SENATE BILL NO. 32 "An Act making and amending capital appropriations and reappropriations and capitalizing funds; and providing for an effective date." The committee began to hear testimony from the departments on the impacts of the proposed appropriations. DEPARTMENT OF FISH AND GAME KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game testified. He addressed four projects that were reduced or eliminated in the subcommittee report. The department's highest priority was the STATEWIDE FACILITIES DEFERRED MAINTENANCE. Kevin Brooks pointed out that this and two of the other requests addressed deferred maintenance. It was important to the department to ensure the life, health and safety of the employees as well as members of the public who might visit department facilities. The request for this project was for $400,000, which would have addressed only ten-percent of their identified need. That amount had been reduced to only $200,000. The ability to address the projects was severely impaired. VESSEL AND AIRCRAFT MAINTENANCE AND REPAIR, was the second deferred maintenance project not granted at the requested level. Only a fraction of the identified need was included in the original request for $200,000. The subcommittee approved only half that amount. The department would need to ground aircraft before placing employees at risk, he warned. DOCK REPAIR MAINTENANCE AND REPLACEMENT was not funded at all in the subcommittee report. The King Salmon facility was the most critical and was used by both the department and the Department of Public Safety. Engineers' reports confirmed the need for repair. The final item Kevin Brooks addressed was the SOUTHEAST REGION VESSEL MAINTENCE SHOP. He explained that the Mental Health Trust Authority had selected the current facility under the land settlement agreement and the department would soon be evicted. It would take at least a year to build a replacement. The department also used the space for vessel and other equipment storage. Other state agencies housed operations in that facility as well. He noted that the Trustee's had an obligation to find the greatest return on the use of that land and the current use was not it. Senator Randy Phillips wanted to know if the department could utilize funding from the Exxon Valdez settlement. Kevin Brooks said that was not an option because the funds had to be used only in Prince William Sound. There was discussion about the location of the requested projects. It was stated that the use of the EVOS funds was carefully audited. Senator Loren Leman noticed the witness did not comment on either the Katchemak Bay or the Upper Cook Inlet research programs and asked if the research projects were a lower priority. Kevin Brooks responded that the department felt the Upper Cook Inlet research while important, was not as critical as the deferred maintenance needs. Senator Dave Donley asked if since the overall funds would be reduced, it would be more helpful to simply place all the deferred maintenance funding in one line item to allow the department to choose which projects to address. Kevin Brooks appreciated the suggestion but stated that the proposed $300,000 would not be adequate to fund the King Salmon Dock. That project had been separated out because it was larger than could be included in the general request. Co-Chair John Torgerson referred to front section language in Section 10 of the bill. Kevin Brooks explained that section detailed the rise in revenues created by the increased fees for commercial fishing crewmember licenses. The department had anticipated those revenues would be used for funding capital projects. He said adjustments might need to be made. Co-Chair John Torgerson asked the witness to review the language in SB 146 and let his office know if any changes needed to be made to fulfill the intent of the Legislature. Senator Al Adams thought the adjustments for compensating the vendors had been made in SB 146. Kevin Brooks said that the adjustments had been made but this addressed more of the mechanics of implementation because of accounting rules, certain recording methods must be followed. DEPARTMENT OF CORRECTIONS DWAYNE PEEPLES, Director, Division of Administrative Services, Department of Corrections testified. He addressed two items. MAINTENANCE, RENOVATION, REPAIR, RENEWAL AND REPLACEMENT was a $900,000 general fund request that had been reduced to only $450,000. Dwayne Peeples testified that the department operated thirteen correctional facilities across the state. The approximate replacement value of the facilities would be $320 million. He detailed the number of bookings and inmates served in the facilities each year, noting that this had a high impact. He also added that the facilities were in constant use 24 hours a day, 365 days a year. The current deferred maintenance, renovation, repair and replacement list exceeded $34 million. Of that amount, $13 million was for deferred maintenance. With the proposed allocation, the department would only be able to perform emergency repairs. This had been the pattern for the last several years and the department had only barely been able to maintain the facilities. The reduced allocation in FY00 would stress the department and curtail the ability to maintain the facilities at the current capacity, he warned. The other request Dwayne Peeples addressed was for $250,000 for security EQUIPMENT REPLACEMENT. The subcommittee reduced that amount to $125,000. The department identified over $2 million in needed replacement items. This would only address minimal emergency repairs. DEPARTMENT OF PUBLIC SAFETY KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety; and Colonel JOHN GLASS, Director, Division of Fish and Wildlife Protection, Department of Public Safety came to the table to speak to the impact of the proposed budget. The first item addressed was the Division of Public Safety request for $537,500 for KODIAK VESSEL REPLACEMENT. Colonel John Glass spoke of his experience with the division and the efforts made with the Legislature to replace the older vessels throughout the state. He specifically noted the need to replacement the vessel in Kodiak. The requested funding for this purchase would be accompanied by approximately $200 revenues generated by the sale