Legislature(2003 - 2004)
02/25/2003 01:47 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
February 25, 2003
1:47 P.M.
TAPE HFC 03 - 25, Side A
TAPE HFC 03 - 25, Side B
TAPE HFC 03 - 26, Side A
CALL TO ORDER
Co-Chair Harris called the House Finance Committee meeting
to order at 1:47 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
Representative Jim Whitaker
MEMBERS ABSENT
None
ALSO PRESENT
David Teal, Director, Legislative Finance Division; Eddy
Jeans, Manger, School Finance and Facilities Section,
Department of Education and Early Development; Janet Clarke,
Director, Division of Administrative Services, Department of
Health and Social Services; Patty Ware, Director, Division
of Juvenile Justice, Department of Health and Social
Services; Kevin Brooks, Director, Division of Administrative
Services, Department of Fish and Game; Kathryn Daughhetee,
Director, Administrative Services Division, Department of
Law; Patrick Gullufsen, Deputy Attorney General, Criminal
Division, Department of Law; Scott Nordstrand, Deputy
Attorney General, Civil Division, Department of Law; David
Marquez, Legislative Liaison, Assistant Attorney General,
Civil Division, Oil, Gas & Mining, Department of Law; John
Cramer, Director, Administrative Services, Department of
Military and Veterans Affairs; Nico Bus, Acting Director,
Division of Administrative Services, Department of Natural
Resources.
PRESENT VIA TELECONFERENCE
Jeff Jahnke, State Forester, Department of Natural
Resources, Anchorage; Sharon Young, State Recorder,
Department of Natural Resources, Anchorage; Peter Panarese,
Acting Director, Division of Parks, Department of Natural
Resources, Anchorage; Captain Howard Starbard, Director,
Division of Fish and Wildlife Protection, Department of
Public Safety, Anchorage; Roberta Carney, Division of
Emergency Services, Department of Military & Veterans
Affairs, Anchorage.
SUMMARY
HB 100 An Act making supplemental and other
appropriations; amending appropriations; and
providing for an effective date.
HB 100 was HEARD and HELD in Committee for further
consideration.
HB 110 An Act making supplemental and other
appropriations; amending appropriations; making
appropriations to capitalize funds; and providing
for an effective date.
HB 110 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 100
An Act making supplemental and other appropriations;
amending appropriations; and providing for an effective
date.
HOUSE BILL NO. 110
An Act making supplemental and other appropriations;
amending appropriations; making appropriations to
capitalize funds; and providing for an effective date.
DEPARTMENT OF EDUCATION & EARLY DEVELOPMENT
Section 5(a)
Out of State Placement educational cost increase due to
increased number of clients and increased length of
stay. $366.8
EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, clarified
that Department of Education & Early Development had
requested the funding for increased costs for out-of-State
placement for educational costs of children that are wards
of the State. The increase is due to the number of students
served.
Section 5(b)
General fund reduction due to preliminary actual for
foundation program that reconciles initial October
student count to the electronic data. ($6,728.8)
Mr. Jeans explained that there are supplemental funds
available in the foundation program. The student-counts
this past October came in lower than anticipated by the
Department, which leaves $6.7 million dollars available.
Representative Croft asked if that $6.7 million was left
from anticipated need for the operation of the normal
foundation, which would not be needed. Mr. Jeans
acknowledged that was correct and that fewer children showed
up this year than anticipated. Additionally, there was a
slight increase in impact aid, which does reduce the State
obligation.
Representative Croft questioned if that amount was not
appropriated through supplemental funding, what will happen.
Mr. Jeans understood that it would lapse to the general fund
at the end of the fiscal year. He added that he did not
know where the money would be going.
Representative Croft thought that the action "artificially"
made the supplemental look $6 million dollars less than it
really is and that it would be going for "other"
supplemental purposes.
Co-Chair Harris informed members that it could be taken off
the books for Legislative use. If nothing is done with it,
it could then be available for Legislative use.
Co-Chair Harris referenced line item 5(a) and questioned its
relationship to the Denali Kid Care program.
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, responded that
there is a relationship with Denali Kid Care. For many of
the children in the out-of-State residential psychiatric
treatment centers, they do qualify for Medicaid and Medicaid
does pay the treatment costs; however, Medicaid is
prohibited from paying their educational costs. Those costs
are a responsibility of the State.
Ms. Clarke responded to a query by Co-Chair Harris, noting
that at present time, there are 84 kids in State custody in
the out-of-State placement. Those children are in 22
different treatment facilities throughout many different
states. Most of the facilities are locked facilities.
There is limited capacity in Alaska for locked facilities.
