Legislature(1997 - 1998)
04/18/1998 09:08 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 292
"An Act making supplemental appropriations; making,
amending, and repealing capital or other
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
Co-chair Pearce called SB 292. She referred to a memo from
Susan Taylor, Fiscal Analyst, Division of Legislative
Finance, which included a spreadsheet of SB 292 by section.
The committee would use this as direct reference to get
through each department. She asked department heads to be
prepared to outline their priority requests as they were
called before the committee. She noted an error in the
spread sheet, section 10(c), line 52, page 6 and noted it
should correctly read $300.0 GF and $300.0 total, rather
than the other funds of $320.8.
JIM SANDERS, Supervisor, Southcentral Regional Office,
Division of Municipal and Regional Assistance, Department of
Community and Regional Affairs testified via teleconference
from Anchorage. He said the Governor declared the Bristol
Bay disaster last 18 July. At that time there were no
resources to begin to assist the impacted regions. They
looked to two funding sources for assistance and U.S.
Senator Stevens was able to get $7 million appropriated for
the disaster last October. It is necessary for Alaska to
match that at twenty-five percent, which equals $2.33
million. Part of that is being made up of in-kind matches
from local communities and the department. Approximately
$1.7 million is needed to complete the match. He explained
three different components: one, a loan program being run
through the Division of Investments; two, community
projects; and three, fisheries research and education. He
said there were already grant applications from communities
and they were working with them in anticipation of funding
being approved. Most communities should begin their
projects after this coming fishing season.
Senator Phillips asked why this disaster was so different
from the economic disaster along the rail belt, 1985 - 1989?
Mr. Sanders said there was such a tremendous drop in income
to the region. The Bristol Bay disaster impacts the
fishermen's ability to return to the fishery this year. He
explained that it took approximately $10,000 to $20,000 for
start up for the fishing season. In some areas it is just
plain a matter of survival. Senator Phillips reiterated
concern over the economic disaster and the fact that the
Governor did not assist them during that time. He asked
specifically what criteria were used.
LAMAR COTTEN, Deputy Commissioner, Department of Community
and Regional Affairs testified via teleconference from
Anchorage. He said he appreciated the comments from Senator
Phillips, however he could not sit and debate what was done
previously. At this time they were considering what was in
front of them and that was a series of communities that did
not have alternative work. There are no other opportunities
for the fishing vessels to work other than fishing in the
Bristol Bay area. These individuals are not looking for a
handout or for a welfare program. However, the fishermen
and the communities are in a very tough spot.
Senator Sharp asked what the annual income of fishermen was.
Mr. Sanders responded that on the Kuskokwim they make
approximately $6,000 to $10,000/year. They also do other
part-time work in the community during the winter. Bristol
Bay fishermen make approximately $40,000/year after having
paid off all their expenses. Senator Sharp indicated that
was higher than the family income of people he represented
in his district. He asked Mr. Cotten what the cut-off date
on the loan application portion of the proposal was and how
many applications did they receive for the $1,000 loan. Mr.
Cotten said they received approximately 500 applications.
He explained that any remaining balance would be applied
toward community projects. Senator Sharp asked how much was
earmarked for commercial fisheries? Mr. Cotten indicated
there was approximately $300,000 to be spent mainly in the
Kuskokwim for fisheries research. They were working with
the Department of Fish and Game to develop the project.
Senator Sharp asked for the breakdown of the funding source.
Mr. Cotten explained that for every dollar the State spends
on fisheries research the Federal grant would match that
with three.
Senator Torgerson asked if the State of Alaska was a party
to the lawsuit regarding price fixing in Bristol Bay and
would they receive any money? Second, would the fish tax be
at least three percent? Mr. Cotten said they were not
participants in the lawsuit. It was a class action suit by
a series of fishermen who have permits in Bristol Bay. He
did not know if the State or local raw fish tax would apply
to any settlement. He guessed it would not as it is a legal
matter between the companies and fishermen. He will check
with the Department of Law and advise the committee.
Co-chair Pearce said the Department of Labor's $3 million
was embodied in another bill so the committee would continue
on with the Department of Administration, line 17, Longevity
Bonus.
SHARON BARTON, Director, Division of Administrative
Services, Department of Administration was invited to join
the committee. The following requests were made by the
Department of Administration:
CENTRAL DUPLICATION: She explained the request in the
amount of $260,000 for Central Duplication. The decision
was made after noting a downward trend for several years to
close Central Duplication. The downward trend was the
result of changing times. The three big factors were: one,
legislation requiring the use of private printers whenever
that was cost effective; two, legislation reducing the
number of reports agencies were required to do; and three,
increased use by departments of high-speed copy machines and
the transfer of reports to Internet rather than printing
copies. This cost of shutting down was $260,000.
OFFICE OF PUBLIC ADVOCACY: This request was in the amount
of $265.4 for the Office of Public Advocacy. She noted the
shortfall projection had been reduced from $441,000 to the
requested amount of $265.4.
OFFICE OF THE PUBLIC DEFENDER: This request was in the
amount of $351,000. An original shortfall projection had
been in the amount of $650,000. Despite an 3.5 percent
increase in caseload the Public Defender kept four positions
vacant and carefully scrutinized other expenditures.
LEASE COSTS: Ms. Barton noted the request was for $383.6.
In response to a query from Co-chair Pearce, Ms. Barton
advised the number was a valid one.
In response to a question from Senator Phillips, Ms. Barton
said any monies left over from the Longevity Bonus Program
would lapse to the general fund.
EPORS: She said there had been two new retirees in FY 98
and some additional health insurance costs. The department
has need for $59.7 in order to pay full costs for EPORS.
Senator Sharp asked if the figure included any individuals
that were not running for reelection but were running for a
different office? Ms. Barton said it did not. She advised
that the two individuals were Jay Kerttula and Chancy Croft.
PIONEER HOMES: She said this was a request for a fund
source change from $250,000 general fund program receipts to
$250,000 straight general fund. This was necessary due to a
shortfall in revenues in the pioneer homes. The amount
could not be made up partly because of additional expenses
in having to set up the in-house pharmacy and also due to
the fact that this program has wrung every dime out of
potential efficiencies. The revenue shortfall was further
due to the inability of some residents to pay, and the new
revenue unit set up this year was not up and running until
about mid-year.
DOUGLAS HOLT, Administrator, Juneau Pioneer Homes,
Department of Administration was invited to join the
committee. In response to a query from Senator Sharp he
said they expected to collect about $1.4 million from
residents. Currently bills were being sent out to residents
and there was a follow-up on those that were not paid. That
shortfall projection has been shrunk from $700,000 to
$250,000. They feel that next year they will be better set
up in both billing and collections. He said the revised
budget would add $1.4 million.
Senator Phillips asked if they were on a five-year or seven-
year plan? Mr. Holt indicated they were on year three of a
seven-year plan. Senator Phillips asked if they were
getting volumes of complaints? Mr. Holt said there had been
a number of complaints and they had listened to them all
carefully. It was noted that most people did not realize
how much was being subsidized by the State. One lady, he
said, asked that he convey her thanks to the Legislature for
the assistance they were giving the elders. Senator
Phillips asked at what percent the State was subsidizing
this program. Mr. Holt said in FY 98 the State subsidized
the program about two-thirds with residents paying about
one-third. In FY 99 that will change to approximately
thirty-eight and a half percent from the residents and the
balance will come from the State. He indicated that at the
end of the seven-year plan the residents will pay $14
million of the $30 million program.
Ms. Barton continued with the following:
SENIOR EMPLOYMENT SERVICES: She said under older rules this
request would have been dealt with through Legislative
Budget and Audit. It is just a request for additional
authorization to receive a higher Federal grant and to be
able to expend the funds.
Ms. Barton advised Co-chair Pearce there were still two
other sections for the department and asked they be picked
up at this point. She referred to a 17 April memo, which
was an amendment to section 2. Co-chair Pearce advised that
these two requests were just received and had not been
incorporated into the spreadsheet provided by Susan Taylor.
