Legislature(2021 - 2022)SENATE FINANCE 532

02/08/2022 09:00 AM Senate FINANCE

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Audio Topic
09:05:16 AM Start
09:06:37 AM Village Safe Water and Wastewater Capital Projects
10:51:45 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Economic Outlook TELECONFERENCED
Moody's Analytics
+ Village Safe Water & Wastewater Captial Projects TELECONFERENCED
Department of Environmental Conservation
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SENATE FINANCE COMMITTEE                                                                                      
                      February 8, 2022                                                                                          
                         9:05 a.m.                                                                                              
                                                                                                                                
9:05:16 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate Finance Committee                                                                            
meeting to order at 9:05 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Click Bishop, Co-Chair                                                                                                  
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof                                                                                                       
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Carrie    Bohan,    Facilities    Services     Program    Manager,                                                              
Department    of  Environmental    Conservation;    Ruth   Kostik,                                                              
Administrative    Services   Director,   Department   of   Natural                                                              
Resources; Randy Bates, Director, Division of Water.                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
VILLAGE SAFE WATER AND WASTEWATER CAPITAL PROJECTS                                                                              
                                                                                                                                
^VILLAGE SAFE WATER AND WASTEWATER CAPITAL PROJECTS                                                                           
                                                                                                                                
9:06:37 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:09:12 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:09:26 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:11:25 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:12:19 AM                                                                                                                    
                                                                                                                                
RUTH  KOSTIK,   ADMINISTRATIVE   SERVICES   DIRECTOR,  DEPARTMENT                                                               
OF NATURAL RESOURCES, introduced herself.                                                                                       
                                                                                                                                
Co-Chair Stedman HANDED the GAVEL to Co-Chair Bishop.                                                                           
                                                                                                                                
9:12:42 AM                                                                                                                    
                                                                                                                                
CARRIE    BOHAN,    FACILITIES    SERVICES     PROGRAM    MANAGER,                                                              
DEPARTMENT    OF    ENVIRONMENTAL     CONSERVATION,    discussed,                                                               
"Department   of  Environmental   Conservation,   Senate   Finance                                                              
Committee"   (copy  on  file).  Ms.  Bohan   looked  at  slide  2,                                                              
titled "Village Safe Water":                                                                                                    
                                                                                                                                
      Village Safe Water's mission is to support rural                                                                          
      communities in their efforts to develop sustainable                                                                       
      sanitation facilities                                                                                                     
           .notdefCommunities with a population less than 1,000                                                               
           per AS 46.07.080                                                                                                     
      We accomplish this mission by:                                                                                            
           .notdefFunding planning, design and construction of                                                                
         water, wastewater and solid waste projects                                                                             
           .notdefProviding project management and oversight for                                                              
           grant funded projects                                                                                                
                                                                                                                                
9:13:51 AM                                                                                                                    
                                                                                                                                
Ms.   Bohan    addressed   slide    3,   titled   "Rural    Alaska                                                              
Sanitation   Funding  Need."  She  informed   the  committee  that                                                              
the  pie chart  contained   information  compiled   by the  Indian                                                              
Health  Services    (IHS)  Sanitation  Deficiency   System  (SDS).                                                              
The   total  rural   sanitation   funding   need   totaled   $2.27                                                              
billion   as  of  the   fall  of   2021.  The   most  significant                                                               
portion  was  for  first  time service  in  unserved  communities                                                               
[61  percent].  The  second  highest  need  was  for  upgrades  to                                                              
benefit   system   operations    or  to   address   minor   health                                                              
threats  [22  percent].  The last  portion  [17  percent]  was for                                                              
upgrades to address substantial health threats.                                                                                 
                                                                                                                                
9:14:58 AM                                                                                                                    
                                                                                                                                
Co-Chair   Bishop   brought   up  the   states    $2  billion   in                                                              
deferred   maintenance   needs  and   $1  billion   in  bulk  fuel                                                              
upgrade   shortfalls.   He  noted  the  $1.3  billion   for  first                                                              
time  service  and  wondered  if  it would  rid  rural  Alaska  of                                                              
the    honey  bucket    system.   Ms.   Bohan   answered   in  the                                                              
affirmative.                                                                                                                    
                                                                                                                                
9:16:09 AM                                                                                                                    
                                                                                                                                
Ms.    Bohan    pointed    to   slide    4,    titled    "Unserved                                                              
Communities."   She  indicated   that   she  provided  additional                                                               
backup   information   and  referred   to   the  document   titled                                                              
 Unserved   Rural  Alaska   Communities    (copy   on  file)  that                                                              
listed  the  unserved  communities   as  contained  in  the  slide                                                              
and  included  the definition   as  Communities   in which  55% or                                                              
less  of the  homes are  served  by a  piped system,  septic  tank                                                              
and  well,   or  covered   haul  system.    She  noted   that  the                                                              
communities   marked  by an  asterisk  on  the slide  already  had                                                              
funding  committed   to  provide  service.   She  added  that  the                                                              
communities  of  Lime  Village  and Crooked  Creek  would  receive                                                              
septic  tank  and well  systems  and Tununak  and  Shageluk  would                                                              
receive   pipe   service.   She   pointed   out   that  the   cost                                                              
estimate   data  and   monthly   user  rates   based   on  a  2016                                                              
Engineer   Report  commissioned   by  Village   Safe  Water  (VSW)                                                              
was outdated along.                                                                                                             
                                                                                                                                
