Legislature(2013 - 2014)SENATE FINANCE 532
02/14/2013 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB18 | |
| Department Overview: Department of Revenue | |
| Department Overview: Department of Health and Social Services | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 18 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 14, 2013
9:02 a.m.
9:02:40 AM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 9:02 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
MEMBERS ABSENT
Senator Lyman Hoffman
Senator Donny Olson
ALSO PRESENT
Jerry Burnett, Director, Division of Administrative
Services, Department of Revenue; Daniel R. Fauske, Chief
Executive Officer and Executive Director, Alaska Housing
Finance Corporation, and President, Alaska Gasline
Development Corporation, Department of Revenue; Frank
Richards, Manager, Pipeline Engineering, Alaska Gasline
Development Corporation; Les Campbell, Budget Director,
Alaska Housing Finance Corporation, Department of Revenue;
Ree Sailors, Deputy Commissioner, Family, Community and
Integrated Services, Department of Health and Social
Services; Jennifer Klein, Facilities Section Chief,
Department of Health and Social Services.
SUMMARY
SB 18 BUDGET: CAPITAL
SB 18 was HEARD and HELD in committee for further
consideration.
DEPARTMENT OVERVIEWS:
Department of Revenue:
Alaska Housing Finance Corporation
Alaska Gasline Development Corporation
Department of Health and Social Services
SENATE BILL NO. 18
"An Act making appropriations, including capital
appropriations and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
9:03:08 AM
^DEPARTMENT OVERVIEW: DEPARTMENT OF REVENUE
9:03:27 AM
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE (DOR), addressed four DOR
capital project requests.
Reference Number (RN) 56759
Child Support Services Computer Replacement Project
$218,000
Mr. Burnett explained that there was a five-year
replacement cycle for computer, server, and printer
components in the division. He added that the request was
annual.
Co-Chair Meyer noted that members' questions would be held
to the end of Mr. Burnett's testimony. He acknowledged that
Co-Chair Kelly joined the meeting.
Vice-Chair Fairclough asked Mr. Burnett to include page
numbers for the committee's reference. Mr. Burnett replied
that he did not have the page numbers. He noted that the
four items should appear together in the budget backup.
RN 56758
Permanent Fund Dividend Division (PFD) Computer
Replacement - Phase 2
$130,000
RN 56757
Permanent Fund Dividend Division - Dividend
Application Information System Software Conversion
$1.5 million
Mr. Burnett elaborated that the system was used to receive
and process PFD applications and to make payments.
Additionally, the system was used for the Pick, Click and
Give program and PFD garnishment calculations. Over the
past ten years the custom system had been written in a
series of modules with PowerBuilder language or in
Microsoft Visual Studio. The department wanted to rewrite
the entire program in one language to standardize
programming and avoid communication problems within the
system.
RN 57093
Alaska Permanent Fund Corporation (APFC) NetApp Filer
$55,000
Mr. Burnett explained that the network appliance operated
to switch the storage location within the network system.
He noted that the proposed item would be funded with APFC
gross receipts.
Vice-Chair Fairclough asked for a briefing on processes in
place used to "true-check" security related to new software
systems. During an APFC tour she had learned that the
system received a significant number of on-going break-in
attempts.
Mr. Burnett answered that the department could provide a
briefing at a later time. He communicated that one of the
primary reasons for rewriting the software related to
internal controls. He furthered that the use of multiple
modules and programming languages made it challenging to
have sufficient system checks.
Vice-Chair Fairclough believed the agency was doing an
excellent job securing Alaska's asset. She wanted to ensure
that a second look was taken at the new software to verify
its correct functionality.
Co-Chair Meyer believed the entire committee shared the
same concern and that members could follow up on the issue.
9:10:11 AM
ALASKA GASLINE DEVELOPMENT CORPORATION (AGDC)
9:10:29 AM
DANIEL R. FAUSKE, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, AND
PRESIDENT, ALASKA GASLINE DEVELOPMENT CORPORATION,
DEPARTMENT OF REVENUE, introduced a Power Point
presentation titled "Alaska Housing Finance Corporation
Budget Presentation to Senate Finance, February 14, 2013."
FRANK RICHARDS, MANAGER, PIPELINE ENGINEERING, ALASKA
GASLINE DEVELOPMENT CORPORATION, discussed funding items on
slide 1.
RN 51753
AGDC - Alaska Gasline Project, Year 4 (FEL 2 & 3)
$25 million
Mr. Richards elaborated that the purpose of the request was
to advance an in-state natural gas pipeline from Prudhoe
Bay to Fairbanks and continuing down to Cook Inlet to
provide natural gas for Alaskans. Slide 1 showed a trumpet
curve representing how mega projects were advanced from the
concept stage through completion. The corporation had
presented the project plan to the legislature for the end
of the front-end loaded (FEL) Phase 1 that identified a
concept moving forward. The $25 million request would
advance the project engineering, permitting, and regulatory
land work into FEL 2 (Alternative Selection). He elaborated
that at the recent instate natural gas caucus AGDC had
optimized its project plan from a rich gas case to a lean
gas case; the change had allowed AGDC to open up pipeline
access to communities along the route more easily and at a
lower cost. He furthered that major straddle plants would
no longer be required to pull natural gas liquids out of
the stream to provide methane to Fairbanks. Overall tariff
costs would be reduced and gas affordability would increase
for Alaskans.
Mr. Richards relayed that AGDC had acquired assets over the
past couple of years including 600 miles of state right-of-
way; it would soon acquire 100 miles of federal right-of-
way. The corporation had received a final environmental
impact statement and had advanced engineering for the
pipeline. Additionally, AGDC had initiated engineering for
its facilities contractor. He stated that the proposed
funding increment would allow AGDC to advance the gas
conditioning design to the next phase.
