Legislature(2021 - 2022)ADAMS 519

05/12/2021 01:30 PM FINANCE

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Audio Topic
02:50:32 PM Start
02:51:02 PM HB70
02:51:10 PM Presentation: Village Safe Water
03:47:32 PM Presenation: Prosecutor Housing
04:16:46 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 10 Minutes Following Session --
+= HB 70 APPROP: CAP; REAPPROP; SUPP; AMEND TELECONFERENCED
Heard & Held
+ Presentation: Dept. of Law & Alaska Housing TELECONFERENCED
Finance Corp. Prosecutor Housing
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ Presentation: Village Safe Water by Ruth Kostik, TELECONFERENCED
Administrative Services Director, Dept. of
Environmental Conservation
                   HOUSE FINANCE COMMITTEE                                                                                      
                        May 12, 2021                                                                                            
                          2:50 p.m.                                                                                             
                                                                                                                                
2:50:32 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Merrick called the  House Finance Committee meeting                                                                    
to order at 2:50 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Carrie   Bohan,   Facilities   Services   Program   Manager,                                                                    
Department  of  Environmental Conservation;  Bryan  Butcher,                                                                    
Chief  Executive  Officer  and  Executive  Director,  Alaska                                                                    
Housing Finance Corporation, Department of Revenue.                                                                             
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Ruth  Kostik, Administrative  Services Director,  Department                                                                    
of  Environmental  Conservation,  Office of  Management  and                                                                    
Budget,  Office  of  the  Governor;  John  Skidmore,  Deputy                                                                    
Attorney General, Criminal Division, Department of Law.                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 70     APPROP: CAP; REAPPROP; SUPP; AMEND                                                                                    
                                                                                                                                
Co-Chair Merrick reviewed the meeting agenda.                                                                                   
                                                                                                                                
HOUSE BILL NO. 70                                                                                                             
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     making   appropriations   to  capitalize   funds;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
2:51:02 PM                                                                                                                    
                                                                                                                                
^PRESENTATION: VILLAGE SAFE WATER                                                                                             
                                                                                                                                
2:51:10 PM                                                                                                                    
                                                                                                                                
CARRIE   BOHAN,   FACILITIES   SERVICES   PROGRAM   MANAGER,                                                                    
DEPARTMENT   OF   ENVIRONMENTAL    CONSERVATION,   began   a                                                                    
PowerPoint presentation titled  "Department of Environmental                                                                    
Conservation House  Finance Committee," dated May  10, 2021.                                                                    
She began on slide 2 titled "Village Safe Water:"                                                                               
                                                                                                                                
     Village Safe Water's mission is to support rural                                                                           
     communities in their efforts to develop sustainable                                                                        
     sanitation facilities                                                                                                      
                                                                                                                                
               Communities with a population less than                                                                          
               1,000 per AS 47.07.080                                                                                           
                                                                                                                                
     We accomplish this mission by:                                                                                             
                                                                                                                                
               Funding planning, design, and construction                                                                       
          of                                                                                                                    
               water, wastewater, and solid waste projects                                                                      
               Providing project management and oversight                                                                       
               for grant funded projects                                                                                        
                                                                                                                                
Ms.  Bohan elaborated  that a  few communities  exceeded the                                                                    
one thousand population limit and  were the exception due to                                                                    
their  status as  second class  cities, which  were included                                                                    
under statute.                                                                                                                  
                                                                                                                                
2:53:47 PM                                                                                                                    
                                                                                                                                
Ms.  Bohan moved  to  slide 3  titled  "Village Safe  Water:                                                                    
Project Assessment:"                                                                                                            
                                                                                                                                
     Project grant applications are scored primarily on how                                                                     
     they address critical public health needs and capacity                                                                     
     to operate and maintain facilities                                                                                         
                                                                                                                                
               Current level of service                                                                                         
               Beneficial health impact provided by the                                                                         
               project                                                                                                          
           Relationship to other project phases                                                                                 
          Operation, maintenance, and management                                                                                
               capabilities                                                                                                     
                                                                                                                                
     High scoring projects added to the Multi-Year Priority                                                                     
     List                                                                                                                       
                                                                                                                                
Ms.  Bohan  explained that  projects  were  ranked in  score                                                                    
order and those  highest on the list  received funding. Once                                                                    
a project  was selected  Village Safe Water  (VSW) committed                                                                    
to funding  it through completion,  but the funding  was not                                                                    
always  allocated   at  one  time.  The   large  longer-term                                                                    
projects  were placed  on the  multi-year priority  list and                                                                    
after  the design  phase  was  completed, received  priority                                                                    
funding  as needed  in subsequent  years to  completion. The                                                                    
multi-year   priority   list    gave   the   Department   of                                                                    
Environmental  Conservation (DEC)  the  flexibility to  fund                                                                    
more than one project at a time.                                                                                                
                                                                                                                                
2:56:23 PM                                                                                                                    
                                                                                                                                
Representative Carpenter pointed to  slide 3 and asked about                                                                    
the  criteria   used  to  judge  capacity   to  operate  and                                                                    
maintain.  Ms. Bohan  replied that  since 2015  VSW employed                                                                    
the   Operation and  Maintenance Best  Practices  tool.  She                                                                    
delineated that the tool was  based on three categories that                                                                    
were established in the Safe Drinking Water Act:                                                                                
technical,  financial, and  managerial categories.  The tool                                                                    
judged water  system capacities. The department  worked with                                                                    
the Rural Utility Business Advisor  within the Department of                                                                    
Commerce,  Community  and  Economic Development  (DCCED)  to                                                                    
gather   information  from   communities   and  score   them                                                                    
according  to  the  tools   criteria.  The  information  was                                                                    
published  on the  program's website  so the  other agencies                                                                    
working with  the communities were  able to look at  how the                                                                    
community was doing and  could provide additional assistance                                                                    
to improve their capacity.                                                                                                      
                                                                                                                                