9:18:02 AM                                                                                                                    
                                                                                                                                
Senator  von  Imhof  requested   a map  of  unserved  communities                                                               
and  wondered  whether  unserved  communities  were  located  near                                                              
enough  to  produce  economies  of  scale.  She wondered   if many                                                              
communities   could  use  the  same  type   of  system  or  needed                                                              
unique   systems.  Ms.   Bohan  pointed   out  that   the  handout                                                              
included  a  listing  of  the  region  where  each  community  was                                                              
located.  She  pointed  to  the  Yukon-Kuskokwim,   Interior,  and                                                              
Norton  Sound  areas  that  had the  highest  number  of  unserved                                                              
communities.   She answered  that  most  of the  communities  were                                                              
remote  and  could   not  connect  to  an  existing   system.  She                                                              
noted   that   there   were  30   communities    that  had   major                                                              
engineering,    construction,   and   capacity   challenges   that                                                              
warranted   a distinct   design.  Each  of  the  communities   had                                                              
such   unique  circumstances    that  it   was  not  possible   to                                                              
utilize  economies   of  scale  and replicate   one  package  that                                                              
fit  all  needs.  The  department   had  pursued  modular   units,                                                              
but they were not cost efficient.                                                                                               
                                                                                                                                
9:21:27 AM                                                                                                                    
                                                                                                                                
Senator  Wilson  asked   where  the 55  percent  distinction   was                                                              
derived   from.  She   did  not   know  agreed   to  provide   the                                                              
information.                                                                                                                    
                                                                                                                                
9:22:01 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  voiced  that  VSW  was an  important  issue  for                                                              
Western   Alaska,  especially   in  the  time   of  COVID  19.  He                                                              
agreed   with  the   cookie  cutter   approach   referred   to  by                                                              
Senator  von  Imhof.  He  hoped  VSW  would  work  extensively  to                                                              
develop  the  approach.   He inquired   about  the  best  practice                                                              
scoring   and  if   VSW  received   community   feedback   on  the                                                              
issue.                                                                                                                          
                                                                                                                                
9:23:46 AM                                                                                                                    
                                                                                                                                
Co-Chair  Bishop  asked   for VSW  to  rank  the  funded  projects                                                              
in  priority  order.  He asked  if  the list  of  funded  unserved                                                              
communities    projects  would  start  in the  current  year.  Ms.                                                              
Bohan  answered   that  the  information   was  on  the  list  for                                                              
unserved  communities.   Co-Chair  Bishop  wanted  a  list  of all                                                              
the funded projects by village in the current year.                                                                             
                                                                                                                                
Senator   Hoffman   requested   the  population   of  underserved                                                               
communities as well. Ms. Bohan agreed.                                                                                          
                                                                                                                                
9:25:44 AM                                                                                                                    
                                                                                                                                
Ms.  Bohan  displayed   slide  5,  titled  "Village   Safe  Water:                                                              
Average Project":                                                                                                               
                                                                                                                                
      .notdefCost to provide running water and sewer to individual                                                            
      homes in a village for the first time                                                                                     
           .notdef$500 -$750 thousand per/home                                                                                
                                                                                                                                
      .notdefProjects typically last 5 -10 years to completion,                                                               
      depending on                                                                                                              
           .notdefSize and complexity of the project                                                                          
           .notdefAvailability of funds                                                                                       
           .notdefAbility of  community     to    meet     ongoing                                                            
           construction funding conditions                                                                                      
                                                                                                                                
9:26:43 AM                                                                                                                    
                                                                                                                                
Senator  von  Imhof asked  if  VSW installed  typical  toilets  or                                                              
composting   toilets.   Ms.  Bohan  answered   that  most  of  the                                                              
toilets    were   traditional     toilets,    however    in   some                                                              
communities   the  toilets  used  a vacuum   system.  Senator  von                                                              
Imhof  hoped  that Ms.  Bohan  would address  the  maintenance  of                                                              
the  systems  later  in the  presentation.   She shared  that  she                                                              
had   visited   communities   with   very  complex   systems   and                                                              
villages  with  simple  systems.  She  observed  that  the  simple                                                              
systems worked well.                                                                                                            
                                                                                                                                
9:28:22 AM                                                                                                                    
                                                                                                                                
Ms.  Bohan  discussed   slide  6,  titled  "Village   Safe  Water:                                                              
Funding  Sources,"  which  showed  a  flow  chart  of its  funding                                                              
sources  and  the  corresponding   allocations.   She  pointed  to                                                              
the  left   side  of   the  slide   that  depicted   the   Capital                                                              
Improvement   Project   (CIP)  allocation   system  derived   from                                                              
the  25 percent  state  match,  USDA Rural  Development   funding,                                                              
and  the EPA  Infrastructure  grants  that  flow  through  the CIP                                                              
traditional    funding   route    in   the   typical   amount   of                                                              
approximately   $70 million   per year.  She  pointed  to  the SDS                                                              
list  on  the  middle   right  and  explained   that  the  funding                                                              
flowed  through  from  IHS  and EPA  tribal  Safe  Drinking  Water                                                              
Act   and  Clean   Water   Act.  The   funding   was  awarded   to                                                              
communities   based  on   each  programs    evaluation   criteria.                                                              
She  delineated  that  a committee  conducted  a  review  that was                                                              
comprised   of  Ms.  Bohan  as  a representative    of VSW  and  a                                                              
representative   from  all  the  participating   federal   funding                                                              
programs.  Once  the funding  was  allocated,  either  VSW  or the                                                              
Alaska   Native  Tribal   Health   Consortium   (ANTHC)   provided                                                              
administrative   support  to  the  communities.   She  added  that                                                              
most villages were eligible for both CIP and SDS funding.                                                                       
                                                                                                                                
