Legislature(1997 - 1998)
10/02/1998 01:30 PM House BUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Legislative Budget and Audit
Anchorage, Alaska
October 2, 1998
1:30 p.m.
Tapes:LBA-980210 Tape 1, Sides 1 and 2
LBA-980210 Tape 2, Sides 1 and 2
LBA-980210 Tape 3, Side 1
CALL TO ORDER
Chairman Phillips convened the meeting of the Legislative
Budget and Audit Committee on October 2, 1998, at
approximately 1:50 p.m. in the Anchorage Legislative
Information Office - Room 220, Anchorage, Alaska.
PRESENT
The following members were present:
Senators Representatives
Chairman Phillips Representative Martin
Senator Donley Representative Bunde
Senator Halford Representative Croft
Senator Pearce Representative James
Representative Therriault
ALSO PRESENT
David Teal, Legislative Fiscal Analyst; Pat Davidson, Legislative
Auditor; Helen Eckman, DVR; Business Enterprise Program; George
Buhite, Youth Corrections Administrator; Janet Clarke, DHSS; Greg
Swank, DNR, SPCO; Brent McGee, OPA; Mike Black, DCRA; Mary
Elizabeth Rider, B. J. Sorensen, Bill Herman, Alaska Mental Health
Trust; Betsy Rolson, DOC; Bob Fisher, Court System; Paul Smith,
DOE; Patty Ware, DHSS; Kay Burrows, Senior Services; George Smith,
Library/Archives; Nico Bus, DNR; Kim Judge, DCR; David Liebersbach,
Diane Alcantra, DMVA, DES; Tom Williams, Senate Finance Committee
Staff providing support for the Legislative Budget and Audit
Committee; Marveen Coggins, Senator Green's office
APPROVAL OF PRIOR MEETING MINUTES
Representative Martin MOVED to approve the minutes of August 14,
1998.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
(Senator Pearce was present at the meeting)
PRELIMINARY REPORTS
Representative Martin MOVED to go into Executive Session for the
purposes of discussing preliminary audits.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
EXECUTIVE SESSION
Chairman Phillips reconvened the meeting to the public at 2:40 p.m.
Representative Martin MOVED to release the 1997 Statewide Single
Audit report immediately to the public.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
(Senator Donley and Senator Halford were present at the meeting)
Representative Martin MOVED to release the following seven
preliminary audits to the various agencies or departments for
21-day response then automatically released within 30-days
depending on the findings:
1. Elective Child Protection Report
2. Management Practice Report
3. Alaska Railroad Corporation Contract Issue
4. Board of Pharmacy Report
5. Surety Fund Report
6. Division of Tourism Contract Issue
7. Division of Agriculture, Matanuska Maid
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to accept the audit request of Senator
Pearce related to the September 1, 1997, Legislative Audit report
on the Department of Health and Social Services, Division of
Medical Assistance and Mental Health and Developmental
Disabilities, Community Mental Health center program, and the audit
request of Senator Donley as to the implementation of AS 18.56.470
by the Alaska Housing Finance Corporation.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Pat Davidson - Within the past year, we have done an audit on the
special education program statewide, not specifically at the
Ketchikan School District. We ask the Committee if they would hold
approving this request until the next meeting until I have a chance
to talk with Senator Taylor and go through with him what we have
already done and our limited ability to actually conduct an audit
in the Ketchikan School District.
Representative Bunde MOVED to hold the audit request from Senator
Taylor until the next meeting.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
REVISED PROGRAM REQUESTS
Representative Martin APPROVED the RPL#41-9-0030, Alaska Court
System, Using Trail Court Performance Methodology to Address
Cultural Diversity in the Courts, $9,854 Federal Receipts.
Chairman Phillips - Would you clarify your statement "recommend
amending appropriation authority from line 19"?
David Teal - It is a Federal reference in response to your request
for more thorough review of the RPL requests. In all of these, we
have changed the appropriation authority or Statutory authority
when as we were looking at them we found a few lines off or an
appropriation off. So in our analysis of them we made those changes
to reflect the proper line for their appropriation authority or the
Statutory authority. The departments received our analysis and DHSS
did approve changes. We have not heard from other departments. I
don't think it is a critical issue but we were trying to make
things as technically correct as possible. That point will come up
later on the capital RPL. Line 19 is a general appropriation so you
could leave it there; line 22 is the admin. support component. Some
of the others don't have to be changed; some are actually in the
wrong component and should be changed. We did not hear from the
Alaska Court System as to whether they agreed with this change.
(Representative James took leave from the meeting)
Bob Fisher, Alaska Court System - In answer to our knowledge of
this, we were not aware; possibly the number (tape inaudible). We
support the change.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#02-9-0057,
RPL#02-9-0058, RPL#02-9-0059, Mental Health Trust Authority Account
Receipts.
David Teal - They were combined into a single RPL and the
Department asked they be separated.
Representative Bunde objected and requested they be voted on
separately.
Representative Martin WITHDREW his motion.
Representative Martin MOVED to approve the RPL#02-9-0057,
Administration, Volunteer Long Term Care Ombudsman, $30,000, MHTAA
Receipts.
Representative Therriault - In the first place, this is going to
obligate us to continue to follow through, although it would be all
from Mental Health Trust funds initially. The $30,000 which is
available is only half of the annual funding. When it shows up in
the next budget you've obligated the next person coming in with the
general fund request. That was a large part of the discussion at
the last meeting.
Representative Croft - The auditor does say that the approval of
this request isn't expected to impact future general funds. It does
on a policy level but not a budget level.
Chairman Phillips hearing objection called for a roll call vote.
Yea: Senator Halford, Senator Pearce, Representative Croft,
Senator Phillips
Nay: Senator Donley, Representative Martin, Representative Bunde,
Representative Therriault
Chairman Phillips - The motion FAILED by a 4-4 vote.
Representative Martin MOVED to approve the RPL#02-9-0058,
Administration, Adult Protective Services/General Relief Data
Management, $18,052, MHTAA Receipts.
Chairman Phillips - Mr. Teal, you state that there is no mention of
the information technology plan in the FY99
Governor's Amended Budget request and I'm asking why?
Kay Burrows - Director, Division of Senior Services - The purpose
of the information technology plan was actually only one project.
It wasn't a full plan. That's why it wasn't included in the
Governor's Amended Budget. This is a project to take one data base
that the Adult Protective Services group has been using in one
software package and simply migrating it to another software
package. We didn't complete the project in FY98 and so we have
funds left over to finish it in FY99.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#02-9-0059,
Administration, Alaska Choices for Independence (Personal
Assistance Services), $97,000 MHTAA Receipts.
Representative Therriault - (tape inaudible, paper shuffling) I
guess considering the one we turned down I'm wondering why ...(tape
inaudible)
David Teal - Any time a program is funded by Mental Health funds,
there is no certainly that the Mental Health Trust will continue to
fund it with Trust funds so right now they're saying you can stop
this program if we stop the Mental Health funding of it, but I
think the Department should probably respond.
Kay Burrows - This is actually not ongoing funding service request.
There is no additional next year funding that is part of this. This
is one time amount of money to look at the personal care attendant
program and develop some manuals to help those beneficiaries who
use independent personal care attendants who are independent
Medicaid providers. It is similar to physicians or other people who
are providers. The beneficiary actually does the hiring and firing
of that independent personal care provider and they have a
consultant available to them. It does not have to do with ongoing
service which would be paid for by the state other than the
services which are currently part of Medicaid.
Representative Martin - The Mental Health Authority is going
further and further in all kinds of grants involving things that
are not the responsibility of mental health. Now because you have
excess money and you're going to expend it into new areas I'm
concerned at what time your earnings may drop and you suddenly find
out you don't have that money for your clients and the assistance
they need. This is another case are you going to spend everything
you have each year and not save anything.
(Representative Bunde left the meeting)
Nelson Page - Chair, Mental Health Trust Authority - I think we
need to remember our beneficiaries include people with Alzheimer's
disease, dementia. That is one of the categories that people are
most likely to get benefit from this program. It also includes
developmental disabilities which is another area where people need
to have care assistance. We thought this was pretty close to our
real purpose.
Representative Martin - Are you still spending all the money you
get? I think Mental Health needs to save some money rather than
spending all their receipts. Nelson Page - It was actually a pretty
rough Fall for us watching the stock market like everyone else. The
answer is "no" we are not spending all our receipts. We have a
reserve account that is intended to provide a buffer. Every year we
spend a fixed percentage of the asset value of the Trust and that
percentage is set based on our experts understanding of what we can
spend without running into the problem you described. So we don't
have a situation where we've overspent.
Representative Croft - So in effect, you inflation proof yourself?
Nelson Page - I'm not sure it's what we'd call inflation proof. The
idea is the purchasing power of the Trust will remain constant.
Representative Croft - By taking a fixed percentage, do you think
you can keep enough in it?
Nelson Page - Yes, we've spent 3-1/4%; we started out at 3% but we
felt we could increase the payout. We think we may be able to
increase it higher in the future depending on how the Trust
performs.
Representative Martin - There is also the responsibility that you
will not continually make more demands on the Legislature for
general fund appropriations; that was part of the oath that this
endowment would build up and less reliant on the general funds.
Nelson Page - We do expect we will be able to at least maintain
purchasing power parity ten years from now. There is built in to
this a little room for growth because we also get the income from
our assets.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#02-9-0062,
Administration, CASA Grant, $39,577 Federal Receipts.
Senator Halford - I haven't been able to figure out what it does.
Brent McGee - Office of Public Advocacy - CASA is an acronym for
Court appointed special advocate. It is a volunteer guardian ad
litem who is recruited, screened, trained, and supervised by OPA.
There are two places where this is happening; one function is to
create a CASA program in Bethel and Juneau; the other is to train
individuals in areas where they can both be volunteer guardian ad
litems in Federal and in State Courts. The notion is there should
be one child advocate in each of those places. The best option is
to have a person who is one unpaid and two able to function in both
Courtrooms.
Senator Halford - Does this advocate function in a Tribal Court?
Brent McGee - No. One is to create a CASA program in Juneau and
Bethel that is exactly what we've had in Anchorage for the last 11
years. That has been very successful. The other piece is to train
people primarily tribal members to act as guardian ad litem in
State Court and also in those areas where there are Tribal Courts.
When they have concurrent jurisdictions we think it is a good idea
to provide that service with a person who costs us no money and
provide the same person for both of those Courts in order to get
better representation. There is no reason to provide a paid person
for the State Court and an unpaid untrained volunteer in the Tribal
Court.
Senator Halford - You said concurrent jurisdiction has been granted
by the Superior Court? I thought the Supreme Court said there is
not concurrent jurisdiction?
Brent McGee - Common state agencies deal directly with Tribal
authorities.
Senator Halford - State agencies do; I'm saying the Courts.
Brent McGee - That is an entity of the state of Alaska. They will
refer cases for an opinion to Tribal Courts or sometime to Village
Elders. Judges are generally interested in getting as much
information as possible so they can make life determining decisions
about a child. They don't grant decision making authority to the
Tribal Court or Village Elders. They want to hear from them.
According to the Village Elders, the guardian ad litem is a perfect
vehicle for them to know what is going on in the State Courts. We
want to use local people who can function in both arenas because we
think we can get a better outcome.
Senator Halford - I agree with all that; I was trying to figure out
the jurisdictional question.
Brent McGee - The jurisdictional question, I don't have any idea
how that is going to be figured out. In order to do
this, we don't have to answer those questions.
Senator Halford - You're not appropriating into any side of that
question?
Brent McGee - No, we're not. This doesn't have anything to do with
jurisdiction. The fact is there are true entities out there; we
want to be able to participate on behalf of the children in both of
those instances. The best way to do that is through a trained
volunteer supervised by a professional.
