Legislature(1993 - 1994)
02/02/1993 09:05 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
February 2, 1993
TAPES
SFC-93, #8, Side A (378-561)
SFC-93, #8, Side B (561-001)
SFC-93, #10, Side A (001-561)
SFC-93, #10, Side B (561-001)
SFC-93, #12, Side A (001-277)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:05 a.m.
PRESENT
In addition to Co-chairs Frank and Pearce, Senators Kelly,
Rieger, and Sharp were present. Senator Kerttula arrived
while the meeting was in progress. Senator Jacko was not
present.
ALSO ATTENDING: Senator Judith Salo; Senator Georgianna
Lincoln; Lloyd Rupp, Commissioner, Kathy Christy, Facilities
Manager, and Michael W. Dindinger, Criminal Justice Planner,
Dept. of Corrections; Richard Burton, Commissioner, and
Kenneth Bischoff, Director, Div. of Admin. Services, Dept.
of Public Safety; Paul Fuhs, Commissioner, and Guy Bell,
Director, Dept. of Commerce & Economic Development; Ron
Garzini, Interim Executive Director, and David Denig-
Chakroff, Director, Rural Programs, Alaska Energy Authority;
Connel Murray, Director, Division of Tourism, Dept. of
Commerce & Economic Development; Mike Greany, Director, and
Karen Rehfeld, Fiscal Analyst, Legislative Finance Division;
and aides to committee members.
SUMMARY INFORMATION
SB 50 - An Act making appropriations for capital
projects; and providing for an effective
date.
Budget Overviews were conducted for the following
departments:
Department of Corrections
Department of Public Safety
Department of Commerce & Economic Development
Department of Education was rescheduled.
Overview by the Department of Corrections
C0-CHAIR DRUE PEARCE invited Commissioner Rupp and Kathy
Christy, Facilities Manager, Department of Corrections, to
join members at the committee table and proceed with the
department presentation.
COMMISSIONER RUPP directed attention to a handout entitled
"FY94 Governor's Request, Department of Corrections, Capital
Budget" (copy on file) which outlined priorities for capital
projects for the department.
No. 1 - Agricultural Rehabilitation Program provided for
funding for relocatable buildings in the amount of $1,750.0.
No. 2 - Statewide Renewal/Replacement/Renovation/Equipment
in the amount of $2,100.0, was addressed by KATHY CHRISTY,
Facilities Manager. She explained the funding was essential
to maintain the buildings, some of which are over 25 years
old, in a safe, secure and functional condition. She said
the department kept an on-going list of priorities which
totaled over $6.5M so only the highest priorities would be
funded by this amount.
No. 4 - Multi-Media Vocational Education Equipment provided
for funding in the amount of $200.0 for vocational education
equipment for four facilities without increasing staff.
No. 5 - Special Purpose Facility - Anchorage provided for
$1,500.0 for building an annex facility which provided for a
full service facility for women.
Co-chair Pearce asked if a list of items agreed to by the
department had been prepared in terms of space or capital
costs relative to the Cleary settlement and what had not
been accomplished at this time. Commissioner Rupp said the
department would be pleased to submit a list of those items
to the chair.
Co-chair Pearce asked if the settlement agreement required
an entire new facility for women. Commissioner Rupp said he
understood an annex or satellite facility would be
acceptable and a more cost effective solution. He felt the
main objective was to give women the same opportunities as
men. The state is not accomplishing that now.
Co-chair Pearce asked if mentally ill inmates were
unnecessarily being held in a hospital setting. Ms. Christy
replied the department was deficient in the care of the
mentally ill.
Commissioner Rupp attested to the fact that the
recriminalization of the mentally ill is a national problem.
He said the department and other administrators across the
country did not support that philosophy but because of
facility limitations were unable to address the problem.
Co-chair Pearce asked, if $1.5M was the estimated cost for
planning site selection, what the complete cost would be for
such a facility. Commissioner Rupp agreed site
determination cost was estimated to be $1.5M. He said the
department would estimate construction cost with an annex
approach.
CO-CHAIR STEVE FRANK asked if all items referred to in the
handout were contained in the Governor's budget and if
additional backup was available in the detail budget books.
Ms. Christy said this overview was from the Governor's
budget.
