Legislature(1999 - 2000)
03/04/1999 06:05 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE LOG NOTES 03/04/99 GENERAL SUBJECT(S): SB 83 Supplemental/Capital Appropriations SB 72 Constitutional Budget Reserve Fund Appropriation The following overview was taken in log note format. Tapes and handouts will be on file with the Senate Finance Committee through the 21st Legislative Session, contact 465-2618. After the 21st Legislative session, they will be available through the Legislative Library at 465-3808. Time Meeting Convened: 6:12 P.M. Tape(s): SFC-99 #46, Side A & Side B PRESENT: X Senator Parnell X Senator Adams X Senator Torgerson X Senator P. Kelly X Senator Donley X Senator Green X Senator Leman X Senator Phillips Senator Wilken ALSO PRESENT: DAN SPENCER, Chief Budget Analyst, Office of Management and Budget; YVONNE CHASE, Acting Director, Division of Administrative Services, Department of Community and Regional Affairs; PAT POLAND, Director, Division of Municipal and Regional Assistance, Department of Community and Regional Affairs; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources & Department of Military and Veterans Affairs; KATHRYN DAUGHHETEE, Director, Division of Administrative Services, Department of Law; BARBARA RITCHIE, Deputy Attorney General, Civil Division, Department of Law; DEAN GUANELLI, Assistant Attorney General, Criminal Division, Department of Law; NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Facilities; DWAYNE PEEPLES, Director, Division of Administrative Services, Department of Corrections; JOHN BITNEY, Legislative Liaison, Alaska Housing Finance Corporation, Anchorage; KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game; MARLA GREENSTEIN, Executive Director, Commission on Judicial Conduct, Alaska Court System. SPEAKER DISCUSSION CO-CHAIR PARNELL Reconvened the committee at approximately 6:12 p.m. He noted that the Committee would pick up sections they had not reviewed and would begin today's meeting with the Disaster section. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS NICO BUS Administrative Services Manager, Division of Support Services, Department of Military and Veterans Affairs joined the SFC Committee. CO-CHAIR PARNELL Requested clarification regarding the lapse date in Section 1. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS YVONNE CHASE Acting Director, Division of Administrative Services, Department of Community and Regional Affairs was invited to join the committee. She explained total amount of authorization which would run through June 30th, 1999. The Division is requesting an extension on the lapse date in order to extend the funds. PAT POLAND Director, Division of Municipal and Regional Assistance, Department of Community and Regional Affairs Explained that the total grant amount was $7 million federal dollars which included no other funding. He noted that he was involved with the Community Grants Program portion. Of the total amount of the $7 million, close to $5.5 has been encumbered. SENATOR TORGERSON According to what we have, $2.3 million was also included with the $7 million. He asked if the Division was only lapsing $5.5? PAT POLAND Explained that $1.5 million dollars would come out of last year's disaster fund. He asked Ms. Chase to assist. YVONNE CHASE Indicated that she could not help out with this information. SENATOR TORGERSON Explained the $2.3 million match was suppose to be from local communities. He asked the Department: "If we approve the lapse date, would it approve the $2.3 million dollars to come out of the general fund?" YVONNE CHASE Stated that the original amount would be the amount approved. It would be only an extension. SENATOR TORGERSON Countered this is general fund money. He asked about the $1.5 million dollars from the Department of Military and Veterans' Affairs money? YVONNE CHASE Apologized to the Committee that she could not adequately respond to questions because she has only taken over the position two days ago. PAT POLAND Commented that Section 1 of the bill would extend the lapse date of the $7 million dollar appropriation; Section 2 is the Disaster Relief fund and is the area which Senator Torgerson is referring to. SENATOR TORGERSON Asked how much of the $5 million encumbered, had actually been disbursed? PAT POLAND $1 million actually disbursed in community grants program which is 3/4 federal and 1/4 state money. SENATOR TORGERSON Referenced the Magnusson-Stevens Act spread sheet. He asked when those funds might be disbursed? PAT POLAND There is a mix of projects that are going on. He thought that it would be reasonable to predict by next summer construction season. SENATOR TORGERSON Asked if there was an updated list of the disaster relief. PAT POLAND Noted that he did have a more current list. He offered to provide that information to the Committee by fax. CO-CHAIR PARNELL Asked that a current list of the funds and projects be provided the committee. Requested Nico Bus to explain section 2, Southeastern Storm disasters. DEPARTMENT OF NATURAL RESOURCES NICO BUS Administrative Services Manager, Division of Support Services, Department of Natural Resources was invited to join the committee. He explained there had been major damage to Juneau, Haines and the Haines Borough from the major rainstorm