Legislative Budget and Audit July 30, 1997 8:00 a.m. Legislative Information Office Anchorage, Alaska Tapes LBA97#6 Side 1 017-363 CALL TO ORDER Chairman Phillips convened the meeting of the Legislative Budget and Audit Committee on July 30, 1997, at approximately 8:06 a.m. in the Legislative Information Office Conference Room in Anchorage, Alaska. PRESENT Representatives Senators Rep. Martin Chrm. Phillips Rep. Croft Sen. Adams Rep. Hanley Sen. Pearce Rep. James Sen. Torgerson Rep. Therriault Rep. Bunde ALSO PRESENT Mike Greany, Director, Legislative Finance Division; Nico Bus, Administrative Service Manager, Department of Natural Resources; Annalee McConnell, Director, OMB; Joan Brown, Budget Analyst, OMB; Jerry Lee Soltani, Senate Finance Secretary; Jerry Burnett; Dean Brown, Division of Forestry, Anchorage. REVISED PROGRAMS RPL 10-8-4010 Fire Suppression Joan Brown, Budget Analyst for OMB, proposed RPL 10-8-4010 to request additional federal receipts for the fire suppression component in the amount of $7,500,000. The funds are necessary due to the heavy fire activity Department of Natural Resources (DNR) has been experiencing on Federal lands. The fire fighting expenditure has averaged over $270,000 per day. Nico Bus, Administrative Service Manager, Department of Natural Resources (DNR) reminded the Committee of DNR's request for emergency disaster declaration for the General Fund on July 14, 1997. Most of the money requested on July 14th has been utilized. Since that time, activity on Federal land has increased from $280,000 to $350,000 per day. As of July 29th, DNR has exceeded its appropriation of Federal funds by $5,300,000. Thus, DNR's request for $7.5 million dollars to continue fighting the fire. The requested funds wil be reimbursable by the Federal government. In addition, the unusually dry weather patterns are predicted to continue for another week. The $7.5 million is necessary to finish fighting the present fires as well as to send crews to the Lower 48 to fight fires there. Dean Brown responded to Chrm. Phillip's question regarding the fire size, stating the fires have burned 715,410 acres. The Inouk fire south of McGrath is currently 482,000 acres. The Inouk fire is a Federal fire and all expenses are totally reimbursable from the Federal government. Chrm. Phillips asked for further expansion from Ms. Brown. Dean Brown introduced herself as Deputy Director, Division of Forestry in charge of Fire and Aviation Resources. She stated that as of that day, 58 fires were burning. The largest fire is the Inouk fire at 482,000 acres. A total of 340 personnel are currently fighting the Inouk fire. The three villages threatened by that fire are currently out of danger. In fact, she continued the active portion of the fire has shifted from the southern perimeter to the northern perimeter. Since July 1, Ms. Brown noted that there have been 151 fires to fight. There have been 503 fires fought within the State of Alaska out of a total of 634 fires statewide. Currently there six Type I crews, three of which were brought in from out-of- state. There are eighteen Type II crews, which are primarily the village crews. There is a tremendous commitment of eleven helicopters. In addition, there are six more than normal of summer contract aircraft beyond the normal fleet, hired for rental for detection and for flying crews and supplies. Ms. Brown continued that the fire situation is severe and compounded by a high pressure weather system extending from north of Dillingham up through the Inouk fire area. That weather pattern is anticipated to remain in place and stable for at least one more week or ten days. Dry lightening is starting new fires. In addition, we have diverted from the normal fire plan in which fires allowed to burn at this stage, in the event that fires start where they will be difficult to contain and threaten life and property in that area. The situation is taking all the Forestry commitment with 90% of the in-state Federal commitment of forces on the fires in Southwest Alaska. In addition, we have been bringing in overhead, but not crews, from out-of-state to fight the fires. Ms. Brown stated that the issue today is that the large expenditure and majority of the fires are now occurring of Federal land, meaning the State would be totally reimbursed for this expenditure. However, the Forestry Division does not have enough authorization at this point. In the meantime, it appears that the fire situation will continue for at least another weekend. Chrm. Phillips asked for questions from the Committee. Sen. Pearce requested clarification regarding the $7.5 million in additional authorization that was followed by a later mention of $5 million. She asked if that means that the DNR is already $5 million into the $7.5 million. Nico Bus stated that the $5 million was the regular appropriation for Federal funds for Fiscal Year 1998. That appropriation has been completely exhausted. The $7 million dollars would be starting from yesterday and put toward the activities of the projected balance of FY 1998. Rep. Bunde asked Ms. Brown whether the policy had changed from the normal fire suppression program due to extenuating circumstances. Did that mean that remote fires are not being allowed to burn? Ms. Brown, Division of Forestry, stated that at this time of year, all remote fires would normally be allowed to burn. Due to the dry fire conditions and extreme fire behavior, some fires have been attacked that are close to villages or that would have threatened something. However, fires are still allowed to burn where they will not have any deleterious effect. Chrm. Phillips asked Mr. Greany for recommendations. Mr. Greany, Legislative