Legislature(2003 - 2004)
03/26/2003 09:03 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 26, 2003
9:03 AM
TAPES
SFC-03 # 31, Side A
SFC 03 # 31, Side B
SFC 03 # 32, Side A
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:03 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Ben Stevens
Senator Lyman Hoffman
Senator Donny Olson
Senator Robin Taylor
Also Attending: PAT PITNEY, Director, Budget and Institutional
Research, University of Alaska; MIKE MAHER, Director, Division of
Administrative Services, Department of Environmental Conservation;
TOM CHAPPEL, Director, Division of Air and Water Quality,
Department of Environmental Conservation; LARRY DIETRICK, Director,
Division of Spill Prevention and Response, Department of
Environmental Conservation; DAN EASTON, Director, Division of
Facility Construction and Operation, Department of Environmental
Conservation;
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB 100-APPROP: CAPITAL PROJECTS
The Committee heard overviews of budget requests of the University
of Alaska and the Department of Environmental Conservation. The
bill was held in Committee.
SENATE BILL NO. 100
"An Act making capital appropriations and reappropriations;
capitalizing a fund; making appropriations under art. IX, sec.
17(c), Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for an
effective date."
University of Alaska
PAT PITNEY, Director, Budget and Institutional Research, University
of Alaska noted the Board of Regents submitted a funding request as
well. She stressed that the Governor's proposed budget represents
approximately one-tenth the amount recommended by the Board.
Safety and Highest Priority Renewal and Replacement
$3,000,000 Alaska Student Loan Corporation (ASLC) Dividend
$641,500 general funds
Reference No.: 38415
Category: University
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2007
Phased-New Project
Projects in this category include highest priority facility
renewal and replacement, code correction and Americans with
Disabilities Act (ADA) projects. An investment in this
category represents a commitment to improve student safety and
maintain building functionality. Fire Safety and Elevator
Safety and Modernization Projects top this list, as the
university's most vital safety needs.
Ms. Pitney stated this request would include elevator repair, fire
safety, etc. that have a highest safety priority.
Co-Chair Wilken asked if these are listed in the backup material in
order of priority.
Ms. Pitney replied there is no priority order as they are all
important.
Co-Chair Wilken surmised therefore the amount appropriated would be
distributed as best as possible between all projects.
Senator Hoffman noted no projects listed are located on rural
campuses and asked whether no life, health and safety issues exist
in those areas.
Ms. Pitney pointed out the Board of Regents request for $971,000 to
address community campus needs.
Senator Hoffman asked that the process utilized to evaluate those
projects be included in the budget request.
Ms. Pitney explained how each campus submits list of projects,
which are compiled according to criterion established by the Board
of Regents. She stated the Board then reviews the projects.
Co-Chair Green requested an explanation of the ASLC Dividends and
University receipts funding sources.
Ms. Pitney stated the University views the ASLC dividends as State
funding appropriated at the discretion of the legislature. She
noted the University receipts are generated from tuition, private
partnerships, donations, foundation receipts, auxiliary receipts
collected from dormitory and food services, etc.
Attracting and Retaining Students
$10,800,000 University Receipts
Reference No.: 38419
Category: University
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2007
Phased-New Project
This request contains projects essential to the University's
goal of attracting and retaining students.
Ms. Pitney stated this item includes two projects: a bookstore at
the Anchorage campus and student housing.
Senator Taylor asked if funds from other sources were intended for
use on the bookstore project.
Ms. Pitney affirmed and explained the issuance of bonds to
construct the dormitories. She informed this is standard practice
of university funding.
Small Business Development Center
$550,000 general funds
Reference No.: 37926
Category: University
Location: Anchorage Areawide
Election District: Anchorage Areawide
Estimated Project Dates: 07/01/2003 - 06/30/2008
Phased Project
The Alaska Small Business Development Center (ASBDC) is a
statewide business assistance program. The services it offers
to small businesses are not duplicated or provided by any
other agency or organization. The primary emphasis of the
program is in-depth, quality business counseling. Through
professional counseling, small businesses are assisted in
solving problems concerning operations, manufacturing,
engineering technology exchange, accounting, business strategy
development and other productivity and management improvement.
