Legislature(2019 - 2020)SENATE FINANCE 532
03/14/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB20 | |
| SB38 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 20 | TELECONFERENCED | |
| += | SB 38 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 38
"An Act making supplemental appropriations for fire
suppression activities and restoration projects
relating to earthquake disaster relief; capitalizing
funds; and providing for an effective date."
9:10:59 AM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, discussed the presentation, "38 38 - Disaster
Relief Supplemental Overview" (copy on file).
9:11:17 AM
Ms. Sanders looked at Slide 3, "FY2019 Disaster
Supplemental Bill":
? 2018 Cook Inlet Earthquake
? Disaster Relief Fund Capitalization
? Federal Highway Administration Funding
? State Facilities Costs Not Covered by Insurance
? FY2019 Fire Suppression Activity
She stressed the urgency of moving the bill forward
quickly. The bill requested a total of general and federal
funds of $139,304.0; $37,301.7 in general funds, $102,002.3
in federal funds.
9:12:44 AM
Ms. Sanders highlighted Slide 4, "Disaster Supplemental
Historical Comparison." The slide offered a historical
summary of disaster supplemental appropriations from FY14
to FY 19, in general fund and federal funds.
9:13:12 AM
Ms. Sanders addressed Slide 5, "Disaster Relief FY 2019
Supplemental Request ($ Thousands)." She listed the
requests:
DNR
Fire Suppression Activity (Language)
$7,900.0 UGF
DOT&PF
Earthquake Response, Repair and Rebuild Multi-Year FY19-
FY20 - $65 million estimate with $6.5 million match
requirement FHWA (Language)
$6,500.0 UGF
$65,000.0 FED
DOT&PF
Earthquake Response, Repair and Rebuild for State
Facilities (Language)
$1,000.0 UGF
Fund Cap
Capitalization of the Disaster Relief Fund (Language)
$21,901.7 UGF
$46,002.3 FED
Ms. Sanders that the Alaska Department of Military and
Veterans Affairs (DMVA), which manages the fund, had
provided OMB information that reduced the fund cap request
to $12.2 million; however, OMB wanted to move forward with
the $21 million request and use the $9 million for response
to future disasters.
9:15:56 AM
Co-Chair von Imhof noted the extra $9 million for fund
capitalization and queried the regularity of forward
funding for future disasters.
9:16:17 AM
Ms. Sanders replied that there was not a typical request
level. She understood that in FY19, the legislature had
deposited an additional $10 million into the fund to raise
the fund balance to a sustainable amount. She said that
amounts in prior years had been low. The extra $9 million
would allow the department to respond to now unknown
emergency needs throughout the state.
9:17:43 AM
Senator Shower asked what happened to the money if it was
not used by the end of the fiscal year.
9:17:45 AM
Ms. Sanders replied that it would stay in the fund until it
was utilized for a specific disaster.
Senator Shower asked whether extra funds rolled over from
year to year.
Ms. Sanders replied in the affirmative.
9:18:04 AM
Co-Chair Stedman asked whether the fund was sweepable.
9:18:07 AM
Ms. Sanders replied no.
9:18:17 AM
Senator Bishop thought that much of the work that would
need to be done would not be seen until after the spring
thaw. He wondered whether contingencies had been built in
to avoid another disaster supplemental in FY21.
9:19:06 AM
Ms. Sanders understood that the request from DOT&PF
considered what would be needed for roads as the spring
thaw occurred. She added that there could be an additional
request in FY20. She stated that DMVA was working an what
those additional costs could be and would provide OMB with
the information.
9:19:55 AM
Co-Chair Stedman explained that this fast-track
supplemental budget had an earlier effective date. The
committee still needed to work on the FY Supplemental
Budget and could use that as a vehicle to provide extra
funds after the spring that.
9:20:38 AM
Senator Micciche understood that approximately $140 million
of the $148 million of the fund was dedicated toward
response and the capitalization of the fund. He wondered
about the total of the $140 million of fund that would be
spent on the earthquake response.
