Legislature(2015 - 2016)HOUSE FINANCE 519
02/06/2015 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Fy 16 Budget Overview: Department of Natural Resources | |
| Fy 16 Budget Overview: Department of Military and Veterans Affairs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 72 | TELECONFERENCED | |
| += | HB 73 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
February 6, 2015
1:32 p.m.
1:32:47 PM
CALL TO ORDER
Co-Chair Neuman called the House Finance Committee meeting
to order at 1:32 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Mark Myers, Commissioner, Department of Natural Resources;
Ed Fogels, Deputy Commissioner, Department of Natural
Resources; Jeanmarie Davis, Director, Division of Support
Services, Department of Natural Resources; Brigadier
General Mike Bridges, Commissioner, Department of Military
and Veterans Affairs; Michael O'Hare, Deputy Director,
Division of Homeland Security and Emergency Management.
PRESENT VIA TELECONFERENCE
Mark Greby, President and Chief Operating Officer, Alaska
Aerospace Corp, Department of Military and Veterans
Affairs.
SUMMARY
HB 72 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 72 was HEARD and HELD in committee for further
consideration.
HB 73 APPROP: MENTAL HEALTH BUDGET
HB 73 was HEARD and HELD in committee for further
consideration.
FY 16 BUDGET OVERVIEWS:
DEPARTMENT OF NATURAL RESOURCES
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
HOUSE BILL NO. 72
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, and making appropriations under art.
IX, sec. 17(c), Constitution of the State of Alaska,
from the constitutional budget reserve fund; and
providing for an effective date":
HOUSE BILL NO. 73
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date":
Co-Chair Neuman reviewed the agenda for the day.
^FY 16 BUDGET OVERVIEW: DEPARTMENT OF NATURAL RESOURCES
1:34:05 PM
MARK MYERS, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES
introduced his staff and introduced the PowerPoint
presentation "FY16 Budget Overview: Department of Natural
Resources": He explained that he would be reviewing some of
the department's missions, his staff would go over key
performance measures, and he would examine the details of
the budget.
1:34:41 PM
Commissioner Myers began with slide 3: "Organizational
Chart": He pointed out that the Department of Natural
Resources (DNR) had approximately 1,100 employees, made up
2 percent of the state's general fund (GF) budget, and
managed about 160 million acres of surface and subsurface
lands. The department had two deputy commissioners: Marty
Rutherford handled all things related to energy (except
energy permitting) and Ed Fogels handled the other
divisions including the Division of Agriculture, the
Division of Mining, Land, and Water, the Division of State
Parks and Outdoor Recreation, the Division of Forestry, and
the Division of Support Services.
1:35:26 PM
Commissioner Myers discussed slide 4 "Core Services":
· Foster responsible commercial development and use of
state land and natural resources, consistent with the
public interest, for longterm wealth and employment.
· Mitigate threat to the public from natural hazards by
providing comprehensive fire protection services on
state, private and municipal lands, and through
identifying significant geologic hazards.
· Provide access to state lands for public and private
use, settlement, and recreation.
· Ensure sufficient data acquisition and assessment of
land and resources to foster responsible resource and
community development and public safety.
Commissioner Myers stated that DNR was viewed as the engine
room of the state. The majority of development of natural
resources occurred and most of the state revenue was
generated within DNR. He furthered that for every $1 added
in GF, DNR had a return of $36 to the state treasury. He
believed that the department was very efficient relative to
its small size. He equated DNR to the United States
Department of Interior at the federal level with the
exception of the Alaska Department of Fish and Game and the
state's Division of Forestry.
Commissioner Myers explained that the department's core
services included fostering commercial development and use
of state lands and natural resources, and mitigating
natural hazards such as forest fires. Fire-fighting funds
made up a large portion of DNR's operating budget. He
reported that through the Division of Geological and
Geophysical Surveys the state conducted volcano and
earthquake monitoring, and issued earthquake warnings. He
also acknowledged that DNR worked diligently at
understanding flood risk, landside risk, and coastal
erosion. He alluded to the inherent risks of living in
Alaska due to natural hazard occurrences. He informed the
committee about the state's role in providing lands for
Alaskans to use. He gave examples of recreational cabins,
new subdivisions, and lands used for commercial
development. He pointed out that DNR was also the leading
agency in determining land selection. Department of Natural
Resources was instrumental in selecting land in Prudhoe
Bay. He conveyed that about 500 million additional acres
needed to be selected in the final selection process. The
state's selection provided economic development in mines,
timber, oil and gas, sand and gravel, and access to
infrastructure. He emphasized that the department was a
data-driven science organization and that it coordinated
state mapping, satellite imagery, and elevation modeling.
He opined that Alaska's data was very important but that
the state was under-mapped.
1:39:14 PM
Commissioner Myers advanced to slide 5: "Land Ownership":
Land Ownership:
· Federal Land: More than 200 million acres
· State Land: Approx. 100 million acres of uplands,
60 million acres of tidelands, shore lands, and
submerged lands, and 40,000 miles of coastline
· Native Corporation Land: 44 million acres
DNR:
· Manages one of the largest portfolios of oil,
gas, minerals, renewable resources, water, and
land in the world
· Manages all oil and gas fields on state land,
including two of the largest oil and gas fields
in North America
· Oversees all activities that occur on state land
Commissioner Myers commented that Alaska's land ownership
was widely distributed across the state. He also mentioned
that Alaska had more coastline than any other state in the
nation. In fact, he reported that Alaska had more coastline
than all of the remaining states combined.
1:39:35 PM
Commissioner Myers turned to slide 6: "State Land Position/
DNR Office Locations." He told of DNR's management
responsibilities and about the locations from which it
managed. He alluded to the magnitude of the area in which
Alaska managed. He affirmed the use of advanced technology
to manage remotely and opined that managing land in Alaska
without the proper infrastructure was expensive.
1:40:20 PM
Commissioner Myers reviewed slide 7: "Division Overviews":
Division of Agriculture (DOA)
· Franci Havemeister, Director
· 40 full and parttime budgeted positions
· 4.2% of DNR's FY16 Operating Budget Request
· $7,350.6 total budget request ($3,149.0 UGF)
· Promotes and encourages development of an
agriculture industry in Alaska
Division of Forestry (DOF)
· Chris Maisch, Director
· 254 full and parttime budgeted positions (does
not include the hundreds of fire season crews)
· 25.9% of DNR's FY16 Operating Budget Request
· $45,355.6 total budget request ($26,251.0 UGF)
· 85.6% of Forestry's budget is Fire Suppression
· Serves Alaskans through forest management and
wildland fire protection
Commissioner Myers explained the function of the Division
of Agriculture. The division handled the quarantining of
invasive species. It also provided oversight of the
agricultural loan program and managed Alaska's seed bank.
He reported that additionally the division was responsible
for issuing key certifications for Alaskan products
necessary for commercial export or commercial consumption
of the state's food resources.
Commissioner Myers moved on to discuss the Division of
Forestry. He noted that the division's key responsibility
was to protect the state's forests and to perform proactive
management of fire. He also mentioned that Alaska's forests
were a resource for biofuels and commercial timber.
1:41:20 PM
Commissioner Myers continued with slide 8: "Division
Overviews":
Division of Geological & Geophysical Surveys (DGGS)
· Steve Masterman, Director
· 52 full and parttime budgeted positions
· 4.9% of DNR's FY16 Operating Budget Request
· $8,622.2 total budget request ($4,631.7 UGF)
· Determines the potential of Alaskan land for
production of metals, minerals, fuels, and
geothermal resources, the locations and supplies
of groundwater and construction material, and the
potential geologic hazards to buildings, roads,
bridges, and other installations
Division of Mining, Land &Water (DMLW)
· Brent Goodrum, Director
· 210 full and parttime budgeted positions
· 15.2% of DNR's FY16 Operating Budget Request
· $26,596.0 total budget request ($11,795.6 UGF)
· Provides for the appropriate use and management
of Alaska's state owned land and water, aiming
toward maximum use consistent with the public
interest
Commissioner Myers stated that the Division of Geological
and Geophysical Surveys was the state's largest science
arm. He mentioned that the division did geologic mapping,
resource identification, and information publication. The
division also did assessments of geologic hazards and
risks, mapped information, and provided and worked on
construction materials. The division was a key provider of
data used by information services by the state's industrial
base, particularly by oil and gas mining and construction
folks.
Commissioner Myers referred to the Division of Mining,
Land, and Water as the state's work horse. The division
handled land sales and did many things at the individual
level as well as at the mega-project level with respect to
mining or oil and gas development.
1:42:42 PM
Commissioner Myers turned to slide 9: "Division Overviews":
Division of Oil & Gas (DOG)
· Paul Decker, Acting Director
· 125 full and parttime budgeted positions
· 13.2% of DNR's FY16 Operating Budget Request
· $23,095.2 total budget request ($9,771.5 UGF)
· Responsible for the leasing of state lands for
oil, gas, and geothermal exploration, and issuing
and monitoring pipeline rightofway leases.