2:58:32 PM                                                                                                                    
                                                                                                                                
Representative  Wool  spoke  to a  community's  capacity  to                                                                    
operate  and  maintain  a system.  He  assumed  a  community                                                                    
needed  the  financial  means  to   maintain  a  system.  He                                                                    
ascertained that it  was a problem if  communities could not                                                                    
afford to  maintain the system.  He inquired  whether fiscal                                                                    
solvency to operate  and maintain a system  was a criterion.                                                                    
Ms.  Bohan answered  in the  affirmative. She  reported that                                                                    
the program  determined if a  community had a  realistic and                                                                    
balanced budget  and were collecting sufficient  revenues to                                                                    
cover the cost of operating  and maintaining the system. She                                                                    
elaborated that it was not  a "yes/no" type of scoring. Each                                                                    
community had  an opportunity to improve  its capacity. Each                                                                    
category had  multiple tiers and  a community  could improve                                                                    
their scores through easily identifiable criteria.                                                                              
                                                                                                                                
3:00:44 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster addressed  the   catch 22   facing the  VSW                                                                    
program regarding communities with  the ability to support a                                                                    
system and  communities that could not.  He acknowledged the                                                                    
need  for  a scoring  system,  but  it left  the  ineligible                                                                    
communities  without  basic   services.  He  understood  the                                                                    
complexity of  the issue  and wanted to  place the  issue on                                                                    
the record and  asked for comments. Ms.  Bohan answered that                                                                    
there  was  no  easy  solution to  the  issue.  The  program                                                                    
discussed the issue frequently,  internally and with federal                                                                    
partners. She  reported that VSW did  adjust the eligibility                                                                    
criteria  in the  current year  to address  the issue.  They                                                                    
lowered the  eligibility score for unserved  and underserved                                                                    
communities  to   access  funds  for  improvement   to  core                                                                    
infrastructure. The  program continued to work  with all the                                                                    
partners to  assist the communities build  its capacity. She                                                                    
noted that  VSW had  success with regional  partners helping                                                                    
with funding.                                                                                                                   
                                                                                                                                
3:04:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  thanked the program for  the recognition of                                                                    
the issue. He realized it was an ongoing process.                                                                               
                                                                                                                                
Ms. Bohan  advanced to slide  4 titled "Village  Safe Water:                                                                    
Average Project:"                                                                                                               
                                                                                                                                
     Cost to provide running water and sewer to individual                                                                      
     homes in a village for the first time                                                                                      
               $350 - $750 thousand per/home                                                                                  
                                                                                                                                
     Projects typically last 5-10 years to completion,                                                                          
     depending on                                                                                                               
            Size and complexity of the project                                                                                
               Availability of funds                                                                                          
               Ability of community to meet ongoing                                                                           
                  construction funding conditions                                                                               
                                                                                                                                
Ms. Bohan discussed an average project.                                                                                         
                                                                                                                                
Co-Chair Merrick asked  what drove the cost up  so high. Ms.                                                                    
Bohan answered that the high  price tag included the cost to                                                                    
mobilize  materials and  the short  construction season  was                                                                    
also a  factor. She relayed  that a delay could  easily mean                                                                    
missing an entire construction  season. Construction for the                                                                    
landscape  and  climate  raised the  costs.  Currently,  the                                                                    
materials  costs had  skyrocketed  due to  the pandemic  had                                                                    
skyrocketed.  She  concluded that  there  was  a variety  of                                                                    
reasons that drove high project cost.                                                                                           
                                                                                                                                
3:07:45 PM                                                                                                                    
                                                                                                                                
Representative  Carpenter referenced  slide  4 and  observed                                                                    
that  the  costs reflected  the  way  things had  been  done                                                                    
versus how things could get  done. He asked if his statement                                                                    
was accurate. Ms. Bohan replied in the affirmative.                                                                             
                                                                                                                                
Representative  Wool  guessed  that  if there  was  a  water                                                                    
utility  in  place  charging for  service,  he  assumed  the                                                                    
utility would not  recover the cost, but  the customer would                                                                    
be billed for service. He asked  about the average cost of a                                                                    
water/sewer  bill that  had a  water system  installed at  a                                                                    
cost of $500 thousand per  home. Ms. Bohan answered that the                                                                    
numbers included on slide 4  were provided via grant dollars                                                                    
and  the  communities  were  not   taking  on  the  expense.                                                                    
However, the customer  would be billed to  cover the ongoing                                                                    
expenses.  She  recalled  that  user  rates  in  some  rural                                                                    
communities  were  as high  as  $250  per month.  She  would                                                                    
follow up with more average costs.                                                                                              
                                                                                                                                
Representative  Josephson  asked   about  goal  setting.  He                                                                    
stated the goal  was lofty and honorable. He  asked what the                                                                    
program was trying  to achieve. Ms. Bohan  answered that the                                                                    
goal was to provide  public health protection through access                                                                    
to  safe drinking  water and  sanitation. Studies  had shown                                                                    
the  health  impacts  associated  with a  hauled  or   honey                                                                    
bucket  system.  There were health  benefits from  access to                                                                    
systems  providing  a  larger  volume  of  water  daily  and                                                                    
properly   treated  water   meeting   safe  drinking   water                                                                    
regulations.                                                                                                                    
                                                                                                                                
