Legislature(2015 - 2016)BILL RAY CENTER 208
05/16/2016 02:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB138 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 138 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 16, 2016
2:38 p.m.
2:38:07 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 2:38 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Joe Michel, Staff, Representative Steve Thompson; Chris
Christensen III, Associate Vice President for State
Relations, University of Alaska; Doug Wooliver, Deputy
Administrative Director, Alaska Court System; Mike Vigue,
Director, Division of Program Development, Department of
Transportation and Public Facilities; Representative Sam
Kito; Representative Louise Stutes.
PRESENT VIA TELECONFERENCE
Keith Gerken, Director, Facility Services, University of
Alaska Southeast.
SUMMARY
SB 138 BUDGET: CAPITAL
SB 138 was HEARD and HELD in committee for
further consideration.
Co-Chair Thompson discussed the meeting agenda.
CS FOR SENATE BILL NO. 138(FIN)
"An Act making and amending appropriations, including
capital appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
2:38:46 PM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for CSSB 138(FIN), Work Draft 29-GS2741\F
(Martin, 5/16/16). There being NO OBJECTION, it was so
ordered.
JOE MICHEL, STAFF, REPRESENTATIVE STEVE THOMPSON, addressed
the committee substitute (CS). The first change appeared on
page 4, line 26: emergency medical services match for Code
Blue Project. The Senate version of the bill had used
alcohol money to pay the appropriation. He explained
Governor Bill Walker's original bill had used General Funds
(GF) to pay for the program. The CS switched the fund
source back to GF. He elaborated there were several places
alcohol funds had been removed because the money was almost
completely spoken for in the Department of Health and
Social Services (DHSS) operating budget for the coming
year; the money would go towards funding for alcohol
treatment programs.
Co-Chair Thompson noted that Representative Gara had joined
the meeting.
Mr. Michel addressed the next change on page 5, line 21
related to the Exxon Valdez Oil Spill (EVOS) Trustee
Council purchase of conservation easements at Termination
Point and Long Island. The funding was a large dollar
value, but came from the EVOS Trust Council (not GF or
other).
Co-Chair Thompson noted that Representative Paul Seaton was
in the audience.
Mr. Michel turned to page 6, line 16 and addressed the
Alaska Housing Finance Corporation (AHFC) Cold Climate
Housing Research Center. He explained the line item had
originally been $1 million paid for with AHFC dividends in
the governor's bill. The Senate version had reduced the
amount to $500,000 and the CS restored the funding to the
full $1 million in AHFC dividends. He moved to page 7, line
25 related to deferred maintenance, renewal, repair, and
equipment. The original request for the Department of
Transportation and Public Facilities (DOT) had been $8
million, which had been reduced to zero deferred
maintenance by the Senate; the CS increased the
appropriation to $4 million. He addressed the next change
on page 7, line 27 related to public and community
transportation state match. The original appropriation had
been $1 million, which had been reduced to zero by the
Senate. The CS restored the funding to $1 million.
2:42:18 PM
Mr. Michel addressed the next change on page 8, line 3
pertaining to a federal aid highway state match of
$41,867,800. He detailed the Senate had reduced the number
to $6 million with a series of reappropriations later on in
the legislation. The difference between the CS and the
Senate version was the amount of reappropriations that had
been pulled out of the match funding in the CS. He noted
the change was present around Section 21. The next change
was on page 18, line 17 for University of Alaska deferred
maintenance, renewal, repair, and equipment, totaling $10
million. The amount restored the governor's original
request, which had been reduced to zero by the Senate. He
noted that on pages 19 and 22 (Sections 2 and 3) there
would be slight number changes reflecting fund source
changes in Section 1.
Mr. Michel turned to page 24, line 10 related to the Alaska
Land Mobile Radio System (ALMR). The CS restored the
original appropriation of $1 million, which had been
reduced to zero by the Senate. The CS also included a
reappropriation for ALMR for approximately $1.2 million
(the amount would was not reflected in the bill's total
dollar amount because it was a reappropriation of funds).
