Legislature(2003 - 2004)
02/18/2004 01:41 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 18, 2004
1:41 P.M.
TAPE HFC 04-25, Side A
CALL TO ORDER
Co-Chair Harris called the House Finance Committee meeting
to order at 1:41 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
None
ALSO PRESENT
Cheryl Frasca, Director, Division of Management & Budget,
Office of the Governor; Kathryn Daughhetee, Director,
Administrative Services Division, Department of Law; Bill
Jeffress, Office of Project Management and Permitting,
Department of Natural Resources; Janet Clarke, Director,
Division of Administrative Services, Department of Health
and Social Services; Tom Lawson, Director, Administrative
Services, Department of Community and Economic Development;
Dan Spencer, Director, Division of Administrative Services,
Department of Public Safety; Eric Swanson, Director,
Division of Administrative Services, Department of
Administration; Eddy Jeans, Manger, School Finance and
Facilities Section, Department of Education and Early
Development; Karen Rehfeld, Director, Division of Education
Support Services, Department of Education and Early
Development; Kevin Brooks, Director, Division of
Administrative Services, Department of Fish and Game; Nancy
Slagle, Director, Division of Administrative Services,
Department of Transportation and Public Facilities; Laura
Glaiser, Director, Division of Elections, Office of the
Lieutenant Governor.
PRESENT VIA TELECONFERENCE
None
SUMMARY
HB 455 An Act making supplemental and other
appropriations; amending appropriations; making an
appropriation to capitalize a fund; and providing
for an effective date.
HB 455 was heard and HELD in Committee for further
consideration.
HB 456 An Act making supplemental and other
appropriations; amending and repealing
appropriations; making appropriations to
capitalize funds; and providing for an effective
date.
HB 456 was POSTPONED.
HOUSE BILL NO. 455
An Act making supplemental and other appropriations;
amending appropriations; making an appropriation to
capitalize a fund; and providing for an effective date.
CHERYL FRASCA, DIRECTOR, OFFICE OF MANAGEMENT & BUDGET
(OMB), OFFICE OF THE GOVERNOR, gave a concise overview of
the two supplemental bills, stating that the proposed
additional spending is about $13.8 million. Savings of
about $8.4 million will offset those General Fund dollars,
resulting in a net increase of $5.4 million. The OMB tried
to limit the funding requests to costs the agencies could
not anticipate or budget for within their management
structures. The Public Defender Agency and the Office of
Public Advocacy are caseload-driven, and Ms. Frasca
explained that the OMB worked with these agencies on
operating changes to enhance savings from the beginning of
FY 04. As a result, these agencies' requests in the
supplemental are reduced. The Department of Health & Social
Services went to an "add-delete" process, resulting in no
overall increase in costs, or net zero.
DEPARTMENT OF ADMINISTRATION
Section 1 ETS
Appropriates the ACS disentanglement settlement of
$3,447,647 from the General Fund to the Information
Services Fund. $3,447,647
ERIC SWANSON, DIRECTOR, DIVISION of ADMINISTRATIVE SERVICES,
DEPARTMENT of ADMINISTRATION (DOA), stated that Section 1
requests reimbursement of a settlement sum received by the
state from Alaska Communication Services as a result of the
state severing its contractual agreement with ACS for
providing telecommunication services. The state has
received roughly half of the sum in the supplemental and
expects to receive the balance by the end of this month.
The sum would reimburse the state for costs incurred upon
severing the contract, including changes to equipment and
technology and disputed billings. All costs incurred were
paid from the Information Services Fund. The law requires
settlement funds be deposited in the General Fund, and the
department asks that the funds be returned to the
Information Services Fund.
DEPARTMENT OF LAW
Section 2 Environmental Law
Exxon Valdez Oil Spill ongoing costs for experts
and outside counsel to analyze continuing injury
and develop restoration options; June 30, 2005
lapse date.
EVOS Restoration $100.0
DAVE MARQUEZ, ASSISTANT ATTORNEY GENERAL, DEPARTMENT of LAW
(DOL), explained that the request refers to the EXXON Valdez
settlement agreement. Under the settlement terms, the claim
can be reopened if there is evidence that the state may have
additional claims. This appropriation would assist the
department in analyzing confidential environmental studies
of Prince William Sound and in making the decision of
whether to reopen the claim.
Co-Chair Harris questioned what is involved in reopening the
case while EXXON is appealing it to the U.S. Supreme Court.
