Legislature(2007 - 2008)SENATE FINANCE 532
03/02/2007 08:30 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB83 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 83 | TELECONFERENCED | |
MINUTES
SENATE FINANCE COMMITTEE
March 2, 2007
8:30 a.m.
CALL TO ORDER
Co-Chair Lyman Hoffman convened the meeting at approximately
8:30:35 AM.
PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
Also Attending: NANCY SLAGLE, Director, Division of
Administrative Services, Department of Transportation and Public
Facilities; ERIC SWANSON, Director, Division of Administrative
Services, Department of Administration; MARK LEWIS, Director,
Division of Administrative Services, Department of Education and
Early Development; DAVID THOMSON, Administrative Manager,
Division of Wildlife Conservation, Department of Fish and Game;
KATHRYN DAUGHHETEE, Director, Division of Administrative
Services, Department of Law; NICO BUS, Director, Division of
Support Services, Department of Natural Resources; CHRIS
ASHENBRENNER, Interim Program Administrator, Council on Domestic
Violence and Sexual Assault, Department of Public Safety; JERRY
BURNETT, Director, Division of Administrative Services,
Department of Revenue;
Attending via Teleconference: From an offnet location: RICHARD
LEARY, Alaska Marine Highway System, Department of
Transportation and Public Facilities; JOHN TORGERSON, Acting
Deputy Commissioner, Marine Highway Operations, Alaska Marine
Highway System, Department of Transportation and Public
Facilities.
SUMMARY INFORMATION
SB 83-SUPPLEMENTAL APPROPRIATIONS
The Committee heard form the Department of Transportation and
Public Facilities, the Department of Administration, the
Department of Education and Early Development, the Department of
Fish and Game, the Department of Law, the Department of Natural
Resources, the Department of Public Safety, the Department of
Revenue. The bill was held in Committee.
8:31:10 AM
SENATE BILL NO. 83
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending certain
appropriations; ratifying certain expenditures; making
appropriations to capitalize funds; and providing for an
effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Hoffman reminded that members had a spreadsheet
detailing the requests.
8:32:01 AM
Department of Transportation and Public Facilities
Section: 1(h)
Result Delivery Unit (RDU) or component: Capital-Airport
Improvement Program Appropriation
Supplemental Need: The Airport Improvement Program
appropriation increases by $2,000.00 from $341,857.10 to
$343,857.10 because of the increase in the allocation
below:
$0.0 Total Funds
Section: 1(i)
RDU or component: Capital-Airport Improvement Program
Allocation
Supplemental Need: Amend FY07 Project-Ketchikan: Snow
Removal Equipment/Sand/Urea Building Construction-Project
includes constructing a new snow removal equipment, sand
and chemical mixing and storage building to house all of
the airport's emergency response and snow removal
equipment. Project is ready to bid as soon as funding is
available
LFD Notes: Additional authorization needed based on recent
engineer's estimate
$2,000,000 Federal Funds
$2,000,000 Total Funds
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities, informed
that the Department would request federal receipts and
expenditure authority for several capital projects that would be
open for bid during the current fiscal year, and are thus "time
sensitive". Ms. Slagle reviewed these requests.
Section: 1(j)
RDU or component: Capital-Surface Transportation Program
Appropriation
Supplemental Need: The Surface Transportation Program
appropriation increases by $18,300.00 from $337,095.20 to
$355,395.20 because of the allocation changes below:
$0.0 Total Funds
Ms. Slagle read the request.
Section: 1(k)
RDU or component: Capital-Surface Transportation Program
Allocation
Supplemental Need: Amend: Anchorage-Eagle River Loop Road
Reconstruction - Old Glenn Highway to Eagle River Road -
Project includes reconstructing shoulders, turn lanes,
pedestrian facilities, lighting and landscaping. The
Department plans to advertise in March.
LFD Notes: Cost estimate has increased - project ready to
bid as soon as receive new authorization.
$2,000,000 Federal Funds
$2,000,000 Total Funds
Ms. Slagle reviewed this request, noting that the cost increases
were due to the purchase of the right-of-way, which was ready to
be obligated on this project.
8:34:46 AM
Section: 1(l)
RDU or component: Capital-Surface Transportation Program
Allocation
Supplemental Need: New: Anchorage: Potter Marsh Trailhead
and Access Improvements - Project includes enhancing
parking lot, provide new boardwalk connections, and connect
the Bird Treatment Learning Center on the Old Seward
Highway to the existing boardwalk. The department plans to
advertise in March
$550,000 Federal Funds
$550,000 Total Funds
Ms. Slagle referred to this as an Anchorage Metropolitan Area
Transportation Solutions (AMATS) project, and informed that the
request was made on behalf of the Municipality of Anchorage.
8:36:06 AM
Section: 1(m)
RDU or component: Capital-Surface Transportation Program
Allocation
Supplemental Need: New: Unalaska South Channel Bridge
Construction - Project includes replacing existing bridge
with a concrete deck bridge. Increased funding required as
low bid was greater than existing legislative authority for
project.
