Legislature(1997 - 1998)
03/04/1997 01:43 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 4, 1997
1:43 P.M.
TAPE HFC 97-44, Side 1, #000 - end.
TAPE HFC 97-44, Side 2, #000 - end.
TAPE HFC 97-45, Side 1, #000 - end.
TAPE HFC 97-45, Side 2, #000 - #120.
CALL TO ORDER
Co-Chair Hanley called the House Finance Committee meeting
to order at 1:43 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Foster Representative Martin
Representatives Davis, Davies, Grussendorf, Moses and Mulder
were absent from the meeting.
ALSO PRESENT
Representative Ivan Ivan; Dan Spenser, Senior Analyst,
Office of Management and Budget, Office of the Governor;
Nico Bus, Acting Director, Support Services Division,
Department of Natural Resources; Janet Clarke, Director,
Division of Administrative Services, Department of Health
and Social Services; Jeff Sisson, Anchorage; Joe Reeves,
Deputy Director, Division of Administrative Services,
Department of Corrections; Remond Henderson, Director,
Division of Administrative Service, Department of Community
and Regional Affairs; Arthur H. Snowden, II, Administrative
Director, Alaska Court System; Percy Frisby, Director,
Division of Energy, Department of Community and Regional
Affairs; Jim Harpring, Division of Emergency Services,
Department of Military and Veterans Affairs; Roger Foisy,
Internal Auditor, Department of Community and Regional
Affairs; Donis Moris, McLaughlin Youth Center; Bob Footte,
UNAK; Walter Sampson, Kotzebue Electric Association; Brent
Petrie, Iliamna, Newhalen, Nondalton Electric Cooperative;
Gary Kessinger, MKEC; Brad Reeve, Kotzebue Electric
Association; Mark Johnson, Chief, Community Health and
Emergency Services; Department of Health & Social Services;
Scott Corstange, McLaughlin Youth Center; Gregg Thompson,
Fairbanks Youth Correctional Facility.
SUMMARY
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HB 113 "An Act extending lapse dates for certain prior year
appropriations; making supplemental, capital, and
special appropriations; and providing for an
effective date."
HB 113 was HELD in Committee for further consideration.
HOUSE BILL NO. 113
"An Act extending lapse dates for certain prior year
appropriations; making supplemental, capital, and
special appropriations; and providing for an effective
date."
ALASKA COURT SYSTEM
Section 14
$32. thousand dollars - Trial Courts
ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM observed that the Nineteenth Alaska State Legislature
passed SB 98. Senate Bill 98 allows the Child Support
Enforcement Division (CSED) to revoke driver's licenses.
After receiving a finding from CSED, the obligor has 30 days
to request judicial review. The Court must hold a hearing
within 20 days after the opposing party has been served. He
estimated that this provision will have a major effect on
the court system. He stressed that hearings will be
centralized in Anchorage to allow a reduction of costs.
Telephone hearings will be used for areas outside of
Anchorage. Part-time employees will also be utilized. He
observed that positions will be hired within the next two
weeks. He added that these positions will be the Alaska
Court System's number one priority for the coming year.
In response to a question by Representative Martin, Mr.
Snowden observed that the CSED provisions in SB 98 are
having an effect on collections. He stated that
professional obligors are making arrangements with CSED. He
noted that CSED just started revoking driver's licenses. He
stressed that there will be a major impact to the Alaska
Court System from the revocation of driver's licenses.
Co-Chair Hanley referred to a similar program in Maine. He
noted that only 5 licenses were actually revoked. He
emphasized that obligors were able to reach agreement with
child enforcement agencies in Maine. Mr. Snowden noted that
there are 43,000 active cases, in Alaska. He estimated that
50 percent of these cases involve arrearage. He assumed
that 15,000 of those in arrearage would want a hearing. He
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maintained that the Court is approaching the issue in a
conservative manner.
In response to a comments by Representative Martin, Mr.
