Legislature(2013 - 2014)SENATE FINANCE 532
02/18/2013 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB18 | |
| Department Overview: Department of Administration | |
| Department Overview: Department of Commerce, Community and Economic Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 18 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
February 18, 2013
9:05 a.m.
9:05:51 AM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 9:05 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Mike Dunleavy
Senator Donny Olson
MEMBERS ABSENT
Senator Click Bishop
Senator Lyman Hoffman
ALSO PRESENT
Becky Hultberg, Commissioner, Department of Administration;
Robert Swenson, Petroleum Geologist, Department of Natural
Resources; Jo Ellen Hanrahan, Director, Division of
Administrative Services, Department of Commerce, Community
and Economic Development; Sarah Fisher-Goad, Executive
Director, Alaska Energy Authority, Department of Commerce,
Community and Economic Development.
SUMMARY
SB 18 BUDGET: CAPITAL
SB 18 was HEARD and HELD in committee for further
consideration.
Department Overviews:
Department of Administration
Department of Commerce, Community and Economic
Development
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."
9:06:52 AM
^DEPARTMENT OVERVIEW: DEPARTMENT OF ADMINISTRATION
9:06:52 AM
BECKY HULTBERG, COMMISSIONER, DEPARTMENT OF ADMINISTRATION,
introduced herself and staff. She summarized that
Department of Administration's (DOA) total funding request
was for $49.9 million, $39.9 million of which represented
capital requests. She mentioned that the department had a
little over $10 million in differed maintenance. She stated
that the department's theme, with respect to capital, was
how it would operate government effectively and make the
best choices with the limited resources that were
available.
RN 54483
General Services Douglas Island Building Year 2 of 2
$9,600,000
Commissioner Hultberg related that it had previously been
indicated that the Douglas Island building needed to be
torn down and completely replaced because it would not be
cost effective to repair the structure. She recalled that
several years prior, there had been a proposal to build a
new state office building, which would cost about $100
million; the tenants of the Douglas Island building would
have been one of the primary occupants of the new state
office building. Upon further research with architects and
engineers, it was determined that the Douglas Island
building could be rehabilitated; furthermore, the
department had determined that it would be more cost
effective to remodel the structure than to build new
construction. She stated that the project would take care
of exterior renovations, including replacing the exterior
curtain and a number of other items; it would also cover
interior renovations, electrical upgrades, and mechanical
upgrades.
RN 54507
General Services Repair Juneau State Office Building
Parking Garage Phase 2 of 3
$2,000,000
Commissioner Hultberg pointed out that the north garage was
39 years old and that the south garage was nearly 42 years
old; furthermore, there was some significant deterioration
in those structures and they were in need of repair. She
stated that a building sat on one of the garages and that
the structural integrity of the facility was very
important. She offered that fully funding the project could
extend the life of the garage by 30 years.
RN 54681
General Services Nome State Office Building and Courthouse
$3,252,170
Commissioner Hultberg stated that the Nome State Office
Building had needed either replacement or repair for a
number of years. She pointed out that it had been
contemplated that the facility would have to be completely
replaced and that there had been a concept that involved
moving those tenants into a new building that would also
accommodate the courthouse; however, upon further
architectural and engineering work, it was determined that
it was cost effective to remodel the building. She added
that this was the final amount needed to complete the
renovation.
Senator Olson inquired if questions should be saved until
the end of the presentation. Co-Chair Meyer preferred that
question be saved until the end.
9:10:31 AM
RN 54683
Alaska Geologic Materials Center Replacement Facility Phase
2 of 4
$15,000,000
Commissioner Hultberg stated that the current facility in
Eagle River, which archived the state's legacy collection
of geologic samples and related data, had been opened in
1984; the samples in the collection had been linked to the
discovery and development of oil, gas, and mineral
resources and were strategically important to the state.
She stated that the samples were currently 70 percent over
capacity and were housed in 60 unheated and unlit 40-foot-
containers, which were less than optimal conditions for
these materials. The request was for purchasing a new
facility; an offer had been made on the facility, but a
final agreement had not been made yet. She stated that the
$15 million would accommodate the purchase of the facility,
but that there may be additional requests in the future.
She offered that the department did not believe that the
future requests would be significant and might not be
needed at all. She concluded that the project was in a bit
of "flux," but that the department believed that it had
identified an alternative that was significantly less
expensive than the construction of a new facility.
RN 56591
Enterprise Technology Services Virtual Tape Systems
Replacement
$500,000
Commissioner Hultberg related that the funding would
replace the virtual tape system and automated tape
libraries, which were beyond the end of their useful life.
The system helped support the department's mainframe, which
was a valuable and important information technology (IT)
asset for the state.
Commissioner Hultberg related that all four of the upcoming
projects for the Division of Retirement and Benefits
addressed increasing member counts. She stated that the
increasing number of retirees required the division to do
additional work. The projects also streamlined and
automated processes in order to provide members with easier
access to information. She offered that automation would
lead to less workload on the division in terms of
personnel.
RN 51599
Retirement and Benefits Combined Retirement System Upgrade
Year 4 of 5.
$350,000
Commissioner Hultberg noted that the funding source was
from the Division of Retirement and Benefits' retirement
funds.
RN 51598
Retirement and Benefits Document Management System Year 4
of 4
$135,000
Commissioner Hultberg noted that the funding source was
from the Division of Retirement and Benefits' retirement
funds. She pointed out that the project's system would
replace microfiche and microfilm document storage methods,
which relied on older technology.
RN 56597
General Services America's With Disabilities Act (ADA)
Improvements-Multiple Locations
$192,300
Commissioner Hultberg mentioned that DOA was responsible
for caring for 11 public buildings and 4 non-public
buildings. She offered that the Department of
Transportation and Public Facilities currently received all
of the ADA funds that were appropriated annually and that
DOA was requesting funds to comply with the ADA regulations
and standards for the buildings that it was responsible
for.