3:11:11 PM                                                                                                                    
                                                                                                                                
Representative Josephson  asked if the state  was subject to                                                                    
a court  order or  some other mandate.  He wanted  to finish                                                                    
the work  by 2030, but he  wondered what would happen  if it                                                                    
was not completed by 2050.  Ms. Bohan replied that there was                                                                    
a    state   statute    and    requirements   that    public                                                                    
water/wastewater  systems  had  to  comply  with  state  and                                                                    
federal  regulations  but  that   was  not  a  directive  to                                                                    
construct a new system.                                                                                                         
                                                                                                                                
Representative Edgmon asked for  the number of villages that                                                                    
did  not  have  adequate   water  sources.  He  related  his                                                                    
experience of a village in  his district that could not find                                                                    
a suitable  water source  to support  the system.  Ms. Bohan                                                                    
responded that  she could not  provide a specific  number of                                                                    
communities that  fit his  description. She  elucidated that                                                                    
VSW worked  with the Alaska Native  Tribal Health Consortium                                                                    
(ANTHC) and the Indian Health  Service (IHS) to list all the                                                                    
known  sanitation  needs  in  rural  communities  that  were                                                                    
maintained on  an IHS  database. She  offered to  follow up.                                                                    
Representative  Edgmon  discussed   that  the   eye  popping                                                                    
numbers   reflected  on the  reality  of  doing business  in                                                                    
rural  Alaska. He  remarked on  the  difficulty of  climate,                                                                    
landscape, location,  and logistics that affected  a project                                                                    
in rural Alaska.                                                                                                                
                                                                                                                                
Co-Chair Foster pointed to the  number for the cost of first                                                                    
time service  on slide 4. He  wondered if the cost  per home                                                                    
was  calculated  by  the  total cost  of  the  whole  entire                                                                    
project and divided it by the number of homes.                                                                                  
                                                                                                                                
3:16:06 PM                                                                                                                    
                                                                                                                                
Ms. Bohan  responded in the affirmative.  She furthered that                                                                    
in 2016, VSW  commissioned a survey to develop  a rough cost                                                                    
estimate for  what it would  cost to provide service  to all                                                                    
unserved communities. She restated  that the methodology was                                                                    
to  take the  cost of  the  entire system  from scratch  and                                                                    
factor in the number of homes in the community.                                                                                 
                                                                                                                                
Representative Wool  asked if there were  situations where a                                                                    
water  system  was  being developed  in  a  community  where                                                                    
residents refrain from being connected  to the system due to                                                                    
costs, which  made the costs  higher for everyone  else. Ms.                                                                    
Bohan answered  in the affirmative.  She shared that  it was                                                                    
more  likely that  the home  was  disconnected from  service                                                                    
because it could  not afford the user fees.  There were some                                                                    
instances  where a  homeowner chose  not  to be  part of  an                                                                    
initial  project due  to  costs and  she  confirmed that  it                                                                    
drove  up   the  cost  for   the  rest  of   the  community.                                                                    
Representative Wool ascertained  that the scenario presented                                                                    
a  whole  new  cyclical challenging  situation,  where  more                                                                    
residents might drop the service due to escalating costs.                                                                       
                                                                                                                                
3:18:48 PM                                                                                                                    
                                                                                                                                
Ms.  Bohan moved  to  slide 5  titled  "Village Safe  Water:                                                                    
Typical Project Timeline," which showed  a flow chart of the                                                                    
timing of a typical project.  She described the process. She                                                                    
indicated  that each  spring VSW  accepted applications  for                                                                    
new planning  projects. The planning  project was  the first                                                                    
step that  identified the problem, potential  solutions, and                                                                    
cost  estimates. The  plans were  reviewed  via a  committee                                                                    
that  included Ms.  Bohan, staff  from  the federal  funding                                                                    
agencies   and  IHS,   and   representatives  from   various                                                                    
regulatory programs that had to  approve system designs. She                                                                    
elaborated  that once  the planning  document was  approved,                                                                    
the  community  may  apply for  a  construction  grant.  The                                                                    
planning project typically  took 9 to 12  months to complete                                                                    
and put the  project in its second year.  She furthered that                                                                    
in year  3 the project  applied for design  and construction                                                                    
funding, which  was awarded by  the fall of the  third year.                                                                    
She noted that design could  take one to two years depending                                                                    
upon the complexity  of the system. By the spring  of year 5                                                                    
construction  funding  was awarded  and  could  last one  to                                                                    
three years.                                                                                                                    
                                                                                                                                
Ms. Bohan turned  to slide 6 "Village Safe  Water: FY2021 by                                                                    
the Numbers:"                                                                                                                   
                                                                                                                                
     Planning Projects                                                                                                          
               $1.9 million funding made available                                                                            
               19 studies for 19 communities                                                                                  
               Project range: $25,000 -$240,000                                                                               
                                                                                                                                
     Construction Projects                                                                                                      
               $62.5 million funding made available                                                                           
               19 ongoing construction projects and 13 new                                                                    
                  construction projects                                                                                         
               Project range: $300,000 - $9.3 million                                                                         
     IHS & EPA Tribal Construction Projects                                                                                     
               $48 million funding made available                                                                             
               35 construction projects                                                                                       
               Project range: $65,000-$7.1 million                                                                            
                                                                                                                                
3:22:49 PM                                                                                                                    
                                                                                                                                
Ms.  Bohan  reported  that  VSW   worked  closely  with  its                                                                    
partners; the  IHS and  the Environmental  Protection Agency                                                                    
(EPA),  both  provided   funding  through  IHSs   Sanitation                                                                    
Deficiency System  (SDS) funding cycle. The  entities scored                                                                    
each  others   work and  ensured  that  no communities  were                                                                    
 falling  through  the cracks   in  the  process. Ms.  Bohan                                                                    
advanced to  slide 7 titled "Village  Safe Water: Supporting                                                                    
Rural Sanitation:"                                                                                                              
                                                                                                                                
