Legislature(1999 - 2000)
01/19/2000 01:39 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT(S): Review of Departments Accomplishments
Department of Education and Early Development
Alaska Aerospace Development Corporation
Alaska Railroad Corporation
The following overview was taken in log note format. Tapes and
handouts will be on file with the House Finance Committee through the
21st Legislative Session, contact 465-2156. After the 21st Legislative
Session they will be available through the Legislative Library at 465-
3808.
Time Meeting Convened: 1:39 p.m.
Tape(s): HFC 00 - 11, Side 1
HFC 00 - 11, Side 2
HFC 00 - 12, Side 1
HFC 00 - 12, Side 2
PRESENT:
X
Representative G. Davis
absent
Co-Chair Therriault
X
Representative Foster
X
Co-Chair Mulder
X
Representative Grussendorf
X
Vice Chair Bunde
X
Representative Moses
X
Representative Austerman
X
Representative Phillips
absent
Representative J. Davies
X
Representative Williams
ALSO PRESENT: Pat Ladner, Executive Director, Alaska Aerospace
Development Corporation (AADC), Department of Community and Economic
Development; Laura Gould, Alaska Aerospace Development Corporation
(AADC), Department of Community and Economic Development; Richard
Cross, Commissioner, Department of Education and Early Development;
Karen Rehfeld, Director, Division of Education Support Services,
Department of Education and Early Development; Governor Bill
Sheffield, President, Alaska Railroad Corporation; Yvonne Chase,
Director, Division of Early Development, Department of Education and
Early Development; Bruce Johnson, Deputy Director, Department of
Education and Early Development; Representative John Coghill Jr.;
Jerome (Jerry) Anderson, Alaska Railroad Corporation, Community and
Economic Development.
LOG
SPEAKER
DISCUSSION
TAPE HFC 00 - 11
SIDE 1
000
Co-Chair Mulder
Convened the House Finance Committee
meeting at 1:39 p.m.
110
RICHARD CROSS,
COMMISSIONER,
DEPARTMENT OF
EDUCATION AND EARLY
DEVELOPMENT
Noted that the State Board of Education
plays a role in guiding the Department of
Education and Early Development.
Emphasized that there needs to be
coordination of missions with the Board
of Education to assure that they are
consistent.
387
Commissioner Cross
Noted that the first graduation
qualification exams would be given in 47
days.
432
Vice Chair Bunde
Questioned how long the standards exam
has been under construction.
469
Commissioner Cross
Acknowledged that work on standards has
been under way for 10-12 years.
Emphasized that there is agreement on the
items that children need to know.
Students will be expected to demonstrate
that they have the skills they need to be
successful.
610
Vice Chair Bunde
Pointed out that some people think that
the exams are being sprung on the
students.
641
Representative
Phillips
Recounted a letter she received from a
high school student requesting funding
for education. It that was so poorly
written that it was embarrassing.
711
Representative
Austerman
Noted that he received two high school
annuals from a school in his district. He
indicated that the quality of the writing
was poor.
796
Commissioner Cross
Stressed that standards are designed to
assure that students can express
themselves appropriately. Noted that we
will need to work together to use the
results of the exams to assure that the
standards are accomplished. Educators
need to shift focus off the tests and on
to the real benefits that they are
intended to achieve. The tests are the
best opportunity to focus on the common
agenda to achieve performance.
1001
Commissioner Cross
Important to accept responsibility but
give up ownership. Emphasized the need to
build support for the benefit of the
students and recognize that there will be
problems.
1076
Commissioner Cross
The department is actively involved in
trying to build support. People are aware
of what is going on. Anchorage has put
practice tests for the high school
graduation-qualifying test on the
internet.
1194
Commissioner Cross
The test contains items that everyone
thinks are important, like balancing a
checkbook.
1218
Commissioner Cross
Noted that there is support for the goal
of achieving standards. Stressed that
they are at an important point in the
process. The test is not the final step.
1275
BRUCE JOHNSON,
DEPUTY COMMISSIONER,
DEPARTMENT OF
EDUCATION AND EARLY
DEVELOPMENT
Summarized accomplishments relating to
the Quality Schools Initiative. Alaskans
have done everything. Performance
standards have been refined for math,
reading and writing. Developmental
profiles were administered to
kindergartens throughout the state.