in which 6 inches of rain fell on one day. Monies for road repair came from the Department of Fish and Game and Department of Natural Resources. Mr. Bus reviewed expenditure costs which totaled $2,730.0 million dollars. SENATOR DONLEY Asked about the $300 thousand dollars for the road. NICO BUS Explained that the Lemon Creak River in Juneau is adjacent to the access the Lemon Creek Prison Facility. The river took out much of the embankment. Department of Transportation and Public Facilities estimated that it would be about $331 thousand dollars to repair. SENATOR LEMAN Asked the process of determining the values of the reports? Who gets paid the money? What does it actually cost to fix? He suggested that it was a fairly loose way of coming up with the estimates. NICO BUS Explained that when there is a disaster the communities apply to Department of Military and Veterans' Affairs for a disaster declaration. Then there is a damage assessment made; this was usual for an "unusual" event. Some of work is emergency repair that must be done. The long term/permanent fix goes through the traditional bid process. Mr. Bus explained that in the case of the Lemon Creek facility, Department of Transportation and Public Facilities assessed it and now it must go through the full bidding process. He added that in the Fritz Cove road, citizens went out to fix it. Otherwise they try to delay projects until they can go through the usual process. SENATOR LEMAN Verified the traditional bid process. SENATOR PHILLIPS Asked who establishes the criteria for disaster relief? NICO BUS Replied that for government entities, there are different thresholds which the federal highway administration has its own threshold for disaster relieve; also the State has established its own. Private individuals can also apply for loans. SENATOR PHILLIPS Referenced Perseverance Trail and asked if it was a higher priority repair? He thought the funding should be for highways and road. NICO BUS Responded that these were damages to the infrastructure of State Parks. He acknowledged that there had been discussion of transferring the trail system to the City and Borough of Juneau. CO-CHAIR PARNELL Asked if this was new damage or was it damages which occurred two or three years ago which funding had been denied. SENATOR PHILLIPS Stated that the trail should not be included in the funding request. He asked for definition of "criteria". CO-CHAIR PARNELL Noted that he and Senator Phillips have material that is in the process of being copied and will be passed out to committee members as soon as possible. SENATOR TORGERSON Asked Mr. Bus to explain the federal map. Line item on page 2. NICO BUS Explained that the total application for line items damage was $1.5 million dollars in which Department of Transportation and Public Facilities put in an application. Federal Emergency funds have been empty, so to make sure the damages are repaired, the Division of Emergency included $1.3 million dollars. The $50,000 match requirement was included initially to respond to the Department of Transportation and Public Facilities requirement. That requirement has been changed and the $50 thousand dollars can roll back into the original amount. SENATOR TORGERSON Can we take out the $50,000? NICO BUS Explained that it could be rolled back into the $1.1 million dollars. The damages to the repair of the road system totaled $1.5 million dollars. SENATOR TORGERSON Asked if this was eligible for ISTEA funding? NANCY SLAGLE Director, Division of Administrative Services, Department of Transportation and Public Facilities, explained that this would not fit under regular ISTEA program. She noted that the Department had submitted a request to the Division of Highways for emergency response coverage. Any of that money should get reimbursement if they were spent within 180 days of the disaster there would be full reimbursement and no match would be required. SENATOR TORGERSON What happened to land fill they needed to take water out of it? NICO BUS Explained that the Haines Borough land fill flooded. The Division of Emergency Services is trying to make it operational again. This is a private organization that usually would not be eligible for assistance, but because it is the only landfill in that community, the circumstance is different. The next request is for the Endicott Mountain Disaster caused by flash flooding and a request in the amount of $278.1 thousand dollars. The total disaster request in the 1999 supplemental was $740,000. Without funding, he noted that there would be danger of the tank farm falling into the river. SENATOR TORGERSON Asked if there were two tank farms, both located on the river? NICO BUS Responded "yes". DEPARTMENT OF LAW CO-CHAIR PARNELL Commented that the Committee had left off on Judgment and Claims, Section 15. He explained that the Magnusson Stevens Disaster Grants Status Report had been passed out for committee members DEAN GUANELI Assistant Attorney General, Department of Law. Explained Section 15, Cleary vs.Smith case. The requested funding would allow for the attorneys to represent the subclass of plaintive women prisoners. He stated that the attorney fees are a modest amount and would reflect the end of attorney fees representing women prisoners. SENATOR DONLEY