The individual business counseling is supplemented with
quality business training designed to improve the skills and
knowledge of existing and prospective small business
owners/managers.
Co-Chair Wilken noted the $100,000 increase over the previous year
funding and requested an explanation.
Ms. Pitney replied this request is for operating funds and pointed
out that no increases had been allocated to this program for over
ten years. He stated the amount requested recognizes increased
expenses and also would secure other matching funds.
Co-Chair Wilken asked if clients are assessed a fee.
Ms. Pitney replied that in some instances fees are charged to cover
operating expenses. She also informed that some local governments
contribute significantly to the operating expenses for the offices
in their communities.
Co-Chair Wilken asked if the local government contributions were
utilized to offset the general funds appropriated to the program.
Ms. Pitney responded the contributions are necessary to provide the
services in the participating communities and that general funds
are utilized for core operating expenses. She remarked that if
unlimited funds were available, the program would be offered in
several communities.
Senator Olson asked if the university instituted a method to track
the effectiveness of this service.
Ms. Pitney answered it does and stated she could provide extensive
evidence of the success of the program. She listed testimonials and
noted startup support is provided to small businesses.
Senator Bunde noted the claim of no duplication of services
provided by other organizations and asked if this includes private
organizations.
Ms. Pitney understood the claim to include other State services.
Senator Bunde told of private service providers complaining of
unfair competition from the University.
Senator Taylor commented on museums and other educational
facilities located in his election district incurring significant
funding reductions.
University Center - Phase 2
$2,400,000 University Receipts
Reference No.: 37841
Category: University
Location: Anchorage Areawide
Election District: Anchorage Areawide
Estimated Project Dates: 07/01/2003 - 06/30/2007
Phased Project
Phase II of the University Center project would encompass the
acquisition of an additional 35,000 gsf in turnkey condition
to house UAA workforce development, training and adult
learning center programs. These programs have a direct
relationship to the applied technology and workforce
development programs accommodated in Phase I of the project.
Ms. Pitney explained this funding is generated primarily from
private partnerships.
Ms. Pitney noted the Board of Regents' request included $3.4
million State funding.
Senator Bunde revisited his earlier comments regarding the
University providing services in competition with the private
sector. He asked if the workforce development, training and adult
education services could be provided by a private entity.
Ms. Pitney was unsure, but stated she would research the matter.
Senator Hoffman compared the Governor's proposed budget to the
Capital Budget Request Summary submitted by the University [copy on
file] and asked if the numbering of the proposed projects in the
Summary is based on priority assigned by the Board of Regents.
Ms. Pitney affirmed the items are prioritized within categories.
Senator Hoffman asked if the nursing facility would be addressed.
Ms. Pitney replied that funding is not included in the Governor's
proposed budget.
Senator Taylor clarified the cost of the University Center - Phase
II project is a $5.8 million project including $3.4 million in
general funds.
Ms. Pitney explained that the conceived project would cost $5.8
million and although the entire amount would not allow for the
project as planned, other options would be reviewed.
Senator Taylor asked the amount of University receipts anticipated
would be used to fund this project.
Ms. Pitney told of separate legislation authorizing an expenditure
of an estimated $14 million for Phase I of the project.
Senator Taylor recalled earlier discussions indicated the project
would have significant lower costs.
Ms. Pitney explained the previous proposal two years prior involved
the purchase of unrenovated empty space as opposed to a turnkey
purchase as specified in this project. She suggested Members visit
the facility in question.
Senator Taylor commented that at a cost of $20 million, the
facility should be "amazing".
Senator Hoffman asked the location of the facility.
Ms. Pitney responded it would be within the University Center Mall
in Anchorage on Old Seward Highway.
Senator B. Stevens interjected that a portion of funding for this
project was included in the bond package approved by voters in the
previous election.
Senator Taylor spoke of another proposed projects including the on-
going renovation of a hanger in Sitka into classrooms that was
identified as the second highest priority by the Board of Regents
but not included in this budget.
Ms. Pitney affirmed.
Co-Chair Wilken requested the witness overview the items included
in the Governor's proposed budget then provide another brief
overview of the Board's requests.