9:13:43 AM
Mr. Richards pointed to slide 2 that identified how the
capital project funds would be spent. Funding would be used
for front-end engineering and design aspects; it would
allow AGDC to advance the design to better optimize and
understand cost implications and how they would be related
to consumers through a tariff. Additionally, funding would
advance the corporation's environmental and regulatory
aspects and would continue stakeholder engagement. He
stated that the project goal was to reach an open season
when AGDC would communicate to shippers and purchasers of
gas what it would ultimately cost for them to commit gas to
the project pipeline. The corporation's optimized plan
showed an open season at the end of 2014/2015 with project
sanction in the 2015 timeframe.
9:14:37 AM
ALASKA HOUSING FINANCE CORPORATION (AHFC)
Mr. Fauske relayed that AHFC's mission statement was to
provide Alaskans access to safe, quality, affordable
housing (slide 3). He read slide 4:
· Bonds and Financing
· Loans
· Public Housing
· Energy
Mr. Fauske believed the corporation continued to
successfully fulfill its mission. He communicated that
demand always exceeded supply, but AHFC was working to keep
up through innovative financing strategies and maximizing
tools to get projects going. He read from slide 5:
As of the end of FY 2012, AHFC assets totaled $4.073
billion.
Accomplishments:
· AHFC's general obligation credit continued to
maintain its strong AA+ rating through FY 2012;
recognized among the strongest in the country.
· $229.1 million of long-term debt was issued in FY
2012.
· Dividend of $9.2 million made to the State of
Alaska in FY 2012; totals nearly $2 billion.
Challenges:
· Federal fiscal policy; low interest rates, low
investment returns.
Mr. Fauske communicated that the largest problem facing
AHFC was the inability to compete with the federal
government's continued printing of money and low interest
rates. He expounded that AHFC was always one-eighth or one-
fourth of a point off when it went to market to issue debt.
He noted that AHFC had not believed that the current
federal fiscal policy trend would last as long as it had.
He elaborated that Federal Reserve System (Fed) Director
Ben Bernanke had announced that interest rates would not be
changed until later in 2015. He explained that as a result
the corporation had taken a $70 million "hit" on interest
earnings; because AHFC is a short-term investor and was
constantly recycling cash there was nothing it could do. He
continued that AHFC had gone from earning 4 to 5 percentage
points on its funds to one-tenth of 1 percent (10 basis
points). He recalled an instance when overnight Fed rates
had been negative. He stressed that it was difficult
maintaining a dividend at a certain level when significant
hits were taken. He believed the difficult times would
pass; AHFC was financially strong and one of the best
housing finance corporations in the country. The low
interest rates were impacting housing finance corporations
nationwide. He stated that AHFC had been blessed with the
ability to be creative because of its strong asset base. He
added that that the corporation would have to ride the
situation out and that federal fiscal policy was beyond its
control.
9:19:04 AM
Mr. Fauske addressed loan programs on slide 6:
Accomplishments (FY 2012):
HomeChoice homebuyer education
· 174 classes to 1,693 Alaskans - 70% lift over
previous year
· Low foreclosure activity, .05 percent or 91 loans
$416.2 million in loan activity for more than 1,800
Alaskan families
· $115.4 million for first-time homebuyers
· $107.1 million for rural loans
· $25.9 million for Veteran's
Challenges
· Low interest rates = 8.5 percent reduction in
portfolio to $2.53 billion
Mr. Fauske elaborated that Alaska was one of five states
that had a veterans' program; it was the one loan program
in Alaska that required voter approval (it had been on the
ballot five times and had always passed with between 72 to
75 percent approval). He detailed that it was the one bond
that had the state's backing due to a federal requirement.
He added that the program functioned beautifully and never
had any problems. He relayed that Alaska had the most
veterans per capita in comparison to other states and that
AHFC was proud of the program.
Mr. Fauske expounded on the low interest rate challenge
(slide 6). He explained that AHFC's mortgage department was
making money; however, money was "going out the back door"
because homeowners were refinancing at lower interest rates
offered by federally backed entities.
9:21:07 AM
Mr. Fauske turned to slide 7 titled "Public Housing
Programs." Public housing made up the largest share of
AHFC; it encompassed housing choice vouchers, senior
housing for people with disabilities, and family self-
sufficiency. He read from slide 8:
Public Housing
· Mainly funded by U.S. Housing & Urban Development
(HUD) for operating, maintaining & constructing
low income housing.
· AHFC owns 1,011 family units, 610 housing units
for seniors or those with disabilities; and
distributes more than 4,300 vouchers in 13
locations that provide rental assistance - $2.5
million/month.
Mr. Fauske communicated that public housing was primarily
federally funded and AHFC was cautiously optimistic about
funds that would be provided.
LES CAMPBELL, BUDGET DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION, DEPARTMENT OF REVENUE, moved to an FY 13
supplemental request on slide 9.
RN 48811
San Roberto/Mountain View Development
$3.2 million in state general funds
$22 million AHFC bonds
$5.092 million AHFC dividends (reappropriation)
Mr. Campbell detailed that the project's purpose was to add
the Mountain View development to the San Roberto
redevelopment that had been appropriated several years
earlier. Combining the two projects drew efficiencies and
addressed affordable housing needs. He listed projected
outcomes shown on slide 9:
· Increase supply of public housing
· Increase development efficiencies
· Use federal rental assistance that is currently
in reserve
· Develop a mixture of family and senior housing
· Improve local neighborhoods
Mr. Campbell reiterated that combining the projects would
increase efficiencies within the development process. He
elaborated that the San Roberto project would redevelop 16
units into 18 units on San Roberto Street; the Mountain
View property had a total of 80 family and senior housing
units.