She noted that the children that are out-of-State, are
actually staying longer on the average from last year. The
length of stay in those facilities is at least 10-12 days
longer than last year, which is adding to those costs.
Section 15(b) & ©
(b) Increase School Fund appropriation for school debt
reimbursement by amount of FY2002 cigarette tax carry
forward and increased collections.
© School construction reimbursement estimate has
decreased from $56,378.4 to $52,536.0, a reduction of
$3,842.4 needed to capitalize the debt retirement fund.
That amount plus the $2,593.9 debt retirement fund
reduction above is the amount the debt retirement fund
is overcapitalized in FY03.
Mr. Jeans noted that this year, the Department has
determined that they will not need a sum of $28 million
dollars to fully fund the debt reimbursement program. The
second piece of the request is that a determination has been
made that there is $2.5 million dollars available in the
Tobacco Tax Fund that the Department could use to offset the
general fund requirement for the debt reimbursement.
Co-Chair Harris questioned why they would want to consider
that. Mr. Jeans responded that tobacco tax revenue is
dedicated to that reimbursement and it is available.
Representative Croft pointed out that the concern is that
the Department would be using $6 million dollars in each pot
of non-general fund money to make the supplemental appear
less. He claimed that action could cut the Legislature's
options later on. Next year, much more will be needed for
the debt retirement and that 'setting aside the individual
items' will be problematic.
Representative Whitaker questioned how it could that be
problematic.
Representative Croft explained that there is $75 million
dollars of general fund spending proposed, and taking money
out of the foundation formula left over funds and taking $6
million out of debt retirement, more will be needed next
year.
Representative Whitaker interjected that since this is the
same year, the Administration recognizes that this would not
be a carry forward. He did not see this as an accounting
concern or a political problem.
Section 16(9)
Miscellaneous Claims and Stale-dated Warrants $47.50
Mr. Jeans noted that the request was for a late billing on a
copier charge.
DEPARTMENT OF FISH AND GAME
Section 16(5)
Miscellaneous Claims and Stale-dated Warrants
$3,000.00
KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF FISH AND GAME, noted that these were
miscellaneous claims and the Department has identified one
additional item for that section for another $250 dollars.
Most of the claims are for bills that were over two years
old when submitted. The Department of Law cannot pay them
paid out of the current year appropriations.
Section 17(a)(4)(B)
Ratifications: AR42100-02 (Administrative Services)
Mr. Brooks stated that the amount requested is $8.05, which
would be used for an accounting issue. The supplemental
would clean up that adjustment.
Section 17(a)(5)
Ratifications: AR 47829-03 (RS DOT/AST DET .08)
Mr. Brooks noted that the amount of the request was for
$16,047 dollars. The request was submitted after the cut-
off date.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Section 3(1) - Fast Track Supplemental
Caseload growth. Current funds projected to be fully
spent by mid-April. $271.0
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained the
request was for $271 thousand dollars for the General Relief
Assistance (GRA) program, which dates back to territorial
days. The State has paid the costs for indigent burials and
emergency assistance for the very poor individuals. The
burial part of the program has grown by 10 or more per
month.
Vice-Chair Meyer asked the total monthly number. Ms. Clarke
responded that there are nearly 42 per month. She pointed
out the General Relief Assistance chart included in members
packets. (Copy on File).
Co-Chair Harris asked if the program had been intentionally
under-funded. Ms. Clarke replied that it had had not been
under funded; the Department had not projected it correctly.
She explained that there is a growing elderly poor
population. The Department plans to look at the program to
determine if there are existing demographics associated.
Representative Hawker commented that expenditures from FY00
- FY01 were same number and then all of a sudden in FY02,
there was a 40% increase. He pointed out that the
projection for this year was consistent with that number.
He asked what had happened between FY01 and FY02 that would
such a significant increase.
Ms. Clarke responded that the Department had not looked at
that to determine if there had been a change during that
time frame.
Section 3(2)
Formula program short funding in the amount of $445.3
and caseload growth of $170.0. Current funds projected
to be fully expended in May. $615.3
Ms. Clarke noted that the request was for foster care
special needs in the amount of $615,300 dollars. The
program pays for one-time items in the foster care program.
She pointed out that the program had been 'under-funded' by
the Legislature last year. The bulk of the supplemental
funding resulted from under funding in the FY03 budget.
Representative Hawker referenced the first six-month detail
versus those projections. He advised that travel costs for
that section typically had run small numbers. However, in
September and October, those numbers increased dramatically.
He asked if any of those costs had been subject to
judgments.
