Legislature(2015 - 2016)BARNES 124
02/09/2015 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Department of Natural Resources, Division of Agriculture | |
| Department of Natural Resources, Division of Parks & Outdoor Recreation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 9, 2015
1:06 p.m.
MEMBERS PRESENT
Representative David Talerico, Co-Chair
Representative Mike Hawker, Vice Chair
Representative Bob Herron
Representative Paul Seaton
Representative Andy Josephson
Representative Geran Tarr
MEMBERS ABSENT
Representative Benjamin Nageak, Co-Chair
Representative Craig Johnson
Representative Kurt Olson
OTHER LEGISLATORS PRESENT
Representative Jim Colver
COMMITTEE CALENDAR
OVERVIEW(S):
DEPARTMENT OF NATURAL RESOURCES, DIVISION OF AGRICULTURE
- HEARD
DEPARTMENT OF NATURAL RESOURCES, DIVISION OF PARKS & OUTDOOR
RECREATION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
FRANCI HAVEMEISTER, Director
Division of Agriculture
Department of Natural Resources (DNR)
Palmer, Alaska
POSITION STATEMENT: Provided a PowerPoint overview of the
Division of Agriculture.
BEN ELLIS, Director
Division of Parks & Outdoor Recreation
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint overview of the
Division of Parks & Outdoor Recreation.
ACTION NARRATIVE
1:06:34 PM
CO-CHAIR DAVID TALERICO called the House Resources Standing
Committee meeting to order at 1:06 p.m. Representatives Seaton,
Josephson, Tarr, Hawker, and Talerico were present at the call
to order. Representative Herron arrived as the meeting was in
progress. Representative Colver was also in attendance.
^OVERVIEW(S): Department of Natural Resources, Division of
Agriculture
OVERVIEW(S):
Department of Natural Resources, Division of Agriculture
1:07:40 PM
CO-CHAIR TALERICO announced that the first order of business is
an overview of the Department of Natural Resources, Division of
Agriculture.
1:07:59 PM
FRANCI HAVEMEISTER, Director, Division of Agriculture,
Department of Natural Resources, related that the 2012 census
(slide 2) reports an 11 percent increase in the number of farms
since 2007; a 3.3 percent increase in agriculture cash receipts
since 2007; and the average age of an Alaska farmer as being
57.1 years, indicating the need for getting young people
involved in the agriculture community. There are 641 farms
considered a family farm for tax purposes. According to the
census, 833,000 acres are involved in farming, with a majority
of that acreage involved in reindeer herding. Production takes
place throughout the state, the primary areas being Fairbanks,
Delta Junction, the Matanuska-Susitna Valley, and the Kenai
Peninsula. The number of farms dipped in 1992, but there has
been a steady rise of agriculture production since then. Over
the last seven years cash receipts have remained steady at $31
million, but the face of agriculture has changed - small scale
agriculture has increased dramatically and large scale
agriculture has decreased.
MS. HAVEMEISTER reported that peonies and rhodiola are new
agriculture areas. The division is excited about the peony
market. Approximately 150 peony producers have plants in the
ground throughout the state. Peony growers are looking at
exports because Alaska can produce peony when no other place in
the nation or the world can, which is from June 15 through
September, the prime bridal season. Rhodiola producers have
worked together to form a cooperative and are looking at
processing equipment to dry their roots and move it into
commerce. Rhodiola is used as a supplement touted for
increasing energy, stamina, strength, and mental capacity.
Alaska producers continue to look for new markets and explore
production opportunities. A flour mill for Alaska grown barley
is in operation in Delta Junction and product is being moved
throughout the state and an export market to the Lower 48 is
being looked at. Producers have taken advantage of the $3
million nutritional Alaska foods in schools funding and have
sold products to school districts small and large.
1:11:01 PM
MS. HAVEMEISTER outlined the division's organizational structure
[slide 3], noting the division has 44 employees with a variety
of job classes, such as agronomists with range management,
soils, and plant pathology experience; maintenance generalists
who help run the Plant Materials Center (PMC) farm; natural
resource specialist; agriculture inspectors; loan officer;
production managers; and development specialists who run the
marketing and inspection sections.
MS. HAVEMEISTER said the division's fiscal year operating budget
was $7.7 million [slide 4]. The division has 35 full-time and 9
seasonal employees. Three full-time employees are located in
the division's Fairbanks office, 18 full-time employees are
located in Palmer, and the Plant Materials Center has [15 full-
time employees and 9 seasonal farm laborers]. The division has
three funding components: agriculture development, the
Agricultural Revolving Loan Fund (ARLF), and the Plant Materials
Center. The division has a variety of funding sources,
including federal funding that is used to promote the marketing
services done through the Division of Agriculture and the
Specialty Crop Block Grant Program that provides about $181,000
to supplement the marketing budget.
MS. HAVEMEISTER explained that the Plant Materials Center (PMC)
is a 405 acre production farm located in Palmer [slide 5].
Established by the legislature in 1972, the PMC's purpose is to
evaluate crops for potential use in Alaska. The plant materials
are made available in small quantities to commercial growers who
subsequently increase the crop and sell commercially for food
production, ornaments, and conservation purposes. She drew
attention to the programs at the Plant Materials Center listed
on slide 5: [the Certified Seed Potato Program, Horticulture
Program, Foundation Seed Program, Certified Seed Laboratory,
Native Plant Evaluation, Invasive Species Program, Revegetation
Technology/ Design, Conservation Plant Technology, Seed Cleaning
and Conditioning, and Ethnobotany Teaching Garden].
1:13:06 PM
MS. HAVEMEISTER said the Certified Seed Potato Program [slide 6]
began in 1984 in response to the industry need for assistance in
managing on-farm potato diseases. At that time the potato
industry was in trouble because of diseases found on the farms.
