Legislature(1997 - 1998)
03/10/1998 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 325
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
Co-Chair Hanley distributed a spreadsheet prepared by the
Legislative Finance Division. [Copy on File].
DEPARTMENT OF ADMINISTRATION
Co-Chair Hanley pointed out that an excess of $1 million
dollars from the Longevity Bonus would be reallocated to
the Office of Public Advocacy (OPA), the Public Defender
Agency and leasing.
SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATION
SERVICES, DEPARTMENT OF ADMINISTRATION, noted that Section
2(a) requests supplemental funding for leases which need to
be in place by April 23, 1998, in order that May lease
payments are made timely.
Ms. Barton addressed the OPA shortfall. OPA recently
completed it's middle of the fiscal year analysis for
expenditures and caseload trends. The projected need is
$265.4 thousand dollars to be used to pay contractors and
the other court appointed State professionals. The
estimate is lower than the one done in June, 1997. The
Public Defender request has been reduced to $351 thousand
dollars. These projections have been reduced in the face
of increased caseloads through tight management in staffing
resources.
Co-Chair Hanley asked if the $215 thousand dollar increment
for the Public Defender would be used for one specific
defense.
KEITH GERKEN, ARCITECT, FACILITIES, DIVISON OF GENERAL
SERVICES, DEPARTMENT OF ADMINISTRATION, explained that
there has been an ongoing $13 million dollar dispute. Last
year, the State attempted mediation to resolve the issue
with no effect. The current expense request covers those
costs associated with the appeal process. Ms. Barton
added, of the $75 thousand dollars appropriated last year,
the Department spent only $36.1 thousand dollars. The
remainder lapsed to the general fund.
BARBARA BRINK, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
PUBLIC DEFENDER AGENCY, DEPARTMENT OF ADMINISTRATION, noted
that the Public Defender agency has a projected shortfall
of $351 thousand dollars. The supplemental request is
necessary in order to continue service through the end of
FY98. While reported crime is on the decrease, arrests and
prosecutions and therefore Public Defender assignments are
substantially increasing. Federal dollars continue to
support community policing, although, she added that in the
child protection arena, recent policy changes by Division
of Family and Youth Services (DFYS) have dramatically
increased the number of new cases.
Representative Grussendorf asked if passage of new
legislation during the past two years had affected the
Public Defender caseload. Ms. Brink replied that even
though there has not been an analysis undertaken, caseloads
have dramatically increased. Currently, there has been in
excess of 500 new felony cases per year.
BRANT MCGEE, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
OFFICE OF PUBLIC ADVOCACY (OPA), DEPARTMENT OF
ADMINISTRATION, noted that OPA requests a FY98 supplemental
in the amount of $441.1 thousand dollars. The estimate was
subject to potential revision after the agency evaluated
the FY97 caseload and cost data. The OPA supplemental need
is based on a $197.4 thousand dollar shortfall from FY97.
Ms. Barton explained Section 2(b), Elected Public Officers
Retirement System (EPORS) supplemental request. As of
January, 1998, EPOS has 43 members; 33 are currently
receiving a monthly pension benefit. Two members retired
in FY98. The $59.7 identified in this supplemental budget
request includes all known costs as of 1/01/98.
Ms. Barton addressed Section 2(c), the Pioneers' Home
component. The Division of Alaska Longevity Programs,
Pioneers' Homes component, has requested supplemental
funding in the amount of $250 thousand general fund
dollars, with an offsetting decrease in program receipts
due to an unanticipated shortfall in general fund program
receipts. Additionally, there is a need to underwrite the
creation and operation of a central pharmacy.
Co-Chair Therriault asked if the Longevity Bonus
calculation was determined through a formula. He pointed
out that it is usually over funded. Ms. Barton responded
that the Department uses a model which takes into account
prior history and mortality rates. During the Longevity
phase out, people are no longer behaving as they did in the
past. Much of the cost reduction has resulted because more
people are taking advantage of their allocated time out of
the State. When out of State, they do not receive the
bonus.
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT
DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, explained that this
Department's supplemental budget request is an attempt to
undo an error which occurred in FY96 & FY97.