Pages 25 and 26 outlined the funding sources that took
place in Section 4. He addressed a new appropriation on
page 35, Section 16 pertaining to the Alaska Court System.
He explained it had been brought to Co-Chair Thompson's
attention that the new Alaska Supreme Court justice in
Fairbanks needed an office. The CS included $300,000 GF for
the renovation at the Rabinowitz Courthouse. Additionally,
the Alaska Court System was given the ability to use
deferred maintenance funds to cover any remaining
renovation cost. Page 36, line 5 included a reappropriation
of an original Denali Commission appropriation of $3
million. The reappropriation leveraged about $7.5 in Trans-
Alaska Pipeline Liability funds for mooring stations
throughout Alaska. Section 17, subsections (d) and (e) on
page 36 pertained to the Alaska Travel Industry Association
(ATIA). He explained ATIA collected monies from members to
pay for a booklet advertising Alaska. The Department of
Commerce, Community and Economic Development (DCCED)
typically handled the project, but it had decided to turn
the responsibility over to the travel industry. The funds
normally collected by DCCED were going to ATIA and a
visitor center staffing position in Tok, Alaska. He noted
the center was the first place visitors coming in from
Canada stopped.
Mr. Michel directed attention to page 36, line 31, which
included language related to the Department of Corrections
(DOC) Offender Management System and Victim Information
Notification System. The item had been included by the
governor and the Senate, but the Senate had changed the
funding source to alcohol funds. The CS restored the
original fund source to GF to allow alcohol funds to be
maintained in DHSS [related to treatment programs].
2:47:00 PM
Mr. Michel pointed to page 37, Section 21 related to the
Department of Environmental Conservation (DEC) clean water
projects. He detailed DEC issued multiple clean water
projects annually; once a project was completed the
balances eventually lapsed. He explained the section
included numerous completed clean water projects where
remaining funds were being reappropriated to the next
project on the list (shown in page 40, subsections (b) and
(c)). Only one of the DEC reappropriations had been
removed, which pertained to removal of Moonlight Springs
transmission line upgrades [in Nome, Alaska]. He expounded
the funds had mistakenly been allocated for
reappropriation; however, the project was not yet complete;
therefore, the project had been removed from the list of
reappropriations. Page 41, line 30 included a
reappropriation not to exceed $5.5 million. He specified
the money had already been appropriated to DHSS for design
and planning of the Alaska Center for Treatment. The words
"and construction" had been added on page 42, line 5.
Mr. Michel directed attention to Section 27, subsection (d)
on page 44. The subsection included the reappropriation of
$7,591,275 to DOT for federal aid highway match. He
explained the governor's budget had included $50 million
for the item. He furthered all of the reappropriations
would go to matching funds for DOT to be leveraged 9 to 1.
Page 47, line 3, subsection (e) also included $800,000. The
two reappropriations provided sufficient funds to meet the
$50 million federal highway state match. Sections 28
through 33 [beginning on page 47] included member submitted
reappropriations, which concluded the changes in the CS.
2:50:03 PM
Representative Wilson asked about the current balance in
the alcohol fund and the appropriations going to DHSS out
of the fund. She wondered why the funds could not be used
for other things. Additionally, she requested specifics on
how the University would spend the $10 million. She
recalled projects of about $100 million had been conducted
several years earlier and she believed the University had
also provided some matching funds. She wondered what the
University currently had in its deferred maintenance fund.
Mr. Michel deferred the question to the University.
KEITH GERKEN, DIRECTOR, FACILITY SERVICES, UNIVERSITY OF
ALASKA SOUTHEAST (via teleconference), replied former
Governor Sean Parnell had allocated $100 million to
deferred maintenance for state facilities for five years.
The University had received $37.5 million, which had been
distributed across the University system. The balance of
the remaining funds was currently committed. [Note: due to
poor audio some testimony is indecipherable.]