Bacterial ring rot, a disease often found on a farm without
proper management, causes the potato to literally melt once it
is put into the barn. The PMC developed a tissue culture
program that provides clean seed to Alaskan seed growers. This
has allowed the certified seed growers to enter into a limited
generation certification program: growers are allowed to plant
back their seed for eight years into certification, after that
eighth year it is moved out into table stock. This also
eliminates many of the disease issues that are carried over from
year to year in the tuber. Responding to Representative Seaton,
Ms. Havemeister reiterated that the division's limited
generation certification program allows a certified seed grower
to sell his product as certified seed for eight years. Table
stock is what is moved out into the retail market, and certified
seed can be sold at any time as table stock. In further
response, she clarified that certified seed is sold for seed
purposes and table stock is what is consumed; seed sold at a
shop/greenhouse should be certified seed. Continuing her
presentation on slide 6, Ms. Havemeister noted that the PMC has
screened over 600 varieties for adaptation to Alaska climates.
Addressing the Horticulture Program, she said it was established
in 2012 and conducts variety trials by partnering with growers
to conduct trials throughout the state to see the suitability in
the different areas of the state. The PMC provides assistance
with crop selection, plant hardiness, cultivation, and harvest
techniques based on region. Additionally, pesticide evaluation
for commercial production is also performed so that the PMC can
give recommendations to the industry. Variety trials have been
conducted on raspberries, blackberries, onions, apple root
stock, asparagus, and garlic.
1:16:05 PM
MS. HAVEMEISTER reviewed the Foundation Seed Program [slide 7].
Located within the Plant Materials Center, this program produces
high quality seed that is well suited for Alaska's climate and
is made available to growers. Foundation seed is purchased and
increased as depicted by the chart on slide 7: three pounds of
breeder seed is planted and then harvested as eighty pounds of
foundation seed and so on. As that plant is propagated out it
is sold at less of a cost to the end user and it is also
increased. The PMC holds a spring and fall foundation seed
sale. The Seed Analysis Laboratory provides services including
viability testing, germination testing, tetrazolium testing, and
purity, noxious weed, and grain moisture testing. All grass and
grain seed sold in Alaska must have a germination test and a
noxious weed test prior to sale.
MS. HAVEMEISTER discussed Native Plant Evaluation Program [slide
8], noting that native plant species are used to support public
infrastructure projects, such as roads and airports, as well as
private industry, including exploration activities for mining
and petrochemical sections. The PMC's Native Plant Source
Directory is a comprehensive directory of in-state producers.
The PMC also partners with the U.S. Bureau of Land Management
(BLM) in the Seeds of Success Program, a national native seed
collection program that collects wild native seed for research,
development, germplasm construction, and ecosystem restoration.
This program's mission is to increase the quality and quantity
of native plant materials available for restoring and supporting
resilient ecosystems. Under the Revegetation Technology and
Design Program, staff provides seed mixture recommendations,
application rates, and application methods on restoration
projects. The PMC has established reclamation projects around
the state; it reviews reclamation projects for agencies and
private sectors and provides recommendations. The PMC assists
companies and agencies with on-site species identifications,
seed collection, processing, and cleaning for future use. The
PMC also conducts baseline vegetation surveys prior to site
disturbance so that during restoration it is known what species
to use for replacement.
1:18:33 PM
MS. HAVEMEISTER explained that the PMC houses both a large-scale
and a small-scale seed house [slide 9], which are operated
primarily in the winter months. Seed is cleaned for Alaska seed
growers, as well as the cleaning of product produced at the
Plant Materials Center and for states and agencies. Seed
cleaning is the separation of physical characteristics of seeds,
such as size, length, width, thickness, weight, surface, and
texture. This is done as a service for fee to the industry.
Cleaning ultimately removes the contaminants that are found in
that seed when harvested. In the 2013 cleaning season the PMC
cleaned 89,258 pounds of seed, ending up with 31,529 pounds of
clean seed; thus, a substantial amount of chafe is removed to
come up with a clean seed product. Addressing the Ethnobotany
Teaching Garden, Ms. Havemeister said the garden came into
effect from federal funding in the early 2000s. A popular
program at the Plant Materials Center, it includes the study of
culture groups in Alaska on the use of plants as food, medicine,
and technology. Many schools have come through to learn about
the native food and the value of those crops. Signage in the
garden allows people to take self-guided tours during business
hours. Maintenance of the garden is performed by PMC laborers
during the summer months. She pointed out that this program is
included in the governor's cut to the budget.
1:20:19 PM
MS. HAVEMEISTER said the Invasive Species Program [slide 10] was
established by the legislature in late 2008. Staff continues to
work diligently to increase awareness through education and
outreach, as well as through partnerships with community groups,
agencies, and private sector. For example, Anchorage had an
advertisement for several years on some of its buses that said
"stop invasive weeds". There is also a lot of radio outreach.
Staff provides presentations to organizations; for example,
staff provided a presentation to the Float Plane Association on
how to prevent the spread of Elodea. Canada thistle management
was done in Anchorage and the Matanuska-Susitna Valley in which
infestation sites totaling about 30 acres were surveyed,
quantified, and managed. Work is also being done on forage and
gravel certification programs which allow revegetation projects
to seek out those entities that are certified weed free to stop
the spread of invasives. To increase presence, staff is going
into box stores and retail outlets to ensure Canada thistle and
other invasives are not being seen. Work is also being done on
invasive freshwater aquatic plants in management efforts.
Elodea surveys have been done in Sand Lake and in Alexander
Lake. In an effort to stop the spread of Elodea the Division of
Agriculture has quarantined five aquatic species that are
considered to be of risk and related to the Elodea family.
1:22:11 PM
MS. HAVEMEISTER stated that the Agricultural Revolving Loan Fund
[slide 11] is housed within the Division of Agriculture. The
fund provides moderate interest rate loans to the agriculture
community. The fiscal year 2014 year-end financial report shows
the fund equity at $22.6 million, an increase of $203,000 over
fiscal year 2013. At year end the fund had $7.5 million
available for cash for loans. In fiscal year 2014 fifteen loans
were approved worth $1.5 million. The current default rate is
2.98 percent, with 83 borrowers located throughout the state.
