Legislature(2023 - 2024)ADAMS 519
03/06/2024 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Department of Natural Resources | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 268 | TELECONFERENCED | |
| += | HB 270 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
March 6, 2024
8:36 a.m.
8:36:46 AM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 8:36 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Dan Ortiz
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative Bryce Edgmon, Co-Chair
Representative Andy Josephson
Representative Will Stapp
ALSO PRESENT
John Boyle, Commissioner, Department of Natural Resources;
Theresa Cross, Administrative Services Director, Department
of Natural Resources; Brent Goodrum, Deputy Commissioner,
Department of Natural Resources.
PRESENT VIA TELECONFERENCE
Ricky Gease, Director, Division of Parks and Outdoor
Recreation, Department of Natural Resources.
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 268 was HEARD and HELD in committee for
further consideration.
OVERVIEW: DEPARTMENT OF NATURAL RESOURCES
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: DEPARTMENT OF NATURAL RESOURCES
8:38:28 AM
JOHN BOYLE, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,
introduced the PowerPoint presentation "Department of
Natural Resources Budget Overview" dated March 6, 2024
(copy on file). He began on slide 2 and shared a memorial
for three members of the Department of Natural Resources
(DNR) who had died in the line of duty in a helicopter
crash. The three individuals who had died were all involved
in performing hydrological surveying work on the North
Slope. The department was profoundly impacted by the loss
and it had responded by ensuring that the right safety
procedures were in place to protect its employees.
Mr. Boyle continued to slide 3 and went over an
organizational chart for DNR leadership. He thought that
there was a special culture within DNR because the people
who worked for the department wanted to make a difference
by maximizing and conserving the state's resources for the
benefit of its people. He remarked that DNR was the
"breadwinner" for all of the other state departments and
brought in the major share of revenue that the state relied
upon to provide services to its citizens. The work of DNR
had significant impacts on the state and would benefit
future generations of Alaska. He relayed that two deputy
commissioners reported to him: Brent Goodrum and John
Crowther. Each deputy commissioner was responsible for a
number of separate divisions within the department. He
shared that DNR was working on new initiatives surrounding
agriculture, mariculture, and food security.
8:43:25 AM
Mr. Boyle continued on slide 3 and offered information on
some of the divisions within DNR. He relayed that the
Division of Mining, Land, and Water (DMLW) was responsible
for managing the state's lands and leases. He thought that
the Division of Forestry and Fire Protection (DFFP) was an
exciting part of DNR and an important industry. The
department would continue to look for ways to improve and
build upon the forestry sector as well as protect the state
from wildfires. He argued that Alaska had the best state
park portfolio of any state, which was partially due to the
work done by the Division of Parks and Outdoor Recreation
(DPOR).
Mr. Boyle continued that the Division of Oil and Gas (DOG)
was experiencing changes as activity on the North Slope
increased. He relayed that the Division of Geological and
Geophysical Surveys (DGGS) was led by Director Melanie
Werdon, who was a longtime DNR employee. He was pleased
when Ms. Werdon agreed to serve as director. He noted that
DGGS informed the science that helped the state understand
its resources, particularly as it related to oil and gas.
The Office of Project Management and Permitting (OPMP) was
tasked with permitting large projects of all types and it
would play a critical role in helping communities develop
broadband infrastructure. He turned the presentation over
to his colleague.
8:48:55 AM
THERESA CROSS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF NATURAL RESOURCES, continued on slide 4 and offered an
overview of DNR's FY 25 operating budget. The chart on the
slide represented the FY 23 actuals, followed by the FY 24
management plan, followed by the FY 25 governor's proposed
amended budget. The most significant change from FY 24 to
FY 25 was in the unrestricted general fund (UGF) category
with an increase of approximately $6.8 million. The second
biggest change was an increase of $3.5 million in
designated general funds (DGF). She explained that the UGF
increase was largely represented by four items within DFFP,
one item within DGGS, and department-wide salary
adjustments. The DGF increase was primarily due to fund
changes and authority increments within DOG and DMLW as
well as department-wide salary adjustments. The overall FY
25 budget increased by 5.9 percent from FY 24. She relayed
that more details would be provided on each division on
upcoming slides.
