Legislature(2015 - 2016)SENATE FINANCE 532
03/19/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Fy 16 Budget Overview: Department of Environmental Conservation | |
| Fy 16 Budget Overview: Alaska Housing Finance Corporation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 26 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 19, 2015
9:05 a.m.
9:05:56 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:05 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Donny Olson
MEMBERS ABSENT
Senator Lyman Hoffman
ALSO PRESENT
Thomas Cherian, Director, Division of Administrative
Services, Department of Environmental Conservation; Bill
Griffith, Facilities Program Manager, Department of
Environmental Conservation; Bryan Butcher, Chief Executive
Officer and Executive Director, Alaska Housing Finance
Corporation, Department of Revenue; Les Campbell, Budget
Director, Alaska Housing Finance Corporation, Department of
Revenue.
PRESENT VIA TELECONFERENCE
Mark Romick, Director, Planning and Program Development,
Alaska Housing Finance Corporation, Department of Revenue;
John Anderson, Director, Research and Rural Development,
Alaska Housing Finance Corporation, Department of Revenue.
SUMMARY
SB 26 BUDGET: CAPITAL
SB 26 was HEARD and HELD in committee for further
consideration.
FY 16 BUDGET OVERVIEWS:
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
ALASKA HOUSING FINANCE CORPORATION
SENATE BILL NO. 26
"An Act making appropriations, including capital
appropriations and other appropriations; making
appropriations to capitalize funds; and providing
for an effective date."
^FY 16 BUDGET OVERVIEW: DEPARTMENT OF ENVIRONMENTAL
CONSERVATION
9:07:01 AM
THOMAS CHERIAN, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC),
showed a presentation dated March 19, 2015. He addressed
slide 2, "FY 2016 Endorsed Capital Request," and reported
that the department's FY 16 capital budget request was $64
million. He noted that 71 percent was from federal receipts
and other funds. He furthered that about 29 percent was
unrestricted general fund (UGF), primarily used as a match
for federal grants or local communities. He pointed out
that the amount was DEC's lowest capital request in the
last 10 years.
Mr. Cherian listed three capital requests from slide 2:
FY2016 Appropriations:
· Village Safe Water and Wastewater Infrastructure
Projects: $51,500,000
· Municipal Water, Sewage, and Solid Waste Facilities
Grants: $9,988,605
· Alaska Drinking Water Capitalization Grant - Subsidy
Funding: $2,526,300
9:09:00 AM
Mr. Cherian presented slide 3, "Historical Capital Budget
Comparison," which depicted DEC's budget from 2004 to the
2016 request, and broke down the funding into categories.
He noted that a substantial portion of past capital budgets
were comprised of federal dollars. He observed that the
budget had been declining, with the exception of 2009, when
the department received approximately $25 million from the
American Recovery and Reinvestment Act (ARRA) [a stimulus
package enacted by the 111th United States Congress in
February 2009].
9:09:55 AM
Mr. Cherian discussed slide 4, "FY 2016 Endorsed Capital
Request," and outlined the first budget request for $51.5
million:
· Village Safe Water and Wastewater Infrastructure
Projects
o First Time Service Projects
o Expansion, Upgrade, and Replacement of Existing
Service
· $42,250,000 Federal
· $8,750,000 General Fund Match
· $500,000 Statutory Designated Program Receipts
Mr. Cherian pointed out that the Village Safe Water (VSW)
projects were heavily funded with federal grants. He
detailed that the projects provided financial support for
water and sewer projects.
Co-Chair MacKinnon asked how to evaluate maintenance and
longevity when considering replacement of existing
services.
BILL GRIFFITH, FACILITIES PROGRAM MANAGER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, explained that most systems
were originally designed with a lifetime of approximately
30 years, although they were typically required to last
much longer due to lack of funding to replace major
components. DEC evaluated how systems were being maintained
in a number of ways. He related that when DEC made a new
funding request, efficacy and maintenance of systems was
considered and communities that could demonstrate an
adequate job were prioritized.
9:12:12 AM
Senator Bishop asked who designed the projects. Mr.
Griffith related that the projects were administered by
state-employed engineers at the VSW Program or by engineers
at the Alaska Native Tribal Health Consortium (ANTHC) who
were federally-employed or employed by the consortium. He
furthered that if projects were designed by the VSW
program, the design was contracted out to private sector
engineering companies. If the project was designed by
ANTHC, most of the design was done in-house.