RN 56601
Retirement and Benefits Policy Automation
$880,000
Commissioner Hultberg noted that the funding source was
from the Division of Retirement and Benefits' retirement
funds and that it would purchase and deploy an off-the-
shelf policy automation system, which was in line with the
department's efforts to streamline processes. The system
would allow the division to write and maintain business
rules, regulations, and policies in a central catalogue.
RN 56602
Retirement and Benefits Identity and Security Governance
$749,400
Commissioner Hultberg related that the funds would purchase
and deploy an off-the-shelf identity management and
security system. She pointed out that The Division of
Retirement and Benefits dealt with very sensitive personal
information and that security and identity management was
very important. The project would manage and secure access
to the division's systems and enforce security policies in
compliance with state and federal regulations; it would
also automate tasks and provide self-service for retirees
for routine processes.
9:15:16 AM
RN 56625
Alaska Rural Communications System Digital Conversion
$5,300,000
Project Description/Justification:
By September 1, 2015, all low power television
services must be converted from analog to digital in
accordance with a FCC mandate. In order for the ARCS
service to continue serving rural Alaskans beyond that
date, the fleet of analog transmitters must be
replaced with digital units. In the interim, it is
critical to maintain existing levels of service. The
transition from analog to digital transmitters will
significantly expand public service to residents in
bush Alaska, primarily by replacing the single-channel
distribution platform with a multi-channel system
offering 3 or 4 video streams inside the same
bandwidth.
Commissioner Hultberg related that there was a policy
decision on whether or not the department would continue
with the ARCS service that was inherent in this capital
request.
RN 56959
Capital Asset Management System Phase 1 of 2
$2,000,000
Commissioner Hultberg stated that 13 departments had
buildings that covered over 10 million square feet of
space; this included the University of Alaska and the
Alaska Court System. She pointed out that the state did not
have a central building information repository and that as
a result, there was not a simple way to look at all the
differed maintenance projects comprehensively across the
enterprise. The funds would maintain accurate and current
facility data statewide in a single web-based system. It
would help the department prioritize deferred maintenance,
renewal, repair, repurposing, and equipment projects using
a consistent methodology across agencies. She concluded
that the increment was a management tool that was intended
to help DOA manage the buildings, but would also help the
department to compare the deferred maintenance priorities
across departments. The increment would also procure a
statewide building condition audit and design a facility
management system.
RN 49602
Deferred Maintenance, Renewal, Repair and Equipment
$10,017,000
Commissioner Hultberg stated that the funding source
included about $7 million from the general funds and
approximately $3 million from public building funds.
RN 54089
General Services Public Building Fund Building Deferred
Maintenance
$6,250,000
Commissioner Hultberg related that $3.2 million of the
funds were general funds, while $3 million were public
building funds.
RN 54799
General Services Non-Public Building Fund Deferred
Maintenance
$767,000
RN 54183
State of Alaska Telecommunications System (SATS) Deferred
Maintenance, Year 4 of 5.
$3,000,000
9:18:00 AM
Senator Olson discussed the Nome State Office Building and
the rising seas in relation to the seawall. He inquired if
there was anything being done about the water damage that
could occur if the building's lifespan was expanded.
Commissioner Hultberg replied that the project would
replace the wall assembly, and would replace the seawall or
add a buttress wall. She furthered that the funding
included plans to address the seawall, but that the current
issue with the building was that the heating and mechanical
systems were located in the basement; this presented a
significant problem in the event of a flood.
Senator Olson inquired where the boiler and heating system
would be moved to in the building. Commissioner Hultberg
responded that it would not be in the basement, but did not
want to speculate as to the exact location. Senator Olson
noted that the "bottom picture" on the lower right showed
an addition to the top of the building and assumed that
this was location where the boiler and heating system would
be going. Commissioner Hultberg believed that the systems
would be moved to the roof area, but that there were
schematics that could be consulted.
Senator Olson discussed the Alaska Geologic Materials
Center Replacement Facility Phase 2 of 4 project and
questioned why the storage area needed lighting and
heating. He did not understand why rock cores that were an
inch or two inches in diameter needed to be heated and lit
in a facility of this type. Commissioner Hultberg responded
that there was degradation of the core samples occurring
because of the climatic conditions that they were exposed
to. She furthered that the degradation of the samples was a
significant concern and that humidity and temperature
controls could address the issue. She offered that she was
not the best person to answer the question. She stated that
there were oil and mineral explorers who accessed the
facility and that the project would provide an environment
that was more conducive to work in. She concluded that the
project would benefit the state's efforts to increase oil,
gas, and mineral exploration. She stated that Mr. Swenson
from the Department of Natural Resources was in the
audience and that he probably could address the line of
questioning better.
Senator Olson was not aware of rocks that would deteriorate
as a result of being exposed to different temperatures. He
wondered again why the core samples would need heating.
Commissioner Hultberg replied that she was not a geologist
and that she did not want to speculate on geologic matters.
She requested that Mr. Swenson join her at the table to
respond to the question.
ROBERT SWENSON, PETROLEUM GEOLOGIST, DEPARTMENT OF NATURAL
RESOURCES, replied that any subsurface sample had moisture
in it and that the freeze and frost cycles of water within
the cores destroyed samples. He pointed out that the
temperature did not need to be at 70 degrees, but that it
needed to be maintained at a level above freezing. He added
that controlling the humidity was important to archiving
the core sample.
9:23:32 AM
Co-Chair Meyer discussed the General Services Repair Juneau
State Office Building Parking Garage Phase 2 of 3 project.
He noted that the request was for $2 million for phase 2 of
3 and inquired how much more funding would be needed to
complete the entire project. He further inquired if
"piecemealing" the project in phases rather than completing
it at all at once was the right approach. Commissioner
Hultberg replied that $5.8 million would be needed to
complete the project. She stated that, generally speaking,
the department did not start construction projects until it
had full funding and offered that the project could be one
appropriation rather than being phased. She added that
other projects, such as IT projects, represented work every
year and that those types of projects had different
considerations around phasing. She concluded that Co-Chair
Meyer made a fair point about the construction projects and
stated that it would be the decision of the committee
whether the funding was phased in or allocated in one
amount.
