Legislature(2011 - 2012)HOUSE FINANCE 519
01/28/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Budget Overview: Department of Labor and Workforce Development | |
| Budget Overview: Department of Environmental Conservation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
January 28, 2011
1:33 p.m.
1:33:37 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:33 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara (via teleconference)
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Clark Bishop, Commissioner, Department of Labor and
Workforce Development; Guy Bell, Assistant Commissioner and
Director, Division of Administrative Services, Department
of Labor and Workforce Development; Tom Nelson, Deputy
Commissioner, Department of Labor and Workforce
Development; Larry Hartig, Commissioner, Department of
Environmental Conservation; Laura Beason, Acting Director,
Division of Information and Administrative Services,
Department of Environmental Conservation.
SUMMARY
BUDGET OVERVIEWS:
Department of Labor and Workforce Development
Department of Environmental Conservation
^BUDGET OVERVIEW: DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT
1:34:44 PM
CLARK BISHOP, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, introduced a PowerPoint
presentation. He explained that the mission of Department
of Labor and Workforce Development (DLWD) was to:
Provide safe and legal working conditions and advance
opportunities for employment for all Alaskans.
Commissioner Bishop detailed that the mission was delivered
through three core areas (Slide 2):
· Statutory and Regulatory Assistance and Enforcement to
protect Alaska's workers through wage and child labor
law enforcement, workplace safety compliance and
enforcement, mechanical device inspection, and
overseeing State of Alaska Americans with Disabilities
Act compliance.
· Workforce Development to support Alaska hire through
the department's employment services, adult basic
education, business partnerships, career and technical
education and training (including AVTEC-Alaska's
Institute of Technology), and vocational
rehabilitation services.
· Income replacement for injured, unemployed and
permanently disabled workers. This includes the
department's Workers' Compensation, Fisherman's Fund,
Second Injury Fund, Unemployment Insurance and
Disability Determination programs.
Commissioner Bishop noted that computer services in job
centers has been somewhat slower in some parts of rural
Alaska, but he stated that improvements had been made,
helped by the broadband connection in Western Alaska.
Commissioner Bishop listed "Key FY10 Accomplishments"
(Slide 3):
· Protect Workers
o The lost workday illness and injury rate per 100
employees was reduced by 9% from 1.76 in FY09 to
1.6 in FY10.
Commissioner Bishop reported that worker compensation
premiums had declined in 2010 for the third year and
efforts to educate employers and workers on the importance
of workplace safety improved both employer bottom lines and
the safety of employees. He opined the changes were the
direct result of changes made in when he came to the DLWD
four years prior, especially reinvigorating the governor's
safety council. He stressed the value of public service
announcements (PSA) about safety issues.
1:40:44 PM
Commissioner Bishop pointed out that DLWD had partnered
with schools to further youth safety and employment.
Outreach had been done that touched 5,300 students in 2009
and 5,100 in 2010 in 57 schools. The number of workers
compensation incidents for minors dropped from 169 in 2008
to 38 in 2010. He emphasized that DLWD would continue to
expand the youth safety and education programs in all
school districts. He believed that educating early would
impact the young person throughout their working life.
Co-Chair Thomas referred to the fishermen's fund and
reminded fishermen that they must have their limited entry
permit in possession January 1. Without the permit,
injuries on the boat would not be covered. Commissioner
Bishop offered to do a press release or PSA on the issue.
Commissioner Bishop pointed to "Key FY10 Accomplishments"
(Slide 3):
· Workforce Development
o The nonresident hire rate in 2009 was 19.1%, down
from 19.6% in 2008.Nonresidents earned 13.3% of
total wages in 2009, unchanged from
2008.Nonresidents accounted for 28.1% of the oil
industry workers (including major oil companies
and oilfield services) in 2009; this was down
from 29.8% one year ago and is the lowest in the
last five years.
o The department served over 143,000 individuals
through the job center network and online labor
exchange system. 36,308 total entered employment,
facilitated by the department.
o AVTEC trained 1,462 individuals in FY 10.
Programs range from five days to eleven months.
The completions for programs exceeding six weeks
was 84%.
· Income Replacement
o Despite historically high claims for unemployment
benefits, Alaska's unemployment insurance trust
remains solvent with a December 31, 2010, balance
of $243.9 million.
Commissioner Bishop detailed that related to income
replacement, 30 other states collectively had to borrow
more than $40 billion from the federal government to pay
unemployment insurance. He recognized work by the
legislature for creating Alaska's program.
1:45:03 PM
Commissioner Bishop spoke to the nonresident hire rate. He
stated his commitment to improving training for Alaskans
and reducing the non-resident hire rate.
Commissioner Bishop noted that there had been 1,610
graduates through the General Equivalency Diploma (GED) and
adult basic education program. He noted he personally signs
the GED diplomas, which comprise 18 percent of high school
diplomas issued in the state.
