Legislature(2005 - 2006)SENATE FINANCE 532
03/01/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB98 | |
| SB97 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 97 | TELECONFERENCED | |
| += | SB 98 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 47 | TELECONFERENCED | |
| += | SB 51 | TELECONFERENCED | |
MINUTES
SENATE FINANCE COMMITTEE
March 1, 2005
9:06 a.m.
CALL TO ORDER
Co-Chair Green convened the meeting at approximately 9:06:19 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice-Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Donny Olson
Also Attending: REPRESENTATIVE RALPH SAMUELS; CHERYL FRASCA,
Director, Office of Management and Budget, Office of the Governor;
KEVIN BROOKS, Deputy Commissioner, Department of Administration;
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities; JOHN MACKINNON,
Deputy Commissioner of Highways & Public Facilities, Department of
Transportation and Public Facilities
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
HB 47-EXTEND BOARD OF REAL ESTATE APPRAISERS
The Committee heard from the sponsor and reported the bill from
Committee.
SB 51-PUBLIC ASSISTANCE PROGRAMS
The Committee adopted one amendment and reported a committee
substitute from Committee.
SB 98-SUPPLEMENTAL APPROPRIATIONS: FAST TRACK
The Committee reviewed but did not adopt a committee substitute and
discussed proposed amendments from the Administration. The bill was
held in Committee.
SB 97-SUPPLEMENTAL APPROPRIATIONS/CBR
The Committee heard a budget overview from the Department of
Transportation and Public Facilities. The bill was held in
Committee.
CS FOR HOUSE BILL NO. 47(FIN)
"An Act extending the termination date of the Board of
Certified Real Estate Appraisers; and relating to the
requirements for membership on the Board of Certified Real
Estate Appraisers."
This was the second hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE RALPH SAMUELS, the bill's sponsor, characterized
this as being "a straight forward" bill. He noted that a revised
Department of Commerce, Community and Economic Development fiscal
note has been provided.
Co-Chair Green reminded the Committee that the original Department
of Commerce, Community and Economic Development fiscal note, Fiscal
Note #1 dated January 20 2005, did not reflect the FY 06 operating
expenses associated with the legislation. The Department's new
fiscal note, dated February 22, 2005, specifies that FY 06 expenses
would amount to $32,800.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS HB 47 (FIN) was REPORTED from
Committee with new $32,800 Department of Commerce, Community and
Economic Development fiscal note, dated February 22, 2005.
SENATE BILL NO. 51
"An Act relating to contracts for the provision of state
public assistance to certain recipients in the state;
providing for regional public assistance plans and programs in
the state; relating to grants for Alaska Native family
assistance programs; relating to assignment of child support
by Alaska Native family assistance recipients; relating to
paternity determinations and genetic testing involving
recipients of assistance under Alaska Native family assistance
programs; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Green stated that this legislation would expand the
Temporary Assistance for Needy Families program to new groups
desiring to participate in the Tribal Communities program. Some of
these programs have experienced "diminished" federal funding, and
therefore, the concern is that the State might be required to both
supplant further federal funding decreases and increase State
funding in order to continue the programs.
Amendment #1: This amendment inserts a new section into the bill on
page nine, following line 18 as follows.
(p) Nothing in this section requires the department to
continue to fund an Alaska Native family assistance grant
program at a level funded before the current grant period or
to replace federal funds for the program with state funding.
Co-Chair Wilken moved to adopt Amendment #1.
Co-Chair Green read the Amendment language.
Senator Olson asked whether alternate plans have been developed
through which to assist families were federal funding discontinued.
Co-Chair Wilken responded that, in that event, the program would
either require adjusting or alternate funding must be identified.
He expressed concern that were the federal funding for this and
other programs to continue to erode, that "the default position of
this Committee" would be to "just automatically backfill with
general fund money." Were a reduced funding situation to arise, it
should be understood that instead of being the time to write
checks, it would be the time to re-analyze the program, its funding
mechanisms, and its funding levels. This amendment would allow that
process to begin.
Senator Olson asked whether the adoption of the amendment would
preclude the State from providing replacement funding.
Co-Chair Green clarified that rather than prohibiting that from
occurring, the language would clarify that there would be "no
assumption that the State will continue the program to the extent
in that current period." Diminishing federal support of programs
would continue to place "tremendous pressure" on the State's
general fund.
There being no objection, Amendment #1 was ADOPTED.
Co-Chair Wilken moved to report the bill, as amended, from
Committee with individual recommendations and accompanying fiscal
notes.
There being no objection, CS SB 51(FIN) was REPORTED from Committee
with four Division of Public Assistance, Department of Health and
Social Services fiscal notes, dated December 10, 2004: Fiscal Note
#1 in the amount of $4,093,800, Tribal Assistance Program; Fiscal
Note #2 in the amount of negative $1,346,400, Work Services
Program; Fiscal Note #3 in the amount of negative $6,727,000, the
Alaska Temporary Assistance Program (ATAP); and Fiscal Note #4 in
the amount of negative $931,500, Child Care Benefits Program.
AT EASE: 9:13:10 AM / 9:14:40 AM
Co-Chair Wilken chaired the remainder of the meeting.
