    
location and  would be covered  by worker's  compensation if                                                                    
she  were  to  get  hurt.  She  reported  that  the  state's                                                                    
worker's  compensation  claims  had  decreased  dramatically                                                                    
since there had been a  high increase in telework, which was                                                                    
positive news for the state.                                                                                                    
4:05:41 PM                                                                                                                    
Representative Edgmon  recalled the committee had  been told                                                                    
recently there  were approximately 20,000 state  workers. He                                                                    
asked  for  verification  that 7,000  state  employees  were                                                                    
currently teleworking.                                                                                                          
Commissioner Tshibaka  responded that the current  number of                                                                    
state employees  teleworking ranged between 5,300  to 6,000.                                                                    
She noted that  the number fluctuated depending  on the need                                                                    
at the time.  She used the Public Defender  Agency under DOA                                                                    
as  an example.  She explained  that depending  on what  the                                                                    
court was doing and depending  on their clients' needs there                                                                    
would be more  attorneys in the office  meeting with clients                                                                    
or more would  go home. She expounded that  it also depended                                                                    
on what was happening in the  office in terms of health. She                                                                    
explained  that there  had been  a  health scare  in one  of                                                                    
DOA's offices and  employees who had all been  in the office                                                                    
the  previous week  were all  out of  the office  during the                                                                    
current week.  She reported the  peak number  of teleworkers                                                                    
had  been  about  6,000  during   COVID.  The  7,000  number                                                                    
reflected  the number  of positions  that  went through  the                                                                    
Pathway  Project  (a  new performance  planning  development                                                                    
system),  resulting in  a  revised  performance plan  system                                                                    
that was teleworkable.                                                                                                          
Representative Edgmon thought Alaska  was on the vanguard of                                                                    
the  effort nationwide.  He asked  for the  accuracy of  his                                                                    
Commissioner Tshibaka replied that  when DOA had started the                                                                    
process, only one  other state had started to  use money for                                                                    
telework  capability.  The  department had  also  identified                                                                    
that  most   of  the  other   states  had   already  started                                                                    
teleworking.  When  the  State  of  Alaska  started  at  the                                                                    
beginning of  COVID, less  than 1  percent of  its employees                                                                    
were teleworking. She  elaborated that there had  not been a                                                                    
telework infrastructure  in Alaska, heightened  VPN capacity                                                                    
for  cybersecurity on  the state's  network, or  deployed an                                                                    
extensive amount  of state laptops [prior  to the pandemic].                                                                    
She reported  that prior to  the pandemic the state  did not                                                                    
have DocuSign  to enable documents  to be  signed digitally.                                                                    
She   explained  that   the   state  had   to   set  up   an                                                                    
infrastructure that none  of the other 49 states  had to set                                                                    
up from  scratch. Additionally, the  work had to be  done on                                                                    
an  expedited   timeframe  because  the   original  guidance                                                                    
mandated being done by December 30.                                                                                             
Commissioner  Tshibaka  referred   to  setting  up  numerous                                                                    
information  technology deployments  on  the tight  timeline                                                                    
under budget and without error  as a government miracle. She                                                                    
stated  that  all  of  the credit  went  to  the  government                                                                    
employees working in DOA who  had worked around the clock to                                                                    
get the  work done. She  believed states had  been surprised                                                                    
Alaska had been able to  pull off such an extraordinary feat                                                                    
in  changing  its  business practices.  Additionally,  other                                                                    
states  had  looked  at Alaska  and  determined  they  could                                                                    
follow a  similar process because it  ensured worker safety.                                                                    
She  added that  the  state had  not lost  a  single day  of                                                                    
operations because of  the work the DOA  employees had done.                                                                    
Additionally, there  had not been  super spreader  events in                                                                    
state buildings  because of the high  number of teleworkers.                                                                    
She remarked that the two items  were big wins the DOA staff                                                                    
had added to the Coronavirus response.                                                                                          
Representative Josephson asked if  the $53 million spent was                                                                    
entirely federal funding.                                                                                                       
Commissioner Tshibaka confirmed that  the money was entirely                                                                    
comprised of Coronavirus funding.                                                                                               
4:09:56 PM                                                                                                                    
Vice-Chair  Ortiz  looked  at  slide 8  showing  23  of  128                                                                    
projects  identified  in  Phase  I. He  looked  at  the  DMV                                                                    
[Division of  Motor Vehicles] category and  asked for detail                                                                    
about the  project in relationship to  car titling, driver's                                                                    
license knowledge tests, and other.                                                                                             
Mr.  Isaacs deferred  the question  to the  commissioner. He                                                                    
stated that the  work had been done prior to  his hire date.                                                                    
He shared  that he had recently  bought his wife a  new car.                                                                    
He  provided his  experience with  DMV and  stated that  the                                                                    
current process worked very well.                                                                                               
Commissioner   Tshibaka  answered   that  the   23  projects                                                                    
highlighted on slide  8 were the top  projects identified by                                                                    
the  department   that  would   bring  an  easy   return  on                                                                    
investment by converting work currently  done in person to a                                                                    
digitized  process. The  DMV  projects  identified could  be                                                                    
digitized and would not require in person work.                                                                                 