Alaskans developed the assessment high
school qualifying exam and benchmark
exams. Standards were adjusted to be fair
to all Alaskans. They were field-tested
in Alaska. The questions that were
considered fair across the state were
used. There are enough questions for 3
tests. Books will be sent to school
districts soon.
1392
Mr. Johnson
The department conducted training
workshops last December.
1456
Mr. Johnson
The department is making an effort to
assure that people have a chance to talk
about assessments. Assessments will be
administered in March. They are on time
examinations. Students cannot mix during
or between testing.
1522
Mr. Johnson
Discussed the next milestone, 63 Alaskans
will be brought together to determine the
cut-line or passing score. Benchmark
decisions will also be made by a group of
Alaskans and will come out in the fall.
1565
Co-Chair Mulder
Clarified that the cut-line will not be
known prior to the exam.
1580
Mr. Johnson
Explained "bookmaking", which will be
used to determine the cut-line or pass
score. The test questions will be ordered
from the easiest to the hardest based on
test scores. The last question will be
the one that students found to be the
most difficult (the fewest correct
answers). The bookmarking group will not
know the percentage of students that
answered a question correctly. They will
go through the answers and decide where
the cut-line should be drawn.
1666
Representative
Phillips
Expressed concern with the bookmarking
approach. She felt that a standard should
be set.
1699
Co-Chair Mulder
Questioned if the objective is to have 70
percent of the children pass. He felt the
lack of a marker could screw the
objective.
1724
Mr. Johnson
Reiterated that the group will evaluate
the questions to decide at what level the
standard should be set based on what they
think a high school graduate should know.
1764
Representative
Williams
Expressed concern with the bookmarking
system.
1813
Representative
Austerman
Expressed confusion regarding the
bookmarking approach.
1821
Commissioner Cross
In response to a question by
Representative Williams, Commissioner
Cross discussed the recent national grade
assessment of the state of Alaska. He
maintained that the state received a poor
grade due to a misunderstanding of the
state's system. He explained that one of
the things that is being worked on is the
appropriate way to state a measure. The
national group felt that the state's
standards (mission) were too vague. What
they did not understand is that there is
another level of standards (performance
measures).
1934
Commissioner Cross
Discussed bookmarking. He noted the
difference between percentages and
bookmarking. Percentages are tailored so
that there is an appropriate scale for
the level of the students being taught.
Bookmarkers will not determine how many
students pass or fail. What they will
determine is what is an acceptable level
on a passing scale, without knowing how
many will pass or fail.
2105
Mr. Johnson
In response to a question by Vice Chair
Bunde, Mr. Johnson explained that a
bookmark would establish a bar rather
than a curve.
2114
Vice Chair Bunde
Stated that he is not concern that
teachers will test to the test.
2160
Commissioner Cross
Acknowledged that there is nothing wrong
with teaching to the test if the test is
made up of the items that students should
understand.
2193
REPRESENTATIVE JOHN
COGHILL
Asked if there is a comparison with
national or international exams.
2290
Mr. Johnson
Responded that there is no national or
international comparison. The tests are
uniquely Alaskan, but he assured the
Committee that the tests are as higher or
higher than other standard tests.
2229
Representative
Foster
Questioned what will be done for students
that do not pass the exams.
2286
Commissioner Cross
Emphasized that education is delivered
through the districts and that the
department is unable to impose results.
2313
Commissioner Cross
Accountability lies first with the
student. Quality initiatives rate schools
and how well they are improving the
performance of their students. The
department plans to bring districts
together at the end of September to share
results and discuss strategies.
TAPE CHANGE, HFC 00
- 11, SIDE 2
92
Representative
Grussendorf
Suggested that there are more people that
can land a plane than can pass the test.
Asked if there should be a horizontal
line before a vertical line. Expressed
concern that standards are going to be
set before they are sure of their
instruments.
213
Commissioner Cross
Pointed out that if there is a high level
of certificates of attendance instead of
diplomas the department will have failed.
