Legislature(2025 - 2026)ADAMS 519
02/14/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Fy26 Department Budget: Department of Military and Veterans' Affairs | |
| Overview: Fy26 Department Budget: Department of Environmental Conservation | |
| Presentation: Village Safe Water and Sewer | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 53 | TELECONFERENCED | |
| *+ | HB 54 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
HOUSE BILL NO. 54
"An Act making appropriations, including capital
appropriations and other appropriations; making
reappropriations; making appropriations to capitalize
funds; and providing for an effective date."
HOUSE BILL NO. 55
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
^OVERVIEW: FY26 DEPARTMENT BUDGET: DEPARTMENT OF MILITARY
AND VETERANS' AFFAIRS
1:35:00 PM
CRAIG CHRISTENSON, DEPUTY COMMISSIONER, DEPARTMENT OF
MILITARY AND VETERANS' AFFAIRS, noted that several of his
colleagues were present and available to assist with the
presentation. He explained that the budget for Department
of Military and Veterans Affairs (DMVA) remained small,
which it had been for several years. There were three
requests in the budget and only one of the requests
required general funds, totaling $175,000. He introduced
the PowerPoint presentation "FY2026 Department Budget
Overview" dated February 14, 2025 (copy on file). He
advanced to slide 2, which displayed the department's
mission statement. He continued to slide 3 and explained
that DMVA encompassed the Alaska Air National Guard (AANG),
the Army National Guard (ANG), the Division of Homeland
Security and Emergency Management (DHSEM), the Alaska
Military Youth Academy (AMYA), and the Office of Veterans'
Affairs (OVA). He stated that Major General Torrence Saxe
served as the Adjutant General and oversaw both AANG and
ANG. In addition, Major General Saxe functioned as the
commissioner of the department's six divisions.
Mr. Christenson explained that the Alaska Aerospace
Corporation (AAC) was administratively housed within the
department and but received minimal administrative support.
He emphasized that the corporation was a national asset and
had not received state funds since 2014. He explained that
AAC was one of four vertical launch facilities in the
nation, with its funding primarily coming from the United
States Army, the Missile Defense Agency, and civilian
launch contracts.
Mr. Christenson directed attention to the Alaska Wing of
the Civil Air Patrol (CAP), which he described as the
official auxiliary of the United States Air Force (USAF).
He noted that the department maintained a close partnership
with CAP, but it did not exercise control over the
organization. The state administered a pass-through grant
of approximately $250,000 to assist with leasing hangar
space, utilities, and other expenses. He explained that
while CAP was not technically part of the organized
militia, the department considered it to be part of it
because CAP was closely integrated with the organized
militia and attended militia meetings.
Mr. Christenson relayed that the Alaska Organized Militia
(AOM) was represented on the slide by dashed lines. He
stated that AOM included ANG, the Alaska State Defense
Force (ASDF), and the Alaska Naval Militia (ANM). He
relayed that ANG was highly operational compared to
national guards in other states. He explained that while
guard members in many states typically trained on weekends
and during limited summer periods, Alaska maintained a
large number of full-time members who supported 24-hour
missions. He indicated that combat search and rescue was a
primary mission of ANG and members frequently performed
civilian rescue operations statewide. Additional missions
included air refueling, strategic and tactical airlift,
missile warning, space surveillance, and air defense. The
personnel stationed at the Clear Space Force Station were
responsible for tracking inbound intercontinental ballistic
missiles and space objects. Air defense operations focused
on monitoring aircraft and objects below the space domain.
He stated that AANG consisted of approximately 2,400 to
2,500 aviators and civilian staff members.
Mr. Christenson continued that AANG's primary focus was
infantry and aviation. He relayed that aviation crews were
stationed in Nome, Juneau, Bethel, Anchorage, and Fairbanks
and the geographic spread had strengthened the department's
aviation capability. Additional responsibilities included
ballistic missile defense at Fort Greely and various
support functions such as engineering, medical services,
and military police. He reported that AANG contained
approximately 1,700 personnel.
Mr. Christenson continued to address ASDF, which was
composed entirely of volunteers. He relayed that membership
had grown from about 50 members to 225 members over the
past six years and the force maintained 25 detachments
across the state. He explained that members were
compensated when activated to state active duty, but
weekend drills, annual training, and other duties were
performed on a volunteer basis. The force had been
instrumental in responding to recent disasters, including
wildfires, earthquakes, floods, and winter storms. The
department's goal was to expand ASDF to approximately 500
members and to place small teams in most villages and
smaller communities in the state. He relayed that members
would receive training in incident response,
communications, community support, and disaster response.
He asserted that having trained personnel already present
in affected communities was critical, especially when
storms or flooding prevented immediate deployment from
outside.
1:42:23 PM
Mr. Christenson explained that ANM rounded out AOM and
included approximately 50 members, most of whom were Marine
or Navy reservists. Membership also included a few retirees
serving to maintain continuity. He clarified that ANM did
not operate boats or ships but provided technical and
general assistance as needed. He shared that members of
ASDF, ANM, and ANG had all responded to the recent floods
in Juneau.
Mr. Christenson continued by detailing the department's
state divisions, which included OVA, AMYA, DHSEM, the Air
Guard Facilities Maintenance, and Army Guard Facilities
Maintenance. He explained that the state employed staff who
provided maintenance for hangars, armories, and other
buildings through a master cooperative agreement. He noted
that the funding was typically shared between the state and
federal governments, but the positions were fully federally
funded in some cases.
Mr. Christenson stated that OVA was a small and effective
office with six staff members who connected Alaska's 70,000
veterans to the benefits earned through military service.
He noted that the office also provided grants to veteran
service organizations. He explained that AMYA was a
tuition-free, quasi-military school designed to serve youth
aged 15 to 18 who were at risk of not graduating from high
school. He emphasized that the academy was neither a
juvenile justice facility nor a treatment center, and
participation was entirely voluntary. The academy held two
residential classes per year at Camp Carroll in Anchorage,
each lasting 22 weeks. There was also a 24-month post-
residential phase during which counselors stayed in contact
with participants to help the students remain in school,
secure employment, or obtain other needed support. He
outlined the academy's core focus areas, which included
high school studies, responsible citizenship, academic
performance, job and life skills, physical fitness, and
leadership and followership.
1:45:26 PM
Mr. Christenson continued to the Division of Administrative
Services (DAS), which was considered the "engine room" of
the department. He shared that DAS was responsible for IT,
procurement, fiscal management, accounting, and
administrative functions. The next entity was DHSEM, which
housed the State Emergency Operations Center (SEOC) and
provided training, preparedness events, and assistance with
exercises. He noted that the division had conducted 88
classes and trained approximately 1,500 individuals over
the past year and had hosted 22 preparedness events. He
added that its most visible function was its administration
of the state's disaster program, which provided both
individual and public assistance when disasters occurred.
He emphasized that the division strongly engaged with
communities during disasters.
Co-Chair Foster expressed his appreciation to the
department for its responsiveness and dedication during
disasters. He was grateful for the speed at which personnel
were deployed to Northwest Alaska communities during the
recent Merbok storm. There was also a recent aircraft
incident that involved the deployment of military aircraft
including the C-130, Black Hawk, and Pave Hawk.
