Legislature(1993 - 1994)
02/09/1993 09:00 AM Senate FIN
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MINUTES
SENATE FINANCE COMMITTEE
February 9, 1993
9:00 a.m.
TAPES
SFC-93, #25, Side 1 (288-end)
SFC-93, #25, Side 2 (559-360)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:00 a.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Kelly,
Kerttula, Rieger, and Sharp were present. Senator Jacko did
not attend.
ALSO ATTENDING: Jerome Komisar, President, University of
Alaska; Wendy Redman, Vice President for University
Relations, University of Alaska; Marsha Hubbard, University
of Alaska; Mike Greany, Director, Legislative Finance
Division; Nancy Slagle, fiscal analyst, Legislative Finance
Division; and aides to committee members and other members
of the legislature.
SUMMARY INFORMATION
CAMBRIDGE ENERGY RESEARCH ASSOCIATES
Co-chair Pearce requested committee approval of a
contract with Cambridge Energy Research Associates
for oil price analysis and forecast. A contract,
not to exceed $17.5, was APPROVED.
SB 50 - Act making appropriations for capital
projects; and providing for an effective date.
Capital Budget Overview was conducted for:
UNIVERSITY OF ALASKA
Cross reference - The FY 94 capital budget was ultimately
incorporated within HCS CSSB 183 (Fin).
HCS CSSB183(FIN) - Act making special appropriations for
restoration projects relating to the Exxon
Valdez oil spill and for oil spill response
projects; making appropriations for capital
project matching grant funds; making
appropriations for capital projects; making
an appropriation to pay judgment, interest,
and attorney fees for Frontier Flying Service
v. Turpin; and providing for an effective
date.
CAMBRIDGE ENERGY RESEARCH ASSOCIATES
Co-chair Pearce directed attention to a proposed contract
with Cambridge Energy Research Associates and called for a
motion for approval. Senator Kelly MOVED to authorize the
director of Legislative Finance Division to enter into a
sole source contract, not to exceed $17.5, with Cambridge
Energy Research Associates for oil price forecasting
services on behalf of the House and Senate Finance
Committees. Co-chair Pearce advised that the House had
agreed to share the cost. She further noted that the
legislature would request a 10% reduction in the contract
price.
Senator Kerttula inquired concerning what Cambridge would be
doing on behalf of the committee. Co-chair Pearce explained
that the committee would receive the quarterly "World Oil
Watch," oil reports and fax alerts, two seats at the
conferences, and regular phone access to the yearly
conference call. Cambridge will be on retainer for a year,
but representatives will not be coming to Juneau. Senator
Kerttula spoke to past concerns with and benefits derived
from Cambridge information. He questioned the value to be
obtained from sending a legislative representative to
Cambridge conferences in Houston, Texas. Co-chairman Pearce
concurred, advising that while the committee would have
access to the conferences and would review any requests to
attend, a request was not likely to be favorably considered.
Co-chair Pearce called for further discussion on the motion.
None was forthcoming. The Co-chairman called for a show of
hands for approval. The motion CARRIED on a vote of six to
zero, and Legislative Finance Division was directed to go
forward with the Cambridge contract.
UNIVERSITY OF ALASKA
DR. JEROME KOMISAR, President, University of Alaska, came
before committee. He explained that the capital budget for
the University is divided into a number of parts. The first
two respond to legal requirements. Repairs to bring
buildings and structures to code compliance are of primary
importance. A number of older buildings need repair for
life safety reasons. All of them are located on the
Fairbanks campus. The University originally requested over
$6 million for code compliance. A further element of this
need responds to federal American Disabilities compliance.
The current request represents approximately half of what
will ultimately be needed to meet federal legislation.
The $34 million request for deferred maintenance, the second
item in the budget, is part of a five-year plan to bring the
physical plant up to acceptable standards.
The third element relates to building completions. A number
of University buildings are under construction or incomplete
in terms of total use. The $24 million responds to this
problem and includes space in Anchorage, MatSu, the system
office at Fairbanks, and Southeast. It also includes
completion of the natural science building and greenhouse in
Fairbanks.
The fourth item is need to bring equipment for both teaching
and research up to discipline standards. That has become of
greater and greater priority within the University since the
gap has not been filled for a number of years. Dr. Komisar
spoke specifically to need for phase I of a fiber optics
project at the Anchorage campus. He explained that it is
slated to develop computer communications across the campus
to tie in both faculty and students and provide a level of
communication that is standard at most universities and
colleges.