9:24:27 AM
Mr. Fauske interjected that the reappropriation increment
would be funded with money saved on the Loussac development
in Anchorage.
Mr. Campbell added that AHFC was using Loussac Manor as a
model for the San Roberto/Mountain View project. He relayed
that at the time of the Loussac project AHFC did not have a
subsidiary and could not develop the project itself.
Subsequently, AHFC had received legislative authority to
create a subsidiary. The subsidiary would help AHFC to
maintain and hold the property itself. He pointed to the
mixed financing structure on slide 10. He explained that
$22 million would be combined with $7.5 million in bonding
authority in order to create a mechanism for AHFC to access
tax credits; the funds would be augmented by the corporate
dividends that were already in place, the dividend
reappropriation, and $3.2 million from the mortgage
settlement fund.
Mr. Campbell relayed that funding would combine with other
capital projects to get federal receipts; the bonding
mechanism would provide access to approximately $8 million
(AHFC estimated that between $8 million and $11 million in
tax credits would go towards the property). He furthered
that the bonds would be paid off when the property was
completed. The corporation was excited about the project
that would add approximately 80 units to the public housing
portfolio; the Riverbend project in Juneau was the last
major development (about 18 years earlier). He added that
the project would take approximately $11 million in state
funds and would leverage about $22 million in other funds.
9:27:25 AM
Mr. Campbell added that his colleague could elaborate on
the mixed financing structure.
Co-Chair Meyer observed that the project was needed. He
noted the financing looked creative. Mr. Campbell replied
that the project had been included as a supplemental
request due to timing issues; AHFC wanted to secure
financing in order to hire a developer. He noted that
development would begin in about one year; AHFC would
provide an update to the legislature at that time.
Vice-Chair Fairclough pointed to the national debt and
asked if any of the federal funding was targeted for
potential cuts. Mr. Campbell answered that much of the
money for the capital fund was already in place. He
communicated that the only funding that could potentially
be affected was for the FY 14 capital fund program. He
relayed that if it occurred the federal sequestration issue
would begin on March 1, 2013 (the FY 14 budget would
conclude on September 30, 2013). He stated that most of the
funding would not be affected.
Senator Dunleavy asked how federal interest rates impact
AHFC's internal projection models.
9:29:49 AM
Mr. Fauske replied that AHFC was constantly monitoring
interest rates. The corporation had restructured on some of
its variable rate debt that was carefully managed. He
continued that AHFC was in the process of designing a new
mortgage program that would be beneficial and would bring
approximately $6 million to the corporation's "bottom line"
through creative financing mechanisms. He elaborated that
AHFC would be in the market for approximately $400 million
in the current year to refinance existing debt at a lower
rate and to replenish funds; the number was not bad, but
AHFC would like it to be higher. He stressed that low
interest loan refinancing was the largest challenge facing
AHFC.
Mr. Fauske believed the corporation would remain
competitive in niche markets including first-time
homebuyers, veterans, and others. The corporation
anticipated that low interest rates would continue for
another 1.5 to 2 years. The corporation knew where it fit
into the market; its bonds were actively sought after among
Alaskans and on Wall Street. He explained that when the
corporation sold bonds it always had a retail-only period
for Alaskans. He stated that AHFC was as competitive as
possible. He pointed to instances when AHFC had been happy
with a deal it had brokered, but due to the announcement of
reduced federal interest rates, the deal had been off by
one-eighth of a percent. He continued that the low rates
had diminished AHFC's ability to participate in different
markets that it used to have a more prominent role in. He
remarked that the current market was grim on the tax exempt
side and observed that there was hardly any differentiation
between tax exempt and taxable.
9:32:49 AM
Senator Bishop believed the project would help continue
improving the Mountain View area. He had previously been
involved in training facilities in the area to provide kids
and adults a place to go to learn different skills. He was
impressed with the improvements.
Mr. Fauske responded that AHFC had purchased 6.5 acres near
Glenn Square [in Mountain View] and had negotiated a deal
with Special Olympics for another acre. He described the
location and added that Bass Pro Shops would be opening on
the site. He discussed that development had increased jobs
and was invigorating the neighborhood. He stressed that the
investment could turn out to be very good.
9:34:27 AM
Mr. Campbell relayed that the Loussac development had been
used as a model for the project and the corporation would
enhance the model as development occurred; it planned to
use the model to produce additional housing in the future.
Mr. Campbell moved to slide 11:
RN 54796
Domestic Violence Designation Program (Empowering
Choice Housing Program)
$1.5 million
Mr. Campbell shared that the project's purpose was to
provide rental assistance to victims of domestic violence
and sexual assaults in order to prevent further harm. The
project was expected to provide rental assistance for up to
250 households statewide and to enhance the governor's
Choose Respect initiative.
Vice-Chair Fairclough observed that the expense appeared to
be reoccurring. She wondered why the appropriation request
was for the capital budget and not the operating budget.
Mr. Campbell replied that the item had been included in the
capital budget the prior year and that it would be an
ongoing request. He acknowledged that the request could be
moved to the operating budget. He explained that tenants
had a time limit of three years in the units; therefore,
three years of funds were obligated to the families.
Vice-Chair Fairclough discussed that the legislature had
been very supportive of assisting families that were
experiencing violence and working to stop generational
violence. She thought the item should be considered for the
operating budget. She believed the increment would help
prevent families from being bumped down on the housing list
when families experiencing domestic violence with a more
immediate need were placed at the top.
