Legislature(2019 - 2020)ADAMS ROOM 519
03/14/2019 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Department of Commerce, Community and Economic Development | |
| Department of Natural Resources | |
| Department of Environmental Conservation | |
| Department of Fish and Game | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 14, 2019
1:33 p.m.
1:33:45 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:33 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Tammie Wilson, Co-Chair
Representative Jennifer Johnston, Vice-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
MEMBERS ABSENT
None
ALSO PRESENT
April Wilkerson, Administrative Services Director,
Department of Commerce Community and Economic Development,
Office of Management and Budget; Lacey Sanders, Budget
Director, Office of Management and Budget; Fabienne Peter-
Contesse, Administrative Services Director, Department of
Natural Resources, Office of Management and Budget; Jeff
Rogers, Administrative Services Director, Department of
Environmental Conservation, Office of Management and
Budget; Samantha Gatton, Acting Administrative Services
Director, Department of Fish and Game, Office of Management
and Budget.
SUMMARY
FY 20 BUDGET OVERVIEWS:
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT
DEPARTMENT OF NATURAL RESOURCES
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
DEPARTMENT OF FISH AND GAME
^DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT
1:34:44 PM
APRIL WILKERSON, ADMINISTRATIVE SERVICES DIRECTOR,
DEPARTMENT OF COMMERCE COMMUNITY AND ECONOMIC DEVELOPMENT,
OFFICE OF MANAGEMENT AND BUDGET, provided a PowerPoint
presentation titled "FY2020 Governor's Amended Budget"
dated March 14, 2019 (copy on file).
Ms. Wilkerson began on slide 3. She noted that, on the left
hand side, there was a comparison of the funding makeup of
Department of Commerce, Community and Economic Development
(DCCED). It compared the FY 19 management plan budget,
which was $168.643 million; as compared to the FY 20 budget
proposal, which was $164.118 million. She remarked that it
was made up of several different funding groups. The
combined general fund made up 52.8 percent of the overall
budget. The other fund group made up 34.3 percent of the
overall budget. Federal funds made up 12.9 percent of the
budget. She remarked that it was an overall decrease from
FY 19 of $4.525 million, or a 2.7 percent decrease. She
remarked that of that decrease, $3.266 million was overall
general funds of that reduction. She pointed to the right
hand side, which showed the budgeted positions in the same
comparison timeframe. She noted the overall reduction of 6
permanent full-time positions, two of which were actual
deleted positions within the budget and four proposed
transfers to the Governor's Office. She moved to slide 4,
"FY2020 Budget: Department of Commerce, Community and
Economic Development Snapshot ($ Thousands)" which showed
the high priority items that were reflected in the changes
in the budget:
? Reorganize and Consolidate the Division of Economic
Development (-$243.4 GF and -2 PFT)
? Realign Local Government Support and Services (-
$1,000.0 GF)
? Withdraw Subsidy to Alaska Legal Services
Corporation (-$450.0 GF)
? Power Cost Equalization (PCE) Program Fund Source
Change (+/-$32,355 Net Zero Change)
? Statewide Support Executive Branch 50 percent
Travel Reduction (-$354.2 GF
Representative Merrick asked for verification that two PCNs
had been deleted and four had been transferred to the
Office of the Governor.
Ms. Wilkerson replied in the affirmative.
Representative Merrick asked for more detail on why the
positions were being moved.
Ms. Wilkerson replied that she would address the question
on a following slide. She continued to address the budget
items on slide 4. She remarked that there was a statewide
50 percent travel reduction of $354,200 in GF.
1:39:29 PM
Vice-Chair Ortiz asked if there would be further detail on
the travel reduction and the department's ability to
address its mission.
Ms. Wilkerson replied that each division directors and
corporations were asked to reevaluate all of their
operations to identify areas where there could be travel
function reductions. She stressed that there were some
areas that could not be reduced, and the authority would be
realigned through the next budget process management plan
to put a more appropriate and accurate level of travel
funding within their budget.
Vice-Chair Ortiz asked if Ms. Wilkerson meant the FY 21
budget cycle.
Ms. Wilkerson clarified she was speaking about the
management plan process. She stated that once the budget
was complete, the directors would realign based on where
they felt they could support their priority travel.
Vice-Chair Ortiz asked about the kinds of things the
department utilized its travel money on.
Ms. Wilkerson answered there was a lot of travel in the
Community and Regional Affairs and Alaska Seafood Marketing
Institute (ASMI) to promote Alaska seafood products.