     Work with partners to support communities in their                                                                         
     efforts to build technical, financial, and managerial                                                                      
     capacity                                                                                                                   
                                                                                                                                
     Provide water and wastewater system operator training                                                                      
     and certification                                                                                                          
                                                                                                                                
     Remote Maintenance Workers                                                                                                 
                                                                                                                                
               Funded through federal grants from EPA and                                                                     
                  USDA and associated state match in the                                                                        
                  operating budget                                                                                              
               15 Remote Maintenance Workers at DEC and                                                                       
                  regional health corporation provide onsite                                                                    
                  training and technical assistance                                                                             
               Emergency response and support                                                                                 
                                                                                                                                
     Village Safe Water does not provide funding for                                                                            
     ongoing maintenance and operations of systems                                                                              
                                                                                                                                
Ms.  Bohan furthered  that the  United States  Department of                                                                    
Agriculture   (USDA)  grants   were   part   of  its   Rural                                                                    
Development  (RD)  section.  She  shared that  some  of  the                                                                    
Remote Maintenance  Workers (RMW) had been  working with the                                                                    
same communities  for over  20 years  and were  dedicated to                                                                    
the job.                                                                                                                        
                                                                                                                                
3:25:18 PM                                                                                                                    
                                                                                                                                
RUTH  KOSTIK, ADMINISTRATIVE  SERVICES DIRECTOR,  DEPARTMENT                                                                    
OF  ENVIRONMENTAL  CONSERVATION,  OFFICE OF  MANAGEMENT  AND                                                                    
BUDGET, OFFICE OF THE  GOVERNOR (via teleconference), turned                                                                    
to  side 8  titled  "Village Safe  Water:  FY2022 Gov  Amend                                                                    
Request (in thousands):"                                                                                                        
                                                                                                                                
     $70,812.0 FY2022 Governor's Amended                                                                                        
               $52,250.0 Fed                                                                                                  
               $18,062.0 AHFC Bonds (match)                                                                                   
               $500.0 SDPR                                                                                                    
                                                                                                                                
     First Time Service                                                                                                         
                                                                                                                                
     Expansion, Upgrade, and Replacement of Existing                                                                            
     Service                                                                                                                    
                                                                                                                                
     Gov Amend is an increase of $2,332.0 of match due to                                                                       
     increased federal support                                                                                                  
                                                                                                                                
Ms.  Kostik noted  that the  increase  was a  result of  the                                                                    
federal funding that  passed in late December,  which was an                                                                    
increase  of $7  million  from  FY 2021  from  the EPA.  She                                                                    
reminded the  committee that the VSW  match was appropriated                                                                    
from  the Alaska  Housing  Finance  Corporation (AHFC)  bond                                                                    
proceeds. She reported that there  were bills moving through                                                                    
the    legislature    [HB74/SB54-AHFC    Water    &    Sewer                                                                    
Bonds/Transportation]  regarding the  transaction but  if it                                                                    
did not pass the AHFC  fund source would need replacement by                                                                    
another fund  source. She reviewed  slide 9, "  Village Safe                                                                    
Water: FY 2021 Supplemental Request (in thousands):"                                                                            
                                                                                                                                
     $3,650.0 GF Match                                                                                                          
                                                                                                                                
     First Time Service                                                                                                         
                                                                                                                                
     Expansion, Upgrade, and Replacement of Existing                                                                            
     Service                                                                                                                    
                                                                                                                                
     Due to increased federal support                                                                                           
                                                                                                                                
Ms. Kostik noted  that the numbers reflected  a higher level                                                                    
of  funding from  the  EPA. She  remarked  that the  federal                                                                    
funding was approved  very late in the  state's budget cycle                                                                    
and had to be included in the supplemental request.                                                                             
                                                                                                                                
Representative Josephson  asked if  the legislature  did not                                                                    
find  $18  million  in  matching  funds  whether  the  state                                                                    
permanently  waived   $52 million.  Ms. Kostik  replied that                                                                    
at some point  VSW had to commit to its  funding partners to                                                                    
accept the funds  and make grants. She explained  that in FY                                                                    
2021 the department  awarded the full amount  of grant money                                                                    
even though the state matching  money was not yet identified                                                                    
and   assumed  it   would  borrow   from   the  next   years                                                                    
appropriation. The  program would need to  alert its funding                                                                    
partners if VSW was unable to find the match money.                                                                             
                                                                                                                                
3:28:23 PM                                                                                                                    
                                                                                                                                
Ms.  Kostik Ms.  Kostik  presented slide  10, "Village  Safe                                                                    
Water: Funding  Sources," which showed  a flow chart  of its                                                                    
funding  sources  and  the  corresponding  allocations.  She                                                                    
delineated that the  chart showed the full  scope of funding                                                                    
sources that  flowed into  the VSW  program. She  pointed to                                                                    
the  left   that  depicted  the  state   match,  USDA  Rural                                                                    
Development funding  and the EPA Infrastructure  grants that                                                                    
flow  through  the  traditional funding  route  through  the                                                                    
multi-year priority  list that  required a state  match. She                                                                    
pointed to  the SDS list  on the middle right  and explained                                                                    
that  the funding  flowed through  from IHS  and EPA  tribal                                                                    
Safe  Drinking Water  Act and  Clean Water  Act for  the SDS                                                                    
list projects.  On the far right  there was one more  pot of                                                                    
funding from  IHS Housing Priority System  (HPS) system that                                                                    
supported sanitation and water  projects. She noted that the                                                                    
colors of the  fund sources would match  the chart depicting                                                                    
the funding history on the next slide.                                                                                          
                                                                                                                                