Division of Parks & Outdoor Recreation (DPOR)
· Ben Ellis, Director
· 187 full and parttime budgeted positions
· 9.9% of DNR's FY16 Operating Budget Request
· $17,326.1 total budget request ($3,952.3 UGF)
· Provides outdoor recreation opportunities and
conserves and interprets natural, cultural, and
historic resources for the use, enjoyment, and
welfare of the people
Commissioner Myers discussed the duties of the Division of
Oil and Gas. He explained that the division did pre-sale
evaluations of state land, managed the sub surface, managed
royalty components, and provided down-hole surface
information to protect correlative rights of all parties
involved with oil and gas development. The state's royalty
share from oil and gas was the major source of revenue for
the state. He relayed that taxes were a derivative product
of the work done through the division.
Commissioner Myers continued with his presentation by
citing the role of the Division of Parks and Outdoor
Recreation. He elaborated that the division managed the
largest state park system in the United States, ran it
inexpensively, and had seven to eight volunteers for every
employee. He furthered that the division had become much
more autonomous increasing its self-sufficiency from 35
percent in the previous year to 44 percent in the current
year. The division anticipated a 50 percent level of self-
sufficiency in the following year. He attributed
improvement to creative marketing, volunteers, and
increased fees.
1:43:54 PM
Commissioner Myers reviewed slide 10: "Division Overviews":
Division of Support Services (SSD)
· Jean Davis, Director
· 131 full and parttime budgeted positions
· 7.8% of DNR's FY16 Operating Budget Request
· $13,709.1 budget request ($5,867.8 UGF)
· Provides clientfocused, efficient and cost
effective financial, budget, procurement, human
resource, information technology and recording
services to DNR and the public
Commissioner Myers explained that the Division of Support
Services was the state's backstop for administrative
support and was the state's information technology (IT)
backbone. The Recorder's Office with locations across the
state was also part of the division.
Commissioner Myers continued with slide 11: "Office
Overviews":
Office of the Commissioner
· Mark Myers, Commissioner
· 9 fulltime budgeted positions
· 1.0% of DNR's FY16 Operating Budget Request
· $1,828.2 total budget request ($1,654.8 UGF)
North Slope Gas Commercialization (NSGC)
· Marty Rutherford, Deputy Commissioner
· 8 fulltime budgeted positions
· 7.6% of DNR's FY16 Operating Budget Request
· $13,225.2 total budget request (UGF)
Commissioner Myers affirmed that the North Slope Gas
Commercialization (NSGC) office, housed within the Office
of the Commissioner, stood out as one of the most important
offices in the department. The office lead the coordination
with the Department of Revenue, Department of Law, and
Alaska Gasline Development Corporation (AGDC) on the big
gas line.
1:44:42 PM
Commissioner Myers explained slide 12: "Office Overviews":
Office of Project Management & Permitting (OPMP)
· Sara Longan, Director
· 19 fulltime budgeted positions
· 4.6% of DNR's FY16 Operating Budget Request
· $8,134.6 total budget request ($738.8 UGF,
$5,648.3 Industry Receipts)
· Coordinates the review of larger scale projects
in the state
Alaska Mental Health Trust Land Office (MHTLO)
· Marcie Menefee, Executive Director
· 18 full and parttime budgeted positions
· 2.5% of DNR's FY16 Operating Budget Request
· $4,321.9 total budget request (MHTAAR Receipts)
· Protecting and enhancing the value of Alaska
Mental Health Trust Lands while maximizing
revenues from those lands over time
Commissioner Myers reported that the state strongly
identified a challenge with permitting large projects. The
complexity, the number of organizations involved, the
different points of view, and other various factors
influenced the permitting process. The Office of Project
Management and Permitting was created to provide a solid
public process and a transparency of information. He
conveyed the office's success in expediency and efficiency.
He also relayed that primary funding for OPMP consisted of
program receipts.
Commissioner Myers conveyed that the MHTLO reported to its
own board of directors. He explained that the office
provided the land services that brought in revenue to run
mental health programs in the state.
1:45:37 PM
ED FOGELS, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES specified that he was asked to highlight four DNR
performance measures. He discussed the chart in slide 13:
"Key Performance Measures: Dollar Value (in thousands) of
Agreements under MOU and RSA for Large Development Projects
Permitting Coordination": He pointed out the dramatic
increase of large scale projects over the past several
years. He elaborated that the state had resources of
interest resulting in significant permitting activity.
Representative Kawasaki asked about the larger projects
that OPMP was currently handling. He also inquired about
the permitting protocol prior to the creation of OPMP.
Mr. Fogels relayed that the coordination process started in
the early 1990's with the Fort Knox Mine. The coordinator
for the project was located within the Division of Mining,
Land, and Water. He furthered that OPMP, created under
Governor Frank Murkowski's administration, contained both
the Coastal Zone Management Program and the large project
coordination function. He indicated that there were two
large mining projects; the Donlin Gold Project and the
Chuitna Coal Project. On the oil and gas side he reported
that OPMP had recently completed permitting for the Point
Thomson Project and was currently coordinating the Greater
Moose's Tooth Project. He also pointed out that OPMP was
involved in state permitting for Shell Oil Company's Outer
Continental Shelf activities.
1:47:56 PM
Mr. Fogels moved on to discuss the second performance
measure as shown in slide 14: "Key Performance Measures:
Mining, Land, and Water Permit Backlog." He explained that
DNR was making considerable progress in reducing the
permitting backlog in the Division of Mining, Land, and
Water. He pointed to the progress shown on the chart
reporting a 56 percent reduction in permit backlog. He
expressed kudos to Brent Goodrum, Director, Division of
Mining, Land and Water, Department of Natural Resources for
his efforts and organizational and operational efficiency
skills. He also mentioned the budgetary support from the
legislature to backfill some positions.
Mr. Fogels advanced to the bar graph on slide 15: "Key
Performance Measures: Square Miles of Published Minerals-
Related Airborne-Geophysical Data." He explained that the
graph depicted the number of square miles of airborne
geophysical data that the Division of Geologic and
Geophysical Surveys had published. He reported that the
division received capital monies to do further data
gathering. He emphasized the amount of state-owned land
that currently lacked data surveys. He contended that the
state remained eligible to receive additional land through
statehood land entitlement. The state needed additional
data in order to select the entitlement land wisely.
1:49:10 PM
Representative Guttenberg asked about a possible
correlation between what DNR has mapped, what has been
staked, and what has been developed or produced. Mr. Fogels
responded affirmatively. He referred to the Livengood
prospect north of Fairbanks. The prospect was discovered,
in large part, due to the assistance of DNR's airborne
geophysical program. He conveyed that when the information
was reported to the public a tremendous amount of staking
activity in the area resulted. He relayed that DNR focused
on areas that had high prospect potential. He believed that
many of the large mining projects currently producing in
the state proceeded DNR's airborne geophysical program
surveys.
Representative Munoz remarked that specific efforts had
been made by the state to reduce the permitting backlog
within DNR. She wondered about the current wait time for an
average permit within the Division of Mining, Land, and
Water. She also asked if Mr. Fogels felt that the proposed
budget changes would affect DNR's permitting backlog. Mr.
Fogels was uncertain about specifying an average wait time
due to variations in permit applications. He suggested that
a temporary water use permit might be issued within a month
versus a lease for a commercial operation that could take 6
months to a year or more depending on the complexity of the
application. He asserted that wait times had been reduced.
He also reported that DNR was receiving a greater number of
incoming applications. The Department of Natural Resources
had input on the potential funding reductions. The
department's first priority was to keep necessary functions
in place that produced an economy for the state. The second
priority was public safety. He remarked that the department
made efforts to ensure that the permitting core remained
intact.
1:52:22 PM
Vice-Chair Saddler asked if efforts made in the airborne
geophysical and permitting areas within the department
supported future development. Mr. Fogels responded in the
affirmative.
Vice-Chair Saddler asked about a reduction of any of the
expenditures and the potential for the value of investments
to diminish in the future. Mr. Fogels responded, "In part,
yes, and in part, no": He elaborated that the department
had built up a staff of experts key to keep work moving
within the department. He relayed that the department was
in the process of developing an electronic permitting
system. Currently, land use permits and water rights
permits were processed via automation. He expressed his
appreciation for capital appropriation monies that allowed
for new automation. He assured the committee that if
funding was limited, a system remained in place for permit
application processing.
Vice-Chair Saddler clarified that anyone could access the
airborne geophysical information well into the future. Mr.
Fogels responded in the affirmative.
Representative Gara asked about funding for the permitting
process for mines and other projects. He wondered if the
funding was comprised mainly of program receipts. Mr.
Fogels responded that major projects were funded through
program receipts. However, the permitting cost of the
smaller projects were typically absorbed by DNR's budget.
1:54:28 PM
Representative Kawasaki asked about the significant number
drop in FY 12 depicted in slide 15. He suggested that a
better metric would be to include the percentage of
backlogged permits. He preferred to see the total number of
permits versus the permits waiting to be evaluated. He also
suggested including a time measure to know the processing
time for each permit. He relayed his difficulty in
determining whether the state was more efficient in its
processing efforts or if there were less permits to process
based on the data provided in the chart.