Co-Chair Meyer observed that it may cost more to phase the
project over several years and pointed out that it appeared
that the garage needed repairs quickly.
9:25:18 AM
AT EASE
9:29:01 AM
RECONVENED
^DEPARTMENT OVERVIEW: DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT
9:29:01 AM
JO ELLEN HANRAHAN, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT, introduced herself for the record and spoke
the department's capital requests.
RN 54070
Economic Development Marketing Initiative
$400,000
Ms. Hanrahan stated that the funds would build on the
multi-pronged marketing and development effort that was
initiated in FY13 to upgrade marketing materials and
activities and supplement Department of Commerce, Community
and Economic Development's (DCCED) statutory
responsibilities in the areas of fisheries, minerals,
forest products, and film. Also, the department had been
increasing its development work in sectors that were beyond
the statutory responsibilities, including mariculture, air
carriers, and Arctic shipping. The FY14 funding would
continue the initiative that was started in FY13 with media
relations contracts, new marketing materials, increased
presence at national and international trade shows for
minerals, forest products, and maritime services in Arctic
development. The funding would also help increase the
marketing presence in Northern European countries that
supported the new Iceland Air seasonal service to Alaska,
as well as domestic marketing activities in support of the
new Virgin Atlantic seasonal service to Alaska.
RN 38943
Community Development and Assistance
$290,000
Project Description/Justification:
Computer Assisted Mass Appraisal (CAMA) System-
$200,000:
This project will modify an existing CAMA system for
use in medium sized municipalities within the state.
Municipalities that levy property taxes must first
collect property data and then assess, or value the
property using the data collected. CAMA systems not
only store the data but also allow properties to be
valued on a "mass basis" rather than on an individual
basis. Commercially available CAMA systems are not
affordable for most Alaska municipalities. The
Fairbanks North Star Borough (FNSB) has developed an
in-house CAMA system that rivals any commercial system
available today. The FNSB has agreed to provide the
Division of Community and Regional Affairs (DCRA) a
copy of the program and allow it to be modified for
use by smaller municipalities in the state. This
project will fund a contractor to modify the existing
system for use by smaller municipalities, pay the
contractor to assist municipalities to install and
integrate the program with their existing finance
programs, and provide maintenance and technical
support for a period of three years. After three
years, it is expected that the integration will be
stable and the municipalities could pay for the system
maintenance directly. There are 15 municipalities in
Alaska that have a property tax and currently do not
have a CAMA system. Nine of these municipalities
(Bristol Bay Borough, Haines Borough, Skagway,
Cordova, Dillingham, Nenana, Nome, Petersburg, and
Unalaska) have said they would implement this system
if it became available.
Grant Agreement Legal Review - $90,000:
The DCRA's grant section administers over 2,300 grants
awarded under seven unique programs. Grants are
executed with a variety of entities including state
agencies, municipalities, tribal entities, non-profit,
for-profit corporations, and other federally
recognized organizations. Total grant funds
administered by DCRA as of the start of FY2013 is over
$1.84 billion. The base grant agreement was developed
over seven years ago for designated legislative
grants. To assure that this agreement and DCRA's grant
policies are in compliance with current statutes,
regulations, and state and federal policies, the
Department of Commerce Community and Economic
Development is seeking a review by the Department of
Law. This review will also include the development of
a third party agreement template and review of other
specific issues that have arisen in the administration
of grants.
Ms. Hanrahan related that this increment was an annual
request that covered many areas that supported Alaska's
communities and pointed out that the first project under
the funding was the CAMA system. She stated that the second
project was a review of the department's grant agreement.
She pointed out that the base grant agreement was outdated
and no longer covered all of the new programs and types of
grants that were occurring. She reported that DCCED's
sovereign immunity waiver clause had been raised as an
issue and stated that several grantees had contacted the
Department of Law to negotiate their own special sovereign
immunity clauses. She added that the legal review of the
standard grant agreement would ensure that the state was
protected and that new types of grants were covered.
RN 38946
Community Block Grants
$6,060,000
Brief Summary and Statement of Need:
This project is for multiple federally funded
programs, enabling the Department of Commerce,
Community and Economic Development (DCCED) to provide
grants to communities and non-profits that provide
services and/or benefits for low to moderate income
individuals.
Project Description/Justification:
Community Services Block Grants:
This program provides funding to reduce and/or prevent
poverty through community based educational activities
which lead to a greater degree of self-sufficiency. As
authorized by federal Public Law 97-35, throughout the
United States the federal Department of Health and
Human Services (HHS) has designated 950 Community
Action Agencies (CAAs) - all of whom may then receive
federal funding that passes-through the appropriate
state agency. Within Alaska the federal HHS has
designated only one CAA - that entity is the non-
profit corporation Rural Alaska Community Action
Program, referred to as RurAL CAP. RurAL CAP's mission
is to protect the heritage of, while also improving
the quality of life for, low income rural Alaskans.
This is accomplished through educational programs such
as alcohol and drug abuse prevention programs, fetal
alcohol syndrome prevention programs, and child
development programs; adult training; affordable
housing programs; advocacy for low-income individuals
and instruction on how to advocate for themselves.
This program has been in existence since 1965. The
federal HHS provides 100 percent of the funding. For
FY2014, DCCED anticipates $3 million in federal
funding.
Community Development Block Grants:
This program provides grants not to exceed $850,000 to
municipalities for planning activities, infrastructure
projects, and economic development activities which
benefit low to moderate-income individuals. This
program has been in existence since 1983. The U.S.
Department of Housing and Urban Development (HUD)
provides the funding, which ranges from $3 to $3.5
million annually with a state required match of 2%.