of older boats. He listed some of the operations the vessel would be used for. The next item was the $1 million reduction to the AIRCRAFT AND VESSEL MAINTENANCE AND REPAIR. The subcommittee recommended funding $500,000, which would have to be split between the aircraft and vessels owned and operated by the department. Colonel John Glass told of the locations of the aircraft patrol areas. He stressed that it would be almost impossible to maintain the 43 aircraft owned by the department with only $250,000. As a result, five aircraft would probably have to be grounded. He detailed the repairs needed by those aircraft and listed their locations in Palmer, Craig and McGrath. The FISH AND WILDLIFE EQUIPMENT request had been reduced by $125,000. This funding was planned for the purchase of a riverboat for the Fairbanks region and a snowmachine for Cantwell. He shared with the members, news he had received that morning about and aircraft engine had just failed. This aircraft supported the VPO program in Western Alaska. The replacement cost of that engine was $35,000 and the airplane would be grounded until the engine was replaced. Failure to make these equipment replacements and repairs would essentially put the division out of business, he warned. He noted that most of the division's operations were performed off-road and were essential to maintaining the renewable fish and wildlife resources in the state. Senator Randy Phillips asked about the collection of fines through fish and game violations. He wanted to know how much money was collected. Ken Bischoff respond that money could only be used for operating expenses not for capital projects. Senator Al Adams felt that any earnings from forfeited equipment or fines should be available for use for capital projects. Ken Bischoff responded that the language did not allow that and said the attorney general's office could better address the reasons why. Senator Randy Phillips wanted to know if there were more fish and game violations this year than last year. Colonel John Glass believed there was an increase in violations, but noted there was also an increase in staff to patrol and discover the violations. Senator Loren Leman wondered if aircraft could be leased instead of purchased. Colonel John Glass said the division could not lease because there were no SuperCub aircraft available and no one willing to lease to the division due to the risk and liability involved. To use a different aircraft that might be available for lease would not be cost effective. It would cost more money to lease rather than buy. An example was a leased Cessna 206 used in Bethel for ten years. In that time, the division could have bought nine aircraft with the money spent on the lease. (Miscellaneous committee conversation.) Senator Randy Phillips returned to the issue of violations and noted the high number of violations probably had been occurring all along but were not discovered until more officers had been available to patrol. Colonel John Glass responded that was correct. Senator Pete Kelly asked for clarification of the amount of the vessel and aircraft maintenance and repair request. Senator Randy Phillips asked the number of staff in the division to enforce the fish and wildlife laws. Trooper Glass responded that there were 89 commissioned officers hired to enforce 586,000 square miles and 33,000 miles of coastline. DEPARTMENT OF HEALTH AND SOCIAL SERVICES JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services was invited to join the committee. She reviewed the impact statement focusing on three projects. The subcommittee had recommended $300,000 of the $750, request for DEFERRED MAINTENANCE, RENEWAL, REPLACEMENT AND EQUIPMENT. The Department of Health and Social Services had 35 state-owned facilities with a replacement value of over $200 million. The deferred maintenance needs were calculated at over $3 million. This request would provide funding for only twelve percent of the documented need. She noted most of their facilities operated 24-hours a day; however, only the most serious life, health and safety issues could be addressed. A list of projects had been provided showing what the deferred maintenance funds would be used for. It was the unknown expenditures, such as a boiler that could fail, that was the biggest problem. She had very serious concerns with the condition of many facilities. The next item of discussion was the request for $200,000 for FAMILY SERVICES FIELD SAFETY, OFFICE AND TRANSPORTATION EQUIPMENT. This was a request for equipment for the Division of Family and Youth Services that was broken into two sections. The first was for radios and cell phones for social workers. She explained the division had many social workers that went into remote areas and intervened with individual lives with potential serious circumstances. The social workers needed the ability to contact someone, such as law enforcement, for assistance if a situation worsened. Over the years, the department discovered that the division had not provided adequate equipment for the social workers as they went into the field. The second portion of the request was for vehicles with the division. Janet Clarke noted that many of the social workers used their own vehicles to go out on investigations and home visits. For example in the Mat-Su office there were 11 people sharing one state-owned vehicle. She warned of the liability issues and that the department did not want the social workers to be targeted because they were required to use their own vehicles for state business. She believed this to be an emergency situation. The final Department of Health and Social Services request addressed was $100,000 for PUBLIC HEALTH NURSING WIDE AREA NETWORD AND COMPUTER UPGRADE. The Public Health Nurses program had been fortunate over the past several years in that they were able to link their system with the federal government for case management information. As patients moved from one location to another, the patient records could be accessed on the centralized system of another public health nurse center. Janet Clarke told the committee this service allowed for tracking and treating outbreaks of certain illnesses. The Alaska Native Health Tribal Consortium notified the division that they would