Legislature(2005 - 2006)SENATE FINANCE 532

03/23/2005 09:00 AM FINANCE


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09:05:16 AM Start
09:22:56 AM SB46
11:08:23 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 46 APPROP: CAPITAL BUDGET:ALMR Project, TELECONFERENCED
Heard & Held
Natural Resources, Public Safety, Revenue
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 141 PUBLIC EMPLOYEE/TEACHER RETIREMENT
Heard & Held
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          March 23, 2005                                                                                      
                             9:05 A.M                                                                                         
                                                                                                                              
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Green convened the meeting at approximately 9:05:16 AM.                                                              
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice-Chair                                                                                                   
Senator Bert Stedman                                                                                                            
Senator Fred Dyson                                                                                                              
Senator Donny Olson                                                                                                             
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Also  Attending:   MAJOR  GENERAL  CRAIG  CAMPBELL,   Department  of                                                          
Military  and  Veterans   Affairs;  STEVE  EASTMAN,   Department  of                                                            
Administration;  DAN SPENCER, Director,  Division of Administrative                                                             
Services, Department  of Public Safety; JOE BEEDLE,  Vice President,                                                            
Finance, University  of Alaska; DAN FAUSKE, CEO/Executive  Director,                                                            
Alaska  Housing  Finance Corporation,  Department  of  Revenue;  LES                                                            
CAMPBELL,  Budget  Director,  Alaska  Housing  Finance Corporation,                                                             
Department of Revenue                                                                                                           
                                                                                                                                
Attending via Teleconference: From an offnet site: FELIX MACUIRE                                                              
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
ALMR Project Overview Presentation                                                                                              
                                                                                                                                
The  Committee   heard   an  Alaska   Land  Mobile   Radio   Program                                                            
presentation from  the Department of Military and  Veterans Affairs.                                                            
                                                                                                                                
SB 46-APPROP: CAPITAL BUDGET                                                                                                    
                                                                                                                                
Budget  overviews   from  the  Department  of  Public   Safety,  the                                                            
University  of Alaska, and the Alaska  Housing Finance Corporation,                                                             
Department  of  Revenue,  were  presented.  The  bill  was  held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
^                                                                                                                               
                                                                                                                                
     ALMR Project Overview Presentation                                                                                         
     Department of Military and Veterans Affairs                                                                                
                                                                                                                                
                                                                                                                                
MAJOR  GENERAL   CRAIG  CAMPBELL,   Adjutant  General/Commissioner,                                                             
Department  of Military and  Veterans Affairs  stated that  over the                                                            
last year,  the focus, direction,  and teamwork associated  with the                                                            
Alaska  Land  Mobile  Radio  Alaska  (ALMR)   project  have  changed                                                            
dramatically.  His presentation, as  detailed in the handout  titled                                                            
"Alaska Land Mobile Radio  Alaska Legislature, March 23, 2005" [copy                                                            
on file] would  address the history  of the project, the  Department                                                            
of Military  and  Veterans Affairs'  involvement  and the  project's                                                            
funding.  A radio demonstration  of  how the system  is designed  to                                                            
work would also be conducted.  He noted that because this project is                                                            
a team effort  between the two departments, personnel  from both the                                                            
Department  of Military and Veterans  Affairs and the Department  of                                                            
Administration would assist him.                                                                                                
                                                                                                                                
     Page two                                                                                                                   
                                                                                                                                
     ALMR History                                                                                                               
        · 1995: ALMR Executive Council Formed                                                                                   
        · 1997: MOU Signed to Jointly Plan New System                                                                           
         · 1009 - 2001: System Design & Analysis Developed                                                                      
        · 2001:MOU Renewed to Implement System                                                                                  
        · 2002 - 2003: Concept Demonstration Project                                                                            
        · 2003 - 2006: System Buildout                                                                                          
                                                                                                                                
Major General  Campbell pointed out  that the AMLR project  has been                                                            
under development  for more than a decade. Its executive  committee,                                                            
which   includes    representatives    from   the   Public    Safety                                                            
Administration,  the  Alaska  Municipal   League,  and  the  federal                                                            
Department  of Defense  (DoD),  is responsible  for  overseeing  the                                                            
project's direction, the  process through which to achieving program                                                            
goals,  and its  funding mechanisms.  Determinations  regarding  the                                                            
direction  of Alaska's AMLR  project were  initially established  in                                                            
1997  and  the  system  was designed   by the  year  2001.  An  ALMR                                                            
Memorandum of Understanding  (MOU) between the involved entities was                                                            
reaffirmed  in  the  year 2001  when  the  implementation  plan  was                                                            
approved.                                                                                                                       
                                                                                                                                
Major General Campbell  shared that the original goal was to develop                                                            
an ALMR system  with the capacity  to provide "interoperability  for                                                            
all agencies"  throughout the State  in both urban and rural  areas.                                                            
However, in 2004, at the  directive of Governor Frank Murkowski, the                                                            
scope of  the project  "changed slightly"  with  the focus being  to                                                            
install AMLR, in the short  term, "along the backbone of the State's                                                            
microwave  system"  paralleling  the  Alaska  road  systems  between                                                            
Valdez   and  Glennallen,   Delta  and   Fairbanks,  Fairbanks   and                                                            
Anchorage, and Anchorage  and Kenai. This routing and the timing are                                                            
important because  this area of the  system must be able  to support                                                            
DoD defense  system needs  in the year 2006.  Furthermore,  the ALMR                                                            
radio  license issued  to the State  by the  Federal Communications                                                             
Commission  specifies   that  the  system  must  be  operational  by                                                            
December  2006.  Thus,  the  timeline  established  for  the  system                                                            
buildout "is critical".                                                                                                         
                                                                                                                                
Major  General Campbell  noted that  project  work conducted  during                                                            
2002 and  2003, was  lauded by  Governor Murkowski  as supporting  a                                                            
system that  would work, even though  the long-term operating  costs                                                            
were unknown  and there was  uncertainty in  regards to whether  the                                                            
proposed design  would be the most cost effective  for the State. In                                                            
addition  to redirecting  the focus  toward supporting  the  routing                                                            
required by DoD, Governor  Murkowski asked that alternative plans be                                                            
pursued  in respect to  providing "communication  interoperability"                                                             
between various  entities throughout  the State. To that  point, new                                                            
technologies  are now available that  could cooperatively  work with                                                            
ALMR to provide a Statewide connective system.                                                                                  
                                                                                                                                
Major General  Campbell declared that "ALMR is a solid  program" and                                                            
the system  along the road grids is  scheduled to for completion  in                                                            
2006. The additional  goal of developing a strategic  master plan to                                                            
provide a cost  effective communications  system for both  urban and                                                            
rural Alaska  is proceeding.  The result might  be a combination  of                                                            
different technologies  that could intercommunicate,  provide secure                                                            
and non-secure capabilities,  transmit both voice and data, and meet                                                            
a variety  of additional  State needs rather  than being limited  to                                                            
providing emergency  communications.  Governor Murkowski's  "vision"                                                            
is a system that, in addition  to emergency interfacing, would allow                                                            
remote health clinics to  communicate with larger facilities such as                                                            
the Mayo  Clinic or the  University of Alaska  the ability  to teach                                                            
"on-line"   throughout   the  State   with  both   data  and   voice                                                            
communication.  The strategic plan  being developed would  assist in                                                            
determining the solutions to this endeavor.                                                                                     
                                                                                                                                
     Page three                                                                                                                 
                                                                                                                                
     State of Alaska Commitment*                                                                                                
        · Provide a Lead Project Manager, staff and fund the                                                                    
          Project Office                                                                                                        
        · Perform site preparation on all non-DoD sites                                                                         
         · Purchase and install the equipment for 37 sites                                                                      
        · Provide connectivity through SATS in return for system                                                                
          maintenance being performed by DoD                                                                                    
        · Split system management costs with the DoD                                                                            
     *Per the ALMR Charter                                                                                                      
                                                                                                                                
Major General  Campbell introduced  Mike Callahan  who was  recently                                                            
hired  as  the  State's  ALMR  Project  Manager.  Mr.  Callahan  has                                                            
background   experience  in  telecommunications   and  has   a  firm                                                            
understanding  of  the  needs  of  the  State.  Working  within  the                                                            
Department of  Military and Veterans Affairs, Mr.  Callahan would be                                                            
representing  the interests  of  any State  entity  involved in  the                                                            
implementation of the ALMR project.                                                                                             
                                                                                                                                
Major General Campbell  noted that further information regarding the                                                            
non-DoD  sites'  preparation,  equipment,  connectivity,  and  costs                                                            
associated  with those endeavors  would be  forthcoming. He  assured                                                            
the Committee  that  recent rumors  that DoD  might be "withdrawing                                                             
from the  program" due  to an "uncomfortable"  working relationship                                                             
with the State  were unfounded. Rather  than issues arising  between                                                            
the participants,  the issues  being discussed  pertain to  the ALMR                                                            
program itself  in respect to how  to coordinate activities  between                                                            
entities to insure that "the 2006 execution date is achieved".                                                                  
                                                                                                                                
     Page four                                                                                                                  
                                                                                                                                
     Current Project Status                                                                                                     
        · Zone Controllers in Anchorage and Fairbanks                                                                           
        · 15 sites currently operational:                                                                                       
                2 in Anchorage                                                                                                  
                2 in Fairbanks                                                                                                  
                1 in Valdez                                                                                                     
                2 in Juneau                                                                                                     
                8 from Fairbanks to Delta                                                                                       
        · Valdez Police Department currently using the system under                                                             
          a Beta agreement                                                                                                      
        · Fairbanks service to begin in 2005                                                                                    
                                                                                                                                
Major General  Campbell informed that  the "central connection"  for                                                            
the ALMR road  grid zone controllers  would be located in  Anchorage                                                            
and Fairbanks.  He provided a map [copy on file] depicting  the ALMR                                                            
site locations  in the State, and  noted that the road system  sites                                                            
are highlighted by "greenish-blue  markings". ALMR beta testing "has                                                            
been very  successful"  and the  system functioned  well during  the                                                            
recent Homeland Security operation conducted in Valdez.                                                                         
                                                                                                                                
     Page five                                                                                                                  
                                                                                                                                
     Funding History - State Portion                                                                                            
                                                                                                                                
     [Note: The chart on  this page depicts the AMLR funding history                                                            
     from 1998  through 2006. Specific  information was depicted  by                                                            
     year;  the  funding  source  such  as the  State,  the  Federal                                                            
     government,  or  Certificates   of Participation   (COPS);  the                                                            
     amount requested;  the amounts appropriated toward  the Program                                                            
     Office,  the Infrastructure and  in Total; as well as  a column                                                            
     reflecting  the  difference  in the  requested  amount and  the                                                            
     actual appropriation.]                                                                                                     
                                                                                                                                
Major General  Campbell stated that the chart on page  five presents                                                            
the monetary  aspect of the program.  This is important information                                                             
as it supports  the position held  by some that the State  "does not                                                            
appear"  to be contributing  its  match requirements  in the  manner                                                            
required "to  make this project successful".  State funding  was the                                                            
sole  funding  source  in 1998,  1999,  and  2000;  federal  funding                                                            
occurred  in the  years 2002  and 2003,  and a  combination of  both                                                            
State and federal  funding occurred  in 2004 and 2005. The  majority                                                            
of the ten million dollars  that has been appropriated in support of                                                            
the system's  infrastructure  was federal funding.  To date,  of the                                                            
total $12,700,000  that has been spent  to support ALMR,  $3,500,000                                                            
is State funding.  On December 31,  2005, a shortfall of  $6,300,000                                                            
is projected.  The State must infuse more money into  the program in                                                            
order to uphold it obligation  to the project. There is a request in                                                            
the State's FY 05 Supplemental Budget to address this issue.                                                                    
                                                                                                                                
Major General  Campbell also noted that additional  federal money is                                                            
being requested.  "Up to now, the  State of Alaska general  fund has                                                            
really  only put  in about  $3.5  million".  Subsequent information                                                             
would  further   reflect  how  this   weighs  against  the   federal                                                            
contributions.                                                                                                                  
                                                                                                                                
Co-Chair Wilken asked whether  the six million dollar request in the                                                            
FY 05 Supplemental  Funding bill would apply toward  the $18,900,000                                                            
funding request shortfall projected at the end of 2006.                                                                         
                                                                                                                                
Major General Campbell affirmed that it would.                                                                                  
                                                                                                                                
Co-Chair Wilken  noted that the additional  $6,500,000 request  that                                                            
is proposed  for the State's  FY 06 budget  would also apply  toward                                                            
that deficit.  Therefore, were both  the FY 05 supplemental  request                                                            
and the FY 06 budget request  approved, the deficit would be reduced                                                            
to approximately five million dollars.                                                                                          
                                                                                                                                
Major  General  Campbell  noted  that the  project  is  still  being                                                            
"scrubbed"  and that, at  the end of 2006,  the expectation  is that                                                            
the State  would  meet its obligation.  Additional  federal  funding                                                            
would also be  received toward that deficit. He clarified,  however,                                                            
that the funding  need could increase as the project  buildout phase                                                            
occurs. $12,500,000  is a "critical"  need with $3,000,000  being an                                                            
absolute need  over the next 90 days.  Parts must be ordered  and in                                                            
place  before  the  start of  the  federal  Northern  Edge  Homeland                                                            
Security military exercise scheduled for August 2005.                                                                           
                                                                                                                                
Major General  Campbell noted that  the three critical needs  at the                                                            
moment include:  an immediate need for three million  dollars as six                                                            
million dollars of SATS  equipment is immediately needed in order to                                                            
upgrade  the  capacity  of existing  microwave  tower  equipment  to                                                            
support  the workability   of the  ALMR system.  The  Department  of                                                            
Military and Veterans  Affairs and the Department  of Administration                                                            
have applied  for grants  to support these  upgrades and to  support                                                            
the buildout  of the  ALMR sites.  These efforts  would support  the                                                            
implementation of the ALMR  system. "The short answer is that you're                                                            
going to  hear more  about this, I  don't think  we have the  dollar                                                            
figure complete yet".                                                                                                           
                                                                                                                                
     Page six                                                                                                                   
                                                                                                                                
     FY 05 Project Office Budget                                                                                                
                                                                                                                                
     FY 2004 Carryover                75,000                                                                                    
        2005 GF Appropriation         50,000                                                                                    
        2005  GF Reappropriation     350,000                                                                                    
     Total Funds Available           475,000                                                                                    
                                                                                                                                
