Legislature(2013 - 2014)HOUSE FINANCE 519
02/20/2014 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB265 || HB266 || HB299 | |
| Overview: Governor's Fy 15 Budget Amendments and Governor's Fy 14 Supplemental Budget Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 20, 2014
1:46 p.m.
1:46:38 PM
CALL TO ORDER
Co-Chair Austerman called the House Finance Committee
meeting to order at 1:46 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Lindsey Holmes
Representative Cathy Munoz
Representative Steve Thompson
MEMBERS ABSENT
Representative Tammie Wilson
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget,
Office of the Governor; Chris Christensen III, Associate
Vice President for State Relations, University of Alaska.
SUMMARY
HB 265 BUDGET: CAPITAL
HB 265 was HEARD and HELD in committee for
further consideration.
HB 266 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 266 was HEARD and HELD in committee for
further consideration.
HB 299 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS
HB 299 was HEARD and HELD in committee for
further consideration.
HOUSE BILL NO. 265
"An Act making appropriations, including capital
appropriations and other appropriations; making
appropriations to capitalize funds."
HOUSE BILL NO. 266
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, and making
reappropriations; making appropriations under art. IX,
sec. 17(c), Constitution of the State of Alaska, from
the constitutional budget reserve fund."
HOUSE BILL NO. 299
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending
appropriations; repealing appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
Co-Chair Austerman discussed the meeting agenda.
1:47:19 PM
^OVERVIEW: GOVERNOR'S FY 15 BUDGET AMENDMENTS and
GOVERNOR'S FY 14 SUPPLEMENTAL BUDGET AMENDMENTS
1:47:19 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, relayed that the proposed amendment
package was small. She remarked that the supplemental bill
had been delivered to the committee on the 15th legislative
day of the current session. She pointed to line 2 of a
spreadsheet titled "FY 2014 Supplemental Bill Amendments
Submitted February 18, 2014" (copy on file). Line 2 listed
an appropriation of $32.7 million for the Susitna-Watana
Hydroelectric Project; the appropriation would be
contingent on the Alaska Energy Authority (AEA) obtaining
executed land access permits needed to continue with field
studies and other activities needed for the Federal Energy
Regulatory Commission (FERC) licensing application process.
The funds were in addition to an FY 15 capital budget
request of $10 million. Lines 3 and 4 included two
reappropriations of access fuel-trigger dollars in the
current year budget. The request on line 3 was $2.5 million
and was specific to costs related to the delayed return-to-
service of the Tustumena; costs included loss of revenue
and others associated with the Kennicott taking over some
of the Tustumena trips. Line 4 included a reappropriation
of the estimated remaining balance in the fuel trigger of
$5 million into the vessel replacement fund. She discussed
that the legislature had put $10 million into the current
fiscal year budget for the design of a replacement vessel
for the Tustumena; construction funds for the vessel would
be needed in the future when the design was complete.
1:51:34 PM
Representative Gara believed there were varying opinions
about the Susitna-Watana Hydroelectric Project. He remarked
that the state had spent $170 million to date on the
project. He wondered why the state would spend an
additional $32 million when it was looking at a large
diameter gasline that would provide approximately eight
times more energy than it could use.
Ms. Rehfeld replied that the Susitna-Watana project had
been very important to the Railbelt system and would help
the state to meet its renewable energy goal of 50 percent
electrical generation by 2025. The project would provide a
source of inexpensive hydro power for the entire region.
She stated that the project was not exclusive of the
gasline project. She detailed that the gasline would
provide gas for Alaskans as a heat source and would provide
a revenue stream for the state.
Representative Gara countered that the gasline would
provide more energy than the state would need. Co-Chair
Austerman communicated that he did not want to debate the
importance of projects.
Representative Gara wondered why it made sense during tight
budgetary times to spend $32 million at the same time the
state was working on an alternative project. He referred to
Ms. Rehfeld's testimony that the Susitna-Watana project
would produce inexpensive power; he wondered if the project
construction cost was factored in and if it was only
inexpensive if the state paid for the project.
Ms. Rehfeld replied that the total financing package for
the Susitna-Watana project had not been determined. She
believed the AEA could provide estimated savings and power
cost estimates.