Senator Halford - The fact is there are two entities out there.
Brent McGee - There aren't two legal entities out there at the same
level of jurisdiction. They exist in fact even if they don't exist
in law.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representation Martin MOVED to approve the RPL#05-9-0569,
Education, Gold Rush Curriculum, $97,901 Federal Receipts.
George Smith - Deputy Director, Division of Libraries/ Archives and
Museums -
Representative Therriault - On the Legislative Finance backup, it
says there is no Federal authorization available in this component
but down further it states Federal approval to expend the funds
(tape inaudible) so I don't understand. Is this an appropriation
already made in the Federal budget? (tape inaudible) I'm wondering
about the source of the funds. Are they in the Federal budget? Are
they ready to be received?
George Smith - This was a grant awarded by the National Archives
Record Service which we did not receive until August of this year.
They were unanticipated funds on our part so we were not prepared
to ask for authorization when we prepared the budget for FY98.
Senator Pearce - (tape inaudible, too faint, paper shuffling)
Representative Therriault - If the Federal money is there then that
takes care of that problem. I'd like to have further discussion
between myself and Mr. Teal about the way these are presented.
Chairman Phillips - In your statement, you say there is no mission
statement or performance measures were developed for this component
but the request (tape inaudible) with state contact (tape
inaudible) standards. I was wondering why we don't have that?
David Teal - I guess Education didn't develop this specific mission
or performance measures. They do have state content measures for
the curriculum and this falls within those and then on the issue of
Federal authorization the Federal funds are in hand now and it is
an issue of Federal receipts that have become available after the
Legislature was done.
Representative Therriault - In the statement no Federal
authorization, are you meaning we do not anticipate and build this
into our budget component?
David Teal - Yes.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#05-9-0584,
Education, Federal Carry Forward, $49,059 Federal Receipts.
Are these receipts we need to carry over or just receipts that one
spent?
George Smith - When we were presenting our budget for FY97 before
the Legislature, the Legislature recommended we adjust our
authorization for Federal money to more clearly reflect what we
were actually receiving and spending each year. Therefore, last
year when we presented our FY98 budget we significantly reduced our
authorization for Federal money. Unfortunately, at the very time
one old Federal grant program that we administer was being phased
out and a new one phased in. We didn't properly anticipate what our
total receipts would be for the Federal Government so what we have
is need for additional authorization for this one year and it will
be resolved in the budget we present to you next January. This will
take care of a need for us to receive authorization and receive the
money during this fiscal year.
Representative Martin - It's already committed; you just need
authorization?
George Smith - Yes
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#05-9-0585,
Education, PELL Grants, $100,000 Federal Receipts.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#05-9-0587,
Education, Business Enterprise Program, $1,000,000 Statutory
Designated Program Receipts.
Representative Therriault - To expand this program so dramatically,
have we had comments back from private sector vendors?
Chairman Phillips - I want to dovetail on what Representative
Therriault has questioned. I have a note, does it effect (tape
inaudible)?
Helen Eckman - Division of Vocational Rehabilitation, Project
Coordinator for the Business Enterprise Program - Under the
Randolph Shepherd Act, there is priority given to the business
enterprise program for this specific type of contract and Elmendorf
has adjusted their announcement to reflect the Act will be
recognized if our bid on this falls anywhere in the target range.
We will be competitively bidding. They did have the option of
negotiating with us directly without putting the contract out to
anyone else, but they are putting out an open solicitation
recognizing the Act if we come within the competitive range.
Representative Martin - If you bid competitively, why do you need
$1 million? What is done with that money?
Helen Eckman - The money basically comes to the Division of
Vocational Rehabilitation as state licenses (tape inaudible) for
the Randolph Shepherd Act. When our blind vendors are placed in a
facility that he or she are operating, they provide services to the
Department of Defense who in turn writes a check to us because we
are the contractor. We receive this money and turn around
immediately and write a check for all (tape inaudible) portion of
it. About 1% will be saved for administrative expenses and the rest
will go right back the facility itself. It isn't a money maker for
us personally. It is just that because we are the contractor for
the Department of Defense that we have a subcontract with our blind
vendor operating this facility. The money has to be given to us
under the contract and we have to return it so that the vendor can
receive reimbursement.
Representative Croft - So this isn't a $1 million cost; it is
authority to go out and bid on a $1 million contract? You need that
room because that's the way the money flows? It says under the
anticipated timeline, it would be difficult to wait for the full
Legislature. That is because this bid is essentially coming up now?
Helen Eckman - Yes. We have to have permission to receive it.
Monetarily they did put it off another seven days when we called
this week but they are anticipating any day.
Representative Therriault - The whole thing is tied to the
operation of a vending machine?
Helen Eckman - No. This is a contract that will provide primarily
cleaning duties, ? services and some food preparation to the
military dining hall facilities at Elmendorf Air Force Base. There
are five different cafeterias or kitchens involved.
Chairman Phillips - You are going to be competing with others on
this proposal?
Helen Eckman - We will be competing and if we don't get the
solicitation, then the full amount of money will never come our way
at all. If we do, we will be in a position to do that.
Representative Croft - Do you have blind and disabled people ready
to take advantage of this contract?
Helen Eckman - Yes, we have already have applications turned in
from three qualified participants in our program who as soon as we
get this solicitation and begin our response we will chose among
those vendors. They are each giving us a proposal on how they will
employ others with disabilities.
David Teal - There is a fund source change here. It cannot be
Statutory Designated Program Receipts. We looked at it and thought
it was okay because they are both. On further checking of the
Statutes of the Executive Budget Act, Statutory Designated Receipts
by definition cannot include State or Federal Receipts.
Representative Martin MOVED to amend his motion to approve the
RPL#05-9-0587, Education, Business Enterprise Program, $1,000,000
Federal Receipts.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#06-9-0017a, Health
& Social Services, Juvenile Accountability Incentive Block Grant,
$1,605,800 Federal Receipts.
(Note: This whole section was difficult to transcribe due to paper
shuffling and speakers not speaking loud and clear into their
microphones. It was transcribed as well as possible under the
circumstances. Tapes are available in Legislative Library.)
Senator Donley - If you will remember we had discussion on this
part of the Federal program and set out several guidelines for the
state to develop. Guideline no. 1 is the state should work towards
accountability for juvenile felons over the age of 15. This
proposal doesn't do anything towards that initial Federal
guideline. This Administration has consistently opposed any
modifications to do with the Federal guidelines required. The
proposal here is to do other things than the first guideline of the
Federal law but not to do anything on that until a future time. I
think it is backwards. I object.
Senator Halford - I want to hear an explanation of what they are
going to do with the money. I tend to agree with Senator Donley.
The Administration opposed our efforts when we are able to get the
automatic waiver down to 16. The Administration was strongly
opposed (tape inaudible, multiple voices) exactly what the first
guideline was. With the Administration support, the first guideline
in the next legislative session . . .
George Buhite - Youth Corrections Administrator - The approval for
the first year only requires active consideration (tape inaudible,
paper shuffling). For three years we have looked at the Governor's
conference did in fact consider this issue and the members of the
conference hotly debated this issue and so I think for the first go
around we do in fact meet what the Federal ? . I in my position
cannot (tape inaudible, too faint) relative to (tape inaudible, too
faint). I would like to go on and say that of the other three
issues, I think we are already ahead of the Feds or fully in
compliance or mostly in compliance with two of the graduated
sanction conditions and the (tape inaudible, too faint). We have
requested funding to the Federal Government through Senator Stevens
about this for about $1-1/2 million dollars as well as a $300,000
grant to develop a data base in Corrections where we would be much
more able to respond appropriately to the information requested by
the Feds . . .
(End, Tape: LB&A-980210, Tape 1 Side 1 #242)
Representative Croft - . . .when they want to tell us we have to do
something they can say that; they've said that before or usually
you have to do this or you don't get Federal money. This just says
because I think the policy they are talking about is so
controversial that they just want the state's to actively consider
it and we are doing that. We don't have to have unanimity on a
controversial matter to receive this money and continue to work
toward these goals and to the extent that we are in agreement on
three of the four and are actively debating the fourth why wouldn't
we want this authority particularly if some members of the
Committee are of the opinion that the first is a good idea. To
simply say there are other people in the state who disagree so we
won't accept this money for three of the four things people want -
If we do need it that was the question last time, what is active
consideration and it is that the liberation under debate of
policies that would affect state compliance with the requirements
we are doing that. I don't understand why we would want to turn
down this money which does largely what all of us want and some of
what some of us want.
Senator Donley - It is carefully calculated that this would comply
for right now because this is (tape inaudible, paper shuffling) and
there is no effort to move toward that requirement for later on.
Additionally I have concerns about the accountability aspects and
the increased sanctions, the actual existence of those within the
system because most of the data I've been able to obtain over the
years doesn't show an effective increased sanction system. It is
all very void how it's done within the Department as far as making
sure that crimes aren't continually being committed and there is a
line drawn at some point. It takes a lot to get to that line. I
think they need to have something more to deal with (tape
inaudible, paper shuffling) so they don't get caught two years out
with no compliance at all. They have the intention to do that under
this proposal.
Senator Halford - Exactly how do you plan to spend the money?
George Buhite - The requirements of the grant are that we have to
have a committee to apply to this on how to spend that money. That
committee apparently consists of Deputy Commissioner of Public
Safety, Commissioner of Corrections, representatives of Department
of Law and Court System and two members of the public (tape
inaudible, paper shuffling, too faint, multiple conversations). We
propose that of the $1,605,800 (tape inaudible), $160,000 to be
used to hire two grant administrators, one primarily to prepare
grants and advertise that process dealing with the training and
technical assistance to deal with the compliance of the grants when
they receive the grants. We are looking at approximately $300,000
to apply for those (tape inaudible, too faint) to address
specifically the activity between agencies like Corrections and
Public Safety. So once we (tape inaudible, too faint, paper
shuffling)
Approximately $550,000 goes to the areas to ? to which the
statewide RP's for services that are accountability based and that
ranges from ? , restitution programs (tape inaudible, too faint,
paper shuffling) particularly in the areas where we are ?.
Approximately (tape inaudible, too faint, paper shuffling) to be
divided up between our Division, Department of Law, Public Safety,
the Court System to provide services (tape inaudible, too faint).
We are looking specifically at how to coordinate those services to
the degree and we've ? and we've identified ? high level of
services ? . That's about as close as we've gotten. The actual
budgets are still (tape inaudible, too faint, paper shuffling).
Representative Martin AMENDED his motion to delay this RPL until
the next meeting to give the Department more opportunity to work on
the concerns expressed by Senator Donley and Senator Halford.
Representative Croft objected to the motion.
Janet Clarke - DHSS - We did delay this RP from the August meeting
and we provide information to Senator Donley and the Committee. If
we delay it again, we will work with the folks who have concerns or
invite them to some of the meetings that are held. On this
particular issue, I'm not sure it can be resolved before the next
meeting. It seems to be a policy question. Right now the Law is at
16.
Senator Donley - It is a policy question and they should be
studying changes to 15. There is nothing in this proposal to do
that. They could modify this proposal to do something regarding
that issue such as survey the public, find out how the public feels
about it rather than approve everything exactly. It would make this
more consistent with the Federal intent and would be the intent of
some of us in the Legislature.
Representative Martin - A lot of times we depend on each other to
specialize various aspects, i.e., University, juveniles, Courts,
and I don't often now all the details but I rely on my colleagues
who do specialize in those issues and that is why when Senator
Donley concerns haven't been answered yet I think it is legitimate.