Snowden noted that obligors have to pay under a schedule
promulgated by Rule 90.3. He observed that the schedule is
very specific. Alaska's requirements for child support
payments are in the national average. Schedules set by CSED
can be modified. Court schedules cannot be modified. He
maintained that the Alaska Court System would welcome the
Legislature to address the issue by statute. The Court
feels that the issue should be addressed by the Legislature.
He asserted that if the Legislature passes a statute the
Court will sunset the Rule. He stressed that a simple
majority could change the Rule. He emphasized that the Rule
should be addressed in whole.
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Section 9(b)
$330.0 thousand dollars - Veterans Land Discount
NICO BUS, ACTING DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF NATURAL RESOURCES observed that the
request would pay for the recalculation of the Veteran's
Land Discount, authorized in 1991. The Department of
Natural Resources' interpretation of the statute was
challenged. An Ombudsman investigation recommended that the
discount be recalculated. There are 36 veteran contracts
involved. He explained that interest payments are not
included. All 36 contracts have not been recalculated. He
referred to Mr. Glenn Sisson's contract. The original
contract was for $26.5 thousand dollars. Under the
recalculation he would receive an additional $14.4 thousand
dollar payment. If interest were include the he would
receive an additional $3.3 thousand dollars. He gave a
brief history of the discount. He noted that the discount
was found to be unconstitutional, but that interpretation
was later overturned.
Co-Chair Hanley asked how the Department calculated the
estimated amount needed. Mr. Bus stated that the Department
looked at the principle and averaged the amount due. He
stressed that the Department no longer has all the
contracts. He stated that any surplus would be lapsed to
the General Fund. He noted that the money would be in its
own account. The legislation specified that interest would
not be paid. The ombudsman agreed that interest would not
be paid.
In response to a question by Co-Chair Therriault, Mr. Bus
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noted that the recalculation process will be complicated.
The Department has included $20 thousand dollars for
administrative costs. Estimates are based on three days per
contract.
JEFF SISSON, ANCHORAGE testified via the teleconference
network in support of the request. He discussed the
overpayment made by his brother, Glenn Sisson. Co-Chair
Hanley observed that there are several ways that interest
can be calculated. Mr. Bus stressed that the request would
pay the principle amount agree to by both parties. Interest
payments can be debated separately.
Co-Chair Hanley asked for the Department's analysis of how
the $300 thousand dollar request was calculated.
Co-Chair Therriault noted that the Department originally
estimated that they would need $6.4 thousand dollars for
research of the contracts. Mr. Bus explained that this is
the amount to research contracts held by the Department of
Natural Resources. Some contracts were sold or transferred
to the University of Alaska and First National Bank of
Alaska. Researching these contracts will be more expensive.
Co-Chair Therriault agreed that repayment should be made.
He quested further justification for the appropriation
request permitting to research and recalculations. Mr. Bus
observed that the Department's estimate was based on the
number of contracts multiplied by three employee days per
contract. He reiterated that any excess will be lapsed.
Co-Chair Hanley stressed that the principal will be paid.
He emphasized the need to consider interest payments and
administrative costs.
Co-Chair Therriault asked if plaintiffs would agree that no
further legal action will be taken after repayments are
made. Mr. Bus stated that the Department would like to
reach an agreement that there will be no further legal
action.
DEPARTMENT OF CORRECTIONS
Section 2
$2.3 million dollars - Cleary Fines
DAN SPENSER, SENIOR ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR stated that the Department
would like to appropriate this amount for capital project in
lieu of paying the fines to the General Fund. The
Administration hopes that this agreement would satisfy the
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Court and plaintiffs.
Co-Chair Hanley noted that fines that have been paid have
been redeposited into the General Fund. The Legislature has
chosen not to pay the fines in the past two session. He
observed that there are two issues. The Court has assessed
$2.3 million dollars in fines through June, 1997. The first
issue is whether the fine will be paid. If the fine is paid
it can be deposited into the General Fund. The second issue
would be to partially fund a women's correctional facility.
JOE REEVES, DEPUTY DIRECTOR, DIRECTOR, DIVISION OF
ADMINISTRATIVE SERVICES, DEPARTMENT OF CORRECTIONS noted
that there is a $2.3 million dollar federal capital request
to build additional beds for violent offenders. This
request could encompass additional beds for female
offenders.