Representative Wilson asked how much University money had
been put in the projects. She referred to the specific $10
million and asked what projects the funds would be used on.
Additionally, she wondered how much funding the University
would be contributing to the completion of the same
projects.
Mr. Gerken relayed that his counterparts for Anchorage and
Fairbanks were also online and could speak to particular
projects. He spoke specifically to the University of Alaska
Southeast (UAS) and relayed there were three projects. The
University system allocated the funds based on the relative
size, square footage, and age of facilities; therefore, UAS
would receive the smallest portion of the $10 million
increment at about $500,000. He furthered UAS had three
projects including the Robertson Building in Ketchikan, a
downtown facility in Juneau, and one on the Juneau campus.
The University expected the three projects to exceed
$500,000, but it would pursue the funds in priority order.
[Note: due to poor audio some testimony is indecipherable.]
Representative Wilson thanked University President Jim
Johnson. She remarked that the problem may not exist if the
University system was consolidated from three universities
to one. She was trying to determine how much of the funding
allocated during the former Parnell Administration was
remaining. Additionally, she wondered where the $10 million
in the CS would be allocated and whether the University
would provide any matching funds.
Mr. Gerken answered that the University was currently
investing in the projects with its own operating budget
dollars. He believed the University statewide budget staff
could provide information about the previous capital
appropriations, which went to the Board of Regents in each
of their meetings. The funds from the $100 million five-
year program were expended or obligated to existing
projects.
2:54:47 PM
Co-Chair Thompson asked for verification Representative
Wilson had a [deferred maintenance] list sent out by his
office.
Representative Wilson appreciated the list, but it merely
contained the deferred maintenance on all of the
[University] buildings statewide. She imagined and hoped
the University had a ranking system. Based on the finance
budget subcommittee process she believed the University had
funds remaining (not necessarily in Southeast). She wanted
to know what projects they were talking about. She relayed
the budget subcommittee had tasked the University with
looking at its buildings to determine whether it could
continue operating over 400 buildings; if not, the
University had been asked to report back in the coming year
about how it would look different. She wanted to ensure
more money was not put into buildings that may no longer
have the population. She thought the University would have
the information. She remarked that $10 million was a
significant sum.
CHRIS CHRISTENSEN III, ASSOCIATE VICE PRESIDENT FOR STATE
RELATIONS, UNIVERSITY OF ALASKA, communicated that the
University had almost 40 percent of all of the square
footage owned by the State of Alaska, which included 420
buildings with an average age of 32 years. The University
currently had a $1 billion deferred maintenance backlog; it
took approximately $50 million per year to keep current
with the backlog and it had received substantially below
that amount from the legislature in recent years as the
state's budget problems had worsened. The University had
recently bonded for $50 million to go towards deferred
maintenance and would be paying the amount off for many
years. He stated that $10 million sounded like a lot of
money but it was not that much when considering the size of
the backlog and the percentage of buildings the University
operated. One of the problems with that many buildings was
the need to keep funding available for unforeseen
emergencies.
Mr. Christensen referred to a letter that he had provided
to Co-Chair Thompson's office [letter from James Johnson,
President of the University to Co-Chair Neuman dated May
16, 2016] (copy on file), which described the specific
projects the $10 million would cover (barring no
emergencies occurred). He noted he had represented the
Alaska Court System for many years and he recalled the roof
of the Dimond Courthouse had failed one day. The roof
project had been on the deferred maintenance list, but it
had failed prior to the work being done; water had damaged
seven stories of the building as a result. He reasoned
things like that happened and it may be necessary to pull
money away from another project to address the issue. He
stated $10 million was a minimal amount considering the
size of the problem, but the University was grateful for
whatever the legislature could provide.
2:58:24 PM
Co-Chair Thompson did not want to see the legislature
micromanage the University's deferred maintenance on over
400 buildings. He had confidence the University was being
as frugal and responsible as it could be in order to keep
buildings from deteriorating and costing more money in the
future.