        FCC Licensing                 75,000                                                                                    
        Project  Office Expenses     390,000                                                                                    
                                                                                                                                
     Projected 2005 Carryover         10,000                                                                                    
                                                                                                                                
Major  General Campbell  stated that  this page  reflects the  costs                                                            
associated with  operating the project's office. These  expenses are                                                            
"fairly  continuous".  State funding  has primarily  supported  this                                                            
expense.                                                                                                                        
                                                                                                                                
9:22:56 AM                                                                                                                    
                                                                                                                                
     Page seven                                                                                                                 
                                                                                                                                
     FY 05 Buildout Capital Budget                                                                                              
                                                                                                                                
     FY2004 Carryover                     1,875,000                                                                             
        FFY2004 COPS Earmark Grant        2,474,000                                                                             
        FFY2005 COPS Earmark Grant        2,467,000                                                                             
     Total Funds Appropriated             6,816,000                                                                             
                                                                                                                                
     Projected Costs                                                                                                            
        Key Bank Financing                1,867,000                                                                             
        Lena Point and Willow Creek         433,000                                                                             
        Blueberry Hill                      513,000                                                                             
        Site Summit                         280,000                                                                             
                                                                                                                                
     Projected 2005 Carryover             3,723,000                                                                             
                                                                                                                                
Major  General Campbell  stated that  this page  reflects the  known                                                            
expenses of  the Buildout Capital  Budget. Four of the 35  sites are                                                            
listed to example anticipated site expenses.                                                                                    
                                                                                                                                
     Page eight                                                                                                                 
                                                                                                                                
     Large State Agency Subscriber Purchases                                                                                    
                                                                                                                                
     DOT/PF                                                                                                                     
     $3.3 million Federal Hwy funds available                                                                                   
        · $1.7 million spent                                                                                                    
        · $1.6 million pending                                                                                                  
                                                                                                                                
     DPS/AST                                                                                                                    
        · $1 million spent (COP grant)                                                                                          
                                                                                                                                
Major General Campbell  stated that while the Department of Military                                                            
and Veterans  Affairs is overseeing  the project, they "are  not the                                                            
sole beneficiary."  Other State entities that would  benefit include                                                            
the Department  of Transportation  and Public  Facilities (DOT)  and                                                            
the  Department   of  Public  Safety.  These  departments   have  an                                                            
inventory of ALMR  radios, and had the system been  operational this                                                            
past year, DOT would attest  that their highway snow removal efforts                                                            
would have  been expedited, as reliable  communication in  the field                                                            
is currently an issue.                                                                                                          
                                                                                                                                
9:24:33 AM                                                                                                                    
                                                                                                                                
     Page nine                                                                                                                  
                                                                                                                                
     DoD Contributions - Project To Date                                                                                        
                                                                                                                                
     Category                  Amount                                                                                           
                                                                                                                                
     Infrastructure            $50,952,915                                                                                      
     Project Mgt                $4,385,382                                                                                      
          Total Funded         $55,338,382                                                                                      
     FY 06 Request              $8,100,000                                                                                      
          Grant Total          $63,438,297                                                                                      
                                                                                                                                
Major General  Campbell pointed out that this funding  is attributed                                                            
solely  to DoD. This  should be  kept in mind  when considering  the                                                            
State's $3,500,000  investment  in the project.  This is "the  issue                                                            
that's been driving the  federal government" to question the State's                                                            
commitment to  the project. The State of Alaska is  a beneficiary of                                                            
the project.  "Our  commitment is  solid", the  State is  conducting                                                            
site improvements,  and is working toward completing  the project in                                                            
2006. Federal officials  have been assured of the State's commitment                                                            
by the supplemental and  FY 06 budget requests. The State would meet                                                            
the  obligation  it  committed  to  "ten  years  ago".  The  overall                                                            
federal/State match is approximately a 75/25 percent split.                                                                     
                                                                                                                                
Major  General  Campbell concluded  his  formal  presentation.  Site                                                            
pictures [copies not on file] were shown to Members.                                                                            
                                                                                                                                
Co-Chair  Wilken  asked  how  the  $650,000  ALMR  request  that  is                                                            
included in the  FY 06 operating budget proposal would  be utilized.                                                            
                                                                                                                                
Major General  Campbell responded  that that money would  be used to                                                            
support  the  operating  component  of  the project  as  opposed  to                                                            
infrastructure  purchasing.  The funding  would be  used to  support                                                            
forthcoming office operation changes.                                                                                           
                                                                                                                                
Senator  Bunde questioned  the  reason that  eight of  the 15  sites                                                            
listed  on page  four  of the  presentation,  are necessary  as  the                                                            
region between Delta and Fairbanks is "pretty flat".                                                                            
                                                                                                                                
Major General  Campbell explained  that of the numerous AMLR  sites,                                                            
those 15 are the ones that  are currently operational. Work is being                                                            
conducted  in  segments with  the  focus  currently being  on  sites                                                            
within the Fairbanks/Delta  segment. The aforementioned  map depicts                                                            
site locations and phases.                                                                                                      
                                                                                                                                
Senator Bunde  asked for further information  regarding the  25-mile                                                            
buffer zone as specified in the footnote on the map.                                                                            
                                                                                                                                
Major  General  Campbell  replied  that the  ALMR  microwave  system                                                            
functions by  connecting "microwave  to microwave". 25 miles  is the                                                            
distance radius  capability for a microwave. The red  circles around                                                            
each site indicate  that radius, and the area at which  they overlap                                                            
is where the connection occurs.                                                                                                 
                                                                                                                                
Senator  Bunde understood  therefore  that each site's  range  is 25                                                            
miles. To  that point, he  noted that 25 miles  would not allow  for                                                            
mass communication.                                                                                                             
                                                                                                                                
Major General  Campbell responded  that this  is exactly the  reason                                                            
that efforts are being  exerted to complete the sites along the road                                                            
system highlighted  by the greenish  blue area on the map.  With the                                                            
exception  of  Southeast  Alaska  enhancements   that  include  both                                                            
microwave and fiber optics  communication, the 2006-buildout efforts                                                            
are being exerted on the  ALMR system located within that parameter.                                                            
The goal of the system  is to develop "a cost effective program that                                                            
will  include ALMR  and other  technologies  that  we could  utilize                                                            
around the  entire State". The AMLR  system that is currently  being                                                            
built would  be "the backbone" of  an overall system and  would work                                                            
with other  technologies;  it could  be determined  in the  analyses                                                            
that AMLR would  be the best choice. The aforementioned  circles are                                                            
indicative of the fact  that microwave alone would not work in Rural                                                            
Alaska. Other possible  options could be fiber optics, satellite, or                                                            
duplicate systems. He noted  that the Yukon-Kuskokwim Health Clinic,                                                            
which  is located  in Bethel,  is actively  preparing  to install  a                                                            
single network  microwave system in the villages it  serves within a                                                            
"50 mile  radius"  of Bethel.  The State,  in conjunction  with  the                                                            
Bethel Police Department,  currently has a test project operating in                                                            
Bethel,  which, while  utilizing  a  different type  of translator,                                                             
would allow  interoperability.  Efforts are  being exerted  to "mesh                                                            
together" these  two systems to achieve  a full spectrum  of secured                                                            
and  unsecured  data.  The  strategic  plan  being  developed  would                                                            
include the results  of this endeavor. In summary,  he affirmed that                                                            
the State has  not "automatically" determined that  the ALMR program                                                            
should be "the sole solution for the State of Alaska".                                                                          
                                                                                                                                
Senator  Bunde  observed  that, other  that  the  non-secure  issue,                                                            
cellular phones could accomplish the task intended for ALMR.                                                                    
                                                                                                                                
Major  General Campbell  replied that  while cell  phones are  good,                                                            
they  would  not perform  well  in  regards  "to  the needs  of  the                                                            
providers"  in  an  emergency  response   situation.  "The  need  is                                                            
different" in that rather  than simply having the ability to talk to                                                            
one another: the  goal would be to develop a network,  similar "to a                                                            
conference  call", in  which everyone  could  communicate with  each                                                            
other. Three people using  three different communication radios with                                                            
different  frequencies  and spectrums,  a VHF  or UHF  or 800  hertz                                                            
radios for example, could  not communicate with each other. The goal                                                            
of this project  to develop a system  in which "it would  not matter                                                            
what radios you have",  there would be the ability "to translate and                                                            
talk with  each other". ALMR  would do that  by establishing  "a one                                                            
frequency  connection". Even  though means  currently exist  through                                                            
which a translator could  be utilized to allow different frequencies                                                            
to communicate,  the ALMR project  would develop a interoperability                                                             
system  in which  a group,  rather than  one individual  talking  to                                                            
another,  could   communicate  even  though  they   might  be  using                                                            
different  technologies.  "That is  the ultimate  goal  that we  are                                                            
looking to achieve through this plan".                                                                                          
                                                                                                                                
Senator  Dyson asked  for  further information  about  how the  site                                                            
depicted on the map in  the Gulf of Alaska, east of Kodiak, would be                                                            
utilized.                                                                                                                       
                                                                                                                                
Major General  Campbell was  unfamiliar with  the specifics  of that                                                            
site.                                                                                                                           
                                                                                                                                
Senator  Dyson asked  regarding any  continuing  problems that  have                                                            
been experienced as the plan has been executed.                                                                                 
                                                                                                                                
Major General  Campbell affirmed  that the  program has experienced                                                             
"problems in the past".  While the program has been in existence for                                                            
a decade,  it "has not  been actively managed  until about  the last                                                            
year or  two". The Governor  Murkowski  administration "understands                                                             
the need" for  such a program and  is "very proactive". In  addition                                                            
to hiring  a  qualified project  manager,  the Commissioner  of  the                                                            
Department   of   Administration   and   himself,  have   a   mutual                                                            
understanding  of what  the State  must do  in this  regard and  are                                                            
working well together.  Historical problems have been identified and                                                            
would  "significantly   be  reduced".  The  State   has  not  "until                                                            
recently" upheld  its responsibility in advancing  the ALMR program.                                                            
                                                                                                                                
Senator  Olson asked  for  further information  about  the types  of                                                            
communications that would  be available in regards to such things as                                                            
the Yukon-Kuskokwim  (YK) Health Care delivery system;  specifically                                                            
whether it would be voice communication.                                                                                        
                                                                                                                                
Major General  Campbell responded that the YK Health  Clinic goal is                                                            
to allow for both voice  and data communication. They desire to have                                                            
images transmitted between  the villages to the Bethel location. The                                                            
State would like  to tie in with the YK Health Clinic's  project, as                                                            
Governor  Murkowski's   request  includes  that   work  be  done  on                                                            
developing  a statewide  system inclusive  of both  voice and  data.                                                            
"The YK Health  Clinic is on the leading  edge right now  of looking                                                            
at how to accomplish that".                                                                                                     
                                                                                                                                
Senator Olson asked whether  it would be feasible to transmit X-rays                                                            
to such places as the Mayo Clinic.                                                                                              
                                                                                                                                
Major  General   Campbell  replied   that  transmitting   such  data                                                            
"ultimately is the desire".                                                                                                     
                                                                                                                                
Senator  Olson asked regarding  the cost  associated with  upgrading                                                            
remote sites,  as the sites  exampled on page  seven are near  other                                                            
infrastructures or communities.                                                                                                 
                                                                                                                                
Major General  Campbell agreed that  the price associated  for sites                                                            
outside of the  road corridor area highlighted in  the greenish-blue                                                            
color  on the map  would increase  "significantly".  The  technology                                                            
connection  is not demonstrated  in the  presentation. He  mentioned                                                            
that  Motorola,  the current  contractor  for  the AMLR  system,  is                                                            
currently  conducting tests  in remote areas  on St. Paul Island  to                                                            
establish  how ALMR could  work in a cost  effective manner  is such                                                            
locations. Developing a  system in a cost effective manner is one of                                                            
the goals of the  project. Senator Olson is correct  in pointing out                                                            
that the site  cost examples presented in the handout  are along the                                                            
road system. However, rather  than costs varying because of the ALMR                                                            
system,  cost  variables are  determined  by  the condition  of  the                                                            
microwave tower. In order  to be brought up to standards, "some need                                                            
more work  than others".  The cost of the  ALMR system component  at                                                            
each site  is "fairly  consistent  for each  tower". Continuing,  he                                                            
noted that some additional  costs are dictated by the site location;                                                            
some  are on mountaintops,  some  are not.  He reiterated  that  the                                                            
State "has not  necessarily come to the conclusion  that ALMR" would                                                            
be the solution in Rural Alaska.                                                                                                
                                                                                                                                
Senator Olson  surmised therefore, "that this is essentially  a road                                                            
system project rather than something that is Statewide".                                                                        
                                                                                                                                
Major General Campbell  affirmed that the ALMR project that would be                                                            
installed by December 2006,  "is the backbone along the road system"                                                            
component.  The strategic  plan that  is currently  being  developed                                                            
would identify  a cost  effective system  that would be implemented                                                             
Statewide. That is "the  larger goal". Whatever system is identified                                                            
for the Statewide  segment must be compatible with  ALMR, and in the                                                            
end, "the most  cost effective solution"  could be the ALMR  system.                                                            
                                                                                                                                
Senator Olson  referenced information  on page eight that  specified                                                            
that  the DOT  and the  Department  of  Public Safety  have  already                                                            
acquired ALMR radios.                                                                                                           
                                                                                                                                
9:37:44 AM                                                                                                                    
                                                                                                                                
Major General  Campbell affirmed that radios have  been acquired and                                                            
would be  re-programmed  to be ALMR  compatible  once the system  is                                                            
operational.                                                                                                                    
                                                                                                                                
Senator Olson  questioned the decision  to purchase radios  prior to                                                            
the  activation  date  due to  the  fact  that  technology  advances                                                            
rapidly.  The  radios  might  "be obsolete"  before  the  system  is                                                            
operational.                                                                                                                    
                                                                                                                                
Major General  Campbell assured that this would not  be a problem as                                                            
there  is  an arrangement   to upgrade  the  radios  as  the  system                                                            
evolves. Money  to "key the radios"  once the system is operational                                                             
is included in  the $650,000 request that was previously  discussed.                                                            
                                                                                                                                