Co-Chair Hanley asked for the Department's priority listing
of new projects for the Department of Corrections. He noted
that the funding to pay the fines could be placed into the
General Fund and projects paid for out of the capital
budget. He asked if an additional women's correctional
facility would be built if the Department does not receive
the fines. Mr. Reeves emphasized that the Department is
reviewing every option available to expand facilities. He
noted that the only funds currently available to the
Department are federal. He clarified that the supplemental
request would not be sufficient to construct a new building.
He explained that the funding would allow male population to
be shifted in order to free beds for female inmates. The
request would provide the Department with flexibility. The
request will be used to start the expansion system. A
portion of the funding would be used to enter into an
agreement with the Department of Transportation and Public
Facilities for engineering review and expansion plans. The
balance would wait for the construction phase of the
project.
Co-Chair Therriault summarized that the request is for a
capital project in lieu of paying the fines. He questioned
if a capital expenditure would meet the order of the Court.
Mr. Reeves noted that the Department of Law will argue in
support of the capital expenditure in lieu of fines. He
acknowledged that there is no guarantee that the agreement
will be acceptable.
Co-Chair Hanley spoke in support of paying the fine
separately from the capital project. He suggested that this
request should be prioritized with other projects on the
Department's list.
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DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Section 3
$1 million dollars - Disaster Relief Fund
NICO BUS, COORDINATOR, DEPARTMENT OF MILITARY AND VETERANS
AFFAIRS observed that no money was appropriated for
disasters in FY 97. Disaster funding was carried forward
into FY 97. There is $50 thousand dollars remaining in the
Disaster Relief Fund. The request would cover disasters
between February 1997 and June 1997.
Co-Chair Hanley observed that the FY 97 supplemental request
contains $585 thousand dollars in operating funds for FY 98.
Mr. Bus explained that this amount covers core FY 98
administrative functions. There is no carry-forward to fund
this function. The Division of Emergency Services operating
budget is charged against the Disaster Relief Fund. Co-
Chair Hanley pointed out that the FY 98 request is $3,377.5
million dollars. Mr. Bus clarified that this contains $1.2
million dollars from the Oil and Hazardous Response Fund,
and $1.1 million dollars in federal receipts. The balance
is from the General Fund, general fund match or the Disaster
Relief Fund.
(Tape Change, HFC 97-44, Side 2)
Mr. Bus agreed that the supplemental request for this
component could be reduced by $585 thousand dollars. The FY
98 operating budget would be short by $585 thousand dollars
if the supplemental request is reduced. Co-Chair Hanley
noted that it is hard to ascertain actual expenditures. He
observed that the Legislature's intent is to not provide
funding in one fiscal year to be spent in another fiscal
year. He spoke in support of reducing the request by $585
thousand dollars and adding this amount into the FY 98
operating budget base. Discussion ensued regarding funding
for Division of Emergency Services. He clarified that there
is no request for FY 98 funding to the Disaster Relief Fund.
Co-Chair Hanley summarized that if the request is reduced
that a general fund appropriation to the Disaster Relief
Fund would be needed to cover the inter-agency receipt. Mr.
Bus added that no funding is available from old
appropriations.
DEPARTMENT OF CORRECTIONS
Section 4(a)
$632 thousand dollars - Fairbanks Correctional
6
Center
Mr. Reeves explained that this request would fund a
replacement boiler at the Fairbanks Correctional Center. He
read a memorandum from Ted Kinney, Facilities Manager II to
Commissioner Pugh, dated 1/28/97 (copy on file). The
memorandum gives a brief history of the boiler.
Mr. Reeves clarified that the boiler cannot be maintained
through further welding. The boiler will be condemned if it
breaks again. Phase one would replace the boiler that heats
the domestic hot water system. Phase two would replace the
two boilers that provide heat for the system. Phase one was
funded by a consolidated repair and maintenance capital
request in FY 95. This would complete the project.