Mr. Fogels appreciated Representative Kawasaki's points and
confirmed that the department had the metrics he suggested.
He stated that Director Goodrum could present case types in
detail and provide other information. He relayed that the
backlog was comprised of over thirty different types of
applications. He was happy to supply the committee with
additional information.
Co-Chair Neuman summarized that there had had been a 60
percent reduction in the number of backlogged permit
applications since FY 11. He stated that in FY 11 the state
had 2,659 permit applications to process and by FY 14 only
1,168 permits needed processing.
Mr. Fogels moved on to slide 16: "Key Performance Measures:
Park Fee Revenues (in thousands)." He informed the
committee that state park fees had gradually been
increasing. Previously, the fees covered about 34 percent
of the park's operating budget. The division recently
instated fee increase bringing the percentage to 44
percent. He interjected that an additional fee increase was
planned within the following two years which would make up
about 50 percent of the operating budget for state parks.
He mentioned that there were other innovative projects that
would help to reduce the reliance on the state's GF for
park operations. He concluded his portion of the
presentation.
1:57:07 PM
JEANMARIE DAVIS, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES stated that she would be
walking the committee through a series of slides that
outline the governor's amended FY 16 budget. She commented
that the first subcommittee meeting, chaired by
Representative Pruitt, was held the previous evening with
the department. She anticipated a detailed review of DNR's
budget.
1:57:46 PM
Ms. Davis turned to slide 18: "DNR FY2016 Governor Amended
Budget - Employees":
DNR will employ about 1,060 Alaskans in fulltime and
seasonal positions, in 29 locations, with main offices
in Anchorage, Juneau, Fairbanks and Palmer, and
regional offices throughout the state.
Ms. Davis explained that the small chart on slide 18
depicted the position counts for DNR since FY 12, a five-
year period. She observed that the number of employees was
relatively stable with only slight changes from year-to-
year. However, the FY 16 proposed budget reflected a net
reduction of 47 positions; a decrease of 48 positions and
an increase of 1 new position. She furthered that of the 48
positions to be dropped only 34 were currently filled. She
relayed that DNR would be working with its employees, the
divisions, the Division of Personnel, and labor negotiators
on any kind of layoff process after the final budget was
approved. She reiterated that the department anticipated a
number of layoffs based on the most current information.
Representative Wilson asked if information was available
concerning specific division layoffs. Ms. Davis responded
in the affirmative. She pointed to the information provided
in the governor's budget that was released the previous
day. She indicated that the information was provided to the
finance subcommittee and could be provided to the full
finance committee. Representative Wilson confirmed that she
wanted the information.
1:59:38 PM
Ms. Davis advanced to slide 19: "Budget Growth Analysis
(Prepared by Legislative Finance) - Department of Natural
Resources' Share of Total Agency Operations (GF Only, in
Thousands)":
DNR's GF budget grew by $27,735.8 million between
FY2007 and FY2016 Governor's Request - an average
annual growth rate of 3.2%.
The department's total FY16 Governor's Request GF
budget equals $337,456 per resident worker (according
to the Department of Labor, there were 333,283
resident workers in Alaska in 2012).
Ms. Davis stated that the annual growth rate of 3.2 percent
was low compared to other departments. She pointed out that
FY 07 and FY 08 DNR's budget remained stable. In FY 09
there was a slight jump in the budget due to an increased
workload in the oil and gas division and an amplified
amount of work on the Alaska Gasline Inducement Act (AGIA)
project. She mentioned that in FY 12 there was an increase
in the budget because of an influx of money provided by the
legislature to assist with the department's permitting
backlog.
2:00:42 PM
Representative Guttenberg asked if the growth rate was
directly related to specific projects and to efforts to
reduce DNR's permitting backlog. Ms. Davis responded that
it was due, in large part, to an increase in resource
development activities around the state. She indicated that
the chart only reflected the GF portion of the budget. The
growth rate was also related to labor contracts. She
notified the committee that DNR would be conducting a
detailed ten-year review in the finance subcommittee
meeting on Tuesday of the following week.
2:01:43 PM
Representative Wilson asked about the reference made on the
chart about the department's total FY 16 governor's request
GF budget equaling $337,456 per resident worker. She felt
that the figure was high. Ms. Davis agreed with
Representative Wilson that the number seemed high. She
agreed to review it and report her findings to the
committee. Representative Wilson replied that she
appreciated Ms. Davis looking into the issue and commented
that she did not want to be taxed at the suggested level.
2:02:31 PM
Ms. Davis continued with slide 20: "Budget Growth Analysis
Without AKLNG - Department of Natural Resources' Share of
Total Agency Operations (GF Only, in Thousands) without
AKLNG":
Without AKLNG, DNR's GF budget grew by $14,549.1
million between FY2007 and FY2016 Governor's Request -
an average annual growth rate of 1.8 percent.
Ms. Davis reported that in FY 15 there was an increase of
$8.9 million to support AKLNG associated with the fiscal
note for a bill that passed [during the 28th Alaska State
Legislature]; SB 138 [Short Title: Gas Pipeline; AGDC; Oil
and Gas Prod. Tax]. In DNR's FY 16 budget request the
department asked that the funds for the AKLNG project be
carried forward and additionally requested further funds
for the project of $4.2 million.
Ms. Davis explained that the chart reflected what core
services within DNR would remain intact if $13.2 million
was removed from the FY 16 budget and $8.9 million was
removed from the FY 15 budget. The chart showed an average
annual growth rate of 1.8 percent. She pointed out that the
horizontal blue line reflected 1.54 percent of the state's
GF.
2:03:38 PM
Ms. Davis discussed the chart on slide 21: "Budget Growth
Analysis (Prepared By Legislative Finance) - Appropriations
within the Department of Natural Resources (GF Only, in
Thousands)." She explained that the graph depicted the
growth of GF only for appropriations within DNR by
appropriation unit based on the management plan in the
governor's budget from FY 07 through FY 16. The top line
[shown in grey] signified DNR's increased efforts in
permitting. She pointed out the uptick on the dark blue
line and attributed it to the AKLNG project. She also drew
attention to the peak on the red line in FY 09 associated
with the Alaska Gasline Inducement Act (AGIA) project. She
stated that money had come into DNR's budget and
subsequently gone back out with AGIA.
Ms. Davis advanced to the graph on slide 22: "Budget Growth
Analysis (Prepared by Legislative Finance) - Appropriations
within the Department of Natural Resources (All Funds, in
Thousands)." She reported that the fire suppression budget
showed an increase between FY 12 and FY 13 of $8.5 million
in federal authority added to the budget. She relayed that
DNR continued to use more federal authority year-after-year
as reflected in the chart.
2:05:16 PM
Representative Guttenberg commented that fire suppression
typically correlated with fire activity in the summer
months. He asked about the jump in FY 13 and whether it
indicated increased fire activity around the state.
Commissioner Myers responded that the department had seen a
dramatic increase in the amount of acreage burned over the
previous ten years. He attributed the increase in fires in
interior Alaska to the dry climate. He reiterated that
naturally induced fires have increased dramatically. He
also mentioned that Alaska's forests have been plagued by
certain invasive species, such as the Spruce Bark Beetle,
leaving dead timber behind. He relayed that there had been
a significant amount of beetle kill identified.
Co-Chair Neuman asked Commissioner Myers if DNR had been
doing more controlled burns to mitigate fire suppression.
Commissioner Myers responded that fuel treatment definitely
helped but was expensive. He reported that DNR did not
fight all fires but fought fires that affected structures
and communities such as the Funny River fire. He opined
that preventative measures and decreasing fuel loads
including back runs and timber harvests made sense.
Co-Chair Neuman asked about whether the department had
expanded timber harvesting because of beetle infestation.
Commissioner Myers responded affirmatively and spoke of
trimming the Spruce Bark Beetle kills on the Kenai
Peninsula. He also relayed that because of warm spring
weather, snow was melting earlier and the White Spruce
trees were not getting enough soil moisture. The trees
became stressed and vulnerable to being attacked by
invasive species. He indicated the department had seen a
significant increase in the effects of invasive species.
Co-Chair Neuman asked about an open harvest of beetle kill
on the Kenai Peninsula. Mr. Fogels responded that much of
the beetle kill on the Kenai Peninsula was within the Kenai
National Wildlife Refuge and Chugach National Forest on
federal land. He believed the state had done its best to
conduct timber sales to thin out the beetle kill on state
land. He reported that DNR would be doing additional sales
on the Kenai Peninsula. He specified that the majority of
the beetle kill on the peninsula was on federal land.
Co-Chair Neuman mentioned open harvesting because the
commissioner had spoken of it earlier in the presentation.
He asked if areas of state land with issues such as beetle
kill would be open for the timber industry to harvest. Mr.
Fogels asserted that the state was offering timber sales on
the Kenai Peninsula. He mentioned the clearing activity
done in the Tok area to remove fire load. He suggested that
fires in the Tok area would be far less intense because of
clean-up done previously. He added that the clearing
provided a significant amount of biomass for many of the
biomass projects such as the one at Tok's school.
