Legislature(1999 - 2000)

05/05/1999 09:09 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
MINUTES                                                                                                                         
SENATE FINANCE COMMITTEE                                                                                                        
May 5, 1999                                                                                                                     
9:09 AM                                                                                                                         
                                                                                                                                
TAPES                                                                                                                           
                                                                                                                                
SFC-99 # 121, Side A and Side B                                                                                                 
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Torgerson convened the meeting at approximately                                                                        
9:09 AM.                                                                                                                        
                                                                                                                                
PRESENT Senator John Torgerson, Senator Loren Leman,                                                                            
Senator Pete Kelly, Senator Randy Phillips, Senator Dave                                                                        
Donley, Senator Gary Wilken, Senator Lyda Green, Senator Al                                                                     
Adams.                                                                                                                          
                                                                                                                                
Also Attending:                                                                                                                 
                                                                                                                                
DAN SPENCER, Chief Budget Analyst, Office of Management and                                                                     
Budget, Office of the Governor; BOB POE, Commissioner,                                                                          
Department of Administration; ALISON ELGEE, Deputy                                                                              
Commissioner, Department of Administration; DEBORAH                                                                             
SEDWICK, Commissioner, Department of Commerce and Economic                                                                      
Development; PETER FREER, Supervisor, Southeast Regional                                                                        
Office, Division of Municipal Assistance, Department of                                                                         
Community and Regional Affairs; DWAYNE PEEPLES, Director,                                                                       
Division of Administrative Services, Department of                                                                              
Corrections; CHRIS CHRISTENSEN, Staff Council, Alaska Court                                                                     
System; MIKE CONWAY, Director, Division of Statewide Public                                                                     
Service, Department of Environmental Conservation; DAN                                                                          
EASTON, Director, Division of Facility Construction and                                                                         
Operation, Department of Environmental Conservation;  KAREN                                                                     
REHFELD, Director, Education Support Services, Department                                                                       
of Education; KEVIN BROOKS, Director, Division of                                                                               
Administrative Services, Department of Fish and Game; WAYNE                                                                     
REGELIN, Director, Division of Wildlife Conservation,                                                                           
Department of Fish and Game; JANET CLARKE, Director,                                                                            
Division of Administrative Services, Department of Health                                                                       
and Social Services; NANCY DAVIS, Chief, Nursing Section,                                                                       
Division of Public Health, Department of Health and Social                                                                      
Services; REMOND HENDERSON, Director, Division of                                                                               
Administrative Services, Department of Labor; NICO BUS,                                                                         
Administrative Services Manager, Division of Support                                                                            
Services, Department of Military and Veterans Affairs and                                                                       
Department of Natural Resources; KEN BISCHOFF, Director,                                                                        
Division of Administrative Services, Department of Public                                                                       
Safety; and Colonel JOHN GLASS, Director, Division of Fish                                                                      
and Wildlife Protection, Department of Public Safety; LARRY                                                                     
PRIESLY, Special Assistant to the Commissioner, Department                                                                      
of Revenue; PETER BUSHRE, Chief Financial Officer, Alaska                                                                       
Permanent Fund Corporation, Department of Revenue; JOHN                                                                         
MALLONEE, Assistant Director, Child Support Enforcement                                                                         
Division, Department of Revenue; JOHN BITTNEY, Legislative                                                                      
Liaison, Alaska Housing Finance Corporation, Department of                                                                      
Revenue; JEWEL JONES, Alaska Housing Finance Corporation;                                                                       
WENDY REDMOND, Vice President, University Relations,                                                                            
University of Alaska; TRACY CARPENTER, Fiscal Analyst,                                                                          
Division of Legislative Finance;                                                                                                
                                                                                                                                
Attending via Teleconference: From Anchorage: JEFF JESSEE,                                                                      
Executive Director, Alaska Mental Health Trust Authority.                                                                       
                                                                                                                                
SUMMARY INFORMATION                                                                                                             
                                                                                                                                
SB  31-MENTAL HEALTH APPROPRIATIONS                                                                                             
                                                                                                                                
The committee heard testimony from the Alaska Mental Health                                                                     
Trust Authority on the impact of the proposed budget.  The                                                                      
recommendations of the capital budget subcommittee were                                                                         
forwarded to the conference committee on HB 50 and HB 51.                                                                       
                                                                                                                                
SB  32-CAPITAL BUDGET APPROPRIATIONS                                                                                            
                                                                                                                                
The committee heard testimony from the departments on the                                                                       
impact of the committee substitute. The bill was held in                                                                        
committee.                                                                                                                      
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 31                                                                                                              
"An Act making appropriations for the operating and                                                                             
capital expenses of the state's integrated                                                                                      
comprehensive mental health program; and providing for                                                                          
an effective date."                                                                                                             
                                                                                                                                
                                                                                                                                
Co-Chair John Torgerson we will begin with the mental                                                                           
health budget capital appropriations.                                                                                           
                                                                                                                                
JEFF JESSEE, Executive Director, Alaska Mental Health Trust                                                                     
Authority, Department of Revenue, testified via                                                                                 
teleconference from Anchorage.  One of the major items in                                                                       
the mental health capital budget was the API-2000 FACILITY                                                                      
REPLACEMENT.  Two portions of the project were projected                                                                        
for FY00. One was the authorization for $7 million in                                                                           
federal receipts that the trust was working with the                                                                            
Governor's office and US Senator Stevens to include in a                                                                        
federal appropriation. That would be matched with $2                                                                            
million of mental health trust authorized receipts.  The                                                                        
purpose of the two funding sources was to complete the                                                                          
demolition of the old buildings. Current plans for the                                                                          
replacement of the Alaska Psychiatric Institution, had not                                                                      
to date included a funding mechanism for demolition of the                                                                      
current facility when it becomes a toxic waste storage                                                                          
facility after its life as a mental institution.                                                                                
                                                                                                                                
Originally the $225,000 for API STOP-GAP REPAIRS - keeping                                                                      
the facility operational during the transition to a                                                                             
different use - was slated to be done with general funds.                                                                       
However, in an effort to assist the state with the goal of                                                                      
closing the fiscal gap, the Trust agreed to use mental                                                                          
health trust funds.                                                                                                             
                                                                                                                                
The next item was HOUSING MODIFICATIONS FOR PEOPLE WITH                                                                         
SPECIAL NEEDS. This was a match program that included both                                                                      
$150,000 of general fund/mental health fund and $250,000                                                                        
from AHFC receipts. This program was to make home                                                                               
modifications to assist individuals in their ability to                                                                         
remain in their homes and community as long as possible. He                                                                     
gave examples of some of the projects.                                                                                          
                                                                                                                                
PROGRAM FACILITITES DEFERRED MAINTENANCE AND AMERICANS WITH                                                                     
DISABILITIES ACT UPGRADES was the next item.  This program                                                                      
was to give opportunities to nonprofit programs with their                                                                      
necessary state-owned facility upgrades.                                                                                        
                                                                                                                                
Next addressed was the MENTAL HEALTH TRUST BENEFICIARY                                                                          
EQUIPMENT. This program was made up of $50,000 in gf/mh and                                                                     
$100,000 of mhtaar. This was an increase in the in-part                                                                         
contribution. The main purpose of this program was to allow                                                                     
nonprofit organizations to meet their continuing equipment                                                                      
needs. The funds generally were distributed in small                                                                            
amounts but allowed the programs to continue particularly                                                                       
those smaller organizations in rural areas.                                                                                     
                                                                                                                                
The MENTAL HEALTH TRUST OFFICE LAND MANAGEMENT AND                                                                              
ENHANCEMENT capital amount of $660,000 from trust                                                                               
authorized receipts were the next item in the mental health                                                                     
budget. This was what the trust land office used to prepare                                                                     
trust lands for development. For example, Jeff Jessee                                                                           
referred to a timber sale that needed to be laid out. Also,                                                                     
work needed to be done in subdivisions to determine the                                                                         
proper plat approval. Much of the money was used for                                                                            
contractual services. A fair amount of the money was used                                                                       
to contract with the Department of Natural Resources, with                                                                      
whom the trust land office had developed a successful                                                                           
relationship. This was not a pot of money just handed over                                                                      
to the land office; there was a specific work plan, which                                                                       
tied all the funds to specific activities on trust land                                                                         
with measurable performance criteria upon which they were                                                                       
measured.                                                                                                                       
                                                                                                                                
AHFC HOMELESS ASSISTANCE PROGRAM included $250,000 from                                                                         
AHFC receipts matched by $200,000 of mental health trust                                                                        
receipt. The point of this program was to develop long-term                                                                     
housing options and support for individuals who were                                                                            
chronically homeless. This was part of a twenty-year plan                                                                       
to break the cycle of recidivism to services that were not                                                                      
very affective and costly, and get them into permanent                                                                          
housing.                                                                                                                        
                                                                                                                                