Commissioner Bishop emphasized that the Employment Security
Division (ESD) had served over 143,000 individuals through
the job center network and on-line labor exchange system,
and 36,308 had entered employment. He stressed that
networking was the key to success. He spent time in the
resource room talking to clients about their skill sets and
helping them find employment. He appreciated staff that
helped Alaskans find work.
Representative Edgmon requested a numbers breakdown related
to non-resident hire for different industry sectors, such
as oil and seafood. He informed the committee that his
district included Unalaska, where 43 percent of the
community was Asian, and over 20 different languages were
spoken in the school.
GUY BELL, ASSISTANT COMMISSIONER AND DIRECTOR, DIVISION OF
ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, replied that about 75 percent of Alaska
seafood workers were non-resident.
1:49:30 PM
Co-Chair Stoltze asked for more information. Commissioner
Bishop replied that the methodology used to determine
resident hire was a combination of cross-matching social
security numbers in the ESD and the permanent fund for
residency requirements.
TOM NELSON, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, added that I-9 verification was also
checked in the Seafood Office. Eligibility to work was also
verified, including checking green cards and other
documentation allowing work in the seafood industry.
Co-Chair Stoltze noted that a person could be eligible for
a permanent fund dividend (PFD) without being a citizen of
the U.S.
Commissioner Bishop spoke to the question of reducing the
numbers of non-residents hired. He stated that he had
focused on getting more Alaskans trained on the year-round
legacy jobs in the seafood industry. In addition, he had
worked with processors, who had not historically recruited
in the Interior. He planned to have a strategy planning
session in February in Juneau to address recruitment.
1:52:01 PM
Representative Costello queried non-resident hire in the
oil industry. She requested a breakdown of where the
nonresident workforce came from and what percentage of the
total workforce was represented.
Representative Costello referred to vocational education
and asked whether the department worked with the Department
of Education and Early Development to reach young people in
high school with vocational skills. Commissioner Bishop
replied that his presentation would give an overview of the
career-technology education plan, which connected youth
into areas with high nonresident hire rate. He listed areas
that the Alaska Workforce Board targeted: construction,
mining, oil and gas, healthcare, and so on.
Representative Wilson referred to people who worked on the
North Slope but owned homes in the Lower 48 where they
lived during their two weeks off. She wondered whether the
department tracked permanent residency. Commissioner Bishop
responded that a person had to spend a certain time in
Alaska to receive a PFD.
Representative Wilson viewed people who lived in Alaska
half-time as Alaskans. She wondered why there was a
perception that North Slope workers lived outside the
state. She questioned the true numbers.
1:56:36 PM
Commissioner Bishop responded that he could spend hours
providing a comprehensive overview on resident hire broken
down by occupation and industry. He noted that he had
worked on the North Slope for 18 years and knew other life-
long Alaskans worked there and spent winters outside the
state.
Representative Wilson asked for a handout with the numbers.
Commissioner Bishop referred to the publication
"Nonresidents Working in Alaska," the non-resident hire
report for 2009. He recommended the document.
Representative Neuman asked what occupations attracted the
most nonresident hires. He wondered how the budget
reflected Alaskans being trained to fill positions occupied
by non-residents. Commissioner Bishop offered to get the
information.
Representative Gara opined that the state did not have the
coordinated vocational-education program it needed. He
thought there was a problem with North Slope workers not
being Alaskans. He pointed to the pipeline training center
in Fairbanks. He queried the effort made by the department
to bring people from rural areas to be trained in Fairbanks
for the North Slope jobs.
2:00:55 PM
Commissioner Bishop responded that the effort was
extensive. He provided data that was a year old, and
promised to get more recent data to the committee. He
detailed that more than 27 percent of the class that had
gone through the class was from rural Alaska.
Representative Gara wanted more living space for rural
people so they could get the training. He referred to a
visit he had made along the Yukon River when there was a
fire two years prior. He described mushroom pickers who
came to the state in the aftermath of the fire. He stated
that the people picked morel mushrooms and made a lot of
money selling them. He asked whether DLWD was planning to
train locals to be prepared for a cottage industry like the
mushrooms that spring up after fires. Commissioner Bishop
answered in the affirmative; one of the most compelling
DLWD success stories related to the rural firefighter
training program. The department had provided more than
$100,000 to promote and recruit rural residents for
firefighters training. Skills were intended to create other
opportunities for other seasonal employment within the
Division of Forestry. He noted that 100 rural firefighters
were trained the previous years.
Representative Gara asked about training for the gourmet
mushrooms. Commissioner Bishop was not familiar with the
mushroom pickers.
Representative Guttenberg agreed that the described
mushroom industry was big and pointed out that considerable
money was made by mushroom brokers. He thought the state
should explore the issue.
Representative Gara recommended thinking outside the box.
Representative Guttenberg stated that local hire was a
significant issue for him. He wanted to know everything the
administration was doing related to promote local hire. The
heads of companies could insist on hiring Alaskans, then
subcontractors and others down the line would follow suit.
