Legislature(2019 - 2020)SENATE FINANCE 532
03/05/2020 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB154 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 154 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 5, 2020
9:01 a.m.
9:01:21 AM
CALL TO ORDER
Co-Chair von Imhof called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Cathy Giessel; Neil Steininger, Director, Office of
Management and Budget, Office of the Governor; Shelly
Willhoite, Capital Coordinator, Office of Management and
Budget, Office of the Governor; Kim Mahoney, Associate Vice
Chancellor of Facilities, University of Alaska Anchorage.
PRESENT VIA TELECONFERENCE
Christopher Hodgin, Senior Project Manager, Division of
Facilities Services, Department of Transportation and
Public Facilities, Anchorage.
SUMMARY
SB 154 APPROP: CAPITAL; SUPP; OTHER APPROP.
SB 154 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 154
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
9:02:20 AM
Co-Chair von Imhof directed members' attention to SB 154.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, stated he would review the
governor's proposed capital budget; both the amounts
included in SB 154 as well as capital projects included in
the mental health bill and the supplemental budget bill. He
discussed the presentation "FY2021 Capital Budget
Overview," (copy on file).
Mr. Steininger looked at slide 2, "FY2021 Capital Budget
and Supplemental Overview - SB 153, 154 and 174," which
showed a table that gave a high-level overview of the major
fund categories used to fund capital projects across the
three bills. He highlighted that the FY 21 amount for
capital projects totaled $140.3 million in Unrestricted
General Funds (UGF). When all other funds were added in,
the total was about $1.3 billion in capital spending. There
were projects intended to start in the current fiscal year
and were included in the FY 20 supplemental budget. The
total for the FY 20 supplemental budget was $25.5 million
UGF, and with all funds it was $81.9 million. The total of
all proposed capital projects being proposed during the
current legislative session was about $1.4 billion in total
spending.
Mr. Steininger showed slide 3, "FY2021 Capital Budget."
Mr. Steininger referenced slide 4, "FY2021 Capital Budget -
SB 153 and 154":
FY2021 Capital Project Priorities
? Prioritize life, health, and safety issues
? Leverage Federal receipts
? Address deferred maintenance
? Strategic investment in future efficiencies
Mr. Steininger addressed the table on slide 4, which showed
a high-level overview of funding for the projects. He
pointed out the difference between FY 20's capital proposed
(inclusive of supplementals) and the FY 21 proposal. There
was a decrease of about $32.4 million, $29.6 million of
which was UGF. He noted that the following pages would
cover all the projects included in the FY 21 capital
budget, some of which he would highlight.
9:06:08 AM
Mr. Steininger turned to slide 5, "Capital Budget Five Year
Overview FY2017 FY2021," which showed a five-year
lookback of capital spending. He pointed out the yellow
bar, which showed federal receipts. A significant amount of
capital spending had come from federally funded projects.
The blue at the bottom showed the General Fund (GF)
projects as well as the match for the federal projects.
Co-Chair von Imhof noted that there was about $286,000 less
in federal dollars from 2017 to 2021. She asked if the
state was maximizing federal funding each year. She asked
about a chunk of money the state received for five years.
Mr. Steininger explained that when trying to maximize
federal receipts, the state primarily looked at things like
federal highways receipts where there was a 90/10 match. He
noted that in the current year there was $65 million in GF
spending to match $650 million in federal funding. He
relayed that departments could leverage federal receipts
through using state funds solely for projects, and the
amount of available funds varied year to year. He noted
that there were a handful of recurring yearly projects with
a fairly advantageous federal match.
Co-Chair von Imhof had seen the Statewide Transportation
Improvement Program (STIP) list and thought there was well
more federal dollars than were shown on the slide. She
wanted to make sure the state was maximizing federal
funding. She anticipated that Co-Chair Stedman would
discuss the Alaska Marine Highway System (AMHS). She knew
that there was maintenance needed on the system and wanted
the state to maximize the available funding.
Co-Chair Stedman wanted to wait to make his comments on the
AMHS for the Department of Transportation and Public
Facilities (DOT) portion of the presentation. He explained
that Alaska was normally prepared to secure other states'
federal monies for shovel-ready projects if the other
states did not have the ability to absorb all the federal
monies. He asked if the state had picked up any additional
federal funds that from other states' allocations. He
wanted to clarify whether any federal funds had been left
on the table.
Mr. Steininger did not know whether or how much the state
had picked up in federal receipts that were left on the
table by other states. He offered to get back to the
committee with a response to the question.
Co-Chair von Imhof asked about federal funds left on the
table by the state.
Mr. Steininger stated he would look at historical capital
spending and get back to the committee with the answer.
Senator Bishop assumed that the information provided by Mr.
Steininger would be comprehensive across all departments.
He wanted to ensure no funds were left on the table.
Co-Chair von Imhof thought it was smart to hold questions
for DOT, but wanted to discuss AMHS. She saw there was
money in the STIP list for the ferries. She wanted to see
what type of matching funds were available, that could be
used to amend the capital budget and get the ferries back
online within the year to the extent that it was possible.
Mr. Steininger considered slide 6, "Capital Budget History
FY2010 FY2021," which showed a bar graph looking at
capital budget funding going back to FY 10 to provide more
context for the current capital budget.
9:11:28 AM
Co-Chair Stedman asked for a definition of "Other" Funds.
Mr. Steininger explained that Other Funds were generally
non-General Fund, non-federal receipts that came from
outside sources. Many of the funds in the capital budget
came from outside sources. He detailed that Statutory
Designated Program Receipts funded a handful of the
project; and were monies received as a gift, grant, or
bequest used for a specific purpose. There was also Alaska
Mental Health Trust Authority Authorized Receipts (MHTAAR)
that funded projects in the AMHTA budget that were given
for a specific purpose by the trust. He noted that the
sources described were the two primary sources of Other
Funds within the capital budget, and there could be a
handful of other smaller sources as well.
Co-Chair von Imhof thought the bar graph was interesting in
that there was a wide variation of spending over the years
shown. She pondered what amount of spending was right. She
observed that 2013 had saturated the market, particularly
with the workforce. She mentioned the 2021 deferred
maintenance list of 270 pages. She mused about the correct
level of funding for the total capital budget to fund
deferred maintenance projects in a timely manner, and to
create infrastructure projects to attract new investment in
the state. She stated that ideally, the legislature wanted
a recommendation from the administration of more than $140
million.
Mr. Steininger displayed slide 7, "FY2021 Capital Budget
Snapshot," which showed a table depicting an overview of
the FY 21 capital budget broken out by department to see
the relative allocation of capital spending across each
department. Further slides would go into more detail for
each agency.
Mr. Steininger highlighted slide 8, "FY2021 Projects by
Department":
Administration
1. Automated Performance Evaluations and Onboarding
System Setup $320.0 UGF
2. Electronic Timekeeping $1,000.0 UGF
3. Integrated Resource Information System (IRIS)
Upgrade $7,100.0 UGF
4. OIT Upgrade to Cloud Servers - Phase I $1,250.0 UGF
5. Public Building Fund Deferred Maintenance,
Renovation, Repair and Equipment $5,946.0 Other
(Public Building Fund)
6. Retirement System Server Replacement $230.4 Other
($162.0 Public Employees Retirement, $67.0 Teachers
Retirement, $1.4 Judicial Retirement)
7. Software for the Shared Services Initiatives
$1,800.0 UGF
8. Service Management System $1,000.0 UGF
Commerce, Community & Economic Development
1. National Petroleum Reserve - Alaska Impact Grant
Program $11,300.0 Fed
2. Alaska Energy Authority - Bulk Fuel Upgrades
$13.000.0 ($5,500.0 DGF (Power Cost Equalization
Endowment), $7,500.0 Fed)
Mr. Steininger referenced a spreadsheet that gave a one to
two sentence explanation of each project (copy on file).
The two projects listed under the Department of Commerce,
Community and Economic Development (DCCED) were annual
recurring projects.
Co-Chair von Imhof asked about the project funded by the
Power Cost Equalization (PCE) Endowment. She asked if the
fund was sweepable.
Mr. Steininger answered "yes."
Co-Chair von Imhof noted that the governor proposed to fund
$5.5 million and then wanted to sweep the fund.
Mr. Steininger stated that the proposed budget in December
included language to reverse the impact of the sweep so
that money would be available in the fund for the
appropriation.
Co-Chair von Imhof asked if the administration supported
reversing the sweep.
Mr. Steininger answered "yes" and that the administration
had included the reverse sweep in the budget it had
presented in December.
9:16:52 AM
Senator Wielechowski asked if any of the projects listed
were for transfer of the payroll system from bi-monthly to
bi-weekly.
Mr. Steininger explained that within in the Integrated
Resource Information System (IRIS) project, there was
activity that would affect the payroll systems. The cost of
the project would go up if there was not a transition to
the bi-weekly payroll system. He stated that maintaining
two payroll systems required a modification within the
software, which would increase the cost.
Co-Chair von Imhof thought that various administrations had
been looking at going to electronic timekeeping. She
thought the bi-weekly payroll was a different issue. She
asked for a description of item 8 under the Department of
Administration (DOA) projects.
Mr. Steininger explained that the Service Management System
was initially called the ticketing system for the Office of
Information Technology. The idea had expanded and the new
system would coordinate the efforts and get the information
to the right person. The system would be used for more
global management. The name had shifted since the original
proposal.
Senator Hoffman referenced Mr. Steininger's comment that
the PCE Fund was sweepable. He had not been able to get an
opinion from the administration, including the attorney
general, that indicated the fund was sweepable. He asked
for Mr. Steininger to provide a document from the Attorney
General's Office that asserted the PCE Fund was sweepable.