Additionally, there was board travel in Division of
Corporations, Business and Professional Licensing (CBPL)
where they were traveling to Washington D.C. The
commissioner's intent was to evaluate travel to be more
efficient. They were considering whether a board really
needed to travel four times per year
Representative LeBon discussed that when he had worked as a
banker the DCCED had a participation loan program that
would make loans in rural Alaska with participation from
banks. He wondered if that program was still active.
Ms. Wilkerson believed he was speaking about Alaska
Industrial Development and Export Authority (AIDEA).
Representative LeBon replied in the negative and determined
the program was long gone.
Ms. Wilkerson moved to slide 5, "FY2020 Budget: Department
of Commerce, Community and Economic Development Snapshot ($
Thousands)":
Reorganize and Consolidate the Economic Development
component (-$243.4 GF and -2 PFT)
? Transfer the economic development activities
from the Department of Commerce, Community, and
Economic Development to the Office of the
Governor
? This realignment will allow an elevated
cabinet-level focus on the Alaska economy and
continue to engage the business community,
provide and oversee outreach efforts, as well as
coordinate and advise the Governor on the
economic impact of policies across all
departments
? This change will realign business processes,
provide more efficiencies through higher level
coordination and reduce State costs due to the
deletion of two positions with funding
Vice-Chair Johnston asked if the commissioner was on the
cabinet.
Ms. Wilkerson replied in the affirmative.
Vice-Chair Johnston asked if the governor was increasing
the cabinet by two positions.
1:44:58 PM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, answered that the positions were being transferred
to the Office of the Governor but it was not increasing the
cabinet. The cabinet consisted of commissioner level
positions.
Vice-Chair Johnston was trying to understand whether the
Governor was given a broader focus with his policy team to
promote the department.
Ms. Sanders answered the proposal brought the positions
into the Office of the Governor to allow direct
coordination with those positions on economic development.
Representative Knopp surmised that four positions would be
moved to the Governor's Office. He also noted the funding
transfer. He understood that in some departments with the
administrative services directors being moved, the funding
was not transferred. He wondered why there was not
continuity with all departments.
Ms. Wilkerson responded that the funding being transferred
was solely the funding remaining for economic development
positions and operating costs. Her position had been
transferred without funding and would be charged back
through an established reimbursable service agreement.
Representative Josephson asked if they would be the same
individuals and same level of pay.
Ms. Wilkerson stated that the Governor's Office could
answer that question.
Ms. Sanders furthered that the funding associated with the
positions was the funding that was transferred for those
positions. She shared that, if those positions were vacant,
she could not answer to what they would be filled.
Co-Chair Wilson remarked that the subcommittee had been
addressing whether the governor needed more people or more
funds. The subcommittee was not thrilled about switching
the money over.
Ms. Wilkerson turned to slide 6:
? Realign Local Government Support and Services (-
$1,000.0 GF)
? Funds the Division of Community and Regional
Affairs budget at approximately FY2018 actual
expenditure levels
? Division leadership is currently identifying
areas for efficiencies, including alternate
methods of service delivery, increased
collaboration with local community organizations,
and options to collaborate with other divisions
and departments for shared rural travel and
outreach to reduce expenditures and dependence on
government
1:49:45 PM
Representative Josephson had received reports the office
represented 319 domestic violence victims annually. He
wondered whether the funds could be raised elsewhere.
Ms. Sanders answered that the Alaska Legal Services (ALS)
corporation was currently raising funds, but she could not
speak to the agency's ability to finance, but noted that it
could possibly expand available funds.
Representative Josephson stated that there had been a
comment that the component was a bit of an outlier.
Ms. Sanders replied that the department had gone through
essential air services, which could not be provided by
other means, but it had been proposed for elimination.
1:52:54 PM
Ms. Wilkerson moved to slide 8 and addressed a proposed
fund source change for the Power Cost Equalization (PCE)
Program. There was no planned change to PCE:
? Power Cost Equalization (PCE) Program Fund Source
Change (+/-$32,355 Net Zero Change)
? This funding change returns the Rural Energy
Assistance Program to a general funded program
and will require annual general fund
appropriations in the same fashion as other state
funded programs through the legislative process
? In FY2020, Power Cost Equalization payments and
associated program management will be funded by
general fund
Co-Chair Foster stated they had talked about PCE being
eliminated. He thought Co-Chair Wilson brought up a good
point about taking money out of PCE. He remarked that took
the money and put it in the Constitutional Budget Reserve
(CBR). There was concern about the low interest earnings,
and once the money was put in the GF it competed with other
programs. Many individuals saw the move as the first step
towards dismantling the fund.
1:54:56 PM
Ms. Sanders replied that the PCE Fund was an example of a
quasi-dedicated fund. The administration agreed it was an
important program and should be a GF program. She shared
that it would compete equally on an annual basis for
available funding.