Ms. Clarke responded that all of the travel expenses were
client related. The Department pays for parents to visit
children for reunification purposes, etc. She acknowledged
that the Department could always do a better job when
looking at the travel costs to make sure that they are the
most cost effective possible. She stressed that for this
program, every payment is scrutinized before it is
authorized.
Representative Hawker commended the Department on their
preparation for the Supplemental Budget request. He
reiterated that most of the requests had been well
documented, however, this section needs to have more
information provided.
Co-Chair Harris inquired if there were ever times when there
were more than one-time special needs. Ms. Clarke advised
that foster care has several different components.
· There is the base rate component which pays the
monthly foster care payment to the foster parents;
and the
· Augmented component for the very difficult special
needs child. The foster parent is then paid an
additional rate every month.
Foster care special needs are for one-time purposes. It
could be that a child has a one-time purchase for special
equipment and/or clothing. The program is about one-time
purchases of specific needs and is not a reoccurring event.
She stressed that these are not a re-occurring monthly
expense.
Section 3(3)
Formula program short funding $2,000.0 and caseload
growth in the amount of $833.3. Current funds
projected to be fully expended in April. $2,833.3
Ms. Clarke commented that the request was for the subsidized
adoption and guardianship program in the amount of $2.8
million dollars. She explained that the program provides a
subsidy for the special needs children that are adopted.
The subsidy covers the needs of those children until they
reach 18 years old. This is federal reimbursement through
the Title 40 program. Last year the request was under
funded by $2 million dollars. She stated that the program
is a success as the program pays less than foster care and
the children are getting a permanent home. Ms. Clarke
pointed out this year's program growth of 9%.
Co-Chair Harris asked if this program was related to the
'balloon project'. Ms. Clarke responded that none of this
program was funded through that project. She added that the
balloon project has helped get children permanent home
placements.
Vice-Chair Meyer assumed that the foster parents that adopt
these children do it out of love. He asked if the children
would still get adopted without these subsidies. Ms. Clarke
responded that it would be more difficult for some families
to take on the extra financial burden because many of these
kids have a lot of problems. The federal government as well
as the State government has adopted this program to
guarantee that the families are not disadvantaged by these
adoptions.
Representative Hawker advised that the program has been
short funded 5 out of the past 6 years. He noted the
indirect cost savings, as Division of Family and Youth
Services (DFYS) no longer carry the children. He asked if
there was an off set cost savings in the base rate.
Ms. Clarke acknowledged that the Department has looked at
that for savings. She noted that the Legislature cut those
projected savings out of the budget already. It was reduced
in the Governor's request from $11.3 million down to $10
million dollars.
Representative Hawker voiced concern with the projected
increase of children in the program. He noted that it had
been running approximately 9-10 children per month and then
commencing January; the projection was raised to 18 children
each month, for the remainder of the year. Ms. Clarke
pointed out that in January and February, the Department has
already had 18 new enrollees. She added that the Department
would look at the increased numbers to determine if in the
last six months, there was an increase in participation.
Representative Hawker stated that the line item had been a
substantial request in the amount of $2.8 million dollars.
He asked if there was any room to compromise on that number.
Ms. Clarke responded that the Department attempts to provide
an update on the formula programs in March to determine if
the projections are in line.
Representative Whitaker commented on the method of payment
for the program. Ms. Clarke advised that there is a
contract with the parents and that they receive a monthly
payment.
Representative Croft noticed that the Department had
attempted to indicate the amount saved from subsidized
adoption as opposed to foster care. He projected that daily
number was around 20. Ms. Clarke stated that the children
in the subsidized program are all special needs children.
The foster care program costs run about $41 dollars a day
and the subsidized adoption program costs run about $23 a
day.
Representative Croft estimated that would be about $7,000
per child, with a total savings of approximately $13 million
dollars. He asked what would be the effect be of under-
funding and then attempting to make a contract with the
parent for the special needs child. Ms. Clarke stressed
that the Legislature has always come through for this
program. The Legislature shares the goals for all children
to be placed in permanent homes. She added that it would be
a breech of contract.
Section 3(4)
Caseload growth. Current funds projected to be fully
spent by the end of May. $110.0
Ms. Clarke stated that the request was for $110 thousand
general fund dollars for old age assistance for Alaska
Longevity hold harmless. This is the program that holds
people harmless from receiving a longevity bonus, a benefit
drop from the Adult Public Assistance (APA) or the
Supplemental Security Income (SSI) components. The reality
of the request is that last year; the Department had
suggested a decrement of $232 thousand dollars. The
Legislature adopted that decrement. The program is
declining, but not as quickly as thought. She acknowledged
that this mistake was that of the Department.