AHFC BENEFICIARY AND SPECIAL NEEDS HOUSING was the core of                                                                      
the mental health housing initiative.  The Alaska Housing                                                                       
Finance Corporation had done an excellent job of working                                                                        
with the Trust and the Department of Revenue to get housing                                                                     
funds linked to operating dollars so that the Trust could                                                                       
maximize the resources of the housing agents, according to                                                                      
Jeff Jessee.                                                                                                                    
                                                                                                                                
The last item was the COORDINATED TRANSPORTATION AND                                                                            
VEHICLES.  This had been originally proposed as a match.                                                                        
Now it would be strictly funded with $300,000 mental health                                                                     
funds.  Instead of purchasing individual vans for each                                                                          
nonprofit, this program assisted communities to develop                                                                         
coordinating systems with centralized dispatch,                                                                                 
maintenance, liability coverage, etc.                                                                                           
                                                                                                                                
Senator Randy Phillips wanted to know if the $7 million in                                                                      
federal funds for the API-2000 facility was secure or                                                                           
simply anticipated. What would happen if the federal funds                                                                      
were not allocated?  Jeff Jessee responded that the federal                                                                     
budget process was not complete.  However, this project was                                                                     
on the Governor's priority list for the US Senator to                                                                           
address. The Trust anticipated it would be funded and did                                                                       
not foresee any problems.  If it were not included in the                                                                       
federal budget then all parties would need to gather to                                                                         
rethink how the facility would be demolished.  He noted                                                                         
that under the settlement, the state was obligated to                                                                           
remove any toxic materials from state land.                                                                                     
                                                                                                                                
Senator Randy Phillip's next question addressed the                                                                             
Homeless Assistance Program. He asked how old the program                                                                       
was.  Jeff Jessee answered it was older than the three and                                                                      
one-half years he had been familiar with it.  Senator Randy                                                                     
Phillips wanted brief examples of what projects were done                                                                       
in the past.  Jeff Jessee felt a good example was women's                                                                       
programs that provided residential placement for homeless                                                                       
women who were alcoholics. Also, there had been grantees in                                                                     
Kenai, Fairbanks, Mat-Su and the Aleutians who used the                                                                         
funds for emergency shelters, to develop transitional                                                                           
housing and provide case management and rental assistance.                                                                      
It was spread out not only geographically, but also some                                                                        
was done by local governments, some by regional housing                                                                         
authorities and some by non-profit organizations. AHFC                                                                          
actually ranked the applications for projects, and the                                                                          
members could review that information, Jeff Jessee pointed                                                                      
out.                                                                                                                            
                                                                                                                                
Senator Dave Donley asked for explanation of the obligation                                                                     
for clean up of the toxic waste.  Jeff Jessee said that                                                                         
under the settlement, the Trust took title to the ground                                                                        
under the API facility. The facility was still owned by the                                                                     
state.  There was an inter-agency land management agreement                                                                     
between the Department of Natural Resources and the                                                                             
Department of Health and Social Services regarding the use                                                                      
of that property.  Once this ceased to be a mental health                                                                       
facility the question was what was to be done once it no                                                                        
longer had a useful life. It was the Trust's position that                                                                      
the intent of the settlement was that clean up of abandoned                                                                     
buildings was the state's responsibility. It would be                                                                           
expensive to maintain these facilities as a toxic waste                                                                         
storage facility, which it would be because of the great                                                                        
amount of waste present.  Therefore, it would be cheaper to                                                                     
demolish the building sooner.                                                                                                   
                                                                                                                                
Senator Dave Donley offered a motion to move the project                                                                        
recommendations of the Senate Finance Capital Budget                                                                            
Subcommittee for SB 31 from the Senate Finance Committee to                                                                     
the Conference Committee on the Budget for inclusion into                                                                       
HB 51. There was no objection and Co-Chair John Torgerson                                                                       
ordered the report prepared for the Conference Committee.                                                                       
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 32                                                                                                              
"An Act making and amending capital appropriations and                                                                          
reappropriations and capitalizing funds; and providing                                                                          
for an effective date."                                                                                                         
                                                                                                                                
                                                                                                                                
The committee began to hear testimony from the departments                                                                      
on the impacts of the proposed appropriations.                                                                                  
                                                                                                                                
DEPARTMENT OF FISH AND GAME                                                                                                     
                                                                                                                                
KEVIN BROOKS, Director, Division of Administrative                                                                              
Services, Department of Fish and Game testified.  He                                                                            
addressed four projects that were reduced or eliminated in                                                                      
the subcommittee report.                                                                                                        
                                                                                                                                
The department's highest priority was the STATEWIDE                                                                             
FACILITIES DEFERRED MAINTENANCE. Kevin Brooks pointed out                                                                       
that this and two of the other requests addressed deferred                                                                      
maintenance. It was important to the department to ensure                                                                       
the life, health and safety of the employees as well as                                                                         
members of the public who might visit department                                                                                
facilities. The request for this project was for $400,000,                                                                      
which would have addressed only ten-percent of their                                                                            
identified need.  That amount had been reduced to only                                                                          
$200,000. The ability to address the projects was severely                                                                      
impaired.                                                                                                                       
                                                                                                                                
VESSEL AND AIRCRAFT MAINTENANCE AND REPAIR, was the second                                                                      
deferred maintenance project not granted at the requested                                                                       
level. Only a fraction of the identified need was included                                                                      
in the original request for $200,000. The subcommittee                                                                          
approved only half that amount. The department would need                                                                       
to ground aircraft before placing employees at risk, he                                                                         
warned.                                                                                                                         
                                                                                                                                
DOCK REPAIR MAINTENANCE AND REPLACEMENT was not funded at                                                                       
all in the subcommittee report.  The King Salmon facility                                                                       
was the most critical and was used by both the department                                                                       
and the Department of Public Safety. Engineers' reports                                                                         
confirmed the need for repair.                                                                                                  
                                                                                                                                
The final item Kevin Brooks addressed was the SOUTHEAST                                                                         
REGION VESSEL MAINTENCE SHOP.  He explained that the Mental                                                                     
Health Trust Authority had selected the current facility                                                                        
under the land settlement agreement and the department                                                                          
would soon be evicted.  It would take at least a year to                                                                        
build a replacement. The department also used the space for                                                                     
vessel and other equipment storage. Other state agencies                                                                        
housed operations in that facility as well. He noted that                                                                       
the Trustee's had an obligation to find the greatest return                                                                     
on the use of that land and the current use was not it.                                                                         
                                                                                                                                
Senator Randy Phillips wanted to know if the department                                                                         
could utilize funding from the Exxon Valdez settlement.                                                                         
Kevin Brooks said that was not an option because the funds                                                                      
had to be used only in Prince William Sound.  There was                                                                         
discussion about the location of the requested projects. It                                                                     
was stated that the use of the EVOS funds was carefully                                                                         
audited.                                                                                                                        
                                                                                                                                
Senator Loren Leman noticed the witness did not comment on                                                                      
either the Katchemak Bay or the Upper Cook Inlet research                                                                       
programs and asked if the research projects were a lower                                                                        
priority.  Kevin Brooks responded that the department felt                                                                      
the Upper Cook Inlet research while important, was not as                                                                       
critical as the deferred maintenance needs.                                                                                     
                                                                                                                                
Senator Dave Donley asked if since the overall funds would                                                                      
be reduced, it would be more helpful to simply place all                                                                        
the deferred maintenance funding in one line item to allow                                                                      
the department to choose which projects to address.  Kevin                                                                      
Brooks appreciated the suggestion but stated that the                                                                           
proposed $300,000 would not be adequate to fund the King                                                                        
Salmon Dock. That project had been separated out because it                                                                     
was larger than could be included in the general request.                                                                       
                                                                                                                                
Co-Chair John Torgerson referred to front section language                                                                      
in Section 10 of the bill. Kevin Brooks explained that                                                                          
section detailed the rise in revenues created by the                                                                            
increased fees for commercial fishing crewmember licenses.                                                                      
The department had anticipated those revenues would be used                                                                     
for funding capital projects.  He said adjustments might                                                                        
need to be made. Co-Chair John Torgerson asked the witness                                                                      
to review the language in SB 146 and let his office know if                                                                     
any changes needed to be made to fulfill the intent of the                                                                      
Legislature.                                                                                                                    
                                                                                                                                
Senator Al Adams thought the adjustments for compensating                                                                       
the vendors had been made in SB 146. Kevin Brooks said that                                                                     
the adjustments had been made but this addressed more of                                                                        
the mechanics of implementation because of accounting                                                                           
rules, certain recording methods must be followed.                                                                              
                                                                                                                                
DEPARTMENT OF CORRECTIONS                                                                                                       
                                                                                                                                
DWAYNE PEEPLES, Director, Division of Administrative                                                                            
Services, Department of Corrections testified.  He                                                                              
addressed two items.                                                                                                            
                                                                                                                                
