Legislature(2023 - 2024)ADAMS 519
02/20/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview: University of Alaska | |
| Overview: Department of Environmental Conservation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 268 | TELECONFERENCED | |
| += | HB 270 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 20, 2024
1:33 p.m.
1:33:03 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:33 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Chad Hutchison, Director, Public Relations, University of
Alaska; Emma Pokon, Commissioner-Designee, Department of
Environmental Conservation; Megan Kohler, Administrative
Services Director, Department of Environmental
Conservation.
PRESENT VIA TELECONFERENCE
Pat Pitney, President, University of Alaska.
SUMMARY
HB 268 APPROP: OPERATING BUDGET; CAP; SUPP; AM
HB 268 was HEARD and HELD in committee for
further consideration.
HB 270 APPROP: MENTAL HEALTH BUDGET
HB 270 was HEARD and HELD in committee for
further consideration.
OVERVIEW: UNIVERSITY OF ALASKA
OVERVIEW: DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Co-Chair Johnson reviewed the meeting agenda.
HOUSE BILL NO. 268
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making capital appropriations; making
supplemental appropriations; making reappropriations;
making appropriations under art. IX, sec. 17(c),
Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for
an effective date."
HOUSE BILL NO. 270
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
^OVERVIEW: UNIVERSITY OF ALASKA
1:34:08 PM
CHAD HUTCHISON, DIRECTOR, PUBLIC RELATIONS, UNIVERSITY OF
ALASKA, introduced himself and turned the presentation over
to University of Alaska President Pat Pitney.
PAT PITNEY, PRESIDENT, UNIVERSITY OF ALASKA (via
teleconference), introduced a PowerPoint presentation
titled "University of Alaska: Empower Alaska," dated
February 20, 2024 (copy on file). She began with a map of
Alaska on slide 2 showing the University of Alaska (UA)
locations. The university system was comprised of the
University of Alaska Fairbanks (UAF), the University of
Alaska Anchorage (UAA), and the University of Alaska
Southeast (UAS). She described UAF as a research
university, UAA as the urban comprehensive university, and
UAS as the Southeast regional university with its primary
campus located in Juneau. She detailed that each of the
universities had community campuses, which stretched from
Ketchikan to Kotzebue and were vital to the accessibility
of the university system and to becoming a community
partner for local workforce development needs. She noted
that UA was very proud of its community campuses and the
work the campuses did in serving their communities.
Ms. Pitney briefly provided an overview of the presentation
on slide 3. She turned to slide 4 titled "Roadmap to
Empower Alaska." She relayed that six of the UA Board of
Regents' 11 members were new within the past two years. She
detailed that the board was working on a plan to set the UA
system up for the future. She was excited about the three
pillars the board had discussed, beginning with
"financially responsible and future focused." She stated
that the stability enabled UA to create momentum though
enrollment, partnerships, and federal funding. The second
pillar was "state and Arctic leadership." She underscored
it was necessary to take the Arctic leadership role for
Alaska to be represented in global Arctic policy and
conversations and research. She stressed the importance of
UA's state leadership and stated that UA was the workforce
engine of the state. The university system had over 200
short programs such as certified nurse assisting, nurse
practitioners, welding, and aviation maintenance, in
addition to its four-year degrees covering education,
business, engineering, biology, and psychology. The
university's leadership role in developing the workforce
for Alaska was a primary focus. She briefly highlighted the
third pillar "Quality Education and Reputation" on slide 4.
1:38:56 PM
Ms. Pitney turned to slide 5 titled "Roadmap to Empower
Alaska" and highlighted strategic near-term priorities of
the Board of Regents. She began with the first priority of
increasing recruitment, graduation, and retention. She
stated that more students graduating faster and retained at
a higher rate reflected stability. She reported that the
current spring was the third semester in a row of year-
over-year increases after nine years of decreases. She
emphasized there was a 16 percent increase in the first
time freshman class the prior fall. She noted that another
large incoming freshman class would really bring the
university's numbers up.
Ms. Pitney moved to the second priority on slide 5:
Sustaining Facilities Maintenance and Modernization Plan.
The board had tasked UA with coming up with a different
solution for deferred maintenance. She elaborated that
deferred maintenance had been its top capital budget
priority for more than 20 years. She noted that she had
been the statewide budget director for the university in
1998 and deferred maintenance had been the top priority
annually. The plan was to provide consistent and stable
funding annually to enable UA to address priority deferred
maintenance projects that had been reviewed and vetted at
the legislative level. She explained that a plan would mean
deferred maintenance would no longer have to be the highest
priority in the capital budget and it would give room in
the capital budget for things like a simulation lab that
was important for the workforce, rather than a roof or
sewer system.