Co-Chair Foster stated it was a policy viewpoint
differences. He provided examples of funds over the years
the four dam pool. Cook Inlet Gas, royalty payments for
natural gas coming out of Cook Inlet. He the PCE program
was all of those things for rural Alaska. It created energy
equity throughout the state.
Vice-Chair Ortiz asked if there was a licensing component
to the department at present.
Ms. Sanders replied in the affirmative.
Vice-Chair Ortiz asked if the proposed budget impact the
licensing component.
Ms. Sanders responded that the only impact she could recall
was related to travel, which should not impact licensing.
Vice-Chair Ortiz asked if there was currently a backlog in
the licensing.
Ms. Wilkerson answered there had been some delays in some
of the licensing. The department had addressed some of the
issues. The department felt the backlog had been addressed.
Co-Chair Wilson referenced a meeting the previous week
where the department had presented well and had provided
access to all of the staff to answer questions.
^DEPARTMENT OF NATURAL RESOURCES
2:00:13 PM
FABIENNE PETER-CONTESSE, ADMINISTRATIVE SERVICES DIRECTOR,
DEPARTMENT OF NATURAL RESOURCES, OFFICE OF MANAGEMENT AND
BUDGET, continued a PowerPoint presentation titled "FY2020
Governor's Amended Budget" dated March 14, 2019 (copy on
file). She began on slide 10 and addressed two bar charts
showing a funding comparison and a budgeted position
comparison. The other funding category included statutory
designated program receipts at about $182,000 less. The
blue section was UGF and DGF ($66.7 million UGF and DGF).
The chart on the right showed positions declining to 865 (a
reduction of 36 positions, 25 of which were currently
filled).
2:03:38 PM
Representative Josephson thought that the guide concession
program was a long-sought after fund that was designed to
structure and organize hunting on state lands. He wondered
whether there was a "backing away" from that strategy.
Ms. Peter-Contesse answered that the $1 million reduction
was a technical adjustment. There was $1 million put in by
the legislature in FY 18 and FY 19, and the current
proposal backed out the $1 million of federal authority
only. She stressed that there was no federal money coming
in for that program, yet. The state was not backing away
from the program.
Ms. Peter-Contesse addressed slide 11:
Recorder's Office Consolidation and Efficiencies (-
$408.0 GF and -3 PFT, -2 PPT)
? Close Fairbanks, Kenai, Juneau, and Palmer
Recorder's Offices.
? Delete five positions (4 filled), transfer
seven positions to Anchorage (6 filled).
? Revenue averages $5.1M/year, expenditures
average $3.8M/year. As long as recording activity
remains stable there will be a positive impact on
the general fund.
? Electronic and mail-in recording available
statewide, walk-in for Anchorage.
? Evaluating solutions to address seasonal influx
of mining documents. Fully Integrate Pipeline
Section into Division of Oil and Gas (-$300.0 GF
and -3 PFT)
? Fully integrate the section and build synergies
with related tasks such as leasing, permitting,
and compliance.
? Reduce administrative positions, reduce
confusion for applicants, and increase both
efficiency and oversight of common-carrier
pipeline Right-of-Way.
Representative Sullivan-Leonard was concerned about closing
the Palmer recording office. She wondered whether the
availability of electronic recording included notarizing
any type of document that may be needed for legal purposes,
or witnessing of signatures.
2:08:23 PM
AT EASE
2:08:38 PM
RECONVENED
Ms. Peter-Contesse replied that the recorder's office did
not provide notarization. She remarked that, if someone did
not want to mail in their documents, there had been
communications with title companies and attorneys to e-
record for the public.
Representative LeBon asked about title companies and banks.
He remarked that the recording would occur the day after
the loan closing. The title company would confirm that the
title had not changed, and gave a "green light" for the
bank to disperse money. He surmised that, under the new
proposed change, the electronic recording still
accomplished a final recorded document and clearance the
next day. He wondered whether that protocol and timeline
would remain in effect.
Ms. Peter-Contesse replied in the affirmative. Most title
companies did not come into the recorder's office anymore,
and all recording was done electronically.
Representative Carpenter spoke about mail-in versus
electronic documents. He asked about the percentage of
each. He specifically queried the impact on the rural
communities.
Ms. Peter-Contesse replied that the current percentage of
electronic recording was 48 percent of all of the
documents. The remaining documents were either mailed in or
over the counter. There was not tracking of the difference
of whether the documents were mailed or over the counter.
2:11:49 PM
Co-Chair Wilson stated there was a DNR office in Fairbanks
She asked if the department had thought about using the
building for multipurpose.