Mr. Marcus explained that this request isn't related to the
ongoing litigation. Through a provision in the settlement
agreement, the state retained the right to reopen the claim
if remaining damages are determined and the damages have not
been properly addressed.
Representative Chenault asked if this is related to the
current contract with a firm that evaluates environmental
studies.
KATHRYN DAUGHHETEE, DIRECTOR, ADMINISTRATIVE SERVICES
DIVISION, DEPARTMENT OF LAW, clarified that the department
is asking the firm currently under contract to subcontract
with an environmental engineering firm which then would
consider the completed analyses to determine the state's
position in the decision to reopen the settlement.
Representative Croft questioned if this $100.0 request would
consolidate the review of the studies. Mr. Marcus responded,
that it would. An environmental engineer would help the
department evaluate whether a claim could be made and how to
restructure it.
Co-Chair Harris asked how much is in the EVOS fund. Mr.
Marcus was unable to respond.
DEPARTMENT OF FISH & GAME
Section 3 Capital
Receipts from City & Borough of Juneau to complete
work at the indoor rifle range in Juneau. These
receipts have already been received, and work at
the rifle range is scheduled to start early spring.
Statutory Des Program Receipts $75.0
KEVIN BROOKS, DIRECTOR, DIVISION of ADMINISTRATIVE SERVICES,
DEPARTMENT of FISH and GAME, explained that Section 3 would
amend an appropriation passed several years ago for the
rifle range in Juneau. The addition of $75 thousand is
funding received from the City & Borough of Juneau (CBJ).
The project is near completion except for tapping into the
city water line. This request would allow the department to
receive the money from CBJ.
OFFICE OF THE GOVERNOR
Section 4 Elections
General funds needed for the Help America Vote Act
(HAVA) fund maintenance of effort. Some work on
the upcoming primary and general elections will
take place during FY 04. $180.0
LAURA GLAISER, DIRECTOR, DIVISION of ELECTIONS, spoke to a
proposed change in the language in Section 4 that would read
"for the operating costs of the division related to the
primary and general elections for the fiscal year ending
June 30, 2004."
Representative Croft questioned whether this is a new
request of $180 thousand or a change in the language. Ms.
Glaiser said that it is a new request.
Representative Croft asked if the division has additional
expenses because it is an election year. Ms. Glaiser
affirmed.
Representative Croft asked if this is the typical increment
given to the division in election years. Ms. Glaiser pointed
to a reduction in the FY 04 budget, and said that the
division would still show a reduction if given this
appropriation.
Ms. Glaiser discussed decrements and reductions between FY
04 and FY 05 and asserted that the division can't get
through this year without the request.
Representative Hawker asked why this funding was
missed in the budget cycle, with election-year costs coming
up. Ms. Glaiser stated that she takes responsibility for
thinking the agency could handle a 10% reduction. She has
restructured and reduced the director's travel, but with the
statutory deadlines to get the forms out, Ms. Glaiser
concluded that the division needs this money
Co-Chair Harris asked if $180 thousand is adequate and Ms.
Glaiser affirmed.
Co-Chair Harris asked if all the polling places are handicap
accessible. Ms. Glaiser stated that the division makes
those accommodations, and it is required by the Help America
Vote Act to make more improvements.
DEPARTMENT OF HEALTH & SOCIAL SERVICES
Section 5(a) Capital
Add the capital project for the State veterans'
home conversion in Palmer to speed up the design
work and take advantage of the summer construction
season. A corresponding FY 05 capital amendment
will also be submitted to delete the project from
the FY 05 budget.
ASLC Dividend $3,500.0
JANET CLARKE, DIRECTOR, DIVISION of ADMINISTRATIVE SERVICES,
DEPARTMENT of HEALTH and SOCIAL SERVICES, explained that
Section 5 (a) is a capital appropriation for the veteran's
home. The project would convert the Palmer Pioneer Home to
the state veterans' home, a 79-bed domiciliary care
facility. The department submitted an initial application
for approval with upgrades including heating, electrical,
conservation systems, fire and other codes. The Legislative
Budget & Audit Committee has used $100 thousand of an
earlier appropriation for an architectural firm to help
complete the final application by April 15. This
appropriation would accelerate the project to certify the
facility for VA receipts about five months earlier than
anticipated in the fiscal notes with the Governor's bill. It
would result in cost savings in the operating budget a
couple years from now.