9:30:53 AM                                                                                                                    
                                                                                                                                
Co-Chair   Bishop   inquired   whether   the   Denali  Commission                                                               
contributed   funding   to  VSW.   Ms.  Bohan   answered   in  the                                                              
affirmative   and  reported   that  the   funding  was   allocated                                                              
through the SDS process.                                                                                                        
                                                                                                                                
9:31:25 AM                                                                                                                    
                                                                                                                                
Senator   von   Imhof    noted   the   governor   spoke   of   the                                                              
importance  of  public  and  private  partnerships   in which  she                                                              
agreed  with.  She  asked  if  Ms. Bohan  was  familiar  with  the                                                              
Leona  Hemsley  Foundation  Grants  and  if VSW  was working  with                                                              
them.  Ms.  Bohan replied   that the  foundation   reached  out to                                                              
VSW  and VSW  had them  contact  ANTHC  who placed  them  with the                                                              
Norton  Sound   Health  Corporation.   She  added   that  VSW  was                                                              
also   working   with   the   foundation.    Senator   von   Imhof                                                              
emphasized   that  she  wanted  VSW  to  take  full  advantage  of                                                              
the   opportunity.   She   relayed   that   the   foundation   had                                                              
extensive knowledge on the issue.                                                                                               
                                                                                                                                
9:33:15 AM                                                                                                                    
                                                                                                                                
Senator   Wielechowski   agreed  with   attempting   to  find  the                                                              
most   efficient   approach.   He  asked   if   federal   American                                                              
Rescue  Plan  Act (ARPA)  funds  were  available  for wastewater.                                                               
Ms.  Bohan   replied  that  there   were  some  ARPA   funds  that                                                              
contributed   to  sanitation    improvements   through   the  IHS.                                                              
Senator   Wielechowski   wondered  if  all  the   ARPA  funds  had                                                              
been  expended  for  wastewater   projects.   Ms.  Bohan  answered                                                              
in the affirmative.                                                                                                             
                                                                                                                                
9:34:16 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman   asked  Ms.  Bohan  if  she  knew  where  Togiak                                                              
was   located.   Ms.   Bohan   responded   in   the  affirmative.                                                               
Senator   Hoffman   shared   that   when   Togiak   attempted   to                                                              
improve  its  water  and sewer  systems  it  was turned  down  for                                                              
a  micro-loan   through   VSW.  The  community   asked   for  help                                                              
through  ANTHC   and  completed  the  system.   He  believed  that                                                              
the  project   would  have  been  completed   sooner  if  VSW  had                                                              
assisted.   He  asked   how  many  other   communities   had  been                                                              
hindered  by  VSW  by  not  assisting   villages  that  had  shown                                                              
their  own  initiative   to  address  its  water  and  sanitation                                                               
needs.  He asserted  that  some  rural  communities  preferred  if                                                              
VSW   stayed  out  of their  business    and  feel they  would  be                                                              
better   served.   He  shared   that   the  Commissioner    [Jason                                                              
Brune,  Commissioner,   DEC],  agreed   with  the  assessment.  He                                                              
believed  that  the  situation   was   unnerving    and  expressed                                                              
disappointment.   He  wondered  if Ms.  Bohan  had  a comment  and                                                              
how  VSW  could  do  better  in  the  future.   Ms.  Bohan  voiced                                                              
that  she  was  familiar   with  the  situation   in  Togiak.  She                                                              
stated  that   VSW  only  recently  established   the  micro-loan                                                               
opportunity  where  they  offered  VSW  eligible  communities  the                                                              
ability  to  apply  for a  heavily  subsidized  loan  through  the                                                              
state  revolving   loan  fund.  She  explained   that  because  it                                                              
was  a  loan  program   the  community  had  to  demonstrate   its                                                              
capacity  to  carry the  loan.  The VSW  program  worked  with the                                                              
EPA  to  develop  the  eligibility  criteria.   Togiak  and  ANTHC                                                              
made  the decision  to  move forward  with  the  project  counting                                                              
on  the  community's   ability  to  access  the  loan  funds.  The                                                              
partnering   agency    to  VSW,   the   Rural   Utility   Business                                                              
Advisor   (RUBA),   Department    of  Commerce,    Community   and                                                              
Economic  Development   (DCCED)   had  been  working  with  Togiak                                                              
to  help  them improve   their  score  to qualify  for  the  loan,                                                              
however  they  were  unable  to  accomplish   qualification   in a                                                              
timeframe  to  work  with the  project.  She  indicated  that  VSW                                                              
had  made  exceptions  for  Togiak  by  keeping  the  application                                                               
open  and  coordinating   with   RUBA.  She  furthered   that  VSW                                                              
offered   Togiak  a  traditional   revolving   fund   loan,  which                                                              
could  help  them  move forward   while pursuing   the micro-fund                                                               
loan.                                                                                                                           
                                                                                                                                