SENATE BILL NO. 98
"An Act making supplemental appropriations, capital
appropriations, other appropriations, and reappropriations;
amending appropriations; making appropriations to capitalize
funds; and providing for an effective date."
This was the fourth hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken clarified that while department overviews
pertaining to the fast track supplemental bill have concluded,
several amendments from the Governor Frank Murkowski Administration
have been received and would be explained to the Committee. After
the bill was heard, the Committee would recess until late afternoon
in order to allow Members to further review the legislation.
Co-Chair Wilken reviewed the committee substitute work draft
Version 24-GS1133\F and its accompanying spreadsheet dated March 1,
2005 [copies on file], and limited his remarks to those requests to
which changes had been made.
[NOTE: Confusion occurred as to whether the February 7, 2005
spreadsheet [copy on file] or the March 1, 2005 spreadsheet was
being referenced. The following Sections are as depicted in the
February 7, 2005 spreadsheet.]
9:16:53 AM
Department of Commerce, Community and Economic Development
Section: 2(a)
RDU: Community Advocacy
Supplemental Need: Small city energy assistance program
$6,450,000 General Funds
Co-Chair Wilken stated that a change to this Section would be that
the specified $25,000, $50,000, or $75,000 community allocation
would be used to pay toward the community's outstanding debt to the
State's Bulk Fuel Loan Program. Any balance remaining after that
payment could be applied toward the purchase of more fuel, with the
condition that the invoice be submitted to the State. This money
would lapse on June 30, 2005.
Senator Olson understood therefore that a community whose debt
exceeded its allocation would not have funds with which to buy more
fuel.
Co-Chair Wilken replied that that is correct. For example, a
community with an allocation of $50,000 and an outstanding debt of
$126,000, would have $50,000 paid towards its debt.
Senator Olson asked whether any provisions have been included
through which a community could acquire more fuel.
Co-Chair Wilken responded, no.
Department of Corrections
Section: 3(a)
RDU: Office of the Commissioner
Supplemental Need: Support for enhanced correctional officer
and probation officer recruiting efforts in urban and rural
Alaska. Workplace Alaska alone is not bringing enough
applicants. The department will purchase TV and radio spots,
and advertisements in smaller publications in locations such
as Seward, Bethel, Nome, Kenai, Eagle River and Mat-SU.
$50,000 General Funds
Co-Chair Wilken explained that the Department of Corrections would
address the Section 3(a) funding request via the use of available
FY 05 lapsed funds.
AT EASE 9:20:17 AM / 9:20:17 AM
Department of Corrections
Section: 3(b)
RDU: Administrative Services
Supplemental Need: The department is seeking an e-procurement
application to lower purchasing prices and improve
efficiencies within the buying process for commodities,
equipment, food, and services.
$225,000 General Funds
Co-Chair Wilken stated that Section 3(b) was zeroed out with the
understanding that the e-procurement application system being
furthered by the Department of Transportation and Public Facilities
would be successfully developed and implemented in other
departments.
Department of Education and Early Development
Section: 4(b)
RDU: Mt. Edgecumbe Boarding School
Supplemental Need: Residential operating costs related to
expanded student population
$800,000 General Funds
Co-Chair Wilken stated that Section 4(b) has been zeroed out. It
was "quite clear" last year when this issue was initially discussed
that the Committee did not favor such an appropriation. However,
the Administration made the decision to expend the money. Therefore
"it is incumbent upon the Administration to find out how to pay for
it." The Committee has continued to uphold its previous position.
Senator Stedman voiced the expectation that funding for the School
would be included in the FY 06 operating budget.
Co-Chair Wilken remarked that this discussion pertains to the FY 05
supplemental request for the School. Funding is included in the FY
06 regular budget proposal.
Senator Stedman, while recognizing "the merits of the table",
voiced support for retaining the funding request. He acknowledged
the School's funding inclusion in the FY 06 budget.
Department of Environmental Conservation
Section: 5(a)
RDU: Capital
Supplemental Need: Due to safety issues relating to emerging
bioterrorism threats and animal diseases, changes in design
were necessary to meet original intent and provide a safe and
secure laboratory facility. This amendment provides additional
funding to cover those design changes and complete
construction of the new Environmental Health Laboratory
$355,000 General Funds
$500,000 Federal Unrestricted Rcpts
$855,000 Total Funds
Co-Chair Wilken noted that while this request would be fully funded
at the $855,000 level, there would be a fund source change in that
it would be supported entirely with General Funds.
Department of Military and Veterans Affairs
Section: 6(b)
RDU: Disaster Relief Fund
Supplemental Need: Base capitalization of fund $1,000.0; 2004
Bering Strait Sea Storm $4,054.4; Interior Earthquake
shortfall $259.3; and Kaktovik Winter Storm $2,363.5
$7,677,200 General Funds
Co-Chair Wilken stated that the 2004 Bering Straits storm, the
Interior Earthquake shortfall, and the Kaktovik Winter Storm
expenses would be provided for; however, the $1,000,000 base
capitalization request was denied.
Co-Chair Wilken commented that further discussion in this regard
would transpire, as the Department has raised concern regarding the
absence of the capitalization.
[NOTE: Further clarification regarding the spreadsheets occurred.
From this point forward, the March 1, 2005 spreadsheet is
referenced.]
