Legislature(2023 - 2024)ADAMS 519
04/27/2023 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB26 | |
| SB87 | |
| SB25 | |
| HB125 | |
| HB178 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 26 | TELECONFERENCED | |
| += | HB 93 | TELECONFERENCED | |
| + | SB 87 | TELECONFERENCED | |
| + | HB 125 | TELECONFERENCED | |
| + | SB 25 | TELECONFERENCED | |
| *+ | HB 178 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 178
"An Act relating to village safe water and hygienic
sewage disposal facilities."
2:56:58 PM
Co-Chair Foster relayed that the committee would hear an
introduction on HB 178.
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, introduced
HB 178. The bill would provide statutory guidance to the
Commissioner of the Department of Environmental
Conservation (DEC) in administering the Village Safe Water
Program (VSWP) and direct the commissioner to prioritize
VSWP projects based on need. Historically, the amount of
funding available for sanitation improvements in rural
Alaska had been inadequate to meet the identified needs. As
a result, funding agencies had developed a criteria to
determine eligibility and priority for the limited
resources available. The Best Practices Score (BPS) was
created as the metric through which to determine
eligibility.
Mr. LaBolle continued that now that Infrastructure
Investment and Jobs Act (IIJA) had provided adequate
funding, HB 178 would ensure that the communities with the
worst water and sewer infrastructure would be the first
communities served by VSWP. Based on the Spring 2023
scoring cycle, 95 of 196 communities in the state did not
meet the minimum threshold for funding through VSWP. If the
BPS continued to be used to determine eligibility and
priority, the state ran the risk of IIJA funds expiring or
being reallocated elsewhere before projects could be
confirmed. He relayed that BPS remained an effective tool
to identify the strengths and weaknesses of a community and
to identify ways to assist a community. It was an
assessment tool to ensure that the state was doing its job
and to identify communities in need, but not as a barrier
to deny funding to communities in need. He shared that
Section 14.20 of VSWP required the state to develop a
capacity development strategy for the Environmental
Protection Agency (EPA) that outlined the methods used to
identify and prioritize communities in need. He emphasized
that VSWP did not indicate that assessment should be used
as a hurdle to eligibility.
Co-Chair Foster commented that rural legislators had
expressed frustration over the years regarding the way in
which smaller communities received funding for water. Some
communities had no piped water or sewer and were considered
unserved communities. He clarified that the bill mandated
that a community's need be placed as a higher priority than
a community's capacity to maintain a system. Some
communities did not score well on maintenance abilities,
but the need for water and sewer was high. He understood
that it was a problem that some communities could not
maintain a system, but accessibility was more important. He
emphasized the importance of capturing the incoming federal
IIJA funds.
3:02:33 PM
Co-Chair Edgmon asked Mr. LaBolle to provide information
about the crafting of the bill.
Mr. LaBolle responded that Co-Chair Foster's office had
collaborated with Co-Chair Edgmon's office as well as the
Alaska Municipal League (AML) and Alaska Native Tribal
Health Consortium (ANTHC) to find a workable way to change
the metrics that determined project prioritization. There
were presently three main portions that went into
prioritization: needs, BPS, and the affordability
framework. The bill would make needs the highest priority
rather than considering it equally amongst two other
elements.
Co-Chair Foster added that awarded funds were based on a
Rural Utility Business Advisor (RUBA) scoring system. If a
community received a low score, it would not be awarded
funds and would not be able to afford a water and sewer
system.
Mr. LaBolle commented that testifiers were available for
questions.
3:04:45 PM
Representative Hannan understood that RUBA left out
communities that were most in need and the bill would
change the way in which funds were awarded to be based on
need. She asked how need was defined or measured.
Co-Chair Foster responded that need could be determined by
whether a community had a piped water system. Some
communities had part of a water or sewer system, but the
area was not fully serviced. He thought the easiest way to
determine need was whether there was a fully operational
water and sewer system.
