Legislature(2021 - 2022)SENATE FINANCE 532
03/03/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Village Safe Water – Funding History, Projected Need, and Fy22 Proposal | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 3, 2021
9:01 a.m.
9:01:39 AM
CALL TO ORDER
Co-Chair Bishop called the Senate Finance Committee meeting
to order at 9:01 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson (via teleconference)
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Natasha von Imhof
ALSO PRESENT
PRESENT VIA TELECONFERENCE
Ruth Kostik, Administrative Services Director, Department
of Environmental Conservation, Office of Management and
Budget, Office of the Governor; Carrie Bohan, Facilities
Services Program Manager, Department of Environmental
Conservation; Randy Bates, Director of Water, Department of
Environmental Conservation.
SUMMARY
VILLAGE SAFE WATER FUNDING HISTORY, PROJECTED NEED, AND
FY22 PROPOSAL
^VILLAGE SAFE WATER FUNDING HISTORY, PROJECTED NEED, AND
FY22 PROPOSAL
9:03:05 AM
Co-Chair Bishop discussed the agenda. He referenced a
spreadsheet entitled "Village Safe Water Funded Projects
2011-2021" (copy on file).
9:04:31 AM
RUTH KOSTIK, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR (via teleconference),
explained that the presentation focused on the program and
its budget and funding history.
9:05:22 AM
CARRIE BOHAN, FACILITIES SERVICES PROGRAM MANAGER,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (via
teleconference), discussed a presentation entitled
"Department of Environmental Conservation - Senate Finance
Committee - February 26, 2021" (copy on file).
Ms. Bohan turned to slide 2, "Village Safe Water":
Village Safe Water's mission is to support rural
communities in their efforts to develop sustainable
sanitation facilities
Communities with a population less than 1,000 per
AS 47.07.080
We accomplish this mission by:
Funding planning, design, and construction of
water, wastewater, and solid waste projects
Providing project management and oversight for
grant funded projects
9:06:24 AM
Ms. Bohan showed slide 3, "Village Safe Water: Project
Assessment":
Project grant applications are scored primarily on how
they address critical public health needs and capacity
to operate and maintain facilities
Current level of service
Beneficial health impact provided by the project
Relationship to other project phases
Operation, maintenance, and management
capabilities
High scoring projects added to the Multi-Year Priority
List
Ms. Bohan expounded that by placing the highest scoring
projects on the multi-year priority list the Department of
Environmental Conservation (DEC) could fund portions of
multiple projects each year and commit to providing
additional funding as needed in subsequent years to
completion. The multi-year priority list gave DEC the
flexibility to affect more projects each year versus
completely funding one or two projects.
9:08:46 AM
Senator Hoffman inquired about emergency situations. He
discussed the community of Tuluksak, where the village
water utility burned down. He relayed that the community
received very little assistance from the state and
developed a multi-party solution between the federal
government and others. He asked if the Village Safe Water
(VSW) Program had provisions to address a complete collapse
of water systems such as in Tuluksak and inquired how the
state could be better prepared to address emergency
situations. Ms. Bohan answered that the situation in
Tuluksak was unusual. She reported that DEC had been
supporting the community of Tuluksak primarily through the
Remote Maintenance Worker program. She explained that DEC
partnered with the Yukon Kuskokwim Health Corporation
(YKHC) and provided annual grant funds to provide onsite
assistance to rural wastewater operators and first
responders that dealt with sanitation systems. The remote
workers from the health corporation were the first on sight
to assess the situation. She maintained that the department
had been working with YKHC to find funding sources. She
indicated that while VSW did not have the resources to
address an emergency, the program was involved with
entities like Indian Health Service (IHS) and the
Environmental Protection Agency (EPA) to identify long and
short term funding sources and would directly manage the
project to rebuild the plant.
9:12:14 AM
Senator Hoffman shared that he had numerous conversations
with the president and CEO of the YKHC, who had initiated
the Remote Maintenance Workers project in the region. He
asserted that there needed to be a better solution from the
state. The village was out of water for several weeks. He
thought it was an unacceptable situation and noted that the
emergency declaration was declared late in the process. He
believed that the people of Tuluksak were put at a greater
risk due to COVID. He hoped that the Village Safe Water
Program would develop a better solution for dealing with
emergencies and bring it to the administration and
legislature.
