Legislature(2001 - 2002)
10/23/2001 01:10 PM Senate BUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT COMMITTEE
LEGISLATIVE BUDGET AND AUDIT
October 23, 2001
1:10 P.M.
MEMBERS PRESENT
Senator Gene Therriault, Chair
Senator Lyman Hoffman
Senator Randy Phillips
Senator Jerry Ward (teleconferenced)
Senator Gary Wilken (teleconferenced) (alternate)
Representative Hugh Fate, Vice Chair (teleconferenced)
Representative John Davies (teleconferenced) (alternate)
Representative Ken Lancaster
MEMBERS ABSENT
Senator Dave Donley
Representative John Harris
Representative Reggie Joule
Representative Eldon Mulder
Representative Bill Williams (alternate)
COMMITTEE CALENDAR
APPROVAL OF COMMITTEE MINUTES
September 7, 2001
REVISED PROGRAM RECEIPTS (RPL's)
01-02-8037
05-02-0625
08-02-0128CAP
09-02-0022
10-02-4021
11-02-0428
12-02-0075
12-02-0100CAP
25-02-6470
45-02-0007CAP
EXECUTIVE SESSION
AUDIT REPORTS
OTHER COMMITTEE BUSINESS
Division of Family & Youth Services
School District Waivers
University Capital Appropriation
WITNESS REGISTER
HEATHER BRAKES, Legislative Assistant to
Senator Gene Therriault
Alaska State Legislature
Capitol Building, Room 121
Juneau, Alaska 99801-1182
Telephone: (907) 465-6590
DAVID TEAL, Director
Legislative Finance Division
Alaska State Legislature
P.O. Box 113200
Juneau, Alaska 99811-3200
Telephone: (907) 465-3795
POSITION STATEMENT: Addressed the RPL's
PAT DAVIDSON, Director
Legislative Audit Division
Alaska State Legislature
P.O. Box 113300
Juneau, Alaska 99811-3300
Telephone: (907) 465-3830
POSITION STATEMENT: Introduced the audit reports
KAREN REHFLED, Director
(Testified via Teleconference)
Department of Education & Early Development
Education Support Services
th
801 West 10 Street #200
Juneau, Alaska 99801-1894
Telephone: (907) 465-8650
POSITION STATEMENT: Spoke to RPL 05-2-0625
DR. ARDY SMITH MILLER
(Testified via Teleconference)
Department of Education & Early Development
Teaching and Learning Support Services
th
801 West 10 Street #200
Juneau, Alaska 99801-1894
Telephone: (907) 465-2971
POSITION STATEMENT: Spoke to RPL 05-2-0625
JAMES MCMILLAN, Deputy Director-Credit
Alaska Energy Authority (AEA) &
Alaska Industrial Development Export Authority (AIDEA)
813 West Northern Lights Boulevard
Anchorage, Alaska 99503
Telephone: (907) 269-3000
POSITION STATEMENT: Spoke to RPL 08-02-0128
NICO BUS, Administrative Services Manager
(Testified via Teleconference)
Department of Military & Veterans Affairs &
Department of Natural Resources
400 Willoughby Avenue, Suite #500
Juneau, Alaska 99801-1724
Telephone: (907) 465-2406
POSITION STATEMENT: Spoke to RPL 09-02-0022
GARY BROWN
Department of Military & Veterans Affairs
Division of Emergency Services
P.O. Box 5750
Fort Richardson, Alaska 99505
Telephone: (907) 428-7036
POSITION STATEMENT: Spoke to RPL 09-02-0022
NANCY SLAGLE, Director
(Testified via Teleconference)
Department of Transportation and Public Facilities
Division of Administrative Services
3132 Channel Drive
Juneau, Alaska 99801-7898
Telephone: (907) 465-3911
POSITION STATEMENT: Spoke to RPL 09-02-0022
JOAN BROWN, Chief Budget Analyst
(Testified via Teleconference)
Office of Management and Budget
Office of the Governor
Court Plaza Building
240 Main Street #802
Juneau, Alaska 99801
Telephone: (907) 465-4681
POSITION STATEMENT: Spoke to RPL 09-02-0022
ROBERT WELLS, Director
Department of Natural Resources
Division of Agriculture
1800 Glenn Highway, Ste. #12
Palmer, Alaska 99645-6736
Telephone: (907) 761-3866
POSITION STATEMENT: Spoke to RPL 10-02-4021
KEVIN BROOKS, Director
(Testified via Teleconference)
Department of Fish & Game
Division of Administrative Services
P.O. Box 25526
th
1255 West 8 Street
Juneau, Alaska 99811-5526
Telephone: (907) 465-5999
POSITION STATEMENT: Spoke to RPL 11-02-0428
WAYNE REGELIN, Director
(Testified via Teleconference)
Department of Fish & Game
Division of Wildlife Conservation
P.O. Box 25526
th
1255 West 8 Street
Juneau, Alaska 99811-5526
Telephone: (907) 465-4190
POSITION STATEMENT: Spoke to RPL 11-02-0428
JOEL HARD, COL., Director
Department of Public Safety
Division of Fish & Wildlife Protection
5700 East Tudor Road
Anchorage, Alaska 99507-1225
Telephone: ((907) 269-5509
POSITION STATEMENT: Spoke to RPL 12-02-0075 & 12-02-0100
ACTION NARRATIVE
TAPE LBA 01-10, SIDE A
CHAIR GENE THERRIAULT called the Joint Committee on
Legislative Budget and Audit meeting to order at 1:10 P.M.
on October 23, 2001. Members present at the call to order
were Senators Therriault, Phillips and Hoffman and
Representative Lancaster. Members present on
teleconferenced line were Senators Ward and Wilken and
Representatives Fate and Davies.