TOM LAWSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, spoke to
Sections 3(a)(b). The Department has requested
supplemental funding in the amount of $50.3 thousand
dollars. The request would be used for Hearing Examiners
for the Division of Insurance and the Division of Banking,
Securities and Corporations. The Division of Occupational
Licensing was providing the support to those two divisions.
In FY96 & FY97, the amount allocated for those divisions
was insufficient to cover actual costs. The Division of
Occupational Licensing absorbed the amount which should
have been paid by the other divisions.
Co-Chair Hanley asked if the Division of Occupational
Licensing was in need of supplemental funding this year.
Mr. Lawson noted they did not, stating that it would be an
accounting fix. Representative J. Davies suggested that it
could be "fixed" by rolling the money forward. Co-Chair
Hanley believed such action would be more difficult to
identify in the long-term.
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
Mr. Spencer noted that Section 4(a) should indicate federal
receipt not corporate receipts.
REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
(DCRA), spoke to Section 4(a)(b). He noted that if a
supplemental appropriation is not forthcoming, the Power
Cost Equalization (PCE) payment level should be reduced
below 85% as soon as possible. If the payment level is not
reduced, the available funds will run out and no PCE
payments would be issued for the last months of FY98. If
payment level was reduced effective 4/01/98, PCE would be
reimbursed at 54.1% for the remainder of FY98.
Co-Chair Hanley asked the restrictions placed on the use of
the stripper well receipts.
JOHN BITNEY, ALASKA HOUSING FINANCE CORPORATION (AHFC),
ANCHORAGE, commented that there had been a series of
settlements which occurred in 1980. The restrictions on
the program are tied to the approval of the State
Department of Energy (DOE). DOE has established criteria
for programs in which the money could be used. It was
intended that any program use of the funds was to be
distributed to the consumers for petroleum product
overprice restitution.
Co-Chair Hanley asked if this would be a one-time pool of
money. Mr. Bitney advised that AHFC periodically receive
small amounts from federal DOE settlements held in escrow
and which accrues interest. These are not one-time funds.
(Tape Change HFC 98- 61, Side 2).
PERCY FRISBY, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
DIVISION OF ENERGY, DEPARTMENT OF COMMUNITY AND REGIONAL
AFFAIRS, ANCHORAGE, stated that the Division had
underestimated last year's need by $1.7 million dollars.
The FY99 request is $17 million dollars plus the
supplemental request of $1.7 million dollars.
Mr. Henderson pointed out that $17 million dollars had been
calculated when the legislation passed in 1993. At that
time, funding was determined at the 85% level, which also
furthered capitalized the fund. At present time, the
demand has increased and prices have gone up. Therefore,
the $17 million dollars per year will not last as long as
anticipated.
Co-Chair Hanley inquired what time of year do retailers buy
their bulk fuel. Mr. Frisby replied that most bulk fuel
purchasing is done June through September. There is a lag
period of 8 to 12 months.
DEPARTMENT OF CORRECTIONS
DWAYNE PEEPLES, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF CORRECTIONS, addressed the
Department's four supplemental request items. With the
increased prisoner population, FY98 has required
significant prisoner transports be done by the five Prison
Transportation Officers, Section 5(d). To be able to
accomplish this requires the use of overtime and increased
transport expenses. Mr. Peeples noted that in order to
make it through this fiscal year an additional $230
thousand dollars would be needed. He pointed out that the
proposed cost had been cut by $10 thousand dollars.
Section 5(c) request was reduced to $1.6 million dollars to
cover prisoner health care costs. In addition, the
Department has reduced Section 5(b) for staff overtime
costs associated with inmate population management. Judge
Hunt's order to bring down the maximum caps should result
in decreased overtime use.
Mr. Peeples noted that Section 5(a) would be supplemental
funding in the amount of $50 thousand dollars to be used
for an additional 18 days of correctional hearings. These
meetings will address all in-State institutions and the
Arizona sites and will consider how to lower the number of
inmates while at the same time responding to the increased
population.
