Legislature(2005 - 2006)SENATE FINANCE 532
03/03/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB98 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 97 | TELECONFERENCED | |
| += | SB 98 | TELECONFERENCED | |
| + | TELECONFERENCED |
MINUTES
SENATE FINANCE COMMITTEE
March 3, 2005
9:04 a.m.
CALL TO ORDER
Co-Chair Wilken convened the meeting at approximately 9:04:26 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice-Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Donny Olson
Also Attending: KAREN REHFELD, Deputy Commissioner, Department of
Education and Early Development; TIM GRUSSENDORF, Staff to Senator
Hoffman; EDDY JEANS, Manager, School Finance and Facilities
Section, Education Support Services, Department of Education and
Early Development;
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB 98-SUPPLEMENTAL APPROPRIATIONS: FAST TRACK
The Committee heard from the Department of Education and Early
Development. A committee substitute was adopted, four amendments
were considered with two adopted. The bill was reported from
Committee.
SENATE BILL NO. 98
"An Act making supplemental appropriations, capital
appropriations, other appropriations, and reappropriations;
amending appropriations; making appropriations to capitalize
funds; and providing for an effective date."
This was the fifth hearing for this bill in the Senate Finance
Committee.
Co-Chair Green moved for adoption of CS SB 98, 24-GS1133\Y, as a
working document.
Without objection the amendment was ADOPTED.
Co-Chair Wilken outlined changes in this committee substitute
compared to the previous committee substitute, Version "F".
9:06:23 AM
Section: 1(b)
Request Delivery Unit (RDU): Department of Administration,
Capital
Supplemental Need: State of Alaska Network Security
Infrastructure Updates
$5,003,500 Information Services Fund
Co-Chair Wilken remarked that it appears the State must take
additional precautions to protect against hacking into the State
system.
9:07:08 AM
Section: 1(c)
RDU: Department of Administration, Capital
Supplemental Need: Alaska Land Mobile Radio (ALMR) for
Infrastructure Upgrades
$6,000,000 general funds
Co-Chair Wilken noted that the federal government has increased its
activities with anticipation of certain factors, one of which is
Northern Edge, in August 2005. This has provided enough information
to upgrade existing sites and begin installment of new sites. The
initial request was $6.175 million; this committee substitute
appropriates $6 million with the remaining $175,000 allocated for
the e-commerce project of the Department of Corrections.
9:07:57 AM
Section: 3(b)
RDU: Department of Corrections, Administrative Services
Supplemental Need: The department is seeking an e-procurement
application to lower purchasing prices and improve
efficiencies within the buying process for commodities,
equipment, food and services
$190,000 general funds
Co-Chair Wilken informed this restores $190,000 to the e-commerce
project. The Department also has lapse funds available, to allow a
total of $200,000 for this purpose.
9:08:36 AM
Section: 6(a)
RDU: Fund Capitalization, Marine Hwy Stabilization
Supplemental Need: Fuel cost and contract increases
$10,004,200 general funds
Co-Chair Wilken noted the original request was for funds to address
fuel cost increases. This committee substitute added funds to cover
increased costs associated with the contract reached with the
Inland Boatmen's' Union.
9:09:19 AM
Section: 6(b)
RDU: Fund Capitalization, Disaster Relief Fund
Supplemental Need: Base capitalization of fund %500,000; 2004
Bering Strait Sea Storm $4,054,400; Interior Earthquake
shortfall $259,300; and Kaktovik Winter Storm $2,363,500.
$7,177,200 general funds
Co-Chair Wilken reminded that the previous committee substitute
proposed not funding this item; however the Department demonstrated
a need. The committee substitute restores a portion of the original
request.
9:09:48 AM
Section 6(c)
Co-Chair Wilken explained this would capitalize the fund for the
network security project outlined in Section 1(b).
9:10:07 AM
Section: 8(b)
RDU: Governor, Elections
Supplemental Need: Additional increased operating costs for
Accu-Vote maintenance; lease cost increases; list maintenance
costs; additional postage and shipping, printing, training,
archiving and destruction costs.
$160,000 general funds
Co-Chair Wilken stated this appropriation is for unexpected
expenses resulting from the latest general election.
9:10:19 AM
Section: 13(d)
RDU: Salary & Benefits Adj., Executive Branch
Supplemental Need: FY 05 costs for the IBU collective
bargaining agreement.
