Legislature(2015 - 2016)SENATE FINANCE 532
02/11/2016 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB138 | |
| SB167 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 138 | TELECONFERENCED | |
| *+ | SB 167 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 11, 2016
9:06 a.m.
9:06:08 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:06 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 Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Pat Pitney, Director, Office of Management and Budget,
Office of the Governor; Adam Bryan, Capital Budget
Coordinator, Office of Management and Budget.
SUMMARY
SB 138 BUDGET: CAPITAL
SB 138 was HEARD and HELD in committee for
further consideration.
SB 167 APPROP: SUPP/CAP/OTHER APPROPRIATIONS
SB 167 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 138
"An Act making appropriations, including capital
appropriations, reappropriations, and other
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
9:07:21 AM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the PowerPoint, "FY2017
Budget Overview Senate Finance Committee FY17 Capital and
FY16 Supplemental" (copy on file).
Co-Chair MacKinnon shared the details of the presentation.
Ms. Pitney looked at slide 2, "FY2017 Capital Budget":
Federal Match/Leverage
All funds: $1,079.9
UGF: $82.9
Energy and Housing
All funds: $52.9
UGF: $21.3
Maintenance
All funds: $92.1
UGF: $53.0
Legal Obligations
All funds: $11.0
UGF: $10.5
Initiatives and School Replacement
All funds: $27.8
UGF $27.7
TOTAL
All funds: $1,263.0
UGF: $195.3
Senator Dunleavy wondered how questions would be handled.
Ms. Pitney shared that the presentation would address each
line item.
Ms. Pitney addressed slide 3, "FY2017 Capital:
Administration":
Public Building Fund Buildings Deferred Maintenance
$4,000,000
Fund Source: Public Building Fund
Prior funding:
FY2016 -$3,000.0
FY2015 -$4,000.0
This project will continue addressing deferred
maintenance needs in the State Office Building,
the Alaska Office Building, the Public Safety
Building, the Douglas Island Building, the Dimond
Courthouse, the Atwood Building, the Fairbanks
Regional Office Building, the Linny Pacillo
Parking Garage and Office, the Palmer State
Office Building, the Nome State Office Building,
the Alaska Geologic Materials Building, and the
Community Building.
State Capitol Third Floor Improvements
$475,000
Fund Source: Statutory Designated Program
Receipts
Prior Funding:
None
Remodel and upgrades to the third floor of the
capitol building to include upgrading the
ventilation and other building systems. This
project utilizes funds from the Juneau Community
Foundation for the sole purpose of performing
improvements and upgrades to the Executive floor
(third floor) of the Capitol Building.
Department Total: $4,475,000
Ms. Pitney looked at slide 4, "FY2017 Capital: Commerce,
Community and Economic Development":
Project Title: Community Block Grants, 90/10Match
Amount: $6,060,000
Fund Source:
$6,000,000 Fed1002
$60,000GF/M 1003
Prior Funding: Annual
Community Block Grants encompass multiple
federally funded programs, enabling the
Department of Commerce, Community and Economic
Development (DCCED) to provide grants to
communities and non-profits that provide services
and/or benefits for low to moderate income
individuals.
Project Title: National Petroleum Reserve -Alaska
Impact Grant Program
Project Title: National Petroleum Reserve -Alaska
Impact Grant Pro
Amount: $3,502,626
Fund Source: National Petroleum Reserve Fund 1063
(Fed) AS 37.05.530
Prior Funding:
FY2016 -$3,502.6
FY2015 -$4,005.6
The National Petroleum Reserve -Alaska (NPR-A)
program provides grants to communities for public
facilities and services. Priority is given to
those communities directly or severely impacted
by the leases and development of oil and gas
within the NPR-A. Funding comes from the federal
government as a share of the funds received on
leases issued within NPR-A.
Project Title: AEA-Electrical Emergencies Program
Amount: $330,000
Fund Source: General Fund 1004
Prior Funding: Annual
The Electrical Emergencies Program provides
technical support when an electric utility has
lost or will lose the ability to generate or
transmit power to its customers and the condition
is a threat to life, health, and/or property. The
ability to respond to loss of power in
communities is essential to their health and
safety.
9:11:46 AM
AT EASE
9:12:26 AM
RECONVENED
Co-Chair MacKinnon looked at slide 3, and wondered if a
private party was donating money to the capitol
improvements. Ms. Pitney replied that the Juneau Community
Foundation was donating money for the improvements to
provide for upgrades to the third floor.
Co-Chair MacKinnon asked if a private donation was allowed.
She wondered if the donation was tax deductible. Ms. Pitney
replied that the donation was through the Juneau Community
Foundation, so she felt that the money was already tax
deductible when it entered the foundation. She assumed the
foundation felt it was consistent with enhancing the
community.
Co-Chair MacKinnon expressed concern as to whether the
donation was an appropriate place to receive the funds.
Vice-Chair Micciche wondered if the first $4 million was
GF. Ms. Pitney replied that the funding was provided
through the Public Building Fund. There were interagency
receipts for departments, based on the used space. She
furthered that sometimes the Public Building Fund was
capitalized. The funds were existing funds that could be
used for deferred maintenance.
9:14:35 AM
AT EASE
9:14:53 AM
RECONVENED
9:14:59 AM
Ms. Pitney discussed slide 5, "FY2017 Capital: Commerce,
Community and Economic Development":
Project Title: AEA-Renewable Energy Projects Round IX
Amount: $5,000,000
Fund Source: Renewable Energy Grant Fund 1210
(DGF/UGF) AS 42.45.045
Prior Funding:
FY2016 -$11,512.7
FY2015 -$22,843.9
This project helps Alaska achieve a 50 percent
renewable energy goal by 2025; and reduces and/or
stabilizes the cost of energy for communities
statewide. The Alaska Energy Authority's (AEA)
current request for applications for projects to
be funded in FY2017 resulted in $50 million in
applications being received for Round IX.
