HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE January 17, 1997 8:03 a.m. MEMBERS PRESENT Representative Ivan Ivan, Chairman Representative Fred Dyson Representative Joe Ryan Representative Jerry Sanders Representative Albert Kookesh Representative Reggis Joule MEMBERS ABSENT Representative Scott Ogan COMMITTEE CALENDAR OVERVIEW: Department of Community and Regional Affairs Division of Municipal and Regional Assistance; Division of Energy; and Boards and Commissions PREVIOUS ACTION No previous action to record WITNESS REGISTER YVONNE CHASE, Director Division of Community and Rural Development Department of Community and Regional Affairs 333 West Fourth Avenue, Suite 220 Anchorage, Alaska 99501-2341 Telephone: (907) 269-4607 POSITION STATEMENT: Presented overview of the Division of Community and Rural Development REDMOND HENDERSON, Director Division of Administrative Services Department of Community and Regional Affairs P.O. Box 112100 Juneau, Alaska 99811-2100 Telephone: (907) 465-4708 POSITION STATEMENT: Presented overview of the budget of the Division of Community and Rural Development PAT POLAND, Director Division of Municipal & Regional Assistance Division Department of Community and Regional Affairs 333 W 4th Avenue, Suite 220 Anchorage, Alaska 99501-2341 Telephone: (907) 269-4500 POSITION STATEMENT: Presented overview of the Division of Municipal & Regional Assistance Division PERCY FRISBY, Director Division of Energy Department of Community and Regional Affairs 333 W 4th Avenue, Suite 220 Anchorage, Alaska 99519-2341 Telephone: (907) 269-4640 POSITION STATEMENT: Presented overview of the Division of Energy LAMAR COTTON, Deputy Commissioner Office of the Commissioner Department of Community and Regional Affairs P.O. Box 112100 Juneau, Alaska 99811-2100 Telephone: (907) 465-2948 POSITION STATEMENT: Answered questions regarding Boards & Commissions ACTION NARRATIVE TAPE 97-2, SIDE A Number 000 CHAIRMAN IVAN IVAN called the House Community and Regional Affairs Committee meeting to order at 8:03 a.m. Members present at the call to order were Representatives Ivan, Dyson, Ryan, Sanders, and Joule. He announced a quorum was present. CHAIRMAN IVAN said this meeting would be the continuation of the overview by the Department of Community and Regional Affairs (DCRA). Several divisions within DCRA would present information including the Division of Community and Rural Development, Division of Municipal and Regional Assistance and the Division of Energy. He said if there was an interest in Boards and Commissions it would be addressed also. Number 0135 YVONNE CHASE, Director, Division of Community and Rural Development, Department of Community and Regional Affairs, said she would present a brief overview on the Division of Community and Rural Development (DCRD) and distributed information to the committee members. She said she would address the Head Start Program, the child care programs, Jobs Training Partnership Act (JTPA) programs and the Alaska Community Service Commission. MS. CHASE said the Head Start Program is a 28-year-old program with a proven track record in terms of the children and the families served by the program. She said services are provided to over 3,000 children every year which provides jobs for close to 600 individuals. She said a little over half of those employees of the Head Start Program have either been or currently are Head Start parents. She said there is parent involvement in the program as well as employment for the communities where the Head Start Programs exist. MS. CHASE referred to information she had distributed and said the Head Start State Collaboration Project is run with $500,000 of federal money and currently they are in the fifth year of operation of a five-year grant. She said they've been able to leverage the money to provide various services. She said it would be difficult to pick one particular project, but said the Danforth COMPASS Project is a timely one. Number 0362 MS. CHASE said the Danforth COMPASS Project encourages communities to develop local initiatives to evaluate successes and to build on those successes. She said the communities also provide some seed money for projects to continue in those communities. Ms. Chase referred to a policy team, which is an interdepartmental team that she serves on. She outlined a selection of projects across the state where representative groups from those projects will be brought in to a training session in February, which will allow those communities to go back with information about what other communities are doing and, in an community inter-collaboration group, begin to do some additional things to utilize departmental monies in the best way that they can. MS. CHASE said there are 13 Head Start grantees across the state who are active on both a state and national level. She said a key to the Head Start Program is the parental involvement and parents are encouraged to not only work in the program, but also to participate in state and national activities. CHAIRMAN IVAN welcomed Representative Kookesh to the meeting. Number 0523 REPRESENTATIVE FRED DYSON referred to the Head Start Program staff in the villages and asked if they were trained in diagnosing and working with persons affected with Fetal