The fund has celebrated 61 years of continued service. In
fiscal year 2014 the Mt. McKinley Meat & Sausage Company, an
asset of the Agricultural Revolving Loan Fund, reported its
first profit, which was $42,488. She noted that this facility
is the only U.S. Department of Agriculture (USDA) slaughter
facility located in Southcentral Alaska. In calendar year 2013
the facility slaughtered just over 950 animals. She pointed out
that a USDA stamp is required to move any product into commerce.
1:23:40 PM
REPRESENTATIVE HAWKER understood the division's numbers are not
audited, but said they are the only numbers he has to work with.
Noting that the revolving loan reported a fiscal year, June 30,
2014, profit of $42,488 [for the Mt. McKinley Meat & Sausage
Company], he said he has concern because the month of June alone
was $43,000 of the $42,000 profit. He asked what happened in
June to suddenly go from a break-even year to a profit.
MS. HAVEMEISTER replied that that was the year-end fiscal report
and she would have to look at the report to see if that $43,000
cash profit was made in that year.
REPRESENTATIVE HAWKER noted Ms. Havemeister's use of the word
"cash" and asked whether these statements are prepared on a cash
basis or on an accrual basis that matches revenue and expenses.
MS. HAVEMEISTER apologized and offered her belief that the
statements are done on an accrual basis.
REPRESENTATIVE HAWKER said he has concerns about these because
in October 2014 there is a loss of $36,000. Earnings reported
through the first four months of fiscal year 2015 show a $19,000
profit. The making of all the profit in one month, he said,
makes him want to understand what is behind those numbers. He
further noted that June's revenue for sale of products was
$230,000 which is $90,000 for that month over what the average
was of the entire year, which seems like unusual numbers. In
June alone the total reported revenues were at 121 percent of
cost; all of the last fiscal year revenues exceeded expenditures
by only 102 percent, so it is a move from 2 percent to 21
percent in one month. He requested a better explanation on
whether the Mt. McKinley Meat & Sausage Company has really
turned the corner and whether solid profits can be expected into
the future.
MS. HAVEMEISTER agreed to provide the requested information and
noted that all of this revenue was run through financial
services at the Department of Natural Resources.
1:27:11 PM
MS. HAVEMEISTER resumed her presentation, noting that the Alaska
Grown Program [slide 12], launched in 1985, has one of the most
recognized logos in the state; for example, the Alaska Grown
logo can be found on apparel in airports as well as places in
the Lower 48. Currently, 650 farms are participating in the
Alaska Grown Program. The Restaurant Rewards Program was set up
using the Specialty Crop Block Grant Program and offers a
percent of reimbursement to restaurants that utilize and source
Alaska Grown products. Over this past year 29 restaurants
participated in the program in Anchorage, Fairbanks, Denali,
Homer, Palmer, and Valdez. Under the Chef at the Market Program
the division offers, through a grant, the opportunity for chefs
to go to local markets and use local products sold at the
markets to show how that product can be prepared. Six chefs
were involved in that program and they hosted thirty-seven
events that year in Anchorage, Palmer, Fairbanks, Kenai, and
Glennallen. Farmers Markets have increased substantially over
the last 7 years - in 2007 there were 7 markets throughout the
state and now there are 41. Farmers Markets are a great
opportunity for both large-scale and small-scale producers to
move their products and are also a great way to connect the
consumer with the producers. The division has worked through a
cooperative agreement with the Department of Health and Social
Services to promote the acceptance of Supplemental Nutrition
Assistance Program (SNAP) benefits and of the 41 markets, 11 now
accept SNAP benefits. This is an excellent way to get low-
income families to healthy wholesome food.
1:29:00 PM
MS. HAVEMEISTER said the division publishes the Alaska Grown
Source Book every other year through Specialty Crop Block Grant
Program money. The 2015 source book includes 250 farms. Farms
must re-apply every other year to be included in that program,
so just because a farm is in the Alaska Grown Program does not
mean an automatic re-entry. The division has effectively used
social media, with a very strong following of over 30,000 likes,
and one single post that had a reach of 199,000. She said the
Farm To School Program was recognized for its contribution to
the public's health and health education. In January 2014 this
program received the Alaska Community Service Award for Health.
Outreach and communication to schools has been stepped up and
there is close work with school nutrition directors and schools
as a whole to educate the state's youth on the benefit of eating
healthy food as well as sourcing local food. School gardens
have increased 11 percent over the past year, and 75 percent of
the state's schools report involvement with the Farm To School
Program. One-hundred percent of schools have received Farm To
School Program education material. One-hundred percent of
school districts have indicated that they have served a form of
local food; a local food does not have to be necessarily an
Alaska Grown product - it can be something like fish or anything
that is grown in the community. The Alaska Grown Produce
Availability Chart was created; it focuses on the school year to
educate schools on what may be available in each school's area
or within the state that could be sourced through the schools.
Multiple school kitchen tours have been hosted for farmers to
meet the school kitchen staff. The division also hosted the
Farm To School Conference in January [2015], connecting
nutritional service directors with farmers. That conference was
attended by 129 people representing nearly 40 communities. In
the conference evaluation responses, 80 percent of the schools
said they will be starting or expanding Farm To School efforts,
95 percent of producers who responded said they planned to sell
more products to the schools, 95 percent of school food service
staff plan on buying more local product, and 99 percent said
they will be integrating more Farm To School concepts into their
curriculum. Thus, this program has done an exceptional job in
its outreach and education.
MS. HAVEMEISTER, responding to Co-Chair Talerico, stated that
the division has had some involvement with the greenhouse
project at the Tok school. She said the division is currently
partnering with the Alaska Energy Authority (AEA) on a grant
application for funding to write a manual on biofuel greenhouse
production.