The Feds are paying us to do it and for some reason the state
policy questions it. Rather than lose it, I'd rather wait until the
next meeting.
Chairman Phillips hearing objection, called for a roll call vote.
Yea: Senator Halford, Representative Martin, Senator Donley,
Senator Phillips
Nay: Senator Pearce, Representative Croft, Representative
Therriault
Chairman Phillips - The amended motion FAILED by a vote of 4-3. Up
for approval is the original motion to approve the RPL.
Representative Croft - There is legitimate disagreement about the
first policy choice. The Feds recognize that in my view by asking
us to consider it and not mandating that we do it. This is an area
where there will be some disagreement. This proposal takes the vast
majority of the issues they ask us to consider and accepts them and
takes this controversial one and continues to consider it. That is
in my view exactly what Congress wanted us to do with this and
let's be very clear if we reject this it is us rejecting this money
to do what most of us think is at least partially correct to do and
continue to study the thing that is controversial. It would be
folly in my opinion to reject it.
Senator Donley - There is nothing in this proposal that continues
to study item no. 1. In fact, item no. 1 is going to be a mandate
on this Legislature and there is nothing here to move us toward
complying with this mandate. If there was something here to move us
towards compliance or even study towards moving us towards
compliance I think that would be persuasive. They haven't proposed
anything like that. They are saying that we've already done it so
we don't have to do it.
Chairman Phillips hearing objection on the original motion, called
for a roll call vote.
Yea: Senator Pearce, Representative Croft, Representative
Therriault,
Nay: Representative Martin, Senator Donley, Senator Halford,
Senator Phillips
Chairman Phillips - The motion FAILED by a vote of 3-4
Senator Halford gave notice of reconsideration for the next
meeting.
Chairman Phillips - I would suggest that the Department contact
those members with objections prior to the next meeting.
Representative Martin MOVED to approve the RPL#06-9-0126, Health
and Social Services, Pass 1 Child Care, $2,2000,000 Federal
Receipts.
Senator Halford - I object for purpose of discussion. One of the
justifications for the $2.2 million is the Governor is going to
request it - no operating impact but it also goes on the say it
will be requested in the year 2000 budget.
Senator Pearce - They will request additional Federal funds next
year.
Janet Clarke - In handing out a chart which I think many of the
members have seen before, it is a chart that shows you our Alaska
temporary assistance program and history of welfare reform. In the
summer months from July to August, we continue to have (paper
shuffling) welfare reform programs. When we have more and more
people working they require child care. What happened this summer
was that the numbers of child care increased beyond what the
Department had projected. We had more people going to work than
what we predicted. So this request although large will serve 588
children and obviously it is an important element of welfare
reform. I do think that there are program managers on line from
Juneau if they can answer more specific questions.
Representative Martin - This bragging that we do about our case
load dropping and expanding so this is really a flexible thing. I
was worried about three weeks ago when the Department bragged that
our case load had dropped about 15%. So we're saying this was for
the last quarter or the year? I really ? numbers from other
indications always going up and I marvel that we keep on saying the
case load is going down. Are we shifting them into other programs?
Janet Clarke - We have shifted money to child care and work service
as welfare reform has concluded programs. We have seen success in
actual benefit payment system which has dropped by 15%. We have had
a significant supplement from general funds over the last couple of
years and we are also not spending our Federal ? which are
available to be carried forward and that's what these Federal funds
are, Federal block grants. They can only be spent in a few areas,
i.e., child care, work service, and there is a special provision
that the Legislature took advantage of last year. We transferred
some of the funds into the child protection service, although
Congress is reducing our responsibility to do that in the future.
We have reinvested funds; we had a lot of general fund savings but
these are Federal funds which are available and cannot really be
used in any other places.
Senator Halford - Is there a general fund component that is funding
part of this still? What happened to it last year?
Janet Clarke - The general fund component of our welfare reform
program is at the floor that the Federal Government has given the
state. They've set a maintenance effort requirement that we have to
continue to maintain. We reached it with the current FY99 budget.
That was a decrease over the prior year. There were $5 million
general fund savings in the overall program. In child care, it
increased rapidly.
Senator Halford - We're saying it is Federal funds, but there is a
general fund component funding this same function, is there not?
And that general funds went up substantially last year? Is it the
same as last year?
Janet Clarke - Yes, there is a general fund component but it did
not go up substantially last year. As I recall, in the Department
of Community and Regional Affairs, the Senate budget took advantage
of the ability to transfer Federal funds about $4 million to be
used for day care assistance programs in that particular child care
activity so general funds have decreased in child care as well as
in other components.
Senator Halford - So you are already taking this grant and
offsetting general funds as much as you can?
Janet Clarke - Yes.
Representative Croft - It doesn't seem the way
Representative Martin characterized this is true. We are moving
people off welfare into work and this is the cost side of it. A
different category, overall savings and this case we're taking
savings in both Federal ? in our welfare and having some increased
cost in child care that primarily the Feds are picking up. It seems
a win financially and a win for people who are now working. If we
can serve 588 children with Federal money, I think we should
approve it.
Senator Halford - It sounds like we are making the maximum offset.
Janet Clarke - We have not made the maximum offset that the Federal
Government allows but certainly the Legislature can look at it in
the future. There are some questions about sustainability of the
Federal funds over the long term. Right now we are benefiting from
the provision in welfare reform that we are considered a high
population state and so we have this special Federal bonus that we
get for four to five years then we lose it after FY01 and that is
like a $7 million drop. We have to carefully balance the long-term
sustainability of using Federal funds that we transfer state funds
what the Federal Government is going to do with some of those
provisions.
Senator Halford - You say we don't dare take advantage of the
maximum Federal funds because politically it will be difficult to
replace them. If we cut the general funds out now, we are making a
political decision that is economic waste. Why shouldn't we use it
to the maximum capacity to replace general funds? When it's not
available you're going to have to replace it with general funds to
face those questions. If we are managing ourselves so we don't use
maximum Federal funds because we're afraid it will be too hard to
increase the general fund budget to pick it up if they stop then it
is a political determination that it is economically unsound.
Janet Clarke - We get more money right now that we're not going to
get after FY01. I think you are saying that in the short time, we
do use as much general fund as we can instead of Federal dollars
and then three years from now pay the bill. Is that what you are
saying?
Senator Halford - Do the Federal funds carry forward? Do they
expire? How are Federal funds treated? There are people who argue
against maximizing Federal funds because they believe it will be
too hard to replace them with general funds when they do run out.
Is that your argument?
Janet Clarke - The current provision we're under for welfare reform
we have a block grant that comes to us through FY02 then Congress
can re-authorize or change or do what they want with that
provision. The benefit we are receiving under the current Federal
block grant is based on a 1994 expenditure so that's why states are
receiving these large Federal funds. At the time, we discussed this
issue with the Finance Committees it was in the first year of
welfare reform. Our tendency as an agency was to be conservative as
to how many people might be benefited or where the funds should go
and what we currently have is the agreement that seemed reasonable
with the Finance Committees. For example, if this line was turned
away and we needed due to economic distress in Alaska and there
weren't jobs available we might see a different picture.
Representative Martin - One of the problems I have is the mystery
as to where the children are coming from. In looking at the other
statistics from the Department of Labor, our birthrate has
decreased 1600 this year from 1990. That is consistent over the
last four years. The age group 5 and under has decreased 4.9%; one
of the largest decreases in the nation. So where are they coming
from? Is it because we increased the level of poverty from 150% to
250%. We're increasing the poverty level and allowing more people
to come in. It's not due to a true birth rate or increase in
children in that age of 5 and under. Are we grabbing money to grab
it and then finding children or people to qualify for it.
Janet Clarke - People are working that's where children are coming
form for this program.
Senator Halford - I'm going to vote "no" because of what I think
about this maximization of the offset. I disagree with what we then
apparently did in Finance last year. I would support it if it came
back in a way that was presented to utilize the offset.
Representative Croft - With two "no" votes, then discussion may be
warranted. I'm not trying to jeopardize the others. People here may
disagree with what happened in Finance, but this is at least a
partial step to maximizing the most. It's asking to use more
Federal money for it. We can have that discussion sometime about
whether that was a proper policy choice but this increment is at
least moving in the direction you want. It's using more money.
Senator Halford - It's not offered to supplant general funds; it's
offered as an increase.
Representative Croft - Nothing in this precludes that discussion
over what we should be doing about maximization. It simply allows
us to use a pot of Federal money. To the extent part of your point
was we were not using enough Federal money this allows us to use
more for people who have a need. This has nothing to do with the
birthrate. These are the same children who were formerly on welfare
and are now children of people who are working.
Janet Clarke - While I certainly appreciate Senator Halford's view,
I don't know that this Committee could do anything about (coughing)
offset from general funds. If you need to go to the full
Legislature, it is likely there wouldn't be a determination until
late in the session. Again we might lose the opportunity to
continue getting more people off welfare.
Senator Pearce - (tape inaudible, too faint, coughing) In the first
real year of the program, the Legislative Finance encouraged us to
take it slowly the first year and then move toward the offsets that
are available for next year including to continue to work toward
maximizing our offset and we should try and take the entire amount
the first year. There were a lot of discussions. Senator Parnell
and I and Chair of the HESS Committee decided it was the best
approach. Not accepting the money and having mostly single mothers
out there who are trying to move off welfare and can't do so
because they don't have child care because this Committee is
sitting on whether to take $2 million from Federal funds is stupid.
Representative Therriault - In the budget, there was language that
said if Federal program receipts exceeded estimated appropriations
in fact, the appropriation from state funds from the effected
program may be reduced by the excess if the deductions are
consistent with the Federal Statutes. I think what this Committee
should do is to ask the Administration for a full accounting of
those areas where the Federal funds where we find ourselves in this
situation and make a determination then are we going to adjust the
budget down. The language in the budget allows us to do that, but
I agree with Senator Pearce.
Senator Pearce - We're talking about people who are trying to get
off welfare; now let's make it work. We should (tape inaudible, too
faint).
Representative Therriault - There are a number of areas where we
need to look for general funds that offset and remove it. I don't
think this is the time to do that.
Chairman Phillips hearing objection, called for a roll call vote.
Yea: Representative Croft, Representative Therriault, Senator
Pearce, Senator Phillips, Representative Martin
Nay: Senator Halford
Chairman Phillips - The motion FAILED by a vote of 5-1.
Representative Martin MOVED to approve the RPL#06-9-0127, Health &
Social Services, Arrestee Drug Abuse Monitoring Program, $101,200
Statutory Designated Grants.
David Teal - The only issue here is the Statutory reference; it
isn't Federal receipts. In the RPL they refer to Statutory
authority, I don't think it effects the validity of the RPL in any
way. It is just the request was flawed in a minor way and as we
reviewed the language we pointed that out.
Representative Martin - For the Committee's evaluation, we've done
an evaluation and we had $1.2 billion in other funds in the front
section where all these designated grants are and are not
considered part of the budget. It really is going to hurt the
Legislature and Governor's office by not proving where they come
from. These are designated general funds rather than undesignated
general funds and I think in a short time the Legislature is going
to find itself in a bad situation with more and more designated
general funds which we now call statutory designated program
receipts versus nondedicated and the problem is getting subject
$1.2 billion off budget. It is 50% of what is called the budget.
Janet Clarke - It is a strange route they take to come to the state
and depending on where we actually get them determines the actual
categorization of the funds. The Federal Government has actually
contracted with a private vendor to manage this program and we will
have a contract with a private vendor. So that situation this
$101,200 does need the definition Statutory Designated Program
Receipts which is why we requested them that way.
Representative Martin - It also meets the category of Federal
Receipts and that is the proper designation for this.