Mr. Christenson continued to slide 4 which included a few
highlights from 2024. He stated that SEOC had been highly
active in 2024 and had responded to 140 incidents. He
clarified that while some incidents were minor,
departmental assistance was still necessary. He reported
that there were 12 state-declared disasters and 3 federally
declared disasters in 2024. He continued to AMYA and
reiterated that the academy held two classes in 2024 and
graduated a total of 244 cadets. He shared that 94
graduates earned a General Education Diploma (GED), eight
earned a high school diploma, and 26 had earned both. He
explained that some cadets arrived at the academy without
sufficient credits to graduate and used the program as an
opportunity to get back on track before returning to their
original schools. As a result, many cadets completed their
studies elsewhere, which accounted for the lower number of
diplomas issued directly by the academy. He shared that the
cadets had collectively lost 6,300 pounds over the 22-week
program, averaging 25 pounds per cadet, through a regimen
of physical fitness and healthy eating. He emphasized that
the academy was not only educational but also a
comprehensive life development program. He extended an open
invitation to any legislator interested in touring the
academy.
Mr. Christenson reported that OVA processed 4,160 new
disability claims through the U.S. Department of Veterans
Affairs during the past year and approximately $100 million
per in disability payments had been distributed to Alaska
veterans. He added that the office also assisted veterans
with home loans, health care, education, and G.I. Bill
benefits. Additionally, the office had sponsored the second
annual Honoring Women Veterans event in Anchorage, which
had over 100 attendees. He noted that the upcoming year's
event would be held in May in Fairbanks. He relayed that
the Alaska Veterans Cemetery in Salcha was progressing and
that most of the major environmental studies had been
completed. He projected that the cemetery could potentially
open in FY 28.
Mr. Christenson indicated that the image on the left side
of the slide showed the coordinated response in Juneau by
approximately 60 members of ANG, ASDF, and ANM. The center
photo was of a 103-year-old World War II veteran who had
never applied for veteran benefits before. He reported that
OVA had learned about the veteran's situation and reached
out to offer assistance and he was now receiving benefits.
The photo on the right was of a graduation ceremony for
AMYA, which he found to be a moving event. The recent
ceremonies had been held at venues such as the Alaska
Airlines Center in Anchorage and he stressed that all
legislators were encouraged to attend.
1:51:12 PM
Co-Chair Foster remarked that he had been in the
legislature for 16 years and he had finally attended one of
the academy's graduations the previous year and had been
deeply impressed. He encouraged others to attend if
possible.
Mr. Christenson continued to slide 5 which contained
additional highlights from 2024. He relayed that ANG's
Counterdrug Support Program partnered with federal and
state agencies to provide analytical and logistical
support. The program contributed to the interdiction of
fentanyl, methamphetamine, and cocaine, removed
approximately $650,000 in illicit currency from
circulation, and supported the distribution of naloxone
kits. He indicated that a future slide would provide more
detail on the program. Additionally, ANG had conducted 148
missions in 2024 and had been credited with 199 saves. He
stated that AANG was prepared to respond at a moment's
notice to refuel tankers when foreign aircraft from Russia
and China approached Alaska's borders. He emphasized that
the mission was ongoing.
Representative Stapp understood that DMVA had been closing
some of the armories around the state and he had heard that
additional closures were expected. He asked if the current
and future closures would impact SEOC's disaster response
capabilities.
Mr. Christenson responded that the armory divestiture
program had been underway for more than a decade. The
program was initiated due to declining Army troop numbers
in many areas and the high cost of maintaining armories
that no longer had assigned soldiers. He shared that a
decision to begin divesting the facilities was made years
ago. He explained that the department had identified 18 to
20 armories to retain in strategic locations, primarily in
hub communities. The department's model was a "hub-and-
spoke" system which meant that as long as robust armory
support existed in the designated hubs, the department
could effectively project resources outward from the hub
locations.
Mr. Christenson reported that four additional armories had
been divested in the current year and that 16 remained in
the queue for future divestiture. When an armory was
divested, ownership was transferred back to the community
through an extensive process that varied depending on the
party that had originally built or owned the facility. He
noted that the U.S. Army Corps of Engineers often played a
significant role in that process. The maintenance cost of
the unused armories was not justified and the department
could operate more effectively using its refined hub-and-
spoke approach.
1:55:07 PM
Representative Stapp appreciated the explanation but
thought it was important to understand that the department
was divesting armories. He thought that many of the
armories that would likely be divested were located in
Western Alaska and he suggested that communities would
benefit from knowing if their local facility was affected.
Mr. Christenson responded by listing the remaining
divestiture sites: Akiachak, Chefornak, Elim, Kasigluk,
Kivalina, Kotlik, Koyukuk, Quinhagak, Newtok, Noatak,
Nunapitchuk, Selawik, Saint Michael, Stebbins, Tuluksak,
and Tanana. He suggested that the department's legislative
liaison could provide a more detailed list in writing after
the meeting.
Representative Stapp asked for more information about
disability claims processed through the Veteran Service
Officers (VSOs). He recalled that the legislature had
approved an increase in VSO salaries the previous year and
asked whether the increase had resulted in improved
retention or efficiency within the program.
Mr. Christenson confirmed that the legislature had approved
a salary increase for VSOs the previous year. He explained
that the department administered a grant program totaling
$1,260,000, which was distributed among four veteran
service organizations. The funding was allocated
proportionally based on the number of VSOs employed by each
organization. Currently, there were 18 VSOs operating under
the grants. He stated that the department would continue
monitoring the impact of the salary increase on retention
and program effectiveness. The increase approved the
previous year amounted to approximately $7,000 per VSO. He
noted that the additional funding enabled the department to
establish a new officer position in Ketchikan. He remarked
that the funding had been very helpful.
Representative Stapp asked whether the department had
successfully filled the VSO position in Ketchikan.
Mr. Christenson responded in the affirmative.
Representative Stapp asked if the department had the
appropriate level of authorized receipt authority to secure
the necessary federal funding for the Alaska Veterans
Cemetery.
Mr. Christenson deferred the question to the department's
Administrative Services Director.
1:58:47 PM
BOB ERNISSE, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF MILITARY AND VETERANS' AFFAIRS, responded that the
department currently had the necessary receipt authority to
proceed with construction of the cemetery.
Representative Stapp understood that the legislature must
authorize the department to receive federal funding. He
asked whether any adjustments were needed to the current
authority level to complete the project.
Mr. Ernisse responded that the department had the necessary
level of receipt authority.
Representative Hannan asked if the divested armory
properties were transferred to local communities, school
districts, or simply shuttered.
Mr. Christenson responded that the facilities were
transferred to the communities through a federal transfer
process. He offered reassurance that the properties were
typically given to tribes, municipalities, or other local
entities rather than being shuttered.
Co-Chair Foster understood communities in his district
often sought the use of former armory infrastructure. The
facilities were repurposed for functions such as city
offices or multipurpose community buildings. He thought
that communities had generally responded positively to the
divestiture program.
Co-Chair Josephson asked whether the 16 villages Mr.
Christenson previously listed were villages that had
already had their armories closed, or whether the villages
were upcoming closures.
Mr. Christenson responded that the 16 sites he had
previously listed were the final armories still pending
divestiture. He noted that the state originally had 88
armories and approximately 18 had been retained. He
emphasized that the vast majority of the armories had
already been divested.
Co-Chair Josephson asked if the armories were relics of the
World War II era or the Cold War era.
Mr. Christenson responded that the armories were generally
smaller structures dating from the World War II era through
the 1960s. He clarified that the facilities were small
buildings with one or two rooms.
Co-Chair Foster added that the armories in his district
resembled large Conex boxes. The buildings were perhaps
twice the the size of a standard Conex unit and were around
16 feet by 40 feet. He noted that the size and structure
was modest.
2:02:43 PM
Representative Bynum commented that he found the VSO
program extremely beneficial to the state, particularly
because Alaska had the highest per capita of veterans. He
thought veterans deserved better programming and services
throughout the state. He noted that Ketchikan had received
a VSO and funding for the position. He asked if the
position was specifically for Ketchikan or if the officer
would also be responsible for Craig.