Project Title: AEA-Rural Power Systems Upgrades
Amount: $5,650,000
Fund Source:
$3,150,000 Fed 1002
$2,500,000 GF 1004
Prior Funding:
FY2016-N/A
FY2015 -$5,120.0
Electric utility systems are part of the basic
infrastructure of rural communities. The power
plant and distribution systems in rural
communities may not meet accepted utility
standards for safety, reliability, and
environmental protections. Due to high costs and
limited economies of scale, most local
communities cannot make the capital investments
needed to meet accepted utility standards
Project Title: AEA-Bulk Fuel Upgrades
Amount: $6,650,000
Fund Source:
$5,350,000 Fed 1002
$1,300,000 GF 1004
Prior Funding:
FY2016-N/A
FY2015 -$7,300.0
The Bulk Fuel program upgrades non-compliant bulk
fuel facilities in rural communities. Upgrading
bulk fuel facilities reduces the cost of energy
by reducing or eliminating fuel loss from leaks
and spills. By providing enough capacity for
current and planned needs, communities may
purchase fuel in larger quantities at a lower
cost per gallon.
Ms. Pitney highlighted slide 6, "FY2017 Capital: Commerce,
Community and Economic Development":
Project Title: AEA-Alternative Energy and Energy
Efficiency Programs
Amount: $1,200,000
Fund Source:
$1,000,000 Fed 1002
$200,000 GF 1004
Prior Funding:
FY2014 -$2,000.0
FY2013 -$4,800.0
This project is for the development of
alternative energy research and development,
resource assessments, regulatory and permitting
issues, outreach and stakeholder involvement for
alternative energy programs. Funding will be used
to meet a minimum 20 percent match that is
required for federal funding. The Alternative
Energy and Energy Efficiency Programs are
critical to the development of cost effective and
technically effective Renewable Energy,
Alternative Energy and energy efficiency
projects. These funds are also used as a match
for federal awards in conjunction with AEA's role
as the Statewide Energy Office.
Co-Chair Kelly queried how much of the fund was
unencumbered. Ms. Pitney agreed to provide that
information.
Ms. Pitney continued to address slide 6:
Project Title: Inter-Island Ferry Authority
Amount: $250,000
Fund Source: General Fund 1004
Prior Funding:
FY2016-$250.0
FY2015 -$500.0
Inter-Island Ferry Authority (IFA) provides daily
service between Ketchikan and Prince of Wales
Island (POW). Passenger revenue and other funds
are insufficient to cover their projected costs.
This transport link is a vital service to
Southeast Alaska. IFA is continuing to refine
their operations plan to maximize profits, reduce
expenses and minimize reliance on state funds.
This grant will allow the Inter-Island Ferry
Authority to continue their operations in FY2017.
Co-Chair MacKinnon queried the reason the item could not be
privatized, so the real cost of the transfer could be borne
by those utilizing the service. Ms. Pitney replied that it
was already privatized, and a significant majority of the
costs were covered by the passenger. She remarked that,
relative to the Marine Highway System, the Inter-Island
Ferry receipts cover most of the cost. The funding would be
a small subsidy to bridge the gap to provide the system.
Vice-Chair Micciche felt that the state should be growing
the authority to "pick up a bigger piece of the Marine
Highway System."
9:18:10 AM
Ms. Pitney stated that the following item would be changed
in the amendments.
Ms. Pitney addressed slide 7, "FY2017 Capital: Commerce,
Community and Economic Development":
Project Title: Lower Kuskokwim School District -Bethel
Regional HS Central Kitchen and Multipurpose Addition
Amount: $7,129,765
Fund Source: General Fund 1004
(Pending Amendment to DEED with REAA Fund)
Prior Funding: None
This project provides for an addition to the
Bethel Regional High School built in 1971. The
high school complex totals 78,316 gross square
feet. This addition will provide centralized
kitchen and food services for the Bethel schools
population of approximately 1,300 students, as
well as a multipurpose room, restrooms, and
storage areas.
Co-Chair MacKinnon wondered why the state would contribute
to an insured building. Ms. Pitney replied that the
building was insured. The building would be replaced as a
school. She stated that the school replacement would not
include the central kitchen. The kitchen would be used for
all schools in Bethel.
Co-Chair MacKinnon wondered if the project was put ahead of
other projects. Ms. Pitney replied that it was put ahead of
other projects, because the kitchen no longer exists.
Ms. Pitney continued to discuss slide 7:
Project Title: Seward -Flood Protection Scoping and
Feasibility Study
Amount: $300,000
Fund Source: General Fund 1004
Prior Funding: None
Over the past 110 years, there have been multiple
attempts to build and maintain a diversion
channel and tunnel in Seward, Alaska. The Army
Corps of Engineers have historically had the
biggest role in this effort. At issue is that the
current tunnel is in need of significant repair,
but is now considered inadequate to handle flood
waters. So, during heavy rain, there is a
significant flooding threat to the town. Rather
than continuing to repair an inadequate system,
the city and the Army Corps of Engineers are
partnering to evaluate alternative ways to
address the flood threat.
Department Total: $36,072,391
$12,069,765 UGF
$5,000,000 DGF
$19,002,626 Fed
Ms. Pitney looked at slide 8, "FY2017 Capital: Fund
Capitalization":
Project Title: AEA-Emerging Energy Technology Fund
Amount: $1,250,000
Fund Source:
$250,000 Fed 1002
$1,000,000 GF 1004
Prior Funding:
FY2014 -$2,000.0
FY2013 -$1,700.0
The Emerging Energy Technology Fund (EETF) grant
program was created in 2010 and competitively
funds emerging energy technologies (renewable,
efficiency, storage, transmission, etc.) for
testing and implementation in Alaska. The program
promotes the expansion of energy sources and
technologies available to Alaskans with the
intent of lowering energy costs.
Senator Dunleavy looked at slide 7, and noted that there
were numerous flood affected areas in the state. He
wondered why the specific project was selected. Ms. Pitney
replied that the project was currently under way. She
furthered that there was a consistent flood damage every
year.
Senator Dunleavy wondered if it was a feasibility study, or
part of the repair process. Ms. Pitney replied that the
parties were engaged to move forward on the project.
Senator Dunleavy asked why this was the only flood
prevention project. He queried the type of proposed study.
Co-Chair MacKinnon requested documentation on the project.
Senator Dunleavy remarked that there were many constituents
who were concerned about the chosen project.
