Legislature(2023 - 2024)SENATE FINANCE 532
02/02/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Administration Response to Prior Meetings | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 2, 2024
9:17 a.m.
9:17:58 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:17 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
Senator Click Bishop
ALSO PRESENT
Lacey Sanders, Director, Office of Management and Budget.
PRESENT VIA TELECONFERENCE
Doug Vincent Lang, Commissioner Department of Fish and
Game, Anchorage.
SUMMARY
^ADMINISTRATION RESPONSE TO PRIOR MEETINGS
9:21:13 AM
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
referred to a letter dated "February 1, 2024" (copy on
file). She began with question 1:
1. What is the minimum balance for the Constitutional
Budget Reserve (CBR) Fund?
There is no statutorily or constitutionally required
minimum balance of the CBR. The CBR is a savings
account meant to cover projected expenditures of the
State when there is a deficit in projected revenues.
For the purposes of managing daily cash flow, a
minimum balance of $400 million to $500 million is
necessary to prevent adverse operational impacts.
Co-Chair Stedman asked about the impact of oil prices on
the CBR.
Ms. Sanders replied that one desire would be to have a
larger savings account, the administration recognized that
operations needed to continue with a balanced budget. She
stated that there was no set number desired by the
administration in the CBR, except the number to meet daily
cash flow needs.
Co-Chair Stedman remarked that there had been various
recommendations over the years.
Ms. Sanders replied that the state did not have a fiscal
plan for additional revenues to increase the CBR balance.
Ms. Sanders referred to question 7:
7. Is any of the salmon study funding in the
Department of Fish and Game (DFG) specific to chinook
stocks?
DFG has $4 million in federal receipt authority for
the Alaska Marine Salmon Program, which chinook salmon
is part of.
9:25:27 AM
DOUG VINCENT LANG, COMMISSIONER DEPARTMENT OF FISH AND GAME
(DFG), ANCHORAGE (via teleconference), responded that DFG
had instituted a marine science program to address the
issue regarding the juvenile salmon emigration from the
Yukon to the nearshore marine environment.
9:29:50 AM
Co-Chair Hoffman stressed that the fishermen in Bristol Bay
felt that the salmon issue was grossly mismanaged by DFG.
He queried the handling of the lawsuit, and the battles and
accusations among the different fishermen.
9:34:26 AM
Mr. Lang replied that the DFG was examining bycatch in the
marine fisheries. He remarked that there were caps on
bycatch in the trawl industry.
Co-Chair Hoffman felt that the hard caps were too high, and
should have a reexamination.
Mr. Lang shared that that the department was examining the
analysis of the bycatch hard cap.
9:40:35 AM
Co-Chair Hoffman felt that DFG should "think outside of the
box." He remarked that food banks needed products, so the
fish industry could contribute to the issue. He stressed
that there were many outlets that the department could use
to see what could be done about salmon distribution.
Mr. Lang agreed and stated the best market that the
department could control was the Alaska and US markets.
Co-Chair Stedman asked about the lawsuit related to
trolling and allocation changes.
Mr. Lang replied that the lawsuit stated that the trollers
were taking fish that were important to killer whales in
Puget Sound. He stated that the judge ruled that the
environmental allowances were flawed, and order a closing
of the troll industry. He shared that the state argued that
ruling, and felt that the impact on the food supply for
killer whales was small.
Co-Chair Stedman asked about the allocation change.
Mr. Lang stated that the decision between charter and troll
industries resulted in an 80/20 split, and determined how
that split would be in the final decision.
9:46:22 AM
Co-Chair Stedman requested that the response be drafted in
a memo and submitted to the committee.
Co-Chair Hoffman requested a written statement about the
large amount of salmon commercially caught by those outside
of the state. He stressed that 25 years prior, Alaska was
touted as the best fish management system in the world. He
felt that the management had slowly declined in quality.
9:50:35 AM
Co-Chair Stedman remarked that there was flexibility in the
lending agencies to deal with the loan issues. He felt that
the bigger issue related to dealing with inventory.
Mr. Lang agreed, and DFG was examining those issues.
Co-Chair Stedman asked for the recommendations to be
completed early for the governor to consider before the
amendment deadline.
Mr. Lang stressed that discussions required those in the
industry, so felt that the February deadline would be
difficult.
Co-Chair Stedman stressed that the February deadline was in
statute, and encouraged Mr. Lang to meet that deadline.
9:54:41 AM
Co-Chair Stedman referred back to question 1, and stressed
that meeting cash flow needs from the CBR was a requirement
within the budget.
Ms. Sanders addressed question 2:
2. Why is the Department of Commerce, Community, and
Economic Development (DCCED) preferable to the
Department of Health (DOH) for administration of food
bank funds?