Mr. Christenson responded that the Ketchikan position also
served Craig as the position was responsible for the Prince
of Wales and Ketchikan regions. He offered to follow up
with more information about the position.
Representative Bynum wondered if there was additional
information about the position. He suggested discussing the
position offline.
Mr. Christenson would follow up.
2:04:24 PM
Mr. Ernisse continued on slide 6 which included a high-
level comparison of the FY 22 actuals and the FY 26
governor requests. He noted that the unrestricted general
fund (UGF) budget had remained fairly consistent, with one
significant change being the transfer of the Alaska Public
Safety Communication Services (APSCS) to the Department of
Public Safety (DPS) in FY 23. The only request for
additional UGF was a funding swap for the Division of
Homeland Security and Emergency Management (DHSEM). The
request would remove $800,000 in federal receipt authority
and add $500,000 in interagency receipts and $300,000 in
capital interagency receipts. He clarified that the
decrease in federal authority was due to most federal
grants moving to the capital budget, and the interagency
receipts were necessary due to an increase in declared
disasters and the ability to allocate payroll to the
disasters or grants.
Representative Galvin understood that ASDF had grown to 225
members and the ultimate goal was to reach 500 members. She
asked how large the force had been over the past few years
and how quickly it was growing.
Mr. Christenson responded he would follow up with the
information.
Representative Galvin asked if it was growing.
Mr. Christenson responded that the force had 50 members six
years ago, then grew to 150, and now had 225 members. He
emphasized that while the goal was to reach 500, the growth
was gradual and progression was slow.
Mr. Ernisse continued on slide 8 and addressed a request
under the Office of the Adjutant General (OAG) for $175,000
in general funds to expand the operations of AOM. The
funding would be used to increase emergency response and
outreach capabilities.
2:07:54 PM
Mr. Christenson continued on slide 8 and remarked that
Alaska was one of the most strategic locations on the
planet. He stated that a significant amount of activity
moved through the state and Alaska was militarily and
economically strategic. He explained that attention had
been recently focused on China, Taiwan, Russia, and North
Korea. He relayed that it was DMVA's to be prepared for a
future conflict. One of the most significant projects the
department was working on was the build-out of a statewide
high frequency radio network. If a "bad actor" disrupted
communications, the state would need to have the ability to
communicate with its communities. He relayed that ANG,
ASDF, CAP, and the Coast Guard had formed a working group
to pool resources and develop a high frequency radio
network across the state which would allow continued
communication in the event of an outage. The full
implementation would take several years but some parts of
the network were already operational. Some sites needed new
antennas, while others had antennas and radios but lacked
trained operators. He stated that there were locations
where build-out was planned for the future. He noted that
it was important to be able to respond to undeclared
disasters and to obtain supplies and training so that
members of AOM could assist Alaskans during disasters or
emergencies.
Co-Chair Foster asked whether the multi-year description
applied to the build-out of the high frequency radio
network or to the funding request. He asked if the $175,000
request was meant to cover three years or if the department
intended to request the same amount in future years.
Mr. Christenson replied that the request was not for one
year or three years, but the request was for the funding to
be included in the department's base budget. He confirmed
that the high frequency radio network build-out would take
multiple years and there would be increased needs for
training, recruitment, and facilities as ANM and ASDF grew.
Co-Chair Foster asked whether the high frequency radio
network was separate from the Alaska Land Mobile Radio
(ALMR) system.
Mr. Christenson responded in the affirmative.
Representative Hannan asked why the request was located in
OAG rather than in DHSEM.
Mr. Christenson responded that ASDF and ANM did not have
their own budget components and were part of AOM within
OAG.
Representative Hannan commented that the request was
confusing. She thought that that referring to it as a
multi-year request implied that it was a capital request
that allowed multi-year spending. She asked if the $50,000
portion of the request was a budget allocation. She
understood that the AOM did not have its own allocation and
was under the Adjunct General's office, but she wondered
why the funding would not be included in the emergency
response section of the budget if it was for disasters.
2:13:17 PM
Mr. Ernisse responded that it was important to remember
that the request was to expand operations for AOM. He
stated that the build-out of high frequency radios was part
of the expansion but it was not the totality of the
request. The department was requesting the funds to be
added to the base budget going forward. He thought it was
appropriate for the request to be located under the
Adjutant General because it covered the entirety of AOM,
not only disaster responses. He reiterated that AOM
represented a significant part of the department overall.
Representative Bynum remarked that AOM was an entity that
he had begun to hear more about over the last few years. He
was aware of AOM helping during recent natural disasters.
He asked how the department was messaging the justification
for the spending and showing Alaskans how it benefited the
state. He asked how the department was carrying out its
communication.
Mr. Christenson replied that AOM included ANG, ASDF, and
ANM. He relayed that those entities comprised the
statutorily defined AOM. The majority of AOM was ANG, with
approximately 4,000 members. He stated that ANG had a
robust advertising and recruiting campaign and that its
recruiting numbers were strong. He explained that ASDF was
most active at the community level, and it typically
participated in community events, festivals, and parades.
He noted that ANM consisted of Navy or Marine reservists
and consisted of a small group of individuals who were
already active and connected and it did not require
extensive recruiting.
Representative Bynum stated that prior to becoming a
legislator, he was an assembly member in Ketchikan and
there had been an event in the community where members of
ASDF had responded and members of the community members
questioned who the personnel were. The general public
usually associated such appearances with ANG but there had
been an increase in participation by ASDF. There had also
been increasing awareness of ANM. He stated that he was
trying to understand what the department was doing to
improve communication with communities about the various
military groups. He wanted the department to clearly
communicate to communities who the individuals in uniform
were, why they were present, and what their mission was. He
asked what the department was doing to increase
communication.
2:17:52 PM
ANGELA LAFLAMME, SPECIAL ASSISTANT, DEPARTMENT OF MILITARY
AND VETERANS' AFFAIRS, responded that some of the actions
the department had taken during the past year included
outreach trips in coordination with ANG and its recruiters
to communities across the state. The department included
personnel from all the organizations under AOM in the
outreach trips to facilitate engagement with community
members prior to an emergency event. She stated that part
of the funding request would support outreach. She
explained that if the department was unable to use military
vessels for travel, the funds would allow transportation of
personnel to provide outreach touchpoints in communities
ahead of any emergency or event.
Representative Bynum stated that he was trying to
understand the reasoning behind the funding, particularly
because there was an additional funding request included.
The benefit of the additional funding was not clear to his
community of Ketchikan. He received questions about the
funding during his time on the assembly and he continued to
receive questions as a legislator. He was trying to
determine how to best communicate the information to
communities. If the department was already engaged in
communication efforts, it would help to be able to direct
constituents appropriately. He asked if there was an
opportunity to utilize personnel from AOM to assist with
VSOs and better serve veterans in the communities. He
wondered which entity would be best suited for the task.
Ms. Laflamme responded that the VSO program was a federal
program with specific requirements. In order to qualify, a
person had to already be a member of an organization such
as ASDF or ANM. She emphasized that the VSO program itself
was federally governed and subject to strict eligibility
requirements.
Representative Allard asked the department to provide more
detail regarding ASDF's community involvement. She asked
the department to describe ASDF's involvement in the
Wrangell flood, a recent earthquake that ASDF had responded
to, and more information on ASDF's response to a recent
avalanche in Eagle River. She explained that she had been
skeptical about ASDF for years and it took time for her to
recognize its importance. The state did not have personnel
stationed in every isolated community and she believed that
ASDF was valuable, but she thought that communication and
messaging could be improved. She stressed that she
supported the budget increment and DMVA. She asked Mr.