For FY2014, DCCED anticipates $3 million in federal
funding with a state match of $60,000.
Ms. Hanrahan stated that the increment was a long-term
annual request. She related that $6 million of the funding
was federal and that only $60,000 was general fund match.
9:35:20 AM
SARAH FISHER-GOAD, EXECUTIVE DIRECTOR, ALASKA ENERGY
AUTHORITY, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT, spoke to the Alaska Energy Authority's (AEA)
capital requests.
RN 56220
Alaska Energy Authority-Susitna-Watana Hydroelectric
Project
$95,200,000
Brief Summary and Statement of Need:
Funding will be used for the engineering feasibility
study, detailed engineering design, geotechnical
investigations, environmental studies, license
application preparation, and project management
consulting on the Susitna-Watana Hydroelectric
Project. Continued work on the Susitna-Watana
Hydroelectric Project is in preparation for the
Federal Energy Regulatory Commission (FERC) license
application anticipated to be submitted in September
2015.
Ms. Fisher-Goad pointed out that the funding was the
estimated cost of the FY14 requirement of moving forward
with the FERC licensing process. She related that AEA was
currently working with FERC to finalize its study plan and
stated that the study plan determination for the final 14
studies was expected to be released on April 1. She
explained that AEA anticipated being out in the field for
58 studies during the first year of a two-year
comprehensive study in preparation to file for its license
in September of 2015. She pointed out that the project was
expected to cost $5.2 billion, which included the estimated
cost of pre-construction and the FERC licensing process.
RN 56681
Alaska Energy Authority- Bradley Lake Transmission System
$13,700,000
1) Beluga-Bernice Lake HVDC Intertie:
This project includes the construction of a 100 MW
high-voltage, direct current (HVDC) intertie between
the Beluga power plant in Southcentral Alaska and the
Bernice Lake Power Plant on the Kenai Peninsula. The
interconnecting power line would consist of two
undersea cables, each rated for 100 MW transfer
capacity. The cables are approximately 36 miles in
length and are estimated to be 300 kcm copper
conductors rated at 80 kV DC. The converters are mono-
pole HVDC converters with a transfer capacity of 100
MW. The actual voltage and submarine cable ratings
will require optimization to provide the most economic
selection for the project.
2) 25MW BESS - Anchorage Area:
This project includes the installation of a 25 MW / 14
MWh Battery Energy Storage System (BESS) in the
Anchorage area. The exact characteristics of the BESS
technology should be evaluated in the design and
procurement of the BESS.
3) Bradley Lake - Soldotna 115kV Transmission Line:
This project includes the construction of a new 68
mile long, 115 kV transmission line from the
Bradley Lake Power plant to a new substation near the
Homer Electric Association (HEA) existing Soldotna
substation. The transmission line includes
modifications to the existing switchgear and 0.5 miles
of 115 kV solid-dielectric cable at the Bradley Lake
Power Plant. The northern end of the line would
terminate in a new 115 kV substation connected to the
existing HEA substation through the existing AEA
static var compensator (SVC) bay. The line would
utilize the same construction configuration and
conductor size as the existing Bradley Lake - Soldotna
transmission line.
4) Flexible Gas Storage - Anchorage Area:
This project includes the installation of a 1.91 MCF
(262 MWh) gas storage facility at an
Anchorage/Matanuska-Susitna area power plant. The gas
storage includes storage tanks for compressed natural
gas, compressor, compressor building and delivery
system. The need for this project should be evaluated
as more stringent gas supply and delivery constraints
are enacted in Southcentral Alaska.
5) University - Dave's Creek 230 kV Transmission Line
Conversion:
This project includes the conversion of 77 miles of
existing 115 kV transmission line from 115 kV to 230
kV from Chugach's Dave's Creek Substation on the Kenai
Peninsula to Chugach's University Substation in
Anchorage. The project requires two separate phases,
the conversion of the line to 230 kV followed by the
conversion of the substations to 230 kV. The line
conversion would include rebuilding the line across
the avalanche areas along the existing route. This
conversion would include the installation of avalanche
deflection structures and the installation of more
avalanche resistant structures. The line would be
placed along the existing line's route.
5) University - Dave's Creek 230 kV Substations and
Compensation:
This project includes the installation of reactive
compensation at Dave's Creek Substation and the
conversion of substations at Dave's Creek, Hope,
Summit Lake, Portage, Girdwood and Indian stations to
230 kV. The project also includes the completion of
the 230 kV bus at Chugach's University substation. The
project also includes the installation of
sectionalizing switches at each of the stations to
allow remote sectionalizing of the transmission line.
Ms. Fisher-Goad stated that the prior year, AEA had
received funding to study the transmission system in the
Railbelt area in order to formulate a detailed analysis of
what transmission upgrades were needed in that region. She
pointed out that the constrained transmission system for
the Bradley Lake Hydroelectric Project had been identified
as a top priority and shared that the funds would start the
initial design of five projects that would help AEA to
continue to work with the Railbelt utilities to remove the
constraints from the Bradley project and energy. She
pointed out that this was the first year of looking at the
projects and that the design was intended to give priority
to taking care of the current AEA-owned assets by making
sure that the energy was able to be delivered to the
utilities that purchased the power.
9:39:16 AM
RN 52498
Alaska Energy Authority- Rural Power Systems Upgrade
$12,600,000
Ms. Fisher-Goad relayed that the funding included $3
million in federal receipt authority and $9.6 million of
general fund receipt authority. She pointed out that this
had been a long-standing AEA project where it designed,
upgraded, and built new power projects in Rural Alaska. She
related that AEA had been partners with the Denali
Commission for several years in developing, designing, and
building the projects. She reported that AEA provided
oversight, project management, and construction resources
that many smaller rural utilities did not have. She pointed
out that AEA had been using a deficiency list to work
through the Rural Power Systems Upgrade projects and that
there were about 30 remaining projects that required
upgrades.