LONGEVITY BONUS: Ms. Barton said there was an anticipation
of $2.2 million being available in addition to what was
taken out of the Governor's budget. She said both Longevity
Bonus and APOC were increments in the Governor's budget for
FY 99 and the Senate Subcommittee has now closed out funding
these two increments. They are not in the House Finance
budget at this time. These are one-time items and should be
dealt with in the supplemental budget with an extended lapse
date. Both are critical items. $310 was for labor contract
negotiations beginning in FY 99 for eleven contracts that
are expiring. They have reduced the staff by five positions
with the strategy in mind that they did not need negotiators
on staff when they were not negotiating and they would just
be added in those years when negotiations were in progress.
However, they do not care if it is funded in the operating
budget, in conference committee deliberations or whether it
is funded as a supplemental one-time item.
APOC: This request is for one-time costs related to an
election year. Senator Phillips indicated that they just
received money. However, Ms. Barton clarified that the
House opted not to fund the request through the operating
budget, but rather through a supplemental. It was not
double dipping.
(pause on record)
STALE DATED WARRANTS: She said these warrants were
collected from all agencies and then they were presented
each year to the Division of Finance for payment. In
response to a query from Senator Phillips, she will check if
there is a statute of limitations on stale dated warrants.
RECORDS STORAGE LEASE: It was explained that the lease
budget for archiving had been shut down. Now agencies would
be paying the archives bill direct and the department would
distribute the proper funds to all agencies that were having
to cover the new costs. This was a deletion from leasing of
$120.0, which has been redistributed to all agencies. In
response to a question from Senator Sharp she indicated the
deletion of $120.0 was an agreement between all agencies to
distribute said amount.
(Tape #126, Side A switched to Side B.)
TOM LAWSON, Director, Division of Administrative Services,
Department of Commerce and Economic Development was invited
to join the committee.
HEARING OFFICERS: He explained the request was for funding
of hearing officers, which were incorrectly charged to
occupational licensing. He said in FY 97 occupational
licensing absorbed about $50.3 in hearing examiner costs
that should have been paid by banking, as well as insurance.
This was caught by a legislative audit last fall and the
department was advised they should take action. Since the
years fiscal transactions for 1996-1997 have been closed
that was the basis for this request. If the Legislature
signs off on this, Banking and Insurance would RSA the funds
to Occupational Licensing to right this wrong. Methods have
been set in place to enable the hearing officer to make the
right charges to the appropriate division.
Senator Sharp asked if the credit should not be returned to
the general fund? Mr. Lawson said that occupational
licensing operates on fees. The auditor was very sensitive
to the fact that fees had been gathered from the licensees
and that money should not lapse into the general funds and
they should get credited back for the funds that were not
properly expended.
LAMAR COTTON, Deputy Commissioner, Department of Community
and Regional Affairs again testified via teleconference from
Anchorage. He introduced PERCY FRISBY, Director, Division
of Energy, Department of Community and Regional Affairs also
on teleconference.
POWER COST EQUALIZATION: Mr. Frisby explained the
supplemental request needed for this year. It was in the
amount of $1,700.0. This would leave them the ability to
fund PCE at its full demand level next year. Co-chair
Pearce asked if this was for FY 98? Mr. Frisby said it was.
Senator Sharp voiced concern that this might be a stretch of
what the Federal government allows them to use. The past
three years AHFC has been saying that the funds could only
be used for weatherization and energy efficiency. This will
have to be checked out. Mr. Frisby advised that the funds
could be applied or used for PCE. Co-chair Pearce said she
thought PCE was funded at eighty-five percent last year.
Mr. Frisby concurred.
(10:05 a.m. at ease - 10:08 a.m. back to order)
Co-chair Pearce said PCE was funded at $17 million last
year, which was the Governor's request. That was not
eighty-five percent, rather a continuation from the previous
year.
SUSAN TAYLOR, fiscal analyst, Division of Legislative
Finance explained how PCE was funded. She said it was
unlikely it was funded at eight-five percent.
Co-chair Pearce asked Mr. Frisby if $1.7 million bring them
to the eighty-five percent level? He indicated that it
would. She further indicated that there was already
adequate description of what record storage costs were.
Mr. Cotten indicated there was nothing in the latest memo
that came from OMB relating to the department.
TRACI CARPENTER, Budget Analyst, Department of Community and
Regional Affairs was invited to join the committee. She
explained these were two small over-expenditures. Her
research showed that these were most likely accounting
errors that occurred at the time of conversion. The $12,000
one was again an accounting error. These were funds that
were applied to the 1989 RSA when they should have been
applied to the 1988 RSA. She advised that the Division of
Finance could fix this.
Co-chair Pearce asked that a memo be provided for the
committee's back up regarding this request.
DWAYNE PEOPLES, Department of Corrections was invited to
join the committee.
PAROLE BOARD: He explained this was a request for $50,000
general funds as operational expenses for the parole board
to address the incarcerated population both in-State and
out-of-State. This would include costs for travel, per-diem
and stipends for the parole board members in dealing with a
backlog of approximately two hundred parole requests.
ADMINISTRATION AND OPERATIONS: This was in the amount of
$721.0 general funds to be spread across the State's twelve
institutions because of abnormally high populations in the
institutions this year. This additional support would be
applied to maintenance of the institutions, including
personal services and overtime.
INMATE HEALTH CARE: This was a $1.650 million general fund
request for inmate health care services. He said this was a
reduction from the original $2.5 million. He believed this
can be reduced down another $50,000 to $75,000 based on
their most recent analysis. He will communicate the exact
figure to the committee next week.
PRISONER TRANSPORTATION: This was a $230,000 general fund
request for the cost of prisoner transportation both in-
State and out-of-State. This includes travel and staff
time.
NICO BUS, Budget Coordinator, Department of Natural
Resources and Department of Military and Veterans Affairs
was invited to join the committee.
DISASTER RELIEF: Mr. Bus explained this was a request for
$2.6 million to capitalize the disaster relief fund. Over
the last number of years the department has tried to close
out all the old disasters. In order to meet their
obligations they are requesting a total amount of $2.6
million. This request included a Department of
Transportation emergency relief in the amount of $620,000
for flooding in the eastern Tanana/northern Copper River
valleys last summer.
Mr. Bus further explained the request for $40,000 Federal
receipts as the Federal government requires they attend some
of their emergency training. This is an authorization to
receive an expended Federal receipt on the State books.
He noted the next item was similar in that when the National
Guard goes out on medivac or special mission some of the
expenses are reimbursable by regional health corporations,
specifically for the members of the flag crew that are State
active duty. The requested $11,000 would put the expended
monies back into the National Guard budget by allowing
accountability as statutory designated program receipts.
(Co-chair Pearce requested an at ease at approximately 10:23
a.m. to see if Col. Pederson was on line.)
Co-chair Pearce identified the next item to be taken up was
the Youth Corps Challenge Program.
Nico Bus asked permission of Co-chair Pearce to explain the
budget point of view for the committee.
ALASKA NATIONAL GUARD/YOUTH CORPS: Mr. Bus said at the time
of the budget they were not sure of the Federal funding. He
said they reduced the Federal funding in the Governor's FY
'99 budget to $1.4 million in Federal funds and $600,000 in
general funds. In December the Federal funds were increased
to $2.1 million. They approached the Governor and asked for
the supplemental to go in two parts; the first part the
Legislature earlier funded in the fast track supplemental in
the amount of $608,000 which would get the Youth Corps
program from February to 30 June 1998. They are requesting
the additional supplemental funding that would make the 1999
budget to $2.1 million. The general fund portion would get
the Youth Corps funding from $600,000 to approximately $1.3
million. Together they make for a $3.4 million, which would
fund two classes with a targeted graduation level of eighty
students. The initial intent was to make sure there was
funding to finish the class they just started from February
through September. He realizes this is confusing but hopes
the committee understands.
