Legislature(1995 - 1996)
04/19/1995 08:35 AM House FIN
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* first hearing in first committee of referral
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HOUSE FINANCE COMMITTEE
APRIL 19, 1995
8:35 A.M.
TAPE HFC 95 - 86, Side 1, #000 - end.
TAPE HFC 95 - 86, Side 2, #000 - #474.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 8:35 A.M.
PRESENT
Co-Chair Foster Representative Martin
Representative Mulder Representative Kelly
Representative Brown Representative Therriault
Representative Grussendorf
Representatives Hanley, Parnell and Navarre were not present
for the meeting.
ALSO PRESENT
Representative Ivan Ivan; Annalee McConnell, Director,
Office of the Director, Office of Management and Budget,
Office of the Governor; Nancy Slagle, Director, Division of
Budget Review, Office of Management and Budget; Joe Perkins,
Commissioner, Department of Transportation and Public
Facilities; Janet Kowalski, Chief of Planning, Division of
Planning, Department of Transportation and Public
Facilities; Sharon Barton, Director, Division of
Administrative Services, Department of Administration; Mark
Badger, Director, Division of Information Services,
Department of Administration; Karen Morgan, Deputy
Director/Administrative Services, Division of Information
Services, Department of Administration; Michael McMullen,
Acting Director, Division of Personnel, Department of
Administration.
SUMMARY
HB 268 An Act making appropriations for capital project
matching grant funds and to capitalize funds;
making, amending, and repealing capital
appropriations; and providing for an effective
date.
HB 268 was HELD in Committee for further
consideration.
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HOUSE BILL 268
"An Act making appropriations for capital project
matching grant funds and to capitalize funds; making,
amending, and repealing capital appropriations; and
providing for an effective date."
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF THE DIRECTOR, OFFICE
OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, provided
an overview of the proposed capital budget. Ms. McConnell
explained that the budget was written from a fiscally
responsible perspective. She continued that the Division
identified specific areas: Kids and families public safety
related items, health and safety issues such as village safe
water issues etc., recommendations regarding the criminal
justice system, transportation and development, and deferred
maintenance.
She indicated the total request would be in the amount of
$135 million dollars. Ms. McConnell understood that amount
was $35 million dollars above that amount the Legislature
had budgeted. She urged Committee members to consider the
proposal submitted by the Administration, pointing out that
the allocation would emphasize matching federal dollars.
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
JOE PERKINS, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES (DOTPF), reviewed DOTPF's portion of the
capital budget request. He stated that the $1.5 million
dollar portion of the DOTPF capital budget request would
include emergency non-routine type repairs for ports,
highways and facilities. Included in the request was $4
million dollars to address deferred maintenance.
Additionally, $20 thousand dollars was allocated for federal
transit administration grants. Those totals would provide
$920 thousand dollars from federal government revenues.
Commissioner Perkins continued, $100 thousand dollars of the
request would be delegated to the Corp of Engineers in order
to provide the necessary match money for activity authority.
He added, $26 million dollars was requested for federal aid
to highways, and an additional $5.5 million dollars for the
federal aid to aviation programs.
The total DOTPF request would be in the amount of $31.6
million dollars which would provide another $305 million
dollars in federal funds. Commissioner Perkins summarized
that few new projects have been recommended. The basic goal
was to address maintenance in order to continue receipt of
federal aid programs.
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Commissioner Perkins responded to Representative Mulder's
question regarding the list of projects. He stated that
federal aid to highway projects had been derived from the
State Transportation Improvement Program (STIP) required for
approval by the federal government.
Commissioner Perkins added, DOTPF is currently in the
process of creating a number of long and short range plans.
The first long range plan would address the next 20 year
transportation and system needs within the State.
Additionally, there will be a ten year plan to address more
specific needs. That plan will match federal monies against
those projects which need to be finished in the State.
Commissioner Perkins continued, the six year plan will
address the current "needs" of the State. That list
consists of three priorities. He concluded that the three
year plan would clarify federal requirements for the federal
aid funds.
Commissioner Perkins emphasized that the plans are important
to the federal highways and to the people in the State who
provide the construction and engineering; the plans provide
information regarding specific projects.
Representative Mulder asked if the projects scheduled in the
current three year plan were the only ones which qualified.
Commissioner Perkins responded that there were other
projects which could be substituted for the current project
recommendations.
Commissioner Perkins advised the proposed federal level cuts
to the Corps of Engineers budget will create the elimination
of all maintenance activities on eighteen harbors in Alaska.
At this time, the Corps of Engineers dredges entrance
channels and repairs breakwaters.