Christenson to explain why the department's work was
important.
Mr. Christenson responded that AOM included ANG and ANM in
addition to ASDF. When the department determined how many
personnel were needed to respond properly to a disaster, a
call was issued to all components of AOM and a variety of
volunteers were deployed. He relayed that ASDF members were
often the first to arrive during emergencies because many
members already lived near a given affected area. In flood
situations, debris management had typically been a major
responsibility for members. He explained that once
volunteers were activated, they were no longer considered
volunteers and were instead placed on active state duty.
Responsibilities during floods included debris management,
assisting with sheltering, and addressing other immediate
needs. In situations involving avalanches, the department
would likely not assign members to debris management in
hazardous conditions, but members would provide support
services for displaced individuals.
Representative Allard understood that the funding request
had been placed under the Office of the Commissioner
because of the structure of military personnel management.
She explained that Homeland Security did not oversee the
military personnel component and that ASDF, ANM, and ANG
were managed by the Adjutant General within DMVA. She asked
if ASDF members also helped in other areas such as traffic
direction. She thought that such tasks were often
overlooked but were valuable.
Mr. Christenson responded in the affirmative. He clarified
that although the members did not engage in law
enforcement, they supported law enforcement personnel by
taking on responsibilities such as traffic duties and
parking management. He noted that such assistance freed law
enforcement to perform other duties during events like
avalanches.
2:25:26 PM
Mr. Ernisse continued to slide 9, which contained the
department's final request for an additional $200,000 in
interagency receipts for the counterdrug program. He
explained that the funding would support a variety of state
functions, including training, outreach, education, and
assistance to other state agencies in drug prevention
efforts.
Co-Chair Foster noted that the request appeared to be
contingent on funding availability and asked whether any
funding had been secured.
Mr. Christenson confirmed that no funding had yet been
secured.
Representative Hannan asked whether the allocation had a
corresponding request from law enforcement agencies. She
inquired whether DPS had submitted a related request. She
noted that since the department was not a law enforcement
entity, any expansion in counter-drug activities would
presumably require increased participation from law
enforcement. She asked whether the interagency receipts
would come from DPS to fund positions like aviation
support.
Mr. Christenson responded that the counterdrug program was
not a standalone program. He explained that the department
supported both state and federal law enforcement and public
health agencies. The program included 18 military personnel
who worked as analysts, aviators, and outreach staff. He
clarified that the individuals were not in charge of
operations, but were requested as partners by agencies such
as DPS, DOH, and the FBI. He stated that the funding
request was for interagency receipts which would allow for
flexibility. For example, if DOH required an additional
position beyond the existing 18 and had the funding, the
department could place an individual on active state duty.
The requested authority would allow the department to
accept the funding.
Mr. Christenson appreciated the committee's time and
reiterated would follow up with the information that had
been requested by members.
2:29:09 PM
AT EASE
2:33:41 PM
RECONVENED
^OVERVIEW: FY26 DEPARTMENT BUDGET: DEPARTMENT OF
ENVIRONMENTAL CONSERVATION
2:34:33 PM
MEGAN KOHLER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION, introduced herself and
explained that the presentation would begin with testimony
from Acting Commissioner Christina Carpenter.
CHRISTINA CARPENTER, ACTING COMMISSIONER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION (via teleconference), introduced
herself and the PowerPoint presentation "Environmental
Conservation Overview" dated February 14, 2025 (copy on
file). She advanced to slide 2 which included the
Department of Environmental Conservation's (DEC) mission.
She noted that while it was often shortened to protecting
human health and the environment, DEC's full mission also
included enhancing the health, safety, and economic and
social well-being of Alaskans.
Ms. Carpenter advanced to slide 3 which displayed the
department's current leadership organization chart. She
acknowledged the departure of former Commissioner Jason
Brune the previous week and noted that she was currently
serving as the department's Acting Commissioner while
continuing in her official role as Deputy Commissioner. She
noted Mr. Reese Williams was in the audience and explained
that he had recently joined the department as the
legislative liaison. She shared that Mr. Williams had
worked as a legislative aide for years and brought valuable
experience to the position.
Ms. Carpenter added that the department was actively
recruiting for a public information officer. She encouraged
anyone aware of qualified candidates interested in an
external communications role to contact her directly. She
relayed that the rest of the organizational chart showed
the department's five division directors and that
collectively, she and the five division directors had over
seventy years of state experience. The department employed
individuals with extensive experience in state budgeting,
finance, and operations processes, and members of
leadership had experience in emergency planning,
preparedness response, and the oil and gas industry. She
expressed that she was proud of the well-rounded and
diverse leadership team.
2:39:17 PM
Ms. Carpenter continued to slide 4 which provided a
snapshot of the department's four programmatic divisions:
the Division of Air Quality (DAQ), the Division of Water
(DW), the Division of Environmental Health (DEH), and the
Division of Spill Prevention and Response (SPAR). She
clarified that the teams were responsible for issuing
permits, performing inspections, and providing technical
assistance to regulated entities. She relayed that DEC was
relatively small and contained 556 positions. Within the
calendar year, DEC had issued 9,553 permits, approvals,
certifications, and plan reviews. She added that the
department had also performed over 3,100 inspections and
site visits. She noted that in 2024, staff had access to
over 29,000 hours of training, which was important because
staff were responsible for issuing timely and defensible
permits and making enforceable regulatory actions. She
explained that department leadership prioritized staff
training and development to ensure that employees could
successfully perform the work of the agency.
Ms. Carpenter advanced to slide 5 and shared that DEC's
budget request for FY 26 was minimal. She noted that there
were only three items for consideration and only one of the
three involved a request for UGF. The first item was a $3
million interagency receipt to increase interagency
authority within the Division of Administrative Services
(DAS). The request for increased authority would respond to
the FY 25 intent language directing the separation of the
department's annual building lease operations and
maintenance costs. She explained that the increase in
authority was a structural change that was necessary to
allow the transfer of funds from various divisions. The
request did not represent a request for new money but was
strictly a receipt authority adjustment. She added that the
same applied to the next request, which related to DW. She
explained that it was a technical cleanup of authorities,
exchanging more restrictive program receipt authority for
general fund program receipt authority.
Ms. Carpenter explained the department made a similar
technical cleanup in DAQ. The final budget increment for
consideration was a $45,000 UGF request for the
appropriation that funded the department's Environmental
Health Laboratory (EHL) operations. She clarified that the
request was intended to cover increased utility costs over
the years that could no longer be covered by the existing
operating budget. She noted that several members of the
committee had already visited the department's facilities.
She explained that EHL was located in East Anchorage and
was the department's only state-owned building. She relayed
that the department was proud of the analytical testing
performed at the lab and it invited any members, staff, or
interested constituents to tour the facility.
2:44:25 PM
Ms. Kohler continued on slide 6 and reiterated that the
department's budget was largely flat and that most of the
changes were related to salary adjustments and reductions
from one-time items. She noted that the budget showed a
17.9 percent increase in the "other" category, which
reflected an increase in interagency receipts. The increase
was not a budget request but a mechanism to allow the
department to move funding. The department had also listed
out Infrastructure Investment and Jobs Act (IIJA) funding
separately, which had been done since the inception of the
funding and was reflected in the upcoming slides.
Ms. Kohler continued to slide 7 and the appropriation for
DAS, which included four allocations: the Office of the
Commissioner, DAS, State Support Services (SSS), and
facilities rent for non-state-owned buildings. She
explained that the request for SSS primarily covered lease
costs and Department of Administration (DOA) chargebacks.