no longer provide the data transmission services at no charge. On an annual basis, the cost would be between $140,000 and $170,000. The $100,000 in this request would allow the establishment of an independent network and eliminate the reliance on the consortium. Tape: SFC - 99 #121, Side B 9:57 AM She continued by saying that this request would have paid for itself in the first year. Senator Lyda Green asked if it was true that some people obtained their health care from the public health nursing over many years. That was Janet Clarke's understanding. NANCY DAVIS, Chief, Nursing Section, Division of Public Health, Department of Health and Social Services came to the table and answered that was true. This was primarily the case in rural areas where public health nurses had been the consistent health professional visitors. She said some records dated back to territorial days. Senator Lyda Green then wanted to know if those records were not deposited in a hospital or other clinic. Nancy Davis said the public health nurses kept the records. She explained that the public nurses provided care across Alaska for natives and non-natives. When there was a communicable disease or other public health situation, public health nursing was the standard deliverer of those services. They worked closely with hospitals, local providers, and tribal health entities to do that. Senator Lyda Green asked if that was the case for Anchorage, Fairbanks and the Mat-Su area Nancy Davis replied had its own municipal health department and the state provided some grant support. In Mat-Su and Fairbanks, the state public health nurses performed those services. ALASKA HOUSING FINANCE CORPORATION (DEPARTMENT OF REVENUE) JOHN BITTNEY, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue testified. The board was currently holding a board meeting in Juneau and he introduced some of the members who were present. The reductions recommended by the subcommittee to the corporation were significant. The $38 million request was reduced by $31.2 million. John Bittney addresses some of the projects. The first was the $9 million SUPPLEMENTAL HOUSING GRANT PROGRAM that was completely eliminated. He described the services provided by the program to leverage HUD Indian Housing funds to regional housing authorities. The corporation provided twenty percent of construction costs, utility hookups, site development costs, water and sewer hookups, and energy efficiency designs. The LOW INCOME WEATHERIZATION was reduced from $4 million to only $1 million. The program had been steadily reduced over the past several years. With this level of reduction, John Bittney calculated that about 476 of the 850 planned homes would not be weatherized. The corporation had indication that there could be some problems with obtaining federal matching funds. If that were the case, approximately $600 federal funds would be lost. The corporation had requested funding five grants for the SENIOR CITIZENS HOUSING DEVELOPMENT GRANT PROGRAM. A total of $4 million was eliminated in the subcommittee's recommendation. Under this budget proposal there would be no grants available for senior housing development in Naknek, Wasilla, Talkeetna, Ketchikan and Homer. The impact spoke for itself, John Bittney said. He wanted to know what the Legislature intended them to do with the programs in future years without the funding. Would the programs be rolled into next year's grants? Should the corporation continue to try to develop senior housing? They were unsure and concerned about the future of the program. They would continue to work with the communities to realize these projects. The SENIOR/STATEWIDE DEFERRED MAINTENANCE AND RENOVATION request had been cut in half from the original $3.5 million amount. This was the major maintenance line item where a variety of smaller maintenance projects for all the public housing facilities. This did not include major renovation or overhaul projects. John Bittney noted that all of the public housing project major renovation projects were completely eliminated. These were the PHASE II MOUNTAIN VIEW/MOUNTIAN VIEW ANNEX; PHASE II PARKVIEW MANOR; SOUTHHALL MANOR RENOVATION; RIVERBEND MULTIPURPOSE BUILDING; and PHASE III CENTRAL TERRACE/FAIRMOUNT RENOVATION. He spoke to the use of the corporations bonding ability to fund deferred maintenance needs for the remainder of the state. This was done in the previous session under SB 360. The corporation was asked to use its own line of credit to issue bonds to assist the state with its own deferred maintenance needs. He said there was concern on Wall Street about the removal of the corporation's ability to keep up its own facilities while paying for other projects. The residents were the ones who would suffer. The lost revenues and costs associated with delaying a project were shown in the impact statement. The ENERGY EFFICIENCY MONITORING RESEARCH program was also eliminated. John Bittney explained this was a $350,000 corporate receipt request to work with state homebuilders to establish a method to generate data on the energy efficiency standards. The standards were mandated by statue for homes with mortgages purchased by AHFC and resulted in an extra cost for the builder and the consumer. Currently, there was no data from Alaska and very little from Canada to show how the systems performed. The final item addresses was the BUILDER AND RATER EDUCATION. State law required a minimum energy rating standard for any newly built home before AHFC could purchase the mortgage. This program allowed the corporation to train and certify raters so the homes could be rated to ensure those standards were met. Without this program, the corporation was unsure how it could meet the mandate. Senator Randy Phillips wanted to know how many units would be affected by the Senior Housing Grant program elimination. John Bittney answered 57 units. Senator Lyda Green wanted to know if each of the applicants for the Senior Housing Grant program provided information of other grants and funds they received that were contingent on this funding. John Bittney said they had and he could provide that information to the committee. He broke the information down by project. JEWEL JONES, Co-Chair, Alaska Housing Finance Corporation commented. She gave