$3,190,900 AMHS Fund
Co-Chair Wilken explained this item, along with Section 6(a), is
also in relation to the Inland Boatmen's Union collective
bargaining agreement.
9:11:04 AM
Section: 15(a)(3)
RDU: Transportation, Capital
Supplemental Need: Cold Bay: Airport Terminal Master Plan -
funding is now expected to be available in April
$200,000 federal funds
Section: 15(a)(4)
RDU: Transportation, Capital
Supplemental Need: Deadhorse: Airport Runway Safety Area
Expansion - FAA is providing discretionary funds to expand the
safety area
$8,000,000 federal funds
Section: 15(a)(5)
RDU: Transportation, Capital
Supplemental Need: Unalaska: Airport Terminal Master Plan and
Improvements - FAA is providing the FFY05 earmark funds in
April
$500,000 federal funds
Co-Chair Wilken reminded that these relate to requests brought by
the Administration at the previous hearing and provide
authorization for three projects at a total $8.7 million. The
projects are ready to proceed.
9:11:41 AM
Section 17
Co-Chair Wilken pointed out this contains traditional language
utilized to authorize receipt of funds from the Constitutional
Budget Reserve (CBR) fund if necessary for this appropriation
legislation.
9:12:11 AM
Amendment #1: This amendment adds a new subsection to Section 4.
Department of Education and Early Development., on page 7, line 18
to read as follows.
(c) The sum of $400,000 is appropriated from the general
fund to the Department of Education and Early Development, Mt.
Edgecumbe boarding school, for increased residential operating
costs for the fiscal year ending June 30, 2005.
Senator Stedman moved for adoption.
Co-Chair Wilken objected for discussion.
Senator Stedman read the language of the amendment. He explained
the issue relating to the Murkowski Administration's proceeding
with the expansion of the school, although funding was not
authorized for this purposed by the legislature. The school is
subsequently "caught" between the Administration and the
legislature. This amendment represents one-half of the originally
requested supplemental appropriation amount. The legislature could
then address in the FY 06 operating budget, the broader issue of
retaining budgetary oversight over the executive branch.
Co-Chair Green recalled that the legislature was clear in its
direction last year. Questions had been raised about the readiness
of this project with regard to student accommodations. She asked
how the legislature is to be assured that this project is ready to
proceed and requested the school administration apprise the
Committee of the project goals and status. She did not support this
appropriation; however, Senator Stedman made a compelling argument
and she would not oppose the adoption of the amendment.
Co-Chair Wilken cited Committee minutes from the hearing of April
28, 2004, in which the Committee denied this funding request. The
issue is not the Mt. Edgecumbe project, but rather the budgetary
process and interaction between the legislative branch and another
branch of State government. He understood this conflict has caused
difficulty for the school.
Co-Chair Wilken noted that the school has operated for many years
with little legislative intervention. Recently, federal funding has
become available for expansion projects, necessitating the
legislature to become more apprised. He requested the Department of
Education and Early Development give a presentation of the history
and future goals of the school.
Co-Chair Wilken withdrew his objection to the adoption of the
amendment.
Senator Dyson asked Senator Stedman opportunity to secure this
funding if the Committee did not adopt this amendment.
Co-Chair Wilken noted the Governor's proposed FY 06 operating
budget includes $1 million for the school. Co-Chair Wilken surmised
the request could be made to the House of Representatives to
include funding in the FY 05 supplemental appropriation. He did not
favor expending $800,000 general funds for the expansion project in
FY 05.
Co-Chair Green informed that the school district in her community
has increased by 300 students since October 2004. The Mt. Edgecumbe
school is requesting additional funding for 60 new students. She
questioned the disparity and asserted the funding formula is
flawed.
Co-Chair Green withdrew her objection to the adoption of the
amendment.
Co-Chair Wilken commented he has received pressure regarding this
matter from both those supporting a supplemental appropriation and
those opposing it. Therefore, it is important that the legislature
become more knowledgeable about the boarding school program.
Senator Bunde remarked that the decision rendered in the lawsuit
filed by Molly Hootch was to result in the elimination of boarding
school institutions. He echoed Senator Stedman's concerns voiced at
previous hearings about the difficulty in containing budget
expenditures given the multiple supplemental appropriation
requests.