Senator Bishop wondered how much local knowledge was
considered as part of the design process. He referenced a
community that got a new laundromat with more capacity than
was requested, resulting in higher costs for the community
than expected. He considered local knowledge to be an
important consideration in project development.
Senator Dunleavy asked what might happen if the request was
not funded. Mr. Griffith referred to a multi-year priority
list, and explained that if some of the projects were not
funded it would be possible that active construction would
stop until additional funds were available.
9:14:50 AM
Senator Olson asked about repairs that were planned, and
wondered what the effects would be if they were not funded.
He used the example of issues related to VSW projects to
repair systems after freezing, and wondered if villagers
would have to resort to using honey-buckets if the repairs
were not funded. Mr. Griffith related that most of the
freezing problems that occurred over the winter were
operational problems, and there were programs in place to
get the affected systems up and running. Those systems
needing major improvements and upgrades to keep running
would be affected by lack of funding. He continued that DEC
did have some projects that fit the criteria.
Senator Olson used the example of Mountain Village, where
an aging system froze and relegated the community to using
honey-buckets. Mr. Griffith believed that service had been
restored to the village, yet the system was tenuous and in
need of a number of upgrades to remain operational. He
stated that the department was working with the village and
it was a good example of a system that could not remain
running much longer without being upgraded.
Senator Olson asked if the problem was due to the original
system or lack of proper maintenance. Mr. Griffith stated
that Mountain Village had an older system that had exceeded
its design life. Parts of the system were well over 30
years old, including pipe in the ground that had frozen
multiple times and was not originally made to withstand
freezing, as well as older components and pumping systems.
The upgrades would include pipe replacement and other
improvements.
9:16:48 AM
Senator Dunleavy asked about life-safety issues in existing
infrastructure that may be in jeopardy, and wondered if the
department could detail project requests accordingly. He
thought it would be disappointing to encounter project
requests beyond life and safety issues. He referred to a
department that he had been working with, and thought that
it had done a good job prioritizing and down-sizing its
budget. He hoped that other departments would be able to
recognize the fiscal situation and do the same. He asked
for all departments to help the committee in identifying
what items were truly a "need" (items if unfunded would
result in catastrophe) and what items could wait.
Co-Chair MacKinnon pointed out that there was a 1 to 5
federal match for the safe water and wastewater projects.
She supported Senator Dunleavy's comments and recognized
that the federal government was $18 trillion in debt held
by other nations. She asked what would occur if the state
did not fund the approximately $9 million in general fund
(GF). Mr. Griffith stated that the majority of the federal
funds in the budget required state matching funds, and
would not be available otherwise. He qualified that there
was a portion of the funding that would come to the state
without the matching funds, but most were contingent.
9:19:50 AM
Senator Bishop asked if the federal funds would revert to
another state if Alaska did not take them. Mr. Griffith
related that the funds were appropriated to Alaska on the
condition of matching funds. Initially the funds would not
be available to another state, but congress would reexamine
them if there was no match.
Senator Bishop asked if the funds would be available the
following year if unmatched in the upcoming fiscal year.
Mr. Griffith was unable to forecast the outcome of not
matching the funds in FY 16.
Senator Olson asked if there had ever been a time when the
state was unable to match the federal funds. Mr. Griffith
replied in the negative.
Co-Chair MacKinnon asked about the timeline of funding
allocated to the state. Mr. Griffith relayed that there was
a five-year limit on the use of the federal funds, but he
would need more research to determine if there was a
limitation on providing the matching funds. He continued
that federal funds were made available on October 1, and
the state was expected to have the funds obligated through
state award within a year.
9:22:38 AM
Co-Chair MacKinnon asked about the yearly expectation
related to matching funds. Mr. Griffith related that the
federal government expected the state to begin to use
federal matching funds and spend them within a five-year
period, but there was no absolute percentage imposed for
state matching funds in subsequent years. He shared that
there was inquiry when funds were not begun to be used
within a two or three year time period.
Co-Chair MacKinnon asked about federal funds that did not
require a state match, and requested that DEC provide the
committee with the details. She additionally asked for a
list of budget request items that prioritized life-safety
issues, and included the amount of federal match if
required.
Mr. Cherian continued on slide 4 and explained that there
were two allocations requested within the VSW
appropriation; 60 percent (approximately $30 million for
first-time service projects, and the remaining 40 percent
(approximately $20 million) for expansion, upgrade and
replacement of existing service.
Mr. Cherian presented slide 5, "Rural Alaska Water and
Sewer," which provided more detail about the funding DEC
had been receiving from federal agencies. He pointed out
previous substantial funding from federal agencies that
declined from 2012 to 2014. He continued that within the
last 10 years, funding for rural Alaska sanitation projects
had declined by over 64 percent ($61 million).
