SENATE BILL NO. 41 "An Act making appropriations, including capital appropriations and other appropriations; making supplemental appropriations; making appropriations to capitalize funds; and providing for an effective date." SENATE BILL NO. 54 "An Act making supplemental appropriations, reappropriations, and other appropriations; amending appropriations; capitalizing funds; and providing for an effective date." 9:04:21 AM PALOMA HARBOUR, FISCAL MANAGEMENT PRACTICES ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, discussed the presentation, "State of Alaska, Office of Management and Budget, Supplemental Budget SB54, Senate Finance Committee; April 18, 2023" (copy on file). She pointed to slide 2, "FY2023 Supplemental Budget Overview." Co-Chair Stedman queried the total number. Ms. Harbour replied that the total supplemental number for both operating and capital was $113.3 million in UGF; $50.6 million in DFG; $63.8 million other state funds; $125.8 million in federal funds; which totaled around $353.5 million. Co-Chair Olson wondered how close oil was to the projection of $87.50 per barrel. Ms. Harbour replied that as of April 10, 2023 the actual forecast was $83.55 per barrel. She explained that the price of oil exceeded that amount over the last eight days. Co-Chair Stedman queried the number of deficit in oil price projection for 2023. Ms. Harbour agreed to provide that information. Ms. Harbour looked at slide 3, "Operating Supps Department Summary." She noted that the large requests were the fire supplementals, Department of Corrections (DOC), Department of Public Safety (DPS), and University of Alaska (UA) bargaining unit increases. She noted that the highest request was $3.7 million for judgments and settlements. Ms. Harbour pointed to slide 4, "Capital Supps Department Summary." She outlined the specific requests in the capital budget supplemental. Co-Chair Hoffman queried the reason for the switch from general funds to designated general funds for UA. Ms. Harbour replied that it was mostly related to receipt authority. Co-Chair Hoffman queried the specific project. Ms. Harbour replied that the project was listed in the backup details. Ms. Harbour addressed slide 5, "Senate Finance Question Responses": Senator Wilson asked about FY2022 Fire Suppression/Preparedness activity and why there appears to be a lapse. There appears to be a UGF lapse in FY2022 Fire Suppression Activity, due to the $15 million in ARPA revenue replacement supplemental funding that was able to be utilized. Senator Bishop asked how much of the FY2023 fire suppression supplemental is remaining for fires. The supplemental submitted January 31st, was insufficient to cover spring fires. The supplemental budget amendments submitted February 14th, include the last $1.2 million needed to cover fires from Summer and Fall of 2022, as well as an additional $6.8 million for anticipated Spring 2023 fire activity. 9:10:38 AM Ms. Harbour pointed to slide 6, "Senate Finance Question Responses (Dollars in thousands)": Senator Hoffman asked about the Department of Correction's plan for managing situations where a correctional facility is over capacity. The Department of Corrections has recently taken proactive measures to ensure that correctional facilities do not remain overcrowded. Capacity levels are checked daily and as numbers rise at intake facilities, the Classification Unit, Central Transportation Unit, Facility Superintendents, and Institutional Probation Officers work together to develop a plan to move offenders to remain below capacity. Senator Hoffman asked about the Department of Correction's plan for managing situations where a correctional facility is over capacity. The Department of Corrections is using emergency contract workers to cover various work such as food services, maintenance, medical, mental health and education/programs where needed. The department is also using on-call non-permanent positions for medical, mental health, and administrative vacancies. These efforts provide coverage while recruiting for permanent classified positions. Ms. Harbour addressed slide 7, "Senate Finance Question Responses (Dollars in thousands)": Senator Stedman asked for more information related to the increased utility costs within the Department of Fish and Game as it relates to fuel needs for hatcheries. • Hatchery utility costs have risen over the past two years due to the volatility in fuel oil and natural gas prices in the Fairbanks markets. For example, rates increased at the Ruth Burnett Sport Fish Hatchery (RBSFH) for natural gas, fuel oil and electricity 4.8 percent, 142.4 percent and 50 percent respectively, between FY2020 and FY2022. For perspective, in FY2022, annual consumption rates were 207,495 CCF of natural gas, 34,700 gallons of fuel oil, and 1,485,840 KWH of electricitythis is substantial consumption, so even small increases in utility rates can have a large impact on cost let alone what has occurred. • In comparison, William Jack Hernandez Sport Fish Hatchery (WJHSFH) operates on electricity and natural gas. Prices have been stable in the Anchorage market. The FY2023 allocation for utilities to this facility of $880K reflects a $50K reduction from the FY2022 level of $931K to assist in covering the RBHSFH FY2023 increase. • Legislative authority appropriated to the new Anchorage and Fairbanks Hatcheries RDU in FY2023 is slightly less than the FY2022 level without any allowance to account for the higher utility/fuel costs. • Efforts are underway with the Department of Transportation and Public Facilities (DOT and PF) to conduct energy audits that hope to improve efficiencies at these facilities and translate into cost