Co-Chair Harris asked if Ms. Clarke was referring to $2.275
million in federal funds. She replied no, the federal
government would match 65% for the capital conversion but
the department would also receive some operating receipts
once the project is certified to offset some of the general
fund expenditures for the facility.
Co-Chair Harris asked if there is a proposal to take some
funding from the student loan corporation dividend. Ms.
Clarke replied yes, that the OMB determination of sources to
provide the state match included that funding source.
In response to a question by Co-Chair Harris, Ms. Clarke
stated that $3.5 million is their best estimate for
renovation of the Pioneers Home.
Ms. Clarke advised that both the veterans the Alaska
Pioneers support the project.
Representative Hawker expressed curiosity over the choice of
student loan corporation funding instead of General Fund
dollars.
JOAN BROWN, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT &
BUDGET, OFFICE OF THE GOVERNOR, explained that the OMB
decided to use the unappropriated FY 04 dividend balance for
the veterans home, as a one-time project. Representative
Hawker asked if this would leave any unappropriated FY 04
money. Ms. Brown answered that the supplemental would use it
all.
Representative Croft asked if this capital request is
dependent on the passage of legislation. Ms. Brown
explained that the passage of legislation would allow the
department to operate a veterans home, but this
appropriation is not contingent on that passage.
Representative Croft questioned making the capital
appropriation to convert the facility to a veterans home
without the authority to operate it as a veterans home if
the bill doesn't pass. Ms. Clarke confirmed that is also
her understanding.
Representative Fate recalled that the legislation is generic
and doesn't specify the Palmer Pioneers Home or the veterans
home. He asked if that would pose a problem in the
authorization of this appropriation. Ms. Clarke replied that
he is correct but that it would not be a problem.
Section 5(b) Alaska Senior Assistance Program
Reduce excess federal fiscal relief funds.
Fed Unrestricted Receipts ($3,334.0)
Section 5(c) Senior Care
Use excess federal fiscal relief funds for FY 04
costs for Senior Care program
Fed Unrestricted Receipts $3,334.0
Ms. Clarke spoke to 5(b) and 5(c) relating to the Alaska
Senior Assistance Program and the Senior Care Program.
Section 5(b) reduces the amount appropriated from federal
funds and allows it to be appropriated to the last quarter
of the fiscal year for the Senior Care Program which has a
starting date of April 1. The federal tax relief dollars
totaling $3,334.0 will be available for reallocation to the
Senior Care Program. She explained that a series of
appropriations of General Fund dollars would make up the
difference of what is needed to run the Senior Care Program
for the last quarter of FY 04. The funding was approved by
the Legislative Budget and Audit Committee (LB&A) last
summer for the Senior Care Program and the appropriation is
consistent with the passed legislation relating to the
program.
Co-Chair Harris discussed whether the unrestricted monies
are required to be used for senior care. Ms. Clarke agreed
they are unrestricted but she reiterated that LB&A
authorized their use by the Senior Care Program. Co-Chair
Harris indicated that the committee could reauthorize the
use of the funds.
Representative Joule asked if the department plans to notify
new people of their eligibility in April when readjustments
to the poverty level are made. Ms. Clarke stated that she
didn't know.
Representative Stoltze asked if hold harmless provisions are
no longer in effect since the senior benefit programs have
been restructured to income levels. Ms. Clarke explained
that the longevity bonus hold harmless program was not
income-based, but these programs are income-based and would
not have a hold harmless provision related to their payment
or their drug benefit.
Representative Hawker questioned the unexpended funds not
included in this total, and what would happen if all the
money were expended by mid-March in the old program. Ms.
Clarke advised that unexpended funds would lapse because the
appropriation only spans one year under the authority of the
LB&A. The department has estimates but it will monitor the
project on a monthly basis to make adjustments.
Representative Hawker noted that this is part of a much
larger appropriation, and asked if it is necessary to
increment through general funds for the five relatively
small items [5(d) through 5(e)(4)]. Ms. Clarke replied that
the department identified no other funding sources and
looked to general fund dollars when the proposal was
written.
Representative Croft asked if the Senior Assistance Program
is the federal money used in the transition from the
Longevity Bonus, or another program. Ms. Clarke explained
that this is the temporary transition from the longevity
bonus, and it is income-based at $120 per month for low-
income seniors who need cash assistance.
