Legislature(2025 - 2026)SENATE FINANCE 532
02/18/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Cases, Judgements, and Settlements – Department of Law | |
| Fy 26 Budget Overview: University of Alaska – Senate Finance Subcommittee of Whole | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
February 18, 2025
9:01 a.m.
9:01:32 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
Senator Donny Olson, Co-Chair
ALSO PRESENT
Senator Cathy Giessel; Cori Mills, Deputy Attorney General,
Civil Division, Department of Law; Chad Hutchison, Director
of State Relations, University of Alaska.
PRESENT VIA TELECONFERENCE
Pat Pitney, President, University of Alaska; Alesia
Kruckenberg, Director of Planning and Budget, University of
Alaska.
SUMMARY
PRESENTATION: CASES, JUDGEMENTS, and SETTLEMENTS
DEPARTMENT OF LAW
FY 26 BUDGET OVERVIEW: UNIVERSITY OF ALASKA SENATE
FINANCE SUBCOMMITTEE OF WHOLE
Co-Chair Hoffman discussed the agenda. He relayed that
after a presentation from the Department of Law, the
committee would transition to have the chairman of the
Senate Finance Budget Subcommittee for the University chair
the remainder of the meeting.
^PRESENTATION: CASES, JUDGEMENTS, and SETTLEMENTS
DEPARTMENT OF LAW
9:02:39 AM
CORI MILLS, DEPUTY ATTORNEY GENERAL, CIVIL DIVISION,
DEPARTMENT OF LAW, introduced herself and relayed that the
Administrative Services Director was available to address
questions about numbers. She would offer information on the
department's $4 million supplemental request for the
Jeremiah M./ABC case, current judgements and settlements,
and statehood defense multi-year funding.
Ms. Mills discussed a presentation entitled "Alaska
Department of Law SUPPLEMENTALS, JUDGMENTS & SETTLEMENTS,
STATEHOOD DEFENSE MULTI-YEAR FUNDING" (copy on file).
Ms. Mills reviewed slide 2, "Supplemental Request - J.M.,
et al. v. Kovol, et al.":
May 2022: Filed in the United States District Court
for the District of Alaska
Plaintiffs: 14 children who are or were in custody of
the Office of Children's Services, represented by A
Better Childhood (ABC), a New York City non-profit
advocacy organization and local counsel in Alaska.
Suit is an "institutional" or "structural" reform case
asking the court to direct the State on how much money
must be spent on child welfare, exactly how that money
should be used, and other specific measures. If
successful, plaintiffs will likely ask the court to
award a third-party monitor to oversee compliance with
any injunction (to be paid by the State).
A vigorous defense by the State will help protect the
legislature's role to appropriate funds and shape
child welfare through legislation and appropriations
and reduce unnecessary oversight.
Ms. Mills relayed that there were many states that had been
sued by the A Better Childhood (ABC) group, and she had
background she could provide. She shared that the
plaintiffs were seeking a class certification, and seeking
recompense via damages. The plaintiffs were seeking
institutional or structural reform. In the state of Oregon,
the organization had been awarded $10 million for
attorneys' fees. She noted that about a third to one half
of states had been sued by the ABC organization or another
organization starting a decade previously. Some of the
states had been in consent decrees for a number of years.
She explained that there was background available to see
what had transpired in the cases, and the department had
been able to communicate with other states for information
on the cases.
Ms. Mills described that the department had filed an amicus
brief in support of state of California, which was fighting
a similar lawsuit. The department had received advice not
to settle. She relayed that the settlement agreements
caused the court to be more involved in the child welfare
system. She thought the state of Texas had spent $40
million for a court monitor after seven years. The
department was fighting the case. She noted that a trial
had been scheduled for May. There had been a status
conference the previous week and the trial was rescheduled
for August. She believed that the trial would be quick and
the department would be able to cut off discovery, which
was one of the most expensive pieces.