9:23:41 AM
ADAM BRYAN, CAPITAL BUDGET COORDINATOR, OFFICE OF
MANAGEMENT AND BUDGET, replied the he had the project
detail. He stated that the federal process required scoping
effort followed by a feasibility study then design and
construction. He stated that funding for the project would
be used to conduct the scoping and feasibility study, and
other preconstruction requirements. The funds would help
the City of Seward match the federal requirements from the
Army Corps of Engineers.
Senator Bishop requested information about state funded
flood repair in the last ten years from GF.
Senator Olson remarked that the studies were customary.
Senator Dunleavy restated that he would like to know more
information about choosing the specific project. Ms. Pitney
replied that the project was based on the current federal
involvement. The City of Seward was ready to take advantage
with the federal partnership, consistent with the federal
matching approach in capital budgeting.
Vice-Chair Micciche noted that the funding was for a stage
of the project. He hoped that there would be funding
available for the Mat-Su flooding issues. Ms. Pitney
replied that the community must have the Corps of Engineers
ready and the timing of the money.
Co-Chair MacKinnon queried the reason that the project was
not funded fully by federal funds. Mr. Bryan agreed to
provide the federal dollar match information.
Co-Chair MacKinnon requested the exact state match. Ms.
Pitney responded that the funds would assist the community
to meet their overall match requirement. She agreed to
provide further information.
Co-Chair MacKinnon wondered whether Seward had a sales tax.
Ms. Pitney did not know.
Vice-Chair Micciche clarified that the request was for some
details related to the project.
9:28:47 AM
Senator Olson wondered why the Kuskokwim School was not
initially included with the other RAA projects. Ms. Pitney
replied that the fire occurred late in the budget
development stage. She stressed that the kitchen was not
high on the list before that time.
Co-Chair MacKinnon wondered if that city had a sales tax.
Ms. Pitney replied in the negative. Senator Hoffman
clarified that Kuskokwim had a sales tax.
Ms. Pitney discussed slide 9, "FY2017 Capital:
Corrections":
Project Title: OSHA Electric Arc Flash Assessment and
Remediation
Amount: $1,800,000
Fund Source: General Fund 1004
Prior Funding: None
Department of Corrections' facilities require
electrical component assessments and potential
upgrades and remediation to comply with code
requirements and improve worker safety.
Occupational Safety and Health Administration
(OSHA) electrical changes were issued in regard
to transmission line electrical requirements.
There is code compliance issues related to the
work covered under National Fire Protection
Association (NFPA) 70E Electrical Work Practices.
Project Title: Annual Safety and Security Maintenance
and Repair
Amount: $1,000,000
Fund Source: General Fund 1004
Prior Funding:
FY2014 -$1,000.0
FY2013 -$1,000.0
This project will replace obsolete, outdated, and
inefficient equipment that is essential to
security, life safety, food service, laundry,
medical, record storage and maintenance equipment
at all correctional facilities and
probation/parole offices. This project will also
provide for essential renewal, replacement,
renovation, remodeling and repair of electrical,
mechanical, roofing, walls, fire and life safety,
security, structural, food services, pavement and
site drainage systems at all correctional
facilities as needed. This work is required to
enable continued safe, secure and efficient
operation of the 24-hour incarceration
facilities.
Department Total: $2,800,000
Vice-Chair Micciche looked at slide 8, and wondered whether
the investments in emerging energy should be suspended. Ms.
Pitney replied that prior investments in emerging energy
had been significant. She stated that continuing to fund
the effective programs would help to match the federal
funds.
9:32:51 AM
Co-Chair MacKinnon wondered whether the federal government
required for additional dollars, or a one-to-one match to
leverage. Ms. Pitney replied that the funding was not a
direct match, but rather a leverage capacity.
Co-Chair MacKinnon surmised that GF was unnecessary. Ms.
Pitney replied that without GF, it was unlikely to attract
the federal funds.
Co-Chair MacKinnon shared that she and Senator Hoffman had
some conversations about AEA and emerging energy
technologies, and may have a different solution for the
committee to consider.
Ms. Pitney displayed slide 10, "FY2017 Capital: Education
and Early Development":
Project Title: FY2017 Capital: Education and Early
Development
Amount: $11,283,533
Fund Source: General Fund 1004
Prior Funding:
FY2016 -$2,623.7
FY2015 -$10,867.5
The FY2017 Major Maintenance Capital Improvement
Projects funding will support projects 1 through
3 on the November 5th, 2015 Major Maintenance
Capital Improvement priority list.
1 -$185,944 Kake Schools Boiler Replacement
2 -$49,135 Petersburg Middle/High School Primary
Boiler Replacement
3 -$11,048,454 Bristol Bay School Energy Upgrades
and Renovations
Project Title: School Construction Grants (AS
14.11.005
Amount: $18,105,925
Fund Source: General Fund 1004
Prior Funding: FY2016 -$43,237.4 (Kivalina)
Two School Construction appropriations will fund
project #1 on the November5th School Construction
Capital Improvement Project priority list, and
complete the funding for the Kivalina replacement
school according to the FY2016 Department of
Education and Early Development Final School
Construction List Eligible Amount.
-$10,867,503 Kachemak Selo New K-12 School
Construction
-$7,238,422 Kivalina K-12 Replacement School -
Kasayulie
Senator Dunleavy queried more information about why Bristol
Bay would receive direct help from the state, as it is not
an attempt to skirt the bonding moratorium.
Co-Chair MacKinnon asked for Senator Dunleavy to restate
his question.
Senator Dunleavy felt that the project was an attempt for a
municipality to skirt the bonding moratorium.
Co-Chair MacKinnon shared that suspending the school
capital debt reimbursement was at a time when Bristol Bay
was in the process of moving forward a bond proposition,
which wanted to request the state to match.
Ms. Pitney agreed to provide information. She stated that
the projects were rated on the school major maintenance
list, that much meet criteria. They were rated through a
strict scoring system, and these were the first three on
the criteria list.
Co-Chair MacKinnon hoped that the administration would
provide further funding of an additional $7.2 million for
Kivalina.