Mr. Cherian discussed the ramifications of reduced funding
listed on slide 5:
Reduced funding means making choices:
· First time water and sewer service where feasible
· Upgrades or replacement of existing systems to
address significant health threats
· Stretching limited funds
o Prioritize for greatest need and biggest impact
o Extend life with targeted improvements, limited
scope
9:25:45 AM
Mr. Cherian moved to slide 6, "Alaska Water and Sewer
Challenge":
· Innovative international research and development
effort
· Goal is to significantly reduce the capital and
operating costs of in-home running water and sewer in
rural Alaska homes
· Recently launched Phase 2
· Focus is on "Decentralized" approaches
o Household based systems
o Water re-use technologies
· To date $4 million in State and Federal funds have
been secured, but there may be a future request to
support completion
Mr. Cherian explained the challenge the department was
facing with regard to increased need in combination with a
declining budget and greater costs. In response DEC had
embarked on a project to find alternatives and options.
Mr. Griffith emphasized the importance of the program,
citing recent studies that showed the significant
difference in communities that had running water compared
to communities that still had to haul water and use honey
buckets. He highlighted the health benefits of bringing
water and sewer to rural communities, and referred to
problems such as skin and respiratory infections that were
shown to be 5 to 10 times higher in communities without
piped water and sewer. While considering declining funds,
the department was trying to utilize available funding to
keep older systems running when possible, such as the
previously mentioned Mountain Village.
Mr. Griffith noted that the Alaska Water and Sewer
Challenge was a multi-year project, and was private sector
based. There were currently six teams competing to come up
with ideas on how to significantly reduce the capital and
operating costs of in-home running water and sewer in rural
Alaska homes. He thought there was potential use for some
of the approaches in other areas statewide, such as homes
with poor quality wells and soil that could not handle
septic systems. He stated there was currently $4 million
available from previously awarded state funds, as well as
federal funds that had been secured. He added that there
would possibly be a future request to support continuation
of the project.
9:28:16 AM
Mr. Cherian presented slide 7, "FY 2016 Endorsed Capital
Request," which he explained was for water and sewer
projects under the Municipal Matching Grants Program:
FY2016 Endorsed Capital Request
· Municipal Water, Sewage, and Solid Waste Facilities
Grants
o Juneau - Water Treatment Improvements, Phase II
o Homer - Water Storage and Distribution
Improvements
o North Pole - Sewer Improvements, Phase II
o Naknek-Sewer Relocation and System Upgrade
· $9,988,605 General Fund
Mr. Cherian presented slide 8, "Municipal Matching Grants,"
and detailed that the community match depended upon
population: 15 percent match for a population up to 1,000;
30 percent match for 1,001 up to 10,000; and a 40 percent
match for any population over 10,000. He explained that
projects were prioritized based on public health need, and
statewide priority.
Senator Olson discussed the high maintenance costs of rural
water and sewer systems, and asked about the Alaska Rural
Utility Cooperative. Mr. Griffith explained that the
cooperative had provided a good opportunity for some
communities that had struggled to operate and maintain
their systems. He furthered that there were 25 to 30
communities who had joined the cooperative, and it had made
a big difference and helped improve the operation and
maintenance of the systems.
Senator Olson clarified that he wondered whether the fees
collected helped in trying to maintain water and sewer
integrity in the communities. Mr. Griffith stated that
maintenance of the existing systems was the sole use of the
collected funds.
9:31:52 AM
Mr. Cherian moved to slide 9, "FY 2016 Endorsed Capital
Request," for the Drinking Water Loan Fund:
FY2016 Endorsed Capital Request
· Drinking Water Capitalization Grant - Subsidy
Funding
· $2,526,300 Alaska Drinking Water Loan Fund
· Federally required loan forgiveness
Mr. Cherian explained that the Drinking Water Loan Fund was
established with an annual federal capitalization grant. He
continued that there was 30 percent loan forgiveness for
communities with economic disadvantage, which was a
requirement for receiving the grant. The criteria for being
considered economically disadvantaged was a median
household income less than the state average, or an
unemployment rate higher than the state average.