1:32:46 PM
MS. HAVEMEISTER reviewed the multiple inspection services
provided by the Division of Agriculture [slide 13]. Export
certification is required for products entering into foreign
markets, she said. For example, to meet China's restrictions on
seed potatoes coming into that country, a phytosanitary
certificate must be written assuring that all of those
requirements have been met. Phytosanitary certificates are also
issued to export timber into Korea and China, which involves
extensive inspection as well as oversight fumigation efforts.
Phytosanitary certificates were issued for over $118 million of
[exported Alaska timber and agriculture products]. The division
is working with the peony producers to address any disease or
pests, although they are just small-scale exports at this time.
Potato seed certification is done on a voluntary basis by those
interested in growing certified seed. Division inspectors are
in the field twice a year looking for diseases of concern and
assuring that stock in the ground meets the disease tolerances
allowed in the certification program. The division also conducts
bin and storage inspections and issues certified seed tags to
those producers whose crops have met the tolerance levels. All
seed for sale in the state of Alaska must be certified. In
response to Representative Tarr, Ms. Havemeister confirmed that
growers pay a fee for the certification service they receive.
MS. HAVEMEISTER noted the division has conducted food safety
audits. The division is working closely with the agriculture
community in getting their product sourced into the schools.
This is a voluntary program as well. The Farm To School Program
created the School Garden Food Safety Guidelines and conducted
nine on-farm food safety audits. The Cooperative Agricultural
Pest Survey (CAPS) is a program where the division implements
USDA plant protection projects and conducts surveys for pests of
concern to the USDA. Much of this is negative data, she said,
but negative data is very important when exporting. Negative
data means not finding a pest.
1:35:12 PM
REPRESENTATIVE JOSEPHSON requested further breakdown of the $118
million as to how much of the export certification is timber
versus other agricultural products. He said he is curious about
whether it is coming from state forest or private inholdings.
MS. HAVEMEISTER agreed to get this information to the committee.
1:35:53 PM
MS. HAVEMEISTER returned to her presentation, explaining that
many times a USDA grade inspection and certification is done on
a quality issue. For example, if a store or wholesaler calls
with a quality issue, the division's inspectors go inspect that
product. If that product is not up to USDA standards a paper
will be issued that will stand up in court. This provides the
store with further assurance that it will be getting product
that meets the quality standards.
MS. HAVEMEISTER said the division's Agriculture Land Program
[slide 14] works cooperatively with the Division of Mining, Land
and Water on area plans designating areas with suitable soil for
agriculture. In 2014 the division sold 100 acres of agriculture
land and interest in agriculture land sales continues. A bridge
across the Nenana River is being built, so progress is being
made in accessing agriculture land there, which the division is
looking forward to. Responding to Representative Talerico, she
offered her belief that about 130,000 acres of agriculture land
would be accessible once the bridge was built.
1:37:09 PM
REPRESENTATIVE JOSEPHSON recalled that in the early 1980s during
the Hammond Administration there were aggressive efforts to
create a farming industry which resulted in notorious problems
and litigation. He asked whether the division's focus is that
pro-active or is less assertive - waiting to see how the
industry develops but lending a helping hand.
MS. HAVEMEISTER replied that in the 1980s the Alaska
Agricultural Action Council helped develop the Delta agriculture
project as well as Point McKenzie. The division is very much
taking a look at this cautiously, she continued, and she
personally has no desire to see more producers move forward and
fail at their endeavors. Responding further, she concurred that
the division is being more incremental than having lofty goals.
1:38:42 PM
MS. HAVEMEISTER resumed her presentation, saying the Agriculture
Land Program includes agriculture land management in which the
division provides technical assistance to producers with a state
farm conservation plan and assisting with grazing management
plans. The division conducts clearing requirements which are
required on an agriculture land sale. For example, the 100
acres sold in 2014 has 40 acres determined to be agriculture
land and, of that, 10 acres is required to be cleared within 5
years. Division staff verifies that those clearing requirements
have been made prior to it going to patent. The division also
provides assistance to agriculture land owners on a variety of
issues and the division continues to research potential areas
for agriculture permits.
REPRESENTATIVE TARR offered her appreciation and support for the
Alaska Farmland Trust Corporation that is working to preserve
some of these valuable lands, particularly with the residential
growth that is occurring in the Matanuska-Susitna Valley. She
inquired whether the division is working with the trust to
preserve some of those lands and further inquired whether any of
the lands are prioritized as more valuable by the division.
MS. HAVEMEISTER responded the division is in communication with
the trust. While division staff provides mapping on soils of
interest and concern to the trust, the division's programs are
separate. It is important to know, she explained, that when the
division sells land for agriculture purposes, that agriculture
covenant is in perpetuity; whereas the Farmland Trust is putting
on covenants after the fact that are fee simple.
1:40:27 PM
MS. HAVEMEISTER turned to slide 15, stating that the division's
industry support includes education and outreach to youth.
Because the average age of Alaska farmers is 57.1 years, the
division is trying to increase interest in the state's youth to
come back to the farm or to introduce them to what farming is.
The division partners with Agriculture in the Classroom, Future
Farmers of America (FFA), 4-H, Teacher Education, and youth
education events. She pointed out that children are now two or
three generations removed from the farm, so it is important they
understand where their food comes from. For example, she has
children visit her farm and some of them have not known that a
carrot comes from the ground or that a cow gives milk.
1:41:30 PM
REPRESENTATIVE COLVER commented that he did not hear mention
that the mantra for the Division of Agriculture is food
security. Without ships going back and forth to western
Washington, he said, Alaskan stores would be empty. During his
recent visit to Hawaii there was a tidal wave warning and the
line for gas was a mile long and the stores were cleaned out of
food and water in about two hours. Food security is important
if Alaska has a natural disaster and until then Alaska will not
know just how important it is. Additionally, [agriculture] is
also a very important private sector industry that is thriving
and growing. A number of small markets in Anchorage encourage
entrepreneurs to market their Alaska grown produce or other
things that they make or manufacture. Thousand-acre farms are
not what is working in Alaska, although there are a few. Five
to ten acres of high-value produce, such as strawberries,
zucchini, target specific markets and provide a good living, so
this is happening. A certified USDA slaughterhouse is
important, he continued. An audit that was performed called
into question that [the slaughterhouse] is competing with the
private sector. However, no private sector partner is stepping
up to take over that role and without that blue USDA stamp on
livestock there is no industry. While [the slaughterhouse] is a
corrections industry, it is part and parcel of the state's
agriculture industry. He requested Ms. Havemeister to address
the importance of that facility to the industry and why it needs
to be supported until another entity steps up to take over that
service.