Co-chair Frank asked if the department had considered the
option of "soft beds" as opposed to construction of a
separate facility. Commissioner Rupp said the soft beds
option would be examined and maximized where possible. He
wanted the committee to be aware of the department's
pretrial requirements. He agreed the cost of a free-
standing facility was not justified.
Ms. Christy added long-term high security females needs
could not be met in Alaska and those inmates were housed
outside the State.
SENATOR JAY KERTTULA asked where the high-security inmates
were housed and the number involved. Ms. Christy said she
believed three to five inmates were housed in North Dakota.
Co-chair Frank asked if a suitable facility was required for
this small number of women inmates. Ms. Christy said the
department was required to address women inmates' needs
without discrimination.
Commissioner Rupp added that the department must convince
Judge Hunt the plan for an annex is appropriate and not
discriminatory in any way. He did not believe the court
would require the department to do anything extreme.
Senator Frank asked if the department had an understanding
of what the Judge would allow. Commissioner Rupp felt the
department knew a high security facility in terms of
construction standard cost was $100.0 per cell. He
guaranteed the committee the department would follow the
most cost effective choice.
Ms. Christy added that the new facility would free up some
beds that could be used by male inmates, and the costly
Sixth Avenue facility could be closed. This would mean
increased capital cost but in part would be compensated by a
more efficient operating budget.
Co-chair Frank asked if the facility was being called a
special purpose facility because it would replace the Sixth
Avenue facility and solve other needs. Ms. Christy affirmed
the fact that the facility would house inmates recovering
from surgery, inmates sentenced to life, care for the
mentally ill, and serve as many other needs as possible.
SENATOR STEVE RIEGER asked about the Spring Creek gym floor
funding for $80.0 and why it was being redone. Ms. Christy
said the linoleum floor was cracked and had potential for
causing sport injuries. During further discussion it was
determined the short life span of the floor was caused, in
part, by poor contractor performance.
End SFC-93 #8 Side 1
Begin SFC-93 #8 Side 2
No. 6 - Hiland Mountain Correction Center Security Upgrade
would cost $1,750,000 for the installation of a double
fence, realignment of the perimeter road and repair of the
electronic security system.
No. 7 - Spring Creek Correction Center Expansion funding in
the amount of $700.0 would increase the capacity by double
bunking 50 beds. Sprinklers would need to be relocated
because of the upper bunk installation. Program space would
also be increased.
No. 8 - Deferred Maintenance request for $500.0 would fund
the most critical of the $12M list of projects. Ms. Christy
referenced the list contained in the handout as a
representative project list. The department chose to
prioritize the items as emergencies arose.
Co-chair Pearce asked if the department had received
deferred maintenance money in the 1993 budget. Ms. Christy
answered that maintenance funding had been combined with
renovation, repair and renewal money. Co-chair Pearce
requested a list of those maintenance projects included in
the 1993 budget.
Senator Rieger asked if the department provided for
allocation items under each appropriation item rather than a
representative list. Discussion followed among members and
it was agreed that a more specific list would be preferred.
Ms. Christy reiterated that the department maintained an on-
going list of needs, but the department chose to remain
flexible in its prioritization because of impending
emergencies.
SENATOR BERT SHARP asked if any changes in standards or
codes had resulted in the reduction of the capacity of any
of the facilities.
Commissioner Rupp answered that double bunk capability
increased capacity but in the area of recreation, medical
services, education and program space more space is needed
especially in light of the fact that facilities are running
at full capacity.
Co-chair Frank questioned the $1,500.0 requested for No. 3 -
Management Information System.
MICHAEL W. DINDINGER, Criminal Justice Planner, Division of
Administrative Services, Department of Corrections, joined
the committee at the table. He stated a partial offender-
tracking computer system used by the department was
purchased in 1980. It has been under evaluation since that
time and on January 31, 1993 a major upgrade was added. One
of the major problems with the system is that it was
designed to track and cannot be used as a data base. Mr.
Dindinger explained that the department's original request
was higher than $1.5M, but this funding provided for an
evaluation enabling the system to be more compatible with
other agencies within the state, to share data, tie in and
add more work stations around the state. He explained that
$1.5M handled the first phase and did not replace the
system. Prior to January 31, 1993, the system could only
list one offense per offender, but after the update it was
able list up to five offenses and the length of stay.