9:07:53 AM
Ms. Mills continued to discuss slide 2 and noted that the
request was for $4 million. She recalled that the
legislature had appropriated $1 million to the Department
of Family and Community Services (DFCS) which went to the
Department of Law to pay for reviewing over 4 million
documents in discovery. She thought discovery had cost $2
million thus far. She relayed that the department had
considered potential pre-trial, trial, and appeal costs,
and the $4 million was a total figure to get the case
through a final adjudication in appellate court. The reason
for the supplemental was due to already being in a deficit
for the year. The request was to complete the entire
process in three years.
Ms. Mills advanced to slide 3, "Judgments and Settlements":
Sargent v. DOLWD - $50.0 (attorney's fees)
SEACC v. DNR - $68.6 (attorney's fees)
Donkel v. DNR - $12.2 (attorney's fees)
Lane v. DFCS
Note: $ in thousands
Ms. Mills explained that within the budget every year,
there was a provision that paid for various judgements and
settlements that resulted from pre-litigation or
litigation. The cases listed were those that the operating
budget was unable to cover. The cases came through the
Department of Law, which did the litigation.
Ms. Mills addressed the first three cases on the slide,
which were all judgements for attorney fees to be paid to
the prevailing party. She relayed that the first case
listed was related to unemployment. She addressed the SEACC
v. DNR case, which involved the Southeast Alaska
Conservation Council (SEACC). The case had to do with
public notice and had gone all the way to the Alaska
Supreme Court. The case had pertained to when a land
conveyance amounted to a disposal of interest in state
land. The court had determined that the transaction was a
land disposal, which meant that certain public notice was
required. The prevailing party was SEACC, which was awarded
around $68,000 in attorney's fees.
Ms. Mills discussed Donkel v. DNR, which had to do with the
release of certain well log information, and disputed which
information had to be disclosed. The court determined that
the information had to be disclosed, and the state had to
pay Rule 82 fees. The fees thus far were $12,000. There was
an appeal as to whether the state had to pay more of the
attorney fees.
9:12:51 AM
Ms. Mills referenced slide 4, "Lane v. State, Dep't. Family
& Comm. Servs., OCS":
Background:
Plaintiff prevailed in a jury trial against the State
on claims of wrongful constructive termination and
retaliation, in violation of the Alaska Whistleblower
Act and was awarded $2,580.6 in damages, plus
interest.
On appeal, the Alaska Supreme Court generally affirmed
the jury's awards, but vacated for past and future
emotional distress and/or loss of enjoyment of life
and ordered a new jury trial to determine noneconomic
damages.
The parties settled in mediation for $1,800.0, with
interest accruing from March 2, 2020, and $699.0 in
Workers' Compensation benefits; $2,616.1 total due to
plaintiff.
Re-trial exposure was at least $550.0 with no cap; the
Workers' Compensation exposure was as much as $3,800.0
plus fees and costs.
Ms. Mills summarized that the fourth case was a
constructive termination case and had to do with wrongful
termination and retaliation with a worker in the Office of
Children's Services (OCS). The employee suffered physical
and mental injury. A jury had awarded damages to the
employee and found the state had done wrongful termination.
The court had not calculated the damages correctly. The
Alaska Supreme Court had affirmed the finding but sent the
case back down. The state settled the issue and damages and
had been able to mediate rather than going back to trial.
The reason for the amount was that the funds had to go back
to 2020 and included interest.
9:16:20 AM
Co-Chair Hoffman asked Ms. Mills to provide information
pertaining to all civil cases for the previous five years,
including what had been settled and what cases had been
won. He wanted to evaluate how the department had been
performing.
Ms. Mills was happy to provide the information. She
explained that department data was not filtered through
settlement or prevailing cases. She thought it might be
difficult to get granular information.
Co-Chair Hoffman thought the people of Alaska and the
legislature needed to evaluate how the Department of Law
had been performing on cases such as described as well as
others. He thought the performance evaluation was important
considering the state's constrained budget.
Ms. Mills thought Co-Chair Hoffman's reasoning was valid.
She noted that every year the department shared information
on what was collected in cases. She estimated that there
were about 5,000 active cases within a given year. She
thought the activity would be worthwhile to provide greater
understanding.
