Legislature(1997 - 1998)

04/04/1998 09:10 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                          MINUTES                                              
                 SENATE FINANCE COMMITTEE                                      
                       April 4, 1998                                           
                         9:10 a.m.                                             
                                                                               
[Due   to   poor   audio  recording,   some   material   was                   
undecipherable]                                                                
                                                                               
CALL TO ORDER                                                                
                                                                               
Senator Sharp  called the  Senate Finance  Committee meeting                   
to order at 9:10 a.m.                                                          
                                                                               
MEMBERS PRESENT                                                              
                                                                               
Co-Chair: Senator Pearce                                                       
Co-Chair: Senator Sharp                                                        
Senator Parnell                                                                
Senator Torgerson                                                              
Senator Donley                                                                 
                                                                               
MEMBERS ABSENT                                                               
                                                                               
Senator Phillips                                                               
Senator Adams                                                                  
                                                                               
ALSO PRESENT                                                                 
                                                                               
Nico  Bus, Budget  Coordinator, Department  of Military  and                   
Veterans  Affairs; Laurie  Perkins, Administrative  Services                   
Director, Department  of Revenue;  Nancy Jones,  Director of                   
the  Division  of  Permanent fund  Dividend,  Department  of                   
Revenue;  Peter Bushry,  Chief Financial  Officer, Permanent                   
Fund Corporation;  Joe Perkins, Commissioner,  Department of                   
Transportation and Public  Facilities; Bo Brownfield, Deputy                   
Commissioner   Department  of   Transportation  and   Public                   
Facilities;  Tom Brigham,  Director,  Division of  Statewide                   
Planning; Mary  Lou Burton,  Budget Director,  University of                   
Alaska;  Chris   Christianson,  General   Council,  Judicial                   
Branch; Ken  Bischoff, Director of  Administrative Services,                   
Department   of  Public   Safety;   Pam  Varney,   Executive                   
Director,  Legislative   Affairs  Agency;   Dwayne  Peeples,                   
Administrative  Services, Department  of Corrections;  Karen                   
Rehfeld, Director of  Education Support Services, Department                   
of Education  and Early Development;  Joan Brown,  Office of                   
Management  and Budget;  Janet Clark,  Department of  Health                   
and  Social Services;  Loren  Jones,  Director, Division  of                   
Alcoholism and Drug Abuse.                                                     
                                                                               
PRESENT VIA TELECONFERENCE                                                   
                                                                               
Pat Ladner, President and  CEO, Alaska Aerospace Development                   
Corporation;  Yvonne   Chase,  Division  of   Community  and                   
Regional  Affairs; George  Buhite,  McLaughlin Youth  Center                   
Superintendent.                                                                
                                                                               
SUMMARY                                                                      
                                                                               
SB 231    APPROPS: CAPITAL/REAPPROP/FUNDS/OPERATING                            
                                                                               
          SB 231 was HEARD and HELD in committee for                           
          further consideration.                                               
                                                                               
SB 230    APPROPRIATION: MENTAL HEALTH PROGRAM (CAPITAL)                       
                                                                               
          SB 230 was HEARD and HELD in committee for                           
          further consideration.                                               
                                                                               
SB 292    APPROPS: CAPITAL/REAPPROP/FUNDS OPERATING                            
                                                                               
          SB 292 was HEARD and HELD in committee for                           
          further consideration.                                               
                                                                               
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                                  
                                                                               
NICO  BUS, BUDGET  COORDINATOR, DEPARTMENT  OF MILITARY  AND                   
VETERANS  AFFAIRS, testified  that  the  department had  two                   
capital budget items  in SB 292, the  supplemental bill. The                   
items were  found in section  11 and section 12.  Section 11                   
included $100  thousand in federal funds,  which allowed the                   
department to  participate in  the counterdrug  program. The                   
program allowed  the department to  work with  the troopers,                   
the  United States  Marshal, and  other agencies  to support                   
drug  enforcement  actions.  The   primary  purpose  of  the                   
project  was to  deter crime.  Forfeited proceeds  were sold                   
profits distributed  to agencies  through the  Department of                   
Justice.  The money  was used  to buy  equipment to  support                   
drug  enforcement activities.  The item  was in  the capital                   
budget  because  most  profits  were  utilized  for  capital                   
equipment.                                                                     
                                                                               
Senator Parnell noted that the  state received federal funds                   
for  narcotics  enforcement  in  the  Department  of  Public                   
Safety  (DPS).   He  asked  if   the  funds   augmented  the                   
counterdrug program.                                                           
                                                                               
Mr.  Bus responded  that DPS  received similar  funding, and                   
would  receive a  share  of  the profits  if  they chose  to                   
participate. He  reiterated that the Department  of Military                   
and  Veterans  Affairs  (DMVA) was  participating  with  the                   
troopers.                                                                      
                                                                               
Mr.  Bus discussed  section  12 of  SB  292, which  included                   
deferred  maintenance for  the youth  corps facilities  $230                   
thousand  in  general funds.  He  explained  that the  youth                   
corps, after serving as a  pilot program for three years was                   
a  permanent  program.  He  stated   that  the  youth  corps                   
building  was   old  and   leaky  with   poorly  functioning                   
furnaces.  The request  would allow  for replacement  of the                   
furnaces and roofs.                                                            
                                                                               
Senator  Pearce restated  that the  funding for  repairs and                   
upgrades would be  used in lieu of rent. She  asked how long                   
the rent would be credited.                                                    
                                                                               
Mr. Bus stated  that $230 thousand would  probably allow for                   
multiple  years  of  credit  against  rent.  He  offered  to                   
provide specific details.                                                      
                                                                               
Co-Chair Pearce  asked what the  state paid in rent  for the                   
youth corps facilities.                                                        
                                                                               
Mr. Bus  replied $16 thousand  per month. He noted  that the                   
final terms were negotiated on the rent.                                       
                                                                               
Co-Chair Pearce  asked if  the state  could expect  a dollar                   
per dollar credit.                                                             
                                                                               
Co-Chair  Sharp  asked if  utilities  were  included in  the                   
rental payments.                                                               
                                                                               
Mr.  Bus stated  that  utilities were  paid separately.  The                   
rental payment covered the use of the buildings only.                          
                                                                               
Co-Chair Sharp  stated that  the item  was listed  as "phase                   
one."  He asked  if  the purpose  was  to semi-obligate  for                   
"phase two."                                                                   
                                                                               
Mr. Bus responded that the  total cost identified for all of                   
the repairs was $450 thousand,  so the $230 thousand request                   
covered  the first  installment. He  added that  the kitchen                   
facility  and  the  ventilation system  required  additional                   
remodel and repair.                                                            
                                                                               
Mr.  Bus pointed  out  one amendment  to  the Department  of                   
Natural  Resources (DNR)  capital budget  of a  $15 thousand                   
general fund request for a  municipal assessment. He offered                   
to answer questions about the request.                                         
                                                                               
Co-Chair  Sharp   noted  that   committee  members   had  an                   
individual  document in  their  committee packet  describing                   
the $15 thousand request.                                                      
                                                                               
Mr. Bus  explained that  the state  paid the  assessment for                   
local improvement  districts. The  request for  $15 thousand                   
allowed the state another 15  years of payment for the local                   
improvement district assessments.                                              
                                                                               
DEPARTMENT OF REVENUE                                                        
                                                                               
LAURIE    PERKINS,    ADMINISTRATIVE   SERVICES    DIRECTOR,                   
DEPARTMENT OF  REVENUE, discussed two capital  budget items.                   
She stated  that the first  was the Permanent  Fund Dividend                   
System Design,  phase two. She  explained that the  item was                   
the second phase of a  system update. The system required an                   
update to meet user requirements.                                              
                                                                               
Senator Parnell  requested additional information  about the                   
system.                                                                        
                                                                               
Ms. Perkins responded that the  second phase would allow for                   
implementation  of  recommendations  from  the  most  recent                   
study on the system design.                                                    
                                                                               
NANCY  JONES, DIRECTOR  OF THE  DIVISION  OF PERMANENT  FUND                   
DIVIDEND, DEPARTMENT OF  REVENUE, referred to page  8 of the                   
handout. She  informed the  committee about  the application                   
period  for the  1998  Permanent Fund  Dividend. She  stated                   
that applications  were first  received and  information was                   
then assembled.  Each application  was microfilmed  and sent                   
for data  entry. She  explained that  the data  entry system                   
was antiquated and overloaded. She  had serious doubts about                   
the  system  lasting  through the  1999  processing  season.                   
Applications were  occasionally rejected by the  system. The                   
vision of an improved  process included automated emails the                   
applicants prompting the application.                                          
                                                                               
Senator Parnell  asked about  pages 10 and  11. He  asked if                   
the   $1   million   request  would   cover   all   of   the                   
recommendations.                                                               
                                                                               
Ms. Jones replied  that the recommendation was  for a three-                   
tiered  system. She  stated  that the  division  was at  the                   
first tier of the system.                                                      
                                                                               
Senator Parnell asked what the $1 million would provide.                       
                                                                               