Noted the 2/26/99 response and asked that the Department go back and address question #5 on the form on corrective action taken. DEAN GUANELI Believed that the active litigation in the Cleary case is winding down. With approximately 800 prisoners being held in Arizona, the population pressure on the Department has decrease. The issues, which were being actively litigated, are now complete. CO-CHAIR PARNELL Requested the Department to continue. BARBARA RITCHIE Deputy Attorney General, Civil Division, Department of Law, stated that item #18, Bess vs. Ulmer award of $11,600 dollars for attorney fees. This was for the issue that went to the Supreme Court regarding the question of "same sex marriage" constitutional amendment. Recommendations included the expedited circumstance of that case. Tried to prevent the matter from being heard or expedited. SENATOR DONLEY Believed that the amount should be taken from the Court's budget and the Court should be held responsible. CO-CHAIR PARNELL Requested the Department to continue. BARBARA RITCHIE Stated that Item #19, Gabrielli vs. Gabrielli child support case addressing the issue of the effect of an unrecorded claim fee. Court held that a recorded child support lien takes priority over a quit claim deed that was unrecorded. She summarized that $2,185 was awarded. CO-CHAIR PARNELL Referenced items #20, #21. Asked Ms. Ritchie to explain #22. BARBARA RITCHIE Explained item #22. Minder vs. State, Alaska Oil and Gas Conservation Commission. Item #22 lawsuit was filed 1995, and was a "whistleblower". The position was eliminated due to budget cuts. TAPE CHANGE 99-46, B Tape Change, SFC 99-46, Side B BARBARA RITCHIE Continued explanation regarding the Minder vs. State case. The negotiated settlement of $94,000 was made and that the settlement would be contingent on an appropriation. SENATOR TORGERSON Questioned if a retaliation of "whistleblowing" and breach of contract had been made. He asked which was it. BARBARA RITCHIE Stated it would be an employment contract. In all employment relationships, which involve the State of Alaska, there is a covenant of good faith and fair dealing. Union might have negotiated this. Does not believe that Mr. Minder was under a negotiated contract. She felt that the plaintiff was seeking more than $94,000. This amount would pay him for one-year mandatory salary including employee benefits. SENATOR TORGERSON What is the $75,000 dollar request for? BARBARA RITCHIE Explained that amount was an error from an earlier spreadsheet. KATHRYN DAUGHHETEE Director, Division of Administrative Services, Department of Law, explained that the spreadsheet does say $75,000 but refers to attachment one of one. There is an updated spreadsheet. Original spread sheet was only picking up the amount on the far right. She stressed that the amount due is the salary plus the benefits. BARBARA RITCHIE Continued, Item #23, Brockman vs. State, Department of Corrections. This was a case brought against the Department of Corrections from 1992 - 1993. The actual lawsuit was filed in 1995 and are clear violations of the "Cleary" case. Tried to do away with the whistleblower act. There were ill-defined supervision problems in this case. One of the aspects of the settlement was that the individual had gone to work for Department of Health and Social Services. She will not be in line for any future state employment. The specific problem with the case was that a personnel officer had cleaned up this employee's personnel file so that a significant problem was created in that the record establishing the states case had been purged. CO-CHAIR PARNELL Noted Items #24, #25, #26, #27, indicating that no presentation would be required. He commented that the Committee had received word that the Department of Law was withdrawing attorney fee awards in Planned parenthood case. He stated that he would provide copies to committee members. He advised the referenced items are #13 and #14. BARBARA RITCHIE Elaborated that both cases are presently on appeal, and may come back before the committee at a later date. SENATOR TORGERSON Asked if these were the only two cases on appeal? BARBARA RITCHIE Acknowledged that was correct. CO-CHAIR PARNELL Requested the Committee to revisit the other sections of the Supplemental relative to the Department of Law. Section 20, miscellaneous claims. Section 22 - Ratifications required no explanations. DEPARTMENT OF CORRECTIONS DWAYNE PEEPLES Director, Division of Administrative Services, Department of Corrections Made a brief presentation on Section #8. Need to have direct appropriation due to changes made in the Legislative Budget and Audit Committee (LBA). The request would be for $750 thousand dollars for the Alaska Correctional Industries. This is a request to transfer money from the revolving loan fund into the Department of Corrections. The funds would be used to purchase supplies for building products. It would be non-general fund. SENATOR TORGERSON Questioned the statement attached to the request regarding the "live animals". SENATOR GREEN Concerning the issue of the stockpile, she commented that there is a provision on statute. DWAYNE PEEPLES Commented that he would follow up and provide that information to Senator Green. SENATOR TORGERSON Asked why the State was purchasing