AT EASE 9:24:47 AM / 9:25:44 AM
Co-Chair Wilken stated that in order to avoid further confusion, he
would reference Section numbers in his remarks.
9:26:24 AM
Department of Administration
Section: 7(a)
RDU: Capital
Supplemental Need: AOGCC costs for gas pipeline reservoir
studies and depletion plan evaluations.
$900,000 General Funds
$300,000 Permanent Fund Corporation Receipts
Total Funds: $1,200,000
Department of Law
Section: 7(b)
RDU: Civil Division, Oil, Gas and Mining
Supplemental Need: Legal costs for work related to the state
gas pipeline and to bringing North Slope natural gas to
market, and other oil and gas projects for FY 05 and FY 06.
$6,750,000 General Funds
$2,250,000 Permanent Fund Corporation Receipts
Total Funds: $9,000,000
Department of Natural Resources
Section: 7(c)(1)
RDU: Capital
Supplemental Need: Gas pipeline risk analysis and royalty
issues.
$1,875,000 General Funds
$ 625,000 Permanent Fund Corporation Receipts
Total Funds: $2,500,000
Department of Natural Resources
Section: 7(c)(2)
RDU: Capital
Supplemental Need: Gas Pipeline corridor geologic hazards and
resource evaluation.
$1,500,000 General Funds
$ 500,000 Permanent Fund Corporation Receipts
Total Funds: $2,000,000
Department of Revenue
Section: 7(e)
RDU: Capital
Supplemental Need: Commissioner's Office - Work related to the
state gas pipeline and to bringing North Slope natural gas to
market.
$3,975,000 General Funds
$1,325,000 Permanent Fund Corporation Receipts
Department of Revenue
Section: 7(f)
RDU: Capital
Supplemental Need: Alaska Natural Gas Development Authority
increased workload for gas pipeline
$1,627,500 General Funds
$ 542,500 Permanent Fund Corporation Receipts
Total Funds: $2,170,000
Co-Chair Wilken stated that while these projects would be fully
funded, the recommendation is that the "expenditures be run
through" the Legislative Budget & Audit (LB&A) committee.
Department of Natural Resources
Section 7(d)(1)
RDU: Operating
Supplemental Need: Gas pipeline Bullen Point Road right-of-way
permitting.
$2,400,000 General Funds
$ 800,000 Permanent Fund Corporation Receipts
Total Funds: $3, 200,000
Department of Natural Resources
Section 7(d)(2)
RDU: Operating
Supplemental Need: Division of Oil and Gas increased workload
for gas pipeline.
$2,025,000 General Funds
$ 675,000 Permanent Fund Corporation Receipts
Total Funds: $2,700,000
Department of Natural Resources
Section: 7(d)(3)
RDU: Operating
Supplemental Need: Commissioner's Office increased workload
for gas pipeline.
$150,000 General Funds
$ 50,000 Permanent Fund Corporation Receipts
Total Funds: $200,000
Co-Chair Wilken stated that Sections 7(d)(1), 7(d)(2), and 7(d)(3)
would be funded and would include a provision of an FY 06 lapse
date. These requests would not be addressed through LB&A. He
recalled that, three years prior, expenditures associated with
another resource development project had been addressed through
LB&A and, as per Senator Gene Therriault, LB&A chair that "worked
out fine." LB&A has assured him that routing the gas pipeline
expenditures through LB&A would not slow the State's gas pipeline
efforts.
Co-Chair Green noted that utilizing Permanent Fund Corporation
receipts in this fashion is not a new process and has been utilized
many times in the past.
Co-Chair Wilken expressed that the use of Permanent Fund
Corporation receipts as the designated Other Funds for resource
development project such as the gas pipeline is a funding
investment that would be reimbursed back into the Permanent Fund
were the project successful. The gas pipeline funds would amount to
25-percent, or approximately $7,100,000, of the overall funding
request. Therefore, this request has a Fund Source change in that
General Funds would be partially replaced with Permanent Fund
Corporation receipts.
Senator Olson understood that Permanent Fund earnings would be
utilized as a funding mechanism for the gas pipeline requests.
Co-Chair Wilken affirmed. "We've done that in the past for resource
development issues that come back in resource development
receipts."
Senator Stedman asked for confirmation that this would be the
Permanent Fund Earnings Reserve Account.
Co-Chair Wilken replied that, "technically, its Corporation
receipts," but it is the Earnings Reserve Account.
Co-Chair Green noted that this would be "in the same relationship
as the deposit would be made from Revenue."
Co-Chair Wilken communicated that it would be 25-percent, with the
knowledge that the 25 percent would be returned. "That investment
will pay itself off in multiples."
Office of the Governor
Section: 8
RDU: Arctic National Wildlife Refuge
Supplemental Need: Funds for support of national efforts to
open ANWR for oil and gas exploration and development.
$375,000 General Funds
$125,000 Permanent Fund Corporation Receipts
Total Funds: $500,000
Co-Chair Wilken stated that, similarly to the gas pipeline funding,
Permanent Fund Corporation Receipts would be utilized to partially
fund efforts to open the Arctic National Wildlife Refuge (ANWR).
[NOTE: The following Section is as depicted in the February 7, 2005
spreadsheet.]