He did not believe the fund was sweepable, and recalled
that no other administration had claimed that the fund was
sweepable. He thought once the opinion was presented, there
could be legal challenges regarding the position of the
administration. He did not believe the administration would
come forward with a written opinion to back up its
statement regarding sweeping the fund.
Mr. Steininger agreed to respond in writing.
Senator Wielechowski asked about item 4 for DOA on slide 8.
He asked if Mr. Steininger anticipated a loss of Alaskan
jobs because of the project. He asked if the item was
subject to collective bargaining issues.
Mr. Steininger did not think there was an intention to lay
off people related to moving to cloud servers. He explained
that as the state looked at centralizing information
technology (IT), it looked at modernizing the way the
services were provided to departments to make the delivery
and all back-office functions more efficient. He pondered
that there would be a benefit to the state if the delivery
of services could be done while expending less resources.
He thought using cloud services could result in better
reliability and a more efficient IT infrastructure for the
state. He could not comment as to whether there would be a
collective bargaining impact.
9:22:18 AM
Mr. Steininger spoke to slide 9, "FY2021 Projects by
Department":
Commerce, Community & Economic Development, continued
3. Alaska Energy Authority - Electrical Emergencies
Program $200.0 UGF
4. Alaska Energy Authority - Rural Power System
Upgrades $17,500.0 ($5,000.0 DGF (Power Cost
Equalization Endowment), $12,500.0 Fed)
5. Alaska Energy Authority - Statewide Railbelt Energy
Plan $3,000.0 UGF (Railbelt Energy Fund)
6. Alaska Railroad: Seward Dock Replacement $3,100.0
Other (Commercial Passenger Vessel Tax)
7. Blood Bank of Alaska $2.3 UGF 8. Community Block
Grants $6,060.0 ($60.0 UGF, $6,000.0 Fed)
9. Alaska Travel Industry Association $5,000.0 DGF
(Vehicle Rental Tax)
10. Hope Community Resources, Inc. - Upgrades to
Housing to Meet State & Federal Licensing Requirements
$78.0 UGF 11. Inter-Island Ferry Authority $250.0 UGF
Co-Chair von Imhof asked about the $250 thousand listed for
the Inter-Island Ferry Authority (IFA).
Mr. Steininger explained that the $250 grant to IFA would
support running a handful of routes in Southeast Alaska. If
IFA were to step away from the routes, the Alaska Marine
Highway System (AMHS) would have to step in and pick up the
routes.
Co-Chair Stedman recalled that several years ago the state
was subsidizing IFA for about $500 thousand per year. He
recalled that IFA submitted financial documents for review
by the Office of Management and Budget (OMB). He thought
the $250,000 proposed on the slide was significantly less
than it would cost for AMHS to operate the run from
Ketchikan to Prince of Wales Island.
Co-Chair Stedman addressed item 6. He understood that the
railroad was exempt through the Executive Budget Act, and
thought it was capable of financing its own project through
revenues. He asked if the commercial passenger vessel tax
funds could be redirected to help with COVID issues faced
by the state. He suggested that there were shoreside
facilities that might need to be upgraded. He thought the
matter should be given consideration.
Co-Chair von Imhof had visited the Seward dock the previous
summer. She had looked closely at the dock and reviewed the
project expansion ideas. She noted that the dock was also
used by the military. There were several fund sources being
considered, including cruise ship passenger taxes. She
thought the project could be considered a strategic
investment for alternative ports in Southcentral Alaska.
She thought each time money was pulled away from strategic
investments, the cost became higher for the consumer and
Alaskan users. She was hesitant to take the funds away from
a project that was already underway and could provide a
much-needed port for distribution of goods and services.
She understood that the Covid-19 virus was growing in
seriousness, and she thought that the committee should look
at all expense and needs with a holistic viewpoint.
9:27:49 AM
Senator Hoffman supported item 5. He thought there should
be a Railbelt energy plan but pointed out that rural Alaska
probably had twice the energy costs than the Railbelt. He
asked what the plan was to address the tremendously high
cost for energy in rural Alaska, or if the administration
believed there did not need to be a plan. He questioned why
there was not investment in some of the poorest areas of
the state.
Mr. Steininger stated that item 4 on the sheet addressed
power system upgrades in rural areas of the state with $5
million in DGF with matching funds to $12.5 million.
Senator Hoffman thought it was ridiculous to say that rural
Alaska received upgrades for 5 percent of the area, and the
rest of the cost would be ignored. He strongly objected to
Mr. Steininger's response. He asked what the administration
was doing for people in Shishmaref and other rural areas.
He asked what was being done towards a statewide plan for
rural Alaska.
Co-Chair von Imhof thought Senator Hoffman had provided a
good idea for a future presentation on rural energy needs.
She thought the Alaska Energy Authority (AEA) and other
stakeholders could be invited to work towards a plan for
rural Alaska.
Co-Chair Stedman recalled that several years previously
there had been a document produced that showed cost
comparisons of energy across the state for oil,
electricity, natural gas, and others. He thought AEA had
produced a chart. He noted that there were disparities in
access. He pointed out that there was a big difference in
costs and other factors and the matter was not as simple as
comparing electricity prices around the state. He asked
that there be a request to have AEA update the chart.
Co-Chair von Imhof thought the request was a good idea and
affirmed that the committee would follow up on the topic of
rural energy needs.
9:31:58 AM
Mr. Steininger addressed slide 10, "FY2021 Projects by
Department":
Corrections
1. Facility Body Scanners $1,310.0 UGF
Education & Early Development
1. Pitka's Point K-12 Site Restoration $6,200.0 UGF
Environmental Conservation
1. Clean Water Capitalization Grant $1,000.0 Other
(Clean Water Loan Fund)
2. Develop Application to Meet EPA eReporting Rule
$1,000.0 Fed
3. Drinking Water Capitalization Grant $2,500.0 Other
(Alaska Drinking Water Fund)
4. Fairbanks PM2.5 Nonattainment Area Voluntary
Heating Device Change Out Program $5,000.0 Fed
5. Village Safe Water and Wastewater Infrastructure
Projects $64,830.0 ($12,080.0 UGF, $500.0 Other
(Statutory Designated Program Receipts), $52,250.0
Fed)
a. Existing Service Projects $25,932.0 ($4,832.0
UGF, $200.0 Other, $20,090.0 Fed)
b. First Time Service Projects $38,898.0
($7,248.0 UGF, $300.0 Other, $31,350.0 Fed)
Senator Wilson asked what facilities had body scanners. He
had visited three correctional facilities and had heard
that the body scanners were not being used because of a
conflict with federal regulations.
Mr. Steininger stated that Goose Creek, Spring Creek,
Highland Mountain and Wildwood correctional centers would
be getting the equipment. He stated he would look into the
use of body scanners and get back to the committee with
additional information.
Co-Chair von Imhof asked about item 1 for the Department of
Education and Early Development (DEED). She noted that the
Capital Improvement Project (CIP) list for educational
facilities was for hundreds of millions of dollars. She
asked if the administration had a plan to address the
matter.
Mr. Steininger stated there were funds in the operating
budget going towards the Regional Education Attendance
Areas (REAA) that could address some of the projects on the
list that were for schools within REAAs. There were no
additional funds in the FY 21 capital budget that may not
be in REAAs.
Co-Chair von Imhof emphasized that there were approximately
40 projects listed for hundreds of millions of dollars that
were waiting to be funded. Some were major maintenance
projects, and some were for new schools.
Co-Chair Stedman had a question about item 5 for Village
Safe Water and Wastewater Infrastructure Projects in the
Department of Environmental Conservation. He asked for a
list of the projects and wanted to see the previous year's
list as well. He wanted to understand how extensive the
village safe water infrastructure challenge was.
Co-Chair von Imhof reiterated the request for a list of the
Village Safe Water and Wastewater Infrastructure Projects
for FY 20, and a list what had been funded; to compare with
the list from FY 21 and what was funded or not.
Senator Hoffman referenced Co-Chair von Imhof's comments
about deferred maintenance on rural schools and reported
that he had a meeting with the commissioner of DEED and the
administration. Major maintenance items were being
addressed. He commended efforts towards construction and
maintenance of rural schools. He thought tremendous headway
was being made.
9:37:18 AM
Mr. Steininger advanced to slide 11, "FY2021 Projects by
Department - Fish and Game":
1. Copper River Boat Launch Facilities Improvements
$140.0 Other (Fish and Game Fund)
2. Endangered Species Act Protect State Right to
Manage $4,000.0 ($1,000.0 UGF, $3,000.0 Fed)
3. Facilities, Vessels and Aircraft Maintenance,
Repair and Upgrades $500.0 DGF (Capital Income Fund)
4. Pacific Coastal Salmon Recovery Fund $4,000.0 Fed
5. Sport Fish Recreational Boating and Angler Access
$3,000.0 ($750.0 Other (Fish and Game Fund), $2,250.0
Fed)
6. Wildlife Management, Research and Hunting Access
$15,000.0 ($3,750.0 Other (Fish and Game Fund),
$11,250.0 Fed)
Governor 1. Elections Redistricting $95.0 UGF 2.
Statewide Deferred Maintenance, Renovation, and Repair
$30,000.0 DGF (Capital Income Fund)
Mr. Steininger explained that there would be a presentation
later in the morning that would address deferred
maintenance in greater detail.
Senator Wielechowski looked at the detail on item 2 for the
Department of Fish and Game (DFG). He thought it seemed
like the item funded the Department of Law to cooperate
with DGF, which he thought would be more appropriate for
the operating budget.
Mr. Steininger noted that the item was a multi-year item
that was in the capital project. He noted that the
department did other research-type projects that had
traditionally been funded through the capital budget. The
item was similar to the past projects and was therefore was
in the capital budget.