9:33:00 AM
Mr. Cherian directed attention to slide 10, "FY 2015
Capital Appropriation Status Summary":
FY2015 Capital Appropriation Status Summary
· 295 total active DEC appropriations
o Non-Facility Construction: 11
o Village Safe Water: 180
o Municipal Matching Grant: 104
· Down from 499 in FY2014
· Anticipate another 160-200 will be closed after this
year
Mr. Cherian noted that there were currently 295 active DEC
appropriations, about 284 of which for water and sewer
projects. There were 11 non-facility construction projects
that included deferred maintenance for the state
environmental health lab in Anchorage, as well as some
appropriations for contaminated sites. He added that most
of the projects were completed, and the department was in
the final phase of closing out the documents.
Co-Chair MacKinnon reiterated the request for two pieces of
information for the committee: a list of federal funds that
did not require a match, and a refined list of requests
with specific public safety and health risks indicated.
9:35:04 AM
AT EASE
9:41:25 AM
RECONVENED
^FY 16 BUDGET OVERVIEW: ALASKA HOUSING FINANCE CORPORATION
9:41:32 AM
BRYAN BUTCHER, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, ALASKA HOUSING FINANCE CORPORATION (AHFC),
DEPARTMENT OF REVENUE, presented slide 1, and noted that
for the first time in a number of years, AHFC's dividend
had increased from $7.5 million in the current fiscal year
to $19 million for the upcoming fiscal year. He noted that
even though the current low interest rates limited what the
corporation could earn, increased activity had led to a 10
percent increase of the mortgage portfolio.
Mr. Butcher showed slide 2, "FY 2016 Capital "Budget
Program," and pointed out that a little over 50 percent of
the AHFC capital request was federal funds, and it was
much smaller than in years past. He recounted that the FY
15 capital budget was about $75 million in
AHFC dividend and state funds; whereas the FY 16 request
was for about $28 million, a little over one-third of
previous requests. He noted the absence of programs
including senior housing and major maintenance for 1,600
public housing units; explaining that they were multi-year
programs that would not go away if not funded in the
current year.
9:44:24 AM
Co-Chair MacKinnon inquired about the $2 million in Alaska
Permanent Fund Dividend funds (shown on slide 2) for use in
Rental Assistance for Victims, and wondered if it was an
appropriate use of the money. Mr. Butcher shared that the
decision to use the funds was made at the Office of
Management and Budget after AHFC had submitted its board-
approved budget.
LES CAMPBELL, BUDGET DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION, DEPARTMENT OF REVENUE, outlined the project
request on slide 3. He discussed the new Affordable Housing
Development Program, which had been added as an amendment
to the governor's budget. The program allowed AHFC to use
federal authority in order to be ready and able to develop
housing units when the opportunity arose. The federal funds
would be leveraged with other funds such as the Capital
Fund Program (from the Public Housing Program); Moving to
Work program fund flexibility in the operating budget; the
tax credit program; and other private sources. When
sufficient funds were realized, AHFC would advance
affordable housing projects through a bidding process and
form a production team with experience in multi-family
development as well as multi-layered financing packages.
Mr. Campbell continued that AHFC expected the developments
to be produced by private entities, and owned and managed
by the Alaska Corporation for Affordable Housing (a
subsidiary of AHFC), which would be the managing partner of
the housing units. He expected the funding to produce
between 60 and 100 units, depending on where they were
located within the state. He discussed expansion of Loussac
Manor, and the development of San Roberto and Mountain View
projects. He stated that AHFC had made $22.4 million in
Federal funds available; the commission did not currently
have all the monies, but expected it to come in when the
projects were ready to move forward. The funds would go
toward production of new affordable housing throughout the
state.
9:47:35 AM
Co-Chair MacKinnon asked how much federal receipt authority
AHFC currently had. Mr. Campbell stated that currently AHFC
had $57 million in the operating budget, most of which was
housing assistance payments. The rest of the funds were for
low-rent projects, Section-8 new projects, and operating
funds to manage the programs.
Mr. Campbell added that AHFC had been appropriated just
under $6 million in UGF for the San Roberto project; to
date $2 million had been expended and the rest was under
contract. The units would be completed later in the fall.
Mr. Campbell moved to slide 4, "Rental Assistance to
Victims - Empowering Choice Housing Program," explaining
that the rental assistance program currently resided in the
Department of Public Safety (DPS). The commission had a
reimbursable services agreement (RSA) in order to run the
program. He pointed out that the funding request was for $2
million from the Alaska Permanent Fund Dividend Criminal
Fund. He noted that it was the fourth year of the program,
and AHFC had allocated 254 vouchers on a referral basis. He
continued that the program was $182,000 under lease, and
AHFC expected the funds to be depleted by the end of the
year. Additionally, AFHC expected to deplete the second
year of funding as well, with the funding for 2015
remaining.