Ms. Peter-Contesse responded that there was currently a
recorder's office in the state owned building in Fairbanks.
She asked for clarification.
Co-Chair Wilson clarified her question. She asked if it
could be a one-stop shop for convenience.
Ms. Peter-Contesse answered that Fairbanks was one of the
areas of concern related to the ability to service seasonal
high-volume clientele and it could bridge the gap of
service.
Co-Chair Wilson remarked that she was only thinking outside
of the box.
Representative Carpenter appreciated the 48 percent figure,
but noted that it was less than half of the document. He
was comfortable with electronics. He would be hesitant to
put legal documents in the mail. He asked if the 48 percent
was a user choice or did some documents have to be
presented in person or electronically.
Ms. Peter-Contesse answered that it was user choice. She
referenced changes to plat files that had to be a physical
document.
Representative Carpenter had a list of deeds,
reconveyances, liens, other.
Ms. Peter-Contesse answered that it was possible to record
anything as long as they met certain criteria.
Representative Carpenter asked for verification.
Ms. Peter-Contesse agreed. She detailed that a person could
not submit a digital document for recording themselves.
They would have to mail in or walk into an office.
2:17:46 PM
Representative Tilton asked if there was process by which a
person with a business outside the banking system could
become someone who did their own digitized recording.
Ms. Peter-Contesse answered in the affirmative. She
explained that it was a simple process to become a
submitter with the contracted company, Simple File.
Representative Merrick asked about the process for approval
if a person filed something electronically. She asked if
the labor in the department was different between in person
versus mailing.
Ms. Peter-Contesse replied that she believed that the
recorders looked for very specific items in the documents.
She stated that there was a minimum acceptance criteria.
She remarked that there were certain margins, a place for
the label, a grantor, a grantee, etc. She stated that the
recorders reviewed electronic and paper documents to ensure
that they met the minimum acceptance criteria. She stated
that the workload was less with electronic documents,
because there was no handling of mail. She stated that the
footprint and budget had been reduced since implementing
electronic recording.
2:20:17 PM
Representative Merrick asked if 50 percent of the work was
done electronically why there were so many people needed in
the office. She wondered whether the people in Southeast
could review the digital documents and the people in
Anchorage could review the paper documents.
Ms. Peter-Contesse replied in the affirmative and stated
that the department did that. She detailed circumstances
wherever there was overflow in the state. The issue was
about the cost of keeping the offices open.
Representative Merrick asked if it was work an employee
could do at home on a computer.
Ms. Peter-Contesse agreed to provide that information.
Representative Carpenter wondered whether some businesses
had authorization to submit documents to the state, and
whether there would be new locations.
Ms. Peter-Contesse replied in the affirmative.
Ms. Peter-Contesse continued with slide 11 and spoke about
fully integrating the Pipeline Section into the Division of
Oil and Gas:
Reduce Lower Priority Programs in Division of
Agriculture (-$1,796.0 GF and -15 PFT, -4 PPT)
? Marketing The state has fostered the
expansion of the "Alaska Grown" brand program to
the point that private industry could further
advance the program without state assistance.
? Agricultural Veterinarian Program not yet
implemented; Department of Environmental
Conservation has a State Vet.
? Farm to Institution Promotes Alaska Grown in
schools, correctional institutions and hospitals;
more appropriately accomplished by industry.
Delete Agriculture Revolving Loan (-$421.7 GF and -2
PFT)
? Promotes the development of agriculture via
moderate interest rate loans but competes with
private lenders.
? Currently 57 loans, $7.3M owed, $12.6M cash on
hand. Loans will be transferred to Department of
Revenue who will sell them; proceeds will go to
the general fund.
2:24:00 PM
Ms. Peter-Contesse moved to slide 12:
Maintain Higher Priority Programs in Division of
Agriculture
? Phytosanitary Inspections For timber, wood
products, peony, and mushroom exports.
? Invasive Species Program Identifies and
treats plant and freshwater invasives.
? Seed Production, Cleaning, and Testing.
? Grass seed used for reclamation and
revegetation projects
? Seed potatoes to produce virus and
disease-free stock that are the foundation
of Alaska's potato industry.
? Agricultural Land Sales Fosters economic
development by selling state land to individuals
and businesses engaged in agriculture. Combining
with Division of Mining, Land and Water's more
robust land sales program to increase
effectiveness and reduce costs.
Co-Chair Wilson turned the gavel to Vice-Chair Johnston
Representative Josephson remarked that he did not know how
to budget for something without statutory change. He
remarked that he had a conversation with a peony grower who
felt that the changes would have a negative affect on his
business.
Vice-Chair Johnston returned the gavel to Co-Chair Wilson.
