Legislature(2017 - 2018)SENATE FINANCE 532
04/26/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB135 | |
| HB150 | |
| HB233 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 135 | TELECONFERENCED | |
| += | HB 150 | TELECONFERENCED | |
| += | HB 233 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 135(EDC) am
"An Act relating to school district participation in
the school construction grant program."
9:12:28 AM
9:12:44 AM
AT EASE
9:13:03 AM
RECONVENED
Co-Chair MacKinnon informed that public testimony on the
capital budget would be at 1:30pm.
[Vice-Chair Bishop made a motion to adopt a CS, but
incorrectly listed the bill draft number. It was later
corrected.]
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, informed that
the draft number the Vice-Chair Bishop had dictated was
incorrect due to a typographical error.
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute for CSHB 135(FIN), Work Draft 30-LS0549\J
(Laffen, 4/19/18).
Co-Chair MacKinnon OBJECTED for discussion.
Ms. Lucky spoke to the bill. She related that the bill
version before the committee included changes to Sections 2
and 3 that applied a different approach but honored the
initial concept of the bill. She said that the three-year
timeframe had been kept in place and an extension had been
added for good cause. She noted a technical change had been
made to the applicability language, a citation that would
span statute AS 14.11.008 through AS 14.11.020.
9:16:27 AM
Senator Olson spoke to Section 2. He asked whether there
was a specific time applied to the extension period.
Ms. Lucky answered in the affirmative. She reported that
there had been a concern conveyed that putting a limit on
the extension could result in the need to change statute.
She said that allowing the department the authority to
determine the appropriate course of action had been deemed
the appropriate approach to the issue.
Senator Olson asked what the sponsor thought of the
changes.
Ms. Lucky believed that the sponsor was supportive of the
changes. She reiterated that the 3-year timeframe had been
in the original bill.
Senator Stevens thought the CS made sense. He questioned
the definition of 'good cause' and wondered if there were
parameters from the department.
Ms. Lucky stated that the issue would be discussed further.
9:18:04 AM
REPRESENTATIVE JOHN LINCOLN, SPONSOR, stated that he was in
support of the CS.
9:18:50 AM
Senator Stevens restated his question about the definition
of 'good cause' and parameters as developed by the
department.
TIM MEARIG, FACILITIES MANAGER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, shared that the need for the funds would
be matched up with the project's timeline. He said that the
timeline may need to be adjusted to match the environment;
the definition of 'good cause' would reflect when the money
was needed to accomplish the project.
9:20:05 AM
Senator Stevens voiced concern that an expression of 'good
cause' could lead to an indefinite extension.
Mr. Mearig informed that participatory share amounts that
were required to accomplish the work on a project, as a
project moved forward, and contract agreements were entered
into, obligations were made that those funds would be
available for the payment of contracts. He said that there
had never been an instance where the participating share
had not been provided.
9:21:02 AM
Senator Olson understood that "good cause' would be at the
subjective discretion of the commissioner.
Mr. Mearig thought there would need to be an evaluation of
the project, and whether it satisfied the participating
share. He admitted that it would be at the commissioner's
discretion whether and extension was needed to properly
support a project.
Senator Olson asked whether there had been a time where the
issue of 'good cause' had not allowed an extension within
the department.
Mr. Mearig explained that under current statute the
department had been unable to offer any extensions.
Senator Olson queried how disagreements would be resolved
between school districts and the department about the
definition of 'good cause.'
Mr. Mearig did not anticipate a lot of disagreement on the
matter. He said that if a determination were made that
limited the funding due to a district there were appeal
processes under regualtion for the district to pursue.
9:23:33 AM
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, it was so ordered.
9:23:59 AM
Representative Lincoln stated that the bill would amend AS
14.11.008 to provide the Department of Education the
discretion to extend the deadline for school districts to
secure the match requirement for school construction
projects, only if the district could show good cause for
the extension. He said that the Northwest Arctic Borough
School District was close to meeting, but would not meet, a
June 29, 2018 deadline to secure the local share for a
replacement of the K-12 school in Kivalina. He stated that
state funds for the school were appropriated in 2015, and
the statute currently required the school district to come
up with the local match within 3 years. He relayed that the
Northwest Arctic Borough had shown great leadership in
recent years as they worked through negotiations with the
borough's primary funding source, the Red Dog Mine. He
stated that the new funding agreement had been signed in
May 2017, the borough would use revenue from that agreement
to secure and re-pay bonding to provide the local match for
Kivalina School. He shared that in March of 2018 the Alaska
Municipal Bond Bank Authority approved the issuance of
$12.7 million in bonds on behalf of the borough to fully
cover the local match for the school, but the bonds were
contingent of funding being secured for the road to the
school. He said that the construction site was 8 miles from
Kivalina, on solid ground that was safe from the erosion
that threatened the town; the road was essential to bring
in construction materials and labor to the site, as well as
to provide an emergency evacuation route for the residents.
He related that the Department of Transportation and Public
Facilitates had issued a final environmental impact
statement on the road in January 2018, which found that the
road posed no significant environmental impacts. He added
that officials from the United States Military Innovation
Readiness Training Program had expressed interest in the
bridge portion of the project. He lamented that sometimes
the calendar could work against projects, particularly ones
that were complicated by logistical and environmental
circumstance.
9:27:03 AM
Senator Stevens wondered whether the sponsor had any
concerns that the definition of 'good cause' was not
defined in the bill.
Representative Lincoln replied that he had a slight concern
but believed that the overall intent of the legislation
outweighed any concern. He believed that the projects
encompassed by the bill were good projects.