Department of Health and Social Services
Section: 9(c)
RDU: Health Care Services: Women's and Adolescents Services
Supplemental Need: Feds reduced FFY 05 funding in the Breast
and Cervical Cancer screening program. The fund source change
will allow services to 1600 enrolled women that otherwise
would not be served due to federal funding reductions. Funds
will be required by late March or early April to continue the
program.
$500,000 General Funds
($500,000) Federal Funds
Total Funds: 0.0
Co-Chair Wilken stated that Section 9(c) was not funded for the
three reasons: in an effort to reduce costs, the Department is
being asked "to raise the threshold of acceptance for those women
that are at risk" to 40 years of age rather than accepting any
female, regardless of age; further clarification as to whether the
federal funds being eliminated were specifically directed to breast
and cervical cancer support or were a general erosion of federal
funds of which the Department chose to remove from this program;
and finally, as reflected in the Committee's recent adoption of
Amendment #1 for SB 51, the desire is to further clarify that,
rather than the expectation being that the State would
automatically offset further diminished federal funding of programs
with general funds, re-evaluation of such an affected program
should occur.
[NOTE: The following request is as depicted in the March 1, 2005
spreadsheet.]
Department of Military and Veterans Affairs
Section: 11
RDU: National Guard Military Headquarters
Supplemental Need: National Guard Audit Disallowance - Federal
auditors have disallowed state expenditures in FFY 05 for a
total of $937,234. This request will cover October 2004 to
June 2005. An amendment will be offered in the FY 06 budget to
cover these expenditures for the remainder of FFY05 and FFY
06. The department estimates they will run out of general
funds by the end of March.
$297,300 General Funds
Co-Chair Wilken noted that the original $446,000 request has been
pared down to $297,300, as it was determined that this level would
be sufficient to address FY 05 actual needs. The FY 06 budget would
address FY 06 funding requirements.
Co-Chair Wilken expressed that this would conclude the changes made
to SB 98. The original SB 98 General Fund request amounted to
$97,082,200; this amount has been reduced to $87,656,000. Federal
funds would amount to $99,380,800 and Other Funds would amount to
$24,492,000 for a total amount of $211,529,700. These amounts are
depicted on the March 1, 2005 spreadsheet.
Co-Chair Wilken requested the Committee to review the Version "F"
committee substitute, and submit any proposed amendments by three
o'clock. The intent is that the Committee would recess and
reconvene later in the day to further address the bill.
Co-Chair Wilken ordered the bill HELD in Committee.
AT EASE: 9:33:50 AM / 9:33:53 AM
SENATE BILL NO. 98
"An Act making supplemental appropriations, capital
appropriations, other appropriations, and reappropriations;
amending appropriations; making appropriations to capitalize
funds; and providing for an effective date."
Co-Chair Wilken stated that the bill is again before the Committee
in order to hear information regarding the Administration's
proposed amendments to SB 98. The amendments are detailed in a
handout dated February 28, 2005 from Cheryl Frasca, Director, the
Office of Management and Budget addressed to the House and Senate
Finance Committee Co-Chairs [copy on file]. Upon the conclusion of
the overview, the amendments would be incorporated into a
forthcoming committee substitute.
CHERYL FRASCA, Director, Office of Management and Budget, Office of
the Governor, stated that the proposed amendments would amount to
approximately $9.5 million in general funds, five million dollars
in Other Funds, and $8.7 million in Federal Funds. She reviewed the
requests depicted in the handout as follow.
FAST TRACK SUPPLEMENTAL AMENDMENTS
Amend. Sec. 1, Department of Administration, by adding new
subsections to read:
(b) The sum of $5,003,000 is appropriated from the
information services fund to the Department of Administration
for State of Alaska network security infrastructure upgrades.
KEVIN BROOKS, Deputy Commissioner, Department of Administration,
reminded the Committee that the State experienced "a cyber attack
on its network system in mid-January" 2005. This event has
underscored the fact that efforts must be advanced "to solidify"
the State's telecommunications and Information Technology
infrastructure, and therefore, while $17 million was included in
the Department's original FY 06 request to address this and other
things, $5 million is being requested via this legislation to
immediately address network deficiencies. He noted that federal
agencies are involved in the investigation regarding the January
attack.
Co-Chair Wilken asked how the inclusion of this request in SB 98
would affect the Department's FY 06 network security budget
request.
Mr. Brooks stated that were this request included in the
supplemental bill, a $12 million request rather than a $17 million
request would be included in the FY 06 Capital budget.
(c) The sum of $6,175,000 is appropriated from the
general fund to the Department of Administration for Alaska
land mobile radio (ALMR) infrastructure upgrades.
9:38:36 AM
Mr. Brooks explained that this new $6.1 million general fund
request would provide infrastructure upgrades to the Alaska Land
Mobile Radio project (ALMR), which is a joint project being
conducted with the federal Department of Defense (DOD). There are
approximately 87 radio sites located between Kodiak and Fairbanks,
which provide communications for voice data video. The request
would provide enhanced service to the Department of Public Safety,
the Department of Military and Veterans Affairs, and the Department
of Administration to fulfill the State's obligation regarding its
agreement with DOD "to shore up this network."
