Legislature(1997 - 1998)
03/28/1998 09:15 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
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MINUTES SENATE FINANCE COMMITTEE 28 March, 1998 9:15 a.m. TAPES SFC 98 # 104, Side A (000-593) Side B (593-000) Side B (590-214) CALL TO ORDER Senator Bert Sharp, Co-Chair, convened the meeting at approximately 9:15 a.m. PRESENT In addition to Co-Chair Sharp, Senators Pearce, Adams and Parnell were present when the meeting was convened. Also Attending: ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor; JOAN BROWN, Budget Analyst, OMB; DWAYNE PEEPLES, Division of Administrative Services, Department of Corrections; JOE REEVES, Deputy Director/ASM, Division of Administrative Services, DOC; KAREN REHFELD, Director, Division of Education Support Services; Department of Education; KAREN CRANE, Governor's Advisory Council on Libraries, Division of Libraries, Archives and Museums, DOE; EDDY JEANS, Manager, School Finance Section, DESS, DOE; DIANE BARRANS, Executive Director, PostSecondary Education Commission, DOE; KEITH KELTON, Director, Division of Facility Construction and Operations, Department of Environmental Conservation; MIKE BURNS, Section Chief, Municipal Grants and Loans, DFC&O, DEC; ALICE EDWARDS, Advanced Technology and Development, Environmental Specialist, Air Quality Improvement, Division of Air and Water Quality; DEC; KURT FREDRIKSSON, Director, Division of Spill Prevention and Response, DEC; JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services; KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Military and Veterans Affairs and Department of Natural Resources; JEFF JAHNKE, State Forester, Division of Forestry, DNR; TRACI CRAMER, Member, Exxon Valdez Trustee Council; MIKE GREANY, Director, Division of Legislative Finance; JIM HAUCK, Fiscal Analyst, DLF; and aides to committee members and other members of the Legislature. via Teleconference: from Seward: FRED ESPOSITO, Director, Alaska Vocational and Technical Education Center; from Anchorage: JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation; CURT FREDRICKSON, Food Safety Laboratory, DEC; RANDALL BURNS, Director, Alaska Psychiatric Institute, Division of Mental Health and Developmental Disabilities, Department of Health and Social Services; DEAN BROWN, Deputy Director, Division of Forestry, Department of Natural Resources; from Kenai: JIM HARPING, Division of Emergency Services, Department of Military and Veterans Affairs; from Fairbanks: MILT WILTSE, Director, Division of Geological and Geophysical Surveys, DNR; from Matsu: ROBERT WELLS, Director, Division of Agriculture, DNR; SUMMARY INFORMATION Note: tape malfunction on tape #104 - some discussion lost SENATE BILL NO. 230 "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." SENATE BILL NO. 231 "An Act making and amending capital appropriations and reappropriations and capitalizing funds; and providing for an effective date." The purpose of this meeting was to hear testimony from departments on the Governor's proposed FY99 Capital projects and the Mental Health Trust Fund projects. Co-Chair Sharp announced that the departments giving presentations today would be as follows: Department of Corrections; Department of Education; Department of Environmental Conservation; Office of the Governor; Department of Fish and Game; Department of Health and Social Services; Department of Military and Veterans Affairs; and Department of Natural Resources. Co-Chair Sharp clarified comments made during the March 21 meeting on these bills regarding the AIDEA funds. He stated the intent of the committee was not to automatically shelve projects with AIDEA fund assignments. The committee however would not be granting any AIDEA funding. He encouraged departments with AIDEA-slated projects to prioritize all their requests and the committee would attempt to address the most critical projects and secure funding regardless of their original fund assignments. They would make an extra effort to include those projects that are of high priority. He noted that those currently designated AIDEA projects would face challenges but wanted to reassure that the projects could still go forth with other funds. The committee started by hearing testimony from the DEPARTMENT OF CORRECTIONS on their projects listed in the FY99 Capital Budget packet. DWAYNE PEEPLES and JOE REEVES were invited to come to the table and speak on behalf of DOC. First to be addressed was DEFERRRED MAINTENANCE, REPAIR, RENEWAL AND REPLACEMENT. Mr. Peeples told the committee the request was for $800,000 General Funds for an emergency maintenance repair fund from which they fund three staff. Senator Phillips asked why the staff positions were included in the Capital budget rather than the Operating budget. Mr. Peeples responded that because the work the employees were doing was primarily Capital projects, their positions were funded from the Capital budget. Co-Chair Sharp asked what the project was funded in FY98. Mr. Peeples informed him the amount was $900,000. The second DOC request was CRIMINAL JUSTICE INFORMATION SYSTEM INTEGRATION. Mr. Peeples testified the main purpose of this project was to make it possible to effectively manage the operational, budget, and planning activities of the DOC. A written statement was included in the budget request and it said: "This includes: creating and maintaining applications necessary to manage; presentence investigations, bookings, custody, classification, time accounting, probation, parole, furlough, program participation, inmate case management, medical records, inmate property accounts, release transactions, automated notifications to victims, communities, and other law enforcement agencies, sex offender registration, transportation, as well as providing the databases needed for budgeting, accountability, and planning purposes for the agency. The second purpose of this project is for the DOC to be a full partner in feeding information to the Comprehensive Criminal History Repository, being developed cooperatively by the departments of Law, the Courts, Corrections and Public Safety, and maintained by the Department of Public Safety." "The third purpose of this project is to allow the DOC to meet legal, statutory requirements for reporting offender information to other agencies such as: the Immigration and Naturalization Service, the Child Enforcement Division, and the Permanent Fund Dividend Program." "The DOC has in place, WAN/LAN operations at all 32 of its work sites, and is currently reviewing the database needs to replace its old "OBSCIS" system. These funds would help the agency finalize its replacement of the old system and help cover the purchase of LAN replacement equipment as necessary." Mr. Peeples said the department was working with the State of Utah to integrate the system their corrections department was using. This new system would streamline operations. He indicated DOC had applied for federal funding to make this possible. They would know by the end of this year whether they had been granted the funds. He told the committee this would be an on-going project. Co-Chair Sharp noted the wording in the program proposal saying, "will help complete." He wondered if this request, if granted, would be the only funds needed, or would the department be coming back in future fiscal years for additional funding for this project. Mr. Peeples responded that it depended upon the federal funding. He speculated that if DOC received the federal receipts, there would be no need for additional monies from the State. The committee moved to the next DOC project, CORRECTIONS REPLACEMENT EQUIPMENT. Mr. Peeples summarized the purpose of this on-going project, which was to replace essential security, live/safety, medical and roads/grounds maintenance equipment throughout all work sites in the agency. The following written statement was submitted to the committee by the department: "The DOC has approximately $16.5 million in state-owned equipment assets. Replacement of old and worn out equipment has been deferred for many years; however, further deferring this replacement will reduce security, decrease food service, and other day-to day operations capability and require repairs which are not as cost effective." "This project funds the replacement of antiquated capital equipment at institutions throughout the state. It also included some new purchases of necessary maintenance, grounds keeping, snow removal, and kitchen equipment. All institutions operate 24 hours a day, 365 days per year, This equipment is used constantly and continually. Their sustained usage requires budgeting for routing replacement of old and worn out equipment every fiscal year." There were no questions by committee members and they moved to the fourth item in the DOC budget packet, DATA PROCESSSING TECHNICAL SUPPORT. Mr. Peeples explained that this project would use $300,000 in federal receipts to provide personal services funding for the agency's WAS/LAN data and word processing technical staff for FY99. The written comments the department provided said: "In FY97, the agency was authorized additional micro/network computer technicians and specialist to support the new management information system development and operations using federal funding received from the federal Criminal Alien support program. This project provides the continuation of the federal funding program support for the positions in FY99." "The agency has completed wiring and hardware infrastructure development of a new wide area network (WAN) and local area networks (LAN) management information system (MIS) throughout all 32 agency work sites. The micro/network computer positions provide critically needed program support to these new WAN/LAN systems. Without the funding for the positions, the agency could not maintain these MIS database operations and would fail to meet responsibilities to the coordinated statewide criminal justice information system and other state, federal and local reporting requirements." Mr. Peeples said the department qualified for the federal Alien Act funding because of the non-citizens the department was holding in the system. Co-Chair Sharp noted how five positions were supported with these federal funds. The committee then addressed the final DOC request, COMMUNITY JAILS SECURITY AND EXPANSION PROJECTS. Mr. Peeples told the committee how DOC was under contract with local governments for 15 jails across the state. If this request was granted, he said the monies would be used for maintenance of the existing facilities and possibly to fund new ones. The budget packet contained written comments on this item, which said: "Local governments operate community jail facilities in 15 statewide locations. The DOC contracts with each local government to house prisoners who are held under State charges. Most of the locations have facility needs; however, five currently involve immediately needed fire/life safety requirements and expansion efforts are currently being reviewed in another three areas: Dillingham $40.9 Renovation and Remodeling; Haines $11.2 Renovations; Seward $17.8 Renovations; Sitka $5.0 Intercoms; Wrangell $5.1 Miscellaneous safety equipment; $120.0 miscellaneous statewide locations, life safety/security items to address expansion of current contract jail locations. Currently reviewing Toksook Bay, Hoonah, and Hooper Bay for expansion of community jail locations." Co-Chair Sharp wanted to know if in the past, the state provided funds for these projects. Mr. Peeples replied DOE had been working with the communities for the past two years. This concluded the presentation by DOC. Co-Chair Sharp announced items included in the supplemental budget packet would be taken up at next Saturday's meeting. The committee invited DEPARTMENT OF EDUCATION representatives to come to the table and speak to their requests included in the FY99 Governor's Capital Budget book. KAREN REHFELD outlined the different requests and said they would give presentations in a different order than listed in the budget packet. She introduced KAREN CRANE who was present to answer any questions the committee may have regarding the library- related items, which were to be addressed first. Ms. Crane gave a brief history of the funding sources used by the Division of Libraries, Archives and Museums for LIBRARY MATERIALS, the first item addressed. She expanded