Co-Chair Therriault asked if the project had been submitted
as part of the Department's capital request. Mr. Reeves
noted that it is in the FY 98 capital request. The
Institution felt that boiler would not last that long. It
would have been on the Governors' FY 98 capital request.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Section 4(b)
$1,247.4 million dollars - McLaughlin/ Fairbanks Youth
Centers
JANET CLARK, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that this
is a capital request that was included in the supplemental
due to its urgent nature. She noted that the McLaughlin
Youth Center was opened in Anchorage in 1968. It is the
State's largest youth center, with a capacity of 150 beds.
It is currently at over 190. It peaked at 199 in February.
The Fairbanks Youth Center was built in 1981. It has a
capacity of 40 beds. Approximately $860 thousand dollars
would be spent for McLaughlin and $390 thousand dollars for
Fairbanks. She showed aerial photographs of the facilities
noting the lack of security measures.
Ms. Clark recounted attempts to break inmates out of the
facilities and drive-by-shootings. She reiterated that both
facilities are over capacity.
Ms. Clark stated that a security consultant performed a
complete analysis of security problems at both facilities.
The Department has a confidential report that is available
to legislators. She observed that if the supplemental
request is approved the Department will begin exterior work
this summer.
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In response to a question by Co-Chair Hanley, Ms. Clark
noted that the request is a capital project.
In response to a question by Co-Chair Therriault, Ms. Clark
stated that the consultant's report has been paid. The cost
to the Department was $10.0 thousand dollars. She
acknowledged that a small amount of design work will be
needed from the Department of Transportation and Public
Facilities. The report recommended fencing material, close
circuit television, gates, and locating barriers between the
roadway and facility.
SCOTT CORSTNAGE, MCLAUGHLIN YOUTH CENTER testified via the
teleconference network. He echoed remarks by Ms. Clark.
GREGG THOMPSON, FAIRBANKS YOUTH CENTER testified via the
teleconference network. He underscored that there is a new
level of teenage violence. The facility is at 150 percent
capacity. He maintained that the security measures
recommended are needed. Staff has their hands full paying
attention to overcrowded conditions.
Section 4(c)
$200 thousand dollars - Emergency Communication
Equipment
Ms. Clark noted that the request is based on a crisis that
has developed for emergency communication equipment on rural
highways. In many areas there is no radio coverage. In
other areas there are breakdowns occurring.
MARK JOHNSON, CHIEF, COMMUNITY HEALTH AND EMERGENCY MEDICAL
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES noted
that the problem has been increasing. The Department
supports voluntary ambulance services in rural Alaska.
There are a number of areas were the systems are 15 to 20
years old and breaking down with increasing frequency. He
maintained that a life-threatening situation is occurring
with increased volume of traffic and ambulance responses.
The Department works with the Division of Emergency
Services, Department of Administration, and the Emergency
Communications Subcommittee of the State Telecommunications
Information Council. He observed that it would be more
costly to fix all existing problems. He stressed that the
request would provide a good start to address the most
urgent priorities.
In response to a question by Co-Chair Hanley, Mr. Johnson
clarified that $3 million dollars is request over 6 years to
replace the entire system and expand coverage to areas not
8
already covered. The Federal Communications Commission
requires that all 2-way radios in the UHF and VHF bands must
migrate to narrow band frequencies, by January 1, 2005.
Most of the State's radio systems are in these bands. He
assumed it would be easier for urban areas to replace these
systems. He stressed that volunteers will not be able to
afford the conversion. He added that the backbone system
will also have to be replaced to meet these requirements.
All new equipment has to meet the new standard. There is
equipment available that can interface with the old and new
standards simultaneously, to allow a phase-in of the new
equipment. The most urgent problems would be addressed by
the $200 thousand dollars request.
Mr. Johnson discussed alternative solutions. He noted that
mobile satellite technology was effective in 3 out of 5
pilot tests. He recounted a crash in Eagle, Alaska that
suffered from the lack of communication.
Section 4(b)
$1,247.4 million dollars - McLaughlin/ Fairbanks Youth
Centers
In response to a question by Representative Kohring, Ms.