LFD Notes: Previous authorization for this project totals
$18,300,000
$14,000,000 Federal Funds
$14,000,000 Total Funds
Ms. Slagle overviewed the request, commenting that additional
funds were necessary for the project to move forward.
Co-Chair Hoffman asked where the project was located.
Ms. Slagle responded that this would replace a bridge in
Unalaska that had been "in the works" for seven or eight years.
8:37:06 AM
Section: 11(a)
RDU or component: Measurement Standards and Commercial
Vehicle Enforcement
Supplemental Need:
1) $55,000 for costs associated with data acquisition,
storage and transfer to meet federal reporting
requirements.
2) $15,000 for annual membership in the North American
Preclearance and Safety System (NORPASS) to continue
deployment of weigh station screening systems equipment.
LFD Notes: An increment of $55,000 GF for CVIEW software
updates is in the FY08 budget. Expect an amendment changing
the fund source to RSS.
$70,000 Receipt Supported Services
$70,000 Total Funds
Ms. Slagle informed that this request would fund the Commercial
Vehicle Information Exchange Window (CVIEW) program, which
allows the exchange of information with the Alaska State
Troopers and other law enforcement bodies regarding commercial
vehicle drivers. It would also provide for the North American
Preclearance and Safety System (NORPASS), which had previously
been federally funded.
8:39:27 AM
Section: 11(b)
RDU or component: Southeast Region Facilities
Supplemental Need:
1) $38,007 for Repairs/Maintenance - Backlog of deferred
maintenance issues that need addressed at facilities
throughout Southeast.
2) $5,000 for travel to inspect facilities.
3) $36,800 for contractual increases for facility
janitorial services at the 7-Mile Complex, AMHS
Reservations Building and Ketchikan Court and Office
Building.
LFD Notes:
1) All of the funding for Facilities Deferred Maintenance
in the capital budget is allocated for other purposes.
3) Janitorial service contract increases are not addressed
in FY08 budget. Potential for Governor's amendment.
$80,500 General Funds
$80,500 Total Funds
MS. Slagle reviewed the request.
Co-Chair Hoffman asked if the increase in janitorial costs was
included in Governor Palin's FY08 budget request.
Ms. Slagle did not recall those expenses included in the FY08
budget.
8:40:53 AM
Ms. Slagle continued that the funding for "Repair/Maintenance"
would address temporary repairs until permanent repairs could be
made.
8:42:34 AM
Section: 11(c)
RDU or component: Central Region Highways and Aviation
Supplemental Need:
1) State Equipment Fleet Cost Increases - $288,500 -
Central Region Highways and Aviation is experiencing higher
than anticipated costs of commodities and overruns in other
areas of the budget and cannot absorb this increase within
the existing FY07 budget.
2) Anchorage Snow Haul - $503,000 - Safety issue as roads
are one lane, there is poor visibility associated with
large snow piles and pedestrians are forced to walk in road
as sidewalks are full of snow.
3) Anchorage Street Sweeping - $274,000 - Must be done per
EPA Air Quality Standards in the spring after snow melts
and roads are full of sand and chemicals creating air
quality issues for Anchorage residents.
4) Avalanche Artillery Purchase and Equipment Repair -
$26,000
5) Funding for Law Enforcement Officers at state-owned
Kodiak Airport - $20,000 - from March 1 through June 30 due
to Transportation Security Administration (TSA) non-
negotiable requirement. TSA has warned that flights in and
out of Kodiak will be prohibited if Law Enforcement
Officers not in place by March 1. Funds are needed to
decrease emergency response time to 15 minutes or less per
TSA rules. Current airport emergency response is greater
than 15 minutes which is unacceptable to TSA. The
department has no choice but to incur this expense.
LFD Notes:
1) The FY07 SEF rates were set during the budget
development and it was originally thought that Central
Region could absorb the increase. However, the Region did
not receive full funding of its FY07 request, so the costs
cannot be absorbed. In effect, this supplemental request is
due to commodity prices and overtime pay.
2) A funding increment request for Anchorage snow haul has
occurred the last several years with no funding
appropriated. Last year it was stated that the cost of each
snow haul is approximately $175,000. This request is for
$503,000 for two snow hauls.
3)Determined by the MOA that the state was not paying its
full share of the costs associated with the MOA sweeping
state roads.
5) This funding basically covers one quarter of the fiscal
year. A gov amendment may be expected for a full fiscal
year on the order of $80,00 for FY08.
$1,111,500 General Funds
$1,111,500 Total Funds
Ms. Slagle overviewed the request, and noted that one half of
this funding would be applied to Anchorage snow removal, due to
heavy snowfall in January. This request includes $26,000 for the
purchase of refurbished howitzers used for avalanche control,
which the State acquired from the Army at a reduced price.