Ms. Cross highlighted that there was an increase of eight
positions from the FY 24 management plan to the FY 25
governor's proposed amended budget across all position
types. She noted that more information about new positions
would be provided on each division slide. The pie charts on
the bottom of the slide represented a high-level comparison
of the four fund categories by total and percentage of the
total operating budget. There were minor changes from FY 24
to FY 25.
Ms. Cross continued to slide 5 and shared that DNR had 20
different funding sources, all listed on the slide. The
general fund included both UGF and DGF and totaled
approximately $128 million. She noted that UGF and DGF
accounted for 61 percent of the department's total
operating budget. Most of the general fund program receipt
revenue was from park fees, leases, material sales, mining
leases, recording fees, and seismic data sales. Most of the
"other" category was made up of statutory designated
program receipts, interagency receipts, capital improvement
projects (CIP), the Alaska Mental Health Trust Authority
(AMHTA), and Permanent Fund Dividend (PFD) receipts. Over
the past ten years, there was an average of $22 in revenue
for every general fund dollar appropriated to DNR.
8:53:05 AM
Ms. Cross explained that in the next section of the
presentation, she would provide a detailed look at each of
the divisions within DNR. She began on slide 6 with DFFP.
The division's UGF increase was its most significant
adjustment at just under $5 million. The remaining fund
category increases were due to bargain salary and health
insurance adjustments. The total DFFP budget increased by 7
percent and the number of positions within the division
remained the same. The FY 25 proposed budget changes
included $1.8 million in UGF for mission critical incentive
pay to invest in the state's wildlife firefighters. The
increment would increase firefighters' compensation by 32
percent. The incentive pay increase would be accomplished
by establishing a letter of agreement, which would be
eventually followed by a permanent solution once the salary
study was complete. Incentive pay played a critical role in
the state's ability to maintain firefighter employment and
to provide adequate and timely responses to wildlife fires.
Firefighter vacancies continued to increase and recruitment
was difficult because Alaska's firefighters received
compensation that was approximately 46 percent less than
that of firefighters in other states. The state lost
approximately $11,000 of its investment in specialized
training when experienced firefighters transferred to other
agencies. The increment would also assist in reducing costs
related to importing firefighters from other states.
Ms. Cross continued on the second budget request for DFFP,
which was $1.5 million in UGF for the acquisition of two
new facility leases for warehouse storage and crew
purposes. The Fairbanks warehouse was in a state of
disrepair and could no longer be safely maintained. The
southcentral crew facility lease was set to expire in
October of 2024 and needed an update. The division had
worked closely with the Department of Transportation and
Public Facilities (DOT) to gain the $1.5 million lease
estimate for both facilities and it had formerly requested
interest from local contractors via the state procurement
process. The facility leases were critical in providing
public safety, protecting the state's investments and
infrastructure, and reducing fire suppression costs.
Ms. Cross continued to the third budget request for DFFP,
which was $900,000 in UGF to fully fund foresters and
prioritize forestry road infrastructure. The funding would
decrease the division's reliance on timber sales receipts
that partially funded nine foresters and support positions.
Realigning the funding and transferring $879,000 in timber
receipts to the services line item would allow for crucial
bridge replacements, create road access for timber, provide
access to lands and resources, reduce costs to individuals
and businesses, and create an environment for economic
growth. Initial constructure projects would occur near
Fairbanks, Haines, Tanana Valley, southeast, and
southcentral regions of the state. The division would
prepare a list of each construction maintenance project and
each project would have a specific scope of work, timeline
for completion, and clearly identified costs. There would
be status updates provided on the projects at the end of
each fiscal year.
8:57:02 AM
Representative Hannan noted that there was a large
supplemental for DFFP which was not reflected on the slide.
She asked for the details of the supplemental for forestry
and fire protection. She recalled that it was around $61
million.
Ms. Cross responded that the $61 million figure was the
fire declaration that the state received in the fall of
2023. There were three additional supplementals: one to
close out the fire season for $26 million, one for spring
fire prepositioning costs, and $1.4 million for increased
aviation costs. The supplemental for the division totaled
approximately $94 million including the fire declaration.