Co-chair Pearce had concerns regarding updating of computer
systems and asked if any firms in the lower 48 had looked at
the system. Mr. Dindinger said that four out-of-state firms
had looked at the existing system. Part of the evaluation
included an analysis by these companies. He explained that
because of sun spots the satellite feed experienced time
blocks, and data could become lost. He went on to explain
that Alaska was only one of four states that handles
sentenced felons, pre-trial misdemeanors, etc. The data
base system needs to be compatible with criminal justice
agencies such as the Dept of Law, Dept of Safety, etc.
Co-chair Pearce reminded the committee that each chairperson
of an operating budget subcommittee would have a later
hearing in order to go into more budget detail.
Co-chair Frank asked what the second phase would entail.
Mr. Dindinger said the second phase would be replacement of
the system. The cost is not yet available. Earlier
estimates amounted to $1M in hardware and $.75M in software
for a new system.
Co-chair Frank observed that the $1.75M for a new system
would be in addition to the $1.5M capital budget request.
He asked how the January 31, 1993 upgrade had been
accomplished. Mr. Dindinger answered that two department
programmers and a non-permanent programmer had been assigned
the upgrade.
Co-chair Frank asked if the $1.5M capital request provided
for computer programmer time. Mr. Dindinger explained that
the $1.5M included evaluation of the system, reprogramming
of the current system, and terminal access for on-site
offices which included some hardware. Co-Chair Frank asked
for an exact breakdown of the $1.5M request.
Senator Rieger asked what part of the $1.5M would be an RSA
to the Division of Information Services. He also asked how
many megabytes of information were contained in the system.
Mr. Dindinger said DOC had just begun to meet with DOIS.
Those costs had not been decided as yet. He said the system
contained 680,000 files, but he did not know the megabyte
capacity of the system and would send the information to the
committee.
Overview by the Department of Safety
Co-Chair Pearce invited Commissioner Richard Burton and
Kenneth E. Bischoff, Director, Department of Safety, to join
members at the committee table and proceed with the
department presentation.
COMMISSIONER BURTON directed attention to a handout entitled
"FY 94 Capital Budget Overview, Department of Public
Safety", (copy on file). He asked members to look at page 2
of the handout which gave a history of the department from
1984. This report excluded the Department of Transportation
because of federal funding in that department. He felt that
the Governor's budget request was not unrealistic, and he
pointed out he had asked for a higher budget because of an
expected major expenditure to replace several patrol
vessels. He explained the department's budget request
maintained or replaced existing facilities and equipment.
Co-Chair Pearce asked the committee to turn to page 10 of SB
50, "An Act making appropriations for capital projects; and
providing for an effective date", and asked for a brief
explanation of each line item.
Senator Rieger asked if the department would support a
change to a single license plate per vehicle to hold down
costs on line 16.
Commissioner Burton explained the cost savings would not be
significant. For the purpose of identifying vehicles in the
area of enforcement, two license plates are deemed very
important.
KENNETH E. BISCHOFF, Director, Department of Safety,
detailed line 17 enhancements as additions to the Anchorage
office such as partitions, signs directing customers and a
new telephone system. Included in that request was a $100.0
study proposing the use of bar code scanning devices to
retrieve information and the ability of customers to process
certain transactions at an auto teller machine.
In answer to Co-chair Frank's question regarding how an
emissions requirement would be handled, Mr. Bischoff said he
would supply that information to the committee.
Mr. Bischoff spoke to the department's forty aircraft,
annual maintenance, rebuilds, etc. He said the request on
line 19 would cover those expenses for FY94. He explained
some services were contracted out, and some maintenance was
carried in the operating budget. Line 20 would cover
similar expenses for FWP enforcement vessels.
Discussion followed between committee members regarding
vehicle and equipment service and maintenance, whether it
should be done within the departments or whether the State
should maintain this service by one department. Co-chair
Frank observed that backup for line 19 indicates funding
would be used only for contractual costs. Commissioner
Burton agreed that these maintenance items could not be
accomplished within the department.
Co-chair Pearce asked the commissioner to address line 22,
statewide law enforcement systems, in the amount of $1.8M.