Alcohol Syndrome (FAS) and Fetal Alcohol Effect (FAE). Number 0552 MS. CHASE said the staff are trained in identifying FAS and FAE to provide referrals for appropriate follow up services. She said the staff are trained to work with children in the Head Start setting who have FAS or FAE. Number 0568 REPRESENTATIVE DYSON asked if the staff is trained to spot child physical abuse and sexual abuse. Number 0575 MS. CHASE said the staff receives some training in terms of the identification of abuse and, hopefully, sufficient training to alert a resource agency like the Division of Family and Youth Services (DFYS) or a community agency. She clarified that although staff are trained to identify abuse, staff are not expected to be specialists in the area. Number 0600 REPRESENTATIVE DYSON asked if there was a standard procedure or policy of what the staff is supposed to do when they spot child abuse. Number 0612 MS. CHASE said Head Start staff are among the list of mandatory reporters under the state policy which requires them to report any incidence of abuse. Number 0628 REPRESENTATIVE DYSON asked if there was a formalized training on spotting abuse. Number 0647 MS. CHASE said there is a section of the training curriculum that has been developed over a number of years which deals with abuse and it has been continually updated. She said the staff should be trained or have the most up to date curriculum available to them adding that because of the low turnover of Head Start staff the training is able to go beyond just a basic training. Number 0687 REPRESENTATIVE DYSON requested a copy of the training curriculum. He referred to her testimony regarding the community groups labeling their successes and requested information regarding what is working with children affected by FAS, FAE and child abuse. Number 0730 MS. CHASE said one of the things that has been effective is early intervention and prevention. She said Head Start does home visitation and early identification with families who are not necessarily involved in child abuse or neglect at the time, but may be at risk families. She said Head Start has one of the nationally recognized home visitation programs. She referred to information the legislature received last year on the healthy families programs which is a similar home visitation program. She said this visitation offers an ability to provide support to the parents. Number 0813 REPRESENTATIVE REGGIE JOULE complimented Ms. Chase on the Head Start Program. He referred to the $500,000 grant the program got from the federal government and noted this is the fifth year of that grant. He asked what the chances are of getting another grant. He asked whether or not this was already being worked on. Number 0834 MS. CHASE said DCRD is constantly applying for additional federal money and the funding status of an additional grant is going to depend on the congressional appropriation. She said that what DCRD has done with the federal money, hopefully, puts them in a top position to receive money. She said this money would not be for a follow on to the current project as she doesn't see this project continuing. The money would be for a new project that would build on the strengths of the current project. Number 0870 REPRESENTATIVE JOE RYAN asked for budget information of the DCRD. Number 0885 MS. CHASE said she obtained the director's position in December so she would rely on the Division of Administrative Services in order to provide accurate budget information. Number 0917 REDMOND HENDERSON, Director, Division of Administrative Services, Department of Community and Regional Affairs, said Head Start grant dollars budgeted for fiscal year 1998 are $5.9 million. REPRESENTATIVE RYAN asked if there was state matching money included in the $5.9 million. Number 0933 MR. HENDERSON said the state funded portion of the Head Start program was $5.9 million and this was general fund dollars. He said there are Head Start dollars received by the grantees directly from the federal government. He said his division has two and a half people administering that program. Number 0960 REPRESENTATIVE RYAN clarified that the rest of the money goes directly to the recipients in the field. Number 0970 MS. CHASE said DCRD serves approximately 23 percent of the children who would be eligible for Head Start services. Number 0980 REPRESENTATIVE RYAN clarified that the exact number is 3,228 children. He asked for information on the 592 jobs provided for Head Start families. Number 0999 MS. CHASE said presently 52 percent of the staff who run the programs either are or were former Head Start parents. MS. CHASE referred to information given to the committee members labeled, "Child Care Programs," and pointed out the historical progression of the child care programs. She said these programs are referred to in connection with the Welfare to Work Program. She said child care and day care assistance began in 1975 and the department has been providing day care assistance since that time. It was divided into three areas; the child care grant, day care assistance for parents who met low and moderate income levels, and resource development which was the funding for licensed provider training. MS. CHASE said child care continued for many