Ms. Pitney addressed the third priority on slide 5:
Achieving Cost-Efficient Operations. She viewed it as a
priority to do things right with modern, streamlined
business processes. The fourth priority was for UAF to
achieve R1 research status [in 2027]. She explained it was
about taking a step for Alaska and would bring increased
economic development, talent, and long-term stability. She
elaborated that it would put UAF in the top 4 percent of
universities nationally and would attract additional
research funding across the state. She highlighted that UAF
had ship operations in Seward and research facilities in
Kodiak and Juneau. She explained that most of the
operations existed partially in Anchorage or passed through
Anchorage on the way to the North Slope Toolik Field
Station, Fairbanks, or electricity projects on the
Railbelt.
Ms. Pitney discussed the fifth priority on slide 5: Empower
Alaska Branding. She referenced UA's docuseries that aired
occasionally, which was focused on building reputation and
on the breadth and depth of its operations. She briefly
highlighted the sixth and last priority on slide 5:
Building Arctic Leaders.
1:43:47 PM
Ms. Pitney turned to slide 6 titled "Enrollment
Highlights." The University experienced a 4 percent
increase in headcount, an increase in student credit hours,
and significant growth in its community and technical
college programs. She highlighted that UA worked with the
construction management industry and with all of the
[federal] infrastructure money coming in, the industry
needed more people skills in managing construction
projects. The UA curriculum was retooled and available
statewide in Anchorage and Fairbanks. She noted the
enrollment had nearly doubled and enabled people who were
already working to take a construction management course to
gain skills necessary to take on management projects.
Ms. Pitney addressed the second bullet point on slide 6:
Dual Enrollment. She explained that there were 3,600 high
school students dually enrolled in college courses, which
reflected a 20 percent increase. She relayed that dually
enrolled students were more likely to remain in Alaska for
school, they could graduate more quickly, and could save
money on the cost of college because they completed one to
two years of college courses prior to graduating from high
school. The option also provided high school students with
a path to being more challenged.
1:45:54 PM
AT EASE
1:46:53 PM
RECONVENED
Co-Chair Johnson reviewed members present. She noted that
the committee would try to speed up the presentation.
Mr. Hutchison stated his understanding that the goal was to
hear highlights on the operating budget and answer
questions. He moved forward to slide 11 to show the FY 25
budget request summary.
Ms. Pitney addressed the FY 25 UA budget request on slide
11. The university's state funding request was $29.2
million with $23 million of the total going to compensation
and fixed costs. She noted there were a series of smaller
requests shown on slide 21 to support academic programs and
services ranging from mental health and public safety to
faculty and project management. She highlighted UA's
deferred maintenance and modernization request [of $35
million annually], which was included in a piece of
legislation. She expressed appreciation to Representative
Stapp's leadership on the legislation that would provide
consistent funding for deferred maintenance. Slide 11
included a request for strengthening the UA athletics
program. She remarked that past budget reductions hit the
athletics program fairly hard, and the goal was to restore
some stability for the UAA and UAF programs.
Ms. Pitney addressed revenue assumptions on the bottom half
of slide 11. She reported that the UA system anticipated a
$5 million increase in unrestricted revenue and a total of
$7 million across its fund sources to meet compensation and
fixed costs.
1:50:17 PM
Ms. Pitney turned to slide 13 titled "UA FY25 Operating
Budget." She pointed to the Board of Regents' request of
$15 million [in state funds] and $2 million in UA funds for
compensation. The slide showed a request of $9 million [in
state funds] and $5 million in UA funds for property
insurance. Currently the governor's budget included $6
million for compensation and $5 million for fixed costs and
directed the university to use non-state funds to fund the
remainder. She stated the university would not have
sufficient non-state funds to fund the remainder; the
university had factored all of the non-state funds in the
$2 million and $7 million in the regents' budget. The
governor's proposed budget left the university short by
more than $10 million for compensation and fixed costs. She
expounded that the compensation included a modest 2.5
percent salary increase and an additional contribution to
healthcare. The university had been able to hold its
healthcare costs steady for about six years, but it now
needed to be increased largely due to post-COVID-19
pandemic use.
Ms. Pitney directed attention to funding for the Technical
Vocational Education Program (TVEP) program at the bottom
of slide 13. She explained that the TVEP program needed a
sunset date extension and if legislation extending the
program did not pass it would mean $6 million from
university vocational education programs across the state.
She remarked that excluding union workforce development,
the university conducted 90 percent of the vocational
education. She emphasized it was a key component of being
able to keep the university's program modern and enabled it
to start high-demand programs. She stated that the
university followed the accountability criteria set forth
in the legislation to a T. She relayed that the TVEP sunset
extension was important to the university.