9:38:26 AM
Senator Hoffman shared that the funds were not for school
construction. He remarked that rural Alaska had two lists:
school construction and maintenance. He stated that the
project was from the major maintenance list, but did not
apply to the school construction moratorium.
Co-Chair MacKinnon stressed that it was the committee's
responsibility to not engage in individual geographic
"fights" to advocate constituents in an effort to make
decisions to positively impact all of Alaska. She hoped
that communities that were able to meet their needs could
provide for their own needs.
Senator Dunleavy remarked that his questions reflected the
questions from his constituents.
Vice-Chair Micciche felt that it was important to examine
whether the communities could cover the costs of those
projects.
Senator Bishop remarked that school construction major
maintenance required boiler and heating upgrades. He
encouraged the administration to utilize standardized
systems. He remarked that there could be a universal
training to develop continuity within all of the schools.
Co-Chair MacKinnon shared that Legislative Budget and Audit
managed a contract in the year prior to examine
standardization. The contractor recommended that it would
not work for Alaska in the building design. She felt that
standardization would save money and would allow people to
maintain the units, because one state employee could
maintain units at a greater level of efficiency.
Ms. Pitney noted that there was $221 million request on the
school major maintenance list for 96 projects across the
state. She stressed that the budget addressed the top three
of 96 projects.
9:45:46 AM
Ms. Pitney discussed slide 11, "FY2017 Capital: Education
and Early Development":
Project Title: Mt. Edgecumbe High School Deferred
Maintenance
Amount: $1,000,000
Fund Source: $1,000,000
Prior Funding:
FY2016 -N/A
FY2015 -$1,700.0
This project partially funds the next project on
the Mt. Edgecumbe High School deferred
maintenance list: Emergency Generator and Switch
Gear Installation. The Mt. Edgecumbe High School
deferred maintenance backlog contains 11 projects
totaling $16,451,000.
Department Total: $30,389,458
Co-Chair MacKinnon wondered how the request would affect
the new swimming pool. She also queried the operating costs
of Mt. Edgecumbe. Ms. Pitney replied that the annual
operating costs for Mt. Edgecumbe would be approximately
$750,000. She explained that Sitka was working to draft a
plan that would take some responsibility from the state.
Co-Chair MacKinnon queried the possibility of suspending
the project, to eliminate the ongoing operating expense,
because of the possibility of emergencies in the future.
Ms. Pitney replied that the project was funded general
obligation bonds, as was moving forward.
Co-Chair MacKinnon wondered if the other pool in Sitka
would be closing. Ms. Pitney replied that she did not
believe the other pool would be closing. She stated that
the pools were in different locations serving different
customer bases.
Co-Chair MacKinnon queried the size of Sitka. Ms. Pitney
replied that Sitka was a small community, but she did not
know the exact size.
Co-Chair MacKinnon understood that the current
administration did not participate in the appropriation for
the second swimming pool in Sitka nor the bond project to
move that project forward. She stressed that the state was
in a difficult time, and she was attempting to explore
options to save money. She remarked that swimming pools
were valuable in communities for safety reasons.
Senator Dunleavy commented that the residents may be
concerned about paying taxes, because of a brand new
swimming pool.
Co-Chair MacKinnon remarked that she supported the bond
package, because there was a highway project in her
community. She stressed that Alaska was in a much different
budget situation than it was at the time of the bond
package adoption.
9:50:41 AM
Ms. Pitney looked at slide 12, "FY2017 Capital:
Environmental Conservation":
Project Title: Village Safe Water and Wastewater
Infrastructure Projects
Amount: $51,500,000
Fund Source:
$42,250,000 Fed 1002
$8,750,000 GF/M 1003
$500,000 SDPR1108
Prior Funding: Annual
This project provides financial and technical
assistance to rural communities to plan, design,
and construct water and sewer system
improvements. 60 percent of the funding will
provide first-time service to communities while
40 percent will be used for expansion, upgrade,
and replacement of existing service.
Project Title: Reapprop for Municipal Water, Sewage,
and Solid Waste Facilities Grants
(AS 43.03.030)
Amount: $4,187,601
Fund Source: General Fund 100
Prior Funding:
FY2016 -$9,988.6
FY2015 -$14,558.2
This project provides funding for grants to
larger communities to plan, design, and construct
drinking water and sanitation facilities and the
associated operating costs of the Facility
Construction component within the Division of
Water. FY2017 grants will be funded through
reappropriations of the remaining balances of
completed projects.
Co-Chair MacKinnon queried the required match, versus what
was represented on slide 12. Ms. Pitney clarified that the
municipal water and sewage was community based grants,
which appropriated completed projects back into the same
program to pick up the next highest priority. She explained
that, unlike the Village Safe Water Act, the project did
not have the match.
Co-Chair MacKinnon wondered if the project used Spill
Prevention and Response (SPAR) funds. Ms. Pitney responded
that that the funds were statutory designated program
receipts.
Co-Chair MacKinnon queried the source of the receipts. Ms.
Pitney deferred to Mr. Bryan
9:52:34 AM
AT EASE
9:56:48 AM
RECONVENED
9:56:55 AM
Ms. Pitney explained that the Village Safe Water
infrastructure projects were prioritized and rated similar
to the school major maintenance projects. She agreed to
provide that list and to identify the projects that had
designated program receipts.
Co-Chair MacKinnon wondered if a community "can" match
rather than "shall" match, so the state provided the
statutory receipts so the community "can" contribute. Ms.
Pitney replied that it was project-dependent. She stated
that it was more likely project-specific, rather than a
requirement for every project.
Vice-Chair Micciche wondered how the village safe water and
waste water infrastructure project fits with the drinking
water capitalization grant. He asked whether both were
attempting to meet an Environmental Protection Agency (EPA)
directive, or were they not related. Ms. Pitney replied
that there were two different programs with different
requirements.
Co-Chair MacKinnon noted the great need for the programs in
rural Alaska. She queried an audit to examine whether or
not the state was repeating itself by going back into
communities to reinvest in the same types of projects. Ms.
Pitney deferred to the Department of Environmental
Conservation (DEC).