years without any changes occurring until 1990. She said at that time, transitional child care began, which is a child care assistance program targeting parents who had worked their way off of welfare to be sure that they did not move back onto the welfare roles. At the same time these parents were assured quality day care programs, as well as resource and referral services. In 1991, at risk child care was developed for individuals in that income level where they were certainly at risk of being on welfare. Number 1164 MS. CHASE stated that in 1993, the Child Care Development Block Grant came about. This was designed to focus on low to moderate income families, those which were working or training to provide needed support. Last year, with the federal changes in the Welfare Reform Program, a number of changes also took place in the child care area, including the Child Care Development Fund. The three federal assistance programs were folded into one program and became part of the new fund. The department now works in partnership with Heath and Social Services to develop a comprehensive plan to utilize these funds. Needless to say, it's extremely important in terms of the Welfare to Work effort that they can provide quality day care, the availability of it, and the financial assistance which parents will need to move from welfare to work. MS. CHASE furthered noted that the state is required to meet federal guidelines and conduct number crunching to ensure that a certain percentage of individuals presently on welfare move from welfare to work. This is an essential piece of this program. At the same time, it's equally important that they ensure this program continues to be available to families operating from hand to mouth on a day to day basis. MS. CHASE stated that one of their challenges in working with Health & Social Services is that they don't compromise the quality of day care while they increase the day care slots. It's important that they maintain the needed capacity in the communities as they progress on the Welfare to Work Program. She then noted figures listed on the right hand side of the Child Care Program handout regarding the current program activities for Day Care Assistance. The department serves about 3600 children per month and of that about 2500 families. She added that they handle about 2300 child care referrals annually and they do have a waiting list which they try to work through as quickly as possible. Number 1336 REPRESENTATIVE RYAN asked if this program was an unfunded mandate or if the federal government provided money for this program. He also asked if the state was required to provide matching funds and, if so, how were the funds broken out. MS. CHASE noted that there was both state and federal money involved. She asked Remond Henderson to give the percentages of these. She stated that there were definitely incentives for states to obtain available federal money. Ms. Chase also noted that there were also some penalties for Health & Social Services if the number of individuals moving from Welfare to Work don't meet the percentages based on their population reflected in the rolls. Number 1384 REMOND HENDERSON stated that he did not have all of the details of the budget with respect to the Day Care programs, but he did say that the general fund portion of the Day Care program is $9.8 million. He noted a new fund which was developed as a result of welfare reform which contains federal funds, as well as the matched assets associated with it. In the fund, there is $4.8 million of which, $3.5 million is interagency receipts received from the Department of Health & Social Services. There is $1.3 million in the general fund match which is associated with this as well. Number 1427 REPRESENTATIVE RYAN asked if this program was still so heavily regulated by local building codes as it was years ago. He noted how these requirements pushed overall expenses up for these facilities. MS. CHASE stated that the standards today are more reasonable. She referred to the handout again, when in 1975, the Day Care Assistance Program began funding for training limited to licensed providers. In 1991, there was a provision established which was targeted at family child care and child care homes. She also noted waivers for rural communities since safety is the real point such as an establishment's egress windows, two exits, etc., rather than whether or not a facility has running water, as long as it is adequate to drink. The department has looked at regulations and the intent of them to find a way to make sure that the children are safe, but under reasonable circumstances. MS. CHASE then noted the various forms of day care provided and mentioned that not only was the department's goal to ensure safety, but an environment where children can learn. Number 1579 REPRESENTATIVE RYAN asked who determined what curriculum is used in these various environments. Number 1584 MS. CHASE stated that it depends on the individual centers. In a number of areas throughout the state, home visitation programs are being instituted. This is an important program for the prevention of child abuse and neglect through early identification. This program is also helpful in determining possible physical challenges of a