Ms. Clarke pointed out that Section 12 also makes an
appropriation contingent on passage of the Senior Care bill.
Section 5(d) Senior Care
FY 04 costs for Senior Care program $154.0
Section 5(e)(1) Alaska Longevity Programs Mgmt
FY 04 costs for Senior Care program. $46.0
Section 5(e)(2) Health Purchasing Group
FY 04 costs for Senior Care program $85.0
Section 5(e)(3) Public Assistance Administration
FY 04 costs for Senior Care program $25.0
Section 5(e)(4) Public Assistance Data Processing
FY 04 costs for Senior Care program $6.8
Ms. Clarke noted that she had briefly explained Sections
5(d) through 5(e)(4) in the earlier discussion with
Representative Hawker. She stated that these increases track
with the Senior Care Program bill. The $3,334,000 of tax
relief money for program benefits falls short of the total
needed, so the department is requesting the portion that the
federal funds can't support.
Ms. Clarke explained that Sections 5(e)(1) through 5(e)(4)
relate to the management costs of the Senior Care Program
that had not previously been budgeted. These costs directly
tie to the fiscal note provided to the committee.
Co-Chair Harris questioned why the request is in the fast
track supplemental rather than the operating budget or the
fiscal note accompanying the legislation. Ms. Clarke
indicated that because the fiscal note appropriation would
not be effective until July 1 the supplemental is the only
mechanism available if the program begins on April 1. She
asserted that the funding is needed quickly.
DEPARTMENT OF NATURAL RESOURCES
Section 6(a) Recorder's Office
Increased costs to process heavy volume of mortgage
refinance activity
Receipt Supported Services $300.0
Section 6(b) Office of Habitat Mgt. and Permitting
Replace unrealized inter-agency receipts in order
to fulfill workload requirements $150.0
Section 6(c) Capital
Increased activity in Remote Recreational Cabin
Site Survey Contracts
Land Disposal Income Fund $119.0
NICO BUS, ACTING DIRECTOR, DIVISION of ADMINISTRATIVE
SERVICES, DEPARTMENT of NATURAL RESOURCES (DNR), spoke to
Sections 6(a) through 6(c). He explained that $300 thousand
in user fees in Section 6(a) is for the Recorder's Office
for extra staff and supplies needed for the increased
workload related to mortgage refinance activity. The normal
workload of 200,000 documents increased this last calendar
year to about 300,000. The department has doubled its
revenue, taking in $8 million.
In response to a question by Co-Chair Harris, Mr. Bus
clarified that the user fees derive mostly from refinancing
home mortgages due to low interest rates, and real estate
activity.
Mr. Bus advised that Section 6(b) requests $150 thousand
and there are not user fees to cover it. The department
anticipated various funding sources that have not
materialized to pay for staffing when the Office of Habitat
Management and Permitting transferred from ADF&G to DNR.
This funding is needed to finish FY 04 with the projected
staffing because with the transition, many new staff came in
at advanced salary ranges instead of entry level as had been
anticipated. The department has also paid for some of the
office space.
Co-Chair Harris asked which agencies DNR targeted for
interagency receipts. Mr. Bus replied, ADF&G and other
agencies, but the projects didn't materialize. In the
transfer, the estimate was too high because the department
had counted on those funds to pay for the existing staff.
Mr. Bus stated that Section 6(c) is an increase from the
Land Disposal Income Fund to pay for remote recreational
cabin surveys and appraisals. This funding was previously
budgeted in the operating budget. People interested in
owning remote recreational sites pay the state beforehand to
do a combined survey and appraisal. Because the surveys and
appraisals weren't completed in FY 03, this appropriation
carries forward into FY 04. Since then, DNR has done a
capital request and would like to amend the capital budget
for FY 04, increasing it by $119 thousand. This would
enable the department to finish the work and get the
contracts out during the summer season.
In response to a question by Representative Fate, Mr. Bus
explained it's a "catching up" procedure because DNR was
late in getting the surveys out, and contracts have been let
which need to be paid.
In response to a question by Representative Croft, Mr. Bus
clarified that the capital request is the prospective
landowners' money that is held until the survey and
appraisal work is completed.