a history of the merger of the corporation with the public housing division. The corporation received accolades from Wall Street and communities across the state that the corporation was accomplishing its mission, which was housing. She stated that the corporation was part of the state and wanted to assist the state. However, the current 81 percent funding cut would hurt individuals. She listed names of people who used the corporation's services. "We can not ask people to continue to live in public housing projects that we cannot do the maintenance. That's not right and that's not fair." Public testimony was submitted requesting that the Low- Income Weatherization project not be cut. These people would have to pay extreme and extraordinary energy costs because of the lack of weatherization projects, according to Jewell Jones. Every day the corporation heard from seniors saying they needed more housing and more options. More seniors came to Alaska every day and needed these projects, she testified. Senator Al Adams noted that the intent of the Legislature with the capital budget was to meet the maximum amount of federal match. He wanted to know the match ratio on supplemental housing. John Bittney answered $9 was provided in the supplemental budget that was intended to cover twenty percent of the cost. Therefore, the match was five to one. The corporation had asked HUD to provide an outline of the federal funding available under this program. Senator Al Adams said that five-to-one match could get the state $45 million. He hoped it would be considered. Senator Gary Wilken said the information provided showed the $9 million request but zero federal funds. It appeared that it was not a required match. He wanted to know if that was the case. John Bittney explained that AHFC provided the grant to the regional housing authority and they applied those dollars directly to HUD. The corporation was not the pass-through agent for the federal dollars. Senator Gary Wilken suggested that in the future, if general funds did leverage federal funds in any manner, the information be provided. Senator Dave Donley pointed out that testimony given in the full committee stated that this program underwent a change this year. Last year it was a required match program, but this year it was no longer required. He noted that while it might facilitate federal fund appropriation it was not mandatory. John Bittney offered to provide the federal statute that stated the senator was essentially correct. There was not a stipulated dollar match required. Instead, HUD recognized the tribes across the state and provided housing funding to them. Each tribe received an allocation of a block grant from HUD. In these cases, the tribes chose to have the housing authorities continue to administer the program on their behalf rather than accept the grants directly. The housing authorities had the administrative network established to operate the programs. The federal statute dictated that there was a cost per unit cap on the number of HUD dollars that could go into each housing unit. The supplemental dollars requested here would allow for additional costs that the cap would not cover. That included the site development costs, utilities hook- up, etc. The housing authorities had to show HUD that the funds were in place to complete the project in order to receive the federal funds. If it there were not adequate funds to complete the project, HUD would not grant the funds. Senator Dave Donley noted there was a program called AHFC federal and other competitive grants. If there was a particularly good project, why couldn't it be funded under this program? Jewel Jones said Anchorage participated with matching grants to AHFC. However, AHFC had a mission to secure affordable housing in rural Alaska. Funding was available on the federal side, but the matching funds had to be provided. It was a three-way partnership with the regional authority i.e. the tribes, the federal government and the State Of Alaska. Senator Dave Donley said it was not really a required match program although it may leverage federal funding. Jewel Jones said it was a leverage and was necessary and important to be there, however it was categorized. Senator Dave Donley argued that it was only necessary and important if the project had the additional expenses involved. If the project could live within the HUD allocated cost, the additional funds would not be necessary. Senator Lyda Green wanted to know if there was a requirement in the language to the grant recipient stating that the funds would be used when applying for federal funds. John Bittney said there was and detailed. AHFC reviewed the planned project and knew where the funds would be spent once the appropriation was received. Senator Al Adams wanted to know an estimate of the percentage of the federal funds that returned to urban areas of the state in the form of labor or materials. John Bittney felt it was far more than half. ALASKA COURT SYSTEM CHRIS CHRISTENSEN, Staff Council, Alaska Court System, noted that none of the four requested projects had been funded in the CS. EQUIPMENT FOR COMPLETION OF THE AUTOMATED CASE MANAGEMENT SYSTEM was a $1.3 million request. A delay in funding this project would postpone the implementation of an integrated case information and processing system. Currently the courts were using a software system designed in 1981 and in many court locations using hardware that was two generations old to process case information. This was a very labor-intensive operation. There were many Range 8 and Range 10 clerk positions because there was not a modern computer system to handle the paperwork. For example, there was millions of dollars of trust money in the court's account that had to be accounted for completely by hand because the existing computer system could not do double entry accounting. Every year, the court has to come and ask for more clerk positions because of the lack of automation. This would delay the automation by at least one more year and continue the existing problems. The second request was for $4 million for DEFERRED MAINTENANCE PROJECTS. Four of the six listed projects were for roof replacements. Leaky roofs were the worst deferred maintenance needs to put off because of the other