Senator Wielechowski reiterated that the item looked like
an operating budget item.
Co-Chair Stedman referenced slide 11 and asked about item 5
for DFG, and the funding for boat ramps and other items. He
wanted to see a list of what the funds were being spent on,
a list of items for the last five years, and whether all
the funds had been used. He recalled committee discussion
the previous year that indicated some of the funds would
not be spent.
Co-Chair von Imhof thought the matter could also be
funneled through the DFG subcommittee as well.
Co-Chair Stedman agreed that the subcommittee should
receive the information in addition to having the documents
being submitted to the co-chairs office and disseminated.
Senator Wielechowski asked if any of the funds would be
used to purchase any of the parcel for Eagle Rock boat
launch access.
Mr. Steininger asked to get back to Senator Wielechowski on
the matter.
Senator Wielechowski requested that if there was a land
purchase for any of the projects, there was information on
the purchase price and assessed value.
Mr. Steininger stated that a future slide listed a project
that related to the parcel purchase within the Department
of Natural Resources.
9:42:36 AM
Mr. Steininger looked at slide 12, "FY2021 Projects by
Department - Health and Social Services":
1. Alaska Psychiatric Institute Projects to Comply
with Corrective Action Plan $1,619.3 DGF (Capital
Income Fund)
2. Anchorage Pioneer Home Renovation $2,080.0 DGF
(Capital Income Fund)
3. Emergency Medical Services Match for Code Blue
Project $500.0 UGF
4. Mental Health Assistive Technology $500.0 UGF
(General Fund/Mental Health)
5. Mental Health Deferred Maintenance and
Accessibility Improvements $500.0 ($250.0 DGF
(Capital Income Fund), $250 Other (Mental Health Trust
Authority Authorized Receipts))
6. Mental Health Essential Program Equipment $600.0
($300.0 UGF (General Fund/Mental Health), $300.0 Other
(Mental Health Trust Authority Authorized Receipts))
7. Mental Health Home Modification and Upgrades to
Retain Housing $1,050.0 ($750.0 UGF (General
Fund/Mental Health), $300.0 Other (Mental Health Trust
Authority Authorized
Receipts))
Co-Chair von Imhof pointed out that the Capital Income Fund
was swept the previous year, and the governor's budget was
utilizing DGF for strategic projects.
Co-Chair Stedman referenced the statewide deferred
maintenance listed on slide 11. He respectfully suggested
that the committee receive a list of what the money would
be spent on.
Co-Chair von Imhof asked if Mr. Steininger made note of the
co-chair's request.
Mr. Steininger stated that there was another presentation
that would give more detail on the distribution of prior
deferred maintenance projects to the Office of the Governor
as well as the plans going forward for deferred
maintenance. He stated he would provide the information
requested.
Senator Wilson looked at slide 10 and considered the
Pitka's Point K-12 site restoration. He thought the project
sounded more like a deconstruction rather than restoration.
He was not certain the project was a deferred maintenance
issue.
Mr. Steininger stated that the project referred to
restoring the site to the condition prior to when the
building was present, which would include removal of the
building, clean-up of the soil, and returning the site to a
usable condition.
9:45:56 AM
Mr. Steininger showed slide 13, "FY2021 Projects by
Department":
Labor and Workforce Development
1. Vocational Rehabilitation Business Enterprise
Program Facility Development and Equipment Replacement
$632.4 ($447.4 UGF, $185.0 DGF (Vocational
Rehabilitation Small Business Enterprise Revolving
Fund))
Military and Veterans Affairs
1. Alaska Land Mobile Radio and State of Alaska
Telecommunications System $5,000.0 ($520.5 UGF,
$4,479.5 DGF (Capital Income Fund))
2. Bethel Readiness Center Security Upgrades $140.0
($70.0 DGF (Capital Income Fund), $70.0 Fed)
3. Bethel Readiness Center Water System Sustainment
$300.0 ($150.0 DGF (Capital Income Fund), $150.0 Fed)
4. Kotzebue Readiness Center HVAC Life-Cycle
Replacement $500.0 ($250.0 DGF (Capital Income Fund),
$250.0 Fed)
Mr. Steininger noted that there was also a $24 million
project listed later in the supplemental budget related to
the Alaska Land Mobile Radio (ALMR) system for replacement
of equipment on towers.
Co-Chair Stedman asked about item 1 for the Department of
Military and Veterans Affairs. He was curious if any of the
money for ALMR would be directed towards consolidation of
dispatch centers for Kenai, Mat-Su, Ketchikan, and
Anchorage.
Mr. Steininger relayed that the funds were not necessarily
related to consolidation of 911 dispatch, but the system
was used by first responders and emergency response
personnel while in the field.
Senator Wilson asked about the administration's position on
the consolidated dispatch plan. He asked if the project was
still going forth or if the request for funding had been
removed.
Mr. Steininger believed the administration's current
position was that whatever system design the state ended up
with needed to meet the needs for 911 dispatch.
Senator Wilson did not feel his question had been answered
and offered to follow up with the department. He assumed
that the total request for the ALMR system was about $31.7
million, with $24 million to be spent by July 1, 2020.
Mr. Steininger stated that the $24 million would not all be
spent by July 1; however, a majority of the funds would be
obligated to begin work as soon as possible to upgrade the
towers in a timely manner.
Co-Chair von Imhof asked why the funds were not requested
the previous year, why was the request in the supplemental
budget, and why there was a rush.
Mr. Steininger was not sure why the funds had not been
requested the previous year. He explained that there was a
rush because federal partners had indicated that they would
back out of the program, leaving the state to operate the
program on its own, if the work was not done in a timely
manner.
Senator Bishop thought there were other areas in the budget
that were vetoed the previous year that shared similarities
regarding the possibility of losing federal funds. He
mentioned cold climate housing as an example.
Senator Hoffman referenced the revision of item 1 for ALMR.
The proposal was a request for $520 thousand in GF, but the
original request was for $3,181,000. He asked what was not
being funded as a result of the $2.6 million reduction in
the funding request.
Mr. Steininger stated that as the department looked at the
maintenance needs, it realized the work could be done for
less funds and came back with a reduced request.
9:50:53 AM
Mr. Steininger referenced slide 14, "FY2021 Projects by
Department":
Military and Veterans Affairs, continued
5. Mass Notification System - Joint Base Elmendorf
Richardson $1,600.0 ($800.0 UGF, $800.0 Fed)
6. State Homeland Security Grant Programs $4,500.0 Fed
7. Statewide Roof, Envelope, and Fall Protection
$1,700.0 ($850.0 DGF (Capital Income Fund), $850.0
Fed)
Natural Resources
1. Abandoned Mine Lands Reclamation Federal Program
$3,200.0 Fed
2. Agriculture Grant Programs Funding $4,536.8 Fed
3. Arctic Strategic Transportation and Resources
(ASTAR) - Phase 2, $2,900.0 UGF
4. Cooperative Water Resource Program Pass-through to
USGS for Stream Gaging Projects $500.0 Other
(Statutory Designated Program Receipts)
Co-Chair von Imhof asked if there was any opportunity to
leverage federal matching funds for the ASTAR project. She
noted that Alaska was the arctic state, with much focus and
research on arctic conditions, climate change, strategic
military positions, and other factors. She wondered if
there was an opportunity to leverage federal funds from the
United States Department of Defense or a federal
environmental agency to match the state's $2.9 million.
Mr. Steininger was not aware of any federal matching funds
for the program. He offered to work with the department to
ensure it had looked into all avenues of funding.
Senator Olson asked if there were any other entities that
were helping to pay for the ASTAR project. He noted that
some of the roads would be used by industry for furthering
exploration.
Mr. Steininger knew the department worked with other
entities in the region as it considered the project and
strategic transportation in the area. He offered to get
back to the committee with more information regarding what
efforts had been put into transportation in the region by
other entities.
Senator Olson asked if the North Slope Borough was
involved.
Mr. Steininger stated he would have to get back to the
committee with the information at a later time.
Co-Chair von Imhof thought more attention could be given to
the project to determine the long-term vision and the goals
for phase two and additional phases. She pointed out that
there were lots of projects around the state that needed
money, and questioned what made the ASTAR project a
priority considering that the governor had vetoed money the
previous year.
9:54:21 AM
Mr. Steininger turned to slide 15, " FY2021 Projects by
Department":
Natural Resources, continued
5. Critical Minerals Mapping - Earth MRI (formerly
3DEEP) $2,450.0 ($750.0 UGF, $200.0 Other (Statutory
Designated Program Receipts), $1,500.0 Fed)
6. Exxon Valdez Oil Spill Kenai River Bookey Parcel
Purchase $2,300.0 Other (Exxon Valdez Oil Spill
Settlement)
7. Exxon Valdez Oil Spill Parks Habitat Restoration
and Protection $3,155.6 Other (Exxon Valdez Oil Spill
Settlement)
8. Federal and Local Government Funded Forest Resource
and Fire Program $7,000.0 Fed
9. Geological Mapping for Energy Development (USGS
STATEMAP) $600.0 ($300.0 UGF, $300.0 Fed)
10. Geologic Materials Center Multispectral Scanning
Equipment $1,290.0 ($865.0 UGF, $275.0 DGF (General
Fund/Program Receipts), $150.0 Other (Statutory
Designated Program Receipts))
11. Land and Water Conservation Fund Federal Grant
Program $2,075.0 ($75.0 DGF (General Fund/Program
Receipts), $2,000.0 Fed)
Mr. Steininger considered slide 16, "FY2021 Projects by
Department":
Natural Resources, continued
12. Land Sales - New Subdivision Development $750.0
DGF (State Land Disposal Income Fund)
13. National Historic Preservation Fund $650.9 ($70.9
UGF, $80.0 DGF (General Fund/Program Receipts), $500.0
Fed)
14. National Recreational Trails Federal Grant Program
$1,600.0 ($100.0 DGF (General Fund/Program Receipts),
$1,500.0 Fed)
15. State Park Electronic Fee Stations $220.0 DGF
(General Fund/Program Receipts)
Public Safety
1. Alaska Wildlife Troopers Marine Enforcement Repair
and Replacement $1,000.0 UGF
2. Crime Laboratory Equipment Replacement $290.0 UGF
3. Marine Fisheries Patrol Improvements $1,100.0 Fed
Co-Chair Stedman asked about item 15. He recalled that two
years previously there were fees added for boat ramps. He
wanted a status report for the electronic fee station. He
wanted to ensure that the ramp fees were being collected.