Senator Olson asked the number of students who would utilize the
Sitka facility.
Ms. Pitney described the classrooms, laboratories, etc. She did not
have a specific number of students who would utilize the facility,
although approximately 1,200 students attend the University of
Alaska Southeast Sitka campus.
Co-Chair Green asked if the $3.4 million additional funding
requested by the Board of Regents included elsewhere.
Ms. Pitney answered it is not.
Senator Hoffman asked whether the private partnership funding is
dependant upon receipt of State funding.
Ms. Pitney told of the current plan that includes two funding
sources and that a State appropriation would be necessary to
complete the project. She furthered that the receipt authority
would provide the ability to pursue other funding sources. She
indicated other options could be considered.
Senator Hoffman asked therefore why the legislature should not
grant authority for the entire $5.8 million in the event other
funds could be secured.
Ms. Pitney replied, "part of the $2.4 million figure is based on
affordability within the University for those items" and what was
expected to be the amount that could be raised through other
sources.
Senator Taylor asked whether the project could be amended were
adequate funding not provided for the project as currently
proposed.
Ms. Pitney responded that if State funds were not appropriated, the
current plan must be changed.
Replacement of Research Vessel
$80,000,000 University Receipts
Reference No.: 37823
Category: University
Location: Fairbanks Areawide
Election District: Fairbanks Areawide
Estimated Project Dates: 07/01/2003 - 06/30/2007
One-time Project
Replacement for the Alpha Helix research vessel.
Ms. Pitney explained the concept that the federal government would
contract for construction of a ship to be given to the University
to manage and conduct research activities in the north Pacific
Ocean.
Senator Bunde asked if the vessel would then be operated at the
University's expense.
Ms. Pitney detailed the process of research facilities whereby
research grants take into account operation of the facility, in
this case a ship.
Senator Bunde commented that if no research grants were awarded the
ship would sit idle.
Ms. Pitney affirmed, but stressed that the current vessel is
heavily utilized with more requests for research project than could
be met. She noted the planned vessel would accommodate additional
research activities and she assured the vessel would not be idle.
Senator Taylor noted the $75 million allocation from the National
Science Foundation, although the actual cost could be $80 million
and asked how the remaining $5 million would be generated.
Ms. Pitney responded that other federal funds would be utilized,
possibly from the National Oceanic and Atmospheric Administration
(NOAA)
Senator B. Stevens questioned why the proposed budget contains this
request for receipt authority when the federal funding is not
included in federal legislation.
Ms. Pitney expressed this project is one of the University's
highest priorities and that this authorization would ensure no
delay once the federal funding is officially provided.
Senator B. Stevens asked at what point the University obtains
control of the vessel, once it is constructed or upon actual
delivery to Alaska. He estimated 18 months would be required to
construct the vessel and questioned the need for receipt authority
given that the vessel would not be completed until FY 05 or FY 06.
Ms. Pitney emphasized the efforts to plan ahead.
Senator Bunde asked where the vessel would likely be constructed.
Ms. Pitney did not know.
Small Project Receipt Authority
$5,000,000 University Receipts
Reference No.: 37852
Category: University
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2009
One-time Project
The value of this request is an estimation of potential
receipt authority needed for FY 04 for main and community
campuses.
And
Project and Planning Receipt Authority
$10,000,000 University Receipts
Reference No.: 38422
Category: University
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2007
One-time Project
This request for non-general fund authority will allow the
university to make expenditures in response to emerging needs
that can be self-funded or partially self-funded.
Ms. Pitney expressed the intent to take advantage of opportunities
to partner with the federal government or private foundations.
Co-Chair Wilken asked for an example of projects that would be
undertaken with these funds.
Ms. Pitney exampled the pavilion located in Juneau. She also told
of advance plans to construct a research facility in Fairbanks and
integrated science facility in Anchorage utilizing foundation
funding.
West Ridge Research Building
$2,000,000 Federal Receipts
$14,000,000 University Receipts
Reference No.: 38475
Category: University
Location: Fairbanks Areawide
Election District: Fairbanks Areawide
Estimated Project Dates: 07/01/2003 - 06/30/2007
One-Time Project
Provide authority to receive funds to build West Ridge
Research Building.