damage they cause. The next request was for $1 million for COURT SECURITY PROJECTS. Assaults and other violent conduct had become increasingly common at courthouses nationwide. Except for the Anchorage courthouse, court buildings around the state were designed in a different era when security was not a big concern. More members of the general public used the facilities each day than any other state agency except perhaps the university. The state had a duty to provide a safe and secure environment for these people. Without this funding, the current level of risk would be present for court staff, jurors, and other courthouse users. He believed the current level of risk was unacceptable. STATEWIDE COURT BUILDING CODE/ENERGY UPGRADE was the last item and requested $400,000. There were eleven courtrooms at six locations around the state that were out of compliance with the Americans with Disabilities Act. Delay in funding these projects exposed the state to potential litigation from users or public interest groups. OFFICE OF THE GOVERNOR There was no one present to testify on behalf of the budget recommendations for the Office of the Governor. RECESS 10:26AM / 1:38 PM Tape: SFC - 99 #123, Side A 1:38 PM [TAPE MALFUNCTION- RECORDING LOST] DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS PETER FREER, Supervisor, Southeast Regional Office, Division of Municipal and Regional Assistance, Department of Community and Regional Affairs testified. The first item was the request for the FLOOD MITIGATION ASSISTANCE GRANTS. Peter Freer detailed the services provided under this program that served approximately 30 communities. He noted this cost no general funds only federal funds. These are 100 percent federal funds made as a grant to the State Of Alaska from FEMA, the Federal Emergency management Agency. Funds were re-granted by the department to municipal governments on a three to one match basis to prepare Flood Mitigation Plans. Municipalities already having flood Mitigation Plans could use the funds for project activities such as elevating, acquiring or relocating structures in danger of flood damage. The $350,000 represented the department's receipt authority. The funds were pass-through only, with no funds retained for administrative costs. Without these funds the Department could not work with cities and boroughs to provide for flood mitigation planning, and to undertake projects that reduced or eliminated damage to property. RURAL DEVELOPMENT ASSISTANCE GRANTS. These were widely used to leverage funds for other projects. The RDA grant program was funded for almost forty years from the state general fund until three years ago; when funding for the program was eliminated. RDA funds provided a source of flexible capital up to $100,000 for rural communities to use on a variety of basic local projects such as landfill fencing, construction of a washeteria, or acquisition of fire fighting or EMS equipment. Demand for the funds historically had been many times greater than the amount of funds available. Neither the Capital Matching Grant program nor the RDA Mini-Grant program offered a one to one replacement for these funds. In the former case, the amounts available to rural communities were smaller; hence more limited in use; in the latter case, funds were pass-through grants from the US Department of Agriculture and must be used according to federal program requirements. ARCTIC WINTER GAMES TEAM ALASKA was an ongoing program that had been funded for many years in varying amounts. The arctic games occurred every two years, with the next games taking place in March 2000 in Whitehorse, Yukon Territory. This organization had been funded historically through this department since 1988 in amounts ranging from $73,300 to $610,000. The higher figures were for years that Alaska hosted the games. For FY99 they received a total of $155,000 and were asking for an additional $75,000 for the year 2000 games. These funds would be used primarily in two areas: 1) coordinating teams and coaches for participation in the games, negotiating transportation costs, purchasing uniforms, and similar activities, and 2) paying annual dues to the International Committee. Failure to provide funding could affect state participation in the games next March if Team Alaska was unable to pay the annual dues in November of this year. The final item for the department was the ALASKA NATIVE HERITAGE PARK. The park opened just last weekend. It received only one state appropriation in 1990. This would permit the grant earnings to be used. If not given, would require the facility to obtain a bank loan. Located in Anchorage, this $15 million project had received only one state appropriation, in FY90 in the amount of $500,000. The Heritage Park requested $800,000 each year in FY98 and FY 99, both denied. They were currently in the budget requesting $500,000 to assist in the final touches to the park. Appropriation of these funds would prevent the Heritage Park sponsors from the possibility of having to seek bank loans which, in turn, would have to be amortized from anticipated profits meant to be used for future maintenance and operation. DEPARTMENT OF NATURAL RESOURCES NICO BUS, Administrative Services Manager, Division of Support Services, Department of Military and Veterans Affairs and Department of Natural Resources. The first request was for $300,000 for completion of the LAND STATUS GIS PROJECT. He showed maps and cards. There were 200 townships left to be converted to this system. He noted how operations would be streamlined under this system. Zero funding would create serious problems for the department's record systems and jeopardize commitments to streamline government operations for industry. The funding would pay for automating land records. There were about 2000 mylars to automate, mostly in the Railbelt and Fairbanks area. Nico Bus then detailed the request for STATE PARK EMERGENCY REPAIRS. Funds were needed for campground repairs such as roads, level campsite pads, tables, firepits, circulation trails, boating facilities and ADA improvements. Specific repairs were needed at Johnson Lake (road repairs), Stariski (road repairs), Kodiak area (bear resistant food containers), Halibut Point (tables, firepits and ADA improvements) and Stormy