APPROVAL OF THE MINUTES
CHAIR THERRIAULT announced that the first order of business
would be the approval of the minutes from the September 7,
2001 Legislative Budget and Audit Committee meeting.
SENATOR RANDY PHILLIPS MOVED approval of the minutes and
asked for unanimous consent. There being NO OBJECTION, the
minutes were approved and adopted.
REVISED PROGRAM RECEIPTS (RPL's)
RPL Number: 01-2-8037
Office of the Governor
Coastal Impact Assistance Program
WITHDRAWN
RPL Number: 05-02-0625
Department of Education & Early Development
Reading Excellence Act Grant
$3.617 Federal CFDA 84.338A Operating
SENATOR PHILLIPS MOVED to ADOPT RPL #05-02-0625 for the
purpose of discussion.
KAREN REHFELD, Director, Education Support Services,
Department of Education & Early Development, (Testified via
Teleconference), explained that the Department has received
a new, federal grant award from the U.S. Department of
Education under the Reading Excellence Act (REA). Nearly
all of the funds would be granted to Alaska schools that
need to improve the reading level of their students. Grant
activities include the issuance of grant awards to schools
to improve reading levels of students, professional
development for teachers, administrators and parents, the
establishment of family literacy programs and an evaluation.
Ms. Rehfeld continued that the Department had not
anticipated receiving the federal funds when the FY02 budget
was prepared. She noted that there was not sufficient
authorization in the current budget for the funds.
Ms. Rehfeld pointed out that Alaska was one of thirteen
states to receive the REA grant. The funding would be used
for eligible schools to improve the reading level of their
students. The number and percentage of children living in
poverty would determine eligibility for the funds. The
federal government has identified thirty-nine schools in
eleven districts as being eligible. She noted that a copy
of the eligible schools was included in each member's
packet. [Copy on File].
The grant contains funding for two new positions. The
positions would last for the duration of the grant. The
majority of the funds would be used for grants to the school
districts and would be available through FY 2004. At that
time, the State could expect to receive an additional $5.1
million dollars for the program. She added that the
Department was requesting increased federal authorization in
the FY03 budget to allow for receipt and expenditure of the
funds.
In response to Senator Phillip's concerns, Ms. Rehfeld
pointed out that the grant includes funding for two
positions. Those positions would only be funded for the
duration of the grant.
SENATOR PHILLIPS asked the total number of positions
currently existing in the Department of Education & Early
Development.
KAREN REHFELD replied that there are three hundred sixty-
five total employees within the Department. This particular
component of the budget has a total of twenty-seven
positions and that all the positions are located in Juneau.
SENATOR WILKEN questioned why the Department would need a
new initiative called Read Alaska. He suggested that the
money should be given to the school districts to be used for
their current reading programs.
DR. ARDY SMITH-MILLER, Teaching and Learning Support
Services, Department of Education & Early Development,
(Testified via Teleconference), commented that the grant
requires that the Department have a full-time position to
administer this grant. In order to meet the requirements, a
full time reading coordinator position was included.
SENATOR WILKEN referenced Page 2 of the handout and asked if
the $160 thousand dollars was being removed from the grant
for administrating costs.
KAREN REHFELD explained that there was some funding included
in the contractual line that would also be used for direct
program activities.
SENATOR WILKEN asked what the "new" person would bring to
the reading programs that do not currently exist in the
State.
DR. MILLER responded that of the two positions, only one
would be a professional level position. That person would
be tasked with charting reading activities of the
participating schools throughout the State. The position
would involve working with the local administrators and
teachers in order to guarantee that they develop and
implement a reading plan that is balanced and comprehensive.
Dr. Miller emphasized that those are the requirements of the
grant.
SENATOR WILKEN inquired if any of the funding would be used
for English as a second language (ESL).
DR. MILLER replied that the money would be used to assist
students that are bilingual or ESL with developing reading
skills in English.
SENATOR PHILLIPS reiterated why the money could not be
distributed to the local school districts.
CHAIR THERRIAULT asked if there was a criterion used to
identify the eleven school districts, which the funds would
be distributed to.
DR. MILLER responded that there are very specific
requirements. She added that that the federal government
requires that the State conduct a couple of activities that
would require money used at the administrative level.
Approximately two percent of the grant is to be set aside
for a statewide program evaluation. The Department would
contract with an outside agency as required by the grant for
that evaluation. She added that there is a considerable
amount of oversight required by the grant and that the
Department does not have the time to provide that work. In
previous applications for the grant, one reason that the
State did not receive the funding was because adequate
personnel oversight was not available to administer it.
SENATOR PHILLIPS questioned why the positions could not just
be funded and then divide the funding among all school
districts.
DR. MILLER emphasized that there are clear guidelines and
criteria from the federal agency determining how schools
could be eligible. That criteria was focused on the
districts and schools within districts that have the highest
number of children identified under the Title 1 regulations
as being from low-income families. She stressed that
criteria has been established. The only schools eligible
were any identified under Title 1 as schools in need of
improvement through their program criteria. She advised
that she had checked with the federal office to determine if
there was any leeway in that criteria and she was told that
there was none. Dr. Miller reiterated that it is not an
option to divide the funding among the districts in an
equitable basis.
SENATOR PHILLIPS commented that everything is income driven.
DR. MILLER disagreed. She stated that the criteria include
identification of schools in greatest need. That
information is based on the student's performance on the
standardized examinations. There is a piece of academic
need as well as economic need.
CHAIR THERRIAULT asked if that could determine the total
amount of money available.
DR. MILLER advised that criteria was used to determine which
schools were eligible to receive assistance under this
grant.
VICE-CHAIR FATE inquired if any of the funds would be going
to non-profit or profit entities in rural Alaska.