9:38:47 AM                                                                                                                    
                                                                                                                                
Senator Stedman,  noting the tower  sites identified on the  map for                                                            
southern  Southeast  Alaska, asked  the reason  that  no tower  site                                                            
would  be located  near  the Prince  of  Wales Island  community  of                                                            
Craig, which is a growing community.                                                                                            
                                                                                                                                
Major  General Campbell  affirmed that  Craig is  outside the  tower                                                            
radius. He stated  that Southeast Alaska "is an exception";  ALMR is                                                            
being pursued  in that  area even  though there  is no central  road                                                            
system as there is in central Alaska.                                                                                           
                                                                                                                                
Major General  Campbell disclosed that Craig is the  site of another                                                            
pilot  project, as  a translator  has been  installed  at the  Craig                                                            
Police Department  to see how the system would work  and communicate                                                            
with other types of communication  systems. The system appears to be                                                            
working.  The Craig  Police Chief  "loves the system"  and wants  to                                                            
expand it.  It appears to  be "the right solution  for that  type of                                                            
community".  In summary, AMLR work  is being furthered in  Southeast                                                            
Alaska   and  testing   is   being   conducted  to   determine   its                                                            
compatibility  with other  systems.  Such things  as the terrain  of                                                            
Southeast  Alaska differing  from that of  the road system  corridor                                                            
would be  taken into consideration  in the  development of  a master                                                            
plan to determines which  technologies would be appropriate and cost                                                            
effective. The remote distances  experienced in Rural Alaska are one                                                            
issue,  and  the  terrain  of  Southeast  Alaska  presents   another                                                            
geographical challenge.                                                                                                         
                                                                                                                                
Senator Stedman,  noting that Juneau  has a fiber optic connection,                                                             
asked regarding "the role of fiber optics" in the system.                                                                       
                                                                                                                                
Major General  Campbell stated  that, "from  the perspective  of the                                                            
Statewide  master  plan",  fiber  optics  is  considered  "a  viable                                                            
alternative" but  perhaps not the sole solution. The  belief is that                                                            
a successful  overlapping  integrative  system  consisting of  fiber                                                            
optics, microwaves, and satellites could be developed.                                                                          
                                                                                                                                
STEVE EASTMAN,  Department of Administration,  showed the  Committee                                                            
pictures  [copies not  provided] of  various  microwave and  two-way                                                            
radio sites in  both urban and rural areas of the  State. Some sites                                                            
are solar-powered.  He noted  that there is  a lot of site  activity                                                            
occurring  in the Fairbanks  region of the  State, and that  some of                                                            
the  sites   being  upgraded  are   more  than  30  years   old.  He                                                            
demonstrated   a  live   radio   connection  between   himself   and                                                            
individuals in Anchorage and Fairbanks.                                                                                         
                                                                                                                                
The ALMR presentation was concluded.                                                                                            
                                                                                                                                
9:46:36 AM                                                                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 46                                                                                                         
     "An Act making capital appropriations and appropriations to                                                                
      capitalize funds; and providing for an effective date."                                                                   
                                                                                                                                
                                                                                                                                
This  was the fifth  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Department of Public Safety                                                                                                   
                                                                                                                                
     New Anchorage Aircraft Hangar                                                                                              
     $6,176,800 AHFC Bonds                                                                                                      
     Reference No.: 40007                                                                                                       
     Category: Public Protection                                                                                                
     Location: Anchorage Areawide                                                                                               
     House District: Anchorage Areawide                                                                                         
     Estimated Project Dates: 07/01/2005 - 06/30/2009                                                                           
     One-Time Project                                                                                                           
     Construct  new aircraft  hangar  at Lake Hood  in Anchorage  to                                                            
     safeguard  the department's  aircraft  assets and ensure  safe,                                                            
     dependable,  and mission capable aircraft are  available in the                                                            
     most cost effective  manner to support the department's mission                                                            
     to  preserve   public  peace,   protect  life,  property,   and                                                            
     resources.                                                                                                                 
                                                                                                                                
Co-Chair Green  anticipated that "intensive discussion"  could occur                                                            
regarding  this  item.  Therefore  she announced  that  a  Committee                                                            
subcommittee  consisting of Senator  Bunde, chair; Senator  Stedman;                                                            
and Senator  Olson would be formed  "to thoroughly" discuss  it. The                                                            
Department would  explain the request, but she asked  that questions                                                            
be deferred to the subcommittee.                                                                                                
                                                                                                                                
9:48:00 AM                                                                                                                    
                                                                                                                                
DAN  SPENCER,   Director,  Division   of  Administrative   Services,                                                            
Department  of  Public Safety  communicated  that  the Department's                                                             
Commissioner   would  like  to  participate   in  the  subcommittee                                                             
discussions. He  shared that the proposal is to designate  16,000 of                                                            
the total  27,000 square  foot facility to  be utilized as  a hangar                                                            
with the remainder  to be used to  house inventory and offices.  The                                                            
proposed facility  would be located near the "very  small hangar" on                                                            
Anchorage's Lake Hood that is currently being utilized.                                                                         
                                                                                                                                
     Firefighting Engines and Equipment                                                                                         
     $500,000 Bond Funds                                                                                                        
     Reference No.: 37767                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2004 - 06/30/2005                                                                           
     One-Time Project                                                                                                           
     Purchase  of two fire  training engines  and related  equipment                                                            
     for the Fire Service  Training offices in Fairbanks and Juneau.                                                            
     This request supports  Division of Fire Prevention's mission to                                                            
     "prevent   the  loss  of  life  and  property   from  fire  and                                                            
     explosion".  This project will assist in providing  firefighter                                                            
     training  and  certification  to  Alaska's  emergency  response                                                            
     agencies,  and  will  in  turn assist  in  the  protection  and                                                            
     prevention efforts of these responders at the local level.                                                                 
                                                                                                                                
Mr. Spencer  noted that this request  would replace two 20-year  old                                                            
engines with  two new fire-fighting  engines  at a cost of  $250,000                                                            
each.  The benefits  derived  would  include  the ability  to  train                                                            
personnel on the latest technology.                                                                                             
                                                                                                                                
Co-Chair Green  asked whether this  request would duplicate  similar                                                            
requests  from  the Division  of  Forestry,  Department  of  Natural                                                            
Resources.                                                                                                                      
                                                                                                                                
Mr. Spencer  responded  that these  engines would  "strictly be  for                                                            
training purposes".                                                                                                             
                                                                                                                                
Senator Hoffman  asked whether the  majority of the training  in the                                                            
State is conducted in Fairbanks or Juneau.                                                                                      
                                                                                                                                
Mr. Spencer  noted that these are  the locations of two established                                                             
training  centers. Information  pertaining  to  training that  might                                                            
occur elsewhere would be provided.                                                                                              
                                                                                                                                
     Statewide Facilities Maintenance                                                                                           
     $718,800 Bond Funds                                                                                                        
     Reference No.: 38976                                                                                                       
     Category: Law and Justice                                                                                                  
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     On-Going Project                                                                                                           
     This  funding is for  facilities maintenance  for DPS  occupied                                                            
     state-owned  buildings throughout Alaska. The  department needs                                                            
     adequate  and maintained facilities to store  evidence, protect                                                            
     department-owned equipment,  and provide employees good working                                                            
     conditions.                                                                                                                
                                                                                                                                
Mr. Spencer  stated  that this  request would  address an  extensive                                                            
list of deferred  maintenance needs such as boiler  replacements and                                                            
electrical upgrades. It  should be emphasized that the list of items                                                            
included  in the request  "is subject  to change"  as an  unexpected                                                            
need might arise at any of the State's facilities.                                                                              
                                                                                                                                
Co-Chair Green  understood that the  proposed funding mechanism  for                                                            
this project is Amerada Hess (AH) bond funds.                                                                                   
                                                                                                                                
     Electronic Fingerprint Services - Live Scan                                                                                
     $465,000 Bond Funds                                                                                                        
     Reference No.: 39942                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 10/01/2005 - 09/30/2008                                                                           
     One-Time Project                                                                                                           
     This  project will  replace six  obsolete NEC  LS-21 live  scan                                                            
     fingerprinting  systems and expand the program  by two new live                                                            
     scan  units. Live scan  devices are  network-connected  devices                                                            
     that capture  fingerprint and photographic identification  data                                                            
     at locations  where the most  people are required to  submit to                                                            
     fingerprinting.  This data  is in a form  to be rapidly  shared                                                            
     with  other agencies  to quickly  identify  person of  interest                                                            
     including  actual or suspected terrorists. The  devices provide                                                            
     a  means  of capturing  and  sharing  information  critical  to                                                            
     threat recognition and intervention.                                                                                       
                                                                                                                                
Mr.  Spencer noted  that  the  six live  scan  fingerprint  machines                                                            
currently  owned are  "old  and obsolete".  Parts  are difficult  to                                                            
obtain "at  best", and other machines  are "cannibalized"  for parts                                                            
when one  breaks. The location  of where the  new machines  would be                                                            
utilized is included in the back-up material.                                                                                   
                                                                                                                                
     Aircraft and Vessel Repair and Maintenance                                                                                 
     $2,314,300 Bond Funds                                                                                                      
     Reference No.: 6121                                                                                                        
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2006                                                                           
     On-Going Project                                                                                                           
     The Department  of Public Safety  annually requests  repair and                                                            
     maintenance  funds  for the  DPS  aircraft and  vessels.  These                                                            
     funds   are  for  the  repair,   replacement  and  maintenance                                                             
     requirements  of this department's  aircraft and vessel  fleet.                                                            
     For  example: the  funds  will be  used to  rebuild vessel  and                                                            
     aircraft  engines and components when they reach  the limits of                                                            
     safe  useful life.  Large marine  diesel  engines and  aircraft                                                            
     engines  require expert  vendors  to rebuild  them. Many  other                                                            
     components  of  vessels  and  aircraft must  be  maintained  or                                                            
     replaced  routinely to ensure safe operating  conditions and to                                                            
     comply with various safety regulations.                                                                                    
                                                                                                                                
Mr. Spencer  noted  that this  is an  annual request  through  which                                                            
maintenance and  repair work on the State's aircraft  and vessels is                                                            
conducted.                                                                                                                      
                                                                                                                                
Senator Olson asked whether  the four aircraft rebuilds specified on                                                            
lines three and four, page  13 of the request, are due to accidents.                                                            
                                                                                                                                
Mr. Spencer understood  these repairs to be routine  maintenance and                                                            
repair work. This would be verified.                                                                                            
                                                                                                                                
Senator Olson  asked for  confirmation that  this request would  not                                                            
include  repairs for  the aircraft  damaged  in a  January 19,  2005                                                            
accident.                                                                                                                       
                                                                                                                                
Mr. Spencer communicated  that this request was developed in October                                                            
2004.  He noted, however,  that  the Department  could utilize  this                                                            
funding  to  repair  any  aircraft   that  suffered  damages  in  an                                                            
accident.                                                                                                                       
                                                                                                                                
Senator  Olson concluded  therefore  that  the aircraft  damaged  in                                                            
January  was  not  included  in the  one  million  dollar  component                                                            
specified for Aircraft Repairs.                                                                                                 
                                                                                                                                
Mr. Spencer affirmed.  The projects included in this  component were                                                            
forecast  prior  to  that  date. However,   the list  could  be  re-                                                            
prioritized to include another project were it deemed necessary.                                                                
                                                                                                                                
Senator Olson noted that  included in the Aircraft Repairs component                                                            
was an ASTAR  infrared system and  an item, referenced as  TAWS that                                                            
he was unfamiliar with.                                                                                                         
                                                                                                                                
Mr.  Spencer,  being also  unfamiliar  with  the term,  stated  that                                                            
further information would be provided.                                                                                          
                                                                                                                                
     Law Enforcement Equipment Replacement                                                                                      
     $1,177,100 Bond Funds                                                                                                      
     Reference No.: 37774                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2006                                                                           
     On-Going Project                                                                                                           
     This funding will  purchase new and replacement law enforcement                                                            
     equipment  for use by the Alaska  State Troopers. The  Division                                                            
     of  Alaska  State  Troopers  relies  upon  capital improvement                                                             
     project  funding for  these types  of equipment  purchases  for                                                            
     day-to-day  operations   in  order  to  meet  the department's                                                             
     mission of ensuring public safety and enforcing state laws.                                                                
                                                                                                                                
Mr. Spencer noted that this is an on-going program whose list of                                                                
prioritized projects could be revised depending on need.                                                                        
                                                                                                                                
Co-Chair Green inquired as to what alternate funding source would                                                               
be utilized, were bonds funds unavailable.                                                                                      
                                                                                                                                
Mr. Spencer responded that the funding source for this request has                                                              
historically been the general fund.                                                                                             
                                                                                                                                
     Live Burn Building at Fairbanks Fire Training Center                                                                       
     $150,000 Bond Funds                                                                                                        
     Reference No.: 39940                                                                                                       
     Category: Public Protection                                                                                                
     Location: Fairbanks Areawide                                                                                               
     Election District: Fairbanks Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2007                                                                           
     One-Time Project                                                                                                           
     This  request  constructs  a  small  concrete/block   live-fire                                                            
     training  burn building at the Fairbanks Fire  Training Center.                                                            
     This request supports  Division of Fire Prevention's mission to                                                            
     "prevent   the  loss  of  life  and  property   from  five  and                                                            
     explosion".  This project will assist in providing  firefighter                                                            
     training  and  certification  to  Alaska's  emergency  response                                                            
     agencies,  and  will  in  turn assist  in  the  protection  and                                                            
     prevention efforts of these responders at the local level.                                                                 
                                                                                                                                
Mr. Spencer stated that this request would allow for "realistic"                                                                
firefighting training to occur.                                                                                                 
                                                                                                                                
      Burn Panel Installation at Juneau Fire Training Center                                                                    
     $150,000 Bond Funds                                                                                                        
     Reference No.: 39939                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2006                                                                           
     One-Time Project                                                                                                           
     Non-protected  burning  can no  longer take  place in the  Fire                                                            
     Training  Center in  Juneau due  to structural  concerns.  This                                                            
     project  installs  thermal tiles  and burn  panels (limited  to                                                            
     those  areas in which  live fire training  will be conducted).                                                             
     This request supports  Division of Fire Prevention's mission to                                                            
     "prevent   the  loss  of  life  and  property   from  fire  and                                                            
     explosion."  This project will assist Fire Service  Training in                                                            
     providing  firefighter training  and certification to  Alaska's                                                            
     emergency  response agencies,  and will  in turn assist  in the                                                            
     protection  and prevention efforts  of these responders  at the                                                            
     local level.                                                                                                               
                                                                                                                                