Ms. Jones responded that a  dependable new data entry system                   
would  be in  effect by  the next  year for  the $1  million                   
request. The second  phase would cover the cost  of a server                   
and the third phase would allow for data.                                      
                                                                               
Senator Parnell  requested further information about  the $1                   
million request.                                                               
                                                                               
Ms. Jones replied yes.                                                         
                                                                               
Senator Parnell asked  if the FY 99  request would guarantee                   
that the system was FY 00 compliant.                                           
                                                                               
Ms. Jones responded yes.                                                       
                                                                               
Ms. Perkins  stated that  the second  item was  intended for                   
the Permanent  Fund Corporation  Telecommunications Disaster                   
Recovery system with a request of $492,800.                                    
                                                                               
PETER  BUSHRY,  CHIEF   FINANCIAL  OFFICER,  PERMANENT  FUND                   
CORPORATION,  explained  that  the  item's  purpose  was  to                   
create a disaster  recovery system in the  event that Juneau                   
was  hit by  a  natural  disaster or  suffered  a long  term                   
disruption of  electronic communications with the  Lower 48.                   
He explained that  the Permanent Fund managed  $9 million in                   
investments internally from the  Juneau location. The system                   
relied on  real-time data feed, market  prices and analytics                   
to enable  the investment  officers to accurately  track the                   
investments and to  remain competitive with the  rest of the                   
institutional  market.  If  the stream  of  information  was                   
interrupted,  the Permanent  Fund  Corporation could  suffer                   
serious  financial consequences.  The request  would counter                   
the  threat and  take advantage  of new  fiber optic  cables                   
installed  by  GCI,  which  would reduce  the  cost  of  the                   
existing data feeds to Juneau.                                                 
                                                                               
Senator  Parnell asked  if  the  improvements would  benefit                   
other agencies.                                                                
                                                                               
Mr. Bushry responded that the  capital project would benefit                   
the Permanent  Fund Corporation  and the  Treasury Division.                   
Other state agencies would assume the cost of the upgrades.                    
                                                                               
Senator  Parnell asked  if  the  division was  collaborating                   
with   the  Department   of  Administration   (DOA)  for   a                   
coordinated state effort.                                                      
                                                                               
Mr.  Bushry responded  that the  Permanent Fund  Corporation                   
would benefit from the request.                                                
                                                                               
Senator Parnell  asked if Mr.  Bushry was  coordinating with                   
DOA.                                                                           
                                                                               
Mr.  Bushry responded  that coordination  was in  place, but                   
the  lease  for fiber  optics  was  for the  Permanent  Fund                   
Division  only.  He  stated that  the  information  obtained                   
would  only be  of  interest to  the  Department of  Revenue                   
(DOR).                                                                         
                                                                               
Senator Parnell  understood that  the fiber length  could be                   
used by other state agencies.                                                  
                                                                               
Mr. Bushry agreed with Senator Parnell.                                        
                                                                               
Co-Chair Pearce  asked if  Juneau was  connected to  the one                   
undersea  cable  that  linked  Alaska  to  the  transpacific                   
cable.                                                                         
                                                                               
Mr.  Bushry  affirmed  that  Juneau  was  connected  to  the                   
undersea  cable.  He  stated   that  the  city  suffered  an                   
interruption  of information  feeds when  the cable  was cut                   
one year ago by a fishing trawler.                                             
                                                                               
Co-Chair Pearce asked if a satellite back-up was an option.                    
                                                                               
Mr.  Bushry replied  that the  quality of  data provided  by                   
satellite was not  optimal. He stated that  a land-line feed                   
was best.                                                                      
                                                                               
Co-Chair  Pearce  asked  if anyone  in  Alaska  had  back-up                   
capability.                                                                    
                                                                               
Mr. Bushry stated that he  could not answer the question. He                   
noted  that  the  requested funding  would  fund  the  first                   
fiber-optic cable, to his knowledge.                                           
                                                                               
Co-Chair Sharp understood that  additional data feed traffic                   
would be directed through the  fiber length. He asked if all                   
of the data would be directed through the fiber length.                        
                                                                               
Mr. Bushry replied in the affirmative.                                         
                                                                               
Senator  Donley  stated  that  he  did  not  understand  the                   
project's emergency capability.                                                
                                                                               
Mr. Bushry responded that a  small site would be established                   
in  Seattle where  historic financial  information could  be                   
retained  and updated  daily. The  disaster recovery  center                   
would  allow for  information  recovery in  the  event of  a                   
long-term natural disaster.                                                    
                                                                               
Co-Chair Sharp noted that  most large financial institutions                   
had a similar mechanism.                                                       
                                                                               
Senator  Donley asked  if the  funding would  allow for  the                   
construction of the disaster recovery center.                                  
                                                                               
Mr. Bushry concurred.                                                          
                                                                               
Senator  Donley  asked  about the  staffing  level  for  the                   
disaster recovery center.                                                      
                                                                               
Mr.  Bushry  responded that  staff  would  not be  necessary                   
unless an emergency  occurred. The space would  be leased to                   
house   the   computers   responsible  for   retaining   the                   
information for possible recovery.                                             
                                                                               
Senator Donley  noted that the  project was listed  as "one-                   
time"  although it  contained a  lease. He  asked about  the                   
term of the lease and when it expired.                                         
                                                                               
Mr. Bushry stated  that the lease would continue  as long as                   
funds  were made  available by  the legislature.  An ongoing                   
operating  budget cost  for maintaining  the  site would  be                   
incurred if  funds were made  available by  the legislature.                   
The  ongoing cost  was estimated  at $46  thousand once  the                   
initial set-up costs were incurred.                                            
                                                                               
Senator Donley  opined that  the site  was redundant  to the                   
existing program.                                                              
                                                                               
Mr. Bushry agreed.                                                             
                                                                               
Senator Donley  suggested that the  fiber optic  cable could                   
be severed in  the same way that the  transpacific cable was                   
severed by the trawler.                                                        
                                                                               
Mr. Bushry acknowledged that the  line could be severed; the                   
ability to  access the disaster  recovery center  could help                   
retrieve the lost information.                                                 
                                                                               
Senator Donley  expressed confusion  about the need  for the                   
second cable  if the  emergency response  was to  access the                   
disaster recovery center.                                                      
                                                                               
Mr.  Bushry explained  that there  were several  purposes to                   
the capital project  request. He stated that the  use of the                   
fiber  optic  cable  would  reduce   the  present  costs  of                   
obtaining information in Juneau.                                               
                                                                               
Co-Chair  Sharp understood  that  disaster relief  potential                   
and  operational savings  were two  important components  of                   
the request.                                                                   
                                                                               
Mr. Bushry concurred.                                                          
                                                                               
Senator Donley asked  how much of the  request was allocated                   
to the  cost of  the site  in Seattle and  how much  for the                   
establishment of the fiber optic cable.                                        
                                                                               
Mr. Bushry  explained that the  majority of the  request was                   
to  establish the  disaster recovery  site  in Seattle.  The                   
equipment and telecommunication  circuits cost $150 thousand                   
to  establish  the  data  links.  The  remaining  amount  of                   
$342,800 would be used for the disaster recovery site.                         
                                                                               
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                           
                                                                               
JOE PERKINS, COMMISSIONER,  DEPARTMENT OF TRANSPORTATION AND                   
PUBLIC  FACILITIES,   stated  that  he  had   one  Statewide                   
Transportation    Improvement    Program   (STIP)    related                   
amendment. He  understood that STIP  would not  be addressed                   
in the meeting.                                                                
                                                                               
Commissioner  Perkins  introduced   the  first  request  for                   
Airport Deferred  Maintenance for  $900 thousand.  He stated                   
that the list of  deferred maintenance projects included the                   
rural airport needs. He stated  that the funding was divided                   
into many small increments for multiple airports.                              
                                                                               
Co-Chair Sharp requested a list  of the proposed maintenance                   
projects.                                                                      
                                                                               
Co-Chair Pearce asked the status  of the federal requirement                   
regarding fencing upgrades around the facilities.                              
                                                                               
BO   BROWNFIELD,    DEPUTY   COMMISSIONER    DEPARTMENT   OF                   
TRANSPORTATION AND PUBLIC  FACILITIES, discussed the ongoing                   
federal  program and  the upgrade  of  fencing for  security                   
purposes in certificated airports.  He noted that there were                   
approximately 27 certificated airports throughout Alaska.                      
                                                                               
Co-Chair Pearce  asked if  the funding  covered the  cost of                   
the fencing requirements.                                                      
                                                                               
Deputy  Commissioner   Brownfield  explained   that  fencing                   
repairs were included in the  item. He added that 25 percent                   
of the funding would be used for fence repair in Sitka.                        
                                                                               
Co-Chair Sharp clarified that all  new fencing was funded by                   
Federal Rural Airport Capital.                                                 
                                                                               
Deputy Commissioner Brownfield concurred  and noted that the                   
certificated airports were the department's responsibility.                    
                                                                               
Co-Chair  Sharp  requested  an itemized  break-down  of  the                   
projects listed in the request.                                                
                                                                               