3:30:15 PM                                                                                                                    
                                                                                                                                
Ms. Kostik advanced to slide  11 titled "Village Safe Water:                                                                    
Funding  History,"   which  showed  a  bar   graph  entitled                                                                    
 Funding for  Rural Water and  Sewer Improvements  SFY2017 -                                                                    
2021.   The bar  graph showed  a five-year  funding history.                                                                    
She detailed  that the  state match  was depicted  in green,                                                                    
EPA funding  was shown in  gold, and USDA-RD  was designated                                                                    
in purple; the  federal funding required a  state match. The                                                                    
IHS  money  was represented  in  blue,  and the  EPA  Tribal                                                                    
funding was  shown in  brown; both  funding sources  did not                                                                    
require a state match.                                                                                                          
                                                                                                                                
Ms.  Kostik  spoke to  slide  12,  "Rural Alaska  Sanitation                                                                    
Funding  Need,"  which  showed a  pie  chart  titled  "Rural                                                                    
Alaska Sanitation  Funding Need  = $1,821,446,807."  The pie                                                                    
chart depicted the total SDS  funding need. The blue portion                                                                    
[68  percent] encompassed  all first  time service  projects                                                                    
and  reflected the  traditional piped  systems and  its high                                                                    
costs  totaling roughly  $1.2 billion.  She  pointed to  the                                                                    
yellow  portion  of  the  pie  chart  labeled   Upgrades  to                                                                    
Benefit  System   Operation  or  to  Address   Minor  Health                                                                    
Threats  and  noted that  the type of  project was  the most                                                                    
difficult to  fund because they  did not frequently  rise to                                                                    
the level  of scoring  to get  funded and  encompassed minor                                                                    
things like putting  a protective roof over a  water tank to                                                                    
prevent deterioration.                                                                                                          
                                                                                                                                
3:32:30 PM                                                                                                                    
                                                                                                                                
Ms.  Kostik  addressed  slide  13,  "Alaska  Water  &  Sewer                                                                    
Challenge Project":                                                                                                             
                                                                                                                                
     Conventional  systems   are  expensive   to  construct,                                                                    
     maintain and replace                                                                                                       
                                                                                                                                
     Many communities  cannot afford the high  operation and                                                                    
     maintenance costs.                                                                                                         
                                                                                                                                
     Available funding  is not  adequate to  serve remaining                                                                    
     homes and make needed improvements                                                                                         
                                                                                                                                
     Innovative  approaches  are  needed to  address  health                                                                    
     problems  associated   with  water  and   sewer  system                                                                    
     deficiencies                                                                                                               
                                                                                                                                
     Focus on decentralized  systems that provide treatment,                                                                    
     recycling, and water minimization                                                                                          
                                                                                                                                
     Pilot testing at UAA delayed  due to COVID, anticipated                                                                    
     to begin in fall 2021                                                                                                      
                                                                                                                                
Ms. Kostik elaborated  that in 2013 DEC  launched the Alaska                                                                    
Water  & Sewer  Challenge Project  that was  a research  and                                                                    
development  project to  try to  build an  alternative to  a                                                                    
piped system that included  an improved self-contained water                                                                    
system for single homes. The goals  were to keep the cost to                                                                    
$160 thousand per  home and be easily  maintained. She noted                                                                    
that DEC was  working with the EPA to set  the standards for                                                                    
water recycling. The  project was in phase 5  with one model                                                                    
and testing  in a community  was slated to happen  after the                                                                    
standards  were  developed.  She  commented  that  community                                                                    
involvement would be critical to the project.                                                                                   
                                                                                                                                
3:34:22 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
Ms. Kostik moved to slide 14 titled Other Water/Wastewater                                                                      
Infrastructure Funding at DEC;                                                                                                  
                                                                                                                                
     .notdef Infrastructure Protection Funding                                                                                  
          .notdef Grants to VSW eligible communities of up to                                                                   
            $150.0 for critical improvements that extend                                                                        
            the life or improve operations of a water or                                                                        
            wastewater system                                                                                                   
          .notdef One-time $4,000.0 appropriation; all funds have                                                               
            been allocated                                                                                                      
                                                                                                                                
     .notdef Municipal Matching Grants (AS 46.03.030)                                                                           
          .notdef Grants to municipalities for public water                                                                     
            supply, wastewater system, solid waste system,                                                                      
            or water quality enhancement                                                                                        
          .notdef Municipalities provide 15-40% match depending                                                                 
            on population                                                                                                       
          .notdef Historically UGF funded program                                                                               
          .notdef No new projects funded since FY 2016                                                                          
                                                                                                                                
     .notdef State Revolving Loan Funds (AS 46.03.032 & AS                                                                      
     46.03.036)                                                                                                                 
          .notdef Low interest loans for clean water and drinking                                                               
            water projects                                                                                                      
          .notdef Capitalized by federal grant funds                                                                            
          .notdef Can be used to match Municipal Matching Grants                                                                
          .notdef Newly created Micro Loan option aimed at VSW                                                                  
            eligible communities                                                                                                
                                                                                                                                
3:37:19 PM                                                                                                                    
                                                                                                                                
Ms.  Kostik  commented  that since  the  Municipal  Matching                                                                    
Grant  program  was  phased  out,   use  of  the  loans  had                                                                    
decreased.  She explained  that  communities  used the  loan                                                                    
funds to supplement their grants.                                                                                               
                                                                                                                                