He found it appalling that during a fiscal crisis the
department was not collecting fees from the cash boxes. He
thought the funds were to help with deferred maintenance.
Co-Chair von Imhof thought ideally the fee stations were
accessible to credit cards. She had seen a sign at a boat
ramp that indicated the day use fee cash box had been
removed due to excessive vandalism. She thought there were
many issues with the fee boxes.
9:57:41 AM
Senator Hoffman considered item 11 regarding the Land and
Water Conservation Fund. He thought many of the projects
were worthwhile. He wondered how the lists of projects were
constructed and who made the decisions. He considered what
had been spent in the past and what was proposed, and did
not think the list had a statewide perspective. He
requested a list of projects in order to determine that all
the people of Alaska were benefitting from the federal
grant fund, which was matched on a 50/50 basis. He thought
there was a blind eye to Western Alaska.
Senator Wielechowski referenced number 15 on slide 16. He
was curious about how much revenue was generated from the
state parks electronic fee stations. He guessed there was
not much revenue gained. He expressed concern about the
vandalism of the fee boxes and thought money would be
wasted.
Mr. Steininger understood that electronic fee stations
helped with revenue collections and made it less
burdensome. He acknowledged the cash boxes saw a lot of
vandalism. He was not certain about the susceptibility of
the electronic fee stations to vandalism.
Senator Wilson requested a list of the projects,
specifically of public use cabins.
Co-Chair von Imhof stated that she loved the public use
cabins. She agreed that a list would be helpful.
Senator Bishop mentioned that there was high demand for
public use cabins and that there was not enough.
Co-Chair Stedman remarked that the subcommittee would
examine the cabins, and the related revenue and
expenditures.
10:02:02 AM
Mr. Steininger displayed slide 17, "FY2021 Projects by
Department":
Revenue
1. Alaska Housing Finance Corporation (AHFC)
Competitive Grants for Public Housing $1,100.0 ($350.0
UGF (AHFC Dividend), $750.0 Fed)
2. AHFC Federal and Other Competitive Grants $7,500.0
($1,500.0 UGF (AHFC Dividend), $6,000.0 Fed)
3. AHFC Housing and Urban Development Capital Fund
Program $2,500.0 Fed
4. AHFC Housing and Urban Development Federal HOME
Grant $4,750.0 ($750.0 UGF (AHFC Dividend), $4,000.0
Fed)
5. AHFC Rental Assistance for Persons Displaced Due to
Domestic Violence - Empowering Choice Housing Program
(ECHP) $1,500.0 UGF (AHFC Dividend)
6. AHFC Senior Citizens Housing Development Program
$1,750.0 UGF (AHFC Dividend)
7. AHFC Supplemental Housing Development Program
$1,500.0 UGF (AHFC Dividend)
8. AHFC Teacher, Health and Public Safety
Professionals Housing $2,250.0 ($1,750.0 UGF (AHFC
Dividend), $500.0 Other (Statutory Designated Program
Receipts))
Senator Bishop spoke to item 8 on the slide and cited a 38
percent teacher turnover in some parts of the state. He
felt that there should be a focus on rural teacher housing.
He stressed that there should be good living conditions
available for the teachers. He felt that the education of
students and teacher retention were linked.
Senator Hoffman agreed with Senator Bishop. He asked for a
list of unmet needs for teacher housing in the state.
Co-Chair von Imhof referenced Senator Bishop's comments and
Senator Hoffman's previous comments about Village Public
Safety Officers (VPSOs). She noted that item 8 referenced
"teacher, health, and public safety." She felt that the
Housing Finance Corporation (AHFC) should present to the
committee. She thought it would be good see a map and
consider where there might be resource deficiencies, as
well as a plan to address the deficiencies. She agreed that
housing was key to making teaching and the VPSO program
successful.
10:05:14 AM
Mr. Steininger highlighted slide 18, "FY2021 Projects by
Department":
Revenue, continued
9. Mental Health: AHFC Beneficiary and Special Needs
Housing $1,750.0 ($1,500.0 UGF (AHFC Dividend), $200.0
Other (Mental Health Trust Authority Authorized
Receipts))
10. Mental Health: AHFC Homeless Assistance Project
$7,300.0 ($6,350.0 UGF (AHFC Dividend), $950.0 Other
(Mental Health Trust Authority Authorized Receipts))
11. Mental Health: Housing - Grant 604 Department of
Corrections Discharge Incentive Grants $100.0 Other
(Mental Health Trust Authority Authorized Receipts))
Mr. Steininger looked at slide 19, "FY2021 Projects by
Department":
Transportation and Public Facilities
1. Joe Parent Vocational Education Center Demolition
and Clean-up $1,000.0 UGF
2. Alaska International Airport System $74,400.0
($26,700.0 Other (International Airport Revenue Fund),
$47,700.0 Fed)
3. Rural Airport Improvement Program $140,000.0 Fed
4. Alaska Marine Highway System Vessel Overhaul,
Annual Certification and Shoreside Facilities
Rehabilitation $15,000.0 DGF (Marine Highway System
Fund)
5. Decommissioning and Remediation of Class V
Injection Wells $1,700.0 UGF
6. Federal-Aid Highway Project Match Credits $6,775.2
($1,500.0 DGF (General Fund/Program Receipts),
$5,275.2 Fed)
7. Federal-Aid Aviation State Match $8,853.4 UGF
(remaining $1.9M funded with a FY2020 reappropriation
for total match of $10.9M)
8. Federal-Aid Highway State Match $54,141.7 UGF
(remaining $10,858.3 funded with a FY2020
reappropriation for total match of $65,000.0)
9. Surface Transportation Program $650,000.0 Fed
Mr. Steininger detailed that the building in item 1 was on
the grounds of the Aniak airport and had been designated an
air hazard by the Federal Aviation Administration. He noted
that the decommission of wells in item 5 was in the final
phase and the wells had been identified by the
Environmental Protection Agency.
Co-Chair Stedman looked at item 4. He wondered whether it
pertained to the federal ferry boat program funding.
Mr. Steininger replied that funds in item 4 were for annual
vessel overhaul and certification, as well as some
shoreside rehabilitation.
Co-Chair Stedman wondered whether the item related to the
federal ferry boat program.
Mr. Steininger answered in the negative.
10:07:50 AM
Co-Chair Stedman stated that there was a federal program
for the Alaska Marine Highway System (AMHS). He discussed
declining funding for the AMHS and wondered if the
administration would be proposing a "catch-up provision."
Co-Chair von Imhof wondered if it made sense to invite DOT
to speak to the capital funding aspects of AMHS.
Co-Chair Stedman thought Co-Chair von Imhof had a good
idea, and that there should be a supplemental hearing on
the AMHS for the operating and capital budget. He
referenced the deferred maintenance list assembled by Co-
Chair von Imhof's office (copy on file) and observed
numerous pages of AHMS projects. He recalled $3 million in
funding to keep up with small maintenance projects outside
bigger appropriations, but the funding had been terminated.
He thought the lack of funding had resulted in a large
amount of deferred maintenance. He had requested a
breakdown of regional appropriations since 2010. He thought
AMHS funding was a significant issue that affected the
Railbelt and coastal Alaska.
Co-Chair von Imhof felt that it was good to combine
discission of operating and capital funding for AMHS. She
thought the committee could do a follow-up with DOT, and
mentioned a ferry system advisory group.
Senator Hoffman looked at item 8, which was a requested
state match of $54 million. He wondered how much in federal
funds was matched. He thought it would be prudent for the
committee to dig into the item further to examine what
projects were being funded throughout the state. He wanted
more information.
10:11:44 AM
Co-Chair von Imhof requested a project list of the federal
aid highway program, and some explanation of why those
projects were chosen.
Senator Bishop commented that historically the information
had been in the capital budget materials.
Senator Wilson looked at the federal funding for the Rural
Airport Improvement Program. He referenced the Bethel
airport and lack of efficiencies with tower communications.
He asked if any of the funds would go towards tower
upgrades in the area.
Mr. Steininger stated that he did not know every project on
the state or federal aviation list. He offered to provide
further information on the Bethel tower.
Mr. Steininger addressed slide 20, "FY2021 Projects by
Department":
Transportation and Public Facilities, continued
10. Other Federal Program Match $1,300.0 UGF
11. Mental Health Coordinated Transportation and
Vehicles $1,300.0 Other (Mental Health Trust Authority
Authorized Receipts)
12. State Equipment Fleet Replacement $15,000.0 Other
(Highways/Equipment Working Capital Fund)
13. Cooperative Reimbursable Projects $15,000.0
($10,000.0 Other (Statutory Designated Program
Receipts), $5,000.0 Fed)
14. Federal Emergency Projects $10,000.0 Fed
15. Federal Transit Administration Grants $10,000.0
Fed
16. Highway Safety Grants Program $8,037.7 ($37.7 UGF,
$8,000.0 Fed)
17. Municipal Harbor Facility Grant Fund Projects
$5,500.0 UGF
Mr. Steininger detailed that item 10 related to matching
funds for projects that did not come from the Federal
Highways Administration, or funds for costs that were
matched by federal funds but ended up not being allowable
costs.