2:07:26 PM
Representative Costello referenced the Pipeline Training
Center in Fairbanks and asked whether any Alaskan could
take advantage of it. Commissioner Bishop answered that the
program was inclusive, not exclusive. He offered to get
more detailed information.
Vice-chair Fairclough queried the definition of non-
residency. She wondered whether the numbers regarding
nonresidents were separated out by union and non-union
people. Commissioner Bishop responded that the data did not
distinguish between union and non-union.
Vice-chair Fairclough questioned whether the issue affected
the number of nonresidents hired. She gave the example of
Ocean Rangers, who were brought up out of Seattle, although
now there was a training program in Alaska. Commissioner
Bishop replied that Alaskans were being prepared to apply
for Ocean Ranger positions.
2:11:06 PM
Commissioner Bishop directed attention to the Alaska
Vocational Technical Center (AVTEC), which trained 1,462
people in FY 10. He encouraged visits. He reported that
there had been 84 percent completions for programs
exceeding six weeks.
Commissioner Bishop informed the committee that a new core-
driller apprenticeship program had piloted the prior year
and was progressing. He noted upcoming plans to expand the
program. The program would train rural residents and
prepare them for high-paying and high-skilled core-drilling
jobs. The program was the first of its kind in the U.S. and
Canada.
Commissioner Bishop reported that he had toured the new
Goose Creek facility to view classrooms and shop spaces for
training. He hoped to coordinate with the Department of
Corrections to get pre-apprenticeship programs ready to
reduced recidivism.
Co-Chair Stoltze thought Goose Creek was a good example of
cooperative efforts for local hire. The emphasis had been
on Mat-Su Borough local hire. The project was bonded by the
borough. He maintained there were ways for local hire to
work out through collaborative agreements.
Co-Chair Thomas noted that several thousand of his people
had gone to the Mat-Su to look for work.
2:14:39 PM
Commissioner Bishop continued that he was excited about a
joint program by the Departments of Public Safety and
Education and Early Development, a cadet corps program in
Sitka. He thought there was a trend towards collaboration.
Another example was a foster-youth program worked on
jointly by the Department of Health and Social Services and
DLWD.
Commissioner Bishop highlighted an AVTEC solar-wind-hydro
program; the wind turbine was operating in Seward up and
close to being commissioned. He added that AVTEC had a good
diesel power-generation program, and would be able to
incorporate solar, wind, and hydro power, and create
alternative energy sources in rural Alaska.
Commissioner Bishop directed attention to FY 12 budget
highlights (Slide 4):
· DLWD total Budget request FY12 was just under $194
million; just under $102 million of that was federal
funding.
· DLWD proposed four programmatic increments:
o $1 million towards Career and Technical Education
(CTE) Plan
o $250,000 for AVTEC for deferred maintenance,
expansion of maritime
2:18:13 PM
Commissioner Bishop detailed that the CTE plan was the
direct result of the gasline training plan strategy II
developed three years prior (Slide 5):
Alaska Career and Technical Education Action Plan
A collaborative effort of the Departments of Labor and
Workforce Development and Education and Early
Development and the University of Alaska
The Plan outlines a comprehensive, integrated career
and technical education (CTE) system for Alaska that
aligns training programs and coordinates delivery to
prepare Alaskans for Alaska careers. Six strategies:
1. Smooth transitions from secondary to
postsecondary education and from school to work.
2. Align curricula to meet industry standards.
3. Identify and promote CTE delivery models that
provide all Alaskans the knowledge and skills for
further training and careers.
4. Recruit, develop, support and retain high-quality
CTE teachers.
5. Maximize the use of public facilities for
training.
6. Establish and maintain sustainable funding
mechanisms for a successful CTE system.
$1 million FY12 budget request to implement priority
actions, including competitive grants and technical
support to school districts.
Commissioner Bishop stressed that the tool would help get
Alaskan young people on the pathway to careers starting in
grade school and on through high school.
Commissioner Bishop turned to the second budget request for
$250,000 for AVTEC for deferred maintenance. He talked
about the Maritime Training Program (Slide 6):
· Maritime Training Program $48.0 UGF, $51.0 DGF & 1 PPT
-AVTEC will have the capacity to train 60 mariners per
year, and qualify Alaskans for employment in Ocean
Ranger positions on cruise ships traversing Alaskan
waters. In 2010, 5 of 21 Ocean Rangers deployed were
Alaskan residents.
· Maintenance Staff to Operating from Capital $250.0 UGF
-This will move all but 1 of AVTEC's 6 maintenance
staff to the operating budget. The positions were
previously supported with Capital Deferred Maintenance
funding.
Representative Wilson appreciated work done tracking young
people out of school and into their work lives.
2:21:07 PM
Commissioner Bishop listed other programs, including the
nurse program (Slide 6):
· Registered Nurse Training Program $226.8 UGF, $100.0
DGF, $300.0 Other & 2 PPT -An additional 20 Alaskans
will be trained to become Registered Nurses. AVTEC
will be able to satisfy the deliverables on a federal
Health Professions Opportunity Program grant that the
Cook Inlet Tribal Council (CITC) received, for which
AVTEC is the sole provider.