1:54:52 PM
Co-Chair Austerman wondered if there was money in the FY 15
budget for Susitna-Watana. Ms. Rehfeld replied that the FY
15 budget included $10 million for the project. She
detailed that the governor's office had not included a
larger request initially because it was hoping the executed
permits would be available in order to bring forward a
dollar amount for the field studies required in the current
year. The reappropriation was contingent on securing signed
permits; substantial progress had been made on getting
permits signed and several landowners were willing to sign
the permits.
Representative Holmes referred to $95.2 million
appropriated in FY 14 and the $32.7 million supplemental
request, which combined totaled $127.9 million for FY 14.
She looked at the $10 million request for FY 15. She
wondered if the reappropriation was a move to put FY 15
funding into the FY 14 supplemental. She wondered when the
money would actually be used and why the FY 14 request was
only $10 million.
Ms. Rehfeld answered that there was an estimate in the
capital project write-up for the cash flow needs in the
remainder of the current fiscal year through FY 15. The
project was contingent upon the permits; there would be
approximately $30 million remaining in the existing
project, plus the $32.7 million, and the $10 million in the
FY 15 budget. She believed the funds would allow the
project to get through FY 15. There would be one additional
year of funding (if everything remained on schedule) to get
to the licensing application period. There would be another
fund installment for engineering if the application period
was successful. She appreciated that the issue was
confusing and hoped the backup material would clarify the
cash flow and timing.
Representative Holmes would look at the issue further to
determine whether it was appropriate for the funding to be
in the supplemental or the amended FY 15 budget.
1:58:33 PM
Representative Edgmon believed the question asked by
Representative Holmes was relevant. He believed it was the
legislature's job to scour the budget like never before due
to tight fiscal times. He did not understand what the
requested money would do for the project that was still in
the feasibility/study stage. He remarked that the requests
represented a tremendous amount of money. He referred to a
Commonwealth North luncheon from the prior fall, where an
attendee had recommended using a Simpson-Bowles approach to
take a look at a list of the proposed large projects to
determine which ones the state would fund. He credited the
governor for putting $29 million into the budget for the
Alaska Housing Finance Corporation weatherization program,
but noted that the funds would only get the program through
half of the year. He stressed that weatherization provided
immediate 30 to 40 percent savings to every household in
addition to valuable jobs statewide. He believed some
people fully supported the project while others had
concerns. He was interested in more information about the
project and the considerable funds designated to it. He
asked for verification that there would be no other
weatherization requests from the governor at present.
Ms. Rehfeld replied that AEA had an approved study plan
from FERC. She detailed that there were a number of complex
studies currently underway in order to meet the application
timelines. She shared that there was a list of studies that
AEA could provide to the committee. She appreciated the
conversation because it was necessary in determining the
overall spending level the legislature and governor's
office were comfortable with given the current fiscal
environment. She had spoken with the housing authorities
and understood that they were interested in doubling funds.
Part of the discussion with the committee would pertain to
priorities it would like included in the budget. She
communicated that the governor's office was working to keep
the amendments and budget as low as possible; the [Susitna-
Watana] project was a priority that the governor's office
thought should be continued if the permits were executed.
She agreed that significant discussion was needed.
2:02:14 PM
Representative Edgmon wanted to gain a further
understanding of the project and expenditures. He believed
$178 million had been appropriated thus far. He noted that
more than $40 million would be put towards the project that
was still "on the drawing board." He noted that an
additional $32 million was requested.
Co-Chair Austerman replied that the conversation would
occur when the supplemental budget was brought formally
before the committee. He did not want to debate one project
against another during the current meeting.
Representative Guttenberg asked if the appropriated funds
had been designed to facilitate permits to be obtained by
AEA. He addressed that the requested funds were contingent
on the permits. Ms. Rehfeld believed all involved parties
were aware that the permits needed to be executed in order
to continue and that additional funding would be required
to pursue the project. She detailed that the discussions
had been ongoing since the prior fall. She believed AEA was
close to securing the permits. She deferred to AEA for
further detail.