Mr. Spencer  stated  that currently  only  small fires  that do  not                                                            
touch  the  facility's  structural   walls  could  be  utilized  for                                                            
training  purposes. The  improvements would  allow more substantial                                                             
training to occur.                                                                                                              
                                                                                                                                
     Rural Law Enforcement Training and Equipment                                                                               
     $2,000,000 Fed Rcpts                                                                                                       
     Reference No.: 38479                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2004 - 09/30/2006                                                                           
     One-Time Project                                                                                                           
     The  Department  of  Justice,  Office   of Community   Oriented                                                            
     Policing  Services,  is expected  to  award the  Department  of                                                            
     Public Safety $2,000,000  to train law enforcement personnel in                                                            
     rural locations  to increase their ability to  deal with crisis                                                            
     situations  and to purchase equipment  for better responses  to                                                            
     emergencies. Previous  federal awards have been $1.8 million in                                                            
     FFY2001, $600.0 in FFY2002, and $1.5 million in FFY2003.                                                                   
                                                                                                                                
Mr. Spencer stated that this appropriation, which is geared toward                                                              
Rural law enforcement, has been included in previous federal                                                                    
budgets and is already included in the federal FFY05 budget.                                                                    
                                                                                                                                
     Continue  Village Public Safety Officers for  Rural Bootlegging                                                            
     Prevention and Enforcement Activities                                                                                      
     $2,000,000 Fed Rcpts                                                                                                       
     Reference No.: 39352                                                                                                       
     Category: Law and Justice                                                                                                  
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2004 - 06/30/2009                                                                           
     One-Time Project                                                                                                           
     This project  will maintain and  augment the number  of Village                                                            
     Public  Safety  Offices (VPSOs)  funded  in Federal  FY2004  to                                                            
     engage in bootlegging  prevention and enforcement activities in                                                            
     rural Alaskan villages.                                                                                                    
                                                                                                                                
Mr. Spencer  stated that this appropriation  has also been  included                                                            
in the FFY05 budget.  It would be a continuation of  previous years'                                                            
support.                                                                                                                        
                                                                                                                                
Senator  Olson asked  how much  of the  total four  million  federal                                                            
dollars identified  in Reference  Numbers 39352  and 38479  would be                                                            
earmarked  to support  the  Village  Public Safety  Officers  (VPSO)                                                            
component identified in the requests.                                                                                           
                                                                                                                                
Mr. Spencer understood  that 100-percent of the two  million dollars                                                            
specified in Reference  Number 39352 would support the VPSO program.                                                            
                                                                                                                                
Senator Olson  asked how much of the funding requested  in Reference                                                            
Number 38479 would support the VPSO program.                                                                                    
                                                                                                                                
Mr. Spencer  noted that that  money would be  shared by a number  of                                                            
entities,  including the  Alaska State Troopers  VPSO program.  More                                                            
information in this regard would be provided.                                                                                   
                                                                                                                                
Senator Olson understood  that a majority of that money has not been                                                            
utilized in the past to support the VPSO program.                                                                               
                                                                                                                                
Senator  Hoffman asked  whether an  analysis of  the success  of the                                                            
program has been conducted.                                                                                                     
                                                                                                                                
Mr. Spencer replied  in the negative. The Department's  commissioner                                                            
has been involved  in reviewing the  VPSO program. Future  plans for                                                            
this federal funding are unknown at this time.                                                                                  
                                                                                                                                
Senator Hoffman  clarified that his question specifically  pertained                                                            
to the success of the bootlegging prevention program.                                                                           
                                                                                                                                
Mr. Spencer  stated that the State  has, with some success,  exerted                                                            
tremendous  effort  in  anti-bootlegging  and  addiction  endeavors.                                                            
These  efforts  are  addressed  in  the  Department's  Missions  and                                                            
Measures, and statistics would be provided.                                                                                     
                                                                                                                                
     Marine Fisheries Patrol Improvements                                                                                       
     $2,500,000 Fed Rcpts                                                                                                       
     Reference No.: 35825                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 10/01/2005 - 09/30/2006                                                                           
     On-Going Project                                                                                                           
     The  Alaska  State  Legislature  urged  the  division  to  seek                                                            
     additional  funds for its patrol  efforts in federal  waters of                                                            
     the  North Pacific  Ocean  and Bering  Sea. This  project  is a                                                            
     result  of  lengthy  negotiations   with  the  National  Marine                                                            
     Fisheries  Service. Federally regulated marine  fisheries occur                                                            
     on a  year-round basis  in the coastal  and offshore waters  of                                                            
     the  State of Alaska.  Both the federal  and state governments                                                             
     share  an interest in ensuring  these fisheries are  protected.                                                            
                                                                                                                                
Mr. Spencer  stated  that this patrol  effort is  an on-going  joint                                                            
enforcement  agreement  between the  State and  the National  Marine                                                            
Fisheries (NMF)  Program. NMF reimburses the State  for a portion of                                                            
vessel  and  aircraft  expenses  as well  as  funding  for  dockside                                                            
inspections. The program has worked well for both entities.                                                                     
                                                                                                                                
Senator  Olson asked  whether  the $1.5  million  Personal  Services                                                            
expense  designated on  page 25  of the request's  back-up  material                                                            
would be utilized to support new employee positions.                                                                            
                                                                                                                                
Mr.  Spencer clarified  that  that funding  would  support  existing                                                            
positions that conduct dockside checks for federal violations.                                                                  
                                                                                                                                
     Driving Simulator-Training Academy                                                                                         
     $265,000 Fed Rcpts                                                                                                         
     Reference No.: 39956                                                                                                       
     Category: Law and Justice                                                                                                  
     Location: Sitka                                                                                                            
     Election District: Sitka/Wrangell/Petersburg                                                                               
     Estimated Project Dates: 10/01/2005 - 09/30/2006                                                                           
     One-Time Project                                                                                                           
     This  project is  to purchase  a FAAC  Inc.  DTS brand  PP-2000                                                            
     state  of  the art  motion  driving  simulator to  enhance  the                                                            
     Emergency   Vehicle  Operation   Course  for  Law  Enforcement                                                             
     Officers  taught at  the Department of  Public Safety  Training                                                            
     Academy.                                                                                                                   
                                                                                                                                
Mr. Spencer expressed  that while funding was provided  in the FY 05                                                            
budget  to support  a driver training  range,  its capabilities  are                                                            
limited.  The item  being requested  could  be likened  to a  flight                                                            
simulator  in that  it would  allow for  such things  "as  practiced                                                            
crashes to occur on a computer rather than in real life".                                                                       
                                                                                                                                
     Language  Section: Public  Safety Aircraft,  Vessel, and  Parts                                                            
     Sales                                                                                                                      
     $300,000 GF/Prgm                                                                                                           
     Reference No.: 38439                                                                                                       
     Category: Public Protection                                                                                                
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2006                                                                           
     On-Going Project                                                                                                           
     This  will allow the  department to use  the proceeds  from the                                                            
     sale  of  aircraft   and  vessels  and/or  related   parts  and                                                            
     accessories   to  fund  repair  and  maintenance,  replacement                                                             
     equipment, acquisition of replacement aircraft and vessels.                                                                
                                                                                                                                
Mr. Spencer reviewed the request.                                                                                               
                                                                                                                                
Co-Chair  Green   asked  whether  this  is  the  historical   amount                                                            
requested for the program.                                                                                                      
                                                                                                                                
Mr. Spencer  replied  that the specific  amounts  for the past  five                                                            
years would be provided. The amounts have varied.                                                                               
                                                                                                                                
Senator Olson asked how the money would be utilized.                                                                            
                                                                                                                                
Mr. Spencer stated it would  be used to maintain and repair aircraft                                                            
and vessels.                                                                                                                    
                                                                                                                                
Senator Olson  noted that the Statement  of Need specifies  that the                                                            
funding  could also  be used  to acquire  replacement  aircraft  and                                                            
vessels.                                                                                                                        
                                                                                                                                
Mr.  Spencer affirmed;  the  funds have  been  used in  the past  to                                                            
assist in  funding a replacement  aircraft  for one that might  have                                                            
been sold.                                                                                                                      
                                                                                                                                
Senator  Stedman  understood  that the  funding  for many  of  these                                                            
projects has been "normally  imbedded in the general fund section of                                                            
our budget".  However, this  year, other  funding sources have  been                                                            
identified.  He found  it "odd"  that after  years  of general  fund                                                            
funding, "a totally  different funding source" have  been identified                                                            
to support certain on-going operations.                                                                                         
                                                                                                                                
Co-Chair  Green  voiced that  it  is also  important  to  "carefully                                                            
assess" whether each project  appropriately meets "the definition of                                                            
a capital  project"  rather than  being  "a hybrid  of an  operating                                                            
expense".                                                                                                                       
                                                                                                                                
Senator  Dyson agreed  that  capital  projects should  be  reviewed.                                                            
However,  the  Legislature  has  "a  responsibility  to  not  be  so                                                            
intimidating".  To  that point,  he  relayed several  situations  in                                                            
which  a  capital  request  should  have  been  submitted,  but  was                                                            
withheld out  of fear of it being  rejected by the Legislature.  One                                                            
such  case  involved  keeping  an  antiquated  front-end  loader  in                                                            
service rather  than replacing it  with a new model; more  money was                                                            
spent trying to keep the  loader operational than it would have cost                                                            
to replace it.                                                                                                                  
                                                                                                                                
Senator Olson  agreed that the Legislature  has a responsibility  to                                                            
provide safe  equipment; however,  requests such as the one  for the                                                            
construction of a new aircraft  hangar in Anchorage, as requested in                                                            
Reference Number  40007, exceeds "reasonability".  Other options are                                                            
available.  He appreciated Co-Chair  Green's decision to  assign the                                                            
hangar project to a subcommittee.                                                                                               
                                                                                                                                
10:04:24 AM                                                                                                                   
                                                                                                                                
University of Alaska                                                                                                          
                                                                                                                                
     Life Safety and Code Compliance                                                                                            
     $11,066,000                                                                                                                
          $10,466,000 ASLC Bonds                                                                                                
          $   600,000 Univ Rcpt                                                                                                 
     Reference No.: 40019                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     On-Going Project                                                                                                           
     The  projects within  this request  will  address life  safety,                                                            
     code  and  Americans  with  Disabilities   Act  issues  at  the                                                            
     university. As part  of its primary mission, UA is committed to                                                            
     the education and well-being of students.                                                                                  
                                                                                                                                
JOE  BEEDLE,  Vice President  for  Finance,  University  of  Alaska,                                                            
specified  that $7.9  million of  the $10.4  million Alaska  Student                                                            
Loan  Corporation  (ASLC)  bond  funds  would  be  provided  to  the                                                            
University  of Alaska Fairbanks  (UAF) campus  and the $2.5  million                                                            
balance would support efforts  at the University of Alaska Anchorage                                                            
(UAA) campus. The University  of Alaska Southeast Campus (UAS) opted                                                            
to focus its bond  funding efforts on the acquisition  of land. That                                                            
effort would be addressed in a separate request.                                                                                
                                                                                                                                
Co-Chair Green  noted that the projects  that would be supported  by                                                            
this  request are  located  on page  two and  three  of the  back-up                                                            
material.                                                                                                                       
                                                                                                                                
     Instructional Science Laboratory Equipment                                                                                 
     $1,400,000                                                                                                                 
          $831,000 ASLC Bonds                                                                                                   
          $569,000 Gen Fund                                                                                                     
     Reference No.: 39997                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     On-Going Project                                                                                                           
     Academic  Equipment  and Instructional  Science  Lab  Equipment                                                            
     Statewide. This request  is for standard replacement of science                                                            
     lab  equipment   used  for  academic  instruction.   The  items                                                            
     requested  have  reached  their  useful  life  and  are  either                                                            
     obsolete  or  beyond  repair.  These  items  are  necessary  to                                                            
     support  the new labs and allow  students to experience  up-to-                                                            
     date instrumentation  techniques used in the  sciences. As part                                                            
     of its  primary mission, UA is  committed to the education  and                                                            
     well-being of students.                                                                                                    
                                                                                                                                
Mr. Beedle stated that this is "a small percentage" of the monetary                                                             
amount required to allow the University to "renew itself" and                                                                   
maintain its competitiveness in classrooms and laboratories.                                                                    
                                                                                                                                
Co-Chair Green asked whether this funding would be limited to                                                                   
equipment replacement.                                                                                                          
                                                                                                                                
Mr. Beedle affirmed that this is a small percentage of the total                                                                
amount required in that regard. The balance of the funding would be                                                             
provided "internally".                                                                                                          
                                                                                                                                
     Administrative  Information  Technology  Equipment Replacement                                                             
     and Upgrades                                                                                                               
     $3,382,900                                                                                                                 
          $3,003,400 ASLC Bonds                                                                                                 
          $  379,500 Univ Rcpt                                                                                                  
     Reference No.: 39999                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     Phased-new Project                                                                                                         
     This  request  is  necessary  to meet  UA's  Administrative  IT                                                            
     equipment needs.                                                                                                           
                                                                                                                                
Mr. Beedle read the funding source breakout, as specified in the                                                                
backup material.                                                                                                                
                                                                                                                                
     Strategic Land and Property Acquisitions                                                                                   
     $10,940,000                                                                                                                
          $2,150,000 Bond Funds                                                                                                 
          $8,790,000 Univ Rcpt                                                                                                  
     Reference No.: 40002                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     On-Going Project                                                                                                           
     This  project   would  allow  for  the  purchase   of  critical                                                            
     properties  necessary for strategic  expansion of campuses.  As                                                            
     part of its  primary mission, UA is committed  to the education                                                            
     and well-being of students.                                                                                                
                                                                                                                                
Mr. Beedle noted that UAS  has identified the purchase of the Gitkov                                                            
Property  near the  Juneau  campus as  its highest  priority.  $2.15                                                            
million  has been  earmarked  for this  endeavor.  A lease/purchase                                                             
agreement  has  been   offered.  This  land  currently   houses  the                                                            
University's  recreation  center  and  would  eventually  house  the                                                            
University's bookstore,  central student area, and business offices.                                                            
UAS would  be investing  an additional  one  million dollars  toward                                                            
these upgrades.                                                                                                                 
                                                                                                                                