Co-Chair Neuman wondered about the success of the state's
timber sales. Mr. Fogels reported that timber sales had
been successful, although the state had recently conducted
a 25-year sale auction but did not receive any bids. He
concluded that sometimes the state timber sales were
successful and sometimes they were not.
2:09:16 PM
Vice-Chair Saddler asked if an area was less likely to burn
again for an extended period after a fire. He asked if the
time frame was 10 to 25 years and about a limit. Mr. Fogels
stated that in a forest fire fuel was typically cleared out
leaving an area less likely to catch fire again for a
while. The type of forest and the ecosystem determined the
time frame. He confirmed that fire danger decreased after a
fire. Commissioner Myers added that there were other
factors that influenced times between area fires.
Co-Chair Neuman commented about dead trees in the Big Lake
area and the difficulty in fighting a fire once it started.
He relayed that the trees in Big Lake were similar to Pixie
Sticks.
Representative Guttenberg asked if there was a coordinated
effort to make resources available from a fire. Mr. Fogels
responded affirmatively. He referred to the Tok school
example. He indicated that his staff was proactive in
working with the private sector.
Co-Chair Neuman asked committee members to hold their
questions until the conclusion of DNR's presentation due to
time constraints.
Ms. Davis provided an additional statistic. The department
had been looking at the ten-year average of fire
suppression GF costs in preparing for the Division of
Forestry overview. She reported that the ten-year average
for UGF was $30.8 million. Over ten years the state had one
year that fire suppression costs reached a high of $66
million and another year that the costs reached a low of
$7.8 million. She contended that over a ten-year period
there were significantly different fire seasons from one
year to the next.
2:12:08 PM
Ms. Davis advanced to the pie chart on slide 23: "Operating
Budget by Division/Office." She explained that the picture
depicted DNR's operating budget by divisions or major
offices. It showed that the FY 16 governor's budget request
was $175.1 million compared to the FY 15 management plan of
$178.3 million. She pointed out that the Division of
Forestry looked to have the largest piece of the pie but
explained that 22 percent of the division's budget was
designated for fire suppression preparedness and the base
amount for fire activity.
Ms. Davis explained the pie chart on slide 24: "Operating
Budget by Fund Type." She relayed that the slide showed
DNR's budget by fund type. Funding for the operating budget
was comprised of 49 percent unrestricted general funds
(UGF), 12.4 percent federal funds, 23 percent other funds,
and 15.6 percent designated general funds. She included
callouts to clarify funding sources categorized as either
"Other Funds" or "Designated General Funds." She read the
callouts on the slide.
Ms. Davis discussed the pie chart on slide 25: "Operating
Budget By Core Services." She stated that it reflected one
additional picture of the operating budget. She reported
that 48 percent of DNR's budget was allocated to fostering
responsible development under core services. She continued
to highlight that 24 percent of budget dollars were
designated for mitigating natural hazard threats such as
fire, earthquake and volcanic occurrences, and coastal
erosion.
2:15:21 PM
Ms. Davis advanced to slide 26: "Operating Budget By Core
Service." She referred to it as the "scary slide." She used
the slide to explain how the department built its budget.
She relayed that the governor's office built the budget
using the FY 15 management plan as the base. She indicated
that the upper left quadrant of the chart outlined the
department's core services divided out by four funding
types: unrestricted general funds (UGF), designated general
funds (DGF), other funds, and federal funds. She continued
to explain that the right side [upper right quadrant]
reflected the total for the [FY 16] adjusted base. She
furthered that the Legislative Finance Division (LFD) then
allocated the transactions in the governor's request into
the adjusted base including one-time appropriations and
union negotiated salary contract costs. The resulting
numbers then became the FY 16 adjusted base figures. She
indicated that the FY 16 adjusted base numbers were
duplicated in the bottom left quadrant of the slide and
that the bottom right quadrant showed the FY 16 governor
amended budget numbers. She referred to the change column
on the far right of the slide. A reduction of $12.6 million
from the management plan to LFD's calculated adjusted base
was shown at the top of the page. An increase of $9.4
million from the adjusted base to the governor's amended
plan was displayed at the bottom of the page.
2:17:11 PM
Ms. Davis relayed that an easier way to look at the budget
was shown on slide 27: "Summary Of FY2016 Governor's
Amended Budget Development." She began by referring to the
top of the slide at the FY 15 management plan. She reported
that the total on the top line was $178.3 million with 1107
positions. She continued that LFD's actions were outlined
in the light blue area at the top of the slide. The FY 16
costs that were added in included the union contractual
salary increases in the light blue area at the top. The
reduction of one-time items were also shown in the same
area of the slide and included $8.9 million for AKLNG, $4.0
million for the Mental Health Trust Land Office, and two
additional items resulting in DNR's FY 16 adjusted base.
The adjusted base was the starting point for comparing the
governor's amended plan.
Ms. Davis moved on to explain the FY 16 governor amended
budget increments in the light green portion of slide 27.
She first pointed to the $8.9 million added back into the
budget for AKLNG. An additional request of $4.2 million was
seen below the AKLNG increment. She noted that the two
items were the only UGF items increased in the department's
budget. The department also added in the Mental Health
Trust money and a small spending authorization increase in
the pipeline and gasoline projects in the State Pipeline
Coordinator's office.
Ms. Davis discussed the pink section that reflected the FY
16 governor amended budget decrements. The figures reflect
budget reductions spread across all of DNR's divisions
totaling $8.6 million. The reduction of $5.9 million in UGF
equated to a reduction of 48 positions. She relayed that
she would be providing a one-page information sheet about
the position reductions to Representative Neuman's office
for distribution.
Ms. Davis referenced the comparison towards the bottom of
the slide in blue. The comparison included the FY 16
adjusted base (LFD's plan) to the FY 16 governor amended
plan. It also showed the FY 15 management plan compared to
the FY 16 governor amended plan. The comparison between the
department's budget and the adjusted base reflected a 5.7
percent increase largely due to the AKLNG and Mental Health
Trust monies being added back into the budget. She
furthered that in looking at the comparison to the
management plan the department showed a 1.8 percent
decrease or a 2.5 percent decrease in UGF. She reported
that the percentages matched the percentages provided by
Pat Pitney, Director, Office of Management and Budget. She
relayed that the last comparison, in the orange section on
slide 27, excluded AKLNG as the addition to DNR's core
services. The numbers reflected an overall 2.3 percent
reduction in DNR's budget for all funding sources and a 7.6
percent reduction in UGF.
Co-Chair Neuman commented that he liked the chart.
2:21:13 PM
Ms. Davis continued to slide 28: "Department Comparison -
FY2015 Management Plan Operating Budget (UGF only in
millions)." She explained that the slide was a department
comparison based on the FY 15 management plan. Only UGF
were compared in the slide. She reported that in FY 15 DNR
represented 2 percent of the state operating budget. The
slide provided a clear picture of where the state's UGF
dollars were being spent. She furthered that in FY 16 the
department decreased to 1.75 percent of the state's budget.
2:22:02 PM
Ms. Davis pointed to the pie chart on slide 29: "DNR
Revenue Generation - DNR Generated Revenue Compared To
DNR's Unrestricted General Fund Budget Annual Average For
FY2006 - FY 2014 (In Thousands)." She summarized that DNR
generated an average of $2.6 billion in revenue annually.
She explained that the large blue section reflected what
monies went into UGF. The orange section indicated monies
going into the Permanent Fund. The two smaller pieces
represented monies going into the Constitutional Budget
Reserve Fund and into other funds such as the school fund,
Agricultural Revolving Loan Fund (ARLF) interests, and
excess program receipts collected in the recorder's office
or through state pipeline coordinator lease fees. She
pointed to the smaller blue circle in the upper right
corner that showed DNR's average annual GF budget to be
$72.8 million from FY 06 through FY 14. She referred back
to a statement made by Commissioner Myer that for every $1
invested in DNR, the department's return was $36. She noted
that the revenue stream picture over the following two
years was likely to decrease. She reported that in looking
at FY 14 by itself compared to the nine- year average, FY
14 revenue was down approximately 2.7 percent. In comparing
FY 13 to FY 14, FY 14 dropped by almost 10 percent in
revenue collection. She wanted to present DNR's broader
picture.
2:24:12 PM
Commissioner Myers reported on slide 30: "Revenue Actuals
and Forecast." He included the slide to show DNR's two
major sources of revenue; oil and gas royalties and oil and
gas taxes. He relayed that the state's royalties were based
on a percentage of production which made them much less
volatile than a net profit share oil tax system. He
continued that even though when the price of oil dropped
the royalty value went down, the royalty value decreased
proportionately much less than did the tax in a net profit
system. He suggested that the state maintain the royalty
share as a base for its budget, a less risky part of the
state's investment. He emphasized that when prices were
really high on a net profit system the state stood to make
significant money. However, when oil prices were low, the
state stood to lose money. Royalties offered some buffer
from losing money. He claimed that royalty management was
an extremely important factor in state revenue. He
furthered that DNR's management of the resources and
commodities was vital to the economy. He reiterated that
historically royalties were not substantially volatile even
with price change compared to a net profit share tax
system. He opined that without the royalty piece or without
production the state would not have taxes. He suggested
that taxes and royalties formed the basis of the current
economy. He noted that as significant as the price drop was
for FY 16, the state still had a strong stable base even
though the effects on royalties were weighty.