2:04:30 PM
Vice-Chair Neuman He wondered what to do about businesses
waiting for the project to move forward. He referred to the
spreadsheet notes that the additional funds would go to
support the progress of licensing efforts. He had been
contacted by a constituent who had a contract with AEA to
provide support services for helicopter fueling; there was
currently an issue with obtaining a land-access permit to
allow studies to continue. He detailed that the small
business had invested over $100,000 in tank farms for
helicopter refueling. He believed money to move projects
forward had been halted until access was acquired.
Ms. Rehfeld deferred to AEA on some of the specific
contract language. She agreed that the issue was one of the
difficulties with large projects. The need for contract
workers was one of the reasons that the requested
appropriations extended into FY 15.
Vice-Chair Neuman understood that the legislature would
discuss which projects it would move forward with; however,
it had already engaged in multiple contracts for the next
couple of years. He wondered what commitment the state
should have to contracted employees.
Representative Gara referred to the supplemental
technicalities raised by Representative Holmes and
Representative Edgmon. He wondered if the supplemental FY
14 funds would be spent in FY 15 if the permits were not
secured and money was not needed by June 30, 2014.
Ms. Rehfeld answered that the funding had been requested as
capital appropriations that would have extended terms; most
capital appropriations were for a five-year timeframe. She
detailed that if the supplemental was approved and the
permits were executed the contractors could begin work in
the upcoming spring field season. The funds would still be
available for use beyond June 30, 2014. She noted that the
timing decision was at the discretion of the legislature.
2:08:41 PM
Co-Chair Austerman believed the conversation related to
timing would occur when the supplemental was in front of
the committee.
Co-Chair Stoltze believed that the Susitna-Watana project
would have legacy benefits that would continue to increase
over the years. He remarked that other energy needs had
been taken care of statewide. He referred to other state
projects that he found less viable.
Co-Chair Austerman reminded members to refrain from
debating projects during the meeting.
2:10:29 PM
Ms. Rehfeld spoke to the FY 15 operating budget amendments.
She pointed to a spreadsheet titled "FY 2015 Operating
Amendments." She relayed that few items were included as an
effort to maintain a lean budget. She looked at page 1,
lines 1 through 3 pertaining to the Department of
Administration (DOA); each of the items related to
requirements under the Federal Affordable Care Act. Line 1
included a request for $61,300 for fees required for all
active self-insured health plans. She detailed that the
state paid a fee for all individuals in the plans for the
Patient-Centered Outcomes Research Institute. Line 2
included $68,000 in general funds for self-insured retiree
health plans. Line 3 included a $3.2 million reinsurance
fee. The items had not been included in the December budget
because at the time the governor's office had been working
with the Department of Law (DOL) and DOA on the issue; it
was unknown whether any litigation would occur. After the
discussions the governor's office had determined that it
was appropriate to include the items in the budget in order
to avoid any potential nonpayment penalties.
Ms. Rehfeld moved to page 2, line 4, which included a
reduction of $150,000 under the Elected Public Officers'
Retirement System (EPORS). The decrease was due to a
reduction in participants in the system; the actuarial work
had not been completed until after the December budget had
been submitted. Lines 5 and 6 included increments for the
Office of Public Advocacy and the Public Defender Agency
based on the entities' current caseloads and appellant
backlogs; the funds would help, but would not address the
entire backlog. Line 7 included a $25,000 statutory
designated program receipts request for certification of
export logs under the Department of Natural Resources
(DNR). She detailed that Legislative Budget and Audit had
recently approved a similar request; logs were primarily
exported to China.
Ms. Rehfeld addressed item 8, a request to restore funding
the governor's office had proposed to reduce for the Alaska
Bureau of Highway Patrol. She detailed that the unit had
been established with federal funds within the Department
of Public Safety (DPS) to maintain dedicated enforcement on
Alaska's four highway safety corridors. Over the past
several years the funding source had been transferred to a
state general fund program. The department had developed
proposals when it had been asked to come up with ways to
deliver its mission and core services at less cost. The
proposals included providing enforcement activities on the
highway safety corridors through state trooper detachments.
She stated that it had subsequently become clear that the
state would not be able to maintain the required patrol in
the areas. She noted that trooper detachments continued to
have a great deal of pressure on the regular patrol
services. She relayed that funds should be restored in
order to maintain dedicated resources that had successfully
reduced highway fatalities.