Representative Hannan thought that it was important that
the budget reflected what had actually been spent. She
thought the exclusion of the spending in the presentation
made it appear that it never happened. She did not doubt
that the $94 million needed to be spent, but she thought
that the money needed to be accounted for and the details
needed to be communicated to the legislature. She was
frustrated that the budget presentation did not reflect the
entire picture. There was always a large supplemental and
the lack of information made the budget difficult to
balance.
Representative Cronk commented that it was important to
have a proactive forestry industry to help manage the
forests. He would rather see the money invested in the
forestry industry than spent on fighting fires. He asked
how the expedited timber bill [HB 104] would help.
Mr. Boyle responded that he believed HB 104 would provide
DNR with more flexible tools to proactively respond to
incidents like insect infestation. He argued that it would
be better to thin the forest before it was infested in
order to contain the problem before it worsened. He thought
more flexible tools would help decrease the amount of
wildfires. Another key element the department was focused
on was making it easier for Alaskans to harvest spruce
trees and the department appreciated the legislature's
support in its effort. Much of the provisions were built
around the historic timber industry, which was geared
towards the southeast region of the state. He was uncertain
whether the historic approach was the best approach as
there were a myriad of opportunities across the state to
manage the forests in different ways.
Mr. Boyle relayed that the department had an idea of how
many acres burned each year and a rough estimate of annual
wildfire costs based on the ten-year average; however,
there was significant variability every year. For example,
which entity was responsible for attacking the wildfires
depended upon which area of the state in which the
wildfires occurred. Sometimes the onus for heading wildfire
efforts fell on the state and other times the onus fell on
the federal government. He understood Representative
Hannan's frustration and thought it was important that the
department examined how to best manage the state's forests
and how to be more proactive in preventing wildfires. He
thought carbon offset projects could be helpful by
incentivizing enhanced forest management techniques. The
department was looking at a number of options for how the
state could be more proactive. He stressed the importance
of recruiting and retaining local firefighters as hiring
firefighters from other states was difficult and costly.
The climate was changing and the approach to wildfires
needed to change as well.
9:05:10 AM
Representative Cronk remarked that the state's timber
industry did not have a large profit margin. He noted that
timber was a less valuable product when the state let it
burn. He argued that either the state could cut, harvest
it, and use the timber, or watch it burn up in smoke. He
commended the department on its proactivity and support of
the timber industry, which could help build homes and
create jobs.
Co-Chair Johnson asked if the department could compile a
report breaking down the ways in which the funding was
allocated in the supplementals. She thought utilizing a
supplemental made sense because the department's costs
varied greatly and were often unpredictable. She suggested
that a short overview report would help the committee stay
informed and help it make better decisions going forward.
9:08:18 AM
Representative Ortiz remarked that he agreed with the
comments from Representative Cronk about needing to better
manage the state's timber and prevent wildfires. He noted
that the current budget request was significantly less than
historical averages which made it hard for the committee to
plan its spending in other areas when it was likely that
there would be a significant supplemental. He asked if the
department would be supportive of the idea of including a
more realistic number in the budget.
Mr. Boyle responded that the department would be supportive
of the idea. He noted that Representative Ortiz was asking
many of the same questions that DNR was asking itself, such
as how the department could better anticipate its costs. He
would be happy to put together the report requested by Co-
Chair Johnson. There were significant cost drivers, such as
hiring fire suppression crews from other states. He
suggested that asking the department to predict fire
suppression costs was like asking someone to predict the
stock market. In 2023, wildfires were minimal through July,
but picked up quickly in August. Ensuring that roads
remained operational during wildfires and that the military
facilities were protected was important. He was happy to
work with the committee and provide as much information as
possible, but significant historic data was already
available.
Representative Coulombe asked Ms. Cross for clarification
on the $900,000 increment. She understood that money was
withdrawn taken from personal services to fund a capital
request and the withdrawn funds would be replaced with UGF.
She asked if her understanding was correct.