9:14:10 AM
Co-Chair Bishop commented that the committee wanted to hear
about the emergency reaction plan once it was developed.
9:14:42 AM
Ms. Bohan spoke to slide 4, "Village Safe Water: Average
Project":
Cost to provide running water and sewer to individual
homes in a village for the first time
$350 - $750 thousand per/home
Projects typically last 5-10 years to completion,
depending on
Size and complexity of the project
Availability of funds
Ability of community to meet ongoing construction
funding conditions
Ms. Bohan detailed that the VSW funded a variety of
projects such as developing a new water source, building a
new water storage tank, constructing a sewage lagoon, and
replacing deteriorating water lines.
9:16:03 AM
Co-Chair Bishop asked if the example project on the slide
represented a typical piped water system from a central
supply. Ms. Bohan answered in the affirmative. Co-Chair
Bishop asked if the program worked with the Cold Climate
Housing Research Program at the University of Alaska
Fairbanks (UAF). He shared that the program was on the
cutting edge of renewable systems that were able to lower
costs. Ms. Bohan relayed that the program collaborated with
a variety of partners on innovation. She was unaware of any
efforts of collaborating with the cold climate program. Ms.
Kostik would be touching on the topic of innovative efforts
to embrace newer technologies. She mentioned the challenge
of not placing the community in the position of being a
test case for a new technology and opted for long term
successful solutions. Co-Chair Bishop advised that it was
important to work closely with communities to right-size
the system for the size of the community.
9:18:28 AM
Ms. Bohan discussed slide 5, "Village Safe Water: Typical
Project Timeline," which showed a flow chart of the timing
a typical project. She described the process. She indicated
that each spring VSW accepted applications for new planning
projects, evaluated the projects and awarded the grants by
the following fall. The planning project typically took 9
to 12 months to complete and put the project in its second
year. She furthered that in year 3 the project applied for
design and construction funding that was awarded by the
fall of the third year. She reiterated that projects would
be put on the multi-year priority list. She noted that
design could take one to two years depending upon the
complexity of the system. The design completion allowed for
a complete understanding of the construction funding need.
By the spring of year 5 construction funding was awarded a
year at a time and construction was completed within two to
three years; construction was completed by years 6 or 7.
9:21:01 AM
Senator Hoffman noted that the lead agencies were the
Alaska Native Tribal Health Consortium (ANTHC) and VSW. He
asked how the projects were divided between the two
agencies and whether ANTHC followed that same projected
timeline as depicted on slide 5. Ms. Bohan replied that all
the communities were assigned support from either VSW or
ANTHC based on a traditional level of service. The goal was
to offer equivalent service regardless of the agency
involved. The timelines were the same.
Co-Chair Bishop asked how long VSW kept final design
documents in its archives. He referenced Tuluksak and
deduced that if the original water system plans were kept
the replacement work could resume very quickly. Ms. Bohan
agreed with the statement. She qualified that VSW had
operated for 40 years, and she could not ensure that all
records were readily accessible. She relayed that Tuluksak
had already been considering a new water treatment plant. A
new set of wells had been drilled and there was a planning
document drafted in 2018, that had been considered by the
various funding agencies as a future project. The plan was
to rebuild the washeteria in a new location with better
construction, which called for a new plan. However, VSW
would evaluate each circumstance on its own merit on
whether to start from scratch or pick up with existing
documents.
9:24:48 AM
Ms. Bohan referenced slide 6, "Village Safe Water: FY 2021
by the Numbers:"
Planning Projects
$1.9 million funding made available
19 studies for 19 communities
Project range: $25,000 -$240,000
Construction Projects
$62.5 million funding made available
19 ongoing construction projects and 13 new
construction projects
Project range: $300,000 - $9.3 million
IHS & EPA Tribal Construction Projects
$48 million funding made available
35 construction projects
Project range: $65,000-$7.1 million
Ms. Bohan explained that the slide data was taken from
real life examples and were the numbers for the current
fiscal year.