Lake Swim Beach (sand replacement.) Trailhead and trail repair funds were needed for the Tonsina Point Trail Bridge, Point Bridget trails, Chugach State Park trails, and TRAAK engineering and support. There was a need for general facilities repairs to buildings, structures and maintenance. This would address critical repairs for state park ranger stations, maintenance shops, volunteer support facilities, picnic shelters and other structures. These included furnace and generator replacements, roof repairs, and volunteer cabins to reduce vandalism in parks. Toilet replacement and water system upgrades were necessary to replace old leaking toilets and to repair water systems to provide safe drinking water for park users. The final item was for the front section for REFORESTATION. After logging or a forest fire, it was important to reforest these areas to provide jobs and future resources. DEPARTMENT OF EDUCATION KAREN REHFELD, Director, Education Support Services, Department of Education, testified. BIA SCHOOL SITE CLEANUP request was $20,000 general funds. The subcommittee proposal eliminated funding that was targeted to begin a direct, phased program of site remediation and cleanup at former BIA school properties. There were approximately sixty BIA school sites. Some of these facilities were abandoned and deteriorating offering increased health and safety hazards to residents due to the presence of asbestos and other hazardous materials. There was increasing liability to the state as a result. These funds would be used to evaluate two sites, Grayling and Nightmute, to determine the scope of work necessary and a cost estimate for the remediation. The request for STATEWIDE ELECTRONIC DOORWAY (SLED) was $100,000. The subcommittee proposal eliminated funding. Without these funds, access to both the State and Legislature homepages would cease to be available to Alaskans who could not afford commercial Internet access or who lived in communities without private Internet providers. Access to basic medical, business and educational sites as well as to federal government information would also be terminated. Distance education students from around the state, whether they were home schooled, in correspondence programs, or enrolled in post secondary courses, used SLED to locate library and other resources in support of curriculum and educational programs. SLED was a cooperative project with the University of Alaska. The funds requested supported telecommunications costs for the 57 communities that accessed SLED via AkNet. Without these funds, SLED would not be available in those communities. HOME MODIFICATIONS FOR INDIVIDUALS WITH DISABILITIES, was only partially funded at $50,000 of the $100,000 request. These funds were used for home modifications for individuals with disabilities who, as part of their Individual Employment Plan, required these modifications in order to attain or maintain employment. The proposed reduction would limit the number of clients served through this program. Co-Chair John Torgerson asked if the BIA cleanup could be done with storage tank assistance funds. Karen Rehfeld responded that it could not because of the different cleanup requirements. Senator Lyda Green asked if the home modification program also served modifications to schools for students. Karen Rehfeld said it was only for adults and only in their homes. Senator Lyda Green wanted to know how long this program had been funded by the state. Karen Rehfeld answered it had been for several years. Senator Lyda Green noted other grants available in the mental health bill and wondered if the projects could be done under that program. Karen Rehfeld responded that she was not familiar with that program. DEPARTMENT OF REVENUE LARRY PRIESLY, Special Assistant to the Commissioner, Department of Revenue; PETER BUSHRE, Chief Financial Officer, Alaska Permanent Fund Corporation, Department of Revenue; and JOHN MALLONEE, Assistant Director, Child Support Enforcement Division, Department of Revenue; came to the table to answer any questions. There were none. UNIVERSITY OF ALASKA WENDY REDMOND, Vice President, University Relations, University of Alaska testified. The subcommittee dropped HUTCHINSON CAREER CENTER. It was funded last year. She noted the services it provided in vocational training for high school and older students. The intent was that it be a bonded project by the borough with a match from the university. If there were no funding from the university, the project would cease. A small amount of funding could allow it to proceed. SMALL BUSINESS DEVELOPMENT CENTER was transferred from the Department of Commerce and Economic Development to the University. Without the state match the program would die and Alaska would be the only state without a center. She noted the services the center provided. STUDENT RECREATION CENTER AT THE JUNEAU CAMPUS. This was a non-general fund request that would use program receipts. DEPARTMENT OF ADMINISTRATION BOB POE, Commissioner, and ALISON ELGEE, Deputy Commissioner, Department of Administration came to the table. Alison Elgee presented the department's impact statement. INFORMATION SERVICES FUND EQUIPMENT REPLACEMENT this allowed the department to take equipment that had become fully depreciated and replace it once it becomes unusable. It was done in a two-part rate. Failure to fund would not result in reduced rates but would slow the rate to serve the customers. She gave an example of a micro-encoding machine that was used for warrants. There was also a tape library the department wished to upgrade. Not doing so would raise operating costs. The second priority was PIONEER'S HOME HEALTH AND SAFETY REPAIRS. This request included only the most basic projects necessary to meet building codes. Of the $500,000 requested, the subcommittee only recommended $144,000. This amount would only fund one project in FY00, the Sitka Pioneer Home elevator mechanical upgrade. All other fire and life safety corrections would go unfunded. They included: Ketchikan Pioneers Home, fire alarm system upgrades, $69.4 (electrical code violation); Juneau Pioneers Home, emergency lighting, $25.5 (electrical code violation); Sitka Pioneers Home, emergency call system replacement, $60.0 (electrical code violation); Anchorage