child which might impede learning or their progress in the future. Number 1673 REPRESENTATIVE DYSON asked if Ms. Chase or administrators of child care have any difficulty in obtaining criminal and arrest records of people who apply for positions in the program. MS. CHASE responded there was a provision that individuals who work directly with children are required to have a criminal history check. She noted that while this check is effective, quite often, individuals in child care programs may have an offense somewhere else which the department is not able to detect, or an individual may not have an arrest record. Ms. Chase offered that one of the problems which continues in child care is the low rate of pay for the individuals who work in these programs. It tends to be an entry level job. Number 1739 REPRESENTATIVE DYSON asked if there was anything they could do to make it easier for the department to get the information they need, especially in the area of child abusers. MS. CHASE said she would like to get back to him on this. She felt as though the system had improved over the years because of technology and the access to information is faster. Technology has enabled them to hook into the national network so that the criminal background is not just limited to Alaska. An offense record usually tells them what an individual has been convicted of rather than what they have been arrested for. There are pros and cons to looking at arrest data. Number 1784 REPRESENTATIVE DYSON asked if the department had detected any pattern where offenses may have started while the perpetrator was still a juvenile. MS. CHASE said she would follow up on this at a later time for the representative. Number 1817 REPRESENTATIVE JOULE asked if the waiting list mentioned previously for day care was a problem in terms of providing adequate facilities for the children in the program. MS. CHASE said that this continues to be a challenge for them because when they have an adult who needs day care assistance in order to continue work, they need this service immediately, which usually means that this day care provided will be subsidized. When an individual has found a job and would like to stay with it, it's important that the department tries to do what they can to support this situation. REPRESENTATIVE JOULE asked, in the context of welfare reform, whether or not Ms. Chase has seen an increase in the demands of slots available to place children and asked if she had any projections on how this waiting list might play out. MS. CHASE stated that she thought they'd see more of a demand on the slots. They actually had an interagency meeting about a week and a half ago in Anchorage and she said there will be continual follow up meetings of a cross agency group to look at the availability of slots, how the overall capacity can be increased statewide and how they can make the slots available. She also mentioned putting a parent in a slot along with a subsidy when it's needed. Number 1903 REPRESENTATIVE JOULE asked with the continuing demand, whether or not people will be able to receive some sort of training on how to open up licensed day care centers in their own home, etc. MS. CHASE said that training is on-going and she thought they would probably see an increase in private home facilities cropping up. Some of the larger centers are also looking at trying to increase their capacity. She is most interested in targeting the rural areas. She said that in Alaska's urban areas, they have the capacity or the ability to increase the capacity more easily than in some of the rural areas. Number 1953 REPRESENTATIVE JOULE asked if she knew, based on waiting lists, in which communities were additional facilities needed. MS. CHASE answered that in working with Heath & Social Services based on how the population breaks down across the state while moving people from welfare to work, they need to be sure to target the same communities. Number 1989 REPRESENTATIVE SANDERS asked about the 23 percent of children which are eligible for the program, but are left out. MS. CHASE responded that they presently serve 23 percent of the eligible children. There are a little over 75 percent of children who are eligible for Head Start. REPRESENTATIVE SANDERS asked if the majority of this 75 percent figure were located in the rural areas and asked why so many children are not being served. He asked if it was merely funding or if the parents didn't want to participate. MS. CHASE stated that it was the lack of availability, not the lack of desire from the parents to participate. She noted that the main reason the Head Start program had been funded by the federal government over a thirty year period was because of parental participation. Parents in communities do become very active in this program, but certainly resources help also. Number 2069 REPRESENTATIVE SANDERS asked if the primary purpose of this program was to help children or to help people return to the work force. MS. CHASE stated that the initial focus of Head Start was to better prepare children to enter formalized school while requiring a parental component. As the program got off the ground many years ago, parental participation became as important as their initial goals for the children. If