2:15:52 PM
Ms. Rehfeld looked at line 9 related to the University of
Alaska. The university had completed its negotiations with
United Academics and had requested a total of $3,370,000
for the agreement; $1,686,500 of the request was general
fund. Line 10 reflected an update to the amount needed to
inflation proof the Alaska Permanent Fund; the Alaska
Permanent Fund Corporation provided the governor's office
with a monthly projection statement. Page 3, line 11
deleted the contingency language section that appropriated
lost federal receipts with general funds related to the
Department of Corrections (DOC); the department believed it
would receive the necessary federal funding. Line 12 trued
up general obligation bond debt service estimates based on
timing and cash flow. Line 13 reduced a general fund
request for jail construction reimbursement by $512,300
given that sufficient cash was available to apply to
payments in 2014 and February 2015. The total reduction to
the FY 15 operating budget was $5,800,000.
2:17:37 PM
Vice-Chair Neuman asked about line 8 pertaining to highway
safety corridors. He stated that according to the
Department of Transportation and Public Facilities (DOT)
none of the state's highways would continue to qualify as
highway safety corridors due to improvements and decreased
fatalities. He wondered if the highways would not qualify
due to extra trooper patrols enforcing the areas. He asked
if the funds were not needed anymore and wondered if Ms.
Rehfeld had discussed the issue with DOT.
Ms. Rehfeld shared that when the Bureau of Highway Patrol
had first been established through federal national highway
safety funds provided to DOT there had been specific
parameters on what the funds could be used for. She
detailed that DOT and DPS worked together on enforcement,
engineering, and an education plan related to the use of
the federal highway funds for the 4 identified corridors.
Over time some of the parameters changed and federal funds
were no longer available to DPS; therefore, funds had been
replaced with general fund dollars over the past couple of
years. She did not know eligibility requirements related to
the designation of a highway safety corridor. The
governor's office proposed a continuation of general funds
for state enforcement along the corridors.
2:20:05 PM
Vice-Chair Neuman surmised that it was difficult to
determine whether increased enforcement, road upgrades, or
a combination of the two, had decreased fatalities and
accidents. He suspected it was a combination of various
items and believed the legislature should look at partial
funding for the request.
Representative Guttenberg looked at the $150,000 reduction
on page 2, line 4 related to actuarial work for EPORS
benefits.
Ms. Rehfeld clarified that the item was based on actuarial
work. She detailed that the funds were evaluated annually
and the governor's office received the data.
Representative Guttenberg asked whether the fund was
supposed to pay for the item. Ms. Rehfeld replied that the
item was a decrement based on the number of eligible
members remaining in the system. Representative Guttenberg
understood. He asked if the system had its own fund. Ms.
Rehfeld replied in the affirmative.
Co-Chair Austerman asked about line 9 related to university
contract negotiations. He asked for verification that the
funding would increase by 2 percent for three years in
addition to a $750 annual bonus per employee. He referred
to most other state contracts that had received lower
increases. He noted that school districts were telling
their employees to expect zero increases.
Ms. Rehfeld replied that there was a write up describing
the agreement. She believed the university could provide
further detail on what its employees were required to pay
for health insurance and other items that other state
employees did not pay for. The university did not provide
pay increments like other state agencies.
Co-Chair Austerman asked for verification that the increase
was 2 percent for three years. Ms. Rehfeld believed that
was the case.
2:23:11 PM
CHRIS CHRISTENSEN III, ASSOCIATE VICE PRESIDENT FOR STATE
RELATIONS, UNIVERSITY OF ALASKA, stated that it was
difficult to do a comparison between university and state
contracts because they covered different items. He
explained that the university did not provide longevity
increases to employees (unlike the state that provided 3
percent longevity increases during the first six or seven
years of employment and additional increases every other
year subsequent to that time). The request on line 9
covered the full increase package. He relayed that the
university did a number of other things that reduced the
package value to employees. He elaborated that as a
university employee he received roughly 60 percent of the
leave time he had received when working for the state
judicial branch. He stated that the university did provide
sick leave, but it had no value unless he became sick.