8:47:19 AM
Section: 11(d)
RDU or component: Northern Region Highways and Aviation
Supplemental Need: Funding for Law Enforcement Officers at
state-owned Cordova Airport from March 1 through June 30
due to transportation Security Administration (TSA) non-
negotiable requirement. TSA has warned that flights in and
out of Cordova will be prohibited if Law Enforcement
Officers not in place by March 1. Funds are needed to
decrease emergency response time to 15 minutes or less per
TSA rules. Current airport emergency response time is
greater than 15 minutes which is unacceptable to TSA. The
department has no choice but to incur this expense.
LFD Notes: see note 5 in preceding line
$20,000 General Funds
$20,000 Total Funds
Ms. Slagle informed that due to changes in Transportation
Security Administration (TSA) regulations, law enforcement
officers were required to reduce their response time at all
"certificated" airports. The FY08 budget proposal contains a
request for approximately $1.2 million to address this
requirement, which will be met by contracting with local law
enforcement and the Alaska State Troopers.
8:48:13 AM
Section: 11(e)
RDU or component: Southeast Highways and Aviation
Supplemental Need:
1) $208,500 - Overtime resulting from extreme winter
weather. Personnel costs associated with plowing,
application of materials used for highways and airports
this winter.
2) $24,500 - Paint for road striping. Paint being ordered
for spring/summer application
$233,000 General Funds
$233,000 Total Funds
Ms. Slagle spoke to this request.
8:49:36 AM
Section: 11(f)
RDU or component: Marine Highway System - Marine Vessel
Operations
Supplemental Need: Unpaid vendors from FY06, including
state agencies - Total is $532,786.91
Outside Vendors: Chevron - $7,985.03; Glacier Family
Medicine - $208.00; Murray Pacific - $753.91; Worksafe -
$1,517.50; Sea Level Transport - $65,800.00; Southeast
Extinguisher Services - $240.00; Stanley - $327.25; Tyler -
$823.20; Otis - $4,035.34; Port of Bellingham - $1,233.30;
Petro Marine - Seward - $35,485.43
State Agencies:
State Equipment Fleet (DOT) for June - $46,652.33; Law
Bills (DOL) - $12,695.62; Retirement & Benefits (DOA) -
$25,196.00; Labor Training (AVTEC) - $9,300.00; Tok Ferry
Reservations (Commerce) - $53,200.00; Laundry Services
(Corrections) - $103,561.77; UAS Training - $87,990.00;
Southeast DOT Inventory Adjustment - $6,850.94; AMHS Travel
& Incidentals not processed - $69,931.29
$532,800 General Funds
$532,800 Total Funds
Ms. Slagle summarized this request.
8:51:14 AM
Section: 11(g)
RDU or component: Marine Highway System-Marine Vessel
Operations
Supplemental Need:
1) $3,600,000 - FY07 operating marine highway fund
anticipated cash shortfall. Collection of revenues is
anticipated to be $51.0 million and expenditures are
anticipated to be $54.6 million.
2) $300,000 - Chenega crew training after winter lay-up and
warranty overhaul. U.S. Coast Guard requirement to operate
vessel.
3) $3,900,000 - Under projected vessel operations costs for
vessel employee overtime and leave.
4) $2,300,000 - Fairweather unbudgeted winter service.
LFD Notes:
1) This supplemental request was expected. The agency
interpreted intent language as "live within authorization"
rather than "live within revenue". However, the intent of
the legislature was "if you can earn it, you can spend it."
AMHS had no reason to expect revenue at high as the level
of authorization, but spent as if the full authorized level
would be collected.
2) Upon lay-up of the Chenega, the crew was assigned to
other vessels. After lay-up, an entirely new crew was hired
which needed to be trained and certified by the USCG.
3) The cost model used for the FY07 business plan was
determined to be under projecting leave and overtime costs
for three vessels.
4) The Fairweather was budgeted for winter lay-up, however,
it was determined that service in southeast was at less
than the minimal level. Additional disregard for
legislative intent "to operate within their budget" is
demonstrated. S
See also fund transfers - Section 12(c)
$10,100,000 General Funds
$10,100,000 Total Funds
Ms. Slagle reviewed this request.
8:51:53 AM
RICHARD LEARY, Alaska Marine Highway System, Department of
Transportation and Public Facilities, attending via
teleconference from an offnet location, described his position
as Business Development Manager. He informed that the M/V
Columbia suffered an electrical fire in September 2006 that kept
it out of service for 21 weeks, and contributed to the Alaska
Marine Highway System's (AMHS) supplemental need.
8:53:00 AM
Mr. Leary disclosed that additional training costs were incurred
when the M/V Chenega relocated its home port from Ketchikan to
Cordova, as not all crew members relocated with the vessel.
Other costs were attributable to an "underestimation" of leave
costs and overtime expenditures.
8:54:32 AM
Co-Chair Hoffman asked if those "oversights" were corrected in
the FY08 requests submitted by the AMHS.
Mr. Leary affirmed.
8:55:17 AM
Co-Chair Hoffman observed that AMHS had "less than anticipated"
service use of the M/V Fairweather, and asked what changes had
been made in the operational plan to better utilize that vessel.