Senator Kiehl asked about the baseline amount in the
department's budget for judgements and settlements.
Ms. Mills relayed that the department did not have a
baseline. If the department did not have funds to pay
judgements and settlements, the funds might come from
another department.
Senator Kiehl asked if the cases referenced only cases for
which the department did not have the funding.
Ms. Mills answered affirmatively.
Ms. Mills discussed slide 5, "SUCCESSES IN FEDERAL ISSUES
LITIGATION
• Maintained the Incidental Take Regulation for Polar
Bears, ensuring no disruption to resource development
on the North Slope
• Kept commercial Chinook fishing open in Southeast
Alaska while the National Marine Fisheries Service
completes a new biological opinion
• Received favorable decision overturning the vast
critical habitat designation for ice seals that would
hinder resource development (On appeal)
• Stopped Federal Highway Administration from forcing
the state Department of Transportation to develop
Greenhouse Gas performance measures covering vehicles
on state highways (On appeal)
• Received recognition of Alaska's ownership of a
majority of Fortymile River (Remainder going to trial
in March)
• Secured access on trails for recreation and mining
around Chicken, Alaska (RS 2477)
• Joined with many others to ensure the Willow project
could continue (On appeal)
Ms. Mills noted that a couple of cases on the slide were
still on appeal. She discussed updates to the status of the
cases. She noted that the Willow Project was still on
appeal, and in the meantime it was able to continue
working.
9:21:20 AM
Ms. Mills showed slide 6, "MULTI-YEAR STATEHOOD DEFENSE
APPROPRIATIONS," which showed a bar graph depicting four
years of the statehood defense appropriations. She relayed
that there had been three main appropriations, one which
was split into two buckets. The first was in FY 21 for $4
million, which had been spent. The $2 million FY 23 amount
that would have gone through the current year had also been
spent. She noted that the department had $500,000 which had
been designed for Tongass National Forest litigation, which
had gone more slowly than anticipated. The department had
spent about $68,000 thus far. She cited that the last
appropriation for FY 24 to FY 26 was $5 million, $1.7
million of which had been expended.
Ms. Mills spoke to slide 7, "REQUESTING CONTINUATION OF
TEMPORARY INCREMENT
Last session, the Legislature approved a $500.0
temporary increment for FY2025, intending to add the
same increment for three years
This increment would total $1,500.0 over three years
(down from the $6,000.0 that was previously requested)
For FY2026, request to continue with the Legislature's
intent for $500.0
Ms. Mills addressed the temporary increment for FY 25,
which would lapse at the end of the year. With the
requested continuation and remaining funds, she thought the
department would be able to get through FY 26.
Senator Kiehl asked if there was an operating amount for
statehood defense in FY 24.
Ms. Mills went back to slide 6 and noted that in FY 24 the
department only had a multi-year appropriation, and then in
FY 25 it received $500,000 within the operating temporary
increment.
Senator Kiehl pondered the spending.
Ms. Mills answered affirmatively.
Ms. Mills showed slide 8, "Questions":
Cori Mills
Deputy Attorney General
Civil Division
(907) 465-3600
[email protected]
9:24:47 AM
Senator Kaufman asked if Ms. Mills saw any difference in
needs considering the change in federal administration.
Ms. Mills appreciated the question. She thought more would
become apparent in the following six months as federal
agencies were staffed. She relayed that the department was
seeing a lot of stays and continuances. She relayed that
the department's goals and guiding principles included
getting finality through court decisions.
Ms. Mills cited that there were over 80 cases involving the
federal government on some sort of jurisdictional or
federal authority issues. The state was aligned with the
federal government on some of the cases, and some not. Not
all the cases were funded with the multi-year
appropriation, which was intended to fund the increase. She
anticipated an increase in cases. She thought there might
be a lesser volume of cases in two years.
9:28:19 AM
Co-Chair Hoffman relayed that people came to him and asked
how the department decided on what cases to take. He noted
that 85 percent of people in his district were Alaska
Native, and had concerns about the direction the state was
taking that directly affected their lives.