Commissioner Perkins continued with  the second item for the                   
Alaska  Marine Highway  System  Overhaul and  Rehabilitation                   
for $4 million.  The item was requested  annually. He stated                   
that the  item allowed for  retention of the  vessel's Coast                   
Guard  licenses. He  offered to  provide  details about  the                   
vessels and their proposed upgrades.                                           
                                                                               
Co-Chair Sharp expressed interest in the details by vessel.                    
                                                                               
Senator  Torgerson  asked  how   much  of  the  funding  was                   
allocated for the Malaspina.                                                   
                                                                               
Commissioner Perkins responded $225 thousand.                                  
                                                                               
Co-Chair  Sharp asked  how much  funding  was allocated  for                   
highway  maintenance.  He  wanted to  compare  the  deferred                   
maintenance  cost of  the Alaska  Marine  Highway System  to                   
that of the road system.                                                       
                                                                               
Commissioner Perkins replied $1.5 million.                                     
                                                                               
Commissioner  Perkins continued  with the  next request  for                   
Emergency and Non-Routine Repairs  for $1 million. He stated                   
that the  funding was employed  for system  emergencies. The                   
request  was  consistent with  that  of  previous years.  He                   
provided  examples  such  as roof  repair  for  an  aviation                   
facility.  He  mentioned  extensive  flooding  on  the  Nome                   
council  road,  which  led  to   spending  $90  thousand  on                   
repairs.  He  stated that  the  funding  could be  used  for                   
aviation, buildings or roads.                                                  
                                                                               
Commissioner  Perkins continued  with the  next request  for                   
Facilities  Deferred  Maintenance  and Critical  Repairs  of                   
$750   thousand.   The    most   important   projects   were                   
prioritized. He stated that  DPS trooper's building required                   
repair of the climate  control system costing $105 thousand.                   
He added that the  Sitka court/office building required roof                   
membrane and  insulation replacement costing  $155 thousand.                   
He considered these repairs emergencies.                                       
                                                                               
Co-Chair Sharp asked  if the repair of  the Unalaska Airport                   
Hangar Roof was another part of the request.                                   
                                                                               
Commissioner Perkins replied no.  He stated that the request                   
for Unalaska  was met in  the previous fiscal year  and that                   
it could be deleted from the list.                                             
                                                                               
Commissioner Perkins continued with  the request for Federal                   
Transit Administration Grants for $930 thousand.                               
                                                                               
TOM  BRIGHAM,  DIRECTOR,  DIVISION  OF  STATEWIDE  PLANNING,                   
stated  that the  transit grants  included funding  from the                   
Federal  Transit Administration,  which  was distributed  to                   
transit   operations  throughout   the   state.  The   small                   
percentage of  match was due  to the fact that  the majority                   
of the match was provided by the operators themselves.                         
                                                                               
Co-Chair Sharp asked who the operators were.                                   
                                                                               
Mr. Brigham replied transit  operators in Barrow, Fairbanks,                   
Kodiak, Ketchikan, Juneau and Anchorage.                                       
                                                                               
Commissioner  Perkins continued  with  the Highway  Deferred                   
Maintenance  request  for  $1,550,000. He  stated  that  the                   
request  appeared   in  the  capital  budget   annually.  He                   
reported  to  the  committee that  figures  might  fluctuate                   
according  to maintenance  needs. He  added that  guard rail                   
replacement, dust  control and pothole repairs  were some of                   
the  uses  of the  highway  deferred  maintenance funds.  He                   
added that the division  had programed the appropriate state                   
match to cover the increased program costs.                                    
                                                                               
Co-Chair Sharp  noted that the imminent  Cordova project was                   
not in the capital budget's rural airport project.                             
                                                                               
Commissioner Perkins  concurred. He stated that  the project                   
was  not included  because the  department was  unaware that                   
the  federal government  would not  authorize the  repair in                   
the discretionary project.                                                     
                                                                               
Deputy Commissioner  Brownfield added  that the  project was                   
reviewed  by the  division;  however,  the Federal  Aviation                   
Administration (FAA)  performed a  yearly inspection  of the                   
certificated airports.  The most recent  inspection resulted                   
in the discovery of a  deteriorating surface that could lead                   
to an  accident. He informed  the committee that  FAA pushed                   
to  accomplish the  repairs as  opposed to  waiting for  the                   
program. The  project must be  completed quickly as  a major                   
safety requirement.                                                            
                                                                               
Co-Chair  Sharp added  that the  type of  aircraft could  be                   
modified for safety purposes.                                                  
                                                                               
Deputy Brownfield agreed.                                                      
                                                                               
Co-Chair totaled  the capital budget requests  at $7,650,000                   
including supplemental requests and amendments.                                
                                                                               
Senator  Donley  revisited  the  FAA  issue.  He  noted  two                   
components of  the statewide  appropriation for  the federal                   
aviation  program.  He  wondered  if there  was  a  matching                   
amount  from the  Alaska Industrial  Development and  Export                   
Authority, (AIDEA).                                                            
                                                                               
Commissioner Perkins  commented that the required  match for                   
FAA  was  between   7  and  8  percent.  The   match  was  a                   
requirement of the $80 million program.                                        
                                                                               
Senator Donley  suggested that the figure  was imprecise. He                   
asked for the exact amount of the AIDEA match.                                 
                                                                               
Commissioner Perkins  explained that  the match  depended on                   
discretionary funding. He  was not sure about the  FY 98 FAA                   
total funding  because the approval process  was ongoing. He                   
stated  that the  projected amount  was an  estimate and  he                   
would have accurate information  in August when the approval                   
process   was  completed.   The   normal   process  was   to                   
appropriate a lump sum and  then distribute it appropriately                   
among projects.                                                                
                                                                               
Senator  Donley asked  if  the item  was  designated in  the                   
budget to be spent without a match.                                            
                                                                               
Commissioner  Perkins  replied  that the  funding  was  only                   
spent with a match.                                                            
                                                                               
Senator Donley recalled reading  a newspaper article stating                   
that the Department of  Transportation and Public Facilities                   
(DOT/PF)  representatives would  vote  on  a formula  change                   
regarding  the  percentage  allocated  to  amenities  versus                   
roads. He wondered where the decision was made.                                
                                                                               
Commissioner  Perkins  replied  that he  made  the  decision                   
about the allocated percentage.                                                
                                                                               
Senator  Donley  requested  further  information  about  the                   
process.  He   asked  if   public  comments   were  reviewed                   
regarding the percentages used in the match process.                           
                                                                               
Commissioner Perkins answered in the affirmative.                              
                                                                               
Senator  Donley   pointed  out  that  the   public  comments                   
advocated overwhelmingly  for a  10 percent match.  He asked                   
why  the  commissioner  recommended  15  percent,  when  the                   
public comments advocated for 10 percent.                                      
                                                                               
Commissioner   Perkins   disagreed    with   the   adjective                   
"overwhelmingly."   He opined  that each  municipality could                   
make a decision regarding their preferred percentage.                          
                                                                               
Senator   Donley  maintained   that   the  public   comments                   
overwhelmingly  supported a  match  of  10 percent,  without                   
question.  He stated  that the  comments were  public record                   
and  he offered  to  provide them  to  the commissioner.  He                   
added that the assembly took  the position to support the 10                   
percent match. He  asked why the commissioner  chose to have                   
his representative  vote with  the mayor  as opposed  to the                   
public.                                                                        
                                                                               
Commissioner Perkins  replied that  he reviewed  the project                   
list  and he  advocated  for "enhancement"  money. He  added                   
that the funding was spent  on enhancements rather than only                   
bike trails.  He stated that  a responsible  project example                   
was the  coastal trail in  Anchorage. If  his recommendation                   
was a problem, the municipality could change it.                               
                                                                               
Senator  Donley  wished  to  understand  the  basis  of  the                   
commissioner's  decision,  when  the  public  overwhelmingly                   
commented against the decision.                                                
                                                                               
Commissioner  Perkins stated  that the  decisions in  DOT/PF                   
were based on many  different recommendations. He added that                   
the Anchorage DOT/PF supported his decision.                                   
                                                                               
Senator Donley  expressed disappointment regarding  the lack                   
of  communication  with  DOT/PF   and  the  legislators.  He                   
realized that  the situation  of the  match was  amiss after                   
reading the newspaper.                                                         
                                                                               
Commissioner Perkins  countered that the department  had one                   
of five  votes on  the issue  of the  Anchorage Metropolitan                   
Area Transportation Study (AMATS).                                             
                                                                               
UNIVERSITY OF ALASKA                                                         
                                                                               
MARY  LOU BURTON,  BUDGET  DIRECTOR,  UNIVERSITY OF  ALASKA,                   
announced three capital budget  requests. She introduced the                   
first request  for Systemwide Deferred Maintenance  and Code                   
Compliance for  $7 million. She  stated that  the university                   
would  devote $16.5  million from  its  operating budget  to                   
maintenance,  repair,  renewal  and replacement  costs.  She                   
explained that a backlog  of projects equaling approximately                   
$90  million   remained.  She   stated  that   the  projects                   
continued  to  be  the   regent's  highest  capital  request                   
priority.                                                                      
                                                                               