DR. MILLER reiterated that the funds could only be granted
to school districts. Those districts will then develop a
reading improvement plan and are encouraged to involve local
non-profit entities and other governmental agencies. There
is one component to the grant, the tutorial assistance
component, in which the districts can use those funds to
contract with private tutorial agencies in order to provide
additional assistance to students that need tutoring outside
the school day. That piece of the grant, which is 15% of
the total, is set aside specifically for contracting with
agencies outside the district.
VICE-CHAIR FATE asked if an outcome could be determined at
the end of the project.
DR. MILLER commented that the grant has a clear requirement
of program effectiveness and student achievement. That is
why the grant contains the provision that approximately 2%
of the total funds are to be used for program evaluation.
The program effectiveness will be evaluated based on
increased student achievement as measured on the
standardized examinations, benchmark examinations over time
and the State's standardized exam.
REPRESENTATIVE DAVIES asked why some of the schools in
Fairbanks did not make the list. He claimed that there are
a significant number of students below the Title 1 poverty
level in that area. He asked if there had been a district-
wide filter applied.
DR. MILLER explained that the criteria used to determine
eligibility was first applied to the individual districts.
Using the criteria of having the highest, absolute number of
children living in poverty, the Anchorage and Mat-Su school
districts both had a higher number under the Title 1
definition than did Fairbanks. She recounted that the
Fairbanks district had not been included in the initial
selection filter.
REPRESENTATIVE DAVIES voiced his concern with the decision
and the way in which the filter was applied. He recommended
that the decision be re-examined.
DR. MILLER commented that she would look at the criteria
again. She did not anticipate that this particular grant
would be able to be used to assist the Fairbanks School
District, however, noted that she would work closely with
that district to identify grants from other areas to assist
those students referenced by Representative Davies.
CHAIR THERRIAULT inquired if the Department had the latitude
to investigate the filtering process.
DR. MILLER replied that the criteria are clearly directed
from the federal level. The only latitude would be to go
back to take a check of the poverty data for the population
districts. She did not anticipate there would be a change.
CHAIR THERRIAULT pointed out that the Department had the
previous authorization, which covered initial costs. He
noted that this request was for additional authorization.
KAREN REHFELD interjected that the Department had not yet
received the second portion of the grant. She noted that it
was a timing issue and would be included in the FY03 budget.
SENATOR WILKEN recommended that criteria be revisited. He
requested that information referenced in the grant be
highlighted and submitted to his office.
SENATOR HOFFMAN pointed out that Hampton School District was
the "poorest" in the State and that only one school in that
district had been included. He questioned why.
DR. MILLER offered to double-check that information. She
reiterated that the criteria used from the federal office
were very clear. Part of the results stem from the fact
that the very small schools do not qualify under a
particular portion of the grant because of their size.
However, the selection of schools with the highest and
second highest percentage of children living in poverty
would be that piece designed to pick up those small schools
with high numbers of low income children. She pointed out
that six of the Lower Kuskokwim schools would be eligible.
SENATOR PHILLIPS asked if the military installations had
been included in the process.
DR. MILLER explained that Metlakatla by their nature as
designated as a community would be eligible for the tutorial
assistance portion of the grant. They would not be only
eligible for the regular reading improvement grants. She
added that there was no provision included in the grant for
consideration of any entity other than local education
agents, which is by definition a school district. Once
those were identified, there was no provision for
consideration of anything other than a local school.
SENATOR PHILLIPS interjected that Fort Rich has three
schools on that military base.
DR. MILLER noted that those schools had been considered.
They were considered in the same manner as all other schools
in the State.
CHAIR THERRIAULT reminded members that there was a MOTION on
the table to approve RPL 05-02-0625.
SENATOR PHILLIPS OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Senators Hoffman, Ward, Wilken, Therriault
Representatives Lancaster, Davies, Fate
OPPOSED: Senator Phillips
Senator Donley and Representatives Harris, Joule, Mulder and
Williams were not present for the vote.
The MOTION PASSED (7-1).
RPL Number: 08-02-0128
Department of Community & Economic Development
Alaska Energy Authority
Bulk Fuel Revolving Loan Fund
$5,000,000 Federal Receipts Capital
SENATOR PHILLIPS MOVED to ADOPT RPL #08-02-0128 for
discussion purposes.
JAMES McMILLAN, Deputy Director-Credit, Alaska Energy
Authority (AEA) & Alaska Industrial Development Export
Authority (AIDEA), Department of Community & Economic
Development, Anchorage, commented that the RPL would
authorize receipt of a $5 million dollar grant to the Alaska
Energy Authority (AEA) to support the existing Bulk Fuel
Revolving Loan Fund (BFRLF). The BFRLF provides low
interest loans to rural communities to purchase several
months worth of bulk fuel supplies. Proceeds from the
retail sales provide the borrowers with the resources to
repay the loan.
The existing revolving loan fund, over the past few years,
has been insufficient to meet all the needs of the
communities in supplying their annual fuel. The $5 million
dollars will allow AEA to attempt to meet those needs.
CHAIR THERRIAULT asked about the fund balance that currently
exists.
JAMES McMILLAN responded that the account has never been
overdrawn. When the account is low, there is an effort to
maintain a "cushion" for emergency needs. Because of the
recent demand, AEA has not been able to do that. Often the
community's requests are cut in half in order that the fund
is not depleted. The State has not yet received the draft
agreement. Once the money is received and placed into that
fund, as the loans are paid back, both the principle and
interest would stay in that fund as permanent
capitalization.