a parent is one, interested; but two, active in what's occurring with their child in these early years; there is a better chance that this interest will continue through the formal education process as well. Many parents become so committed to the program that they want to become staff. This is one of the biggest success factors of the program. Number 2080 MS. CHASE continued with her presentation by addressing the Job Training Program (JTPA) under the Job Training Partnership Office (JTPO). She provided the committee with a hand out and referred to the left column. She noted that it was important to provide the committee with the number of adults served through programs, as well as the emphasis of Welfare to Work to show the committee what the actual numbers of the totals in these programs were, i.e., adults on public assistance or youth in youth welfare families. She added that there was a commitment to work with not only dislocated workers who may have been very active in the work force and need to be retrained, but also to work with individuals who have been in those borderline, low income jobs which she spoke about previously. MS. CHASE referred to the information in the middle column outlining the ways in which the department serves individuals. For example, in Valdez, with the closing of the Harborview Hospital, JTPA has been working with the onsite labor management committee at Harborview and with the larger state-wide committee to assess whether or not JTPA assesses whether they can provide help in either re-training or re-locating a worker to other parts of the state in the event of a lay-off. She also noted the Ketchikan pulp mill and their dealings there. MS. CHASE next referred to the handout regarding training for rural Alaskans. The Home Care Services Program with the Tanana Chiefs Council (TCC) trains individuals in the communities to work with the elders in order to help them maintain residence in their own homes if at all possible. Ms. Chase noted that the secret to success with job training programs are partnerships. She pointed out that the right hand column of this same handout reflected information related to areas the department works in to partner with other agencies. She mentioned specifically the Alaska Resource Investment Council which takes the lead in the program area and intends to work with the department on the one stop federal grant which the department received. This grant consists of approximately $7.2 million over three years and gives the department the ability to partner with private industry. It brings together the resources the state has to bear to see that the department can retrain and relocate where necessary. MS. CHASE summed up her comments by mention of the Alaska Community Services Commission which is essentially the domestic Peace Corps. This commission provides volunteers the ability to do community service projects while receiving a minimum wage. At the end of a commitment to the program, a volunteer gets a stipend for further educational training. Number 2366 REPRESENTATIVE DYSON asked if there was anything which precluded the job training partnership from conducting training within correctional facilities. MS. CHASE stated that she didn't know the answer to this question, but she said she would follow up on this issue for Representative Dyson. Initially she didn't think so. Number 2388 REPRESENTATIVE RYAN asked if they still employed youths to paint murals and such during the summertime. MS. CHASE said that they still do. Number 2406 REPRESENTATIVE SANDERS asked how much general fund money was involved with the JTPA program. MR. HENDERSON stated that with the JTPA program the amount of grant money was zero. Between the JTPA money and the State Training Employment Program (STEP), there is $17 million consisting of federal funds and UI (Unemployment Insurance) trust funds. He also added for clarification purposes information regarding the grant funds. He noted that there are general funds involved in the administration to pay for salaries and travel related to these grant fund programs. REPRESENTATIVE SANDERS asked how much money this was. MR. HENDERSON stated that he would follow up on this information for Representative Sanders. Number 2456 PAT POLAND, Director, Municipal and Regional Assistance Division came forward to testify. He noted that this division was relatively small, but predominately provided a broad range of services to community governments. He said that he would briefly review the programs within the division and then answer questions. MR. POLAND noted that the bulk of their organization, consisting of 50 employees, was focused on local government assistance. They spend the majority of their time traveling to communities, working hands on with local city clerks, administrators, managers, etc., helping to manage the day to day affairs of a community. A subset of this organization, their rural utility advisor program, provides the same type of assistance, but is focused exclusively on managing the business affairs of local utilities with a particular emphasis on sewer and water. TAPE 97-2, SIDE B Number 000 MR. POLAND stated that the division provides staff support to the Local Boundary Commission which is an independent