Mr. Christensen continued that the state paid 100 percent
of the economy medical plan premiums for its employees,
whereas the university was paying 83 percent in the current
year and 82 percent in FY 15. He communicated that every
month he had $200 taken from his paycheck to pay his share
of the health insurance premium. He believed the university
had negotiated tight and responsible contracts. He noted
that the contracts before the committee were for the
university's largest faculty union. The union had a small
pot of money for genuine merit increases for exemplary
performance (e.g. bringing grants in or other). He
continued that many professors would receive no bonus, some
would receive a small bonus, and others who showed the high
performance would receive large bonuses. He relayed that
the contracts more closely resembled those in the private
sector.
2:25:52 PM
Co-Chair Austerman asked about the $750 cash bonus. Mr.
Christensen replied that the amount had been negotiated.
The actual percentage increase was 2 percent per year. He
stated that the cash would be used for either merit or
market increases. He reiterated that the university did not
provide longevity increases like the state.
Co-Chair Austerman asked how many employees would be
eligible for the increase. Mr. Christensen replied that
there were roughly 950 full-time equivalent employees in
the category.
Co-Chair Stoltze asked about the comparison between the
negotiated contracts for the university and for DOA
negotiated state employee contracts.
Mr. Christensen replied that there were two sides that had
negotiated long and hard. He believed the contracts were
reasonable and responsible when taking into consideration
the total expenses and what employees had given up. He
restated that it was very difficult to do a direct
percentage comparison between the university and the state.
He did find it interesting that the state did not seem to
be looking to what the university was doing to manage
personnel costs in an era of declining revenue.
Co-Chair Stoltze referred to the $750 bonus and surmised
that the figure was de minimis for a tenured professor. He
wondered whether the bonus went to adjunct professors as
well. Mr. Christensen answered that adjunct professors fell
under a different union. The union under discussion
pertained to professors teaching upper level courses. He
added that the salary of a full professor began at $62,000
per year (the equivalent of a pay range 19a in the state
system).
Co-Chair Stoltze believed the $750 may be a more prudent
way to handle bonuses. He noted that the bonus treated the
employees equally. He detailed that if the bonus was based
on percentages they would pay more for professors who were
already financially well-off.
Mr. Christensen pointed out that the contract did reclaim
some management rights that had been given away many years
earlier. For instance, language had been improved to
provide that management had the right to assign a workload
that met the needs of the university with a focus on
increased faculty productivity. The university felt that
the management givebacks reduced the cost of the contracts.
He noted that the faculty had been very forthcoming on the
issue; there were many employees who wanted to improve the
university who had worked to negotiate contracts with that
goal in mind.
2:29:57 PM
Co-Chair Stoltze shared a story about one of his former
professors at the University of Alaska Fairbanks. He had
learned that there was a $5.8 million United Academics
increase; $2.9 million would come from the state general
fund. He wondered about the other $2.9 million and asked if
it was separate from the appropriation under discussion.
Mr. Christensen answered that not all of the university's
contracts were fully negotiated. It appeared that the full
amount would be approximately $5.1 million from the
university and $5.1 million from the state's general fund.
Co-Chair Austerman found it interesting that the state was
working to figure out how to balance the budget, but that
the annual increase came to approximately $4,000 per
employee.
Representative Thompson asked whether university receipts
would fund half of the cost for each of the three years.
Mr. Christensen answered in the affirmative. He noted that
three to four years earlier the state had picked up 60
percent of the cost compared to the 50 percent it currently
covered. He communicated that the university had the
incentive to produce contracts like the one before the
committee.
Representative Thompson asked if the $750 amount would be
received each year. Mr. Christensen replied that the bonus
was annual.
Representative Gara asked for verification that the
university would pay $1.686 million and the general fund
would pay for the remaining $1.686 million. Mr. Christensen
responded in the affirmative.
Representative Gara asked for confirmation that the
university would request another $5.1 million general fund
request in the next year or so for its other employees (the
university would also absorb an additional $5.1 million
increment). Mr. Christensen answered that the items should
be in the current budget. There were two contracts the
legislature had not yet seen, but they were much smaller.