Mr. Brooks stated that this money would allow the State to meet
some May 2005 contractual deadlines. A similar amount of money
would be requested in the FY 06 budget to continue these upgrades.
The federal government has provided approximately $43 million to
purchase equipment for these sites, and in addition, has pledged an
additional $100 million investment in this regard.
Senator Dyson asked how this request would impact the FY 06 budget.
Mr. Brooks stated that the total ALMR funding would amount to
approximately $12,400,000. Were this request granted, the
$6,400,000 balance would be included in the FY 06 capital budget.
Senator Dyson surmised therefore that this six million dollar
increment would be in addition to the Department of Military and
Veterans Affairs' proposed FY 06 budget.
Mr. Brooks clarified that this request would be included in the
Department of Administration's FY 06 capital budget.
Ms. Frasca noted that a budget amendment to this effect was
recently submitted.
Mr. Brooks expressed that while work on the ALMR project has been
conducted for several months, the request was not been submitted
earlier as details were too vague.
Senator Olson asked what benefits would be provided by the
upgrades.
Mr. Brooks explained that each of the sites, ranging from road to
mountaintop sites, has a communications tower and an approximate
ten by twenty foot housing structure for the radio equipment,
generators, and batteries. The current equipment is old and must be
updated for compatibility and security reasons. An upcoming
military exercise would require communication component
enhancements that would be supplied by the military.
Senator Olson asked the reason State funding is being requested if
the federal government is supplying the equipment.
Mr. Brooks expressed that the military would be supplying equipment
specific to their needs. The State funds being requested would
provide for the upgrades for the multitude of State agencies that
utilize the network. This would include first responders, the
Department of Transportation and Public Facilities, the Department
of Health and Social Services, and the Alaska Railroad. Once the
upgrades were in place, DOD would further commit to paying for on-
going operating and maintenance expenses associated with these
sites.
Co-Chair Wilken understood that the reason this amendment is being
proposed "is because the federal government did something to
jumpstart us."
Mr. Brooks replied "not exactly". The agreement between the State
and DOD has existed for several years. The driving force behind
this amendment is to coordinate the needs of the various State
departments and DOD and to upgrade "42 of the most critical sites"
in order to have them tested and functioning before the beginning
of the August 2005 military exercise. The request was delayed in
order to provide updated and accurate information.
Co-Chair Wilken stated that, considering the amount of money
involved, an ALMR briefing would be appreciated.
Mr. Brooks stated that a briefing could be conducted.
Amend sec. 6, Fund Transfers, by amending subsection (a) and
adding a new subsection to read:
(a) The sum of $10,004,200 [$6,813,300] is appropriated
from the general fund to the Alaska marine highway system fund
(AS 19.65.060(a)).
Ms. Frasca stated that this amendment would increase the general
fund appropriation to the Alaska Marine Highway System Fund to
provide for the monetary terms of the Inlandboatmen's Union of the
Pacific contract, which is further specified in Amendment sec. 13
on page two of the handout. Approximately $3.2 million would be
required to address the costs of the FY 05 contract. Two sections
in the Administration's amendments pertain to this contract.
Co-Chair Wilken noted that the packet contains a January 26, 2005
memorandum [copy on file] from Ray Matiashowski, Commissioner of
the Department of Administration to Senate President Senator Ben
Stevens regarding the specifics of the contract.
(c) The sum of $5,003,500 is appropriated from proceeds
of the State of Alaska master lease line of credit program to
the information services fund (AS 44.21.045(a)) for purposed
of financing the following Department of Administration fiscal
year 2005 capital project request:
PROJECT AMOUNT
State of Alaska Infrastructure $5,003,500
Network Security Upgrades
Ms. Frasca stated that Sec. 6, subsection (c) relates to the
financing mechanism being proposed to pay for the five million
dollars of network security infrastructure upgrades previously
discussed in Amend. Sec. 1, subsection (b). This line of credit,
which had been included in the FY 06 budget, would be moved forward
to fund FY 05 network expenses with the intent to bill agencies
through the "EPR rate" in order to access both "State and non-State
fund sources to repay this line of credit over time."
Co-Chair Wilken understood that this money was part of the original
$17 million request.
Ms. Frasca affirmed.
Amend sec. 8, Office of the Governor, by adding a new
subsection to read:
(b) The sum of $160,000 is appropriated from the general
fund to the Office of the Governor, division of elections, for
increased costs for the fiscal year ending June 30, 2005.
Ms. Frasca stated that this amendment would provide funds to the
Division of Elections to address increased costs associated with
such things as the AccuVote voting machines maintenance and lease
cost increases in FY 05. Postage and shipping costs, unassociated
with separate Division of Election legislation that had previously
reported from Committee, would also be provided for.
Amend sec. 13, Salary and Benefit Adjustments, by adding new
subsections to read:
(d) The sum of $3,190,000 is appropriated from the Alaska
marine highway system fund (AS 19.65.060(a)) to the Department
of Transportation and Public Facilities, marine vessel
operations, in order to implement the monetary terms of the
collective bargaining agreement for the Inlandboatmen's Union
of the Pacific, representing the unlicensed marine unit, for
the fiscal year ending June 30, 2005.