Mr. LaBolle responded that the department conducted a needs
assessment which was already part of the ongoing
prioritization process. The bill would move the existing
needs metric to the top.
Representative Hannan asked if need was on the scoring
rubric already. She asked how the high need areas would be
distinguished from one another. She clarified that she
supported the bill.
Mr. LaBolle responded that the needs assessment was not
included within BPS. He explained that BPS was a separate
sheet that dealt with managerial capacity.
Representative Hannan replied that she presumed that the
department would know that she wanted to see the needs
assessment and ensure that the least served villages would
be the highest priority.
Co-Chair Foster noted that he would provide at the next
meeting a list of served and unserved communities in order
to provide members with a sense of the needs in the state.
Representative Coulombe commented that her concern was that
the department had shared that it had experienced
difficulty changing the scoring system because of the
requirements of the federal government. She wanted to
ensure that the changes would not be in conflict with
federal requirements.
Mr. LaBolle deferred the question to the department.
3:09:52 PM
RANDY BATES, DIRECTOR, DIVISION OF WATER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, relayed that the department did
not take a position on the bill. He emphasized that the
department wanted to ensure that communities had the
opportunity to take advantage of IIJA funds. It was
important to assist rural communities in any way possible.
Although the department did not take a position on the
bill, it recognized the desire to prioritize needs for
eligible communities. He did not think that the bill as
worded would accomplish the desired goal.
Representative Coulombe asked if the state's ability to
utilize federal funds would be impacted if the bill were to
pass.
Mr. Bates responded in the negative. The department
intended to use all of the available funds. He did not
think any community would be left behind. It was also the
desire of the department to ensure that the communities
would be able to safely maintain and operate the facilities
in the long term.
Representative Coulombe asked if the score card required by
the federal government came from the federal government
itself or from the department.
Mr. Bates replied that SDWA required that there be a
capacity assessment in place prior to the construction and
operation of a facility. The department had utilized BPS as
one of the assessment tools that would predict whether a
community could safely maintain and operate a facility. If
the department were to abandon BPS and eliminate a capacity
assessment, certain funding would be jeopardized.
3:14:18 PM
Representative Stapp thought it was a smart idea to ensure
that high needs communities received important utility
systems. He was concerned that the facilities would not be
maintained after the IIJA money had lapsed if certain
assessments were abandoned.
Mr. Bates responded that the existing scoring system was
necessary to determine capacity. It determined whether a
community could safely maintain and operate a facility and
would give the state the opportunity to assist a community
to build its strengths and work towards developing the
capacity to maintain and operate a facility.
3:16:02 PM
Co-Chair Edgmon referred to Section 14.20 of VSWP which
detailed state authority for new systems. There was a
requirement to comport with respect to each national
primary drinking water regulation in effect. He asked Mr.
Bates if the bill would make it easier for the department
to compete for federal funding and make Alaska more
competitive. He relayed that in the past, he had worked as
a regulator in a state agency and the power of regulatory
authority allowed a regulator to take a simple sentence in
statute and derive significant meaning through the
regulatory process. He asked if the VSWP could be expanded
upon to meet the frustration and concern about lack of
facilities through the regulatory process.
Mr. Bates asked Co-Chair Edgmon to restate the second
portion of his question.
Co-Chair Edgmon responded that he understood that the
statutory addition to VSWP would give the department some
additional tools to enhance the scoring mechanism. He
thought that the scoring mechanism needed to advance to the
"next level" in order to take advantage of potential
federal funding. He asked if his understanding was correct.