Co-Chair Harris inquired about the trend the Legislature had
taken to make that decision. Ms. Clarke stated that in
FY01, the Department decreased the program by almost 11%; in
FY02, the program was decreased by 10%, and the Department
anticipated that they could decrease it in FY03 with a 11%
reduction, however, in reality, that amount turn out to be a
7% reduction.
Co-Chair Harris asked how many people qualify for that
program. Ms. Clarke responded that there are 1,137 Alaskans
that qualify.
Section 3(5)
Funds to hire superintendent and unit leader and
provide other operating funds needed to open the
facility that will be completed April 15, 2003.
$155.2
Ms. Clarke remarked that the request was for $155 thousand
dollars to allow the Department to open the new Kenai
Peninsula Youth facility. The construction will be complete
in mid April. The request would allow the facility to be
staffed so that there can be kids in the facility by July
st
1.
Co-Chair Harris asked if the request were not received at
this time, would the Department then enter it into the
normal budgeting process. Ms. Clarke acknowledged that
would be difficult given that the utility costs. She added
that it is important that there is enough security to make
sure that the facility does not get vandalized.
Vice-Chair Meyer inquired how much money would be needed for
the superintendent position. Ms. Clarke pointed out that
the backup failed to indicate that the requested amount
includes two and half months for superintendent costs and
unit leader for one full month. She indicated that the
supplemental could be decreased, while keeping the
superintendent and unit leader on while hiring the staff.
Representative Hawker advised that the request was
predicated upon opening the facility by the mid April
completion date.
In response to Representative Hawker, Ms. Clarke advised
that the Department had received appropriation for the
construction of the project two years ago. They also had
received the design and planning money before that.
Construction began this past year.
Representative Hawker asked if the anticipated completion
date for the project would be early. Ms. Clarke indicated
that had been the scheduled date for completion for quite
some time. Funds had not previously been requested for
opening the facility.
Representative Hawker found it troubling that the Department
was requesting funds to fully staff the facility at this
time. He noted that the size of the request. He asked if
there was funding available from other facilities to help
cover these costs or if employees running other facilities
could be brought in to manage this one for the initial
opening.
PATTY WARE, DIRECTOR, DIVISION OF JUVENILE JUSTICE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, responded that it
was possible that staff from other facilities might apply
for the positions of superintendent or unit leader; however,
in terms of transfer opportunities, the reality is that
someone would choose to apply for a promotion. There are
potential savings in other facilities.
Representative Stoltze commented that recruitment would not
be a problem in the Kenai area. He added that he did not
think that there was a sense of urgency for funding the
project.
Representative Chenault commented that bringing the facility
on line earlier would keep the Department from needing to
transfer juveniles to Anchorage.
TAPE HFC 03 - 25, Side B
Representative Chenault continued, that action would
encourage the Department to address the concern on the local
level. He admitted that he had not kept track of the work
being done on that facility and acknowledged that there will
be costs associated whether the project is funded or not.
Those costs will be related to the utilities.
Ms. Ware added that it takes a significant amount of time to
provide the appropriate staff training. She noted that the
some staff might transfer, however, the Department
anticipates a number of new hires from the Kenai. That will
require the Division to do a significant amount of on-site
training. Part of the request allows the Division to gear
st
up and have a trained staff by July 1.
Co-Chair Williams advised that the funding had not been
added last year as the Legislature proposed that funding
could be addressed through this supplemental. He did not
foresee any problems with that.
Section 8(a)(1)
The Division of Finance is incurring substantially more
costs for accounting and payroll data processing
charges, due to both increased usage and rate
increases, and unanticipated increased costs due to
conversion from ADABAS to DB2. (Savings in general
relief program offsets $300.0.) $400.0
Ms. Clarke spoke to the Adult Public Assistance (APA)
program request in the amount of $2.368 million dollars,
including the combined federal assistance funds that would
meet the need of that program. The program provides a cash
supplement for those that receive SSI. The State provides
about $362 dollars per month, and the feds provide
approximately $500 dollars per month up to a total of $890
dollars per month. The individuals on the program have to
be low-income elderly or permanently disabled person. The
FY03 appropriation was reduced by $1.8 million dollars last
year and part of the supplemental is due to that shortfall.
There has been consistent growth in the program and it has
averaged 5% the last ten years. She pointed out that the
disabled population seems to be growing at a faster rate
than the elderly population.
Representative Hawker commented that the program has become
a two to one ratio of disabled to elderly. He questioned
the reasons for the exponential growth in the program. Ms.