All of the contracts together should total approximately
$5.1 million.
Representative Gara asked for verification that the items
were in the current year budget. Mr. Christensen answered
that some of the items were in the current year budget. He
elaborated that the contracts the committee had already
seen in the governor's budget were for the United
Federation of Teachers, the Fairbanks Firefighters' Union,
and the non-covered employees. The proposed amendment
included the United Academics faculty. The committee had
not yet seen the University of Alaska Adjuncts contract,
which would be approximately $200,000 undesignated general
fund and $200,000 designated general fund.
2:33:31 PM
Co-Chair Stoltze mentioned EPORS and believed it had only
been in effect for two years. Ms. Rehfeld thought the
system may have been in effect slightly longer.
Co-Chair Stoltze thought EPORS may have been established in
the 9th Legislature. He recalled that at the time there had
only been nine Republicans in the House. The system had
been a generous benefit program that enabled participants
to add onto their retirement by working at a higher paying
job for one day. He imagined that remaining participants in
the system were currently in their 60s or older.
Ms. Rehfeld replied that there were 20 retirees and 15
survivors still receiving benefits.
Co-Chair Stoltze discussed that few employees could have a
significant financial impact; the EPORS beneficiaries had
not put a substantial amount into the system and the state
was paying a high amount to those beneficiaries. He noted
that some of the employees had not taken real benefit of
the system, while others had; there were also some examples
of abuse of the system by employees who worked very short
periods.
Representative Gara pointed to a provision in the current
retirement system that allowed a state employee's three
highest earning years to count for retirement. He provided
an example of a state employee that made $50,000 annually
for the majority of their career, who then worked for three
years at $110,000 annually. He wondered if the
administration was guarding against the practice. He
remarked that the employee in his example had not paid into
the pension system at $110,000, but that their pension
would be based on the amount.
Co-Chair Stoltze remarked that municipal employees also had
the option.
Representative Gara reiterated his question to the
administration. Ms. Rehfeld deferred the question to DOA.
Representative Gara asked Ms. Rehfeld to pass the concern
on to the department.
Co-Chair Austerman noted that if a person served on a
borough assembly for three years, took $100 out into
retirement, and became elected at $50,000, the person would
get benefits at whatever their timeframe was.
Representative Gara provided another example of a person
working their three high years.
2:37:48 PM
Representative Gara asked about lines 5 and 6 on page 2. He
spoke about the increase in crime sentencing and noted that
if sentencing continued to increase the state may need to
build another prison. He asked which of the formerly 0 to
1-year crimes had become 1, 2, and 3-year crimes. He
thought the state should look into whether it was
appropriate to reduce any of the sentences in order to
avoid the cost of another prison. He wondered if the
governor's office or other had looked into the issue.
Ms. Rehfeld replied that the criminal justice working group
(including the DOL, the Court System, DOC, and DPS) had
looked at issues like the one mentioned by Representative
Gara. She would communicate the question to the working
group and believed they could provide the information.
Representative Gara did not believe anything was being done
to address the issue and believed it was the
administration's responsibility. He asked for estimates to
build a new prison. Ms. Rehfeld expressed certainty that
the issue had been discussed; she would ensure that
information was communicated to the committee.
Co-Chair Stoltze made a remark on the efficacy of picking
which prisoners were harmless. Representative Gara
clarified that he was speaking specifically about low-level
crimes. Co-Chair Stoltze commented that they were crimes
nonetheless.
2:40:02 PM
Ms. Rehfeld addressed the capital budget amendments in a
spreadsheet titled "FY 2015 Capital Amendments." She
pointed to line 1 that provided an update of the Susitna-
Watana project. Line 2 included a request of $580,800 for
the Exxon Valdez Oil Spill Trustee Council to purchase two
parcels on the lower Kenai River to provide for public
access and riverbank restoration. Lines 3 and 4 included a
$6 million funding request for Alaska Marine Highway
System. She explained that the FY 15 budget included an
annual $6 million general fund request for vessel and
terminal upgrades and overhauls due to aging vessels. The
proposed request would provide an additional $6 million
from the capitalized account of Alaska Marine Highway
Stabilization Fund. Line 5 included a $2,497,500 general
fund request for a new project under DOT. The department
had been working on the item with federal and state
entities to cleanup a PCB contamination site at Aniak High
School. She explained that the contamination had been an
issue for a lengthy period of time. An agreement had been
negotiated between various parties; the project total was
$9.7 million and the state's portion was approximately 16
percent.