Clark noted that the Department would go to competitive bid
for any purchases.
Representative Kelly questioned how much of Fairbanks's
excess capacity is due to the Nome facility closure. Ms.
Clark clarified that the youth facilities have a detention
unit and a long-term unit. The detention unit is where the
overcrowding is occurring. She explained that all the beds
at the Nome Youth Facility were treatment beds. She stated
that overcrowding is caused, in part, by a statewide lack of
treatment beds. She observed that the Johnson Youth Center
has an eight bed capacity. There are currently 26 kids at
the Johnson Youth Center. The Nome Youth Facility costs $1
million dollars to operate annually.
DONIS MORIS, MCLAUGHLIN YOUTH CENTER testified via the
teleconference network. She observed that the Nome Youth
Facility is still being used as a short-term detention
facility. Ms. Clark noted that the Nome Youth Facility has
nine beds. It is currently being used for emergency
detention. It costs approximately $350 - $400 thousand
dollars to run the facility for short-term emergency
detention. Representative Kelly ascertained that there are
kids in detention beds that belong in treatment beds.
Section 5(a)
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$939 thousand dollars - Adult Public Assistance
Ms. Clark noted that section 5, subsections (a) - (d) are
supplemental operating requests.
Ms. Clark noted that Adult Public Assistance (APA) provides
financial assistance to approximately 11,500 people per
month. There are approximately 4,300 elderly, 7,100
disabled, and 100 blind individuals receiving assistance.
The program is closely linked to the federal Supplemental
Security Income (SSI) program. She observed that the
caseload has remained stable. There has been a caseload
growth of 7 to 9.1 percent, since 1992. The Department
requested a 6 percent growth in caseload for the program.
The Legislature approved a 2 percent growth rate, and
challenged the Department to reduce costs. The payment
schedule is set in statute. The cost of the program is
driven by caseload. She noted that there have been federal
changes to the SSI program. Approximately 300 persons
diagnosed with drug and alcohol abuse have been eliminated
from the program. Of these, those that qualify for Medicaid
and APA were given an extra 120 days to receive their
redetermination. Therefore, reductions from the elimination
of these recipients will not occur until May or June 1997.
Taking this into account, the Department is at its projected
amount. She stated that the request reflects the high range
projection. The mid range projection estimates that $800
thousand dollars will be needed. The low range projection
shows that less than $500 thousand dollars would be needed.
A new projection for Aid to Families with Dependent Children
(AFDC) shows that there may be excess funds in this program
that can be used to offset the request.
In response to a question by Co-Chair Hanley, Ms. Clark
noted that the Governor's request includes a $1.2 million
dollar reduction for the elimination of the 300 recipients
diagnosed with alcohol and drug abuse problems. The
Governor's FY 98 request equals the FY 97 authorized amount
with the addition of the supplemental request and the
reduction for the 300 persons that were eliminated.
Section 5(b)
$10 million dollars - Indian Health Service
Ms. Clark noted that this component is 100 percent federally
funded. The component pays for Medicaid recipients that use
Indian Health Service facilities. In FY 96, the federal
payment rate was doubled. The Department did not budget
enough to cover the rate increase. There has also been
increased utilization of this component. She noted that the
Department's strategy for long-term cost containment is to
10
look at better utilization of Indian Health Service
facilities.
Co-Chair Hanley asked how much of the request is due to
increased utilization and how much is due to the rate
increase. He questioned the reduction to state Medicaid
costs due to utilization of this component. Ms. Clark
clarified that persons paid from this component must be
Medicaid eligible.
Section 5(c)
$1 million dollars - Foster Care
Ms. Clark noted that statutes require the Department to
arrange for the care of every child committed to its
custody, and to pay for the cost necessary to insure the
adequate care of children. "Foster care is not the program
for kids that have committed crimes, but for kids who are
victims, and have suffered abuse or neglect." She pointed
out the relationship of the program to subsidized adoptions.