Governor Dunleavy proposed $3,000.0 UGF as a
FY2024 supplemental appropriation to Department
of Commerce, Community, and Economic Development
(DCCED) to provide grant funding for food banks,
pantries, and other organizations that provide
food to Alaskans as soon as the appropriation is
made available. DCCED has capacity to assist the
Department of Health (DOH), in addition it has
experience with issuing grants through a grant
application process which may reach more entities
across the state. With the ongoing backlog with
the Supplemental Nutrition Assistance Program
(SNAP), appropriating the supplemental funding to
DCCED allows DOH to continue their efforts and
maintain their focus on resolving the backlog,
while expediting the funding to foodbanks, food
pantries, and other organizations to meet the
current, ongoing needs of Alaskans.
This is in addition to the proposed one-time
FY2025 appropriation of $1,500.0 to DOH. This
funding is a continuation of funding that was
allocated in FY2024 and allowed food banks to
make bulk purchases in an effort to promote food
security in the State.
Co-Chair Stedman handed the gavel to Co-Chair Hoffman.
Senator Wilson why the money had been moved between
departments.
Ms. Sanders replied that the Department of Health (DOH) had
received $1.2 million the year prior for grant funding for
food banks, and the money continued in the FY 25 budget.
10:00:06 AM
Senator Wilson stressed that DOH had significant issues
with that money, resulting in some disgruntled communities.
He felt that the Department of Commerce, Community and
Economic Development (DCCED) had a better handle on the
money.
Co-Chair Hoffman handed the gavel to Co-Chair Stedman.
Ms. Sanders addressed question 3:
3. Provide detail on the FY2024 $8.8 million
supplemental request for the Supplemental Nutrition
Assistance Program (SNAP).
Below is a breakdown of the $8,829.2 supplemental
request to Address the Supplemental Nutrition
Assistance Program Backlog.
Senator Kiehl wondered whether the hiring bonus was an
annual bonus.
Ms. Sanders agreed to provide that information.
Ms. Sanders addressed question 4:
4. What is the balance of the Regional Educational
Attendance Area and Small Municipal School District
School Fund (REAA Fund)?
The current unobligated balance of the REAA Fund
is $0. In FY2024, the entire fund appropriation
and fund balance was allocated to the 1 School
Construction project, Newtok K-12 School
Relocation/Replacement, Mertarvik. In addition,
per Alaska Statute 14.11.030(b), the unobligated
and unexpended cash balance of the fund may not
exceed $70 million. The fund capitalization in
the FY2025 Governor's Budget is $26,978.0.
Ms. Sanders discussed question 5:
5. Provide the total of the Regional Educational
Attendance Area (REAA) major maintenance list.
The Department of Education and Early Development
only produces one Major Maintenance Grant Fund
list each year that ranks REAA district projects
alongside city and borough district projects. On
the FY2025 Major Maintenance Grant Fund list,
there are 33 REAA school district projects that
total $111,139.4, which is approximately 45
percent of the total list. The first two REAA
projects are ranked at 2 and 9.
Ms. Sanders pointed to question 6:
6. Please clarify if Mt. Edgecumbe High School is
included in the REAA major maintenance list.
Mt. Edgecumbe High School (MEHS) is a division
within the Department of Education and Early
Development (DEED), as such they are considered a
State agency and their deferred maintenance needs
are prioritized amongst all State of Alaska
facility deferred maintenance needs and funded
through the statewide deferred maintenance
appropriation.
Furthermore, Alaska Statute (AS) 14.11.011, Grant
applications, outlines what school districts are
eligible to submit an application to DEED for a
school construction or major maintenance grant.
AS 14.16.050, Applicability of education laws,
outlines the provisions that would apply to the
operations and management of MEHS as if it were a
school district and AS 14.11.011 is not listed,
meaning MEHS would not be eligible to submit an
application for school construction or major
maintenance, and thus not eligible to be funded
under the REAA fund.
Senator Wilson recalled that the line item veto on the Mt.
Edgecumbe upgrades was because of the REAA major
maintenance availability. He wondered whether the
administration would correct that error in the line item
veto.
Ms. Sanders replied that the veto mentioned that it was
part of the deferred maintenance list for the state.
10:05:36 AM
Co-Chair Stedman agreed that there needed to be further
explanation on the reasoning of the veto.
Co-Chair Hoffman stressed that the problem was about
education, and did not feel that the school should compete
with deferred maintenance for the rest of the state. He
remarked that Mt. Edgecumbe should be included in a list
for all school major maintenance.
Co-Chair Olson stressed that there were safety and health
concerns in the maintenance requirements.
Co-Chair Stedman requested that the Department of Education
and Early Development (DEED) examine the issue around
transporting children during the winter break.