Janet Clarke - The check the state will receive comes from a
private contractor not from the Federal Government.
Representative Martin AMENDED the motion to approve the
RPL#06-9-0127, Health & Social Services, Arrestee Drug Abuse
Monitoring Program, $101,200 Statutory Designated Program Receipts.
Chairman Phillips - Hearing no objection, the amendment to the
motion was APPROVED. On the amended motion, hearing no objection,
the motion was APPROVED.
Representative Martin MOVED to approve the RPL#06-9-0128, Health &
Social Services, Epidemiology Drug Rebates (Ryan White CARE Act),
$50,000 Statutory Designated Grants.
This is the first time I remember putting "Statutory Designated
Grants" into our RPL's.
Representative Therriault - This is some kind of a rebate that used
to come back completely off the budget.
Janet Clarke - This is actually a new part of the Ryan White CARE
Act (tape inaudible, too faint, multiple conversations) ...
requires the pharmaceutical companies to give rebates back to
states (tape inaudible, too faint, multiple conversations) ... give
some portion of that back to the state for additional program use.
This was a fairly new provision.
Representative Therriault - The money rebated to us - are we under
some contractual - does it meet statutory definition?
Janet Clarke - As I understand it, the Federal Government requires
the drug companies to rebate to the state for ? high drugs. It
requires the state to use the money for programs so that is very
similar to what the Legislature does with the WIC program where we
get formula rebates back. Yes, I think it does meet the statutory
definition.
Representative Martin - With that in mind, everything we have off
budget in a fund always had a specific Statute reference. The
Committee ought to show what Statute in the future. Your using that
phrase so the Statute should be referenced, especially since it is
a new program. What Statute are we referring to?
David Teal - It doesn't necessarily (tape inaudible, paper
shuffling) Statute is just a definition of what's, it's something
that OMB wanted to do and worked on for a while and got through. It
allows you to take what used to be called program receipts now in
some cases the Statutory Designated Program Receipts. It applies
only in this case there is a the contract involved. In some cases,
it is specific services that are applied, but generally speaking,
if there is a signed contract for these services then you classify
it this way. Statutory 37.05.146 - what that Statute says is simply
that it is a definition of program receipts, a nongeneral fund
program receipts. Under there it says "designated program receipts
means money received by the state from a source other than the
state or Federal Government that is restricted to a specific use by
the terms of a gift, grant, bequest or contract".
(Senator Halford left the meeting)
Chairman Phillips - We're going to take a break from RPL's due to
the lack of a quorum.
OTHER BUSINESS -Y2K
Bob Poe - I'm the Y2K project office. I appreciate being able to
speak to the Committee today. Each of you received a status report
and my plan is to continue to provide you with timely status
report. You should receive another one next week. I'd like an
opportunity on an ongoing basis to get before the Committee to
update you. First, I'd like to point out that Y2K is not just a
computer problem. It is truly a risk management problem and I offer
three numbers for you to consider. The Gardner Group which is a
leading think tank on information technology has estimated the cost
of Y2K clean up to be $250 billion. I would suggest that the cost
of national litigation to follow would is $1 trillion is something
we should pay attention to. Three hundred national law firms have
opened up Y2K practices to get ready to sue companies that don't
deal with the Y2K issue. This is also a leadership issue. I would
suggest that no one really caused this problem. It is nobodies
fault. It is a very real problem. It is on our watch and we have to
deal with it. There is a lot less time than you think. The calendar
right now says there is 455 days are left but actually Y2K is
already happened. With you have a credit card that has an
expiration date of 00 it failed at the beginning of this year. June
30, 1999, is when it will hit the state because we will change
fiscal years at that time. September 1999 is an old computer
programmers trick shooting into data files should cause us a
problem. 9/30/99 is the Federal fiscal year and all of those dates
happen before the New Year's Eve date and the change of the
millennium.
What is the state doing about it. Governor Knowles issued
Administrative Order No. 177 which set up the Y2K Project office
and established what that office would do and what each agency is
responsible for doing and also elevated the office to Cabinet level
position so it could get the job done. We have a formal plan and it
is the same plan everyone else is using around the world. It is a
five step plan and that's what we are following. We are starting a
triage process to identify 199 business functions that the state
performs and we identified 87 that are critical because they
reflect on life, health, safety or the economic well-being of the
state of Alaska. Our inventory systems are complete. Assessment of
those systems is probably in the neighborhood of 60%. The reason I
qualified that is we are in the process of implementing a
comparable status reporting system so we know how each agency is
doing on the same basis and we should have that system debugged and
fully running by late November. We have a website which is being
used to transfer a lot of information to various users and in fact
it is referenced by states like New York which has spent over $400
million because we have a more thorough vendor analysis for the
imbedded chip problem than most other states do. There are several
systems which are already compliant that are compliant on the
current operating system that is the state accounting system access
the payroll system, DNR lands management system, Student Loan
system, permanent fund accounting systems, child support system and
Medicaid.
Alaska's primary exposure are small and medium size businesses;
that diversified fabric of our economy is wide we've probably done
so well in the face of low oil prices and mineral prices and bad
timber situation. Those are the business which are paying attention
to Y2K and can be enormously affected. Electric transmission we're
probably not as vulnerable because we are not on a big complicated
grid like the rest of American. Telecommunications on the other
hand we are much more vulnerable. The supply-chain issue we're much
more vulnerable. Anchorage is at the end of the supply chain from
America's standpoint. Healthcare is a big issue because there are
a lot of imbedded chips in those biomedical equipment.
(End, Tape 1: LB&A-980210 Tape 1 Side 2 #242)
Bob Poe - We're going to have to rely on contingency planning.
That's okay. If the system fails, what do we do? Get listings of
those critical files. Resurrect that manual form that you use to
do. Also we are using the risk management fund at this point to
deal with it. We feel that is a justifiable use of the fund largely
because those 300 law firms getting ready to litigate on us. There
are eighty cases in Court right now on Y2K; the Alaska Bar has
opened a Y2K section. The attorneys are ready. We are trying to
keep the Legislature informed. We'll be asking for a FY99
supplemental and give you accurate numbers on that. Those requests
will be coming through the Y2K office and we'll be asking for CIP
request for the year 2000. The reason for that is the Y2K problem
will extend quite a ways beyond 9/31/99. We also have to recognize
that there are leap year problems and we rely on contingency
planning that is just a stop gap measure.
In closing, I'd like to say three things. One, I can guarantee is
that things will go wrong as a result of Y2K. This isn't something
that people are thinking about; it will happen. Second, the real
test of all our success is how we get through that difficult
period. Finally, I challenge this Committee and the rest of the
Legislature and Administration that this really is a leadership
issue; it is nobodies fault. It is going to happen. And it is our
responsibility to deal with it.
(Representative James was back on line)
Senator Pearce - I was just at a State Chamber Convention
monitoring a panel on what the state is doing but I know the
banking industry led by NBA is working very closely to follow their
customers and suppliers (tape inaudible, too faint). Is anybody
looking the connection between the state and local communities and
what is our lives in terms of systems (too faint)
Bob Poe - We really do have a three prong approach that is taking
care of our own needs, reaching out to smaller unified businesses
and local communities. I met with the counsel mayors; I'll be
speaking to AFN; I met with the North Star Borough. They are doing
a resolution on Y2K. So the first thing we're trying to make people
aware of the problem. They're going to need some help. We're trying
to bring resources to bear (paper shuffling) but we don't have much
financial resources at this time. So when we get a communication
from a local government we get on the phone with them and talk with
whoever is in charge of their Y2K effort.
Senator Pearce - You mentioned that the bonding industry is
seriously looking at Y2K compliance and its vulnerability. Do we
have any feel for whether or not any financial (too faint) or do we
know if any local communities could have problems with their
bonding because of it.
Bob Poe - The short answer is all of them could have. At this
point, the bond industry needs to look and see if you have a plan,
are you dealing with it and are you funded. Funding is a big issue.
So as the bond question comes up depending on how close you get to
the date the risk return trade ? issue that a bond counsel or
traders are thinking about is going ?. The risk is higher if you
don't have a plan. Or if we looked at you nine months ago and you
had a plan and it looked good but we haven't seen much progress it
may reflect on your bond. The same thing with insurance. Both the
general insurance for the state of Alaska and the aviation
insurance both of those underwriter groups tried to include a rider
eliminating any kind of protection with regard to Y2K. Because we
had a plan we were able to take care of the general liability
insurance; we still haven't worked out the aviation insurance.
Representative James - One of the things I have read or heard about
Y2K is the cost; how much work there has to be; what kind of plan
you have to have, can you tell me in simple terms why this is so
complicated?
Bob Poe - It is not very complicated. The computer problem itself
is simple; it's a two digit date problem. The problem is it is so
pervasive. We've become so dependent on so many automated systems
and they are so intertwined today that's what makes it complicated.
Representative James - To go one step further, what's so
complicated about changing from a two digit to a four digit?
Bob Poe - It's not in the simple sense. The problem is there are so
many different systems; so many different solutions to solving that
date problem. If you have an old system there is one set of
solutions to reprogram all the formats, but if you have something
in a more modern language the solution is different. The other
thing that is challenging is if problem with the imbedded chips
about 2-4% are going to have date problems; the key is knowing
which one. Most of its going to be like my VCR it's going to blink
just as well after 2000 as before, but the imbedded chip in a fire
engine says that I haven't been maintained for 99 years I don't
think I'll run we have to deal with that. That maybe as simple as
contacting the manufacturer and find out what the reset routine is
or have your maintenance people put those machines on the ? when
the date turns and tell them they are all maintained. We need to
figure that out and each one of those particularly the imbedded
chips have unique solutions. We have to figure out the solution for
each one.
Representative Martin - I think we should get involved. I do take
objection to the perceived threat that if we don't do something
we're going to be sued.
Bob Poe - I'm not offering a threat. I'm just simply saying if we
don't develop a case that we've made a good faith effort to solve
the standard practices to solve it we are much more vulnerable than
we would be if we'd taken action.
Chairman Phillips introduced Red Boucher.
Red Boucher - My name is H.A. "Red" Boucher; I am former Lt.
Governor, Mayor of Fairbanks and State Representative. I'm
currently a computer consultant. About two years ago, I became a
part of a national and international organization sponsored by
Purdue University, the Center for International Strategic Studies.
In 1960, one megabyte of ram cost $3.2 million; today one floppy
disc costs $1 and contains 1.3 megabytes so it wasn't a computer
decision; it was a management decision. They just punched in two
numbers instead of four. The real problem and somebody said why
wasn't it corrected it was kind of periferated. Nobodies going to
be using these programs; nobody even thought of it. It was only
about five to six years ago when people began to ask questions. I
have brought two videos which I'd like to pass out to each member
of the Committee. It is a three hour tape put on by Senator Robert
Bennett's committee of which Senator Stevens is an ex-officio
member. It is a bipartisan committee and at the end of listening to
this, then make your own decisions. You deal with the cost section
of the problem. The people down in the engine room made the
mistake. They are trying to correct it now, but it is the executive
and Legislature who is going to have to make the decisions. We are
now part of a net worth world that we interface. If every single
computer in the building and in the state was fixed how about the
imbedded chip in the power grid. We are fortunate we are not
connected to the power grid outside. Based on two and half years of
research, this is real and as Senator Bennett said it scares the
hell out of him. It scares me not because we can't solve it but the
level of public awareness is nil and people who have to make the
decisions should rely on the resources available.Last year I didn't
see any legislation about Y2K. I predict that you will be bombarded
by insurance companies, legal aspects and others in the coming
session.
Representative James - No one seems to come up with a solution?