Commissioner Burton asked Mr. Bischoff to explain how
critical the coordination of computer systems was between
the Dept. of Law, Dept. of Corrections, and the Court
system. Mr. Bischoff hoped that the committee would see
similar requests from those departments. Within the Dept.
of Safety, this request would maintain the Alaska Public
Safety information network and rewrite the management system
which contains approximately 22 million records, supports
2,600 users and also provides all motor vehicle processing.
He felt the Alaska criminal history data base was in poor
shape but the source of many decisions. After a data
quality audit of 300 million transactions, only about one-
third of those contained fingerprints and one-third
dispositions. At this time anyone accessing the system is
not provided all available information.
Co-chair Pearce wanted the legislature to be assured that
all systems would communicate with each other if the Dept.
of Public Safety, Dept. of Law, Dept. of Corrections and
Courts all receive funding for new computer systems.
Mr. Bischoff agreed that was a valid concern. He stated
that Congress appropriated $27M to the states to improve the
integrity and quality of criminal and police records
nationwide. Alaska received approximately $700.0 of that
appropriation. He explained there were no existing statutes
that provide for cooperation between agencies, but most
departments realize the importance of cooperation. He
believed the Governor's office was going to introduce
legislation, this session, addressing some of the mandatory
requirements between departments.
End SFC-93 #8, Side 2
Begin SFC-93 #10, Side 1
Commissioner Burton informed the committee that DOL was in
final review of the Governor's proposed legislation
providing for sanctions for city police departments and
other agencies throughout the State that do not cooperate
with state departments.
SENATOR JUDITH SALO asked how all the data processing would
stay organized, and what state agency would be responsible
for that. Mr. Bischoff said there was no guarantee that
statewide coordination would happen. A few years ago, a
council was formed and had limited success. Some
requirements of the system are dictated by the standards
needed to participate in national systems. He said a core
control group of working level people existed that tried to
make these systems talk to each other. At this time, there
is no policy making body to ensure that fact. The
Governor's proposed legislation provided for an advisory
group to the Commissioner of Public Safety to be used as a
sounding board for these issues.
Co-chair Pearce found it hard to believe the Governor was
going to create another advisory group. She instead
suggested the State hire a computer expert who would oversee
these issues.
Mr. Bischoff addressed line 23 at the direction of Co-chair
Pearce. He explained that this request for funding by
Alaska State Troopers for replacement equipment was for
revolvers, holsters, snow machines, video cameras, and other
tools used by law enforcement.
Co-chair Pearce asked what FWP bulk fuel storage tanks were
being replaced by line 24 and 25. Commissioner Burton said
he had asked DEC to pay for these tanks but was
unsuccessful. Mr. Bischoff reported that the locations of
the underground tanks were in Aniak, King Salmon, Bethel,
Kodiak and Soldotna. In answer to Co-chair Pearce's
question, he informed the committee that funding would bring
the tanks under compliance and it was his understanding this
would complete the department's responsibility for
underground tank replacements.
Senator Rieger asked the Commissioner to report to the
committee if the tanks would be replaced with above the
ground tanks.
Referencing line 25, Co-chair Frank questioned whether items
under $25,000 should be requested in the operating budget,
and if items over $25,000 automatically went into the
capital budget. He asked if OMB gave the department any
direction in that area.
Commissioner Burton agreed that items like revolvers and
license plates seemed more appropriate for the operating
budget. He said that to his knowledge there were no
guidelines available.
Mr. Bischoff informed the committee that indirect guidelines
were the caps that each agency received for its operating
budget and services needed to be prioritized within that
cap. He explained that if license plates were placed in
DMV's operating budget, field offices would have to be
closed.
Senator Salo asked for clarification regarding budgets. She
proposed, as the pressure on the operational budget became
more intense, items were shifted to the capital budget. Mr.
Bischoff agreed that in general that was true. The capital
budget was generally used for significant one-time costs,
and maintenance costs generally came under the operating
budget.
Senator Salo felt the repairs listed on line 19 should be
funded through the operating budget. Mr. Bischoff said it
was a matter of interpretation.
Co-chair Pearce asked OMB to provide guidelines for the
operating and capital budget for the committee.