10:10:52 AM
Ms. Sanders agreed to provide that information.
Ms. Sanders pointed to questions 8 and 9:
8. Clarify the state share amounts for the School
Construction and Major Maintenance Grant Fund lists?
The total State share on the FY2025 School
Construction Grant Fund List is $260,489.8. The
latest school construction list can be found
here:
htps://education.alaska.gov/Facilities/final/FY25
ConstructionFinalList.pdf.
The total State share on the FY2025 Major
Maintenance Grant Fund List is $249,060.1. The
latest major maintenance list can be found here:
htps://education.alaska.gov/Facilities/final/FY25
MaintenanceFinalList.pdf.
9. What are the differences in amounts between the
FY2024 and FY2025 School Construction and Major
Maintenance Grant Fund lists?
The total State share on the FY2024 School
Construction Grant Fund List is $195,666.8. The
FY2025 list is $64,823.0 more than the FY2024
list. The final FY2024 School Construction Grant
Fund list can be found here:
htps://education.alaska.gov/Facilities/final/FY24
ConstructionFinalList.pdf.
The total State share on the FY2024 Major
Maintenance Grant Fund List is $217,866.8. The
FY2025 list is $31,193.3 more than the FY2024
list. The final FY2024 Major Maintenance Grant
Fund list can be found here:
htps://education.alaska.gov/Facilities/final/FY24
MaintenanceFinalList.pdf.
Ms. Sanders discussed question 10:
10. Provide the total amount of deferred maintenance
at the University of Alaska, and the amount of
proposed funding for this purpose in the FY2025
budget.
The University of Alaska's total deferred
maintenance backlog is approximately $1.4
billion. The following table provides the
breakdown of the total backlog amount by priority
projects, campus, and system wide services.
The Governor's FY2025 budget addresses deferred
maintenance needs of state departments, including
the University of Alaska, in a capital
appropriation titled Statewide Deferred
Maintenance, Renovation, and Repair and totaling
$28,222.5.
Senator Kiehl remarked that the capital request was 2
percent of the deferred maintenance. He remarked that
generally, 2 percent of the value of facilities was the
request. He queried the plan to get on top of the deferred
maintenance problem.
Ms. Sanders replied that the plan was to appropriate the
Alaska Capital Income Fund for deferred maintenance needs
in the state.
Senator Kiehl commented that it was not a good plan.
Ms. Sanders pointed to question 11:
11. What is the Department of Public Safety's schedule
of maintenance needs for their aircraft and marine
vessels?
The Department of Public Safety's aircraft and
vessel maintenance schedules are available on the
attached documents.
a. Attachment 1 - Department of Public
Safety Aircraft and Vessel Maintenance.pdf.
b. Attachment 2 - DPS PMS PV Stimson-Large
Class Vessel.pdf.
Senator Kiehl recalled a set of policies to prevent vessels
from going into the undetected maintenance problems. He
requested a list of those policies.
10:15:17 AM
Co-Chair Stedman requested that the subcommittee address
the question.
Ms. Sanders highlighted questions 12 and 13:
12. When did the Department of Administration start
the digitization process for Payroll Services? How
much has been invested thus far?
This question appears to be referencing IRIS HRM
(Integrated Resource Information System Human
Resources Management) implementation and its
impact on timesheets. Before IRIS, the State
utilized a home-grown Enterprise Resource
Planning system which consisted of two pieces,
AKSAS (Financial) and AKPAY (Human Resources). In
FY2015 the State started using IRIS Financial and
fully implemented IRIS with the implementation of
HRM in FY2018. With implementation of HRM most of
the State agencies kept utilizing their manual,
paper-based processes. Some of this was due to
convenience, challenges with configuration, and
system limitations. Since the recent upgrade to
IRIS Advanced, the system has more capability and
functionality; this will further expand with the
move to the cloud. Most of the timesheets that
flow through payroll are still hand audited, and
manually entered into the system.
Instead, the "Continuation of Payroll
Digitization" project refers to an expansion of
the approved FY2024 capital project of $2.2
million to obtain equipment and programming that
will allow for digital payroll processing to
eliminate the printing of timesheets for
processing and retention. For more information on
these two projects please see the attached
documents.
Attachment 3 FY2024 Capital Project
Digitization of Payroll Services and
Recruitment.pdf.
February 1, 2024 Page 5 of 7
Co-Chairs Stedman, Hoffman, and Olson
Attachment 4 FY2025 Capital Project Expand
and Complete Digitization of Payroll Services and
Recruitment.pdf.
13. Please provide an overview of the timesheet
process for State employees.