Representative Wilson wanted to see where the money had
been spent to determine whether there were still existing
funds remaining prior to the allocation of the $10 million.
She requested a funding sheet.
Vice-Chair Saddler referred to the University's $1 billion
deferred maintenance backlog. He asked for the total value
of the University buildings. Mr. Christensen answered that
it was in excess of $2 billion. He would work to follow up
with a precise number.
Vice-Chair Saddler surmised the backlog represented
approximately half the value of the buildings.
Mr. Christensen answered that the backlog reflected that
the 420 buildings had an average age of 32 years. Half of
the buildings were very old and very few were new. The
combination of old buildings and being unable to keep up on
deferred maintenance resulted in significant deferred
maintenance representing a significant percentage of the
asset value.
2:59:59 PM
Vice-Chair Saddler referred to page 41 of the CS related to
the changes and reappropriation for the DHSS Alaska Center
for Treatment. He asked for specifics about the project. He
asked about the original appropriation for the Southcentral
Foundation Residential Psychiatric Treatment Center. He
wondered about the cost when finished and who was operating
the facility.
Mr. Michel answered that the original appropriation had
been state matching funds for the Bring the Kids Home
project. The funds had been reappropriated for planning and
design of Alaska Center for Treatment in Anchorage
(Clitheroe Center). He detailed in collaboration with the
Alaska Mental Health Trust Authority (AMHTA) the goal had
been to start construction on the project to have treatment
available as soon as possible (utilizing efforts from the
omnibus crime bill SB 91 and other).
Vice-Chair Saddler stated there was a Clitheroe Center the
Salvation Army operated out of at Point Woronzof, which had
associated facilities. He asked if the Alaska Center for
Treatment project would entail brand new construction or
the demolishing and reconstruction of an existing facility.
Mr. Michel answered that the building was very old;
therefore, there would be significant new construction, but
they would try to salvage as much of the existing building
as possible.
Vice-Chair Saddler asked for resources to gain additional
information on the project. Mr. Michel replied that he
would supply the information.
Representative Kawasaki asked about Section 35 on page 50
related to legislative reappropriations. He noted that the
language in the previous bill version was slightly
different; the prior version included language about four
specific reappropriations from the Taskforce on Sustainable
Education, Legislative Budget and Audit, Legislative
Council, and the operating budget. The current version
included four different dollar amounts. He asked why the
change had been made.
Mr. Michel answered that the additional reappropriations in
the section were related to the second legislative special
session.
Representative Kawasaki referred to language that the $1.5
million appropriated for security surveillance upgrades and
enhancements for the state capitol building were included.
He asked about the unexpended and unobligated GF balance
for the eight items [Section 35 of the CS contained eight
reappropriations].
3:04:00 PM
Mr. Michel would follow up with an answer. He believed the
Senate version had included a dollar figure. The
calculation would mean adding the additional
reappropriations on top of the balance minus $1.5
[million].
Representative Kawasaki referred to the prior bill version
[CSSB 138(FIN)], which listed the estimated balance of the
four items as $5.5175 million. He furthered $1.5 million
would be appropriated specifically for the security
systems. He noted the remaining funds would go directly to
Legislative Council. He did not know what the amount would
be - he guessed $4 million or larger. He asked for
verification that the remaining funds would be used at
Legislative Council's discretion as long as it was used for
renovation and repair or technology improvements for
legislative buildings.
Mr. Michel replied that an additional difference from the
Senate version appeared on page 51, line 11: "and other
necessary projects." The Senate version used the word
"expenses" instead of "projects," which could be any
variety of things (not specific capital projects). He
explained the money would go to Legislative Council, which
expended funds from its appropriations.
Representative Kawasaki asked if the Legislative Council
could use the funds for the Anchorage Legislative
Information Office (LIO).
Mr. Michel replied in the affirmative. The capital budget
included a $12.5 million appropriation for the Anchorage
LIO. The language was not confining and the funds could be
used for other necessary expenses related to legislative
buildings and facilities.