And
Yukon Flats Training Center Expansion Completion
$1,200,000 Federal Receipts
$1,100,000 University Receipts
Reference No.: 38514
Category: University
Location: Fort Yukon
Election District: Interior Villages
Estimated Project Dates: 07/01/2003 - 06/30/2007
One-Time Project
Authority is requested to receive funding from the Economic
Development Administration (EDA) and other sources to expand
the Yukon Flats Training Center. The addition will house the
computer lab and provide space for uliti-day or multi-week
training programs in Voc-Tech and other disciplines.
Ms. Pitney noted these items reflect technical adjustments. She
explained the West Ridge facility would be constructed utilizing
bonding authority and the bonds would be re-payed with grant
funding for research activities conducted within the facility.
Ms. Pitney furthered that the Yukon Flats Training Center is
similar, in that the funding source would be changed.
Senator Hoffman referenced that the aforementioned Board summary
does not include these items.
Ms. Pitney affirmed because these are technical changes.
Senator Hoffman asked how this complies with the bonding package
approved by voters in the previous election.
Ms. Pitney stated that these technical changes are in compliance
with the bonding package.
Senator Bunde spoke to the intent to provide training to unemployed
and underemployed adults and asked if any research has been
conducted to determine whether participants obtain jobs upon
completion of the program.
Ms. Pitney assured that extensive follow-up occurs.
Senator Bunde asked whether training is provided for fields in
which jobs are available.
Ms. Pitney emphasized that before a program is offered, significant
demand is identified for training in a particular field. Once this
training is provided and a workforce available, she stated the
program is relocated to another community to meet demands in that
location.
Senator Bunde spoke of frustration for graduates who receive
training then are unable to apply it.
Ms. Pitney spoke of the close relationships with communities.
Senator B. Stevens cited the Governor's proposed budget includes
$120.9 million of university receipts for capital projects and the
request for $98 million is included in the proposed FY 04 operating
budget and asked whether the University is requesting a total
amount of $218 million or if some "overlap" is occurring.
Ms. Pitney replied that a "very small overlap" exists in that
funding for planning is included in the operating budget.
Ms. Pitney explained that the bookstore and housing projects
requests overlap in the capital and operating budgets because some
funds would be generated from university receipts and included in
the capital budget and other funds are generated from debt service
on bonds and included in the operating budget.
Senator B. Stevens requested documentation of non-duplicable
expenditures for the previous five years.
Ms. Pitney stated that she would provide this information.
Senator Bunde recalled that the existing bookstore is required to
breakeven or earn a profit and asked if this would be required for
the new facility.
Ms. Pitney responded this is the expectation.
Senator Bunde asked if the new dormitory would also be self-
sufficient.
Ms. Pitney stated that revenues generated from the existing
dormitory units pay operating expenses plus contribute to
university receipts.
SFC 03 # 31, Side B 09:50 AM
Co-Chair Green commented that the requests included in the proposed
budget distribute funds primarily to Fairbanks, Anchorage and
Juneau. She asserted that other campuses have needs that are not
included.
Senator Hoffman asked how the bookstore and dormitory projects
would be undertaken if adequate funding were not appropriated.
Ms. Pitney spoke to the amount of funds needed to complete both
projects and indicated that if not appropriated by the legislature,
attempts would be made to secure funding from other sources, or the
projects would be addressed with funding requested over several
fiscal years.
Ms. Pitney then addressed the Board of Regent's funding request of
$42.4 million in State funding plus $108 million in University
receipt authority. She remarked the projects not included in the
Governor's proposed budget are University-wide at main campuses and
community campuses and necessary to maintain a solid foundation.
She informed that these are primarily small items, such as
renovating a classroom to change disciplines, parking structures,
exterior refurbishing, etc. She pointed that any institution with
$1.2 billion of facilities, a regular investment is necessary. She
asserted that the $17 million proposed is "far below" the amount
required.
Senator Taylor asked whether the University has historically
depended upon the legislature to provide funds for maintenance.
Ms. Pitney assured this is not basic maintenance, which is funded
through the operating budget. She clarified this request is for
funding of boiler replacement and similar expenses.