Commissioner Myers made one other comment regarding
Representative Wilson's observation of the cost per
resident. He reported that the cost per resident was
approximately $37 per resident rather than $336 thousand.
Vice-Chair Saddler referred to slide 24. He asked about the
Permanent Fund receipts in the "other funds" category. Ms.
Davis responded that the legislature looked at DNR's budget
in both the Division of Oil and Gas and the Division of
Mining, Land and Water. She reported that both divisions
were generating revenues from leases, royalties, and mining
that were deposited into the Permanent Fund. The
legislature chose to fund a portion of each of the
divisions' operating budgets from Permanent Fund earnings.
Co-Chair Neuman asked Ms. Davies about her comments
regarding budget consistencies [by fund type] over the
prior ten years. Ms. Davis stated that her comments applied
generally across the board. She provided FY 06 numbers. She
relayed that in FY 06 UGF was 50 percent, DGF was 15
percent, other funds were 22 percent, and federal funds
were 13 percent.
Co-Chair Neuman asked if the dollars amounts were about the
same. Ms. Davis confirmed that the numbers were very much
the same. Co-Chair Neuman indicated that he was pleased
that the increase in monies for electronic upgrades were
paying off.
2:28:37 PM
Representative Wilson asked about fire suppression. She
reported a large fire in the Fairbanks area having to do
with the military. She wanted to know what happened to
reimbursement funds from the military to compensate for
lost state assets. She wanted to know if the funds were
deposited into the state UGF. Mr. Fogels believed that the
money would be deposited into the general fund. Ms. Davis
confirmed that the funds would be deposited into UGF and
were referred to as "prior year recovery":
Representative Wilson asked if there was a method of
tracking the cost of fire suppression per year. She
suggested that the fire suppression figures did not include
any offsets received by the state. Ms. Davis confirmed that
offsets were not part of the figures. However, she
indicated that with some research she would be able to
provide accurate numbers that included prior year recovery
offsets received by the state for the previous ten years.
Representative Wilson did not request that Ms. Davis
provide the numbers. She also asked about air quality. She
wondered whether air quality was taken into consideration.
Mr. Fogels responded that he would get back to her. He
stated that the department had its fire plan that outlined
where the state should focus on resource development. He
expounded that property values and public safety were both
considered in prioritizing. He was not sure if air quality
was considered when fighting fires. Representative Wilson
expressed her appreciation of Commissioner Folgers'
willingness to get back to her.
Representative Gara referred to slide 30. He wondered about
the potential of receiving negative credits for FY 15 and
FY 16. He wanted to know which numbers were used to
generate a forecast. Commissioner Myers relayed that DOR
Commissioner Hoffbeck had informed him that there was a
significant amount of credit not accounted for FY 14. He
suggested that Representative Gara confer with Commissioner
Hoffbeck.
Representative Gara asked about the anticipated revenues
from the Shell development project. He suggested that
currently the law was written such that the state would not
receive production credits three miles off shore. The state
would have to depend on getting a share of federal
royalties. He asked if there had been or would be
litigation to enforce the statehood compact's 90/10 split
of offshore oil. Commissioner Myers responded that although
it was a priority to the current administration and to
previous administrations to get federal revenue sharing in
the offshore for Alaska he was uncertain whether Alaska was
entitled to receive federal revenue sharing under the Outer
Continental Shelf Lands Act (OCSLA). He asserted that it
was a legal question.
Co-Chair Neuman commented that the question might be one to
pose to the state's Attorney General. Commissioner Myers
added that there was another potential benefit from OCSLA.
He explained that property taxes could be collected and
there was also the potential to generate other revenues
with oil flowing through facilities that are on state
lands.
2:33:06 PM
AT EASE
2:35:36 PM
RECONVENED
^FY 16 BUDGET OVERVIEW: DEPARTMENT OF Military and Veterans
Affairs
2:35:55 PM
BRIGADIER GENERAL MIKE BRIDGES, COMMISSIONER, DEPARTMENT OF
MILITARY AND VETERANS AFFAIRS introduced the PowerPoint
presentation "FY2016 Budget Overview - Department of
Military and Veterans Affairs":
2:37:06 PM
Brigadier General Bridges reviewed slide 2: "Mission":
To provide military forces to accomplish military
missions in the state or around the world; provide
homeland security and defense; emergency preparedness,
response, and recovery; veterans services; and youth
military style training and education.
Brigadier General Bridges turned to slide 3: "Core
Services":
· Defend and Protect Alaska and the United States
· Disaster Preparedness/Response and Recovery
· Youth Intervention
· Outreach to Veterans and Military Families
2:37:48 PM
Brigadier General Bridges reviewed the pie chart on slide
4: "DMVA FY2016 Budget by Core Service":
Defend and Protect Alaska and the United States
· $31,646.2 all funds
· 165 PFT
Disaster Preparedness/Response and Recovery
· $11,603.8 all funds
· 62 PFT
Youth Intervention
· $12,831.8 all funds
· 91 PFT
Outreach to Veterans and Military Families
· $2,261.7
· 4 PFT
Brigadier General Bridges pointed out that there were only
four full-time positions for outreach to veterans and
military families serving over 77 thousand veterans in
Alaska. Many of the 77 thousand veterans were not currently
registered to receive federal veterans' affairs (VA)
benefits. The state's mission was to enroll every eligible
veterans to receive benefits.
2:38:42 PM
Co-Chair Neuman asked about the current status of veterans
having access to federal hospitals. Brigadier General
Bridges responded that great strides had made across the
country to provide veterans access to federal care
facilities. He reported that due to outreach conducted in
coordination with the Alaska Native health care system and
corporate care providers around the state federal programs
were now linked for reimbursement or direct cost benefit to
the Alaska Native Tribal Health Care Trust programs. Also,
he relayed that ongoing expansion efforts were being made
to provide transportation to necessary care facilities for
veterans short on funds or living in remote locations.
Recently, the department was awarded a $750 thousand,
three-year grant ($250 thousand per year) to help pay for
ground transportation to VA care facilities for veterans
living in very rural parts of Alaska on and off the road
system. The grant monies could also be used to pay for
transportation on the Alaska Marine Highway System (AMHS).
The department previously attained funding for aerial
transportation for veterans living off of the road system.
Co-Chair Neuman asked if veterans had access to rural
health centers. Brigadier General Bridges responded
affirmatively. He suggested that, for example, instead of
flying a veteran into Anchorage from Bethel or from a
remote village in the Bethel region, Yukon Kuskokwim Health
Center was now able to provide a veteran's care and have it
paid for with federal VA funds.
Co-Chair Neuman commented that health care was the largest
concern brought to his attention by his veteran
constituents. Brigadier General Bridges referred to a graph
that showed the progress being made in veteran access to
health care facilities.
Co-Chair Neuman wanted Brigadier General Bridges to provide
the committee additional information on the location of
health care facilities accessible to veterans within
Alaska. He suggested that individual legislators could, in
turn, share the information to their district communities.
Brigadier General Bridges indicated that he was happy to
provide Co-Chair Neuman with the information.
Representative Wilson asked about the number of doctors in
each of the facilities. Brigadier General Bridges stated
that he did not have the information for federal VA health
care.
Representative Wilson wondered if the state kept track of
how many doctors were available to care for veterans. She
referred to going on post in Fairbanks. It was her
understanding that Fairbanks lost one of its doctors.
Brigadier General Bridges responded that the information
Representative Wilson was asking for was not something the
four-person office tracked. He suggested that she might be
able to get the information from the federal branch. He
offered to ask Mr. Bowen, the state's VA administrator, if
the state had the information. He also offered to pursue
the information.
Representative Wilson appreciated Brigadier General Bridges
making the effort to provide the information. She
understood that there were no doctors currently available
to serve the area's veterans. Veteran patients saw
physician assistants rather than physicians. She wanted to
be able to convey exactly what services were available to
veterans in her district.
Brigadier General Bridges reiterated that he would provide
Representative Wilson the information. He stated that he
was aware of information in the Mat-Su Valley because of
recent hiring issues with providers.
2:42:34 PM
Brigadier General Bridges advanced to slide 5: "Top Level
Organizational Chart." He explained that the slide
contained the department's primary organizational chart and
showed the divisions within the department. He drew
attention to the stand-alone blue box representing the
Alaska Aerospace Corporation which he would be discussing
later in the presentation. The red box represented the
federal Title 10 officer, working for the chief of the
National Guard Bureau, who was the protector and oversight
person for the federal government's property, funds, and
equipment used by the Title 32 Alaska National Guard
Forces. He clarified that the person was a representative
of the federal government as an advisor to the adjutant
general on behalf of the United States Department of
Defense.