Maintained that the standards exist.
322
Mr. Johnson
Stressed that the standards have been
established. Emphasized The point is
within the standard how high do we want
the student to achieve before graduation.
There are degrees of difficulty (within
multiplication problems how high should
the student perform). Should students be
able to multiply 2 place, 3 place or more
numbers.
422
Representative
Foster
Pointed out difficulties that rural
students have. Many do not have access to
equipment or laboratories needed for
chemistry or other subjects. Expressed
concern that they will not have the
teaching facilities or teachers to meet
their needs. Emphasized that rural
students cannot compete with Anchorage
and Fairbanks students.
586
Commissioner Cross
Acknowledged that there are tough issues.
Stressed that the skills that are being
tested are skills that the students need
to have regardless of where they live. If
the students aren't receiving the skills
then the department is going to have to
figure a way to get them to the students.
Emphasized the need for benchmarks.
747
Vice Chair Bunde
Observed that many legislators have
GED's.
787
Representative
Williams
Questioned what is being fixed by the
standards.
917
Representative
Coghill
Pointed out that there are a lot of
students of military families in the
state's system.
950
Representative
Austerman
Agreed that the standards should be the
same for all students.
1020
Commissioner Cross
In response to a question by
Representative Austerman, Commissioner
Cross noted that 32 percent of the
state's students are where 25 percent of
the nation's students are.
ALASKA RAILROAD CORPORATION
1328
GOVERNOR BILL
SHEFFIELD,
PRESIDENT, ALASKA
RAILROAD CORPORATION
Stated that the Alaska Railroad
corporation (ARRC) is a professionally
run, self-sustaining, full service
railroad serving ports and communities
from the Gulf and Alaska to Fairbanks.
It has been owned by the State of Alaska
since 1985, the railroad is overseen by a
seven member Board of Directors appointed
by the Governor. Referred to derailments
that resulted in oil spills. He spoke to
the preventative actions that the
railroad has undertaken. There has been
a letter sent that detailed all the
changes that the railroad has undertaken.
Next Tuesday, there will be a full report
available regarding the operations of the
railroad.
1531
Governor Sheffield
Noted that the cabooses are back on the
railroad for positive train control.
1587
Co-Chair Mulder
Asked for a statement of the Alaska
Railroad Corporation's mission.
1596
Governor Sheffield
The mission is defined as providing safe,
high quality transportation services for
the State of Alaska.
1623
Governor Sheffield
Added that the mission is to provide safe
transportation to visitors and residents
of the state and develop and foster long
term growth in the state. He stressed
that, for the investment, the state
receives increased jobs and improved
infrastructure.
1680
Governor Sheffield
Outlined the state's investment. The
railroad is a tax-exempt entity. It is
the only full service rail in the nation
operating passenger and freight service.
1755
Governor Sheffield
Stressed the importance of the railroad
to provide safe transportation and foster
economic growth. The railroad has not
required state funds since it was
purchased. Railroad employees are not on
the state's payroll or retirement system.
1832
Governor Sheffield
The railroad generates approximately $9
million dollars in annual income.
1883
Governor Sheffield
An ongoing capital investment is needed
to take advantage of improved technology.
1910
Governor Sheffield
In 1989, an audit recommended the
revamping of the Alaska Railroad
Corporation's safety program. The
railroad was able to reduce their rate of
injuries in the last half of 1999.
1977
Governor Sheffield
Reviewed financial indicators. Profits go
back into the railroad to increase its
operation. The railroad increased in
value from $22.3 million in 1984 to
$101.2 million dollars in 1999. Ridership
has grown. Since 1995, the railroad has
shipped 2.76 million metric tons of coal
in the last year.
2055
Governor Sheffield
The railroad has approximately 650
employees in 2000. The railroad pays
$36.2 million dollars in wages.
2085
Governor Sheffield
Noted capital improvements. Fixed assets
have increased to over $180 million
dollars. The railroad receives $10
million dollars a year from Congress for
ties and other expenses.
2113
Governor Sheffield
When the state purchased the Alaska
Railroad Corporation it assured that
passenger service would be continued. A
private owner would only operate
profitable lines.