Vice-Chair Micciche noted that there was a 0.95 cent tax
into the SPAR fund, per gallon of motor fuel. He shared
that he would be researching the possibility of covering
the cost with the extra $75 million that was raised with
that recent tax on contaminated sites. He shared that the
intention of growing the fund was for the department and to
cover some of the orphan sites.
Ms. Pitney highlighted slide 13, "FY2017 Capital:
Environmental Conservation":
Project Title: Drinking Water Capitalization Grant -
Subsidy Funding
Amount: $2,526,300
Fund Source: Alaska Drinking Water Fund 1100
(Other)
Prior Funding: Annual
This project provides federal funding for the
Alaska Drinking Water Fund (ADWF) loan program to
meet an Environmental Protection Agency
requirement. The federal capitalization grant for
the ADWF program requires the department to issue
subsidies (a loan forgiveness process) in
addition to traditional low-interest loans. The
ADWF program functioned strictly as a loan
program until FY2011 when the subsidy provision
was added to the federal budget. In order to
implement this provision, an appropriation is
necessary to properly record the loan forgiveness
payment as an expense in ADWF.
Project Title: Statewide Contaminated Sites Cleanup
Amount: $1,000,000
Fund Source: General Fund 1004
Prior Funding:
FY2014-$3,000.0
FY2013 -$2,000.0
Contaminated sites owned by the State and
contaminated sites without any known or capable
responsible party ("orphan" sites) can only be
addressed with State general fund resources.
These contaminated sites pose a public health
risk, and cannot be redeveloped without
appropriate cleanup of the known contaminants.
For many local communities, state-owned and
"orphan" contaminated sites may present barriers
to business development and economic growth
Department Total: $59,213,901
$13,937,60 1UGF
$3,026,300 Other
$42,250,000 Fed
Senator Bishop queried a list of the targeted orphan sites
targeted for the $1 million. Ms. Pitney agreed to provide
that information.
10:01:49 AM
Ms. Pitney looked at slide 14, "FY2017 Capital: Fish and
Game":
Project Title: Fairbanks Regional Office Electrical,
Telephone System, and Repairs
Amount: $350,000
Fund Source: General Fund 1004
Prior Funding: None
The Fairbanks Regional Office compound is the
largest owned facility within Fish and Game. This
project includes replacement, repair, and
upgrades to existing electrical system and
critical upgrades to existing telephone system
Project Title: Facilities, Vessels and Aircraft
Maintenance, Repair and Upgrades
Amount: $1,000,000
Fund Source: General Fund 1004
Prior Funding:
FY2016-N/A
FY2015 -$500.0
This annual project funds repair, maintenance and
renovation of department facilities statewide as
well as vessel and aircraft repair and
maintenance.
Project Title: Sport Fish Recreational Boating and
Angler Access
Amount: $3,000,000
Fund Source:
$2,250,000 Fed 1002
$750,000 GF/M 1003
Prior Funding: Annual
This project allows the Division of Sport Fish to
continue to construct and upgrade recreational
power boating and sport fish angler access
facilities statewide using Sport Fish Restoration
apportionment funds comprised of 75 percent
federal assistance and 25 percent non-federal
match. Projects include boat launches, mooring
floats, parking lots, restrooms, fish cleaning
facilities, and other services
Department Total: $4,350,000
$2,100,000 UGF
$2,250,000 Fed
Co-Chair MacKinnon wondered if DFG could provide a list of
the date of purchase for the aircrafts and vessels. Ms.
Pitney agreed to provide that information.
Vice-Chair Micciche queried further detail about the $3
million with $750,000 in GF. He wondered if it was for the
Kasilof parking lot. He felt that parking lot would be
nice, but did not know if the state could afford the lot at
the current time. Ms. Pitney agreed to provide that
information.
Ms. Pitney looked at slide 15, "FY2017 Capital: Office of
the Governor":
Project Title: Primary and General Elections
Amount: $3,814,000
Fund Source:
$3,694,000 GF 1004
$120,000 Election Fund 1185 (Other)
Prior Funding:
FY2015 -$3,693.8
FY2013 -$3,693.8
(Prev. Operating)
This project will cover the cost of the 2016
primary and general elections. General and
primary elections occur every two years. This
project also includes $120,000 in Help America
Vote Act funding that is held in the Election
Fund to cover the election year costs of the
Toyukak settlement. This project will pay for
language translation services to provide voter
information in audio and written form in six
additional Native language dialects.
Project Title: Criminal Justice Reform and
Reinvestment -Placeholder
Amount: $5,000,000
Fund Source: General Fund 1004
Prior Funding: None
Placeholder for reform and reinvestment
recommendations yet to be decided but likely to
be proposed via reports from the Alaska Criminal
Justice Commission.
Department Total: $8,814,000
$8,694,000 UGF
$120,000 Other
Co-Chair MacKinnon suggested that the project be included
in the operating budget. She felt that there should be
clarity about where the projects should be assigned.
10:07:37 AM
Ms. Pitney discussed slide 16, "FY2017 Capital: Health and
Social Services":
Project Title: Deferred Maintenance -Pioneer Homes and
Non-Pioneer Homes
Amount: $2,834,345
Fund Source: General Fund 1004
Prior Funding:
FY2016 -N/A
FY2015 -$6,857.6
Deferred maintenance projects for Pioneer Homes
statewide, and the non-Pioneer Homes facilities
maintained by the department. The department is
responsible for operating and maintaining the six
Pioneer Homes throughout the state, and 34 other
facilities including public health centers,
laboratories, youth facilities and the Alaska
Psychiatric Institute. Pioneer Homes deferred
maintenance backlog contain 89 projects for a
total of $13,030.3. Non-Pioneer Homes backlog
contain 171 projects for a total of $11,120.7.
-$1,417,500 Pioneer Homes
-$1,416,845 Non-Pioneer Homes
Project Title: Emergency Medical Services Match for
Code Blue Project
Amount: $500,000
Fund Source: GF Match 1003
Prior Funding: Annual
This project supports communities' purchase of
essential emergency medical response equipment.
The Code Blue Steering Committee was formed to
identify and purchase critical Emergency Medical
Services (EMS) equipment and ambulances for
agencies around the state, particularly in rural
locations. For FY2017, $500,000 is required to
match federal, local and private funds to be
allocated for all seven regional offices for
needs such as: ambulances, heart monitors,
training equipment, and communications equipment.