body appointed by the governor and attached to the department. They have two staff who conduct the commission's technical work such as receiving petitions for incorporation, dissolution, annexation, and also logistics of setting up meetings, analysis, writing reports, etc. The division does some lands management and planning, although this function has been significantly reduced. Currently, there is a staff of three which does this type of work. Under this general component is the Municipal Lands Trustee, a responsibility which the state accepted and received under the Alaska Native Land Claims Settlement Act. Under this Act, the state holds in trust for unincorporated communities land for future municipal or other public uses. MR. POLAND continued that the division also provides basic planning assistance which has evolved into special planning projects such as the base closures at Adak and Delta Junction, as well as participation in the Community Response Partnerships in Ketchikan and Wrangell with the mill closures. They also administer the state revenue sharing, municipal assistance programs, and they also distribute funds under a raw fish tax sharing program. They distribute national forest receipts, which comes under a pass through program, among other such projects conducted with a one person staff. MR. POLAND mentioned the function of a state assessor who, under the department's auspice, is a one person office with a clerical position. This person serves much like that of a local government assessor. This person is responsible for monitoring the practices of local governments, assessment and tax collection practices, as well as assuring that functions are done within the confines of state law. They are also responsible for administering the Senior Citizen's Renters Rebate Program and the Disabled Veteran's Renters Rebate Program. MR. POLAND stated that the division has staff associated with the Alaska Coastal Management Program. Largely, they receive funds from the Division of Governmental Coordination. These funds in turn are awarded to the various coastal districts throughout the state. They are responsible for grant oversight, as well as for technical assistance. MR. POLAND mentioned the division's research and analysis section consisting of two individuals located in Juneau. Some of this program's more notable accomplishments include a very extensive community database which covers a wealth of information about Alaska communities. He recognized that the state budget has gotten smaller and the fact that other department's ability to do outreach to communities has diminished. The division finds itself more in the role of working on behalf of other departments and he named some. MR. POLAND stated that the division has assumed responsibilities and programs related to community and economic development which were formally in the Division of Community and Rural Development. These include the Community Development Quota Program, the Community Development Block Grant Program, the Rural and Development Assistance Program, and the Rural Development Investment Fund. MR. POLAND concluded by stating that the department has seven offices scattered over the state located in Anchorage, Fairbanks, Juneau, Nome, Kotzebue, Bethel and Dillingham. Their primary offices are located in Anchorage and Juneau. Their Kotzebue and Dillingham offices consist of one person. Their Nome, Fairbanks and Bethel offices consist of three people. Number 250 REPRESENTATIVE RYAN asked about the formula for figuring mill rates on property and what it's based on. He said in the past it was not based on a very specific formula. MR. POLAND noted that the state assessor has been able to evolve the estimating procedures, but there still is no formal detailing of what property is out there and continued that it's basically a formula driven series of estimates which dictates property rates. This is not true for vehicles though. Through state registration of automobiles and the use of technology, they are able to get a hard number of how many vehicles there are in the state. The state assessor is charged with determining the full and true value of these vehicles, including everything which is conceivably taxable regardless of exemptions. Number 334 REPRESENTATIVE RYAN next asked about the Municipal Land Entitlement Program. When municipalities form they receive a certain amount of land from the state and in exchange they compose a government for the area. The vast majority of municipalities still maintain in some cases an excess of 90 percent of the land which they were given. The original intent of the act was a way of getting land into the private sector. Municipalities still owning this land defeats the purpose of this act. He noted Mr. Poland's mention of a land trust. MR. POLAND responded that under the Alaska Native Land Claim Settlement Act a certain amount of land was required to be set aside in the community for future public needs. In places where there is no municipal government they hold this land in trust until such a government is formed. In the interim the department acts as a trustee, for example, they leased some land to the school district in Chignik for a school there. Number 394 REPRESENTATIVE RYAN asked