Co-chair Pearce asked Senator Phillips if the money he had
in the operating budget for the Youth Corps was enough to
finish the two classes started now and slated to finish
September 1998. She also asked if there was additional
general fund money for a 1999 class? Senator Phillips
indicated there was enough money for one class.
She then asked Col. Pederson how the class was going.
COL. GARY PEDERSON, Director, Alaska National Guard Youth
Corps, Department of Military and Veterans Affairs testified
via teleconference from Anchorage. He said they currently
had one hundred three cadets in the program to graduate 14
August 1998. Co-chair Pearce asked the Federal funding
available for fiscal year '99 and continuation of those
funds? Col. Pederson explained the result of the meeting
between General Lestenkof and U.S. Senator Ted Stevens.
Senator Stevens advised that he would do his best to ensure
full funding was available. Even though there is a shortage
of funding he has great expectations this will be rectified.
Senator Adams asked how many teachers there were within the
present program? Col. Pederson said they currently had
thirty instructors on staff; five teachers and twenty-five
vocational instructors. He explained that the ratio of 3
students to 1 teacher was high because they had to cover the
young folks twenty-four hours every day on a shift basis.
Mr. Bus continued for the Department of Natural Resources.
FIRE SUPPRESSION: This was a request in the amount of $13
million. He explained they started the year with $3.3
million, however due to disaster received another $6.6
million. In order to finish this fiscal year they feel
they need this requested amount. It would include monies
for a spring fire activity. All indications include a heavy
fire season, specifically they are worried about the Kenai
Peninsula.
Senator Torgerson asked if any of the monies included fire
prevention? Mr. Bus advised that it was all fire
suppression. Some was for aviation contracts and the
largest amount for personal services was to hire fire
fighters when the fire starts. He said fire prevention was
funded in the Forest Management component.
Senator Sharp asked the amount they started with and Mr. Bus
reiterated the $3.3 million was correct. He further
explained that the $6.6 million was part of the $13.
million. That was approximately at total of $16 million.
Mr. Bus said that was correct.
Senator Phillips asked if any of the money was used in
Southwest Alaska, Red Devil. Mr. Bus responded that it
included Red Devil, Stony River, etc.
RECORDERS OFFICE: Since things are going well and there is
a request for more mail-outs, postage and courier they have
requested authorization to accommodate this increased work
load. Customers pay for the service through program
receipts. This request would allow them to keep up with
their services.
Senator Adams said he thought the fees being collected would
take care of the over-load? Mr. Bus explained that it did.
The request was for $100,000 in program receipts and the
remaining $250,000 was deposited to the treasury.
Senator Parnell asked about the equipment upgrade. Mr. Bus
explained that one thing that was a real problem in the
Recorders' office was that the office still has nineteenth
century technology even though we were now living in the
twentieth century. Part of the money would be used to
upgrade terminals and PC's so the workload could be
processed faster. Senator Parnell asked if this was part of
their capital budget request and Mr. Bus indicated this
portion was not.
OLD EAGLE SCHOOL: Mr. Bus explained this project. There
was a Court order to move the buildings and then once
removed the department would have to clean the contaminated
site. A contractor was hired last year with the funds that
were appropriated. Rather than haul the material to
Fairbanks for proper disposal he burned them on site. There
was asbestos in the material and this caused grave concern
for OSHA. Department of Environmental Conservation fronted
the Department of Natural Resources to properly clean up the
site and the total bill came to $155,000. Mr. Bus advised
the work has been completed and the funds are to reimburse
the Department of Environmental Conservation.
Senator Phillips said the contractor should have taken the
asbestos across the border to the asbestos mine, which is
only about thirty to forty miles away.
GEOLOGICAL MATERIALS CENTER: He explained this request was
in the amount of $85,000 for storage for core sampling plus
another increase in the 1999 budget bringing the total of
the project to $1.1 million in order to restart the project.
AG. REVOLVING LOAN FUND: The 1999 operating budget
drastically reduced the budget for the Division of
Agriculture. With the requested funds they feel they can
finish the fiscal year. There are two large amounts of
money relating to two farms having environmental problems.
One is a lagoon that needs to be pumped; the other is a well
that needs to be drilled. He noted the audit report will
recommend the amount be paid for the protection of
collateral for loans.
Senator Sharp requested backup regarding the loans and Mr.
Bus said he would provide that to the committee.
PARKS MANAGEMENT: He briefly explained this item and asked
the line item be approved. He said that the budget
reduction allowed for fewer fee collectors and therefore the
compliance dropped from ninety-five percent of people paying
to sixty percent; lack of maintenance; the bottom line is
that they are not meeting their program receipt budget. If
the funding source is not switched then the Division of
Parks may have to look at opening parks later, thus
complicating the problem even further.
Senator Phillips asked about the compliance reduction. Mr.
Bus explained that if there is no campground host then
people just camp. He explained that even with budget
reductions they can not lay off their Rangers. So the first
positions to be cut are the campground hosts. Senator
Phillips asked about the campground hosts. Mr. Bus
explained that even though they are volunteers they receive
a stipend and may receive a little money.
(Tape #126, Side B switched to Tape #127, Side A.)
Senator Sharp asked about the program receipts and if they
were not there how could they be transferred? Co-chair
Pearce explained they had previously budgeted for $150,000.
Senator Parnell said these funds would then be transferred
from program receipts to general funds.
Co-chair Pearce advised the meeting would recess to the
floor and then return to Senate Finance Committee at 1:00
p.m. She said she hoped to finish the supplemental requests
today.
Co-chair Pearce reconvened the Senate Finance Committee at
approximately 1:15 a.m. She noted those present as Co-chair
PEARCE, Senators SHARP, TORGERSON, PARNELL and PHILLIPS.
She noted the committee had completed Department of Military
and Veterans Affairs and Department of Natural Resources and
they would commence with the Department of Education.
KAREN REHFELD, Director, Education Support Services,
Department of Education was invited to join the committee.
She explained the following:
AVTEC: This is a request for $75,000 in Federal
authorization. It relates to their recently received
certification from U.S. Department of Education to
participate in the PELL grant program. Approximately
twenty-two students have applied and received notification
of their eligibility.
STALE DATED WARRANTS: There are three items under this
miscellaneous claim and they are all prior year billings.
OVEREXPENDITURES: She said these were ratifications of
overexpenditures. Both items relate to the Division of
Vocational Rehabilitation under the small business
enterprise program. This is being done as a clean up of
prior year accounts.
RECORDS STORAGE: She noted that part of the funding would
allow the department to maintain their records management
responsibility.
Co-chair Pearce asked if the department had any projects in
the memo that was received last night. Ms. Rehfeld
indicated they did not.
KEVIN BROOKS, Director, Division of Administrative Services,
Department of Fish and Game was invited to join the
committee.
SITUSUILAQ HATCHERY: The request represents lease costs to
the land owner wherein the department operated the hatchery
north of Kotzebue for approximately fifteen years. The
hatchery was closed in June 1995. There was some diesel oil
spilled at the site and in conjunction with the Department
of Environmental Conservation they have been using oil
response funds to clean up the site. The supplemental
request represents payment to the land owner.
Co-chair Pearce referred to a request made to Senator Adams
that a letter be received from the land owner indicating
receipt of the lease payments through September. That would
preclude any further suits against the State. She wanted to
know if the department had done this. Mr. Brooks said that
any payment would be part of a written settlement that would
address just this issue. The department will not make the
payment without a written agreement.
SUBSISTENCE: This was a request in the amount of $56,000 to
help the division due to a reduction in the amount of
$160,000. He said even though the began the year with every
intention of living within their budget, several things came
up that required additional work and effort by the
department that they could not stop doing. This was
basically working with the Federal subsistence board process
and the task force. The effort expended by the division
included working with the Division of Wildlife in
representing the department at the Federal subsistence board
and protecting the State's rights, trying to keep hunts open
for both general and subsistence and challenging proposals
in the Federal arena to make sure they were getting the best
presentation.