Ms.  Burton addressed  the next  request for  Small Business                   
Development Programs  for $450  thousand in  matching funds.                   
The   funding   represented   continuation   funding   which                   
generated over  $4 for every  $1 invested by the  state. She                   
noted that  the governor's budget proposed  that the funding                   
be derived from  AIDEA. She urged the  committee to consider                   
the program on its merits regardless of the funding source.                    
                                                                               
Co-Chair Sharp asked about the source of the match.                            
                                                                               
Ms. Burton responded that $1  million was 50 percent federal                   
funding and 50 percent private funding.                                        
                                                                               
Co-Chair  Sharp asked  if the  federal funding  was received                   
directly by the university.                                                    
                                                                               
Ms.   Burton   replied   that  the   federal   funding   was                   
incorporated  into the  university's  operating budget.  She                   
stated  that  the program  was  historically  funded in  the                   
capital budget.                                                                
                                                                               
Co-Chair Sharp asked about the prior fiscal year's request.                    
                                                                               
Ms. Burton  responded that the  prior fiscal  year's request                   
was $450 thousand.                                                             
                                                                               
Ms.  Burton  continued with  the  request  for the  Physical                   
Education  Facility Design  and Construction-  Juneau Campus                   
for $4  million. The request  would allow the  university to                   
seek non-state funding or loans  to finance a basic physical                   
education facility. One source  of funding was the potential                   
sale of the Bill Ray Center in Juneau.                                         
                                                                               
Co-Chair  Sharp  wondered  if   the  university  could  sell                   
property  and   then  spend  receipts   without  legislative                   
approval.                                                                      
                                                                               
Ms. Burton responded that the  funding must be authorized by                   
the  legislature. She  stated  that  the university  receipt                   
authority and user fees would cover the sale proceeds.                         
                                                                               
Senator   Torgerson   asked   if    the   funds   could   be                   
reappropriated to university operations.                                       
                                                                               
Co-Chair  Sharp  understood   that  the  university  receipt                   
authority could be derived from  varied sources. He asked if                   
the  tuition fees  might be  used for  a physical  education                   
facility.                                                                      
                                                                               
Ms. Burton replied absolutely not.                                             
                                                                               
Ms. Burton stated that the  university had a capital item in                   
the  supplemental budget.  The item  requested authority  to                   
receive  and  expend  up  to   $1.7  million  in  university                   
receipts for  planning and design of  a multi-agency fishing                   
facility in Juneau. She mentioned  that the National Oceanic                   
and Atmospheric Administration (NOAA)  was in the process of                   
building a  new fishing  facility in Juneau.  The university                   
requested the option  of being a co-tenant  in the facility.                   
She noted that Senator Ted  Stevens proposed the notion that                   
the  federal   and  the  state  governments   would  combine                   
research efforts to gain the  benefits of collaboration. The                   
fisheries unit at the university  was occupying space needed                   
by instructional programs, making  the move advantageous for                   
multiple reasons.  She added that  the request  was included                   
in  the supplemental  bill because  NOAA was  proceeding and                   
hoped for commitment by May.                                                   
                                                                               
ALASKA COURT SYSTEM                                                          
                                                                               
CHRIS CHRISTIANSON, GENERAL  COUNCIL, JUDICIAL BRANCH, began                   
with  a  $2,734,000  request for  Emergency  Replacement  of                   
Courtroom Recording Equipment. He  mentioned that Alaska was                   
the  only  state  to  utilize   tape  recorders  instead  of                   
stenographers in  the court  system. Stenographers  would be                   
paid  at range  17 based  on what  they were  compensated in                   
other states, leading  to more than $1  million in personnel                   
costs.  He   explained  that  the  court   system's  current                   
equipment was  over 15 years  old and that  the manufacturer                   
of that  equipment went  out of business  six years  ago. He                   
noted  that the  equipment  had  a 10  year  life span  when                   
purchased. After  realizing that  a complete record  was not                   
generated, criminal  trials were  repeated. The  request for                   
the  equipment  was 10  percent  lower  than expected.  Next                   
year's  request would  fund rural  courts,  estimated at  $1                   
million.                                                                       
                                                                               
Mr. Christianson  stated the  second request  for renovation                   
of  the Boney  Courthouse  in Anchorage  for $1,460,000.  He                   
stated that the  Alaska Court System was facing  a number of                   
citations  for the  courthouse built  in 1974.  An inventory                   
was completed in  1993 and a total of  101 deficiencies were                   
identified  with a  projected construction  cost of  over $5                   
million.  Two prior  appropriations  allowed  the system  to                   
address many  of the deficiencies  and the final  stage will                   
allow  for   completion  of   the  project   and  ultimately                   
compliance    with   Americans    with   Disabilities    Act                   
requirements  and  energy  codes   for  lighting  and  power                   
adequacy.  He provided  a copy  of project  details for  the                   
committee members.                                                             
                                                                               
Mr.  Christianson  continued  with the  third  priority  for                   
replacement of  hardware equipment for the  new Computerized                   
Case Management  System. The cost  of the initial  phase was                   
$900  thousand.  Benefits  to  the  public  included  faster                   
processing of documents and information requests.                              
                                                                               
Mr.   Christianson  continued   with  the   system's  fourth                   
priority of the Palmer  Courthouse Expansion for $1,914,000.                   
The courthouse  was built to  originally serve  a population                   
of 31 thousand people. In  1996 the Supreme Court authorized                   
the  relocation of  a superior  court judge  from Valdez  to                   
Palmer, in  response to significant population  and caseload                   
increases in  Palmer. The building expansion  would increase                   
efficiency while benefiting the jurors and the public.                         
                                                                               
Mr.  Christianson concluded  with the  last request  of $850                   
thousand for  the Statewide Court  Facility Code  and Energy                   
Conservation Upgrades.  The project would span  three years,                   
FY 99 through FY 01.                                                           
                                                                               
Senator Parnell  asked about the  request for  completion of                   
the computerized case management  system. He reported to the                   
committee his  experience of sitting  with a  district court                   
judge to observe an arraignment.  He recalled that the judge                   
worked  with  between  40  and  80 files  per  day  and  was                   
required to hand  write each order. He found  the process to                   
be  a waste  of time  and  resources. He  believed that  the                   
computerized   case   management    system   would   improve                   
productivity.  He wondered  if the  item was  tied into  the                   
clerk's office and how it  might implement efficiency of the                   
judge's time in the courtroom.                                                 
                                                                               
Mr.  Christianson  responded  that  the goal  was  to  allow                   
terminals  to   be  connected  to   the  mainframe   in  the                   
courtrooms. He  mentioned another  project with the  goal of                   
improving case management in a  district court in Anchorage.                   
He believed  that changes in  hardware and  procedures would                   
improve the process and make  it more efficient. He expected                   
to report improvement next year.                                               
                                                                               
Senator Parnell recalled that district  court judges did not                   
have  terminals. He  stated that  Alaska was  behind in  the                   
technology aspect of court proceedings.                                        
                                                                               
Senator   Torgerson  asked   about  the   Palmer  courthouse                   
expansion. He  recalled the approval  of a  maximum security                   
prison in  Anchorage as well  as authorization of  a project                   
in Big  Delta. He  understood that the  goal of  the process                   
was to minimize the prisoners  in Palmer. He asked about the                   
potential impact.                                                              
                                                                               
Mr.  Christianson   responded  that  the  majority   of  the                   
caseload was civil.                                                            
                                                                               
DEPARTMENT OF PUBLIC SAFETY                                                  
                                                                               
Co-Chair  Sharp  continued  with the  Department  of  Public                   
Safety (DPS).                                                                  
                                                                               
KEN   BISCHOFF,   DIRECTOR   OF   ADMINISTRATIVE   SERVICES,                   
DEPARTMENT OF  PUBLIC SAFETY,  began with  a reappropriation                   
request of $1.4  million from the fingerprint  system to the                   
Sitka  Academy  Project. The  funds  were  available due  to                   
outsourcing  to   a  service   bureau  that   would  combine                   
fingerprint records with those  of six other western states.                   
The  reappropriation combined  with  another $700,000  would                   
allow the  completion of a  twenty person  women's dormitory                   
at the  Sitka Academy  along with  relocation of  the firing                   
range. This  item was found  in the capital  budget language                   
section 7.                                                                     
                                                                               
Co-Chair Sharp asked Mr. Bischoff  to begin with the regular                   
capital budget requests.                                                       
                                                                               
Mr. Bischoff stated that the  item was an annual request for                   
fish and wildlife protection aircraft  and vessel repair for                   
$1,221,500.   He  stated   that   the  department   operated                   
approximately  40 aircraft  and 20  vessels, which  required                   
annual maintenance.                                                            
                                                                               
Mr. Bischoff explained  the next item for  Fish and Wildlife                   
Protection  Equipment for  $375 thousand.  These maintenance                   
projects included  those for  skiffs, outboard  motors, snow                   
machines, all-terrain vehicles  and other equipment required                   
for the enforcement activity of the division.                                  
                                                                               