Co-chair Frank asked DPS to provide several years of budget
history after noticing a drop of over $1M worth of
equipment. Mr. Bischoff answered that budget tightening
could have been responsible for some budget reductions.
Co-chair Pearce, after referencing line 27 & 28, Facilities
Renewal and Replacement/Deferred Maintenance, asked if DPS
kept a representational list of prioritized projects and if
the priority changed in case of emergencies. Commissioner
Burton said in budget preparation, he asked his agency
directors and managers to provide a list of priorities for
their respective departments. He also had available a list
of all state owned and leased properties.
Commissioner Burton directed attention to page 11, line 4,
Juneau Public Safety Building Code Upgrade/Modifications.
He said the Juneau building was built in 1970 for five-years
temporary use and was still being used. One-third of the
building was being used for office space and needed
renovation such as upgraded bathrooms, and handicapped
access.
Mr. Bischoff addressed line 6, Enforcement Vessel
Replacement, funding of $1M. He said it would begin to fund
the need to replace some of the agencies smaller aging
vessels.
Co-chair Pearce inquired concerning DOL's negotiations with
a fishery company which provided for two vessels for the
State in lieu of a fine. She asked if this vessel was the
one in question. Commissioner Burton said that because of
enforcement action taken last spring, the fishery company
was in negotiations with DOL and in lieu of a fine, may
provide two vessels for the State. He informed the
committee he was privy to some of the negotiations, and DOL
was to inform the president and speaker of the Senate of the
outcome. He understood that forfeiture legislation was in
the works and would find out when it would be submitted to
the legislature. He said, however, it would not effect line
6 funding.
Recess 10:40am
Reconvene 11:45am
Overview by the Department of Commerce
& Economic Development
Co-Chair Pearce invited Commissioner Paul Fuhs and Guy Bell,
Director, Department of Commerce & Economic Development, to
join members at the committee table and proceed with the
department presentation.
COMMISSIONER FUHS directed attention to a handout titled
"Department of Commerce & Economic Development FY 94 Capital
Budget", (copy on file). He said #1 requested $750.0 for a
three to five year transition from a Wang computer system to
a new system. He explained Wang Laboratories had filed for
bankruptcy and the department was forced to phase into a
more open computer system. Another capital request would
follow to accomplish the conversion of the data base to a
new system.
Senator Rieger asked how much data was contained in the
department's computer system and if it was a data based
system. GUY BELL answered that there were over 30,000
occupational licensees, 63,000 business licensees,
approximately 1,000 permits for games of chance and skill,
21,000 corporate records, 5,000 active security
registrations, 5,300 producer and 1,100 insurer licensing
files, and $230M of outstanding loans on file. He said it
was a data base system but used extensively and daily.
SENATOR TIM KELLY asked why the department was not using,
and could it return to, the State's mainframe computer. Mr.
Bell explained that in 1982 the department made the decision
to leave the State's mainframe, mainly because of charge-
back costs. He said the possibility of returning to the
mainframe could be investigated in regard to cost, etc.
Senator Rieger's main concern was the high cost of changing
from one computer system to another.
Mr. Bell stated that over 200 employees were using the
system, each of which needed a new work station. He
explained that the existing Wang work stations were not
compatible with any other system. It was estimated the Wang
system would last from five to ten additional years, and the
transition was planned to be complete in three to five
years. Four in-house computer programmers would perform the
changeover in systems.
Mr. Bell, in response to Co-chair Frank's question, said he
did not know how DOL and DOPS computer systems compared to
DCED's.
Commissioner Fuhs directed attention to item #2., Economic
Development Matching Grants. He said backup material
provided a list of projects funded in FY91. In general,
these projects would not be accomplished without the grant
funding.
Senator Salo asked if any evaluation data for FY91 projects
was available in order to see how those projects were
working. Commissioner Fuhs agreed to provide that
information and offered that all projects were operating at
the present time.
Senator Kelly asked for an explanation of the Dalton City
Tourism Project (Renovation of White Fang Set). Mr. Bell
said the White Fang set was being converted for use as a
tourist attraction in the Haines area.
Commissioner Fuhs hoped item #3., Small business Assistance
and Development, would get more attention in Alaska. The
Small Business Development Center, connected to the
University of Alaska, helps people write business plans,
marketing assessments, and gives technical assistance to
small businesses.