SENATOR PHILLIPS reiterated the MOTION to MOVE RPL 08-02-
0128. There being NO OBJECTION, the motion passed.
RPL Number: 09-02-0022
Department of Military & Veterans Affairs
Anti-Terrorism Activities
$1.842 Federal Operating
NICO BUS, Administrative Services Manager, Department of
Military & Veterans Affairs, Juneau, (Testified via
Teleconference), explained that the request was for $1.842
million dollars of federal authorization to be made
available for potential federal grants associated with anti-
terrorism activities. He noted that $642 thousand dollars
of the authorization would be specific to a Department of
Justice grant; the remaining $1.2 million dollars would be a
"bridge" for funds expected to be received from the federal
government. Those funds would be disbursed quickly when
they arrive.
Mr. Bus noted that the $642 thousand dollars portion would
provide for the State's ability to grant communities the
purchasing power to buy individual protective equipment for
the first responders to a terrorist event. He added that
the $1.2 million dollars would support a variety of anti-
terrorism associated activities.
Mr. Bus noted that Gary Brown was present to discuss the
U.S. Department of Justice's grant if the Committee had
questions.
VICE-CHAIR FATE asked if there was a list of priorities for
the equipment uses.
GARY BROWN, Division of Emergency Services, Department of
Military & Veterans Affairs, Ft. Richardson, advised that
there is a "list in the making" at this time. From the
initial $406 thousand dollars, $85 thousand of those dollars
were determined to develop an assessment of the Alaskan
communities and the first responder's capabilities and
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needs. That assessment must be completed by December 15.
CHAIR THERRIAULT voiced concern that the personnel service
costs were not yet determined. He asked what the State was
obligated to pay for to address the potential matched costs
and if the Department anticipated receiving any of the funds
within the next month or two.
NICO BUS acknowledged that the $1.2 million dollars was an
unspecified amount. The understanding is that the money
would be available and distributed based on federal
criteria. Those funds would be reimbursed between now and
December for the out of pocket expenses. He assumed that
the Department would be able to provide a more detailed plan
at the December meeting.
CHAIR THERRIAULT recommended that there needs to be a list
of the agencies, the amount that they spend and why that
amount was spent. He inquired if those costs were being
tracked at this time.
SENATOR WARD asked if a list existed of the money spent
since September 11, 2001.
NICO BUS responded that the Department had received requests
from the various agencies including Department of
Transportation & Public Facilities and the airport work.
TAPE LBA 01-10, SIDE B
NICO BUS continued that the amount had included many
agencies and local police departments. He emphasized that
this was a preliminary request.
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities, Juneau,
(Testified via Teleconference), advised that the Department
was tracking the expenditures and funds specifically related
to the increased security needs in the rural airports and
the marine highway terminals. Security has been increased.
By the next LBA meeting in December, the Department should
have numbers available. There are nineteen airports
currently under federal requirements and that includes two
international airports.
CHAIR THERRIAULT asked if waiting for the accounting would
be a problem.
NANCY SLAGLE explained that Department of Transportation &
Public Facilities is currently using their existing budget
to pay for these expenses. She pointed out that the
Department is coming toward the snow season, which could
place additional pressure on the budget.
SENATOR WARD asked how much the local communities have spent
th
since September 11 in regard to how much they had
requested.
NANCY SLAGLE did not know that figure. She reiterated that
the Department has been tracking these amounts and will have
them itemized soon.
SENATOR WARD asked if the amount requested had been included
in the $14 million dollars requested by the Governor for
terrorist activities in the State.
JOAN BROWN, Chief Budget Analyst, Office of Management and
Budget, Office of the Governor, (Testified via
Teleconference), noted that she was not aware of a $14
million dollar request from the Office of the Governor. She
added that the Disaster Policy Council was meeting on a
regular basis and charged with evaluating necessary
activities in order to secure the State.
SENATOR WARD asked who was evaluating all that was currently
being done in the State regarding this issue.
JOAN BROWN understood that the Disaster Policy Council was
responsible for that work.
SENATOR WARD asked the amount authorized and who was
authorized to spend that money.
JOAN BROWN did not know particulars but did know that
Department of Transportation & Public Facilities was
providing increased security at the airports, and that the
public health labs were incurring additional costs and that
the National Guard has been activated at the airports. She
did not know the costs.
SENATOR HOFFMAN questioned the level of security required of
these additional services.
NANCY SLAGLE responded that the Federal Aviation Agency
(FAA) security guidelines are changing on a daily basis.
She added that it appears that as time progresses, the FAA
continues to add more hoops that passengers have to go
through to receive clearance. There is an attempt to
distinguish the level of security needed in the rural
airports versus major hubs.
SENATOR WARD inquired if it was the FAA who had ruled in
parts of the State like Bethel. He asked why there needs to
be three armed guards in the small airports.
NANCY SLAGLE did not know if that was an FAA requirement or
a National Guard/local police requirement.
SENATOR WARD asked if the requested funding could be used
for the three positions in Bethel.
NICO BUS did not know the criteria at this time. The money
will be received from the federal government and they will
specify the criteria. He apologized from not having the
details. He reiterated that the Department will provide the
accounting as it occurs.
CHAIR THERRIAULT questioned if the money was passing through
the State offices or the local governmental offices. He
stressed that it was not the intent to leave any State
agency "dry" during the middle of the fiscal year.
NICO BUS apologized that the details, which the Committee
requested, were not available. He reiterated that the
federal money would be used for both State and local
government.
DAVID TEAL, Director, Legislative Finance Division, reminded
the Committee that federal authorization can be used for
anything once the authorization is there. This money may
not be the actual dollars that are distributed. If there is
federal authorization on the books for disaster planning and
control, the agency can spend that money with the
authorization. He advised that as a result of the terrorist
acts, the State has already spent the money and that money
needs to be replaced.
Mr. Teal added that the $642 thousand dollars was an
operating RLP. Any of the unspent balance of that money
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will lapse on June 30.