Senator Micciche supported the legislation as written.
Vice-Chair Bishop understood that the Environmental Impact
Statement (EIS) for the Kivalina school build had been
completed by DOT&PF.
Representative Lincoln informed the committee that the EIS
for the road was issued in January 2018.
Vice-Chair Bishop supported the CS. He offered comments on
the road. He noted that to build a road in the state meant
working with numerous regulatory entities. He said that
permitting could take up to 6 years. He believed that
common sense would prevail in extension decisions for 'good
cause' projects.
9:30:59 AM
Co-Chair MacKinnon offered a financial concern about how
many times money would be held, not turning over, on
projects that could be putting people to work in the state.
She spoke to the issue of Kivalina. She worried about the
timely deployment of assets. She wondered how many years
was long enough for $70 million to be sitting in an account
and not benefitting students.
9:34:00 AM
Mr. Mearig thought Co-Chair MacKinnon raised a great point
about executing school projects in a timely manner. He
noted that delays resulted in project cost increases. He
thought the issues needed to be examined by those in charge
of the projects. He asserted that districts were keen to
have projects put in place. He thought the ability to work
with districts to keep projects in motion was important. He
did not have an answer as to how many extensions would be
undertaken for an individual project. He thought that the
description of need, set forth by the district for
consideration of a project by the commissioner, would set
the parameters.
9:35:46 AM
Co-Chair MacKinnon asked Mr. Mearig to provide in writing a
definition of 'good cause.' She said that the legislature
needed to have some knowledge of how much money would be
was sitting in wait for stalled projects that could be used
elsewhere in education.
9:36:43 AM
Co-Chair MacKinnon spoke to the possible delay in
construction due to the need for a road to the building
site. She stressed that the legislature had made it clear
that the state was not going to pay for the road to be
built.
Representative Lincoln understood that the road would be
primarily funded by the federal government. He cited a
specific reason for the delay as the establishment of a
funding agreement between Red Dog Mine and the borough; a
village infrastructure program that would fund construction
projects and bring additional funds to the state.
9:37:56 AM
Co-Chair MacKinnon asked whether there was a timeline for
the building of the road. She expressed concern for the
students in Kivalina who had been waiting for their school
to be built. She asserted that her primary focus in trying
to help the project along was the students.
Representative Lincoln shared Co-Chair MacKinnon's feelings
for the people and students of Kivalina. He stated the
changing climate and increasing severity of storms made
investing in the current location would not be a wise
decision. He said that the students were excited for the
prospect of a new school, rather than renovating the old
school at the current site. He felt that the delay would
result in a better outcome for the community. He offered to
provide a timeline at a later date.
9:40:26 AM
Co-Chair MacKinnon asked for a total cost of construction
and design of the road.
Co-Chair MacKinnon commented that the committee was looking
at the Regional Educational Attendance Area (REAA) school
list. She asked about a study regarding standardized school
construction. She emphasized that it was her intent to
require standardization of building design. She wondered
what the department was going to do to reduce the costs of
building schools in the state.
Mr. Mearig responded that the department had supported
standardized school design for instances where multiple
schools of the same size and type were being build. He
pointed out to the committee that the first three schools
currently on the priority construction list were of varying
size and construction needs. He said that the department
supported standardized components and was working with
districts to actively pursue criteria for school design and
cost affective school construction.
9:43:45 AM
Co-Chair Hoffman knew that the Northwest Arctic had led the
way in trying to compress the construction timeline, which
ultimately reduced construction costs. He thought the
concept of 'design-build' had been proved to the shorten
construction timeline and save money. He thought that if
the concept was working in one region it should be used in
other regions.
Mr. Mearig stated that the department supported alternative
project delivery methods. He relayed that there were
guidelines for helping districts to determine when those
guidelines should be used. He said that on other occasions,
the timeline would allow for a design to be fully developed
and then competitively bid in the traditional sense. He
stated that the department did not mandate design build or
other alternative project delivery methods but supported
those methods and worked with each district to examine a
project environment that would result in the best and most
cost-effective project outcome.
Co-Chair Hoffman thought that the department should
encourage the design-build concept. He believed that this
would save the state money.
9:46:38 AM
Co-Chair MacKinnon lamented that there was $100 million
dollars in one district. She praised the work of Mr.
Mearig. She stated that the legislature had encouraged the
department to start taking a proactive role in leading,
rather than following, the districts in construction
alternatives.
9:48:13 AM
Representative Lincoln appreciated the conversation about
standardization and project cost control and stated that it
had been a prominent part of the Kivalina project.
Co-Chair MacKinnon asked about a Sectional Analysis.
9:49:11 AM
AT EASE
9:50:06 AM
RECONVENED
Co-Chair MacKinnon OPENED public testimony.
DR. ANNMARIE O'BRIEN, SUPERINTENDENT, NORTHWEST ARCTIC
BOROUGH SCHOOL DISTRICT, spoke in support of the bill. She
discussed her work history. She discussed current statute,
and the lack of a provision for the consideration of
exceptional circumstances that might warrant additional
time to secure a financial match. She thought that without
the legislation, it was possible that critically needed
school projects would be forced to forfeit state
appropriations. She said that the Kivalina project was a
perfect example of why the provision was needed.
9:53:29 AM
Vice-Chair Bishop discussed a new zero fiscal note from
Department of Commerce, Community and Economic Development,
OMB component 2737.
Co-Chair MacKinnon discussed housekeeping.
CSHB 135(EDC) am was HEARD and HELD in committee for
further consideration.
9:55:07 AM