Ms. Sanders asked whether he was referring specifically to
the Disaster Relief Fund.
Senator Micciche clarified that there was a request to
capitalize on the fund; additionally, there was the request
for earthquake response. He assumed that OMB assumed that
part of the Disaster Relief Funds would be spend in the
response.
9:21:19 AM
Ms. Sanders replied that the maximum number that she had
received that applied to the Disaster Relief Fund was $60
million in total state cost. She said that the cost was
dependent on what would be covered by the federal
government. She reiterated the DMVA was working through the
analysis to determine what the additional need could be.
She noted that there was existing funding in the fund that
had been obligated. She repeated that the ask was for $12
million, with an additional $9.7 that could be utilized
toward the Cook Inlet earthquake if needed. There was an
anticipation that there may be the need for more general
funds to be deposited into the fund, but that it had not
been determined what that need would be.
9:22:25 AM
Co-Chair von Imhof expressed concern about the possibility
that millions of dollars more could be requested. She
queried the evaluation process being used to approach
repairing buildings damaged by the earthquake.
9:23:27 AM
Ms. Sanders referred the question to Bryan Fisher from
DMVA.
9:23:55 AM
BRYAN FISHER, EMERGENCY PROGRAM MANAGER, DEPARTMENT OF
MILITARY AND VETERANS AFFAIRS, ANCHORAGE, (via
teleconference), related that schools affected by the
earthquake in Eagle River and Anchorage were going to be
repaired in-place. He said that cost analysis had been done
about whether to shutter or repair them and that the
analysis had shown that repairs to the standing buildings
would be most cost effective. He said that the department
and the school district would work with the Federal
Emergency Management Agency (FEMA) to determine the most
reasonable and cost-effective method going forward.
9:25:50 AM
Co-Chair von Imhof thought that the most cost-effective
thing to do would be to consolidate schools and capture
excess capacity, and not to repair the two schools. She
thought that a list of the roads that were going to be
repaired with earthquake funds should be compared to the
list of roads that were going to be repaired with Capital
Budget funds, to assure that there were not any
redundancies.
9:26:17 AM
Co-Chair Stedman said that the list could be provided to
the committee. He believed that further conversation should
be had about consolidation versus rebuilding.
9:27:06 AM
Senator Shower asked if the same comparison could be made
for Huston.
9:27:28 AM
Co-Chair Stedman said that the road repairs for the entire
earthquake zone could be compared to already existing
capital projects in order to wed out redundant repair
projects.
9:27:37 AM
Senator Micciche understood that the money OMB was
requesting was not related to school repair but was related
to road and state facility repairs.
9:27:55 AM
Ms. Sanders responded that the Disaster Relief Fund was
utilized to respond to disasters, the Cook Inlet earthquake
was declared a disaster, schools could apply for the
funding.
9:28:25 AM
Senator Micciche asked whether the fund could be used for
residential damage.
9:28:30 AM
Ms. Sanders deferred to DMVA but believed that private
residents could apply for relief through the fund.
9:28:52 AM
Ms. Sanders looked at Slide 6, "Disaster Relief Fund
Snapshot." She shared that the point-in-time snapshot on
st
the slide showed the fund balance history as of July 1
each year.
9:29:20 AM
Ms. Sanders highlighted Slide 7, "Disaster Relief Fund
Snapshot":
? Fund Balance as of March 5, 2019
? $362.9 (GF)
? Fund will be full expended by April 1, 2019
9:29:41 AM
Senator Wielechowski asked who had the discretion to make
payouts from the fund. He asked whether the payments were
done through request for proposal or were sole source
contracts issued.
9:29:54 AM
Ms. Sanders replied that DMVA administered the disaster
relief funds. She deferred to DMVA.