2152
Governor Sheffield
Reiterated that the railroad is tax
exempt entity. He emphasized the
importance of the service where people
have no other transportation.
2210
Co-Chair Mulder
Pointed out that it costs approximately
$2,200 per person for rail service in one
area of Alaska during the winter.
Stressed the need to evaluate the cost.
2263
Governor Sheffield
Noted that there is no way to charge
enough to make it economical in some
areas.
2282
Co-Chair Mulder
Observed that the House Finance Committee
has to make policy decisions and set
direction.
2302
Vice Chair Bunde
Noted that some of the individuals that
live in remote areas (where the railroad
operates a deficit) are among those that
cry the loudest that they are not
receiving state services and should not
pay taxes.
TAPE CHANGE, HFC 00
- 12, SIDE 1
51
Co-Chair Mulder
Observed that the federal government is
providing a large amount for railroad
maintenance.
120
Governor Sheffield
Responded that 120,000 railroad ties can
be bought with the federal funding the
railroad receives. In two to three years
the Alaska Railroad Corporation will only
require 35,000 replacement ties a year.
196
Governor Sheffield
With the savings the railroad can do
other maintenance and buy more
locomotives. New locomotives are more
powerful and will save money by allowing
trains to operate with fewer locomotives.
He discussed other efficiencies that can
occur through further investments. All
the money made in a year goes into the
next summer's capital budget to make the
railroad safer and more efficient.
435
Representative
Austerman
Asked about the Anchorage railroad
station expansions.
448
Governor Sheffield
Noted that the Anchorage railroad
expansion was built to increase the
number of passengers using the service.
549
Governor Sheffield
Discussed the plan to increase tourism's
use of the rail. He estimated that $2
million dollars could be gained through
the Anchorage expansion.
608
Governor Sheffield
Noted that there is a chance that coal
contracts could be lost. The cash
generated from coal contracts have
decreased. Passenger increases will help
to make up for the loss of revenue from
coal.
709
Representative
Austerman
Asked the cost to operate the Anchorage
station.
731
Governor Sheffield
Stated that the cost would be about $300
thousand dollars a year.
815
Governor Sheffield
In response to a question by
Representative Grussendorf, Governor
Sheffield noted that severe weather and
bad track conditions caused a derailment
near Hurricane.
962
Governor Sheffield
Discussed cabooses. He noted that
cabooses help when the train has to back
out of sight and assist in switches
1083
Governor Sheffield
In response to a question by
Representative Phillips, Governor
Sheffield noted that the railroad uses a
line of credit of up to $10 million
dollars to address problems.
1116
Representative
Phillips
Observed that there is an obligation to
keep the deep-water ports open in Seward.
1170
Representative
Phillips
Discussed other obligations to the
federal government. Noted that Whittier
also needs to stay open.
1184
Co-Chair Mulder
Asked Representative Phillips to work on
a mission statement.
1201
Governor Sheffield
In response to a question by
Representative Foster, Governor Sheffield
noted that the derailment has cost $3
million dollars so far and may cost up to
$5.5 million dollars.
1231
Representative
Foster
Noted that the Alaska Railroad
Corporation is seeking legislative
changes.
1281
Governor Sheffield
Discussed legislation relating to an
agreement with the city of Whittier. He
added that the railroad has been busy
with land trades. There is no money
involved.
1354
Co-Chair Mulder
Asked if legislation has been drafted.
1366
Governor Sheffield
Stated that the legislation has not been
drafted.
1445
Vice Chair Bunde
Asked what measures are being taken for
spill response prevention.
1459
Governor Sheffield
Noted trains contain spill response
equipment. They are working to increase
spill response.
1508
Vice Chair Bunde
Referred to the railroad dock in Seward.
Asked how rates will compare to those
charged by the city of Seward.
1523
Governor Sheffield
Did not know the city's rate. Noted that
tariffs have not been increased in many
years. Railroad tariffs will be increased
this year. Acknowledged competition with
the city of Seward.
1641
Governor Sheffield
Spoke to hauling freight. Discussed
railroad transportation into Canada and
mining in the Yukon Territory.