MAINTENANCE, RENOVATION, REPAIR, RENEWAL AND REPLACEMENT                                                                        
was a $900,000 general fund request that had been reduced                                                                       
to only $450,000.  Dwayne Peeples testified that the                                                                            
department operated thirteen correctional facilities across                                                                     
the state. The approximate replacement value of the                                                                             
facilities would be $320 million. He detailed the number of                                                                     
bookings and inmates served in the facilities each year,                                                                        
noting that this had a high impact. He also added that the                                                                      
facilities were in constant use 24 hours a day, 365 days a                                                                      
year. The current deferred maintenance, renovation, repair                                                                      
and replacement list exceeded $34 million. Of that amount,                                                                      
$13 million was for deferred maintenance. With the proposed                                                                     
allocation, the department would only be able to perform                                                                        
emergency repairs. This had been the pattern for the last                                                                       
several years and the department had only barely been able                                                                      
to maintain the facilities. The reduced allocation in FY00                                                                      
would stress the department and curtail the ability to                                                                          
maintain the facilities at the current capacity, he warned.                                                                     
                                                                                                                                
The other request Dwayne Peeples addressed was for $250,000                                                                     
for security EQUIPMENT REPLACEMENT.  The subcommittee                                                                           
reduced that amount to $125,000. The department identified                                                                      
over $2 million in needed replacement items. This would                                                                         
only address minimal emergency repairs.                                                                                         
                                                                                                                                
DEPARTMENT OF PUBLIC SAFETY                                                                                                     
                                                                                                                                
KEN BISCHOFF, Director, Division of Administrative                                                                              
Services, Department of Public Safety; and Colonel JOHN                                                                         
GLASS, Director, Division of Fish and Wildlife Protection,                                                                      
Department of Public Safety came to the table to speak to                                                                       
the impact of the proposed budget.                                                                                              
                                                                                                                                
The first item addressed was the Division of Public Safety                                                                      
request for $537,500 for KODIAK VESSEL REPLACEMENT. Colonel                                                                     
John Glass spoke of his experience with the division and                                                                        
the efforts made with the Legislature to replace the older                                                                      
vessels throughout the state. He specifically noted the                                                                         
need to replacement the vessel in Kodiak. The requested                                                                         
funding for this purchase would be accompanied by                                                                               
approximately $200 revenues generated by the sale of older                                                                      
boats. He listed some of the operations the vessel would be                                                                     
used for.                                                                                                                       
                                                                                                                                
The next item was the $1 million reduction to the AIRCRAFT                                                                      
AND VESSEL MAINTENANCE AND REPAIR. The subcommittee                                                                             
recommended funding $500,000, which would have to be split                                                                      
between the aircraft and vessels owned and operated by the                                                                      
department.  Colonel John Glass told of the locations of                                                                        
the aircraft patrol areas. He stressed that it would be                                                                         
almost impossible to maintain the 43 aircraft owned by the                                                                      
department with only $250,000. As a result, five aircraft                                                                       
would probably have to be grounded. He detailed the repairs                                                                     
needed by those aircraft and listed their locations in                                                                          
Palmer, Craig and McGrath.                                                                                                      
                                                                                                                                
The FISH AND WILDLIFE EQUIPMENT request had been reduced by                                                                     
$125,000. This funding was planned for the purchase of a                                                                        
riverboat for the Fairbanks region and a snowmachine for                                                                        
Cantwell.  He shared with the members, news he had received                                                                     
that morning about and aircraft engine had just failed.                                                                         
This aircraft supported the VPO program in Western Alaska.                                                                      
The replacement cost of that engine was $35,000 and the                                                                         
airplane would be grounded until the engine was replaced.                                                                       
                                                                                                                                
Failure to make these equipment replacements and repairs                                                                        
would essentially put the division out of business, he                                                                          
warned. He noted that most of the division's operations                                                                         
were performed off-road and were essential to maintaining                                                                       
the renewable fish and wildlife resources in the state.                                                                         
                                                                                                                                
Senator Randy Phillips asked about the collection of fines                                                                      
through fish and game violations. He wanted to know how                                                                         
much money was collected.  Ken Bischoff respond that money                                                                      
could only be used for operating expenses not for capital                                                                       
projects.                                                                                                                       
                                                                                                                                
Senator Al Adams felt that any earnings from forfeited                                                                          
equipment or fines should be available for use for capital                                                                      
projects.  Ken Bischoff responded that the language did not                                                                     
allow that and said the attorney general's office could                                                                         
better address the reasons why.                                                                                                 
                                                                                                                                
Senator Randy Phillips wanted to know if there were more                                                                        
fish and game violations this year than last year. Colonel                                                                      
John Glass believed there was an increase in violations,                                                                        
but noted there was also an increase in staff to patrol and                                                                     
discover the violations.                                                                                                        
                                                                                                                                
Senator Loren Leman wondered if aircraft could be leased                                                                        
instead of purchased. Colonel John Glass said the division                                                                      
could not lease because there were no SuperCub aircraft                                                                         
available and no one willing to lease to the division due                                                                       
to the risk and liability involved. To use a different                                                                          
aircraft that might be available for lease would not be                                                                         
cost effective. It would cost more money to lease rather                                                                        
than buy. An example was a leased Cessna 206 used in Bethel                                                                     
for ten years. In that time, the division could have bought                                                                     
nine aircraft with the money spent on the lease.                                                                                
                                                                                                                                
(Miscellaneous committee conversation.)                                                                                         
                                                                                                                                
Senator Randy Phillips returned to the issue of violations                                                                      
and noted the high number of violations probably had been                                                                       
occurring all along but were not discovered until more                                                                          
officers had been available to patrol.  Colonel John Glass                                                                      
responded that was correct.                                                                                                     
                                                                                                                                
Senator Pete Kelly asked for clarification of the amount of                                                                     
the vessel and aircraft maintenance and repair request.                                                                         
                                                                                                                                
Senator Randy Phillips asked the number of staff in the                                                                         
division to enforce the fish and wildlife laws.  Trooper                                                                        
Glass responded that there were 89 commissioned officers                                                                        
hired to enforce 586,000 square miles and 33,000 miles of                                                                       
coastline.                                                                                                                      
                                                                                                                                
DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                                        
                                                                                                                                
JANET CLARKE, Director, Division of Administrative                                                                              
Services, Department of Health and Social Services was                                                                          
invited to join the committee.  She reviewed the impact                                                                         
statement focusing on three projects.                                                                                           
                                                                                                                                
The subcommittee had recommended $300,000 of the $750,                                                                          
request for DEFERRED MAINTENANCE, RENEWAL, REPLACEMENT AND                                                                      
EQUIPMENT. The Department of Health and Social Services had                                                                     
35 state-owned facilities with a replacement value of over                                                                      
$200 million. The deferred maintenance needs were                                                                               
calculated at over $3 million. This request would provide                                                                       
funding for only twelve percent of the documented need. She                                                                     
noted most of their facilities operated 24-hours a day;                                                                         
however, only the most serious life, health and safety                                                                          
issues could be addressed.  A list of projects had been                                                                         
provided showing what the deferred maintenance funds would                                                                      
be used for.  It was the unknown expenditures, such as a                                                                        
boiler that could fail, that was the biggest problem. She                                                                       
had very serious concerns with the condition of many                                                                            
facilities.                                                                                                                     
                                                                                                                                
The next item of discussion was the request for $200,000                                                                        
for FAMILY SERVICES FIELD SAFETY, OFFICE AND TRANSPORTATION                                                                     
EQUIPMENT. This was a request for equipment for the                                                                             
Division of Family and Youth Services that was broken into                                                                      
two sections. The first was for radios and cell phones for                                                                      
social workers. She explained the division had many social                                                                      
workers that went into remote areas and intervened with                                                                         
individual lives with potential serious circumstances. The                                                                      
social workers needed the ability to contact someone, such                                                                      
as law enforcement, for assistance if a situation worsened.                                                                     
Over the years, the department discovered that the division                                                                     
had not provided adequate equipment for the social workers                                                                      
as they went into the field.                                                                                                    
                                                                                                                                
The second portion of the request was for vehicles with the                                                                     
division. Janet Clarke noted that many of the social                                                                            
workers used their own vehicles to go out on investigations                                                                     
and home visits.  For example in the Mat-Su office there                                                                        
were 11 people sharing one state-owned vehicle. She warned                                                                      
of the liability issues and that the department did not                                                                         
want the social workers to be targeted because they were                                                                        
required to use their own vehicles for state business. She                                                                      
believed this to be an emergency situation.                                                                                     
                                                                                                                                