Senator Taylor asked if the University therefore does not maintain
a building fund similar to private businesses to address such
expenses.
Ms. Pitney replied that such a fund is not maintained in all cases.
She noted that a 30-year old laboratory is insufficient for current
research and educational needs. She noted that some facilities have
"sinking funds" with which to address maintenance issues.
Ms. Pitney continued her presentation of the Board of Regent's
budget request, speaking to the necessity of attracting and
retaining students, noted that the amount of University contributed
funding is higher than the amount requested of the State.
Senator Hoffman commented on the difficulties in retaining students
at rural campuses. He informed that he discussed the matter with
President Mark Hamilton and was informed that additional efforts
are necessary. Senator Hoffman cited that graduation rates of
freshmen are very low and asked no action is proposed to address
this concern.
Ms. Pitney replied that operating budget funding could be better
applied to this issue. She told of significant efforts undertaken
at the Bethel campus and of pilot programs underway to secure
retention of students.
Ms. Pitney described the My UA Portal project, intended for
attracting and retaining students. She explained this "computer
technology concept" that would bring the University of Alaska to
levels similar to other universities in information technology
delivery of services, both business and instructional.
Senator Bunde asked if this would be an online version of the
existing catalog.
Ms. Pitney emphasized it would more sophisticated and would include
syllabuses coursework, adviser contact, business services, ordering
of books and materials and other services for distant learning
students.
Senator Taylor noted the benefits provided to the children of
University employees to attend tuition-free. He surmised that
because of this program all college-age children would attend the
University; however, he has learned that 96 percent were attending
other schools.
Ms. Pitney next addressed the Board's budget requests targeted at
preparing for Alaska's economic success, including nursing and
vocational technical training. She told of significant efforts to
provide nursing education and cited the workforce need is expected
to continue through the year 2020. She anticipated that the
University would be unable to fulfill the need to provide trained
nursing personnel within 20 years.
Senator Taylor asked the number of students currently enrolled in
the nursing program.
Ms. Pitney listed 110 graduations with intent to increase the
number to 220 graduates. She informed that 300 nursing majors are
attending the University with 800 students on the waiting list for
the program. She stated that education services are offered in
Anchorage, Fairbanks and Kodiak, with plans to expand services to
Juneau and Bethel.
Senator Taylor asked about the Tanana Valley Community College
(TVCC) relocation to the Fairbanks courthouse building.
Ms. Pitney responded that the TVCC received the old courthouse
building; however it must be renovated. She stated the facility
would be utilized for the delivery of different courses.
Senator Taylor asked if the TVCC was moving out of its current
location.
Ms. Pitney informed that the TVCC has outgrown the current
facility.
Co-Chair Wilken referenced a book describing the TVCC and its
programs.
Ms. Pitney redescribed the proposed construction of major science
facilities in Anchorage and Fairbanks, indicating that funding for
these projects would be requested the following fiscal year.
Senator Hoffman commented that the nursing program has had a lot of
success, and asked why it has a lower priority than small business
development.
Ms. Pitney replied that the Small Business Development Center has
been historically funded at one level and that a funding increase
is needed. She surmised that the evaluation process, prioritizing
projects according to category could have resulted in the higher
priority assigned to the Small Business Development Center.
Senator Hoffman preferred prioritization of all projects regardless
of whether they are categorized as pertaining to the attraction and
retention of students, beneficial to economic development, etc.
Ms. Pitney stated she would relay that message to the Board of
Regents.
Senator Taylor opined that bonding does not appear to provide
adequate funding for the proposed projects.
Ms. Pitney relayed the intent had been to utilize bonding generated
revenue to partially fund proposed projects, including the Lena
Point laboratory in Juneau and the science facilities in Anchorage
and Fairbanks. She furthered that additional funding would be
requested to cover the remaining costs.
Senator Taylor commented that he did not realize this at the time
the bonding package was approved the previous year.
Senator Taylor thanked the witness for her presentation.
Department of Environmental Conservation
Co-Chair Wilken referenced a handout titled, "Village Safe Water,
Community Totals" [copy on file] which, although does not directly
pertain to the discussion, could provide information to members. He
thanked Departmental personnel for their efforts on compiling this
information.