1750
Co-Chair Mulder
Questioned if the state could do a bond
issue for continuation of the railroad to
the Arctic.
1763
Governor Sheffield
No, not through revenue bonds.
1772
Co-Chair Mulder
Asked if there would be people to buy
those bonds.
1781
Governor Sheffield
Stated that work has not been done at
this point.
1794
JEROME (JERRY)
ANDERSON, ALASKA
RAILROAD
CORPORATION,
COMMUNITY AND
ECONOMIC DEVELOPMENT
Stated that the state could bond if there
was a revenue stream. It would not tie
into the Alaska Railroad, as we know it
today.
1841
Governor Sheffield
Stressed the value of coal resources and
the need for access to that resource.
1856
Representative
Foster
Noted that the coal north of Kotzebue
could supply the world for 400 years. He
spoke to the idea of private ownership of
the railroad. He asked if the
privatization committee had any
suggestions on privatizing the railroad.
1912
Governor Sheffield
Stated that he was waiting for that data
to be released.
1924
Co-Chair Mulder
Asked that the safety issues on
realignment in Fairbanks and limits of
visibility be addressed for Rep. Coghill.
1945
Governor Sheffield
Stated that there was a plan to address
those concerns. He spoke to the route
outside of Ft. Wainwright, which is a $22
million dollar project, supported by
Senator Stevens. He commented on a new
tracking system for hauling missiles.
Funding for these projects are being
considered and would solve the problem of
the refinery.
2056
Governor Sheffield
Stated that the best thing that the
legislature could do would be to approve
the land trade negotiations.
2100
Co-Chair Mulder
Stressed that he does not want to
jeopardize the future of Ft. Richardson
or hold up that base. Expressed concern
that the work continues. Observed that
there can be no development along Cluney
Lake.
2137
Governor Sheffield
Agreed that should not be a decision that
the legislature should have to make. The
railroad got caught in the middle of that
concern.
2165
Representative
Foster
Spoke to the long-term vision of the
railroad.
2189
Co-Chair Mulder
Asked when the state could anticipate a
dividend from the railroad. Stated that
he would like to see a dividend of
approximately $5 million dollars a year
from the railroad.
2212
Governor Sheffield
Replied that the railroad would feel good
if they were in a position to pay a
dividend. The goal is to establish a
time within the next year of when payback
can be expected. He added that the
railroad does a lot to help
municipalities.
TAPE HFC 00 - 12,
SIDE 2
ALASKA AEROSPACE DEVELOPMENT CORPORATION
000
PAT LADNER,
EXECUTIVE DIRECTOR,
ALASKA AEROSPACE
DEVELOPMENT
CORPORATION (AADC),
DEPARTMENT OF
COMMUNITY AND
ECONOMIC DEVELOPMENT
Noted that the mission of the Alaska
Aerospace Development Corporation is to
promote aerospace-related economic growth
and develop corresponding technologies
and support services.
Discussed programs and contributions to
the mission. The Kodiak Launch Complex
(KLC): a state-owned, AADC managed rocket
launch complex developed to support both
commercial and government launch
activity.
Fairbanks satellite ground stations: an
AADC effort to facilitate private
development of satellite ground stations
for polar orbiting satellites.
Discussed the Challenge Learning Center
in Kenai. He estimated that the Center
would be operational in the next summer.
224
Mr. Ladner
Noted that their existing customers
include Lockheed Martin Corporation, the
US Air Force and US Army.
While not direct customers of AADC, the
agency has worked with the following
companies to develop ground stations in
Fairbanks: Los Alamos Laboratories, Space
Imaging Inc., the US Air Force
224
Mr. Ladner
Discussed performance measures.
Measure: Increase the number of launches
from the Kodiak Launch Complex (KLC) to
at least two in FY01.
Demonstrate economic impact from KLC
launch activities of at least $2 million
in FY01.
Continue to work with industry to locate
more satellite ground stations in the
Fairbanks area.
260
Mr. Ladner
AADC is targeting two to three launches
for FY2001, one for Lockheed Martin in
September 2000 and two government
missions in the first half of 2001.
Contract negotiations are being finalized
with Lockheed and discussions have
commenced for the two government
missions.