9:37:57 AM
Mr. Campbell answered that the demand for AHFC's regular
voucher system exceeded the supply; therefore, the
corporation had designated federal and operating budget
funds for the program.
Co-Chair Meyer remarked that the money would be needed
ongoing.
Mr. Campbell addressed a statewide project improvement
funding request on slide 12:
RN 40068
Statewide Project Improvements
$2 million
Mr. Campbell detailed that the project addressed known and
unknown conditions in AHFC's housing stock. He listed
project outcomes shown on slide 12:
· Funding for emergency repairs, i.e., roof
replacements, fire alarm systems, etc.
· Quick response to code changes and life/safety
issues
· Provide amenities not programmed
· Quick response to unforeseen conditions
· Enhance operations for individual Asset Management
Projects (AMPs)
Mr. Campbell elaborated that the program would help AHFC to
keep up with and get ahead of the deterioration of existing
components. The primary function was to address major or
extraordinary work items that were identified annually
through the Physical Needs Assessments (PNA) produced by
the housing maintenance staff and asset supervisors. A copy
of the current PNA had been provided to staffers that week.
He noted that PNA needs totaled over $23 million. He
relayed that the program would be ongoing.
Mr. Campbell pointed to the Building System Replacement
Program on slide 13:
RN 47069
Building System Replacement Program
$1.5 million
Mr. Campbell communicated that the program addressed
specific major repairs and/or replacement items identified
in a five-year review. The project would reduce maintenance
costs, increase the useful life of a structure, and
increase safety for tenants. The request had been proposed
for the capital budget because AHFC did not have
replacement reserves for building items such as roofs,
parking lots, siding, and other. He relayed that there was
not debt on the buildings.
9:41:19 AM
Mr. Campbell looked at an increment for fire protection
systems on slide 14:
RN 47066
Fire Protection Systems
$2.2 million
Mr. Campbell shared that the systems' purpose was to flush,
evaluate, and make life/safety code repairs to public
housing fire protection systems on all AHFC properties
throughout the state. The project would reduce maintenance
costs, increase the useful life of structures, and increase
safety for tenants. Mr. Campbell looked at slide 15:
RN 47068
Security Systems Replacement/Upgrades
$500,000
Mr. Campbell highlighted that the increment's purpose was
to upgrade existing security and door access systems to
senior housing for those with disabilities and multi-family
public housing complexes. He listed projected outcomes on
slide 15:
· Increase security for residents
· Reduce theft and vandalism
· Reduce maintenance and custodial costs
· Increase useful life of structures
Mr. Campbell relayed that AHFC anticipated two additional
funding requests for the replacement/upgrades in the
upcoming two years.
Mr. Campbell moved to a Housing Loan Program request on
slide 16:
RN 37918
Housing Loan Program
$6 million
Mr. Campbell discussed that the program would provide gap
funding to increase homeownership and rental units. The
program was primarily used in rural areas to increase
housing for teachers, health professionals, and public
safety officials. There was one allocation to teachers,
health professionals, and public safety officials and one
allocation to Village Public Safety Officers (VPSO). He
addressed slide 17:
RN 49395
Housing Loan Program: Teacher/Health/Public Safety
$5 million (allocation)
Mr. Campbell explained that the increment was part of the
Housing Loan Program allocation that would provide gap
funding to increase home ownership and rental units for
teachers, health professionals, and public safety officials
in rural Alaska. He pointed to the second program
allocation on slide 17:
RN 49369
Housing Loan Program: VPSO
$1 million
Mr. Campbell elaborated that the allocation would provide
gap funding to increase home ownership and rental units for
VPSOs in rural Alaska. The program increased affordability
for housing purchases by low- to moderate-income families
and lowered interest rates on AHFC mortgage programs to
attract loan volume and generate net income.
Mr. Fauske provided a brief history of Housing Loan
Program. In the past he had been asked to help with
recruitment and replacement. He detailed that either
salaries could be increased or the gap in financing could
be addressed. For example, he explained that gap funding
would address a situation where a rural Sixplex cost $1
million, but was budgeted at $700,000. The corporation's
approach was to remove the gap to by providing a project
access to unlimited financing through Wall Street.
Additionally, AHFC provided school boards and others with
the ability to borrow money. He had been hesitant at first,
but the program had become very popular; 330 to 350 units
had been built throughout the state in remote areas. He
stated that the VPSO portion had been challenging and AHFC
was working to prioritize it. He added that funds coming
out of the school foundation formula were captured,
recycled, and leveraged.
Co-Chair Meyer appreciated the program. He observed that it
was difficult to entice qualified teachers to work in
remote areas where housing was a challenge.
9:46:38 AM
Senator Dunleavy asked how the program was working out. Mr.
Fauske responded that the program was working quite well.
Mr. Campbell noted that to date 364 units had been funded;
87 of the 364 total were currently under development. A
total of 11 units had been funded for the VPSO portion of
the program; 9 of the 11 units were currently under
development. He moved to slide 19:
RN 6323
Supplemental Housing Development Program
$7 million
Mr. Campbell communicated that the program's purpose was to
supplement federal housing funds provided to regional
housing authorities to ensure safe, decent, affordable
housing. He listed projected outcomes on slide 19:
· Construction of affordable homes in up to 20 urban
and rural communities
· Build on-site water and sewer facilities
· Provide energy-efficient design features in homes
· Construct roads to project sites
· Provide electrical distribution systems
· Retrofit homes to provide a safe, healthy, workable
home environment
· Provide clients with new, safe, energy efficient,
comfortable housing
Mr. Campbell elaborated that the program matched up to 20
percent of the allowable HUD funds and helped with items
that HUD did not fund. He relayed that none of the money
was used for housing authority administrative costs.