Assessment of Health Risks From Use of Diesel Fuel in Rural
Alaska
$768,300
Reference No.: 38513
Category: Natural Resources
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2006
One-Time Project
Rural Alaska communities are facing a major decision about
diesel fuel use. By 2007, they must decide to either incur the
costs of building a separate and new fuel tank infrastructure
for handling a new cleaner diesel fuel for trucks and buses or
convert their entire community fuel use for electrical power,
heating and vehicles to the cleaner diesel fuel. Either case
will incur significant costs for the community, individuals
and perhaps the State. This decision can not be made without
knowing the health risks and health costs of continuing to use
the existing grade diesel fuel for power and heat.
MIKE MAHER, Director, Division of Administrative Services,
Department of Environmental Conservation, introduced Mr. Chappel.
TOM CHAPPEL, Director, Division of Air and Water Quality,
Department of Environmental Conservation, noted the federal
Environmental Protection Agency (EPA) has passed regulations
applying to trucks and vehicles. He told of the need to understand
the health impacts on rural Alaskan residents, as existing data
applies to national highway use only. He pointed out that the
majority of diesel fuel is utilized for power generation in rural
Alaskan communities than for trucks and buses as occurs in other
areas.
Senator Bunde assumed that if the studies indicate a conversion is
advisable, a substantial expense would be required. He asked the
estimate of this expense.
Mr. Chappel gave speculation of the increased costs. He relayed
that the new fuel is manufactured in the state of Washington at an
additional cost of five to ten cents per gallon. He pointed out
this does not include shipment to rural Alaskan communities and
other factors that could increase the amount as much as 40 cents
more. He surmised that during the first year, a "sorting out of the
market" would occur before the actual price of the new fuel would
be established.
Senator Bunde predicted that eventually, the new fuel would be
required and suggested the funds proposed for this study could be
better spent on the new fuel.
Senator Taylor inquired about the use of federal funds.
Mr. Chappel responded that the State has determined this study is
important, although the federal government has yet to announce
whether it would fund the project. He stated that "compelling
inference," indicates the new fuel would dominate the market,
possibly necessitating the conversions.
Senator Taylor understood the concerns but suggested they are
misplaced. He doubted significant evidence could be found to
determine health risks between the two fuels. He suggested the
focus should be the costs involved in the conversions. He remarked
that the current health risk assessments apply to Los Angeles,
California, and possibly Anchorage and Fairbanks, but not to rural
Alaskan communities. He stressed the Legislature must make a policy
call as to the amount the State should spend to implement a
decision made in Washington D.C.
Senator Taylor asked what federal receipts would be used to fund
this project and whether the funds would be diverted from another
project.
Mr. Chappel replied that the Department would request federal funds
specifically for this study. He asserted that health consequences,
if any, are unknown. He stated that if the new fuel cost ten cents
more per gallon and no health consequences were identified, the
Department could argue against making conversions.
Senator Taylor questioned how the conversion could be avoided if
only the new fuel is manufactured. He pointed out that air quality
problems have only occurred in Fairbanks and Anchorage and
suggested any studies should be conducted in those locations.
Senator Taylor commented that funds directed from the EPA would be
acceptable for this project.
Senator Hoffman understood fuels are assessed different taxes and
diesel used for motor vehicles is distinguished through the use of
blue dye. He asked how the fuels are differentiated in rural areas.
Mr. Chappel replied that rural Alaskan communities are not required
to separate the fuels.
Senator Olson asked if the health impacts of the different diesel
fuels are studied elsewhere, possibly by the national Center for
Disease Control.
Mr. Chappel affirmed that significant data has been collected in
areas along major roadways and in neighborhoods near roadways. He
stated that this information has established that the health risks
justify the higher cost of the cleaner fuel for these areas.
However, he reiterated that no data exists for areas far from major
roadways. He relayed that the Department has discussed the issue
with the Center for Toxic Disease, although the CDC has not been
involved to date. He noted that if the project progresses, the CDC
would be included in the assessment.
Senator Olson asked if the CDC were involved whether that agency
would provide funds.
Mr. Chappel assured the Department would attempt to secure funds
from any potential source.