1:53:17 PM
Ms. Pitney turned to slide 14 showing different UA revenue
streams. She focused on FY 24 and listed funding sources
including general funds, unrestricted funds, and
designated/restricted funds. She noted that only the
general funds and unrestricted funds were available for
compensation and fixed costs in general. She explained that
designated and restricted funds included competitive
federal grants or situations where an industry partner
asked the university to work on a particular project or
problem. She explained that the university only had access
to the $300 million and $216 million [shown for FY 24] and
the remainder was directed funding for specific uses. She
used Medicaid as an example and explained that the state
could not use Medicaid funding from the federal government
to run the Department of Commerce, Community and Economic
Development. Likewise, the university could not use a
[federal] Department of Defense grant for the geophysical
institute to pay salaries for its facilities group. She
explained that even though total revenue [for FY 24] was
$815 million and the total budget was $900 million, there
was only about $500 million in revenue to cover the base
foundation.
Ms. Pitney discussed sources of earned revenue [for FY 23]
on slide 15. There was $206 million in unrestricted funding
comprised of tuition ($79 million), student fees, and
indirect cost recovery (funding on federal grants to pay
for things like management and facilities). University
receipts included the natural resources fund distribution
of about $7.5 million and interest income that reflected
interest earned on working capital. She elaborated that
interest income was fortunately high and the university
anticipated it would go up to about $3 million in a steady
interest rate environment.
1:56:08 PM
Representative Ortiz looked at slide 6 in relation to
teacher preparation and healthcare and associated pilot
programs. He asked if the FY 25 budget request would enable
UA to expand the programs in an efficient and more robust
way. He was hearing a lot about workforce gaps in the two
areas.
Ms. Pitney agreed there was a workforce gap in the two
areas highlighted by Representative Ortiz. She relayed that
the year before last, the legislature appropriated $3.5
million for the expansion of health programs and the
university was actively working to implement the expansion.
The increment included additional pay for nursing faculty
the university was having trouble retaining, in addition to
funding for new nursing faculty and faculty in allied
health areas that made up a large part of the healthcare
workforce. The expansion should be fully implemented by the
following year. At that point, if the university was
getting close to capacity in terms of student demand, it
would be ready for another request. All three of the UA
schools were working together on expanding teacher
preparation. She referenced an Educators Rising conference
that would take place in Juneau in the coming week or two.
The effort began with high school students with an interest
in becoming teachers. Additionally, there were mentorship
programs and a scholarship program for the student teaching
year provided the year before last. She reported that the
university had capacity in its current education programs
and it was having difficulty getting enough interested
students. She referenced work at the high school level to
get students interested in taking dual credits focused on
education that would direct them towards a teaching degree.
Ms. Pitney directed attention to slide 21 showing workforce
needs in psychology and school counselors in Anchorage and
a healthcare management master's degree in Fairbanks. The
slide showed small funding requests for base general funds
to help run the aforementioned programs.
2:00:47 PM
Co-Chair Johnson noted the committee had reached the end of
the time allotted for the presentation.
Ms. Pitney thanked the committee and was available to
answer questions offline.
Co-Chair Johnson thanked Ms. Pitney for the presentation.
2:01:33 PM
AT EASE
2:02:17 PM
RECONVENED
^OVERVIEW: DEPARTMENT OF ENVIRONMENTAL CONSERVATION
2:02:23 PM
Co-Chair Johnson noted that committee members were due on
the House floor at 2:30 p.m.
EMMA POKON, COMMISSIONER-DESIGNEE, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, introduced herself and provided
a PowerPoint presentation titled "House Finance Committee:
Environmental Conservation Overview," dated February 20,
2024 (copy on file). She briefly highlighted the Department
of Environmental Conservation's (DEC) mission on slide 2:
Conserving, improving, and protecting Alaska's natural
resources and environment to enhance the health,
safety, and economic and social well-being of
Alaskans.
Commissioner-Designee Pokon turned to an organizational
chart on slide 3. She expressed gratitude to the leadership
team, including Christina Carpenter, the former
environmental health director, who had stepped into the
role as acting deputy commissioner. She gave an overview of
the work provided by DEC on slide 4. She highlighted the
protection of air and water quality including permitting,
monitoring, and inspection work. The Environmental Health
Division included programs such as food safety and drinking
water, and solid waste and pesticides. Additionally, the
division included the state veterinarian responsible for
overseeing animal care and importation standards, the
environmental health lab responsible for conducting
analytical testing for a variety of programs, and
inspection and compliance components for regulatory
programs. The Division of Spill Prevention and Response
(SPAR) ensured preparedness for spills. The division
ensured that facilities handling a certain threshold of
materials had spill plans in advance and when a spill
happened SPAR was involved in the response. The division
housed a contaminated sites group that took over the
management of a site once the initial spill response was
complete. Additionally, there was an RFA [Response Fund
Administration] group that oversaw the SPAR fund.