She explained that the Governor's FY 97 request was reduced
by $200 thousand dollars. She observed that the Department
has been providing care for high cost children at private
psychiatric hospitals in Anchorage. Most of the money goes
to foster care parents. The component also funds the Alaska
Youth Initiative Program, contracts, and kids in the custody
of the Division of Family and Youth Services who have
suffered abuse and neglect.
(Tape Change, HFC 97-45, Side 1)
Ms. Clark detailed a typical high cost case under the
Department's care. "Frank" is currently residing in a
private psychiatric hospital. Costs at private psychiatric
hospitals can be $1 thousand dollars a day. The Department
has negotiated a rate of $350 dollars a day. Foster care
runs between $30 and $40 dollars a day. A facility in
Montana has been located to care for children like "Frank".
She observed that there has been an increase in high cost
kids.
Co-Chair Hanley asked for a break down of foster care and
residential care costs.
Representative Kelly referred to the Fahrenkamp Center. He
noted that many of the children in foster care have mental
health problems. He asked why kids with mental health
diagnosis are not treated at the Fahrenkamp Center. Ms.
Clark noted that many children that are not determined to be
mentally ill have severe behavior problems. She stated that
the system, of residential diagnosis and treatment centers
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for youth, envisioned centers throughout the state. The
Department is looking for alternatives to high cost
psychiatric care.
Representative Kelly noted that some delinquent children are
in foster care. Ms. Clark referred to the federal Title IV-
E program. She observed that the State receives
approximately $700 thousand dollars for delinquent children
from this program. The State receives approximately $7
million dollars for child abuse and neglect cases. She
noted that foster care costs approximately $10.8 million
dollars. There are approximately $1.3 million dollars in
federal funds. She clarified that the $7 million dollars
from the Title IV-E program is spread throughout the
Division of Family and Youth Services.
Co-Chair Hanley summarized that approval of the supplemental
request would result in $168 thousand dollars over the
Governor's FY 98 request for Foster Care. Ms. Clark
explained that the Department had anticipated that there
would be alternatives in place for care of high cost kids.
She anticipated that the Department can live within the FY
98 request for Foster Care. She emphasized that other
programs will take the pressure off of Foster Care.
Section 5(d)
$685 thousand dollars - McLaughlin Youth Center
Ms. Clark observed that staff needs have risen due to
increased occupancy. She emphasized that overtime costs
have been reduced. On call staff have filled vacant
positions. Some of the request is for increased
commodities.
Co-Chair Hanley noted that the FY 97 authorized amount is
$8.865 million dollars. The Governor's FY 98 request is
$8.899 million dollars. He observed that FY 98 will be $650
thousand dollars short of the FY 97 total, with the addition
of the supplemental. Ms. Clark noted that the Governor's FY
98 request contains some diversion programs to try to limit
overcrowding of youth facilities. A budget amendment has
been requested.
Power Cost Equalization (PCE)
REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
stated that the Administration is requesting an amendment of
$1.5 million dollars for PCE. The Power Cost Equalization
program will be at 85 percent of full funding. The current
PCE funding level is at $17 million dollars. If the request
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is not funded, PCE will be prorated at a rate of 67 percent
of full funding. He added that an amendment has been
submitted to the Office of Management and Budget for a $2
million dollar increment in the FY 98 operating budget.
Representative Foster questioned why the request was
submitted with the Department's original request. He
emphasized that it is more difficult to add an amendment
than to retain funding. Mr. Henderson assured him that the
request was submitted as soon as the Division of Energy
received the information. He noted that there was an
increase in fuel rates.
Co-Chair Hanley asked if the power consumption rates have
changed.
PERCY FRISBY, DIRECTOR, DIVISION OF ENERGY, DEPARTMENT OF
COMMUNITY AND REGIONAL AFFAIRS explained that the Department
discovered when they performed their mid year analysis that
problems with low water, late fuel deliveries, and storms
had increased fuel costs. He observed that consumption has
increases by approximately 2 percent per year.
Co-Chair Hanley asked why the funding source is the General
Fund, instead of the Power Cost Equalization Fund. Mr.