Mr. Beedle informed  the Committee that other tentative  UA property                                                            
acquisitions  are detailed  on pages eight  and nine of the  back-up                                                            
material. Financing would  be provided by the individual campuses or                                                            
revenue bonds.                                                                                                                  
                                                                                                                                
Co-Chair  Green   asked  whether   another  fund  source   had  been                                                            
considered in  lieu of bond funds for the acquisition  of the Gitkov                                                            
property.                                                                                                                       
                                                                                                                                
Mr. Beedle  stated  that the  current plan,  which  is supported  by                                                            
Governor Frank  Murkowski, is to utilize Amerada Hess  funds for the                                                            
endeavor.  The University  is "delighted"  that it  "is included  in                                                            
that  capital  budget  item  utilizing   that  source".  The  Gitkov                                                            
property  is  strategically   located  and  is  important   to  UAS.                                                            
Nonetheless,  the  University would  be  willing to  consider  other                                                            
funding options.                                                                                                                
                                                                                                                                
Co-Chair Wilken asked that  the definition of University receipts be                                                            
shared.                                                                                                                         
                                                                                                                                
Mr.  Beedle   stated   that  the   University   is  "blessed"   that                                                            
approximately  60-percent of  its operating  budget is supported  by                                                            
sources  other than  the general  fund.  These sources  include  the                                                            
University's  ability  to  utilize  research-based  funds  with  the                                                            
federal  government and  resources generated  from student  receipts                                                            
such as  tuition, housing,  books, food,  and recreational  activity                                                            
fees.  Research dollars  have reached  a "meaningful"  level at  the                                                            
University: $37 million  in Facilities Administrative (F&A) research                                                            
reimbursement  is expected  in FY  06. The University  is  "charging                                                            
appropriate  amounts to  pay for those  buildings  and can in  fact,                                                            
then dedicate  some of  that for a  building and  a debt service  to                                                            
include interest, in research categories".                                                                                      
                                                                                                                                
Co-Chair  Green  asked  whether  there  is  any  limitation  on  the                                                            
purposes for which  University Receipts (Univ Rcpts)  could be used.                                                            
                                                                                                                                
Mr. Beedle  responded that  the majority of  Univ Rcpts are  used to                                                            
support  operating  expenses.  Approximately  half of  F&A  Research                                                            
revenue  is used  to  support  associated administrative   expenses.                                                            
Student  receipts are  used to support  such things  as housing  and                                                            
activities. Students  "are carrying an increasing  load every year".                                                            
                                                                                                                                
10:11:58 AM                                                                                                                   
                                                                                                                                
Senator  Olson asked regarding  the four  million dollars  specified                                                            
for aviation expansion.                                                                                                         
                                                                                                                                
Mr. Beedle  explained  that the  UAA aviation  technology  facility,                                                            
which is located  at Anchorage's Merrill Field, is  primarily funded                                                            
by  federal   dollars.   It  currently   offers   Federal   Aviation                                                            
Administration  (FAA)  Controller  Licenses, air  travel  simulation                                                            
equipment, and  a two-year program in aviation technology.  Adjacent                                                            
to the facility  is an old hanger that the University  has committed                                                            
to acquiring,  as the current facility  has limited apron  space for                                                            
parking aircraft,  including research  planes. This expansion  would                                                            
allow services to be increased.  Funding for the four million dollar                                                            
project  would be  provided  via a  combination  of  a fund  raising                                                            
campaign and  federal dollars. The  University is "optimistic"  that                                                            
the goal would be obtained.                                                                                                     
                                                                                                                                
     Systemwide Minor Renewal and Renovation                                                                                    
     $17,611,500                                                                                                                
          $ 6,886,500 Bond Funds                                                                                                
          $10,725,000 Univ Rcpt                                                                                                 
     Reference No.: 40023                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     Phased-underway Project                                                                                                    
     This  request  will provide  needed  funding to  perform  minor                                                            
     renewal  and renovation  of laboratory  and  student space.  As                                                            
     part of its  primary mission, UA is committed  to the education                                                            
     and well-being of students.                                                                                                
                                                                                                                                
Mr. Beedle  stated that  this request  would allow  the UA to  "keep                                                            
current"  on  its  deferred  maintenance  needs.  Funding  would  be                                                            
provided  by a combination  of Amerada  Hess bonds  and Univ  Rcpts.                                                            
Deferred  maintenance   needs  are  un-specified;   each  campus  is                                                            
provided the authority  to address its own identified list of needs,                                                            
as funding would allow.                                                                                                         
                                                                                                                                
Senator  Hoffman asked  whether  the exclusion  of  the Chukchi  and                                                            
Kuskokwim campus's from  the list would indicate that those campuses                                                            
have no major deferred maintenance needs.                                                                                       
                                                                                                                                
Mr.  Beedle  stated  that,  to  the  contrary,  there  are  deferred                                                            
maintenance needs  at those campuses. However, those  needs would be                                                            
addressed separately.  The UA Board  of Regents would be  meeting at                                                            
the  Bethel campus  in  April and  a campus  walk  through would  be                                                            
conducted.  Substantial structural  improvements are needed  at that                                                            
campus. Approximately  half of the  GF funds appropriated  to the UA                                                            
would  be   earmarked  for   community   campus  needs.   University                                                            
President, Mark Hamilton,  and the Board have supported "redirecting                                                            
operational   dollars"  to  address   community  campuses   deferred                                                            
maintenance  needs. Receipt  authority allowing  the UA to  redirect                                                            
funds toward community campuses' needs must occur.                                                                              
                                                                                                                                
     Small Business Development                                                                                                 
     $832,000 Gen Fund                                                                                                          
     Reference No.: 40024                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 -06/30/2010                                                                            
     On-Going Project                                                                                                           
     The   Small   Business   Development   Center   (SBDC)   offers                                                            
     specialized   business  assistance   through  its  Procurement                                                             
     Technical  Assistance   Center,  the  Technology  and  Research                                                            
     Development  Center, BUY ALASKA,  the Manufacturing  Assistance                                                            
     Center  and, the newly proposed  Alaska Performance  Excellence                                                            
     Award  program.  The  SBDC  fulfills  UA's  commitment  to  the                                                            
     citizens of Alaska  to provide lifelong learning opportunities,                                                            
     applied research,  and economic development.  SBDC fulfills the                                                            
     top  listed  priorities  of  the  university  including;  major                                                            
     public  service   emphasis,  small  business  development   and                                                            
     training, and efforts  to building a diverse economy in Alaska.                                                            
                                                                                                                                
Mr. Beedle  stated  that the Small  Business  Development Center  is                                                            
sponsored  by UAA. While  its main office  is located in  Anchorage,                                                            
Statewide expansion plans  are being furthered. This is an operating                                                            
budget request that is  being pursued through the capital budget due                                                            
to the  fact that  both the Department  of  Commerce, Community  and                                                            
Economic Development  and UA are endeavoring to protect  the budget,                                                            
as  it was  once  "forgotten"  and  not included  in  the  operating                                                            
budget. That year's funding  was included in the capital budget and,                                                            
as a consequence, this  funding request has continued in that manner                                                            
for the past ten  years. This routing assures the  UA President, the                                                            
UAA Chancellor, the Board,  and the Center's directors that it would                                                            
receive the  "special attention" that  it needs as opposed  to being                                                            
"absorbed and almost forgotten"  in the academia's operating budget.                                                            
This funded  is leveraged with the  local entities that provide  the                                                            
facility  in which the  Center is  housed. The  State match  equates                                                            
therefore to  approximately 25-percent  of the overall budget.  Also                                                            
included  in this  budget is  an Office  of Management  and  Budget,                                                            
Office  of the  Governor  proposal  to implement  a  new  initiative                                                            
called the  Alaska Performance  Excellence  Award, which is  modeled                                                            
after the Malcolm  Baldrige National Quality Program.  This $135,000                                                            
increment  would  allow the  State  to become  involved  in a  total                                                            
quality management program that is operating in many states.                                                                    
                                                                                                                                
Co-Chair   Green   remembered   the  year   that  the   Center   was                                                            
inadvertently omitted from  the operating budget. She inquired as to                                                            
what other funding supports the Center.                                                                                         
                                                                                                                                
Mr. Beedle replied  that the Small Business Development  program has                                                            
grown to  include procurement  and technical  assistance efforts  to                                                            
insure   that  small  businesses,   and   their  personnel,   remain                                                            
competitive in regards  to State contracts that are awarded. The Buy                                                            
Alaska program  was also  developed to  promote Alaskan businesses.                                                             
Federal  receipts and  other  program support  are  directed to  the                                                            
University. Money and services  from such entities as First National                                                            
Bank Alaska, other  banks, communities, and other  organizations are                                                            
received.                                                                                                                       
                                                                                                                                
Co-Chair Green  asked for verification that this is  a State general                                                            
fund request amounting to $832,000.                                                                                             
                                                                                                                                
Mr.  Beedle affirmed.  There  is a  minimum  of a  50-percent  match                                                            
requirement.  The  program's  appropriation  request  has  not  been                                                            
adjusted to reflect inflation.                                                                                                  
                                                                                                                                
Co-Chair  Green noted  that the FY  2005 request  was $450,000.  She                                                            
asked that further  information regarding the increase  in the FY 06                                                            
request  be provided;  particularly  as personnel  expenses are  not                                                            
provided for in capital request projects.                                                                                       
                                                                                                                                
Mr.  Beedle  stated that  the  breakout  of the  expenses  would  be                                                            
provided.                                                                                                                       
                                                                                                                                
[NOTE:  Further clarification  regarding  the SBDC  program  funding                                                            
request is provided on page 35 of these minutes.]                                                                               
                                                                                                                                
     Integrated Science Complex                                                                                                 
     $21,600,000 Bond Funds                                                                                                     
     Reference No.: 40025                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     Phased-new Project                                                                                                         
     This  project will design  and construct  the first phase  of a                                                            
     new  integrated Science  complex and  provide a concept  design                                                            
     for  the  subsequent  phases  that  will  complete   integrated                                                            
     sciences program delivery.  The proposed project is in response                                                            
     to   a  critical   shortage   of   fundamental   core   science                                                            
     instructional  and  laboratory  space. Current  facilities  are                                                            
     insufficient  and inadequate to meet the current  demand of 450                                                            
     science  majors  and 4000  non-majors  each semester.  The  new                                                            
     facility  will feature state of the art science  academic labs,                                                            
     and technology associated with distance delivery.                                                                          
                                                                                                                                
Mr. Beedle  stated that this project,  which has been identified  by                                                            
the University's  and  UAA as their  highest priority,  is also  the                                                            
University's  "largest  capital  new  construction  project".  These                                                            
Amerada Hess Bond Funds  combined with $8.4 million in State General                                                            
Obligation  Bonds that were  approved in 2002  would fund the  total                                                            
$30 million  project, which would  be located on the UAA  campus. It                                                            
should  be noted,  however,  that  UAA estimates  that  in order  to                                                            
properly build  a "modern complex  that would be able to  handle the                                                            
demand by  students and  researchers" would  cost approximately  $70                                                            
million.                                                                                                                        
                                                                                                                                
10:22:08 AM                                                                                                                   
                                                                                                                                
Senator Bunde  opined therefore that while the request  is for $21.6                                                            
million, "the real request is for $71.6 million.                                                                                
                                                                                                                                
Mr. Beedle explained  that following the Board of  Regents' approval                                                            
of the University's  budget request  that was submitted to  Governor                                                            
Frank Murkowski,  they received an appeal from UAA  asking that they                                                            
be allowed  to present the  full needs of  the project. As  noted by                                                            
Senator Bunde,  there could be "a two-pronged approach"  in that the                                                            
$21.6 million  was the amount  initially approved  by the Board  and                                                            
forwarded to the  Governor. The UAA "campus has a  greater need than                                                            
this".                                                                                                                          
                                                                                                                                
Senator Bunde  commented that, while the initial request  is "fairly                                                            
substantial";  the $71.6 million  is even  more so. Nonetheless,  he                                                            
appreciated   knowing  the  entire   funding  need  as  opposed   to                                                            
piecemealing a project together.                                                                                                
                                                                                                                                
Senator  Stedman, noting  the University's  strong  desire to  build                                                            
this complex,  asked whether  the project  would have been  included                                                            
had the Amerada  Hess Bond Funds been unavailable.  He characterized                                                            
the use of  the Amerada Hess Bonds  Funds as being "questionable  at                                                            
best".                                                                                                                          
                                                                                                                                
Mr. Beedle reiterated that  this project is the University's highest                                                            
priority, and it would  remain as such even were a different funding                                                            
source required.  The University has calculated the  amount it could                                                            
fund separate  from this request.  This is  a basic core or  "Type A                                                            
facility" structure  "that should  be an absolute obligation  of the                                                            
State". The  revenue generated by  the University from student  fees                                                            
and research income does  quality as a means to support revenue bond                                                            
financing for  the University's portion of the calculation.  "Absent                                                            
State core  funding" the University  "does not have another  funding                                                            
source.  We are  reliant upon  the State  for our  core educational                                                             
facilities".                                                                                                                    
                                                                                                                                
     Center for Innovative Learning - Alaska Native Science and                                                                 
     Engineering Program                                                                                                        
     $4,955,000                                                                                                                 
          $  500,000 ASLC Bonds                                                                                                 
          $4,455,000 Univ Rcpt                                                                                                  
     Reference No.: 40026                                                                                                       
     Category: University                                                                                                       
     Location: Anchorage Areawide                                                                                               
     Election District: Anchorage Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     Center for Innovative Learning is a new campus facility being                                                              
     planned to house learning programs that directly impact                                                                    
     student retention and student success.                                                                                     
                                                                                                                                
Mr.  Beedle  stated  that  University   Receipts,  in  the  form  of                                                            
donations,  would totally fund the  University's obligation  to this                                                            
program. The Alaska  Native Science and Engineering  Program (ANSEP)                                                            
has been very  successful and has "a 70-percent retention  by Alaska                                                            
Native students in a very  difficult program". This program is being                                                            
nationally recognized.  A national science foundation  grant assists                                                            
in  supporting  this   program.  Due  to  University's  fundraising                                                             
efforts,  three-quarters of  the $4,455,000  in University  Receipts                                                            
have been  raised by donations  from such  entities as the  Rasmuson                                                            
Foundation  and a  federal appropriation.  The  $500,000 GF  funding                                                            
component is recommended by the Governor.                                                                                       
                                                                                                                                