2:29:14 PM
Ms. Peter-Contesse addressed the inspection question by
turning to slide 13:
Consolidate Parks Administrative Staff (-$150.0 GF and
-1 PFT, -2 PPT)
? Three filled positions eliminated in Palmer,
Soldotna, and Anchorage.
? These administrative staff are the front line
staff answering questions from the public,
processing funds collected in Iron Rangers, and
issuing permits.
? The division will maintain services by
continuing to modernize the fee collection
system, going cashless, and transferring some
duties to Anchorage.
Statewide Support Executive Branch 50 percent Travel
Reduction (-$354.7 GF)
? Excludes fire, federal funding for the Tongass
Roadless Rule, and the coal inspection program
Representative Josephson noted that the peony farmer
believed that there would be great stress.
Ms. Peter-Contesse replied that the department was
maintaining the phytosanitary program and it was a
priority.
Representative LeBon stated there was a reference made to
the revolving loans.
Ms. Peter-Contesse replied there had been discussion
between OMB and at least one private lender who had
expressed concern about competition. There was competition
between the state and the private sector.
2:31:54 PM
Representative LeBon guessed that the majority of the loans
were operating lines for crops or livestock, and were paid
back seasonally when crops were sold. He wondered whether
that was a fair assessment. He also asked whether they were
real estate secured loans.
Ms. Peter-Contesse replied that she did not know.
Representative LeBon remarked that the real estate secured
loans were on state-patented land for farming. He noted
that the commercial banking industry did not venture into
that type of lending, because of the restriction on the
deed. He remarked that, if the loan defaulted, the bank
would be prohibited from foreclosing on the property for
any other purpose than a farming purpose. He stressed that
the state revolving loan program could absorb that risk,
knowing that it could remain as agricultural land.
Representative Carpenter noted a conflict of interest
between the banks and the state farm loans. He noted that
the elimination of the ability for low interest farm loans
was indicative of a state that did not value agriculture.
He supported the governor's intentions to reduce the budget
but he wondered if there was another area in the state that
could handle farm loans. He thought it appeared to be a
short-sighted decision. He appreciated that the
phytosanitary inspections would be maintained.
2:36:15 PM
Vice-Chair Ortiz was familiar with the revolving loan fund
process, because of the Fisherman's Revolving Loan Fund. He
noted that there were currently 57 loans, and of those
loans a total $7.3 million was owed to the state with $12.6
million cash on hand. He remarked that in the Fisherman's
Revolving Loan Fund there was some original seed money put
into that program, but the fund continued to grow based on
the fishermen's ability to pay back their loans and
interest. He wondered whether that was the same case with
the proposed program. He asked whether the program was
started with some seed money, and did it fund itself.
Ms. Peter-Contesse replied in the affirmative. She shared
that she had a chart that showed when the money was put in.
She stressed that the fund was revolving and very healthy.
Ms. Peter-Contesse moved to slide 13:
Maintain Higher Priority Programs in Division of
Agriculture
? Phytosanitary Inspections For timber, wood
products, peony, and mushroom exports.
? Invasive Species Program Identifies and treats
plant and freshwater invasives.
? Seed Production, Cleaning, and Testing
? Grass seed used for reclamation and
revegetation projects
Seed potatoes to produce virus and disease-free
stock that are the foundation of Alaska's potato
industry.
? Agricultural Land Sales Fosters economic
development by selling state land to individuals and
businesses engaged in agriculture. Combining with
Division of Mining, Land and Water's more robust land
sales program to increase effectiveness and reduce
costs.
Vice-Chair Johnston asked about the seed plant in Palmer.
Ms. Peter-Contesse replied it would not be able to do all
the trials it was currently doing, but would focus on seed
cleaning for revegetation.
2:40:04 PM
Representative LeBon remarked that he agreed with moving
state land into private ownership for development. He
wondered whether there was an awareness of whether or not
the deed that would follow the transaction would be
restricted to only farming purposes.
Ms. Peter-Contesse answered that she did not know, but she
believed that it would be an agricultural covenant.
Representative LeBon remarked that transferring ownership
of state land into the agricultural industry with a
restrictive deed language in the transfer, then there must
be an examination of the revolving loan fund program for
those farmers.
Representative Knopp wondered whether there would be an
examination of the program after the merge. He stressed
that the programs came with restrictions. He stated that
the Division of Agriculture had no mandates for farming. He
encouraged a reexamination of the program.
Ms. Peter-Contesse did not know the nuances of the program,
but she would communicate the question and follow up.
Representative Knopp reiterated that there was no
agricultural mandate on the properties, and asked that
there be agricultural mandates on the properties.