Co-Chair Austerman referred to the increment on line 2 and
did not realize that the Exxon Valdez oil had extended up
to the Kenai River. Ms. Rehfeld was not an expert on the
Exxon Valdez oil spill, but she believed the council was
able to use resources for restoration and to access
projects. The council felt that it could contribute to the
item and had asked the governor's office to make the fund
request.
2:43:15 PM
Representative Holmes pointed to line 1 related to Susitna-
Watana supplemental FY 14 funds versus FY 15 funds. She
referred to language on line 1 stating that the amendment
updated the projected future-year funding needed. She
believed that if the funds were for future needs they
should not be in the supplemental budget.
Ms. Rehfeld replied that the amendment updated the out-year
costs based on the $10 million that had been requested in
the budget and what would be needed in the next fiscal
year. She added that additional cash flow detail was
included in a backup document ["Alaska Energy Authority -
Susitna-Watana Hydroelectric Project FY 2015 Request" (copy
on file)]. She relayed that AEA would be happy to discuss
the project in more detail.
Co-Chair Austerman referred back to the supplemental
budget. He asked for the total anticipated shortfall and
draw from the savings accounts for all budgets under
discussion.
Ms. Rehfeld replied that members' packets should contain an
amended fiscal summary that included all of the budgets;
she would ensure members had the material. She relayed that
the revised fiscal summary would include fiscal notes that
were not reflected in December 2014. She detailed that in
December the governor's office calculated the FY 14 draw at
$1.9 billion out of the reserve funds; with the fiscal
notes and supplemental requests the draw increased to just
below $2.1 billion. In December the calculated draw for FY
15 had been $1.1 billion; with fiscal notes and
supplemental requests another $29 million had been added
for a total of $1.13 billion.
2:46:09 PM
Representative Gara asked about the capital budget
amendment for Aniak High School on line 5. He did not want
students to be exposed to health risks, but he wondered if
the waste was far enough underground that it did not
present a danger to anyone. He wondered if there was an
option to not spend the money if a danger did not exist.
Ms. Rehfeld did not believe the school would be operating
if the students were in immediate danger. She communicated
that work had been done by DEC for cleanup. The cleanup
would be repaid as a portion of the negotiated settlement;
however, there was still work to be done. She believed DOT
and DEC could provide further information on the status and
the depth of the contamination.
Representative Gara was interested in additional
information. He did not want students to be in danger, but
he wondered if there was a need for the expenditure.
Co-Chair Stoltze suspected that part of the danger was
associated with any potential for litigation pertaining to
an ignored environmental risk. He stated that many things
were done because of the fear of the legal system. Ms.
Rehfeld replied that the backup materials talked about that
the pertinent buildings operated as the school's shop and a
science classroom facility. The backup also addressed
drinking water wells that were clear on the site.
Additionally, it addressed the PCB contamination, what had
been done, and what the agreement would do in terms of
cleanup. She reiterated that DOT and DEC could provide
additional information.
Co-Chair Austerman discussed the schedule for the following
day.
ADJOURNMENT
2:50:22 PM
The meeting was adjourned at 2:50 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 266 Operating_Amendment_Spreadsheet_2-18-14.pdf |
HFIN 2/20/2014 1:30:00 PM |
HB 266 |
| HB 265 Capital_Amendment_Detailed_Backup 2-18-14.pdf |
HFIN 2/20/2014 1:30:00 PM |
HB 265 |
| HB 265 Capital_Amendment_Spreadsheet_2-18-14.pdf |
HFIN 2/20/2014 1:30:00 PM |
HB 265 |
| HB 266 _Operating_Amendment_Detailed_Backup_2-18-14.pdf |
HFIN 2/20/2014 1:30:00 PM |
HB 266 |
| HB 266 Amendment_Summary_2-18-14.pdf |
HFIN 2/20/2014 1:30:00 PM |
HB 266 |