Brigadier General Bridges stated that the new commissioner
for the department was Laurie Hummel, retired from the
United States Army. She was in the process of reenlisting
which accounted for her absence in the present Finance
Committee meeting. He noted Mr. Bob Doehl, a retired Air
National Guard Colonel and former Army soldier and officer,
was the new deputy commissioner for the department. Colonel
Doehl was coming into the position with substantial
military experience.
Brigadier General Bridges identified the divisions within
the department; the Army National Guard, the Air National
Guard, the Division of Homeland Security and Emergency
Management, the Alaska Military Youth Academy (a program
established approximately 20 years previously to take care
of the national security threat of the state's young people
becoming drains on society versus productive members), and
the Division of Veterans Affairs. The Veteran's Affairs
office, operated by four staff members, was supported by
the veterans' service officers around the state such as
Veterans of Foreign Wars and the American Legion. He
reported that the total force within the department was
approximately 4,000 uniformed members and over 300 non-
uniformed employees.
2:45:00 PM
Brigadier General Bridges reviewed slide 6: "Alaska Air
National Guard":
2 Wings with more than 2,120 members
· 168th ARW located at Eielson AFB
· 176th WG located on JBER
Primary Weapons Systems:
· KC-135 Tanker Wing at Eielson AFB
· Space Warning and Surveillance Squadron
· C-17 Associate Squadron on JBER
· C-130H Airlift Squadron
· Rescue Coordination Center
· HC-130, HH-60 & GA Rescue Squadrons
· Air Defense Squadron
Brigadier General Bridges elaborated that the slide was a
description of the Alaska Air National Guard. He explained
that there were two wings: the 168th Tanker Wing located at
Eielson Air Force Base (AFB) and 176th Wing located at the
Joint Base Elmendorf Richardson (JBER). The 168th Wing was
home to KC-135 tankers, the in-flight area refueling
tankers, and housed the Space Warning and Surveillance
Squadron, an early warning watch unit that looked for
incoming things from outer space. He pointed out that the
176th Wing was the most complex and operational wing in the
Air National Guard across the country. The wing had a C-17
large cargo jet squadron and a C-130H small cargo airlift
squadron. The wing was also home to the Rescue Coordination
Center, the combat search and rescue squadrons, and the air
defense squadron which was the North American Aerospace
Defense Command (NORAD). NORAD's mission, run by Air Alaska
Air National Guard, was to watch for interspace invasion by
fixed-wing aircrafts from other nations.
2:46:36 PM
Brigadier General Bridges scrolled to slide 7: "Alaska Army
National Guard":
Three major units with more than 1900 members:
Joint Forces Headquarters
297th Battlefield Surveillance Brigade
· Headquarters & Headquarters Co
· 1-297thCAV Reconnaissance & Surveillance
· 297thCombat Support Company
· 297thSignal Network Support Company
· B Company, 1stBattalion 143rdInfantry (ABN)
38th Troop Command
· 1stBattalion 207thAviation
· 761stMilitary Police Battalion
· 103rdCivil Support Team
· 207thMulti-Functional Training Regiment
· 49thGround Missile Defense Battalion
Brigadier General Bridges informed the committee that
Alaska's 297th Battlefield Surveillance Brigade was one of
nine brigades scheduled to be deactivated later in the
current year. He reported that the Army decided that the
battlefield surveillance brigades were no longer needed.
The department was working on the replacement force
structure from the Army as it downsized. He reported that
the 38th Troop Command was the brigade equivalent
administrative headquarters for the department's other
units within the state.
Brigadier General Bridges briefly discussed the 49th Ground
Missile Defense Battalion which was a ground-based missile
defense based at Fort Greely. He relayed that it was a 24/7
operational national strategic mission made up of 210
Alaska National Guard members in full-time status in
support of Intercontinental Ballistic Missile (ICBM)
threats from rogue nations such as Iran and North Korea. He
shared that there was a small full-time unit, a civil
support team primarily for weapons of mass destruction such
as chemical, biological, radiological hazards of accidental
or deliberate release within the state. The support team
was also deplorable around the world to assist other
states, territories, and other nations.
HH
2:48:12 PM
MICHAEL O'HARE, DEPUTY DIRECTOR, DIVISION OF HOMELAND
SECURITY AND EMERGENCY MANAGEMENT explained slide 8:
"Division of Homeland Security & Emergency Management":
Critical services to protect lives and property from
terrorism and all other hazards, as well as to provide
rapid recovery from disasters.
Mr. O'Hare specified that there were 62 people in the
division that helped Alaska communities prepare, respond,
recover, plan, train, and exercise for any disaster that
might occur. The division carried out its mission through
partnerships with local, state, and federal agencies, non-
governmental organizations, and faith-based organizations
to help with recovery processes and some unique tactical
communications. The division helped with alert and warning
systems such as tsunami warning systems seen in the coastal
communities. The division also does outreach in the schools
including earthquake preparedness.
2:49:49 PM
Brigadier General Bridges turned to slide 9: "Office of
Veterans Affairs":
The Office of Veterans Affairs continues to help
Alaska's veterans and their families improve the
quality of their lives by helping them file claims for
education, medical, compensation/pension as well as
assisting them in obtaining earned military awards.
Brigadier General Bridges reiterated that there were 77
thousand known veterans in Alaska, only 32 thousand of
which were registered with the federal VA. One of the key
missions of the Office of Veterans Affairs was to get the
other 44 thousand veterans registered to receive the
benefits they were entitled.
2:50:34 PM
Brigadier General Bridges advanced to the graph on slide
10: "Measures and Results - Federal Veterans
Administration Benefits in Alaska by Type and Calendar Year
(in Millions)." He reviewed the type of benefits veterans
received in Alaska including medical care, insurance and
indemnity, education and vocational rehabilitation, and
compensation and pension. He pointed out the significant
growth that had resulted from the work performed by a staff
of four people. Millions of dollars were brought into
Alaska in the form of economic activity and earned benefits
to individuals that served the nation since 2008.
2:51:15 PM
Representative Edgmon referred to the 32 thousand of the 72
thousand [Secretary's Note: The number was 77 thousand
rather than 72 thousand] veterans registered. He suspected
that there was a great number of veterans in rural Alaska
that were not registered. He wanted Brigadier General
Bridges' input. He also asked about the number of veterans
that were not registered and were homeless. Brigadier
General Bridges indicated that the homeless numbers that
the office was aware of based on working with other
entities was less than 1,000 in Alaska. He stated that the
last number he had heard was approximately 600.
Representative Edgmon wondered about the disparity between
registered and non-registered veterans. Brigadier General
Bridges explained that a registered veteran had met with a
veterans service officer, provided military discharge
records, and supplied documentation to the federal VA
system. He asserted that there were many different reasons
that veterans did not register. Some veterans were
embarrassed or did not feel they deserved to receive
benefits based on the position in which they served or
because of their length of service. The philosophy of the
VA division was that it was one veteran at a time. Some
people were discouraged by the bureaucratic process
involved in registering.
Representative Edgmon thanked Brigadier General Bridges for
his response.
Co-Chair Thompson relayed his personal experience in
registering as a veteran in Alaska. At the end of the
process he received his card and certification.
2:54:43 PM
Vice-Chair Saddler expressed his approval of the efforts of
the division. He wanted to emphasize that the more veterans
that sign up helped the state with its scores, which in
turn, provided federal resources for things like clinics,
hospitals, and staffing.
Brigadier General Bridges agreed with Vice-Chair Saddler's
comment and furthered that there had been an amazing
increase in federal dollar receipts in Alaska. He reported
that the 32 thousand registered in Alaska were bringing in
approximately $660 million in federal dollars. He claimed
that with a greater number of registrations being received
there would be a greater number of federal receipts
received by the state. He relayed that demographically
Alaska had the most veterans of any state per capita. Also,
Alaska had the highest number of military personnel
currently serving per capita in the nation. He brought up
the fact that family members sometimes were entitled to
benefits based on the veteran's military service but were
not always aware of their entitlement. He surmised that the
benefits to the state could be extraordinary if all of
Alaska's veterans were registered.
2:56:25 PM
Representative Wilson asked if DMVA was working with
Department of Labor and Workforce Development (DLWL)
regarding education and vocational rehabilitation for
veterans. Brigadier General Bridges relayed that it was a
combination of both the federal and state departments of
labor and the federal and state VA divisions. The state had
its own office in downtown Anchorage on DeBarr Road in the
same building occupied by the state's [federal] vocational
office.
Representative Wilson asked about the role of the education
and vocational rehabilitation division within the
department. Brigadier General Bridges confirmed that the
division linked up the federal fund resources to pay for
the educational component provided to veterans.
Representative Wilson asked if DMVA was working with the
University of Alaska (UA) system. She indicated that there
were counselors available specifically for Alaskan veterans
to ensure an easy transition in enrolling in classes.
Brigadier General Bridges responded that UA was sourcing
the service with veteran service officers at the university
level to assist with the veteran student population. He
complimented the university president and his chancellors
for working with DMVA, with the division's administrator,
and with the federal VA office.