MS. HAVEMEISTER answered Mount McKinley Meat & Sausage Company
is the only USDA certified slaughter facility in Southcentral
Alaska. It provides the USDA stamp that is necessary to move
any product into commerce. That facility serves the industry
from as far away as Kenny Lake, Delta Junction, Kenai Peninsula,
Talkeetna, and further. The Board of Agriculture has struggled
with this issue for many, many years. However, the private
sector has not stepped up at this point, nor has private sector
come forward and made an offer to the board to move it in that
direction. She said she is aware that the Kenai Peninsula is
looking at options for starting mobile slaughter facilities and
the division has provided information in this regard. So, while
there is a little bit of private sector interest, no one has
stepped up at this point to fill that need.
1:46:19 PM
REPRESENTATIVE COLVER inquired whether the facility broke even
this year.
REPRESENTATIVE HAWKER explained that the financial statement
showed a profit of $42,000 for the year end of June 30, 2014.
However, $43,000 of that profit was reported for the single
month of June. The proportions of the revenues year-to-date and
the proportions of the revenues and expenses for the month of
June were very disproportionate to those reported for the entire
year. He said he has therefore requested the division to
provide answers to his questions so he can be comfortable as to
whether those statements are reliable given they are not subject
to a true financial audit.
1:47:37 PM
MS. HAVEMEISTER, in response to Representative Seaton, confirmed
that the division's [fiscal year 2015 operating] budget is $7.7
million, of which $2.5 million is the Agricultural Revolving
Loan Fund (slide 4).
REPRESENTATIVE SEATON observed from slide 11 that the revolving
loan fund approved 15 loans totaling $1.5 million or $100,000
per loan. He asked what the diversity of those loans is and
whether, over time, an increasing or decreasing percentage of
the loan fund is being loaned out.
MS. HAVEMEISTER responded the majority was farm development
loans, second was operating loans, and third was chattel loans.
There continues to be sufficient cash available and there has
never been an instance where a loan couldn't be approved due to
a lack of cash.
1:48:54 PM
REPRESENTATIVE TARR understood that if Alaskans spent just $5
every week for Alaska Grown products it would bring hundreds of
millions of dollars of economic development to the state. She
requested further information in this regard.
MS. HAVEMEISTER recalled reading that information, but said she
does not have the number in her head. The division is always
promoting people to purchase Alaska Grown. Regarding food
security, she said it must be understood that if there is not a
market for that product, [the state] may be food secure for a
year. But, a farmer is not going to grow product just for the
sole purposes of making the state food secure, there has to be a
market for that product. She recalled that [the $5] was a
Facebook post that went viral. People were hoping to educate
people on the value of even spending $5 a week more on Alaska
Grown products and the overall return that that would be to the
state, including increasing food security.
1:50:14 PM
REPRESENTATIVE SEATON drew attention to slide 8 and noted that
on the Kenai Peninsula the Department of Transportation & Public
Facilities is clearing roadways pretty far back, but there is
contention that this attracts moose for foraging. He asked
whether the Division of Agriculture is working with the
Department of Transportation & Public Facilities to determine
which grasses are not preferred by moose and could be used along
road rights-of-way so as not to attract moose.
MS. HAVEMEISTER answered that her staff does work closely with
the Department of Transportation & Public Facilities, but she
has not been brought into the conversation about grasses not
preferred by moose. She said she will follow up in this regard.
1:51:35 PM
REPRESENTATIVE SEATON thanked Ms. Havemeister for the division's
quarantine on Elodea and said the rehabilitation of lakes on the
Kenai Peninsula is looking good. He inquired what people should
do if they see Elodea for sale in a pet store. He further noted
that there are no notices anywhere about disallowed species or
where to report them.
MS. HAVEMEISTER confirmed the division's issuing of a quarantine
and said the division has sent notices to all the pet stores
within the state. She said division staff frequent some of the
pet stores, although she cannot say every pet store has been
visited. As well, the division works with other interested
private sector, quasi-state, agencies that have people on the
ground. The Plant Materials Center web site has a notice where
people can report sightings or they can call in any sightings.
The division tries to get someone there to take a look within 48
hours of receiving a report.
REPRESENTATIVE SEATON asked whether people could take a picture
and send that in.
MS. HAVEMEISTER replied that the division does frequently get
photos, not so much taken at pet stores but more from box stores
where people find invasive species in plants. A substantial
amount of photos are received from people who have taken
pictures with their "smart" phones and are requesting
identification of a plant. People can also call the division.
She said her staff is very responsive in getting back to people.
She offered to look at whether the division has a link to which
a photo can be sent that then goes to staff.
1:54:32 PM
REPRESENTATIVE SEATON asked whether agricultural loans for
marijuana have been received.
MS. HAVEMEISTER responded that none have been received at this
time, but internal discussions have been started as to whether
the Division of Agriculture will be doing marijuana loans.
REPRESENTATIVE SEATON inquired whether it would be the Division
of Agriculture, Department of Environmental Conservation (DEC),
or another agency that would do the monitoring and testing of
[marijuana] concentrations in a food source.
MS. HAVEMEISTER answered that currently the division does not
have any oversight of food; the division deals with agriculture
USDA quality inspections. She said her assumption is that it
would fall under DEC. While she has talked to her staff about
seed, she does not yet have an answer about how the Division of
Agriculture would be involved if there is a certified seed.
REPRESENTATIVE HERRON asked whether marijuana is going to be
inventoried in the Plant Materials Center.