The final Department of Health and Social Services request                                                                      
addressed was $100,000 for PUBLIC HEALTH NURSING WIDE AREA                                                                      
NETWORD AND COMPUTER UPGRADE. The Public Health Nurses                                                                          
program had been fortunate over the past several years in                                                                       
that they were able to link their system with the federal                                                                       
government for case management information. As patients                                                                         
moved from one location to another, the patient records                                                                         
could be accessed on the centralized system of another                                                                          
public health nurse center. Janet Clarke told the committee                                                                     
this service allowed for tracking and treating outbreaks of                                                                     
certain illnesses.                                                                                                              
                                                                                                                                
The Alaska Native Health Tribal Consortium notified the                                                                         
division that they would no longer provide the data                                                                             
transmission services at no charge. On an annual basis, the                                                                     
cost would be between $140,000 and $170,000. The $100,000                                                                       
in this request would allow the establishment of an                                                                             
independent network and eliminate the reliance on the                                                                           
consortium.                                                                                                                     
                                                                                                                                
                                                                                                                                
Tape: SFC - 99 #121, Side B    9:57 AM                                                                                          
                                                                                                                                
                                                                                                                                
She continued by saying that this request would have paid                                                                       
for itself in the first year.                                                                                                   
                                                                                                                                
Senator Lyda Green asked if it was true that some people                                                                        
obtained their health care from the public health nursing                                                                       
over many years. That was Janet Clarke's understanding.                                                                         
NANCY DAVIS, Chief, Nursing Section, Division of Public                                                                         
Health, Department of Health and Social Services came to                                                                        
the table and answered that was true.  This was primarily                                                                       
the case in rural areas where public health nurses had been                                                                     
the consistent health professional visitors. She said some                                                                      
records dated back to territorial days.                                                                                         
                                                                                                                                
Senator Lyda Green then wanted to know if those records                                                                         
were not deposited in a hospital or other clinic. Nancy                                                                         
Davis said the public health nurses kept the records. She                                                                       
explained that the public nurses provided care across                                                                           
Alaska for natives and non-natives.  When there was a                                                                           
communicable disease or other public health situation,                                                                          
public health nursing was the standard deliverer of those                                                                       
services. They worked closely with hospitals, local                                                                             
providers, and tribal health entities to do that.                                                                               
                                                                                                                                
Senator Lyda Green asked if that was the case for                                                                               
Anchorage, Fairbanks and the Mat-Su area Nancy Davis                                                                            
replied had its own municipal health department and the                                                                         
state provided some grant support. In Mat-Su and Fairbanks,                                                                     
the state public health nurses performed those services.                                                                        
                                                                                                                                
ALASKA HOUSING FINANCE CORPORATION (DEPARTMENT OF REVENUE)                                                                      
                                                                                                                                
JOHN BITTNEY, Legislative Liaison, Alaska Housing Finance                                                                       
Corporation, Department of Revenue testified. The board was                                                                     
currently holding a board meeting in Juneau and he                                                                              
introduced some of the members who were present.                                                                                
                                                                                                                                
The reductions recommended by the subcommittee to the                                                                           
corporation were significant. The $38 million request was                                                                       
reduced by $31.2 million. John Bittney addresses some of                                                                        
the projects.                                                                                                                   
                                                                                                                                
The first was the $9 million SUPPLEMENTAL HOUSING GRANT                                                                         
PROGRAM that was completely eliminated. He described the                                                                        
services provided by the program to leverage HUD Indian                                                                         
Housing funds to regional housing authorities. The                                                                              
corporation provided twenty percent of construction costs,                                                                      
utility hookups, site development costs, water and sewer                                                                        
hookups, and energy efficiency designs.                                                                                         
                                                                                                                                
The LOW INCOME WEATHERIZATION was reduced from $4 million                                                                       
to only $1 million. The program had been steadily reduced                                                                       
over the past several years. With this level of reduction,                                                                      
John Bittney calculated that about 476 of the 850 planned                                                                       
homes would not be weatherized. The corporation had                                                                             
indication that there could be some problems with obtaining                                                                     
federal matching funds.  If that were the case,                                                                                 
approximately $600 federal funds would be lost.                                                                                 
                                                                                                                                
The corporation had requested funding five grants for the                                                                       
SENIOR CITIZENS HOUSING DEVELOPMENT GRANT PROGRAM. A total                                                                      
of $4 million was eliminated in the subcommittee's                                                                              
recommendation.  Under this budget proposal there would be                                                                      
no grants available for senior housing development in                                                                           
Naknek, Wasilla, Talkeetna, Ketchikan and Homer. The impact                                                                     
spoke for itself, John Bittney said. He wanted to know what                                                                     
the Legislature intended them to do with the programs in                                                                        
future years without the funding. Would the programs be                                                                         
rolled into next year's grants? Should the corporation                                                                          
continue to try to develop senior housing? They were unsure                                                                     
and concerned about the future of the program. They would                                                                       
continue to work with the communities to realize these                                                                          
projects.                                                                                                                       
                                                                                                                                
The SENIOR/STATEWIDE DEFERRED MAINTENANCE AND RENOVATION                                                                        
request had been cut in half from the original $3.5 million                                                                     
amount.  This was the major maintenance line item where a                                                                       
variety of smaller maintenance projects for all the public                                                                      
housing facilities. This did not include major renovation                                                                       
or overhaul projects.                                                                                                           
                                                                                                                                
John Bittney noted that all of the public housing project                                                                       
major renovation projects were completely eliminated. These                                                                     
were the PHASE II MOUNTAIN VIEW/MOUNTIAN VIEW ANNEX; PHASE                                                                      
II PARKVIEW MANOR; SOUTHHALL MANOR RENOVATION; RIVERBEND                                                                        
MULTIPURPOSE BUILDING; and PHASE III CENTRAL                                                                                    
TERRACE/FAIRMOUNT RENOVATION.                                                                                                   
                                                                                                                                
He spoke to the use of the corporations bonding ability to                                                                      
fund deferred maintenance needs for the remainder of the                                                                        
state.  This was done in the previous session under SB 360.                                                                     
The corporation was asked to use its own line of credit to                                                                      
issue bonds to assist the state with its own deferred                                                                           
maintenance needs. He said there was concern on Wall Street                                                                     
about the removal of the corporation's ability to keep up                                                                       
its own facilities while paying for other projects. The                                                                         
residents were the ones who would suffer.  The lost                                                                             
revenues and costs associated with delaying a project were                                                                      
shown in the impact statement.                                                                                                  
                                                                                                                                
The ENERGY EFFICIENCY MONITORING RESEARCH program was also                                                                      
eliminated. John Bittney explained this was a $350,000                                                                          
corporate receipt request to work with state homebuilders                                                                       
to establish a method to generate data on the energy                                                                            
efficiency standards.  The standards were mandated by                                                                           
statue for homes with mortgages purchased by AHFC and                                                                           
resulted in an extra cost for the builder and the consumer.                                                                     
Currently, there was no data from Alaska and very little                                                                        
from Canada to show how the systems performed.                                                                                  
                                                                                                                                
The final item addresses was the BUILDER AND RATER                                                                              
EDUCATION. State law required a minimum energy rating                                                                           
standard for any newly built home before AHFC could                                                                             
purchase the mortgage.  This program allowed the                                                                                
corporation to train and certify raters so the homes could                                                                      
be rated to ensure those standards were met. Without this                                                                       
program, the corporation was unsure how it could meet the                                                                       
mandate.                                                                                                                        
                                                                                                                                
Senator Randy Phillips wanted to know how many units would                                                                      
be affected by the Senior Housing Grant program                                                                                 
elimination. John Bittney answered 57 units.                                                                                    
                                                                                                                                
Senator Lyda Green wanted to know if each of the applicants                                                                     
for the Senior Housing Grant program provided information                                                                       
of other grants and funds they received that were                                                                               
contingent on this funding. John Bittney said they had and                                                                      
he could provide that information to the committee. He                                                                          
broke the information down by project.                                                                                          
                                                                                                                                
JEWEL JONES, Co-Chair, Alaska Housing Finance Corporation                                                                       
commented.  She gave a history of the merger of the                                                                             
corporation with the public housing division.  The                                                                              
corporation received accolades from Wall Street and                                                                             
communities across the state that the corporation was                                                                           
accomplishing its mission, which was housing.  She stated                                                                       
that the corporation was part of the state and wanted to                                                                        
assist the state. However, the current 81 percent funding                                                                       
cut would hurt individuals. She listed names of people who                                                                      
used the corporation's services. "We can not ask people to                                                                      
continue to live in public housing projects that we cannot                                                                      
do the maintenance.  That's not right and that's not fair."                                                                     
                                                                                                                                
Public testimony was submitted requesting that the Low-                                                                         
Income Weatherization project not be cut. These people                                                                          
would have to pay extreme and extraordinary energy costs                                                                        
because of the lack of weatherization projects, according                                                                       
to Jewell Jones.                                                                                                                
                                                                                                                                