Red Boucher - There is no silver bullet. It never happened before
and the greatest thing you can do is become informed, hold public
hearings and interface with the international and national experts
who provide life line facilities.
Bob Poe - One of the things that happened last year was numbers and
solutions were identified. By beginning of session we will have to
you a supplemental request which will be very specific about which
things we do to do and what the cost will be.
Representative James - I appreciate that because I do understand
the problem but I haven't seen anyone come up with a request for
what it's going to take to change it so I'm happy to hear one is
forthcoming.
Bob Poe - The other thing I'd offer is as we go through the work
plan and learn more we'll get smarter as we go. This project has
never been done before so anybody who claims to be an expert isn't
because there aren't experts. People haven't done it before. So
there is a certain amount of getting smarter but we'll give you
firmer numbers at the beginning of session.
REVISED PROGRAM REQUESTS
Chairman Phillips moved back up the calendar to Representative
Martin's motion to approve RPL#06-9-0128 to exclude the words
"Statutory Designated Grant" and replace it with "Statutory
Designated Program Receipts".
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#06-9-0129, Health &
Social Services, Consumer Affairs Position, $45,000 MHTAA Receipts.
Senator Halford - Explanation?
Janet Clarke - This is the first time this request has come before
the Committee. This position would do is provide a Mental Health
Consumer Affairs position to consult with consumer boards in the
development of policies for mentally ill individuals. There are
many states that are developing this kind of position. A mentally
ill consumer which actually be in the position.
Chairman Phillips - Mr. Teal, your statement the FY00 funding
request for this position is from Mental Health funds, future
funding could impact the general fund. How?
David Teal - All we are referring to there is they ? with another
RPL. Once you create a position it doesn't necessarily go away.
Senator Pearce - Why is this coming outside the regular budget
process? (tape inaudible, too faint).
Janet Clarke - My understanding is that consumer advocates have
been asking for this kind of position of a long time. I know there
was some confusion about this position could be established in
state service, what other states have done and research was done in
the interim when this idea came up a year ago. So the position was
not included in the budget because people didn't really understand
what the advocates were talking about and how it would fit in the
state system. In the interim the Mental Health Board met with
consumers, Mental Health Trust Authority and the Department, did
some research on what other states have done, how we would
establish this position, what the job duties would be, etc., and
the Mental Health Trust Authority agreed to the concept in May but
the details hadn't been worked out and then they authorized this at
their August meeting.
Senator Pearce - authorized at their August meeting, departments
are I assume in the process of building budgets for the coming
legislature so what is the extraordinary circumstance to look at it
now rather than during the full legislative process and look at it
as part of the larger picture (tape inaudible, too faint).
Janet Clarke - The Mental Health Trust Authority authorized the
position as one of their recommendations for FY00 budget. At the
same time at their August meeting they authorized the Department to
go forward with this position now because the advocates have been
pushing for some time that this position was necessary and really
it was the Mental Health Board, the Administration and the Trust
Authority that hadn't quite figured out how to do it so they
believed it was worthwhile to go forward. I believe they heard from
a lot of beneficiaries about the benefit of this position and they
were convinced they needed to go forward.
Representative Martin - Reading the previous report, Mental Health
had requested this position before for more than one year.
Evidently we didn't approve it. This is still asking for it.
Nelson Page - Mental Health Trust Authority - The reason for the
timing on this is that we have been exploring the possibility of
this position for some time. There wasn't really a consensus on
what the position should be and that was what we were trying to
facilitate and that was what we were trying to facilitate, the
consensus. That didn't come to us until this summer. When it did
come to us actually we were surprised with the group of
beneficiaries that we have we usually don't get this strong a
consensus on what to do. As soon as we had that consensus that's
what we approved. We have approved Mental Health Trust Authority
funds for the position for FY00 and will be included in our budget
recommendation.
Chairman Phillips - Hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve the RPL#06-9-0130, Health &
Social Services, Children's Health Outreach, $211,500 Statutory
Designated Program Receipts.
Chairman Phillips - Mr. Teal, you said there is a minor technical
problem.
David Teal - The minor technical problem was that the grant was for
$1 million and the fiscal year amount didn't add up. The Department
has clarified it; the FY02 number should be $157,000 and it does
add up.
Senator Pearce objected.
Senator Pearce - I'm not sure (tape inaudible, too faint, paper
shuffling)
Representative Martin - It goes right in to what I was saying
before even though they have temporary receipts right now that will
allow the position they are also saying that they will have to have
money next year through general funds and all these grants that use
to be designated this will be general fund and technically it is
still general fund moneys even though we call it a grant. The full
legislature is suppose to be responsible for these things no matter
what we call it and I hope this group will go to the Finance
Committee where we evaluate it. It seems to be a open door position
now that anything that comes as a grant or gift will be put under
this designated grant and dedicates general funds.
Janet Clarke - The money from the Robert Wood Johnson Foundation
and the Crockett Fund will help supplement even the state's effort
for the Children Health Expansion Program that the legislature
authorized last year. The funds will be used for outreach as
required under the Federal expansion. The Robert Wood Johnson
Foundation expanded their role in helping the state implement the
Children Health Expansion Program so it is consistent with the
direction the legislature authorized. As part of the Program there
is a requirement that the state do outreach and go out and identify
children that may be Medicaid eligible and if not benefited by the
Medicaid program how they may benefit by the new expansion program
that the legislature authorized. We will use the funds to actually
provide a couple of grants. I do have more details that I can share
with you. One of the pilot sites is in the Mat-Su area; we believe
there are a number of children. We are going to specifically work
in rural Alaska with a consortium of the grant to go out and look
for children who are Medicaid eligible. They are covered 100% if
they are Native children with Federal funds. There will be some
technical support as well.
Senator Pearce - Has our CHIP program been approved by the Trust?
Janet Clarke - I know we have pushed the implementation date to
March 1, 1999, based on the amount of money that was approved by
the legislature. I do not believe our state plan has been submitted
to some of them.
Senator Pearce - How many programs that we did pass why would we
take this money to go out and find more children. We've got a
program; let's get started and see how's it's working and then talk
about (tape inaudible, too faint). It is my understanding that we
don't have (tape inaudible).
Deborah Smith - CHIP Coordinator for Department of Health & Social
Services - Is the question whether or not Alaska has actually
submitted or approved its CHIP plan? The plan was submitted on
August 31 and we anticipate response for ? within the next two to
three weeks. We have not received any questions from them since we
submitted it.
Senator Pearce - The implementation isn't until next March?
Deborah Smith - That is correct.
Representative Croft - I read here that the Robert Wood Johnson
Foundation is meeting today to discuss that grant. Do we now if
they've given us the award?
Deborah Smith - They would not be making the final decision only
recommending to the full Board. This is just the meeting of the
national advisory committee.
Representative Croft - And the grant has a start date of January 1,
1999?
Deborah Smith - Yes
Representative Croft - I think it makes sense to start identifying
but it may make sense to delay this until the next meeting when we
see what the Foundation decides?
Janet Clarke - I know that with the Children's Health Expansion
money the Federal Government has put some limits on spending any of
that until the implementation date actually occurs so some of the
administration work and initial outreach we can't do until March 1
under those rules so the intention was that this grant would help
us get started before we bring children on. Deborah, is there any
harm to the program since we have an implementation date of
January 1, 1999, in delaying?
Deborah Smith - This RPL has two pieces to it. One is the Crockett
Foundation money which is available right now; the second piece is
the Robert Wood Johnson Foundation money. As long as this RPL for
the RWJ money would be able to come before this committee prior to
the start date of January 1 I would see no problem in delaying but
obviously the more time we have to plan on how we are going to
implement with resources the better off we will be.
Representative Martin - Is part of this money coming from the
Mental Health Trust Authority?
Janet Clarke - No
Representative Martin - I'm wondering how come after all these
years that we haven't found all the children available?
Chairman Phillips hearing objection, called for a roll call vote.
Yea: Representative Croft
Nay: Representative James, Representative Therriault, Senator
Halford, Senator Pearce, Representative Martin, Senator Phillips
Chairman Phillips - The motion FAILED by a vote of 1-6.
Representative Martin MOVED to approve RPL#06-9-031, Health &
Social Services, Work Initiatives Project, $224,200 Federal
Receipts.
Chairman Phillips hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve RPL#06-9-0139, Health &
Social Services, Energy Conservation Initiative, $1,328,700 Federal
Receipts.
Senator Halford objected.
Janet Clarke - This comes from a low income energy assistance
program. This is a competitive grant that the Department reviewed
as part of a low income housing energy assistance program which
provides funding to help low income families achieve assistance in
energy. We will look at weatherization projects, energy efficient
products incentives and financial planning. In our Department we
have a Federal program that actually provides for fuel purchasing.
This would go to those folks who are beneficiaries of that program
and the reason the Federal Government offered this program was to
reduce the energy needs of those low income individuals.
Senator Halford - This is a $1.3 million; we have MEA ? budget
weatherization efficiency stuff I'm just wondering if this would
supplant other state funds in any way?
Mary Riggen-ver - Program Coordinator, Energy Assistance Program,
Division of Public Assistance - These funds would not be
supplanting any weatherization funds. Basically what this is geared
towards is helping individual households learn how to use energy
more efficiently and reduce their demand whereas Alaska Housing
Finance Corporation Weatherization is geared more to coming in and
making retrofit to the home. This is designed to help households
learn to reduce their consumption.
Senator Halford - Does this go to the individuals or is this money
totally used in the program to tell individuals to turn out their
lights.
Mary Riggen-ver - The grant would go to RURALCAP that the grant has
been written for and it uses the MERICORP members to help with
projects in the public schools and also has pieces of some rebate
purchasing so the best way to reduce energy is to learn how to use
air ceiling. The MERICORP members will help that household do that
and they may want to have rebates on buying high energy or high
efficiency on stoves. They are still paying for much of the cost
but there will be some incentive to make those changes.
Senator Pearce - How much of the money actually goes to the low
income recipient and how much is consumed by the poverty pentagon?
Mary Riggen-ver - Almost the entire grant goes to RURALCAP and a
lot of what the grant is focused on is training and education. We
have a breakout in the grant application to the Federal Government
but primarily we are paying for education and rebate to the family
if they chose to take advantage of the different rebate options
that are available to them.
Chairman Phillips - Do these people pay their light bills? If so,
it seems to me if they have a high light bill they will do
something about your own way of living.
Mary Riggen-ver - Part of the education is to learn what draws the
most electrical usage.
Senator Pearce - Are there missions and measures developed and is
there accountability that we can see to measure the grant to
RURALCAP? Does someone go back and see how they spent over $1
million and decide whether it was efficient or effective?
Mary Riggen-ver - A key piece of this grant is an evaluation which
has to be shared with all the state. It is a demonstration grant.
Part way through and at the end there is an evaluation.
Senator Pearce - That is different from what I asked. I asked if
there were measures built in not at the end.
Mary Riggen-ver - I guess I'm not clear on your question.
Senator Halford - With regard to the Federal application, how much
of the money will be used in rebates for other different benefits
passed on to low income people and how much will be used in the
administration, training, operation of everything else?
Mary Riggen-ver - As far as the majority of the grant, I don't have
a total for you as far as the grant is written in terms of the
improvement cost of the household. A lot of things depend on what
needs to be done and the service is geared toward that. It is hard
to say what the actual cost would be. As far as the majority of the
cost, it is education and doing assessments and providing the
energy fairs and materials for the public schools.
Representative Martin - It seems we've be doing this for a number
of years. How many years have we been running this through the
Federal moneys and how does this conflict with the Power
Equalization Program which in my opinion encourages the rural
community to use as much energy as they can and we reimburse them
so we really have a conflict there of two forces running against
each other.