Senator Bunde predicted that because the usage in Alaska is
considerably less than in the Lower 48, continued manufacture of
the older fuel solely for use in Alaska is unlikely. He referenced
Senator Taylor's opinion that it is acceptable to expend federal
funds for this project. Senator Bunde commented on public concerns
regarding the State's total budget, citing this project as an
example of increased spending.
Statewide Contaminated Sites Cleanup
$5,000,000 Oil/Haz funds
Reference No.: 33826
Category: Health/Human Services
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
On-going Project
This CIP funds assessment and cleanup of highest priority
state-owned sites or sites where the responsible party is
unknown or has refused to take appropriate action. Work
includes site assessment, corrective action plan, clean up,
monitoring and final site closure.
LARRY DIETRICK, Director, Division of Spill Prevention and
Response, Department of Environmental Conservation, outlined this
item.
Senator Olson asked the success rate of recouping funds from
businesses or other entities.
Mr. Dietrick gave the three-year average recuperation rate at 90
percent. He elaborated that some payments are not received until
after the cleanup is completed and some instances require
litigation.
Senator Olson asked the amount of the remaining ten percent that
would remain unrecoverable.
SFC 03 # 32, Side A 10:39 AM
Mr. Dietrick replied that this information is contained in the
biannual report the Department is required to submit to the
legislature. He stated he would provide a copy to Senator Olson.
Senator Hoffman asked for an estimation of when all the cleanup
projects would be completed.
Mr. Dietrick responded that 133 State-owned sites have been
identified as in "need of attention", at an estimated total cost of
$67 million. He qualified that some sites would require additional
funds and others would require less funding than predicted.
Alaska Spill Response Depots and Corps System
$300,000 Oil/Haz Funds
Reference No.: 37792
Category: Health/Human Services
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
On-going Project
This project will provide funds to maintain readiness and
response capabilities in local communities through the
purchase of response equipment and delivery of training to
local responders. The project will also provide funds to
develop specific geographic response strategies and tactics
for the protection of critical environmentally sensitive areas
of the State and areas of public concern. Wherever possible,
matching funds for these projects will be sought from local
communities, other government agencies, and other parties.
Mr. Dietrick explained this project would allow the Department to
communicate with local parties "over the phone" to direct cleanup
activities. He stated this would result in cost savings with the
elimination of travel expenses and the need to contract services.
Senator Bunde asked the original source of the Oil and Hazardous
Response funds.
Mr. Dietrick detailed the Response fund originally was generated
from a nickel-per-barrel tax imposed on crude oil production in
Alaska. He stated that in 1995, the legislature adjusted the tax
rate to "a two-cent three-cent", explaining this funding source is
generated from the three cents per barrel collected.
Senator Hoffman understood this fund balance has a limitation, at
which time the tax is no longer imposed.
Mr. Dietrick affirmed and explained that once the balance reaches
$50 million, the two-cent tax collected for the Reserve Response
Account, is suspended. He noted the tax has not been collected for
five years.
Data Integration
$580,000 federal receipts
Reference No.: 37972
Category: Development
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2005
On-going Project
The Department of Environmental Conservation is integrating
the many sources of information within the department for more
efficient and effective management, regulating and service to
the public.
Mr. Maher explained this funding is a grant and would be utilized
with the intent to make information accessible to decision makers
and the public. He stated the grant has two parts: one for external
integration of the four states included in "Region 10", and a one-
stop grant for internal integration, designed to extend funds to
programs within the Department.
Mr. Maher relayed that Commissioner Ernesta Ballard requested the
Department completely overhaul all data operations from the web
site to developing on-line permitting.
Municipal Water, Sewer and Solid Waste Matching Grant Projects
$6,447,100 AHFC (Alaska Housing Finance Corporation) Dividend
$6,708,800 federal receipts
$10,721,300 general funds
Reference No.: 33824
Category: Health/Human Services
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
On-going Project
Grants to larger communities for municipal water, sewer, and
solid waste planning, design and construction projects. Grants
require a local match of 15% - 50% of project costs.