Every day the corporation heard from seniors saying they                                                                        
needed more housing and more options. More seniors came to                                                                      
Alaska every day and needed these projects, she testified.                                                                      
                                                                                                                                
Senator Al Adams noted that the intent of the Legislature                                                                       
with the capital budget was to meet the maximum amount of                                                                       
federal match.  He wanted to know the match ratio on                                                                            
supplemental housing. John Bittney answered $9 was provided                                                                     
in the supplemental budget that was intended to cover                                                                           
twenty percent of the cost. Therefore, the match was five                                                                       
to one. The corporation had asked HUD to provide an outline                                                                     
of the federal funding available under this program.                                                                            
                                                                                                                                
Senator Al Adams said that five-to-one match could get the                                                                      
state $45 million. He hoped it would be considered.                                                                             
                                                                                                                                
Senator Gary Wilken said the information provided showed                                                                        
the $9 million request but zero federal funds. It appeared                                                                      
that it was not a required match.  He wanted to know if                                                                         
that was the case.  John Bittney explained that AHFC                                                                            
provided the grant to the regional housing authority and                                                                        
they applied those dollars directly to HUD. The corporation                                                                     
was not the pass-through agent for the federal dollars.                                                                         
                                                                                                                                
Senator Gary Wilken suggested that in the future, if                                                                            
general funds did leverage federal funds in any manner, the                                                                     
information be provided.                                                                                                        
                                                                                                                                
Senator Dave Donley pointed out that testimony given in the                                                                     
full committee stated that this program underwent a change                                                                      
this year.  Last year it was a required match program, but                                                                      
this year it was no longer required. He noted that while it                                                                     
might facilitate federal fund appropriation it was not                                                                          
mandatory. John Bittney offered to provide the federal                                                                          
statute that stated the senator was essentially correct.                                                                        
There was not a stipulated dollar match required. Instead,                                                                      
HUD recognized the tribes across the state and provided                                                                         
housing funding to them. Each tribe received an allocation                                                                      
of a block grant from HUD. In these cases, the tribes chose                                                                     
to have the housing authorities continue to administer the                                                                      
program on their behalf rather than accept the grants                                                                           
directly. The housing authorities had the administrative                                                                        
network established to operate the programs.                                                                                    
                                                                                                                                
The federal statute dictated that there was a cost per unit                                                                     
cap on the number of HUD dollars that could go into each                                                                        
housing unit. The supplemental dollars requested here would                                                                     
allow for additional costs that the cap would not cover.                                                                        
That included the site development costs, utilities hook-                                                                       
up, etc. The housing authorities had to show HUD that the                                                                       
funds were in place to complete the project in order to                                                                         
receive the federal funds. If it there were not adequate                                                                        
funds to complete the project, HUD would not grant the                                                                          
funds.                                                                                                                          
                                                                                                                                
Senator Dave Donley noted there was a program called AHFC                                                                       
federal and other competitive grants. If there was a                                                                            
particularly good project, why couldn't it be funded under                                                                      
this program? Jewel Jones said Anchorage participated with                                                                      
matching grants to AHFC. However, AHFC had a mission to                                                                         
secure affordable housing in rural Alaska.  Funding was                                                                         
available on the federal side, but the matching funds had                                                                       
to be provided. It was a three-way partnership with the                                                                         
regional authority i.e. the tribes, the federal government                                                                      
and the State Of Alaska.                                                                                                        
                                                                                                                                
Senator Dave Donley said it was not really a required match                                                                     
program although it may leverage federal funding.  Jewel                                                                        
Jones said it was a leverage and was necessary and                                                                              
important to be there, however it was categorized. Senator                                                                      
Dave Donley argued that it was only necessary and important                                                                     
if the project had the additional expenses involved. If the                                                                     
project could live within the HUD allocated cost, the                                                                           
additional funds would not be necessary.                                                                                        
                                                                                                                                
Senator Lyda Green wanted to know if there was a                                                                                
requirement in the language to the grant recipient stating                                                                      
that the funds would be used when applying for federal                                                                          
funds.  John Bittney said there was and detailed. AHFC                                                                          
reviewed the planned project and knew where the funds would                                                                     
be spent once the appropriation was received.                                                                                   
                                                                                                                                
Senator Al Adams wanted to know an estimate of the                                                                              
percentage of the federal funds that returned to urban                                                                          
areas of the state in the form of labor or materials.  John                                                                     
Bittney felt it was far more than half.                                                                                         
                                                                                                                                
ALASKA COURT SYSTEM                                                                                                             
                                                                                                                                
CHRIS CHRISTENSEN, Staff Council, Alaska Court System,                                                                          
noted that none of the four requested projects had been                                                                         
funded in the CS.                                                                                                               
                                                                                                                                
EQUIPMENT FOR COMPLETION OF THE AUTOMATED CASE MANAGEMENT                                                                       
SYSTEM was a $1.3 million request. A delay in funding this                                                                      
project would postpone the implementation of an integrated                                                                      
case information and processing system. Currently the                                                                           
courts were using a software system designed in 1981 and in                                                                     
many court locations using hardware that was two                                                                                
generations old to process case information.                                                                                    
                                                                                                                                
This was a very labor-intensive operation. There were many                                                                      
Range 8 and Range 10 clerk positions because there was not                                                                      
a modern computer system to handle the paperwork. For                                                                           
example, there was millions of dollars of trust money in                                                                        
the court's account that had to be accounted for completely                                                                     
by hand because the existing computer system could not do                                                                       
double entry accounting.                                                                                                        
                                                                                                                                
Every year, the court has to come and ask for more clerk                                                                        
positions because of the lack of automation. This would                                                                         
delay the automation by at least one more year and continue                                                                     
the existing problems.                                                                                                          
                                                                                                                                
The second request was for $4 million for DEFERRED                                                                              
MAINTENANCE PROJECTS.  Four of the six listed projects were                                                                     
for roof replacements. Leaky roofs were the worst deferred                                                                      
maintenance needs to put off because of the other damage                                                                        
they cause.                                                                                                                     
                                                                                                                                
The next request was for $1 million for COURT SECURITY                                                                          
PROJECTS. Assaults and other violent conduct had become                                                                         
increasingly common at courthouses nationwide. Except for                                                                       
the Anchorage courthouse, court buildings around the state                                                                      
were designed in a different era when security was not a                                                                        
big concern.  More members of the general public used the                                                                       
facilities each day than any other state agency except                                                                          
perhaps the university. The state had a duty to provide a                                                                       
safe and secure environment for these people. Without this                                                                      
funding, the current level of risk would be present for                                                                         
court staff, jurors, and other courthouse users. He                                                                             
believed the current level of risk was unacceptable.                                                                            
                                                                                                                                
STATEWIDE COURT BUILDING CODE/ENERGY UPGRADE was the last                                                                       
item and requested $400,000. There were eleven courtrooms                                                                       
at six locations around the state that were out of                                                                              
compliance with the Americans with Disabilities Act. Delay                                                                      
in funding these projects exposed the state to potential                                                                        
litigation from users or public interest groups.                                                                                
                                                                                                                                
OFFICE OF THE GOVERNOR                                                                                                          
                                                                                                                                
There was no one present to testify on behalf of the budget                                                                     
recommendations for the Office of the Governor.                                                                                 
                                                                                                                                
RECESS 10:26AM / 1:38 PM                                                                                                        
                                                                                                                                
                                                                                                                                
Tape: SFC - 99 #123, Side A   1:38 PM [TAPE MALFUNCTION-                                                                        
RECORDING LOST]                                                                                                                 
                                                                                                                                
                                                                                                                                
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS                                                                                    
                                                                                                                                
PETER FREER, Supervisor, Southeast Regional Office,                                                                             
Division of Municipal and Regional Assistance, Department                                                                       
of Community and Regional Affairs testified.                                                                                    
                                                                                                                                
The first item was the request for the FLOOD MITIGATION                                                                         
ASSISTANCE GRANTS. Peter Freer detailed the services                                                                            
provided under this program that served approximately 30                                                                        
communities.  He noted this cost no general funds only                                                                          
federal funds.                                                                                                                  
                                                                                                                                
These are 100 percent federal funds made as a grant to the                                                                      
State Of Alaska from FEMA, the Federal Emergency management                                                                     
Agency. Funds were re-granted by the department to                                                                              
municipal governments on a three to one match basis to                                                                          
prepare Flood Mitigation Plans.  Municipalities already                                                                         
having flood Mitigation Plans could use the funds for                                                                           
project activities such as elevating, acquiring or                                                                              
relocating structures in danger of flood damage.  The                                                                           
$350,000 represented the department's receipt authority.                                                                        
The funds were pass-through only, with no funds retained                                                                        
for administrative costs.  Without these funds the                                                                              
Department could not work with cities and boroughs to                                                                           
provide for flood mitigation planning, and to undertake                                                                         
projects that reduced or eliminated damage to property.                                                                         
                                                                                                                                