9:13:16 AM
Ms. Cross responded that the majority of timber sales
receipts were currently being used to pay for nine personal
services positions. The cost was hindering the department's
ability to fund crucial bridge and road projects. The
$900,000 increment would allow the department to continue
to build the timber industry by paying for the nine
positions with UGF. There would then be a transfer of
timber sales receipts to perform the necessary maintenance
and construction work.
Representative Coulombe asked whether the issue was
temporary or would the increment be included in the base.
Ms. Cross responded that the bridge and road projects would
be funded with the timber sales receipts and personal
services positions would be funded with UGF. The department
was open to moving some of the timber sales receipts to a
capital appropriation in the future.
Representative Coulombe asked how much of the $1.8 million
increment was going towards incentive pay. She asked for a
breakdown of how much money was going directly to
firefighters.
Ms. Cross responded that the supplementals requested for FY
24 were not for incentive pay, but to pay for costs that
had been incurred over the past fire season. The $1.8
million increment in FY 25 would be entirely for incentive
pay.
Co-Chair Johnson noted that the committee had a hard stop
at 10:00 a.m. and she suggested that Ms. Cross continue the
presentation to allow for time for more questions.
9:16:49 AM
Ms. Cross relayed that the last item within DFFP was
$84,000 for annual maintenance on heavy equipment. She
explained that regular maintenance on the equipment would
ensure the safety of Alaskans. The funding would allow the
division to complete annual maintenance on nine new pieces
of equipment through DOT's State Equipment Fleet Program
(SEFP). The division had been coordinating with the SEFP
team to order and receive new heavy equipment and annual
maintenance was required in order to protect the initial
investment and maximize the lifespan of the equipment. The
new equipment would help maintain 400 miles of existing
logging roads in the interior region of the state,
facilitate projects in the southcentral region of the
state, and create new roads to create access to forests.
The increment would also enable tree planting, timber
harvest, and carbon offset projects.
Ms. Cross continued to slide 7 and detailed the request for
DPOR. The division's most significant increase was the
other funds category. There was an increase of 53 percent
in UGF because the division's UGF authority for FY 24 was
minimal, which made the new boating safety language item
appear more significant than it was. The remaining fund
category increases were due to bargain salary and health
insurance adjustments and increased by just over 7 percent.
The number of positions increased by five for a total of
174 positions in the division.
Ms. Cross relayed that the first item of the division's FY
25 governor's amended budget request was for $300,000 in
DGF to maintain the fleet to ensure reliable emergency
responses for the safety of Alaskans. The division was
responsible for ensuring funding for crucial offroad
vehicles and boats that were not part of SEFP. The current
fleet was aging and some parts were no longer available for
repairs. The second request was for an increase of $375,000
in CIP receipts for two Engineering Assistant II positions
and one Engineer/Architect II position to meet the demand
of increased design and construction infrastructure work.
The three new permanent positions would focus on enhancing
capital projects, ensuring public safety, complying with
regulations, and providing timely technical support to
other state agencies. An influx of federal funding through
the Land and Water Conservation Fund and the National
Recreation Trails Program provided many opportunities for
parks projects to enhance the experience of visitors, and
the three new positions would contribute to the
improvements.
Ms. Cross shared that the next request was for a Park
Ranger I position and a Park Specialist to restore the
management of Delta Area Parks and Recreation. The division
was asking for an increase of $210,000 in DGF to pay for
the two new permanent fulltime positions. The division
would restore the management of seven Delta state park
units that needed maintenance and upgrades. She stressed
that both positions would be stationed in Delta and would
be co-located in the DFFP office. The final request was for
$281,300 in UGF for boating safety receipts. The request
would remove $306,300 of boat registration fee authority
from the numbers section of the budget and would add the
$281,300 in UGF in the language section. The intention was
to allow boat registration fees to lapse in the general
fund, then appropriate an equal amount of general funds in
the following year. The approach would allow for more
predictability because the amount of boat registration fees
collected each year was uncertain and not available for
appropriation until late in the fiscal year. The language
item would be updated based on actual revenue collected.