CHAIR THERRIAULT suggested that would include using some of
the other federal authorization. He believed that the State
would not suffer a crisis.
DAVID TEAL recommended asking Mr. Bus how much federal
authorization was on the books at this time in that
component. That knowledge would provide an idea of how much
it would be adding to.
NICO BUS replied that the money would come to the Division
of Planning and Control and that operating budget is
limited. The federal funding that is used for disasters is
in the disaster relief fund and would require a formal
declaration of a disaster. At that time, the State would be
able to access unlimited federal funds.
Mr. Bus continued, the Department intends to have an
assessment on the use for the $642 thousand dollars by
December 2001. The communities are eager to buy the
equipment and begin the work required for the anti-terrorism
laws.
GARY BROWN added that the $642 thousand dollars was very
specifically identified for equipment. As soon as the study
is completed, that money with the remaining $321 thousand
dollars could be spent on equipment.
CHAIR THERRIAULT noted that he was not concerned with that
amount. His concern rested with the $1.2 million dollars.
SENATOR PHILLIPS voiced his concern with the accountability
of that money. He did not think that the Department knew
what they were "going after" and how that money would be
spent. He recommended that every two weeks, a total expense
budget be given to the Chair of the LBA Committee.
SENATOR WARD echoed support for the thoughts expressed by
Senator Phillips. He believed that it was important for the
Legislature to know what the Administration is doing on an
on-going basis to address the terrorist concerns.
CHAIR THERRIAULT outlined the options of the Committee. The
Committee could provide partial authorization on the
proposed amount or they could provide for the full amount.
He stated that he could review those amounts and release the
funds accordingly. He felt that the Committee needs more
information on releasing the entire $1.2 million dollars to
the Department.
DAVID TEAL pointed out that the LBA Committee does not know
what might be associated with the authorization of the
federal expenditures. He suggested that as part of the
reporting requirement, the Committee should consider the
intention to reimburse federal activities and/or to spend
the authorization on activities that don't require a State
match. Such an action would keep from tying up that money.
He reiterated that it is important that the Committee
respond to the terrorist activities.
CHAIR THERRIAULT inquired from Mr. Bus if the current
mechanism used by the agency of coming to the LBA Chair for
authorization has been working for the Department.
NICO BUS responded that the model being used for the gas
pipeline is working well. He pointed out that the
Department only requests authority on the books for the
federal receipt authority. He noted that there would be no
general fund match.
SENATOR HOFFMAN asked if any of the money would be used for
situations associated with Anthrax.
NICO BUS stated that the terrorism funding would be covering
that also. The expenditures would mostly be used for local
governments responding to federal requirements for increased
security at airports. He reiterated that the specific
criteria for the federal funds are forthcoming.
REPRESENTATIVE DAVIES voiced his support with providing the
$1.2 million dollars with the understanding that the reports
be submitted to the LBA Chair. He requested that a full
report be provided at the December meeting and that it be
included in the motion.
SENATOR PHILLIPS MOVED to ADOPT RPL 09-02-0022 with the
understanding that the Department report to the LBA Chair
every two weeks in order to keep a running total of what is
being spent.
CHAIR THERIAULT asked for clarification of the motion and at
what point his approval would be executed. He thought it
would be preferable that the Department comes to the Chair
with a list of proposed expenditures, which he could sign
off on. Those items would be tracked when approved.
Anything disapproved, would then come forward to the
meeting.
NICO BUS agreed that would be acceptable.
SENATOR PHILLIPS acknowledged the proposal.
SENATOR WARD recommended that the motion should be to
authorize the $1.2 million dollars including a reporting
procedure to the LBA Chairman every two weeks as well as a
sign off procedure.
NICO BUS envisioned that as soon as the Department receives
federal approval for funds, then that grant of approval
would be given to Senator Therriault itemizing the criteria.
He added that it might not be in two-week intervals, but
rather depending on when the information was forthcoming
delivered from the federal government.
SENATOR WARD voiced support for that concept.
SENATOR PHILLIPS WITHDREW the amended portion of the RPL and
requested to add the concept proposed by Mr. Bus.
CHAIR THERRIAULT clarified the MOTION and MOVED the $642
thousand dollar portion of the request. There being NO
OBJECTION, that portion of the request was adopted.
CHAIR THERRIAULT stated that given the $1.2 million dollars,
the LBA Chair would be able to approve up to $1.2 million
dollars of receipt and expenditure from the federal
authorization. As those funds come in, Mr. Bus would
provide the back up to the Committee Chair for approval up
to that dollar amount. If there is questionable spending,
the Chair can decline to authorize the amount and then move
it to the full Committee's consideration at the next
meeting. There being NO OBJECTION, the motion was adopted.
RPL Number: 10-02-4021
Department of Natural Resources
Promoting Agriculture in Alaska
$520,000 Federal Operating
SENATOR PHILLIPS MOVED to ADOPT RPL 10-02-4021 for
discussion purposes. He observed that the Division of
Legislative Finance had recommended that the request be
reduced to $225,000 dollars and that the agency could
request the remaining balance in FY03.
ROBERT WELLS, Director, Division of Agriculture, Department
of Natural Resources, Palmer, explained that the Division
received the grant from the U.S. Department of Agriculture
for the purpose of promoting agriculture in Alaska. The
goal is to build a marketing strategy and implement consumer
education programs to strengthen markets for Alaska Grown
products. Alaska's total allocation is $520,000 dollars,
which will be spent over three years to market Alaska Grown
Products and promote direct markets for farmers.
He added that producers in Alaska are finding it
increasingly difficult to sell their products due to mergers
and consolidation in retail industry, increased costs to
enter the market and the lack of a developed marketing
infrastructure. However, research shows that consumer
support is strong when consumers are reminded of the
benefits of Alaskan Grown products and that those products
are clearly identified as Alaska Grown.