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
NICO BUS, BUDGET COORDINATOR, DEPARTMENT OF MILITARY AND
VETERANS AFFAIRS, explained that Section 6 is a request for
$2 million dollars supplemental funding to capitalize the
Disaster Relief Fund so that it can meet projected
obligations for the next 12 months. The average annual
State disaster expenditure for the past five years has been
$3 million dollars.
DEPARTMENT OF EDUCATION
KAREN REHFELD, DIRECTOR, EDUCATION SUPPORT SERVICES,
DEPARTMENT OF EDUCATION, explained that Section 7 is a
request for the Alaska Vocational Technical Center (AVTEC)
in Seward in the amount of $75 thousand dollars generated
from federal receipts. The PELL grant program has no
impact on the general fund. She emphasized that there are
no requirements for matching funds.
DEPARTMENT OF FISH AND GAME
KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF FISH AND GAME, noted that Section
8(a) supplemental request would cover lease costs for the
Situsuilaq Hatchery. The hatchery has been closed,
although, a leaking fuel line was detected, and a resulting
spill must be cleaned up. During the clean up period, the
landlord has not been able to lease the property; the
appropriation will pay the landlord for lease costs.
Mr. Brooks spoke to Section 8(c) supplemental budget
request which would cover costs for a Fairbanks indoor
shooting range. The initial request was made for 50%
federal aid dollars and 50% state dollars. Following a
decrease in federal funds, the proposed request shifted the
funding ratio to 25% federal funds and a 75% state match.
Co-Chair Hanley questioned if this need was time sensitive.
Mr. Brook commented that without the requested funding,
there are not enough federal funds to make it happen,
although, agreed that it could wait another month to be
placed in the Capital Budget Request.
Mr. Brooks spoke to Section 8(d) supplemental budget
request in the amount of $56 thousand dollars for the
Subsistence Division. He pointed out that the Division's
general fund budget has been reduced by nearly 40% since
FY94. This need comes at a time when subsistence is heating
up, becoming one of the most critical issues facing Alaska.
The supplemental will cover the shortfall and enable the
Division to carry out their statutory required functions.
Mr. Brooks acknowledged Representative Hanley's concern
that the Department had not worked within the budget
allocated in FY98. Mr. Brooks spoke to the extenuating
circumstances surrounding Subsistence in the State Of
Alaska.
Mr. Brooks noted Section 8(e) supplemental budget request
in the amount of $80 thousand dollars to be used for the
study of harbor seals in Prince William Sound. In response
to Representative Martin, Mr. Brook commented that the
Department has printed all results from previous oil spill
studies.
Mr. Brooks addressed Section 8(f) supplemental budget
request in the amount of $25 thousand federal dollars for
participation in bilateral discussions with the Russian
government on Bering Sea "Doughnut Hole" issues, Russian
Maritime boundary, and the pollack conservation. He noted
that the request would cover mostly travel costs.
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
GARY PEDERSON, DIRECTOR, ALASKA NATIONAL GUARD YOUTH CORP,
FT. RICHARDSON, DEPARTMENT OF MILITARY AND VETERANS
AFFAIRS, spoke to Section 12(d.15) supplemental budget
funding request in the amount of $230 thousand dollars for
repairs and upgrades to the Alaska National Guard Youth
Corps facility at Camp Carroll.
The funding would allow for the replacement of 12 furnaces
and 16 roofs as well as adding siding and insulation. The
barracks were intended to be temporary training facilities
for the military and are now used on a year-round basis by
the Youth Corps. The repairs and upgrades would be used in
lieu of rent.
(Tape Change HFC 98- 62, Side 1).
Mr. Bus spoke to Section 12(c.5) supplemental budget
funding request which will ensure a two-class per year
program. Although the funding would be for FY99, it is
needed now to plan future classes.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Mr. Spencer noted that Section 9(b) supplemental budget
request would be withdrawn.
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, spoke
to Section 9(a), a delete of $1.5 million general fund
dollars in the Alaska Temporary Assistance Program (ATAP).
She noted that the program has experienced a dramatic
caseload decline. Co-Chair Hanley asked if those funds
could be used for costs not related to maintenance of
effort.
JIM NORDLUND, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that these
funds were above and beyond what was required for
maintenance of effort and could be spent for any other
purpose without violating the requirements.