(The presence of Senator Adams is noted.)
Senator Sharp asked that if this was worked out with the
Division of Wildlife why didn't they agree to RSA monies
over? Mr. Brooks said they had tried to limit the RSA's to
specific harvest surveys and different big game surveys.
This project as explained was a more broader item.
HARBOR SEAL STUDY: This was $80,000 of EVOS funds for
continuation of the harbor seal study in Prince William
Sound. There was not a meeting early enough to submit the
request to Legislative Budget and Audit. The project will
be continued on into 1999 and has been included in the
department's 1999 budget as well.
U.S./RUSSIA - BERING SEA: This was a request for $25,000 in
Federal funds for the Commissioner's Office received from
the National Marine Service to provide for travel costs in
dealing with the Bering Sea fisheries and boundary issues.
Senator Sharp asked if this was for the individuals in the
Commissioner's Office that were normally responsible for the
North Pacific Fisheries? Mr. Brooks said this involved
specific travel to Russia by David Bevin along with
fisheries scientists.
Senator Phillips asked the status of the talks. Mr. Brooks
said these were government to government talks and he would
have to get back to the committee for any further specific
details.
DESIGNATED PROGRAM RECEIPTS: This was submitted to the
committee on 9 April with several other items. The request
is for a number of projects being done by groups in the
private sector and represented specific costs.
STALE DATED WARRANTS: These were invoices being submitted
now over two years old.
OVEREXPENDITURES: This was an amount of $200 to ratify an
old expenditure and RSA. This is a clean up item.
RECORDS STORAGE: This is the departments share of the
larger transfer regarding storage.
JANET KOWALSKI, Director, Division of Habitat and
Restoration, Department of Fish and Game was invited to join
the committee. She gave a brief description of the
following:
KATCHAMAK BAY: She said $85,000 was included in the Habitat
budget in order to receive a Federal grant through DGC.
When DGC received their entire NOAA coastal zone
appropriation it was larger than originally anticipated.
This also would have been an LB&A request if they would have
been meeting.
Co-chair Pearce moved on to the Department of Health and
Social Services.
JANET CLARKE, Director, Division of Administrative Services,
Department of Health and Social Services was invited to join
the committee.
ALASKA TEMPORARY ASSISTANCE PROGRAM: She explained this was
a reduction in the amount of $1.5 million in general funds.
This has to do with reduced welfare caseload during the
current fiscal year.
In response to Co-chair Pearce, Ms. Clarke explained that
item #42 was being withdrawn.
PUBLIC HEALTH LAB, ANCHORAGE: This is a request for
statutorily designated receipts related to the public health
lab being built in Anchorage. The receipts come from
certificates of participation that have already been sold
and will go the Department of Transportation and Public
Facilities for work they are doing on the new facility.
GENERAL RELIEF MEDICAL: She explained that in FY 98 there
had been a spike in general relief medical eligible clients
who have come to the program. In looking at the numbers she
said they have seen that many of the individuals that
previously qualified for the Medicaid program are now
showing up in the General Relief Medical program.
This was due to some of the Congressional changes in
eligibility for SSI and Medicaid and they are now not
eligible for Medicaid.
(The presence of Senator Donley is noted.)
Ms. Clarke advised the committee that this program actually
ran out of funds in February. Temporarily they have
transferred funds from the Medicaid program to keep the
bills being paid while the Legislature considered this
supplemental.
Senator Phillips asked how many individuals were they
talking about? Ms. Clarke said it was her understanding
they were seeing about three hundred more individuals under
general relief.
In response to a query from Senator Parnell, Ms. Clarke said
there was a bill passed last year with reference to a
savings in the Adult Public Assistance Program and the
Medicaid Program. At that time they could not estimate how
many would apply for general relief medical. They did note
in their fiscal note that perhaps as much as $1 million
worth of expenses could come to this program.
Senator Sharp asked if the individuals now ineligible under
Medicare and Medicaid they automatically become eligible
under general relief? Ms. Clarke indicated they do have to
apply and be eligible for general medical relief as well.
There are very strict conditions for application.
Senator Parnell indicated that even though the Legislature
did not act on that the catch was indicated in the
department's fiscal note. He asked what the categories were
that got cut off for alcohol treatment.
BOB LABBE, Director, Division of Medical Assistance,
Department of Health and Social Services was invited to join
the committee. He explained the Federal policy, which
eliminated certain disabled children and substance abusing
individuals as the only basis for disability. The Medicaid
eligibility basically follows the Federal SSI program for
cash for those groups. They had estimated some individuals
because they knew they would no longer qualify for the
Federally matched program and would fall into the general
relief medical program. He further indicated there were
legal alien issues that came up last wherein they were no
longer able to cover certain groups of legal aliens under
Medicaid but the State did cover them, if they qualified,
under general medical relief.
Senator Sharp asked if drug addicts could also apply under
general medical relief? Ms. Clarke indicated there were
only approximately seventy-five drug and alcohol clients.
Mr. Labbe noted they had been seeing a decrease in
expenditures in general relief medical. In the past in had
been a much larger program.
There followed general discussion of the committee members.
Ms. Clarke further explained that one had to have a monthly
income of less than $300, less than $500 in assets to
qualify for the general relief medical. You can not qualify
for any other medical coverage. The individual must have an
immediate need for medical care for a terminal illness,
chemotherapy treatment for cancer or a chronic condition.
In response to a query from Senator Torgerson, Ms. Clarke
explained the seventy-five individuals and that they were a
total increase of three hundred individuals to the program.
The requested amount under this program was to serve three
hundred additional individuals equaling about
$5000/individual.
Senator Parnell said the back up did not correctly reflect
the number of individuals being served. It should read that
1700 to 1800 were being served, including those qualifying
for abortions. He felt this deception was outrageous. Ms.
Clarke apologized and said there was no effort on her part
to deceive.
Mr. Labbe commented on the conditions for qualifications and
the eligible planned group. The abortion payments that are
made as State funded payments come out of the budget but
from a population that is eligible for Medicaid. He
indicated that there was approximately $800,000 in FY 97 in
abortion-related costs out of the total budget.
Senator Parnell continued to voice his concern about the
lack of abortion individuals not showing up on the records.
He felt the department needed to show everyone that was
being funded. Otherwise the calculation per person was
basically meaningless.
Mr. Labbe reiterated there was no intention to deceive.
They have always used the same eligibility formula for the
program. He said the total dollars include the abortions
and therefore the distribution by category of service would
include those costs. Senator Parnell said if that was the
case then the eligible clients should correctly reflect 1700
or 1800. Mr. Labbe said the difference was one must also
look at the distribution of race, age and location. That
only includes the 856. Senator Parnell asked for a reprint
of the chart so the proper and complete information was
presented to the committee.
Ms. Clarke said they have tried to put together a more
complete picture as this program is debated in the
Legislature.
Senator Sharp asked if the department was assuming the
Legislature was going to fund all requests? Ms. Clarke said
that one thing the committee should know was that hospital
payments had been reduced to less than twenty-nine percent
of the costs. Senator Sharp said the question was
regarding the priority list. Mr. Labbe responded and said
all of the services on the list were not presently funded.
He said they were only part way down for their coverage
under general relief medical program. He explained the
difficulties in using the lists were that they required
regulation changes. Even though a problem is perceived it
takes a while to change it. He said the priority list was
not a good option for daily management.
Senator Parnell asked how this worked if they ran out of
money in February. Were they funding right now from other
sources? He asked directly if the list was meaningful at
all. Mr. Labbe said the list was not terribly meaningful in
mid-year. The problem lies in that if they make a decision
now for FY 99 they would notice to cut some services or
change some rates. Typically, however, the clients that are
eligible go to a provider, the provider sees them and the
bill comes in. There is a lag anywhere from one to five
months from the date the service is provided until a bill is
presented. Therefore, the department incurs liabilities.