9:21:14 AM
Ms. Cross advanced to slide 8 and detailed the budget
changes for DMLW. The division's budget increased by just
under $1.9 million and the other funds category increased
by approximately $500,000. There was a UGF decrease and
federal funds decrease due to fund changes and the end of a
three-year, one-time UGF increment related to Revised
Statute (RS) 2477. The remaining fund category changes were
due to bargain salary and health insurance adjustments for
a total budget increase of 5.3 percent. The first budget
change was an increase of $741,000 in DGF to advance the
state's rights in navigability and RS 2477. The division
appropriated a one-time, three-year increment between FY 22
and FY 24 of $695,000 to accomplish the governor's
initiative of managing uplands, developing resources, and
increasing Alaskan's ownership of land consistent with
unique federal and state laws.
Co-Chair Johnson suggested that Ms. Cross summarize the
items.
Ms. Cross continued that the funding would pay for three
permanent positions and the necessary ongoing work related
to RS 2477. The next budget request was for an increase of
$500,000 in CIP authority to increase capital receipt
authority to accommodate additional project activity. The
request was in response to the increased number of capital
projects over the last few years.
Ms. Cross relayed that the next budget request was to
realign personal services funding to assist with employee
retention efforts. The request was for a fund change of
$400,000 in DGF. The division requested to realign personal
services authority to reflect the actual spending through a
fund change. The request would reduce statutory designated
program receipt authority by $100,000 and federal authority
by $300,000.
9:24:43 AM
Ms. Cross continued to slide 9 and the Division of Support
Services (DSS). The division's UGF increased by
approximately $800,000 and the remaining fund category
increases were due to bargain salary and health insurance
adjustments. The division's total budget increased by 6.1
percent. The number of positions remained the same at 89.
The division only had one budget change, which was an
increase of $578,000 in UGF for the Fairbanks Denali
building lease renewal. The increment within the DSS
facilities component would provide DGGS with the funding
required for its building lease in Fairbanks. She explained
that DOT began a search for an alternative building
location in 2022 and concluded that there were none that
were suitable.
Ms. Cross advanced to slide 10 and the Division of
Agriculture (DOA). She relayed that the division's minimal
fund category increases were due to bargain salary and
health insurance adjustments and its total budget increased
by 2.2 percent. The number of positions remained the same
at 37. She noted that the division had no FY 25 budget
changes but she would highlight a few of the division's
accomplishments on the slide. The division continued to
administer over $6 million in United States Department of
Agriculture (USDA) grants in recent years with $2.3 million
in microgrants for food security.
Co-Chair Johnson shared that she had the privilege to tour
some of the agricultural facilities in Delta in 2023. She
understood that one of the requests was for more storage
space and to set aside monies to keep the co-op fully
funded throughout the year. She asked for an update on the
situation.
Mr. Boyle responded that he understood that Co-Chair
Johnson was referring to the Delta Grain Barley Reserve
Program. The state was helping to support a co-op that
could buy a certain quantity of barley grown every year to
ensure there was a consistent level of demand for farmers,
create more market opportunities, and ensure a measure of
food security. A recent rainy year impacted the amount of
barley that was harvestable across the state which meant
that livestock producers needed to import barley from other
states in order to feed the livestock. The purpose of the
program was to start building out a safety net to ensure
that every year, there would be a backstock of barley that
could provide grain to the agricultural community when
necessary. He thought the program would be a smart
investment in infrastructure and help grow more consistent
demand, which would enable farmers to grow higher
quantities and to expand operations.
9:29:02 AM
Representative Hannan referred to DMLW on slide 8. She was
hoping to see some interest in increasing funding to study
invasive species. She noted that there was an experimental
farm in Palmer working on an invasive species project and
she did not see any funds listed for the efforts. She asked
if there was a reason for the lack of funds.
Mr. Boyle responded that the experimental farm was at the
plant material center in Palmer and was led by DOA. He
understood the director of DOA was online and could provide
additional details.
Co-Chair Johnson confirmed that the director was not
online.
Mr. Boyle asked if the deputy director was online.
Co-Chair Johnson confirmed that the deputy director was not
online.
Mr. Boyle replied that he would follow up with
Representative Hannan on the status of the project.