CHAIR THERRIAULT asked for comments on the Division of
Legislative Finance's recommendation.
ROBERT WELLS commented the recommendation would be
satisfactory. He added that the Division is diligently
working to determine ways to spend the money responsibly.
He saw the need for television advertising time. He added
that the Division currently has a matching grant program,
which requires farm growers to match dollar for dollar up to
$2,500 dollars. It is a modest program but has doubled the
amount of advertising that can be done. He believed that
some of that funding could help bolster that program.
CHAIR THERRIAULT asked if any of the money would be made
available for out-of-state marketing.
ROBERT WELLS replied that there is discussion with the Board
of Agriculture regarding exporting of Alaska Grown Products.
Three weeks ago, Alaska potatoes were exported to Taiwan.
There has been consideration given to what export products
Alaska might be able to move into. He noted, however, that
nothing is on the table at this time. Mr. Wells pointed out
that the preliminary budget does address these concerns and
the cooperative marketing program.
CHAIR THERRIAULT advised that at this time, Alaska export is
small enough that the station costs cannot be spread to many
containers, which could create a barrier for breaking into
that market. He saw potential right now to make some
advances in the overseas market.
ROBERT WELLS acknowledged comments made by Senator
Therriault, pointing out that the Division was open to those
possibilities.
SENATOR WILKEN asked if this type of campaign had ever
occurred previously in the State. He inquired how the
programs success would be determined.
ROBERT WELLS responded that to date, the Division has not
had this type of aggressive campaigning in the State of
Alaska. Marketing was begun in 1986. He noted that success
would be measured on a yearly basis with the reporting of
sales of products in the State, depending on crop yields in
any given year. He claimed that there are ways to measure
the success.
SENATOR WILKEN questioned if there was a component within
the RLP, which addresses the measurement of success and/or
the market penetration.
ROBERT WELLS replied that the Division could guarantee that
would be included.
SENATOR WILKEN acknowledged that was an important component
and should be included.
SENATOR PHILLIPS MOVED to ADOPT RPL 10-02-4021 in the amount
of $225,000 dollars. There being NO OBJECTION, the RPL was
adopted as adjusted.
RPL Number: 11-02-0428
Department of Fish & Game
Wildlife Conservation & Restoration CARA
$265,000 Federal Receipts - Operating Budget
SEANTOR PHILLIPS MOVED to ADOPT RPL 11-02-0428 for the
purposes of discussion.
TAPE LBA 01-11, SIDE A
KEVIN BROOKS, Director, Division of Administrative Services,
Department of Fish & Game, explained that the Department of
Fish & Game has applied for additional grants from the U.S.
Fish & Wildlife Service for projects under the new federal
Wildlife Conservation & Restoration Program (WCRP). The
program was previously referred to as the Conservation &
Reinvestment Act (CARA). The appropriated level of federal
fund authority in the component is less than the amount of
grant funds available to the Department. The Department
needs the additional funding.
The Legislature only authorized an expenditure of $1,510 for
FY02 and directed the Department, through the Intent
Language to request additional spending authority via the
Legislative Budget and Audit (LBA) Committee if Congress
authorized funds for the program in FY03.
CHAIR THERRIAULT pointed out the notation indicated by
Legislative Finance that the claim was a "bit dramatic".
KEVIN BROOKS agreed with the characterization that the
language was a little dramatic, however, acknowledged that
those are projects, which the Department would like to see
"up and running". There would be a statewide benefit for
implementation of the projects.
Since the RPL was submitted, all correspondence has been
forwarded to the Legislative Finance Division. There is
approval of $2.4 million dollars for the current fiscal year
from the federal government, with receipt authority of $1.5
million dollars. The issue is whether or not the Department
can expect continuation of the funding.
CHAIR THERRIAULT remembered that there had been concern in
approving these requests. He asked if there would be timing
problems in holding off on the proposal. He commented that
he would prefer to reschedule the request for the next
meeting.
WAYNE REGELIN, Director, Division of Wildlife Conservation,
Department of Fish and Game, Juneau, (Testified via
Teleconference), commented on the specifics of the timing.
He explained that the programs that the Department would
like to get started this current year are all ones that need
to occur in May and June. If the Division waits for the
Legislature, those projects will not be able to be started
in a timely fashion. He indicated the projects being
proposed:
· Alaska Bird Observatory
· Anchorage Coastal Wildlife Refuge
· Public Service Kiosk
· Wildlife Viewing Guides
· Chilkoot Viewing Program
· Department of Fish & Game Indirect Costs
REPRESENTATIVE JOHN DAVIES MOVED to APPROVE a reduced
amount. He recommended specifically:
· The Alaska Bird Observatory in the amount of $30
thousand dollars,
· The Anchorage Coastal Wildlife Refuge in the
amount of $35 thousand dollars,
· The Chilkoot Viewing Program in the amount of $20
thousand dollars, and
· Indirect Costs in the amount of $5 thousand of the
$15 thousand dollars
He MOVED the total amount of $90 thousand dollars be adopted
for RPL 11-02-0428.
SENATOR PHILLIPS asked why those specific items were chosen.
REPRESENTATIVE DAVIES commented that those items are all the
ones that need to get into the field by summer. The other
two are pilot programs and a lower priority.
REPRESENTATIVE LANCASTER asked if the Committee did not
fully funding the component, would that action jeopardize
the State's ability to receive the WCRP funding in the
future.
KEVIN BROOKS replied that it would not jeopardize that
funding. The Division has been given a couple years to
spend the total funding dollars.
VICE-CHAIR FATE asked if the funds would go through Fish and
Wildlife funds.
KEVIN BROOKS explained that these funds were classified as
federal aid dollars, not fish and game funds.