It is hard to turn this on a dime. A regulation change
would have to be made in order to use the list.
In response to a query from Senator Phillips, the list as
defined by the Legislature and in statute is that the
department is to make an estimate of their ability, given
the appropriation, to manage that appropriation. This
assessment would have to made at the first of the year
because there is always this delay, same as last year. The
reduction in Medicaid has also created them problems. This
is why the list is not effective as a daily management tool.
Senator Torgerson asked about money being transferred out of
Medicaid or Medicare to cover the shortage. Ms. Clarke said
through the Office of Management of Budget when they ran out
of funds in February monies were transferred from Medicaid
or Medicare. The requested amount would cover monies to be
paid back. She did not recall the exact amount but would
supply the information to the committee.
MEDICAID PROGRAMS: This was a request for $1.306.6 million
in Federal funds for school based claims that come into the
Department of Health and Social Services. In the FY 98
budget the department estimated a total of $2 million would
come in from this program. She briefly explained the
program.
(Tape #127, Side A switched to Side B.)
Ms. Clarke continued.
INDIAN HEALTH SERVICE: This is a request in the amount of
$1.3 million. She said this is a repository for Federal
funds that the department processes. She said the monies
are not only used in the Indian Health Service but also
moved around in the school districts. Under the time study
program each school gets a grant.
Senator Torgerson asked how much of the school district
claims were being paid under this program? Ms. Clarke said
the Federal share of the claim was $4.6 million. Senator
Torgerson further asked if the department was going to spend
$3 million on back case adoptions? Ms. Clarke explained
that the agreement is that any money that comes to the State
from this program half is sent back to the school districts.
The other half is discretionary funds that the Legislature
can appropriate for many different purposes. The Governor
has proposed the remainder of the monies be used for the
adoption backlog. LB&A acted on part of that and there are
several other requests that will be before the Senate
Finance Committee at a later time.
MEDICAID PROGRAM: This is a request for Federal authority
for the Medicaid program for $12,018,400. She explained the
department embarked on a fairly severe cost containment
effort in this program, which required a number of
regulatory changes to try and live within the general fund
budget. These efforts have been successful because the
department is not requesting any general funds. The Federal
authority request now before the committee will eliminate
the general fund request.
Senator Sharp asked if this was a "break even" on the
savings in general funds? Ms. Clarke explained that the
request would go for three main items as listed in their
backup.
MEDICAID SCHOOL-BASED CLAIM: This is the second part of the
school based claim. She noted that at the 12 December LB&A
meeting the department requested $1.3 million for dealing
with the adoption backlog of children they had identified as
having been in foster care for a number of months and years.
These children also had various barriers to being adopted.
The LB&A committee approved $433,000 and allowed the
department to go forward with one-third of the request so
they could get started right away on dealing with this
problem. The department is requesting the remainder of the
funds so they can continue this program. The department has
coordinated meetings with the Court system, Department of
Law, Public Defender and the Office of Public Advocacy in
order to allow many of these children to become legally free
for adoption. Some four hundred children are eligible for
adoption.
Co-chair Pearce asked what the results were from the monies
approved at the LB&A meeting. Ms. Clarke responded that two
primary grants have been awarded to two individuals. They
have agreed that they were going to target fifty adoptions
of special needs children. So far the work for twenty-two
children has been completed with only final adoption
proceedings pending.
Senator Parnell indicated that he was very supportive of the
approach being taken by the department. He said he was
concerned whether the department would be able to expend the
remaining requested funds and accomplish the task. He felt
this request being built into the FY 98 budget was
excessive. Ms. Clarke said the grants were not awarded
until early February due to negotiations. There were start-
up costs, training sessions, home studies and coordination
costs with tribal partners. She advised the reason the
request was in the supplemental request was because the
revenue was available in this current year. The department
knows that they would not be able to spend the money this
year and therefore are requesting a lapse date through FY
99. She explained the adoption program in the budget was
subsidy payments and not related to the backlog of children
identified. This was a one-time request.
Senator Phillips asked what the rush had been for the
request before LB&A back in December? Ms. Clarke explained
that the department knew it was going to take awhile to
develop an RSP and a program with grantees. They pushed to
get this accomplished so they could get the necessary work
done to develop a program and protocol for providing names
of the children and working out what results they wanted.
WIC PROGRAM: She explained that this was a request for
$1,241.5 for the WIC program. This is a one hundred percent
Federally funded program except for the statutory designated
receipts they get from formula rebates. It provides
specific nutritious food, packages and nutrition education
for low-income, pregnant, at-risk women. They have seen a
continuing growth in the program over the last several
years. This request will allow the department to keep up
with the kind of growth they are seeing.
MEDICAID FACILITIES AND NON-FACILITY: This was a request
for $7,770.1 general funds. She explained the request was
due to the Federal match rate not being as high as
originally anticipated.
DFYS/BLOCK GRANT: This request was for $119.3 in general
funds. The request was due to a reduction in Federal Title
XX block grants. These monies were used to fund the Child
Protection workers.
YOUTH FACILITIES: This was a request for $290.0 in general
funds to help alleviate overcrowding at the Johnson Center
in Juneau and the McLaughlin facility in Anchorage.
GEORGE BUHITE, Director, McLaughlin Youth Center testified
via teleconference from Anchorage. In response to a
question from Senator Phillips he indicated that McLaughlin
presently house one hundred ninety-eight juveniles when they
were equipped for only one hundred fifty. He also explained
that the Johnson Youth Center was only an eight-bed facility
but they were presently housing twenty-two to twenty-three
juveniles. As a general rule all the facilities were
operating at approximately one hundred thirty-eight percent
of capacity.
Senator Torgerson asked what the increase was over last
year. Mr. Buhite explained that at McLaughlin they were
running approximately ten juveniles per day more than last
year and at Johnson they were up about four juveniles per
day. The significant part, he noted, especially for
McLaughlin was that for approximately every eight to ten
juveniles per day in the facility they needed to add one
staff per shift to meet the safety and administrative code
requirements.
FOSTER CARE: Ms. Clarke called the committee's attention to
an amendment in the department's packet regarding this item.
She said the initial request had been in the amount of
$355.6 general funds. The amendment requested the addition
of Federal funds in the amount of $404.2. She noted a
significant increase in the number of foster care
augmentation requests. She said this augmentation rate was
necessary to pay for a number of items that are above the
base foster care rate. This may include transportation to
visit physicians, special foods, laundry, in-home
assistance, childcare and etc. The department had seen an
increase in children with special needs over the past year.
Co-chair Pearce asked what the Federal receipts were. Ms.
Clarke indicated they were Title IV (3) receipts and are
available for children who meet the eligibility criteria.
The Federal government pays for the same the department
provides as long as they are eligible for those same
services.
ALASKA CHILDREN'S TRUST FUND: She noted the item did
actually go into Revenue because that's the department that
manages that item. The $2.0 million is a request for a
deposit into the Children's Trust Fund. She explained that
fund was created in 1988 by the Legislature and there was
currently a balance of $6.5 million. Proceeds would be
available for grants made by the Children's Trust board for
child protection, child abuse services, etc.
Senator Phillips asked if there was an emergency situation?
Ms. Clarke said she was not familiar with why it was a
supplemental request and perhaps someone from OMB would be
better qualified to provide any answers.
LAURA BAKER, Budget Analyst, Office of Management and Budget
was invited to join the committee. She explained the $2.0
million deposit was put into the supplemental because it was
an item being used in a reallocation.
MISCELLANEOUS CLAIMS: This was a request for $4,200 for
bills older than two years that have been submitted for
payment.
RECORDS STORAGE: There was no explanation given.
SUBSIDIZED ADOPTION PROGRAM: This was a new request for
$257,000 general funds for the subsidized adoption program.