(e) If the appropriation made by (d) of this section
takes effect, it takes effect on the date the collective
bargaining agreement listed in (d) of this section is ratified
by the membership of the respective collective bargaining
unit.
Ms. Frasca stated that this request would address FY 05 expenses
associated with the collective bargaining agreement for the
Inlandboatmen's Union of the Pacific, which was previously
discussed. "This is the actual appropriation from the Marine
Highway System Fund to make those payments."
Amend sec. 15(a), Department of Transportation and Public
Facilities Federal Projects, to read:
Sec. 15. DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES FEDERAL PROJECTS. (a) The appropriation to the
Department of Transportation and Public Facilities for
the Airport Improvement Program made by sec. 1, ch. 159,
SLA 2004, page 35, line 22, is increased by appropriating
from federal receipts an additional
$14,285,000[$5,850,000], to be allocated as follows:
(1) Kotzebue: Obstruction Removal and
Safety Area (HD 40) $5,300,000
(2) Tenakee Springs: Seaplane Float
Rehabilitation (AD 5) 550,000
(3) Cold Bay: Airport Terminal Master
Plan (HD 37) 200,000
(4) Deadhorse: Airport Runway Safety
Area Expansion (HD 40) 8,000,000
(5) Unalaska: Airport Terminal Master
Plan and Improvements (HD 37) 500,000
Ms. Frasca stated that this is the Administration's final amendment
to the Fast Track Supplemental bill. These three capital projects
being added could get underway in March or April 2005, provided the
authorization is given to spend the federal funds early.
Co-Chair Wilken calculated that the State would be realizing an
additional nine million dollars in federal funding.
Ms. Frasca deferred to the Department of Transportation and Public
Facilities in order to ascertain whether this would be additional
funding.
Co-Chair Wilken asked whether funding for this request would
replace other projects.
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities, stated that
this amendment regards federal airport improvement funding. Some of
the funding is discretionary in that it is additional funding that
was made available to the State from the Federal Aviation
Administration (FAA). Approval of this amendment would not result
in replacing any other funds that the Department would receive in
its regular entitlement program.
Co-Chair Wilken asked regarding the reference to HD 40 and HD 5.
Ms. Frasca clarified that "HD" is a reference to House District.
Amend sec. 17(a), Lapse of Appropriation, to read:
(a) The appropriations made by secs. 1(b), 1(c), 7(a),
7(c), 7(d), and 7(e) of this Act are for capital projects and
lapse under AS 37.25.020.
Ms. Frasca expressed that this technical amendment would specify
that the funds being requested in Section 1(b) and 1(c) for the
ALMR and network security upgrade requests would not lapse.
Ms. Frasca stated that this concludes the Administration's
amendments to the Fast Track Supplemental bill.
Co-Chair Wilken ordered the bill HELD in Committee.
SENATE BILL NO. 97
"An Act making supplemental, capital, and other
appropriations, and reappropriations; amending appropriations;
making appropriations to capitalize funds; making an
appropriation under art. IX, sec. 17(c), Constitution of the
State of Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that the Department of Transportation and
Public Facilities would be continuing its overview of its Regular
Supplemental bill requests.
AT EASE: 9:51:53 AM / 9:53:09 AM
Item 124
Section: 17(i)
RDU: Central Region Highways and Aviation
Supplemental Need: Anchorage snowhaul and equipment fuel,
utilities, sand and steel cost increases.
$1,374,400 General Funds
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities stated that
these request is the result of fuel, utility, and commodity price
increases as well as an increase of approximately $130,000 relating
to Anchorage snowhauling expenses. Fuel expenses have increased
approximately 30-percent or $500,000; utility expenses have
increased approximately six-percent or $70,000; and steel price
increases have directly impacted the Department's ability to
replace grader blades, culverts, and road signs. Sand, salt and
chemical costs have also increased. Commodity increases amount to
approximately $680,000. The Department's FY 05 Anchorage downtown
area snowhauling budget had been reduced "a little too
aggressively" by $250,000.
Item 125
Section: 17(j)
RDU: Northern Region Highways and Aviation
Supplemental Need: Equipment fuel, utilities, and steel cost
increases.
$1,399,500 General Funds
Item 126
Section: 17(k)
RDU: Southeast Region Highways and Aviation
Supplemental Need: Equipment fuel, sand, chemicals and steel
cost increases.
$263,400 General Funds
Co-Chair Wilken noted that Sections 17(i), 17(j), and 17(k) depict
similar expenses for other regions of the State. Continuing,
however, he asked the reason Anchorage snowhauling expenses were
considered part of the Central Region rather than the Interior
Region.
Ms. Slagle informed that the State has assumed responsibility for
downtown Municipality of Anchorage roads' snowhauling as State
roads transit through the Municipality. She pointed out that snow
removal in Anchorage "is more of an issue" than it is in other
communities through which State roads travel. The State's Anchorage
snowhauling budget was reduced in the FY 05 budget, based on
historical snowfall records; however, snowfall has exceeded those
averages.
Ms. Slagle concurred that Sections 17(i), (j), and (k) are similar
in nature.
Section: 17(l)
RDU: State Equipment Fleet Administration
Supplemental Need: Fuel increases - credit card expenditures
reimbursed by user agencies.