KAREN REHFELD, Deputy Commissioner, Department of Education and
Early Development, testified this funding is requested for
inclusion in the fast track supplemental reason because the
Administration admitted the additional students and the housing,
staffing and other costs have been incurred. The Department is
unable to cover these costs.
Senator Bunde asked if the Murkowski Administration and the Mt.
Edgecumbe school administration unaware that the legislature
refused to fund this project in the initial FY 05 budget.
Ms. Rehfeld relayed that upon adjournment of the previous
legislative session and it was understood that the legislature
would not fund this project the Governor gave a directive to enroll
the additional students. The Department followed the directive. The
dispute was the legislature's intent that the project should be
delayed one year, while the Governor insisted the project should be
done during the current year.
Senator Bunde suggested funding this item from the Office of the
Governor budget.
Senator Bunde remarked this situation could establish an
"interesting precedence" allowing the administration to expend
funds for a project and thus obligating the legislature to
appropriate those funds. He asserted he did not accept the adoption
of this amendment as setting precedence.
Senator Olson favored this amendment. He agreed the situation
involves two issues, the school and a conflict between two branches
of government. The governor is active year round and therefore has
a better understanding of the issues.
Senator Olson spoke to the benefits of the boarding school program,
including the high scores its students score on the exit
examinations. He expounded upon his experiences at a boarding
school and noted the accomplishments of graduates of the Mt.
Edgecumbe school. He cautioned against causing struggle for the
students in an attempt to influence the Governor.
Co-Chair Green calculated the per student allotment for Mt.
Edgecumbe students at $5,120. She suggested that if this amount
were allocated for students in her district their test scores would
be higher as well.
There was no further objection and the amendment was ADOPTED.
Amendment #2: This amendment adds a new subsection to Section 4.
Department of Education and Early Development., on page 7, line 18
to read as follows.
(c) The sum of $800,000 is appropriated from the general
fund to the Department of Education and Early Development, Mt.
Edgecumbe boarding school, for increased residential operating
costs for the fiscal year ending June 30, 2005.
Senator Olson announced this amendment would be NOT OFFERED.
9:27:12 AM
Amendment #3: This amendment inserts a new subsection to Section 2.
Department of Commerce, Community and Economic Development., on
page 6, following line 19 to read as follows.
(f) Section 62(f), ch. 159, SLA 2004, is amended to read:
(f) Subject to (a) of this section, the sum of
$1,560,000 is appropriated from the general fund to the
Department of Commerce, Community and Economic Development for
payment as a grant under AS 37.05.315 to Dillingham City
Schools for expenses incurred on or after April 1, 2004, for
middle school roof replacement and high school design,
engineering, and roof and structural repairs.
This amendment also provides that the appropriation is retroactive
to April 1, 2004.
Senator Olson moved for adoption.
Co-Chair Green objected.
Senator Olson outlined accompanying explanatory language, which
reads as follows.
This request on behalf of the City of Dillingham School
District is to allow the District to be reimbursed expenses
incurred on a school project prior to July 1, 2004. Due to the
emergency nature the District spent funds on design prior to
July 2004 to ensure the project would be done in time for
opening day of school.
This language would cover expenses incurred on or after April
1, 2004 for this specific appropriation.
Co-Chair Wilken clarified this issue relates to a timing change in
the funding.
Co-Chair Green asked if this relates to replacement of the gym
floor.
TIM GRUSSENDORF, Staff to Senator Hoffman, described the mold
problems in the gym at the high school.
Co-Chair Green asked if the mold was contained in the floor.
Mr. Grussendorf replied that the mold was actually in the walls,
but subsequent damage caused the floor to become unusable. The
original appropriation was intended for replacement of the ceiling
in the district's middle school; however, if the mold in the high
school were not immediately addressed, the high school would have
to have been closed.
Co-Chair Green heard reports that the removed wood from the gym
floor was transferred to the local dumpsite where it was recovered
by residents and reused in their homes. Given that the materials
were still usable, she surmised this project should have received
additional scrutiny.
Mr. Grussendorf responded that the wood had buckled and was
unusable as a floor. He could not speak to its suitability for
other uses.
Co-Chair Green understood that the damage was limited to one
portion of the gym floor and that the entire floor did not require
replacement. She stated that residents recovered the wood, sanded
and refinished it and built good floors in their homes. She
reiterated that some projects should receive more diligent review.