She explained that this particular program was a subsidy
payment for many children who have been in State custody for
special needs who are then adopted. Ninety percent of the
children in this program who receive a subsidy have come
from the foster care component. The department had
originally estimated the program would grow by eleven point
four percent in FY 98. Actually, they have seen a growth of
eighteen percent, which is considerable above what they had
budgeted for and requested of the Legislature.
Ms. Clarke advised the committee that was the last
departmental request. Co-chair Pearce thanked Ms. Clarke.
She then called the Department of Law.
BRENDA MARKEY, Director, Division of Administrative
Services, Department of Law was invited to join the
committee. She noted that Dean Guaneli, Chief Assistant
Attorney General was present to identify and explain the
next item. She noted that most of the additional costs were
due to a change in venue.
DEAN GUANELI, Chief Assistant Attorney General, Legal
Services Section-Juneau, Criminal Division, Department of
Law was invited to join the committee.
CRIMINAL DIVISION/EXTRAORDINARY EXPENSES: He explained
briefly for the committee that the State bears the burden in
criminal cases to prove the case beyond a reasonable doubt.
What that means is witnesses have to be brought to Court and
get them on the stand. In Alaska it is often found that the
witnesses do not live in the area where the Court proceeding
occurs. Two-thirds of the department's travel budget is to
bring witnesses to Court. The other third is to get
attorneys out to the places where the Court proceedings are
held. He advised the committee that this year they faced
the extraordinary situation of having four separate murder
trials; two from Yakutat that had to be moved to Juneau; and
two from Bethel arising out of the shooting at the high
school. One had to be moved to Dillingham and the other to
Anchorage. Those kinds of expenses cannot be anticipated in
any fiscal year. The Dillingham trial had over thirty
witnesses that had to be subpoenaed from Bethel to
Dillingham. Many were juvenile, high school students who
witnessed the shooting. Further expenses that had to be
borne were having a parent or guardian accompany the minors,
hotels and meals. Due to the Judge's strict time schedule
for the trial it was necessary to charter the witnesses from
Bethel to Dillingham. He explained the same costs were
being entailed in the trial of the other juvenile in
Anchorage.
Senator Donley asked why the two were not being tried
together. Mr. Guaneli advised that they were severed
because the evidence in one would not have been admissible
against the other defendant. Also, one was tried as an
adult and the other as a juvenile. Senator Donley further
asked if the department was able to make any comments as to
how to save money on prosecutions next year? Mr. Guaneli
said there were several bills that had been introduced to
make changes to criminal law. He said the changes proposed
for Evidence Rule 403 and 404 would certainly help. Another
change that would help the particular problem is a change in
rules regarding telephonic testimony. In further response
to Senator Donley, Mr. Guaneli advised that the Governor had
introduced these bills, but he did not know their status.
Senator Donley believed that appropriate questions should be
asked today in order to look at reforms the Legislature
could advocate to hold down future costs.
Mr. Guaneli further referred to a memorandum requesting an
additional $100,000 to cover travel expenses; also the sex-
offender registration program.
Senator Donley asked again about the Bethel murder trial and
why it was so difficult. Mr. Guaneli explained the change
of venue and the need to bring forward so many witnesses due
to the fact that the State had charged the defendant with
First Degree Murder. This takes a lot.
JUDGMENTS AND CLAIMS: Ms. Martin explained the revised
numbers for this item is in the memorandum from OMB dated 17
April and received late yesterday. That amount was $695,602
general funds and $327,760 AHFC corporate receipts.
BARBARA RITCHIE, Deputy Attorney General, Department of Law
was invited to join the committee. She responded to Senator
Sharp's question and advised that the claim was listed in
with the Cleary case.
(Tape #127, Side B switched to #128, Side A at approximately
2:45 p.m.)
There was some discussion amongst the committee members
regarding the department's monthly report.
Senator Torgerson asked for a brief review on claim number
five under Judgments and Claims. (Hackett and Groom vs.
Commerce) Ms. Ritchie explained that this was a lawsuit
filed against the State with regards to the Americans with
Disabilities Act. The employee claimed the right to certain
work place modifications. She advised that she did not have
much information regarding the case because most of it was
protected and confidential. In further response to Senator
Torgerson she said that this was an area of increasing
litigation.
Co-chair Pearce advised Ms. Ritchie that the department's
back up was incomplete and would it please be provided the
committee. She said this made it difficult to know anything
about the cases. Ms. Ritchie said she would provide the
committee with the requested back up.
TRUSTEES FOR ALASKA GOVERNMENTAL COORDINATION: Ms. Ritchie
explained that this was a claim for a judgment at the
Superior Court level. The case involved an administrative
appeal from the State's concurrence with the EPA as required
by the Federal Coastal Zone Management Act regarding renewal
of the Clean Water Permit for discharges from the Cook Inlet
offshore oil platforms. It was required that this be
consistent with the Alaska Coastal Management Program. The
Native village of Port Graham appealed this decision. The
amount sought in the judgement is approximately $24,000.
Co-chair Pearce asked the status of the decision. Ms.
Ritchie said it was not entirely clear and that she would
provide information by Monday that would explain the status.
Senator Torgerson asked if we were paying all the legal
fees? Ms. Ritchie indicated that was correct.
PETRIE CASE: Ms. Ritchie explained this was a case brought
against the State of Alaska and the Department of Community
and Regional Affairs. It arose out of events back in 1993
involving the merger of the Alaska Energy Authority. She
explained that the Legislature had passed legislation, which
split the existing programs between AIDEA and the Department
of Community and Regional Affairs. After offering continued
employment to Mr. Petrie shortly thereafter he was advised
that he was going to be laid off. He in turn filed suit
because he felt he was laid off due to prior involvement in
the investigation of the former Energy Authority director.
Mr. Petrie alleged that Representative Ramona Barnes, then
Speaker of the House, insisted that during the transition he
not be retained. There was substantial evidence that this
was correct. The case was eventually settled and the final
total cost of damages was estimated at between $423,000 and
$578,000. He also had claims for violation of
constitutional rights and punitive damages. She explained a
settlement worked out with retired Judge Ripley in the
amount of $337,500. She pointed out that the Alaska Supreme
Court recently ruled that the "Whistle-Blower Act" does not
authorize awards of punitive damages against the State.
Senator Torgerson asked if in the Gas for Votes settlement
the correct amount was $65,000? Ms. Ritchie said it was the
Supreme Court ruling in the amount of approximately $80,000.
There will be no further bill.
Co-chair Pearce indicated that if tallied together the
Cleary matter would be $2,807,498. Ms. Ritchie concurred.
Senator Sharp asked for identification of the AHFC case.
Co-chair Pearce advised Senator Sharp where it was but noted
that there was no back up for it. Ms. Ritchie said she
would get it to the committee.
KOYOKUK: Co-chair Pearce asked Ms. Ritchie to identify this
item for the committee. Ms. Ritchie said it was in the
packet transmitted late yesterday evening. She indicated it
was in a memo from Carol Carroll to Annalee McConnell. This
related to a case of flooding response and clean-up. The
settlement was $1.6 million plus interest for a total amount
of $1,695,735.64. She explained the settlement and
mediation discussions with retired Judge Ripley. She said
the result of entering renegotiations was the settlement and
the State was able to maximize its recovery from FEMA. They
were also able to reduce invoiced amounts by $1.3 million
and reduce the interest on the date of settlement by twenty
months.
(A brief tape malfunction is noted at this time.)
Mr. Guaneli spoke to the passed abortion legislation. He
noted the problem for the civil division and that they had
advised the Governor that both of the laws were
unconstitutional. Due to the conflict of interest issue it
was necessary to have two attorneys (who volunteered) from
the criminal division handle the litigation. He noted that
the case had taken considerable time and effort from the two
prosecutors in Fairbanks in addition to the same effort by
an Anchorage appellate attorney. Both of the laws were
struck down by the Superior Court on summary judgments. The
particular supplemental appropriation is to cover the cost
the criminal division had to bear in filling a position to
handle these cases. It was assumed the appeal would
continue over a two-year period and therefore $300,000 with
an extended lapse date is proposed.