9:41:37 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  voiced  that  Western  Alaska  had  the  highest                                                              
level  of  unemployment   and the  lowest  income  in  the  state.                                                              
He  wondered   whether   VSW  had  tried   to  identify   all  the                                                              
programs   Togiak  might  qualify   for.  He  spoke  to  the  high                                                              
cost   of  living   in  the  area.   He  believed   that   when  a                                                              
community   showed  initiative   the  state  should  jump  at  the                                                              
opportunity   to help.  He  asked how  many  times  VSW  travelled                                                              
to  Togiak  to help  them  identify  a  loan  or  funding  source.                                                              
He  wondered  what  the  VSW  mission  was  and  how  the  mission                                                              
failed the people of Togiak.                                                                                                    
                                                                                                                                
9:44:25 AM                                                                                                                    
                                                                                                                                
Ms.  Bohan  agreed  that VSWs   mission  was  to try  to  identify                                                              
all  the  opportunities  to  fund  sanitation  improvements.   She                                                              
commented   that  VSW  did not  accomplish   the  mission  on  its                                                              
own  and  looked  to  its  many  partners,   and  in the  case  of                                                              
Togiak,  ANTCH  led  the  effort  of  funding  coordination.   She                                                              
restated  that  VSW  requested  that  RUBA  assist  in the  Togiak                                                              
effort  since  it  was  RUBAs   specialty.  She  stated  that  VSW                                                              
would  continue  to assist  Togiak  but  acknowledged  that  there                                                              
were   not   many   funding   opportunities.    Senator    Hoffman                                                              
restated   his  question  regarding   the  number   of  times  VSW                                                              
travelled   to  Togiak  to  assist  the  community.   He  believed                                                              
that  VSW  should  reevaluate   its mission   and  empathize  with                                                              
the  rural  residents  of  Alaska  and  assist  communities   that                                                              
show  its  own  initiative.    He  contended  that   VSW  hindered                                                              
communities that wanted to better themselves.                                                                                   
                                                                                                                                
9:47:52 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:49:05 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Bishop HANDED the GAVEL to Co-Chair Stedman.                                                                           
9:49:11 AM                                                                                                                    
                                                                                                                                
Co-Chair    Stedman    stated    that   the    Economic    Outlook                                                              
presentation would be rescheduled.                                                                                              
                                                                                                                                
9:49:54 AM                                                                                                                    
                                                                                                                                
Senator  Olson  thanked  VSW for  its assistance   in Golovin.  He                                                              
spoke  about   troubles   with  the  Best   Practices   score  and                                                              
viewed  it as  a hinderance  to  eligibility.  He  had heard  from                                                              
villages   that  believed   that  they   could  never   be  served                                                              
because   ineligibility    prevented   them  from   developing   a                                                              
sustainability   plan.  He  planned  to propose   eliminating  the                                                              
best  practices  score.   He was  aware  of  federal  issues  that                                                              
would  arise  and  wondered  what  the  best way  was  to get  rid                                                              
of   the  Best   Practices   score,   which   he   felt   hindered                                                              
progress  in  communities   in need  of  a  sustainable  plan.  He                                                              
asked  how  the  best  practices   score  could  be  circumvented                                                               
for    communities    that    lacked    the    capacity    for   a                                                              
sustainability    plan.   He  asked   if  the   division   favored                                                              
eliminating the scoring system.                                                                                                 
                                                                                                                                
RANDY  BATES,   DIRECTOR,  DIVISION   OF  WATER,  responded   that                                                              
there  were slides  prepared  to  address  the issue  of  the Best                                                              
Practice   scores.   He   spoke  to   DEC's  mission   to   assist                                                              
communities     with   sanitation     infrastructure     and   was                                                              
 excited     to  help.   He   underlined    the   challenges   and                                                              
acknowledged   there   was  room  for  improvement.    He  related                                                              
that  VSW   worked  with   all  its  partners   to  help   achieve                                                              
capacity,   which  was  a  federal  requirement   under  the  Safe                                                              
Drinking   Water   Act.   He  was   open   to   the  conversation                                                               
regarding  eliminating   the  best practices   score  but  did not                                                              
think  it  would  alleviate   the  capacity   issue  and  that  it                                                              
would not go away.                                                                                                              
                                                                                                                                
9:54:39 AM                                                                                                                    
                                                                                                                                
Senator  Olson  thought  that water  and  sewer  was important  to                                                              
all  communities    in  Alaska.   He  stressed   that   COVID  had                                                              
exacerbated  the  issue  of access  to clean  water  and  sewer in                                                              
rural Alaska.                                                                                                                   
                                                                                                                                
Co-Chair  Bishop  commented  on  best practices.   He voiced  that                                                              
best  practices   was  a  required  piece  of  accepting   federal                                                              
money.  He  asked whether   the best  practices  list  would  look                                                              
different with full General Fund (GF) funding.                                                                                  
                                                                                                                                
Mr.  Bates  answered   in  the  affirmative.   He indicated   that                                                              
best  practices   were  utilized   to  prioritize  projects   that                                                              
were  ready  for funding.   He elaborated   that all  the  state's                                                              
needs   will   be   funded    by   the   federal   infrastructure                                                               
legislation   and  therefore,  even  though   the  best  practices                                                              
score   would   remain   relevant,   it   would   not  act   as  a                                                              
 gatekeeper    and  all   of  rural  Alaskas    sanitation   needs                                                              
will  be  met.  Co-Chair  Bishop   asked  whether  all  the  needs                                                              
will  be met  between  the  states   share  and the  tribal  share                                                              
of   the   federal    funding.   Mr.   Bates    replied   in   the                                                              
affirmative.                                                                                                                    
                                                                                                                                