Representative Brown requested a breakdown of the Intermodel
Surface Transportation Efficiency Act of 1990 (ISTEA)
enhancements.
JANET KOWALSKI, CHIEF OF PLANNING, DIVISION OF PLANNING,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, offered
to provide that information to the Committee. She noted
that there is an apportionment for the transportation
enhancement money floor.
Representative Brown questioned the allocation for the
natural gas fleet. Ms. Kowalski replied the allocation
would cover the municipal fleet and an air quality monitor.
The Anchorage municipality has consistently violated the
carbon monoxide standards. The funds would convert part of
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the municipality's fleet into natural gas use.
NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, distributed
two handouts to Committee members: "Criminal Justice
Information Systems Integration Summary of FY96 Phase I
Projects" [Attachment #1] and "FY96 Requested
Telecommunications Capital Projects" [Attachment #2].
FRONT SECTION OF HB 268
Ms. Slagle provided a sectional overview of HB 268.
Representative Martin referenced Section #6 noting concern
with DOTPF's accumulating revenue from uncompleted projects.
Ms. Slagle reported that a project would have to qualify for
the statutory definition of a capital project and that those
funds would not be used for operating expenses. The
original allocation to the community would require a match.
Representative Martin asked if the accumulated interest
could be used as a match amount. Ms. Slagle stated that the
interest would not be adequate to cover the match portion.
She added that depending on the size of the community, that
amount would range between 5% and 30% percent.
Representative Martin questioned the excess authority which
DOTPF had accumulated over the years. Ms. Slagle explained
that Sections #6 & #7 were the areas allowing the
uncommitted matching fund dollars. The amount resulting
from authorization over project costs is not available. She
pointed out that at the beginning of each Legislative
session, a Capital Project (CP 3) report is provided which
lists all the projects available and their status.
Representative Martin voiced concern in continuing to
receive depleted federal funding.
Ms. Slagle pointed out that Section #9 would correspond to
the handouts #1 and #2. Representative Mulder referenced
Section #9 asking if the $2 million dollars which the
Department of Corrections received from the federal
government would be used as part of that cost. Ms. Slagle
stated that the $2 million dollars would cover costs for
deferred maintenance needs. Representative Mulder pointed
out that criminal justice concerns appeared to be that
Department's highest priority. Ms. Slagle emphasized that
both needs are important and should be addressed.
Representative Therriault asked how the amount in Section
calculated by determining the amount received last fiscal
year and then what was accomplished with that revenue.
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Representative Therriault referenced Section #11 and asked
if those funds would be tied to the dormitory expansion.
Ms. Slagle commented that a portion of those funds would be
used for that purpose.
Representative Brown questioned Section #11, the $4 million
dollar allocation for the satellite communications project.
Ms. Slagle responded that would be a portion of the $700
thousand dollar general fund request. She added, there is
an additional $300 thousand dollars in general fund dollars
and $2.1 million dollars for the same project.
Representative Martin referenced Section #12 noting his
concern that the amount did not indicate the interest
accrued. Ms. Slagle stated that the amount identified would
be the original appropriation. The language identifies
"including accrued interest".
Representative Mulder referenced Section #11 and Section
dollars had been supported by the Mat-Su Borough. Ms.
Slagle understood that the $9 million dollars did not go to
the Mat-Su Borough. It was identified funding for the Ita
Mitsu Kodak Company who would be opening up Wishbone Hill.
Representative Mulder advised that the appropriation was
intended to stimulate activity in the Mat-Su region. He
felt it was inappropriate to take those funds without the
borough's concurrence.
(Tape Change, HFC 95-86, Side 2).
Representative Martin suggested further discussion was
needed regarding the Mat-Su Borough. He spoke against the
borough receiving those funds without further consideration
of the statewide needs.
OFFICE OF THE GOVERNOR
Representative Brown referenced the $1 million dollars
allocation request from the Office of the Governor and asked
for a list of projects that revenue would fund. Ms. Slagle
replied that decision would come about through a committee
process. There currently is an inventory available of the
existing facilities including a priority listing. She
offered to provide that list, noting that Jack Kreinheder in
the Office of the Governor coordinated the process.
Ms. Slagle advised that the total identified funding need
would be in the amount of $40 million dollars.
DEPARTMENT OF ADMINISTRATION
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Ms. Slagle listed the requested allocations.
Personnel records automation in the amount of $364
thousand dollars.
Ms. Slagle noted the allocation would provide imaging of
state employment applications. Representative Brown asked
if the agencies would need special equipment to access the
images.
MICHAEL MCMULLEN, ACTING DIRECTOR, DIVISION OF PERSONNEL,
DEPARTMENT OF ADMINISTRATION, replied that the information
would be accessible through fax lines and that it would not
require additional equipment.