Representative Guttenberg pointed to Section 10 on page 33
related to the Kivalina School. The bill specified that the
money would satisfy the state's obligation of the consent
decree. He asked if the legislature was the body deciding
that the appropriation satisfied the consent decree. He
wondered what authority the language had.
Mr. Michel responded that he did not have sufficient legal
expertise to answer the question. He advised members to
review the pros and cons discussed by the Senate related to
the language. The language had been inserted by the Senate.
Representative Guttenberg asked if there was a
representative or written response from the Department of
Law (DOL) that could provide further detail.
Co-Chair Thompson replied there was a written response from
Doug Gardner [Legislative Legal Services director] and he
would have information provided.
Representative Gara requested to hear from DOL to ensure
the legislature was meeting its legal obligations related
to the Kivalina School.
Co-Chair Thompson agreed that he would try.
3:09:05 PM
Representative Gara requested to ask several questions of
the Alaska Court System.
Co-Chair Thompson noted that DOL had provided responses,
but were not available at present.
Representative Gara remarked there had been a $600,000
increment to renovate an office in Fairbanks for the new
Alaska Supreme Court justice. He noted the increment had
been reduced to $300,000 with the remainder of costs to be
covered by deferred maintenance funds. He knew the incoming
justice would not want excessive funds spent on her office.
He asked why it would cost $600,000 to accommodate the new
justice and a couple of staff for one office in a new
building.
DOUG WOOLIVER, DEPUTY ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM, answered that the Rabinowitz Courthouse had a 5th
floor that was largely unfinished. He detailed when the
building had been built in 2001 there had been enough
funding to allow for eventual expansion in the hope that
Justice Jay Rabinowitz would be replaced by another justice
from Fairbanks. In 2008 Justice Dan Winfree had been
appointed [and had moved into the 5th floor]. The $629,000
had been the cost to build Justice Winfree's office for
four additional staff and a conference room. The 5th floor
was still largely unfinished. The court system anticipated
the cost for the work on the new office would be slightly
less, but the project had not yet gone out to bid since the
appointment had been made the previous Thursday. The court
system had done some preliminary work on the numbers, but
he was always surprised by the cost of capital projects.
The $300,000 and deferred maintenance funds would enable
the court system to build the office. He added that
hopefully the cost would be below $629,000.
Representative Gara relayed he had been privileged to work
for former Justice Rabinowitz. He asked for verification
that there was unfinished space on the 5th floor of the
Rabinowitz Building that it would cost over $300,000.
Mr. Wooliver answered in the affirmative.
Representative Gara observed that the estimate exceeded the
amount needed to purchase a house. Mr. Wooliver answered in
the affirmative and noted commercial space was expensive.
He reiterated the cost had been $629,000 for almost the
same amount of space for Justice Winfree. He added some of
the work that had been done when Justice Winfree moved to
the 5th floor was one-time work (e.g. circulation and
ventilation work). He anticipated the cost would be a bit
less [than $629,000].
Co-Chair Thompson assumed Davis Bacon wages would be paid
to the contractor because it was a government project. Mr.
Wooliver believed so.
Representative Gara remarked on the high cost for an
existing space. He asked if the department had looked at
the most efficient way to build an office for three or four
people.
Co-Chair Thompson assumed the estimated funds included
building and equipping the office with computers and other
necessary supplies. He asked for verification it was a
turn-key operation.
Mr. Wooliver answered that the cost included construction,
plumbing and electrical. The walls were currently bare-
stud.
Representative Gara referred to an ATIA appropriation for
tourism marketing and a staff member. He asked for the page
reference in the bill. Mr. Michel directed attention to
page 36, line 12.
Representative Gara asked if the position at the Tok office
would be a state or ATIA employee.