Co-Chair Thomas asked whether there would be future
requests to replace federal funds with general funds. Mr.
Bell estimated that the state's future commitment once the
grant to CITC expired would be approximately $60,000
general funds. He detailed that leasehold improvements had
to be made in the Muldoon training center. The improvements
were "front-loaded" to a five-year period; the lease would
be raised for five years and then drop significantly.
Co-Chair Stoltze mentioned the response of the City of
Seward to AVTEC. He wondered Seward was an odd place to
train workers, since he did not feel it cared for the
economy. Commissioner Bishop responded that the green
energy program fit the community of Seward. He pointed out
that the nurses program was in Anchorage.
2:26:09 PM
AT EASE
2:32:25 PM
RECONVENED
^BUDGET OVERVIEW: DEPARTMENT OF ENVIRONMENTAL CONSERVATION
2:32:39 PM
LARRY HARTIG, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, introduced a PowerPoint presentation. He
described the mission of the Department of Environmental
Conservation (DEC): To protect human health and the
environment. He pointed out that the department's programs
emphasized the links between humans and the environment and
ultimately dealt with issues of human health. He reported
that DEC made sure the air, water, and food was safe, and
that hazardous waste was managed safely and cleaned up if
released. The department also oversaw public drinking water
systems and waste systems, even in the smallest
communities.
Commissioner Hartig noted that many DEC functions derived
from federal acts (such as the Clean Air Act, Clean Water
Act, and Resource Conservation Recovery Act) that the state
implemented or was delegated to run. He noted that there
were often very complex requirements associated with the
programs. The state often found itself being the "oil in
the machine" between the federal government and the local
communities trying to implement the difficult federal
requirements that sometimes do not work well in Alaska. The
department works with the federal government and the local
community to make sense of the complex requirements.
2:36:51 PM
Commissioner Hartig listed "Responsibilities and Functions"
of the department (Slide 3):
· Develop standards
· Issue permits
· Provide compliance and financial assistance
· Respond to spills of oil and other hazardous
substances
· Safeguard the quality of food and seafood
· Operate the State Environmental Health Lab
· House the Office of the State Veterinarian
· Regulate pesticides and certain types of use
· Educate and assist the public
· Interact with our federal agency counterparts
· Investigate violations and enforce state law
Commissioner Hartig explained that the department develops
standards for emissions of air and water. The standards are
applied to permits or other authorizations. The state also
has to track the situation and measure performance against
the standard and to demonstrate that the standards are met.
Commissioner Hartig continued that the state issues permits
and then ensures compliance. The department will assist
people with compliance and had the ability to make loans
and grants to communities for water and sewer projects.
Commissioner Hartig noted that DEC addresses food safety.
Food that comes from outside the state or that is produced
in Alaska and shipped outside falls under federal
jurisdiction. Any food produced and consumed in the state
is regulated by DEC.
Co-Chair Thomas asked whether DEC was involved in the
exported morel mushrooms discussed in the earlier
presentation. Commissioner Hartig answered that the
department would inspect and regulate mushrooms that were
packaged to be shipped outside the state. He added that the
mushroom business was big.
2:40:14 PM
Commissioner Hartig emphasized that the quality of seafood
was very important. He noted that other governments asked
the department to certify products leaving the state. He
pointed out that even though interstate commerce and
national commerce were regulated by the federal government,
through the Food and Drug Administration (FDA) or U.S.
Department of Agriculture (USDA), they relied heavily on
state operatives to conduct the inspections.
Commissioner Hartig explained that DEC operated the State
Environmental Health Lab in Anchorage, housed the Office of
the State Veterinarian, regulated pesticides and certain
types of use, such as the railroad.
Commissioner Hartig pointed out that DEC was also a
regulatory and enforcement agency with police powers; it
could issue subpoenas with the attorney general's office
and bring civil and criminal actions.
Commissioner Hartig directed attention to a table
containing an overview of the budget. He summarized that
the department's operating budget had fairly steady
funding. There were small increments and additional
positions that did not represent new initiative with new
programs; increases were related to more work in a few
areas, including the gasline initiative. He noted that
preparing for a large gasline required a great deal of work
up-front. Under the Alaska Gasline Inducement Act (AGIA),
the proposal was to have permits by 2014; the department
was required to collect baseline data, create a model about
existing and future emissions, and determine right-of-ways.
2:44:39 PM
Vice-chair Fairclough asked whether the department
duplicated any of the work done by the Alaska Natural Gas
Development Authority (ANGDA). Commissioner Hartig could
not think of any overlap. He stated that the role of DEC
was not looking at pipeline routes or economic feasibility,
but looking at air and water emissions and permits.