DAN EASTON, Director, Division of Facility Construction and
Operation, Department of Environmental Conservation, testified that
the mission of the Division is to "assist communities in improving
sanitation conditions." He stated the Division accomplishes this by
making loans and grants available and otherwise working with
communities to build water, sewer and solid waste facilities. He
noted this item and the remaining items address this purpose.
Mr. Easton explained this item addresses larger communities and
detailed the application process in which the Department assesses
need based on public health and environmental conditions, as well
as the communities' record of operating and maintaining existing
water and waste facilities. He pointed out the local match
requirement of 15 to 20 percent and that the program is funded
primarily with State funds, although federal funds could be used in
some smaller communities located away from the major road system.
Senator Bunde clarified this program funds the construction of
facilities and that the ongoing operating and maintenance expenses
would be the responsibility of the community.
Mr. Easton affirmed.
Village Safe Water Project Administration
$506,400 AHFC Dividend
$1,519,100 federal receipts
Reference No.: 33820
Category: Health/Human Services
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
On-going Project
Village Safe Water project administration is the operating
cost of delivering Village Safe Water engineers and other
program staff, as well as associated travel, contracts,
supplies and equipment.
Mr. Easton noted the Village Safe Water project provides grants to
the smallest communities for water, sewer and solid waste projects.
He detailed the process whereby proposals are submitted each year
and ranked by the Department according to public health and
environmental criteria, as well as the community's capacity to
operate and maintain the system. He pointed out these grants
require no local match and that the projects are funded with 75
percent federal funds and 25 percent State matching funds.
Mr. Easton noted this item is essentially the same amount as the
current year. He stated that this funding is transferred to the
Department's operating budget and expended for engineering and
other costs associated with managing the project.
Senator Bunde asked if operation and maintenance of the facilities
is the responsibility of the community.
Mr. Easton affirmed.
Senator Bunde asked how successful this program has been.
Mr. Easton replied that the program has been "largely successful".
He assured that if the Department determines that a community is
not capable of operating and maintaining the system, the project is
not undertaken in that area.
Senator Bunde asked if the State has been required to assume
responsibility of the system in any communities.
Mr. Easton responded that the Department does not have the
capability to assume operations. He noted that the Department
employs remote maintenance workers in cases of emergency such as a
fire, to assist in making the system operational again. He defined
the success of communities as those undertaking good preventive
maintenance, collecting fees to operate the facility and employing
a certified operator. He cited no instances in which a community
was deemed absolutely incapable of operating the system and the
system had to be shut down.
Co-Chair Green referenced the use of AHFC dividend funds for this
item and asked whether these funds were included in the information
provided to the Committee by the AHFC.
Co-Chair Wilken assumed this "claim on the dividend" is included.
It was established that the $19,708,000 AHFC funding for this item
this is in addition to the dividend appropriated to the State.
Co-Chair Wilken asked the efforts of the Department with the Denali
Commission regarding village sustainability for utility projects.
Mr. Easton replied that the Department is involved with other
agencies in a Sustainable Utility Steering Committee within the
Denali Commission, to create village sustainability.
Co-Chair Wilken requested a brief explanation of the interaction
with the Denali Commission and the progress of sustainability. He
noted that the commissioner has "taken a different look" at the
statutory requirements relating to the Village Safe Water program
and asked how this assessment has been integrated within the
Department. He asked if the proposed projects had been scrutinized
with the new criteria.
Mr. Easton responded that the proposed projects had not been
reassessed, noting this budget request is a continuation of
previous years. He emphasized the complexity of the matter.
Village Safe Water Feasibility Studies
$736,600 AHFC Dividend
$2,209,200 federal receipts
Reference No.: 33821
Category: Health/Human Services
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
On-going Project
Grants to communities for preparing engineering feasibility
studies. The studies identify designs and operating costs for
sanitation facilities that are appropriate for the community.
Mr. Easton noted the amount requested for this item in FY 04 is
approximately $373,000 less than the current year appropriation.
Mr. Easton thanked Co-Chair Wilken for his remarks on the Village
Safe Water database. Mr. Easton expressed embarrassment over the
four years required to complete the exercise, emphasizing that the
delays were primarily in collecting information from sources other
than the Department. He spoke to the importance of the completed
project.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 11:00 AM
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