Senator Bishop asked if the project shown on slide 20 was
located in Ketchikan. Mr. Campbell replied that the images
on slide 20 showed a development in Ketchikan.
Senator Bishop pointed out that the Department of Labor and
Workforce Development was working with AHFC and that
students trained through the Ketchikan Native Association
were working on the project shown on slide 20.
Mr. Campbell noted that additional pictures were located in
the AHFC FY 14 Budget Summary (copy on file).
9:49:52 AM
Mr. Campbell addressed slide 21:
RN 6351
Energy Efficiency Monitoring Research
$1 million state general funds
Mr. Campbell highlighted that the project's purpose was to
conduct research, analysis, information dissemination, and
interchange among members of the industry, as well as
between the industry and the public. He listed projected
outcomes on slide 21:
· Conduct research, analysis, information
dissemination and interchange among members of the
industry, and between industry and the public
· Gather data and perform analysis of geographically
diverse area energy-efficient designs for homes
· Monitor homes for energy usage, comfort levels,
durability, occupant health and economic benefits of
efficiency features.
Mr. Campbell expounded that the grant would be designated
to the Cold Climate Housing Research Center (CCHRC) to
provide the services. He relayed that much of the
information used in the Weatherization Program and others
was provided by CCHRC. Mr. Campbell directed attention to
slide 22:
RN 6334
Senior Citizen's Housing Development Program
$4.5 million
Mr. Campbell discussed that the increment would provide
funds for development of senior citizen housing and
accessibility modification to seniors' residences. He
listed projected outcomes on slide 21:
· Three development projects or about 30 units
· Modifications for accessibility for approximately 40
units
· Provide technical assistance grants for building
capacity in organizations that develop senior
housing
Mr. Campbell shared that the program had funded 1,229
senior units and had provided accessibility modifications
to more than 251 homes to date. Slide 22 showed images of a
Cooper Landing project.
9:52:11 AM
Mr. Campbell looked at the HUD federal HOME Grant Program
on slide 22:
RN 6347
HUD federal HOME Grant Program
$750,000 general funds
$3.35 million federal receipts
Mr. Campbell noted that the $750,000 million would be used
as a match for the federal receipt funds. The project's
purpose was to expand the supply of affordable, low- and
moderate-income housing and strengthen ability of the state
to design and implement strategies to achieve an adequate
supply of safe, energy-efficient and affordable housing.
Projected outcomes were listed on slide 22:
· Develop affordable rental housing by funding
development gap for four rental projects or about 50
units
· Weatherize 42 homes
· Assist 35 homebuyers to achieve homeownership for
lower-income families by providing down payment and
closing cost assistance
· Preserve low-income homes through a moderate
rehabilitation
Mr. Campbell relayed that the program had funded 46 rental
projects and 55 units of rental assistance. The program had
additionally assisted 362 low-income households in the
purchase of homes; it also provided tenant-based rental
assistance. He explained that AHFC had a program set up
through the Department of Corrections (DOC) to reduce the
rate of recidivism in Alaska. He noted that the program had
received national awards. The corporation was also working
with the Department of Health and Social Services on a
similar referral program for children aging out of foster
care.
Senator Dunleavy asked if there had been a federal or state
first-time homebuyer loan program for teachers. Mr. Fauske
responded that AHFC still offered the no down payment
program for teachers. The program was primarily used in
urban areas, but there had been some rural activity.
Mr. Fauske communicated that he had chaired the governor's
Council on the Homeless for multiple years. One of the
problems that struck him was that when prisoners were
released from custody they did not have a place to go
unless they had family support. Therefore, he decided to
work with DOC to address the problem. He noted that there
had been stunning results in the program. The corporation
looked forward to expanding the program in other areas of
the homeless problem.
Mr. Campbell looked at slide 25 that showed images of the
redevelopment of the Fairview Manor into the Weeks Field
Estates in Fairbanks.
9:56:06 AM
Mr. Campbell looked at the HUD Capital Fund Program (slide
26):
RN 6342
HUD Capital Fund Program
$3.2 million
Mr. Campbell stated that the purpose of the program was to
renovate and modernize public housing rental units
statewide. The projected outcomes were to modernize public
housing rental units, code compliance, and conduct energy
audits. He relayed that the current year's funding had been
set aside for the San Roberto/Mountain View project.
Mr. Campbell looked at Federal and Other Competitive Grants
on slide 27:
RN 6348
Federal and Other Competitive Grants
$5 million federal receipts
$1.5 million general fund match
Purpose: Allow AHFC to apply for HUD, other federal
agency, and private foundation grants that target
housing needs and supportive services of low-income
and groups with needs such as senior citizens, those
with mental, physical, or developmental disabilities,
or homeless Alaskans.
Projected outcome:
· Fund matching portion when needed
· HUD Supportive Housing
· Housing Opportunities for Persons With AIDS
(HOPWA)
· USDA Housing Preservation Grant Program
· Grant Match Program
· HUD Technical Assistance Program
Mr. Campbell addressed Competitive Grants for Public
Housing on slide 28:
RN6350
Competitive Grants for Public Housing
$750,000 federal receipts
$350,000 general fund match
Purpose: Allow AHFC to apply for HUD, other federal
agency, and private foundation grants that target
housing needs of low-income and groups with special
needs who live in public and/or assisted housing.
Projected outcome:
· Match requirements for federal grants such as:
o Family Self-Sufficiency (FSS) Coordinator
and case workers
o Senior Services Coordinator
o Resident Opportunities and Supportive
Services (ROSS) grant
· Match for operations of services, such as after-
school programs, public housing developments and
resident computer training labs
Mr. Campbell elaborated that the program gave AHFC the
opportunity to take advantage of HUD grants when they
became available.