Ms. Mills explained that in cases where the state was sued,
the state was in a position to defend or settle. When the
cases involved a statute, the department leaned toward
defending the statute. She noted that the department was
always evaluating settlements and looking at whether
mediation was the best course. She discussed proactive
cases, which were much fewer. Most proactive lawsuits were
child-in-need-of-aid or mental commitment cases. She
mentioned state sovereignty and jurisdiction cases, which
involved policy choices. She emphasized that the department
followed the policy direction of the administration. She
mentioned the issue of resources.
Co-Chair Hoffman recalled that 30 years previously there
had been issues with the state recognizing tribal
sovereignty. She asked where the state stood with regard to
the state recognizing tribal sovereignty.
Ms. Mills stressed that case law had made it clear that
tribes were sovereign. She knew there had been questions
previously and thought the department had withdrawn the
Attorney General's opinion on the subject. She pondered the
bounds of sovereignty. She mentioned special laws in the
state.
Co-Chair Hoffman asked what dialogue the state had taken
with the tribes to clarify the boundaries of sovereignty.
He asked whether it was an ongoing process or if the blurry
lines were to be settled in court.
Ms. Mills thought that currently the issue was endeavored
to be settled outside of court. She thought the area had
been lacking. She recounted that two years previously the
legislature had approved the addition of a tribal attorney
for the civil division in the department. The criminal
division now had one as well. She thoguht strides had been
made through dialogue regarding finding common ground. She
asserted that there would continue to be disputes and
pondered how to limit disputes. She noted that the
department website had a page devoted to tribal relations.
9:33:24 AM
Co-Chair Hoffman asked if there was current litigation with
tribes related to sovereignty boundaries.
Ms. Mills answered "yes." She noted that the major cases
involved suits against the federal government and involved
tribal interest. She mentioned land issues in Juneau and an
issue in Eklutna.
Co-Chair Hoffman asked if the Eklutna case was about
gaming.
Ms. Mills relayed that the Eklutna case was about land
designation and whether it was "Indian Country."
Co-Chair Hoffman acknowledged that the matter was complex
and relayed he had met with some of the members. He
pondered how a tribe could have a license from the federal
government and expressed the desire to have further
conversations with the department on the topic.
Co-Chair Hoffman handed the gavel to Senator Kiehl.
9:35:04 AM
AT EASE
9:36:17 AM
RECONVENED
^FY 26 BUDGET OVERVIEW: UNIVERSITY OF ALASKA SENATE
FINANCE SUBCOMMITTEE OF WHOLE
9:36:22 AM
Senator Kiehl discussed the agenda.
9:37:03 AM
CHAD HUTCHISON, DIRECTOR OF STATE RELATIONS, UNIVERSITY OF
ALASKA, introduced himself and listed University of Alaska
(UA) staff available online.
9:37:33 AM
PAT PITNEY, PRESIDENT, UNIVERSITY OF ALASKA (via
teleconference), discussed a presentation entitled
"University of Alaska Empower Alaska" (copy on file).
Ms. Pitney looked at slide 2, "University of Alaska
Alaska's System of Higher Education":
Empower Alaska
Pillars
• Financially Responsible and Future-Focused
• State & Arctic Leadership
• Quality Reputation
University/System Roles
• System Office Advancing Post-secondary
Education by Driving Value to the Universities.
Corporate structure required by State Constitution
• UAA Alaska's Comprehensive, Workforce Emphasis,
Health University: A University of
Distinction, Transforming Lives and Communities.
• UAF Alaska's Research and Arctic University:
Creating Excellence Through Transformative
Experiences.
• UAS Alaska's Experiential Learning University:
Impacting the World by Offering an Unparalleled
Education Rooted in the Natural and Cultural
Richness of Southeast Alaska.
Ms. Pitney mentioned the three pillars listed at the top of
the slide and discussed six strategic priorities including
achieving tier 2 research level, a deferred maintenance
strategy, and elevating UA's position as a leader in the
higher education space. The strategic priorities guided the
budget request.