Co-Chair Hanley asked if there were additional funds over
and above the $1.5 million anticipated in that category.
Ms. Clarke stated that there could be but because it is a
new program, the Department is not confident to yet
calculate additional funds.
Ms. Clarke spoke to the supplemental budget request listed
in Section 9(c) in the amount of $180 thousand statutory
design program receipt dollars for activity costs
associated with the public health laboratory. Ms. Clarke
commented that the program receipts would result from
certificates of participation.
Ms. Clarke continued, Section 9(d) supplemental budget
request in the amount of $1.4 million dollars would be used
for total program costs to the General Relief Medical
Program which provides emergency medical care for low
income Alaskans. Co-Chair Hanley requested a guideline
breakdown of eligibility for the program. Representative
Martin voiced concern with the amount of funds being used
to provide abortions.
RON SUPER, ADMINSTRATIVE OFFICIER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES stated that the Department would prepare a
letter addressing the concerns of Representative Martin.
Ms. Clarke spoke to Section 9(e) supplemental budget
request in the amount of $1.3 million dollars from the
School Based Claims fund from which the Department receives
in order to administrate the activities which school
districts undertake. The Legislative Budget and Audit
Committee (LBA) recommended that this request come before
the full Legislative Body.
She noted that LBA Committee approved $433 thousand
dollars. The grants have already been awarded. There has
been a subsequent request in the amount of $866 thousand
dollars.
Ms. Clarke continued, Section 9(f) is a supplemental budget
request in the amount of $12.018 million federal receipts
dollars for the FY98 Medicaid Program. The appropriated
federal funding authority available to the Medicaid program
was not adequate to meet the program's projected need.
Because this program is 100% federally funded, the
Department uses the component as a source of funds for
transferring within the Medicaid program.
BOB LABBE, DIRECTOR, DIVISION OF MEDICAL ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained that
the Department's effort to increase the federal 100%
reimbursement to Natives has been successful. With limited
federal authority, the Department "bumped" up against the
cap.
Ms. Clarke noted Section 9(g) was a supplemental budget
request in the amount of $886 thousand dollars for the
Medicaid school-based services costs related to the
adoption caseload backlog. Those funds will lapse 6/30/99.
The request would address a backlog of 400 children
identified available for adoption, 40% which are Native.
Most of these children have special needs.
Ms. Clarke spoke to Section 9(h) supplemental budget
request deduction in the amount of $1 million dollars to
Yukon Kuskokwin Health Corporation (YKHC), State Community
Health Services building for design and construction.
Staff are currently located in two facilities. Having
separate regional and health center facilities reduces the
effectiveness of support staff and skilled professionals
whose services need to be optimized. Combining the
regional office and health center will provide an economy
of scale sharing common areas. She stressed that there is
not adequate space available for lease in Bethel and that
the public health service needs of those residents must be
met in an effective and efficient way.
Co-Chair Hanley requested more back up on the project.
UNIVERSITY OF ALASKA
MARY LOU BURTON, DIRECTOR, UNIVERSITY STATEWIDE BUDGET
DEVELOPMENT, UNIVERSITY OF ALASKA, FAIRBANKS, addressed
Section 19(a) requesting supplemental funding in the amount
of $606 thousand dollars to cover the settlement of certain
liability claims. As directed by the Court, the details of
the settlement are to remain confidential. She offered to
answer questions in an Executive Session.
Co-Chair Hanley noted following discussion on Section
19(b), the House Finance Committee would go into Executive
Session to discuss Section 19(a).
Ms. Burton stated that Section 19(b) was a supplemental
budget request in the amount of $1.7 million dollar
university receipts to be used for planning and design
costs for a multi-agency fishery facility to be located in
Juneau.
Representative Martin MOVED that the House Finance
Committee convene into Executive Session at 3:50 P.M.
(Tape Change HFC 98- 62, Side 2).
The House Finance Committee reconvened at 4:10 P.M.
Following discussion of the agenda, Co-Chair Hanley
adjourned the meeting.
HB 325 was HELD in Committee for further consideration.
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