on a written statement included in the budget packet, which read, "Until FY96 library materials were funded from capital funds. Originally funded at about $350.0 a year, this amount was reduced in the 1990's, until in FY96, the State Library received no funds. IN FY97, the Governor's operating budget included $200.0 for materials but this was reduced to $100.0 by the Legislature. The State Library cannot buy even the critically essential materials to serve the needs of agency and legislative staff. Periodical prices have risen 150% in the past 10 years; book prices 80%. It is most cost effective for the state to centralize information services, but the State Library can respond to agency needs only if it is able to acquire the needed materials. This Capital amount is critical to meeting these needs." She explained this statement as basically saying that because the program was only funded at 50% in the operating budget, the division was asking for the remaining $100,000 granted from the capital budget. She told committee members that because of the shortfall in recent years, the library had been unable to purchase important historical records. She gave as an example, a collection of materials once belonging to Joe Juneau that the library was able to purchase in the past. Without this additional funding, the library would not be able to make similar purchases, which she described as vital to the history of the state. By granting the capital budget request, Ms. Crane emphasized, the library would be able to keep pace with periodical material and also purchase historical material. Co-Chair Sharp asked for clarification that the FY99 operating budget contained a request of $100,000 for this project. Ms. Crane agreed that amount was being requested. The second DOE item to be addressed was AVTEC FOOD SERVICES BUILDING - ROOF, RENOVATION AND UPGRADE. FRED ESPOSITO was linked to the meeting via teleconference and spoke to this request. He told committee members that this building located on the Alaska Vocational and Technical Education Center campus was in various states of disrepair. Among other problems, the roof leaked. The DOE was asking for $100,000 in FY99 for this planned, phased project. This request would fund the repair of major roof leakage in one AVTEC Food Services classroom, the cafeteria, and kitchen for a total of 9,400 square feet. There were no questions on this request and the committee moved ahead to LIBRARY - STATEWIDE LIBRARY ELECTRONIC DOORWAY [SLED]. A written statement in the Governor's proposed budget packet explained SLED as follows: "Through a cooperative venture between the University of Alaska Fairbanks and the State Library, SLED provides Internet access to communities across Alaska. SLED provided access to a wide range of materials, including the legislature and its on-line information,; basic government, education, medical and legal information; and major library collections in Alaska and the United States, including the holdings of the Library of Congress. This access reduces the information inequities between the urban and rural areas of Alaska. Since its inception in FY95, SLED has received funding from the state, libraries, and the private sector." Ms. Crane told the committee members that most rural communities had access material through SLED because they did not have Internet capabilities. She said most of the money required to operate this on-going program went toward telecommunication costs. She added that SLED received about 1700 "hits" per month. Co-Chair Sharp asked if this request was also included in last year's Governor's packet. Ms. Crane replied that it was. Ms. Rehfeld began discussion on the next DOE request, VOCATIONAL REHABILITATION HOME MODIFICATIONS FOR INDIVIDUALS WITH DISABILITIES. She told the committee the $150,000 requested here would be used to provide grants to non-profit organizations for home modifications for individuals with disabilities throughout the state. If approved, this would be considered a new, on-going project. She spoke of the importance for many individuals with disabilities to remain in their own homes and live independently. DOE included written comments, which said, "These modifications will enable the individuals to continue to live in their homes independently and, in some cases, will enable individuals to go to work. Without basic living needs addressed first the individuals cannot consider employment." Co-Chair Sharp asked why this program would be run through the DOE. Ms. Rehfeld answer was that the Division of Vocational Rehabilitation is part of DOE. Senator Parnell wanted to know if other funding for this project was provided through the Alaska Housing Finance Committee. Co- Chair Sharp said there was other funding for similar projects. Senator Parnell noted that he was aware of other grants issued by AHFC for home modifications. Ms. Rehfeld said she wasn't familiar with AHFC programs and could not speak to the issue. Co-Chair Sharp told the committee they would get more details on AHFC programs at a later meeting and concluded the discussion on this budget request. The final item in the DOE request was ALASKA COMMISSION ON POSTSECONDARY EDUCATION COMPUTER REPLACEMENT. DIANE BARRONS came to the table to testify for this item. She started out by bringing a budget modification to the committee's attention. She said $63,000 of the original request was devoted to other data. The PostSecondary Education Commission was able to work out an agreement with Division of Motor Vehicles to tag those functions onto their system. Therefore, they would no longer need those funds. The remainder of the funds would be used to "upgrade and replace computer equipment to enhance delivery of postsecondary education finance programs to consumers," according to the written comments included in the budget packet. Other included comments said, "Essential Equipment - During FY96 the agency successfully converted to a new data processing system. This system places many highly manual administrative processes with an automated paperless system. Further, automation and efficiency is possible if staff is properly equipped with appropriate equipment. This capital project allows continuation of the agency's five- year replacement plan by upgrading and replacing its local area network peripheral equipment to current technology. This will allow continued development of LAN based subsystems to speed the delivery of the agency's education finance programs to its constituents. Items purchased with this capital project include: PCs; printers; and a modern e- mail system." This concluded the presentation from DOE on their budget proposals for FY99. The committee then took up the requests from the DEPARTMENT OF ENVIRONMENTAL CONSERVATION. KEITH KELTON AND MIKE BURNS spoke to a group of budget requests that would fund the VILLAGE SAFE WATER PROJECT. The department provided a written statement explaining the project that read, in part: "The Village Safe Water priority list proposes funding for projects as follows: Federal Receipts (EPA) $11,843.3 General Fund 8,081.1 AK Housing Finance Corp 16,351.0 Total $36,275.4 In addition, the list identifies federal funding from the Rural Development Administration for $10,000.0. These funds are awarded directly by RDA to the communities and authority to receive and expand is not required. However, the use of these funds does require a state dollar-for-dollar match. Therefore, the state funding request includes match for both the RDA and EPA construction appropriations totaling $22,708.3 from a combination of General Fund and AHFC receipts. The state appropriation request also includes funding for capital improvement project (CIP) administration of $1,723.8." "...The VSW program provides technical and financial support to rural villages in the construction of water, wastewater and solid waste facilities. By statute (AS 46.07), a village is defined as "an unincorporated community which has between 25 and 600 people residing within a two mile radius or a second class city, or a first class city with not more than 600 residents." The VSW program, with a staff of 20, works with village officials to plan, design and construct approximately $45.0 million of projects annually. The funding for this program has been a combination of federal and state matching funds. Ownership of a project is transferred to the village when it is completed with the village responsible for the operation and maintenance (O&M) of the utility." "VSW projects are closely coordinated with other state and federal agencies, particularly the principal federal funding agencies: US Public Health Service (PHS), the US Environmental Protection Agency (EPA), and the Rural Development Administration (RDA). The VSW program and PHS work on jointly funded projects, sharing funds and project leadership, depending on the agency's history in working with a particular village." "The VSW program develops an annual project priority list based on information submitted via questionnaires completed by the villages. These proposed projects are ranked according to a criteria system that considers principally hazards to health and environment, and the village's capability to manage O&M. The ranked priority list is submitted through the Governor's Office to the Legislature for funding. The Legislature determines the level of funding available, taking into consideration the federal dollars available to match state appropriations." Mr. Kelton told the committee the department was requesting $10,428,800 in General Funds for the VSW ADMINISTRATION. This amount would be spread out over a six-year period and was a one-time project. Mr. Kelton then explained the request for VSW FEASIBILITY STUDY GRANTS. The $5,902,700 General Fund requested was to match federal funding of the same amount and be allocated over the next six years. Written testimony provided by DEC said, "The VSW program encourages communities to analyze their sanitation problems and develop cost effective solutions through engineering feasibility studies before requesting construction dollars through the capital budget process. This approach results in better capital and operation and maintenance cost estimates. This initial step also encourages the communities to become more involved in planning the facilities they will eventually own and operate. Planning periods periodically take from 12 to 18 months to complete providing the opportunity to develop additional utility operating capacity through the Department of Community and Regional Affairs Remote Utility Business Advisor program." Mr. Kelton pointed out for committee members the FY99 priority list, which identified 20 engineering feasibility studies for a total cost of $1,805.4, split evenly between state and federal funding. He went into some detail about the priorities. Co-Chair Sharp announced this list was located in the smaller, "Budget Overview" binder. He then spoke of the next two requests, VSW GRANTS MATCHED BY FEDERAL RDA and VSW GRANTS MATCHED BY FEDERAL EPA. These were both one-time projects spread out over six years. The RDA match project would require $25,160,400 AHFC funds and $34,839,600 General Funds. The EPA match project would require $65,190,600 AHFC funds and $750,000 General Funds to match $65,940,600 Federal receipts. DEC written comments stated, "Federal funding in support of the VSW program has been primarily in the form of matching appropriations obtained by Alaska's congressional delegation. These funds have been appropriated through the US EPA and RDA. In addition, the Indian Set-Aside program provides funding for projects administered by VSW and PHS. Each appropriation carries the eligibility and matching fund requirements corresponding to the federal program administering the funding. The match requirements range from zero with the Indian Set-Aside program to 50/50 with RDA and EPA appropriations. RDA funds can be used to fund water, wastewater and solid waste projects, while EPA funds are available only for water and wastewater projects. RDA funding is granted directly to communities and authority to receive and expend funds is not required. Authority is required to receive and expend EAP funding." "It is anticipated that federal appropriations of $15,000.0 and $10,000.0 for EPA and RDA respectively will be available for technical assistance training and education as well as