if they do anything with the present municipal land or with the future incorporation of a municipality as to their entitlement under the Municipal Lands Act. MR. POLAND noted that their only role there is to secure information from the Department of Natural Resources so that areas can get an estimate of what their entitlement might be. In a planning context, they also provide technical assistance in identifying potential uses. Number 420 REPRESENTATIVE IVAN recognized Representative Mark Hodgins in the gallery and invited him to the committee table. Number 430 REPRESENTATIVE DYSON asked if the division's work with potable water was done through the Village Clean Water Program. MR. POLAND responded yes, that they work both with Village Safe Water and with the Indian Health Service. They go through a mutual process of identifying and prioritizing communities to work with, particularly ones which are of concern to them. This is done in several fashions. They work with them in advance before installation of a system by identifying the appropriate technology so that they'll be able to operate and financially pay for the system. They also work with communities on existing systems. MR. POLAND drew the distinction that they are separate from physical plant maintenance. This is done under the Village Safe Water with their crews. His division is focused on the business end of this program by establishing good billing and collection systems with rates at a level which will pay for the services. Number 488 REPRESENTATIVE DYSON asked if there was another department within Community & Regional Affairs which does deal on the operational level of waste water treatment. MR. POLAND stated that no, this is located in Environmental Conservation and their Village Safe Water Program. Number 510 REPRESENTATIVE IVAN inquired about the Coastal Zone Management Program and asked what areas of the state are active under this program. MR. POLAND stated that the majority of the districts under this management plan are municipalities, either organized boroughs or small first class cities with planning powers. In addition, there are four coastal resource service areas within the unorganized borough which have coastal management planning responsibilities. There is one in the Bristol Bay area, the Bethel region, the Bering Straits/Nome region and one in the Alaska Westward area of the Aleutian Islands. These areas are supported by federal coastal management program funds. They have no taxing authority. They have no real implementation authority. They have a local board which prepares and adopts a plan which is then forwarded to the state and adopted by the state. It then becomes the responsibility of state agencies to implement the plan. MR. POLAND stressed that these plans proposed are general in nature and not zoning plans per se, although there are some significant controls. The legislature adopted the Alaska Coastal Management Program and set it up through statute. The plan is developed and adopted locally. It is then forwarded to the state. There is a coastal policy council which is set up in statute consisting of state commissioners, as well as certain representatives of the coastal districts and public members. These individuals approve or disapprove a plan, but there is no actual formal submission of the plan to the legislature for approval. Number 764 REPRESENTATIVE IVAN asked about the receipt of Alaska Industrial Development & Export Authority (AIDEA) funding by the Rural Development Agency and what the amount of this money was. He asked what the department is looking for in the next fiscal year. MR. HENDERSON noted that they received $800,000 from AIDEA for the Alaska Regional Development Organization (ARDOR) Program in FY 97 and $650,000 from ADA for the Rural Development Assistance Program. REPRESENTATIVE IVAN asked for Mr. Poland's forecast for budget planning this year. MR. POLAND stated that they would be budgeting the same amount of money this year. MR. HENDERSON said that the Rural Development Assistance Program is in the Capital Budget. They haven't been given the exact number yet, but they're looking to receive the same amount of money. Number 842 PERCY FRISBY, Director, Department of Energy, came forward to testify. He noted that this department dealt with construction and maintenance in rural Alaska consisting of four programs. First, the department deals with rural bulk fuel repair & upgrades for community tank farms in conjunction with the Coast Guard and the EPA in attempts to bring the tank farms into minimal compliance. They oversee about ten piping projects for minimum compliance per year, as well as three to five complete upgrades. They also deal with rural power system upgrades by taking a look at distribution systems to determine line loss efficiencies, repair, (indisc.). They deal with power plants, replacing them if needed, as well as looking at alternative energy and ways to replace fossil fuel generation. They also look to downsize systems and to make them more centralized. The department responded to bulk fuel and electrical emergencies particularly in the winter time when temperatures plunge. Number 992 REPRESENTATIVE DYSON asked how this department interfaced with the Alaska Village