Mr. Bates responded that the department recognized that the
common denominator was BPS and the managerial and financial
scores were particularly on a decline. The department had
been working on a plan to reverse the declining scores. In
2022, the Division of Community and Regional Affairs (DCRA)
gained two additional staff, $500,000 in additional
funding, and a federal grant recognizing that DCRA needed
to approve service to the communities specific to
addressing declining scores in the managerial and financial
categories. There was a new grant awarded to AML that was
also dedicated to addressing the declining scores. He
emphasized that the department had recognized BPS
challenges and the state had committed resources to address
the problems. It was not the intention of the department to
keep systems at bay, but to help communities become
eligible under the scoring rubric. The department had
affirmed its commitment to evaluating the scores in a
transparent and public manner by soliciting input,
evaluating information, and determining the efficacy of the
scores. He emphasized that the department intended to take
full advantage of the IIJA funding; however, communities
had to be in a position to accept infrastructure projects
in order for the facilities to operate safely and
sustainably.
3:23:06 PM
Co-Chair Edgmon thought the discussion was important. The
circumstances in some smaller communities in the state were
challenging. He thought there were several requirements
that went beyond the letter of the law. He was not hearing
whether the bill would provide more statutory "cover" to
evolve the scoring system. He wanted to make sure that the
bill would provide a tool to the department that would help
it better serve communities in need. He wanted to give
constituents the assurance that the issue was being taken
seriously.
CARRIE BOHAN, FACILITIES PROGRAM MANAGER, DIVISION OF
WATER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, noted that
the description of the project evaluation criteria
described previously [by Mr. Bates] was not fully accurate.
She would be happy to provide the correct information to
the committee. The first category upon which the department
determined priorities was potential health benefits, and
the second looked at the current level of service in a
community. The first two categories made up 50 percent of
project scoring. The third category was capacity. She
clarified that affordability was not an eligibility or
scoring criteria, but a simple tool to help inform the
department on the anticipated fees. The department would
also discuss with a community its plan for sustaining the
system and determine whether the community could partner
with entities to compensate for higher costs that citizens
could not afford.
Co-Chair Edgmon commented that there were communities that
could not currently meet the criteria and it was important
to help the communities meet the criteria. He asked whether
the bill would make it more difficult to achieve the goal.
Mr. Bates responded in the negative. The bill would not
hurt the department's process or prevent it from achieving
the goal of helping communities meet the criteria. It would
affirm much of the process that was already in place.
3:29:47 PM
Co-Chair Edgmon asked what it would take to help the
department and if it would need any statutory assistance.
There was about $250 million available in federal funding
for which the state would not qualify under the current
system.
Mr. Bates replied that it was important to know that the
$250 million in funding was not VSWP funding, but was in
the capital budget as Indian Health Service (IHS) funding.
He relayed that IHD did not consider capacity in awarding
funding for infrastructure to communities in need. The
department needed help with assisting the community in
developing managerial and technical capacity in order to
become eligible through the scoring metric. It would
require the community and the department to collaborate to
ensure that the community would be able to independently
operate and maintain a water and sewer system. He
emphasized that the department was making changes and was
looking for support in its continued efforts towards making
additional changes on the delivery of service. Communities
needed to know what the required steps were to become
successful and it was the department's responsibility to
educate the communities.
Co-Chair Edgmon explained that the frustration he was
feeling was directed towards not having a larger picture.
He was aware that the problem was capacity-driven in rural
Alaska. He suggested that the bill contain a larger
context. There were many communities in the state that
needed water and sewer systems and millions of dollars
would soon be available to construct the system and he had
not heard enough conversation about it. He thought there
was much more to be discussed.
Co-Chair Foster commented that he wished that everyone
could spend time in a village to understand the desperate
need for safe water systems. He thought that if state
workers were subjected to a honey bucket system, all
workers would immediately push for implementing water and
sewer systems in villages. He thought that everyone was
trying to accomplish the same thing and he thought that the
bill would do a lot of good. He thought that people were
beginning to understand the level of frustration felt about
the system. It had been popular to say that honey buckets
belonged in museums for over thirty years and nothing had
changed. He thought some progress was being made but many
people were frustrated that the progress was not
substantial enough. A lack of water and sewer was a third-
world situation, and he thought it was an important issue
in the state. It was prudent to take advantage of IIJA
money and he did not want to miss the opportunity. He
understood the need for capacity and suggested that it
might be the responsibility of the state to help
communities reach capacity. He relayed that life, safety,
and health were three of the most important constitutional
priorities.