The fifth item would provide construction for growth.
Projects included within the $25.8 million request are the
most immediate in terms of meeting growing demands upon the
University. The first priority is completion of an aviation
technology building. It entails an addition to an existing
structure. This involves a matching arrangement. The
University has received close to $7 million in federal funds
through the FAA. The program will be vocational and
technical. It has great appeal to Alaskan students. There
is a waiting list for entry to the program, and an immediate
and very large job market is available to graduates.
Dr. Komisar further spoke to the proposed upgrade of the
Anchorage science building, land acquisition, and an
addition to the Bristol Bay campus at Dillingham.
The final area of capital requests relates to planning for
growth. It covers projects the University has identified as
a need, for which detailed study should begin immediately.
Capital budget needs total $107 million, considerably more
than the $19 million allowed by the Governor. Part of the
difference is that the deferred maintenance request is being
considered for bonding rather than direct appropriation.
The $33 million for deferred maintenance has thus been
removed from the list.
In response to a question from Senator Kelly, Dr. Komisar
said that bonds would be issued through AHFC. Authority to
issue such bonds would have to be authorized by act of the
legislature. Senator Kerttula asked if annual payments
would then be made on the bonds. Dr. Komisar advised of
alternatives. The legislature could appropriate needed
payments each year, or AHFC could utilize some of its income
for bond payments. Senator Kerttula requested backup
evidencing AHFC's ability to make the payments.
Dr. Komisar explained that as a self-help approach to
capital needs, the University purchased a building in
Anchorage to ease the demand for space. It is also looking
at creative ways of obtaining physical structures for
campuses. The University hopes to construct a research
facility at Fairbanks that would be paid for through
indirect cost recovery (federal contracts). The facility
will also house some federal agencies. In dealing with need
for additional dormitory space, the University has
considered attempting to tie in with the hotel industry to
construct something that could be used by tourists in the
summer and available to students for the academic year.
Senator Kerttula spoke to utilization of campus facilities
during weekends and urged that the University meet the needs
of students who pattern their time toward weekend
educational opportunities.
Dr. Komisar concurred in need for greater utilization of
space. He stressed, however, that new space sought by the
University is "specialized space." Anchorage campus needs
relate to library and scientific space. Once scientific
needs are met at Fairbanks, there will be additional need
for research areas.
Senator Rieger inquired concerning what led to the June 17,
1991, fire marshal inspection which gave rise to requested
funding to meet code upgrades. Dr. Komisar attested to
routine inspection of state facilities by the fire marshal.
He further advised that code compliance questions had been
raised prior to the inspection. Senator Rieger raised
questions regarding whether failure to achieve code
compliance put administrators, faculty, and students in
danger. Dr. Komisar observed that when he arrived at the
University, negotiations with the fire marshal had been
ongoing. Following fire marshal review, the initial dollar
figure was much higher than the requested $6 million. That
amount reflects negotiations and focus upon the most
critical aspects.
Senator Rieger questioned the critical nature of $617.0 for
fencing around the large animal research station. Dr.
Komisar responded that a strong fence is needed for musk ox
and caribou.
Co-chair Frank concurred in concern that the state always
seems to be reacting to orders from the state fire marshal.
He acknowledged that the legislature presumably passes laws
adopting updated building and fire codes. The Dept. of
Public Safety then attempts enforcement. He suggested it
would be helpful to hold a hearing with the fire marshal for
a better understanding of why buildings later need to be
brought to code when they were built to code in the first
place. He further suggested there may be a means of
altering the fire code, within responsible bounds, so the
state would not expend moneys for upgrades that do not
relate to life-threatening or dangerous situations. Senator
Rieger concurred.
Senator Kerttula suggested that the committee also
investigate minimum requirements for meeting American
disability compliance, suggesting that some attempts to do
so have been greatly overdone.
Co-chair Pearce inquired regarding the technical process
involved in developing dollar figures for capital requests.
Dr. Komisar advised that the University construction office
prices all requests.
End, SFC-93, #25, Side 1
Begin, SFC-93, #25, Side 2
Co-chair Pearce asked if University facilities would be
included within the executive order placing maintenance of
state buildings under the division of facilities management
within the Dept. of Transportation and Public Facilities.
Dr. Komisar said that the University was invited to
participate in discussions. He then voiced his belief that
it would be important for the University to continue to
build and maintain its own facilities.
Speaking to code compliance, Dr. Komisar observed that
foregoing questions raised by committee were also raised by
the board of regents. He concurred in the suggestion that
the committee meet with the fire marshal.