saving. Ms. Harbour pointed to slide 8, "Senate Finance Question Responses (Dollars in thousands)": Senator Kiehl asked about the methodology behind deciding which parks to re-open, and whether or not there's a prioritized list. The Division of Parks and Outdoor Recreation (DPOR) does not maintain a list or methodology to reopen parks because they are open to the public unless there is a reason to close. When situations arise that necessitate a temporary closure of a state park unit, DPOR works quickly to remedy and address those issues to reopen public access to outdoor recreation opportunities. A park unit may have a gate closed during the winter months due to management decisions or budget limitations. Gates are closed to many campgrounds in the wintertime across the state due to lack of ability to plow and staff the unit. Many of these areas are converted into wintertime recreational opportunities including groomed ski trails. The division also maintains management control and the ability to limit specific recreational uses within each. Ms. Harbour pointed to slide 9, "Senate Finance Question Responses (Dollars in thousands)": Senator Olson asked for additional details regarding the Advanced Air Mobility project. The Advanced Air Mobility (AAM) Infrastructure study will result in a report that will inform Alaska's build out of NextGen technology to improve aviation safety and reliability. The study will include an inventory of all existing state, public, federal, and military infrastructure assets and a gap analysis that highlights needs for the full implementation of AAM. Alaska is the most dangerous place to fly according to the FAA. The AAM is going to look at the current infrastructure and lack of infrastructure needed to keep our airspace safe. This study will highlight what we do have, what we don't have and some potential solutions. There's a lot of opportunities in front of Alaska to capture federal funding that can be utilized to improve the safety of Alaska's airspace. This study is exploring solutions that fit within current federal funding streams but will also highlight the needs that fall outside of current or conventional funding. Senator Bishop queried the person available from the Department of Transportation and Public Facilities (DOT/PF). Ms. Harbour replied that Mr. Pannone was online from DOT/PF. Ms. Harbour highlighted slide 10, "Senate Finance Question Responses (Dollars in thousands)": Senator Hoffman requested confirmation regarding whether or not there are shortages for ice roads that need to be addressed. Northern Region (NR) has $250.0 in their budget for ice roads. They received an increment of $50.0 in FY2013 for the ice road to Kiana (TORA with Northwest Arctic Borough (NWAB)) and $200.0 in FY2023 (Tanana, Rampart, and NWAB). To the best of NR's knowledge there are no additional needs or identified shortages for ice roads. In Alaska's Statewide Transportation Improvement Program (STIP), there is $2 million in federal funding for Ice Roads and Seasonal Roads Maintenance Program. The Department of Transportation established a Safe Ice Roads for Alaska (SIRA) Program for communities to competitively access funding for ice roads. This funding has been awarded to communities and the Native Village of Napaimute received just under $500.0 for over 200 miles. Ms. Harbour looked at Attachment 1 and Attachment 2 (copies on file). Co-Chair Stedman asked for the details of the attachments. Ms. Harbour looked at Attachment 1. 9:15:10 AM Co-Chair Stedman requested that the highlights be addressed on each item. Ms. Harbour noted that fire supplemental. Ms. Harbour noted that the Department of Administration (DOA) were all related to one issue, which was lease payments. Ms. Harbour noted some cleanup items for bargaining unit agreements. Ms. Harbour noted the items related to the Department of Education and Early Development (DEED). Senator Bishop noted that electricity rates had increased by 50 percent. Ms. Harbour stated that page 9 included additional costs to the Department of Fish and Game (DFG). 9:20:45 AM Ms. Harbour noted the supplemental ask from DPS. She continued to outline the details within the attachment. Senator Bishop wondered whether the maintenance operator wage issue had seen resolution. 9:24:15 AM DOM PANNONE, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, JUNEAU (via teleconference), replied that the department submitted a supplemental request for funding for the critical incentive pay in January. Senator Bishop wanted to ensure that the request was expedited to ensure the integrity of the workforce. Co-Chair Olson remarked on some damage to a jet engine from the Nome Airport. He wanted to know the mission critical status. He stressed that there was an individual component that allowed for application for the mission critical status. Mr. Pannone agreed. 9:25:46 AM Co-Chair Olson wondered whether there needed to be an increase to the amount available for mission critical status. Mr. Pannone replied that a 30 percent increase was effective when utilized as related to recruitment and retention. Ms. Harbour agreed. Ms. Harbour looked at page 24, as related to health insurance increases for the legislative branch. 9:29:17 AM Co-Chair Stedman requested a brief overview of all totals. Ms. Harbour replied that the total for operating supplementals was $102.4 million in UGF, $20.6 million in DGF, $15.2 million in other funds, and $115.2 in federal funds. The total for operating supplementals was $253.5 million. SB 41 was HEARD and HELD in committee for further consideration. SB 54 was HEARD and HELD in committee for further consideration. 9:35:32 AM AT EASE 9:40:52 AM RECONVENED