Commissioner Hartig directed attention to a pie chart on
Slide 5 illustrating the FY 12 budget request by program
divisions:
· Administration: 10.6% or $8,583.9
· Air Quality: 12.9% or $10,385.7
· DEC Buildings Maintenance and Operations: 0.7% or
$560.1
· Environmental Health: 22.2% or $17,912.1
· Spill Prevention and Response: 23.1% or $18,649.2
· Water: 30.5% or $24,559.2
Commissioner Hartig detailed the components of the Division
of Administration (Slide 7):
· Commissioner's Office
o Commissioner: Larry Hartig
o Deputy: Dan Easton
· Administrative Services
o Director: Mary Siroky
ƒEnvironmental Crimes Unit
ƒInformation Services
ƒFinancial Services
ƒBudget Services
ƒProcurement & Building Management
· State Support Services
· Challenges:
o Increased Lease Costs
· New Initiatives:
o No Significant New Initiatives
Commissioner Hartig detailed that the division housed the
Environmental Crimes Unit with two criminal investigators
(in Fairbanks) and one civil investigator (in Anchorage).
The unit would be notified for larger and more serious
violations and would work with the attorney general's
office. He noted that the state had environmental crimes,
but not that many. The unit worked closely with the federal
government.
Commissioner Hartig pointed out that the biggest challenge
for the Division of Administration was increased lease
costs, illustrated on Slide 8. Over the past seven years,
lease costs have increased about $1.4 million. The
department had been absorbing the costs; there was an
increment in the FY 12 operating budget for $468,900 to
help offset some of the cost, but about $1 million was
absorbed. He emphasized that a $1 million hit was
significant for DEC as a relatively small department with a
total operating budget of $80 million (30 percent federal
funds).
2:48:25 PM
Vice-chair Fairclough wondered if environmental assessment
data of contaminated sites related to the gas line project
expired. Commissioner Hartig clarified that he referred to
a DEC data base of contaminated sites in the state that was
referenced for a variety of purposes. In relation to a gas
line, the data could be used to determine if any portion of
an 8oo mile long proposed corridor or construction site for
a gas line was contaminated, who was responsible, and if it
was remedied. He added that the records help to identify
potential risks to a project.
Vice-chair Fairclough asked about baseline data on air
quality for analysis in furthering gas line development.
She wondered if there was a "shelf life" for data collected
on air quality in the event development takes many years.
Commissioner Hartig explained that various air quality data
was gathered. For example, meteorological data would not
change that much over the years but air emissions data was
continuously monitored. He elaborated that Federal Clean
Air Act required standards were "prevention of significant
deterioration"(PSD); an air pollution ceiling established
to protect human health. The department examined the
cumulative impact of existing development to remain under
the ceiling and in the "attainment area" established by the
federal regulations. The department restricted existing
emissions to allow new industry on the North Slope. He
related that multiple new projects such as: outer
continental shelf, standard regional on shore, gas line,
etc. were slated for potential development. The department
must draw conservative emission assumptions to remain
within allowable limits and enable future development. The
department introduced monitoring programs for air emission
data. The data will be updated constantly for all North
Slope development.
Representative Wilson voiced that Fairbanks was designated
a "non-attainment" area. She asked if the designation
denied Fairbanks the benefits of a gas line.
Commissioner Hartig responded that Fairbanks was designated
a non-attainment area because of "p m 2.5" small
particulate matter generated by wood stoves. He elaborated
that monitoring data guided efficient and effective choices
to mitigate the problem and measures progress towards
attainment. He furthered that if a municipality remained in
a non-attainment area designation for too long the federal
government can withhold highway funds. The designation can
restrict development since the allowable emission standards
are in violation, there isn't room for new industry to
emit.
2:55:46 PM
Representative Wilson clarified that her concern was the
non-attainment area designation prohibited the additional
use of natural gas because of cumulative emissions.
Commissioner Hartig confirmed the situation. He felt that
it was important to work toward attainment and that timing
was critical.
Representative Costello referred to increased costs
associated with leases. She asked how the department funded
the increases the last seven years without increased
available funding. Commissioner Hartig pointed to
information included on the bottom of Slide 8, that
detailed the cost cutting measures taken by the department
to cover lease costs:
Cost Cutting Measures Taken To Cover Increased Lease
Costs:
· Equipment replacement schedules have been delayed or
discontinued indefinitely. Replacement is only
occurring as equipment fails and only after a
determination that it meets a vital need.
· Positions are being held vacant resulting in
diminished customer service levels.
· Funding for new air monitoring sites and special
studies has been dropped from current spending plans.
· The number of site visits for compliance monitoring
has been reduced.
· Contracts for petroleum research and shore zone
mapping have been cancelled.
· Travel expenditures have been reduced beyond the 10%
travel reduction absorbed in FY11.
Commissioner Hartig noted that the reductions were spread
throughout the department.