Ms. Peter-Contesse looked at slide 14:
Consolidate Parks Administrative Staff (-$150.0 GF and
-1 PFT, -2 PPT)
? Three filled positions eliminated in Palmer,
Soldotna, and Anchorage.
? These administrative staff are the front line
staff answering questions from the public,
processing funds collected in Iron Rangers, and
issuing permits.
? The division will maintain services by
continuing to modernize the fee collection
system, going cashless, and transferring some
duties to Anchorage.
Statewide Support Executive Branch 50 percent Travel
Reduction (-$354.7 GF)
? Excludes fire, federal funding for the Tongass
Roadless Rule, and the coal inspection program.
2:46:20 PM
Vice-Chair Johnston remarked that sometimes the person was
the only person in the building in some of the communities.
She hoped that there could be a solution about whether
there would be an opportunity for visitors. She remarked
that rangers were in the field.
Ms. Peter-Contesse highlighted slide 15:
Increase Wildland Fire Suppression Activity Base
Budget (+$8,400.0 GF)
? Wildland fires are a fact of life in Alaska and
the budget should reflect that reality.
? Increases base budget from $5.2M to $13.6M, the
lowest spent in the last 10 years.
? In low fire years this will eliminate the need
for emergency declarations.
? On average over the last ten years $35.7M UGF
is spent annually. Add Reservoir Modeling
Contractual Services to Base Budget (+250.0 GF)
? Funding previously in the capital budget, and one
time item of $250.0 GF in FY2019.
? Cost effective to hire consultants to analyze
reservoirs on the North Slope and Cook Inlet.
? Models are used to calculate where production
originates in the reservoir and under which
leases to ensure the State is getting the correct
royalty share. ? A recent study resulted in an
additional $100 million in state revenue
Representative Josephson asked how the department absorbed
the difference in a higher fire season.
Ms. Peter-Contesse answered there were two methods. She
remarked that there could be a fire declaration, which
allowed the department to spend what it needed to fight
fires. She remarked that there was also language in the
budget that allowed for collection of additional federal
authority. She stated that there could also be a
supplemental request. She shared that there was currently a
supplemental request of $7.9 million in the FY 19 budget,
which would cover the spring fire season. She noted that
the money was expected to be spent in the spring.
Vice-Chair Ortiz noted that if the average for the last ten
years had been $35.7 million, and wondered why they did not
bump the amount up to the average of $35.7 million.
Ms. Peter-Contesse answered that it was an option, but it
was not known whether the full amount would be needed.
Vice-Chair Ortiz appreciated that, but climate change was
making his region dryer. He did not anticipate a decrease.
Co-Chair Wilson clarified it was $13.6 million.
Ms. Peter-Contesse agreed.
2:50:56 PM
Representative Carpenter asked if the state's ability to
fight fires would be degraded if there was no budget of $35
million.
Ms. Peter-Contesse replied in the negative. She continued
to address slide 15:
Alaska Geospatial Council (+$260.0 GF and transfer 1
PFT)
? The Alaska Geospatial Council (AGC) was funded by a
capital project which runs out this fiscal year, and a
one-time $100.0 increment for FY2019. The AGC improves
geospatial coordination in Alaska, and fosters data
sharing. Mapping is necessary to conduct business and
manage resources, and rather than having multiple
agencies spending money on data collection this model
collects data once, and uses it many times.
? Funded from the sales of seismic tax credit data.
Seismic Data Distribution and Public Release (+$300.0
GF and +1 PPT) Division of Oil and Gas (DOG) receives
and prepares seismic data for release ten years after
collection per AS 43.55.025. This includes large,
complex datasets (25-250 terabytes) which can take
upwards of one year to prepare for release and sale.
In mid-FY2017 Division of Geological and
Geophysical Surveys began selling seismic data to
the public. The price of seismic data is well
below market rate and can be increased up to 50
percent by a Director's Order; it will still be
below market rates and will not discourage future
sales.
? $50.0 to fund 1 PPT at the Geologic Materials Center
to distribute seismic data.
? $250.0 to fund the preparation of seismic data for
release in DOG
2:53:29 PM
Ms. Peter-Contesse stated that the next two items in the
presentation were funded by the sale of seismic data. She
shared that the Alaska Geospatial Council was also funded
by a capital project, but the funds would run out in the
current fiscal year. She noted that there was a $100,000
increment for FY 19, which was a one-time item. She
remarked that the Geospatial Council coordinated all the
data-sharing for mapping in the state. She stressed that
mapping was needed across almost every agency in the state.