construction. The amount available for construction requiring a state match is $21,843.3." The next request was for a total of $3,365,000 General Funds for VSW PROJECTS WITHOUT MATCH. Again, this would be spread out over a six-year period and would be a one-time project. Co-Chair Sharp asked if these monies would be used for municipal matching. Mr. Kelton replied the funds would go toward specific loan programs for communities that could re- pay the loans. Co-Chair Sharp wanted to know if the loans were processed through DEC, which Mr. Kelton assured him they were. Co-Chair Sharp then requested a breakdown of projects by EPA and RDA funding. Mr. Kelton told him that determining the eligibility of funds for each project was convoluted. He expanded on the written comments explaining the types of projects the different funding sources would cover. He talked about the geographical and economical restrictions. Some funds were limited to the western Alaska region, other funds could not be granted to communities with a per capita income that exceeded $40,000. Mr. Kelton moved ahead to the next DEC request, DENALI BOROUGH LANDFILL PROJECT, PHASE II. He told the committee the $865,000 General Funds, if granted, would allow for the construction of two transfer stations, one each in Cantwell and Healy. Each would include 10-yard dumpsters, lighting and a small heated shack for a cashier/operator. The funding would also include closing the Anderson and Cantwell dumps. Co-Chair Sharp directed the discussion back to VSW. He wanted to know if the totals were targeted to rural areas by federal procedure. Mr. Kelton responded, telling the committee how Senator Ted Stevens targeted rural or Native villages. He admitted that there was a fairly broad area that the department could apply the criteria. He talked of the difficulty in coming up with the ratio of projects that would still keep the program viable. Mr. Kelton spoke of the Administration Match, how water and sewer hook-ups would provide better health care conditions. He again referred to the list showing the 20 feasibility studies. He talked of DEC's efforts with DCRA to work with communities to get infrastructures set up and staff properly trained so the local community could take over and run the projects. He emphasized this method of addressing the matter had proven very successful. The committee then resumed talk on the Denali Landfill. Mr. Kelton explained how Phase III of the project was for the actual construction. Co-Chair Sharp asked for clarification that this project had already gone through the planning stage and is ready for construction. He wanted to know if it was "bid-ready." Mr. Kelton said that while the project wasn't "bid-ready," construction was anticipated to begin next summer. He explained that because of the timing of the fiscal year funds dispersal and the short construction season, it would not be feasible to plan the construction this summer. He told the committee, one of the concerns was the timing of the river barges that would deliver materials to the construction site. There would be a risk of missing the period of high water level, and once missed, the chance was lost for the year. There were no further questions and the committee addressed the next DEC item, MUNCICPAL MATCHING GRANTS PROGRAM. Mr. Kelton told the committee this program consisted of two funding sources, $2,117,200 Federal Receipts and $14,633,600 General Fund. Some of the federal funds were available through the EPA for Native and rural Alaskan water and wastewater projects. The majority of those were committed to VSW projects, however, five projects from the MMG program priority list qualified for these funds. They were the ones listed in this request showing a federal match. This request also included other projects, listed by priority, and proposed to receive general funds. He pointed out the priority list of projects included in the budget packet. Co-Chair Sharp asked about municipal match requirements. Mr. Kelton responded that the municipalities would have to come up with a match to qualify for the grants. Senator Adams wanted to know about rural communities' qualification for these grants. Mr. Kelton told him the department would need to work with the applying community to help them improve their infrastructure. Co-Chair Sharp referred back to an earlier discussion the Finance Committee had regarding a program to train communities to establish and run their infrastructure. Mr. Kelton replied that DCRA had a program titled RUBA which ran in conjunction with DEC's program, to accomplish the same goal. Co-Chair Sharp asked if the department kept track of the facilities built over the years in which the community had abandoned because of a failure to run a feasible infrastructure. He wanted this information as it applied to the VSW project. He emphasized that the reason for his interest in tracking the successes and failures of these projects was because of the significant amount of money being spent. He noted that it comprised a large percentage of the Capital Budget. The committee took up the next DEC budget item, FOOD SERVICE LABORAROTY. CURT FREDRIKSSON and JANICE ADAIR joined the committee via teleconference from Anchorage. Ms. Adair told how the lease was about to expire, and after 25 years in the same location, the facility was no longer adequate to serve the needs of the department. Of particular importance, was the demands placed on the microbiology program, which did not function well at the current facility. She said the $145,700 General Funds would be used to evaluate the replacement options and prepare the department to pursue the most effective replacement solution Co-Chair Sharp asked when the current lease would expire. Ms. Adair answered this June. The next DEC budget request was addressed, ELECTRONIC ACCESS TO DOMESTIC WASTEWATER PROPERTY FILES. Ms. Adair explained to the committee how this database would contain the information in DEC's domestic wastewater files for use by engineers, realtors, developers, lenders, homebuyers and sellers. This data was accessed continually and needed to be easier for the public to use, she stressed. Written comments included in the budget packet stated, "The data would be available my modem, compatible with various municipalities' GIS systems and searchable by property description, address, system types, owner name, and other fields as necessary. DEC staff would maintain the system. Ms. Adair said the project would be funded with $200,000 AHFC funds and would be a one-time project. The committee heard testimony from ALICE EDWARDS on the next item, FINE PARTICULATE MONITORING. Ms. Edwards went into detail explaining the need for this project. She said, in part, that the US EPA required the state to install and operate particular matter (PM) 2.5 monitoring stations throughout Alaska. Particulate matter of less than 2.5 microns is a product of combustion and is linked to numerous adverse health impacts, according to Ms. Edwards. The division was requesting $3,077,200, over a six-year span for this one-time project. In a statement prepared by DEC, the issue was further explained as follows, "The project is requested to enable the department to better protect Alaskan residents from the harmful effects of long-term exposure to fine particulate matter (smaller than 2.5 microns). Fine particulate matter is a product of combustion; common sources include cars, trucks, oil- or coal-fired power plants, natural sources (such as volcanoes), and oil-fired home heating systems. Recent health research has linked low concentrations of fine particulate pollution to increased incidents of respiratory and heart disease, school absenteeism, hospital visits, cancer in women and premature death. Medical researchers have shown that fine particles penetrated deep into the lungs and, although the mechanism is not fully understood, cause health impacts, which now rank fine particulates among the top five harmful pollutants. EPA's new PM 2.5 regulation requires the state to install and operate PM 2.5 samplers for a minimum of three years. EPA will totally fund this monitoring under Section 103 Grant - no state match is required. The funding will be used to procure, install and operate PM 2.5 monitoring networks across the state to meet the department's mission of protecting public health." Ms. Edwards listed for the committee what the funding for this project would accomplish. She said the division would procure, install, operate and repair PM 2.5 particulate samples in 15 rural and urban sites across the state. They would monitor and analyze the filters and establish regulations working with local governments to develop air quality standards, and develop a health advisory notification system to warn the public when conditions become unhealthy; and train state and local air quality staff. Senator Adams voiced concerns about the air quality in many rural areas in the state. He asked how this program would be applied to rural communities. Ms. Edwards told him the department's first priority would be to address the larger, urban communities because they were subjected to higher amounts of pollution. The department would attempt to establish monitoring stations in some rural areas after the urban needs were met. Senator Adams noted the funding for this program was proposed to continue for six years. He directed the department to spend some of the resources on rural communities. Of particular concern to him was the Village of Nuigsut, where emissions from the North Slope oil activities cast a yellow cloud over the community. Co-Chair Sharp told the committee that his concerns related to the possibility of future funding requirements of the state to maintain and operate the monitoring stations after they are installed. He understood that federal receipts were paying for the start-up costs, but said he didn't want the state, because it accepted the federal funds, to be required to financially support the program later. This concluded the discussion on the air quality issue and the committee moved on to the next DEC item, LOCAL RESPONSE AGREEMENTS. Mr. Fredriksson spoke on this program where the department had entered into agreements with fifteen local governments to use their emergency response resources to respond to oil spills. Under these agreements, DEC reimbursed local governments for actual costs incurred while responding to a spill. The department anticipated entering into agreements with additional communities, Mr. Fredriksson explained. Senator Adams asked for an explanation of the Oil/Hazardous Fund, used for this program. Mr. Fredriksson told him the fund consisted of two accounts. The Response account, with a balance of $50 million, is earned from a two-cent per barrel surcharge imposed on produced crude oil. The other part of the fund, the Prevention account, charged three- cents per barrel on produced crude oil. Senator Adams, Co- Chair Sharp and Mr. Fredriksson had further discussion on the statutes dictating this fund. The committee then addressed the next group of DEC requests relating to fuel storage tanks. The first item was, UPGRADE, CLOSURE OR REPLACEMENT OF STATE-OWNED UNDERGROUND STORAGE TANKS. Mr. Fredriksson told the committee the department was requesting $4,428,900 Oil/Hazardous Funds over the next two fiscal years. These funds would be used for the upgrade, replacement or permanent closure of sub-standard state-owned underground storage tanks. These tanks store petroleum for essential services such as power generation, emergency power backup, vehicle and equipment fueling. Tanks were located at approximately 85 different facilities, many of them in rural communities. The department included with its request, a complete list of the tanks slated for this project. Senator Pearce asked if the department's intent was to have all state-owned tanks cleaned up by 1999. Mr. Fredriksson affirmed that. Co-Chair Sharp asked for clarification of "state-owned" facilities. Mr. Fredriksson explained that DEC had entered into agreement with other departments to address the needs of fuel tanks owned by those departments. He gave Department of Education's state-owned school facilities as one example. The other agencies were, Administration, Fish & Game, Natural Resources, Public Safety, Transportation and University of Alaska. By consolidating the efforts into one department, the state