8:55:39 AM
JOHN TORGERSON, Acting Deputy Commissioner, Marine Highway
Operations, Alaska Marine Highway System, Department of
Transportation and Public Facilities, informed that operation
costs of the M/V Fairweather were not included in the FY07
budget, as the Murkowski Administration intended to decommission
that boat during the winter months. The FY08 budget request
includes funds for year-round operation of the vessel, thus
these supplemental requests should not be necessary the
following year.
8:56:26 AM
Co-Chair Hoffman noted that AMHS had come under great scrutiny
in recent years due to the high operational costs. He asked what
"belt tightening measures" had been considered to streamline
costs.
8:57:15 AM
Mr. Torgerson indicated that the budget amendments would reflect
an approximate $10.5 million reduction in operational costs,
which would be achieved via increased efficiency of the System.
8:57:57 AM
Co-Chair Hoffman asked if any union contracts would be
renegotiated in the coming year.
Mr. Torgerson replied that contracts with all three bargaining
units would expire June 30, 2007.
8:58:18 AM
Section: 11(h)
RDU or component: Capital
Supplemental Need: New: Cantwell Maintenance Station
Remodel and Electrical Repair
OSHA inspection found unsafe electrical and building code
violations. Electrical service is located in a low lying
area that is prone to flooding and the entrance/exit to the
building is through the boiler room. Department received an
OSHA compliance order for this and is mandated to fix the
violation no later than June of 2007.
$250,000 General Funds
$250,000 Total Funds
Ms. Slagle overviewed this request, adding that the building was
built in 1954, and is not "up to code".
8:59:43 AM
Section: 11(i)
RDU or component: Capital
Supplemental Need: New: Thompson Pass Refueling Station
OSHA inspection found fuel dispensing machines located
inside the maintenance station, creating an unsafe work
environment. Fuel dispensing machines must be moved outside
of building. Department received an OSHA compliance order
for this and is mandated to fix the violation no later than
November 2007. Funds are needed to begin work in FY07 in
order to comply with the deadline
$150,000 General Funds
$150,000 Total Funds
Ms. Slagle summarized this request.
9:00:38 AM
Section: 11(j)
RDU or component: Capital - Marine Highway System
Supplemental Need: Amend FY07 Project: Alaska Marine
Highway System - Vessel and Terminal Overhaul and
Rehabilitation
Unforeseen problems that needed to be repaired during
annual overhaul. Unforeseen problems included steering
systems, replacing corroded steel decking, life boat and
davit refurbishment, turbo charger repair, bow thruster
work and electrical generator repair. Without the repairs,
vessels would not have been certified for operations during
FY07. Repaired vessels include LeConte, Matanuska,
Columbia, Kennicott, Taku, and Fairweather.
$1,944,000 General Funds
$1,944,000 Total Funds
Ms. Slagle reviewed this request, characterizing the AMHS
vessels as an "aging fleet".
9:02:07 AM
Co-Chair Hoffman surmised that maintenance was an expenditure
which the Department could plan for and address through regular
operating appropriations.
9:02:49 AM
Ms. Slagle told that the FY08 proposed capital budget contained
a request for approximately $13.4 million for vessel overhaul
expenses and facility repairs. The Department was examining this
issue closely.
9:03:27 AM
Mr. Torgerson agreed that the Department could better manage its
finances by increasing its "anticipated capital receipts". He
explained that normal, anticipated State maintenance revealed
other mechanical problems that had not been foreseen or budgeted
for. Some of these mechanical issues were eligible for federal
monies, and the Department planned to use as much federal funds
as possible.
9:04:39 AM
Co-Chair Hoffman set forth that the Committee had funded in
excess of $25 million in supplemental requests for the AMHS in
the past five years. He understood this to be a capital item,
and asked the current capital request for this category.
9:04:58 AM
Mr. Torgerson was unsure, but assumed the "balance" was zero.
9:05:24 AM
Section: 11(k)
RDU or component: Capital - Airport Improvement Program
Appropriation
Supplemental Need: The Airport Improvement Program
appropriation will increase by $11,500.00 from $341,857.10
to $353,357.10 because of the allocation changes below:
Section: 11(l)
RDU or component: Capital - Airport Improvement Program
Allocation
Supplemental Need: Amend FY07 Project: Atka Airport
Extension and Resurfacing
Project includes runway extension and minor realignment, a
new taxiway and apron, paving of operational surfaces,
medium intensity runway lighting, a double bay snow removal
equipment building, other related improvements and land
acquisition. The department plans to advertise in April.
$4,000,000 Federal Funds
$4,000,000 Total Funds
Section: 11(m)
RDU or component: Capital - Airport Improvement Program
Allocation
Supplemental Need: New: Nightmute Airport Reconstruction
Project includes expanding the runway, constructing a
runway safety area, taxiway and safety area, relocating and
expanding the apron, constructing two single bay snow
removal equipment buildings, rehabilitating the airport
access road, and acquiring land for airport improvements.
The department plans to advertise in June.