Representative Hannan referred to the first budget request
for DMLW, which was $741,000 in DGF to advance state's
rights in navigability and RS 2477. She understood that
$365,000 of the $741,000 was for legal services and she
asked for more details about the request. The Department of
Law (DOL) had millions of dollars in its budget allocated
to legal services and she wondered why the funds also
needed to be in DMLW's budget if the funding was already
present within DOL.
BRENT GOODRUM, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, responded that much of the work done by DNR and
DMLW, such as gathering information and working in the
field, was encumbered by DMLW. He relayed that oftentimes,
the department would hire experts prior to litigation to
join department employees in the field. There were many
locations that could not be accessed via road and
transportation via airplane was required, which meant
contracting with aviation entities. He explained that any
legal cost that occurred prior to a court setting or a
filing in court was encumbered by DMLW. After there was a
formal filing within the Alaska Court System, DOL would
contract with the experts in the field on subjects such as
geomorphology and navigability. He noted that DNR was
responsible for a significant portion of the upfront legal
services work. He stressed that it was critical that the
department conducted the "boots on the ground" gathering of
information up front so that it could relay the information
to DOL quickly, especially when the state had disagreements
with the federal government.
Representative Coulombe referred to DPOR on slide 7. She
understood that there would be two new positions for Delta
parks. She was concerned that Chugach Park was getting
overrun, as it was the park with the highest levels of
traffic. She understood that there was an increase in
funding for Chugach and asked if there were any active
plans to improve access to the park.
Mr. Boyle suggested that the director of DPOR respond to
the question.
9:34:25 AM
RICKY GEASE, DIRECTOR, DIVISION OF PARKS AND OUTDOOR
RECREATION, DEPARTMENT OF NATURAL RESOURCES (via
teleconference), responded that the Delta State Park areas
needed more staff members. Typically, the division would
meet with the superintendents and rank the areas of
greatest need. There were about six units in Delta that had
been under passive management and consignment and
concessionaires had been operating in the area. The
division has been proactive and had been making requests
for the Delta State Park area. He noted that Chugach was
the most visited public land in Alaska. The division was
trying to allocate as many resources to the park as
possible through the budget. The division currently had a
significant amount of capital money that was allocated to
paving parking lots and providing additional parking as an
effort to address the increased demand.
Representative Coulombe asked if there were any plans to
add new positions around the Chugach Park access areas.
Mr. Gease responded that the division was looking at adding
more employees. There could be a request in 2025, 2026, or
a subsequent year's budget for additional employees. The
division was examining its resources in terms of the
general fund program receipts and the vehicle rental tax,
which funded the operating budget. If the division had the
capacity to take on additional people, Chugach would likely
be one of the priority investment areas.
9:37:37 AM
Ms. Cross continued on slide 11 and detailed the budget
changes for DOG. The division's DGF increased by just under
$1 million, and the federal funds category increased by
approximately $100,000. There was a UGF reduction and other
fund category reduction due to fund changes. The remaining
fund category changes were due to bargain salary and health
insurance adjustments. The division's total budget
increased by 2.2 percent and the number of positions
remained the same at 92. There were three governor's budget
changes which were all fund changes. The division requested
multiple fund changes by reducing $500,000 in UGF authority
and a total of $485,000 in statutory designated program
receipt authority, while increasing general fund program
receipt authority by $885,000 and federal authority by
$100,000. The changes would align the expenditures and the
revenue related to the services the division provided.
Ms. Cross continued to slide 12 and the budget changes for
OPMP. The office's UGF increased by just over $200,000 and
the remaining fund category changes were due to bargain
salary and health insurance adjustments. The total budget
increased by 3 percent and the number of positions
increased by one, bringing the total number of positions to
14. The office had one governor's budget change for
administrative support for the carbon offset program [in SB
48] for a cost of $176,000 in UGF. The office was
requesting a new Administrative Officer I position to
provide administrative and project support for the carbon
offset program on state land. The position would support
the newly appointed carbon manager in successfully
developing and implementing state projects for the state
carbon offset program. The program would boost the state's
economy with new state revenue.
Ms. Cross advanced to slide 13 and the DGGS budget changes.
The division's UGF increased by just under $1.2 million.