Mr. Michel answered that it was defined in law that the
state have a tourism marketing position in Tok. The
Legislative Finance Division had communicated the position
was funded with Designated General Funds (DGF). In the
current CS the money was collected from ATIA members and
went to funding a position required by state law for a
state employee, which had been an error. He explained the
error would be corrected in the next CS.
Co-Chair Thompson asked if the office was the first place
commercial trucks were required to stop when entering the
U.S.
Mr. Michel answered that the facility in Tok was the first
tourism and marketing office, but it was not a weigh
station.
Co-Chair Thompson surmised the position did not have a dual
purpose. Mr. Michel answered that it was a dual purpose
position, which was shared with DOT in regards to visitor
center responsibilities including licenses and other.
3:16:51 PM
Representative Pruitt stated that it was a weird quirk in
Alaska statute mandating a visitor center in Tok; there was
no other location in Alaska with the requirement.
Therefore, the state was required to provide a staff at the
location. He did not recall why the provision was in
statute, but he thought it should be looked at in the
future. He surmised at some point in time someone from the
district had been in the right circumstances to secure the
requirement in statute. He agreed that Mr. Michel was
correct. The only way to eliminate the requirement was to
make a statutory change. He remarked the state required the
position, but it was also requiring the travel industry to
pay for a state employee, which may not fit within the
travel industry's plan on how it wanted to spend its money
as the state moved the association away from GF.
Representative Gattis remarked that she hauled equipment
across the border and she did not have to stop to talk with
tourism staff. She clarified the weigh station was not
affiliated with the tourist staff.
Representative Gara wanted to hear why the position was
needed. He relayed that two or three years back the
legislature had passed a school funding plan specifying how
much money should have gone towards education funding. He
explained that later on, the legislature had chosen not to
appropriate the funds. He stated that everything was
subject to appropriation, even the position in Tok. The
question was whether it was a wise use of money, which he
did not have information on. He underscored it was not
mandatory to fund everything just because it was in a
statute. He added there were some statutes providing for
things he wished were funded at present.
Co-Chair Thompson asked if the increment was GF money.
Mr. Michel answered that it was not GF money in the current
CS. The funds were received from members of the ATIA (just
like cruise ship head tax) and should be spent on things
authorized by ATIA. As drafted, the current CS used ATIA
funds to pay for the position, which had been a drafting
error on his part.
Representative Gara surmised if it was one thing if the
money was provided to the state by ATIA, but he was not
aware of ATIA giving the state any money. He knew ATIA took
advertisements out in a state travel planner and paid for
those, but it was not money being given to the state. He
asked travel planner money was being used for the position.
Mr. Michel answered that it was travel planner money.
Representative Gara noted [ATIA] members received a benefit
for that. He questioned whether it was the best use of
$125,000, but he moved on to a different subject. He
discussed that over $2 million for his district had been
taken from projects that were not moving forward at the
time. He understood that the state was in a fiscal crisis
and had not tried to claw the money back. He believed most
members had done the same. However, he pointed to page 48
and remarked he had no problem appropriating funds to help
with a senior center or police building, but the bill
included a reappropriation in the Soldotna and Sterling
areas for kitchen upgrades, police roof work. He
acknowledged the items were needed, but asked if the items
had been in the governor's original budget.
Mr. Michel answered in the negative. The reappropriation
items had been submitted by members of the legislature.
Representative Gara asked if the same applied to the Anchor
Point Library on page 48, line 22. Mr. Michel answered in
the affirmative, the item was a reappropriation. The
original appropriation was Anchor Point Library planning;
the words "and purchase" had been added to the
reappropriation.
Co-Chair Thompson surmised the money was still going to the
same project.
Mr. Michel replied in the affirmative. He detailed $15,000
had been appropriated in 2014 for the Anchor Point Library
and a legislator from the district had requested the
additional "and purchase" language.
3:22:49 PM
Co-Chair Thompson asked for verification that it was a 2014
appropriation. Mr. Michel replied in the affirmative.