(End, Tape 2: LB&A-980210 Tape 2 Side 1)
Mary Riggen-ver - and often when you have a large electric bill you
may not know what is causing that bill to be so high. It may be one
of the particular items or appliances you are using and this is
something that you've identified that could be replaced and you are
helped decide what is the best type of product to buy to save you
the most money in the long run. Those are the things that you're
helped with.
Representative Martin - Alaska Housing Finance Corporation has been
doing this for years as well as the Homebuilders Association. We've
paid them very well but I take this as another load of money to go
out into RURALCAP areas to keep people employed.
Chairman Phillips hearing objection called for a roll call vote.
Yea: Senator Pearce, Representative Croft
Nay: Representative James, Representative Therriault, Senator
Halford, Representative Martin, Senator Phillips
Chairman Phillips - The motion FAILED by a vote of 2-5.
Chairman Phillips moved RPL#06-9-0140 to the bottom of the calendar
to correspond with the discussion on the Western Alaska Disaster
Relief Status Report.
Representative Martin MOVED to approve RPL#09-9-0058, Military &
Veterans Affairs, Participation in State Fair and Municipal League
Conference, $32,182 Federal Receipts-FEMA.
Chairman Phillips hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve RPL#09-9-0059, Military &
Veterans Affairs, Participation in FEMA sponsored Project Impact,
$50,000 Federal Receipts.
Chairman Phillips hearing no objection, the motion was APPROVED.
Chairman Phillips moved RPL#10-9-4021 CIP, Natural Resources,
Purchase an estimated 41,000 acres of land on Northern Afognak
Island to the bottom of the calendar.
Representative Martin MOVED to approve RPL#10-9-4016a, Natural
Resources, North Slope Borough Natural Gas, $136,220 Statutory
Designated Program Receipts.
Greg Swank - It has been formalized.
Chairman Phillips hearing no objection, the motion was APPROVED.
(Representative James left the meeting)
Representative Martin MOVED to approve RPL#20-9-0003, Corrections,
Female Offender Residential Substance Abuse Treatment Program,
$51,104 MHTAA Receipts.
Chairman Phillips hearing no objection, the motion was APPROVED.
Representative Martin MOVED to approve RPL#20-9-0006, Corrections,
Existing Community Residential Center, $325,000 Federal Receipts.
Chairman Phillips clarified Mr. Teal's statement that he was not
sure how this subsection was going to be implemented. It was
clarified with Legal Services.
Chairman Phillips hearing no objection, the motion was APPROVED.
Representative Therriault raised a question on a prior approved
motion. - FEMA provided $32,000 receipt of these funds will replace
general funds previously earmarked to use for Federal programs.
This is one of those areas where we freed up general funds, should
we take the reduction in Federal funds or allow them to be shifted.
I'd like to get more information on what is going on.
David Liebersbach - Acting Director of Emergency Services - The
extra FEMA funds made available at the end of `98, that is Federal
98 money made available to us we would like to apply to a couple of
projects so we could free up state money that we can match with
other Federal receipts that we have available. Now primarily we
will use other Federal receipts, those other funds Federal and
State to augment some training. We have the training already to be
presented and this would be used to bring local responders into the
training.
Representative Therriault - We authorized a general fund match for
a special program; we don't need it all now so we are shifting it
to something else. I'm not sure what we are shifting it to; were we
short on matching on some other Federal pot and if so, why?
David Liebersbach - I can't say we are short in matching some other
Federal pot because we are just now getting our Federal year 99; we
haven't actually got it. We would anticipate there will be
additional add on moneys like there was on this particular one
throughout the year, the Federal year.
Representative Therriault - Are we being asked to give blanket
approval from this day forward to take that pot of freed up general
funds and just match these additional Federal funds that might
become available?
David Liebersbach No I think that if we get more Federal funds we
will have that, Federal authorization for those funds. We will have
to come back here.
Representative Therriault - If we don't capture additional Federal
funds will there be a general fund balance which will carry forth
potentially to the end of the fiscal year and would lapse but by
passing this we would give you authorization to spend?
David Liebersbach - The state general matching funds will be used
as we planned to use them which would be for the AML and state fair
but if we get the Federal funds that are eligible to be applied to
those we would free up those state funds and apply them to the
training. If we don't take the Federal funds then we will have to
use them where we are authorized to use them.
Representative Martin MOVED to approve RPL#21-9-0007, Community &
Regional Affairs, Rural Utility Business Advisor Program, $100,000
Federal Receipts.
Chairman Phillips hearing no objection, the motion was APPROVED.
epresentative Martin MOVED to approve RPL#21-9-0068, Community &
Regional Affairs, Southeast Alaska Community Economic
Revitalization Team, $10,000 Federal Receipts.
Chairman Phillips hearing no objection, the motion was APPROVED.
In regard to RPL#09-9-0002 CIP, Military & Veterans Affairs, AK
National Guard, Federal Scout Armories, $1,350,000 Federal Receipts
and RPL#10-9-1014 CIP, Natural Resources, Parks & Recreation Mgmt,
Parks Mgmt, Symns Rec Trail, $300,000 Federal Receipts, Mr. Teal
stated that at the last August meeting, the Committee approved both
capital requests and we looked and the language is missing from the
capital budget that allows us consideration of excess Federal and
other receipts. I faxed a memo with a Legal Services opinion.
Without detailing the problem, I think the solution is what you
care about it; your actions were appropriate or legal; we just need
to clarify to OMB that the basis for the approval was not
necessarily what you thought it was but it's okay. It will help to
clarify it through a letter. I would recommend not telling them how
to do it, just tell them there is a problem and they can figure out
how to rectify it.
Chairman Phillips requested Mr. Teal draft the letter.
Representative Croft MOVED to approve RPL#10-9-4021CIP, Natural
Resources, Purchase an estimated 41,000 acres of land on Northern
Afognak Island, $74,397,953 EVOSS.
Senator Halford - I think there is a legitimate question as to
whether it is in order for this Committee to take action that is
prohibited by the State Constitution.
David Teal - I asked Legal Services about it. They said there would
be no difference in your failing to consider it or rejecting it. It
wouldn't prejudice the issue either way. It is probably better to
reject it than not consider it. The letter to OMB on the other CIP
RPL's could include that you rejected it for these reasons.
Representative Croft - I thought it would give the Committee an
opportunity to put those objections on the record.
Senator Pearce - Well, this question has been floating around so
I'd like to see how the legal authority for this Executive Branch
responds.
Molly McCammon - Executive Director, Exxon Valdez Oil spill Trustee
Council - We just got a copy of the legal opinion yesterday and
haven't had a chance to look at it. We believe this proposal is
properly before you. We've had 25 similar RPL's before you in the
last five years in which you have taken action on. We believe this
one is consistent with those RPL's; there is no difference between
them.
Representative Martin - Just because we did something wrong in the
past doesn't mean we should continue.
David Teal - There is no other opinion. This request came to us to
late and we'd already asked Legal Services on the prior two.
Chairman Phillips hearing objection called for a roll call vote.
Yea: Representative Croft
Nay: Representative Therriault, Senator Halford, Senator Pearce,
Representative Martin, Senator Phillips
Chairman Phillips - The motion FAILED by a vote of 1-5.
Senator Halford - The settlement was a negotiated deal that used a
process which has had constitutional questions from its inception.
If we are getting into the discussion about how the approval
mechanism works then we as a Committee should request free analysis
from Legal Services. Is our disapproval a statement of the specific
item or a process question?
Chairman Phillips - Mr. Teal, would you honor Senator Halford's
request.
Representative Therriault - Also referencing the last five year's
actions.
Tracy Cramer - Exxon Valdez Oil Spill Settlement Council, ? Rescue
Center - The Shulak land acquisition, the Horseshoe Bay
acquisition, the ....
Representative Therriault - Were those all yours with the lack of
this language in the capital budget?
Tracy Cramer - That's the problem. Legal Services has determined
that the legislature had to previously look at an action on ? so
LB&A can't now take action.
Representative Therriault requested the list of those actions.
Tracy Cramer - Last year the corporation ? the same language ?
Chairman Phillips requested Mr. Teal follow through on that
request.
OTHER BUSINESS - WESTERN ALASKA DISASTER RELIEF STATUS
REPORT
David Liebersbach - Acting Director, Division of Emergency Services
- The Governor declared a disaster on the third of June for lack of
fisheries in Western Alaska, including Bristol Bay, the upper Yukon
drainage for a total of 99 communities. The second disaster
declaration on September 16 included or added four more communities
for a total of 104 communities.
Senator Halford - In the definition of a disaster area, you are
including basically all of Western Alaska, the coastal areas and
then up river Yukon and Kuskokwim to what point at the high point?
David Liebersbach - On the Yukon to Eagle, Canadian Border and the
entire Yukon drainage and Koyukuk and Bettles.
Senator Halford - What about the Kuskokwim?
David Liebersbach - Not the entire Kuskokwim. Not McGrath. I
believe Aniak. We do have a map with all communities involved.
Representative Martin - I'm concerned that the Governor and
administration may be expanding what we normally consider a
disaster from an active disaster of a flood or earthquake or
volcanic eruption to what is economic and where does the Department
fit in. I think you're being used; you have to follow orders, of
course, and this is strictly an economic thing rather than a
natural disaster. Have we expanded the word or has the Governor and
Legal Services for some reason other enlarged this concept?
David Liebersbach - No, I do not believe so because the
determination on the cause of this disaster was linked very
scientifically if you will. I wasn't involved in that but I
understand it was linked to the El Nino and the forming of the
waters that cause the lack of salmon from coming the second year in
a row.
Senator Halford - I thought there was a new Washington report that
came out which said the opposite? That it wasn't El Nino but it was
the variability of the fisheries itself. Didn't that just come out
in the last two or three days?
David Liebersbach - I'm not aware of that report but it's possible.
Senator Halford - It was a news item at the time it came out.
Representative Martin - But El Nino didn't discriminate on certain
rivers and coastlines. El Nino affected everything on the Pacific
Rim so why are we saying just certain regions? If El Nino is to
blame so everyone in South East, Cook Inlet, etc., should share.
David Liebersbach - Operationally we put 11 mobile teams managed
out of a central Bethel location to take applications from
communities in Western Alaska, Bristol Bay and lower Yukon. Four
mobile teams were managed out of Fairbanks managing the upper Yukon
and Koyukuk. This has been going on through August and all of those
teams are back out of the field and all of our field operations are
completed. Additionally managed out of Bethel was processing and
delivering of fish to three coastal communities in lieu of
subsistence stock. We also coordinated operation with volunteer
organizations through VOFATD; that organization was headed by Red
Cross and coordinated with them for any kind of volunteer or
donations to meet unmet needs that we could round up.
Senator Halford - What were the communities where purchased fish
was delivered?
David Liebersbach - Cooper Bay, Chevak and Salmon Bay. What the
declaration called for was the emergency living expense program
that you have a hand out that describes the eligibility. It
included salmon fishing vessel permits, crew permit on those
vessels and fish processing plant. Those that live permanently in
the declared areas were eligible for the emergency living expense.
Senator Halford - How did you determine where the people worked in
the process?
Diane Alcantra - Recovery Manager, Emergency Services - Through
their 1099 for the prior year.
Senator Halford - If they worked one day in a processing plant
during the prior year they were eligible? An awful lot of that is
seasonal and some of the areas you are talking about had so little
economic activity in good years so I wonder where some plants work
for a week and that was it and others haven't worked for years.
Diane Alcantra - We accepted their information and self
declaration.
Senator Halford - Any income from fisheries regardless of how small
made them eligible if you worked in one of the three categories.