Pioneers Home, sidewalk railing, $39.8 (civil code violation); Fairbanks Pioneer Home, electrical upgrades, $32.2 (electrical code violation), and building structural analysis, $40.0 (architectural code violation); Palmer Pioneers Home, building structural analysis, $30.0 (architectural code violation); all homes, emergency capital funds, $58.1 (architectural code violation). These projects were badly needed. The $500,000 request was minimal capital funding and represented only the most critical needs of the approximately $18 million in known/existing code violations. There had only been minimal amount of funding over the last several years for these types of projects. The next request was $250,000 for the BETHEL COURTHOUSE TRANSFER. Failure to fund this request would mean that, as opportunities to move state agencies into the Braund Building in Bethel arose, funds would have to be identified from the individual agencies' budgets to facilitate the moves. PUBLIC DEFENDER CRIMINAL JUSTICE INFORMATION INTEGRATION PROJECT was a $400,000 request that was not recommended for funding by the subcommittee. Failure to fund the capital request would result in this agency starting the year 2000 with computer equipment and software that could not be made Y2K compliant. This would result in reduced productivity and inefficiencies in an agency burdened with a steadily increasing caseload. Failure to fund this project would once again delay the PDA's ability to coordinate with other criminal justice agencies. This agency would not have hardware or software capable of integrating with other elements of the system or using data currently available. This would continue to result in duplication of data entry and inefficient use of the state's resources. Additionally this agency's non-mission critical case management system would not be Y2K compliant. The current system was written in DOS and needs to be replaced. Without a case management system this agency would be reduced to reliance on paper records and hand searches, again a time consuming and inefficient use of state resources. Internal agency communication would remain fragmented without consistent access to legal research and data. This would result in efficient case processing and additional slowdowns in cases moving through court. This would impact not only this agency, but all other elements of the criminal justice system that rely on the efficient processing of information to move cases through the system. The INFORMATION TECHNOLOGY LITERACY PROJECT provided technology training for all State Of Alaska employees as well as University of Alaska staff, faculty and students by delivering on-line training to their desktop at work and at home. Established to meet statewide training needs by the Telecommunications Information Council in FY99, it was a partnership between a private company, the Gartner Group, the University of Alaska and the state. Currently, over 4,000 students were enrolled in the online courses with new courses and students added each day. Courses were available in all the most commonly used software such as MS WORD, EXCEL and PowerPoint as well as highly technical network and database management programs. The $175,000 would access a $4.5 million grant package to enhance information technology management and skills. Eliminating the state's contribution to the partnership would mean that the state's most cost effective means of training state employees in the rapidly changing world of information technology would not be available. Necessary employee training either would get done or more expensive options would be used. Currently, 3.345 users enrolled in courses. Travel conference fees and training fees were being eliminated from department budgets. The next item was the $500,000 request for BANDWIDTH INCREASE, which was not funded in the CS. The purpose of the project was to provide general funds for capacity increases to the state's network. Normally, capacity increases were funded through interagency receipts and rates for services. However, at the time rates were calculated and budgets prepared, agencies were not able to provide sufficient information regarding the projected impact of new applications on the state's network. This one-time capital request would provide necessary contributed capital for capacity increases until better projections, analysis and alternatives could be identified for providing data network services in rural areas and those solutions could be incorporated into ITG services and rates. Without funding, in order to meet the required bandwidth needs, agencies would see a significant rate increase due to the reliance on telecommunications as well as new applications deployed over the network. Much of this new dependency on bandwidth was the growth in automated processes encouraged by budget constraints. SATELLITE INTERCONNECTION PROJECT EQUIPMENT REPLACEMENT AND REPAIR was a request for $150,000 that the subcommittee did not recommend funding. The SIP provided essential news, weather, government, and educational information to all Alaskans through satellite delivery of several video and audio channels to 220 earth stations throughout Alaska. It carried Gavel to Gavel, the Alaska Rural Communications Service and Ready to Learn programming. It had a history of broadening services while reducing costs, taking advantage of the latest digital compression technology and integrated management across agencies and institutions. Funding would provide support for long-standing equipment repair problems with the system and start-up funds for project management to ensure self-sufficiency and cost- benefit. There had been no funding for four years for management or for repair and replacement of earth stations and transmitters. The system charge-back from communities had been less than effective, serving as a deterrent for trouble reporting, creating a deficit and weakening the systems' overall integrity. State funding would leverage non-state funding. Failure to fund would place the Emergency Alert System at risk. The next request was for $615,000 for the LAND MOBILE RADIO CONVERSION. The plan was to convert all two-way radio systems to allow interoperability of two-way radio resources at the federal, state, and local levels so that