One dollar of state general funds leverages
greater than four dollars in other fund sources.
Ms. Pitney discussed slide 17, "FY2017 Capital: Health and
Social Services":
Project Title: Office of Civil Rights Remediation
Completion
Amount: $2,773,980
Fund Source:
$554,796 Fed 1002
$2,219,184 GF/M1003
Prior Funding:
FY2012 -$1,000.0
FY2010 -$1,337.4
The Office of Civil Rights was directed to have a
comprehensive Risk Assessment of the Department
completed by an independent third party. As part
of the settlement, the Department is required to
address the findings that were identified in the
Risk Assessment. This project will fund the
addressing of the findings.
Project Title: MH Essential Program Equipment
Amount: $500,000
Fund Source:
$250,000 GF/MH 1037
$250,000 MHTAAR 1092 (Other)
Prior Funding:
FY2015 -$500.0
FY2013 -$475.0
This is a periodic competitive capital grant
project administered by the Department of Health
and Social Services. Funds allow grantees to
purchase durable goods: snow blowers, kitchen
equipment, therapeutic equipment, etc., that are
essential to the core services and programs
offered to clients. This capital project is
offered every other year, and applications for
grant funds consistently exceed funds available.
Ms. Pitney displayed slide 18, "FY2017 Capital: Health and
Social Services":
Project Title: MH Home Modification and Upgrades to
Retain Housing
Amount: $1,050,000
Fund Source:
$250,000 GF 1004
$500,000 GF/MH 1037
$300,000 MHTAAR 1092 (Other)
Prior Funding: Annual
This competitive capital grant program provides
housing modifications for persons with special needs.
People are able to remain in their homes, thereby
avoiding the greater cost of supported housing or
institutional housing.
Department Total: $7,658,325
$6,553,529 UGF
$550,000 Other
$554,796 Fed
Vice-Chair Micciche looked at slide 17, and queried the
findings for the Comprehensive Risk Assessment for the
Office of Civil Rights. He wondered if there was a rule of
law that required action. He queried the initiation of the
Comprehensive Risk Assessment. Ms. Pitney agreed to provide
that information. She shared that the issue was a follow up
to an issue that occurred six or seven years prior.
Ms. Pitney highlighted slide 19, "FY2017 Capital: Military
and Veterans Affairs":
Project Title: Bethel Scout Battalion -Phase 1 of 5
Amount: $1,000,000
Fund Source: General Fund 1004
Prior Funding: None
This project allows the Department of Military
and Veterans Affairs to initiate purchase of
equipment to support for a new Scout Battalion of
the Alaska State Defense Force, to be stationed
in Bethel, Alaska, to conduct their mission.
Project Title: National Guard Counterdrug Support
Amount: $100,000
Fund Source: Federal 1002
Prior Funding: Annual
The National Guard Counterdrug Support Program
(CDSP) supports law enforcement agencies in drug
enforcement operations, assists in training Law
Enforcement Officers, and provides community-
based drug awareness programs. The primary
purpose of the U.S. Department of Justice Asset
Forfeiture Program is to deter crime by depriving
criminals of profits and proceeds from their
illegal activities. The CDSP program is needed to
provide citizen protection and life safety
measures.
Project Title: State Homeland Security Grant Programs
Amount: $4,500,000
Fund Source: Federal 1002
Prior Funding: Annual
The State of Alaska receives State Homeland
Security grants from the U.S. Department of
Homeland Security. The grants provide for
programs across the state for homeland security
planning, equipment, and emergency training
exercises. In support of the department's
mission, these programs address issues of life,
safety, and protection of infrastructure, and are
necessary for effective citizen preparedness,
local first response, and statewide emergency
preparedness
Department Total: $5,600,000
$1,000,000 UGF
$4,600,000 Fed
Vice-Chair Micciche looked at the funding for the Bethel
Scout Battalion. He wondered if that was an appropriate
project.
Senator Hoffman shared the funding for the Bethel Scout
Battalion was a five year commitment, so there should be
additional discussion on all the phases of the project. He
requested further information on the project.
10:13:04 AM
Senator Dunleavy stressed that the state could not fund new
programs, and pointed out that the request was for a new
program.
Co-Chair MacKinnon agreed
Senator Dunleavy shared that he was not sure what
newspapers the administration was reading.
Senator Olson wondered if the private donations were
significant for recreation projects. Ms. Pitney replied
that she did not know about the private donations for the
specific project, but furthered that there were other
programs that utilized private donations to attract the
federal match.
Senator Bishop understood that the individual departments
would present their individual projects. He shared that the
goals of the Bethel Scout Battalion was a valuable project.
He felt that there may be a possibility to utilize federal
money to eliminate the use of GF funding.
Vice-Chair Micciche stressed that committee supported most
of the programs, but each program must be strictly
evaluated.
Co-Chair MacKinnon restated that it was difficult to demand
that Alaskans fund state government during the expansion of
programs.
10:18:10 AM
Ms. Pitney addressed slide 20, "FY2017 Capital: Natural
Resources":
Project Title: Federal and Local Government Funded
Forest Resource and Fire Program Receipts
Amount: $1,800,000
Fund Source:
$1,400,000 Fed 1002
$400,000 SDPR1108 (Other)
Prior Funding: Annual
This project provides receipt authority for
federal and local government funded projects
including competitive grant awards for hazardous
fuels reduction, Firewise and prevention
education, special forest disease surveys, forest
restoration projects, biomass inventories, towns
and cities targeted for community forestry
projects and tree plantings, forest stewardship
plans, and agreements for one time local
government funded field projects.
Project Title: USGS State map Grant to Spur Mineral
Investment and Exploration
Amount: $600,000
Fund Source:
$300,000 Fed 1002
$300,000 GF Match 1003
Prior Funding: None
This project will leverage federal funds,
existing airborne geophysical surveys, on-going
U.S Geological Survey (USGS) and academic
geologic research on regional mineral trends, and
a potential FY2016 USGS hyperspectral survey to
produce 1:63 scale, 360 geologic maps, mineral
deposit assessments and geochemical data in the
Tok area. This will spur mineral investment and
new exploration expenditures.