DEPARTMENT OF PUBLIC SAFETY
Section 7 Capital
Scope change for the Ketchikan Public Safety
Building appropriation, sec. 1, ch. 82, SLA 2003,
pg. 33, ln. 22, to include a purchase of a building
and adjacent lot and improvements $0.0
DAN SPENCER, DIRECTOR, DIVISION of ADMINISTRATIVE SERVICES,
DEPARTMENT of PUBLIC SAFETY explained that the department
would like to change the scope of an appropriation from
constructing a new building to buying an existing facility.
The existing building is currently owned by the Ketchikan
borough, and is smaller and $3 million less than the
proposed new building. The department could buy this
building and move in for $1.2 million.
Representative Croft questioned how this item would save
money. Mr. Spencer explained that last year's appropriation
of $2.4 million was vetoed down to $1,225,000 by the
Governor. The department determined that it could buy a
building with the lower appropriation, as well as afford
improvements to the building and the lot.
DEPARTMENT OF REVENUE
Section 8(a) Alaska Permanent Fund Corp.
Increased costs to advocate for POMV
Perm Fund Rcpts $300.0
Section 8(b) Alaska Permanent Fund Corp.
Authorization that APFC may advocate for POMV $0.0
BOB BARTHOLOMEW, CHIEF OPERATING OFFICER, ALASKA PERMANENT
FUND CORPORATION, DEPARTMENT of REVENUE, explained that
Section 8(a) is an increase in the FY 04 operating budget to
be used for an expanded education and outreach campaign on
the POMV, or Percent of Market Value proposal that the board
has recommended to the legislature. The corporation had
planned to start the campaign toward the end of the fiscal
year, but the board has encouraged the public education
effort sooner than anticipated.
Mr. Bartholomew explained that Section 8(b) expands the
corporation's authority in using state funds. It currently
is allowed to use budgeted funds to educate on the operation
of the Permanent Fund. This section would expand and
broaden that authority to include an advocacy role in
promoting a position and encouraging action by the
legislature or the voters. An advocacy campaign would
require direct approval by the legislature.
Co-Chair Harris asked if the corporation is requesting a
language change as well as an increased allocation. Mr.
Bartholomew confirmed that is correct. He cited Title 15,
which comes into play for ballot propositions. Title 15
specifically states that direct approval from the
legislature is required in order for the Permanent Fund to
use state funds for advocacy.
Representative Stoltze remarked that advocacy might be
called lobbying, and he asked for a description of the
planned lobbying efforts. Mr. Bartholomew pointed out that
all state agencies including the corporation have the
authority to directly lobby the legislature. The corporation
over the past year has educated the legislature on the POMV
issue. If the resolution passes the legislature, the real
issue of advocacy will present when the initiative is placed
on the ballot. At that time, the corporation will no longer
have the ability to advocate the public or the legislature,
and Mr. Bartholomew stressed that advocating the legislature
will be more important.
Mr. Bartholomew continued discussing the current authority
of the corporation with Representative Stoltze.
(Tape Change, HFC 04 - 25, Side B)
Representative Stoltze asked if the $300 thousand request
would be adequate for the advocacy effort for the year. Mr.
Bartholomew said that the appropriation would be used in FY
04 through June 30. The FY 05 budget contains an additional
request.
In response to a question by Representative Stoltze, Mr.
Bartholomew stated the corporation would not spend very much
money lobbying the legislature. The corporation would like
to start educating the public before the passage of the
constitutional amendment.
Representative Stoltze asked the total budget for advocacy
and education. Mr. Bartholomew replied the maximum amount
of a three-tiered plan for FY 04 and FY 05 would total $1.4
million, depending on how many times the ads are run.
Representative Stoltze asked if requests for proposals to
public relations firms have gone out. Mr. Bartholomew
replied that the corporation has had an on-going contract
with a communications firm in Anchorage for the past four
years that helped with the mail-out in January regarding the
POMV. In reference to this supplemental request and the FY
05 budget request, he explained that there is a request for
proposals from communications and ad agencies. The
corporation will not move forward with the contract without
legislative approval.
Co-Chair Harris pointed out that the committee asked Mr.
Heinze [ANGDA] not to use state money to lobby for more
state money. He expressed that it is a philosophical
question.
Vice-Chair Meyer advised that many on the House Finance
Committee helped to educate the public on Percent of Market
Value last summer and fall, but he said that not everyone
likes the concept of POMV. It raises the issue of fairness
whether to use public funds to advocate this position when
an opposing group is raising private funds to advocate their
own position. He asked about alternatives if this
appropriation is not funded.