Co-Chair Thomas asked what community experienced the
largest increase in lease costs. Commissioner Hartig
identified Anchorage. He explained that due to a
miscalculation in the rent when the department entered into
the lease they paid too much. The offset resulted in an
artificially low rent for a period of time. The increase in
FY12 reflected the actual cost of the Anchorage rent and a
jump in Juneau rent.
2:59:40 PM
Co-Chair Thomas asked when the Anchorage and Juneau leases
expired. Commissioner Hartig offered to get the
information.
Representative Costello queried shore zone mapping and
petroleum research timelines. She asked if the work will
increase and when completion was expected. Commissioner
Hartig replied that program managers and directors set the
priorities for what work was relevant and required.
Performing the work was a question of timing; executed when
pertinent to a project.
Representative Gara wondered if trucking in natural gas
from the North Slope for use in Fairbanks was a more
productive use of state funds than the regulatory approach.
Monitoring and enforcing air quality still resulted in
violations. Commissioner Hartig explained that the problem
was timing and health issues. A transition to a gas line
would take time. Air quality must be addressed in the
interim. The federal regulations were based on significant
human health concerns. The department believed significant
air quality improvement was achievable through better
stoves and other similar measures. He emphasized that the
department wanted to work with the community, find viable
solutions and advocate for them to the federal government.
3:04:13 PM
Representative Gara restated the question. He pointed out
that gas line aside, the community of Fairbanks was working
on trucking in natural gas in a cost-effective way. He
suggested that instead of fining people for poor air
quality standards, why not use the regulatory money to
bring cheaper, cleaner gas and help the community burn less
wood. Commissioner Hartig asserted that the department had
not penalized anyone in the community. The department was
working with the community to develop a containment plan to
achieve compliance over time. He stressed that DEC never
issued any fines, and preferred that the community deal
with individual violators.
Vice-chair Fairclough queried whether the department asked
the legislature for increases to cover lease costs.
Commissioner Hartig replied that the FY12 governor's budget
contained an increment of $468.9 thousand. Vice-chair
Fairclough voiced that the additional expense resulted in
reduced services. She wondered if DEC requested increases
during the years of higher lease costs.
LAURA BEASON, ACTING DIRECTOR, DIVISION OF INFORMATION AND
ADMINISTRATIVE SERVICES, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, answered that a small increase was requested
in FY08. She related that the largest expenses was incurred
in FY10. Additional significant lease costs occurred over
the past two years.
3:07:53 PM
Representative Edgmon inquired about the secondary
wastewater issue in Unalaska and the department's external
relations with the Environmental Protection Agency (EPA).
Commissioner Hartig felt that the relationship with the EPA
was very good. He shared that conflicts occured in
connection with national standards that do not fit well in
Alaska, resource constraints that do not match Alaska's
priorities, and timing demands to implement regulations.
For example, the secondary wastewater treatment
requirements or rising diesel costs in Fairbanks at the
same time as compliance deadlines and national regulations
for particulate emissions became law. He emphasized that
despite the issues the relationship worked.
Commissioner Hartig explained secondary treatment of public
wastewater and the problem it poses for many rural Alaska
communities. He related that primary treatment employed
separation, filtering, and settling of wastewater and
discharged the effluent. Secondary treatment added
biological processes to remove more of the contaminants out
of the water. The process was more effective but more
expensive. The EPA established the secondary wastewater
regulations over 30 years ago. The agency offered waivers
for Alaskan communities in recognition that many were not
ready to comply. Only eight communities applied.
Consequently, the EPA issued waivers to all communities
that would have gotten a waiver if they had applied
(including Unalaska). The agency reserved the right to
could suspend the waiver at any time. He added that of
late, the EPA determined that Unalaska was in violation of
their primary wastewater permit, and must also comply with
secondary wastewater regulations. The waiver was revoked
for other factors: Unalaska is a larger community with more
economic development, not a Native community (one of the
factors), and the water discharged was located next to
seafood plants that attract the endangered Steller's
Eiders.
Commissioner Hartig continued that the state in the
meantime, took primacy and will issue the next permit. The
department believed that an enhanced primary permit was
adequate and the money saved was better spent on other
larger priorities such as landfill and drinking water
compliance issues. He thought that Unalaska was a unique
situation, but the concern was whether the EPA would
suspend waivers in other communities. He concluded that the
state will deliberate with the EPA until agreements were
reached.
Representative Edgmon commented that secondary treatment
could cost Unalaska $30 - $40 million. He wanted DEC to
take a more aggressive stance with the EPA.
Co-Chair Thomas asked if the federal government will force
the state to enforce drinking water regulations. He queried
if the department would help communities obtain new water
systems needed for compliance. Commissioner Hartig related
that the department's Environmental Health Division oversaw
food safety and public water plants. He explained that
public drinking water from water facilities that serve over
25 people were regulated under the federal Safe Drinking
Water Act. The regulations were updated periodically.