9:58:28 AM                                                                                                                    
                                                                                                                                
Mr.  Bates said  that  DECs  hope  was  to position  the  state to                                                              
take  the fullest  advantage  of  the  infrastructure  money  that                                                              
was forthcoming.                                                                                                                
                                                                                                                                
Senator    Hoffman   reiterated    that   there   were    systemic                                                              
problems  in  DEC that  needed  to be addressed.   He argued  that                                                              
every  year  that a  project  was  delayed  had real  effects  for                                                              
communities.   He felt  that the  funding  was an  opportunity  to                                                              
get  things   done  for  rural   Alaska.  He  feared   that  DECs                                                               
bureaucracy  would  keep  rural  communities  from  receiving  the                                                              
federal   funding  in  a  meaningful   timeframe.   He   suggested                                                              
that  ANTHC  should  take  charge   of  VSW projects   since  they                                                              
were in the field and getting projects accomplished.                                                                            
                                                                                                                                
10:00:49 AM                                                                                                                   
                                                                                                                                
Ms.  Bohan  pointed  to slide  7,  "Village  Safe  Water:  Funding                                                              
History."  She  drew  attention  to  FY  2022  and the  small  red                                                              
line  depicting  the  Denali  Commission  funding   and the  large                                                              
navy  area  on  the  bar  that portrayed   the  $39.3  million  in                                                              
COVID  related  funding   through  the  IHS.  She  expounded  that                                                              
the  IHS and  ANTHC  used  a portion  of  the funding  to  develop                                                              
an  in  depth  planning   analysis  for  providing   the  unserved                                                              
communities      water     and    sanitation     services.     The                                                              
organizations    would   define   solutions    to   provide   pipe                                                              
service   or  other  methods   with  currently   available   money                                                              
outside of the federal legislation.                                                                                             
                                                                                                                                
Ms.  Bohan  addressed  slide  8,  "Village   Safe  Water:  Funding                                                              
History."   She   highlighted   that   the  slide   depicted   the                                                              
funding  for  FY 2023.  She  noted  that Village   Safe Water  was                                                              
not   directly   anticipating    an  increase    in  its   federal                                                              
funding,  however  the  IHS received  a  substantial  increase  in                                                              
FY 23 of over 3 times its normal level.                                                                                         
                                                                                                                                
Co-Chair  Bishop  inquired  whether  the  funding  flowed  through                                                              
VSW.  Ms. Bohan  responded  in  the negative  and  expounded  that                                                              
when  VSW provided  lead  project  support  the  money would  flow                                                              
through Village Safe Water on the community's behalf.                                                                           
                                                                                                                                
10:03:35 AM                                                                                                                   
                                                                                                                                
Senator  Olson  deemed  that  2015  funding  was a  turning  point                                                              
in  funding  relief  and  eligibility  based  on  best practices.                                                               
He  asked  for  more  historic  data.   Ms. Bohan   would  provide                                                              
the information.                                                                                                                
                                                                                                                                
10:04:19 AM                                                                                                                   
                                                                                                                                
Ms.  Bohan discussed   slide 9,  "Village  Safe  Water: FY2022  by                                                              
the Numbers":                                                                                                                   
                                                                                                                                
      .notdefPlanning Projects                                                                                                
           .notdef$1.9 million funding made available                                                                         
           .notdef19 studies for 19 communities                                                                               
           .notdefProject range: $75,000 -$180,000                                                                            
      .notdefConstruction Projects                                                                                            
           .notdef$69.7 million funding made available                                                                        
           .notdef9 ongoing construction projects and 10 new                                                                  
           construction projects                                                                                                
           .notdefProject range: $80,000 -$21.1 million                                                                       
      .notdefIHS and EPA Tribal Construction Projects                                                                         
           .notdef$55.2 million funding made available including                                                              
           $1.3M from Denali Commission                                                                                         
           .notdef17 construction projects                                                                                    
           .notdefProject range: $563,000 -$8.8 million                                                                       
                                                                                                                                
10:06:51 AM                                                                                                                   
                                                                                                                                
Ms.  Bohan pointed  to  slide  10, "Village  Safe  Water:  Funding                                                              
Eligibility":                                                                                                                   
                                                                                                                                
      .notdefCommunities are eligible for one VSW funded planning                                                             
       project at a time                                                                                                        
                                                                                                                                
      .notdefAn approved planning document and a demonstration of                                                             
     a minimum level of capacity is required for design                                                                         
       and construction funding                                                                                                 
                                                                                                                                
 .notdefEnsure the community has the technical, financial,                                                                    
    and managerial capacity to operate and maintain the                                                                         
       facility in the long term                                                                                                
                                                                                                                                
 .notdefRequirement of all new public water systems per the                                                                   
       Safe Drinking Water Act                                                                                                  
                                                                                                                                
  .notdefFirst time piped service projects also require an                                                                    
       approved Sustainability Plan                                                                                             
                                                                                                                                