Ms. Pitney addressed slide 21, "FY2017 Capital: Natural
Resources"
Project Title: National Recreational Trails Federal
Grant Program
Amount: $1,700,000
Fund Source:
$1,500,000 Fed 1002
$200,000 GF Match 1003
Prior Funding: Annual
Alaskans rely on trails for recreation,
subsistence and transportation. Trails need
maintenance to ensure safe passage, and that they
remain open and available for use. Funds are
distributed as 80/20 matching reimbursable grants
for trail and trailhead development, maintenance,
and education programs for safe and responsible
trail use. Grants are awarded to organizations,
agencies, and local governments, resulting in
trails that are safe, high-quality, have year-
round access, and include motorized, non-
motorized, and diversified trails.
Project Title: Abandoned Mine Lands Reclamation
Federal Program
Amount: $3,200,000
Fund Source: Federal 1002
Prior Funding: Annual
The Legislature enacted the Alaska Surface Coal
Mining Control and Reclamation Act in 1983 (AS
27.21). The main purpose of the act was to
promote the reclamation of areas mined before
enactment of the federal Surface Mining Control
and Reclamation Act of 1977. Conditions on some
of these mined areas could endanger public health
and safety, have environmental implications, and
prevent the beneficial use of or cause damage to
land and water resources.
Ms. Pitney looked at slide 22, "FY2017 Capital: Natural
Resources"
Project Title: National Historic Preservation Fund
Amount: $800,000
Fund Source:
$650,000 Fed 1002
$150,000 GF Match 1003
Prior Funding: Annual
The National Historic Preservation Fund (NHPF) is
a federal program to assist states with their
statewide historic preservation programs. The
NHPF fund is used for grants to local
governments, agencies, organizations and
individuals for restoration or stabilization of
historic properties, and grants for survey,
inventory, education, planning and training
projects. Included in this capital project are
cooperative historic preservation projects
executed through cooperative or assistance
agreements or grants with federal agencies.
Cooperative historic preservation projects with
federal agencies help meet mutual cultural
resource management goals.
Project Title: Snowmobile Trail Development Program
and Grants
Amount: $250,000
Fund Source: Special Vehicle Registration
Receipts 1195 (DGF) AS 28.39.020
Prior Funding: Annual
Snowmobiling is one of Alaska's fastest growing
outdoor activities and a very important
transportation resource for rural communities.
There is a growing demand to develop and maintain
trails and trailheads to provide for safe riding
opportunities and transportation routes, and to
educate riders about safe riding practices. Funds
for this program are provided by snowmobile
registration fees paid by Alaskans. Funds are
distributed in the form of matching grants for
trail development and maintenance, trail marking
and signing, safety education, and to establish
legal trail easements.
Department Total: $8,350,000
$650,000 UGF
$250,000 DGF
$400,000 Other
$7,050,000 Fed
Senator Hoffman wondered if the grants were required to
spend the fees. Ms. Pitney believed that the grants were
directed toward trail development. She agreed to provide
further information.
Ms. Pitney discusses slide 23, "FY2017 Capital: Public
Safety":
Project Title: Marine Fisheries Patrol Improvements
Amount: $1,200,000
Fund Source: Federal 1002
Prior Funding: Annual
This annual project is part of a joint
enforcement agreement (JEA) with the National
Marine Fisheries Service. The project is for
federal fiscal year 2016 JEA. The JEA federal
funding has historically been part of the capital
budget since it primarily funds equipment, but it
also currently funds four positions. Federally
regulated marine fisheries occur on a year-round
basis in the coastal and offshore waters of
Alaska. Both the federal and state governments
share an interest in ensuring these fisheries are
protected. This project will help the department
achieve its mission to ensure public safety and
enforce fish and wildlife laws and protecting
wildlife resources.
Project Title: Reapprop for Aircraft and Vessel
Repair, and Deferred Maintenance
Amount: $3,619,500
Fund Source:
2,319,500 GF 1004
$1,300,000 Alaska Capital Income Fund 1197
(DGF) AS 37.05.565
Prior Funding:
FY2016 -None
FY2015 -$2,150.0
This project allows for the annual repair and
maintenance of aircraft and vessels that must be
completed in order to ensure safe operating
conditions. The project also allows for
maintenance and repairs on its existing aircraft
hangar facilities which are in need of
structural, siding, electrical, and heating
repairs. These hangars are a main support hub for
the state to provide many mandated and essential
public safety functions, primarily in rural
Alaska.
-$2,269,500 Aircraft and Vessel Repair and
Maintenance
-$1,350,000 Deferred Maintenance
Department Total: $4,819,500
Co-Chair MacKinnon noted that there were four funded
operating budget positions in the first appropriation. She
stressed that the capital budget currently contained some
operating budget money from the federal grant. She
understood that the state had grounded an aircraft, and
wondered if that aircraft had been sold. Ms. Pitney replied
that the aircraft had not been sold, but it was currently
in storage. There was a hope to reinstate that aircraft
into the fleet.
10:23:08 AM
Co-Chair MacKinnon queried the reason for not selling the
aircraft. Ms. Pitney replied that the difference was that
the retiring vessel was old, and the helicopter was fairly
new to the fleet.
Co-Chair MacKinnon wondered why the proceeds from selling
the aircraft would not be used to pay for the project. Ms.
Pitney restated that the helicopter was fairly new, so
there was a hope that there was hope to use it in the
future.
Ms. Pitney displayed slide 24, "FY2017 Capital: Revenue."