RN 50682
Alaska Energy Authority-Renewable Energy Projects Round Six
$25,000,000
Ms. Fisher-Goad stated that during the 10th day of the
current session, the legislature had received a list of
AEA's evaluated round-six projects and that the funding
source would provide $25 million to the highest ranked
projects on that list.
RN 49734
Alaska Energy Authority- Bulk Fuel Upgrades
$8,500,000
Ms. Fisher-Goad shared that the funding included $2 million
in federal receipts and $6.5 million in general funds. She
related that this was a rural program that AEA had been
working with the Denali Commission on to build and upgrade
bulk-fuel storage facilities. She recalled that the year
prior, the Coast Guard was going to prohibit fuel into
communities because of insufficient storage systems. She
pointed out that with the development of the Denali
Commission and availability of federal funds, AEA had been
able to provide upgrades in 97 communities. She stated that
the current request would provide upgrades to Nunam Iqua,
Perryville, and partial funding of the Kipnuk project.
RN 49735
Alaska Energy Authority- Alternative Energy and Efficiency
Programs
$2,000,000
Brief Summary and Statement of Need:
This project is for the development of alternative
energy research and development, resource assessments,
regulatory and permitting issues, outreach and
stakeholder involvement for alternative energy
programs.
Ms. Fisher-Goad shared that the funding would be primarily
used for the Village End Use Efficiency Program, which had
a rural emphasis on energy efficiency in order to look
holistically at the communities regarding what AEA could
continue to do to ensure that efficiency measures were met
for community facilities in those communities.
RN 52507
Alaska Energy Authority-Energy Plan Implementation
$1,000,000
Ms. Fisher-Goad observed that after "The Energy Pathway"
had been developed by AEA, it had put forward a regional
planning development in order to take the pathway from a
community basis and look at the regional level. She
mentioned that AEA had been working in partnership with a
lot of the regional development organizations regarding
developing the regional plans; this was similar to what AEA
had done with the Southeast Integrated Resource Plan, with
the exception that it would not be AEA led. Instead, AEA
was providing technical assistance and support for the
regions in order to develop the plans.
RN 32950
Alaska Energy Authority- Electrical Emergencies Program
$330,000
Ms. Fisher-Goad shared that this program provided technical
support, materials, and equipment when a rural electric
utility had lost, or would lose the ability to generate or
transmit power. She pointed out that the increment provided
funding for AEA to move in a very quick fashion and related
that AEA coordinated with the Division of Emergency
Services. The funding source would allow AEA to mobilize
and respond quickly to a rural community that was in need.
Ms. Hanrahan spoke to DCCED's capital requests.
9:44:15 AM
RN 51748
Alaska Industrial Development and Export Authority- Ambler
Mining District Access
$8,500,000
Project Description/Justification:
The purpose of this project is to provide all season
access for exploration and development of potential
mineral resources within the Ambler mining district.
Mineral resources in the region have long been known
and access has been a significant factor in the
region's lack of development. The goal of this effort
is to define an optimal corridor, proceed with
permitting and environmental documentation, and
establish a right-of-way. Thereafter, some form of
public-private partnership would be structured to
proceed with private finance and construction relying
on user commitments to repay the funds used to
construct the facility.
RN 56693
Alaska Industrial Development and Export Authority- Natural
Gas Treatment and Distribution
$50,000,000
Brief Summary and Statement of Need:
This funding will be used in conjunction with other
capital from the private sector and the Alaska
Industrial Development and Export Authority to
directly reduce Alaskans' cost of natural gas sourced
from a North Slope natural gas liquefaction plant.
This funding will be used to reduce the capital costs
of a North Slope plant, provide for project financing
costs for the development and construction of the
project, as well as financial assistance during the
construction/expansion of a distribution system, or a
combination of the two.
Project Description/Justification:
This funding will be used to leverage other sources of
funds, including private sector capital, Alaska
Industrial Development Export Authority (AIDEA)
financing, and tax credits to provide the greatest
financial relief to local utility rate payers in
Interior Alaska. Funds could potentially be used to
reduce the capital costs of a North Slope natural gas
liquefaction plant, assist in financing the
construction/expansion of a natural gas distribution
system, or other opportunities to provide significant
rate payer relief as proposals are brought forward.
The liquid natural gas (LNG) output from the plant
will be trucked south and used by Fairbanks area
utilities to provide natural gas for space heating and
fuel for electrical generation at prices significantly
less than prevailing costs for heating oil and diesel
fuel. The Alaska Energy Authority (AEA) is also
investigating the potential of North Slope LNG to
assist with short term needs in the Cook Inlet region.
A natural gas liquefaction plant could also produce
propane that can be distributed to interior and river
system villages.
The primary components of an LNG trucking operation
are:
1. securing a long term supply of LNG on the North
Slope;
2. construction of a plant to liquefy natural gas and
temporarily store the LNG product at a North
Slope site prior to loading trucks for transport;
3. securing trucking infrastructure to transport the
LNG;
4. construction of LNG receiving and storage
facilities in the Interior with re-gas capabilities;
5. construction of local distribution infrastructure
to deliver natural gas to end users.
The LNG production facilities and local distribution
system are potential targets for state assistance that
reduces energy costs for Interior homes and businesses
by providing natural gas service quickly and at a much
lower cost than they are currently experiencing.
RN 55631
Nutritional Alaskan Foods for Schools
$3,000,000
Ms. Hanrahan stated that the program was a continuation of
a program that had been started in FY13, which had been
highly successful. The increment provided grant funds to
school districts to purchase healthy, Alaska-grown food
products. The products including Finfish or shellfish that
were caught or harvested in Alaskan waters, livestock that
was raised in Alaska, milk produced from livestock in
Alaska, fruits and vegetables that were grown in Alaska,
native produce and berries, and the transportation and
shipping costs for those goods. She pointed out that 53 of
the 54 school districts were currently participating in the
project and that the remaining district was in the process
of completing its grant agreement. She reported that DCCED
had collaborated with the Division of Agriculture and had a
survey on the "Farm to School" website. She stated that on
the survey, 93 percent of the respondents wanted the
program to continue.