9:58:57 AM
Mr. Campbell looked at AHFC Energy Programs on slide 29:
RN 52598
AHFC Energy Programs
$50 million general funds
$1.5 million federal receipts
Mr. Campbell discussed that the purpose of the programs was
to provide cost-effective energy improvements to homes
throughout the state. The appropriation included the AHFC
Weatherization Program and the AHFC Energy Rebate Program.
He turned to the Weatherization Program on slide 30:
RN 50683
AHFC Energy Programs - Weatherization
$30 million general funds
$1.5 million federal receipts
Purpose: Provide cost-effective energy improvements to
homes occupied by low-income families throughout the
state.
Projected outcome:
· Reduce household operating costs of the resident
· Improve resident health and safety
· Improve durability and longevity of housing stock
· Replace unsafe heating systems
· Install smoke detectors and/or carbon monoxide
detectors
· Create and sustain local jobs
Mr. Campbell directed attention to before and after images
of a weatherized home in rural Alaska.
10:00:19 AM
Mr. Campbell addressed the Home Energy Rebate program on
slide 32:
RN 51947
AHFC Energy Programs - Home Energy Rebate
$20,000,000
Purpose: Assist homeowners to decrease fuel
consumption by providing rebates for making
recommended, cost-effective energy improvements to
their homes throughout the state.
Projected outcome:
· Reduce household operating costs of the resident
· Improve resident health and safety
· Improve durability and longevity of housing stock
· Replace unsafe heating systems
· Gather statistical intelligence about home energy
consumption
Mr. Campbell relayed that both energy programs were
popular. He added that the Home Energy Rebate program had
no income limit and was available to all Alaskans. He
looked at Statewide ADA Improvements on slide 33:
RN 45389
Statewide ADA Improvements
$500,000
Purpose: Address recommendations suggested in the
recent American Disability Act (ADA) audit.
Projected outcome:
· Comply with HUD Voluntary Compliance Agreement
· Comply with Americans with Disabilities Act (ADA)
· Comply with Section 504 of the Fair Housing Act
· Increase access for tenants and visitors with
disabilities
· Allows for "aging-in-place" for seniors
· Increase unit rent-ability
· Maintain federal funding by complying with HUD
mandates
Mr. Campbell shared that the program had been in place for
the past couple of years and was expected to continue for a
couple more years. He highlighted the Homeless Assistance
Program increment in the Mental Health bill on slide 34:
RN 45390
Homeless Assistance Program
$6,300,000 general fund
$850,000 Mental Health Trust Authority Receipts
$850,000 general fund/Mental health
Purpose: Support programs that address homelessness by
providing assistance to families in imminent danger of
becoming homeless or those who are currently homeless.
Projected outcome:
· Prevent near homeless individuals and families
from becoming homeless
· Provide homeless individuals and families
assistance to obtain safe, sanitary shelter
Mr. Campbell explained that the program may be leveraged
with other funds such as Senior Housing Program, Home
Program, or other. He relayed that all homeless assistance
program funds would be combined and administered into one
program by AHFC. He addressed the Beneficiary and Special
Needs Housing increment in the Mental Health bill on slide
35:
RN 6360
Beneficiary and Special Needs Housing
$1,750,000
Purpose: Provide funds for Alaskan Nonprofit service
providers and housing developers to increase housing
opportunities to Alaska Mental Health Trust
beneficiaries and other special needs to populations
throughout Alaska.
Projected outcome:
· Add 40 congregate housing units for people with
mental illness or developmental disabilities
· Reduce recidivism among clients spending time in
institutions
· Provide supportive housing, including assisted
living, for people with mental, physical, or
developmental disabilities, or multiple disorders
· Provide transitional housing with support
services for newly recovering alcoholics and
addicts
Mr. Campbell noted that slide 36 provided an example of a
project completed in Juneau.
10:04:56 AM
Co-Chair Meyer noted that AHFC was doing an excellent job
fulfilling many statewide needs.
Vice-Chair Fairclough asked if the home energy rebate
program currently had as many applicants as there had been
when the program first started. Mr. Fauske replied that
there were currently 700 people on the program's waiting
list. The corporation had held off on a major advertisement
campaign because the program had been so successful and
AHFC wanted to avoid a run on the bank. Outreach had been
increased to let people know the program still existed. He
clarified that AHFC wanted to offer the program to more
homeowners, but wanted to ensure that it had enough funds
to meet expectations. He relayed that when people learned
about the program they tended to sign up quickly.
Vice-Chair Fairclough pointed to other housing units (e.g.
duplexes, fourplexes, sixplexes, and other). She was
interested to know how single family homes were accessing
the program before expanding the program to other types of
housing. She surmised that the program would allow families
to save in multifamily housing units as well. She wondered
if there continued to be a need in the single family
housing arena and about further expansion.
Mr. Fauske replied that the single family housing need
continued to exist. He estimated that there were
approximately 10,000 homes projected on the weatherization
side. He pointed to rising energy costs throughout the
state and opined that money allocated to the program was
well spent given the immediate return and job creation. The
program applied to condominiums, duplexes and fourplexes;
an owner had to occupy some of the units. He relayed that
the program had received many requests to expand beyond its
current horizon to larger units. He believed increased
funding for expansion would allow the program to include
additional larger units.
10:08:44 AM
Vice-Chair Fairclough disclosed that she did not own rental
properties.
Senator Bishop referred to the energy audit and
weatherization programs. He stated that the program had
been successful at providing job training. He noted that
knowing how to install the upgrades was important in order
for the maximum energy efficiency benefit to be obtained.