Co-Chair  Sharp  opined that  the  requests  appeared to  be                   
potential operating budget items.                                              
                                                                               
Mr.  Bischoff continued  with  the  trooper law  enforcement                   
equipment  request  for  $353,500.  The  equipment  included                   
vehicle  radios,   batteries,  vehicle   disabling  devices,                   
handguns, tape recorders, cameras and computers.                               
                                                                               
Senator    Parnell   understood    that   the    legislature                   
appropriated funds  that may have  been used  for equipment.                   
He  asked  if the  amount  requested  was adequate  for  law                   
enforcement  equipment purchases.  He  preferred to  refrain                   
from using  personal services  funds to  purchase equipment.                   
He requested clarification about the request.                                  
                                                                               
Mr. Bischoff  recalled significant discussion  regarding the                   
department's   work   plan.   He   acknowledged   that   the                   
department's  operating  budget  required  the  movement  of                   
funds from personal  services to other line  items. One line                   
item would cover a shortfall  in prisoner transportation for                   
$200  thousand.  The  other   line  item  transfer  included                   
approximately   $490   thousand  for   trooper   recruitment                   
replacement training,  related travel costs,  employee moves                   
and  academy  tuition  to obtain  trooper  replacement.  The                   
request mentioned  earlier in the meeting  was made annually                   
by the department.                                                             
                                                                               
Senator  Parnell  asked  if  personal  services  funds  were                   
expended on the computer related equipment or radios.                          
                                                                               
Mr. Bischoff responded no, not to his knowledge.                               
                                                                               
Mr.  Bischoff   continued  with  trooper   dispatch  console                   
replacement  for Fairbanks.  The request  for $250  thousand                   
would  fund  a  project  consisting  of  redesign,  upgrade,                   
purchase  and  replacement  of  Very  High  Frequency  (VHF)                   
communications and  telephone interfacing  equipment located                   
in the  Public Safety  building in Fairbanks.  The equipment                   
was over 16 years old.                                                         
                                                                               
Mr.  Bischoff  addressed  the  statewide  academy  expansion                   
request for $700 thousand.  He mentioned the reappropriation                   
for the  Sitka academy,  which was tied  in to  the request.                   
The project  combined with the reappropriation  in section 7                   
would  provide  $2.1  million  for  the  construction  of  a                   
women's  dormitory and  the relocation  of  a firing  range.                   
Encroaching  development makes  use of  the firing  range an                   
increasing public liability.                                                   
                                                                               
Co-Chair Pearce opined  that if the city  allowed the zoning                   
for development  near the firing  range the  developer ought                   
to pay for the relocation.                                                     
                                                                               
Mr.  Bischoff responded  that the  project was  considered a                   
capital  match because  the city  of Sitka  contributed $300                   
thousand  in  terms  of  road  enhancements  and  access  to                   
relocate the  firing range and  as such is  participating in                   
the project.                                                                   
                                                                               
Co-Chair Pearce asked about the state's cost.                                  
                                                                               
Mr. Bischoff responded $2.1 million.                                           
                                                                               
Senator Parnell asked  if the current shooting  range was on                   
state land or leased land.                                                     
                                                                               
Mr. Bischoff did not know  the answer, but offered to report                   
back to the committee.                                                         
                                                                               
Senator  Torgerson  asked   about  guarantees  that  another                   
subdivision would  not be  built near  the new  firing range                   
location.                                                                      
                                                                               
Mr.  Bischoff  understood that  the  firing  range would  be                   
accessible  to the  public during  times  that the  troopers                   
were  not using  it making  the likelihood  remote that  the                   
problem would emerge again.                                                    
                                                                               
Senator  Parnell stated  that he  was driven  to the  firing                   
range's new location which was a great distance from town.                     
                                                                               
Senator Donley  asked if  the cost of  the firing  range was                   
$700 thousand.                                                                 
                                                                               
Mr. Bischoff  replied that  Sitka contributed  $300 thousand                   
and  estimating the  100 yard  shooting range  cost at  $360                   
thousand.                                                                      
                                                                               
Co-Chair  Sharp  understood  that  the  total  cost  of  the                   
project  was $2.1  million.  He  asked if  the  cost of  the                   
shooting range was included in the request.                                    
                                                                               
Mr. Bischoff replied  that the state's total  outlay for the                   
project was  $2.1 million. The  city of Sitka  would provide                   
$300 thousand  for a  total of  $2.4 million  project, which                   
would accomplish  both the woman's dormitory  addition and a                   
shooting range.                                                                
                                                                               
Co-Chair  Sharp asked  if the  proposal was  from the  prior                   
year's  appropriation of  $1.4 million.  He asked  where the                   
cost  of the  joint  effort for  the fingerprinting  program                   
would be covered.                                                              
                                                                               
Mr. Bischoff  responded that  the department  requested that                   
the $116  thousand operating budget  increment be  placed in                   
the criminal records and identification component.                             
                                                                               
Co-Chair Sharp asked  if the funding source  was the general                   
fund.                                                                          
                                                                               
Mr. Bischoff concurred.                                                        
                                                                               
Mr.  Bischoff  continued  with   the  Alaska  Public  Safety                   
Information  Network (APSIN)  statewide data  communications                   
request  for $150  thousand. He  explained that  the project                   
would continue  the conversion from older  technologies. The                   
department was  transitioning to  an internet  based system.                   
He noted that  there were 200 thousand users  of the systems                   
including  the department  plus all  of the  law enforcement                   
agencies around the state.                                                     
                                                                               
Co-Chair  Sharp noted  that there  were three  various APSIN                   
requests.  The  first request  was  for  $150 thousand,  the                   
second for  $600 thousand and  the third for  $150 thousand.                   
He asked if each project was a stand-alone project.                            
                                                                               
Mr. Bischoff  responded that  each item  involved components                   
of  the  same  overall  application and  networks,  but  the                   
projects themselves  were separate.  The APSIN  redesign and                   
implementation  would  be   similar  to  other  department's                   
systems.  He  stated  that  changes  in  state  and  federal                   
legislation  created  the  need to  implement  more  current                   
technology. The department was able  to attract some federal                   
grant funds so  that the general fund would  not provide the                   
only source. He stated  that some general fund participation                   
was required to implement the project.                                         
                                                                               
Mr.  Bischoff continued  that the  APSIN data  communication                   
would begin  to integrate the telecommunications  portion of                   
the   application.   The   APSIN   redesign   included   the                   
application itself along with  trooper histories and trooper                   
reports.  He added  that the  APSIN  NCIC-2000 analysis  and                   
design was a national system  that over 60 thousand agencies                   
participated  in.  The  system  allowed all  50  states  and                   
Canada to perform criminal history  checks and establish hot                   
file entries for missing and  wanted persons. The system was                   
developed in 1965 and used  very old technology. The Federal                   
Bureau  of  Investigation  spent  hundreds  of  millions  of                   
dollars to upgrade the network.                                                
                                                                               
Co-Chair Sharp understood that the  current APSIN system had                   
interconnection capability with the nationwide system.                         
                                                                               
Mr. Bischoff agreed. He stated  that the compatibility would                   
change as the nationwide system was upgraded.                                  
                                                                               
Senator Parnell asked about [undecipherable].                                  
                                                                               
Mr. Bischoff responded that DNA  samples were indexed in the                   
system  when identified  at  the crime  lab.  He added  that                   
flagging  for  sexual offenders  in  the  registry was  also                   
present.                                                                       
                                                                               
Co-Chair   Sharp  continued   with  the   department's  only                   
supplemental  request.   He  stated  that  the   Council  of                   
Domestic Violence and Sexual Assault  had an ongoing project                   
to automate  statistics and data  captured at  each shelter.                   
The  supplemental request  would  allow  this capability  in                   
every shelter  to allow the  standard data collection  to be                   
implemented  in each  shelter to  allow  for more  effective                   
reporting  of incidents.  The request  would complete  phase                   
three, the last phase of the project.                                          
                                                                               
LEGISLATURE                                                                  
                                                                               
PAM VARNEY, EXECUTIVE  DIRECTOR, LEGISLATIVE AFFAIRS AGENCY,                   
explained  the capital  budget request  for FY  99 including                   
six projects.  She noted  that the  legislature appropriated                   
capital budget funds to improve  the data processing section                   
resulting in  fewer calls to  the help desk  and maintenance                   
departments.  She began  with the  first  item, the  Capitol                   
School renovation  to office space. The  legislative council                   
intended to convert the school  to office space. The offices                   
would  relocate from  the  Goldstein  Building, whose  lease                   
exceeds  $335  thousand  per  year.  She  stated  the  lease                   
expense by  $230 thousand  per year.  The operating  cost of                   
the  Capital  School   would  include  janitorial  services,                   
electricity  and oil  expenses. The  lease savings  would be                   
recovered over approximately nine years.                                       
                                                                               