In response to a question by Senator Sharp, Mr. Guaneli said
that even if the civil division had handled the case they
would have had to come back with a supplemental request.
OIL & GAS LITIGATION: Ms. Ritchie said there was an
amendment in the memo presented last evening for a reduction
from $2.5 million to $1.5 million.
CIVIL DIVISION: She explained this was a reappropriation to
the civil division of $200,000. She pointed out a memo in
the packet addressing this issue. Co-chair Pearce asked
what the funding source was. Ms. Ritchie said it would be
the unexpended unobligated balance of longevity bonus
grants. Co-chair Pearce asked the extraordinary situation
in the civil division regarding this matter. Ms. Ritchie
said it was addressed in the memo. She indicated that it
was basically the same situation as outlined by Mr. Guaneli
in the Criminal Division. She explained the most
significant increase was in the Child Protection and
Juvenile Delinquency case work they have been experiencing.
She noted that since August 1997 the cases have been
skyrocketing. The department is unable to cover the
shortfall by other components as they are short in those
areas as well. She outlined several areas they were running
short in and the department has no control over incoming
caseload. For example, she advised the committee that
regarding campaign finance reform they have had four
lawsuits filed. The most significant as to costs was the
one filed by the ACLU. She also pointed out that they had
been unable to meet the budgeted vacancy factor for the
civil division and therefore were projecting a shortfall.
She did say they were doing constant updates on their
projections and also their timekeeping and billing system
for the civil division. They were also trying to keep
closer track of where their resources were going.
With regards to the lawsuits involving campaign finance
reform Senator Phillips asked if the four lawsuits could be
combined? Ms. Ritchie said that would be a major
undertaking. However, the Court had ordered a stay on three
of the lawsuits pending the final outcome of the lawsuit
filed by the ALCU.
OIL & GAS: Co-chair Pearce noted that the amendment would
reduce the amount to $1.5 million. Ms. Ritchie concurred
and said this was because of the Exxon Valdez settlement.
(Tape #128, Side A switched to Side B at approximately 3:30
p.m.)
She gave a brief explanation on this settlement. She
cautioned the committee, that even though there were areas
they were able to reduce costs, there were other areas that
some unanticipated events occur that may cause increases.
Senator Sharp asked if the $1.5 supplemental was needed for
all the oil and gas litigations or was it needed for other
services under the umbrella of oil and gas litigations.
TINA KOBAYASKI, Assistant Attorney General, Oil, Gas and
Mining Section, Department of Law was invited to join the
committee. She said that most of the costs were for outside
expert counsel.
Senator Adams indicated that there had been a meeting
conducted by Attorney General, Bruce Bothelo and Ms.
Kobayashi about six weeks earlier. Even though it was a
confidential meeting, all legislators had been invited and
they had gone over all the cases and knew about the
supplemental request at that time.
Senator Sharp asked about some reappropriations or roll-over
monies that was not going to be used by the department in
the amount of a quarter-and-a-half million. He asked if
there was an anticipated roll-over this year? Ms. Ritchie
said that anything unspent will lapse.
Co-chair Pearce noted for the committee that the Department
of Law also had some stale dated warrant items and records
storage costs. There were no questions. Ms. Markey
explained that under the stale dated warrants this referred
to an old claim from 1995.
Co-chair Pearce called Public Safety, Domestic Violence.
JAYNE ANDREEN, Executive Director, Council on Domestic
Violence and Sexual Assault, Department of Public Safety was
invited to join the committee.
DOMESTIC VIOLENCE: The request was the result of a two-fold
need in Alaska. Due to the Domestic Violence Act passed in
1996 there arose a significant need for training for human
service workers and child abuse reporters. They have
managed to obtain Federal funds to subsidize a significant
part of that training, especially with the Criminal and
Civil Justice systems. At a Governor's summit on Domestic
Violence in December, it was recommended a central clearing
house for all training materials and trainers in the State.
It was also recommended that training be provided school
teachers, personnel, health providers, etc. The requested
funds would be used to begin the central clearing house
through a web site as well as expanding on the existing
training, developing more curriculums and making trainers
available for human services providers. Ms. Andreen
explained why it was presented as a supplemental rather than
a budget request. She said that some of the process had
been started in developing a curriculum. They made a
commitment with the Domestic Violence summit to have the
training up and running by the end of this calendar year.
Co-chair Pearce noted that the Department of Public Safety
had $2,100 in miscellaneous warrants and $800 for storage
costs.
Co-chair Pearce then called Department of Revenue, CSED.
LAURIE PERKINS, Director, Division of Administrative
Services, Department of Revenue was invited to join the
committee. She noted there were six items to be brought
before the committee.
CSED: This was for non-reimbursable costs of collecting
child support payments for children in State custody and to
repay required reimbursements. She said in the past
matching Federal funds had been used to collect child
support. It was learned through a Federal audit that these
expenditures do not qualify for Federal participation. The
$140,000 request is the Federal share and the department is
requesting a general fund appropriation for it.
MISCELLANEOUS TELEPHONE CHARGES: Late last year it was
admitted by the telephone vendor that the telephone billings
had been in error and billed the department for $147,000.
She advised that the fiscal year 1998 portion had been paid.
The $82,000 is comprised of general funds match of $27,900
and under Federal receipts the amount of $54,205.
RECORDS STORAGE CHARGE: This request was in the amount of
$7,400.
FIELD OFFICE RELOCATION, JUNEAU: This was a relocation
requested by the Department of Administration to move from
the existing location to a State leased facility. The move
would reduce the overall State lease costs.
Senator Adams asked once the relocation was accomplished
what would be the costs savings on an annual basis to the
State? Ms. Perkins said she did not know that amount but
Dugan Petty could provide it.
ALCOHOL BEVERAGE CONTROL BOARD: She said the administrative
clerk, responsible for processing liquor licenses had an
extended paid medical leave. In order to keep up with the
statutory requirements to process liquor licenses it was
necessary to hire a temporary clerk. The request was in the
amount of $16,000 general funds to cover those costs.
Ms. Perkins noted the final request was forwarded in the
memo to OMB and provided late last evening. It was in the
amount of $240,000 general funds. The appropriation was
needed to augment the Federal incentives, which had been
reduced as a result of ATAP collections decreasing. She
explained that Federal incentives plus general fund matching
to get their thirty-four percent State match which is
matched by the Federal government for sixty-six percent.
She said they had taken immediate steps to reduce costs by
instituting a hiring freeze, renegotiated RSA's, reduced
travel expenses and by doing this they had been able to
reduce the shortfall from $1.189 million to $705,000.
Senator Sharp indicated that when he served on LB&A they
knew the Federal incentives would not last forever. The
purpose of the incentives was to get programs up and running
and not to last forever. Ms. Perkins said the law governing
Federal incentives was changing. After the year 2000 it
will be based on the amount of total collections rather than
just ATAP.
Co-chair Pearce said this concludes all the departments. In
review she noted that Department of Labor had a
miscellaneous claim; Department of Environmental
Conservation had an expenditure ratification for $110,000;
and the Governor's office had an overexpenditure.
Co-chair Pearce took a five minute at ease. Committee was
reconvened.
MARLA GREENSTEIN, Executive Director, Commission on Judicial
Conduct testified before the committee via teleconference.
She explained they were the agency that handles ethical
complaints against Judges. Last year they handled four big
complaints; two very serious matters that required outside
attorney fees. She said those were reflected in the
supplemental request. The amended request was increased to
$95,830. The reason was for an oversight on her part. She
also realizes that they were consistently underfunded in
their personal services line item.
There being no questions, Co-chair Pearce returned to the
Department of Transportation.