Mr. Campbell moved to slide 5, discussing the Housing Loan
Program, noting that it had an appropriation with two
allocations in it. The first allocation was for the Housing
Loan Program; to increase housing for teachers, and health
and public safety professionals in rural Alaska. He
explained that the allocation had $3,691,400 in corporate
dividends, and gave an incentive for communities to build
housing to bring professionals into the area to stay.
Currently there was about 289 units of teacher housing
being built.
9:50:38 AM
Co-Chair MacKinnon informed the committee that she had
received a letter from the Rasmuson Foundation, offering
$1.95 million in matching funds Housing Loan Program for
teacher, health, and public safety.
Senator Dunleavy stated that the committee would be asking
departments to provide a list of high-priority projects
with a life-safety component. He referred to a program
funded previously that dealt with services for victims of
violence, and suggested he would elevate it above the
Housing Loan Program.
Co-Chair MacKinnon noted that she had not had a chance to
follow up regarding the Rasmuson Grant; she thought the
committee would support funding for a one-to-one grant, but
the requested $3,691,400 was probably a little bit too high
for the Senate to support considering all other funding
priorities. She stressed the importance of prioritizing
budget requests to highlight items with a health and safety
considerations.
Senator Bishop surmised that the duplex model reflected in
the slide could be utilized to have a teacher housed on one
side and a Village Public Safety Officer (VPSO) on the
other side. Mr. Butcher stated that AHFC did not put out
Request for Proposals (RFPs) until funding was secured. If
the Housing Loan Program did not go forward in the current
year, it would not go away. He clarified that the housing
was offered for health professionals, teachers, and public
safety professions; and AHFC strove to make sure that the
community was working together to determine the need. As
the program had evolved, the need for the specified
occupations in rural Alaska had grown.
9:54:28 AM
Co-Chair MacKinnon asked if there was a prototype or
standardized design components for the housing, and noted
that after examining the proposals she noticed there had
been a unique design requested for every community. Mr.
Butcher related that there was no standardized design,
however frequently the same developer was used on multiple
projects. He pointed out the different building needs for
different areas of the state.
Co-Chair MacKinnon stated that for future presentations, it
would be important for AHFC to provide salient details on
alignment, standardization of process, and economies of
scale. She referred to a study being done by the
administration that asked engineers if the state could
benefit from having prototype schools or facilities. She
opined that a prototypical design would save the state
money and ensure energy efficiency. She spoke to meeting
the needs of communities quickly and efficiently. She used
the example of a school built in her district that utilized
$1 million in cost savings after using the design of
another recently built school.
9:57:22 AM
Senator Olson echoed the statements of Co-Chair MacKinnon,
and asked what percentage of housing was built specifically
for teachers versus VPSOs and others. Mr. Campbell did not
have the figures, but stated that AHFC had sent a list of
units built to the committee two weeks previously. He
thought there had been about 15 VPSOs, and the majority of
the remaining houses went to teachers with about 12 to 15
units for health professionals.
Senator Olson asked what the process was for initiating the
program. Mr. Butcher stated that there was a $25,000 pre-
development grant available for communities to get the
process going. AHFC worked with the communities that needed
help to work through the entire approval process. He
explained that there was a scoring process, and related
that the cost of the proposed unit factored in to the
score, as well as anything the community might bring to the
table (such as available land). He added that communities
did not always get approved for housing in the first or
even second year, but ultimately working with AHFC, they
would get the housing.
Senator Olson clarified that the first point of contact
would be AHFC. Mr. Butcher concurred.
Mr. Campbell added that there was no standard design on the
structures, but they were required to be energy efficient.
Co-Chair MacKinnon referred to her work on the Renewable
Energy Fund Advisory Committee, and thought that
standardized mechanical systems would be helpful for
maintenance and to extend the life of the properties.
10:00:18 AM
Mr. Campbell explained slide 6, "Housing Loan Program:
VPSO," explaining that the second allocation was for $1
million specifically set aside to provide for housing units
for VPSOs. He reported that as of June 30, 2014 there were
four units being used and another nine under construction.
Co-Chair MacKinnon asked if the FY 16 request had been
awarded. She added that 100 percent of the funds from prior
years had been expensed or encumbered.
Mr. Butcher remarked that AHFC had changed the way it
administered programs over the years; there was a time in
the 1990s when things were done in phases due to the budget
crunch. He recounted that as a result, there were
incomplete housing units for seniors in some communities;
and it had placed a great deal of pressure on the
legislature to appropriate funds for completing the
projects. After that time, AHFC did not administer projects
until all the money was in hand.