RURAL DEVELOPMENT ASSISTANCE GRANTS. These were widely used                                                                     
to leverage funds for other projects.                                                                                           
                                                                                                                                
The RDA grant program was funded for almost forty years                                                                         
from the state general fund until three years ago; when                                                                         
funding for the program was eliminated.  RDA funds provided                                                                     
a source of flexible capital up to $100,000 for rural                                                                           
communities to use on a variety of basic local projects                                                                         
such as landfill fencing, construction of a washeteria, or                                                                      
acquisition of fire fighting or EMS equipment. Demand for                                                                       
the funds historically had been many times greater than the                                                                     
amount of funds available. Neither the Capital Matching                                                                         
Grant program nor the RDA Mini-Grant program offered a one                                                                      
to one replacement for these funds.  In the former case,                                                                        
the amounts available to rural communities were smaller;                                                                        
hence more limited in use; in the latter case, funds were                                                                       
pass-through grants from the US Department of Agriculture                                                                       
and must be used according to federal program requirements.                                                                     
                                                                                                                                
ARCTIC WINTER GAMES TEAM ALASKA was an ongoing program that                                                                     
had been funded for many years in varying amounts.                                                                              
                                                                                                                                
The arctic games occurred every two years, with the next                                                                        
games taking place in March 2000 in Whitehorse, Yukon                                                                           
Territory. This organization had been funded historically                                                                       
through this department since 1988 in amounts ranging from                                                                      
$73,300 to $610,000. The higher figures were for years that                                                                     
Alaska hosted the games.  For FY99 they received a total of                                                                     
$155,000 and were asking for an additional $75,000 for the                                                                      
year 2000 games.  These funds would be used primarily in                                                                        
two areas: 1) coordinating teams and coaches for                                                                                
participation in the games, negotiating transportation                                                                          
costs, purchasing uniforms, and similar activities, and 2)                                                                      
paying annual dues to the International Committee.  Failure                                                                     
to provide funding could affect state participation in the                                                                      
games next March if Team Alaska was unable to pay the                                                                           
annual dues in November of this year.                                                                                           
                                                                                                                                
The final item for the department was the ALASKA NATIVE                                                                         
HERITAGE PARK. The park opened just last weekend.  It                                                                           
received only one state appropriation in 1990.  This would                                                                      
permit the grant earnings to be used. If not given, would                                                                       
require the facility to obtain a bank loan.                                                                                     
                                                                                                                                
Located in Anchorage, this $15 million project had received                                                                     
only one state appropriation, in FY90 in the amount of                                                                          
$500,000. The Heritage Park requested $800,000 each year in                                                                     
FY98 and FY 99, both denied. They were currently in the                                                                         
budget requesting $500,000 to assist in the final touches                                                                       
to the park.  Appropriation of these funds would prevent                                                                        
the Heritage Park sponsors from the possibility of having                                                                       
to seek bank loans which, in turn, would have to be                                                                             
amortized from anticipated profits meant to be used for                                                                         
future maintenance and operation.                                                                                               
                                                                                                                                
DEPARTMENT OF NATURAL RESOURCES                                                                                                 
                                                                                                                                
NICO BUS, Administrative Services Manager, Division of                                                                          
Support Services, Department of Military and Veterans                                                                           
Affairs and Department of Natural Resources.                                                                                    
                                                                                                                                
The first request was for $300,000 for completion of the                                                                        
LAND STATUS GIS PROJECT. He showed maps and cards. There                                                                        
were 200 townships left to be converted to this system. He                                                                      
noted how operations would be streamlined under this                                                                            
system.                                                                                                                         
                                                                                                                                
Zero funding would create serious problems for the                                                                              
department's record systems and jeopardize commitments to                                                                       
streamline government operations for industry.  The funding                                                                     
would pay for automating land records. There were about                                                                         
2000 mylars to automate, mostly in the Railbelt and                                                                             
Fairbanks area.                                                                                                                 
                                                                                                                                
Nico Bus then detailed the request for STATE PARK EMERGENCY                                                                     
REPAIRS.  Funds were needed for campground repairs such as                                                                      
roads, level campsite pads, tables, firepits, circulation                                                                       
trails, boating facilities and ADA improvements. Specific                                                                       
repairs were needed at Johnson Lake (road repairs),                                                                             
Stariski (road repairs), Kodiak area (bear resistant food                                                                       
containers), Halibut Point (tables, firepits and ADA                                                                            
improvements) and Stormy Lake Swim Beach (sand                                                                                  
replacement.)                                                                                                                   
                                                                                                                                
Trailhead and trail repair funds were needed for the                                                                            
Tonsina Point Trail Bridge, Point Bridget trails, Chugach                                                                       
State Park trails, and TRAAK engineering and support.                                                                           
                                                                                                                                
There was a need for general facilities repairs to                                                                              
buildings, structures and maintenance. This would address                                                                       
critical repairs for state park ranger stations,                                                                                
maintenance shops, volunteer support facilities, picnic                                                                         
shelters and other structures. These included furnace and                                                                       
generator replacements, roof repairs, and volunteer cabins                                                                      
to reduce vandalism in parks.                                                                                                   
                                                                                                                                
Toilet replacement and water system upgrades were necessary                                                                     
to replace old leaking toilets and to repair water systems                                                                      
to provide safe drinking water for park users.                                                                                  
                                                                                                                                
The final item was for the front section for REFORESTATION.                                                                     
After logging or a forest fire, it was important to                                                                             
reforest these areas to provide jobs and future resources.                                                                      
                                                                                                                                
DEPARTMENT OF EDUCATION                                                                                                         
                                                                                                                                
KAREN REHFELD, Director, Education Support Services,                                                                            
Department of Education, testified.                                                                                             
                                                                                                                                
BIA SCHOOL SITE CLEANUP request was $20,000 general funds.                                                                      
The subcommittee proposal eliminated funding that was                                                                           
targeted to begin a direct, phased program of site                                                                              
remediation and cleanup at former BIA school properties.                                                                        
There were approximately sixty BIA school sites.  Some of                                                                       
these facilities were abandoned and deteriorating offering                                                                      
increased health and safety hazards to residents due to the                                                                     
presence of asbestos and other hazardous materials. There                                                                       
was increasing liability to the state as a result. These                                                                        
funds would be used to evaluate two sites, Grayling and                                                                         
Nightmute, to determine the scope of work necessary and a                                                                       
cost estimate for the remediation.                                                                                              
                                                                                                                                
The request for STATEWIDE ELECTRONIC DOORWAY (SLED) was                                                                         
$100,000. The subcommittee proposal eliminated funding.                                                                         
Without these funds, access to both the State and                                                                               
Legislature homepages would cease to be available to                                                                            
Alaskans who could not afford commercial Internet access or                                                                     
who lived in communities without private Internet                                                                               
providers. Access to basic medical, business and                                                                                
educational sites as well as to federal government                                                                              
information would also be terminated.                                                                                           
                                                                                                                                
Distance education students from around the state, whether                                                                      
they were home schooled, in correspondence programs, or                                                                         
enrolled in post secondary courses, used SLED to locate                                                                         
library and other resources in support of curriculum and                                                                        
educational programs.  SLED was a cooperative project with                                                                      
the University of Alaska. The funds requested supported                                                                         
telecommunications costs for the 57 communities that                                                                            
accessed SLED via AkNet. Without these funds, SLED would                                                                        
not be available in those communities.                                                                                          
                                                                                                                                
HOME MODIFICATIONS FOR INDIVIDUALS WITH DISABILITIES, was                                                                       
only partially funded at $50,000 of the $100,000 request.                                                                       
These funds were used for home modifications for                                                                                
individuals with disabilities who, as part of their                                                                             
Individual Employment Plan, required these modifications in                                                                     
order to attain or maintain employment.  The proposed                                                                           
reduction would limit the number of clients served through                                                                      
this program.                                                                                                                   
                                                                                                                                
Co-Chair John Torgerson asked if the BIA cleanup could be                                                                       
done with storage tank assistance funds.  Karen Rehfeld                                                                         
responded that it could not because of the different                                                                            
cleanup requirements.                                                                                                           
                                                                                                                                
Senator Lyda Green asked if the home modification program                                                                       
also served modifications to schools for students. Karen                                                                        
Rehfeld said it was only for adults and only in their                                                                           
homes.  Senator Lyda Green wanted to know how long this                                                                         
program had been funded by the state.  Karen Rehfeld                                                                            
answered it had been for several years.                                                                                         
                                                                                                                                
Senator Lyda Green noted other grants available in the                                                                          
mental health bill and wondered if the projects could be                                                                        
done under that program.  Karen Rehfeld responded that she                                                                      
was not familiar with that program.                                                                                             
                                                                                                                                