$3,000,000 Federal Funds
$3,000,000 Total Funds
Section: 11(n)
RDU or component: Capital - Airport Improvement Program
Allocation
Supplemental Need: New: Nunapitchuk Airport and Access
Improvements
Project includes extending the runway, installing runway
and taxiway lights, improving the airport access road,
relocation of the apron, and constructing two single bay
snow removal equipment buildings. The department plans to
advertise in May.
$1,500,000 Federal Funds
$1,500,000 Total Funds
Ms. Slagle summarized these requests, and reported that the
Department would like to have funds available to advertise the
projects for bidding in the summer of 2007.
9:06:40 AM
Section: 11(o)
RDU or component: Capital - Airport Improvement Program
Allocation
Supplemental Need: Scope change from Stony River: Airport
Rehabilitation (ch. 61, SLA 2001, page 32, line 3) to Stony
River: Airport Relocation and Airport Improvements. Project
includes constructing a new airport south of the existing
airport to include a new runway, lighting, safety area,
apron, taxiway, support area, and an equipment storage
building.
LFD Notes:
$0.0 Federal Funds
$0.0 Total Funds
Ms. Slagle informed that this was a title change for a previous
appropriation.
9:07:33 AM
Fund Transfers
Section: 12(c)
RDU or component: Alaska Marine Highway System Fund
Supplemental Need: Eliminate the ending FY06 / beginning
FY07 negative fund balance of $10,732,284.58. The negative
fund balance is indicative of under collection of
unrestricted revenues to support the amounts appropriated
from the fund for operation of the system.
LFD Notes: This is a problem of cash vs. accrual. The
marine highway receives and expends cash revenue prior to
the year it is accrued (e.g. - received one year, services
rendered the next). This is legal because they have an
appropriation (expenditure authority) which allows them to
expend funding collected regardless of the year it is
accrued.
$10,732,300 General Funds
$10,732,300 Total Funds
Ms. Slagle explained that this request would address a negative
fund balance within the AMHS. The System utilizes "deferred
revenue," as ticket sales begin to generate monies in the winter
months for services that would not be rendered until the
following summer, which is the subsequent fiscal year. This
request would balance the fund.
9:09:29 AM
Co-Chair Hoffman asked for assurance that the Committee would
not be presented with a negative balance in the future.
Ms. Slagle responded that the underfunding issue was dependent
on the revenues collected.
Co-Chair Hoffman understood the source of revenue, and clairifed
that he was speaking to the management of the AMHS. He stated
that "the State of Alaska and this Committee need to be assured
that there is better management."
9:10:31 AM
Mr. Leary agreed that bringing a "level of conservatism" would
be beneficial to the System.
9:10:57 AM
Mr. Torgerson concurred that the AMHS needed to operate within
the appropriations granted by the legislature. He pointed to the
"extraordinary" circumstances the previous year as an
explanation for the supplemental request.
9:11:46 AM
Co-Chair Hoffman understood the legislature as a whole expected
better management of the AMHS. Absent increased efficiency, the
System would be in "jeopardy".
9:12:05 AM
Mr. Torgerson agreed, and would convey that information.
9:12:36 AM
Department of Administration
Section: 2(a)
RDU or component: Retirement and Benefits
Supplemental Need: The Division of Retirement and Benefits
contracted with a tax consultant to assist with obtaining
Internal Revenue Service code qualified status for the
defined contribution plan. The cost of this work was not
included in the original fiscal note for SB 141. This
request for a GF increase will be offset with a $80,000 GF
reduction from the Elected Public Officers Retirement
System (EPORS-($50,000)) and the Unlicensed Vessel
Participant Annuity Retirement Plan (UVPARP-($30,000))
allocations.
LFD Notes: Existing PERS/TRS reserve balances can't be used
for this purpose because expenditures relate to the new
Defined Contribution plan. The defined contribution reserve
fund has not yet built a significant reserve balance. (the
original SB 141 fiscal note required GF for the same
reason). Although the department links this increase to an
offsetting decrease in subsections 2(d), there is no
required link.
$80,000 Federal Funds
$80,000 Total Funds
ERIC SWANSON, Director, Division of Administrative Services,
Department of Administration, reviewed this request.
9:13:55 AM
Section: 2(b)
RDU or component: Retirement and Benefits
Supplemental Need: This request is for the purpose of zero
balancing the Division of Retirement and Benefits fund
allocations. Their cost allocation plan was reviewed by a
tax consultant, resulting in allocation changes that affect
the FY2007 budget.
LFD Notes: This section complies with the recommendation of
the federal cost allocation plan consultant.
($153,300) PERS
($133,700) TRS
$160,300 Bene Sys
$85,500 JRS
$85,400 NGNMRS
($44,200) FICA
$0.0 Total Funds
Mr. Swanson summarized this request as a "reallocation" of FY07
operating funds.