Henderson observed that the Power Cost Equalization Fund is
estimated to run out in the year 2000.
Representative Foster reiterated his disappointment that the
request was not submitted in the original legislation.
Representative Kohring emphasized that alternative energy
sources need to be explored.
Co-Chair Hanley summarized that the FY 98 request with the
addition of a $2 million dollar amendment would be $500
thousand dollars more than the FY 97 authorized and
supplemental request. He noted that the price of oil is
dropping. He asked if the estimate is based on current
prices. Mr. Henderson clarified that estimates are based on
Alaska Public Utilities Commission (APUC) rates. The
request is at 85 percent of the full funding level.
BOB FOOTE, UNALAKLETT testified in support of the request.
He maintained that rural residents should not have to plead
their case for PCE funding every year. He emphasized that
the program is a tremendous help for the elderly. He
maintained that the reduction of state support to rural
areas threatens the existence of small villages.
WALTER SAMPSON, ALASKA VILLAGE ELECTRIC COOPERATIVE (AVEC)
testified in support of the request. He noted that AVEC
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represents 50 communities. He emphasized that AVEC is
attempting to provide and improve service. He observed that
rural residents will be hurt by welfare reform. He stressed
that AVEC will be forced to reduce service if funding is not
provided. He observed that oil delivered by barge costs
$1.08 dollars a gallon. Oil delivered by air costs $2.14
dollars a gallon. He maintained that Power Cost
Equalization is not a subsidy program, but an equalization
program. He observed that AVEC is considering connecting
communities through interties to reduce costs.
BRENT PETRIE, ILIAMNA, NEWHALEN, NONDALTON ELECTRIC
COOPERATIVE
spoke in support of the request. He observed that fuel
delivered in September 1995, cost $1.09 dollars per gallon.
The same fuel, delivered today, costs $1.77 dollars per
gallon.
GARY KESSINGER, MIDDLE KUSKOWIN ELECTRIC noted that their
cooperative has the highest PCE rate, the lowest income and
the highest use. His users will have a 7.3 cent increase
per kilowatt if the amendment is not approved. He
emphasized that the rural economic environment is fragile.
BRAD REEVE, GENERAL MANAGER, KOTZEBUE ELECTRIC COOPERATIVE
spoke in support of the amendment. He pointed out that some
of the small villages do not have the economy to keep water
and sewage systems going. He emphasized that they are
putting up the first utility grade wind turbine in the
State. They are working with AVEC to provide waste heat and
wind power that will allow a reduction of diesel use.
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Section 4(d)
$100 thousand dollars - Radio Equipment, DMVA
Mr. Bus explained that the request will allow the purchase
of emergency radio equipment. He pointed to problems that
occurred during the Miller's Reach Fire. He noted that the
request will fund the purchase of a point to point portable
radio.
Co-Chair Hanley noted that a whole new system would cost $35
million dollars.
JIM HARPRING, DIVISION OF EMERGENCY SERVICES spoke in
support of the request. The request will allow coordination
of responding agencies. He observed that a plan is being
developed to address the overall problems.
14
(Tape Change, HFC 97-45, Side 2)
Mr. Harpring clarified that the request will assure that
there is 800 MHz capability with the Municipality of
Anchorage's trunking base station and the federal
government's 400 MHz system.
In response to a question by Co-Chair Therriault, Mr.
Harpring noted that there is a federal mandate for
conversion by the year 2006.
Section 7
$220 thousand dollars - Emergency Alert System
Mr. Bus explained that this request would provide funding
for the Emergency Alert System (EAS). The EAS system is a
federally mandated system to alert every community.
Mr. Bus clarified that this item was not in the original FY
97 capital budget request. The Office of Management and
Budget tried to added the request as an amendment.
Mr. Harpring stated that the request is a "turn-key"
operation. The program was federally mandated to be
implemented by January 1, 1997. He explained that EAS will
replace the old Emergency Broadcast System. Currently,
there is no system that would allow a statewide alert.
ADJOURNMENT
The meeting adjourned at 4:07 p.m.
15
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