2:58:36 PM
Brigadier General Bridges discussed slide 11: "Alaska
Military Youth Academy":
Mission
To meet the life coping skills and educational needs
of 16 to 18 year old Alaskans who are at risk of not
completing their secondary education, and to provide
them with the values, skills, education and self-
discipline to succeed as adults.
Brigadier General Bridges explained that the Alaska
Military Youth Academy was not a constitutional or
statutory component of DMVA. He conveyed that the academy
was and additional program. He provided some historical
background. The program was enacted by congress about 20
years prior because of the national threat of obesity and
the high school drop-out potential for youth. Congress
tasked, challenged, and funded the United States Department
of Defense to implement the program through the National
Guards of the states. Currently the program existed in 36
states. The program brought at-risk youths that were either
on the verge of dropping or already dropped out of high
school, or in trouble from other failure. The program
served youth from the ages of 16 to 18. He specified that
the program was voluntary and was provided in a residential
military boot camp setting to steer participants in the
right direction. He furthered that the program was held at
Fort Richardson for 5.5 months. The program included
academic, physical fitness, self-discipline, citizenship,
and community service components.
Brigadier General Bridges pointed out that DMVA ran two
residential courses per year with approximately 270
participants graduating annually. The department had a goal
of 288 graduates per year. However, some participants chose
not to complete the program. He noted that there was a 12-
month aftercare component in which participants were
required to maintain monthly contact with an adult mentor
to ensure their success in one of the following: completing
traditional high school, moving into an educational or
vocational technology program, joining the military,
working full-time, or working part-time while attending
school. He asserted that following aftercare participants
were likely to succeed as adults.
Brigadier General Bridges told of a grant program that
added a 5-month leg of vocational training working with
industry, similar to an apprenticeship. The end result was
for participants to transition into an apprenticeship
position with a civilian company. The program was not
currently in place and was new to Alaska. The department
had requested federal funding and was awaiting approval. He
relayed that a state funding match was not required and
signified that industry partners had already committed to
partnering with DMVA.
3:01:34 PM
Vice-Chair Saddler stated he had been a participant as a
parent and mentor. He surmised that the program was
effective and supported the investment in young people. He
commended Director Roses and his crew. He relayed that he
would offer his continued support for the program.
Brigadier General Bridges relayed his personal involvement
with and appreciation for the program.
3:02:38 PM
Brigadier General Bridges turned to slide 12: "Measures and
Results - Percent of Cadets Placed in Employment,
Education, or Military as Graduation by Fiscal Year." He
reported that at the conclusion of the current class which
ends in February over 4,500 young people will have
graduated from the program since its inception in 1993. He
remarked that the percentage of cadets placed in
employment, education, or in the military ebbed and flowed
as seen in the chart. He commented that recruiting efforts
were ongoing. However, he attributed a large group of
participant self-referrals to the influence of past-
graduate family members and friends. He continued to report
that there had been multi-generational participation in
some families.
3:03:16 PM
Brigadier General Bridges advanced to slide 13: "FY2016
General Fund Budget." He referred to the box chart on the
far right of the slide. He explained that it depicted each
agency's budget request. He emphasized that DMVA's budget
was one of the smallest of the state agencies with the
largest single workforce. National Guard members were
included in the department's workforce numbers. He
disclosed that the majority of the revenue and operating
funds for the department were federal dollars. The state
provided some matching funds and funds to exclusively take
care of business. He concluded that the DMVA's budget was
relatively small compared to the state's overall budget.
Brigadier General Bridges reported that three weeks
previously the governor's office requested that the
department transfer GF from DMVA to a separate designated
fund for the Alaska Aerospace Corporation. He relayed that
the Department of Administration and the legislature would
determine the future of the Alaska Aerospace Corporation
which would be presented later in the presentation.
Brigadier General Bridges detailed that the department's GF
budget grew overall by $4.3 million between FY 07 and FY
16. The governor's request GF budget reflected an annual
average growth of 3.1 percent. The department's total FY 16
governor's request GF budget equaled $54 per resident
worker. He provided information about changes to the
department's Alaska Military Youth Academy (AMYA) fund. He
explained that the same money was coming to the department
in a different way.
3:05:32 PM
Brigadier General Bridges reviewed slide 14: "General Fund
Look-Back: Appropriations within the Department of Military
and Veterans Affairs (GF Only)." He reported that the [red]
line on the chart reflected a change in pass through monies
for the AMYA program. He pointed out that the large bump on
the green line represented a change to the Alaska Aerospace
Corporation zeroing out in the following two years. He
referred to the administration's request to move monies
from DMVA to a different fund for the Alaska Aerospace
Corporation.
Brigadier General Bridges reported on slide 15: "All Funds
Look-Back: Appropriations within the Department of Military
and Veterans Affairs (All Funds)." He informed the
committee that the slide uptick included $1.3 million in
federal funds for AMYA [red line] and $250 thousand federal
funds for the veterans' highly rural transportation grant
[blue line]. He also noted the large drop in funding for
the Alaska Aerospace Corporation on the green line.
3:07:15 PM
Brigadier General Bridges slide 16: "Status of FY2015
Changes":
Alaska Military Youth Academy (AMYA)
$23.7 UGF
This increment was approved to partially off-set the
cost of new GED testing requirements, which moved from
a paper-based test to a computer-based format January
1, 2014. AMYA has completed a new GED testing center
and has identified and purchased preparatory
curriculum and software to transition testing for
cadets to a computer-based format.
$4,791.4 UGF / -$5,654.7 I/A Receipts
This fund source change was the result of the passage
of HB 180, which changed the funding methodology for
AMYA to a direct appropriation instead of passing
through the Department of Education and Early
Development. This change has had no impact on the
services provided by AMYA.
Vice-Chair Saddler asked about alternative testing
locations. He wondered if all cadets were given the
opportunity to take the General Education Development test
(GED). Brigadier General Bridges responded that the GED was
available to any cadet. He suggested that not all cadets
were interested in taking the GED. The department preferred
and encouraged participants to receive either a high school
diploma accredited through the AMYA program or a diploma
from a traditional high school.
Vice-Chair Saddler asked about the number of academy
graduates. Brigadier General Bridges relayed that the
academy anticipated having over 4,500 students at the end
of the current class since 1993.
3:08:53 PM
Representative Guttenberg asked about the military's
recognition of successfully completing the GED versus
receiving a high school diploma. Brigadier General Bridges
suggested that when the military downsized, as it was
currently doing, it automatically increased its standards
for membership into the military services. An applicant had
to be a close-to-perfect human specimen in all primary
categories including physical fitness, medical health,
academics (i.e. a high school diploma), and clear of moral
and ethical legal issues. He continued to explain that in
the current military climate, other than during a surge
requirement, holders of high school diplomas were much more
likely to be enlisted into the military than GED holders.
3:10:58 PM
Brigadier General Bridges turned to slide 17: "FY2016
Budget Highlights - Decreases in the Governor's Amended
FY2016 budget":
Decreases in the Governor's Amended FY2016 budget
· $350.0 UGF -Interior Veterans Cemetery operations
Construction of the Interior Veterans Cemetery
has been delayed due to availability of federal
funds. Therefore, operating funds are not needed
in FY2016.
· $300.0 UGF -Base Realignment and Closure Impact
Assistance
DMVA will work with available resources and
coordinate with other interested parties to
advocate for sustainment of Alaska's military
installations.
· $350.0 UGF -Army Guard Facilities Maintenance
DMVA anticipates some cost savings due to changes
in cost-sharing ratios with the National Guard.
· $133.6 GF Match/$75.5 Fed -Pre-Disaster Mitigation
Activities
Pre-Disaster Mitigation activities will be
reduced.
Brigadier General Bridges reported that $350 thousand would
be the annual operating cost the department would incur
once the veterans' cemetery in Fairbanks was built and
opened. He shared that the federal VA reappropriated the
monies for the following year due to delayed construction
of the cemetery.
Brigadier General Bridges moved to discuss funds used in
conjunction with base realignment and closure impact
assistance. He reported that retired senior military
officials were contracted to examine the state's strategic
messaging and preparations for base realignment and closure
issues. He relayed that the reduction was only for FY 16.
He suggested that the funds could be reinstated in the
future if needed.
Co-Chair Thompson asked if the funds could have been used
to address and offset some of the base realignments being
done with just a reduction in force. Brigadier General
Bridges responded that the department was already working
with the community leadership of Fairbanks and Anchorage to
reduce the potential threat of one or both of the brigade
combat teams in U.S. Army Alaska. Co-Chair Thompson asked
if any of the funds slated for the base realignment and
closure impact assistance were being used to mitigate the
reduction of Alaska's brigade combat teams. Brigadier
General Bridges replied in the negative.
Vice-Chair Saddler announced that there would be listening
sessions in Anchorage and Fairbanks within the following
two weeks. He encouraged members in attendance to clearly
express opposition to any reductions to active duty forces
in Alaska including JBER and all of the bases in Alaska's
interior. Brigadier General Bridges added that all of the
new department leadership would be participating in the
listening sessions.