David Liebersbach - The monetary eligibility was the maximum of
$1500 per person or maximum of $5000 up to $5000 per family. It was
to be applied only towards food and that was other than those who
were food stamp eligible but same types of food, electricity, water
or sewer and fuel for heater purposes. The awards if you were found
eligible you award would be dispensed via authorization to a vendor
and payment to a vendor can be half of the recipient for those
things based on the recipient's designation of how they would like
that award dispersed. The status of the program right now again on
the fact sheet given to you at the bottom shows that we have taken
5343 applications; we've approved 2424 of those; we expect to
complete the application approval process by the end of October and
disbursement of those approved moneys to the vendors will be by the
middle of November. We are still taking applications via 1-800 and
that will be available until October 31. We anticipate more
applications; right now they are running about 30 new applications
a day.
Senator Halford - have you dispensed the new applications yet?
David Liebersbach - Yes, we have.
Representative Croft - On what basis were you rejecting the
applications? On what were the most rejected?
Diane Alcantra - Not a resident of the effected areas or didn't
work in the effected industry.
David Liebersbach - The fish program total of 12,000 fish were
acquired chum salmon; they were processed, frozen and shipped 8150
of those salmon to the three communities and it is in lieu of their
normal subsistence take. Whatever remaining 3900 fish yet to be
shipped and those are pending freeze up as the folks don't have the
capability of maintaining them out there particularly with
potential electrical cutoffs.
Senator Halford - How does that compare with their normal
harvest?
David Liebersbach - We have Fish and Game in developing the needs,
etc., and I can't give you that answer right now.
Diane Alcantra - I believe it is somewhat less; it was based on
what leaders canvassed community.
Senator Halford - Is the fish all for human consumption?
David Liebersbach - Yes, we are not providing fish for dog food.
There is through the volunteer organization an effort to get fish
for dogs in communities on the Yukon.
Senator Halford - Do you have any idea what you paid for the fish
per pound?
Carol Carroll - I do not have it available but will get the
information. We do have it; I just don't have it calculated out.
Senator Halford - I just hope the state paid the average market
value instead of more.
David Liebersbach - We purchased the fish, paid to have them
processed and shipped. They were not hatchery fish; they were
purchased through a fish purchasing in Kotzebue and processed in a
processing plant and stored in Unalakleet and shipped to the
communities in need.
Senator Halford - How did you account for the money in terms of the
source of the appropriation? What are the source of funds for the
expenditures? What is the balance in the disaster relief fund?
David Liebersbach - It came from the disaster relief fund.
Diane Alcantra - I don't know what the balance is.
Carol Carroll - The balance of the disaster relief fund at the time
of the declaration was $20,000; I do believe it is that right now.
Senator Halford - So there was $20,000 in the fund and you've spent
$7 million, where does the money come from?
Carol Carroll - There is a process in Statute where you can go and
access money to spend before coming to do a supplemental. We will
be coming to the Legislature for a supplemental. We did follow the
process in Statute.
Senator Halford - The process in Statute deals with going to other
appropriations transferring appropriations in a kind of priority
series. You did not attempt to transfer or look at any other
appropriations?
Carol Carroll - We worked through the Division of Finance and we
have a Memorandum of Understanding with them. It is the same way
that we do the DNR fire.
Senator Halford - Are you familiar with the opinion that was
circulated a couple of weeks ago on that process?
Carol Carroll - No, I am not.
Senator Halford - But there was no effort to utilize other
appropriations or transfer appropriations into the availability
account or whatever the disaster relief fund is called?
Carol Carroll - Not to my knowledge.
Senator Halford - It still comes back to the same question. The
Constitution says that money can be expended subject to an
appropriation. Somewhere there has to be a book that has an
appropriation that this expenditure is coming from.
Carol Carroll - This is the same process we have used for almost
all of the disasters I am aware of if we didn't have money in the
fund.
Representative Martin - I would disagree with that Senator Halford.
We are usually talking about natural disasters; this is one which
was generated as an economic one and I would say other regions
experienced disasters, i.e., crab, and they didn't get any relief.
I think you are stretching the rules by saying this is similar to
a natural disaster. In a lot of those places we get reimbursed by
the Federal Government when we use general funds; we are not going
to be reimbursed this time for an economic disaster.
Representative Croft - What legal opinion was Senator Halford
referring to? Is that the way you want ????
Senator Halford - It's probably the same response I got when I
asked. I don't know who to ask the question but the disaster
Statute is very specific in terms of how you go through the process
to get money and I don't know whether, you guys are trying to
manage and operate programs and you are talking about probably the
three poorest communities in Alaska and even in a good year they
are so in a bad year I don't want to act like I don't care about
buying fish to give to Hooper Bay; I don't. I don't have a problem
with it but the process requires an appropriation and you have now
got $7.5 million and somewhere someone has had to appropriate some
money.
(End, Tape 2: LB&A-980210 Tape 2 Side 2)
Representative Therriault - It says here that the eligibility
limits will be set at the highest allowed to serve the largest
population; so what were the limits set at?
Mary Riggen-ver - 60% of median income for Alaska. It is roughly
equivalent to 150% of poverty.
Senator Halford - What are the Federal guidelines for poverty for
a family of four.
Representative Martin - It's $28,000 for a family for four.
Janet Clarke - I would like to point out that this low income home
energy assistance program is part of the $10 million package
Senator Stevens worked to get for the State of Alaska. The bulk of
the funds $8.3 million are already going out to tribal entities
(tape inaudible, blowing), Yukon Kuskokwim Bristol Bay (tape too
faint) to complete the package. Other regions have received the
funds directly from the Federal Government. This is the Bristol Bay
region share. We felt that it would help make funds available for
longer times during the winter. Currently, we are able to serve an
average of about 35 ? during the winter or three months over the
winter.
Representative Martin - According to the latest Department of Labor
Bristol Bay is the richest area not only in Alaska but in the
Nation per capita income. It has always been up there.
Janet Clarke - This will go to low income people who live in
Bristol Bay.
Representative Croft - Why does this money have to come through us?
What route did the other money take and why did this take the same
route?
Mary Riggen-ver - In several areas of Alaska the block grant is
administered directly by tribal organizations and the state handles
the balance. The Bristol Bay is one handled by the state so the
money directly to the tribes that are directly managing the block
grant recipients and the state take the money for the area which is
Bristol Bay.
Senator Halford - What is the eligibility number again for a family
of four?
Janet Clarke or Mary Riggen-ver - I think 150% of $28,000. I know
$42,000 doesn't sound right. When we were doing children self
expansion at 200% poverty was at about $40,000; I'm not sure.
Senator Halford - What do they get?
Mary Riggen-ver - I don't have the figures but it seems to me for
a household of one the 60% of median income was about $1080 for a
month and as far as the grant amounts we're looking at an average
for household between $2000-3000, probably around $2500 and it
depends on household size and income.
Senator Halford - So this is $2000-3000 on top of the $5000 in the
direct grant?
Mary Riggen-ver - No, this would be the only funds they have in
this area.
Senator Halford - I was just going to say I still have a question
about ? but if we are trying to match ? fair we can't very well say
let's give it to everyone else through a tribal entity and those
who come to the state and try to work with the state you can't have
it. That is less than ?; this may be the right deal for everyone
else, defeating it will have an unfair outcome.
Senator Pearce - How is it actually paid out? Is it after the fact
that the person pays their energy assistance which I assume is to
help pay their electric bills or does the person pay their bill and
we reimburse them or do we pay a percentage of the bill. ? - Grants
are paid out directly to the vendor and we can allocate part of the
grant to oil and part to electricity and basically it is what they
tell us on their application as to how they want it. It's made as
a direct payment so if they have past due bills it goes to pay past
due as well as current or future.
Senator Halford MOVED to approve RPL#06-9-0140, Health & Social
Services, Emergency Energy Assistance, $1,700,000 Federal Receipts.
Chairman Phillips hearing no objection, the motion was APPROVED.
David Liebersbach - You have the financial plan and budget before
you. Other state programs involved in this was a waiver or
refunding permit fees except for the $15 retained for (tape
inaudible). Waiver of the PCE cap for these folks
Senator Halford - Was this for residents of the effected area only?
David Liebersbach - Yes
Senator Halford - We may get a challenge from outside permit
holders on the differential between in-state and out-of-state
permit fees? The second thing you said was a waiver of the PCE so
they'll be able to spend more than $7.50, the amount now. That, of
course, is drawing down ? appropriated account which means the PCE
account goes bankrupt quicker? ? - I believe, the PCE issue was not
becoming eligible for ? because they were not paying their bills
directly. I don't do that program but that was what I understood.
So that because we pay the vendors for them then they ? not
eligible for the (tape inaudible, coughing).
Senator Halford - Well, that is an administrator's question.
Waiving the cap has an effect on the Feds ? Program. I may have
misstated that; I don't believe the cap was waived. Maybe I'm wrong
on that.
Annalee McConnell - The PCE Program normally the utility bills are
paid by the person and because in this case the payments are being
made to the utility company and not as cash grants to individuals
we had to make an accommodation for that. Any payments made on
behalf of a person to the utility company could count for PCE. It
does not change the amount the person would be eligible for or the
utility would get. It is simply an administrative matter. The whole
aim of this program was not to do direct cash grants but make the
money available for the most essential living needs like the
utilities and food and otherwise we would have had an bad situation
for both the utilities and customers. `we were already having
people who were getting cut off notices and having their service
cut off.
Senator Halford - So that has no cost; it is part of the cost of
the other program?
Annalee McConnell - Yes, there is no cost impact to it at all.
Representative Martin - It does have a cost. I really think this
whole thing is getting to the legislators' authority in receiving
money and spending money, you're not only expanding money without
proper authority but you are cutting off revenue that go to
agencies of the state and I don't think you have the right to do
that. Let the legislature battle it out but I really think under
the name of emergency you went too far with constitutional
responsibility that belongs to the legislature.
David Liebersbach - At this point in time there are several
programs that the Governor is putting in quite a bit of time with
the Congressional delegation and different Federal organizations to
bring more money into the state. At the original declaration we
requested a FEMA declaration; that although in writing has not been
for all practical purposes was turned down because FEMA didn't want
to set a precedent; they have an issue on both West and East Coast
long term issues of low fisheries so they did not want to set a
precedent with that.
Senator Halford - Has FEMA ever declared an economic disaster?
Annalee McConnell - FEMA has twice declared fisheries disaster,
once in Washington State in the `80's and once in Alaska in the
late 70's. They have been concerned about their budget situation
right now and although they did not directly provide a FEMA
disaster, FEMA is heading up and actually Secretary Wick himself is
heading up an international agency to provide financial assistance
to Alaska.
Senator Halford - While FEMA didn't do that, FEMA has been heading
up this task force of multiagencies a result of that was the
receipt of $10 million from the Department of Energy which is an
emergency fund they have and that was Federal money available. is
that the money that went through the tribal organization in the
interior and we just approved ...
David Liebersbach - That is correct. The SBA has declared this a
disaster and they do currently have teams in Alaska going out and
taking applications for low interest loans. The SBA's program
includes political subdivisions which are antiguous to the area to
the declared areas. As an example it includes some of the areas
like Kenai Peninsula for the low interest loans.
Senator Halford - So if you have a boat loan, a permit loan and you
didn't make any money two years in a row and you live in Kenai or
Mat-Su or somewhere else and you are an Alaska resident you can
access the SBA program if there is a way to consolidate or somehow
guarantee a loan? ? - You can apply for low interest loan at 4% for
a working capital loan to pay your expenses so there is some
flexibility ? gearing up costs.
Senator Halford - What about area of eligibility for that loan?
? - It has to be in the disaster area or one of the political
subdivisions and you had to have been effected by the disaster.