Mr. Bartholomew said that education is their best tool
because polling groups indicate that a broad segment of the
public is not aware of the issue. The corporation has been
advised to use radio and television, and their other tools
are very limited.
Mr. Bartholomew described the corporation's struggle to
educate the public on two separate issues: How the POMV
works, and the use of the fund's earnings. There would be a
lot of merit in educating the public, without advocacy.
Outreach efforts would be severely limited without this
appropriation and without broadened authority, but the
corporation has planned for it.
Mr. Bartholomew continued, if the constitutional amendment
passes the legislature, the authority provision in
subparagraph (b) may be more important than the increased
funding.
Representative Hawker asked what the corporation would
advocate if this appropriation is forthcoming. Mr.
Bartholomew replied, the board advised educating, and if
given the authority, advocating on the POMV payout, the
spending limit on the Permanent Fund. The corporation has
avoided the legislative issue of use of the fund's earnings.
Representative Hawker requested absolute assurance that the
appropriation would be used to discuss the merits of Percent
of Market Value, and not what the legislature might choose
to do with the funds available under the POMV. Mr.
Bartholomew stated that is correct.
Co-Chair Harris wondered about the supplemental request if
the legislature doesn't pass the POMV. Mr. Bartholomew
explained that the money would lapse.
In response to a question by Representative Croft, Mr.
Bartholomew discussed two series of radio ads and a six-part
series on the fund's history on KTOO public television. He
clarified that the ads were educational and currently the
corporation does not have the authority to advocate.
Representative Croft asked if the current ads mention the
deletion of principal as part of POMV. Mr. Bartholomew
replied none of the ads addresses removal of principal. The
30-second spots center on the broad concept that the fund
has grown and matured but it has certain guidelines that the
corporation feels are outdated. The two public policy
issues of the proposal that will be addressed later are the
removal of principal and if the 5% spending limit is the
right level
Representative Croft asked if the ads mention the spending
limit. Mr. Bartholomew said several ads mention that POMV
will limit the annual removal from the fund. The approach
is that this proposal works best under any of the scenarios,
whether dividends or expanded to other uses.
Representative Croft asked the source of the $300 thousand.
Mr. Bartholomew said it is corporate receipts or revenues
generated by the investments of Permanent Fund money. He
clarified that these receipts go into the Earnings Reserve.
Representative Croft asked if the corporation has a request
for an additional $1.1 million in the budget process.
Mr. Bartholomew explained the four-part funding that
involves freeing up $200 thousand in the existing FY 04
budget, which, with this additional $300 thousand request,
will total $500 thousand for FY 04. The corporation will ask
for an amendment to the original FY 05 budget of $700
thousand, freeing up $200 thousand of the previous FY 05
request to total $900 thousand for FY 05. The sum of the
two is $1.4 million.
DEPARTMENT OF TRANSPORTATION
Section 9(a) Anchorage Airport Administration
Tenant improvement inspection oversight. DOT will
contract out management of the extensive tenant
building activity for the few months prior to opening
the terminal. Internal staff cannot handle this level
of one-time activity. Cost will not affect FY 05
budget. Internat'l Airports Revenue Fund $200.0
JOHN MACKINNON, DEPUTY COMMISSIONER, DEPARTMENT of
TRANSPORTATION and PUBLIC FACILITIES, spoke to Section 9(a)
explaining that Concourse C is scheduled to open in June
2004, and tenant improvements on the concourse are underway.
The department needs a consultant contract to manage and
inspect the tenant build out being done by a variety of
contractors. With the large investment in this building,
the tenant build out must conform to specifications and
safety levels.
Section 9(b) Anchorage Airport Facilities
Concourse C operations costs of planning and
implementation of the consultant contract (to be
hired in March) and the first month (June) of
operations and maintenance.
Internat'l Airports Revenue Fund $1,500.0
Mr. MacKinnon explained that Section 9(b) relates to the
department lacking staff to handle the maintenance and
operations of the expanded Concourse C. The airport
administration would like to contract out for maintenance,
and this request includes hiring a consultant to handle the
request for proposals. The concourse will open in June 2004.
Representative Fate asked if the use of the Fund requires
approval.
NANCY SLAGLE, DIRECTOR, DIVISION of ADMINISTRATIVE SERVICES,
DEPARTMENT of TRANSPORTATION and PUBLIC FACILITIES replied
that the agreement with the signatory airlines involves
presenting them with the operating budget for comment. She
said that authorization for this supplemental is not
required.