9:26:20 AM
Senator Wilson asked if the type of funding impacted the
timeline. Ms. Bohan responded in the affirmative. She
offered that VSW accepted applications in the spring that
allowed for grant funding distribution in the fall of the
same year. Projects under the IHS or EPA were referred to
as the Sanitation Deficiency System (SDS) and were not
funded until the following spring so there was a six-month
difference in the timing of when the funds were available
for SDS projects. She pointed out that VSW was involved
with IHS and EPA in awarding SDS grants.
9:28:13 AM
Senator Hoffman asked if the state provided additional
funding for the 25 percent match for federal dollars would
the state be available to procure more federal money. He
shared that the federal COVID bill was passed by the House
of Representatives and contained $1.4 billion for projects
for Alaska and in addition $600 to $800 billion was slated
for local and state governments. He wondered if VSW had any
involvement in forwarding the needs of Alaska for some of
the COVID funding for water systems. He emphasized that
water systems were a critical need in the fight against
COVID. Ms. Bohan replied that presently the state was
providing matching funds for all available federal funds,
and additional state match would not make more federal
funds available. She explained that regarding future
funding opportunities, VSW worked with IHS and ANTHC to
maintain the IHSs SDS data base. She explained that all
known sanitation needs were listed in the data base along
with possible solutions and cost estimates. She relayed
that Ms. Kostik would be addressing the topic in greater
detail shortly. She mentioned that the data was shared with
the states federal delegation. She remembered that the
amount of $1.3 billion was calculated in the prior year for
the overall sanitation improvements in the state.
9:32:22 AM
Senator Hoffman clarified that he was not referring to
prior COVID funding but was citing the amount of the next
round of COVID funding slated for Alaska, tribal and local
governments. Ms. Kostik deferred the answer to her
colleague concerning discussions with the Alaska delegation
and what was in the bill for Alaskas sanitation needs.
RANDY BATES, DIRECTOR OF WATER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION (via teleconference), replied that the
department had been working with the congressional
delegation and that Ms. Bohans answer had been correct.
The department relayed the SDS list containing projects for
new service and repairs in the amount of approximately $1.4
billion. The funding would be new money for new projects in
the state and not from the pipeline of original funding for
VSW the state received each year.
9:35:13 AM
Co-Chair Bishop asked about the $1.4 billion submitted to
the delegation. He wondered if it was a complete list of
the need in the state. Ms. Bohan responded that the amount
signified the complete list of projects that had been
identified in the spring of the prior year. She delineated
that it included fully piping all unserved communities
and repair and replacement of existing systems in all
communities where need had been identified. Co-Chair Bishop
referenced another infrastructure funding bill that was
under consideration in Congress and thought it was an
additional opportunity for funding sanitation projects.
9:36:40 AM
Senator Wilson asked if the department could comment on
how projects had been impacted by COVID-19. Ms. Bohan
answered that she would provide the list of projects
impacted by COVID and could not currently provide a figure.
She shared that most projects had been delayed up to the
entirety of the prior summer. She indicated that the
primary concern had been introducing COVID into communities
via the construction crews. She discussed the very short
construction season in the state and the challenge of
safely administering projects within the short timeline.
There were potential financial impacts to projects because
of the wider-spread COVID-19 impacts and the COVID related
delays in manufacturing and shipping. She anticipated
moving forward as close to normal as possible in the
upcoming season.