Commissioner Fuhs said item #4, Alaska-Japan Fisheries
Cooperation, for $45.0 was a minimum funding request and at
its lowest since it was initiated in 1985. It would cover
some meetings and exchanges between communities and medium-
sized Japanese companies working in community development
programs and assisting with by-catch species. He felt the
program was of value because other countries, like Japan,
would look to the state government's involvement in
fisheries.
Co-chair Pearce asked if there was any connection between
this program and personnel in the Tokyo office. Mr. Bell
answered that the offices would work together, but there was
no direct connection.
(Co-chair Pearce announced the Department of Education
Overview would be rescheduled until Monday, February 8, at
9:00 a.m.)
Commissioner Fuhs directed attention to item #5, Gold Rush
Centennial Celebrations. He said this celebration was
similar to the Gold Rush '92 program which brought people up
the highway. He felt the program was a good investment
because tourist dollars were spread out more around Alaska
and benefited more small Alaskan businesses.
Co-chair Pearce asked if the department could provide a list
of celebration grant applications by local communities to
see what sorts of grants this funding would accomplish.
Commissioner Fuhs agreed to give the committee specific
examples of this kind of celebration funding. He added that
the department had specific examples of money spent from the
1992 Alcan Highway celebration experience.
CONNEL MURRAY, Director, Division of Tourism, Department of
Commerce and Economic Development, provided background.
Beginning in 1986, a reasonable increase of traffic over the
highway occurred as a result of the world's fair in
Vancouver. In 1988-89, the department spent almost $1M
advertising the 50th anniversary of the Alaska highway.
Last year, Alaska realized an increase in highway visitation
of 14 percent. He stressed how important the independent
traveler was to smaller operators, lodges, etc. He felt a
series of events beginning in 1996, the anniversary of the
discovery of gold in the Klondike, could keep the highway
use momentum going. Local communities have already
organized, or were in the process of organizing, local gold
rush committees. He informed the committee that a federal
cooperative grant had been filed with Seattle Convention and
Visitors Bureau. The capital request would not include
marketing, and money from the operating budget would be used
to sell the events.
Co-chair Pearce asked if the Yukon could be involved in the
funding of this celebration. Mr. Murray answered that the
Yukon and British Columbia were both involved in the
marketing program.
Commissioner Fuhs stated Alaska had one-sixth of the coal in
the world. He said there was new technology that allowed
coal to burn cleaner. This funding would be used for test
shipments of Alaskan coal to confirm the suitability of the
coal for new technology and new markets. The other new
prospect for Alaska coal is coal-water fuel which replaces
no. six fuel oil. This fuel is easier to transport and if
it was spilled, would not be a polluting toxic substance.
In answer to Co-chair Frank's question, Commissioner Fuhs
stated most of the coal was on State land, some on mental
health lands and some on Arctic Slope Regional Corp. land.
Co-chair Frank asked how the department's initiative fit
with the private sectors' initiative to develop coal.
Co-chair Pearce announced there would be a subcommittee
meeting on the subject of coal development. Commissioner
Fuhs suggested Ron Garzini, Interim Executive Director,
Alaska Energy Authority and Chris Gates, Director of
Economic Development, both top state coal authorities, be
available for that briefing.
Discussion followed regarding the relationship of state
marketing and private development.
Co-chair Pearce asked if the railroad had helped with coal
development. Discussion followed regarding railroad issues
including fees, the hotel development and their tax exempt
status. Co-chair Pearce announced that the railroad
authority would be invited to come before the committee to
speck to these issues.
Co-chair Pearce invited Ron Garzini, Interim Executive
Director, and David Denig-Chakroff, Director, Rural
Programs, Alaska Energy Authority to join members at the
committee table and proceed with their presentation.
RON GARZINI directed attention to the handout titled
"Financially Restructured Alaska Energy Authority FY94
Capital Budget Request Summary" (copy on file). He stated
the programs would be addressed in order of priority. He
wanted the committee to know the department was putting an
emphasis on rural management and training in advance and
consistent with the capital projects.