Representative Edgmon  stated there was potentially  a large                                                                    
sum  of money  coming into  Alaska via  federal funding.  He                                                                    
wondered in  broad terms how  that could affect all  the VSW                                                                    
projects.  Ms.  Kostik  thought  that it  was  a  very  good                                                                    
question.  She deduced  that there  was  possibly even  more                                                                    
funding coming  through a  federal infrastructure  plan. She                                                                    
shared that  the federal delegation had  been very effective                                                                    
at obtaining funding for VSW,  which necessitated asking for                                                                    
more  matching  dollars.  She reiterated  that  construction                                                                    
material prices had skyrocketed,  and projects were going to                                                                    
cost  more temporarily.  The huge  injection  of cash  would                                                                    
exacerbate   the   problem   for  things   like   contractor                                                                    
availability. She  worried that  the current funding  had to                                                                    
be spent by 2024 and did not  know how much could be done in                                                                    
the timeframe considering the limitations.                                                                                      
                                                                                                                                
3:40:10 PM                                                                                                                    
                                                                                                                                
Representative Edgmon stated  that her answer made  a lot of                                                                    
sense and listed the challenges.  He recalled a presentation                                                                    
by  Alaska  Native  Tribal Health  Consortium  (ANTHC)  that                                                                    
reported on the  number of aging systems. He  cited slide 12                                                                    
and deduced  that there  was more  need in  communities with                                                                    
existing  service needing  upgrades. He  questioned the  pie                                                                    
chart  allocation.   He  noted   that  a  small   number  of                                                                    
communities lacked  services and  most had  existing service                                                                    
needing  upgrades. He  asked  if he  was  reading the  slide                                                                    
incorrectly. Ms. Bohan  answered that the data  on the graph                                                                    
on  slide 12  came directly  form the  SDS database  she had                                                                    
described earlier  from the ANTCH  and IHS database  and was                                                                    
based  on  known needs.  She  furthered  that the  disparity                                                                    
Representative  Edgmon  described  between  the  first  time                                                                    
service costs  for the 28  communities that  remain unserved                                                                    
cost an estimated $50 million  to $60 million to construct a                                                                    
new  system   versus  the   upgrades  needed   for  existing                                                                    
facilities that costs much less.                                                                                                
                                                                                                                                
Representative   LeBon  thanked   the  presenters   for  the                                                                    
informative presentation. He had  a question regarding first                                                                    
time service. He  referenced a $45 million project  and at a                                                                    
cost  of $500  thousand per  home he  deduced that  about 90                                                                    
structures  would  benefit  from   the  project.  Ms.  Bohan                                                                    
replied that she did not know  the number off the top of her                                                                    
head but  agreed the numbers Representative  LeBon used were                                                                    
fairly accurate.  She reported that the  community she spoke                                                                    
of was  Tununak and she did  not recall the number  of homes                                                                    
that the  project would serve. Representative  LeBon guessed                                                                    
that   there   was   a  combination   of   residential   and                                                                    
nonresidential structures. He asked  if a community could be                                                                    
too  small to  qualify for  a program  and wondered  how the                                                                    
ability to maintain a system was judged.                                                                                        
                                                                                                                                
3:44:48 PM                                                                                                                    
                                                                                                                                
Ms.  Bohan responded  that there  was not  a low  population                                                                    
level that  affected eligibility  but at  a certain  point a                                                                    
small  population could  not support  a system.  The program                                                                    
looked  at other  alternatives for  providing services.  She                                                                    
detailed  that IHS  had a  program that  provided wells  and                                                                    
septic  systems  for individual  homes  and  VSW would  also                                                                    
consider  the same  type  of  service. Representative  LeBon                                                                    
surmised that in  theory no community could be  too small to                                                                    
receive  some   level  of  assistance.  Ms.   Bohan  replied                                                                    
affirmatively.                                                                                                                  
                                                                                                                                
3:46:16 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:47:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
^PRESENATION: PROSECUTOR HOUSING                                                                                              
                                                                                                                                
3:47:32 PM                                                                                                                    
                                                                                                                                
JOHN SKIDMORE,  DEPUTY ATTORNEY GENERAL,  CRIMINAL DIVISION,                                                                    
DEPARTMENT  OF  LAW   (via  teleconference),  discussed  the                                                                    
Department of  Laws  (DOL) housing  requests in  the Capital                                                                    
Budget. He considered housing a  retention issue. He offered                                                                    
that the  issue had  four components. The  largest component                                                                    
was  housing.  Overall,  the  Criminal  Division  had  a  25                                                                    
percent  to 37  percent  turnover rate  for prosecutors  per                                                                    
year between 2018 and 2020.  He elucidated that turnover was                                                                    
most pronounced in  rural Alaska with Bethel  averaging a 45                                                                    
percent turnover  of prosecutors over  the last 7  years. He                                                                    
called  it  a   tremendous   problem   and  identified  that                                                                    
housing was  a  critical component  to  retention. He listed                                                                    
the  three categories  of the  housing issue:  availability,                                                                    
quality,  and affordability.  He  shared that  he had  heard                                                                    
stories from  prosecutors having  to sleep in  their offices                                                                    
for long periods of time  until housing became available. He                                                                    
shared his own  personal experiences with the  issue when he                                                                    
had lived in  rural communities. He spoke to  the quality of                                                                    
housing  available. Some  units lacked  necessities such  as                                                                    
locks  on   the  front  door,  running   water,  or  working                                                                    
appliances. He  believed the  challenges helped  explain why                                                                    
people did not stay in  the communities for long periods. He                                                                    
voiced  that   affordability  was  also   problematic.  Many                                                                    
housing options required  first and last month's  rent and a                                                                    
deposit.  New prosecutors  also  had student  loan debt  and                                                                    
other  moving  expenses.  He  viewed  the  situation  as  an                                                                    
obstacle to trying to attract  and retain quality people. He                                                                    
explained  that on  May 12,  1990,  a law  was adopted  that                                                                    
allowed various  state agencies to own  and operate employee                                                                    
housing. The  authorization was for  DOL, the  Department of                                                                    
Fish and Game (DFG), Department  of Public Safety (DPS), and                                                                    
Department  of Transportation  and Public  Facilities (DOT).                                                                    
He believed  that DOL was  the only department that  had not                                                                    
taken  advantage  of  the  law and  concluded  that  it  was                                                                    
currently  necessary.  He  elaborated  that  the  department                                                                    
wanted  to   build  or  buy   housing.  The   plan  included                                                                    
consulting  with  the  Alaska  Housing  Finance  Corporation                                                                    
(AHFC) on costs, logistics, etc.                                                                                                
                                                                                                                                