Mr. Campbell clarified that there was no additional funding
required to finish the prior years' projects.
Mr. Campbell showed slide 7, "Cold Climate Housing Research
Center," explaining that the project was formerly the
Energy Efficiency Monitoring Research Center. He relayed
that the request was for $1 million of corporate dividends,
for a designated grant to the Cold Climate Housing Research
Center in Fairbanks to conduct construction research
analysis and disseminate information to the public and
housing industry. He furthered that the center continued to
gather data and do analysis on its own and for AHFC. He
detailed that the prior budget showed $170,000 had been
expensed and $580,000 was encumbered and expected to be
spent by the end of June 30, 2015.
10:03:10 AM
Mr. Campbell discussed slide 8, "HUD Federal HOME Grant
Program," and shared that the program had funded 51 rental
projects, comprising 898 new units and 537 low-income
homes. The program assisted another 761 low-income
households to purchase homes and had provided 328
households with rental assistance to prevent homelessness.
He furthered that through the program, AHFC ran voucher
programs including the Prisoner Reentry Program as well as
a program for kids aging out of foster care.
Senator Dunleavy asked about the maximum income level to
qualify for the HUD program.
MARK ROMICK, DIRECTOR, PLANNING AND PROGRAM DEVELOPMENT,
ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE
(via teleconference), replied that the qualifying income
level was 60 percent of the median income based on the area
of the state and family size. He quantified that in the
community of Juneau, 60 percent of the median income for a
family of 4 would be $45,000, which would be the upper cap.
10:05:47 AM
Mr. Campbell continued discussing the HUD Federal Home
Grant Program, and noted that the request was for $750,000
in-state GF and $3,750,000 in federal receipts. He
specified that the program required the state match.
Co-Chair MacKinnon asked if $750,000 was the match amount,
or minimum. Mr. Campbell stated that $750,000 was the
specific match amount; the $3 million of the federal
receipts was AHFC's appropriation and the additional
$750,000 was recycling of old prior years program funding
that came back. Mr. Butcher added that the Municipality of
Anchorage received its own federal Home Grant Program
funds; AHFC administered the program for the entirety of
the state with the exception of Anchorage.
Mr. Campbell showed slide 9, "Federal and Other Competitive
Grants," which overviewed a request for $1.5 million in
state GF, and $3 million in federal receipts. He explained
that the program gave AHFC the opportunity to apply (when
funding became available) for funding that targeted housing
needs and supportive services of low income groups with
special needs. He explained that the match was not a solid
match but rather some programs required it, and some did
not.
10:08:09 AM
Co-Chair MacKinnon asked if AHFC could apply for extra
corporate dividends to use as matching funds for some of
the grants listed on slide 9. Mr. Campbell specified that
AHFC could use a prior year's appropriation of corporate
dividends if there was excess available.
Vice-Chair Micciche thought the HUD programs seemed very
specific and wondered if they were all separate from each
other due to the criteria of the applicants. Mr. Campbell
answered in the affirmative and mentioned a recent grant
for people with disabilities.
Vice-Chair Micciche expressed that he would like a specific
list of HUD programs. Mr. Campbell relayed that AHFC would
provide the information. He mentioned the Housing
Opportunities for Persons With AIDS (HOPWA) program.
10:09:43 AM
Mr. Campbell presented slide 10, "Competitive Grants for
Public Housing," explaining that it was similar to the
previous request, but was directed towards the tenants in
AHFC's public housing units. The grants included HUD funds
that became available for a particular use and frequently
had a match requirement; there was no specific grant, but
there was an ability to apply for them. He listed past
grant programs such as the Family Self-Sufficiency
Coordinators, Senior Services Coordinators, Resident
Opportunities and Support Services, and other programs that
dealt with public housing.
10:11:03 AM
Mr. Butcher relayed that the Competitive Grants for Public
Housing would be critical in the success of their Rent
Reform Program, a program which would help many public
housing residents out of the AHFC system into their own
apartments. He relayed that ten years prior, the average
length of stay in the public housing units was 3 years;
whereas currently the average length of stay was 8 years.
The rent reform program dealt with work-able residents to
help them transition out of public housing so that AHFC
could get to the thousands of Alaskans on the wait list. He
continued that the program would include a great deal of
self-sufficiency work, to ensure that individuals had the
skills necessary to help transition.