Representative Gara relayed he did not have a problem with
the projects, but he wondered whether the original money
for the Sterling Senior Center for garage, storage, and
workshop work had been reappropriated to kitchen upgrades.
Mr. Michel answered in the affirmative. He elaborated that
the original appropriation had been $300,000. The
reappropriation used the remaining balance of the funds
spent on garage, storage, and workshop to pay for kitchen
upgrades.
Representative Gara asked for verification that the bill
expanded the use of previously appropriated funds to the
Sterling Senior Center and the Soldotna police building.
Mr. Michel answered that the reappropriation used the same
pot of money originally appropriated in 2012 (FY 13); no
additional state funds were being used. The reappropriation
merely expanded the scope of the project the original
appropriation had been intended for to kitchen upgrades and
essential roof replacements.
Representative Gara did not support opening the bill up for
all members to start getting projects in their districts.
He wanted to ensure the process was done in a fair way. He
referred to $2.496 million appropriated to Palmer for
wastewater treatment plant property acquisition,
engineering, design, and construction. He asked how it
related to the original appropriation (page 47, line 8
through 13).
Mr. Michel answered that the original appropriation in 2005
was Palmer wastewater treatment plant property acquisition.
The funds were still allocated to the wastewater treatment
plant. He explained the land had been acquired and the
reappropriation would go to funding engineering, design,
and construction. He furthered that very little had been
used from the original appropriation. He detailed the City
of Palmer was going to be sued for some of its water
discharge; therefore, the legislator requesting the
reappropriation had the primary goal of advancing the
project into the construction phase in order to start
filtering water.
Representative Gara noted the initial funds had been to
acquire the property and now the reappropriation of $2.5
million would go to costs that every city had. He remarked
that the City of Palmer stood out in the CS as a community
getting $2.5 million to do something not included in the
original appropriation. He stated that the increment almost
begged for every community to ask for similar treatment.
3:26:38 PM
Representative Gattis discussed that her district had over
$4 million reappropriated. She had told the mayor of
Wasilla that all of the funds had been swept. She had
promised the mayor that if other people were able to use
the reappropriations she would fight for the $4 million for
the City of Wasilla. She was now fighting for the funds
because she had promised that if other districts were able
to get their money she would fight hard for her district.
She stated the increments had opened up a big door. She
remarked that people said "they wouldn't squawk" because
they understood the state's fiscal situation, but if other
districts were able to get their money, she would fight for
money for Wasilla. She concluded that the issue was a huge
concern.
Mr. Michel asked if it had been an appropriation from the
last year. There had been a variety of projects around of
around $20 million that had been swept into the AHFC income
fund. He noted the receipts had been saved and if it was
one of the reappropriations it would still be sitting
there.
Representative Gattis had believed no money would be
reappropriated towards specific districts.
Representative Kawasaki concurred with the past two
speakers. He stated that the Senate bill version had swept
aside 43 different items. For example, he referred to a $4
million appropriation for the Kalifornsky Beach Road in
Kenai in 2006, of which, about $140,000 had not been used.
He noted that for a timeline of that length it seemed
reasonable that perhaps the funds were just not used. He
noted the CS contained much fewer reappropriation items and
he wondered how they had been selected.
Mr. Michel replied that many versions had been discussed in
regards DOT federal highway match money. The governor's
original appropriation included about $50 million GF to
match 9 to 1 federal dollars for the state's federal
highway match. Over the course of meeting with the
different departments, there had been multiple projects
originally appropriated to a department that were set to
lapse. The idea was if the money was going to lapse, the
funds could be used to leverage the 9 to 1 DOT match. He
detailed initially it was merely DOT lapsing funds, later
on other projects due to lapse had been brought into the
DOT reappropriation for matching funds by the Senate. He
elaborated there had been many projects that were not set
to lapse. He specified that any project where there was
concern it would end up closing out with less money than
the original appropriation - the dollar figures in the bill
had been taken from a lapsing grant report (a snapshot
occurring sometime in January) - and would not be available
for the federal 9 to 1 matching funds. He explained if
there had been concern the item may have been expended, it
had been removed from the reappropriation and replaced with
GF. The majority of the projects originally included and
replaced were set to lapse into the GF at the end of the
year. The goal in the CS was to ensure the items were not
in the DOT match. One of the items was used for the Denali
Commission reappropriation for mooring stations, but the
majority were no longer included in the DOT reappropriation
and were sitting on the lapsing grant fund list waiting to
lapse into the GF.