$1,100,000 Highway Working Capital Fund
Ms. Slagle stated that this Fund authorization is specifically
related to fuel cost increases. The State equipment fleet contracts
out the amount of fuel that is utilized, and the various State
agencies are provided a credit card through which consumption
charges are tracked. The bills are submitted to the State Equipment
Fleet, which in turn, bills the agencies for reimbursement. This
request pertains to the authorization to expend those reimbursed
monies.
Senator Stedman asked whether the State could track fuel
consumption by vehicle.
Ms. Slagle responded that the process is designed to track by
credit card rather than by vehicle. Since the credit cards could
also be used for bulk purchases, it would be difficult to track a
specific vehicle's consumption unless a credit card was
specifically used for one vehicle. Mileage and maintenance costs,
however, are tracked per vehicle in the fleet.
Senator Olson asked how the Department addresses the rising
expenses of non-State employees who are under contract to service
Bush Alaska airports.
Ms. Slagle asked for whether the question regards general
maintenance contracts that are in affect for Rural airports.
Senator Olson affirmed that this concern regards those responsible
for such things as snow removal in places like Savoonga and
Shaktoolik.
Ms. Slagle understood that such contracts are bid out and re-
negotiated on a regular basis of approximately two years. This
provides the ability to address increasing expenses.
Senator Olson stated therefore, that when the airport manager at
Salmon Bay contacts him and relays "that the price of fuel just
jumped" by a certain percent that his response would be that he had
to abide by a Department of Transportation and Public Facilities
contract that would be re-negotiated every few years. He asked
whether provisions have been made to address such a scenario.
Ms. Slagle replied that further information regarding pricing
indexes for Rural Alaska would be provided. While the Department
does have the ability to incorporate such cost increases into the
contracts for Rural areas, there is no specific need to address
this currently as, had the situation been different, a request of
that nature would have been brought forward. Therefore, she assumed
that such matters are being addressed internally.
Senator Olson voiced that rather than his concern being about the
contracts, his concern is about the increased fuel costs to those
independent contractors.
Ms. Slagle responded that in several instances, independent
contractors utilize State equipment for Rural airport maintenance.
She was uncertain as to whether the fuel used in those cases was
included in the contract conditions or whether the State was
responsible for it. She would clarify this.
Section: 17(m)
RDU: Statewide Information Services
Supplemental Need: Funding for telecommunications chargeback
costs. FY 04 supplemental funding was not built into FY 05
budget, thereby causing a shortfall.
$659,600 General Funds
Ms. Slagle explained that this request is associated with the
amount of funds that the Department pays to the Department of
Administration for its Enterprise Productivity Rate (EPR) usage,
which is specifically associated with technology that the
Department of Administration is providing to the Department. These
rates have been increasing over the years and a similar request was
before the Committee in the FY 04 Supplemental legislation. The
Department's budget has not been adjusted to accommodate this
expense. Some "shifting of rates" did occur; however it did not
alleviate the pressure on the Department's budget as was intended.
Co-Chair Wilken asked the reason that this sort of request is
specific to the Department of Transportation and Public Facilities
and not to others.
Ms. Slagle responded that these expenses relate to the usage of
computers and associated peripherals such as printers. The current
formula, which the Department of Administration developed a few
years prior, is based on department position counts. This has
"greatly impacted" the Department of Transportation and Public
Facilities as it has equipment operators and over 1,800 Marine
Highway vessel employees who work in the field and do not have
access to computers or telephones. Another consideration is that
many of the Department's operations are conducted 24-hours a day.
The combination of these things incurs more of these expenses on
the Department of Transportation and Public Facilities than other
departments.
Co-Chair Wilken asked what would occur were this request unfunded.
Ms. Slagle responded that the Department would be required to make
"drastic changes between now and the end of the year." The money
would be drawn from other programs, specifically the highways and
aviation program as those are the programs that have general fund
dollars.
Senator Olson asked whether not funding this request might result
in "risk to life or limb."
Ms. Slagle stated that the response to that question is difficult.
Funding it with existing program general fund dollars would
negatively affect the Department's ability to adequately address
Spring road issues.
Co-Chair Green asked whether general fund dollars were the only
funding option; specifically whether federal funds might be
utilized.
Ms. Slagle stated that federal funds could be utilized for general
administrative support as well as for indirect cost allocation plan
(ICAP) funding which are those funds not designated for a specific
project. However, the Department has utilized available ICAP funds
to the maximum level and there is no further flexibility.
Co-Chair Green asked whether other non-federal funding options
might be available.
Ms. Slagle responded that ICAP funds are calculated as a percentage
of each construction project, whether the funding source is
federal, State, or International Airport Bond Funds. The Department
endeavors to maximize all funding sources.
Section: 17(n)
RDU: Central Region Highways and Aviation
Supplemental Need: King Salmon air traffic control current
year contract.
$68,000 General Funds
Ms. Slagle stated that these funds are in addition to the $44,500
request included in the Fast Track Supplemental bill that was
specific to FY 04 expenses. This request pertains to the costs
associated with the King Salmon Airport Control Tower for FY 05.
Senator Olson commented that funding of this request is imperative
as, from personal experience, he characterized the airport as
resembling a busy mosquito beehive. He noted that this funding
might have averted the incident in which an aircraft had knocked
down the control tower a few years earlier.