Senator  Dyson  asked  that  further  information   about  ANSEP  be                                                            
provided to his office.                                                                                                         
                                                                                                                                
Mr. Beedle acknowledged the request.                                                                                            
                                                                                                                                
Co-Chair  Wilken   asked  that  current   and  past  ANSEP   student                                                            
enrollment numbers be provided.                                                                                                 
                                                                                                                                
Co-Chair Green  asked that the information  also be provided  to her                                                            
office.                                                                                                                         
                                                                                                                                
Senator   Bunde  reminded   the  Committee   that  in  addition   to                                                            
construction  expenses, operation  and maintenance  expense  funding                                                            
sources should be determined.                                                                                                   
                                                                                                                                
     University of Alaska Anchorage Student Housing - Phase 2                                                                   
     $1,150,000                                                                                                                 
          $  150,000 Gen Fund                                                                                                   
          $1,000,000 Univ Rcpt                                                                                                  
     Reference No.: 40027                                                                                                       
     Category: University                                                                                                       
     Location: Anchorage Areawide                                                                                               
     Election District: Anchorage Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     Phased-underway Project                                                                                                    
     This request will fund the construction of a new student                                                                   
     residence hall at UAA.                                                                                                     
                                                                                                                                
Mr. Beedle noted  the $150,000 GF component would  allow the project                                                            
planning to  be completed. Project  construction would be  funded by                                                            
the  one  million  dollar  University  Receipt  Authority   provided                                                            
through the Alaska  Housing Finance Corporation (AHFC).  UAA student                                                            
housing is  currently full and there  is an extensive waiting  list.                                                            
Student  housing can  currently  provide for  eight  percent of  the                                                            
student  enrollment. Land  is available for  the housing  expansion.                                                            
The one million  dollar component would be combined  with a previous                                                            
allocation for a total of $9.1 million.                                                                                         
                                                                                                                                
Senator Bunde questioned  the reason for revenue bonds being used as                                                            
a  fund  source as  he  understood  that  university  housing  never                                                            
generates sufficient  revenue to offset construction,  operation and                                                            
maintenance  expenses.  There is a  waiting list  because dorms  are                                                            
akin to subsidized housing.  Therefore he inquired as to how revenue                                                            
would be generated to cover the cost of the bonds.                                                                              
                                                                                                                                
Mr. Beedle  responded that with the  generous support of  the State,                                                            
housing has  been provided at the  three major University  campuses.                                                            
Some community  campuses have also utilized general  funds to assist                                                            
in  their housing  needs.  Equity  that  has  built up  in  existing                                                            
housing  combined with  raising dorm  room fees  in facilities  that                                                            
have 100-percent  occupancy would  provide the necessary  funds. The                                                            
University  housing  has become  self-supporting  and  the Board  of                                                            
Regents has adopted policies  specifying that things such as housing                                                            
would be self-supporting.  While some campuses "need  a little help,                                                            
we are  "90-percent  of the way  there". Conventional  financing  is                                                            
achievable,  as the  University has  become "very  close 110  to 125                                                            
receipt to debt service".                                                                                                       
                                                                                                                                
Senator  Bunde  maintained   his  position  that  this   housing  is                                                            
subsidized housing. The  State could fund things such as this rather                                                            
than assisting the elderly.                                                                                                     
                                                                                                                                
     Biological Research and Diagnostic Facility                                                                                
     $4,760,000  Univ Rcpt                                                                                                      
     Reference  No.: 40032                                                                                                      
     Category:  University                                                                                                      
     Location: Fairbanks Areawide                                                                                               
     Election District: Fairbanks Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     The  new BiCS - Biological  Research  and Diagnostics  Facility                                                            
     (BiRD) is located  on the UAF West Ridge, the center of science                                                            
     and  research  activities  for  the UAF  Campus.  The  facility                                                            
     incorporates   program  components  and  space  for  laboratory                                                            
     animal holding and  care, procedure rooms, necropsy, diagnostic                                                            
     laboratories, incinerator, and administrative space.                                                                       
                                                                                                                                
Mr. Beedle  stated that the University's  current research  facility                                                            
houses thousands of research  animals. Previous funding was provided                                                            
by a GO bond in 2002. Due  to a funding shortfall at the UAF Campus,                                                            
the decision  was made to  allow federal research  funds to  pay for                                                            
the BiCS facility through  a University revenue bond mechanism. This                                                            
request would  allow the University to complete the  construction of                                                            
the facility.                                                                                                                   
                                                                                                                                
10:34:36 AM                                                                                                                   
                                                                                                                                
     West Ridge Research Logistical Support Facility                                                                            
     $7,000,000  Univ Rcpt                                                                                                      
     Reference  No.: 40033                                                                                                      
     Category:  University                                                                                                      
     Location: Fairbanks Areawide                                                                                               
     Election District: Fairbanks Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     As  Research Programs  expand on  the UAF  Campus, storage  and                                                            
     staging for  field equipment and archival space  are becoming a                                                            
     growing issue.  Many initiatives come with a  certain amount of                                                            
     field  research equipment that  is only used in the  summer and                                                            
     must  be stored though  the off season.  Grants also come  with                                                            
     stipulations   concerning   the  storage   of  research   data,                                                            
     specimens,  and  DNA  in  a  safe  collections  area.  The  new                                                            
     facility will provide  adequate secure storage for UAF research                                                            
     programs.                                                                                                                  
                                                                                                                                
Mr. Beedle shared that  a tremendous amount of research is conducted                                                            
in remote areas  of the State. This request would  allow the support                                                            
equipment  for such  research  to be safely  stored  in one  central                                                            
facility.  The design  has been  finalized and  sufficient  proceeds                                                            
would be available  to construct and  support the storage  facility.                                                            
                                                                                                                                
Co-Chair  Green  asked  whether  this  project's  receipt  authority                                                            
differs from the receipt authorities previously discussed.                                                                      
                                                                                                                                
Mr. Beedle  explained that  the receipt authorities  do differ.  The                                                            
receipt  authority for  this project  is based  on federal  research                                                            
grant receipts  that  would pay the  debt service  of revenue  bonds                                                            
that the University  would issue.  The previous receipt authorities                                                             
included such  things as donations to the University  Foundation for                                                            
such things as the Merrill  Field Aviation project, other donations,                                                            
and student receipts.                                                                                                           
                                                                                                                                
Co-Chair  Green  asked that  the funding  sources  for  each of  the                                                            
receipt authorities  be identified in terms of it  being a donation,                                                            
campus  receipt, federal  grant, or  other types  of receipts.  This                                                            
would provide further funding clarification.                                                                                    
                                                                                                                                
Mr. Beedle  stated that this information  is available and  would be                                                            
provided. The  Board of Regents had also requested  such a breakout.                                                            
                                                                                                                                
     Biological and Computational  Sciences Facility - Computational                                                            
     Component                                                                                                                  
     $600,000 Univ Rcpt                                                                                                         
     Reference No.: 40041                                                                                                       
     Category: University                                                                                                       
     Location: Fairbanks Areawide                                                                                               
     Election District: Fairbanks Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     Phased-new Project                                                                                                         
     Once complete,  Biological and Computational  Sciences Facility                                                            
     (BiCS)   will    provide   multi-use   lab,   classroom,    and                                                            
     computational  space for research  and academic purposes.  BiCS                                                            
     will  be constructed  in 4 phases. Phase  1, which constructed                                                             
     utilities  infrastructure   and  the  Biological  Research  and                                                            
     Diagnostics   Facility,  has  been  funded.   In  Phase  3A  of                                                            
     construction,  the Computational Element of the  Biological and                                                            
     Computational   Sciences  Facility  (BiCS)  will  provide  much                                                            
     needed  research  Computational  Science space  for the  Arctic                                                            
     Region Super Computer group.                                                                                               
                                                                                                                                
Mr. Beedle  stated that  this request would  provide for  continuing                                                            
infrastructure  development   planning  for  future  research  needs                                                            
associated with the West Ridge BiCS facility.                                                                                   
                                                                                                                                
10:37:00 AM                                                                                                                   
                                                                                                                                
     Rasmuson Reading Room                                                                                                      
     $5,000,000  Univ Rcpt                                                                                                      
     Reference  No.: 40042                                                                                                      
     Category:  University                                                                                                      
     Location: Fairbanks Areawide                                                                                               
     Election District: Fairbanks Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     The Rusmuson Library  Student Reading Room will provide a year-                                                            
     round  academic activity area  for students on the UAF  Campus.                                                            
     The facility is specifically  intended to provide an attractive                                                            
     gathering  space  for  students  and  group  settings,  and  is                                                            
     programmed  to  have  a variety  of  study and  seating  areas,                                                            
     conference rooms, and a coffee/snack bar component.                                                                        
                                                                                                                                
Mr. Beedle stated  that the Rasmuson Library is the  largest library                                                            
in  the  State.  "It  is  used  extensively  for  research  and  for                                                            
archives". The  reading room furnishings would be  "totally paid for                                                            
from private sources and/or students and/or concession" revenue.                                                                
                                                                                                                                
     Alaska Statehood Gallery                                                                                                   
     $1,400,000  Univ Rcpt                                                                                                      
     Reference  No.: 40044                                                                                                      
     Category:  University                                                                                                      
     Location: Fairbanks Areawide                                                                                               
     Election District: Fairbanks Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     Phased-underway Project                                                                                                    
     This project  proposes an addition to the University  of Alaska                                                            
     Museum  of the North  which would include  an Alaska  Statehood                                                            
     Gallery,  a  full service  café  and  dining area,  and  museum                                                            
     collections   management  space   (total  11,000  GSF)   at  an                                                            
     estimated  cost of $6 million.  The funding source(s)  for this                                                            
     addition  are planned to be totally private and  not to require                                                            
     state or university foundation money.                                                                                      
                                                                                                                                
Mr. Beedle stated  that the desire of this request  is to locate and                                                            
store historical  State documents in a Museum. Donations  would fund                                                            
the  project.  A  significant  amount  of  the  donations  would  be                                                            
received  as the result  of efforts  on the part  of Governor  Frank                                                            
Murkowski  and Congressman  Don Young.  Multiple  locations for  the                                                            
Museum are  being considered. The  project is conditional,  based on                                                            
the Board  of Regents approval  of it being  privately funded.  Were                                                            
this request approved,  this funding would be combined with previous                                                            
funding authority to provide  a total of six million dollars for the                                                            
project. Work  on the project would  not begin until the  funds were                                                            
raised.                                                                                                                         
                                                                                                                                
     Expansion of the Existing Anchorage Campus Megaplex structure                                                              
     $16,000,000 Univ Rcpt                                                                                                      
     Reference No.: AMD 40038                                                                                                   
     Category: University                                                                                                       
     Location: Anchorage Areawide                                                                                               
     Election District: Anchorage Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     Amendment                                                                                                                  
     This project  is an expansion  of the existing campus  megaplex                                                            
     structure, including  the Bookstore, Wells Fargo Sports Complex                                                            
     and  the  Student  Union  to  accommodate  student   enrollment                                                            
     growth,  expand  sports and  recreation opportunities  and  co-                                                            
     locate  student affairs functions  in the central campus  core.                                                            
     The  project  will improve  the  overall accessibility  of  the                                                            
     bookstore  and student affairs programs for students,  faculty,                                                            
     staff  and the public. The project  is consistent with  the UAA                                                            
      master plan as a priority for the 2003-2013 timeframe.                                                                    
                                                                                                                                
Mr. Beedle  reviewed  the project.  "It  is typical  that in  modern                                                            
University  settings, we expect  the students  to pay" for  services                                                            
such as those specified  in this request. Such things as student fee                                                            
assessments or bookstore proceeds would pay for the bonds.                                                                      
                                                                                                                                
     School of Nursing Facility                                                                                                 
     $6,000,000 Univ Rcpt                                                                                                       
     Reference No.: AMD 40039                                                                                                   
     Category: University                                                                                                       
     Location: Anchorage Areawide                                                                                               
     Election District: Anchorage Areawide                                                                                      
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project, Amendment                                                                                                
     UAA  is uniquely  situated, surrounded  by two  of the  largest                                                            
     hospital  complexes in  Alaska. As the  U-Med District  complex                                                            
     grows, partnerships  with neighboring institutions  continue to                                                            
     emerge.  For  the  past  year,   the  University  has  been  in                                                            
     discussion  with neighboring institutions about  partnership of                                                            
     joint use  healthcare training facilities. Recently  the Alaska                                                            
     Native  Tribal Health  Consortium and  the University  formed a                                                            
     workgroup  to  examine  the possibilities  for  constructing  a                                                            
     joint  use health-education  facility  on land  owned by  ANTHC                                                            
     north  of Ambassador  Drive along Bragaw  Street. This  project                                                            
     would fund planning efforts for the future facility.                                                                       
                                                                                                                                
Mr. Beedle  stated that UAA, in partnership  with the Alaska  Native                                                            
Tribal  Health  Consortium  (NTHC),  is proposing  to  develop  this                                                            
training complex  to train nurses  and allied health professionals.                                                             
The complex  would be located at the  Alaska Native Hospital  Campus                                                            
in Anchorage.  A portion of the facility  would be specific  to NTHC                                                            
and approximately  three floors would be used for  the Allied Health                                                            
and Nursing  Training.  Basic Integrated  Science  courses would  be                                                            
required  prerequisites   to the  Applied   Integrated  Science  and                                                            
Nursing courses. The UAA  Medical District adjoins the proposed site                                                            
and the University is excited  to work with NTHC. This request would                                                            
allow for the development  of a project funding mechanism, including                                                            
possible federal funding.                                                                                                       
                                                                                                                                
Co-Chair Green  asked whether the program would be  available to any                                                            
student.                                                                                                                        
                                                                                                                                
Mr.  Beedle assured  that  it would.  The program  would  be an  UAA                                                            
accredited nursing program with Statewide delivery.                                                                             
                                                                                                                                
Senator Olson,  noting that there is a nationwide  nursing shortage,                                                            
spoke in support of the program.                                                                                                
                                                                                                                                