response to life threatening situations could be quick and efficient. It was planned for completion in 2006. Meanwhile there was an immediate problem with communication between different crews. Bob Poe added that during the Miller's Reach fire crews couldn't communicate. Failure to fund this request would jeopardize federal grant monies that required a matching grant. Senator Dave Donley asked if there could only be one pioneer home project other than the Sitka elevators, what would it be. Alison Elgee listed several requests and noted the specific code violations. Senator Dave Donley repeated his question of what one would she choose. Alison said there were no funds to deal with unanticipated contingency emergencies. That was what she would choose. Senator Loren Leman referred to the Public Defenders Office request in which she stated that the equipment was not Y2K compliant. He wanted to know the seriousness of the problem. Alison Elgee said the biggest problem was that the systems were unable to run the programs that were Y2K compatible. Senator Gary Wilken was under the impression that there was money left over from last year for some of the pioneer home problems. Alison replied that there was but it was not adequate for the critical needs. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT DEBORAH SEDWICK, Commissioner, Department of Commerce and Economic Development testified. The ECONOMIC DEVELOPMENT MATCHING GRANT PROGRAM provided a one to one match to a grant from the Economic Development Administration to provide planning and implementation funds for a variety of economic development activities and programs. It was an integral part of the Division of Trade and Development's developmental services and budget. The EDA grant would likely focus on rural development and economic diversification. Without the requested $100,000 appropriation, the state would be unable to obtain the federal funds. The other request was $200,000 in AIDEA receipts for the ECONOMIC DEVELOPMENT MATCHING GRANT PROGRAM. This program had been the cornerstone of the department since its inception. She listed the number of grants given and the amount of non-state matching funds garnered. In FY95 $35,000 was granted to the Metlakatla salmon bake facility. As a result the community was able to capitalize on the tourism market. They will now be able to use HUD funds to build an artist center next to the salmon bake. Norton Sound Halibut Processing Plant was another project. The plant contributed a $35,000 payroll to the community. BREAK 2:18 PM / 2:38 PM DEPARTMENT OF ENVIRONMENTAL CONSERVATION DAN EASTON, Director, Division of Facility Construction and Operation, Department of Environmental Conservation testified. The first item was the WATER QUALITY project request for $125,000 in general funds. The state did not have primacy for water quality decisions. Obtaining primacy meant that decisions about permits for use of state waters would be made by the state not the federal government. The regulated industry had stated a clear preference that the state pursues assumption of primacy for water quality. Preparing a plan for primacy assumption was no small task. The state must work closely with regulated industry, environmental groups and the federal government. Regulations must be prepared, fee structures determined staffing plans prepared and a transition plan from the federal government to the state prepared, submitted and approved. With denial of this increment, the state would not pursue a plan for assumption of primacy. MIKE CONWAY, Director, Division of Statewide Public Service, Department of Environmental Conservation spoke to the VILLAGE SAFE WATER request for $219,000. The Department of Environmental Conservation's FY00 capital budget request for the Village Safe Water Program included engineering feasibility studies in 27 communities and construction projects in 44 communities. This represented almost a forty-percent increase over the number of projects in the FY99 capital budget. The increase in projects resulted from a large increase in federal funding for village sanitation. The Division of Administrative Services provided administrative support to Facility Construction and Operation for its grant programs. The number of grants issued by FCO increases substantially. Requirements for frequency of payments were also increased at the direction of the Division of Legislative Audit. Existing administrative staff was fully utilized. The department would not be able to meet express payment requests and timelines for the FCO program without the additional administrative position. FCO project managers worked directly with the communities and other state and federal agencies to complete the projects. Each project was assigned to a single engineer who was responsible for getting the project started, guiding the community to an appropriate project design, helping the community while safeguarding the investment of state and federal funding as the construction progressed, and ultimately seeing that the project got built and operated by the community. The subcommittee proposal suggested that the department could accomplish this work with contracts rather than employees. The department would pursue contracts but could not state for sure that the contracting option would be successful. DEPARTMENT OF LABOR REMOND HENDERSON, Director, Division of Administrative Services, Department of Labor. There were three requests and the subcommittee recommended funding for all. He was available to answer any questions. There were none. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS There was no testimony given for this department which received 100% funding on its requests. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Co-Chair John Torgerson realized the department had not seen any amendment and that it was difficult for them to comment on any potential plans. He said he would reserve time at a later meeting for them to comment on the amendments. This concluded department testimony for the capital budget. Co-Chair John Torgerson announced the 6:00 PM evening to hear public testimony. ADJOURNED Senator Torgerson recessed the meeting at 2:45 PM. Minutes for public testimony on the FY00 capital budget are separate. SFC-99 (30) 5/5/99