Co-Chair von Imhof wondered whether Co-Chair Stedman had a
comment on the harbors.
Co-Chair Stedman stated that he would like a list of the
harbors involved in item 17. He noted that the state put up
50 percent for the Municipal Harbor Matching Grant Fund,
which must be run as an enterprise fund.
10:15:05 AM
Mr. Steininger advanced to slide 21, "FY2021 Projects by
Department":
University
1. UAF US Array Earthquake Monitoring Network
$19,000.0 ($2,500.0 UGF, $16,500.0 Fed)
Courts
1. Court Security Improvements $1,551.1 UGF
2. Statewide Deferred Maintenance $1,551.2 DGF
(Capital Income Fund)
Mr. Steininger looked at slide 22, "FY 2020 Supplemental."
He stated that the following slides addressed projects that
were in the FY 20 Supplemental Budget, and either had a
supplemental effective date or were sufficiently urgent as
to need to start them in the current fiscal year.
Mr. Steininger spoke to slide 23, "FY2020 Supplemental
Projects SB 154 and 174." The table summarized the list
of projects by department. He pointed out that some
departments had negative UGF, which reflected that there
were some completed projects with no work remaining but
some UGF was being repealed and returned to the general
fund. The total of the supplemental projects was roughly
$25.5 million in UGF, and $81.9 million total inclusive of
federal match.
10:16:46 AM
Mr. Steininger referenced slide 24, "FY2020 Supplemental
Projects":
Commerce, Community & Economic Development
1. Deposit Unexpended Balances of Completed Projects
Totaling $1,066.3 UGF to the General Fund
2. Housing and Urban Development (HUD) Community
Development Block Grant to Support Earthquake Recovery
Efforts $35,856.0 Fed
3. National Petroleum Reserve Alaska Impact Grant
Program Addition of $6,670.2 Fed for a Total of
$13,098.9 Fed
Governor
1. Help America Vote Act $3,700.0 Other (Election
Fund)
2. Redistricting Board $2,500.0 UGF
Military and Veterans Affairs
1. Reappropriation for the Mass Notification System
$900.0 ($450.0 UGF, $450.0 Fed)
2. Alaska Land Mobile Radio Site Refresh $24,000.0 UGF
Co-Chair von Imhof requested a breakdown of the budget for
the Redistricting Board. She questioned if the board would
have any sole-source contracts, if the $2.5 million request
would go towards lawyer fees, and when the funds would be
spent.
Co-Chair Stedman looked at the Alaska Impact Grant Program
and requested a list of the grants. He thought some
requests came late in the budgetary process and wanted to
better understand what the funds were being used for.
Senator Bishop queried the shelf life on the system of item
2 of the Department of Military and Veterans Affairs
(DMVA). He wondered if annual maintenance of the system
would go down after the equipment refresh was funded.
Mr. Steininger agreed to provide the information.
Senator Olson asked for Mr. Steininger's report on the
Redistricting Board to include details about elections
redistricting in the amount of $95,000.
10:20:51 AM
Mr. Steininger turned to slide 25, "FY2020 Supplemental
Projects":
Public Safety
1. Automatic Dependent Surveillance Broadcast System
for DPS Aircraft Federal Mandate
$398.4 UGF
2. Radio Replacement to Outfit Incoming New Troopers
$500.0 UGF
Revenue
1. Deposit Unexpended Balances of Completed Projects
Totaling $331.9 UGF to the General Fund
2. Reappropriation from Revenue for Tax Analysis and
Refresh $454.4 UGF
Co-Chair von Imhof asked where the reappropriation listed
in item 2 under the Department of Revenue (DOR) would go.
Mr. Steininger stated that the funds would be
reappropriated back to DOR for tax analysis.
Co-Chair von Imhof asked what taxes would be analyzed.
Mr. Steininger replied that DOR anticipated that they would
need to analyze various tax proposals in the near future.
Co-Chair Stedman wanted a more specific answer regarding
the tax analysis.
Co-Chair von Imhof stated that there were several bills and
an initiative on the topic of taxes in the following
months. She asked if the department would still need the
funds if none of the bills materialized and the initiative
failed.
Mr. Steininger stressed that the department would need to
analyze the impacts of the initiatives regardless of the
outcome.
10:23:12 AM
Co-Chair Stedman noted that both the legislature and the
administration hired many consultants and thought that the
reappropriation sounded like a lot of money. He requested
that the chairman take a hard look at the expense.
Co-Chair von Imhof wondered when the $450,000 would be
payed to an out-of-state consultant.
Mr. Steininger replied that the department intended to seek
subject matter experts for some of the items.
Senator Olson looked at the request for DPS and observed
that there was no money requested for the VPSO Program, and
that all the funds would go to the Alaska State Troopers.
Mr. Steininger affirmed that there were no funds requested
for the VPSO Program in the supplemental capital budget.
Mr. Steininger considered slide 26, "FY2020 Supplemental
Projects":
Transportation and Public Facilities
1. Scope Change: Knik Goose Bay Road $2,000.0 UGF
2. Earthquake Relief Federal Ineligible Costs
$3,000.0 UGF
3. Deposit Unexpended Balances of Completed Projects
Totaling $3,000.5 UGF to the General Fund
4. Federal-Aid Aviation State Match for Rural Airports
$1,964.6 DGF (Capstone Avionics Revolving Fund) for a
total FY2021 state match of $10.8M
5. Reappropriation from Transportation for Federal-Aid
Highway State Match $10,858.3 UGF for a total FY2021
state match of $65M
6. Alaska Marine Highway System Vessel Overhaul
Additional Needs $5,000.0 DGF (Marine Highway System
Fund)
7. State Equipment Fleet 32 Vehicles to Support New
Troopers $3,155.0 Other (Highways/Equipment Working
Capital Fund)
Senator Wilson asked about item 4. He mentioned the sunset
of the Capstone Avionics Revolving Fund. He asked if the
fund would be wiped out to match the project and recalled
only 15 loans had been given out from the fund.
Mr. Steininger replied that through the governor's proposed
budget, there were uses of the fund including state match
for rural airports.
Senator Wilson wondered what would occur should someone
want to reinstate that fund.
Mr. Steininger relayed that if the fund were not to sunset,
the state would have to find a new way to fund the
projects.
10:26:55 AM
Co-Chair von Imhof asked about the scope change for item 1,
and understood that it was not a new project, rather it was
a change to the appropriation of existing funds.
Mr. Steininger agreed. He qualified that the existing
project had been specific to a certain section of the road,
and there was another section which more urgently needed
repairs for safety reasons. He stated that the money had
not been expended. The scope had been expanded in order to
use the funds across the entire road to address the most
critical needs.
Co-Chair von Imhof asked if the $2 million in UGF was new
funds or existing funds that had been previously allocated.
Mr. Steininger stated the funds were existing funds
appropriated in the past, and the total appropriation was
$2 million.
Senator Wilson thought he could explain the history of the
funding. He recalled that in 2017, during the operating
budget process, a $4 million amendment was added for the
Knik Goose Bay Road project. In the other body, $2 million
was put toward the project. The current proposal would
address miles 1 through 7 of the road.
Co-Chair von Imhof asked if $2 million UGF would be the
total amount needed from the current year and add to the
deficit.
Mr. Steininger explained that the $2 million was
appropriated in a prior year and would not add to the 2020
deficit. The reappropriation simply allowed previously
appropriated funds to be used for an extended purpose. He
stated that the funds were not new money, and it was not
clear on the slide.
Senator Bishop requested that DOT address the road item
when the agency came to committee. He had heard reference
of rut repair. He referenced the proposed Motor Fuels Tax
legislation that was moving through the legislature. He
wanted to ensure that capital dollars were not used for
maintenance. He supported fixing the road.
10:30:44 AM
Co-Chair von Imhof asked if school construction and major
maintenance was usually funded. She asked if the proposed
budget had any AHFC weatherization components.
Mr. Steininger answered "no."
Co-Chair von Imhof thought the budget had included the
funds the past. She asked for further details and a reason
why the item was not included.
Mr. Steininger agreed to provide more information.
Co-Chair von Imhof asked about snow machine trail
development that was typically funded with snow machine
receipts, which was DGF. She asked why the item was not in
the budget.
Mr. Steininger stated that the item had not made it into
the budget and the prioritization of projects was shown in
the proposed budget.
Senator Bishop commented that if the funds would not be
used as prescribed by the user group or used for trails,
the law should be changed.
Co-Chair Stedman referenced a comprehensive spreadsheet of
"Statewide DM Backlog" (copy on file) and major maintenance
of the state's schools. He thought the schools were well
dispersed throughout the state.
Co-Chair von Imhof affirmed that schools needing major
maintenance were all over the state. She estimated there
was $193 million in major maintenance and about a $7
million request.
10:33:31 AM
Senator Wielechowski thought his community had the Port of
Anchorage as a priority. He mentioned that 90 percent of
all the goods came in through the port. He thought the
military had identified the port as a top priority. He
asked if the administration thought it was important to
make sure the port was funded and repaired.
Mr. Steininger did not know enough on the issue to provide
a comment.
Senator Wielechowski asked if the administration believed
the Port of Alaska needed to be repaired and funded. He
thought the state had just received federal funds, and the
project had worked to reduce costs. He asked if the topic
was on the administration's radar.
Mr. Steininger stated he would get back to the committee
with more information.
Senator Hoffman commented that throughout the proposed
budget there were funds being proposed to be expended under
the Capital Income Fund. He asked for a list of the
projects being funded. He requested a list of criteria the
administration used to access the funds.