RN 45816
Alaska Air Carriers Association Inc.- Medallion Foundation
$250,000
Brief Summary and Statement of Need:
This project is for state support of the Medallion
Foundation. The mission of the Medallion Foundation is
to reduce aviation accidents in Alaska by fostering a
new safety culture and by promoting higher safety
standards through training, research, education,
auditing and advocacy.
Project Description/Justification:
For the past decade, a total of $17 million from the
federal government has funded the Medallion
Foundation. Federal delegates indicate that the state
provide matching funding for continuation of the
program. Medallion Foundation participants transport
90.3 percent of the passengers enplaned in Alaska by
carriers operating in Alaska. Those same participants
carry 95 percent of the cargo and mail transported
within Alaska. Participants in the safety program
serve 100 percent of the communities in Alaska. The
voluntary participation results in a higher level of
air safety for all of Alaska's communities and for
residents that fly on these carriers. Since formed in
2001, the Medallion Foundation has contributed
significantly to the reduction in aviation mishaps.
More than 100 air carriers and 800 general aviation
operators have actively participated in Medallion
Foundation programs. Commercial aviation accidents
have been reduced by 39 percent.
RN 38713
Arctic Power- Arctic National Wildlife Refuge Program
$300,000
Ms. Hanrahan stated that the funds would aid in opening the
coastal plain of the Arctic National Wildlife Refuge.
RN 41959
Arctic Winter Games State Teas Alaska- State Participation
Grant
$485,000
Ms. Hanrahan related that the funds would be used to keep
the registration fee for participants at a level that was
attainable to allow Alaskan youth to participate in the
Arctic Winter Games. She stated that the games offered more
than 20 sporting events, as well as traditional dance and
music, and added that it was an important cultural event
for Alaska.
RN 55062
Blood Bank of Alaska- Facilities and Services Expansion
Project
$7,000,000
Ms. Hanrahan shared that the Blood Bank of Alaska provided
blood and blood products to all Alaskan hospitals. The
funds would be used to construct a new facility to
consolidate four separate facilities that were spread
across Anchorage. She related that the blood bank had been
experiencing an enormous growth in demand for its services
and that the new building would accommodate new blood
products and new laboratory services within one facility;
it would also help minimize Alaska's reliance on the Lower-
48 for emergency services.
9:50:16 AM
RN 42004
Fairbanks 2014 Arctic Winter Games Host Society- Winter
Games Preparation
$1,000,000
Project Description/Justification:
The Fairbanks 2014 Arctic Winter Games Host Society
project for $1,000,000 is for the planning and
implementation of the Arctic Winter Games which will
be held in Fairbanks on March 15-22, 2014.
Ms. Hanrahan stated that the Arctic Winter Games was
expected to result in an economic impact of over $13
million in direct visitor spending and event operations.
She reported that the funds would be used to continue the
planning to hire additional personnel in the six months
preceding the games in order to establish a volunteer
program, implement a marketing program, and acquire IT and
software equipment to maintain the current administration.
The Arctic Winter Games Host Society also raised funds from
corporate, community, and individual donors, as well as in
kind donations.
RN 50409
Life Alaska Donor Services, Inc-Donor Program
$65,000
Ms. Hanrahan relayed that the funds would be used to
promote the Anatomical Gift Donation Program. She pointed
out that the funds were provided to grantees for promoting
the donation program.
RN 48513
Marine Exchange of Alaska- Alaska Vessel Tracking System
Upgrades and Expansion
$600,000
Project Description/Justification:
This project will be used to continue the build out of
Alaska's "Maritime Safety Net" system. This will
assist to operate, maintain, upgrade, and expand the
vessel tracking network. The tracking network aids in
the safe, secure, efficient and environmentally sound
maritime operations. This Marine Exchange of Alaska
(MEA) project is to allow expansion of the vessel
tracking system's coverage and capabilities throughout
Alaska. The MEA is currently expanding the
capabilities of the vessel tracking sites by adding
weather sensors and radios that can receive and pass
on digital selective calls from vessels in distress.
Incorporating these added sensors will further enhance
the safety of mariners operating in Alaska.
In addition to state agencies (Departments of
Transportation and Public Facilities, Commerce,
Community and Economic Development, Fish and Game,
Public Safety and Environmental Conservation), the
Coast Guard, coastal communities and mariners are
using the system to aid safe, secure, efficient, and
environmentally sound maritime operations in the
Arctic. The system has also been used to monitor
Shell's exploration operations and validate compliance
with environmental protection measures prescribed in
permits. The information provided by the system is
also used by the Coast Guard and state to develop risk
reduction measures for vessels transiting the Bering
Strait and monitor compliance with safety and
environmental regulations.
RN 38948
National Petroleum Reserve-Alaska Impact Grant Program
$3,945,018
Brief Summary and Statement of Need:
The National Petroleum Reserve - Alaska (NPR-A)
program provides grants to communities for public
facilities and services. Priority is given to those
communities directly or severely impacted by the
leases and development of oil and gas within the NPR-
A.
Ms. Hanrahan stated that the funds represented 50 percent
of funding that was collected by the federal government for
leases within the National Petroleum Reserve. She stated
that the actual amount of NPRA funds was unknown at this
point, but that it would be somewhere between $3.8 billion
to $3.9 billion.
RN 51902
Reappropriation: Atmautlauk Rural Power System Upgrade
$0
Project Description/Justification:
The Akiak RPSU project was completed with $2,250,000
in state funds and $2,250,000 in federal Denali
Commission funds. The balance of the appropriation,
$1,750,000 would be used to fund a project from the
same region that is on the Alaska Energy Authority
(AEA) project list. The project identified is
currently Atmautluak RPSU. Estimated construction cost
to for the Atmautluak RPSU project is $2.8 million
dollars. Additional state funds are being sought to
complete the project through the RPSU Energy Projects
Capital request.