She added that facilities rent for non-state-owned
buildings consolidated the department's lease costs into
one allocation. The allocation included salary adjustments
and $3 million in interagency receipts to track lease costs
and respond to intent language. She also highlighted the
reversal of the Juneau Air Lab relocation, which had been a
one-time increment of $87,000.
Ms. Kohler continued to slide 8 and addressed costs for
facilities operations and maintenance for state-owned
facilities. She reiterated that the appropriation only
applied to EHL in Anchorage. She explained that the results
delivery unit (RDU) provided funding for utilities,
building systems, and two full-time labor, trades, and
crafts employees, but it did not fund laboratory
operations. She stated that the department was requesting
$45,000 under the RDU to reflect the increased utility
costs since 2020.
Ms. Kohler moved on to DEH and stated that there were no
significant changes proposed for FY 26. She explained that
the increases in the budget were a result of salary
adjustments.
Ms. Kohler continued to slide 10 and DAQ. She stated that
there were no significant changes in the division's budget
and that the increases reflected salary adjustments.
2:47:43 PM
Representative Stapp remarked that Fairbanks recently
received a notice regarding the State Implementation Plan
(STIP) about the requirement for homebuyers and sellers to
pay for energy assessments on their homes. He asked whether
the mandate would apply to the entire state or only to
residents of Fairbanks.
Ms. Carpenter asked for the question to be repeated.
Representative Stapp repeated the question.
Ms. Carpenter responded that the requirement was limited to
homeowners in the non-attainment area in Fairbanks.
Representative Stapp asked whether Ms. Carpenter had any
information about the cost that residents would be required
to pay under the mandate.
Ms. Carpenter responded that she did not know the cost but
she would follow up.
Representative Stapp explained that he raised the issue
because the cost of the energy rating requirement might be
an item to consider adjusting once the information became
available.
2:50:21 PM
Ms. Kohler continued on slide 11 and detailed the funding
for SPAR. She stated that the funding was flat, although it
might appear not to be. She explained that the flat funding
included a reversal of funding intended for SB 67 [passed
in 2024], which created the Firefighting Substance Disposal
Reimbursement Program, but the funding would not be
returned to the department. The program began on January 1,
2025, and the department continued to utilize the funding.
However, the department removed one-time items from the
base budget to maintain clear accounting. Any unspent
authority remaining at the end of FY 25 would be carried
forward into FY 26 and FY 27 and would be reflected in the
department's management plan.
Representative Tomaszewski asked for more information about
the perfluoroalkyl and polyfluoroalkyl substances (PFAS)
mitigation program included in the spill prevention and
response fund.
Ms. Kohler responded that she could provide general
information but would need to defer to subject matter
experts for technical details. She explained that the
program allowed local and community entities to seek
reimbursement for firefighting foam disposal.
Representative Tomaszewski asked whether there were any
requirements for cities, boroughs, or municipalities to
qualify for the grant program.
Ms. Kohler responded that she did not have the specific
criteria but believed the eligibility requirements were
broad. She offered follow up in writing.
Co-Chair Josephson asked what the department's strategy was
for addressing decades old PFAS contamination now that a
law had been enacted to prohibit new PFAS chemicals.
Ms. Carpenter asked for the question to be repeated.
Co-Chair Josephson asked what the department's strategy was
for addressing legacy PFAS contamination. He clarified that
he was not referring to SB 67, which addressed disposal,
but rather to contamination that predated the bill's
effective date. He noted that there was a portion of Sand
Lake where PFAS had been detected in the water table and
had crossed over Raspberry Road. He asked what the
department was doing for Alaskans in areas where PFAS
already existed and what the strategy was for the many
communities that were likely impacted.
Ms. Carpenter replied that the department had been working
with impacted property owners and potential responsible
parties and was conducting well sampling in some areas. She
did not have current information about the Raspberry Road
site but confirmed that DEC had been involved. She could
follow up with more detailed information.
2:55:03 PM
Co-Chair Josephson asked if there was a recommendation
regarding water consumption in Gustavus. He stated that he
had spent approximately ten days in Gustavus a couple of
summers prior and wanted to know whether the water was
safe.
Ms. Carpenter responded that she would defer the question
to subject matter experts within the department for
information specific to the water in Gustavus.
Representative Hannan responded that she could provide some
insight. She stated that she had previously represented
Gustavus prior to redistricting. She explained that in the
case of Gustavus, the contamination cleanup was a
Department of Transportation and Public Facilities (DOT)
item. She relayed that DOT was the responsible party in
many Alaskan communities where PFAS contamination existed
on state lands, particularly for testing at airports where
PFAS testing had been mandated. The DEC budget item related
to PFAS involved a buyback provision passed in legislation
the previous year [SB 67]. The bill allowed for the return
of unused foam because the Federal Aviation Administration
(FAA) no longer mandated the use of PFAS foam at airports
across Alaska. She relayed that DEC's role in PFAS
contamination was usually limited to testing the foam, but
much of the testing was also carried out by DOT. She added
that some of the legacy contamination sites in the
Fairbanks area were military-related and the federal
government was the responsible party. Most of the budget
for PFAS contamination cleanup in Alaska appeared in the
DOT budget, not the DEC budget.
Co-Chair Josephson commented that he was surprised DEC did
not have a larger role in advising DOT. He stated that he
would take the topic offline.
Co-Chair Foster requested that the Ms. Carpenter work with
subject matter experts to provide a short narrative about
PFAS that could be distributed to the committee.
Ms. Kohler continued on slide 12 and detailed the request
for DW. She stated that the funding was again largely flat.
There was a technical adjustment that involved cleaning up
unused fee funds and moving the funds into general fund
program receipts. The cleanup was similar to the cleanup
previously done in the DAQ RDU. The department anticipated
that DW would be able to utilize the funds.
2:59:15 PM
Co-Chair Josephson asked Ms. Kohler what the current
balance in the response fund was.
Ms. Kohler responded that the projected ending unobligated
balance for the prevention account in FY 24 was
$25,420,000.
Co-Chair Josephson asked for clarification that the
response account was the larger of the two funds [spill
prevention and response funds].
Ms. Kohler confirmed that the response account was the
larger of the two.
Co-Chair Josephson asked for the balance in the response
account.
Ms. Kohler responded that she did not have the specific
number but would be happy to follow up with the
information.
Representative Tomaszewski asked how many positions were
budgeted by DEC.
Ms. Kohler responded that there were 556 budgeted
positions.
Representative Tomaszewski asked how many of the positions
were currently filled.
Ms. Kohler responded that as of January 15, 2025, 518 of
the positions were filled.
Representative Tomaszewski asked how many of the 518
employees teleworked or worked from home.
Ms. Kohler responded that 64 percent of the department's
positions were currently teleworking under formal telework
agreements. She explained that the agreements generally
required employees to be in the office between two and four
days per week.
Representative Tomaszewski thought that teleworking
required performance oversight and asked whether the
department used key performance indicators to ensure that
work was being completed.
Ms. Kohler responded that the department used a robust
performance tracking and planning process. She explained
that every January, the department reviewed its goals,
broke the goals down by division, program, team, and
individual, and then tracked and assigned goals and tasks
accordingly. She added that the process helped employees
understand how their work contributed to the department's
overall mission.
3:02:55 PM
Representative Stapp asked who was responsible for the
enforcement of the department's administrative regulations.
Ms. Carpenter responded that programmatic staff were
responsible for enforcement. She added that the department
also had two environmental crimes investigators housed
within the Office of the Commissioner.