9:40:22 AM
Ms. Pitney referenced slide 4, "Enrollment Highlights. She
noted that enrollment continued to increase. She discussed
reclassification of courses at UAA and noted that it had
impacted about 1,500 students in reporting. She noted that
if the data was normalized for the change, it showed
enrollment up in the range of 5 percent. First time
freshmen numbers continued to be in double digits and
overall enrollment continued to grow modestly.
Ms. Pitney emphasized one of the main budget requests was
recruitment and retention and increasing enrollment. She
noted that more than anything, UA's financial stability was
based on a stronger student body. She cited continued
increases in dual enrollment across the system. She relayed
that retention was at an all time high. She noted that
retention for Alaska Performance Scholarship (APS) students
was nearly 90 percent from freshman to sophomore year, with
close to a 60 percent graduation rate. She thanked the
members for support for the Washington, Wyoming, Alaska,
Montana, and Idaho (WWAMI) Program, and noted that the
program was growing from 20 to 30 students due to the
change.
9:44:15 AM
Ms. Pitney turned to slide 5, "FY26 Budget Request
FY26 Operating Budget State funding request $34.5M
• Compensation and other operating costs $24.1M
• Programs to support Recruitment, Retention &
Graduation $5M; Athletics $5M; Economic Growth $0.4M
FY26 Capital Budget
• Deferred Maintenance & Modernization-$60M (FY26) or
$35M annually
• Priority capital requests $24.6M ($144.4M total)
• Capital project receipt authority for externally
leveraged funds $59M
• Research programs and other Governor priorities $43M
Ms. Pitney explained that for the compensation and other
fixed costs, all but about $100,000 of the amount was
included in the governor's budget. She discussed the
economic growth funding for agriculture and noted the
program support was not included in the governor's budget
currently. She noted that a bill had been introduced in the
House that proposed to provide $35 million in annual
funding into the Major Maintenance Fund for UA. She thought
the consistency of the funds would allow for focusing the
capital budget on items unrelated to deferred maintenance.
She noted that for the 20 to 30 years that she had been
involved in the UA budget, deferred maintenance was always
at the top of the list. She emphasized the importance of
consistency of funding.
Ms. Pitney recalled that the last time UA had received $35
million on an annual basis was in the 2010 to 2015
timeframe, at which time UA had been able to keep the
deferred maintenance backlog from growing. She noted that
as debt service declined the funds would be reallocated.
She mentioned the goal of having the annual amount up to
$60 million per year, which was the depreciation level of
UA's facilities on an annual basis. Deferred maintenance
was still a top priority in the capital budget.
9:48:54 AM
Ms. Pitney mentioned an opportunity for a National Science
Foundation (NSF) grant for dock improvements, which was an
$18 million request. She discussed funding requests for
classrooms and readers archives. She discussed funding from
the previous funding from the legislature the previous year
for R1 research status, which was vetoed down to $12.5
million. There was currently $5 million in the capital
budget.
Ms. Pitney addressed questions she had received in advance
related to federal turbulence and what impact it might have
on UA. She relayed that the current executive orders were
disruptive and created uncertainty. She considered that
each of the orders had been put on hold through the courts.
She referenced a couple of days when funding was paused.
Beyond being disruptive, she did not see tremendous impact.
She mentioned the program Girls on Ice to encourage girls
into science programs.
Ms. Pitney summarized that for the most part, UA's research
agenda was aligned with the state and with the federal
administration. She thought there were about 1,500 grants
and contracts with about 5 percent that might be at risk.
She pondered how the federal government would prioritize
continued research. She commented on the small size of UA.
She felt comfortable that UA's research portfolio aligned
quite well with the federal agenda, and that UA was
positioned well.
9:55:02 AM
Senator Kiehl knew there were some members that had
expressed concern about coordination given them most recent
guidance from the United States Department of Education
with the Alaska Native Science and Engineering Program
(ANSEP). He was particularly concerned about the Preparing
Indigenous Teachers & Administrators for Alaska Schools
(PITAAS) Program. He asked Ms. Pitney to keep the committee
up to date on the issue.