Recently, the EPA identified a new pathogen, mandated
additional treatment and that all public water systems come
into compliance, even though the pathogen may not exist in
Alaskan communities. He reported that Cordova, Ketchikan
and other communities were struggling to comply. DEC was
committed to resolving the issue with waivers or other
means of alternative compliance. He asserted the issue was
another instance where the department was working with the
EPA on behalf of communities to come up with solutions.
3:18:33 PM
Commissioner Hartig furthered that DEC was working
arduously on the waste water issues in Unalaska and held
numerous discussions with the EPA.
Co-Chair Thomas added that the "water bug" [pathogen]
inflicted very expensive and burdensome regulations for
Cordova and other communities making compliance difficult.
Commissioner Hartig assured that DEC was aware of issue and
working with Cordova. Co-Chair Thomas suggested the
legislature might introduce a resolution encouraging
federal help. He guessed that compliance could cost $100
million or more.
Commissioner Hartig directed attention to the Division of
Environmental Health (Slide 9):
Components:
• Director's Office
Director: Kristin Ryan
• Food Safety & Sanitation
• Laboratory Services
• Drinking Water
• Solid Waste Management
• Building Maintenance & Operations
• Challenges:
- High Risk Food Safety Inspections
- Environmental Health Lab Revenues
• New Initiatives:
- Shellfish Pilot Program
- Deregulating Low Risk Small Business and
Community Event Foods
Commissioner Hartig spoke of a new initiative that
monitored paralytic shellfish poisoning (PSP) for
recreational users. The shellfish pilot program asked local
communities to collect samples and send them to the
environmental health lab in Anchorage. The department will
report back to the local community about safe and unsafe
beaches. He reported that close monitoring for PSP was in
place for the commercial shellfish industry. Due to loss of
life in Alaska the pilot program was vital for recreational
users. The funding request for the FY12 capital budget was
$400 thousand. The department will consider program
expansion with success of the pilot.
Co-Chair Thomas requested clarification on funding for the
commercial shellfish program.
3:22:56 PM
Commissioner Hartig explained that in FY11 the department
added a field operator position to collect commercial
shellfish samples for PSP testing. In FY12 the department
requested an increment for a laboratory microbiologist. The
position's duties will include processing PSP samples for
commercial and recreational users
Commissioner Hartig turned attention to slide 10, Division
of Air Quality:
Director: Alice Edwards
Components:
· Director's Office
· Air Quality
Challenges:
· Federal Rules for Greenhouse Gas
· Fairbanks Air quality
New Initiatives
· Gasline permitting
· North Slope Cumulative Air Quality
Commissioner Hartig indicated that EPA instituted
regulatory reporting of greenhouse gas emissions for larger
facilities. Permits were required. The regulations were new
to industry and the state. The state must investigate what
control technologies the facilities could employ to prevent
or reduce their emissions. He mentioned that
Representative Guttenberg opined that Fairbanks was unique
in the world for severity of temperature inversions;
resulting in poor air quality and sick citizens. He asked
what authority DEC would exercise to address the problem as
the compliance deadline looms. Commissioner Hartig restated
that the department was working closely with the borough on
the issue. The borough does not enforce emissions for home-
heating devices; responsibility falls on the state. The
department does not have administrative penalties it can
enforce. Violations must be enforced through civil action,
which has not happened. A complaint hot-line was set up. He
repeated that DEC was working with the borough and EPA on
an attainment plan. He warned that EPA will write the plan
if attainment was not reached. Representative Guttenberg
believed if the state lost control the EPA will wield a
heavy hand. He referred to uncooperative citizens and asked
if DEC established a timeline to prosecute violators.
Commissioner Hartig revealed that the department had to
"fall into" enforcement. He had hoped for local control.
The department did advance a timeline; they were working on
a case by case basis. Severe violations would cause DEC to
accelerate enforcement. The bottom line was protecting
human health.
3:28:52 PM
Representative Joule recounted the problem with naturally
occurring asbestos in Ambler. When gravel was moved
asbestos dust particles were released in the air. Some
projects were held up. A clean source of gravel was
identified. The problems were resolved. He worried that the
same problem could arise constructing the road to the Upper
Goldbelt mining district in Ambler. He asked if the
administration planned to develop guidelines for air
quality or propose legislation. Commissioner Hartig
commented that there were no standards in Alaska when using
asbestos containing materials. The asbestos fibers released
in the air were a human health risk. A working group from
the Department of Transportation and Public Facilities
(DOT), Department of Health and Social Services (DHSS), and
DEC were examining the issue to determine if regulations
and statutes were necessary.
Commissioner Hartig directed attention to the Division of
Spill Prevention and Response (SPAR) (Slide 11).