Fiscal Analyst, stated it was a straight- forward request for which he recommended approval. Chrm. Phillips asked for further questions. No further questions being asked, Rep. Martin MOVED for approval of RPL 10-8-4010 for a total of $7.5 million dollars to the Department of Natural Resources for Fire Suppression. Chrm. Phillips noted the MOTION and asked for an oral vote. Rep. Bunde stated that it appeared that with $250,000 per day being spent over the next 10 days, against $7.5 million, that the DNR should anticipate spending only $1.25 million dollars. Dean Brown projected that in the next 10 days to a month the DNR would be responding to fires in the Lower 48 with crews from Alaska. Rural fire crews are reimbursed for marketing themselves out-of-state. In addition, many fires occur in the spring with a majority of those fires on Federal land. Chrm. Phillips asked Ms. Brown to confirm that there were currently eleven helicopters and six small planes being used on the Inouk fire. Dean Brown stated that these aircraft were in addition to the usual contract planes for the State and for the Alaska Fire Service. Chrm. Phillips asked if there were any further questions. The MOTION passed unanimously, APPROVING RPL 10-8-4010. Sen. Torgerson asked Chrm. Phillips to clarify his decision on the request regarding the Department of Transportation (DOT). Nancy Slagle had called him to ask for approval of an RPL that came out several days ago. This RPL authorized the bond proceeds from the sale for moving the Soldotna maintenance facility for DOT. The information was not disseminated to the committee members and public notice was not given, so the RPL will be held until the 21st so the proper public notice can be given. Sen. Pearce asked how long the LBA meeting on the 21st would last. Chrm. Phillips responded that the LBA meeting is anticipated to last about 2 hours with a start at 1:30 p.m. on the 21st. Rep. Therriault stated Nancy Slagle had just arrived in Fairbanks. Sen. Torgerson reiterated that he did try to get the DOT RPL on the agenda. However, it was necessary to give public notice and provide the Committee members with copies. Nancy Slagle asked if it was likely that the RPL would be taken up before the meeting on the 21st. Chrm. Phillips stated that it was unlikely that the Committee would meet before the 21st. Nancy Slagle noted that in a week to ten days, the DOT would have been able to award a contract. If the RPL was not approved today that this would create a timing problem, resulting in the loss of the current bid. This would mean that the contract would have to be re-bid, increasing the cost of the process as well as delaying the project. Sen. Torgerson asked why the Committee was not made aware of the RPL until yesterday, when the Bill was signed two and a half months ago. Nancy Slagle acknowledged that that was true. In working with Legislative Finance and Legislative Audit, it was felt that the August 7th date would be adequate for DOT's needs. When DOT realized that the August 7th meeting was not going to happen, they realized the timing would be difficult. Sen. Torgerson asked if the bid was not good through the 21st and would have to re-bid. Ms. Slagle stated that if the DOT did not have the authority to approve that expense, the bids would be lost. Then the contract would have to be re-bid. Mr. Greany added he and Randy Welker had been looking for a solution to this problem. The last Legislature passed a bill authorizing the Soldotna maintenance facility be authorized using the Certificate of Participation financing mechanism. However, an attendant appropriation mechanism was not put into place to authorize either the department to spend the money for that purpose nor to provide the debt service on those COP's once issued. Randy Welker and Mr. Greany have been looking to see what other mechanisms would be available to deal with the issue in the interim by the Budget and Audit Committee. At this point, Mr. Greany asked the Committee to approve the COP proceeds as a new statutory designated program receipt. One technical problem exists in that the actual COP's will not be issued until late September or early October. Therefore, the COP's will not be available to the project until then. In the interim, unappropriated general funds would have to front this project. Mr. Greany recommends approval of this process with the understanding that there is some risk, but that there is clear Legislative intent for this project. The State Bond Committee has passed a resolution stating their intention to issue the bonds. The point is that there would not be a completed contract until after the COP's are actually issued. The delay until now revolved around the bid opening relative to being able to start the project this construction season. Sen. Torgerson stated that Legislative approval exists for this action. He would not like the project to be held up or have to be re-bid. Chrm. Phillips asked Sen. Torgerson to research this question and report back after 5 p.m. today. He stated that another emergency meeting would be attempted to respond to this RPL after the details have been compiled. Sen. Pearce asked that Mr. Greany and Nancy Slagle discover why this situation arose and find solutions to keep it from happening again. Chrm. Phillips concurred asking Mr. Greany and Ms. Slagle to respond to this request with a one page letter that would be sent to all members of the Committee. Mr. Greany agreed and added that all the information on the RPL request would also be compiled and sent to each member. ADJOURNMENT Chrm. Phillips adjourned the meeting at approximately 8:36 a.m. LBA 7/30/97 Page 6