would save considerable costs, according to Mr. Fredriksson. The second item was for the CLEANUP OF STATE-OWNED CONTAMINATED SITES. Written testimony provided by DEC said, "Over 250 state- owned contaminated sites are listed on DEC's Contaminated Sites Database. These sites are located on lands owned by a variety of state agencies. While many of the sites are being addressed by a responsible party other than the state (i.e., an oil company on state-leased property), many of them were actually created by a state agency or third party that is not taking action to address the contamination." "This CIP will address some of the most threatening contaminated sites for which the state is directly responsible. The work involves assessments of the type of contaminants, the location (how far have they spread, is groundwater affected, etc.), cleanup, and where possible, cost recovery. While priorities may shift slightly, sites proposed for work under this request are: Anaik White Alice - School Facility; Aniak Airport Building 302; Deadhorse Hotel Property; Arctic Coiled Tubing; Old Coldweather Contractors; Peger Road Maintenance Station; Haines Fuel Terminal; Pedro Bay School; Manokotak School and Kaltag School." Mr. Fredriksson told the committee the department was requesting $6,739,000 Oil/Hazardous Funds, over the next four years for this one-time project. Co-Chair Sharp stated that while he saw the proposed projects listed, there were no dollar amounts showing the costs for each site. Mr. Fredriksson told the committee he would provide a breakdown. The committee had further discussion on the particular projects selected for this program. The next item was then addressed; UPGRADE, CLOSURE OR REPLACEMENT OF PRIVATELY-OWNED UNDERGROUND STORAGE TANKS. Mr. Fredriksson said the department, under this program, intended to issue grants to minimize the financial burden imposed on tank owners and operators by federal and state requirements. The request was for $14,823,500 over a three- year period of time. He pointed out that the department provided a list of proposed projects and their ranking. Senator Adams asked how much money had been spent to date on this project. Mr. Fredriksson replied approximately $20 million. Co-Chair Sharp asked what spending account would be used to pay for this project. Mr. Fredriksson told him the name of the account was called Storage Tank Assistance Fund. The next storage tank item addressed was the UPGRADE OF STATE-OWNED ABOVEGROUND STORAGE TANKS. Mr. Fredriksson told the committee the purpose of this program was to improve bulk fuel storage conditions at state-owned or operated facilities by repairing, upgrading, replacing and/or consolidating aboveground storage tank facilities. He said the main focus of the program was spill prevention. Another function of the program would be to initiate training programs for state, local and private operators. Mr. Fredriksson stated there was a real problem, especially in rural areas, with operator error. The situation could be helped if the operators were properly trained. In addition, he added, these trained operators would be ideal candidates to run their local Emergency Response Program. The department requested $6,400,000 Oil/Hazardous Funds over the next four years. A list of the proposed projects was included with the budget request. Senator Adams asked how much had been spent for private owners' upgrades or repairs because state or federal standards that changed since the tanks were purchased. Mr. Fredriksson assured him that the tanks addressed in this request were very large, bulk-fuel facilities, which were not usually found in most rural communities. He said the smaller, privately-owned tanks Senator Adams was referring to, fell under different guidelines and funding was available through Department of Community and Regional Affairs to bring those tanks up to compliance. Senator Adams noted there was nothing in statute to govern this. Co-Chair Sharp said the program proposed 80% of its funds to REAA school projects. He asked if there was any funding available for non-REAA schools. Mr. Fredriksson replied that the department composed a priority list based on the severity of the problem. He stated that just because a school was not an REAA school, it wasn't automatically excluded. Co-Chair Sharp admonished that all the schools included were REAA schools and he did not see any participation from communities in those areas. The next item was for STATE HAZARDOUS MATERIALS RESPONSE. This request asks for $1,500,000 Oil/Hazardous Fund over four years for the establishment of an in-state hazardous materials response team. Mr. Fredriksson told the committee this program was to be directed at high-risk areas in the state such as the rail system and the Kenai Peninsula. He stressed that there was a need to take a more defensive posture on this matter. He said the department had reached an agreement with Fairbanks to provide service in the area surrounding that community. Co-Chair Sharp asked if Fairbanks and Anchorage dealt with emergencies using their existing fire-rescue agencies. Mr. Fredriksson said that was correct. The committee moved on to the next request, the INVESTIGATION AND CLEANUP OF PRIVATLEY-OWNED CONTAMINATED SITES. Mr. Fredriksson briefly described the need for this six-year, $12,340,000 Oil/Hazardous Fund appropriation. He said this program would focus on ensuring clean up on contaminated sites that posed the greatest potential threat to public health and the environment, regardless of who owned the sites. This primarily applied to situations where the property owners either refused, or challenged their responsibility in handling clean-up efforts themselves. In these cases, DEC would go ahead and perform the clean-up then try to recover the costs at a later date. Another situation this would cover were those in which no single responsible party could be determined and thus assigned to do the clean up. There were no questions and the committee was finished hearing testimony regarding the Oil/Hazardous Fund allocation requests. The next DEC item was the COOK INLET WATER QUALITY MONITORING DATABASE. Written comments included in the budget packet said, "This project is to develop a comprehensive water quality geographic information system (GIS) for Cook Inlet to monitor chronic sources of marine pollution that may be affecting recovery of resources and services injured by the Exxon Valdez oil spill." The request was $340,000 EVOSS Funds. Senator Adams asked if FY99 was the final year for this program, which Mr. Fredriksson told him it was. The committee then took up the final DEC request included in the FY99 Governor's Budget packet, NATURAL RESOURCES DAMAGE ASSESSMENT PROTOCOL AND GUIDELINES. Mr. Fredriksson said this project would be funded with EVOSS funds also. The department's written statement said, "An extensive and in-depth scientific research program has been conduced in the wake of the Exxon Valdez oil spill. While a significant volume of research findings has been accumulated, none of this information has been examined to compare the biological resources damaged, the sampling protocol used to make the initial damage assessment, the process of recovery of these resources or how sampling and assessment should be conducted at future spills to aid in our understanding of damages to the environment. This multi-year project will review the scientific information, which has been collected since the Exxon Valdez oil spill and evaluate which studies are most relevant to identifying the best means for assessing and evaluating impacts and damages from another large spill." "The project would also include development of scientific sample protocols and guidelines that would be a blueprint for state scientific data collection efforts when a spill occurs. When a spill occurs it is not possible, during the emergency phase of the response, to collect all of the scientific information that may be needed to quantify damages to natural resources. It is, therefore, necessary that sampling protocols and guidelines be developed along with an overall sampling strategy to target what scientific information is most essential to documenting impacts and damages. Such sampling and assessment protocols may be directed towards overall ecosystem impacts, tropic levels or biological resources. It would be a guide to sampling efforts that will provide information to the state for recovering damages to state natural resources. The goal of the project would be to achieve the highest dollar value recovery regardless of whether the approach is based on population levels, individual species, or other approaches. A review of past economic evaluation data would also be conduced as part of this project to support an appropriate sampling hierarchy and assessment protocols." Co-Chair Sharp admonished that it had been ten years since the Exxon Valdez oil spill and there still was not a finished product on setting the protocol. He said he found the last sentence of the department's statement interesting. Senator Pearce agreed and asked why DEC didn't have a finished product. When Mr. Fredriksson said he did not know why, she said she wanted to review what monies had been spent on the program to date before approving any more. She emphasized that she did not question whether the need was important, just that she would need reassurance that the funds had been put to good use. Co-Chair Sharp added that he realized the funds were considered "free money," but that there should be some accountability and something to show for the expenditures. Mr. Fredriksson attempted to clarify the difference between this program and others which attempted to judge the spill response efforts. He said this program focused on damage assessment and how it would be determined. Senator Pearce wondered if the question of damage assessment wasn't already being decided in the court system with litigation from the Exxon Valdez oil spill. Mr. Fredriksson said this program was an effort to look at the actions of the past ten years and decide what steps to take in future spill situations. This would include what samples should be taken and other processes that proved successful in making assessments of the damages from the Exxon spill. He stressed that the intent was not to determine whether or not the participating parties in the Exxon spill clean up did a good job, but that the intent was to plan for future incidents. This concluded the presentation from DEC. Co-Chair Sharp called for a break at approximately 10:40 a.m. He announced his intention of adjourning the meeting at 1:00 p.m. and asked further speakers to be concise and brief. When the meeting resumed, the committee heard presentations on the DEPARTMENT OF FISH AND GAME capital project requests. KEVIN BROOKS, Director of the Division of Support Services testified. The first request was $400,000 for STATEWIDE FACILITIES REPAIR, MAINTENANCE, AND REPLACEMENT. A written statement on the project stated: "The Department of Fish and Game has employees in over 40 locations around the state and own facilities in many of these locations. These facilities include offices, bunkhouses, warehouses, workshops, cabins, laboratories, airplane hangers, and other structures that are vital to the mission of the department. Most routine, ongoing maintenance is funded through annual operating appropriations. Larger repair, renovation and replacement projects have been requested in the capital budget, but have been funded at only a fraction of the identified amount in recent years. Deferred maintenance on facilities is a critical issue for the department with many of the requested projects involving life, health and safety issues." "In identifying and prioritizing projects, the department first considers life, health and safety implications. It is critical that we provide a safe and efficient environment to our employees and the public as we carry out our statutory responsibilities of managing the state's fish and wildlife resources. Projects are also developed so that facilities will comply with the American's With Disabilities Act (ADA); meet building, mechanical, electrical, and life safety codes; and comply with Department of Labor standards for employee housing. Finally, the department actively pursues projects that will reduce operating costs through energy efficiency measures, and insuring the