Representative Martin complained about the expense of
upgrading the equipment. He pointed out that currently a
$17 million dollars balance remains available in service
funds. He recommended using those funds first. Ms. Slagle
advised that those funds are within an internal service fund
that supports the computer network. She explained that
maintaining the central equipment and processing everyday
activities consume that amount. Representative Martin
reiterated that there was a balance at the end of the year
of $17 million dollars. Ms. Slagle stated that there was an
appropriation of $1.46 million dollars specifically from
that fund to provide equipment needed for replacement in
order to maintain that system.
Representative Brown asked the legal restrictions on the use
of the Information Services Fund (ISF). She proposed more
of those funds being used in lieu of general funds as
proposed. Ms. Slagle advised that fund provided specific
services for the agencies.
SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF ADMINISTRATION, clarified that the
$17 million dollar balance remaining in the ISF was composed
of a major portion of the value of assets and equipment,
whereas, the cash in that fund amounts to $2 million
dollars. She pointed out that the $17 million dollar figure
thus was deceptive.
Ms. Barton advised that the money could be spent for
depreciation and replacement of equipment for the statewide
network. She added, special funding would not be
appropriate to fund from the ISF.
Representative Martin questioned the increase to information
projects. Ms. Barton replied that the State has a lot of
"catching up" to do in order to keep up with the efficient
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use of technology currently available. Ms. Slagle pointed
out that there is a lot of federal money available which
mandates upgraded equipment. Representative Martin stressed
that the federal government is broke, and suggested that the
State should not try to match federal dollars which might
not in reality be available.
Ms. Slagle continued.
Overhaul of State personnel management system
request in the amount of $325 thousand dollars.
Ms. Barton noted that the original personnel act which had
been written at the time of statehood currently is no longer
appropriate. There have been many changes in technology and
needs resulting in a system which can no longer assure the
maximum payback on the $1.1 billion dollars spent each year
on personnel services. She added that the systems are out-
moded and out-dated. Ms. Barton explained that the
requested amount would allow for further expertise in order
to sort through the old system's inefficiencies.
Statewide information services equipment
replacement request in the amount of $4.446
million dollars.
Ms. Slagle pointed out the request related specifically to
the Division of Information Services and the refurbishment
of the equipment needed to maintain that system.
Statewide consolidated data network request in the
amount of $457 thousand dollars.
Representative Brown inquired why the entire amount needed
to complete the project had not been requested. She
emphasized that the request should be a high priority.
KAREN MORGAN, DEPUTY DIRECTOR/ADMINISTRATIVE SERVICES,
DIVISION OF INFORMATION SERVICES, DEPARTMENT OF
ADMINISTRATION, stated that a request for full funding had
been submitted, although the Department and the
Administration decided that there were other priorities
within the Department which needed to be met. The original
amount to fully fund the project was $3.1 million dollars,
some of which has been funded from a capital request
received by the Department of Labor in a previous year. She
concluded that there will be an additional funding request
placed next year.
Retirement and benefits electronic imaging and
automation request in the amount of $997 thousand
dollars.
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Ms. Slagle ascertained that the request would provide for
the management of documentation and employment history
records.
Statewide satellite communication project request
in the amount of $2.4 million dollars.
Ms. Slagle noted the request would provide for the remainder
of a large project undertaken by the Department.
Representative Brown noted that she had requested that the
Department provide for an amount of funding in which they
would need to create a single broadcast signal. She thought
the request exceeded that proposal.
MARK BADGER, DIRECTOR, DIVISION OF INFORMATION SERVICES,
DEPARTMENT OF ADMINISTRATION, agreed that a modest approach
would provide the flexibility for the infrastructure.
Although, he added, the current request could be used for
more items of concern. He noted that in the long run, this
request would reduce the cost of providing services and
would require less satellite space while carrying more data.
Representative Brown asked the source of the $700 thousand
dollars in gifts and grants. Mr. Badger replied currently,
when anything is done within State government toward
telecommunications, the State looks at ways to partner with
the federal government or private providers to pay for a
portion of that cost. It is hoped that funds will be
generated from donations, gifts and grants from private
providers and other interested institutions.
KOAHNIC broadcasting matching grant request in the
amount of $140 thousand dollars.
Ms. Slagle commented the allocation would provide the first
urban American radio station in the United States. She
added that the station would broadcast to the Anchorage,
Mat-Su, and the Kenai Peninsula areas. The requested amount
would provide for a match to be received from federal funds
and private contributions.
HB 268 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 9:50 A.M.
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