MS. HAVEMEISTER replied it currently is not, and is a topic that
will have to be discussed further.
1:57:08 PM
REPRESENTATIVE HAWKER queried whether the Agricultural Revolving
Loan Fund's current default rate of 2.9 percent is number of
loans or principle balance.
MS. HAVEMEISTER offered her belief that it is principle balance
and said she will get back to the committee in this regard.
REPRESENTATIVE HAWKER said that would be inconsistent with the
June 30 annual reporting graph he saw on the division's web
site, which shows something between 10 and 15 percent in
delinquent and default as far as principle balance.
MS. HAVEMEISTER reiterated she will get back to the committee.
CO-CHAIR TALERICO offered his appreciation for the information
about Nenana, saying it will be great to have access to this
enormous amount of property. He further remarked about how good
it is to be educating kids.
The committee took an at-ease from 1:58 p.m. to 2:00 p.m.
^Department of Natural Resources, Division of Parks & Outdoor
Recreation
Department of Natural Resources, Division of Parks & Outdoor
Recreation
2:00:18 PM
CO-CHAIR TALERICO announced that the next order of business is
an overview by the Department of Natural Resources, Division of
Parks & Outdoor Recreation ("Alaska State Parks").
2:00:24 PM
BEN ELLIS, Director, Division of Parks & Outdoor Recreation,
Department of Natural Resources (DNR), first pointed out that
the photograph on the cover slide of his Power Point
presentation is of the new Americans With Disabilities Act (ADA)
accessible trail in the K'esugi Ken Campground, located in the
South Denali Visitor Center Complex. Turning to slide 2, he
noted that Alaska's state park system is the largest in the
nation and is vast, diverse, unique, and popular. Wood-Tikchik
State Park, at 1.6 million acres, is the nation's largest state
park and Chugach State Park is just one or two acres shy of half
a million acres. One of the smallest parks is the House of
Wickersham State Historical Site on about one-half acre. So, he
said, there is a diverse challenge as far as management.
MR. ELLIS noted that slide 3 is the centerfold of the Alaska
State Parks brochure. The brochure depicts seven park units,
but now there are six units, he pointed out. This is because
Wood-Tikchik State Park and Chugach State Park have been
combined into one unit for purposes of ensuring that division
staff is addressing issues in various areas as needed. Most of
[Wood-Tikchik's] bookkeeping and administrative work is being
done out of Anchorage, which frees of up the rangers to provide
service. In winter the division brings back one Wood-Tikchik
ranger to focus on the Chugach area because the use in Wood-
Tikchik drops drastically during the winter months.
2:02:59 PM
MR. ELLIS turned to slide 4, stating that 75-80 percent of the
division's operating budget falls into the category of Field
Operations, and is supported by the general fund, program
receipts, and vehicle rental tax funds. The Administration and
Grants Section provides support for all of the areas within the
division, and is primarily funded through federal funds, with a
small amount of general fund and program receipts. The Office
of Boating Safety does outstanding work in providing information
and saving lives, especially children. The other sections are
the Office of History & Archaeology, the Alaska Trails Office,
and the Design & Construction crew.
MR. ELLIS said the parks management and access budget of just
over $14.1 million, shown on slide 5, is everything except for
the Office of History & Archaeology, which has its own budget
component. Of the $14.1 million, $7.6 million is focused on
field operations, the area that most people think of as Alaska
State Parks, such as campgrounds and trails. He explained that
the Design & Construction element shown on slide 5 is more of an
enterprise organization - of the 16 or 17 people in this area,
only about 1.5 personnel are funded by the general fund. From
the various contracts had with parks and other agencies, this
element may be working on about $31 million-worth of projects
throughout the state over about a three-year period of time.
This element is a huge enterprise action within Alaska State
Parks, but it is used by a number of agencies.
2:05:44 PM
MR. ELLIS reviewed the Field Operations Section [slide 6],
reporting there are 81 permanent staff members and 13 non-
permanent staff. However, he pointed out, for every one Alaska
State Parks worker, there are eight volunteers who make up the
service component, and the division could not provide the level
of service that it does without its volunteer corps. These
volunteers are key to the campgrounds, restrooms, trails, and 17
advisory boards around the state. Alaska State Parks deals with
many things, including 124 park units, 71 campgrounds, and 900
miles of maintained trail. He drew attention to the pie charts
depicting the Field Operations budget [of $7.6 million] and the
program receipt revenue [of $2.6 million], which are the fees
charged. Those fees are paid into the general fund and then
reimbursed to Alaska State Parks through an agreement that comes
from the legislature for general program receipts, he explained.
MR. ELLIS reminded members of last year's discussion about park
fees [slide 7]. Fees had not been raised in 10 years and there
had never been a systematic analysis of the fees and where they
were in relation to other fees or to other state parks. Last
year the legislature sent a very clear message that it would
like to see those fees increased to pay more for the operational
part of Alaska State Parks, and lawmakers replaced $250,000 of
general fund money with $250,000 of program receipts. In May
2014 the division increased its public use cabin fees. The old
fee structure had a prime time and an off-season time for cabin
fees. It was determined that this did not make sense because
some cabins received the most use during the winter, a time
considered off-season. So, the division just set fees and
raised these fees by an average of $10 [per night] per cabin.
The only thing not raised was the $5 per day fee for car parking
in parking lots that have enhanced facilities such as restrooms
and trails. The division wanted to keep access to the parks
available and not have a price-point cutoff so as to ensure that
anyone wanting to get out and use those facilities could use
those facilities.
2:10:20 PM
MR. ELLIS explained that the bar chart on slide 8 depicts last
year's fees in blue, the current fees in red, and in green is
the amount to which he has the authority to raise those fees.
The figures shown for boat launch, day pass, camping pass, and
public use cabins are averages because some locations are more
expensive than others.