Co-Chair Stedman added to Senator Hoffman's request to ask
for information on the sources of funds in the Capital
Income Fund as compared to where the money was going. He
suggested that the information should go back several
years. He explained that the Capital Income Fund was a
holding account where small appropriations were moved. The
fund had built up over the years. He thought it was
important to look at the source of the funds, where the
funds were directed, and the criteria for use.
Mr. Steininger addressed the use of the Capital Income
Fund, and stated that the administration tried to direct
the fund towards projects related to maintenance of state
assets and facilities. He used the example of the
renovation of the Anchorage Pioneer's Home, and deferred
maintenance funds that would be spread to small facilities.
He noted there was an annual distribution of Amerada Hess
Funds that came from the Permanent Fund, which was
different every year but was about $27 million. He noted
that cruise ship gaming taxes were often directed into the
fund to supplement deferred maintenance funding. The fund
did not cover the total expense of deferred maintenance but
did offset some of the costs.
10:38:16 AM
Co-Chair von Imhof thought the question was how much of the
funding went to the governor to use at his discretion
rather than to the appropriating body.
Mr. Steininger stated that the $30 million that was in the
Office of the Governor was a way that the administration
had been trying to address deferred maintenance on a
wholistic basis across all state facilities, rather than on
a facility by facility appropriation. The method allowed
more flexibility to respond to emergent needs and to
prioritize. He mentioned condition indexes and standard
criteria across facilities as a means of evaluating
facilities. He thought some departments might have more
savvy in evaluating needs than other departments. He
suggested that working with the Division of Facilities
Services within DOT provided more ability to apply
objective rigor as to how the funds were applied.
Mr. Steininger offered to provide a list of projects that
funds had been distributed to over the last several years
that the funds had been centrally managed. He acknowledged
that there was a learning process to centralize the
function as the division came online. He stated that the
fund was not a slush fund but rather a way to manage the
work on a statewide basis with more fairness to those
departments with only a few facilities.
Co-Chair Stedman thought that there should be a request for
a five-year charter of accounts for incoming and outgoing
funds to the Capital Income Fund, in consideration of the
capital budget. He thought there would be better
understanding of the fairness around the state if the
committee examined the record. He thought the requested
items for expenditure in the current budget might meet the
top of the list for the legislature, or they might not.
10:41:29 AM
Senator Wielechowski considered the "Statewide Deferred
Maintenance Backlog" document and was curious about the
prioritization of items. He asked if there was auditing or
assurance that the requested costs were reasonable. He used
the example of repainting the second floor of the
governor's house for a cost of $180,000. He assumed that
state workers were doing the labor. He was curious about
the oversight that was present to keep costs in line.
Co-Chair von Imhof wanted to allow the conversation to not
be rushed. She suggested the committee take a recess and
resume in the afternoon.
Co-Chair von Imhof wanted to bring the focus to the capital
budget. She brought up the coronavirus and the Port of
Alaska as previously mentioned. She thought the project was
important to all of Alaska. She mentioned a project for the
University of Alaska/Medical (UMed) District expansion and
Northern Access Road project, which had been funded and
defunded. The previous year Northern Lights Boulevard had a
sinkhole and had closed, which was access the multi-
billion-dollar UMed District. She suggested that if the
virus was a "new normal," a new road was needed to access
the area in a timely and safe manner. She wanted the
governor's office to comment on the road and connection to
medical care and the University for the entire state.
10:46:00 AM
Senator Wielechowski stated that the committee had been
through the issue many times. The funds for the project had
been appropriated, and the Municipality of Anchorage had
said it did not want the road constructed. He cited that
all the community councils surrounding the area had not
supported the road project. He respectfully disagreed with
Co-Chair von Imhof's opinion and thought that the current
road system worked fine.
Co-Chair von Imhof agreed to disagree. She thought the
whole area continued to be built up and was concerned about
danger to students and delay in travel to the hospital. She
discussed potential for travel disruption. She understood
that there were some community members did not want the
road but suggested the project would be for the greater
good for the state.
Senator Olson thought Co-Chair von Imhof had brought up a
significant issue of the Covid-19 virus, which he saw as a
blossoming need. He considered costs of quarantine and did
not see any money being appropriated or considered.
Co-Chair von Imhof noted that there was an amendment for
the operating budget for $4 million with an additional $9
million in federal funds. She thought there might be a
supplemental budget with funds for the virus. She agreed
that Alaska had experienced very different funding needs
such as earthquakes and wildfires. She referenced the
spring revenue forecast and considered that the state had
potentially less revenue coming in, which put more pressure
on the budget. She emphasized that the state always needed
to leave headroom for things that were unknown.
Co-Chair von Imhof recessed the committee until 1:30 p.m.
10:49:38 AM
RECESSED
1:33:29 PM
RECONVENED
Co-Chair von Imhof explained that the committee would
continue the discussion with the topic of deferred
maintenance liability, which must be considered carefully
while developing the capital budget. She referenced the
long list of projects evidenced in the "Statewide DM
Backlog" document.
Mr. Steininger discussed the presentation, "FY2021 Deferred
Maintenance Update," (copy on file). He noted that Ms.
Willhoite would give an overview of the deferred
maintenance backlog as well as historical funding, after
which DOT staff would discuss activities within the
Division of Facilities Services. Staff would discuss the
plan that was being implemented and future plans on how the
department was handling facilities maintenance throughout
the state.
1:35:26 PM
SHELLY WILLHOITE, CAPITAL COORDINATOR, OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF THE GOVERNOR, discussed the
presentation.
Ms. Willhoite looked at slide 2, "Deferred Maintenance:
Overview":
Deferred maintenance is maintenance or repair projects
that have been delayed or postponed due to lack of
funds within an entity's normal operating budget
cycle. Maintenance and repairs are activities that
keep assets in safe, effective, working condition.
Postponing needed repairs could lead to asset
deterioration and ultimately asset impairment.
Generally, a policy of continued deferred maintenance
may result in higher costs, asset failure, and in some
cases, health and safety implications.
Co-Chair von Imhof asked Ms. Willhoite to read the last
sentence on the slide.
Ms. Willhoite showed slide 3, "Deferred Maintenance: State
Owned Facilities," which showed a bar graph depicting the
number of facilities by agency. There were about 2,400
facilities throughout the state, representing 14
departments in 20 million square feet of space and $9.7
billion in replacement value. The chart depicted the number
of buildings by department.
Ms. Willhoite turned to slide 4, "Deferred Maintenance:
Facility Types":
Types of facilities vary by entity
• UA manages classroom, laboratory, research,
residential, and office space
• DOA manages general office space
• DOC and DHSS both manage 24 hour facilities
• DMVA manages military and other facilities and
statewide armories
• DNR oversees park service cabins, shelters, fire
suppression and preparedness shops
Ms. Willhoite noted that the bar graph on slide 4 showed
the total square feet in facilities by agency. She pointed
out that the University had over 8 million square feet,
while DOT had about 2.5 million square feet. She explained
that the University had classrooms and laboratories, with
larger buildings. Conversely, DOT had a greater number of
smaller buildings, many of them electrical buildings.
Co-Chair von Imhof thought that when the DOT came to
committee, she wanted to discuss the composition and
function of the agency's 732 buildings.
1:39:13 PM
Ms. Willhoite spoke to slide 5, "Deferred Maintenance:
Statewide Backlog $1.9 Billion":
Deferred maintenance backlog:
?University of Alaska $1.3 billion
?Department of Transportation and Public Facilities
$341 million
?All other agencies total $313 million
Senator Wielechowski thought that some of the projects
seemed extremely expensive and unnecessary. He used the
example of radar and speed indicator installation in a
parking garage for $26,300. He recalled a cost for the same
technology being $5,000. He mentioned repairs in the
governor's house and thought the proposed costs seemed
extraordinary. He wondered what sort of vetting was being
done for the projects and wondered if there were state
employees that could perform the work at a lower price.
Mr. Steininger thought that Senator Wielechowski's concerns
were part of the reason all of the departments' deferred
maintenance projects needed to be considered together. He
thought having consistent cost estimates and standards
would hopefully start to address some disparities being
pointed out. He thought having experts in the state looking
at cost estimates and applying consistent standards would
be an improvement. He noted that the current list and
prioritization had been submitted by each individual
department, and the prioritization reflected the
department's perception of priority ranking rather than
looking at projects together across departments, which was
the goal of the administration.
1:42:45 PM
Senator Olson thought he had heard Mr. Steininger state
there was no oversight on the numbers being proposed. He
was appalled at the proposed expense for the projects. He
was hearing that no one vetted the numbers before the list
was assembled.
Mr. Steininger clarified that the numbers were done on a
departmental basis, and each department vetted the items
before they were assembled into the list. He explained that
some of the projects landed on the deferred maintenance
list for the very reason that the project did not involve
health-life-safety, as those that did were addressed
through the agencies' operating budget.
Senator Wielechowski asked if there were always competitive
sealed bids for construction contracts. He asked where
allocated funds went if the project ended up being cheaper
than expected.
Mr. Steininger stated that whenever there was a project of
any nature, bidding would adhere to the procurement code.
There were different levels of competition based on the
nature and size of the project. If a project bid came back
lower than estimated, the remaining funds would be put back
in the deferred maintenance pot to be allocated for the
next most critical need.
Co-Chair von Imhof considered a list of projects for the
University of Alaska Anchorage (UAA) on page 127 of the
deferred maintenance backlog list, which showed a cost of
$2 for ten items to replace pumps. She asked if the list
should be getting so granular.
Ms. Willhoite thought the amounts might be a typographical
error.