Under "Umbrella" programs, DAVID DENIG-CHAKROFF spoke to the
energy problems in rural Alaska. He stated the department's
goal for rural communities was three part. The first was to
eliminate and prevent emergency situations and improve life,
health and safety situations as related to energy
facilities; secondly, to implement capital substitutions for
energy projects that would create better efficiency and
lower cost power; and thirdly, improve management of rural
energy projects and utilities. He then described the
individual programs in relation to these goals.
Mr. Denig-Chakroff explained that A-1, Operation, Technical
and Emergency Assistance was the basis for the rural
technical assistance program. The goal was to train
utilities in better business management as well as technical
operations and maintenance practices. He said that since
this training had started, no power related emergency had
been declared a state emergency. A-2, Electrical System
Life, Health and Safety Improvements request was reduced
because work in this area had been accomplished. It
included correcting problems in wiring, inadequate
grounding, fire violations, etc.
Mr. Denig-Chakroff said funding for A-3, Rural Utility
Regionalization, Consolidation and Business Management
Training would help the utilities become more self-
sufficient and less state funding would be required. He
said this program would be closely coordinated with DEC,
DC&RA and some federal programs. In answer to Co-chair
Pearce's question, he said A-3 would not help fund two
positions for DC&RA.
Co-chair Pearce asked if one document existed that addressed
each department's responsibility and how the coordination
was taking place. Mr. Garzini voiced his support for this
coordination between departments and hoped the appointment
of Commissioner Blatchford, Commissioner Sandor and himself
as the state's representatives to the Rural Development
Council would help accomplish that. He felt management
should be in place before capital improvements.
Senator Kelly asked why A-3 was in the capital and not the
operating budget. Mr. Denig-Chakroff stated the department
believed utility consolidation and business management
training could be completed in a year or two and would
identify a number of rural utilities that should be merged.
He pointed out that in some instances, the department has
declined further assistance until the utility joins a
professional organization of its choice.
Mr. Denig-Chakroff directed attention to A-4, Rural Power
Systems Upgrades funding. He explained this was a
continuation of an on-going program addressing upgrades of
systems by replacing old generators or improving
distribution systems to more efficient voltages to prevent
line losses. He pointed out one of the problems of rural
communities joining existing utilities was that the
utilities would not want to take on a community that had
existing problems.
Mr. Denig-Chakroff directed attention to A-5, Emergency Bulk
Fuel Repairs/Prevention, providing follow-up from a
completed assessment. He said A-5 funded emergency repairs
discovered in the assessment. He pointed out funding for
major upgrades or environmental rehabilitation on existing
systems was covered in A-7, Bulk Fuel System Upgrades.
Mr. Denig-Chakroff directed attention to A-6, Statewide
Electric and Power Project Development, which would identify
the capital substitution projects and small hydro-projects s as
discussed under item A-3.
End SFC-93 #10, Side 2
A tape is not available for the rest of the meeting.
Mr. Denig-Chakroff discussed A-8, Alternate and Applied
Energy Technology Development listing small hydro projects,
wind projects, coal and hybrid systems, etc. under research.
Senator Rieger asked if any loans or grants were available
for research funding. Mr. Garzini affirmed that AEA looked
to local efforts, federal money and grants for funding. In
answer to Senator Rieger's question regarding appropriations
from the general fund to the AEA, Mr. Denig-Chakroff stated
legislation was being introduced regarding this issue.
Mr. Garzini reported that A-9, Energy Conservation
Management-State-Funded Facilities, addressed rural Alaska.
AEA, working with DOT, would put together a program of state
investments to be made for energy efficiency.
Mr. Garzini directed attention to B-1, Reimbursable
Authority, and B-2, Component Renewal & Replacement-AEA-
Owned Facilities. He said facilities were aging and the
reserve would service power lines, power houses, etc. He
pointed out that funds must be appropriated through the
legislature. In answer to Senator Rieger's question
regarding the four-dam pool, he explained a fund was set up
with utility money, and capital improvements are decided by
a vote of the four-dam committee.
Under specific projects, Mr. Garzini outlined the Snettisham
acquisition; Railbelt, St. Michael-Stebbins, Sutton-
Glennallen, and Southeast interties feasibility studies;
Tazimina and King Cove Hydroelectric projects; and coal
initiatives. He also provided a handout restructuring plan
for the railbelt energy plan.
ADJOURNMENT
The meeting was adjourned at approximately 12:00 p.m.
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