Ms. Pitney agreed.
9:56:00 AM
ALESIA KRUCKENBERG, DIRECTOR OF PLANNING AND BUDGET,
UNIVERSITY OF ALASKA (via teleconference), considered slide
6, "FY26 Fiscal Summary-BOR vs Gov," which showed a table
of the UA Board of Regents' budget next to the governor's
proposed budget. She highlighted that most of the
compensation and fixed costs were supported in the
governor's budget. She expressed concern about the $4.9
million in one-time funding and UA receipt authority that
was needed to generate increased enrollment envisioned by
the programs. She mentioned $5 million for athletics.
Mr. Hutchison mentioned that the agriculture landfill
discharge request for $400,000 was included.
Ms. Kruckenberg mentioned the budget adjustments at the
bottom of the slide, which was trueing up and moving some
UA budget authority. She mentioned moving UA receipts at
the direction of the Office of Management and Budget (OMB).
Senator Kiehl relayed that the committee was happy to work
with UA to true up the books. He asked for an idea of how
much additional receipt authority UA was requesting.
Ms. Kruckenberg estimated that there was a five percent
buffer. She noted that UA had done its first comprehensive
financial review with the board recently and was still
working through the details. She noted that the
supplemental budget request was a little higher than the FY
26 request. There was always a concern that the budget was
inflated, and UA was working to get it as close as
possible. She offered to provide more specific numbers at a
later time.
10:00:14 AM
Ms. Kruckenberg displayed slide 7, "Fiscal Summary-Change
in Revenue," which showed a table. She directed attention
to the far right of the table, which showed projections of
how UA expected to increase its earned revenues. She
thought there would be $24 million in various types of
earned revenue which would help cover the compensation and
fixed cost increases. The request for state appropriation
versus earned revenue was about 50/50. She highlighted that
there was an estimate that tuition and fee revenue would be
up by $9 million from rate increase and enrollment
increases. The $2 million in other restricted funds was
overhead UA could earn on federal grants. She thought the
figure would have to be monitored closely.
She pointed out $7 million built in for federal receipts,
which was an increase of roughly 3.5 percent. She
highlighted $6 million in designated and restricted funds,
that was mostly auxiliary. She mentioned a post-Covid
deficit that had to be trued up. The numbers were being
monitored closely and those in serious deficit had plans to
discuss with the board.
Ms. Kruckenberg highlighted slide 8, "Fiscal Summary-State
Reports," which showed a table including the FY 25 and FY
26 budgets actuals from FY 22 through FY 24. She cited that
total revenue shown on the bottom was $944 million, while
year-end projections left a delta of roughly $106 million
that UA needed but did not have. She directed attention to
the $124 million listed in "other" and made note that if
receipt authority was not in the right place, it could not
be spent.
10:04:42 AM
Mr. Hutchison looked at slide 9, "FY26 Operating Budget":
Compensation $20.1M ($27.5M total)
Salaries and Benefits Increases $5.9M ($9.7M total)
• Wage increase for employee groups as required by
collective bargaining agreements
• Wage increase (2.75%) for non-union staff
• UA and UNAC reached a tentative agreement on a new
three-year contract.
• A funding request of $2.3M UGF ($3.2M total)
has been submitted to OMB
• UNAD contract expires in FY25 and no increase has
yet been negotiated for FY26
• Once a tentative agreement has been reached
with a union, a funding request will be made
through the appropriate legislative process
Health Care Increases $14.2M ($17.8M total)
• In FY26, the university's medical (including dental
and vision) plan is expecting an increase in premium
costs ($7M) and under-recovery from FY24 ($10.8M)
• Cost increases will be included in the FY26 staff
benefit rate charged to departments
Mr. Hutchison discussed the contract reached with United
Academics (UNAC). He mentioned the upcoming Board of
Regents meeting, at which time the contracts would be
discussed. He affirmed that he would submit an amendment
once the agreement had been made with United Academics -
Adjuncts (UNAD). He noted that a big portion of the
compensation increase was due to healthcare increases. He
made note of insurance increases.