Co-Chair MacKinnon mentioned a recent conversation in the
Department of Revenue subcommittee on the operating budget,
which suggested that the federal government was not
allowing the state to move people out of assisted housing.
She wondered about the motivation for individuals to move
out of subsidized housing, and questioned as to how the
scenario was benefitting the state. Mr. Campbell relayed
that there was no time limit for seniors and people with
disabilities; however if individuals were work-able, people
went into the step program, which had a five-year time
limit. He detailed that each year of the step program the
rent increased and at the culmination of the time period,
the rent was at market rate.
Senator Dunleavy asked if at that point the individuals
were no longer subsidized by the state. Mr. Campbell stated
yes, the individuals would move off of the program. He
reiterated that AHFC was concerned with transitioning
people out of public housing in order to give others the
opportunity to get help.
Senator Dunleavy asked about AHFC's $19 million dividend
and wondered where it went. Mr. Butcher clarified that the
first $10 million went to debt service on previous capital
project bonds that had sold over the last 20 years. He
furthered that OMB had always requested the additional $9
million be used for capital project requests of the
corporation. He thought it was administratively easier for
AHFC to administer its own projects with its own funds.
10:14:42 AM
Mr. Campbell explained slide 11, "HUD Capital Fund Program"
(CFP), specifying that the program was a grant AHFC
received from HUD to help modernize or renew units in the
low rent program. He detailed that the funds had
flexibility under the Moving to Work Program, and AHFC had
used some in the past to contribute to Affordable Housing
Development Program expenses. He added that there was no
match required, and the request totaled $2.5 million in
federal receipts.
Mr. Campbell spoke to slide 12, "AHFC Energy Programs -
Weatherization," which detailed a $6.6 million request in
state GF and a $1.5 million request in federal receipts.
The funds would provide cost-effective energy improvements
to low income families. The program provided efficiencies
to upgrade, using the latest building science tools, and
targeted heat-loss areas of homes. The program was mostly
used in rural areas but was also available in urban areas.
He added that AHFC had about $33 million; $27 million from
the previous year's appropriation, and a carry-over of
about $6 million from prior awards that would be awarded
April 1, 2015. After that date, all of the prior year's
funds would be encumbered. Mr. Butcher added that the
timing had to do with the specific construction season in
rural Alaska. He continued that the FY 15 funds had not
currently been expended but would be in a few weeks.
Co-Chair MacKinnon asked if there was a legislative
representative on the AHFC board. Mr. Butcher responded in
the negative.
10:17:38 AM
Mr. Campbell moved to slide 13, detailing the second
project of the energy program - the Home Energy Rebate. He
elaborated that the FY 16 request was for $3 million in
corporate dividends, which would provide rebates to
homeowners as an incentive to making energy-efficient
improvements to their homes. He detailed that for existing
homes, the rebate amounts were determined by the point and
step increases that were achieved by the as-is and post
energy ratings of the dwelling. Funds were awarded based on
how many positive rating steps were achieved. The current
balance from prior years was close to $30 million,
[encumbered for the program participants utilizing the 18-
month time period to make energy improvements] which left a
balance of about $28 million that was available for the
future.
Co-Chair MacKinnon shared that she had participated in the
program and that the AHFC team had done an outstanding job.
She relayed that she lived in a small zero-lot-line, and
she completed the process with her neighbor. She benefitted
from the program and saw a 30 to 40 percent reduction in
her energy consumption. She discussed the different levels
of reimbursement and the choices available for
weatherization materials. She wondered if the program was
restructured and expanded so more individuals could qualify
for the rebate. Mr. Campbell relayed that AHFC had tweaked
the program, but it was essentially the same.
JOHN ANDERSON, DIRECTOR, RESEARCH AND RURAL DEVELOPMENT,
ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE
(via teleconference), spoke to minor adjustments to the
program, citing changes to the software used to administer
the program. He shared that the current program was a six-
star point system, but the base and points achieved to
reach the maximum rebate remained much the same.
Co-Chair MacKinnon asked how many steps the program had.
Mr. Campbell stated that there were five steps.
10:22:04 AM
Mr. Campbell presented slide 14, "Homeless Assistance
Program (HAP)" from the mental health bill. He pointed out
the $6 million request in state GF, as well as $850,000 in
GF/Mental Health funds and $850,000 in Alaska Mental Health
Trust Authority Receipts. He explained that the program
provided grants to local communities and agencies to
support programs designed to reduce homelessness, provide
services that prevent displacement, and assist the homeless
to transition back to permanent housing. The funds would be
comingled to achieve program goals. He furthered that there
were about 13,000 people affected by the funding in the
previous fiscal year. He cited a 2009 ten-year plan to
reduce homelessness in Alaska, which identified the
activities and cost savings to reducing homelessness in the
state.