Ms.  Varney  mentioned  a  study by  the  budget  and  audit                   
committee concluding  that the Capital School  represented a                   
valuable asset  and cost effective office  space. She stated                   
that  the  building  would  be   brought  up  to  code  with                   
elevators  and converting  the classrooms  to office  space.                   
She stated that Legislative  Legal and Research would occupy                   
the third floor. The second  floor would house the executive                   
director's  office,  accounting,  personnel  and  house  and                   
senate  records.  The  first  floor  would  house  the  data                   
processing section,  the legislative legal  library combined                   
with the  research library  and the  Legislative Information                   
Office  (LIO). She  noted that  the building  would house  a                   
large Juneau  Information Conference room combined  with the                   
data  processing  training room.  She  hoped  to have  video                   
teleconferencing  equipment  to  be utilized  by  House  and                   
Senate members. She expected to  move into the building July                   
1999.                                                                          
                                                                               
Ms.  Varney  continued  with the  next  item,  for  computer                   
system  conversion.  She  stated that  the  computer  system                   
required Y2K  compliance. She pointed  out that  the bidding                   
process and part  of the analysis was  complete. She offered                   
to  provide the  executive summary.  The projected  cost was                   
$2.5 million  for the project.  The request was for  a total                   
of $1.8  million because  the hope  was to  hire experienced                   
programmers  to  save  money.   The  cost  for  the  project                   
included design  work, server licensing,  technical training                   
for agency  technicians and purchasing  software development                   
tools.                                                                         
                                                                               
Ms.  Varney  discussed  the  next   item,  the  second  year                   
computer  software  replacement   project  for  legislator's                   
office, which  was an ongoing  four-year project  to replace                   
the Senate and House  computer equipment. She explained that                   
the plan  was to  replace 69  Power Mac  60100 with  PCs and                   
purchasing  software and  printers.  The total  cost of  the                   
project was $240,500.                                                          
                                                                               
Ms. Varney  continued with the  next project,  replacing the                   
Legislative  Affairs Agency's  (LAA) computer  equipment and                   
software.  She stated  that  the  information offices  would                   
convert  to PCs  and  state standard  hardware and  software                   
that were  approved by legislative council.  The request was                   
for $60 thousand.                                                              
                                                                               
Ms.  Varney  discussed  the replacement  of  Macintosh  SE30                   
computers and old printers that  were used as teleconference                   
terminals  in the  Capitol with  laptops and  quiet printers                   
for a total  of $17,800 thousand. She mentioned  the need to                   
upgrade 16  legal services computers  and software  to allow                   
for   compatibility   with    legislative   platforms.   The                   
replacement of more advanced PCs would cost $32 thousand.                      
                                                                               
Ms.  Varney  continued with  the  next  item, the  statewide                   
legislative telephone system  replacement. The phone systems                   
in the legislator's interim offices  along with those in the                   
LIO offices would  be replaced. Conversion to  the new phone                   
system would save the state  $14,400 annually. The telephone                   
upgrade   proposal  was   approximately  $49   thousand  for                   
Anchorage,  $8  thousand  for  Fairbanks,  $5  thousand  for                   
Homer, $12 thousand  for Kenai, $5 thousand  for Kodiak, $13                   
thousand for MatSu and $5 thousand  for Sitka for a total of                   
$100 thousand.                                                                 
                                                                               
Ms. Varney discussed the final  request for a teleconference                   
bridge.  She noted  that the  state  paid approximately  $27                   
thousand per year to lease a  bridge. The bridge was old and                   
encountered  frequent breakdowns.  Purchasing  a new  bridge                   
would eliminate  the annual lease  costs and  provide better                   
service. The total request was $156 thousand.                                  
                                                                               
Senator Parnell asked about the  average life of a bridge if                   
purchased.                                                                     
                                                                               
Ms.  Varney replied  that the  leased bridge  was considered                   
"state-of-the-art" when  purchased by  Alaska Communications                   
six years  prior. She  anticipated that  a new  bridge, with                   
software updates would function longer than five years.                        
                                                                               
Senator Parnell wondered if the  option of bidding for a new                   
lease every few years had been explored.                                       
                                                                               
Ms. Varney  replied that Alaska Communications  was the only                   
provider of the bridge service  six years ago when the lease                   
was signed.                                                                    
                                                                               
Senator Parnell  supposed that instead  of embarking  on the                   
telecommunications  business, bidding  for  the best  option                   
might provide the best service.                                                
                                                                               
Senator Parnell  asked about the Capitol  School renovation.                   
He  wondered  what  the  useful life  of  the  building  was                   
anticipated.                                                                   
                                                                               
Ms.  Varney replied  that  the useful  life  of the  Capitol                   
School  following  renovation  would  be  the  same  as  the                   
Capitol  as both  buildings  were built  in  the 1920s.  She                   
imagined  that the  improvements  would work  to extend  the                   
life of the Capitol School building.                                           
                                                                               
Senator Parnell  asked about BASIS  and the request  of $1.8                   
million for upgrades.  He asked if BASIS would  be year 2000                   
compliant.                                                                     
                                                                               
[Undecipherable]  replied yes,  the proposal  would redesign                   
and implement  the BASIS  system, which  would be  year 2000                   
compliant.                                                                     
                                                                               
Senator Parnell asked if the  system would run under the new                   
[undecipherable].                                                              
                                                                               
[Undecipherable]  replied  that the  goal  was  to exit  the                   
mainframe and utilize the internet environment instead.                        
                                                                               
Senator Parnell  asked if  the system  would be  operable in                   
the internet environment.                                                      
                                                                               
Co-Chair   Sharp    asked   about   the   lease    for   the                   
teleconferencing bridge. He  asked if a lease  would tie the                   
state to one communication supplier.                                           
                                                                               
Ms. Varney  explained that the current  agreement included a                   
five year lease with  AT&T/Alaska Communications. The bridge                   
had not  been upgraded  in six years.  She believed  that if                   
the  choice was  made to  go  out to  bid, newer  technology                   
would be the best choice.                                                      
                                                                               
Co-Chair Sharp  asked if  the bid  would tie  the user  to a                   
single source supplier for the  communication link. He asked                   
who provided maintenance and the cost.                                         
                                                                               
Ms.  Varney responded  that the  purchase  price included  a                   
year of  maintenance. Currently the  state paid  $36 hundred                   
to AT&T Alaska Communications for the maintenance service.                     
                                                                               
Co-Chair  Sharp  asked if  the  maintenance  of a  purchased                   
bridge could be contracted out.                                                
                                                                               
Senator Parnell  asked if  the cost  of putting  the project                   
out to  bid had been compared  to the purchasing price  of a                   
new system combined with maintenance costs.                                    
                                                                               
Ms. Varney  explained that past methods  of teleconferencing                   
for the  legislature were different  than those  of standard                   
industries. If the legislature wished  to change the method,                   
the  bidding  process  would  be  simpler.  The  legislature                   
leased  the  bridge  and hired  the  operator.  Most  bridge                   
services provide an operator. She  added that there were not                   
instate    service     providers    for     the    necessary                   
teleconferencing service.  Bids would go to  an out-of-state                   
provider.                                                                      
                                                                               
SENATE BILL 292                                                              
                                                                               
     "An  Act  making supplemental  appropriations;  making,                   
     amending,    and    repealing    capital    or    other                   
     appropriations;  making  appropriations  to  capitalize                   
     funds; and providing for an effective date."                              
                                                                               
Co-Chair Sharp informed the  committee that the supplemental                   
items would be discussed by department.                                        
                                                                               
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT                   
                                                                               
Co-Chair  Sharp   began  with  the  Kodiak   launch  complex                   
project.                                                                       
                                                                               
PAT LADNER, PRESIDENT AND  CEO, ALASKA AEROSPACE DEVELOPMENT                   
CORPORATION  (via teleconference),  explained that  statutes                   
allow authority  to receive funds, but  legislative approval                   
was required in  order to spend the funds.  He mentioned the                   
negotiation of  contracts for the  first three  launches. He                   
requested approval  to spend the  funding received  from the                   
three launch contracts.                                                        
                                                                               
Co-Chair Sharp stated  that the total funding  for the three                   
launch sites  was $5  million. He asked  if the  first three                   
launches would be performed by the Air Force.                                  
                                                                               
Mr. Ladner concurred that the  first three launches were Air                   
Force.                                                                         
                                                                               
YVONNE  CHASE, DIVISION  OF COMMUNITY  AND REGIONAL  AFFAIRS                   
(via  teleconference), discussed  the $500  thousand request                   
for  the Head  Start  center. She  stated  that the  capital                   
funds  would be  used throughout  the state  to improve  the                   
centers  and consequently  their  programs.  The funds  were                   
targeted  for securing  compliance with  health, safety  and                   
sanitation  standards. She  stated that  the reason  for the                   
division's submission of  the request was due  to joint work                   
with  the state  Head Start  association to  assist multiple                   
communities. She  pointed out that the  items listed totaled                   
more than  $500 thousand, so  needs would be  prioritized if                   
the request was approved.                                                      
                                                                               
Co-Chair  Sharp  asked  if  the   projects  were  listed  in                   
priority.                                                                      
                                                                               
Ms.  Chase replied  that  the list  represented  a total  of                   
projects  with  the  amounts  for  each  community.  If  the                   
request was approved, the division  planned to work with the                   
Head Start  Association to  help the  communities prioritize                   
based on the amount of funding available.                                      
                                                                               