She shared that, with the exception of the first item, all
of the remaining items were Alaska Housing Finance
Corporation (AHFC) programs:
AHFC Facility Maintenance Program: $1 million
AHFC Cold Climate Housing Research Center (CCHRC)
AHFC Rental Assistance for Victims -Empowering Choice
Housing Program (ECHP)
AHFC Teacher, Health and Public Safety Professionals
Housing
AHFC Senior Citizens Housing Development Program (UGF
through Reapprop)
AHFC Housing and Urban Development Federal HOME Grant
AHFC Housing and Urban Development Capital Fund
Program
AHFC Housing and Urban Development Capital Fund
Program
AHFC Competitive Grants for Public Housing
AHFC Supplemental Housing Development Program
AHFC Weatherization Program (UGF through Reapprop)
MH: AHFC Homeless Assistance Program
MH: AHFC Beneficiary and Special Needs Housing
Department Total: $52.2 million
10:27:44 AM
Co-Chair MacKinnon queried further detail on the $3 million
DGF for supplemental housing. Ms. Pitney replied that the
funding correlated with a federal program that filtered
through regional housing authorities. The supplemental
amount was intended for items outside the housing units,
such as providing the infrastructure for attaching the unit
to a utility line.
Co-Chair MacKinnon wondered what was paid the previous year
for the project. Ms. Pitney responded that the
appropriation was consistently $3 million.
Senator Hoffman requested all the requests from prior
years.
Co-Chair MacKinnon shared that the departments would
present the prior years' funding for the projects.
Co-Chair MacKinnon shared that the supplemental budget
portion of the presentation would be rescheduled.
10:30:35 AM
Ms. Pitney discussed slide 25, "FY2017 Capital:
Transportation and Public Facilities." She stated that
there were six GF components. She remarked that the Airport
Improvement Program; and the Surface Transportation and
Statewide Federal Programs had federal matching funds. She
stated that the other funds for those programs were capital
receipts through the federal program. She stated that the
Airport and Transportation Match for the federal funding
was $62 million. She noted the Public and Community
Transportation Match of $1 million. The State Equipment
Fleet Replacement was $24 million of other funds; and the
operating funds were used to rent the equipment for the
fleet.
Senator Hoffman queried the list of equipment replacement,
and the year of the replacement, and their location. Ms.
Pitney shared that the information was available.
Co-Chair MacKinnon shared that Senator Bishop had conducted
a review, and expected a perspective on some of the issues
of maintenance in the fleet.
Vice-Chair Micciche shared that he had many questions for
the Department of Transportation and Public Facilities
(DOT/PF). He wanted to understand the detail of all the
categories.
Co-Chair MacKinnon shared that there was a plan for each
department to justify their requests to the committee. She
queried how the fleet was exiting the state.
10:35:43 AM
Senator Dunleavy wondered if the purchases were conducted
solely by DOT/PF. Ms. Pitney replied that the projects were
across the board.
Senator Dunleavy queried whether each department selected
their own criteria for purchasing vehicles. Ms. Pitney
responded that there was a movement on the
standardizations.
Co-Chair MacKinnon wondered whether commissioners were
given vehicles. Ms. Pitney responded that some
commissioners were given vehicles. There were some
departments with shared vehicles depending on their
requirements.
Co-Chair MacKinnon asked whether an audit would be possible
to see whether the vehicles were utilized. Ms. Pitney
replied that the audit was a part of the standards.
Co-Chair MacKinnon wondered if the committee would like to
hear more about the function and utilization of the fleet.
Vice-Chair Micciche would like to hear more information
about the unmatched UGF.
10:40:35 AM
Co-Chair MacKinnon wondered if Vice-Chair Micciche was the
subcommittee chairman for DOT/PF. Vice-Chair Micciche
replied in the affirmative.
Senator Olson remarked that he would like to hear more
about the unused helicopter in DPS.
Co-Chair MacKinnon felt that all departments should present
the costs and requests for their fleet.
Ms. Pitney continued to discuss slide 25.
Vice-Chair Micciche wondered why there was not more
potential for potential match in the AMHS.
Co-Chair MacKinnon remarked that she committee wanted to
understand how the current fleet was utilized, and how to
invest the fleet to keep it operational for Alaska.
Ms. Pitney concluded slide 25.
10:45:15 AM
Ms. Pitney highlighted slide 26, "FY2017 Capital:
University of Alaska":
Project Title: Deferred Maintenance
Amount: $10 million
Fund Source: General Fund 1004
Prior Funding: FY 16, $3 million; FY 15, $12
million
Ms. Pitney looked at slide 27, "FY2017 Capital: Judiciary":
Project Title: Deferred Maintenance
Amount: $2.382 million
Fund Source: General Fund 1004
Prior Funding: FY 16, $2.5 million; FY 15 $2.42
million
This is an annual project to address repairs to
building components that have not been
sufficiently maintained and whose condition now
threatens longevity of the buildings.
Project Title: Court Security Projects
Amount: $1.351 million
Fund Source: General Fund 1004
Prior Funding: FY 14, $1 million; FY 13 $1.7
million
This request is for funding an on-going multi-
year project to provide for physical security for
the public, judges, staff, jurors, and other
users in court facilities statewide.
Department Total: $3.733 million
SB 138 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 167
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; making
reappropriations; amending appropriations; repealing
appropriations; and providing for an effective date."
10:46:34 AM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR looked at slide 28. She stated that
there were more children in foster care and subsidized
adoption than was originally budgeted, which accounted for
most of the supplemental request. She noted that the
negative $1.4 million was because of a misdating of the
dividends, per the LFD recommendation to correct that
error.
Senator Bishop felt that the summaries seemed smaller than
in the past. He did not feel comfortable making accurate
determinations based on the limited information.
Co-Chair MacKinnon restated that the state was in a
difficult budget time.
Senator Dunleavy surmised that the request was
approximately $195 million. He stressed that it was an
addition request for the current year's budget. Ms. Pitney
agreed.
Senator Dunleavy remarked that the supplemental request
would be an additional $252 million to the current year's
budget. Ms. Pitney explained that there were previous
actions for the TransCanada buyout and the continuation of
the pipeline, she agreed that there would be an additional
$252 million.
Co-Chair Kelly shared that the committee would have a press
availability following the meeting.
Co-Chair MacKinnon discussed housekeeping.
SB 167 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:50:36 AM
The meeting was adjourned at 10:50 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021116 SFIN FY16 Supplemental FY17 Capital.pdf |
SFIN 2/11/2016 9:00:00 AM |
Overview: OMB Capital/Supplemental |
| 021116 OMB SB138 SFIN Response to Questions.pdf |
SFIN 2/11/2016 9:00:00 AM |
SB 138 |