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities was
invited to join the committee.
ALASKA MARINE HIGHWAY FUND: This was a request for
$1,741,199 in general funds for the Alaska Marine Highway
System Fund. This would cover the direct extraordinary
costs related to the Prince Rupert blockade and also the
lost revenues incurred from refunds that were made for
ticketed passengers specifically related to that incident.
Section 18(b) is additional authority for the Marine Highway
System to cover those extraordinary costs incurred during
that incident.
Senator Sharp asked if money collected from tickets went
into the Marine Highway fund. Ms. Slagle indicated that was
correct. The refunded tickets were paid from that fund.
Senator Sharp further inquired if they were asking for the
entire $1.7 million out of general funds. Again Ms. Slagle
indicated that was correct. She clarified that it was the
loss of revenues associated with the blockade. Senator
Sharp said this fund always had a balance in it because
ticket revenue goes into it and the Legislature supplements
it from general funds. He wanted to know why they were
being asked for general funds to make up the lost revenue.
Ms. Slagle said that was because they had seen lost revenues
decreasing and this was to help avoid depletion of the
Marine Highway Fund itself. She also explained that their
budget was based on a certain amount of revenue they
anticipated receiving from the sale of tickets, food, etc.
Senator Phillips asked how many days total the blockade was?
What amount of revenue did this represent?
BOB DOLL, General Manager, Ferry Operations, Southeast
Region, Department of Transportation and Public Facilities
was invited to join the committee. He responded to Senator
Phillips question and said it represented the cumulative
effects over the next two months of all of the tickets that
had to be refunded. Senator Phillips asked what was the
procedure if a boat unexpectedly broke down and had to be
dry-docked. Mr. Doll explained that normally if they were
dealing with a single ship and a limited amount of time, and
depending on the time of year, probably the Alaska Ferry
System could rebook those individuals in a number of
different ways. When it occurs as did during the blockade
and totally shuts off a major exit point, that creates a
different problem. In further response to Senator Phillips,
he said in the case of a vessel being broke down and put
into dry-dock they would not normally ask the Legislature
for a supplemental. This was a special case.
Co-chair Pearce indicated the ship did not shut down the
point of entry; the Governor did and then refused to reopen
it.
SENATOR ROBIN TAYLOR was invited to join the committee. He
reiterated the same point as Co-chair Pearce. On the 19th
of July there was a blockade situation while the Governor
was floating down the river. He did nothing about it and
then refused to take the vessel back south because he was
going to litigate the matter. He said what was really lost
here was suffered by the people of Southeast Alaska who were
no longer interconnected with the road system. The overall
cost of this incident is probably three times more the
amount being requested before this committee. He said this
would put the money back out of the general fund and into
the Marine Highway Fund, which is essential to its
operation. They were supposed to have recovered all of this
amount plus more in litigation. Instead, the litigation has
been resolved in the approximate amount of USD156,000 to be
spent by the Canadians to encourage people to come to Prince
Rupert.
Senator Adams asked if there was litigation going on at this
time to recover our losses from the Canadian government?
Ms. Slagle said she believed the settlement was reached with
the Canadian government and the department has received some
money to pay claims and they have received some assistance
in the lease costs for the Prince Rupert facility. Senator
Adams asked the monetary figure. Ms. Slagle said it was
approximately $90,000/year in lease cost assistance.
Co-chair Pearce said she also recalled all the statements
that we were going to sue and force the Canadians to pay us.
She asked if the State ended up not having a good case? And
why did the State settle for so much more less than they
said they were going to? Ms. Slagle said she was not privy
to that information and it would be best to pose those
questions to the Department of Law.
Ms. Slagle explained the next item as being the actual cost
that was incurred related to the Prince Rupert blockade
incident. It covers legal costs as well as over time,
travel and contractual services extraordinary to this
incident. Co-chair Pearce asked that she explain what they
were doing in pulling $518,000 from the Marine Highway Fund
and what were they doing with it. Ms. Slagle said this was
actual expenditures out of the Marine Highway System Fund.
There were some crew overtime costs they had paid for,
travel needs they covered, $325,000 legal expenses which
included outside counsel as well as Department of Law. Co-
chair Pearce asked if the department was asking they ratify
funds they had already spent? Ms. Slagle indicated it was
increasing their authorization level to cover those
expenditures. Co-chair Pearce asked if the department had
already RSA'd $325,000 to the Department of Law. Ms. Slagle
said they had an RSA in place with them already. Their
actual expenditures through the end of February was $302,000
they expected. Co-chair Pearce said she hoped the
Commissioner for the Department of Transportation was not
going to sign to send the money over to the Department of
Law when they did not recover any money. She said, "that
would be crazy". Ms. Slagle indicated that they were
required to pay regardless of the outcome under the RSA
agreement. Co-chair Pearce asked if there was not some sort
of performance measure in the RSA agreement? She did not
know why the Department of Transportation would be required
to pay that under the circumstances.
Ms. Slagle indicated the department had nothing in the memo
that was sent over last evening. In response to a question
by Senator Phillips, Mr. Doll said that it was his
understanding the litigation was against the fishermen
themselves as individuals. The Government of Canada made
the agreement, which involved obtaining the agreement of the
individuals who had participated in the blockade. He
believed that has been accomplished and at that point the
settlement would be effective. He noted that some of the
money had been delivered.
Senator Torgerson advised the committee that at the Co-
chair's request he would try to close out at 4:00 p.m. on
Monday the DOT budget. They would leave open only the
Southeast Region and Marine Highway System.
Co-chair Pearce called the Department of Labor.
ARBE WILLIAMS, Director, Division of Administrative
Services, Department of Labor was invited to join the
committee. She referred to the memo of 17 April to OMB,
page two and said the Department of Labor was requesting the
amount of $88,000 in general funds. She said the need arose
at their joint workshop with the U.S. Census Bureau.
Software is required to continue the next phase of the
census work. $50,000 is needed for FY '98 and $38,000 is
needed for FY '99. She said the $50,000 would be used to
complete Phase I which was to verify changes made in the
last three years as to the boundaries was incorporated into
the electronic census bureau's tiger line files. Monies
would also be used to correct the 1990 tiger line files and
to load the layers of all of the corrections made to the
1990 files up through the present date. She said this need
for corrections was because the 1990 census was based on
1927 geodetic surveys. The year 2000 was going to be based
on the 1983 geodetic survey. Phase II would allow the
department to create precinct boundaries.
Co-chair Pearce said it seemed like the Feds should have to
pay since we do the census for them. Ms. Williams said the
census bureau has never paid for that work.
Co-chair Pearce called the University.
WENDY REDMOND, University of Alaska was invited to join the
committee. She explained that last year they were in
negotiations with the United Academic a new faculty union.
They had anticipated what the contract would be and the
requested amount reflected the difference, which was a .5
percent difference for half a year. She said that OMB did
not actually include any money but gave them a net zero from
this year's budget. She said she did not know what that
meant and the University would rather have the money.
SETTLEMENT OF A CLAIM: This request was for $606,500 for a
liability claim. It was directed to remain confidential by
the Court. She is allowed to speak only executive session
regarding this matter in order to secure the funding.
Senator Parnell asked if the confidentiality extended only
to the terms of the settlement or did it also include who
the parties were and who the attorneys are. Ms. Redmond
said she could handle this confidential matter very quickly
with no need to keep anyone waiting.
Senator Adams asked that the committee go into executive
session in her office for the purpose of discussing this
private matter. Co-chair Pearce said she has already been
briefed regarding this matter and she did not need to
attend. Senator Sharp indicated that his office could be
used, which was agreed to by the committee.
Co-chair Pearce outlined the committee schedule for Monday
at 9:00 a.m. to begin full subcommittee closeouts.
ADJOURNMENT
Co-chair Pearce adjourned the meeting at approximately 4:40
p.m.
SFC-98 -35- 4/18/98
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