Senator  Torgerson asked  if the  funding  was matched  with                   
local money.                                                                   
                                                                               
Ms.   Chase  replied   yes.  She   stated  that   individual                   
communities  contributed  to  the Head  Start  centers.  She                   
indicated that  the contributions  were not an  exact match.                   
She offered to provide details to the committee.                               
                                                                               
Senator  Torgerson   asked  if   the  Head   Start  projects                   
involving  new  buildings  were   for  the  purpose  of  new                   
programs.                                                                      
                                                                               
Ms.  Chase replied  that  new programs  arose  in the  state                   
along with existing buildings requiring extensive repairs.                     
                                                                               
Senator Torgerson imagined that  the requested funding might                   
fund one or  two projects. He felt that a  priority list was                   
important  in his  decision making  about appropriating  the                   
funds.                                                                         
                                                                               
Ms. Chase  stated that the  department would  not prioritize                   
the   projects.  The   Head   Start   Association  and   the                   
communities would  work together  to determine  the greatest                   
needs.  She agreed  that two  of the  larger projects  would                   
utilize the funds  in their entirety. She  supposed that the                   
Head  Start Association  would select  many  of the  smaller                   
items first and  use additional funding to  initiate the new                   
projects.                                                                      
                                                                               
DEPARTMENT OF CORRECTIONS                                                    
                                                                               
DWAYNE  PEEPLES,  ADMINISTRATIVE   SERVICES,  DEPARTMENT  OF                   
CORRECTIONS,  discussed   the  $100   thousand  supplemental                   
capital  request.   The  intention   was  to   purchase  new                   
equipment and  two vehicles in Bethel.  The office equipment                   
and computers were for the  Smart Start Initiative in the FY                   
99   operating  budget.   The   governor  was   implementing                   
increased   probation   and   parole  supervision   of   sex                   
predators. He  stated that Alaska  had 700 sex  predators on                   
probation with an  anticipated 150 more over  the next year.                   
The intention  was to focus  on monitoring  and surveillance                   
of  those  considered  high-risk  for  repeat  offence.  One                   
probation officer  was transferred to Bethel.  He added that                   
a request  was made in the  FY 99 operating budget  for four                   
probation  officers.  The  remaining balance  of  the  funds                   
would  go  toward   purchasing  office  equipment,  personal                   
protection  equipment   and  creating  operations   for  two                   
probation officers  in Anchorage,  one in Fairbanks  and one                   
in Palmer.                                                                     
                                                                               
Senator Parnell asked if the  sex predators were the highest                   
priority for parole supervision.                                               
                                                                               
Mr. Peeples replied yes.                                                       
                                                                               
Senator  Parnell clarified  that the  funds were  to provide                   
supervision capabilities to increase  the supervision of the                   
high-risk individuals.                                                         
                                                                               
Mr. Peeples concurred.                                                         
                                                                               
Co-Chair Sharp  asked if two  vehicles in Bethel  would help                   
increase the supervision.                                                      
                                                                               
Mr. Peeples  responded that the  additional vehicles  were a                   
part of the overall plan for the department.                                   
                                                                               
Senator  Parnell  asked how  the  need  in Bethel  had  been                   
identified.  He  thought  that larger  urban  centers  would                   
house more predators.                                                          
                                                                               
Mr.  Peeples  responded  that  Anchorage  would  obtain  two                   
additional  parole officers.  The intention  was to  enhance                   
Bethel's  coverage as  it had  a fairly  high percentage  of                   
sexual predators on parole.                                                    
                                                                               
Co-Chair Sharp  asked how  many people  would be  tracked by                   
two vehicles in Bethel.                                                        
                                                                               
Mr. Peeples offered to report  back to the committee with an                   
answer.                                                                        
                                                                               
Senator Parnell  asked if the  parole officers  had vehicles                   
in Bethel.                                                                     
                                                                               
Mr.  Peeples  responded  that the  number  of  vehicles  was                   
insufficient to  fully implement the monitoring  program. He                   
added that two people do not have vehicles.                                    
                                                                               
DEPARTMENT OF EDUCATION                                                      
                                                                               
KAREN  REHFELD,  DIRECTOR  OF  EDUCATION  SUPPORT  SERVICES,                   
DEPARTMENT OF  EDUCATION AND  EARLY DEVELOPMENT,  began with                   
the  first request  to provide  funding  to Mount  Edgecombe                   
High School  for the removal  of hazardous chemicals  in the                   
powerhouse facility.  She spoke about the  various chemicals                   
and compounds  existing in the  facility in addition  to the                   
long range plan to demolish  the building. She explained the                   
goal of securing the building to keep the students safe.                       
                                                                               
Co-Chair Sharp  asked if the  department was  requesting $40                   
thousand of the $158,250.                                                      
                                                                               
Ms.  Rehfeld responded  that the  original  request was  for                   
$158,300,  which   included  the  removal  of   the  friable                   
asbestos.  She stated  that prior  to the  asbestos removal,                   
the chemicals must be disposed of and the building secured.                    
                                                                               
Senator Torgerson asked if the building was locked.                            
                                                                               
Ms.  Rehfeld  responded that  plywood  was  nailed over  the                   
windows, but some students have  displaced the wood to enter                   
the  building. She  stated that  the  request would  provide                   
funding  to  place galvanized  steel  over  the windows  and                   
remove some  of the  stairs and  platform access  to further                   
secure the building.                                                           
                                                                               
Co-Chair   Sharp  asked   if   the   building  had   signage                   
communicating the contaminated materials.                                      
                                                                               
OFFICE OF THE GOVERNOR                                                       
                                                                               
JOAN  BROWN, OFFICE  OF MANAGEMENT  AND  BUDGET, stated  the                   
request was  an additional  $1 million  in general  funds to                   
continue  to work  down the  list of  state facilities  with                   
physical  barriers for  compliance  with  the American  with                   
Disabilities Act (ADA).                                                        
                                                                               
DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                     
                                                                               
JANET  CLARK,  DEPARTMENT  OF HEALTH  AND  SOCIAL  SERVICES,                   
highlighted the first project for  the ADA competitive grant                   
for the  mental health beneficiaries for  $200 thousand. She                   
pointed  out  that $100  thousand  was  Mental Health  Trust                   
Authority  receipts and  $100 thousand  general fund  mental                   
health. The  project would provide grants  for mental health                   
beneficiaries to upgrade their facilities.                                     
                                                                               
Ms. Clark  addressed the  next project  for the  Division of                   
Family  and Youth  Services  (DFYS) technology  improvements                   
with  a  request  of  $450  thousand  [undecipherable].  She                   
stated that  the project would  continue the  development of                   
the  main  computer  system that  DFYS  used  called  Online                   
Resources  for the  Children of  Alaska (ORCA).  The federal                   
funds are available only with the available match.                             
                                                                               
Ms.  Clark  continued  with  the   Alcohol  and  Drug  Abuse                   
Management  Information System  upgrade  with  a request  of                   
$392  thousand in  general funds.  The project  was itemized                   
for  committee  members.  She noted  that  the  Division  of                   
Alcoholism  and  Drug  Abuse managed  a  $20  million  grant                   
program  annually.  The  division  secured  support  to  the                   
grantees that  provided management information.  The funding                   
was  divided  by  $60  thousand   for  current  support  and                   
training, $210  thousand for hardware and  software upgrades                   
for the grantees, and $122  thousand for computerized grants                   
management performed annually.                                                 
                                                                               
Senator  Parnell recalled  a provider  testifying about  the                   
carry  forward  of  grants  to  replace  computers  and  buy                   
software.                                                                      
                                                                               
LOREN  JONES,  DIRECTOR,  DIVISION OF  ALCOHOLISM  AND  DRUG                   
ABUSE,  responded  that  some   programs  had  resources  to                   
purchase  computer equipment.  He stated  that compatibility                   
and  standards for  software and  hardware were  established                   
within  the division.  Hardware  purchased specifically  for                   
the required  software allowed the division  to maintain the                   
standard.                                                                      
                                                                               
Ms. Clark continued  with a request for  the department wide                   
client integration project. The  request for the project was                   
$800  thousand, with  $400 thousand  of general  funds, $200                   
thousand of federal funds and  $200 thousand from the Mental                   
Health Trust  Authority. She explained  that the  system was                   
not new, but simply provided a new use of data.                                
                                                                               
Co-Chair Sharp  assumed that the federal  government did not                   
require more than a 100 percent match.                                         
                                                                               
Ms.  Clark  concurred. She  stated  that  the federal  funds                   
would  be applied  by federal  agencies  for direct  federal                   
funds.  Matching funds  would  be received  by some  federal                   
agencies  depending  on  which  programs were  in  the  data                   
warehouse.                                                                     
                                                                               
Co-Chair Sharp observed that the  item's details showed $200                   
thousand in federal match.                                                     
                                                                               
Ms.  Clark  explained that  the  department  applied to  the                   
federal government for $200 thousand.  The amount of general                   
funds received were an important component to the equation.                    
                                                                               