4:11:58 PM                                                                                                                    
Vice-Chair   Ortiz  had   heard  some   concerns  from   his                                                                    
constituents  that   some  individuals  may  not   have  the                                                                    
knowledge  or access  to digital  processes. He  stated that                                                                    
some constituents  had been very  frustrated by  the change.                                                                    
He asked if the department had heard similar things.                                                                            
Commissioner  Tshibaka  answered  in  the  affirmative.  She                                                                    
clarified that customers would still  have the ability to go                                                                    
to  DMVs  for  in-person  service. She  explained  that  the                                                                    
project created  an alternative  access point.  She detailed                                                                    
that currently  no one  had the option  to access  the three                                                                    
services  digitally.  The  goal  was  to  offer  alternative                                                                    
options.  She  reported  that the  services  were  currently                                                                    
creating  lines, backlogs,  and delays  at DMVs.  She stated                                                                    
they  could clear  out  a lot  of traffic  from  the DMV  by                                                                    
making an online  option available. She shared  she had been                                                                    
working with  other stakeholders  and partners  to determine                                                                    
when internet would  be available across the  state. She was                                                                    
hearing from partners that within  two years there should be                                                                    
internet available across the  state regardless of location.                                                                    
She  stated  it  was  something  she  was  considering  when                                                                    
pushing  digital initiatives  for the  state. She  agreed it                                                                    
was unfair that digital services  would only be available to                                                                    
people living in places with  internet. She reasoned that if                                                                    
it took about  one to two years to  provide digital options,                                                                    
it  synced with  the timing  when internet  access would  be                                                                    
available to everyone.                                                                                                          
Vice-Chair Ortiz  appreciated the efficiencies  being found;                                                                    
however, he stated it was  one thing to say that individuals                                                                    
could still  come in if  there continued  to be an  open DMV                                                                    
office.  He had  seen a  list of  six or  seven DMV  offices                                                                    
slated  for  closure.  He was  concerned  about  how  people                                                                    
without digital access could access the services.                                                                               
Commissioner   Tshibaka  answered   that  the   department's                                                                    
proposal  was to  transition those  DMVs  to public  private                                                                    
partnerships.  She used  the  partnerships  the U.S.  Postal                                                                    
Service  had with  FedEx as  an example.  The administration                                                                    
would transition  the DMVs to private  partnerships so there                                                                    
would be  DMV services  available in those  communities. The                                                                    
idea  was  to   eliminate  the  cost  to   the  state  while                                                                    
continuing  to provide  services to  community members.  She                                                                    
elaborated that people  who did not want to  use the private                                                                    
partnership  could drive  to  a  state DMV  up  the road  or                                                                    
access services online or via mail.                                                                                             
Representative   Josephson  noted   there  was   concern  by                                                                    
Alaskans about shifting to  a public/private partnership. He                                                                    
remarked that some Alaskans were  aware that DMV was a money                                                                    
maker for  the state.  On the whole  he believed  the public                                                                    
was  satisfied  with  the services  they  were  getting.  He                                                                    
shared Vice-Chair Ortiz's concerns.                                                                                             
4:16:20 PM                                                                                                                    
Commissioner  Tshibaka  answered  that  she  understood  the                                                                    
concerns.  She highlighted  that  the  ideas were  proposals                                                                    
offered to  the legislature as  the policy making  body. She                                                                    
believed the  state was facing a  significant challenge with                                                                    
a   budget  [gap]   exceeding  $2   billion.  She   detailed                                                                    
commissioners  were all  given the  task of  coming up  with                                                                    
cost  savings  to bridge  the  gap.  She reported  that  the                                                                    
department was  trying to  come up  with cost  savings ideas                                                                    
without eliminating  services. She asked the  legislature to                                                                    
consider   the   private   partnership  in   each   location                                                                    
individually  because the  situation  in  each location  was                                                                    
unique.   She   understood   that  everyone   involved   was                                                                    
struggling with  the challenges  of how  to bridge  the gap.                                                                    
She noted that  one side of the bridge  pertained to revenue                                                                    
and  the other  side pertained  to the  cost of  government.                                                                    
There  were other  proposed  solutions including  digitizing                                                                    
128 other initiatives.  She noted it would  cost $25 million                                                                    
to make the changes, but  once implemented it would save $89                                                                    
million  per year.  She stated  there were  different things                                                                    
that  could be  done within  the department  to achieve  the                                                                    
goals  and  the items  in  the  presentation were  all  just                                                                    
Mr.  Isaacs shared  that when  he got  his driver's  license                                                                    
when  he  turned  16,  he   had  gone  to  Craig  where  the                                                                    
DMV  was  a  public/private  partnership with  the  City  of                                                                    
Craig. He stated that the proposed  model was not new to the                                                                    
State of Alaska DMV and was tried and true for many years.                                                                      
HB  69  was   HEARD  and  HELD  in   committee  for  further                                                                    
HB  71  was   HEARD  and  HELD  in   committee  for  further                                                                    
Co-Chair  Merrick reviewed  the schedule  for the  following                                                                    
4:18:54 PM                                                                                                                    
The meeting was adjourned at 4:18 p.m.                                                                                          

Document Name Date/Time Subjects
AK CRF Allocations and Expenditures as of 2.26.2021.pdf HFIN 3/1/2021 1:30:00 PM
COVID-19 Federal Funding to AK 2.5.2021.pdf HFIN 3/1/2021 1:30:00 PM
HFIN OMB COVID Funding Overview 2.26.pdf HFIN 3/1/2021 1:30:00 PM
HFIN-DOA-PPP Presentation 3-1-21.pdf HFIN 3/1/2021 1:30:00 PM