Ms. Fisher-Goad stated that the project was a
reappropriation to the Atmautlauk Rural Power System
Upgrade Project. She related that two years prior, AEA had
received a $4 million general fund appropriation to
complete the Akiak project; however, there was conditional
language that specified that the project could not use more
that 50 percent state funds. She stated that AEA had been
able to work with the Denali Commission to fulfill to the
conditional language.
Senator Dunleavy inquired if AEA currently had a project
that was related to coal. Ms. Fisher-Goad replied in the
negative.
Senator Dunleavy wondered if the state had a philosophy
that would entertain coal possibilities in the future. Ms.
Fisher-Goad replied that coal was not considered a
renewable resource, but that AEA had been involved in coal
projects in the past.
Senator Dunleavy inquired if coal was still a real
possibility. Ms. Fisher-Goad believed that it was and added
that the University of Alaska Fairbanks was looking at a
combined heat and power coal project. She concluded that
coal was a fuel source that people were still looking at
using.
9:55:44 AM
Senator Olson inquired if the Susitna-Watana Hydroelectric
Project would have a cost of $5.2 billion. Ms. Fisher-Goad
responded that $5.2 billion was current estimate of the
project's cost. Senator Olson understood that there was a
built in overrun, which was quite a bit more than that
amount. He inquired what other ideas AEA had regarding
getting Rural Alaska access to less expense energy. Ms.
Fisher-Goad replied that AEA's mission was to reduce the
cost of energy in Alaska and that there were a variety of
projects that had an emphasis on the costs of power in
Rural Alaska. She replied that with respect to the cost of
the Susitna-Watana project, the $5.2 billion was an
estimated project cost that had a plus or minus 25 percent
of the estimated project costs. She reported that the "band
of possibilities" had narrowed and that the previous year,
there had been an estimate of approximately $4.76 billion.
The new estimate was a Level IV engineering estimate that
had a plus 50 percent/minus 30 percent estimation built
into it. She related that as the stages of licensing,
environmental work, and engineering design progressed, the
certainty of project costs became more refined. She stated
that the Renewable Energy Fund Program had funded several
projects and reported that the program was statutorily
targeted for high-energy-cost areas and that the Rural
Power System Upgrade projects and Bulk Fuel projects were
also targeted at Rural Alaska. She discussed Power Cost
Equalization, which was a $40 million program that provided
state assistance for rural residents and community
facilities in Rural Alaska.
Senator Olson inquired how much money from the Renewable
Energy Program was targeted at Rural Alaska. Ms. Fisher-
Goad responded that she could provide a breakdown of all
the projects and that there was a statutory requirement
that specified that there needed to be a regional balance
to where the projects were targeted at. She stated that she
did not have the breakdown with her regarding how much
funding went to Rural Alaska out of the $202 million that
had been appropriated to the fund for projects. She added
that the projects were broken down into different regions,
several of which were for Rural Alaska and concluded that
AEA could provide the information to the committee.
Senator Olson further inquired if the amount that went to
rural projects was less than $202 million. Ms. Fisher-Goad
responded that it would be less than $202 million primarily
because of the requirement to spread the funding across the
State of Alaska.
Co-Chair Meyer noted that Ms. Sarah Fisher-Goad had made a
presentation to committee, but had been unable to finish
due to time restraints. He requested a complete list of the
projects and how much money was saved in Rural Alaska and
elsewhere throughout the state. Ms. Fisher-Goad responded
that that she would be happy to provide the requested
information and recalled a prior discussion regarding
rescheduling for AEA to be able to complete the overview.
She offered that the presentation had ended right before
the Renewable Energy Fund overview.
10:00:24 AM
Co-Chair Meyer noted that he would confer with Co-Chair
Kelly regarding scheduling the overview and repeated his
request for the list of projects.
Senator Olson pointed out that over $95 million was being
spent on a project, which may or may not be within budget.
He requested information regarding the Alaska Air Carriers
Association's request for the Medallion Foundation. He
thanked Governor Parnell for recognizing how important the
Medallion Program was and noted that it decreased aircraft
accidents by 39 percent, which was very significant. He
observed that a number of his family members had been
killed in aircraft accidents and related that he was
sensitive to the issue. He discussed a letter from the
Alaska Air Carriers Association and related that it
expressed concerns regarding the future funding of the
Medallion Program. He stated that association wanted $3.5
million over the next three years in order to continue the
program. He pointed out that even the Department of Public
Safety's pilots subscribed to the Medallion Program. He
discussed the Safety Management System, which would be
required for Part-139 airports and pointed out that
Fairbanks International Airport was 1 of the 27 airports
that would be required by the Federal Aviation
Administration to have one of these systems. He stated that
the Medallion Program had already put a number of people in
place to try and develop the management system and inquired
if the administration would be in favor of increasing
funding to the Alaska Air Carriers Association in order to
allow them continue with the Medallion Foundation. Ms.
Hanrahan replied that the governor's budget allocated
$250,000 "for this purpose," and offered that the
legislature had the prerogative to allocate funds where it
thought appropriate.
Senator Olson stressed importance of continuing with the
Medallion Program and related that it had a dramatic effect
in reducing the number aircraft accidents.
Senator Olson discussed the Arctic Power- Arctic National
Wildlife Refuge Program. He pointed out that Arctic Power
had been in place for a long period of time and that a lot
of money had been spent on trying to open up the Alaska
National Wildlife Reserve (ANWR). He observed the absence
of the late U.S. Senator Ted Stevens, who had been a strong
advocate of the program, as well as the changes to the
federal administration that were anti-development in the
region. He inquired why the state was still spending
$300,000 in unrestricted general funds for Arctic Power
that seemed "to have no vision of going anywhere" for the
next several years. Ms. Hanrahan believed that "this"
administration felt that it was important to open up the
coastal plain of ANWR and that it would like to continue
the support for that effort.