structural integrity of a facility will remain sound for a minimum of 20-30 years." "...These projects are representative of the types of projects needed and reflect current facility needs. Projects may be added or deleted to meet changing priorities and conditions. With a FY99 request of $400.0, the department will address only the most critical projects in the upcoming construction season. Additional project detail is available upon request." Also included in written testimony was a list of projects and costs associated with completion of each, totaling $2.9 million. The next item ADF&G requested to be funded was VESSEL MAINTENANCE AND REPAIR. This would "...maintain large research vessels. These vessels support fishery monitoring and stock assessment programs" according to written testimony. The amount desired was $250,000 in general funds. Mr. Brooks reminded the committee this request had been before the Legislature in the past and had not been funded. Co-Chair Sharp asked if the vessels were used primarily for the commercial fishing division activities. Mr. Brooks affirmed. SOUTHEAST REGION VESSEL FACILITY was the third ADF&G budget request and asked for $1,170,000 general funds and $130,000, or ten-percent, fish and game funds. Mr. Brooks explained this was for the vessel facility in Juneau. Again the request was made last year and was not funded. Mr. Brooks stressed the urgency saying that the department needed to vacate the facility this year, as the building was located on Mental Health Trust Authority land. This request would allow the construction of a building just east of the present location on NOAA owned land, he explained. A land lease exchange was agreed upon where ADF&G could erect a building and have access to their dock. The cost of constructing a new dock would cost over $1 million he shared. The department included ten-percent funding from the Fish/Game fund because both fish and wildlife divisions would use the facility. Co-Chair Sharp wanted to know if the department currently used Fish/Game in the present facility, or if this would be the first time the funds would be used on the vessel facility and storage operations. Mr. Brooks responded that the state did not pay for the use of the subport building. However, after July 1, the building would revert to MHTA ownership. He said that the commercial fisheries division operated a tag laboratory in the subport, which they already relocated. In addition, the entire department, along with others, used the building for storage and the Department of Administration was using a separate request to accommodate the storage operations. The next item was HARDROCK MINING FISHERIES RESEARCH. Mr. Brooks explained the $225,000 AIDEA receipts request. He referred to earlier testimony from Janet Kowalski, Director of the Habitat Division, about the tremendous growth in the mining industry in Northwest and Interior Alaska. It was estimated that over 1 billion private sector dollars were being expended for exploration, construction and production this year alone. Therefore, the department was requesting funding to help collect baseline biological data to assess the impact on fish resources and to work with industry to developing those projects. Co-Chair Sharp noted this was a two-year project using AIDEA funds the first year and general funds the second. Mr. Brooks though there was potential for using AIDEA funds the second year, but wouldn't be determined until the next year's budget process. The committee moved on to the next ADF&G budget request of $200,000 for REGIONAL WILD FOOD HARVEST SURVEY. Mr. Brooks said the funds would go to the Subsistence Division to gather data for management purposes as well as information for the Boards of Fisheries and Game. A lot of the data that department had was very outdated, some of it over ten years old. What the division hoped to do was bring the harvest surveys up to date and get on a three to five year cycle for the state, Mr. Brooks stated. Co-Chair Sharp asked if this would be in addition to harvest tag and fish ticket information. Mr. Brooks explained that the surveys would entail staff going out into rural community households. Mr. Brooks told the committee those were all the ADF&G project requests that would use general funds. The next request was for $300,000 AIDEA funds to be used on DEVELOPING FISHERIES projects. Mr. Brooks referred to discussions over the past couple of years about developing projects. The department had been in a quandary because they knew of population stocks that they were unable to tap because of fears of exploitation. He used as examples of sea urchins, herring, crab and shellfish. The department hoped to devise a mechanism for developing fisheries and has worked with industry to use their money for some of the work. This project would serve two purposes, according to Mr. Brooks. One would be to do stock assessments. The other would work through a public process to establish a funding mechanism for these types of projects that would allow development, be good for the fishermen and generate revenue for the general fund as well. He stated that the department believed this would be a very good project to pursue. Co-Chair Sharp asked that in light of the difficulty of the last year, if the department would provide a breakdown of what developing fisheries they intended to use the funding for. Mr. Brooks agreed to provide the information. MOOSE RESEARCH CENTER REPAIR AND MAINTENANCE was the next ADF&G project in the FY99 budget request. Mr. Brooks told the committee the center was built during the middle 1960's and that part of the $100,000 Fish/Game funds would be used for access road improvements because sections of the road were impassible during a couple months of the year. Other work needing to be done included roof repair and other building deferred maintenance on the animal handling facility. Mr. Brooks then moved on to the HATCHERY RENOVATION, REPAIR AND MAINTENANCE request for $112,500 federal receipts and $37,500 Fish/Game funds. He spoke of the Anchorage facility located near Fort Richardson operated by the Sport Fish Division that was in need of upgrades and repairs. He then testified to the SPORT FISHING AND RECREATIONAL BOATING PUBLIC ACCESS AND FACILITY DEVELOPMENT project. This request was for a total of $5.6 million, $4,200,000 in federal receipts and $1,400,000 Fish/Game funds. This was another project that was 75 percent federally funded, according to Mr. Brooks. This on-going project was required, as 12.5 percent of available federal funds must be set aside for access-type projects. He explained how the department worked with communities across the state in developing these projects. Co-Chair Sharp encouraged committee members to look at the detail sheet attached to the written statement that showed where the funding would be spent. His only concern was that the amount of money had rapidly escalated in the last couple years on expenditures out of the federal fish and game funds and the rolling balance of federal fish and game funds were going down. He realized there was an infusion of new money into the state fish and game fund, but the balance was being spent faster than it was coming in. He was concerned that they were spending down to where they couldn't react. Mr. Brooks replied that the department shared the concern and watched the situation very closely. He pointed out that in the Division of Wildlife Protection the federal balance was dropping, but for the Sport Fishing Division there was actually an increase. He referred to the passage of the federal Brady Bill and said there was a spike in the federal funds because of the excise taxes on ammunition. He assured the committee that the department watched the fish and wildlife sides separately to ensure the sustainability of the funds. The committee moved along to address the AREA OFFICE EQUIPMENT REPLACEMENT budget request. Mr. Brooks explained that this was a project proposed by the Division of Wildlife Conservation to use $100,000 Fish/Game funds. They did an assessment of their area offices and this would provide upgrades. He spoke of a vehicle that needed replacing. Typically the department obtained vehicles from surplus and used them well beyond their life expectancy. He also told of ATV's and snowmachines that needed replacement. Tape #105 Side A The last ADF&G request was for JUNEAU INDOOR SHOOTING RANGE AND HUNTER EDUCATION FACILITY CONSTRUCTION. The project requested $1,000,000 Fish/Game funds and $500,000 federal receipts for the construction of a two-room hunter education facility and indoor shooting range. Mr. Brooks told the committee there was an outdoor shooting range in Juneau and that an indoor range was located in the basement of a school, but the arrangement was no longer available. He stressed that the department was watching the federal funds, making sure enough surplus built up before they planned to begin this project. The federal fund allocation was designated for hunter education projects. Co-Chair Sharp asked his staff member, TOM WILLIAMS about the federal match. He wanted to know if it was the same ratio, noting that funding for the Fairbanks shooting range had to be switched in the supplemental budget because of overspending. Mr. Williams said the funding had been fifty- fifty, but was now 25-75 federal to state funds. Mr. Brooks pointed out that in the operating budget there was a fairly specific three to one match with the federal being the larger share. For the shooting range, there was not the specific requirement, he said. There was further discussion and Co-Chair Sharp assured that the committee and the department would work further on the matter. This concluded the ADF&G capital project requests. Co-Chair Sharp called upon the OFFICE OF THE GOVERNOR to speak to its one request. JOAN BROWN, Budget Analyst for the Office of Management and Budget presented the item. This was a $500,000 general fund request to continue work on compliance with the AMERICANS WITH DISABILITIES ACT. She explained that the funds would be used to remove the physical barriers within state-owned facilities in order to comply with the federal law. Senator Parnell wanted to know why this request was done through the Office of the Governor rather than the Department of Transportation and Public Facilities. Ms. Brown replied that some of the funds were RSA'd to DOT&PF or to the University, depending on the specific project. Senator Parnell asked if DOT&PF had any ADA requests included in their capital budget. Ms. Brown did not know specifically. She said some projects had ADA compliance requirements included in them, but if there was no other work planned other than ADA compliance, the funding was funneled through the Governor's Office. She said that DOT&PF did an inventory in 1994 and identified about $55 million dollars worth of compliance projects needed. Those projects had been funded through the Governor's Office since 1994. Ms. Brown pointed out that $1 million was also included in the supplemental budget request for ADA items. The committee then heard presentations on the DEPARTMENT OF HEALTH AND SOCIAL SERVICES capital projects. JANET CLARKE represented the department and said she would cover both the capital budget and mental health budget funded items. She first addressed the DEFERRED MAINTENANCE, RENEWAL, REPLACEMENT AND EQUIPMENT request. This was for $192,300 federal receipts and $750,000 general funds, for the department's 38 state-owned facilities, including youth correctional facilities and public health centers. Ms. Clarke testified that many of the facilities were run 24 hours a day and got extreme use. Like other state agencies, DH&SS had many deferred maintenance issues, she said. A list of some of the projects was included in the budget packet, to which Ms. Clarke referred. Ms. Clarke then spoke of the next project that was amended by the Governor and included a request for $550,000 bond revenue and $275,000 in general funds for project related expenses for the PUBLIC HEALTH LABORATORY NON-BONDABLE COSTS project that was authorized by the Legislature last session. She told the committee that the certificates of participation had been sold. What the department needed from the Legislature was authorization to receive and expend statutory designated receipts that were allowable to be charged to the certificates of participation