9:14:23 AM
Section: 2(c)
RDU or component: Retirement and Benefits
Supplemental Need: This is a fund source adjustment for the
PERS/TRS litigation appropriations made in sec.24(a) and
(b), ch. 82, SLA 2006, from the original $200,000 from each
retirement system fund to 72% and 28%, respectively, per
the division's cost allocation plan. The appropriation from
PERS changes from $200,000 to $288,000 and the TRS amount
changes from $200,000 to $112,000.
$0.0 Total Funds
Mr. Swanson overviewed this request, stating that it would
correct an error in allocation.
9:15:03 AM
Section: 2(d)
RDU or component: Unlicensed Vessel Participant Annuity
Retirement Plan
Supplemental Need: Plan adjustment for reduced current year
obligation.
LFD Notes: Although the department links this decrease to
an offsetting increase in subsection 2(a), there is no
required link.
($30,000) General Funds
($30,000) Total Funds
Section: 2(d)
RDU or component: Elected Public Officers Retirement System
Benefits
Supplemental Need: Plan adjustment for reduced current year
obligation.
LFD Notes: Although the department links this decrease to
an offsetting increase in subsection 2(a), there is no
required link.
($50,000) General Funds
($50,000) Total Funds
Mr. Swanson spoke to these requests, and related them to
subsection 2(a).
9:15:28 AM
Co-Chair Hoffman asked if a similar reduction would occur in
FY08.
Mr. Swanson affirmed.
9:15:46 AM
Section: 2(e)
RDU or component: Office of Public Advocacy
Supplemental Need: Current year caseload increase estimate
based on the agency's current expenditures and projections.
The agency was not fully funded in FY2007, based on their
FY2006 supplemental roll forward and caseload projections.
There are excess guardianship fees receipts in FY2007.
LFD Notes: OPA has frequently requested GF supplements in
the past. SDPR is collected from clients who have the
ability to pay, but OPA does not have authorization to
spend all receipts. This increases OPA's FY07 SDPR to
$406,500 (from $206,500). FY06 Supplements totaled
$2,568,000 ($2,550,000 GF + $18,000 Fed Rcpts).
$200,000 Statutory Designated Program Receipts
Mr. Swanson highlighted this request, noting that amendments to
the request were possible, depending on the case load.
9:16:31 AM
Section: 2(f)
RDU or component: Public Defender Agency
Supplemental Need: Current year caseload increase estimate
based on the agency's current expenditures and projections.
The agency was not fully funded in FY2007, based on their
FY2006 supplemental roll forward and caseload projections.
LFD Notes: The Public Defender Agency provides
constitutionally mandated defense services for indigent
clients and they are required by statute to accept all
Court appointed cases. The statewide increase in felonies
impacts this agency and they have little control over their
caseload. The FY06 Supplemental was $217,600 GF.
$240,000 General Funds
Mr. Swanson reviewed this request, likening it to the previous
supplemental request.
9:17:06 AM
Department of Education and Early Development
Section: 4(a)
RDU or component: School Finance & Facilities
Supplemental Need: Cost to pay trial work already provided
for the Moore v State lawsuit, which pertains to adequate
funding levels for school districts.
LFD Notes: Moore vs. State went to trial in October 2006.
The judge's decision is expected sometime later this year.
The Department notes that this will be the last funding
request unless the case goes to appeal.
$100,000 General Funds
MARK LEWIS, Director, Division of Administrative Services,
Department of Education and Early Development, summarized this
request.
Section: 4(b)
RDU or component: Mt. Edgecumbe Boarding School
Supplemental Need: Cost of one-time payment of the FY2005
Teachers' Education Association of Mt. Edgecumbe
arbitration award.
LFD Notes: This is a one-time payment for an arbitration
award issued on March 4, 2005. Although Mt. Edgecumbe is
currently paying the correct amount, these funds are for
those who were on the payroll at the time of the complaint.
$107,900 General Funds
Mr. Lewis overviewed this request, adding that the grievance
which resulted in this award regarded teacher preparation time.
9:18:31 AM
Section: 13
School Debt Reimbursement
Supplemental Need: Reduce total School Debt Reimbursement
by 4,855,900 from $93,935,000 to $89,079,100. Debt
Retirement Fund decreases by $5,565,600 from $66,935,000 to
$61,369,400 and the School Fund increases by $709,700 from
$27,000.000 to $27,709,700.
($4,855,900) Total Funds
Mr. Lewis characterized this request as a "true-up" for the
reimbursements that would occur in 2007.
Section: 12(b)
Fund Transfers
RDU or Component: Debt Retirement Fund
Supplemental Need: Reduce general fund capitalization
necessary to fund School Debt Reimbursement due to a
$709,700 increase in the amount of School Fund receipts
(cigarette tax) available and a decrease of $4,855,900 in
the amount needed for FY2007 School Debt Reimbursement.
($5,565,600) General Funds
Mr. Lewis reviewed this request, relating it to Section 13.