Representative Bynum thought there appeared to be
uncertainty across the state regarding changes at the
federal level. He asked whether the department anticipated
any regulatory changes or disruptions at the federal level
that could impact its ability to operate.
Ms. Kohler responded that the department was actively
monitoring developments and guidance. She added that the
department was currently funded and had no current concerns
about disruptions.
^PRESENTATION: VILLAGE SAFE WATER AND SEWER
3:05:43 PM
GENE MCCABE, DIRECTOR, DIVISION OF WATER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, introduced himself.
CARRIE BOHAN, PROGRAM MANAGER, DIVISION OF WATER,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, introduced
herself.
Mr. McCabe introduced the PowerPoint presentation "Village
Safe Water Program Overview" dated February 14, 2025 (copy
on file). He advanced to slide 2 and reviewed the mission
of Village Safe Water (VSW), which was to support rural
communities in their efforts to develop sustainable
sanitation facilities. He clarified that sustainability
referred to both economic and operational sustainability.
The VSW program funded planning, design, and construction
of water, wastewater, and solid waste facilities across
Alaska. The program also provided project management and
oversight for grant-funded projects statewide.
Mr. McCabe continued to slide 3 and addressed the
challenges of rural sanitation in Alaska. He noted that the
state's remoteness, climate, and ground conditions
significantly increased construction costs, which in turn
elevated operational expenses. He noted that Alaska
presented an extremely difficult environment for operating
sanitation systems which placed significant stress on both
the systems and the individuals responsible for
maintenance. He expressed appreciation for system operators
across the state and acknowledged the hard work required to
keep systems running.
Mr. McCabe stated that when funding was established, it was
intended to address concerns at a single point in time, but
the needs continued to evolve and prices changed. As a
result, VSW was always chasing inflation, always chasing
cost increases, and always chasing the increasing need. He
emphasized that VSW was still making great progress. He
noted that local capacity for operations and maintenance
was sometimes lacking for a variety of reasons and the
issue went beyond the ability to train and retain operators
in a given area. He recognized that the challenges were
compounded by the state's unique climate and operational
environment. He explained that the situation took a toll on
everyone involved in maintaining, operating, and funding
the system. He relayed that there were strategies in place
to address the challenges.
3:09:17 PM
Mr. McCabe stated that VSW's collaborations were more than
just partnerships, but were teams. He explained that
entities such as the Rural Utility Business Advisor
(ARUBA), the Alaska Native Tribal Health Consortium
(ANTHC), the Indian Health Service (IHS), the Environmental
Protection Agency (EPA), the U.S. Department of Agriculture
(USDA), and the Denali Commission were not siloed
organizations. Rather, the partners communicated regularly,
knew one another personally, and functioned as a true team.
He stated that the aim was to combine multiple funding
sources to ensure no community was left out, and that there
were various avenues available to achieve the goal.
Mr. McCabe explained that IIJA was enacted at a time when a
database existed of projects that Alaska needed in order to
meet its sanitation needs. More projects had since been
added and prices had increased significantly, and there was
a continually growing gap. He explained that $3.5 billion
was originally made available through IIJA, with $2.1
billion representing Alaska's sanitation needs. However,
the $2.1 billion figure was no longer accurate, even though
it remained the available funding amount. He stated that
when projects were ready to proceed, VSW could apply for
funding, but the further time moved from the date that list
was created, the more the funding and the need diverged.
Co-Chair Josephson asked whether the $2.1 billion was
intended to represent the cost of completing water and
sewer sanitation for all 230 villages.
Mr. McCabe deferred to Ms. Bohan.
Ms. Bohan replied that IHS managed the Sanitation
Deficiency System (SDS) database, which was a national
database. She explained that Engineers at VSW and ANTHC
worked directly with communities to identify and address
sanitation needs and were responsible for understanding
community needs and documenting the needs in the database.
She stated that the $2.1 billion figure originated in 2022
and reflected all documented needs. She explained that
projects for comprehensive pipe systems for all unserved
and underserved communities at that time were included in
the database. The projects included all communities using
honey buckets or flush tank haul systems. The funding in
the database would have provided full pipe service to
communities. She added that many of the remaining dollars
reflected improvements to existing systems.
3:12:51 PM
Ms. Bohan continued on slide 4 and explained that there
were two main sanitation funding mechanisms. The first was
administered through VSW and was shown on the left side of
the slide in the yellow box. She stated that VSW partnered
with USDA Rural Development and the EPA, which provided
annual grants that required a 25 percent state match, then
VSW administered funds through the Capital Improvement
Project (CIP) funding cycle.
Ms. Bohan stated that the second mechanism shown on the
right side of the slide was the IHS and Tribal funding
process, which the department referred to as the SDS
funding cycle because it used SDS as its data hub. The IHS
dollars included housing funds, regular funds, and IIJA
dollars, as well as tribal and Indian "set-asides." She
added that she would address the state revolving funds near
the end of the presentation. She explained that a portion
of the federal dollars was carved out and administered
directly by the EPA through the use of SDS. She emphasized
that substantial funding as a result of the infrastructure
bill was currently being distributed through the SDS cycle
depicted on the right side of the slide. She noted that she
sat on the review committee as a partner and that ANTHC
also participated in the VSW review committee for the CIP
cycle. She reiterated that both teams worked closely on
both funding systems.
Ms. Bohan explained that VSW staff provided support to
approximately one-third of rural communities and ANTHC
supported about two-thirds. She stated that funding
followed the community's lead agency assignment, which
meant that if VSW supported a community, the funds
allocated to that community would be routed VSW, regardless
of funding source. The same was true for communities
supported by ANTHC. She relayed that the process created a
web of funds going back and forth. She noted that a common
misconception was that making ANTHC the lead agency offered
unique funding opportunities, but all communities were
eligible for the same opportunities. The lead agency
structure was simply a means of sharing responsibilities
across communities.
3:16:18 PM
Ms. Bohan advanced to slide 5 which included a graph of how
the VSW funding had increased over time. She noted that the
color-coded chart illustrated the different funding sources
and highlighted the substantial growth between 2015 and
2025. The dark blue section represented IHS dollars
received as a result of the IIJA bill and the funds totaled
approximately $450 million over the past two years.
Mr. McCabe continued on slide 6 and explained what an
average project looked like. He noted that project costs
varied widely depending on the nature of the construction
and the community. A typical village piped water project
could range from $500,000 to $4 million per home, depending
on the size of the village and the project. He reported
that the average cost for first-time home connection
service was approximately $1.35 million per home. Projects
typically lasted five years, including both the design
cycle and construction cycle. He emphasized that it was
important to complete engineering work prior to
construction. Projects had the potential to last up to 10
years, depending on the nature of the available funding. If
funding became a problem, there could occasionally be a
one-year gap during a project. He noted that such gaps were
unusual but could cause delays in construction.
Mr. McCabe continued to slide 7 and referred to a map
showing the underserved and unserved communities in Alaska.
He stated that the communities marked in bold had projects
on the books either to initiate services or to upgrade
services. He added that more projects were expected to come
online shortly. He turned the presentation back to Ms.
Bohan.
3:18:33 PM
Ms. Bohan continued on slide 8 and explained that the VSW
funding cycle was an annual funding opportunity. She noted
that community eligibility was defined in AS 46.07.080.
Eligible communities included second-class cities, first-
class cities, municipalities, and tribal and nonprofit
entities with a population of fewer than 1,000 residents,
as well as Metlakatla. She stated that eligibility included
most small rural communities, in addition to the cities of
Bethel and Kotzebue, which qualified as second-class
cities.