Co-Chair Foster noted that Mr. Bates mentioned that IHS did
not consider capacity. He would like Ms. Francine Moreno to
provide additional information on the topic. He asked what
the legislature could do to help the department. He
wondered if need was placed above capacity by ANTHC.
3:38:10 PM
FRANCINE MORENO, DIRECTOR, RURAL UTILITY MANAGEMENT
SERVICES, ALASKA NATIVE TRIBAL HEALTH CONSORTIUM (via
teleconference), responded that the IIJA funds included a
criteria for capacity based on needs.
Co-Chair Foster thought that Mr. Bates had said that IHS
did not consider capacity. He asked Mr. Bates to explain
what he meant in more detail.
Ms. Bohan responded that it was her understanding that IHS
used the Sanitation Deficiency System (SDS) to evaluate
projects. She was a member of the scoring committee along
with IHS, EPA, and other federal agencies that was
responsible for determining eligibility for both VSWP
funding and IHS money. There was a capacity indicator
included in the efforts of the committee which was
developed in collaboration with the agencies. The tool was
stripped of its indicators about a year prior and as a
result, all communities received the same score from the
capacity indicator and what remained was scoring based on
need.
Representative Galvin was interested in the capacity
building element. She had read that at least $3.5 billion
would be available to develop new infrastructure. She
relayed that when the state was building its educational
system, there were no schools, teachers, or housing for
teachers and that many people would agree that it was a
capacity issue. She emphasized that the state made
education happen because it was important and it was in the
state constitution. She was unsure if the word "need" had
to be included in the bill in order to stress the
importance. She asked Mr. Bates if any of the IIJA funds
bound for the state would assist in building capacity in
order to initiate projects. If the funds would not assist
in building capacity, it needed to be addressed as soon as
possible.
3:42:36 PM
Mr. Bates responded that ongoing education and support was
a subsidized system and it was a different process than
community infrastructure. He shared that $2.1 billion of
the $3.5 billion in IIJA funds for new infrastructure were
allocated to Alaska. Once the water and sewer systems were
built, the federal money would cease and it would be the
responsibility of the communities to maintain and operate
the systems sustainably. The state would not provide
subsidies for the ongoing maintenance and operation of the
systems nor would the federal government. He wondered if
the 142 residents of Wales, Alaska would be capable and
willing to pay the required fee of over $300 per month to
maintain a new water and sewer system. He thought it would
be a challenge to the community to pay for the service on a
monthly basis. The department did not have appropriations
for the ongoing operation and maintenance for community
systems.
Representative Galvin asked if there were suppositions
being made about what the citizens of Wales would or would
not do. She suggested there might be other ways to pay for
the system, such as through tribal organizations. She did
not think it should be a barrier to building a system.
Mr. Bates responded that the department was not making
suppositions or guesses. The department would ensure that
the system would be supported by the community and that the
residents were willing and able to financially support the
system. He shared that the Wales residents had been
surveyed and Ms. Bohan could speak to the results of the
survey.
Ms. Bohan added that there was planning document created
which detailed the potential expenses for a water and sewer
system in Wales. The survey asked community members about
their willingness to pay over $300 per month for a new
system and none of the respondents were willing to pay the
amount. Similar planning documents included a section
related to sustainability and the department found that it
could often come to a logical engineering solution, but the
sustainability solution was often marginalized. The
department decided to separate engineering from
sustainability and consider the two separately. The
department would collaborate with the community on
potential sustainability plans and determine if there were
regional partnerships available to assist it in paying the
rate for the new systems.