livestock and questioned the payments to vendors for that purpose. DWAYNE PEEPLES Replied that Mt. McKinley purchases the livestock, slaughters it, processes it and then sells it. This is revenue receipt. When the correctional industries sells a product, the money from the sale goes into the fund, and then the funds are appropriated from the account back to the Department to purchase more products. CO-CHAIR PARNELL Section 9, Requested Dan Spencer to testify. Co- Chair Parnell referenced Section 20, Department of Corrections, miscellaneous claims request for $12,000 item. SENATOR PHILLIPS Asked if these were stale-dated warrants. He asked which was the oldest? DWAYNE PEEPLES Replied the oldest was from 1/20/95. OFFICE OF MANAGEMENT AND BUDGET DAN SPENCER Chief Budget Analyst, Office of Management and Budget, Office of the Governor Noted that the claims are not stale-dated warrants, they are old bills. ALASKA HOUSING FINANCE CORPORATION (AHFC) JOHN BITNEY Legislative Liaison, Alaska Housing Finance Corporation, Anchorage Testified via teleconference from Anchorage. He explained that Section 9 would lower the general fund appropriation into the Alaska debt retirement fund. In Section 1(a), there is language that takes the balance of the $103 million dollars available from AHFC and appropriates that into the debt retirement fund. At the time the budget numbers were calculated, all numbers were not yet in and finalized. He pointed out that taking the difference between 9 million and 7.865 million would actually be required. Section #9 would take the difference of the numbers to come from the general fund. CO-CHAIR PARNELL Asked if backup had been submitted. He noted that the Committee has nothing in writing. JOHN BITNEY Replied that he would submit backup material the first thing up in the morning identifying the debt service schedule. AHFC makes two payments per year on the bonds and the next payment will be due on 1st June. CO-CHAIR PARNELL Requested that Mr. Bitney submit the necessary backup. DAN SPENCER Commented that the reason that there is lineage between the FY2000 budget and the front section because, last year the Conference Committee ended appropriating the entire AHFC dividend. CO-CHAIR PARNELL Reiterated the request for the backup from AHFC. He asked if the Department of Health and Social Services wanted to withdraw the $21,000 request relating to GRM claims. DAN SPENCER Confirmed that was correct and noted that he would submit the memo tomorrow. He commented that he had been informed that the Department of Administration had stale-dated warrants in the amount of $11,800 dollars. CO-CHAIR PARNELL Referenced Section #20. DEPARTMENT OF FISH AND GAME KEVIN BROOKS Director, Division of Administrative Services, Department of Fish and Game Provided Supplemental information found from an old concern in the amount of $1,600 dollars. CO-CHAIR PARNELL Referenced Section #20 ALASKA COURT SYSTEM MARLA GREENSTEIN Executive Director, Commission on Judicial Conduct Stated that this was a request for past attorney's fees for two formal hearing of the Commission. The two hearings were for Judge Compton and Judge Johnston. These are under stale dated warrants as the they are for past claims. CO-CHAIR PARNELL Referenced Section #22, ratifications. One of the radifications not heard dealt with the Department of Community and Regional Affairs Section #22, Department of Environmental Conservation, Section #22, Department of Natural Resources for fire suppression. Co-Chair Parnell requested Mr. Bus to explain the next item. NICO BUS Explained ratification #22 in the amount of $5,391,004 for the fire at Fort Greely, FY98. Two emergency requests for fire, on June 5 and June 15 which required approximately $5 million dollars. Approximately $2 million dollars has currently been reduced between State and Federal contributions. This request resulted from a timing problem of the fire. He noted that the Legislature leaves in May and fire occurred in June. CO-CHAIR PARNELL What is the source of funds recouped? NICO BUS Alaska Statute 26 states that monies for these disasters shall be made available. Funds can be borrowed against general funds until can be ratified or request made through supplemental. SENATOR PHILLIPS Asked the average spent for a fire season? NICO BUS Replied that fire costs for the State of Alaska is roughly $10 million in general funds. SENATOR PHILLIPS Pointed out that the $10 million dollars had already been spent for that fiscal year. He asked if another $5.4 million was being added. NICO BUS Responded that the $5.4 million dollars was for 1998. CO-CHAIR PARNELL Stated that was the last section in which departments were requested to be available to testify on. He requested the subcommittee chairs to come back with further reductions and suggestions. Additionally, Co-Chair Parnell asked that Senator Adams to put forth any ideas or suggestions. DAN SPENCER Voiced confusion on stale dated warrants. Two elements on stale dated warrants and one that is more than two years old. CO-CHAIRPARNELL Explained the agenda for the next meeting. He explained that there would be public testimony at that time. ADJOURNMENT The meeting adjourned at 7:40 P.M. SFC-99 (10) 3/04/99 p.m.
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