9:30:36 AM
Ms. Sanders discussed Slide 8, " Disaster Relief FY2019
Supplemental Amendments ($ Thousands)":
? Department of Transportation and Public Facilities -
$1,000.0 UGF
? Surface transportation "administrative
activities" not covered by the Federal Highway
Administration (FHWA) and Federal Emergency
Management Agency (FEMA)
? Department of Labor and Workforce Development -
$1,000.0 FED
? Disaster Unemployment Assistance Program -
assistance to individuals whose employment or
self-employment has been lost or interrupted as a
direct result of a major disaster
9:32:11 AM
Senator Wielechowski asked whether any of the DOT funds had
already been spent, and if so, where had the money been
spent.
Ms. Sanders replied that some of the money had been spent
on response to disaster needs. She offered to provide
information detailing where the expenditures had been made.
9:33:00 AM
Senator Wielechowski was curious whether the funds had been
spent within the agency or on private contractors.
9:33:10 AM
Ms. Sanders assured the committee that the money had been
spent within the agency.
Senator Wielechowski assumed that the positions were
already salaried and wondered if the funds were being spent
for overtime services.
Ms. Sanders said that the employees of the department were
project specific and their time had to be allocated to
individual projects. Those projects could not be used to
cover other costs within the agency, so areas were
identified where employees were not able to charge their
current salaries to a specific project because those
projects were covered with general funds and not as a long-
term capital project.
9:33:43 AM
Senator Bishop said that some of the work that would need
to be done was going to be a match to federal authority. He
asked what the $1 million in federal dollars could be used
for.
9:34:20 AM
Ms. Sanders understood that the funds would be used to pay
for potential wages lost during the disaster.
9:34:42 AM
Co-Chair von Imhof thought that capital projects had
declined as a result of the shrinking Capital Budget and
wondered about project specific employees in a department
that might not have many projects.
9:35:10 AM
Ms. Sanders said that the yearly Capital Budget included
significant highway funding and funding for inspections for
various infrastructure. She said that additional
information on the departments position control number
(PCN) count.
9:35:41 AM
Co-Chair Stedman did not think the additional information
would be necessary. He said that the Capital Budget had
been minimized down to federal match over time. He stated
that there had not been an excess revue stream to add
projects to the budget. He understood that DOT&PF had
trouble crossing appropriation lines or moving money around
in its budget.
9:36:28 AM
Ms. Sanders explained that there were restrictions on
crossing the appropriation lines. She did not know whether
those restrictions extended to the $1 million in questions.
She said that the request was to cover costs that were not
associated with projects for employees that were doing work
related to the Cook Inlet disaster.
9:36:59 AM
Senator Wilson requested details of where the department
was spending money and for a list of disaster projects.
9:37:28 AM
Co-Chair Stedman said that the information would be
provided to the committee.
9:37:48 AM
Ms. Sanders clarified that DOT&PF may not know the exactly
which projects would be completed on the road, as the
spring thaw progressed the department would get a better
idea of possible projects. She said that additional details
for administrative activities could be provided.
9:38:36 AM
Co-Chair Stedman requested more detail on both Supplemental
Amendments on Slide 8 on the presentation.
9:39:21 AM
Co-Chair von Imhof MOVED to ADOPT the committee substitute
for SB 38, Work Draft 31-GS1037\U (Caouette, 3/13/19).
Co-Chair Stedman OBJECTED for discussion.
9:39:53 AM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, explained the
committee substitute. He stated that Ms. Sanders had
already discussed the two major changes from the previous
version. Section 1, page 1 showed the funding for the
Disaster Unemployment Assistance Program. Page 2 showed a
word change on line 3 that restated the purpose of the $65
million to DOT&PF for surface transportation disaster
repair. Page 2, line 12, showed the amendment for $1
million to DOT&PF for non-covered service transportation
costs. Finally, the last change could be found on Line 22
that showed that all of Section 3 had a capital project
lapse date.
9:41:31 AM
Co-Chair Stedman REMOVED the OBJECTION. There being NO
OBJECTION, it was so ordered.