10:07:51 AM                                                                                                                   
                                                                                                                                
Co-Chair   Bishop  had   a  query  regarding   the  third   bullet                                                              
point.  He  shared   that  a  rural  community   in  his  district                                                              
received   a  washateria  larger   than  the  one  requested.   He                                                              
wondered   if VSW  listened   to  the  communitys    feedback  and                                                              
local  knowledge.   Ms.  Bohan  answered  that  the  engineers  at                                                              
VSW  and ANTHC  coordinated   with  the community.   In  addition,                                                              
the  review  committee   she  had  mentioned   earlier  and  DECs                                                               
drinking   water,  wastewater,   and  solid  waste   programs  all                                                              
had  to  review  and  approve   the  planning   documents  at  the                                                              
conceptual   stage.  She furthered   that  VSW garnered   feedback                                                              
from  the communitys    regional  health  corporations.   Co-Chair                                                              
Bishop   emphasized   that   VSW   should   rely   on  the   local                                                              
sanitation operators.                                                                                                           
                                                                                                                                
10:09:56 AM                                                                                                                   
                                                                                                                                
Ms.  Bohan  addressed  slide  11,  "Village  Safe  Water:  Funding                                                              
Eligibility":                                                                                                                   
                                                                                                                                
      Operations and Maintenance Best Practices capacity                                                                        
      assessment tool developed in conjunction with ANTHC                                                                       
      and RUBA                                                                                                                  
                                                                                                                                
      Communities are scored twice per year based on                                                                            
      information provided to DEC and RUBA                                                                                      
                                                                                                                                
Ms.   Bohan   commented   that   VSW   developed    the   capacity                                                              
assessment  in  2015 and  vetted  it with  its  regional  partners                                                              
and   ANTHC.    She   stressed    that   the   current    capacity                                                              
assessment   was   a  change  from   the  prior   best   practices                                                              
process   to  one   universal   assessment.    In  addition,   VSW                                                              
performed  the  capacity  assessment  prior  to  granting  funding                                                              
versus   after   funding   was   granted   as  in   the   previous                                                              
process,   when  the   community   had  to   prove  its   capacity                                                              
level.  The  former  method  often  used  up  to  3 years  of  a 5                                                              
year  funding  cycle just  to  determine  capacity,  resulting  in                                                              
a  shortened    project   life   as  well   as   threatening   the                                                              
projects    federal   funding,  which   could  be  reassigned   to                                                              
another  project.  She  furthered  that  the  score  taken  in the                                                              
spring  was  used  for  determining   eligibility   the  following                                                              
fall.                                                                                                                           
                                                                                                                                
Co-Chair  Bishop  asked  for an  explanation  of  RUBA. Ms.  Bohan                                                              
reiterated    that   it  stood   for   Rural   Utility    Business                                                              
Advisor.                                                                                                                        
                                                                                                                                
10:13:27 AM                                                                                                                   
                                                                                                                                
Senator   von  Imhof  referenced   demonstrating   capacity.   She                                                              
asked    if    demonstrating     capacity    involved     training                                                              
individuals   on  maintaining  the  systems   from  the  inception                                                              
of  the project.  She  inquired  whether   it was  challenging  to                                                              
find  enough   people   willing  to  maintain   and   operate  the                                                              
communities    systems.   Ms.  Bohan  responded   that  she  would                                                              
answer    the   question    in   more    depth   later    in   the                                                              
presentation.   She  elucidated  that  it was  a  frequent  issue.                                                              
Federal   and   state  regulations    required   a  community   to                                                              
employ  a  certified  operator,  which  offered   challenges.  She                                                              
commented  that  VSW  wanted  to  provide  long-term  sustainable                                                               
solutions and it was an issue.                                                                                                  
                                                                                                                                
10:16:02 AM                                                                                                                   
                                                                                                                                
Senator  Hoffman  was  pleased  that  VSW  was looking  for  long-                                                              
term   sustainable   solutions.   He  cited   slide   11  and  was                                                              
concerned  with  the  second  bullet  point  regarding  twice  per                                                              
year  scoring.  He relayed  that  some  communities  did  not have                                                              
the  staff  to  provide   the  information.   He  reiterated   his                                                              
question  regarding   how often  VSW  visited  rural  communities                                                               
and   acted  as    boots   on  the   ground.    He  worried   that                                                              
otherwise,   VSW   conclusions   could   be  flawed.   Ms.   Bohan                                                              
replied  that  the  department   continued  to  make  traveling  a                                                              
priority  in  order  to  meet  the needs  of  the  communities  it                                                              
served.  She  elaborated  that  VSW  funded  in  conjunction  with                                                              
regional   health  corporations,   a  remote  maintenance   worker                                                              
program  located  in hub  communities  as  well  as utilizing  DEC                                                              
employees  based   in Anchorage   to  provide  the  same  service.                                                              
Each  of  the 10  to  15 workers  were  assigned   10 communities                                                               
to    provide    technical    assistance    and    training    and                                                              
collectively   made over  200  visits  in  a year.  She  furthered                                                              
that  RUBA  was developed   to provide  the  same  service  except                                                              
for  financial  and  managerial   utility  capacity.   The  remote                                                              
staff   worked   on  behalf   of  VSW.   In  addition,    VSW  had                                                              
engineering   staff   that   visited   about   one-third   of  the                                                              
communities.                                                                                                                    
                                                                                                                                