for construction management work. She said there were some costs that could not be charged to the certificates based on their tax-exempt status. She explained those expenses were the reason for the general fund request. She spoke further of the stipulations of the bond receipt expenditures. Some of the exclusions were internal audits and right-of-way activities. She told the committee that when the bond certificates were sold, they received the lowest rate, which was much lower than discussed with the Legislature last year. Ms. Clarke moved on to the next item for WELFARE REFORM INFORMATION SYSTEM AND OFFICE AUTOMATION. This was the third of a four-year project to upgrade the eligibility information system to comply with the changes made to welfare reform. She explained the past mainframe system with dummy terminals and the new, front-end Windows based PC link into the mainframe. The mainframe would still be used as a data repository. The upgrade would provide a more flexible way for workers to perform their jobs. She said most of the equipment and hardware was already purchased. The Anchorage office was the only one left and consisted of this request. She spoke of federal requirements that the state comply with a "maintenance of effort" stipulation. VITAL STATISTICS ARCHIVE IMAGING AND SYSTEM REPLACEMENT was the next item in the DH&SS capital budget request. Ms. Clarke told the committee the two-year project would implement optical imaging to preserve some of their vital statistics records. This included birth and death records along with marriage and other records and would allow on- line access to the information. She said that many of the records were currently stored in a vault, but were old and there were problems with deterioration of some of the papers. The next request was for $341,600 general funds for EMERGENCY MEDICAL SERVICES COMMUNICATIONS EQUIPMENT. Ms. Brooks reminded the committee that last year the Legislature had funded some of the Interior's highest priority needs to replace communication equipment in some of the "dead spots." A lot of that money was used along the main highways. She referred to a study funded by the Highway Safety Planning Agency that pointed out some additional major communication problems for emergency medical services. She told the committee there was still a lot of work to be done in this area and these funds would be used to continue the efforts. She detailed some of the specific projects. Co-Chair Sharp said it was his understanding that these funds would be used primarily for equipment and would not include training. Ms. Clarke affirmed. The committee then heard presentations on DH&SS projects that would be funded through the Mental Health Trust Authority bill. Ms. Clarke informed the members that all four of the proposed projects had been approved by the MHTA in their recommendations to the Legislature and the Governor. The first item was $225,000 for STOP-GAP REPAIRS AT ALASKA PSYCHIATRIC INSTITUTE. Co-Chair Sharp noted that RANDALL BURNS, Director of API, was on-line to answer any questions if necessary. Ms. Clarke told how API was a 35-year old facility and there had been some well-publicized articles on the state of API. She stated that the relatively small amount of this request would help the department deal with the most critical life/health/safety code compliance issues. She advised that the cost to completely repair the facility would be millions of dollars. However, sine the department was working to find a replacement for the facility, they elected to perform only the most needed repairs. Mr. Burns was invited to comment via teleconference from Anchorage. He offered to go through a list of their concerns. It was decided that the written statement provided in the budget packet would suffice. Ms. Clarke continued with the next request, which was $400,000 for DEFERRED MAINTENANCE - COMPETITIVE GRANTS FOR TRUST BENEFICIARY PROGRAM FACILITIES. She told the committee that this project would not fund any state facilities but would go out for competitive grant for all four beneficiary groups who would apply for the most critical life/health/safety issues within their facilities. She added that this request did not apply to ADA compliant projects. The funds would be used for items such as sprinkler systems. Senator Parnell asked if this money was in addition to payments made through the operating budget and Medicaid program for contractual services. He felt that the private sector businesses should budget their income to accommodate these needs. In fact, he heard arguments from the providers explaining why they held money from year to year so they could save up to purchase things like upgraded computer systems. Therefore, he suggested that since these were private facilities provided services to the state in return for payment, they should cover these expenses themselves. He thought it odd that the state was providing grants to the businesses so they could upgrade their capital. Ms. Clarke explained that this was an on-going practice and there was a wide range of circumstances with each grantee. Some may have been able to hold onto funding to provide the upgrades. However, some of the smaller providers might not be in the same situation but still had the same life/health/safety needs. The next DH&SS item was BENEFICIARY AND SPECIAL NEEDS HOUSING PROGRAM. Ms. Clarke explained that the department had implemented this program for the last four years and did it in conjunction with the Mental Health Trust Authority and the Alaska Housing Finance Corporations. They had been successful in using these funds in the past as Harborview was closed and they funded home improvement and development for patients coming out of Harborview, according to Ms. Clarke. She spoke of the downsizing at API and said the funds would continue to be used for community-based services. Independent housing was shown to be a primary requirement for self-sufficiency, she stressed. She reminded the committee how in the past, the department had provided them with a complete summary of the projects and offered to do so again. Co-Chair Sharp asked if this was the funding source for facilities like the new Douglas Terrace facility. Ms. Clarke didn't think this program funded that project, but that it was similar to the types of projects that were funded in the program. She gave a facility in Kenai as an example of one that was funded under this program. Co-Chair Sharp returned to the Douglas facility and wondered where the funding for it came from. Ms. Clarke said she would check. She said projects in their program went through a competitive grant process and that it was possible that the Douglas facility participated in some way. Co-Chair Sharp requested the detailed breakdown of which programs received the funding and the number of units built. Senator Parnell referred to the written statement provided in the budget packet. He noted one of the special needs housing listed was for transitional housing with support services for newly recovering alcoholics and addicts. Similar language was also used in the General Relief Assistance Program, and he wanted to know if the funding was used for capital construction projects or for rent payments for program participants. Ms. Clarke replied that the intent of this program was for capital home modifications or other investments, not for rent payments. The last request for DH&SS used all mental health trust receipts and was for COMPLETE CAPITAL NEEDS ASSESSMENT OF ALL BENEFICIARY PROGRAMS. Ms. Clarke spoke to the $200,000 request. THE DEPARTMENT OF MILITARY AND VETERANS AFFAIRS was the next agency to present its capital budget requests. NICO BUS, Administrative Services Manager for DMVA and the Department of Natural Resources, spoke to items for both departments. The first DMVA request was for the JUNEAU ARMORY DESIGN AND CONSTRUCTION. Mr. Bus reminded the committee that the Legislature funded the first phase of the project last year and this year's request would primarily cover construction costs and get the project to the point of qualification for federal funding. He said the City and Borough of Juneau and the MHTA came to an agreement over the issue of land and the department had the needed land permitted. They also had a contract secured with DOT&PF to conduct environmental studies and design work. Co-Chair Sharp saw that the general fund portion was a two- year project and asked what was the minimum amount required in order to qualify for federal matching funds. Mr. Bus replied that it depended whether the facility was a state or federal armory. State armories, such as the Juneau facility, required a 25 percent state-funding match. In addition, environmental work and site preparation must be paid with state funds. NEW PHONE SWITCH - INTEGRATED SWITCH DIGITAL BETWORK COMPLIANCE was the next DMVA item. This would allow the department to upgrade the switches to make them more adaptable to emergency support response, according to Mr. Bus. This second of a three-year project requested $96,000 general funds. The next request was $148,000 federal receipts and $102,900 general funds for NATIONAL WARNING SYSTEM UPGRADE PHASE II. Last year, the Legislature funded the first increment of this phased project, said Mr. Bus. He explained how this project would take advantage of prevailing technology and converge voice-grade warning systems to digital interface networks. The department planned to hook up 27 communities and with the funding last year was able to do nine communities, purchase network servers and other equipment. Under this phase of the project, they would hook up three or more communities, depending on equipment costs, and continue over the next several years until all 27 were connected. He noted that equipment costs were lowering and the department was hopeful they could do more communities with the appropriated funds. Mr. Bus moved on to the next item, EMERGENCY WIRELESS PHASE II. He explained that the funds form that request would purchase four repeater wide spectrum wireless communication systems in Southcentral Alaska and allow the department to improve communications during disasters. He spoke of the Miller's Reach fires where repeater stations' circuits were either preempted or destroyed. This would make the department more independent of the repeater stations and improve the ability to respond to emergency situations. The next capital budget request was for $84,000 federal receipts and $150,000 general funds for ARMY GUARD DEFERRED MAINTENANCE, RENEWAL AND REPLACEMENT. Mr. Bus spoke of a significant backlog in deferred maintenance needs. The funds would be used for essential facility repairs such as failed furnaces, roof repairs, structural components, electrical systems, etc., according to Mr. Bus. He said those were prioritized within the department. Co-Chair Sharp requested a detailed list of the facilities and planned repairs. VHF RADIO REPLACEMENT - DIVISION OF EMERGENCY SERVICES was the next DMVA item. Mr. Bus said that to be compatible with the new federal standards, the department received an appropriation last year to replace all their radio equipment. This year they requested $146,400 for the second to the last phase of the purchasing project. JIM HARPING of the Division of Emergency Services was linked to the meeting from Kenai via teleconference. He added that this project was part of a migration with each state, community and the federal government trying to do this in unison. He urged that the equipment must be replaced because of FCC mandate. According to Mr. Harping, a task force comprised of federal and state representatives approached their vendors who responded favorably to requests for assistance in the project. He estimated they would complete the changeover within the next two to five years. Mr. Bus moved along to EMERGENCY COMMUNICATION RESPONSE TEAM - EQUIPMENT. He explained that there were five response teams available for emergency response deployment. Those were the people who would get to the site first and often times there was no form of communication or other equipment available. Therefore, the teams needed to be completely self-sufficient within the first 72 hours. This request would equip one of the teams with the full set of necessary equipment, according to Mr. Bus. Mr. Harping described some of the emergency situations where these teams were deployed. He