Clarke pointed out that previously, the disabled population
would have been treated in institutions. The State is now
able to serve the disabled person in their home. The
supplemental would provide cash assistance so that these
individuals can remain in their own homes or assisted living
homes. As people are living longer, some of the elderly
become disabled and then reclassified. She added that
disabled children are being identified at an earlier age and
are tending to live longer.
Representative Hawker observed that the formula is a 'matter
of statute' and added that it is the highest supplement in
the United States. He questioned if there are other areas
with lapsing funds.
Ms. Clarke responded that other programs such as General
Relief assistance, old age assistance and the welfare,
located in the same BRU, have requested supplemental
assistance. She did not anticipate additional lapsing
funds. The program has a maintenance of effort requirement
in order to receive the federal Temporary Assistance to
Needy Families (TANF) block grant.
Section 8(a)(2)
Unanticipated federal grant award to fund Child Abuse
Treatment Plans for Alaska Native Children and Parents
project. $450.0
Ms. Clarke observed that the request in the amount of $450
thousand federal fund dollars would be used for the Indian
Child Welfare Act to allow the Department to increase Native
foster home participation and to work with the Native Health
Board. The program is 100% federally funded and no State
matching funds required.
Sections 8(a)(3) - 8(a)(8)
8(a)(3) Population increase of 18.9% has resulted in
increased overtime of $16.7 and laundry, food, and
clothing costs of $9.1. FY2002 average population was
179.6, while FY03 has averaged 198.3. $25.8
8(a)(4) Extraordinary medical costs including MRI,
extensive brain testing, weekly allergy shots, and
surgery. $20.0
8(a)(5) Staff for population increase. Average daily
population has increased 36% over FY02. Facility
capacity is 6. Average population in FY02 was 6.9,
while in FY03 the average population has been 9.3.
$100.8
8(a)(6) Medical costs for physical therapy for 1 youth.
$11.5
8(a)(7) Population increased 34.7% over FY02 and
extraordinary medical costs. $35.0.
8(a)(8) Operating costs driven by increased number of
licenses and certificates, including non-permanent
positions to deal with backlogs. Also covers rent for
a move into a new facility earlier than anticipated.
$195.0
Ms. Ware discussed the difficulties with the current budget
dealing with the pressures and population problems. She
pointed out the pressure this fiscal year in the Bethel
Youth Facility and the Nome Youth Facility. She observed
that the Bethel Youth Facility is over capacity and children
from there have been sent to Fairbanks. She compared the
average monthly bed days and observed that there has been a
46% increase. Bethel consistently has been overcrowded and
it is continuing to grow. She stressed that the number of
increases in the Class A felonies. None of the youth in the
detention unit are there for anything less than a very
serious offense.
Ms. Ware discussed increases in the Nome Youth Facility. It
is a six-bed facility and has operated with as many as 9 to
12. She acknowledged that many of the youth are from other
areas. Staff has had to be increased to address the
concerns.
Ms. Ware remarked that the Division has not been able to
absorb the increased costs. There was a $70 thousand dollar
cost for the American Correctional Association
Accreditation, which insures that outside reviewers check
the detention and treatment facilities. Due to the
increased detention counts, the Division has had to pay for
escorts and travel costs related to transferring children to
other facilities.
Ms. Clarke pointed out that the other costs include
extraordinary medical costs. The State does attempt to go
after their insurance if they have it, however, most are not
insured.
Co-Chair Harris asked about the McLaughlin Youth Facility.
Ms. Ware explained that youth picked up in Kenai area are
then brought to the McLaughlin Youth Facility. The Kenai
Facility will be used for short periods of time for
detention time. These are not treatment beds.
Co-Chair Harris commented that the opening of the Kenai
Facility would not necessarily bring down the cost of
McLaughlin. Ms. Ware understood that it would in the longer
term.
Ms. Clarke noted that the Department shows that the
McLaughlin Facility averaged daily a population of just
fewer than 180 in FY02; currently, it is running just over
198 daily. If those were detention kids, there would be
some relief.
Representative Stoltze asked if there were any court
directives regarding the capacity concerns. Ms. Ware stated
there are not. The Division uses the tools of making sure
that they have the accreditation guaranteeing that they are
in compliance.
Vice-Chair Meyer questioned if other correctional centers
required a local contribution. Ms. Clarke noted that many
of the local communities have donated land. Anchorage is
the only municipality that participates in the operating
budget.
Representative Hawker observed that Nome request was over
$224 thousand dollars. He pointed out that the Juvenile
Justice budget for FY03 had been $35 million dollars. He
pointed out that this request was for .6% of their annual
budget. That 'troubled' him that the Division did not have
enough managerial control to deal with such a small
variance.