Brigadier General Bridges continued to review proposed
budget decrements. He stated that the department had
benefited from other states not spending their facilities
monies in the previous three years. Alaska received close
to $50 million of additional federal dollars to build,
maintain, and modernize select Army Guard facilities. He
offered that the department also received $133 thousand GF
match for pre-disaster mitigation activities which included
conducting preparatory training outreach in communities for
their own local emergency planning processes. For example,
instead of spending money on travel the department was
moving towards more video or teleconference training and
using the mail system to disseminate training information
to assist communities in refining their own emergency
response plans. Also, the department intended to modify its
twice-yearly consolidated training by expanding the
training packages and information provided to participants.
He concluded that DMVA would be more creative in how
training and messaging was delivered.
3:14:44 PM
Brigadier General Bridges continued with slide 18: "FY2016
Budget Highlights - Increases in federal authority in the
Governor's Amended FY2016 budget":
Increases in federal authority in the Governor's
Amended FY2016 budget
· $1,300.0 Fed -Alaska Military Youth Academy (AMYA)
AMYA anticipates award of a 40-month grant to
provide a job-training component to selected
cadets who have completed AMYA's residential
program.
· $250.0 Fed -Office of Veterans Affairs
The Office of Veterans Affairs was awarded a
federal grant to off-set the costs of ground or
sea transportation of veterans in highly rural
areas.
Brigadier General Bridges indicated that no state match was
required for either item. The state only needed the
authority to receive the federal funds.
3:15:39 PM
Brigadier General Bridges deferred to a colleague to
present information about the Alaska Aerospace Corporation.
MARK GREBY, PRESIDENT AND CHIEF OPERATING OFFICER, ALASKA
AEROSPACE CORP, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
explained slide 19: "Alaska Aerospace Corporation":
· Alaska Aerospace Corporation (AAC) was created in
1991 as a public corporation of the state within the
Department of Military and Veterans' Affairs.
· AAC is an independent corporation with board of
directors, appointed by the Governor
· AAC's mission is to develop aerospace related
economic growth within the State of Alaska
· AAC employs approximately 50 personnel
· AAC's KLC is the United States' newest launch
facility and holds an FAA Commercial Space
Transportation license
· Kodiak Island has unparalleled access to the
southern sky and poses a very low risk to public
safety
Current Launch Vehicles
· Minotaur IV & Taurus XL (Orbital)
· Athena I and II (Lockheed)
Future Launch Vehicles
· Antares (Orbital)
· Athena III (Lockheed)
Mr. Greby clarified that the definition of aerospace did
not include anything to do with airplanes, airports, or the
airlines. He made a correction to the slide that AAC
employed approximately 35 personnel rather than 50.
3:17:46 PM
Mr. Greby advanced to slide 20: "Alaska Aerospace
Corporation - FY2015 Budget Changes":
· New Launch Contract
· New Global Imaging Services Contract
· $2 Million Reduction of General Funds
· Deleted 3 Vacant PCNs (Program Analyst, Acct Tech,
Watchman/Guard)
· Deferred Maintenance
Mr. Greby indicated that AAC's budget request in FY 15 was
approximately $6 million in GF. In FY 15 the corporation
received and executed a launch contract. He reported that
the initial launch went fine, although the customer flight
did not go as well. Also, in FY 15 AAC became the sole
distributor of satellite produced products of Alaska data
upon the execution of a new Global Imaging Services
contract. He added that AAC reduced its GF by $2 million
from the prior year, deleted 3 vacant positions, and
planned to use deferred maintenance monies received in
2015.
3:19:22 PM
Mr. Greby reported on slide 21: "Alaska Aerospace
Corporation - FY2016 Budget Highlights":
· Complete Damaged Facilities Rebuild
· Secure Additional Launch Contract
· Receive Federal Operations and Sustainment Funding
· Initiate Imaging Data Satellite Downlink Services
· Expand Launch Services Market
· Eliminate State Operations and Sustainment, and
Deferred Maintenance Funding
· Position AAC to Become Independent of Future State
Funding Needs
Mr. Greby reported that deconstruction was currently taking
place. He elaborated that only insurance funds were being
used to rebuild the damaged launch facility. He emphasized
that state monies were not in any way being used for the
rebuild. The facility was being reconstructed to the pre-
mission condition and nothing further. He reported that AAC
was working to secure an additional launch contract. He
mentioned that AAC was on contract with another launch, but
it had not been funded to date. The original contract
specified that AAC would be able to launch again within 12
months.
Mr. Greby detailed that the Alaska Aerospace Corporation
was in the process of obtaining federal operations and
sustainment funding. The original request was in the amount
of $10 million but was decreased to $7 million in committee
then further reduced to $6 million divided between all
orbital launch sites that support the United States
Department of Defense launches. There were only 2 launch
sites that qualified, the Aerospace Corporation site and
the Wallops Island launch in Virginia. Alaska Aerospace
Corporation would be receiving about $3 million.
Mr. Greby continued to review FY 16 budget highlights. He
stated that AAC would be initiating imaging data satellite
downlink services. Currently AAC received its data from an
imaging company, but would be downloading and downlinking
directly from the satellite. He conveyed that AAC was
reaching out to a much larger market to expand its launch
services.
3:22:23 PM
Representative Gara referred to page 20 regarding the new
launch contract. He wondered about any remaining launches
falling under the contract. Mr. Greby responded that AAC's
contract was for a launch and required that the site be
ready for another launch in twelve months.
Representative Gara asked if there was a commitment for a
launch in twelve months. Mr. Greby confirmed that AAC had a
commitment for a launch. However, the launch was not
presently federally funded.
Representative Gara asked about securing an additional
launch contract highlighted on slide 21. He wanted to know
if a launch contract had been secured. Mr. Greby clarified
that an additional launch contract had not been secured
yet.
Representative Gara wondered about potential revenues from
the new Global Imaging Services Contract. Mr. Greby
clarified whether Representative Gara was asking about the
line item on slide 21:
· Initiate Imaging Data Satellite Downlink Services
Representative Gara clarified that he was referring to a
line item on slide 20:
· New Global Imaging Services Contract
Mr. Greby explained that there was no any infrastructure
associated with the contract. He emphasized that the
contract was purely a means to generate revenue.
Representative Gara asked about the cost of the contract
and the estimated revenue potential that AAC stood to
generate from the contract. Mr. Greby stated that he would
be happy to provide the committee with the numbers
Representative Gara was requesting.
Co-Chair Thompson mentioned that he was aware of a meeting
scheduled the following week in which Mr. Campbell and/or
Mr. Greby would be presenting a business plan to the
committee. He suggested Mr. Greby provide the committee
with the requested numbers at that time. Mr. Greby agreed
that AAC could provide numbers to the committee. Also, he
stated that Mr. Campbell would be meeting with the governor
in the following week. Co-Chair Thompson confirmed that he
would also be meeting with Mr. Campbell.
3:25:33 PM
Vice-Chair Saddler asked about economic diversification. He
wanted to know about the economic ripple effects of having
a medium launch facility operating in Alaska. He
specifically asked Mr. Greby to identify ripple effects for
the University and for private businesses. Mr. Greby
responded that medium lift was the new market for the
majority of new satellite launches. Alaska was positioned
to accommodate new constellations of satellites that had to
go into polar, sun-synchronous types of orbits only
reachable out of a United States launch site. The Kodiak
Island and the Vandenberg Air Force Base launch sites were
the only qualified locations. He relayed that the
governor's order halted AAC's progress transitioning to
medium lift status.
3:27:40 PM
Representative Kawasaki wanted further clarification
regarding securing an additional launch contract in FY 16.
He asked if it was in addition to the multi-year, multi-
contract launch secured in the previous year. Mr. Greby
responded in the affirmative. He specified that the
additional launch contract was in addition to the multi-
year contract.
Co-Chair Thompson asked if it was true that the governor
had put everything on hold and was not presently moving
forward.
Mr. Greby responded that AAC was not moving forward on
medium lift but was advancing on the current launch
capabilities on the current launch site in the existing
configuration.
HB 72 was HEARD and HELD in committee for further
consideration.
HB 73 was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson thanked the presenters and reviewed the
schedule for the following day.
ADJOURNMENT
3:29:31 PM
The meeting was adjourned at 3:29 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DNR - HFin Budget Overview FINAL.pdf |
HFIN 2/6/2015 1:30:00 PM |
|
| DMVA House Finance Overview - edited 2 5 15.pdf |
HFIN 2/6/2015 1:30:00 PM |
|
| DNR Response HFIN Overview.pdf |
HFIN 2/6/2015 1:30:00 PM |
|
| Response to HFIN DNR Summary One-Pager FY2016 Gov Amended Budget.pdf |
HFIN 2/6/2015 1:30:00 PM |
|
| DMVA Response HFIN Overview.pdf |
HFIN 2/6/2015 1:30:00 PM |
|
| DMVA Response HFIN Native Health Care Orgs & Veterans.pdf |
HFIN 2/6/2015 1:30:00 PM |