10:08:07 AM
Mr. Hutchison addressed slide 10, "FY26 Operating Budget
(cont.)
Fixed Cost Increases
Cyber Security & Information Technology $825K ($2.7M
total)
This request will help fund, centrally managed
computing contracts for hardware and software
maintenance; site licensing; campus software and
contract licensing renewals; personnel cost increases
to recruit and retain IT professionals; and hardware
updates and training across the system to promote
network security.
Facilities Maintenance & Break/Fix Operating Costs $2M
($6M total)
Facilities maintenance funding is necessary to
preserve capital assets critical to UA's mission.
Several years of reduced operating budgets and minimal
capital funds have increased the ongoing risk and
evidence of costly and disruptive building failures.
Funding constraints have put additional strain on UA's
operating budget to fund preventative and current
facility maintenance needs.
Utilities Cost Increases $1.2M ($2.4M total)
This request covers the projected FY26 utility cost
increases at UAA and UAF. Cost increases include
utility expenses such as electrical, fuel, water, and
sewer; and commodity costs for utility inputs.
Mr. Hutchison referenced a UA publication related to
operating and capital budget requests known as "Redbook,"
which had been distributed to members and was available on
the UA website. He discussed cybersecurity and IT requests,
which included continual software and hardware upgrades and
maintenance. He noted that the figures shown were
predominantly funded in the governor's proposed budget. He
mentioned that UA was spending approximately $30 million
annually on preventative maintenance. He addressed
utilities cost increases and noted that Chugach Electric
had filed for a rate increase. He noted that much of the
increases had to do with rural campuses. The governor had
funded the amount in his proposed budget.
Senator Kiehl asked about electrical bills in Southeast
Alaska.
Mr. Hutchison relayed that the University of Alaska
Southeast (UAS) electrical bills were significantly lower
than in other areas of the state.
10:11:41 AM
Mr. Hutchison advanced to slide 11, "Program Requests":
Recruitment, Retention & Graduation Support $5M ($9.9M
total)
Requests will align with recommendations from EAB's
report.
• Marketing, Recruitment, Scholarships
• Advising and Enrollment Management
• Student Enrollment Services
• High Demand Program Expansion and Technology
Enhancement
• Campus Safety
Athletics $5M ($8M total)
Athletics initiative has community champions and would
provide reputational benefits to support future fiscal
stability. This request anticipates $3M of other
funding from UAA ($2M) and UAF ($1M) through
fundraising or internal reallocation.
Economic Growth for Alaska $375K ($975K total)
Ensure Alaska's resilience through food security &
research field safety and regulatory oversight.
Mr. Hutchison relayed that the BOR was very passionate
about the program requests listed on the slide. He made
note of a system-wide 1.1 percent gain in enrollment. He
mentioned declining enrollment in K-12 education. A
committee completed a review and report which would make
recommendations related to recruitment, retention, and
graduation support. He mentioned recommendations including
multi-model marketing, common data warehousing, and a pilot
program for tuition matching. He relayed that the governor
had talked to the president about boosting the working age
popoulation in the state, which could result in more
recruitment efforts. He mentioned an "enrollment funnel" at
UAF that had been successful.
10:16:09 AM
Mr. Hutchison continued to address slide 11. He mentioned
that UAS was considering two positions to bolster
recruitment in targeted areas. He mentioned a dual
enrollment coordinator that would be in Juneau and working
with all campuses in Southeast.
Mr. Hutchison discussed athletics as listed on the slide.
He stressed that athletics was related to marketing and
enrollment. He mentioned past cuts to athletics, which he
thought were still in the process of recovery. He mentioned
hockey, gymnastics, and skiing at UAA; and expansion to
Division 1 in hockey at UAF. He mentioned that there were
many constituents passionate about athletics.
Senator Kiehl thought he had missed the number for the
third university for athletics at UA.
Mr. Hutchison relayed that there were only two universities
in the athletics budget request.