Co-Chair Green removed her objection to the adoption of the
amendment.
Senator Bunde asked why this funding is necessary in the fast track
supplemental appropriation.
Mr. Grussendorf replied that the funds have been expended.
Senator Stedman asked if a maintenance fund exists to address
temporary repairs, or if the problems are allowed to worsen until a
total rebuild is necessary.
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and Early
Development, testified he was not aware that Dillingham has a
supplemental fund source for these issues. He detailed the capital
project process involving submittal of proposals, approval and
prioritization, and eventual appropriation of funding for specific
projects.
Senator Stedman suggested the Committee review and consider
existing and possible mechanisms for addressing necessary repairs
to avoid major renovations.
Co-Chair Wilken agreed and requested the Department address this
matter at a future hearing.
Without further objection the amendment was ADOPTED.
9:34:11 AM
Amendment #4: This amendment inserts a new subsection to Section 2.
Department of Commerce, Community and Economic Development., on
page 6, following line 15 to read as follows.
(f) The sum of $1,000,000 is appropriated from the general
fund to the Department of Commerce, Community and Economic
Development, Alaska Energy Authority, for the power cost
equalization program for the fiscal year ending June 30, 2005.
Senator Olson moved for adoption.
Co-Chair Wilken objected.
Senator Olson outlined the accompanying explanatory language, which
reads as follows.
In recent years, the Power Cost Equalization Program has not
been fully funded so that subsidies to electricity consumers
in high cost communities have necessarily been pro rated in
order to meet the appropriated funding level.
In FY 04, the pro ration averaged 82% for the year, with the
latter months April and May at 75% and June at 63%.
For FY 05, increase[d] fuel costs have significantly increased
the cost of electrical generation in these areas resulting
[in] further pro ration to the consumers. Currently, the pro
ration is at 65% and is expected to erode further for these
last 4 months.
From conversation with AEA, they estimate that supplemental
funding of $1 million would bring the program pro ration up to
76% for this year, if it is provided in a timely manner.
Co-Chair Green asked if different funding sources, such as the
federal National Petroleum Reserve-Alaska (NPR-A) funds, have been
considered as a funding option for the Power Cost Equalization
(PCE) program.
Senator Olson responded that NPR-A funds have been considered for
this program, as the purpose of those funds is to offset the
impacts of resource development within the Reserve. However, this
suggestion has not been favored.
Co-Chair Wilken remarked that he does not support the $6.45 million
appropriated to the PCE program. He has attempted to provide a
method for small communities to repay debt incurred for fuel
expenses. He stressed that this appropriation however, "totally
ignores" the impact on those residents paying a 10 percent premium
on all items transported north from Anchorage.
Co-Chair Wilken pointed out that PCE members consumed three percent
more electricity and four percent more fuel. The appropriated
contained in the committee substitute is "very generous" and
additional funding would be "unacceptable". He maintained his
objection to the adoption of this amendment.
Senator Olson countered that the referenced $6.5 million was
intended for something other than PCE. He disputed the 12 percent
increase figure of energy in rural Alaska.
Co-Chair Wilken reiterated that all goods delivered to the Interior
region incur a 10 percent surcharge compared to the 12-20 percent
increase that is limited to energy expenses.
A roll call was taken on the motion.
IN FAVOR: Senator Olson
OPPOSED: Senator Bunde, Senator Dyson, Senator Stedman, Co-Chair
Wilken and Co-Chair Green
ABSENT: Senator Hoffman
The motion FAILED (1-5-1)
The amendment FAILED to be adopted.
AT EASE 9:41:19 AM / 9:44:23 AM
Senator Olson expressed disappointment that this supplemental
appropriation relays the message that prevention and foresight are
not a priority. He specified the absence of funding for the breast
and cervical cancer screening program. He stressed for the record
that he supports this program and spoke of the impacts of these
cancers on members of the Committee as well as Iditarod musher
Deedee Jonrowe.
Co-Chair Green offered a motion to report CS SB 98, 24-GS1133\Y as
amended, from Committee with individual recommendations.
Co-Chair Wilken thanked staff for assistance on this legislation.
There was no objection and CS SB 98 (FIN) MOVED from Committee.
ADJOURNMENT
Co-Chair Wilken adjourned the meeting at 09:47 AM
| Document Name | Date/Time | Subjects |
|---|