9:39:08 AM
Ms. Bohan looked at slide 7, "Village Safe Water:
Supporting Rural Sanitation:"
Work with partners to support communities in their
efforts to build technical, financial, and managerial
capacity
Provide water and wastewater system operator training
and certification
Remote Maintenance Workers
Funded through federal grants from EPA and USDA
and associated state match in the operating
budget
15 Remote Maintenance Workers at DEC and regional
health corporation provide onsite training and
technical assistance
Emergency response and support
Village Safe Water does not provide funding for
ongoing maintenance and operations of systems
9:41:27 AM
Senator Hoffman asked if the number of remote maintenance
workers was adequate. He explained that the area served by
YKHC was larger than the State of Washington and served 56
villages with a large population of rural Alaskans. He
noted the example of only 10 remote workers in the Yukon
Kuskokwim area. Ms. Bohan replied that VSW did continually
monitor the adequacy of the number of remote workers in the
various regions and would adjust resources accordingly if
warranted. She explained that based on DECs understanding
and feedback from the communities, VSW felt that the
current level of service was appropriate. She acknowledged
that there were regions with different circumstances. She
elucidated that in Southeast and Southcentral Alaska a
remote maintenance worker could provide service to more
communities versus in communities with higher needs. In
higher need areas each remote worker was assigned to a
smaller number of communities to ensure the level of
service was met. She felt the level of service was
sufficient. Senator Hoffman wondered if he asked the CEO of
YKHC or any other native corporations in his district
whether he would get the same response. Ms. Bohan hoped
that the same response would be given. She reiterated that
VSW stayed in close communication with the communities. She
offered that the corporations applied to VSW each year to
request funding and could identify the need for additional
staffing. She informed the committee that she had managed
the Remote Maintenance Worker program for 8 years and she
had increased the number of workers in the Norton Sound and
Yukon Kuskokwim regions by one worker in each region. She
recounted that VSW engaged in conversations regarding the
number of remote workers each year. She voiced that VSW
would be happy to engage in discussions regarding the need
for more remote workers in the coming spring.
9:44:58 AM
Co-Chair Bishop referenced operator certification and
training and asked how the activities had been affected by
COVID-19. Ms. Bohan responded that VSW did not directly
offer training but facilitated finding training
opportunities. She indicated that most service providers
moved to online training. She had initially doubted the
success of online training but had been surprised by the
creative approach. She used the example of continuing
education requirements. She noted that there were fewer
operators that had lapsed their certification renewal due
to lack of continuing education units. Co-Chair Bishop
surmised that individuals were still able to get certified.
Ms. Bohan responded in the affirmative.
9:47:02 AM
Ms. Kostik addressed slide 8, "Village Safe Water: FY2022
Gov Amend Request (in thousands):"
$70,812.0 FY2022 Governor's Amended
$52,250.0 Fed
$18,062.0 AHFC Bonds (match)
$500.0 SDPR
First Time Service
Expansion, Upgrade, and Replacement of Existing
Service
Gov Amend is an increase of $2,332.0 of match due to
increased federal support
Ms. Kostik noted that the increase was a result of the
federal funding that passed in late December, which was an
increase of $7 million from FY 2021 from the EPA. She
reminded the committee that the VSW match was appropriated
from the Alaska Housing Finance Corporation (AHFC) bond
proceeds. There was a bill moving through the legislature
regarding the transaction [SB 54/HB 74 - AHFC Water & Sewer
Bonds/Transportation]. She detailed that there was
sufficient federal authority to accept the $52.250 million.
The money would be spent over several years due to the
timeline of projects. There were only two allocations for
VSW as listed on the slide.
9:49:17 AM
Senator Wilson looked at the projects on the spreadsheet
and considered the lifetime of equipment that was being
upgraded. He pointed to a project that had received an
upgrade and 8 years later received a complete water
overhaul and two years later received another upgrade to
the same plant. He wondered whether they were expansions or
maintenance issues. Ms. Bohan thought there might be a
couple of factors to consider when looking at the list. She
discussed that the way VSW worked through the multi-year
priority list was to award new grants each year to fund an
ongoing construction project. She guessed that what he
referenced was ongoing supplemental funding for ongoing
repair or replacement for a particular project. She noted
that the titles of projects were generic, and Senator
Wilson might be looking at two similarly titled projects
for different portions for the same community for things
like replacing distribution lines in different
subdivisions. She explained that generally the expectation
of the lifetime of sanitation infrastructure in rural
communities was 40 years.
9:51:38 AM
Co-Chair Bishop requested the number of projects being
funded with the $70 million listed on slide 8. Ms. Bohan
did not have a definitive list of the projects that might
be funded. Co-Chair Bishop asked if the funding approved in
the current year would not be available until 2022. Ms.