Components:
• Director's Office
Director: Larry Dietrick
• Industry Preparedness & Pipeline Operations
• Prevention & Emergency Response
• Contaminated Sites Program
• Response Fund Administration
• Challenges:
- Declining Prevention Account Balance
• New Initiatives:
- Contaminated Site Identification for Gasline
Work
- Deepwater Horizon Lessons and Risk Assessment
Work Plan
- Aleutian Island Marine Traffic Risk Assessment
He communicated that SPAR was funded through the response
fund. He referenced Slide 11, "How the Response Fund
Works"):
• Response Account
- Funded by 1¢ surcharge on each barrel of oil
- Surcharge suspended when fund exceeds $50 M
- Pays for situations deemed emergency or imminent
threat
• Prevention Account
- Funded by a 4¢ surcharge on each barrel of oil
- Pays for the programs within the Spill Prevention &
Response Division and associated capital projects
Commissioner Hartig explained how the response fund worked.
The fund represented the five cents surcharge on crude oil
that was produced in the state. When the response fund
dropped below $50 million the one cent surcharge kicked in
until the fund was replenished. The four cents portion was
used to fund SPAR operations. Commissioner Hartig cited
Slide 14 that illustrated a graph depicting the prevention
account balance and consequences of a six to seven percent
yearly decline in North Slope production. He noted that the
cost of running SPAR increased as production decreased.
SPAR was living on a surplus, which was diminishing. The
surcharge will not replenish the fund enough to run the
division.
3:34:41 PM
Representative Costello asked why DEC's oil decline curve
differed from the Department of Revenue's (DOR) predicted
decline. Commissioner Hartig corrected that the curve
illustrated the decline in the prevention account balance
not crude oil production.
Commissioner Hartig continued that in FY11 the legislature
added intent language to the department's budget soliciting
proposals for the fund's sustainability. The department
outlined two options, either increase the surcharge, or
back fill with general funds. He emphasized that the issue
was complex. He assured that the Governor was closely
tracking the account to consider options.
Representative Guttenberg asked if the department was
authorized to back-charge the party responsible for the
spill. Commissioner Hartig explained that DEC was legally
required to prosecute the Potentially Responsible Party
(PRP). The collected funds were deposited into a mitigation
account. The legislature decided the use of the money.
Historically the funds were always re-appropriated back
into the response fund.
3:38:10 PM
Commissioner Hartig turned to water quality (Slide 15):
Division of Water Quality
Program Director: Lynn Kent
Components:
• Water Quality
• Facility Construction
- Village Safe Water Program
- Municipal Grants & Loan
• Challenges:
- Declining Federal Funding in the Village Safe
Water
Program
- Completing and Maintaining Permitting Primacy
- Water Quality Standards
• New Initiatives:
- Gasline Permitting
Commissioner Hartig relayed that the Village Safe Water
Program operated in communities of <600 residents. The
program was funded with 75 percent federal funding and 25
percent state match. Federal funding was declining, about
40 percent in the last seven years. He cited Slide 16,
"Rural Alaska Water and Sewer" that depicted a graph of the
funding decline between 2004 and 2011. He identified a
table on Slide 17 that showed how the federal match
declined from 2004 to 2011. He pointed out that in 2004 the
United States Department of Agriculture (USDA) contributed
$30 million, down to $17.4 million in 2011. In 2004 the
EPA's match was $43 million decreasing to $13 million in
201l. He added that the state's match decreased
accordingly. Special set aside funds for native
communities: Indian Health Service (IHS) and EPA Tribal had
declined. The overall totals went from $127 million in 2004
to $77 million in 2011; a precipitous drop predicted to go
to zero. Commissioner Hartig added that in larger
communities the state provides $23 million a year in
funding for a municipal match program. In FY12 the governor
proposed $20 million in matching funds from the capital
budget.
Representative Gara referred to a letter he and
Representative Austerman sent DEC requesting a proposal for
additional inspectors for the food safety program. He
recounted that in budget subcommittee last year they
learned that a lack of food safety inspectors rendered the
program was a danger to public health. Additional funds for
more inspectors were not requested in the governor's
budget. The department's response was to leave it up to the
legislature. He wondered what the administration planned to
do. Commissioner Hartig divulged that DEC's level of food
inspections were well below federal requirements. The
difficulty was the size and accessibility of Alaska. In
other states, county governments carried out inspections.
In Alaska, Anchorage was the only community that performed
and funded inspections. All other communities relied on the
state. Statewide DEC performed one inspection per facility
every four years; recommended twice each year. He indicated
that the DEC's solution was to address the issue in other
ways. The department would need 31 more inspectors at a
cost of $2 million per year to carry out inspections twice
a year. He did not believe the legislature would fund that
amount.
3:44:08 PM
Representative Gara concluded that the issue was a
significant public danger. He was concerned that nothing
was done. He felt inaction could lead to loss of life. The
legislature relied on public policy proposals from the
agency. He felt the agency was "passing the buck" for
liability on to the legislature.
ADJOURNMENT
The meeting was adjourned at 3:46 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DEC Presentation for HFC 1.28.11.pdf |
HFIN 1/28/2011 1:30:00 PM |
|
| DOLWD FY 12 Budget Overview 1-28-2011PDF.pdf |
HFIN 1/28/2011 1:30:00 PM |