spoke of the communication services they provided. In his opinion, this had been a very successful operation. Previously, funding for this program came exclusively from the operating budget. However, the equipment was worn and needed replacing to keep the teams effective. The next item was for the NOME ARMORY DESIGN AND CONSTRUCTION. The total cost of the facility would be $7 million and this portion of the request was for $5,712,500 federal receipts and $662,000 general funds, explained Mr. Bus. Co-Chair Sharp noted that the larger general fund allocation would be required next year. As a point of interest, he asked why the state match was higher than that for the Juneau Armory. Mr. Bus replied that a donation made by the City and Borough of Juneau counted towards the state match requirement. The final DMVA request was $2 million federal receipts for ARMY GUARD STATEWIDE PLANNING AND CONSTRUCTION. Mr. Bus told the committee this project was for contingency planning and construction. He said that sometimes because of congressional add-ons or other reasons, the department was appropriated extra money but it needed a designated project in order to expend those funds. This project would allow the department to do that, he explained. At this time there were no specific plans because funding was contingent on federal appropriations. Mr. Bus began presentations on THE DEPARTMENT OF NATURAL RESOURCES capital budget projects. The first was for COMPLETION OF LAND STATUS GIS SYSTEM. This project had been funded by the Legislature for the last six years and was on target and almost complete, according to Mr. Bus. The project converted manual status plats to digital so people could call the information up on computer. This would eliminate the need for manual maintenance, speed up the decision making process for the resource managers and allow public access through the Internet. The request for this year was $250,000 AIDEA receipts. The next DNR request was RURAL COALBED METHANE $200,000 general funds. Mr. Bus explained this project as an alternative to energy for rural communities. The Legislature had been funding this for the last several years and was getting the project ready to enter the drilling phase. He told the committee the department identified three areas where they could perform drilling operations. He offered MILT WILTSE, Director of the Division of Geological and Geophysical Surveys, who was on-line from Fairbanks and could speak further to the project. Mr. Wiltse further explained the project as originally requested by the Governor several years ago. Coalbed methane was a new technology in the country and DGGS brought in experts from Texas to educate them. They were working to locate target sites to drill and test the feasibility of producing coalbed methane. The actual drilling phase of the project would be very expensive, he warned. The department was working to get a body of knowledge before beginning to drill so there would be the best chance of success. Also, Mr. Wiltse said, the department was trying to obtain federal matching funds for the project. Some of the capital funds already appropriated and requested here would be used to encourage the federal DOE or the US Geological Survey funds to match the state dollars to share the burden of some of the late phases of the project. The $200,000 requested this year would be used in conjunction with funds from previous appropriations to do more detailed on-site investigations, such as seismic testing to understand the local geological structural situation at the target sites, according to Mr. Wiltse. They hoped to avoid drilling in wrong areas. Mr. Bus continued to the next project, STATE PARKS EMERGENCY REPAIRS. Basically the park units had several areas where there was a deterioration of facilities and in order to protect them, the department identified about $400,000 worth of work to be done, he explained. The repairs would include water systems, roads, repairing cabins, improving workshops and in the Big Delta State Historic Park, do riverbank erosion protection. Co-Chair Sharp asked if any of these projects were included in the deferred maintenance list. Mr. Bus replied that the Division of Parks had identified $35 million of deferred maintenance. Co-Chair Sharp assumed there would be some overlap. AIRBORNE GEOPHYSICAL AND GEOLOGICAL MINERAL INVENTORY was the next item. Mr. Bus spoke to the $500,000 AIDEA receipt request and again offered Mr. Wiltse as the project manager who could highlight the project. Mr. Wiltse said the private industry investment in the growing industry was encouraging. This year DNR had identified four areas that would be the maximum number of mining districts where they would conduct the airborne surveys was contingent upon the level of funding from the CIP request, he explained. Those areas were the Fortymile district, Livengood district, Iditerod Mining district in southwestern Alaska and the eastern Nome district in western Alaska. A final decision would be made on which of the areas are flown when they knew the outcome of the CIP request. He said they tried to match the funding level with the area that needed to be flown in order to do a credible job, according to Mr. Wiltse. He stated that all the identified tracts had exceptionally good mineral potential, varying degrees of accessibility and had residents desiring mineral development. Each of the areas had ground staking done in anticipation that the surveys would be flown. Co-Chair Sharp wanted to know if any of the prospective areas had other landowners or federal agencies that might participate similar to what was done in the Nome area. Mr. Wiltse was not aware of any, but noted that the projects were not to the appropriate stages. However, he felt there would be participation from the Native Corporations in the Nome area were the projects to go forward in western Alaska. He spoke of federal interest in activities in the Fortymile area as well as Canadian interest in the mineral holdings across the border. Therefore he speculated there would be future cooperative work with the US Geological Survey, the Canadian Providential Survey and the Canadian National Survey. Co-Chair Sharp remembered Doyan Corporation used to have land ownership in the area, but wasn't sure if they still did. Mr. Bus moved on to the $200,000 AIDEA receipts request for the RECORDER'S OFFICE EQUIPMENT UPGRADE. He told the committee that the recorder's office operated in 14 different locations and were a high production organization. They produced images of real estate transactions and performed other tasks. This request would fund equipment replacement as the current equipment was failing. Mr. Bus reminded the members that the department approached them last budget year requesting new technology. When that was not funded, they held stakeholders meetings and received feedback from their customers saying that at the very least, the office needed good equipment; copiers, time stamps, reader printers and other necessary items. He offered the written statement in the budget packet detailed the specific items. As a footnote, he added that because of the Airborne Geophysical and Geological Mineral Inventory project and the increased business it brought the recorders office, they collected $340,000 in revenue than budgeted. Some of the customers expected that some of the income be reinvested in equipment replacement, he stated. The next item was also a Recorder's Office request, $165,000 for RECORDER'S OFFICE APERTURE CARD FILMING AND DIGITIZING. Mr. Bus explained there was a deterioration of records and specifically between 1970 to 1977 during the pipeline era the records produced were of a very poor quality. Many of those were unreadable. Using new technology, those microfilm records could be re-filmed to obtain much better data. This project envisioned filming and enhancing the records from the seven-year period. It would then also be possible to digitize them and make available in that format. Co-Chair Sharp asked if this required distinct equipment, which Mr. Bus affirmed. Co-Chair Sharp wanted to know of the two procedures, re-microfilming and digitizing, which was the most critical. Mr. Bus replied that the microfilming equipment was the most needed. STATE LAND DISPOSALS AND LEGAL DEFENSE SURVEYS was the next request and asked for $300,000 general fund. Mr. Bus spoke to this explaining that the project was an opportunity for the state to dispose of some of its lands. This project envisioned offered 200 previously offered lots and 100 remote recreational lots for sale to citizens. The funding would allow the department to do surveys and appraisals and enable for sealed bid actions. He stressed that the revenue generated would far exceed the costs and offered an opportunity for the general public to get more state land. Co-Chair Sharp wanted to know what was the tie-in with the legal defense surveys and if the parcels would be specific areas or tied in with land disposals. Mr. Bus responded that it would be in support of the legal activities and he assumed that the Department of Law and the DNR would work together on identifying those and doing right-of-way determinations. Of the total request, $50,000 would be used for the legal defense portion of the project. Co-Chair Sharp wanted assurance that under this project, a fee simple wouldn't be written to an existing right-of-way. Senator Adams requested a list of the land disposal areas for the committee. Mr. Bus said one would be made available. The committee then heard the next request for $150,000 for STATE OIL AND GAS ELECTRONIC INTERFACE WITH INDUSTRY. Mr. Bus stated that this was an automation effort to work with the industry. Nationwide, there was an attempt to get data to entities, such as the Division of Oil and Gas. He added that the State was working through the Information Technology Group to get all royalty production reports electronically. Currently, the division received all its reports manually and had to renter the information, which was very labor intensive and pushed the process about 30 days behind. Under this project, the information would be transferred electronically by the oil companies as soon as they had it, and the division could immediately update its royalty information and records. The funds would be used to buy the hardware and software that would enable that, Mr. Bus told the members. Mr. Bus next addressed WILDLAND AND URBAN INTERFACE FIRE TRAINING AND CERTIFICATIONS. The $120,000 requested would be used towards a national project to improve the ability to track fire qualifications of state and Structure Fire Department firefighters, according to Mr. Bus. It would require a PC based National Wildland Fire Qualification tracking system and refurbishing of some excess equipment for training purposes, he continued. He offered JEFF JAHNKE Division of Forestry Director and DEAN BROWN, Deputy Director, was available if the committee had questions. Co- Chair Sharp noted that some of the members had already been lobbied on this request. REFORESTATION AND MONITORING was the request heard next. Mr. Bus said this project envisioned doing two reforestation projects, $100,000 for reforestation in the Tanana Valley, $100,000 for reforestation in the Kenai area and $50,000 to monitor both areas. The goal was to stimulate forest management and timely reforestation as required under the Forest Practices Act and promote the enhancement of production of the renewable resources. Senator Adams asked about the Miller's Reach fire damage and if the division had plans to reforest that area. Mr. Jahnke said the Kenai reforestation portion included plans to reforest areas that suffered fire damage. There were no plans for reforestation in the Mat-Su area, he stated. Most of that area was "urban interface" or privately owned, he added. Co-Chair Sharp then asked if the planned reforestation would be done in harvested areas. Mr. Jahnke said that was correct with the exception of the fire-damaged area in Kenai. Mr. Bus moved on to the FEDERAL EXCESS PROPERTY - VEHICLES request for $150,000, which would fund the maintenance of federal access property. He told the committee the department had equipment available from the federal government at no charge. However, there sometimes were repair costs. The department then loaned the equipment to local and private fire departments. This