1:45:50 PM
KIM MAHONEY, ASSOCIATE VICE CHANCELLOR OF FACILITIES,
UNIVERSITY OF ALASKA ANCHORAGE, thought the amounts might
be a typo. She relayed that UAA used a third party to help
with the deferred maintenance list, which totaled over $500
million. She stated that items on the deferred maintenance
list were not intended to be individual projects, but
rather were done in a project delivery method. The items on
the list included contemplation that that item costs would
be part of a biddable job rather than on a standalone
basis.
Co-Chair von Imhof acknowledged that she had been
incorrect, and the amount was $2,000 for each item. She
suggested the list combine items.
Senator Wilson asked how often the deferred maintenance
lists were updated. He saw that departments tracking went
back to FY 11. He wondered if completed jobs remained on
the list for a period of time.
Ms. Willhoite informed that deferred maintenance lists were
updated at least annually, usually after the construction
season. She continued that the administration asked for
updated maintenance listings and prioritization of projects
before deferred maintenance allocation.
1:49:00 PM
Ms. Willhoite displayed slide 6, "Deferred Maintenance:
Backlog $803,011.1 (excluding University $1.3 billion),"
which showed a bar graph of deferred maintenance backlog
amount per department. She noted that the University data
had been pulled out after it skewed the graph to a degree
that made the graph unusable. The departments were listed
in order of deferred maintenance total. She added that
DOT's amount included facilities, highways, aviation,
harbors, and the AMHS. She noted that the full chart
including the University was in the appendix.
Ms. Willhoite discussed slide 7, "Deferred Maintenance:
Statewide Facilities Approach":
Centralized Analysis, Recommendation and Approval
?Created the Executive Facilities Maintenance
Advisory Committee and the State Facilities
Council
?Created the Division of Facilities Services
within the Department of Transportation and
Public Facilities
?Started Statewide Deferred Maintenance
Appropriations
Ms. Willhoite noted that the Executive Facilities
Maintenance Advisory Committee (EFMAC) was created to
coordinate and increase efficiencies in facilities
maintenance across all departments. Prior to the statewide
approach, each department had been putting together its own
facilities maintenance.
Co-Chair von Imhof asked if the positions were paid
committee appointments. She asked who was on the committee
and who was on the State Facilities Council.
Ms. Willhoite informed that the council was implemented the
following year and had representatives from the Division of
Facilities Services as well as from each department.
Mr. Steininger clarified that the EFMAC was made up of
existing state employees that managed facilities as part of
the job. The idea was to get together a group of subject
matter experts and stakeholders from all departments.
Ms. Willhoite continued to address the slide. She discussed
creation of the Division of Facilities Services within DOT
for the purpose of increased efficiencies and
standardization.
1:52:45 PM
Senator Wilson asked if the management of facilities had
been consolidated, or if the change still in process.
Ms. Willhoite stated that several departments were
complete, including DOA, DOT, and DEED. Several departments
were in the middle of being transitioned to being
coordinated by the new division, including Department of
Fish and Game.
Senator Wilson asked improvements had already been seen as
a result of the consolidation, such as better
prioritization of projects.
Ms. Willhoite stated that the division was implementing a
software package that would assist in prioritization, and
the project was not yet complete. When complete, the
database would give a consolidated overview of deferred
maintenance projects.
Ms. Willhoite continued to address slide 7. She detailed
that in 2018, the administration started doing statewide
deferred maintenance appropriations as a lump sum. The
Division of Facilities Services would help prioritize the
funds. She mentioned intent language in a bill passed the
previous year that made the process be consolidated across
agencies.
1:55:04 PM
Ms. Willhoite reviewed slide 8, "Deferred Maintenance:
Statewide Appropriation Status," which showed a table
depicting the amount appropriated for each department for
2018, 2019, and 2020. She explained that before the
administration came up with the allocation, the department
had been asked to examine if the top ten priorities were
still the same. The information was used to make an
allocation, and it was the hope that the funds were
allocated to the most critical needs in the state.
Ms. Willhoite continued to address slide 8. She noted that
the previous year was the first year that the council was
used to help allocate funds. The council had met to
consider projects and reach consensus on how to make the
allocation. The group had identified the need to reserve
some funds aside for emergent needs. Several departments
had emergency funds in the past. The current fund was about
$2 million, of which $800,000 had been expended thus far.
Ms. Willhoite looked at slide 9, "Deferred Maintenance:
Governor's Proposed Budget":
?FY2021 Deferred Maintenance: $37.5 million
?Statewide Deferred Maintenance: $30.0 million DGF
(Capital Income Fund)
?Department of Administration: $5.9 million Other
(Public Building Fund)
?Courts: $1.6 million DGF (Capital Income Fund)
Co-Chair von Imhof asked if there would be a forthcoming
breakdown of the $30 million DGF for statewide deferred
maintenance from the Capital Income Fund.
Ms. Willhoite explained that the division director would
discuss the process the administration was using for
expenditure of the $30 million. There was not a list of
projects assembled yet, but when the list was complete it
would be provided to the committee.
1:58:16 PM
CHRISTOPHER HODGIN, SENIOR PROJECT MANAGER, DIVISION OF
FACILITIES SERVICES, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, ANCHORAGE (via teleconference), showed
slide 10, "FY2021 Deferred Maintenance - Division of
Facilities Services."
Mr. Hodgin referenced slide 11, "Deferred Maintenance:
Statewide Approach":
• Deferred Maintenance moving forward into FY2021
Collaborating with OMB and the State Facilities
Council
• Prioritizing deferred maintenance projects across
all executive branch agencies, including the
University
• Facilities Council deferred maintenance workshops
currently in-progress, with goal of submitting
Statewide prioritized list to OMB by the end of
April 2020
• The Basic Approach projects are being prioritized
based on a combination of relevant factors to create
a Project Index Value (PIV)
Mr. Hodgin showed slide 12, "Deferred Maintenance:
Statewide Approach the Basics":
?Project prioritization a combination of the below to
create a Project Index Value
(PIV):PIV= (MAI) x (System Factor) x (Need)
• MAI-Mission Alignment Index, alignment of
facility to an Agency's mission
• System Factor - Scale related to various
building systems and their impact on building
• Need - The urgency
?If known, other attributes are also shared such as
anticipated return on investments, any matching funds,
or eligibility as a financed energy savings
performance project
Co-Chair von Imhof wanted a description of the scale that
would be used to assess things like need. She asked Mr.
Hodgin to explain how the scale was developed.
Mr. Hodgin advanced to slide 24 in the index, "Deferred
Maintenance: Statewide Approach Mission Alignment Index
Examples":
?Critical:
?The Agency cannot meet its mission without this
facility. There are no viable workarounds
?Important:
?Would impact the Agency's mission if
unavailable. Possible workarounds
Supportive:
?Would possibly impact the Agency's mission if
unavailable, but other options available
?Other / Non Mission Critical:
?Would not have an effect on the Agency's mission
if unavailable
Mr. Hodgin explained that the mission alignment index scale
was a zero to zero-point-nine scale, with a designation of
zero-point-nine indicating the most critical facility for
the particular agency. He explained that there was a margin
above zero-point-nine for other facilities that would have
statewide importance as well as agency importance.
Mr. Hodgin furthered that the system factor was also a
decimal scale that went from zero to one, with a
designation of one signifying the critical life/safety
repair needs at a facility. He made note of corresponding
scales for projects such as interior renovations,
mechanical/electrical upgrades, or building envelope
upgrades. He explained that the need scale went from one to
five, with a rating of five signifying the most critical
need and a rating of 3 signifying projects that needed
attention to prevent deterioration of a building. He
surmised that items with a need ranking below three would
not make the list.
Co-Chair von Imhof thought the example in the index was
helpful.
2:03:25 PM
Mr. Hodgin showed slide 13, "Deferred Maintenance:
Statewide Approach Example," which showed table using an
illustrative example of an electrical system upgrade to an
office building. The example showed a critical building for
the department. He reviewed the approach for determining
the project index value.
Mr. Hodgin referenced slide 14, "Deferred Maintenance:
Statewide Approach Example," which showed a table with
illustrative example values. He posited that when the
approach was applied to all projects in the deferred
maintenance backlog, one could see that the projects could
be ranked. He thought the slide would show that the
projects with the highest index value should represent the
state's most critical important buildings for the state and
respective agencies, where the repairs fixed the most
important components of the buildings and the repairs were
in the most immediate need.
Co-Chair Stedman referenced the idea of a scatter plot
chart, which could be used to show all the data points to
see where there might be clusters.
Co-Chair von Imhof was fond of data and charts, and liked
Co-Chair Stedman's idea. She used the example of a project
that was not prioritized and as a result, systems degraded.
She asked who was responsible for looking at systems on an
ongoing basis and updating the index values.
Mr. Hodgin acknowledged that if the condition of a facility
deteriorated, the index yearly refresh would change the
need metric to a higher value and place the project at a
higher priority in the list. If the facility was under the
care of the Division of Facilities Services or DOT,
typically "maintainers" looked at systems and reported any
deficiencies to hub managers or foremen. Other agencies
that were not consolidated used maintenance professionals
that would report to managers.
Co-Chair von Imhof reiterated the request for a scatter
plot to help the committee envision the trends.
2:07:37 PM
Co-Chair von Imhof questioned the amount of a reasonable
deferred maintenance savings account in the event of a
sudden occurrence such as extreme cold or an earthquake.
She discussed scenarios where property degraded over time
after not receiving maintenance. She asked what options an
agency would have.
Mr. Hodgin deferred the question to Ms. Willhoite.
Ms. Willhoite referenced a chart that showed a percentage
that was recommended to set aside for deferred maintenance,
but the amount had been well outside the realm of the
budget. She thought that with facilities maintenance
consolidation, it would be possible to get a better scope
of what a good percentage for savings would be.