^PUBLIC TESTIMONY
9:41:52 AM
Co-Chair Stedman OPENED public testimony.
Co-Chair Stedman requested comments from Mr. Fisher.
9:42:10 AM
Mr. Fisher stated that the agency was responsible to
implement the provisions of the Alaska Disaster Act. The
agency coordinated and managed funding from the Disaster
Relief Fund to other state agencies, local governments, and
school districts for repairs to infrastructure damaged due
to a declared disaster. He added that the agency managed a
program on residential damages included in the damage
declaration. For the 2018 earthquake, the governor declared
both public and individual assistance. Individual
assistance provided support to repair essential areas of a
primary residence for homeowners affected by the earthquake
and personal property loss. He noted that on January 31,
2018, the President of the United States had declared
federal funds be made available for repairs related to the
earthquake. He said that the department was in the early
stages of determining the cost of all the necessary
repairs. He expressed concern about the spring thaw and
shared that FEMA had never responded to a frozen
earthquake before. He related that state and local
governments, tribal governments, and certain private non-
profits that provided essential government services were
eligible for state and federal disaster assistance funds.
He furthered that any of the infrastructure damages that
were eligible for reimbursement would be reimbursed on a 75
percent federal, 25 percent state, cost share. He shared
that the public assistance program was a reimbursable
program, applicants were expected to complete projects,
then request a draw down from FEMA and the state to be
reimbursed for expenses. He said that the department was
required to follow all the federal OMB guidance procurement
regulations, trainings were currently happening on how to
perform proper procurements. He said that sole source
contracts were rare. He spoke to two programs available for
individuals seeking reimbursement for damages to essential
living areas of a primary home. He stated that temporary
housing assistance was also provided housing for
individuals who were displaced due to major damages. He
said that there were currently, approximately 14,000
applicants for state program and 6,000 for FEMA programs.
He related that the states administrative code mandated
that when a federal disaster was declared, residents had to
go through FEMA and the U.S Small Business Administration
for potential low interest loans before they could avail
themselves of the state disaster assistance. He said that
the process was currently underway. He said that applicant
briefings were beginning for school districts and local
governments to develop the scope of work needed to repair
facilities to pre-disaster conditions. He said that there
was potential to mitigate some of the damaged buildings to
prevent further damage from future earthquakes.
9:49:36 AM
Senator Wilson aske whether there would be a supplemental
application process after the spring thaw.
9:50:04 AM
Mr. Fisher responded that the state application period had
ended. The FEMA registration period could be extended to
May 31, 2019. He said that damages that were revealed after
the spring that would be cause for reassessment of the
situation.
9:51:14 AM
Co-Chair von Imhof asked whether school districts had a
deadline for submitting formal requests for specific
schools.
9:51:38 AM
Mr. Fisher replied that school districts had submitted
their initial requests and were in the program. He said
that the agency would work with districts to make sure that
scopes of work and estimates were developed for any of the
work that needed to be done to any of the facilities.
9:52:09 AM
Co-Chair von Imhof understood that, through the
applications, the agency had an idea of the scope of funds
needed in the districts. She wondered whether districts had
been asked to provide both a Plan A and a Plan B. She asked
whether any schools would close entirely.
9:53:00 AM
Mr. Fisher related that the budget presented in the
disaster supplemental bill was based on a preliminary
damage assessment conducted in December 2018. He said that
moving forward, FEMA would bring in engineers to work with
districts to look at all damaged buildings to determine the
most cost-effective repairs or replacements. He said that
the agencys primary role in that process would be to
assure that schools districts were being heard and to
advocate for those districts.
9:54:31 AM
Co-Chair von Imhof thought it would be a good idea for all
agencies to work together on a true effort to control costs
and to investigate systems that might be inefficient.
9:55:52 AM
Senator Wielechowski declared a potential conflict of
interests. He worked during the interim for a labor
organization that represented Alaskan workers. He asked how
any of the contracts were requests for proposal versus sole
source contracts.