He commended AHFC for providing training. He shared that he
had received a heartfelt letter related to the tangible
benefits the home energy rebate program offered to
homeowners. He added that a neighbor had cut their fuel
usage in half under the weatherization program.
10:11:02 AM
Mr. Fauske replied that the average rebate was
approximately $6,300, with an average expenditure of
slightly over $10,000. The approximate $4000 difference
equated to approximately $27 million to $30 million for the
Alaskan economy; AHFC estimated that about $4,000 jobs had
been created. The corporation had worked to minimize the
number of its employees in order to keep from becoming a
bureaucracy; the majority of its workers were contractors,
vendors, and others. He relayed that the weatherization
program was offered to homeowners who were at "100 percent
of medium income over the low" and the energy rebate
program was offered to homeowners on the upper side. He
reiterated an earlier statement that demand exceeded
supply. He reminded the committee of AHFC's $250 million
bond program for performance-based contracting; the program
now had its first recipients and there had been over 360
audits around the state. The corporation was working with
Department of Transportation and Public Facilities and
others with a concentration on municipally owned
facilities. He shared that the City of Kenai was planning
to work on three of its structures. He detailed that under
the program a contractor would guarantee that energy
savings generated would service the debt on the bonds. He
was anxious for the program to get underway; AHFC would
work with the University of Alaska, school districts, and
others. He encouraged committee members to remind
constituents of the program. He added that AHFC had
received requests from non-city owned entities (e.g.
hospitals and other). He concluded that the consistent
message the corporation received was to further expand the
programs.
10:13:56 AM
AT EASE
10:17:18 AM
RECONVENED
^DEPARTMENT OVERVIEW: DEPARTMENT OF HEALTH AND SOCIAL
SERVICES
10:17:43 AM
REE SAILORS, DEPUTY COMMISSIONER, FAMILY, COMMUNITY AND
INTEGRATED SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, provided a Power Point presentation titled
"Department of Health and Social Services FY 14 Capital
Budget Request." She turned to slide 2:
RN 42830
Bethel Youth Facility Renovation, phase 2 of 2
$10.6 million
Ms. Sailors elaborated that the renovation had expanded
some of the detention and treatment beds, implemented
security measures, and provided additional space for
existing probation officers. Slide 3 illustrated the
facility plans and impacted areas. She moved to slide 4:
RN 56065
Master Client Index, State Interface Improvements to
the Health Information and Direct Secure Messaging
Gateway
$5.7497 million
Ms. Sailors explained that the project was extremely
important and funding would cover the implementation of
services such as hosting, software service for the Master
Client Index (MCI), and would provide the agency with a
single view of its clients across all agency programs. She
expounded that MCI allowed the agency to look across
programs and systems. Additionally, the program supported
secure emailing of personal health information across the
state. She addressed slide 5:
RN 56657
Transition of Care Pilot Project
$1.040 million
Ms. Sailors detailed that the project was funded by a 90/10
federal to state match. The project would ensure that
patients' health and treatment data traveled with them when
they moved from a hospital into a nursing home or vice
versa. She emphasized that the transitions were high risk
moments for patients; the project would guarantee that
onsite providers would have patients' essential care
requirements.
10:21:49 AM
Ms. Sailors looked at the Personal Care Assistant Pilot
Project on slide 6.
RN 56649
Personal Care Assistant Pilot Project
$1.040 million
Ms. Sailors communicated that the project was funded by a
90/10 federal to state match. She shared that personal care
assistant programs had been growing substantially and the
funding would allow the agency to implement a monitoring
system to confirm when and where services are delivered.
The project was directed at services to people in their
homes in lieu of putting patients in institutions.
Additionally, the project would enable the agency to take
some of the burdensome paperwork off clients. She addressed
the Electronic Vital Record Registration System phase 2 of
2 (slide 7):
RN 42853
Electronic Vital Record Registration System Phase
2 of 2
$1.785 million
Ms. Sailors relayed that the completion of the project
included software development for marriage and divorce
records and would bring the agency up to full encryption
requirements. Additionally, the project would bring the
agency in compliance with the federal Intelligence Reform
and Terrorism Prevention Act.
10:23:30 AM
Ms. Sailors directed attention to the proposed increment
for the Alaska Veterans Pioneer Home Resident Lifts on
slide 8:
RN 56658
Alaska Veterans Pioneer Home Resident Lifts
$212,000
Ms. Sailors detailed that the project would fund ten lifts
and their installation in state pioneer homes. The lifts
had dramatically reduced patient and staff injuries and
workers compensation claims. She moved to slide 9:
RN 56805
Equipment Needs for Front-Line Probation Officers,
Juvenile Justice Officers, and Facilities and
Probation Offices
$267,000
Ms. Sailors elaborated that the increment would fund a
variety of safety equipment (e.g. training supplies, body
armor, law enforcement identification, jackets, finger
printing machines, security cameras, and other).
10:24:59 AM
Ms. Sailors turned to slide 10:
RN 56810
Office of Children Services Live Scan Fingerprinting
$135,200
Ms. Sailors relayed that the funding would go to the
replacement of live scan machines that were used for
background checks during foster parent recruitment. The
live scan enabled quick turnaround time, reduced paper, and
allowed workers to work and concentrate on other items as
well. She moved to slide 11:
RN 56652
Juneau Pioneer Homes Security Cameras
$106,000
Ms. Sailors communicated that the Juneau Pioneer Home was
the only pioneer home without interior and exterior
cameras. The increment would fund the installation of 20
cameras.
10:25:55 AM
Ms. Sailors directed attention to slide 12. The increment
would allow for the department to securely backup its data.