request would enable DNR to obtain equipment for use by the structured fire departments, which were first to respond to fires. In his opinion, it was important to outfit these fire departments with current and up to date equipment. The next item in the DNR capital budget packet was SOUTHEAST VALUE ADDED TIMER SALES. Mr. Bus explained that this project envisioned two timber sales based on the value-added legislation passed in 1996. One would be a timer sale in Wrangell and the other would be in Ketchikan. The $108,000 funds would be used for the layout and travel to those sites. Co-Chair Sharp expressed surprise that there was state-owned timberland in Southeast. A presentation for the FAIRBANKS FACILITY MAINTENANCE, REPAIR AND CONSTRUCTION was then heard. DNR had a nice facility on one side of the road, but the other side of the road held surplus equipment from the federal government accumulated over several years, according to Mr. Bus. Last year, the Legislature appropriated funds to replace a furnace. This year the department was requesting money to upgrade the power supply to meet safety codes, do renovations to make the building ADA accessible and construct restrooms so there would be separate men's and women's facilities. Mr. Bus stated that written material included in the budget packet detailed the requests. Mr. Bus next spoke to the OIL AND GAS ROYALTY ACCOUNTING SYSTEM PHASE II. He noted that the Legislature previously funded phase I of the project. He said a lot of progress had been made on the royalty accounting and this portion of the project would purchase software upgrades to make all the reporting standard and improve the manual processes. This would speed up the amount of royalties billed to the oil companies. The next request was for $60,000 for FIRE MANAGEMENT PLAN MAP ATLAS UPGRADING. Mr. Bus explained that in firefighting, the mass of land ownership determined who paid for the firefighting efforts. The map had been updated over the last several years and contained errors and inaccuracies, according to Mr. Bus. This funding would be used to update the map and make it digitized for wider access. Mr. Bus then presented KENAI RIVER AREA PLAN STUDIES IMPLEMENTATION. This included two projected recommended by the Kenai Area Special Management Group, comprised of DNR, Department of Fish and Game, Department of Environmental Conservation, the Kenai and Soldotna boroughs, the guides association, sport fishermen, and Kenai River property owners. One part of the project would be a vessel overcrowding study and would address the social aspect of how many vessels could reasonably be on the river at any one time. The other part of the project would be a boat wake erosion study and evaluate whether the boat wakes were damaging the habitat. This had matched funding with the US Geological Survey who was doing a hydrology study, and had already contributed $35,000 to this project. Co-Chair thought it might tie into the major boat launch facilities included in the ADF&G capital project requests. The next DNR item was AGRICULTURAL LAND DISPOSALS. Mr. Bus explained that, similar with the Division of Lands, the Division of Agriculture over the last several years had reposed several parcels they would like to sell again. Also, with the mental health settlement, the division was now in a position to offer those parcels that were in dispute, he stated. This project would offer parcels, including 8,750 acres currently in state ownership, and put the land back in private ownership. The funding source for this project would be Agricultural Loans and would generate about $4-5 million for the loan fund, Mr. Bus anticipated. Co-Chair Sharp wanted to know if any revenues generated would return to the Agirc Loan fund. Mr. Bus affirmed, saying that the revolving loan fund was the owners of the property. However, the portions of the sale that were part of the Mental Health Claims settlement would go into the general fund. Co-Chair Sharp asked if this was strictly Agriculture Rights land. The project proposed to do ALF properties and Agricultural Rights properties, Mr. Bus answered. He added that the earlier lands disposal capital project was Title 38 lands under the direction of the Division of Lands. Mr. Bus continued with the presentation, speaking to the SYMMS TRAILS FEDERAL GRANTS. He explained that this federally funded project would allow the state to award grants to different organizations for trail projects. He listed past awards granted to different organizations and the number of applicants versus the number of awards. The next request was $640,000 federal funds for NATIONAL HISTORIC PRESERVATION GRANTS. These grants were awarded to individuals for historic preservation activities and were comprised of 60 percent federal and 40 percent state funds, according to Mr. Bus. This specific request was for capital projects, which were all federally funded, he added. He spoke about the application and awards process of the grants. Co-Chair Sharp noted the large amount of money and looked in the written statement for the areas anticipated for projects. He was unable to find that information and requested the department provide it. Mr. Bus replied that he would and added that most of the funds were routed through the Division of Parks, History and Archeology who administered many of the projects. Co-Chair Sharp's concern was that he felt the funds should go to non-profit groups rather than aid to the division. Mr. Bus replied that a large percentage went to the division to administer all the different grants. Then the funds went to local communities. Co-Chair Sharp requested a list of the past year's activities plus anticipated activities for this year. The committee then heard the presentation for ABANDONED MINES LANDS RECLAMATION. Mr. Bus explained that over the years, there had been many mines abandoned and there was a federal program that tried to mitigate the hazards caused by the abandoned mines. The $1.5 million used to be accounted in the operating budget, this year the department switched the funds to the capital budget because all the money would go to private contractors to fix the hazards, according to Mr. Bus. They were multi-year projects and the department felt it was more appropriate to reflect them in the capital project. Co-Chair Sharp asked if the programs were administered through the Division of Mines, which Mr. Bus affirmed. TRACI CRAMER, member of the Exxon Valdez Trustee Council, came to the table to speak to the next DNR capital budget request, KENAI HABITAT RESTORATION AND RECREATION ENHANCEMENTS. She noted there were two other EVOSS projects that were included in the Governor's budget amendment. The Kenai project would allow DNR to proactively manage resources at the same time as accommodating the public, she stated. This project would include the construction of boardwalks, grateways, signage, re-vegetation of the riverbank and possible redirection of the public to keep them away from the critical habitat areas. The $462,300 was entirely settlement funds, she pointed out. Ms. Cramer then spoke to the other two requests; the first was SMALL PARCEL PURCHASES. This would allocate $820,000 for the acquisition of three small parcels. The price was based on the appraised fair market value and included $500,000 for the Baycrest parcel. This was a 90-acre parcel located north of Homer and fronted Katchemak Bay. Also included was $80,000 for a parcel on the Ayakulik River, $240,000 for a parcel on the Karluk River Lagoon. Co-Chair Sharp requested detail on the items since they were not included in the capital budget packet. The third project Ms. Cramer addressed was $3 million for an archeologically repository and local display facilities. The Exxon Valdez oil spill affected the archeological resources of the area, she stated. The trust council therefore approved this money to access the damage. Included in the project was construction of an archeological repository, a regional repository on the Price William Sound, construction of mobile display facilities in the communities themselves so the artifacts could be brought the to communities, and also development of traveling exhibits. According to Ms. Cramer, the exhibits would be developed in the regional repository and then made available to the local display facilities. Co-Chair Sharp asked if a repository site had been selected. Ms. Cramer listed eight communities interested in housing either the repository or the display facilities. At that time a Request for Proposals was being drafted for distribution the next week. The plan was to competitively solicit for the different facilities. Co-Chair Sharp wanted to know if these would be housed in only one community. Ms. Cramer replied that the repository would be in one community and the others would have either constructed or upgraded local display facilities. Co-Chair Sharp pointed out that some of the communities seemed too remote to allow wide viewing of the exhibits. Mr. Bus continued with the two remaining Governor's capital project amendments for DNR. The first was for MT. MCKINLEY MEAT AND SAUSAGE PLANT ROOF REPAIR, overseen by the Division of Agriculture. He told the committee that the plant burned down and that most of the fire damage had been repaired. However, the department division discovered during the reparations that the roof was in worse shape than they thought. The insurance did not cover those repairs and the $150,000 requested in the amendment would be needed. He described that phase one of the project would get the facility to a stage where it could be opened for business, and phase two would complete the project. He stressed the necessity for the roof repairs, saying if they were not done the roof would leak and the plant would need to be closed again. The Department of Environmental Conservation required the closure due to concerns of meat contamination. Co-Chair Sharp commented that he had no idea of the ripple affect of the plant closure until the fire forced the earlier closure. The next item was the ROYALTY OIL [PRICE REOPENERS - undistinguishable] for $100,000. Mr. Bus said this had been funded in a prior capital project and was part of royalty settlements with the oil companies. The settlements stipulated that the oil producers or the state could come back and argue on the calculation of the royalty payments, destination and other factors. The department exhausted the $100,000 and this request would replace those monies, he said. The funds were used to hire expert witnesses, contracted out from private sector to support the state's case on these disputes. Returning to the original capital budget packet, the committee took up MENTAL HEALTH TRUST LAND MANAGEMENT PLAN. Mr. Bus explained the $530,000 request as part of a five- year assets management strategy to develop and implement the direction of the trustees to deal with asset management for the mental health land issues. This project would fund hiring of contractors for technical expertise to value and inventory assets, perform feasibility and marketing research, develop real estate plan prospectives, etc. said Mr. Bus. The mental health board approved the funding. The final DNR request was $15,000 for MUNICIPALITY AND BOROUGH SPECIAL ASSESSMENTS. As a state landowner, the department was getting involved with local improvement districts, explained Mr. Bus. Most of the time the state did not participate in these activities, but given the democratic process, when the property owner decided to do a local area improvement district, the state was assessed a portion of the cost. Past appropriation for these projects had been exhausted and the department currently had a $2000 assessment from the Mat-Su Borough. Mr. Bus anticipated that this $15,000 could be used for the next seven to eight years to pay for some of the small local area improvement district assessments. This concluded the presentation by DNR. There was no other department presentations taken at the meeting. Co-Chair Sharp noted there was no Senate Finance Committee meeting scheduled for the following Monday. There were no other announcements except Co-Chair Sharp's stated intent to finish departmental presentations on the capital budget the next Saturday. ADJOURNMENT Co-Chair Sharp adjourned the meeting at approximately 12:30 p.m. SFC-98 (2) 3/28/98 am
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