She remarked that it was a coordinated group. She remarked
that there was work on a geoportal that allowed for access
to multiple data sets across the state. She shared that the
Geospatial Council cost approximately $260,000 a year. A
position would be moved from the Office of Project
Management and Permitting into the Division of Geological
and Geophysical Surveys. There was expertise that could be
combined with the position to manage the program.
Representative Josephson stated that the previous
administration had been alarmed about the undervaluing of
the data and the expense associated with preparing it for
public release. He wondered whether he should be looking
for DGF funds. He assumed that there was an increase in the
price.
Ms. Peter-Contesse replied in the affirmative. She stated
that the director of the Division of Geological and
Geophysical Surveys had the ability to increase the price
of the seismic data. She stated that the increase in price
included DGF increments that would be funded by that
increase. She stressed that there was a belief that it was
well below market value.
Ms. Peter-Contesse referenced graphs from the Legislative
Finance Division, which showed that the GF budget equated
to $304 per resident worker. She pointed out that for FY
18, if the firefighting costs were removed, the activities
in DNR generated and returned to the state $21 for every
dollar. This money included royalties, minerals, leases,
timber sales, land sales, etc.
^DEPARTMENT OF ENVIRONMENTAL CONSERVATION
2:58:59 PM
JEFF ROGERS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION, OFFICE OF MANAGEMENT AND
BUDGET, continued a PowerPoint presentation titled "FY2020
Governor's Amended Budget" dated March 14, 2019 (copy on
file). He reported that the next day was his last day with
the state. He shared a about his work with the legislature
and the state. He began on slide 18 with two bar charts
showing a funding comparison and budgeted position
comparison between FY 19 and FY 20.
3:02:07 PM
Mr. Rogers addressed slide 19:
? Repeal Ocean Ranger Program (-$3,846.8 Other)
? Created by ballot initiative in 2006
? Funded by $4/berth fee (paid "below the line"
directly by the passenger, not the cruise agency)
? Program not required by state constitution or
federal law ? Program duplicates water and air
discharge and other compliance activities
? No other permitted industry is subject to "24/7
onsite observers"
? Program conducted primarily by out-of-state
contractor with non-Alaskan employees
? Department retains environmental compliance
authority over cruise ships under AS 46.03.710
Pollution Prohibited and AS 46.03.020 Powers of
the Department
? Partially offset by $420.8 fund source change
from Ocean Ranger receipts to Commercial
Passenger Vessel Environmental Compliance (CPVEC)
Funds for fish tissue monitoring and indirect
costs
3:05:36 PM
Vice-Chair Johnston asked for the difference between ocean
ranger reporting and industry self-reporting.
Mr. Rogers answered that industry was required to do all
types of self-reporting. He remarked that DEC had issued
240 violations, but only 6 had come from ocean rangers.
Vice-Chair Ortiz referenced Mr. Roger's mention there had
only been 6 cases where ocean rangers had documented
emissions from cruise ships that were out of compliance. He
noted that in the budget subcommittee meeting Mr. Rogers
had likened the ocean rangers to a state trooper. He
thought that it made sense there were only 6 counts of
cruise ships dumping illegally, and he thought it meant
cruise ships were not dumping because of the presence of an
ocean ranger.
Mr. Rogers answered that there were incidences of
noncompliance. He agreed there was some deterrent effect of
having a ranger ride on the vessel. He remarked that if the
state had been spending GF the program would have ended
much earlier.
3:09:33 PM
Vice-Chair Ortiz appreciated the perspective and agreed
they should be looking for ways they may not be efficiently
using money. He asked about the statement that the land-
based program had documented violations.
Mr. Rogers answered that the violation reporting came
through both avenues.
Vice-Chair Ortiz stated there were situations where people
came onboard from port.
Mr. Rogers agreed. He did not know the frequency. He could
follow up.
3:11:34 PM
Representative Knopp referenced the bullet point on slide
19 related to out of state contractors. He asked about the
prerequisite requirement for an ocean ranger.
Mr. Rogers replied that the ocean ranger contract was
competed for annually - it was not inexpensive. He
addressed the costs.
Representative Josephson referenced the statement that the
department had booked a lot of berths. He asked for
verification that there was one berth per ship.
Mr. Rogers affirmed.
Representative Josephson queried the qualifications for an
ocean ranger.
Mr. Rogers answered that the qualification for an ocean
ranger was to be a marine engineer.
3:16:09 PM
Representative Josephson stated on the one hand it sounded
like ocean rangers were highly skilled engineers.
Mr. Rogers answered that they were marine engineers, but
they were not environmental scientists.