9:19:45 AM
Section: 14(b)(1)
Ratification
Supplemental Need: AR17720-04 Quality Schools
$51,621,560 General Funds
Section: 14(b)(2)
Ratification
Supplemental Need: AR17720-05 Quality Schools
$107,601,480 General Funds
Mr. Lewis spoke to these requests, adding that the ratifications
would correct errors in the accounting processes. He stressed
that the Department had made policy changes to improve its
accounting system.
9:21:27 AM
Department of Fish and Game
Section: 5(a) and (b)
RDU or component: Wildlife Conservation
Supplemental Need: Fund source switch for the Harlequin
Duck Population Dynamics project in Prince William Sound,
that is measuring the recovery from the Exxon Valdez Oil
Spill.
LFD Notes: The SDPR decrement is unrelated to the project-
it simply makes the supplemental appear to be a net zero.
The SDPR is unlikely to be collected.
$30,000 Exxon Valdez Oil Spill Funds
($30,000) Statutory Designated Program Receipts (SDPR)
$0.00 Total Funds
DAVID THOMSON, Administrative Manager, Division of Wildlife
Conservation, Department of Fish and Game, presented the
Department's request to the Committee.
9:22:38 AM
Department of Law
Section: 7(a)
RDU or component: Civil Division, Deputy Attorney General
Supplemental Need: Judgments and Settlements. Amount is
$92,509.85 as of February 1, 2007
$92,600 General Funds
Section: 7(b)
RDU or component: Civil Division, Deputy Attorney General
Supplemental Need: The amount necessary to pay additional
judgments awarded against the state before June 30, 2007.
$0
KATHRYN DAUGHHETEE, Director, Division of Administrative
Services, Department of Law, told that these requests had three
major components: an Alaska Psychiatric Institute (API) suit
brought by a patient, a Board of Fisheries case and a seafood
processor complaint.
9:24:24 AM
Co-Chair Hoffman inferred that the request was time sensitive
due to the interest the State would incur if the claims were not
paid in the current fiscal year.
9:24:37 AM
Ms. Daughhetee answered that interest was constantly accruing,
and had not made the "time sensitive" designation herself.
9:25:00 AM
Section: 7(c)
RDU or component: Administrative Services
Supplemental Need: FY 06 Unpaid Miscellaneous Bills -
$6,254.47. Funding to pay prior year bills not received in
time for payment by the department. Employee moving
expenses - $1,581.05; employee mileage reimbursement -
$47.89; consulting contracts - $4,200; hotel rooms for
employee travel - $349.28; copier maintenance - $76.25
$6,300 General Funds
Ms. Daughhetee summarized this request.
9:25:27 AM
Department of Natural Resources
Section: 8(a)(1)
RDU or component: Geological Development
Supplemental Need: Implementation of geologists class study
effective July 2006
LFD Notes: Sec. 6, Ch. 33, SLA 2006 requires that
reclassifications be paid from the amounts originally
appropriated.
*Funding for 4 PFT positions are requested in the FY08
Governor's budget for "Special Projects" and funded with
Interagency Receipts ($97,300) and DSPR ($276,100).
$79,400 General Funds
Section: 8(a)(2)
RDU or component: Geological Development
Supplemental Need: Implementation of geologists class study
effective June 2006
LFD Notes: Sec. 6, Ch. 33, SLA 2006 requires that
reclassifications be paid from the amounts originally
appropriated.
The federal grant could not be modified in time to reflect
increased FY07 costs
$114,800 General Funds
NICO BUS, Director, Division of Support Services, Department of
Natural Resources reviewed these requests, which would fund a
wage increase for the Department's geologists.
9:26:29 AM
Section: 8(b)
RDU or component: Capital
Supplemental Need: Funding from the Mat-Su Borough for
development of the South Denali Visitors Center
Interpretive Plan.
LFD Notes:
$30,000 will be spent in FY07
$70,000 will be spent in FY08
$100,000 Other Funds. Fund Source: Statutory Designated
Program Receipts
Mr. Bus overviewed this request.
9:26:48 AM
Section: 14(a)
Ratification
Supplemental Need: AR37313-06 Fire General Fund
$6,406,509,850 Total Funds
Mr. Bus spoke to this request.
AT EASE 9:27:30 AM/9:27:55 AM
9:27:57 AM
Mr. Bus continued that the request would fund expenditures for
fire suppression activity between May and June of 2006 after
existing appropriations had been exhausted.
9:28:29 AM
Department of Public Safety
Section: 9
RDU or component: Capital
Supplemental Need: The U.S. Department of Justice has
awarded the Council on Domestic Violence and Sexual Abuse a
Violence Against Women Act Stop grant of $5 million for
prevention of domestic violence and sexual assault in
Alaska. The funding will be used for services provided by
the Department of Law, Public Safety and Alaska Court
System and for victim services.
LFD Notes: The DCVSA sunset on June 30, 2006 and is in it's
1-year wind down period.