CHAIR THERRIAULT pointed out that there was a motion on the
table made by Representative Davies. There being NO
OBJECTION, RPL 11-02-0428 was adopted.
RPL Number: 12-02-0075
RPL Number: 12-02-0100CAP
Department of Public Safety
Marine Fisheries Patrol Improvements
Marine Fisheries Patrol Enhancements-Two Vessels
$601,450 Federal Receipts
$400,000 Federal Receipts
SENATOR PHILLIPS MOVED RPL 12-02-0075 and RPL 12-02-0100CAP
for purpose of discussion.
JOEL HARD, COL., Director, Division of Fish & Wildlife
Protection, Department of Public Safety, advised that the
two RPL's were intended to receive and expend some federal
money that has been made available through the Natural
Marine Fisheries Service for enhanced marine fisheries
patrol. The funding has never been available before this
time. The funding potential is a result of lengthy
negotiations with that agency.
Col. Hard noted that the money has not yet been received.
It has been given tentative approval through that agency.
It represents money that has been passed through the Coastal
Stewardship Act for law enforcement intentions. He added
that because they do not have the infrastructure to provide
that law enforcement, they have chosen the Division to
assume that responsibility.
Col. Hard informed members that there are twenty-five
coastal states vying for the money.
CHAIR THERRIAULT voiced concern with the first RPL, which is
an operating request. He asked if there were federal monies
coming through to help with staffing resulting from the
request. He asked if there would be opposition in making
the $601,000 part of a capital request. When that money was
gone, the positions would be eliminated.
COL. HARD acknowledged that was the intent. He reiterated
that it would make no difference if it were classified as a
Capital Improvement Project (CIP) issue.
SENATOR PHILLIPS referenced RPL 12-02-0100CAP noting that
all of the vessels where stationed in Southeast Alaska.
COL. HARD clarified that was the way it appears because of
the separation of the RPL's. The proposal is to replace
aging vessels. The most aged vessels in that class are in
Southeast Alaska and represent a broader look at the overall
marine patrol requirements of the Division.
REPRESENTATIVE LANCASTER asked if the contractual services
listed on RPL 12-02-0075 would be seasonal-type jobs.
COL. HARD replied that the money associated with the first
RPL is intended to increase aircraft and marine operating
hours. That could involve the personnel services of
existing employees. Additionally, there is a component
which would increase the seasonal aid man-months that the
Division has for current employees. There are two positions
called "contract" employees, which would act as police-type
help. They would perform certain police functions and would
assist with further investigations.
CHAIR THERRIAULT asked if it was permissible to be working
on both the operating and capital budget at the same time.
DAVID TEAL explained that technically there is no difference
between the capital and operating budget. The concern can
be addressed easily. He provided the option of not
approving RPL 12-2-0075 and instead adding the $601,450 to
RPL 12-02-0100CAP to the capital request. That action would
provide a single RPL approval.
CHAIR THERRIAULT warned that with turning down one of the
RPL's, all the verbiage would also be lost in that action.
DAVID TEAL advised that the verbiage is not really
important, as it is just a description. The move would only
put receipt authority on the books, allowing the Department
to spend it as they wish.
SENATOR HOFFMAN asked how old were the two referenced 25-
foot Boston whalers.
COL. HARD guessed that they were over twenty years old.
Eventually, the State will end up with only two vessels
rather than the current four. He pointed out that the State
has sold about seven boats in the last four years. The
Division is operating at this time with only five boats.
SENATOR PHILLIPS MOVED that RPL 12-02-0075 be made into a
capital request-funding category.
REPRESENTATIVE DAVIES asked if there would be any difference
in how long the receipt authority would last if it were
authorized as a capital rather than an operating request.
DAVID TEAL responded that there would be a technical
difference. If it were a capital request, the money would
th
not lapse on June 30; if it were an operating request, the
th
funds not spent by June 30 would go away.
CHAIR THERRIAULT commented that he did not have a problem
with carrying the federal authority forward into future
years.
Chair Therriault referenced the MOTION to ADOPT RPL 12-02-
0075 on the table. There being NO OBJECTION, it was
adopted.
SEANTOR PHILLIPS MOVED to ADOPT RPL 12-02-0100. There being
NO OBJECTION, it was approved.
RPL Number: 25-02-6470
Department of Transportation & Public Facilities
TSAIA Federal Drug Seizure
$100,000 Federal
U.S. Department of Justice/Federal Forfeiture
SENATOR PHILLIPS MOVED to ADOPT RPL 25-02-6470 for purposes
of discussion.
NANCY SLAGLE explained that the federal government would
allow the sharing of funds seized during drug law
enforcement operations at the Ted Stevens Anchorage
International Airport (TSAIA). The federal reimbursement
for property and cash recovered in these operations at the
airport could be used for safety related items not
previously budgeted at TSAIA. The funds would provide
additional safety training courses and equipment to airport
security officers. The primary purpose of the Department of
Justice forfeiture program is to deter crime by depriving
criminals of the profits and proceeds of their illegal
activities and to weaken criminal enterprises by removing
the instrumentalities of crime. An ancillary purpose of the
program is to enhance cooperation among federal, state, and
local law enforcement agencies through the equitable sharing
of federal forfeiture proceeds.
There being NO OBJECTION, RPL 25-02-6470 was adopted.
RPL Number: 45-02-0007CAP
Arctic Region Supercomputer Purchase
$32,000,000 Capital-University Receipt Authority
SENATOR PHILLIPS MOVED to ADOPT RPL 45-02-0007 for
discussion purposes.
CHAIR THERRIAULT asked if there was any opposition from
moving the receipt authority from federal receipt to
University receipts to be increased by $2 million dollars.
There being NO OBJECTION, RPL 45-02-0007 was approved.