Mr. Ladner
Discussed the Northern Edge exercise. The
inclusion of the space aspect would
result in at least one launch from
Kodiak.
341
Mr. Ladner
Discussed a marketing/ commercialization
grant received from the Alaska Science
and Technology Foundation. The grant
would be expended over a three-year
period. The purpose of the grant is to
reach out to as many potential customers
as possible and solidify launch contracts
for the KLC. A technical marketing
component of the grant will assist in
contract development and negotiation as
well as explore KLC enhancements that
could broaden the customer base. The
launch control center is complete. It is
occupied and being used.
544
Mr. Ladner
The University of Alaska Anchorage,
Institute of Social and Economic Research
(ISER) performed an analysis of the
inaugural launch from the KLC. Based on
actual expenditures, ISER determined the
total economic effect for the state to be
$1.3 million in sales and $450,000 in
payroll. A benchmark is being developed.
598
Mr. Ladner
Discussed the Fairbanks satellite ground
stations effort. They did not have to
expend a lot of money for the five ground
stations. They are working with data
processing to assure a full product
within the state.
693
Mr. Ladner
Discussed FY99-00 Accomplishments. Noted
that there were two successful launches
from the KLC for the US Air Force prior
to the completion of the facility.
Scheduled first orbital launch from the
KLC for Lockheed Martin Corporation.
Maintained that the construction effort
has been successful. The entire system is
ready.
801
Mr. Ladner
As the construction of the KLC comes to
completion, AADC will transition the
facility to a year-round operational
mode. An aggressive marketing strategy
aimed at increasing awareness of the
facility, identifying potential customers
and solidifying launch contracts will be
implemented.
The grant process would provide a
technical director under contract to work
closely with industry.
915
Mr. Ladner
Discussed FY01 strategies/priorities, to
increase local employment opportunities
and to support aerospace activities.
Lockheed Martin Corporation is currently
working with the Chamber of Commerce. One
of the largest suppliers is working with
the community.
937
Representative
Grussendorf
Expressed a desire to see participation
in the Northern Edge exercises. He noted
that Sitka would be used.
974
Mr. Ladner
Responded that space assets played a
large role in the Gulf War. The role at
KLC would be to launch a rocket over the
ocean to simulate an enemy missile
launch.
1090
Vice Chair Bunde
Noted that there was an unsuccessful
launch and asked if it would have an
impact on the KLC.
1121
Mr. Ladner
The recent test failure will have an
impact on the development of the system.
Anticipated a major effort to retest. Did
not think it would have a major impact.
1161
Mr. Ladner
The launch complex is the first of its
kind. Finding out that this project is
bringing an awareness of Alaska. NASA is
making big plans for an up coming launch
that will bring a different view of
Alaska.
1301
Representative
Phillips
Questioned how many tests of ballistic
missiles will occur before action by the
President.
1342
Mr. Ladner
Stated that the federal government was
looking for two successful tests in a
row. The recent failure is a minor set
back.
1410
Co-Chair Mulder
Who is the contractor involved.
1424
Mr. Ladner
Boeing is the contractor. There are other
subcontractors.
1447
Co-Chair Mulder
Boeing showed an interest in utilizing
Kodiak due to its position.
1508
Mr. Ladner
Noted that Kodiak launches are realistic.
1519
Co-Chair Mulder
What efforts have been made to attract
Boeing to Kodiak?
1536
Mr. Ladner
Met with the head of Boeing two years
ago. Will brief them in the future. The
dialog is occurring.
1590
Co-Chair Mulder
Noted that Senator Stevens is
sympathetic.
1607
Representative
Austerman
Asked if there is anything the board can
do to expand other aspects of the
aerospace industry.
1629
Mr. Ladner
There is a long-range plan. The first
thing to demonstrate is that there is a
world class launch facility. The
commercial satellite industry had slowed.
They are working with a satellite builder
on a bonding issue.
1715
Vice Chair Bunde
ADJOURNMENT
The meeting adjourned at 4:37 p.m.
HOUSE FINANCE COMMITTEE
LOG NOTES
January 19, 2000
House Finance Committee 12 1/19/00
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