Ms. Ware emphasized that the Division's budget has been very
tight. She explained that the Division has maintained
vacant positions and undertaken a number of things to keep
the budget under control. She offered to meet with
Representative Hawker to discuss these concerns.
Representative Foster interjected that the Nome facility
houses kids from all over Arctic Alaska and that the
overcrowding has not resulted from only Nome kids.
Section 8(a)(b)
8(a) Operating costs driven by increased number of
licenses and certificates, including non-permanent
positions to deal with backlogs. Also covers rent to
move into new facility earlier than anticipated.
$195.0
8(b) Claims growth and match rate adjustment.$10,991.3
Ms. Clarke noted that these were supplemental requests for a
total of $195 thousand dollars in receipt-supported services
for Vital Statistics. A few years ago, Vital Statistics
increased their fees for certificates by $5 dollars to help
pay for their activities. She noted that the supplemental
request had two components addressing:
· A considerable backlog. The Division hired temporary
staff to reduce that backlog.
· Moving costs and a small amount for an additional
lease cost. The Juneau office moved to a new
facility in the Lemon Creek area. The Legislature
authorized funds for seven months.
Vice-Chair Meyer commented that he had received a
certificate for his adoptive child and that it was a small
charge. Ms. Clarke responded that the charge for that type
certificate is $15 dollars.
Vice-Chair Meyer recommended that fee costs be increased.
Ms. Clarke responded that would be good especially if
service levels could be increased.
Co-Chair Harris noted that the Division earns more than they
spend. Ms. Clarke discussed that the amount earned over
budget for FY02 was $132 thousand dollars. She advised that
the Department was requesting $195 thousand dollars. It is
anticipated that the Division will earn $215 thousand
dollars this year.
Representative Croft clarified that the Division is
requesting to be able to keep the fees that they are already
raising.
Representative Joule asked when the fees previously had been
raised. Ms. Clarke did not know when the increase occurred.
Section 8(b)
8(B) Claims growth and match rate adjustment.$10,991.3
Ms. Clarke indicated that the request was for the Medicaid
services. It is a request for $28.1 million general fund
dollars. The request resulted from changes in the federal
Medicaid authorized percentage rate, which impacts the
program dramatically. Prior to 1998, Alaska was a 50% match
State. Then Senator Frank Murkowski was able to bring the
rate up to 59.8% percent. In FY00, Alaska's rate changed
and then Senator Murkowski increased Alaska's overall rate
by 5% because the cost of living was so much higher. That
was good for the State; however, the Bureau of Economic
Analysis changed the way the national formula calculates per
capita income, and that went into the national formula for
the rate. Due to the way that they recalculated that,
Alaska took a 3% hit in the rate. Last year, the
Legislature did provide funds to address that rate and at
the time, legislators anticipated that there would be some
way that Congress would be able to fix it. However, that
did not happen.
The other change in the rate is that the Division had
budgeted a larger amount that they thought would be 100%
claimable from the Indian Health Service facilities. That
money has not been seen. The other request is for growth in
the program.
Co-Chair Harris asked how the Administration was attempting
to do to curb the growth of Medicaid expenses.
Ms. Clarke advised that in the past week, regulations had
been adopted which allow the Department to do more
administrative cost containment in the program, which will
impact the long run. At present time, there is a billing
lag within the Medicaid program. Ms. Clarke advised that
the Administration is also considering other options.
Co-Chair Harris inquired if the poverty level percentage
would be analyzed.
Ms. Clarke asked if Co-Chair Harris was referring to the
Denali Kid Care program. There are varying percentage
levels of poverty that the Medicaid program covers. The
Commissioner is looking at all those rates with everything
being on the table.
Ms. Clarke distributed the Option List. (Copy on File).
She explained that the way that list works, it is important
to cut the #1 service first; however, the items at the top
of the list are the ones that are most cost effective. That
would not be a good tool. She emphasized how complicated
this matter is and that the option list is not a good cost
cutting tool.
Co-Chair Harris asked if the option list statute were to be
changed or eliminated, would that help the Department. Ms.
Clarke responded that it could provide more flexibility in
managing and that is what other states are doing.
Sections 8© & (d)
8( c)&(d) Suicide Follow-back Study; extend lapse date
to June 30, 2004.
Ms. Clarke commented that the request was for a lapse date
extension for the Suicide Follow-back study.
Section 16(6)
Miscellaneous Claims and Stale-dated Warrants
$42,267.93
Ms. Clarke noted that the request was for ratifications.
One for approximately $2.7 million dollars for the Medicaid
Program in response to a budget shortfall. The federal fund
claims had been disallowed in that amount.