Ms. Bohan relayed that projects were planned to ensure the
most appropriate alternative was being pursued to solve a
particular problem. There was a review committee to ensure
goals were being met that included representatives from
DEC's permitting division along with funding agencies. She
stated that the committee discussed potential problems at
the planning and conceptual stage before projects moved to
the design stage. The effort had accelerated project
timelines and helped to proactively address issues. Once a
project had an approved planning document, the organizers
could apply for design and construction funding. She noted
that design and construction were handled as separate
funding applications.
Ms. Bohan stated that DEC was working with its partners to
help communities seeking VSW funding for first-time piped
service projects to develop sustainability plans. She
explained that the purpose of the plans was to ensure that
communities understood the financial burden of the project
and were prepared for the user fees and operation and
maintenance requirements. She emphasized that the
department would examine the plans before it dedicated
funds to a project.
Ms. Bohan continued to slide 9 and relayed that it was an
annual application process for new projects. She explained
that the department used a scoring criterion similar to
IHS's scoring system and that the projects were evaluated
based on beneficial impact to public health. She explained
that projects providing any level of service to unserved
communities received the highest possible score, while
projects offering only marginal benefit received the
lowest. The current level of service in a community was
also considered as part of the scoring process. She noted
that communities with no piped systems received the highest
score, communities with flush tank and haul systems
received fewer points, and communities with existing piped
systems received no additional points. In addition, the
technical, financial, and managerial capacity of the
community was evaluated. She noted that minor points were
awarded for communities that demonstrated the ability to
join the project with others or submitted high-quality
applications.
Ms. Bohan emphasized that the department worked diligently
to fund as many projects as reasonably possible each year.
She explained that one strategy was to break large projects
into phases. The designing phase of a project often took
several years, and the department could fund a small
portion of many projects to move them into the design
phase. Once the design was completed, projects would then
be first in line for future phases of funding. She stated
that the department was committed to funding the phased
projects through to completion.
3:22:31 PM
Mr. McCabe continued on slide 10 and provided a quick
overview of some sample projects. There was a new source
water distribution system in Unalakleet, new water
treatment plants and washeterias in Wales and Nunapichuk, a
lift station replacement in Saint Paul, a new intake water
and transmission line in Shaktoolik, and a new water
storage tank in Saint George.
Mr. McCabe continued to slide 11 and explained that in
2024, the best management practices score had been removed
from the funding eligibility criteria to allow more
communities to become eligible for funding. During the
design phase, the previously mentioned review committee
convened a multidisciplinary team to review and comment on
designs at the early conceptual stage. The process had
significantly reduced surprises during permitting and
construction and had led to notable improvements in project
execution. He added that efforts had been made to utilize
modular construction, which shortened the time required on-
site by allowing components to be built offsite and then
transported and installed. He explained that the department
had seen some successes with modular construction.
Mr. McCabe reported that the department had also sought a
better balance between contractual construction support and
the use of local labor. He understood that the preference
was for hiring local laborers, but the projects needed to
be completed urgently and efficiently, and it was not
always possible to hire local workers. He explained that
automation could reduce the burden on local operators, but
it would also increase system complexity, which created new
challenges if a system failed. He explained that the
department continued to evaluate the tradeoffs.
3:24:51 PM
Ms. Bohan advanced to slide 12 which provided an overview
of the capital budget. She highlighted that $65 million
represented the CIP funding and approximately $350 million
was expected from IHS, which came primarily from IIJA.
Mr. McCabe continued to slide 13 and explained that the
department operated a remote maintenance worker program
under VSW. He described the workers as heroes who traveled
across the state to respond to emergencies and deliver
hands-on technical training. There were currently 15 remote
maintenance workers, 13 of which were regional health
corporation employees funded by grants, and three were DEC
employees. He relayed that a remote maintenance worker had
brought a doorknob to a village where the previous operator
had taken the key, and the worker had successfully replaced
the doorknob and repaired the system. He stressed that the
employees played an important role in keeping water and
sanitation systems operational. The remote maintenance
workers also provided training and phone support to
operators who did not know where to turn and were a
critical resource for operators in rural communities.
Mr. McCabe continued to slide 14 which detailed several
current challenges. He stated that there was a shortage of
experienced engineers, which affected the department and
its partners. He explained that although entry-level
engineers were available, the complexity of the projects
required experienced staff. Supply chain delays and
inflation continued to cause cost overruns. He noted that
in Alaska's remote and constrained environment, sourcing
compliant equipment often required significant effort. He
added that IHS funding was typically awarded without
considering the local capacity to operate and maintain
systems, which sometimes resulted in systems that were too
expensive for communities to operate.
3:28:31 PM
Ms. Bohan continued on slide 15. She noted that while the
VSW program received considerable attention, DW also
managed the State Revolving Loan Fund (SRLF), which
provided low-interest loans, primarily to municipalities
and some private utilities. She explained that SRLF was an
ongoing opportunity that accepted applications year-round.
She relayed that DW reviewed applications three times per
year and allocated new funding accordingly. The available
funding was currently higher than the demand, and she hoped
to use the funding to assist more municipalities and water
and wastewater utilities. She noted that there were
additional funding opportunities through IIJA that included
funds for full loan forgiveness for projects addressing
emerging contaminants, particularly those addressing PFAS
contamination. The division had actively reached out to
communities with known PFAS issues to encourage the
communities to pursue the funding. She added that the
division had also been working with the Drinking Water
Program to assist communities by conducting monitoring to
determine if PFAS was present, which could allow
communities to qualify for fully forgiven loans.
Representative Bynum relayed that he was concerned about
the sustainability of the VSW systems that were being
installed. He highlighted that the investment was $2
billion and that maintaining the systems over a 50-year
period would cost approximately $27,000 per home. He
assumed the systems were built to meet EPA standards but
asked what the long-term plan was for maintaining the
systems.
Mr. McCabe responded that sustainability remained a major
concern. He stated that systems were required to generate
sufficient revenue to be self-sustaining, including
covering repair, maintenance, and upgrades over time. He
emphasized that a system might be high quality, but if it
was unaffordable for utility customers, the intended
outcome would not have been achieved. The sustainability
concern was carefully evaluated during the planning
process.
Representative Bynum commented that it was unclear how
communities could afford to cover the estimated $27,000 per
year. He understood the need for rate-setting for utility
companies to cover costs, but he thought the projected
expenses were unrealistic for communities. He asked how the
state planned to address the issues over the next 10 to 15
years. He thought an emergency situation would arise
without appropriate investment. He did not see a clear
plan.
Ms. Bohan responded that Representative Bynum's concerns
were the reason the department had initiated discussions
with the committee around sustainability planning prior to
allocating funding. She explained that the department had
been working to bring together all partners, including
communities and regional entities, to identify additional
sources of revenue to support system sustainability. For
example, the community of Wales had received funding to
install piped service, but the projected monthly user rate
was over $300. She explained that when community members
were asked if they were willing to pay the $300 amount,
they declined. She stated that the conversation needed to
involve not just the communities, but also regional
partners who might assist in addressing long-term costs.
She noted that IHS had the statutory authority to fund
operations and maintenance, but it had never received
appropriations to do so, which was an active topic of
discussion at the national level. The VSW statute also
allowed for support of operations and maintenance, but
similar to IHS, the authority had not been funded or
implemented.
3:34:35 PM
Representative Hannan referred to slide 12. She noted that
the top line of the capital request listed "dollars in
thousands," but Ms. Bohan had verbally referred to
"millions." She asked whether the general fund match was
$22 million or $22,000.
Ms. Bohan responded that the correct figure was $22
million.