In response to a question from Senator Frank, concerning
funding for the nature conservancy, MARSHA HUBBARD,
explained that the project was added by the Governor.
Funding for contaminated site cleanup at the University of
Alaska, Fairbanks, reflects submission of a capital request
to the Dept. of Environmental Conservation. DEC then
budgets the effort. In this instance, the Governor elected
to place the funding in the University budget rather than
under DEC. The 470 funds would be utilized for cleanup of
the University equipment yard and physical plant. Funding
would provide for an assessment. DEC indicates that actual
cleanup would cost approximately $2 million.
Discussion followed between Senators Kelly and Frank and Ms.
Hubbard regarding benzene contamination.
Pointing to the request for classroom improvements and
remodeling at UAA, Co-chair Pearce noted that the original
$2.2 million request was reduced to $1.2 by the Governor.
She then asked what would not be done because of the
decrease. Dr. Komisar said that the University would be
unable to transform all vacated space. It would spread the
money as far as it can in increasing classroom space. The
Co-chair requested a list of projects to be undertaken with
the reduced funding.
Senator Rieger inquired concerning University policy for
small computer purchases. Marsha Hubbard indicated that a
general bid is issued. Responding to an additional
question, Dr. Komisar explained that the type of computer
varies. There is standardization within the administrative
function. Variation occurs on the academic side where
different types of computers better fill specific needs.
Co-chair Pearce noted reduction of the fiber optic request
from $1.3 million to $530.0. She then asked for information
on what would be accomplished under the reduced sum. Marsha
Hubbard answered that three central hubs would be built.
She also agreed to provide additional information.
Responding to an inquiry from Senator Sharp, Dr. Komisar
explained that the $600.0 in general funds for the aviation
technology center relates to planning for completion of the
facility rather than to construction. The $10.1 million
match with the $6.7 million federal grant would have
provided both planning and construction funds. Federal
moneys will not be available until the University has the
needed matching funds. The proposed addition is estimated
to cost approximately $17 million.
In reply to a question from Co-chair Pearce, Ms. Hubbard
advised that the University received $300.0 last year. With
that funding, the current $600.0 request, and authority for
the federal funds, the University could be bid-ready for
next year should the state match be forthcoming. The match
is approximately $10.00 of state funds for $7.00 federal.
The Co-chair then asked if it would make sense to expend
state moneys to replace current lease space. Dr. Komisar
answered that funding would not only replace lease space, it
would also enable the University to enlarge the program.
The fact that the program would be at one location would
also be more efficient.
Senator Frank voiced his understanding that the Governor was
intent upon finishing unfinished buildings. He then
questioned the proposed expansion for the aviation program.
Dr. Komisar noted that the Governor did not allow
construction moneys. He merely provided for planning. Dr.
Komisar stressed the importance of the aeronautical program.
Alaska is one of two or three locations nationwide where air
traffic controllers are trained and can immediately commence
on-the-job training in airports. That is quite an
achievement. Dr. Komisar stressed the importance of the
industry in Alaska. Co-chair Pearce requested an expanded
project description with associated justification. She
further asked for information on lease space cost
effectiveness versus adding on to the present building.
Senator Rieger raised a question regarding the $6.8 million
for completion of the Butrovich Building. Dr. Komisar said
that the building was originally constructed in 1985.
Thereafter, various constructions at the facility "dribbled
along." The Butrovich Building provides a good case history
of "how not to put up a building." Last year $3 million was
provided for redesign and construction of the basement to
house the super computer. Senator Kerttula noted that the
issue of the super computer has led to a serious problem of
distribution of significant federal funding. He voiced
support for the computer and stressed its value to both the
state and Alaskan students. Federal funding will,
unfortunately, be distributed to other universities.
AGENCY-WIDE COMPUTER REQUESTS
Co-chair Pearce advised that a compilation of computer
system requests totals $19.5 million. She suggested that a
subcommittee work with the Office of Management and Budget
on the issue and asked that Senator Rieger head the effort.
STATE FIRE MARSHAL
Co-chair Pearce asked that Senator Rieger, chairman of the
subcommittee for the Dept. of Public Safety budget, schedule
an appearance of the state fire marshal before the
subcommittee and notify the full Finance Committee
membership of that scheduling. Members wishing to pose
questions to the fire marshal may then do so at that time.
ADJOURNMENT
The meeting was adjourned at approximately 9:55 a.m.
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