The remaining fund category changes were due to salary and
health insurance adjustments. The total budget increased by
11.9 percent and the number of positions in the division
increased by two, bringing the total to 68 positions. The
division had one budget request for $1 million in UGF to
power Alaska's future with geothermal energy and two full-
time positions to support the mission. The increment would
create a three-person geothermal program to begin the
geothermal characterization work. One existing permanent
full-time Geologist IV would be repurposed to the program
and there would be one new Geologist III and one Analyst
III recruited for Anchorage or Fairbanks. The division's
initial stage of geothermal characterization work was
distinct and would be coordinated with the University of
Alaska, federal partners, Alaska Native partners, and
private sector partners' ongoing initiatives. In order for
the state to attract industry capital and develop
geothermal power plants, the state needed regional scale
geologic information to identify the most promising
geothermal areas to target. All data and results would be
published and freely available to the public and the
industry through the division's easily accessible databases
and published technical reports online.
9:41:32 AM
Representative Hannan referred to slide 12 on OPMP and the
carbon offset program addition. She recalled that SB 48 had
a fiscal note for staffing costs. She asked Ms. Cross to
remind her of the details of the fiscal note, such as the
overall cost, the number of positions that were added in SB
48, and whether there had been an increase in demand. She
wanted to determine whether the fiscal note was written
incorrectly and if it needed to be updated.
Ms. Cross responded that the fiscal note included $493,600
in UGF and the addition of three permanent full-time
positions. One position was within DMLW, one was within
OPMP, and one was within DFFP. Both positions within DMLW
and OPMP had been filled and the new employee hired for
DFFP would start later in the month. The funding would be a
continuation for FY 25 in order to add the additional
administrative support position once the program was
established.
Mr. Boyle added that the department was currently in the
regulation promulgation process and it was working on
getting the state's forest assets program off the ground.
He thought that the department had received close to a
dozen different proposals from prospective project
developers to date. The regulation process needed to be
completed in order to establish a framework to evaluate the
different proposals and then determine which of the
potential projects was within the state's best interests.
The regulation process should be completed by roughly the
middle of 2024. From the point of completion on, the
department should be in a position to start working through
the proposals to determine which proposals had actually
materialized into a project on state land.
Representative Hannan expressed her concern about the
supplemental nature of the funding. She was surprised that
an administrative support position was not included in the
fiscal note for the bill and that the funding would be an
additional add-on to the base budget. She thought it seemed
logical that there would be a need for the administrative
support position to execute the program. She suggested that
either the process was not thought through well enough or
that the response was too overwhelming. She hoped that the
state would see some revenue coming from the project in the
following year.
Ms. Cross replied that an administrative support position
was included in the fiscal note. The three positions that
she discussed previously were for FY 24 and the upcoming
positions were slated for FY 25. The department wanted to
ensure that the three positions were filled and stable
before an additional position was incorporated. She
reiterated that the cost was part of the original fiscal
note.
Representative Hannan asked if a multi-year fiscal note was
not automatically included in a bill. She had assumed that
the fiscal note would be automatically included. She
relayed that Ms. Cross had just stated that the fiscal note
only outlined the costs for FY 24, but the administrative
support position was always set to be incorporated in FY 25
and the funding needed to be added in again to the base.
She would have presumed that when the fiscal note was
adopted, the position would have already been included in
the costs.
Ms. Cross replied that it was the department's
understanding that even when positions were added in the
fiscal note, the department would still have to go through
the process with the Office of Management and Budget (OMB)
to request the positions, which was the approach it took
for FY 25. A representative from OMB was available to
answer the question in more detail. She noted that
Representative Cronk was the DNR subcommittee co-chair and
he and his staff were extremely knowledgeable about the
process. According to Representative Cronk's staff, the
department prepared the fiscal note in the proper manner.
9:47:20 AM
Representative Galvin referred to slide 13 and the
geothermal energy project. She asked if the $1 million
increment would be allocated for two positions or for three
positions. She also asked for more information about the
geothermal project, such as whether sites had been
identified and how the money would be spent.