MR. ELLIS reviewed the revenue generated by park fees [slide 9],
noting that the blue bars on the chart depict the revenue
received in [fiscal year 2014]. He said state park attendance
has been fairly steady at about 5 million visits [per year] for
the last four or five years, and each year usually has an
anomaly such as a fire or flooding that closes campgrounds or
trails. To project revenues for fiscal year 2015 [red bars],
the division used a steady attendance and found that about
$500,000 more would be generated in fiscal year 2015. Pointing
out the column labeled "carry forward", he explained that Alaska
State Parks is one of the few divisions allowed to carry over
the money that it has in its pocket from one year to the next.
The legislature gave the division this opportunity because July
1 is right in the middle of the division's season. To be able
to have the funds, especially dealing with program receipts, the
division needs them earlier in the year than July 1. The
projected carry forward of about $500,000 for fiscal year 2015,
as compared to about $300,000 for fiscal year 2014, may seem
like a lot. However, it must be remembered that the division is
already using $250,000 of that money from last year in program
receipts to fill in. The division feels comfortable carrying
over somewhere between $150,000 and $250,000 a year, since this
has been the division's historic average. It is the division's
bank account in case there is a summer that is rainy, or has
fires, or something else that tanks the revenues.
2:14:10 PM
MR. ELLIS turned to slide 10 to discuss field operational
expenses versus the revenue collected. In [fiscal year] 2005,
the revenue was 41 percent of the operating expenses for parks,
campgrounds, and so forth. In [fiscal year] 2013, revenue
dropped to 35 percent of the operating expenses. In [fiscal
year] 2014, revenue was 33 percent of the operating expenses.
This is because revenue was remaining flat while operating
expenses were climbing. A stringent management process on
expenses is being implemented by the division because it doesn't
help to raise fees if more money keeps being spent. While the
division cannot control the cost of services such as pumping
outhouses, it can control what it spends itself. Those
decisions used to be in the area office, but now they are in the
director's office, and expenses will likely become flat-lined.
For [fiscal year] 2015, the division projects that revenue will
cover 44 percent of the operating expenses, and for [fiscal
year] 2016 that revenue will cover 50 percent of the operating
expenses. The division hopes to do even better and is therefore
looking at other options as well.
REPRESENTATIVE TARR shared that she included information about
the fee increases in her newsletters so the public would not be
surprised and her office did not receive any negative responses.
She asked whether the division heard any complaints and whether
there was any drop in visitor numbers.
MR. ELLIS replied that when increasing fees the division was
very sensitive to not over-price itself out of business and to
consider that the division is a service to the people of the
state to access their own land. He reported that the division
has not received any negative comment. People understand that
these fees and increases are going back into the facilities and
their management, and people support that.
2:18:38 PM
MR. ELLIS stated that Design & Construction is more of an
enterprise project [slide 11], with only 1.5 of the staff, the
chief and the administrative assistant, paid out of the general
fund. He explained that this section works the state parks and
the deferred maintenance and capital programs, as well as works
a myriad of state and federal offices in designing and executing
oversight of projects. For example, if the Department of
Transportation & Public Facilities wants to do a small road, it
calls the Alaska State Parks' contractors. A rifle range
created this past year in the southcentral area was designed by
Design & Construction. Additionally, Design & Construction
works with the U.S. Fish and Wildlife Service, the Alaska
Department of Fish & Game, and boat ramps. Money is generated
by Design & Construction; for example, 25 contracts worth $2.48
million were awarded to outside private contractors in fiscal
year 2014.
REPRESENTATIVE JOSEPHSON remarked that this seems like a
business enterprise. He asked whether the division is charging
these services at cost and whether this is designed to keep
consistency to the designs of cabins and landscaping plans.
MR. ELLIS replied that, by statute, a profit cannot be charged.
Time and effort are charged, which is how staff is funded. He
posed an example of a campground upgrade in which a contract is
awarded to Contractor X. A Design & Construction engineer or
engineer in training would be on site to confer with the
contractor to ensure that the state's investment is carried out.
The time the engineer is on site or working on the design is
paid for by the particular contract to that campground. Design
& Construction also provides interpretive information, such as
signage and brochures, for the U.S. Fish and Wildlife Service
and the Alaska Department of Fish & Game. So, consistency is
provided for within whatever agency is being dealt with.
REPRESENTATIVE JOSEPHSON remarked it surprises him that the
National Park Service (NPS) wouldn't have a sense of what it
wants to do.
MR. ELLIS responded it isn't that NPS doesn't know what it wants
to do. For example, there might be a scenic byways grant that
goes through NPS as the agency. The NPS would contract the
division's interpretive group to go along and do workshops
beside, say, the Parks Highway, and create a report or document
that would be used by the NPS to justify the Parks Highway as a
scenic byway.
2:23:18 PM
MR. ELLIS moved to slide 12, noting that the Alaska Trails
Office has two full-time and two part-time staff and currently
has two grant programs. The federally funded Recreational
Trails Grant Program is a grant program of $1.5 million. He
reminded members that in last year's capital budget, $200,000
was added to the Alaska State Parks program so it could continue
this. So, basically, the state leveraged $200,000 to get $1.5
million from the federal government. Half of this goes to local
trail organizations through grants and the other half goes to
Alaska State Parks for rehabilitating trails. Funding for the
second program, the SnowTRAC program, has been removed from the
current [state] budget. SnowTRAC provides mostly grooming for
trails in Southcentral, Northern, and some in Southeast. A snow
machine registration fee is collected by the Division of Motor
Vehicles (DMV). There is no statute that says DMV should turn
that money over to Alaska State Parks for this program, it has
always been gentlemen's agreement since its creation 12 years
ago. Unless redirected to another agency, he anticipates that
SnowTRAC will go away after this winter. The Alaska Trails
Office participates in the First Day Hikes program that is
across the nation, getting people outdoors on January 1. There
is also Trails Celebration Day and getting people outdoors and
on trails to improve their health.