Co-Chair  Wilken pointed  out that  the Small  Business Development                                                             
Center,  Reference  Number 40467,  had not  yet been  discussed.  He                                                            
asked for further  information about  how that project might  relate                                                            
to Small Business Development Project, Reference Number 40024.                                                                  
                                                                                                                                
Co-Chair Green  stated that another  project yet to be discussed  is                                                            
the  Procurement  Technical  Assistance  Center  Program,  Reference                                                            
Number 40468.                                                                                                                   
                                                                                                                                
     Small Business Development Center                                                                                          
     $500,000 Gen Fund                                                                                                          
     Reference No.: 40467                                                                                                       
     Category: University                                                                                                       
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     On-going Project                                                                                                           
     The Small Business  Development Center (SBDC) fosters, promotes                                                            
     and assists  the growth and development of small  businesses in                                                            
     the   State  of  Alaska   through   a  multi-faceted   business                                                            
     assistance  program.  The  Small  Business  Development  Center                                                            
     offers specialized  business assistance through its Procurement                                                            
     Technical  Assistance   Center,  the  Technology  and  Research                                                            
     Development  Center, Buy Alaska,  the Manufacturing  Assistance                                                            
     Center,  and the newly proposed  Alaska Performance  Excellence                                                            
     Award  program.  The  SBDC  fulfills  UA's  commitment  to  the                                                            
     citizens of Alaska  to provide lifelong learning opportunities,                                                            
     applied research, and economic development.                                                                                
                                                                                                                                
     Procurement Technical Assistance Center Program                                                                            
     $147,000 Gen Fund                                                                                                          
     Category:  University                                                                                                      
     Reference  No.: 40468                                                                                                      
     Category:  University                                                                                                      
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     On-going Project                                                                                                           
     The  Procurement Technical  Assistance  Center is a  nationwide                                                            
     program to  provide businesses with the marketing  know-how and                                                            
     technical  tools they need to  obtain and perform successfully                                                             
     under federal, state and local government contracts.                                                                       
                                                                                                                                
     Buy Alaska Program                                                                                                         
     $50,000 Gen Fund                                                                                                           
     Reference  No.: 40469                                                                                                      
     Category:  University                                                                                                      
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     The Buy  Alaska Program is a  partnership of the University  of                                                            
     Alaska  Small Business Development  Center, Anchorage  Economic                                                            
     Development  Corporation  and the Alaskan  business  community.                                                            
     The  program  assists  businesses,  consumers,  and  government                                                            
     entities  in finding competitive Alaskan sources  for goods and                                                            
     services.                                                                                                                  
                                                                                                                                
     Alaskan Performance Excellence Award                                                                                       
     $135,000 Gen Fund                                                                                                          
     Reference  No.: 40470                                                                                                      
     Category:  University                                                                                                      
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     One-Time Project                                                                                                           
     The   implementation   of  the  proposed   Alaska  Performance                                                             
     Excellence Award program  will energize Alaska organizations to                                                            
     improve  efficiencies and customer  and employee satisfaction;                                                             
     it  will provide  Alaskan  business, industry,  government  and                                                            
     other  organizations  a competitive  edge in  the domestic  and                                                            
     global  marketplace;  and it  facilitates  Alaska's  transition                                                            
     from a resource-based economy to a performance based economy.                                                              
                                                                                                                                
Mr. Beedle explained  that an error had been made  in regards to the                                                            
total budget for  the Small Business Development Project,  Reference                                                            
Number  40024. The  $832,000 total  request for  the Small  Business                                                            
Development  Center   (SBDC)  included  four  projects:   the  Small                                                            
Business Development  Center, Reference  Number 40467 for  $500,000;                                                            
the  Procurement  Technical  Assistance  Center  Program,  Reference                                                            
Number 40468 for $147,000;  the Buy Alaska Program, Reference Number                                                            
40469  for $50,000;  and the  Alaska Performance  Excellence  Award,                                                            
Reference Number 40470 for $135,000.                                                                                            
                                                                                                                                
Co-Chair Green  understood therefore,  that the expenses  associated                                                            
with all four SBDC projects  was inadvertently included in Reference                                                            
40024.                                                                                                                          
                                                                                                                                
Mr. Beedle apologized for  any confusion that might have resulted as                                                            
the result  of this SBDC funding compilation.  One GF authority,  in                                                            
the amount  of  $832,000, is  being requested  to  address the  four                                                            
projects.                                                                                                                       
                                                                                                                                
This concluded the University's capital budget overview.                                                                        
                                                                                                                                
Co-Chair  Green  announced  that  Pat  Pitney,  Director  of  Budget                                                            
Development  and Institutional Planning,  University of Alaska,  was                                                            
available, via teleconference, to address Member's questions.                                                                   
                                                                                                                                
Senator  Hoffman  asked regarding  the  plans for  the University's                                                             
unfinished facility  in the community of Dillingham.  The $1,200,000                                                            
designated  to the project is not  reflected in the University's  FY                                                            
06 capital request.                                                                                                             
                                                                                                                                
Mr. Beedle informed the  Committee that a $750,000 Federal Title III                                                            
grant has been  assured. This funding would be used  to complete the                                                            
classroom facility. Design  bid solicitations would be advertised in                                                            
approximately 60 days.                                                                                                          
                                                                                                                                
Senator Hoffman  understood that funding amounting  to approximately                                                            
$1,200,000  would be  required to  complete the  facility. He  noted                                                            
that he would discuss this further with Mr. Beedle.                                                                             
                                                                                                                                
Co-Chair Green thanked the University for its presentation.                                                                     
                                                                                                                                
Co-Chair  Green informed  Mr. Felix MaGuire,  who was participating                                                             
via teleconference,  that the Department of Public  Safety's request                                                            
for a New Anchorage Aircraft  Hangar, Reference No.: 40007, had been                                                            
referred  to a subcommittee,  chaired  by Senator  Bunde. She  asked                                                            
whether  he  would be  willing  to  discuss his  concerns  with  the                                                            
subcommittee.                                                                                                                   
                                                                                                                                
FELIX MAGUIRE  testified via teleconference from an  offnet site and                                                            
voiced that  he would discuss  his concerns  with the subcommittee.                                                             
Continuing,  however,  he  noted that  the  federal  government  had                                                            
appointed an  Aviation Advisory Board  (AAB) to the State,  and that                                                            
Congressional  legislation  is being  advanced that  would make  the                                                            
Board a permanent council.  "It is mystifying that that Board is not                                                            
being used as  a sounding board for this type of proposal".  To that                                                            
point, he urged the Committee to refer this project to the AAB.                                                                 
                                                                                                                                
Co-Chair  Green communicated  that  the subcommittee  would  discuss                                                            
this further with Mr. McGuire.                                                                                                  
                                                                                                                                
Senator Bunde,  subcommittee chair, noted that the  project would be                                                            
reviewed  by the  AAB and  its  findings would  be  provided to  the                                                            
subcommittee.                                                                                                                   
                                                                                                                                
Alaska Housing Finance Corporation, Department of Revenue                                                                     
                                                                                                                                
10:48:40 AM                                                                                                                   
                                                                                                                                
DAN  FAUSKE,   CEO/Executive   Director,   Alaska  Housing   Finance                                                            
Corporation, Department  of Revenue, stated that the  Alaska Housing                                                            
Finance Corporation  (AHFC) FY 06 Capital budget is  very similar to                                                            
the budgets  presented over the past  ten years. Notable  changes or                                                            
differing  budget  amounts  include the  Teachers  Housing  program,                                                            
which  has been  well  received. That  program  has  evolved into  a                                                            
combination  grant/loan program  that has  been expanded to  include                                                            
nursing housing  and possibly public  safety personnel. While  these                                                            
expansions to  the housing program are included in  the request, the                                                            
details with the various departments are still being discussed.                                                                 
                                                                                                                                
Mr. Fauske  communicated that  AHFC "is doing  very well".  The most                                                            
notable  issues  being  addressed  are  "on the  federal  side";  in                                                            
particular the changes  and reductions that are occurring nationwide                                                            
in the  federal  Housing and  Urban  Development  (HUD) program.  He                                                            
recently attended  meetings in Washington, DC to discuss  this issue                                                            
and he voiced optimism  that the moratorium that AHFC imposed on its                                                            
HUD voucher program, as  result of the federal involvement, would be                                                            
sorted out. AHFC is frustrated  that the federal HUD program ignored                                                            
the advice  of a four million  dollar study  HUD had conducted  that                                                            
advised them not to change  their approach to the Alaska HUD program                                                            
as "Alaska  was in a unique  position". The  process of getting  the                                                            
Alaska HUD program  back on track is underway. In  addition to their                                                            
impact  on  AHFC's  operating  budget,   the  federal  changes  also                                                            
affected AHFC's capital budget.                                                                                                 
                                                                                                                                
10:50:16 AM                                                                                                                   
                                                                                                                                
LES CAMPBELL,  Budget Director, Alaska Housing Finance  Corporation,                                                            
Department of  Revenue, noted that the AHFC capital  budget requests                                                            
are  compiled   in  a   booklet  titled   "Alaska  Housing   Finance                                                            
Corporation Budget  Summary 'Results-Oriented' FY  2006 Draft. Draft                                                            
Capital Budget, March 23, 2005" [copy on file].                                                                                 
                                                                                                                                
     Housing Loan Program/Teacher/Health Professionals Housing                                                                  
     $6,281,800 Corporate Receipts                                                                                              
     Reference No.: 37918                                                                                                       
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose of this program is to increase home ownership for                                                              
     low-income borrowers by subsidizing interest rates based on                                                                
     family income or family size.                                                                                              
                                                                                                                                
Mr.  Campbell   noted  that   these  funds   would  supplement   the                                                            
Corporation's   popular   housing   program  and   expand   business                                                            
opportunities  for providing  affordable housing  for Teachers,  and                                                            
health professionals, and public safety employees.                                                                              
                                                                                                                                
     Supplemental Housing Development Program                                                                                   
     $4,300,000 Corporate Receipts                                                                                              
     Reference No.: 6323                                                                                                        
     Category: Housing/ Social Services                                                                                         
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 06/30/2010                                                                           
     The purpose of the program is to supplement federal housing                                                                
     funds provided to Regional Housing Authorities to ensure safe,                                                             
     decent, affordable housing throughout Alaska.                                                                              
                                                                                                                                
Mr.  Campbell  stated  that   the  these  funds  would  be  used  to                                                            
supplement federal housing  funds in regards to such things as water                                                            
distribution,  sewer hookups, electrical distribution  systems, site                                                            
development, energy efficiency  improvements, and road construction.                                                            
The funds are  limited to 20-percent  of the total development  cost                                                            
per housing unit  and are prohibited from supporting  administrative                                                            
expenses of the Housing Authority.                                                                                              
                                                                                                                                
     Low-Income Weatherization Program                                                                                          
     $1,800,000 Federal Receipts                                                                                                
     $3,000,000 Corporate Receipts                                                                                              
     Reference No.: 6332                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose of the program is to provide cost-effective energy                                                             
     improvements to homes of low-income families.                                                                              
                                                                                                                                
Mr.  Campbell  read  the program  information  and  noted  that  the                                                            
weatherization  improvements  provided  by these  funds would  allow                                                            
moderate  and  low-income  families   to  obtain  decent,  safe  and                                                            
affordable  housing. Energy improvements  would include furnace  and                                                            
electrical repairs, woodstove repairs, and egress windows.                                                                      
                                                                                                                                
Senator Bunde asked the definition of low-income.                                                                               
                                                                                                                                
Mr. Campbell responded  that the low-income level  is based on HUD's                                                            
published rates. This information would be provided.                                                                            
                                                                                                                                
Co-Chair Green  agreed that it would be beneficial  to have the list                                                            
of program qualifiers.                                                                                                          
                                                                                                                                
     Senior Citizen's Housing Development Fund                                                                                  
     $3,500,000 Corporate Funds                                                                                                 
     Reference No.: 6334                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose of the program is to provide funds for the                                                                     
     development of senior citizen housing.                                                                                     
                                                                                                                                
Mr. Campbell read the program  description specified on page 3-17 of                                                            
the backup material.                                                                                                            
                                                                                                                                
Co-Chair  Green  noted  that  this funding  would  provide  for  the                                                            
projects specified on page 3-18 in the handout.                                                                                 
                                                                                                                                
     HUD Federal HOME Grant Program                                                                                             
     $750,000 Corporate Receipts                                                                                                
     $3,500,000 Federal Receipts                                                                                                
     Reference No.: 6347                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The  purpose  of  this  program  is to  expand  the  supply  of                                                            
     affordable, low- and  moderate-income housing and to strengthen                                                            
     the ability of the  State to design and implement strategies to                                                            
     achieve  an  adequate  supply of  safe,  energy-efficient,  and                                                            
     affordable housing.                                                                                                        
                                                                                                                                
Mr. Campbell  read the purpose  of the program.  He noted that  with                                                            
the exception  of the Municipality  of Anchorage, which has  its own                                                            
separate  program, this  request would  address AFHC  projects  on a                                                            
statewide basis.                                                                                                                
                                                                                                                                
     HUD Capital Fund Program (formerly CGP)                                                                                    
     $500,000 Federal Receipts                                                                                                  
     Reference No.: 6342                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose of this program is to provide management                                                                       
     improvements to the Public Housing program.                                                                                
                                                                                                                                
Mr. Campbell stated that  these federal funds are provided annually,                                                            
in  grant  form,  to  housing  authorities  "to  help  renovate  and                                                            
modernize public  housing units. These funds provide  for work items                                                            
outside  FY2003  bond  package  such  as: administrative   expenses,                                                            
tenant   education   projects,  drug   elimination   projects,   and                                                            
management improvements."                                                                                                       
                                                                                                                                
Senator Bunde  asked whether any negative  impact is anticipated  in                                                            
light of "the  federal deficit problem" and the fact  that the State                                                            
has historically  received a substantial amount of  federal funding.                                                            
                                                                                                                                
Mr. Campbell  stated that  these federal  modernization fund  levels                                                            
have decreased  over the past several  years. Therefore,  the actual                                                            
appropriated  amount  of the  $500,000  request for  the  management                                                            
improvement component is unknown.                                                                                               
                                                                                                                                
Senator Bunde cautioned  that it would be difficult to replace these                                                            
federal funds  with State GF were  they eliminated "at some  point".                                                            
                                                                                                                                