Mr. Hutchison discussed the economic growth for Alaska
category listed on slide 11. He described diverting waste
stream landfills for soil amendments for $200,000, which
would be used to help bolster food security. Wastewater
from landfills would be used for fertilizer. The remainder
of the total request would be for research field safety. He
mentioned that much research was completed in hazardous
remote zones such as volcanoes. The software update would
provide updated technology for operating in the field.
10:21:03 AM
Senator Cronk discussed athletics and relayed that he was a
firm believer in being the best. He relayed that he went
through the athletics system and graduated from UAF. He
mentioned recruiting Alaska kids and competing at the
national level. He discussed UAF basketball and thought
there were only five scholarships. He thought there were
many urban and rural kids that could be part of the
program, but there was a lack of time for development. He
supported bringing more Alaska students to the program and
thought it should be funded. He thought the model had been
proven but the system had moved away from it.
Senator Kiehl asked about recruitment and retention
support, and investments in recruiting out of state and
internationally. He asked Mr. Hutchison to provide the
committee with more information on how the funds would be
split.
Mr. Hutchison agreed to provide the committee with the
information.
Mr. Hutchison looked at slide 12, "Recruitment, Retention,
Graduation (EAB)
• Jan 28th UA Board of Regents (BOR) received a report
with recommendations from consultant EAB
• Feb 6th BOR Ad Hoc Committee on Recruitment,
Retention, and Graduation met to prioritize
recommendations
• Feb 13th UA BOR Ad Hoc Committee met and recommended
the BOR adopt the recommendations, which included
developing a Systemwide Attainment Framework
(SAF) for recruitment, retention, and graduation
• Included developing metrics, targets, and a
dashboard to measure SAF progress and
jumpstarting some initiatives.
• BOR budget request includes $5M to support the
recruitment, retention and graduation efforts
• Marketing, Recruitment, Scholarships
• Advising and Enrollment Management
• Student Enrollment Services
• High Demand Program Expansion and Technology
Enhancement
Campus Safety
10:23:42 AM
Mr. Hutchison showed slide 13, "Legislative Discussion
Points
• What is the long-term solution to the UA's
outstanding deferred maintenance issues?
• The major maintenance and modernization fund
was a step in the right direction.
• What can be done to help slow rising insurance
costs? can the economics of pooling with the state
work?
Mr. Hutchison thought the president had covered the topic
of the slide. He mentioned HB 236 by Representative Stapp
the previous year, related to UA's Deferred Major
Maintenance Fund. He thought legislative discussions were
ongoing. He mentioned past looks at the economics of
pooling insurance that were not favorable. He asked if Ms.
Kruckenberg could address the FY 24 ratification.
Ms. Kruckenberg showed slide 16, "FY24 Ratification," and
noted that in FY 24, UA had expended more University
receipts than it had budget authority to spend. The system
had the revenue but had not had the authority. The bottom
part of the slide quantified the main cost drivers. She
mentioned Statutory Designated Program Receipts and an
increase of $5.5 million, which required receipt authority.
She mentioned a change in accounting practice for how UA
Foundation funds were utilized. She mentioned an increase
in land management and Natural Resource Fund activities.
She mentioned $11.4 million in unrestricted operations. She
mentioned the deficits in auxiliary and recharge
operations, which had to be balanced at the end of the
year. She emphasized that the situation was being more
actively monitored, and that it would not be repeated in
the future.
10:28:33 AM
Senator Kiehl thanked Ms. Kruckenberg for bringing the FY
24 ratification forward. He shared the concern and
appreciated Ms. Kruckenberg's assertion that it would not
be repeated.
Mr. Hutchison thanked the committee.
Senator Kiehl asked members to work with his office
regarding concerns and ideas. He discussed the agenda for
the following day.
ADJOURNMENT
10:30:21 AM
The meeting was adjourned at 10:30 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 84 LAW SFIN Budget Overview FINAL 2.18.25 (002).pdf |
SFIN 2/18/2025 9:00:00 AM |
SB 84 |
| SB 56 2025-02-18 UA Overview Presentation.pdf |
SFIN 2/18/2025 9:00:00 AM |
SB 56 |