2:25:39 PM
MR. ELLIS addressed the Office of Boating Safety program [slide
13], noting that this outstanding program is recognized
throughout the U.S. The [life jacket] loaner boards provided
for the Kids Don't Float education program has been unbelievably
successful. There has been a campaign to focus on those that
are above the teenage years to wear float coats or jackets, and
increased compliance rates for adults are being seen.
MR. ELLIS turned to slide 14, pointing out that the budget of
$2.5 million for the Office of History & Archaeology is mostly
federal money, so this office is not included as a component of
the division's budget. This office annually reviews about 2,600
projects for impacts on cultural properties, and it is the
reservoir for the Alaska Heritage Resource Survey, a statewide
inventory of historic, archaeological, and paleontological
sites.
MR. ELLIS reminded members that [fiscal year 2015] funding was
provided for a pilot Artist-in-Residence program [slide 15],
which follows on the very successful Arts in the Parks
Initiative. The pilot project will be kicked off this summer.
It will be very modest with four to six Alaskan artists chosen
to spend about two weeks at the Gruening cabin. Each artist
will then hold a workshop for the public and will donate one
piece of art to the division for use in promoting Alaska's
beautiful areas.
2:29:01 PM
MR. ELLIS addressed the South Denali Visitor Center Complex
Initiative [slide 16], drawing attention to a briefing paper
included in the committee packet. Originally, he explained, the
focus was to build the visitor center first and let everything
else shake out as it can. In 2012 the division flipped its
focus and made Phase One be the K'esugi Ken Campground that is
located about 1.5 miles into Denali State Park in the South
Denali Visitor Center Complex. This campground will have RV
camping with electrical hookups, a walk in campsite area, a day
use area, hiking trails, a ranger contact station, and two
public use cabins. The RV campground is about 90 percent done.
Three-phase power was run about 20 miles up the Parks Highway,
electrifying mostly borough land along the highway for potential
economic development from Trapper Creek on up. Phase Two is
currently on hold. The funding used so far has been a "35,000-
foot view" to look at a visitor center at some point in the
future. If it becomes a priority and economical, nothing will
be lost from what has been done so far, but for now it is
shelved, along with the road going to the top.
2:31:21 PM
MR. ELLIS pointed out that challenges facing the division
include increased public demand [slide 17]. The division is
constantly assessing its staff and moving its resources around
to ensure that the best service possible is being provided
without having to knock on the legislature's door asking for
more people. Alaska State Parks has $62 million in deferred
maintenance and it accrues at about $3 million a year. Without
the capital projects those deferred maintenance needs will grow.
For its construction work, the division looks at about a three-
year timespan from the time the legislature appropriates the
money to when the project is done. This means that for this
summer the division will have a capital improvement project in
the pipeline, and the same for next year. He said he thinks
that the enterprise unit is pretty safe for the time being
because he anticipates that the other agencies the division uses
will pick up the slack because those agencies want the division
to do more than it can do now.
MR. ELLIS highlighted the division's areas of excellence [slide
18]. He said Design & Construction averages $7-$10 million
worth of projects per year; volunteers are recruited, hired, and
trained; and the Facebook page for Alaska State Parks has 1,998
likes. The division is working with the Department of Commerce,
Community & Economic Development to get out the message of parks
through advertising given the division has no advertising or
marketing budget.
MR. ELLIS displayed a photo of fighting bull moose [slide 19]
and of a camper in her tent [slide 20] while urging members to
remember to come visit Alaska's state parks.
2:34:19 PM
REPRESENTATIVE TARR inquired whether the division has a list of
what the $62 million in deferred maintenance represents. She
surmised the division has prioritized that list. She further
inquired whether any parks will have to be closed due to not
enough maintenance dollars.
MR. ELLIS answered that he currently does not anticipate closing
any facilities. He said the division has a book that lists
every deferred maintenance project and the book is updated every
six months. The book goes out to the region and the region has
the ability to re-prioritize what that list is and to add any
new things that have come on line. Emergency maintenance for
something like a roof collapse would definitely rise to the very
top of the list and become emergency funds and the division
would cherry pick off the things that had already been approved
in the budget in order to fix the emergency. While estimates
for all projects are included in the book, a new estimate would
need to be done for those that have been on the list for a long
while and then rise to the top. He pointed out that when a
campground is rehabbed, attendance will increase the next year
because now the facility is nice.
2:36:50 PM
REPRESENTATIVE HAWKER thanked Mr. Ellis for a job well done and
for listening and working with the people in his community which
includes Chugach State Park. Saying that deferred maintenance
is a big issue, he offered his hope that when submitting its
budget the division will focus on that deferred maintenance.
REPRESENTATIVE SEATON requested Mr. Ellis to provide a
comparison of the economics of cabins and yurts in the parks,
the surveys of participants about how cabins and yurts compared,
and what the division's future plans might be in this regard.
MR. ELLIS agreed to provide the committee with that information.
He said the division has not added any new yurts, but new public
use cabins have been added, primarily on the road system in
areas that already have a campground. The cabins are filling up
faster and faster. A change in the demographics using public
use cabins is being seen. It was thought that the more cabins
built, the more the division would catch up with demand.
However, demand has increased because cabins on the road system
are being used more and more by the disabled since the cabins
are accessible. There is also increased use by young families,
especially military families that have no clue about camping but
are being introduced to it. Additionally, yurts in remote areas
have been successful.
REPRESENTATIVE TARR, in regard to the division having no money
for marketing, suggested that members could help by including
that marketing information in their constituent newsletters.
MR. ELLIS thanked Representative Tarr for the offer. He said he
has seen information that was included in the division's
newsletters to members be subsequently included in constituent
newsletters, which he appreciates. He agreed to provide members
with any information that comes up in this regard.
2:41:15 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:42 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| House resources- Division of Agriculture.pdf |
HRES 2/9/2015 1:00:00 PM |
|
| LegOverview2.9.15NU.pdf |
HRES 2/9/2015 1:00:00 PM |
|
| SDVC Briefing FINAL.pdf |
HRES 2/9/2015 1:00:00 PM |