Commissioner-Designee Pokon addressed DEC's vacancy rate on
slide 5. As of December 15, DEC's vacancy rate was 13.5
percent; however, when the numbers were viewed over the
course of the year it looked a bit more favorable to fill
positions quickly. The department placed an emphasis on
ensuring it had the capacity and manpower to do its job.
2:06:09 PM
Commissioner-Designee Pokon addressed DEC's FY 25 operating
budget on slide 6. She relayed that the department was
looking at another relatively stable year. There were some
shifts in federal funding coming to and through the agency.
She turned the presentation over to Megan Kohler to review
the budget highlights.
MEGAN KOHLER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION, reviewed the department's FY
25 operating budget request on slide 6. She noted that the
presentation separated infrastructure funding from DEC's
base budget. The majority of the change from FY 24 to FY 25
was attributed to salary adjustments. There was some
cleanup shown as an undesignated general fund (UGF)
reduction, cleanup from operating to capital, and a
reduction in an office refresh one-time item. She
highlighted there was an additional federal increment in
its Air Quality Division.
Ms. Kohler addressed the FY 25 operating budget for the
Division of Administration. The division included the
Office of the Commissioner, administrative support, and
state support services (primarily lease costs and
Department of Administration (DOA) chargebacks). The
majority of the changes were salary increments. She
highlighted a one-time increment for the Juneau air lab
relocation. She explained that DEC's building located on
Willoughby Avenue was under new ownership and was
undergoing an extensive renovation. She elaborated that the
air lab had been out of service since the past summer. She
furthered that it was a long-term issue with the building
on maintaining environmental controls associated with
sample quality and delicate scales located in the building;
therefore, DEC was looking to relocate the lab to a more
stable, purpose built environment. The item had been
changed in the governor's amended budget to be able to get
the lab up and running more quickly. The other change was a
reduction in federal funding as a result of backing out a
one-time increment for the office refresh.
2:08:55 PM
Ms. Kohler turned to slide 8 and reviewed the department's
buildings, maintenance, and operations portion of the FY 25
operating budget. She explained that DEC owned one
building, which housed its environmental health lab in
Anchorage. She offered a tour of the building to any of the
committee members. Historically, the funding had been UGF;
however, beginning in FY 22 there were increases in
utilities costs. The department began using a small portion
of its federal indirect carryforward. She explained that
the carryforward was no longer available; therefore, the
budget included UGF to cover the cost.
Ms. Kohler moved to the budget for the Division of
Environmental Health on slide 9. She noted there were no
significant changes proposed for FY 25. The increases for
the division reflected salary adjustments. There were two
items for the Division of Air Quality on slide 10. Under
the governor's amended budget there was an increment of
about $1 billion [in federal funds] for community emission
inventories, a climate pollution reduction grant that
allowed the state and the Alaska Municipal League to
prepare a planning document required for communities to
access additional federal dollars. The second item was
largely technical and aligned receipt authority. She
detailed that two receipt accounts were reduced and the
GFPR [general fund program receipts] was increased based on
funds the division would need due to a fee increase
implemented in the fall of 2023.
2:10:44 PM
Ms. Kohler turned to slide 11 and noted there were no
significant changes in the FY 25 SPAR budget. She concluded
the presentation with two items for the Division of Water
on slide 12. The first item was the transfer of federal
funding from the operating budget to capital budget. She
noted the item was more appropriate for the capital budget
because the funds were grant based. The second change was
in UGF associated with an Infrastructure Investment and
Jobs Act (IIJA) related one-time increment in FY 24.
2:11:26 PM
Representative Coulombe looked at slide 10 and asked what
GFPR stood for.
Ms. Kohler replied that GFPR stood for general fund program
receipts.
Representative Hannan asked about the Juneau air quality
lab that had been out of service since the prior summer.
She asked if the lab had been able to do its work the
through the previous summer at a different location.
Ms. Kohler answered that the lab had been able to do its
work by utilizing contract labs outside of Juneau; however,
it was not sustainable in the long term.
Representative Hannan asked if DEC was taking the samples
but not processing them locally.
Ms. Kohler replied affirmatively.
Representative Hannan asked if DEC was looking for a new
lab location. She asked about the timeline and cost.