Representative Galvin appreciated the response. She
presumed that the idea of a monthly fee must feel foreign
to some communities. She thought there was a clash of
cultures, and the fees might seem impossible to some
citizens, particularly if the community was not cash-based.
She had visited many villages in the state and often slept
on the floor of a library or another public building
because there was no housing available. She thought that
villages were being set up to fail by demanding capacity
prior to the approval of a project. The issue needed to be
approached in a different way.
Mr. Bates responded that one of the challenges experienced
by many rural communities was that there was not an
industry in the local area. There were opportunities for
other regional partners to subsidize the rates to operate
and maintain a new water and sewer system. Without
subsidies, community members would be responsible for the
entire cost of a system. He assured the committee that
there were regional programs that could assist in some
areas.
3:51:05 PM
Representative Hannan noted that there were a few letters
in the committee packet detailing the opinions of several
rural communities. There was a letter from the community of
Bethel (copy on file) that described a potential
"bureaucratic nightmare" involving significant score
reductions from one year to the next despite submitting a
nearly identical plan. She wondered if the department had
the opportunity to respond to Bethel and whether it would
include the committee in its correspondence. She understood
that Bethel had the capacity for a system and was still
struggling with receiving a passable score within the
scoring rubric. There was an additional letter in the
packet (copy on file) from DEC Commissioner Jason Brune to
the Alaska Bush Caucus that stated that in the Spring 2023
scoring cycle, 95 of 196 communities did not meet the
minimum threshold; however, not all communities were
seeking funding for water and sewer infrastructure. She
asked why a community would be scored even if it were not
seeking funding.
Mr. Bates responded that the department's responses to the
letters were included in the packet as well (copies on
file). The letter from the city of Bethel included a
particularly significant amount of information. The
department had a draft response specific to one of Bethel's
projects and it had responded to many of Bethel's concerns
largely related to the managerial and financial components
of the scoring tool. He shared that DEC had not yet
coordinated a response with its sister agency, the
Department of Commerce, Community and Economic Development
(DCCED). He relayed that he would share the final draft of
the response with the committee once it was drafted.
3:54:58 PM
Ms. Bohan responded that previous to 2015, the similar but
more arduous capacity assessment tool RUBA was in place and
the scoring took place after funding was awarded. The tool
created some issues in that communities often took years to
work with RUBA to demonstrate the minimum capacity to
release the funds, which generally had a limited lifespan
of around five years. The funds were then held up by one
community which prevented another community that had the
capacity to move forward from utilizing the funds. The
department intentionally changed the order of operations so
that the scoring effort would occur in advance of
allocating funding. The new ordering would also provide a
more current idea of a community's capacity and the ways in
which it could use assistance from the state. The program
was voluntary and a community could choose to sit out if
was not interested in participating. The department was
concerned that if the data were collected only once a year,
there could be a drastic decline in capacity before the
next assessment. The department thought that scoring
communities twice a year would be more helpful and accurate
than scoring communities once a year. The department would
conduct one assessment for informational purposes and the
other would be to determine eligibility. If a community had
met the minimum score, it could submit an application. It
was possible for the department to see only 10 to 20
applications for construction every year.
Mr. Bates thought it was important for the department to
recognize and own that there were areas of improvement. He
was happy to provide additional comments or have additional
conversations with committee members. He emphasized that it
was a goal of the department to provide excellent service
to the state's rural communities.
Co-Chair Foster understood that the issue was challenging.
He thought that food and shelter were top priorities for
human beings and the following priorities were sanitation
and clean water. He realized that it was important to
ensure that systems were being maintained for the long term
and that it could be difficult. He found it concerning that
many community members did not have basic water and sewer.
He went to 27 villages in the prior summer and many people
washed their hands repeatedly in the same bucket of water
for days on end. He thought that need was more important
than the capacity to maintain a system.
4:00:12 PM
HB 178 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the agenda for the following day's
meeting.