Section 10(a) Capital
Earmarked projects passed in January's federal
omnibus bill which must all be obligated before
September 30, 2004: $0.0
Co-Chair Harris asked if the following series of capital
requests [Sections 10(a)(1) through 10(a)(41) and 10(b)] are
all federal and other funding sources, without matching
general funds.
Ms. Slagle explained that there are a few projects requiring
some matching funds provided either through the AIDEA
dividend or International Airport Revenue Funds, but no
General Fund match.
Vice-Chair Meyer asked about Section 10(a)(6), Kotzebue Dust
and Persistent Particulate Abatement Research. Mr. MacKinnon
replied it's a paving project being monitored in an area
where dust is a problem.
Representative Hawker expressed concern that if
appropriated, the money couldn't be spent before it lapses.
Mr. Mackinnon stated that these capital items are part of
the recently passed omnibus bill, which contains conflicting
language. One version of the bill includes a lapse date of
Sept. 30. The department put these items in the fast track
supplemental in order to obligate these funds. He commented
that it seems unusual that earmarks would lapse. The
legislation also involves the earmarks coming off the top of
the federal highway funds.
Representative Hawker questioned what would satisfy
"obligating" the funds. Mr. MacKinnon responded that federal
highway rules require the department to meet milestones
before proceeding to the next phase of a project. Once
reached, the department can obligate the money. He added
that the department would do everything it could to obligate
the $10 million.
In response to a question by Representative Hawker, Mr.
MacKinnon noted that the state did not have a choice in
accepting the earmarked funds.
In response to a question by Representative Joule about
Section 10(a)(1), Mr. MacKinnon observed that most of the
earmarks did not come from the department, but from the
communities, and he added that it can take months to discern
their use.
Co-Chair Harris asked for more information about the two
items for the University of Alaska Transportation Research
Center in Section 10(a)(4) [$2,000.0] and
Section 10(a)(35) Capital
University of Alaska Transportation Research Center
(ED 99) $1,500.0
Mr. MacKinnon explained these items came out of different
funding sources in the appropriations bill. The center
researches issues including dust control and more durable
pavements.
Co-Chair Harris referred to Section 10(a)(20) and asked if
the state can authorize giving this money to another federal
agency to develop rural projects, for example, to the BIA
for the Donlin Creek Road to allow faster procurement. Mr.
Mackinnon replied that it is a possibility.
Co-Chair Harris noted that most of the earmarked projects
are in rural Alaska, and questioned if the priority for
highway monies needed to be rural roads. Mr. MacKinnon
agreed.
Representative Croft noted that the AIDEA dividend and the
Student Loan dividends are substitutes for general funds. He
also noted that half of the amount of these dividends are
going toward Section 10(a)(7), the Coffman
Cove/Wrangell/Petersburg Ferries and Ferry Facilities, and
Section 10(a)(40), the Coffman Cove Inner Island Ferry /Bus
Terminal. Ms. Slagle agreed. Representative Croft asked for
more information.
Mr. MacKinnon responded that the appropriation would benefit
a private organization, not the state's fast ferry system.
Representative Croft reiterated the perception that most of
the federal money would be used for rural Alaska and
questioned the division. Ms. Slagle observed that they had
not done a rural/urban breakdown.
Section 9(c) Capital
Federal contract to perform maintenance and
operation for 5 years at Adak air facility.
Interest earnings must be spent on the Adak air
facility. Adak Airport Operations $10,000.0
Ms. Slagle observed that the project in Section 9(c) is
based on a contract with the U.S. Navy to take over the
operations and maintenance of the Adak Airport. She
clarified that the state would contract with the city of
Adak for most of the operations.
Representative Moses explained that the airport had been
turned over to the city.
Co-Chair Harris noted that $10 million would be spent. Ms.
Slagle observed that the funding would come from the U.S.
Navy over 5 years. Mr. MacKinnon added that the state would
receive an additional $13.5 million from other sources than
the Navy over the next three years for both operations and
maintenance.
Section 10(a)(41) Capital
Mobility Coalition (ED 99) $500.0
Representative Hawker questioned this project that provides
transportation infrastructure to low-income families
statewide. Mr. Mackinnon said that he would provide the
information. The coalition is working with the department,
which has been involved with mobility issues for years.
Co-Chair Harris stated that HB 455 would be HELD in
committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:11 P.M.
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