Representative Kawasaki asked if the current CS capitalized
as much federal money as possible. Alternatively, he
wondered if money had been left on the table.
Mr. Michel deferred the question to DOT.
3:33:39 PM
MIKE VIGUE, DIRECTOR, DIVISION OF PROGRAM DEVELOPMENT,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES,
answered the governor's requested budget of $50 million for
match would be adequate to fully obligate the 2017 federal
aid apportionment received by the state from the Federal
Highway Administration.
Representative Kawasaki asked how projects were funded if a
state match was required when grants and federal funds came
in after the cycle.
Mr. Vigue replied the department received an appropriation
from the Federal Highway Administration at the beginning of
each year. The department compiled the Statewide
Transportation Improvement Program (STIP), which included a
program of projects. Any additional funds that came through
were already incorporated into the STIP. He clarified that
the Federal Highway Administration really provided
authority to spend more money, but it did not provide
additional funds. He detailed the department received an
appropriation and obligation authority. When the department
received a bit of extra money, which occasionally happened
with "August redistribution" that was already built into
the program.
Representative Kawasaki asked for verification the
situation would be the same for the Federal Railway
Administration (FRA) that worked on a different calendar,
or the Federal Aviation Administration (FAA), or other
agencies.
Mr. Vigue responded he was uncertain about FRA because the
department did not typically see FRA money. However, FAA,
the Federal Transit Administration, and the Federal Highway
Administration operated in a similar manner.
Representative Gara referred to page 48, lines 24 through
29. He noted in the past there had been an appropriation
for the Tall Tree Bridge on the Kenai Peninsula, of which
the CS would reappropriate $45,000 to a project to upgrade
Aspen Avenue in Ninilchik. He asked if it was a federal
match project or merely left over money being put into a
new project paid for by the state.
Mr. Michel answered that it the grant had originally been
appropriated to the Kenai Peninsula Borough and was more
than likely an appropriation requested by a legislator. He
noted it had not been included in the STIP.
Co-Chair Thompson asked for the year of the request. Mr.
Michel replied 2014. He offered to follow up with
additional information.
Representative Gara replied he did not need to see
additional information. He stated the increment transferred
remaining funds from one project to a new project. He
stated there were 40 House members and he did not support
including the member requested items. He stressed he was
not grabbing any of the reappropriations for his district.
He would love to have money for a road in his district.
Representative Wilson asked whether the legislature ever
received a list of what the matching funds would be
utilized for. She referred to Chena Hot Springs
roundabouts, which many people had voiced they did not
want. She believed it was almost impossible for legislators
to stop the process because the legislature allocated
matching funds and the department was able to spend the
money however it wanted. She wondered how the department
received a project the community did not want once it was
on the department's list.
[Note: Mr. Vigue was unable to complete a response due to a
fire alarm.]
3:38:46 PM
AT EASE
3:44:40 PM
RECONVENED
Co-Chair Thompson remarked that the committee would meet
the following day on the bill. The meeting would be at
10:00 a.m. The meeting was recessed to a call of the chair
[Note: the meeting never reconvened].
ADJOURNMENT
3:45:59 PM
The meeting was adjourned at 3:45 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 138 HCS WORKDRAFT FIN vF.pdf |
HFIN 5/16/2016 2:30:00 PM |
SB 138 |
| SB 138 UA Letter Deferred Maintenance Funding.pdf |
HFIN 5/16/2016 2:30:00 PM |
SB 138 |