DEPARTMENT OF REVENUE                                                                                                           
                                                                                                                                
LARRY PRIESLY, Special Assistant to the Commissioner,                                                                           
Department of Revenue; PETER BUSHRE, Chief Financial                                                                            
Officer, Alaska Permanent Fund Corporation, Department of                                                                       
Revenue; and JOHN MALLONEE, Assistant Director, Child                                                                           
Support Enforcement Division, Department of Revenue; came                                                                       
to the table to answer any questions. There were none.                                                                          
                                                                                                                                
UNIVERSITY OF ALASKA                                                                                                            
                                                                                                                                
WENDY REDMOND, Vice President, University Relations,                                                                            
University of Alaska testified.                                                                                                 
                                                                                                                                
The subcommittee dropped HUTCHINSON CAREER CENTER. It was                                                                       
funded last year.  She noted the services it provided in                                                                        
vocational training for high school and older students. The                                                                     
intent was that it be a bonded project by the borough with                                                                      
a match from the university.  If there were no funding from                                                                     
the university, the project would cease.  A small amount of                                                                     
funding could allow it to proceed.                                                                                              
                                                                                                                                
SMALL BUSINESS DEVELOPMENT CENTER was transferred from the                                                                      
Department of Commerce and Economic Development to the                                                                          
University. Without the state match the program would die                                                                       
and Alaska would be the only state without a center.  She                                                                       
noted the services the center provided.                                                                                         
                                                                                                                                
STUDENT RECREATION CENTER AT THE JUNEAU CAMPUS.  This was a                                                                     
non-general fund request that would use program receipts.                                                                       
                                                                                                                                
DEPARTMENT OF ADMINISTRATION                                                                                                    
                                                                                                                                
BOB POE, Commissioner, and ALISON ELGEE, Deputy                                                                                 
Commissioner, Department of Administration came to the                                                                          
table. Alison Elgee presented the department's impact                                                                           
statement.                                                                                                                      
                                                                                                                                
INFORMATION SERVICES FUND EQUIPMENT REPLACEMENT this                                                                            
allowed the department to take equipment that had become                                                                        
fully depreciated and replace it once it becomes unusable.                                                                      
It was done in a two-part rate. Failure to fund would not                                                                       
result in reduced rates but would slow the rate to serve                                                                        
the customers.  She gave an example of a micro-encoding                                                                         
machine that was used for warrants.                                                                                             
                                                                                                                                
There was also a tape library the department wished to                                                                          
upgrade. Not doing so would raise operating costs.                                                                              
                                                                                                                                
The second priority was PIONEER'S HOME HEALTH AND SAFETY                                                                        
REPAIRS.  This request included only the most basic                                                                             
projects necessary to meet building codes. Of the $500,000                                                                      
requested, the subcommittee only recommended $144,000. This                                                                     
amount would only fund one project in FY00, the Sitka                                                                           
Pioneer Home elevator mechanical upgrade. All other fire                                                                        
and life safety corrections would go unfunded. They                                                                             
included: Ketchikan Pioneers Home, fire alarm system                                                                            
upgrades, $69.4 (electrical code violation); Juneau                                                                             
Pioneers Home, emergency lighting, $25.5 (electrical code                                                                       
violation); Sitka Pioneers Home, emergency call system                                                                          
replacement, $60.0 (electrical code violation); Anchorage                                                                       
Pioneers Home, sidewalk railing, $39.8 (civil code                                                                              
violation); Fairbanks Pioneer Home, electrical upgrades,                                                                        
$32.2 (electrical code violation), and building structural                                                                      
analysis, $40.0 (architectural code violation); Palmer                                                                          
Pioneers Home, building structural analysis, $30.0                                                                              
(architectural code violation); all homes, emergency                                                                            
capital funds, $58.1 (architectural code violation).                                                                            
                                                                                                                                
These projects were badly needed. The $500,000 request was                                                                      
minimal capital funding and represented only the most                                                                           
critical needs of the approximately $18 million in                                                                              
known/existing code violations.                                                                                                 
                                                                                                                                
There had only been minimal amount of funding over the last                                                                     
several years for these types of projects.                                                                                      
                                                                                                                                
The next request was $250,000 for the BETHEL COURTHOUSE                                                                         
TRANSFER. Failure to fund this request would mean that, as                                                                      
opportunities to move state agencies into the Braund                                                                            
Building in Bethel arose, funds would have to be identified                                                                     
from the individual agencies' budgets to facilitate the                                                                         
moves.                                                                                                                          
                                                                                                                                
PUBLIC DEFENDER CRIMINAL JUSTICE INFORMATION INTEGRATION                                                                        
PROJECT was a $400,000 request that was not recommended for                                                                     
funding by the subcommittee.                                                                                                    
                                                                                                                                
Failure to fund the capital request would result in this                                                                        
agency starting the year 2000 with computer equipment and                                                                       
software that could not be made Y2K compliant.  This would                                                                      
result in reduced productivity and inefficiencies in an                                                                         
agency burdened with a steadily increasing caseload.                                                                            
                                                                                                                                
Failure to fund this project would once again delay the                                                                         
PDA's ability to coordinate with other criminal justice                                                                         
agencies.  This agency would not have hardware or software                                                                      
capable of integrating with other elements of the system or                                                                     
using data currently available.  This would continue to                                                                         
result in duplication of data entry and inefficient use of                                                                      
the state's resources.                                                                                                          
                                                                                                                                
Additionally this agency's non-mission critical case                                                                            
management system would not be Y2K compliant. The current                                                                       
system was written in DOS and needs to be replaced.                                                                             
Without a case management system this agency would be                                                                           
reduced to reliance on paper records and hand searches,                                                                         
again a time consuming and inefficient use of state                                                                             
resources.                                                                                                                      
                                                                                                                                
Internal agency communication would remain fragmented                                                                           
without consistent access to legal research and data.  This                                                                     
would result in efficient case processing and additional                                                                        
slowdowns in cases moving through court.  This would impact                                                                     
not only this agency, but all other elements of the                                                                             
criminal justice system that rely on the efficient                                                                              
processing of information to move cases through the system.                                                                     
                                                                                                                                
The INFORMATION TECHNOLOGY LITERACY PROJECT provided                                                                            
technology training for all State Of Alaska employees as                                                                        
well as University of Alaska staff, faculty and students by                                                                     
delivering on-line training to their desktop at work and at                                                                     
home.  Established to meet statewide training needs by the                                                                      
Telecommunications Information Council in FY99, it was a                                                                        
partnership between a private company, the Gartner Group,                                                                       
the University of Alaska and the state.                                                                                         
                                                                                                                                
Currently, over 4,000 students were enrolled in the online                                                                      
courses with new courses and students added each day.                                                                           
Courses were available in all the most commonly used                                                                            
software such as MS WORD, EXCEL and PowerPoint as well as                                                                       
highly technical network and database management programs.                                                                      
                                                                                                                                
The $175,000 would access a $4.5 million grant package to                                                                       
enhance information technology management and skills.                                                                           
                                                                                                                                
Eliminating the state's contribution to the partnership                                                                         
would mean that the state's most cost effective means of                                                                        
training state employees in the rapidly changing world of                                                                       
information technology would not be available.  Necessary                                                                       
employee training either would get done or more expensive                                                                       
options would be used.                                                                                                          
                                                                                                                                
Currently, 3.345 users enrolled in courses. Travel                                                                              
conference fees and training fees were being eliminated                                                                         
from department budgets.                                                                                                        
                                                                                                                                
The next item was the $500,000 request for BANDWIDTH                                                                            
INCREASE, which was not funded in the CS. The purpose of                                                                        
the project was to provide general funds for capacity                                                                           
increases to the state's network.  Normally, capacity                                                                           
increases were funded through interagency receipts and                                                                          
rates for services.  However, at the time rates were                                                                            
calculated and budgets prepared, agencies were not able to                                                                      
provide sufficient information regarding the projected                                                                          
impact of new applications on the state's network.                                                                              
                                                                                                                                
This one-time capital request would provide necessary                                                                           
contributed capital for capacity increases until better                                                                         
projections, analysis and alternatives could be identified                                                                      
for providing data network services in rural areas and                                                                          
those solutions could be incorporated into ITG services and                                                                     
rates.                                                                                                                          
                                                                                                                                
Without funding, in order to meet the required bandwidth                                                                        
needs, agencies would see a significant rate increase due                                                                       
to the reliance on telecommunications as well as new                                                                            
applications deployed over the network.  Much of this new                                                                       
dependency on bandwidth was the growth in automated                                                                             
processes encouraged by budget constraints.                                                                                     
                                                                                                                                
SATELLITE INTERCONNECTION PROJECT EQUIPMENT REPLACEMENT AND                                                                     
REPAIR was a request for $150,000 that the subcommittee did                                                                     
not recommend funding.                                                                                                          
                                                                                                                                