Bohan specified that the funding would be available in the
fall of 2021.
9:52:47 AM
Senator Olson discussed lifespans of water systems existing
prior to VSWs existence. He cited issues in the
communities of Selawik and Unalakleet, in his district. He
asked what kind of programs were available to mitigate the
issues. Ms. Bohan thought the examples of Selawik and
Unalakleet were different. The freeze-ups in Selawik were
due to power outages, and not directly related to the
wastewater utility itself. She acknowledged that Unalakleet
was one of the first systems built and one of the oldest
distribution systems. The department was looking into long
term solutions, had already developed a plan and had a
replacement cost estimate for replacing the distribution
system. She relayed that the project was a multi-year plan.
The community was currently positioned to pursue funding
due to its collaboration with VSW. The short-term solution
was more challenging and was under discussion
9:55:50 AM
Senator Olson was concerned that with low water pressure,
lack of potable water, and increased risk of pipes
freezing. He thought the immediate need was more important
to consider in the short term and the long term would take
care of itself.
Co-Chair Bishop relayed that VSW heard his concerns.
9:56:35 AM
Ms. Kostik reviewed slide 9, " Village Safe Water: FY 2021
Supplemental Request (in thousands):"
$3,650.0 GF Match
First Time Service
Expansion, Upgrade, and Replacement of Existing
Service
Due to increased federal support
Ms. Kostik noted that there was a higher level of funding
from the EPA. She remarked that the federal funding was
approved very late in the states budget cycle and had to
be included in the supplemental request. Co-Chair Bishop
deduced that there were 13 projects for FY 2021. He asked
if the project list would grow due to the supplemental. Ms.
Kostik relayed that funding was allocated for FY 2021 based
on the full amount of the federal awards and operated on
the assumption that if the department needed to borrow from
FY 2021 to push match back to the prior year it would do
it. There would be no additional projects with the match;
the funds made the funding whole.
9:58:30 AM
Ms. Kostik presented slide 10, "Village Safe Water: Funding
Sources," which showed a flow chart of funding sources and
the corresponding allocations. She delineated that the
chart gave the full scope of funding sources that flowed
into the VSW program. She pointed to the left that depicted
the state match, USDA Rural Development funding, and the
EPA Infrastructure grants that flow through the traditional
funding route through the multi-year priority list. She
pointed to the SDS list on the middle right and explained
that the funding flowed through from IHS and EPA tribal
Safe Drinking Water Act and the Clean Water Act. On the far
right there was one more pot of funding from IHS Housing
Priority System (HPS) system. She noted that SDS and HPS
did not require state matching funds. She noted that the
colors on the fund sources would match the chart depicting
the funding history on the next slide.
10:00:03 AM
Senator Wilson asked if the Denali Commission had provided
funding for VSW in the past. Ms. Bohan explained that the
Denali Commission had not directly provided funding to VSW,
but it was presently a partner in the funding source for
SDS as part of IHS money in the amount of roughly $2
million.
10:01:12 AM
Senator Hoffman recalled that the committee considered the
Major Maintenance List two weeks previously and noticed
that several schools had broken water systems. He wondered
whether a community could apply to VSW on behalf of a
school. Ms. Bohan answered that generally a project to
support just a school was not eligible for VSW funding.
However, serving a school as part of a larger project was
possible. She added that often it was critical for a
project to include a school because it became a significant
financial contributor that made the system affordable for
the community. There were communities in which schools had
its own independent water system and would not be eligible
for VSW assistance. Senator Hoffman understood that it was
advantageous for a school to be part of the community's
water system. Ms. Bohan answered in the affirmative.
10:03:14 AM
Ms. Kostik displayed slide 11, "Village Safe Water: Funding
History," which showed a bar graph entitled Funding for
Rural Water and Sewer Improvements SFY2017 - 2021. The bar
graph showed a five-year funding history. She detailed that
the state match was depicted in green, EPA funding was
shown in gold, and USDA-RD was designated in purple; the
federal funding required a state match. The IHS money was
represented in blue, and the EPA Tribal funding was shown
in brown; both funding sources did not require a state
match. She pointed out that the federal dollars had
increased significantly in recent years.