10:21:25 AM                                                                                                                   
                                                                                                                                
Senator  Hoffman   cited  that  he represented   the  largest  hub                                                              
representing   56 villages  over  a  huge  area. He  wondered  how                                                              
VSW    distributed    the    funding    between    unserved    and                                                              
underserved   communities.  Ms.  Bohan  answered  that  there  was                                                              
not  a distinction   between  unserved   and  underserved  in  the                                                              
funding.  The  analysis  currently  underway  would  inform  VSWs                                                               
funding  decisions   regarding   unserved  communities   and  once                                                              
the  planning   documents  were  completed,   they  would  be  the                                                              
highest   priority   VSW  projects.   She   added  that   unserved                                                              
communities    received   the   highest   score   in  the   health                                                              
categories   which  weighted   those   projects  as   the  highest                                                              
priority.  Senator  Hoffman  asked  what  the purpose  of  scoring                                                              
communities was twice each year.                                                                                                
                                                                                                                                
10:24:15 AM                                                                                                                   
                                                                                                                                
Ms.   Bohan   replied   that  there   were   two   purposes.   She                                                              
conveyed  that  there  was a high  turnover  in  operators  and in                                                              
key  community  positions   so  the twice   a year  communication                                                               
helped  VSW   maintain  awareness   of  the  level   of  technical                                                              
assistance  needed   and to  ensure  that  the community   leaders                                                              
were  focusing   on the  funding   process.  The  fall  score  was                                                              
for informational purposes only.                                                                                                
                                                                                                                                
10:25:14 AM                                                                                                                   
                                                                                                                                
Co-Chair  Bishop   requested  a  follow-up   presentation  in  the                                                              
spring.  He  wanted  the presentation   to  include  how many  DEC                                                              
staff  were examining   the Infrastructure   Investment   and Jobs                                                              
Act  (IIJA) funding  so  that  every possible  dollar  of  funding                                                              
would be attained.                                                                                                              
                                                                                                                                
10:27:08 AM                                                                                                                   
                                                                                                                                
Ms.  Bohan  referred   to  a  handout   titled   Best  Practices                                                                
(copy  on file)  that  included  the scoring  criteria  and  noted                                                              
that   the  following   slide   summarized   the   criteria.   She                                                              
pointed    to   slide   12,   "Village    Safe   Water:    Funding                                                              
Eligibility":                                                                                                                   
                                                                                                                                
                                                                                                                                
      .notdefTechnical                                                                                                        
           .notdefOperator Certification                                                                                      
           .notdefPreventative Maintenance Plan                                                                               
           .notdefCompliance                                                                                                  
                                                                                                                                
      .notdefManagerial                                                                                                       
           .notdefUtility Management Training                                                                                 
           .notdefMeetings of the Governing Body                                                                              
      .notdefFinancial                                                                                                        
           .notdefBudget                                                                                                      
           .notdefRevenue                                                                                                     
           .notdefWorker's Compensation Insurance                                                                             
           .notdefPayroll Liability Compliance                                                                                
                                                                                                                                
Ms.   Bohan   communicated    that   the   foundation    of   best                                                              
practices   was  housed  in  the  Clean  Water  Act.  Via  federal                                                              
regulation,   the  state  was   obligated  to  all   public  water                                                              
systems  serving  over  25  people  in the  state.  She  furthered                                                              
that  before  the  system  was  approved,  the  community   had to                                                              
demonstrate     technical    and   managerial     capacity.    She                                                              
maintained  that  all  of the  states   systems  were  subject  to                                                              
the   evaluation.   She   informed   the   committee   that   RUBA                                                              
offered    online   managerial    utility    training    and   did                                                              
compensate for any training travel costs.                                                                                       
                                                                                                                                
Co-Chair  Bishop   remarked  that  the  operator   and preventive                                                               
maintenance   criteria   should  be  weighted   very  high  as  an                                                              
indicator of long-term maintenance ability.                                                                                     
                                                                                                                                
10:31:18 AM                                                                                                                   
                                                                                                                                
Senator   Wilson  referenced   the  comments  that   through  IIJA                                                              
all  communities  would   be served.  He  asked  if  the  criteria                                                              
and   scoring   would  still   be  necessary    or  would   become                                                              
obsolete.    Ms.  Bohan   clarified    that   that   funding   was                                                              
appropriated   to the  IHS  and correlated   to all  the  projects                                                              
in  its  SDS  data  base.  She added   that  Alaskas   portion  of                                                              
the  funding  was $2.1  billion  and  IHS  was still  determining                                                               
how   the   funding    would   be   ultimately   allocated.    She                                                              
reiterated   that  VSW   funding  would   not  markedly   increase                                                              
under  IIJA and  would  be a much  smaller  portion  of the  total                                                              
project  funding  however,   VSW would  still  utilize  a  scoring                                                              
system for its portion of the funding.                                                                                          
                                                                                                                                
10:33:48 AM                                                                                                                   
                                                                                                                                
Co-Chair   Bishop   clarified   that   the  allocation    of  IIJA                                                              
funding happened but was not yet appropriated.                                                                                  
                                                                                                                                