RN 56808
Department - Wide Disaster Recovery
$805,800
Ms. Sailors turned to slide 13. She explained that the item
was a direct pass-through of federal dollars to Alaska
health care providers. The funds were a reward to
physicians and hospitals for installing electronic health
information systems and using them in a meaningful way. The
High Tech Act incentive program had been embedded in
American Recovery and Reinvestment Act (ARRA). She
furthered that as an increasing number of providers came
into compliance they would be eligible for some
reimbursement of initial cost and an ongoing bonus in
payments under Medicare.
RN 51853
Electronic Health Record Incentive Payments
$30,187,500 federal
10:27:46 AM
Ms. Sailors addressed an increment on slide 14:
RN 42837
Emergency Medical Services - Match for Code Blue
Project
$425,000
Ms. Sailors elaborated that the funding would be used to
help local communities purchase needed emergency medical
equipment for ambulances and other. She detailed that the
funding was leveraged with other funds available through
the Rasmuson Foundation, the Denali Commission, and the
U.S. Department of Agriculture.
10:28:48 AM
Ms. Sailors pointed to slide 15 and explained that the
increment was in the mental health budget (SB 20). She
shared that the Mental Health (MH) Deferred Maintenance and
Accessibility Improvements was a competitive grant program
that helped provider organizations get capital repairs on
their facilities.
RN 56572
Mental Health (MH) Deferred Maintenance and
Accessibility Improvements
$1 million
Ms. Sailors turned to another mental health increment on
slide 15. She detailed that the grant program provided
funding for improvements to private homes for items such as
ramps and other that would allow individuals to remain in
their homes.
RN 54275
MH Home Modification and Upgrades to Retain Housing
$1.050 million
Ms. Sailors addressed another mental health increment on
slide 17. The funding would provide hearing and vision
appliances to help individuals who did not have insurance
coverage or could not afford the items.
RN 33671
Medical Appliances for Beneficiaries Experiencing
Sensory Impairments
$500,000
Ms. Sailors looked at the last mental health item on slide
18. Funds would go towards the continued implementation of
a replacement grant system. She detailed that the item
created an interface between the department and grantees
related to reporting. She elaborated that keeping track of
the grants was important given that approximately $25
million in grants went out through the department.
RN 56573
Implementation of Replacement Grant System
$700,000
10:31:08 AM
Ms. Sailors turned to the last two increments on slides 19
and 20. She explained that the department had non-pioneer
home deferred maintenance and pioneer home deferred
maintenance. The total non-pioneer deferred maintenance
request was $2.9 million and the pioneer home request was
for $3.8 million.
RN 57040
Non-Pioneer Homes Deferred Maintenance, Renovation,
Repair and Equipment
$2,902,800
RN 37934
Pioneer Home Deferred Maintenance, Renovation, Repair
and Equipment
$3,871,200
Co-Chair Meyer noted it was not necessary to go through
each deferred maintenance item.
10:32:10 AM
Vice-Chair Fairclough pointed to replacement and
maintenance requests. She wondered how the department could
include the maintenance of equipment inside its existing
budget. She stated that revenues could decline in future
years, which would impact appropriations. She wondered if
maintenance replacement funds had been created.
Ms. Sailors referred to the governor's deferred maintenance
programs from the past several years and explained that the
department conducted an assessment of needs every two
years. The assessment was updated annually as corrections
were made or items broke down. She discussed that the
department had a considerable investment in information
technology (IT) resources; some very old technology was
being replaced. She shared that the vital statistics
program was operating on old Wang Software; parts for the
system were only available on EBay. She furthered that some
of the department's IT systems had been developed in the
1980s and were at the point of expiration. She emphasized
that the department was conscious about making sure that
improvements were compatible and complimentary.
10:34:37 AM
Vice-Chair Fairclough appreciated the streamlining concept.
She discussed that the legislature had talked about
building funds or other options that would enable items to
be replaced. She stated that the items were operating costs
and should have a maintenance line where assets were
depreciated.
Co-Chair Meyer agreed. He believed some of items may fall
under the operating budget category. He pointed to specific
items such as equipment needs for probation and juvenile
justice officers and other.
10:35:54 AM
JENNIFER KLEIN, FACILITIES SECTION CHIEF, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, replied that the department had
been looking at the issue related to equipment costs and
actual turnover. She shared that the equipment tended to
need replacement on a regular basis. She relayed that the
department had an ongoing discussion about whether items
fell under capital or operating expenses. She furthered
that desktop replacement was typically in the operating
budget. She communicated that the department had not been
able to fit items such as the juvenile justice equipment
and fingerprinting with the Office of Children's Services
into the operating budget.
Vice-Chair Fairclough stressed that she was not being
critical of the department. She relayed that it was a
problem for the Senate Finance Committee to work on. She
stated that if departments had a funding line, the
legislature would sweep funds from the accounts in order to
pay for critical items in the event of a budget deficit.
She opined that it was a global issue related to building
replacements, maintenance, software replacement, and other.
She believed a change could be made, but it would take
discipline.
Co-Chair Meyer appreciated the department's work. He
discussed the schedule for the following day.
ADJOURNMENT
10:38:22 AM
The meeting was adjourned at 10:38 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AHFC Budget Senate FIN final 2 13 13 (2).pdf |
SFIN 2/14/2013 9:00:00 AM |
SB 18 |
| FY2014 - Capital Budget Narrative Request - 2-15-2013-Final.pdf |
SFIN 2/14/2013 9:00:00 AM |
SB 18 |
| SFIN HSS PPT-JKlein 021413.pptx |
SFIN 2/14/2013 9:00:00 AM |
SB 18 |