Co-Chair Bishop observed that the IHS brought a lot of
resources to the state.
10:04:14 AM
Ms. Kostik spoke to slide 12, "Rural Alaska Sanitation
Funding Need," which showed a pie chart titled Rural
Alaska Sanitation Funding Need = $1,821,446,807. The pie
chart depicted the total SDS funding need. The blue portion
[68 percent] encompassed all first time service projects
and reflected the traditional piped systems totaling
roughly $1.2 billion.
Co-Chair Bishop deduced that 68 percent of rural Alaska did
not have any sanitation service. He wondered whether he was
correct. Ms. Kostik responded in the negative. She reported
that DEC had a performance measure that showed
approximately 98 percent service. The cost was so large
because the remaining communities were the most challenging
to serve due to things like location, logistics,
permafrost, etc. Co-Chair Bishop believed that the slide
was misleading. Ms. Kostik clarified that the pie chart
reflected only the cost of unserved homes.
10:06:58 AM
Senator Hoffman thought the number on the slide was
daunting. He asked if all the requests for projects fell
under AS 47.07.080 that specified a population size of one
thousand and under. He asked whether there was a list of
projects for communities over one thousand residents. He
referred to the spreadsheet list on page 8 for 2020. He
cited a project for the community of Kotzebue and noted
that its population was over one thousand.
Ms. Bohan explained that Kotzebue and Bethel were eligible
for VSW by their designations as second class cities. She
related that currently Kotzebue received funding for a new
water treatment plant in the amount of $27 million. She
informed the committee that for the communities that fell
outside of VSW eligibility, DEC had a low interest long
term revolving loan program.
10:09:16 AM
Ms. Kostik addressed slide 13, "Alaska Water & Sewer
Challenge Project":
Conventional systems are expensive to construct,
maintain and replace
Many communities cannot afford the high operation and
maintenance costs.
Available funding is not adequate to serve remaining
homes and make needed improvements
Innovative approaches are needed to address health
problems associated with water and sewer system
deficiencies
Focus on decentralized systems that provide treatment,
recycling, and water minimization
Pilot testing at UAA delayed due to COVID, anticipated
to begin in fall 2021
Ms. Kostik elaborated that in 2013 DEC launched the Alaska
Water & Sewer Challenge Project that was a research and
development project to try to build a better water system
for single homes that was self-contained. The goals were to
keep the cost to $160 thousand per home and be easily
maintained. She noted that DEC was working with the EPA to
set the standards for the recycled water. The project was
in phase 5 with one model and testing in a community was
slated to happen after the standards were developed. She
commented that community involvement would be critical to
the project.
10:12:14 AM
Senator Hoffman asked if there were any communities
remaining on the honey bucket system presently. Ms. Bohan
relayed that there were currently 32 communities listed as
unserved. She noted that two of the communities were slated
for service and had received funding. She believed that the
remaining communities presented a significant challenge for
receiving service.
Senator Hoffman wanted to thank all the people that worked
at the VSW Program. He communicated that when a community
received service it was a life changing situation. He
thought many people in the state did not realize the luxury
of having in-home water and sewer. He emphasized the
importance of the program and reiterated his appreciation
of the work of VSW.
Co-Chair Bishop echoed Senator Hoffman sentiments.
Co-Chair Bishop discussed the agenda for the following day.
ADJOURNMENT
10:15:43 AM
The meeting was adjourned at 10:15 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 022621 VSW Funded Projects 2011-2021.pdf |
SFIN 2/26/2021 9:00:00 AM SFIN 3/3/2021 9:00:00 AM |
Village Safe Water Program |
| 022621 SFIN DEC VSW Overview.pdf |
SFIN 2/26/2021 9:00:00 AM SFIN 3/3/2021 9:00:00 AM |
Village Safe Water Program |
| 030321 DEC Response to SFIN VSW Overview 03.03.2021.pdf |
SFIN 3/3/2021 9:00:00 AM |
Village Safe Water Program |