3:54:25 PM                                                                                                                    
                                                                                                                                
Representative Rasmussen  asked if  any properties  had been                                                                    
identified in  the areas  of need. She  shared that  she did                                                                    
not have experience  in rural Alaska, but she  had worked in                                                                    
the  real estate  world as  an agent  and appraiser  for the                                                                    
past  10 years.  She felt  that the  cost per  unit of  $300                                                                    
thousand  was  only  sufficient  for  a  modular  home.  She                                                                    
questioned  the  proposal.  Mr. Skidmore  replied  that  the                                                                    
proposal of $300  thousand per unit came from  a Request for                                                                    
Information (RFI)  the department had done.  He acknowledged                                                                    
that  the  cost  of  building  materials  had  significantly                                                                    
increased, and it  was a rough guess.  He discovered through                                                                    
discussions  with  AHFC  that the  costs  were  more  likely                                                                    
$350,000 to $400,000  but could increase up  to $600,000. He                                                                    
had not done  a Request for Proposal (RFP)  yet and  readily                                                                    
acknowledged   that   the  costs   could  be   much  higher.                                                                    
Representative Rasmussen stated that  in Anchorage one could                                                                    
not  get into  the market  for under  $500 thousand  and the                                                                    
costs  of building  materials had  skyrocketed. She  did not                                                                    
want to put the cart before  the horse if the timing was not                                                                    
right. Mr. Skidmore  replied that the proposal  was not only                                                                    
to  build   but  to  search   for  existing   structures  if                                                                    
available. The  request was merely to  obtain enough funding                                                                    
to  investigate what  was available.  He emphasized  that he                                                                    
was open to all options.                                                                                                        
                                                                                                                                
3:58:16 PM                                                                                                                    
                                                                                                                                
Representative  Rasmussen   asked  if  the   department  was                                                                    
looking for  one consultant  for all  communities or  one in                                                                    
each community.  Mr. Skidmore  answered that  the department                                                                    
listed  the  priority  of  communities  [Bethel,  Utqiagvik,                                                                    
Kotzebue, Nome (in  that order)] and would  begin in Bethel.                                                                    
Currently,  the requested  amount of  money would  not allow                                                                    
them  to include  the other  communities  and he  considered                                                                    
Bethel a  test run. Representative Rasmussen  asked how many                                                                    
units they needed  in Bethel. Mr. Skidmore  replied that the                                                                    
department anticipated  the need  at 9 to  10 units,  and it                                                                    
would  take   up  the  entire  $3   million.  Representative                                                                    
Rasmussen asked if the department  needed the same amount of                                                                    
housing for the three  subsequent communities in the future.                                                                    
He  responded that  the housing  necessary in  the remaining                                                                    
three communities were two to  three units and together were                                                                    
the   equivalent  to   what  was   needed   in  Bethel.   He                                                                    
acknowledged that more information was needed.                                                                                  
                                                                                                                                
4:00:11 PM                                                                                                                    
                                                                                                                                
Co-Chair Merrick  asked if the department  helped pay moving                                                                    
expenses  for  employees.  Mr. Skidmore  answered  that  the                                                                    
department only  paid for  part of  the moving  expenses and                                                                    
were authorized  to pay $6 thousand,  which included airfare                                                                    
for the employee  and family. He discovered  that the amount                                                                    
could  vary substantially  depending on  where the  employee                                                                    
was  moving from  and  whether  they had  a  family and  the                                                                    
number  of possessions.  He reiterated  that the  department                                                                    
was  examining all  options from  modular housing,  attached                                                                    
homes,  etc. and  wanted to  seek the  advice from  AHFC. He                                                                    
also wanted to  partner with DPS that already  had an agency                                                                    
section that managed housing. The  department had housing in                                                                    
the  same  communities  as DOL  needed  it,  which  provided                                                                    
benefits for both agencies.                                                                                                     
                                                                                                                                
4:03:07 PM                                                                                                                    
                                                                                                                                
Representative  Josephson   had  some  concerns   about  DOL                                                                    
getting into  the housing business,  although they  may have                                                                    
been  assuaged by  the partnership  with DPS.  He asked  for                                                                    
clarification  that   DPS  already  operated   housing.  Mr.                                                                    
Skidmore  answered in  the affirmative.  He recognized  that                                                                    
DPS was  a good  resource, had a  greater housing  need, and                                                                    
managed its  housing for 31 years.  Representative Josephson                                                                    
asked about major maintenance  and replacement. He expressed                                                                    
uncertainty   about  how   DOL  would   manage  it   without                                                                    
assistance.  He wondered  whether  DOL would  rely on  DPSs                                                                     
 know  how.   Mr. Skidmore  replied  that  the statute  that                                                                    
authorized  the purchase  of  housing  also authorized  rent                                                                    
collection. The  rent allowed  for DOL  to contract  out for                                                                    
maintenance. He noted that guidance  from DPS and AHFC would                                                                    
be beneficial in  how to manage property maintenance.                                                                           
                                                                                                                                