Representative Stapp stated that he was struggling with the
numbers presented on slide 5. He noted that the slide
detailed the high cost of delivering water and sewer
service and the highest estimate was $4 million per home.
He thought it seemed extremely high and asked for a
specific scenario in which that estimate applied.
Ms. Bohan responded that the figure referred to a recently
completed planning effort for seven homes in the community
of Alatna. The initial cost estimate for piped water and
sewer service for the homes had been $28 million. The
estimate had since been revised to $25 million.
Representative Stapp remarked that the $4 million per home
figure was striking and requested a copy of the cost
analysis.
Ms. Bohan responded that she could provide the summary in a
follow up. She acknowledged that the Alatna example was the
most extreme case.
Representative Stapp asked whether there was any
possibility of using IIJA funding or other available grants
to establish a fund similar to the Power Cost Equalization
(PCE) program for the purpose of supporting long-term
operations and maintenance costs. He asked if such an
approach would be within the scope of the existing grant
authorities.
Ms. Bohan responded that to her knowledge, the IIJA funds
could not be used in that manner. She explained that the
funding had been allocated through IHS, which had partnered
with ANTHC to administer the dollars. She repeated that
conversations continued at the national level about the
possibility of future IHS funding for operations and
maintenance.
3:38:10 PM
Representative Allard asked Ms. Bohan to repeat the
explanation about the cost of the Alatna project.
Ms. Bohan responded that IHs dollars had been used by ANTHC
to contract with engineering firms. She explained that the
firms had developed in-depth engineering plans to examine
the feasibility of providing piped water and sewer service
to unserved communities. The most recent cost estimate from
the Alatna planning document was $25.5 million and the
project would serve seven homes in the community.
Representative Allard asked for a list of the names of the
contractors involved in the project, whether the state
received comparable bids, and to be provided with all
relevant details of the contracting process. She asked for
the complete record, including who the contractors hired,
to whom the request for proposals had been sent, and the
full data and analysis behind the cost estimate. She
described the $25 million figure as "craziness" and stated
that she wanted every detail.
Co-Chair Foster acknowledged that Alatna was likely the
most extreme example, with only seven homes. He stated that
many of the communities he represented were significantly
larger and that new projects in those areas often involved
expansion of existing piped systems. There might already be
a functioning water and sewer system in some of the
communities, but additional housing development could
require expansion. He stated that economies of scale
applied more effectively in larger communities.
Additionally, the cost of transportation varied by
location, and logistics in communities like Shaktoolik and
Unalakleet could be easier than in more remote areas like
Alatna. He noted that coastal access and the presence of
local labor could help reduce costs compared to areas where
all materials needed to be flown in and outside workers
needed to be brought on site.
Co-Chair Foster emphasized the importance of sustainability
and explained that it was not feasible to install systems
that the local population could not afford to operate. He
encouraged a shift in mindset when discussing these issues
and explained that concerns about sustainability had
historically been a barrier to delivering basic services to
some communities. The primary goal should be ensuring that
every Alaskan had access to clean water and sanitation,
although sustainability should be considered. He stated
that the risk of illness made the issue urgent. Over the
years, VSW had explored innovative system designs to meet
the needs of communities where conventional piped
infrastructure was not practical.
Co-Chair Foster explained that VSW had hosted design
competitions to encourage engineers to propose affordable
and effective alternatives. He emphasized that the state
needed to prioritize implementing the systems into
communities, especially in light of public health concerns
highlighted during the COVID-19 pandemic. He described
conditions he had witnessed in some villages where no
formal sanitation system existed. Some residents relied on
large waste bins and residents dumped the contents of five-
gallon waste buckets into those bins, which often
overflowed. He stated that in such circumstances, children
could be seen running through the waste, tracking it into
homes, and increasing the risk of illness. He stressed that
inadequate access to clean water contributed further to
health concerns. He relayed that he had stayed in homes in
Deering where conditions made water access difficult, and
residents had to retrieve five-gallon buckets of water
using four-wheelers due to the cold. The quantity of water
retrieved was insufficient to take a shower and it was
burdensome to collect water every other day in small
increments. He noted that people often reused the same
water multiple times for handwashing, which eventually
became ineffective and led to health issues. He emphasized
that the issue was a major concern for him.
Representative Tomaszewski referenced the $2.1 billion cost
and understood that with an average cost of $1.35 million
per home, the allocation would cover a little over 1,500
homes. He asked whether there was a total count of homes
currently identified as needing service.
3:43:43 PM
Ms. Bohan responded that she did not have a current number,
but that the most consistent estimate over many years had
been approximately 3,500 homes. She added that she would
follow up to confirm the figure.
Representative Tomaszewski remarked that $1.35 million per
home was a significant cost but he understood that the
figure included infrastructure such as water and sewage
treatment plants. He emphasized that all residents needed
access to clean drinking water. He asked whether there had
been any consideration of using individual septic tanks.
When he had built his first home, he installed a septic
tank and drilled a well and he thought that there might be
some communities where such a system would be suitable. He
noted that in areas like Fairbanks, individual homes
typically relied on wells, holding tanks, or septic systems
rather than city water and sewer service. He asked whether
there had been discussion of adopting other approaches in
rural Alaska to be more cost-effective.
Ms. Bohan responded that individual systems were considered
in the planning process. The engineering planning documents
included analysis of multiple alternatives and the funding
agency review committee initially reviewed reports
identifying which alternatives should be considered. If an
alternative was determined to be not fundable or
permittable, the committee instructed planners to focus on
realistic and fundable options. She explained that
engineers developed cost estimates for three or four
feasible alternatives, followed by a selection process to
identify the most appropriate solution. The community also
participated in selecting the preferred alternative. She
relayed that everyone involved would prefer to use wells
and septic systems whenever possible, as the systems were
less expensive and easier to maintain. She shared that Lime
Village and Rampart used individual systems and Northway
used a flush tank and haul system, which were selected as a
result of the review process. She noted that the
communities in bold on slide 7 had received funding and
that Alatna had not yet been funded. She clarified that the
$25.5 million figure came from the engineering planning
document.
3:46:54 PM
Co-Chair Foster remarked that he had previously represented
both Alatna and Allakaket. He noted that Alatna was located
on the opposite side of the river from Allakaket, which
created additional logistical challenges, such as
transporting materials across the river by boat if there
were not enough parts delivered with the main shipment. He
acknowledged the complexity of the situation and
appreciated the presentation.
Representative Jimmie thanked Co-Chair Foster for providing
a description of the conditions faced in rural communities.
She appreciated the department's efforts to bring running
water to rural Alaska and stated that she wished there were
a way to fast-forward the process so that all communities
could receive service as soon as possible.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 54 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the agenda for the next committee
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2.14.25 HFIN VSW Overview.pdf |
HFIN 2/14/2025 1:30:00 PM |
|
| 2.14.25 HFIN FY2026 DEC Department Overview.pdf |
HFIN 2/14/2025 1:30:00 PM |
HB 53 |
| (H) FC DMVA FY26 Budget Overview Final.pdf |
HFIN 2/14/2025 1:30:00 PM |
HB 53 |
| DEC Response to HFIN Village Safe Water First Service Cost Estimates 02.21.25.pdf |
HFIN 2/14/2025 1:30:00 PM |
HB 53 |
| DEC Response to HFIN 01.15.24 Crum DOR OHSRRF 4th Qtr 2024.pdf |
HFIN 2/14/2025 1:30:00 PM |
HB 53 |
| (H)_FIN Budget DepartmentOverview Questions Responses_2.21.25.docx.pdf |
HFIN 2/14/2025 1:30:00 PM |
HB 53 |