Ms. Kohler replied that the department hoped that a
multiyear increment would mean DEC could utilize the funds
for FY 24 to get the lab up and running as soon as
possible.
Commissioner-Designee Pokon added that DEC wanted to get
the lab up and running as quickly as possible, but there
was not a fixed location at the current time. She stated it
was a work in progress the department was focused on
getting resolved.
Representative Hannan asked whether there would be air
quality monitoring of cruise ships in Juneau in the
upcoming season.
Commissioner-Designee Pokon answered affirmatively. The
monitoring would be conducted, and sampling would be done
but it was a matter of getting the samples processed and
getting the measurements. The department had been finding
workarounds, but it was not sustainable in the long term.
2:14:31 PM
Representative Galvin looked at slide 5 and found the low
vacancy rate remarkable. She recalled hearing from the
prior commissioner the previous year that the vacancy rate
was quite managed because when vacancies were not filled,
the commissioner had removed the positions. She asked if
there were fewer overall full-time positions in DEC or if
the department had managed to keep a low vacancy rate.
Commissioner-Designee Pokon answered there were more
positions currently than in prior years. The department had
focused on getting recruitment materials out and
prioritizing the workload of getting a new person in the
role in recognition of the fact that while it was an
additional task for a supervisor, the work the position was
supposed to be taking care of began piling up and the
department wanted to make sure it was staying on top of the
issue. She relayed that she had not removed any positions
because they were vacant for an extended period of time,
but she believed it was necessary to be thoughtful about
whether the department was carrying workload for an
extended period of time without filling the position. She
relayed that the department scrutinized the vacancy to
determine whether it was a recruitment challenge or
something else. She believed a position being vacant for an
extended period was a red flag and a reason for a careful
look, but it did not immediately necessitate getting rid of
the position.
2:16:33 PM
Representative Josephson asked when the last classification
study had been done for DEC. He asked if there was one
pending.
Commissioner-Designee Pokon replied that she did not know.
Representative Josephson looked at the SPAR budget on slide
11 and asked what the "other" funding represented.
Commissioner-Designee Pokon believed it may be an element
of the commercial passenger vessel (CPV) funds that came to
SPAR. She deferred to Ms. Kohler for additional details.
Ms. Kohler confirmed that the statement made by
Commissioner-Designee Pokon was correct. She added that
interagency receipts were also included.
Representative Josephson believed the former ocean ranger
program was housed in DEC. He asked what the law said
related to the requirement for there to be a ranger on a
large vessel.
Commissioner-Designee Pokon believed that the statute
currently read that there was an expectation for there to
be an ocean ranger on large commercial passenger vessels
located in marine waters of the state. There was currently
a bill that would shift to credentialed DEC inspectors
boarding ships twice a year to do compliance and regulatory
checks. She believed it was an effective regulatory
oversight mechanism that had been implemented the past
several years. She stated that the credentialed inspectors
were longer term DEC employees with the capacity to view
compliance over time. Additionally, the inspectors could
engage with the vessels and responsible parties to ensure
compliance directly as opposed to being observers only. She
stated that the statute currently called for ocean rangers
who were marine engineers to be present on large vessels.
2:19:38 PM
Representative Josephson was used to shoreside regulation
in recent years; however, he thought it sounded like the
state was not technically in compliance with the law.
Commissioner-Designee Pokon replied that she believed DEC
was providing effective oversight of large cruise vessels
and more deliberate oversight of smaller vessels. She
reiterated her earlier remark that DEC had credentialed
inspectors on the vessels at least twice a year and it was
actively overseeing compliance of environmental
requirements.
Commissioner-Designee Pokon thanked the committee for its
time.
HB 268 was HEARD and HELD in committee for further
consideration.
HB 270 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
day.
ADJOURNMENT
2:20:57 PM
The meeting was adjourned at 2:20 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY25 HFin UA Financial Overview Final 2 20 2024 for House Finance Committee.pdf |
HFIN 2/20/2024 1:30:00 PM |
HB 268 HB 270 |
| HFIN FY2025 DEC Department Overview 2.20.24.pdf |
HFIN 2/20/2024 1:30:00 PM |
HB 268 |
| DEC Oveview Response HFIN CPVEC Fund 240313 Final.pdf |
HFIN 2/20/2024 1:30:00 PM |
HB 268 |
| DEC Oveview Response HFIN Legislative Finance Fund Source Reports 1166 and 1205.pdf |
HFIN 2/20/2024 1:30:00 PM |
HB 268 |
| DEC Oveview Response HFIN DEC CPVEC Fund Balance 3.13.2024.pdf |
HFIN 2/20/2024 1:30:00 PM |
HB 268 |