4:05:13 PM                                                                                                                    
                                                                                                                                
Mr. Skidmore continued  that the housing component  was a $3                                                                    
million request,  but the total  request was $4  million. He                                                                    
addressed  the recruitment  and retention  request for  $400                                                                    
thousand. He  related that  the request  involved developing                                                                    
recruitment  strategies   and  professional   materials.  In                                                                    
addition,  he  wanted  targeted  aggressive  recruitment  of                                                                    
talent  in  the  lower  48 or  headhunting  for  experienced                                                                    
prosecutors  especially  around  sexual assault  and  sexual                                                                    
abuse  of  minors  as  quickly as  possible.  He  cited  the                                                                    
approval  for  10 new  prosecutors  for  sexual assault  and                                                                    
sexual abuse  of minors.  He shared that  DOL had  created a                                                                    
Prosecutor Training Specialist position  in the past year to                                                                    
help  with training  and the  position remained  open for  9                                                                    
months. There  had been limited  interest expressed  and the                                                                    
interest generated was not  experienced as deemed necessary.                                                                    
He believed that targeted recruitment  was crucial. The item                                                                    
was in  the Capital  Budget because it  would be  a one-time                                                                    
spend.                                                                                                                          
                                                                                                                                
Mr.  Skidmore furthered  that training  for prosecutors  was                                                                    
another  key  area  for   recruitment  and  retention  [$300                                                                    
thousand]. He  determined that the  quality and  quantity of                                                                    
training  provided to  prosecutors  needed improvement.  The                                                                    
department wanted  to develop off-the-shelf materials  to be                                                                    
used  internally for  training for  trial advocacy  and best                                                                    
practices for sexual assault and  sexual abuse of minors. He                                                                    
exemplified  the Forensic  Experiential Trauma  Interviewing                                                                    
that was a trademarked program  found to be a best practice.                                                                    
He  reported that  another aspect  of training  was facility                                                                    
needs. He  voiced that the department  "struggled to provide                                                                    
adequate   trial   advocacy    training   to   the   state's                                                                    
prosecutors. He  proposed partnering with the  university to                                                                    
create  a  training  facility  for  ongoing  in-state  trial                                                                    
advocacy training  needs by remodeling  a classroom  to look                                                                    
like a courtroom. The university  was also interested in the                                                                    
project for their own uses.                                                                                                     
                                                                                                                                
4:10:19 PM                                                                                                                    
                                                                                                                                
Mr.   Skidmore   spoke   about  the   final   request;   the                                                                    
installation  of   secure  Wi-Fi  in  court   houses  [$300K                                                                    
Improved  Technology  for  Efficiency].  He  explained  that                                                                    
prior  to 2014  DOL  primarily relied  on  paper files.  The                                                                    
system shifted to  an electronic file in 2014  that was much                                                                    
more  efficient but  was not  yet  complete. The  department                                                                    
needed  secure Wi-Fi  access in  courthouses to  access case                                                                    
files, e-file  complaints and  motions, and  issue discovery                                                                    
while in the  courtroom. He noted that there  was public wi-                                                                    
fi in the court houses, but  it was not secure. In addition,                                                                    
the  department needed  to develop  a secure  interface with                                                                    
the Alaska  Court System to exchange  case information, file                                                                    
court dates, and receive court orders and decisions.                                                                            
                                                                                                                                
4:13:45 PM                                                                                                                    
                                                                                                                                
Representative Josephson asked how  long a prosecutor worked                                                                    
in a typical  work week. Mr. Skidmore did not  have an exact                                                                    
number. The  department did  not track  the number  of hours                                                                    
people worked. He shared his  personal experience of working                                                                    
between 60 to 80  hours per week and when he  was in a trial                                                                    
it  was much  more.  He knew  that  prosecutors worked  much                                                                    
longer  than  the  37.5 hours  they  were  compensated  for.                                                                    
Representative Josephson  asked for verification  that there                                                                    
had  been  no  recent  COLA increase  for  partially  exempt                                                                    
employees.  Mr. Skidmore  answered  in  the affirmative  and                                                                    
recalled that the COLA was not increased for 7 years.                                                                           
                                                                                                                                
4:15:36 PM                                                                                                                    
                                                                                                                                
BRYAN  BUTCHER,   CHIEF  EXECUTIVE  OFFICER   AND  EXECUTIVE                                                                    
DIRECTOR, ALASKA HOUSING  FINANCE CORPORATION, DEPARTMENT OF                                                                    
REVENUE, believed  that Mr. Skidmore covered  most items. He                                                                    
added that  AHFC was able  to help DOL with  the maintenance                                                                    
issues. He related that the  corporation ran over 100 public                                                                    
housing units  in Bethel and some  in Nome and had  staff to                                                                    
maintain  them. He  furthered  that  AHFC was  collaborating                                                                    
with DPS on compiling a  comprehensive list of housing needs                                                                    
in rural Alaska.                                                                                                                
                                                                                                                                
HB  70  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Merrick reviewed  the  meeting  for the  following                                                                    
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:16:46 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:16 p.m.                                                                                          

Document Name Date/Time Subjects
HB 70 HFIN re AHFC Collaboration 4.30.2021.pdf HFIN 5/12/2021 1:30:00 PM
HB 70
HB 70 HFIN DEC VSW Overview 05.10.2021.pdf HFIN 5/12/2021 1:30:00 PM
HB 70
HB 85 Amendment 1 051221.pdf HFIN 5/12/2021 1:30:00 PM
HB 85
HB 104 Public Testimony by 051221.pdf HFIN 5/12/2021 1:30:00 PM
HB 104
HB 70 FY21Supp Capital Law-Criminal Rural Housing Overview.pdf HFIN 5/12/2021 1:30:00 PM
HB 70