Co-Chair Sharp  asked about a  preference for  general funds                   
or mental health trust funds.                                                  
                                                                               
Ms.  Clark  responded  that there  was  no  preference.  She                   
continued with the next  project for nursing communications.                   
She noted that  the section of public health  nurses was the                   
last  set of  employees  who lacked  personal computers  and                   
were  therefore  separated  from   the  rest  of  the  state                   
government.  She  stated that  the  nurses  used a  computer                   
system  to track  client information  in  the public  health                   
nursing  center. The  computer  upgrade  would allow  nurses                   
access to email  and the internet and  to transmit collected                   
data.                                                                          
                                                                               
Ms.  Clark introduced  the next  item for  family and  youth                   
services  field  safety  and transportation  equipment.  She                   
explained the need to replace  vehicles and safety equipment                   
for the  division of family  and youth services.  She stated                   
that  employees in  the division  requested additional  cell                   
phones, alarms and newer vehicles.                                             
                                                                               
Ms. Clark  introduced the McLaughlin  Youth Center  heat and                   
ventilation  control  system.   The  project  would  replace                   
obsolete and nonfunctioning  mechanical controls. She stated                   
that  the existing  manual  controls  were approximately  30                   
years old  and in  poor condition. The  plan was  to replace                   
obsolete controls  with a direct  digital control  system to                   
allow  central  monitoring  of  system.  The  upgrade  would                   
reduce energy and operating costs by 12 -17 percent.                           
                                                                               
Co-Chair  Sharp asked  if  another  capital project  request                   
existed for the McLaughlin Youth Center.                                       
                                                                               
Ms. Clark  responded that the  department had  another, much                   
larger request for the youth center.                                           
                                                                               
Ms.  Clark continued  with a  request for  the Kenai  Health                   
Center project.  She explained that  in 1967  the department                   
entered  an  agreement  for  the  exchange  of  land,  which                   
allowed for  the location of  the health center in  the City                   
Hall building. She  added that staff increased  from four to                   
nine, which  led to a  crowded work environment.  She stated                   
that the  waiting room  and city  council meeting  room were                   
shared. She  mentioned the plan  for a joint  facility where                   
the  city  provided  land with  city  and  state  government                   
sharing a facility.                                                            
                                                                               
Ms.  Clark  examined  the funding  of  planning  and  design                   
appropriations for youth  correctional facilities throughout                   
the state.  She stated that  the request was  for $1,500,000                   
for  a new  facility  in  the Ketchikan  area  to serve  the                   
southern southeast. She  noted that FY 95 saw  20 percent of                   
admissions  to  the  Johnson Youth  Center  in  Juneau  from                   
Ketchikan. She explained that Ketchikan  was without a youth                   
center,   which   made   work  difficult   for   local   law                   
enforcement.  The initial  plan budgeted  for four  beds and                   
the  local community  decided to  supplement  with beds  for                   
emotionally disturbed  youth and those with  substance abuse                   
issues.  The community  was seeking  the funds  from private                   
foundations and the Mental Health Trust Authority.                             
                                                                               
Co-Chair Sharp understood that the  facility might cost more                   
than $3 million.                                                               
                                                                               
Ms.  Clark  responded that  the  addition  of the  beds  for                   
substance abuse  and mental health  would increase  the cost                   
to approximately $2.7 million.                                                 
                                                                               
Co-Chair  Sharp asked  if the  proposed amount  of beds  was                   
ten.                                                                           
                                                                               
Ms. Clark  concurred. She noted  that the  department wished                   
to minimize the use of beds,  but was supportive of the need                   
for mental health services.                                                    
                                                                               
Co-Chair Sharp asked about  the efficiencies associated with                   
a four bed facility.                                                           
                                                                               
Ms.  Clark  responded  that  a four  bed  facility  was  not                   
particularly  efficient.  She  stated   that  an  eight  bed                   
facility and a four  bed facility incurred similar operating                   
costs.                                                                         
                                                                               
Ms. Clark continued by providing  photographs and history of                   
past  legislative  appropriation  for the  McLaughlin  Youth                   
Center detention.  She noted  last year's  appropriation for                   
replacement of  an abandoned cottage  and planning  funds to                   
upgrade  the  detention  facility at  McLaughlin.  The  $5.2                   
million  request for  McLaughlin  would  fund the  remaining                   
portion of the project.  The project would provide detention                   
facilities and additional detention beds.                                      
                                                                               
GEORGE BUHITE,  MCLAUGHLIN YOUTH CENTER  SUPERINTENDENT (via                   
teleconference),  stated that  the youth  center housed  300                   
children  in their  220 bed  capacity with  the rate  of new                   
entrants increasing each year.                                                 
                                                                               
Co-Chair  Sharp  referred to  an  aerial  photograph of  the                   
layout provided to the committee members.                                      
                                                                               
Ms. Clark  helped to explain the  photograph's location. She                   
mentioned  that  McLaughlin  Youth Center  was  situated  on                   
Mental Health Trust Authority land,  which was provided in a                   
settlement.                                                                    
                                                                               
Ms. Clark continued with the  next item. She stated that the                   
legislature  funded  planning  and design  for  the  initial                   
stages  of  the  Matanuska  Susitna  Detention  and  Support                   
Facilities. The  current request  was for $4.1  million. She                   
stated that the Matanuska  Susitna valley lacked a facility.                   
The department recognized the need  to serve the population,                   
since 9  percent of the  detention admissions were  from the                   
Matanuska  Susitna area.  She  explained  that the  planning                   
funds allowed for a 15  bed facility with the opportunity to                   
expand.  She  stated that  the  issue  of finding  land  was                   
large.                                                                         
                                                                               
Senator   Parnell  understood   that  the   cost  would   be                   
approximately $410 thousand per bed.                                           
                                                                               
Ms. Clark agreed  and stated that the  project was "starting                   
from scratch."                                                                 
                                                                               
Co-Chair Clark  asked if the  facility required  kitchen and                   
laundry facilities.                                                            
                                                                               
Ms. Clark  stated that the department  preferred to contract                   
the kitchen and laundry services.                                              
                                                                               
Mr.   Buhite   contributed   that  probation   offices   and                   
educational  space was  incorporated into  the plan  for the                   
sake of efficiency.                                                            
                                                                               
Ms. Clark  introduced the last  item for  competitive grants                   
for  statewide family  inhalant  treatment  program for  the                   
cost  of  $800 thousand.  She  noted  that Alaska  lacked  a                   
treatment  facility  for  inhalants.  She  stated  that  the                   
problem in  rural areas was increasing  with surveys showing                   
as  many  as  20  percent of  high  school  students  trying                   
inhalants.  Inhalant abuse  led to  permanent brain  damage,                   
which incurred long-term costs.                                                
                                                                               
Senator Parnell  asked if the Mental  Health Trust Authority                   
had shown interest in the issue.                                               
                                                                               
Ms. Clark  responded yes.  She stated  that the  project had                   
not  gone  through  the   Mental  Health  Trust  Authority's                   
process although they were interested in the problem.                          
                                                                               
Senator Parnell  understood that  the item was  intended for                   
substance abuse treatment.                                                     
                                                                               
Co-Chair Sharp  asked if Ms. Clark  envisioned a competitive                   
grant. He asked about the term competitive.                                    
                                                                               
Ms. Clark  explained that the proposal  would be competitive                   
by seeking interest in the facility.                                           
                                                                               
Senator  Parnell asked  if other  forms  of substance  abuse                   
used separate  facilities for  separate addition  issues. He                   
wondered if the item might be included in operating grants.                    
                                                                               
Ms.  Clark responded  that  the  department sought  specific                   
types  of grant  programs.  Some facilities  competed for  a                   
variety of programs. She added  that the request was not for                   
operating  dollars  but  instead   for  capital  dollars  to                   
purchase  or  renovate  a facility  to  create  a  treatment                   
facility.  The competitive  grant proposal  would allow  the                   
department to ascertain interest in the project.                               
                                                                               
Co-Chair  Sharp  asked  if  the request  was  similar  to  a                   
designated grant.                                                              
                                                                               
Ms.  Clark  chose not  to  designate  it. She  preferred  to                   
evaluate the interested entities.                                              
                                                                               
Co-Chair   Sharp   requested   further   information   about                   
operating funds.  He asked if  the project would  fall under                   
substance and alcohol abuse for operating budget purposes.                     
                                                                               
Ms. Clark concurred  and noted that requests  to the federal                   
government would be submitted as well.                                         
                                                                               
Senator Parnell wondered why a  grant to purchase a facility                   
was preferable to purchasing the treatment service.                            
                                                                               
Ms. Clark stated  that she had finished  discussing her list                   
of items.                                                                      
                                                                               
SB  231  was  HEARD  and   HELD  in  committee  for  further                   
consideration.                                                                 
                                                                               
SB  230  was  HEARD  and   HELD  in  committee  for  further                   
consideration.                                                                 
                                                                               
SB  292  was  HEARD  and   HELD  in  committee  for  further                   
consideration.                                                                 
                                                                               
ADJOURNMENT                                                                  
                                                                               
                                                                               

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