EXECUTIVE SESSION
REPRESENTATIVE LANCASTER made a motion, in accordance with
Title 24 and 44, to MOVE into Executive Session for the
purpose of discussing audit reports, which are held
confidential by law. There being NO OBJECTION, the
Committee went into Executive Session at 3:20 P.M.
CHAIR THERRIAULT requested that Pat Davidson (Legislative
Auditor), her staff and Committee Staff, Heather Brakes be
present for the Executive Session.
The Committee resumed Open Session at 3:45 P.M.
AUDIT REPORTS
REPRESENTATIVE LANCASTER MOVED to release the following
preliminary audits to the agencies for response:
· DCED/Board of Chiropractic Examiners
· DCED/Board of Examiners in Optometry
· DCED/Board of Professional Counselors
· DFG/Wildlife Conservation-Hunter Information &
Training Program
There being NO OBJECTION, the preliminary audit reports were
released for agency response.
REPRESENTATIVE LANCASTER MOVED to release the final audit
report as public:
· DOA/AKSAS
There being NO OBJECTION, the audit was released for public
response.
REPRESENTATIVE LANCASTER MOVED to release the final audit
report as public:
· DLWD/Division of Vocational Rehabilitation
REPRESENTATIVE DAVIES OBJECTED. He asked that issue be held
in Committee until the next scheduled meeting.
A roll call vote was taken on the motion.
IN FAVOR: Senator Hoffman, Ward, Wilken, Therriault
Representatives Lancaster, Fate
OPPOSED: Representative Davies
Senators Donley and Phillips and Representatives Harris,
Joule, Mulder, and Williams were not present for the vote.
The MOTION PASSED (6-1).
CHAIR THERRIAULT noted that he would get together with
Representative Davies to discuss a follow-up meeting on the
audit and the material contained in it.
REPRESENTATIVE DAVIES voiced his concern that releasing the
audit may preclude some of those concerns.
The audit was released for public response.
OTHER COMMITTEE BUSINESS
Division of Family and Youth Services
CHAIR THERRIAULT pointed out that there was one audit
request proposed for the Committee's consideration.
PAT DAVIDSON, Director, Legislative Audit Division, Alaska
State Legislature, advised that an audit request had been
submitted by Representative Chenault regarding financial
services for the Division of Family and Youth Services
(DFYS). The request asks for a detailed audit of the entire
Division. She noted that her office was working with his
staff to further define the specific objective of the audit.
Ms. Davidson explained that when the objectives are
determined, those handled in the up-coming federal review
will be excluded and that her office would work with the
representative's staff to prioritize the other issues.
CHAIR THERRIAULT commented that the proposed scope of the
audit was "fairly" broad. He pointed out that it falls into
the same category as the request made by Representative Fate
at an earlier meeting.
PAT DAVIDSON noted that she had been working with
Representatives Chenault's aid, Sue Wright, who has been
sent copies of the areas of the federal review. Ms.
Davidson reiterated that her office would meet with
Representative Chenault's office to discuss the audit and to
prioritize the issues.
CHAIR THERRIAULT advised that it was his preference to hold
the request until the Division of Legislative Audit staff
works with Representatives Chenault's office.
School District Waivers
CHAIR THERRIAULT mentioned that the Department of Education
& Early Development has been requested to submit to the LBA
Committee, a listing of the different school districts
requesting waivers for funds going into the classrooms. He
added that he had requested that those waivers be submitted
to the entire Committee so that they could be outlined.
University Capital Appropriation
CHAIR THERRIAULT referenced work to be done on the
University of Alaska-Anchorage (UAA) campus. UAA was issued
a capital appropriation with fairly broad language for that
type of work. In the course of doing the work on the campus
this year, leaking pipes in the hot water distribution
system were found in a number of the buildings. The broad
language was such that they did have authorization to take
some of the capital funds and address the problem. However,
when they requested the broad language, they also attached a
list of projects and fixing the leaking pipes was not
included.
The University was concerned since they had deviated from
the original intent of what the money was issued for. UAA
felt compelled to come back and disclose that change to the
Legislature.
REPRESENTATIVE DAVIES asked the amount the actual work cost.
CHAIR THERRIAULT responded that the work cost about $1
million dollars.
REPRESENTATIVE DAVIES asked if Senator Therriault believed
it was a legitimate emergency.
CHAIR THERRIAULT replied it was and suggested that it was
cost effective to address it at the time it was discovered.
School District Waivers
SENATOR WILKEN understood that there had been twenty-nine
waivers requested of which eleven have been approved. He
hoped that when the Legislative session starts, there would
be time to spend with the Department of Education & Early
Development to better understand why the waivers have been
granted. He pointed out that two years ago, the definition
was changed to include the administration, which should have
the principles and assistants. He claimed that change
broadened the seventy percent significantly.
Senator Wilken wanted to find out why the waivers were being
granted and what the issues were. He stressed that he would
rather see that seventy percent stay in the classroom.
CHAIR THERRIUALT voiced his concern of looking at the
spreadsheet. He pointed out that there are some school
districts, which had achieved a higher percentage for the
classroom, and this year it had decreased. He asked why.
Chair Therriault recommended that the LBA Committee needs to
have further discussion on the matter regarding what they
would like their role to be.
SENATOR WILKEN agreed. He pointed out that the original
intent was intended to be corrective and determine the
issues so that the seventy percent would get back into the
classroom.
SENATOR HOFFMAN agreed that the Committee should establish
the public policy and then get the seventy percent back into
the classroom. He interjected that determining the
administrative functions was not the role of the Committee
or the Legislature.
ADJOURMENT
CHAIR THERRIAULT adjourned the Legislative Budget & Audit
Committee at 3:55 P.M.
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