The second ratification request was for $54.9 thousand
dollars from the federal Title 4-E Program. The Department
claimed the funds at the federal rate; upon review, it was
determined that they should not have been claimed as federal
costs.
Ms. Clarke pointed out the third section was a whole number,
(30+), claims resulting from old invoices and late bills.
DEPARTMENT OF LAW
Section 4(a)
Criminal Justice Litigation - Outside counsel and
experts for the parental consent lawsuit $432.6 and the
sex offender registration lawsuit $150.0
KATHRYN DAUGHHETEE, DIRECTOR, ADMINISTRATIVE SERVICES
DIVISION, DEPARTMENT OF LAW, explained that $582 thousand
dollars for the Criminal Division for two cases used in
defending Alaska Statutes and that the one for sex offender
registration, funds of $150 thousand dollars had been
expended. The balance of that request is for $482 thousand
dollars and would be used for the Planned Parenthood cases.
The trial phase of that has just been completed in
Anchorage. The requested funds are for the expenses
incurred for 2 attorneys and the anticipated costs in
preparing the post trial brief and appeal costs.
Co-Chair Harris asked why outside counsel had been hired.
Ms. Daughhetee stated that a Supreme Court brief is
complicated language and that the State needed someone
experienced in drafting that type language.
PATRICK GULLUFSEN, DEPUTY ATTORNEY GENERAL, CRIMINAL
DIVISION, DEPARTMENT OF LAW, added that these two cases are
within the Criminal Division's management responsibility.
They are connected with criminal activity and legislation.
With respect to the Alaska's Sex Offender Registration Act
and the hiring of outside counsel, the Department used in-
th
house counsel up through the 9 Circuit. They ruled the
statute unconstitutional. In 1994, the 'toughest' sex
offender laws were passed by the Legislature. The case was
the first before the Supreme Court. The Department of Law,
at that point, thought it was appropriate, given the
significance of the case nationwide, to hire the best that
could be found in outside counsel to represent the case.
Section 4(b)
Oil and gas caseload shortfall. $500.0 is needed for
the reopener-specific casework and $100.0 for ongoing
D.C. casework primarily regarding Federal Energy
Reserve (FERC) and TAPS (utility) reopener.
Extended lapse date thru June 30, 2004 $600.0
Ms. Daughhetee explained that within the Oil and Gas
Division, the Civil Division needs $6 thousand dollars to
deal with reopening cases on the horizon. The Department of
Law anticipates that the oil companies will marsh
significant resources and the State needs to be on equal
footing to protect the interest's in these royalty items.
TAPE HFC 03 - 26, Side A
DAVID MARQUEZ, LEGISLATIVE LIAISON, ASSISTANT ATTORNEY
GENERAL, CIVIL DIVISION, OIL, GAS & MINING, DEPARTMENT OF
LAW, explained that if the Department does not receive the
money, they would have to do it 'in-house'. He did not
believe that they had the expertise.
Co-Chair Harris asked what would happen if the State
prevails. Mr. Markus responded that if the State prevails,
Alaska could get up to $60 million dollars in royalties
through to June 2003, and could then expect some $10 million
per year in royalties from then on.
Representative Joule asked what would happen if Alaska did
not do this and if it would it be a technical violation of
the Constitution. Mr. Markus did not believe that it could
rise to a constitutional issue; however, the State should do
all that it can to make the argument, so that the State will
prevail.
Section 9
Judgments and Claims
$1,064,246.51 GF, $72,053.97 PERS $1,136.4
Ms. Daughhetee pointed out the Judgment and Claims request.
She added that component would total $4 - $5 million dollars
when the Catastrophic Reserve Fund was added in.
Section 10
Fairbanks DA office had unexpected move and lease costs
due to the Department of Transportation and Public
Facility's closure of Fairbanks court building. $95.0
Ms. Daughhetee observed that the Department of
Transportation and Public Facilities decided to close the
State owned facility in which the District Attorney's office
was housed. The office was moved to a non-State facility,
which required lease costs.
Co-Chair Harris questioned if there would be a RSA from the
Department of Transportation and Public Facilities, reducing
the supplemental request. Ms. Daughhetee explained that
issue was yet to be determined. There could be a shortfall
in the prosecutorial effort of vacant positions if the
funding is not realized.
Section 16
MISCELLANEOUS CLAIMS AND STALE-DATED WARRANTS
$17,947.00
Ms. Daughhetee noted that there were set of stale-dated
warrants that the Department has accumulated in the amount
of $17 thousand dollars and that they need to be paid.