Mr. Fauske expressed  that this concern has been communicated  "loud                                                            
and clear"  to HUD. AHFC  would not be in  "a position comfortable"                                                             
enough  to present  the  Legislature  with  a request  "to  supplant                                                            
federal funding with AHFC corporate receipts".                                                                                  
                                                                                                                                
     Federal and Other Competitive Grants                                                                                       
     $1,000,000 Corporate Receipts                                                                                              
     $3,000,000 Federal Receipts                                                                                                
     Reference No.: 6348                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose of this  program is to allow AHFC to apply for HUD,                                                            
     other  federal  agency,  and  private  foundation  grants  that                                                            
     target the housing  needs and supportive services of low-income                                                            
     and  special  needs  groups   such  as:  senior  citizens,  the                                                            
     mentally,  physically,  or  developmentally  disabled,  or  the                                                            
     homeless.  AHFC will  also apply for  energy related grants  as                                                            
     they relate  to housing. When  required, AHFC will provide  the                                                            
     needed  matching  funds. Some  of the  funds  received will  be                                                            
     passed  through to local non-profit  sub-grantee organizations                                                             
     that deliver housing and/or services.                                                                                      
                                                                                                                                
Mr. Campbell  read  the purpose  of the  program as  denoted in  the                                                            
backup material.                                                                                                                
                                                                                                                                
Co-Chair Green  asked whether the  specified AHFC Corporate  receipt                                                            
match is a flexible percentage.                                                                                                 
                                                                                                                                
Mr.  Campbell  informed   that  each  program  has   its  own  match                                                            
specification.  The majority of federal  match levels range  between                                                            
ten and 50-percent.                                                                                                             
                                                                                                                                
     Competitive Grants for Public Housing                                                                                      
     $250,000 Corporate Receipts                                                                                                
     $750,000 Federal Receipts                                                                                                  
     Reference No.: 6350                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose of this  program is to allow AHFC to apply for HUD,                                                            
     other  federal  agency,  and  private  foundation  grants  that                                                            
     target  the  housing  needs of  low-income  and  special  needs                                                            
     groups  such as: senior citizens,  the mentally ill,  disabled,                                                            
     or the  homeless who  are eligible for  public and/or  assisted                                                            
     housing.  AHFC will also apply for grants to  prevent crime and                                                            
     substance  abuse in  public housing and  assist public  housing                                                            
     families attain economic  self-sufficiency. When required, AHFC                                                            
     will provide the needed match.                                                                                             
                                                                                                                                
Mr. Campbell read the purpose  of the program and noted that some of                                                            
these  funds "would  be passed  on to local  non-profit sub-grantee                                                             
organizations  that deliver housing  and/or services". This  program                                                            
is directed toward public housing recipients within the State.                                                                  
                                                                                                                                
     Energy Efficiency Monitoring Research                                                                                      
     $500,000 Corporate Receipts                                                                                                
     Reference No.: 6351                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose  of this project is to conduct research,  analysis,                                                            
     information  dissemination,  and interchange  among members  of                                                            
     the industry, as well  as, between the industry and the public.                                                            
                                                                                                                                
Mr. Campbell  read the  program purpose  and noted  that these  AHFC                                                            
funds  would support  "a designated  grant to  Cold Climate  Housing                                                            
Research Center to conduct  housing construction research, analysis,                                                            
and information  dissemination  among the  housing industry  and the                                                            
public. Data gathering  and analysis is being continually related to                                                            
energy  efficiency  technology  for homes  constructed  in  northern                                                            
building and market conditions".                                                                                                
                                                                                                                                
     State Energy Program (SEP) Special Projects                                                                                
     $30,000 Corporate Receipts                                                                                                 
     $300,000 Federal Receipts                                                                                                  
     Reference No.: 32526                                                                                                       
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The  purpose  of  this   program  is  to  allow  the  State  to                                                            
     participate  in special project  grants offered by the  Federal                                                            
     Department  of Energy  to promote energy  related technologies                                                             
     and research.                                                                                                              
                                                                                                                                
Mr. Campbell shared  that this funding would support  such things as                                                            
"building  technologies,   codes  and  standards,   wind  and  power                                                            
technologies  renewable energy for  remote areas, or transportation                                                             
technologies".                                                                                                                  
                                                                                                                                
Mr. Campbell  pointed out that the  ten AHFC requests to  this point                                                            
have been  included in  AHFC budget requests  for approximately  ten                                                            
years.  The following  six items are  new AHFC  projects that  would                                                            
support the Corporation's mission.                                                                                              
                                                                                                                                
     Information Systems Server Upgrades & Replacements                                                                         
     $ 335,200 Corporate Receipts                                                                                               
     Reference No.: 40066                                                                                                       
     Category: Housing/ Social Services                                                                                         
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The  purpose of this  project is to  replace or upgrade  server                                                            
     systems that are at or near the end of their life cycle.                                                                   
                                                                                                                                
Mr.  Campbell  stated  that  the  outcomes  of  this  project  would                                                            
include:  replacing systems/models  that are  at or near the  end of                                                            
their life cycles;  providing additional capacity  for normal system                                                            
growth;   improving    disaster   recovery   capability;    reducing                                                            
maintenance costs;  improving application performance  and improving                                                            
overall sever performance  upgrades. The computer systems that would                                                            
be addressed  are detailed in the  "Program Description"  section on                                                            
page 3-31 of the handout.                                                                                                       
                                                                                                                                
     Central Terrace                                                                                                            
     $941,910 Federal Receipts                                                                                                  
     Reference No.: 40067                                                                                                       
     Category: Housing/Social Services                                                                                          
     Location: Anchorage                                                                                                        
     Election District: 20                                                                                                      
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The  purpose of  this project  is  to provide  funding for  the                                                            
     disposition,  demolition or sales  of buildings in the  Central                                                            
     Terrace development                                                                                                        
                                                                                                                                
Mr. Campbell read the Phase 1 language on page 3-33 as follows.                                                                 
                                                                                                                                
     Central Terrace  Replacement-Phase 1 utilizes  Federal funds to                                                            
     replace   old   housing   stock   with   alternative    housing                                                            
     opportunities  in the Anchorage area. These funds  will be used                                                            
     to ready the units  for disposal, demolition, or for sale. AHFC                                                            
     will  apply  for Housing  Choice  Vouchers  on  a one  for  one                                                            
     replacement.                                                                                                               
                                                                                                                                
     Birch Park Window Replacement                                                                                              
     $1,323,000 Corporate Receipts                                                                                              
     Reference No.: 40069                                                                                                       
     Category: Housing/Social Services                                                                                          
     Location: Fairbanks                                                                                                        
     Election District: 9                                                                                                       
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose  of this project  is to replace all of the  windows                                                            
     in Birch Park I and Birch Park II in Fairbanks.                                                                            
                                                                                                                                
Mr. Campbell  read the  purpose and the  replacement information  on                                                            
page 3-35 as follows.                                                                                                           
                                                                                                                                
     Birch Park  Window Replacement utilizes Corporate  (AHFC) funds                                                            
     to replace  all the windows at  Birch Park I and Birch  Park II                                                            
     in Fairbanks.  Replacement of these windows will  reduce energy                                                            
     loss  and increase  comfort for  the residents.  These  windows                                                            
     need  to be replaced  to maintain the  structural integrity  of                                                            
     the buildings.  The new windows  will be commercial  grade with                                                            
     standardized   hardware.  This   project  will  lower   routine                                                            
     maintenance  cost  and provide  for health  and safety  issues,                                                            
     i.e. egress and security.                                                                                                  
                                                                                                                                
     Statewide Project Improvements                                                                                             
     $500,000 Corporate Receipts                                                                                                
     Reference No.: 40068                                                                                                       
     Category: Housing/ Social Services                                                                                         
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose  of this project  is to provide funding  to address                                                            
     known and unknown conditions in AHFC's housing stock.                                                                      
                                                                                                                                
Mr. Campbell  read the project  purpose language  and noted  that it                                                            
would "provide  structures and amenities  not currently programmed,                                                             
it will enhance  operations, allow  quick response to ordinance  and                                                            
code  changes,  and   provide  for  quick  response  to   unforeseen                                                            
conditions".                                                                                                                    
                                                                                                                                
     CO Detector Installation                                                                                                   
     $330,000 Corporate Receipts                                                                                                
     Reference No.: 40070                                                                                                       
     Category: Housing/ Social Services                                                                                         
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose  of this project is to install CO  detectors in all                                                            
     rental units of AHFC's housing stock.                                                                                      
                                                                                                                                
Mr. Campbell  read the program  purpose. The  required number  of CO                                                            
detectors  would be  installed  in each  housing  unit. The  project                                                            
would make AHFC compliant with both State and local regulations.                                                                
                                                                                                                                
      Statewide Fire Protection System Investigation Project                                                                    
     $380,000 Corporate Receipts                                                                                                
     Reference No.: 40071                                                                                                       
     Category: Housing/ Social Services                                                                                         
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The purpose  of this project  is to determine and document  the                                                            
     fire protection  needs for all  rental units of AHFC's  housing                                                            
     stock.                                                                                                                     
                                                                                                                                
Mr.  Campbell expressed  that  this  fire protection  project  would                                                            
"establish   a  database  for  maintaining   functioning   and  code                                                            
compliant systems.  It will also track the replacement  of smoke and                                                            
fire detectors  as well as  track the life-span  expiration  of fire                                                            
alarm panel components and systems".                                                                                            
                                                                                                                                
Co-Chair  Green   commented  that  the  CO  detector   system  might                                                            
eventually be a component of this project.                                                                                      
                                                                                                                                
     Homeless Assistance Program  - Mental Health Bill                                                                          
     $500,000 Corporate Receipts                                                                                                
     $500,000 Mental Health Trust Fund Receipts                                                                                 
     Reference No.: 6359                                                                                                        
     Category: Housing/ Social Services                                                                                         
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The  purpose  of  this  project is  to  support  programs  that                                                            
     prevent  homelessness  by providing assistance  to families  in                                                            
     imminent  danger   of becoming   homeless,  or  those  who  are                                                            
     currently homeless.                                                                                                        
                                                                                                                                
Mr. Campbell  read the  program information  and stated that,  "AHFC                                                            
funds "will be matched  by Mental Health Trust Authority funds. Both                                                            
funds will be combined and administered as one program by AHFC".                                                                
                                                                                                                                
     Beneficiary and Special Needs Housing - Mental Health Bill                                                                 
     $1,200,000 Corporate Receipts                                                                                              
     Reference No.: 6360                                                                                                        
     Category: Housing/Social Services                                                                                          
     Location: Statewide                                                                                                        
     Election District: Statewide                                                                                               
     Estimated Project Dates: 07/01/2005 - 6/30/2010                                                                            
     The  purpose of this  program is to  provide funds for  Alaskan                                                            
     non-profit   service  providers   and  housing  developers   to                                                            
     increase  housing opportunities  to Alaska Mental Health  Trust                                                            
     beneficiaries  and other special  needs populations  throughout                                                            
     Alaska.                                                                                                                    
                                                                                                                                
Mr. Campbell read  the program purpose and noted that  the projected                                                            
project outcomes,  as detailed on  page 3-45 of the handout,  are as                                                            
follows.                                                                                                                        
                                                                                                                                
        · Congregate housing for people with mental illness,                                                                    
          developmental disabilities;                                                                                           
        · Supportive housing, including assisted living for people                                                              
          with mental, physical, or developmental disabilities, or                                                              
          multiple disorders; and                                                                                               
        · Transitional housing with support services for newly                                                                  
          recovering alcoholics and addicts.                                                                                    
                                                                                                                                
Mr.  Campbell stated  that  the funds  could  be "used  for  housing                                                            
development and/or residential accessibility modifications".                                                                    
                                                                                                                                
11:08:23 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green asked whether  this request  would require  a Mental                                                            
Health Trust Fund Match.                                                                                                        
                                                                                                                                
Mr. Campbell replied that no match would be required.                                                                           
                                                                                                                                
Co-Chair  Green noted  that this project  has been  included  in the                                                            
AHFC budget  for numerous  years. To that  point, she asked  whether                                                            
the services  provided in this program  are required as part  of the                                                            
AHFC mission.                                                                                                                   
                                                                                                                                
Mr. Campbell affirmed that  these services have been included in the                                                            
Corporation's  strategic   plans  for  several  years.  This  year's                                                            
request is slightly  lower than previous years' $1,700,000  amounts.                                                            
                                                                                                                                
Co-Chair  Wilken,  referencing   the  Corporation's  Six  Year  Plan                                                            
specified  on page 3-47 of  the backup material,  asked whether  the                                                            
Plan  reflects  the  new  dividend  calculation  that  would  become                                                            
effective in FY 2007.                                                                                                           
                                                                                                                                
Mr. Campbell  affirmed that the Plan  reflects the revised  dividend                                                            
calculation methodology that would be implemented in FY 2007.                                                                   
                                                                                                                                
Mr.  Fauske   interjected   that   a  significant   amount  of   the                                                            
Corporation's  bond  obligations would  be paid  off by  FY 2007.  A                                                            
balance  of  approximately  $22  million,  down from  a  total  $103                                                            
million, in General Obligation  (GO) bonds would exist at that time.                                                            
As a result of this reduction  in debt service, the revised dividend                                                            
calculation  would equate  to approximately  the identical  dividend                                                            
level  the Corporation  shares  with  the  State under  the  current                                                            
calculation.  The business plan anticipates  growth in the  dividend                                                            
amount. "Our business plan is working".                                                                                         
                                                                                                                                
Co-Chair  Wilken  understood  therefore  that  a  decrease  in  debt                                                            
service  should   be  considered  when  analyzing  the  $60,000,000                                                             
difference  in the net income  of FY 2006  and FY 2007. Thus,  there                                                            
would be no  expectation that General  Funds (GF) would be  required                                                            
to replace the decline in net income.                                                                                           
                                                                                                                                
Mr.  Campbell affirmed  that  a $30  million debt  service  decrease                                                            
would occur in FY 2006.                                                                                                         
                                                                                                                                
[NOTE: Recording technicalities resulted in the remaining minute of                                                             
the meeting being unrecorded.]                                                                                                  
                                                                                                                                
Mr. Fauske agreed that the bonds would be retiring.                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Green adjourned the meeting at 11:10 AM.                                                                               

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