Funding will be distributed as follows:
Dept. of Law, 25% - $1,250,000
Dept. of Public Safety, 25% - $1,250,000
AK Court Systems, 5% - $250,000
Victim Services, 30% - $1,500,000
Discretionary, 15% - $750,000
$5,000,000 Federal Funds
CHRIS ASHENBRENNER, Interim Program Administrator, Council on
Domestic Violence and Sexual Assault, Department of Public
Safety, highlighted this request, noting that half of the funds
would be dedicated to "sexual assault response team enhancement
activities".
9:29:30 AM
Co-Chair Hoffman asked how the funds would be distributed
throughout the State.
Ms. Ashenbrenner replied that the funds would be allocated to a
fund a broad range of programs, including the enhancement of the
crime lab, an additional DNA expert, assistance in funding
attorneys to prosecute sexual assault cases, and to fund various
victim services programs throughout the State.
Co-Chair Hoffman asked if these were federal funds.
Ms. Ashenbrenner confirmed.
9:30:28 AM
Department of Revenue
Section: 10(a)
RDU or component: Tax Division
Supplemental Need:
1) $210,000 - Cruise tax Initiative implementation costs:
Three positions and contractual expenses for hearings for
public notice, legal advice on regulations, advertising,
training and development of online data filing system.
2) $45,000 - Corporate Income Tax Litigation
The Tax Division is working on a high-level corporate
income tax case with a potential for hundreds of millions
of dollars in settlement. Funding is requested to begin the
casework with the Department of Law. Additional funding
will not be required in FY2006.
LFD Notes:
2) Major corporate income tax lawsuit with one of Alaska's
largest tax payers, potential recovery in the $100s of
millions - this funding will pay the difference from part-
time to full time for a DOL attorney to prepare for this
case.
$255,500 General Funds
JERRY BURNETT, Director, Division of Administrative Services,
Department of Revenue, detailed this request, adding that
ongoing funding for the "Cruise Tax Initiative" was included in
the proposed FY08 budget.
9:31:49 AM
Senator Elton relayed that the Department of Environmental
Conservation had submitted a supplemental request related to the
cruise ship tax that was funded using Commercial Passenger
Vessel Environmental Compliance (CPVEC) funds. He asked why the
Department of Revenue was not able to fund this request with
CPVEC dollars.
Mr. Burnett explained that the $50 per passenger fee levied by
the initiative was "broken down" in to two categories, with $4
of the tax designated for environmental compliance, and the
remaining $46 deposited into the general fund. The Department of
Environmental Conservation would have access the monies
allocated to environmental compliance, whereas the Department of
Revenue must request funding from the general fund portion.
9:32:51 AM
Section: 10(b)
RDU or component: Permanent Fund Dividend Division
Supplemental Need:
1) $70,000 - Increased MyAlaska costs - DOA did not charge
for service before FY07. The Division did not know when
preparing the FY07 budget that DOA would be charging for
the service in FY07.
2) $60,000 - Department of Administration's (DOA) Office of
Administrative Hearings costs are higher than anticipated
due to high rates.
3) $220,700 - Data Loss and Recovery. Ongoing recovery
efforts are beyond division's capability to absorb.
$350,700 Other Funds Permanent Fund Dividend Funds
Mr. Burnett summarized this request, adding that the Department
recovered from the data loss incident to distribute 99.6 percent
of Permanent Fund dividends (PFDs) on time.
9:34:24 AM
Co-Chair Stedman inquired as to the fiscal impact of the data
loss on the dividends.
9:34:47 AM
Mr. Burnett replied that, based on the FY07 estimate, data
recovery costs would reduce the amount of the PFD by
approximately $0.33 to $0.35 per dividend.
9:35:16 AM
Section: 10(c)
RDU or component: Child Support Services
Supplemental Need: Unanticipated federal incentive funding
due to performance during FFY 05.
$181,700 Federal Funds Fed. Incentive Payments
Section: 10(d)
RDU or component: Child Support Services
Supplemental Need: Reduction in receipt supported services
funding due to unanticipated federal incentive funding due
to performance during FFY 05.
LFD Notes: The estimated carryforward of unexpended RSS
will be increased by this amount.
($181,700) Other Funds Receipt Supported Services
Mr. Burnett reviewed these requests for changes in funding
source, noting the availability of federal funds.
9:35:50 AM
Section: 10(e)
RDU or component: Alaska Mental Health Trust Authority,
Long Term Care Ombudsman
Supplemental Need: The Long Term Care Ombudsman's Office
(LTCO) receives its funding from DHSS/Senior and
Disabilities Services Administration, mostly from a federal
grant (Title 3 and Title 7). This year DHSS has reduced the
amount of the grant due to unavailable federal funding, so
additional general funds are necessary.
$38,300 General Funds
($38,300) Other Funds Interagency receipts
$0.0 Total Funds
Mr. Burnett overviewed this request.
9:36:24 AM
Co-Chair Hoffman asked the effect of this request on the FY08
budget.
Mr. Burnett responded that the budget amendments reflect an
increase in this component of $102,000 to replace "unrealizable
federal funds" for FY08.
ADJOURNMENT
Co-Chair Lyman Hoffman adjourned the meeting at 9:37:30 AM.
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