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Section (4)
Criminal Justice Litigation - Outside counsel and
experts for the parental consent lawsuit $432.6 and the
sex offender registration lawsuit $150.0 $582.6
JOHN CRAMER, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT
OF MILITARY AND VETERANS AFFAIRS, noted that the request was
in the amount of $42.7 million dollars to capitalize the
fund for declared disasters during the FY03 and for
emergency preparedness and operation costs. He added that
$680 thousand dollars has been the appropriation seed money
for the period of time until the fiscal year starts. The
additional $150 thousand dollars is for items associated
with running the State Emergency Coordination Center around
the clock. The additional $30 thousand dollars will be used
for the Alaska State Defense Course for protecting assets.
Section 11 (a)&(b)
11(a) and (b) Structure change to move Commissioner's
Office and Unallocated Reduction components to National
Guard BRU
Co-Chair Harris pointed out that the Commissioner's Office
was requesting a structure change. Mr. Cramer could not
provide information on the reason for that request.
DEPARTMENT OF NATURAL RESOURCES
NICO BUS, ACTING DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF NATURAL RESOURCES,
Section 7
Fixed costs and fire suppression costs incurred to
date. $19,033.8
Mr. Bus observed that the request was for $19 million
dollars for fire suppression. Co-Chair Harris asked
historical information regarding the costs associated with
fire suppression.
Mr. Bus replied that the average fire suppression expense is
about $14 million dollars.
Co-Chair Harris asked if the Legislature put $14 million
dollars into the budget this year, would the Department then
not need to request a supplemental. Mr. Nico responded that
he would hope so as that would mean that there would have
been fewer fires than this past year, which was a high year.
Co-Chair Harris questioned if 'hot shot fire crews' were
used to fight outside of their local areas. Mr. Bus
explained that the 'hot shot' crews are an elite group and
are not always called as they cost more. There are 70+
village crews that are made up of 16-20 member teams that
are trained by the Division of Forestry. They are on a
rotation schedule and those are the crews that are usually
called in.
Co-Chair Harris asked about the practice the Department uses
in hiring crews.
JEFF JAHNKE, (TESTIFIED VIA TELECONFERENCE), STATE FORESTER,
DEPARTMENT OF NATURAL RESOURCES, ANCHORAGE, explained that
there are four hot shot crews in the State of Alaska. They
are sponsored by the federal government. The Department
brings those crews on early to do work around Anchorage and
Kenai to reduce the damage of the bark beetle. They are on
all summer and spend much of their time on demand. They are
also used in the fall to do field reduction work and then
they are laid off and brought back the next year. They are
a very good crew.
Section 12(a)
Increased costs to process heavy volume of mortgage
refinance activity and increased postage and supplies
costs. $149.1
Mr. Bus noted the $149.1 thousand dollar request for the
Recorder's Office as a result of the low interest rates and
refinancing of loans, program receipts have increased.
Section 12(b)
Increased fees for City of Kodiak park maintenance
contract. $4.0
Mr. Bus explained that the request in the amount of $4
thousand dollars would allow for the management of a city
park in Kodiak.
Co-Chair Harris observed that last summer many parks had
been closed due to budget restraints. He questioned how the
parks could be opened without a supplemental request.
Mr. Bus clarified that last year's appropriation had been
short-funded. Some parks were opened as a result of the
Capital appropriation. The Department is evaluating the
situation and currently is in discussion with the Governor's
Office with the anticipation that all parks will open.
Co-Chair Harris questioned what would happen if a local non-
profit group volunteered to keep them open at their expense.
Mr. Bus responded that the Department would attempt to
support that effort.
Section 12©
National Coastal Wetlands Conservation grant pass thru
to Juneau for purchase of wetlands near Herbert River.
$553.0
Mr. Bus observed that the request was for $553 thousand
dollars for a federal grant for the Department of Natural
Resources to distribute to the City of Juneau.
Co-Chair Harris noted that property has been deforested.
Mr. Bus observed that the owner had begun cutting on the
property to the dismay of many local residents. The owner
has agreed to sell the land to the City & Borough of Juneau
and this appropriation would allow the purchase of that
land. The City 7 Borough of Juneau has taken action and
will own the property.
Representative Hawker understood that there were a number of
complications and protests within the community regarding
the sale of the land. Mr. Bus advised that the issues had
been resolved through the Planning Commission.
Section (17)(b)
FY02 Fire Suppression costs AR37313-02 Fire General
Fund and AR37311-02 Fire Federal Receipts
Mr. Bus discussed the fire suppression request for
$13,340,900 dollars. He explained that the funds were spent
after the last legislative session adjourned. He pointed
out that this had been the fifth largest fire year on record
for the State of Alaska.
Co-Chair Harris stated that HB 100 & HB 110 would be HELD in
Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:51 P.M.
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