10:34:07 AM                                                                                                                   
                                                                                                                                
Senator    Olson   pointed    to   the    technical    aspect   of                                                              
eligibility   and  wondered  what  happened   when  the  expertise                                                              
was  lacking.   Ms.   Bohan  responded   that   she  managed   the                                                              
operator  certification   program   and there   were  a number  of                                                              
initiatives   to  help  operators   achieve   certification   that                                                              
included  outreach  and  increased  training  opportunities.   She                                                              
related    that   VSW   was   unable   to   send    operators   to                                                              
communities   lacking   staff.  The  remote   operators   provided                                                              
support  to  existing  operators.  She  noted  the  challenges  to                                                              
maintaining   certified    operators.   Senator   Olson   inquired                                                              
what   the  timeframe   was   for  communities    that   were  not                                                              
eligible  to  become   qualified.  She  indicated   that  unserved                                                              
communities  currently   had time  to work  on  eligibility  while                                                              
the   planning   document    was   in   the   process   of   being                                                              
developed.   Senator  Olson  voiced  that  from  the  perspective                                                               
of  some   rural  communities,    VSW  was   not  supporting   the                                                              
process of capacity.                                                                                                            
                                                                                                                                
10:38:49 AM                                                                                                                   
                                                                                                                                
Senator   Olson   asked   Mr.   Bates   whether   he  viewed   the                                                              
progress  in  VSW from  an  optimistic  or  pessimistic  point  of                                                              
view.   Mr.    Bates   responded    that   he   was    absolutely                                                               
optimistic.    He  recognized   that  there  were  challenges   at                                                              
VSW  and with  the  scoring  system  but pointed   out there  were                                                              
also   challenges    in  the   communities    that   need   to  be                                                              
overcome.   He  characterized   the   forthcoming   funding  as  a                                                              
 transcendent   opportunity.    He emphasized   that  VSW  heavily                                                              
relied  on  its  partners  ANTHC  and  RUBA.  He  elucidated  that                                                              
VSWs   role  was  in  the  technical  score  and  ANTHC  and  RUBA                                                              
were  involved  in  the  financial  scoring.   The  timeframe  for                                                              
eligibility  never  ended  and  all involved  wanted  communities                                                               
to  build  the  capacity.  The  capacity  ensured  that  not  only                                                              
could  a  community  obtain  rural  sanitation   but  maintain  it                                                              
in  the  long-term.  He  acknowledged   that there  was  room  for                                                              
improvement.                                                                                                                    
                                                                                                                                
10:42:33 AM                                                                                                                   
                                                                                                                                
Senator   Wilson   asked   if   the  funding   would   cover   new                                                              
infrastructure   and  homes  that  could  accommodate   new  water                                                              
and sanitation systems.                                                                                                         
Ms.  Bohan,  believed  that  the intention   for the  IHS  funding                                                              
was  to  provide  service  to  every  home  except  for  difficult                                                              
outliers.  She  furthered   that housing   funding  was  available                                                              
but not through sanitation funding.                                                                                             
                                                                                                                                
Senator   von   Imhof   wanted   to  see   a  presentation    that                                                              
contained  the  history  of what  was  accomplished,  what  worked                                                              
and   did   not  work   well,   the   questions    asked   of  the                                                              
communities,   and   details   regarding   future  projects.   She                                                              
felt that the presentation lacked useful information.                                                                           
                                                                                                                                
10:46:14 AM                                                                                                                   
                                                                                                                                
Co-Chair  Bishop  emphasized   that there  was  a  huge amount  of                                                              
federal   money  from  different   programs  forthcoming   and  it                                                              
would   take  a   tremendous   effort   to  utilize   all   of  it                                                              
effectively.                                                                                                                    
                                                                                                                                
Senator   Hoffman  remarked   that   a  large  component   of  the                                                              
housing  issue  was  working  with  the housing   authorities.  He                                                              
wondered  whether   there  were  conversations   between  VSW  and                                                              
the  housing  authorities  to  ensure  that  the new  homes  would                                                              
have  the  infrastructure  to  support  the  proposed  systems  to                                                              
avoid    retrofitting.     Ms.   Bohan    responded    that    the                                                              
conversation     between    VSW,   ANTHC,    and    the    housing                                                              
authorities   was   not  always   successful,   and  houses   were                                                              
often  built  without  coordination.  She  acknowledged   that the                                                              
discussions   would  be  more  important   with  the  accelerated                                                               
funding.  She  offered  that  regulations   prohibited   providing                                                              
service  to  homes  not  yet  built,  which   presented  a  timing                                                              
mismatch,  but  VSW was striving  to  synchronize  the projects.                                                                
                                                                                                                                
10:49:19 AM                                                                                                                   
                                                                                                                                
Senator   Wilson   wondered   how  many   communities    would  be                                                              
served via the forthcoming appropriations each year.                                                                            
                                                                                                                                
Co-Chair  Bishop   interjected  that   the information   would  be                                                              
provided in a future presentation.                                                                                              
                                                                                                                                
10:50:01 AM                                                                                                                   
                                                                                                                                
Senator  Olson  commented  on  the  water  issues  in Unalakleet.                                                               
He  asked  for  an  update.   Ms.  Bohan  replied   that  VSW  was                                                              
drilling  test  wells  and  the design  was  completed  for  a new                                                              
water  source,  construction   would  begin  in the  current  year                                                              
and replacement of the distribution system would happen                                                                         
over the next several years.                                                                                                    
                                                                                                                                
10:51:30 AM                                                                                                                   
                                                                                                                                
Co-Chair Bishop discussed the afternoon's meeting.                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
10:51:45 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:51 a.m.