Mr. Hodgin did not have the number. He referenced a
recommendation of the National Science Foundation that
suggested one to four percent of the gross asset value per
year for deferred maintenance. He estimated that the asset
value of the state was $8 billion.
2:11:14 PM
Co-Chair von Imhof asked if the states asset value was $8
billion, was the $30 million in reserve one to four percent
of the total.
Mr. Hodgin answered "no."
Co-Chair von Imhof asked what the amount would be at one
percent. She thought the amount would be about $800
million.
Senator Wielechowski referenced page 49 of the Statewide
Deferred Maintenance Backlog, which showed a number of
projects to replace signage and rehabilitate trails for
what he thought looked to be about $1 million. He was
curious if there was any sort of process for soliciting
volunteers or school groups to do the work.
Mr. Hodgin was not aware of such a process.
Co-Chair von Imhof was wondering if Senator Wielechowski
was referencing something like a GoFundMe page for public
work.
Senator Wielechowski referenced the rehabilitation of the
Mt. Baldy trail in Anchorage for $75,000. He thought it
would not be difficult to find a non-profit group in
Anchorage to take on the project. He mentioned a project
his daughter did painting electrical boxes. He thought that
the idea was worth pursuing.
2:13:50 PM
Co-Chair von Imhof asked about the large backlog of
deferred maintenance. She asked if the project index value
would be seen in small items or large buildings.
Mr. Hodgin stated that the division had started the index
process building by building on the Deferred Maintenance
Backlog spreadsheet. The backlog would be the start of the
process. He did not anticipate that the result of the work
would show each component, but rather building by building.
Mr. Hodgin showed slide 15, "Property Disposal Directive."
Mr. Hodgin considered slide 16, "Property Disposal
Directive: Update":
? February 12, 2019 Property Disposal Directive
Directed Executive Branch to investigate options
available for reducing the State's assets by
identifying properties that could be divested
? A multi-departmental workgroup was formed, inclusive
of State Facility Council members and project managers
from the DOT&PF Division of Facilities Services
? Methodology involved departments categorizing their
facilities into 'Consider' or 'Non Consider'
categories
Consider: These buildings were identified by
departments as candidates for divesting.
Candidate buildings may be appropriate for
demolition, space consolidation, or selling.
Non-Consider: Identified by departments as non-
candidates. Departments were asked to provide
justifications for each non-consider building.
2:17:01 PM
Mr. Hodgin displayed slide 17, "Property Disposal
Directive: Consider Candidate Example From Property
Disposal Report":
Maintenance Shop & Warehouse Ketchikan, AK 99901 4,430
Square Feet State Owned
Concept: Southcoast Region currently occupies two
locations for three components within the region which
includes M&O, Construction and SEF. The Construction
office has been a trailer which has deteriorated
beyond repair and it is not in an acceptable condition
employees should be working in. Co-locating all three
within vacant space located at the AMHS Engineering
building will reduce costs for both Southcoast Region
and AMHS and will provide staff adequate working
conditions
Advantages: 1. Reduced operating costs by sharing
facility operations across three areas 2. Improved
efficiencies having M&O, Construction and SEF in one
location 3. Improved working conditions for staff
Disadvantages: 1. Unknown start up costs 2. Disposal
of previous location could contain Hazmat or asbestos
Expected benefit: Unknown operating savings will be
realized, however there is the assumption a savings
will occur. Utilizing existing space and reducing the
building inventory.
Mr. Hodgin highlighted slide 18, "Property Disposal
Directive: Consider Candidates & Next Steps":
Next Steps
? OMB discussions with individual Departments on the
Consider candidates, any further cost benefit
analyses, and approvals of selected Consider
candidates
? Determining proper resources and project management
to implement approved selected property disposals
? Resourcing and implementing the disposal of the
approved properties
Co-Chair Stedman referenced the Mt. Edgecombe Aquatic
Center and asked if it had removed from the liquidation
list.
Mr. Hodgin answered in the affirmative.
Co-Chair Stedman asked about the Stratton Library in Sitka.
Mr. Hodgin believed the library was still on the
liquidation list.
Co-Chair Stedman asked that Mr. Hodgin re-review the item.
He expanded that the building went along with the state-
owned Sheldon Jackson Museum, and enhanced the viability of
the museum by providing a larger area for the museum
collection. He thought the library allowed for more
visitors and thereby less subsidy for the museum. He
explained that there would most likely be language
forthcoming in legislation that would restrict the agency's
ability to collect funds if the building was sold.
Co-Chair Stedman thought the division should consider the
National Guard Amory in Sitka. He wanted to know what
benefit the asset gave to the state. He noted that DEED was
in consideration of liquidating or leasing four properties
in Sitka to monetize the value of the property not needed
for Mt. Edgecumbe High School. The funds would help fund
the school and provide funds for maintenance for
facilities. He did not think the parcels of real estate
were included in the list but were under discussion. He
thought there were some challenges with how the asset list
was being composed. He wanted the department to get back to
his office regarding the armory and the library in Sitka.
2:21:54 PM
Mr. Hodgin affirmed that he would get more information from
the departments to answer Co-Chair Stedman's questions.
Co-Chair Stedman stated that there had been a repair in the
previous year's budget that had been vetoed. He wanted Mr.
Hodgin and the division to provide a solution rather than
provide a standard response.
Co-Chair von Imhof observed there was an executive summary
and property disposal directive dated February 12, 2019,
that directed all commissioners to investigate options
available for reducing the state's assets by identifying
properties that could be sold or sold and leased back to
the state in order to realize savings. She thought it would
be helpful to have a list of how many buildings had been
identified and sold in the almost-year since the directive.
Mr. Hodgin agreed to provide the information.
Co-Chair Stedman understood Co-Chair von Imhof's request
but was concerned that the state would be in a liquidation
mindset. He discussed the Stratton Library, and noted the
library had a third of the archives of the State Library
and Archives in Juneau. He reiterated that if the library
was liquidated, it would hinder the survival of the Sheldon
Jackson Museum. He wanted an expansion of the analysis of
the proposed liquidation.
Mr. Hodgin answered "yes."
2:24:49 PM
Mr. Hodgin looked at slide 19, "Property Disposal
Directive: The Divestment Process":
? Executive Branch to follow an established process
for divesting excess buildings managed by the
Department of Administration (Appendix C), with
exception of:
• Buildings on airport land under DOT&PF
authority (AS 02.15.060.070)
• Buildings acquired by DOT&PF from the
acquisition of land for highway projects (AS
19.05.070)
• Education buildings (AS14.07.030)
• DNR buildings which improve state lands (AS
38.05.035)
• Federally funded buildings, in which each
federal agency has its own rules and may
require federal funds to be refunded. For
example, DMVA federal use or funded
armories, in which DMVA is following federal
guidelines in their current facilities
divestment program.
? For those facilities with little value or
unlikeliness to sell, other factors for consideration
include suspension of all maintenance and repair
costs, liability associated with vacant structures and
demolition costs.
Co-Chair von Imhof asked if buildings the state divested of
would be sold on the open market to the highest bidder, or
if the state would engage with a third party to sell the
properties.
Mr. Hodgin thought the first step was to see if any other
agency had a need for the facility. He was not familiar
with the rest of the process. He offered to provide a copy
of the guidance paper that outlined the process.
Co-Chair von Imhof commented that it made sense to
consolidate buildings but questioned the efficacy of
shuffling buildings between agencies, which would not lower
the overall deferred maintenance backlog. She asked to get
more information about executive branch's established
process. She reiterated her request for more information
about what properties had been divested in the previous
year.
Mr. Hodgin agreed to provide the information.
2:27:42 PM
Mr. Hodgin showed slide 20, "Questions?"
Co-Chair von Imhof noted that there was an appendix
starting on slide 21. She asked if Mr. Hodgin wanted to
highlight any more topics on the previous slides.
Mr. Hodgin answered "no."
Co-Chair von Imhof asked to go to slide 26, "Deferred
Maintenance: Replacement Value of our Facilities," which
showed a table with data on the number of facilities in
each agency, including the square footage and replacement
value. She asked about Mr. Hodgin's earlier comments
regarding NSF's recommendations for deferred maintenance
savings at one to four percent of the replacement value
annually.
Co-Chair von Imhof thought 1 to 4 percent of the state's
total replacement value was about $97 million to $360
million, while the proposal being considered was for $30
million. She referenced slide 8, which showed the statewide
appropriation a status by agency for 2018, 2019, and 2020.
She thought there was a better amount to arrive at than the
proposed $30 million. She hoped the committee would
contemplate what amount made sense. She recalled the
previous day that the Legislative Finance Division had
discussed a potential for $100 million to $200 million less
in revenue for 2020, and potentially another $100 to $200
million less revenue for 2021. She mentioned increased cash
needs and a dwindling balance in the Constitutional Budget
Reserve.
SB 154 was HEARD and HELD in committee for further
consideration.
Co-Chair von Imhof discussed the agenda for the following
day.
ADJOURNMENT
2:31:46 PM
The meeting was adjourned at 2:31 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 030520 Capital Project Summary.pdf |
SFIN 3/5/2020 9:00:00 AM |
SB 154 |
| 030520 FY2020 Deferred Maintenance Backlog 12.31.2019 - All.pdf |
SFIN 3/5/2020 9:00:00 AM |
Deferred Maintenance 2020 |
| Final SFIN Capital Budget Overview 03.05.2020.pdf |
SFIN 3/5/2020 9:00:00 AM |
SB 154 |
| Final SFIN Deferred Maintenance Overview 03.05.2020.pdf |
SFIN 3/5/2020 9:00:00 AM |
Deferred Maintenance 2020 |