The cloud migration of IRIS and employees
processing their own time sheets are unrelated
processes. Yes, IRIS is in the process of
transitioning to the CGI Cloud; however, the
payroll digitization project is independent of
the cloud migration. The project for Digitization
of Payroll will not change how other departments
submit their timesheets. Rather, this project
will modernize the processing aspects of the
payroll process on the back end, streamlining a
process that is intensive in labor, supplies, and
time, into a digital platform which reduces
printing, routing, editing, and storage of paper
documents to a faster and more cost-efficient
methodology in the long run. This expansion is
needed to complete the project and include all
duties and tasks that can be digitized that are
currently performed by payroll services,
including timesheet auditing, payroll production
data entry and distribution, Personnel Action
Request Form (PARF), Letter of Agreements,
payroll production tasks, and expanded
infrastructure to help address manual entry
timesheets.
With the completion of this project, those
scanned images will be stored electronically
rather than being printed and stored in file
cabinets. This improved process will have
numerous benefits including: 1) electronic
records will be cataloged and easy to search; 2)
payroll services will no longer need to print and
retain thousands of documents, which currently
increase the total lease costs of the division
unnecessarily; 3) increased efficiency and
timeliness in processing nearly 15,000 timesheet
documents every two weeks. The FY2025 capital
request is to fully fund the process that was
started by FY2024 capital appropriation.
Co-Chair Stedman felt that the issue was most appropriate
for the subcommittee.
Senator Kiehl remarked that there would be redundancies, so
he wanted to work on the next stem in ensuring
efficiencies.
Co-Chair Stedman wanted to examine the possibility of
automation.
Senator Wilson looked at the document from FY 24, and
stated that it did not mention that it would be a multi-
step project.
10:20:13 AM
Ms. Sanders replied that she was not part of the
conversations, but stated that it was intentional that it
be multi-phased. She agreed to follow up on that issue.
Ms. Sanders addressed question 14:
14. Was the Department of Fish and Game research
vessel disposed of or sold? If it was sold, what is
the status of the proceeds? And what is the life
expectancy of the new vessel?
The Department of Fish and Game's (DFG) research
vessel was disposed of for $100.0. The $100.0
received for the disposal was retained by the
division and the proceeds will be used for
deferred maintenance for other divisional assets.
The life of a large asset can be hard to
determine. It is highly dependent on DGF's
ability to do routine maintenance. The other
large vessels in the DFG fleet were acquired as
follows:
Research Vessel (R/V) Solstice 2005
R/V Resolution 1971
R/V K-Hi-C maintained and operated by
the Division of Commercial Fisheries since
1996; owned by the Kodiak Island School
District
Co-Chair Stedman remarked that the issues would be address
in the subcommittee process.
Senator Wilson queried the life expectancy of the vessels.
Ms. Sanders indicated that she would provide that
information.
Co-Chair Olson wondered whether it was normal for the
department to keep the proceeds from the liquidation of an
asset.
Ms. Sanders replied that an appropriation was required for
a department to maintain the proceeds.
Co-Chair Stedman stated that the remaining responses would
be scheduled at a future meeting. He stated that the next
meeting would be the following Tuesday morning.
ADJOURNMENT
10:23:57 AM
The meeting was adjourned at 10:23 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020224 Admin Response to Prior Meetings DNR LFD DOR.pdf |
SFIN 2/2/2024 9:00:00 AM |
Department Responses |
| 020224 DOR Response to SFIN Fall 2023 RSB Presentation 01.30.24.pdf |
SFIN 2/2/2024 9:00:00 AM |
|
| 020224 ttachment 5 - FY2025 Capital Project 65234 - DOTPF Stwd PFAS Fleetwide Foam Replacement.pdf |
SFIN 2/2/2024 9:00:00 AM |
|
| 020224 DOR Slides to SFIN Fall 2023 RSB 02.02.24.pdf |
SFIN 2/2/2024 9:00:00 AM |
SB 2 |
| Attachment 4 - 020224 FY2025 Capital Project Expand and Complete Digitization of Payroll Services and Recruitment.pdf |
SFIN 2/2/2024 9:00:00 AM |
|
| 020224 Attachment 3 - FY2024 Capital Project Digitization of Payroll Services and Recruitment.pdf |
SFIN 2/2/2024 9:00:00 AM |
|
| 020224 Attachment 2 - DPS PMS PV Stimson-Large Class Vessel.pdf |
SFIN 2/2/2024 9:00:00 AM |
|
| 020224 Attachment 1 - Department of Public Safety Aircraft and Vessel Maintenance.pdf |
SFIN 2/2/2024 9:00:00 AM |
|
| 020224 02.01.24 SFIN OMB Follow-up to 01.22.24 Hearing.pdf |
SFIN 2/2/2024 9:00:00 AM |