9:56:22 AM
Mr. Fisher replied that the contracts were primarily RFPs.
He said that some of the earlier contracts had been sole
source, but primarily, the contracts had been put out to
bid.
9:57:21 AM
Senator Wielechowski requested a list of all sole source
contracts, who the contracts were awarded to, and the
amounts of the contracts.
Co-Chair Stedman asked what information could be made
available to the committee.
9:57:37 AM
Mr. Fisher said that the information would have to be
collected; the contracts were done on an applicant by
applicant basis and local governments, school districts,
and non-profits would have the information. He stated that
the information would become available as the permanent
repair projects and reimbursement projects were completed.
9:58:08 AM
Senator Shower asked whether an update on the repairs to
the middle school in Huston was available.
9:58:27 AM
Mr. Fisher did not have specifics on the status of the
middle school. He relayed that the damage to the school had
been significant. He estimated that if the building needed
to be demolished, and rebuilt, funding could be made
available to bring the building back to pre-disaster
condition. He reported that if the cost to bring the
building back to pre-disaster condition in a repair mode
was greater than 50 percent of the cost to replace the
school, options would be negotiated between the school
district and FEMA the state would be involved in those
negotiations.
9:59:18 AM
Senator Olson requested a copy of the sole source contracts
requested by Senator Wielechowski.
9:59:25 AM
Co-Chair Stedman assured the committee that any information
sent to the committee would be distributed to all members.
9:59:39 AM
Senator Wilson declared a conflict of interest. He was an
employee of the Mat-Su school district. He asked whether
the state and FEMA had differing standard for what would be
determined as a primary residence.
10:00:18 AM
Mr. Fisher replied that the state utilized guidelines like
FEMA for determining primary residence. He shared that a
primary residence was home that was lived in more than
half of the year and that the homeowner had to be living in
the home at the time of the earthquake. He offered an
example of military personnel that might be deployed out-
of-state and leasing the home at the time of the disaster;
in that case, the homeowner could apply for low-interest
disaster loan from the Small Business Administration but
would not be eligible for grant funding.
10:01:18 AM
Co-Chair Stedman understood that if a person was posted
overseas, but their primary residence was in the earthquake
zone, they would not qualify for disaster relief.
10:01:33 AM
Mr. Fisher replied in the affirmative.
10:01:47 AM
Senator Shower asked if the spouse of the deployed military
personnel was still living in the residence, would that
count on the applications.
10:02:06 AM
Mr. Fisher replied in the affirmative. If the family of the
homeowner was living in the house, they would be eligible
for grant assistance.
10:03:08 AM
Co-Chair Stedman CLOSED public testimony.
10:03:24 AM
Senator Wilson queried whether the eligibility requirements
for the disaster funding created additional hardships for
Alaskans. He wondered whether a review of those
requirements, and how funds were administered, could be
done.
10:04:04 AM
Co-Chair Stedman replied that there was an expectation that
a lot would be learned as the state dealt with the damage
caused by the earthquake.
SB 38 was HEARD and HELD in committee for further
consideration.
10:04:54 AM
Co-Chair Stedman discussed the schedule for the following
week.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 20 Work Draft Version S.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 20 |
| 3-9-19 - SB 20 CS Zero Language Differences Explanation.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 20 |
| 3-11-19 Senate SB 20 CS Zero Compare (Version M to Version S).pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 20 |
| DRF FY19 Supplemental LFD Inquiry Response 3.7.19 Final.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 38 |
| SB 38 03.07.2019 - Disaster Response Process and Status Update - FINAL.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 38 |
| SB 38 Work Draft Version U.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 38 |
| SB 38 Enclosure A B to Major Disaster Request.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 38 |
| SFC 3.14.19 FY2019 Supplemental Overview SB 38 - Disaster Relief Supplem.._.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 38 |
| SB 38 Updated Amounts - Disaster Supplemental.pdf |
SFIN 3/14/2019 9:00:00 AM |
SB 38 |