The SIP provided essential news, weather, government, and                                                                       
educational information to all Alaskans through satellite                                                                       
delivery of several video and audio channels to 220 earth                                                                       
stations throughout Alaska. It carried Gavel to Gavel, the                                                                      
Alaska Rural Communications Service and Ready to Learn                                                                          
programming.                                                                                                                    
                                                                                                                                
It had a history of broadening services while reducing                                                                          
costs, taking advantage of the latest digital compression                                                                       
technology and integrated management across agencies and                                                                        
institutions.                                                                                                                   
                                                                                                                                
Funding would provide support for long-standing equipment                                                                       
repair problems with the system and start-up funds for                                                                          
project management to ensure self-sufficiency and cost-                                                                         
benefit. There had been no funding for four years for                                                                           
management or for repair and replacement of earth stations                                                                      
and transmitters. The system charge-back from communities                                                                       
had been less than effective, serving as a deterrent for                                                                        
trouble reporting, creating a deficit and weakening the                                                                         
systems' overall integrity.                                                                                                     
                                                                                                                                
State funding would leverage non-state funding.                                                                                 
                                                                                                                                
Failure to fund would place the Emergency Alert System at                                                                       
risk.                                                                                                                           
                                                                                                                                
The next request was for $615,000 for the LAND MOBILE RADIO                                                                     
CONVERSION. The plan was to convert all two-way radio                                                                           
systems to allow interoperability of two-way radio                                                                              
resources at the federal, state, and local levels so that                                                                       
response to life threatening situations could be quick and                                                                      
efficient. It was planned for completion in 2006.                                                                               
Meanwhile there was an immediate problem with communication                                                                     
between different crews.  Bob Poe added that during the                                                                         
Miller's Reach fire crews couldn't communicate.                                                                                 
                                                                                                                                
Failure to fund this request would jeopardize federal grant                                                                     
monies that required a matching grant.                                                                                          
                                                                                                                                
Senator Dave Donley asked if there could only be one                                                                            
pioneer home project other than the Sitka elevators, what                                                                       
would it be.  Alison Elgee listed several requests and                                                                          
noted the specific code violations.  Senator Dave Donley                                                                        
repeated his question of what one would she choose.  Alison                                                                     
said there were no funds to deal with unanticipated                                                                             
contingency emergencies.  That was what she would choose.                                                                       
                                                                                                                                
Senator Loren Leman referred to the Public Defenders Office                                                                     
request in which she stated that the equipment was not Y2K                                                                      
compliant.  He wanted to know the seriousness of the                                                                            
problem. Alison Elgee said the biggest problem was that the                                                                     
systems were unable to run the programs that were Y2K                                                                           
compatible.                                                                                                                     
                                                                                                                                
Senator Gary Wilken was under the impression that there was                                                                     
money left over from last year for some of the pioneer home                                                                     
problems.  Alison replied that there was but it was not                                                                         
adequate for the critical needs.                                                                                                
                                                                                                                                
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT                                                                                 
                                                                                                                                
DEBORAH SEDWICK, Commissioner, Department of Commerce and                                                                       
Economic Development testified.                                                                                                 
                                                                                                                                
The ECONOMIC DEVELOPMENT MATCHING GRANT PROGRAM provided a                                                                      
one to one match to a grant from the Economic Development                                                                       
Administration to provide planning and implementation funds                                                                     
for a variety of economic development activities and                                                                            
programs. It was an integral part of the Division of Trade                                                                      
and Development's developmental services and budget. The                                                                        
EDA grant would likely focus on rural development and                                                                           
economic diversification. Without the requested $100,000                                                                        
appropriation, the state would be unable to obtain the                                                                          
federal funds.                                                                                                                  
                                                                                                                                
The other request was $200,000 in AIDEA receipts for the                                                                        
ECONOMIC DEVELOPMENT MATCHING GRANT PROGRAM. This program                                                                       
had been the cornerstone of the department since its                                                                            
inception. She listed the number of grants given and the                                                                        
amount of non-state matching funds garnered.                                                                                    
                                                                                                                                
In FY95 $35,000 was granted to the Metlakatla salmon bake                                                                       
facility. As a result the community was able to capitalize                                                                      
on the tourism market. They will now be able to use HUD                                                                         
funds to build an artist center next to the salmon bake.                                                                        
                                                                                                                                
Norton Sound Halibut Processing Plant was another project.                                                                      
The plant contributed a $35,000 payroll to the community.                                                                       
                                                                                                                                
BREAK 2:18 PM / 2:38 PM                                                                                                         
                                                                                                                                
DEPARTMENT OF ENVIRONMENTAL CONSERVATION                                                                                        
                                                                                                                                
DAN EASTON, Director, Division of Facility Construction and                                                                     
Operation, Department of Environmental Conservation                                                                             
testified.                                                                                                                      
                                                                                                                                
The first item was the WATER QUALITY project request for                                                                        
$125,000 in general funds.                                                                                                      
                                                                                                                                
The state did not have primacy for water quality decisions.                                                                     
Obtaining primacy meant that decisions about permits for                                                                        
use of state waters would be made by the state not the                                                                          
federal government.  The regulated industry had stated a                                                                        
clear preference that the state pursues assumption of                                                                           
primacy for water quality.                                                                                                      
                                                                                                                                
Preparing a plan for primacy assumption was no small task.                                                                      
The state must work closely with regulated industry,                                                                            
environmental groups and the federal government.                                                                                
Regulations must be prepared, fee structures determined                                                                         
staffing plans prepared and a transition plan from the                                                                          
federal government to the state prepared, submitted and                                                                         
approved.                                                                                                                       
                                                                                                                                
With denial of this increment, the state would not pursue a                                                                     
plan for assumption of primacy.                                                                                                 
                                                                                                                                
                                                                                                                                
MIKE CONWAY, Director, Division of Statewide Public                                                                             
Service, Department of Environmental Conservation spoke to                                                                      
the VILLAGE SAFE WATER request for $219,000.                                                                                    
                                                                                                                                
The Department of Environmental Conservation's FY00 capital                                                                     
budget request for the Village Safe Water Program included                                                                      
engineering feasibility studies in 27 communities and                                                                           
construction projects in 44 communities.  This represented                                                                      
almost a forty-percent increase over the number of projects                                                                     
in the FY99 capital budget. The increase in projects                                                                            
resulted from a large increase in federal funding for                                                                           
village sanitation.                                                                                                             
                                                                                                                                
The Division of Administrative Services provided                                                                                
administrative support to Facility Construction and                                                                             
Operation for its grant programs. The number of grants                                                                          
issued by FCO increases substantially. Requirements for                                                                         
frequency of payments were also increased at the direction                                                                      
of the Division of Legislative Audit. Existing                                                                                  
administrative staff was fully utilized. The department                                                                         
would not be able to meet express payment requests and                                                                          
timelines for the FCO program without the additional                                                                            
administrative position.                                                                                                        
                                                                                                                                
FCO project managers worked directly with the communities                                                                       
and other state and federal agencies to complete the                                                                            
projects.  Each project was assigned to a single engineer                                                                       
who was responsible for getting the project started,                                                                            
guiding the community to an appropriate project design,                                                                         
helping the community while safeguarding the investment of                                                                      
state and federal funding as the construction progressed,                                                                       
and ultimately seeing that the project got built and                                                                            
operated by the community.                                                                                                      
                                                                                                                                
The subcommittee proposal suggested that the department                                                                         
could accomplish this work with contracts rather than                                                                           
employees. The department would pursue contracts but could                                                                      
not state for sure that the contracting option would be                                                                         
successful.                                                                                                                     
                                                                                                                                
DEPARTMENT OF LABOR                                                                                                             
                                                                                                                                
REMOND HENDERSON, Director, Division of Administrative                                                                          
Services, Department of Labor. There were three requests                                                                        
and the subcommittee recommended funding for all.  He was                                                                       
available to answer any questions.  There were none.                                                                            
                                                                                                                                
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                                                                                     
                                                                                                                                
There was no testimony given for this department which                                                                          
received 100% funding on its requests.                                                                                          
                                                                                                                                
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                                                                              
                                                                                                                                
Co-Chair John Torgerson realized the department had not                                                                         
seen any amendment and that it was difficult for them to                                                                        
comment on any potential plans.  He said he would reserve                                                                       
time at a later meeting for them to comment on the                                                                              
amendments.                                                                                                                     
                                                                                                                                
This concluded department testimony for the capital budget.                                                                     
Co-Chair John Torgerson announced the 6:00 PM evening to                                                                        
hear public testimony.                                                                                                          
                                                                                                                                
                                                                                                                                
ADJOURNED                                                                                                                       
                                                                                                                                
Senator Torgerson recessed the meeting at 2:45 PM. Minutes                                                                      
for public testimony on the FY00 capital budget are                                                                             
separate.                                                                                                                       
SFC-99 (30) 5/5/99                                                                                                              

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