Mr. Boyle responded that the $1 million funding would apply
to two positions, as denoted on the slide. The purpose of
the program was to recognize that the state had not
dedicated resources to understanding its geothermal
potential. The state was currently facing an energy
shortfall in the Cook Inlet and he thought that it was
incumbent upon the state to look at developing all of its
potential energy resources of all types. Geothermal energy
was a topic of significance because Alaska was a
seismically active area. The first priority would be to
conduct early characterization work, particularly in the
Cook Inlet, in order to better understand what the
hydrological and geothermal systems were in the area. The
goal was to use the data to help incentivize companies and
entities interested in developing geothermal power to
consider Alaska. Geothermal technology was rapidly
advancing and the toolkit of different geothermal options
had expanded significantly in the last few years. The goal
was to focus on delivering energy solutions for the state,
including the Railbelt. Geothermal systems could help
provide reliable, renewable, low-cost energy for
communities that were not currently connected to the grid.
He expressed that he was enthusiastic about the idea and
thought that there was a lot of potential in the state.
Representative Galvin asked if there was a plan for the $1
million request.
Mr. Boyle responded that there was a scope of work already
in process.
9:51:52 AM
Ms. Cross advanced to slide 14 and the budget for the Trust
Land Office (TLO), which was supported by AMHTA funding.
The office followed a zero-based budget in each fiscal year
and the $100,000 increase in the other category was due to
salary adjustments. The total budget increased by 2.1
percent and the number of positions in the office remained
the same. The office did not experience significant budget
changes, but some of its accomplishments and priorities
were listed on the slide.
Ms. Cross continued to slide 15 and the Office of the
Commissioner. There were minor fund changes due to salary
adjustments and the total budget increased by 1.6 percent.
The number of positions remained the same at 10. Some of
the accomplishments of the office were listed on the slide,
most notably the adjudication of 35 appeals in FY 23.
Ms. Cross moved to slide 16 and provided an overview of
DNR's vacancy data and recruitment initiatives. The overall
department vacancy rate was 16.1 percent as of January 31,
2024. The vacancy rate had continued to decline over the
last 14 months. The division with the lowest vacancy rate
was TLO at 0 percent and the highest rate was OPMP at 30.8;
however, OPMP's high vacancy rate was due to there being
very few positions within the office. The department's
recruitment and retention initiatives included
transitioning 11 job classes to a competency-based minimum
qualifications (MQ) system, which impacted roughly 300
positions at DNR. The change included expanding natural
resource specialist jobs to accommodate non-supervisory
career paths. The department had reduced processing of its
recruitment timelines to under two business days for
postings and hire approvals and it had also successfully
utilized hybrid telework to promote a better work-life
balance. Currently, 44 percent of DNR's employees were
utilizing a hybrid telework schedule and 56 percent were in
the office fulltime.
Ms. Cross explained that the department was utilizing a
number of strategies to address the vacancy and recruitment
challenges, such as reclassifying and modifying positions,
utilizing acting status, broadening the applicant pools,
hiring for short term and long term non-permanent
positions, offering advanced step placements, and extending
seasonal work options. She relayed that DNR was one of four
departments that would begin utilizing the new recruitment
tool called Attract later in the month. The new tool would
leverage the database of prospective jobseekers by
categorizing work experience and history into a searchable
system and issue automated notifications to up to 66,000
jobseekers in Alaska that could be suitable for open
positions. She shared that Attract had shown to increase
the applicant pool by 36 percent on average during its beta
testing phase.
9:56:01 AM
Representative Cronk relayed that he had a comment about
the earlier conversation on timber. He explained that if a
forest fire burned through a timber section of birch trees,
the trees would rot and the wood would be wasted. He
thought that bureaucracy was slowing down the timber
industry and wood was becoming worthless. He urged that the
state view its timber as a resource rather than allowing it
to burn or rot.
HB 268 was HEARD and HELD in committee for further
consideration.
HB 270 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnson reviewed the agenda for the afternoon's
meeting.
ADJOURNMENT
9:58:14 AM
The meeting was adjourned at 9:58 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2024 DNR HFIN Budget Budget Overview 030624.pdf |
HFIN 3/6/2024 8:30:00 AM |
HB 268 HB 270 |