Senator Halford - So if you are a Bristol Bay fisherman who lives
in Kenai you are eligible; are you eligible if you live in the
Mat-Su Borough?
David Liebersbach - Also the FDA, Department of Agriculture through
food banks has provided a couple hundred thousand dollars worth of
food primarily to the school system ? school lunch program to
effected communities out there to feed. The Bureau of Indian
Affairs has provided some emergency assistance funds I don't have
a figure on that.
Senator Halford - Are they going through state appropriation or
directly
David Liebersbach - Those are going directly through the Federal
agencies such as DIA; likewise I believe with the food bank. There
are a myriad of other what appears to be other Federal sources that
are coming in; money from different agencies to and it is varying.
Right now they are going through there `99 budget but Senator
Steven's has tagged on to some bills a total of another $50 million
in Federal money. Not all that would come direct to the state; some
of that will go to SBA to about $5 million for them to back up
their programs that they are doing now. It does include quite a bit
of money for direct branch to the communities and it provides for
some money to reimburse or basically the state to recover some of
its cost. It is similar to but not like the FEMA program. Some of
it is very new. It comes through the Department of Agriculture and
I believe the Department of Commerce so there is a multitude of
ways additional $50 million that have not been approved or assigned
yet but between the Congressional delegation and the Governor's
office in Washington and here quite a bit of work is going on.
Annalee McConnell can provide further details on that issue.
Chairman Phillips - I would like to have a copy of this, send it to
the Legislative Budget & Audit Committee members and perhaps the
Finance Committees. I am tell you you are going to have more
questions coming. This is the first time I've seen a layout of what
areas to the state. I've been reading about it but I couldn't
visualize it.
Representative Therriault - The possibility of an additional $50
million from Congress will that allow for the ? in the state
general fund and your total here of $7.8 million is that just
obligated and the number might be higher?
David Liebersbach - Yes, we expect that we may need - the remaining
applications that have not been processed at this time that those
applications that are approved will probably take up the remaining
$4.1 million out of the original $12 million finance plan.
Senator Halford - You listed that one of the things you are taking
into (tape inaudible, paper shuffling) is $1.5 million match for
last year's program. That program was a combination of municipal
grants and $500 to each individual I think they were loans at that
point, what happened to that program? After we adjourned, there was
the statement the communities couldn't make the match and that
program was dying but is that program in place and the other
program is on top of it or what's happened to that.
David Liebersbach - The Magnuson Stevens money which I believe you
were referring to required a match by either from communities or
from the state. Most of the communities were unable to match and
has been sitting there With this declaration they have allocated
$1.5 million of this $12 million grant to provide that match so
that program can go forward.
Senator Halford - And that program included municipal grants for
stream work and activity in municipalities and also helped
municipalities with lost tax revenues from fishing taxes, etc., the
answer included an individual low interest, no interest loan
program, that didn't have that much interest initially because it
was such a small amount, but what happened to that program?
David Liebersbach - I don't have a solid answer on; that; that
program was administered by ? (tape inaudible, paper shuffling) so
I don't have details on it. It was administered by CCRA.
Senator Halford - Does anyone in Juneau know what happened to that
program?
Annalee McConnell - The might recall that at the end of the session
there were no general funds provided to match the Federal Magnuson
Stevens money of over $7 million and we did say at that point that
if we were able to secure an arrangement with the Feds where they
would accept in kind or we were able to match projects up we would
actively pursue that, however, that has not panned out and of
course we now have a situation for the second year in a row of
these communities hit very hard by lack of fish runs. Their ability
to match those Federal funds is basically nonexistent. The whole
point of that program was to provide jobs in the communities on
various kinds of community construction projects. There was no
individual assistance ? part of the Magnuson Stevens act it was all
in this area of community projects to try to provide some
replacement income.
Senator Halford - Wasn't there something out of the commercial
fishing revolving loan fund that was part of that
package?
Annalee McConnell - I don't think that was the particularly part of
the Magnuson Stevens Act, the declaration. The revolving loan fund
has been working with fishermen the last two years to restructure
boat loans that are held through that program.
Senator Halford - This was an individual program that I thought was
at least at the point it is explained at the same time the
appropriations bill was put on in Finance and then got changed to
I guess a community program receipts or something. I thought it was
in the same bill.
Annalee McConnell -No, There was a piece of impact to the fisheries
loan program I don't know the dollar amount off the top of my head
but I'm pretty sure that was not part of the Magnuson Stevens Act.
If I can check it though, if I'm wrong I will let you know.
Senator Halford - I bet it was Representative Ivan's bill but that
bill had all the stuff in it I thought. I don't know who to request
it of but I would like to have somebody or perhaps Ms. McConnell
coordinate what is available in combination of currently approved
and things that are working their way along in consort relief to a
family of four, pick a community, that live in Quageluk. What does
the package represent to them and I would also like to know how it
compares to their income from the fishery on the average was in the
past. On the one hand we are dealing with a lot of these and these
are the poorest communities in the state but within the region they
are also the richest communities in the state and their worst year
they have probably ten times the average income as Hooper Bay,
Chevak, Scammon Bay. I would like to know how the allocation of
this benefit goes based on what we all know is the real need of
those communities.
Annalee McConnell - Senator Halford, we can certainly do that; I
can give a lot of it to you right off the top of my head. To put it
in perspective in a typical FEMA disaster such as what we had with
the Miller's Reach fire the maximum aid which would have been
available to a family would have been $13,400. We do not expect to
come anywhere close to that amount of aid per family here and I
must point out the families in this art of the state although there
are certainly exceptions are at the low poverty level. They're also
in communities where there are no other jobs. The individual we
spoke to the Mat-Su Valley to drive to another job the business
they worked for burned down. That kind of situation. We don't have
that of course in the villages. so the assistance we provided, the
$1500 in basic living expense for food, home heating fuels,
electricity in many cases is only going to be $1500 for a family
and I think there is something David Liebersbach said which might
have been a little confusing to you. he said that our program was
$1500 per individual for a maximums of $5000 per family but the
only get up to $5000 if you have more than three people in the
family. You only get $5000 if you have more than three people in
the family if you have three direct fisheries jobs, the permit
holder, the crew licensee or fish processing operator. So if there
is only one person in the family who has a commercial fishing
income then the maximum with $2500 even if they have three
children. That is really a very small amount of money. Mary
Riggen-ver mentioned we able to get licenses funds; that is
obviously a very critical factor in Alaska in these villages if you
are not going to have a home heated over the winter you are going
to have people freezing to death so the amount we are looking at
there is probably $2500 maximum per household if they meet the
income eligibility so which people who are not going to get that
program. Also the aid which we are hopping to secure through the
Federal Government which Senator Stevens' is working on would be
limited to people who were below the Federal poverty level. So I
don't think we are going to have a situation where somebody has a
permit or happens to be able to make a lot of money this year is
going to get a tremendous amount of money this year; in fact, the
aid is going to the people who needed it the most. It is going to
very basic things of food, fuel, electric water and sewer service.
Senator - You will get back with us on how all the information is
put together.
Annalee McConnell. Yes. Some of it we may not know for a while
depending on the timing of the Federal funds but we can certainly
give you write up what we told you families would be getting. It is
sometime hard when you aren't in the villages to remember the kind
of impact when you have so many people in the community who are
dependent both on subsistence and commercial fishing for their
entire year's income and it was (too faint) to get some of the
Federal agency people to understand that this is different from a
normal disaster that they might deal with like a hurricane where
someone may not be able to go to their job two-three weeks but
three months from then they will have a job. In this case, if you
miss fishing you don't have enough income over the winter and I
think they do understand that now. In helped a tremendous amount
when Secretary Daly came out and visited some of these villages and
we were able to arrange for some people from other Federal agencies
to come up here so they really did finally get that message.
Senator Halford - I don't see this package being a bad thing for
anyone but I am concerned with the appropriation question, the
constitutionality of the disaster relief fund. I supported this in
the general fund for last year's program but I do think the
constitutional question is almost overwhelming and I would like to
see if OMB can request from the Attorney General's office a written
opinion of how that Statute works, its constitutional affirmative
I hope they would say; the legislature would say in affirmative and
what process was followed. And I recognize that the process that
has not been followed in the past, not that it was just always done
this way. I think that is not the real answer. If the process is
wrong then whenever it gets down to individual benefits someone
from another region is upset because their economic disaster didn't
get declared because there weren't enough people or something. I
think if we have a constitutional question your process is in
danger of being enjoined by a Judge on constitutional grounds and
that could happen fairly quickly if somebody were apt to go after
it. We've had great programs defeated by attorneys one with I think
Zoebel very quickly in the past.
Annalee McConnell - I will talk to the Department about that; we
did of course follow the procedure in which the Governor sends a
letter to the President and Speaker and offers the opportunity of
a special session and the Statute says that if they concur in
writing that a special session is not necessary one doesn't have to
be held. We did outline in that letter that we would be requesting
a supplemental. There are a couple of things that have made this
situation more difficult. We no longer have a disaster fund that is
funded in anticipation of disasters. We always have disasters in
Alaska; they may not always be as large as this but we know we have
them. In former years, there was a fund and we normally went first
there and only when you got to a situation where you had either so
many smaller ones or a big one was the fund tapped out. We have of
course proposed to the legislature on a number of occasions in the
last three years that now that many of the past disasters were
closed out which was the reasons the legislature stopped funding or
we were told the reason they stopped funding disaster
appropriations we have cleaned those past disasters up and I think
it would be appropriate to next session to talk about what is a
responsible level for this disaster fund. The other thing is that
obviously in the middle of a disaster is not the time to try to
figure out if the practices have been followed for years have some
problems with them but when the crisis is over I think it is
appropriate to take a look at it.
Chairman Phillips - We will conclude that. The next thing we have
is the Salary and Benefit Study mini report.
Tom Williams - Senate Finance Committee Aide, Staff assisting the
LB&A Committee - At your direction we took a look at all of the
responses which came in from Committee members regarding the salary
study. In addition, Legislative Auditor, Legislative Finance
Director and I each took a look at it in light of the comments and
looked for technical issues; we met with KPMG and expressed some
technical concerns and asked them to more thoroughly describe how
they reached some of their conclusions, asked them to compare their
samples to the broader composition of employees, and to tell us how
much validity it had and didn't have. They were agreeable to do
that, add some more definitions, make things clear based on the
data already compiled and they will be coming back with a third
draft for us to look at which will address those concerns. We
expect them to have a final report back to the Committee for
release next meeting.
Representative Therriault -I would just ask that the next draft be
? more closely otherwise when we come out with the final product
there is going to be a lot of confusion. A lot of these things
should be worked out before anything is turned out. I should have
said something at a previous meeting; I was surprised that I
already had two two-inch thick documents that were radically
different in their findings and while I kept them to my self I'm
not sure everyone else did.
Tom Williams - Yes, it will be scrutinized by staff; again there
were a little different expectations of what that preliminary draft
would be. It will be a different process.
Representative Therriault - When will the next meeting be? What
time frame are we talking about in the completion of the final
product?
Chairman Phillips - That is up to me I assume; my guess it will
probably be in the third week of November. Is that about the right
time frame? First week in December? I want to avoid the
Thanksgiving Holidays.
Tom Williams - KPMG said they will be able to get this to us by the
15th or late October.
Chairman Phillips - I'm looking at the third week in November;
first week in December for the next meeting. We'll make it before
Representative Martin leaves.
ADJOURNMENT
Chairman Phillips adjourned the meeting at 6:20 p.m.
(End, Tape 3: LB&A-980210 Tape 3 Side 1)
| Document Name | Date/Time | Subjects |
|---|