Co-Chair Meyer pointed out that the committee probably
shared Senator Olson's frustration and opined that the
chances of ANWR being opened in the next several years were
not very high. He appreciated that the effort was still out
there and related that the committee could discuss whether
to take a break for a few years or to keep pursuing it.
Co-Chair Meyer observed that Vice-Chair Fairclough had
joined the committee.
10:04:57 AM
Co-Chair Meyer discussed the Economic Development Marketing
Initiative. He pointed out that the state had a lot of
initiatives. He was unsure how this initiative differed
from all the other marketing programs, but noted that it
was an annual occurrence. He requested an explanation of
the difference between this particular marketing program
versus some of the other marketing initiative programs and
wondered if it should be in the operating budget if it was
an ongoing initiative. Ms. Hanrahan thought that this
particular initiative was developed partly from a desire
several years ago by the administration and the legislature
for DCCED to expand its efforts on economic development and
help diversify its economic base. She pointed out that at
the time, there had been some "gap analysis" conducted
within the department to determine what areas were not
getting enough support. She related that the Alaska Seafood
Marketing Institute was very specific to fish and was a
strong program. She pointed out that tourism was another
very specific sector, but that the department had a number
of different sectors that were not being addressed or did
not have adequate support. She shared that the initial
program was meant to "beef up" the department's efforts in
the areas that had not been addressed as well in the past,
as well to expand into areas that it had not addressed
before.
Co-Chair Meyer requested examples of areas that had not
been addressed in the past. He offered that tourism and
fishing had their own marketing programs and further
queried if the timber or the mining industries were the
areas that Ms. Hanrahan was referencing. Ms. Hanrahan
replied in the affirmative and explained that the
initiative was helping the department to become a more
active and involved participant in timber and mining. She
shared that it also allowed the department participate in
more national and international trade shows related to the
two industries. She pointed out that the department would
be attending the Canadian investor's conference on
minerals, which represented an effort to bring more
attention to these areas.
Ms. Hanrahan continued to address Co-Chair Meyer's question
and shared that the department was also involved with
helping to incentivize Iceland Air and that it was looking
at getting more air carriers coming to Alaska. She pointed
out that the department had also development a new program
in mariculture and that it was expanding and diversifying
its base; furthermore, it was supplementing the programs
that it currently had.
10:08:31 AM
Co-Chair Meyer commented that it would be useful to see the
successes of the annual appropriation and inquired if it
might be more appropriate to put it in the operating
budget. Ms. Hanrahan agreed that if the program continued,
it would be appropriate in the operating budget. She
pointed out that some of the programs that DCCED was
currently working included "buying local" campaigns. She
shared that the department was collaborating with other
state-agency programs such as the Alaska Grown and Silver
Hand programs. She stated that the department was working
on Alaskan branding for marketing. She pointed out that
FY13 was the first year of the program and that it was
first time that department would be putting forward an
extra effort into supplementing the statutory
responsibilities it had in the areas of timber, forest
products, and fisheries; furthermore, the department would
be expanding its base.
Co-Chair Meyer asked if the program was new. Ms. Hanrahan
responded that it was started in FY13.
Co-Chair Meyer inquired about the cost of the Blood Bank of
Alaska project and asked who else was participating in the
facility besides the state. Ms. Hanrahan replied the state
was putting $19.1 million into the blood bank, but that the
request only referenced $7 million. She stated that the
blood bank had initiated a campaign for private donations,
which had a goal of $10 million. She pointed out that $10
million would be added to the $19.1 million, which brought
the total up to $29.1 million. She observed that "they"
were still working on leveraging the $23 million gap. Co-
Chair Meyer commented that it was a sizable gap.
Vice-Chair Fairclough observed that the Blood Bank of
Alaska was approaching other foundations and was attempting
to leverage matching money in order to fill in the gap. She
believed that the blood bank had contacted the Rasmussen
Foundation. She commented that her office had indicated to
the blood bank that 100 percent state funding was not the
best way to move forward with the project and offered that
it was working hard to take on a significant responsibility
regarding the project.
10:12:16 AM
Co-Chair Meyer noted that Blood Bank of Alaska's project
was needed statewide. He added that committee wanted the
project to be successful, but would like there to be other
participants besides the state.
Co-Chair Meyer observed that there would be more discussion
about the $50 million request for the natural gas treatment
and distribution system. He discussed the two
appropriations for the Arctic Winter Games.
Senator Olson inquired how the department decided on who
would participate in the Arctic Winter Games, as well as
the number of participants. Ms. Hanrahan replied she did
not have the information offhand, but that she would get
back to committee with a response.
Senator Olson requested a distribution of where the games'
participants came from in Alaska.
Co-Chair Meyer discussed the following meeting's agenda.
10:14:13 AM
SB 18 was HEARD and HELD in committee for further
consideration.
10:14:22 AM
ADJOURNMENT
The meeting was adjourned at 10:14 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOA-CapitalOverviewFY14(02-18-13) Senate Finance.pdf |
SFIN 2/18/2013 9:00:00 AM |
SB 18 |
| Annual Status Report.pdf |
SFIN 2/18/2013 9:00:00 AM |
|
| Letter from Sara Fisher-Goad.pdf |
SFIN 2/18/2013 9:00:00 AM |
|
| RE Fund Allocations by Region.pdf |
SFIN 2/18/2013 9:00:00 AM |
|
| SFin DCCED Cap 2-18 Q&A 3-7-13.pdf |
SFIN 2/18/2013 9:00:00 AM |
SB 18 |
| Team Alaska AWG Fact Sheet.pdf |
SFIN 2/18/2013 9:00:00 AM |
SB 18 |