Mr. Campbell continued to discuss slide 14, mentioning that
the most recent grantees had utilized HAP funds to expand
shelter facilities, develop supportive transition housing,
provide case management and rental assistance services, and
develop supportive housing for mental health trust
beneficiaries. The funds would be combined and administered
by AHFC; with a portion being used to support the planning
and operation of the Alaska Coalition on Housing and
Homelessness as well as the '211' statewide information and
referral system.
Mr. Campbell discussed the program monies, stating that
AHFC had program funds that were not expensed or encumbered
under contract, but ready to go out in the following 4 or 5
months. The funds had not been awarded, but were on
schedule to be awarded.
Mr. Campbell turned to slide 15, discussing the Beneficiary
and Special Needs Housing Program, with a request of $1.5
million in state GF/Mental Health funds. The program had
developed 195 housing units since FY 00, and was a
continuing program to serve populations with special
housing needs. He pointed out that there were many
similarities between the program and HAP; with the
Beneficiary and Special Needs Housing Program doing more of
the "brick and mortar" work as well as supporting
developments that were already in place.
10:25:38 AM
Senator Bishop asked if the program was individually site-
specific or could it be used for individuals with differing
needs.
Mr. Romick relayed that the program housing was not site-
specific, noting that the largest project had 46 units in
Anchorage. He furthered that the program helped a number of
different people; trust beneficiary groups were the program
target but it helped other disability groups as well.
Senator Bishop wondered if individuals cycled out of the
program facilities. Mr. Romick responded in the
affirmative.
10:27:34 AM
Senator Olson referred back to slide 14, and asked why the
fund source was the Alaska Mental Health Trust Authority
(AMHTA). Mr. Campbell stated that traditionally AHFC worked
with AMHTA on homelessness programs.
Senator Olson asked why AHFC did not utilize more funding
from the trust. Mr. Butcher suggested the question would
necessitate a conversation with AMHTA. He discussed
reductions and subsequent conversations with the trust
regarding priorities and where funds were best and most
responsibly spent.
Senator Olson commented that AMHTA might not be operating
under the same conception of the fiscal gap that the
legislature was. He referred to slide 13, and asked about
the aforementioned remaining balance of funds. He wondered
if the program, which was important but not income based,
could be suspended for a year. Mr. Butcher relayed that
AHFC gathered information in the fall regarding the number
of people who had started the initial energy ratings
process, trying to determine how many would not utilize the
program. He furthered that AHFC's first request
(internally) was about $20 million, and the amount was
reduced after more information was gathered.
10:30:41 AM
Co-Chair MacKinnon clarified that her earlier comments
regarding the energy rebate program did not indicate that
she supported the allocation being requested.
Senator Olson thought there were a number of members that
had benefitted from the program.
Co-Chair MacKinnon reiterated the blanket request for a
prioritized project list from all departments. She shared
that the governor and his administration had provided the
legislature with a significantly reduced capital budget,
however she foresaw the need for more cuts. She spoke to
the deficit and referred to future potential draws from the
state's savings; and asserted that it was up to the Senate
Finance Committee to make a recommendation to the
legislative body.
10:32:35 AM
Senator Dunleavy spoke to the federal and municipal
matching funds, and called for greater scrutiny of
spending. He discussed the debt ceiling, which been raised
34 times since 1980. He pointed out the federal
government's $18.2 trillion debt, which was $1 trillion in
1982. He pointed out that the current federal budget was
$3.9 trillion, with $3.3 trillion coming from taxes and the
remainder from borrowing. He summarized by saying that
example does not indicate the wisdom of an action.
SB 26 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:35:04 AM
The meeting was adjourned at 10:35 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 031915 Village Safety Water Multi Year Priority List.pdf |
SFIN 3/19/2015 9:00:00 AM |
SB 26 |
| 031915 DEC FY2016 Municipal Matching Grants List.pdf |
SFIN 3/19/2015 9:00:00 AM |
SB 26 |
| 031915 DEC Capital Budget Overview.pdf |
SFIN 3/19/2015 9:00:00 AM |
SB 26 |
| 031915 AHFC Budget Senate FIN - FY2016 - 3-19-15-view-version.pdf |
SFIN 3/19/2015 9:00:00 AM |
SB 26 |