Representative Josephson referenced Mr. Rogers' statement
about the tongs in the salad bar. He recalled a story about
a cruise ship in Southeast Alaska that had dumped
photographic chemicals into the water. He wondered how a
land-based regulator would know about that violation,
without self-reporting.
Mr. Rogers replied that the land-based regulator would not
know about that incident.
Representative Josephson stated the cruise ship industry
was a sophisticated industry that had sued the City of
Juneau and had been aggressive about protecting their
interests. He felt that the state needed its own "eyes and
ears" on the industry.
Vice-Chair Ortiz referenced higher than acceptable fecal
coliform in the ocean water in his region. He was not
claiming the cruise ship industry had anything to do with
it, but he asked for verification it was a DEC issue.
Mr. Rogers agreed.
Vice-Chair Ortiz asked how the state could be proponents
for removing the program when it did not cost the state any
money and cost the average passenger $4. He asked about the
reasoning for eliminating the program based on his
thoughts.
Mr. Rogers asked for the question to be clarified.
Vice-Chair Ortiz clarified his question.
3:21:21 PM
Mr. Rogers replied that the replacement was the Clean Air
Act and the Clean Water Act, but the question was about the
methods used. He remarked that DEC had statutory authority
under state and federal law to extract, if necessary,
compliance out of every industrial permittee in the state.
Co-Chair Wilson felt it was a subcommittee issue.
Representative Josephson stated that the Prince William
Sound required a tug a long distance. He remarked that the
full-time lack of comparability, but noted that there was
sight and sound monitoring of every tanker from Valdez port
all the way to the sea.
Mr. Rogers agreed, but the discharge was unknown. He
stressed that there was a large amount of ballast water
that may or may not be contaminated.
Mr. Rogers addressed slide 20:
? Withdraw Funding for Dairy Regulation (-$179.6 GF
and -1 PFT)
? Alaska's dairy industry has declined from 65
dairies to one operating bovine dairy today
? Federally required program requires significant
state subsidization
? Small-scale industry could not likely bear
full-cost of required regulatory program
? Eliminating program will not increase risk to
public health, as dairies would not be able to
sell milk or milk products commercially
? Outsourcing regulatory program to another state
is not likely feasible
? Deletes one Environmental Program Specialist
position (Dairy Sanitarian)
? Remove Economist Position (-$124.3 GF and -1 PFT) ?
Statewide Support Executive Branch 50 percent Travel
Reduction (-$167.5 GF)
Representative Tilton thanked Mr. Rogers for his service to
the state and wished him good luck.
^DEPARTMENT OF FISH AND GAME
3:26:08 PM
SAMANTHA GATTON, ACTING ADMINISTRATIVE SERVICES DIRECTOR,
DEPARTMENT OF FISH AND GAME, OFFICE OF MANAGEMENT AND
BUDGET continued a PowerPoint presentation titled "FY2020
Governor's Amended Budget" dated March 14, 2019 (copy on
file). She began on slide 22 and highlighted two bar graphs
showing a funding comparison and budgeted position
comparison.
Ms. Gatton turned to slide 23:
Commercial Fisheries:
? Remove projects funding with Charter Revolving Loan
funds (-997.0)
? Southeast Region Fisheries Management (-131.0)
? Central Region Fisheries Management (-161.0)
? AYK Region Fisheries Management (-465.0)
? Westward Region Fisheries Management (-240.0)
Wildlife Conservation:
? Adjust the Scope of Management of Special Areas
Wildlife Viewing (-$280.0 GF) -- This program is
being reduced not eliminated
Statewide Support Services:
? Statewide Support Executive Branch 50 percent
Travel Reduction (-$565.4 GF)
3:30:21 PM
Vice-Chair Ortiz asked about the statewide travel
reduction. He asked what types of things would not occur if
the travel reduction went through.
Ms. Gatton answered that the department was taking a hard
look at how it used travel and it believed there was room
to reduce the department's footprint.
Vice-Chair Ortiz asked how the money was currently spent in
the travel area.
Ms. Gatton replied that the department did a large number
of surveys, and also traveled to Board of Fish and Board of
Game meetings. The department was looking to determine
whether more could be done telephonically.
Co-Chair Wilson canceled the 9:00 a.m. meeting the
following day. She reviewed the schedule for the following
afternoon.
ADJOURNMENT
3:33:28 PM
The meeting was adjourned at 3:33 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HFC 3.14.19 FY2020 Gov Amend Budget Presentation DCCED DNR DEC F&G.pdf |
HFIN 3/14/2019 1:30:00 PM |
HFIN Budget Overview Multi |
| HFIN Response 3.14 DEC and DNR.pdf |
HFIN 3/14/2019 1:30:00 PM |
HFIN Budget Overview Response Q's |