Co-Chair Wilken stated that this request would advance.
Section: 17(o)
RDU: Human Resources
Supplemental Need: Shortage in realizing savings due to delay
in implementing electronic timesheets.
$140,000 Various Funding
Ms. Slagle informed that funds had been reduced in the Human
Resources component of the Department's FY 05 operating budget due
to anticipation that the implementation of an electronic timesheet
would reduce expenses. However, the implementation of that system
has been delayed and the Department has been required to pay the
Department of Administration for Human Resources services.
Co-Chair Wilken understood therefore that the FY 05 budget
reflected the decrement relating to this system.
Ms. Slagle communicated that a $160,000 decrement was reflected in
the FY 05 budget. A $20,000 general fund decrement of that amount
is not being requested.
Senator Bunde observed that, on numerous occasions, the savings
anticipated to result from consolidation or improved technologies
have not been realized. To that point, he asked whether this
endeavor "would eventually save money."
Ms. Slagle assured that it would, as an electronic timesheet system
would avoid the process of duplicating data entries by staff as
well as any associated errors that might occur in the current
payroll process.
Senator Bunde asked when the anticipated savings would be realized.
Ms. Slagle responded that no related funding is requested in the FY
06 budget, as the system should be in operation.
Senator Bunde hoped this issue would not resurface in the FY 06
supplemental request legislation.
Section: 18(a)
RDU: Capital
Supplemental Need: Airport Improvement Program increase of $18
million in federal funds as allocated.
Total Funds: zero
JOHN MACKINNON, Deputy Commissioner of Highways & Public
Facilities, Department of Transportation and Public Facilities,
specified that this request is the result of additional federal
funds being realized late in FY 05. The projects provided for by
this funding would be of Statewide significance and would not
displace existing projects.
Item: 138
Section: 18(b)(4)
RDU: Capital
Supplemental Need: Statewide: Emergency Bridge Replacement
$800,00 Federal Funds
Co-Chair Wilken asked the location of the bridge addressed by this
request.
Ms. Slagle expressed that, rather than being a specific bridge,
this request would allow the Department to temporarily stockpile
goods in Anchorage and Fairbanks. The Department currently has
sufficient material to replace an approximate 100-foot bridge;
however, double that amount of material is required.
Co-Chair Wilken understood therefore that no specific bridge would
be addressed by this request.
Item 136
Section: 18(b)(2)
RDU: Capital
Supplemental Need: Statewide: Comprehensive Highway Safety
Plan.
$500,000 Federal Funds
Ms. Slagle stated that Congressional re-authorization legislation
being considered would require states to develop a comprehensive
safety plan. This funding would further this plan, which would
include crash data, crash patterns, safety and education issues,
and the potential implementation of methods through which to
address these and other issues. She noted that the FY 06 budget
contains a similar request.
Senator Bunde asked whether federal funding would also support the
FY 06 request.
Ms. Slagle concurred.
Co-Chair Green asked when the Safety Plan project began.
Ms. Slagle voiced the understanding that this project has not, of
yet, begun and that this funding would allow for its development.
Co-Chair Green recalled a Committee discussion in which it was
determined that only continuing projects could be included in the
supplemental bill.
Co-Chair Wilken asked the Department's understanding of whether new
programs could begin in a supplemental bill.
Ms. Slagle understood otherwise.
Co-Chair Wilken commented that this might be a policy decision.
Co-Chair Green understood the definition of a supplemental request
to be limited to continuing programs only. To that point, she asked
whether this project could be delayed until FY 06.
Co-Chair Wilken additionally asked whether this request would
require a State match.
Ms. Slagle stated that a State match would be required, and that
the Department does have adequate funding available in its FY 05
match program. Several of the associated projects have begun or are
in the Environmental Impact Study (EIS) stage. The Department has
not followed "any type of guideline or policy" that would prohibit
a new project from coming forward. The money is available and the
construction portions of the project could be advertised and begun
as early as May. Beginning projects early in the construction
season would be beneficial "in the long run."
Co-Chair Wilken asked regarding the Match level.
Ms. Slagle responded that the match would be approximately 4.5
percent, provided this was a Surface Transportation Program (STP)
project.
Co-Chair Green noted that a nine percent minimum State match might
be required.
Ms. Slagle voiced that the Department has a variety of federal
highway funding options available, each with different match rate
requirements. The bridge has a 20-percent match rate. Regular STPs
require a 4.5 percent match level.
Co-Chair Wilken stated that this concludes department presentations
on both SB 97 and SB 98.
The bill was HELD in Committee.
Co-Chair Wilken announced that the Committee would recess until
later in the day, with the intent to address any forthcoming
amendments and report SB 98 from Committee.
RECESS: 10:18:30 AM / 3:00:19 PM
Co-Chair Wilken announced that the meeting, which had been intended
to continue at five o'clock, has been cancelled. The intent of the
Chair is to include the amendments proposed by the Administration
in a committee substitute for SB 98 that would be addressed at the
March third Committee hearing. Members' amendments would be
considered at that time, with the intent to report the bill from
Committee.
ADJOURNMENT
Co-Chair Wilken adjourned the meeting at 03:01 PM.
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