Electric Cooperative, Inc. (AVEC). MR. FRISBY said they work closely with AVEC. As for upgrades and efficiencies, AVEC is a regulated utility and they answer to the Alaska Public Utilities Commission (APUC). The department works with them on some regionalization concepts along with the smaller distributions and inter-ties to eventually set up more centralized systems. They also work with AVEC on potential hydro projects. The Energy Division also works with the Power Cost Equalization Program which is related to AVEC. REPRESENTATIVE DYSON asked if all of the power systems they work with are regulated. MR. FRISBY responded that not all of them were regulated. He noted a co-op which is AVEC, Alaska Power and Telephone, and numerous others which aren't. He went on to add that there are 50 stand alone communities which are not regulated. Number 1085 REPRESENTATIVE DYSON asked what systems are in place to protect the consumer from being gouged. MR. FRISBY responded that each community is required under the Power Cost Equalization program to submit monthly reports to the APUC and these numbers are verified as allowable costs. The state then disburses the funds. The state works with the stand alone communities by helping them formulate budgets. The state also helps with planning and efficiency. Number 1178 REPRESENTATIVE DYSON asked about shallow gas technologies or other alternatives which the state is exploring. MR. FRISBY said that he thought shallow gas was worth exploring. He would like to complete a comparative analysis in these potential sites for development of the same. He has done a preliminary analysis of the potential sites, but would like to do something more in-depth. Number 1238 REPRESENTATIVE DYSON asked if some of the communities were concerned with recent legislation which allows for competition. MR. FRISBY said he hadn't heard any concerns. He thought the communities would like to see more competition. The cost of doing business in the rural communities is so expensive it is hard to amortize an operation. He noted that in some cases there are three providers of fuel in a community and stated that if these communities established bulk facilities the cost of fuel could be dropped. Number 1357 REPRESENTATIVE IVAN encouraged the establishment of regional grid systems and the feasibility of natural gas use. Number 1464 REPRESENTATIVE JOULE asked about the problem of disintegrated bulk fuel storage tanks in some communities and wondered about a time table to change out these systems. MR. FRISBY responded that there is a $3 million problem with bulk fuel systems in Alaska. He said he is engaged in crisis management working with the Coast Guard and the EPA. These organizations issue the citation for each community. Mr. Frisby attempts to keep these facilities open with piping projects. In addition, the state has been fairly successful in filing for federal funds on behalf of communities to help take care of the problem. In these instances communities are responsible to pull together their own financial packages for submission. Number 1643 REPRESENTATIVE RYAN asked why the Community Safe Drinking Water Program was put into DEC rather than in Community and Regional Affairs. MR. POLAND stated that in the early 70's, the federal monies were directed at more traditional sewer and water systems of larger communities. There was an engineering department in place which was probably trying to stretch as much as they could. They administered these monies and after a while the emphasis was placed on rural Alaska. REPRESENTATIVE RYAN has observed that DEC is not very effective in implementing these programs in the rural areas. He asked if Mr. Poland thought their department would do a more efficient job. MR. POLAND responded that there had been some serious efforts made by both agencies to work more closely together. Significant strides have taken place. Number 1885 REPRESENTATIVE ALBERT KOOKESH asked Mr. Frisby if he and his department were working on a state energy plan and offered the committee's help in implementing one. MR. FRISBY said they were actively working with AIDEA on a short term, immediate issue plan which will go to the administration. A complete state plan is appropriate at this time, short and long, to encompass both the rural and urban areas. Number 1997 REPRESENTATIVE IVAN asked what would happen if the PCE program discontinued. MR. FRISBY responded that APUC and their regulatory authority gets the state in the door to work with small stand alone utilities. They also have rural utility workers which go out and do periodic inspections of facilities. This is also a safeguard that the utility is running efficiently. If PCE discontinues, there will still be some form of regulation. They actively look for safeguards to protect the consumer. REPRESENTATIVE IVAN then asked about the department's budget and what they forecast for this coming year in light of cutting $400,000 from their budget MR. FRISBY said that he has 27 employees in the division. He proposed the $400,000 cut which means a reduction of this work force to 23 employees. He is scaling back some of the project activity from 15 projects down to 10. Also, he intends to contract out to the private sector to do design and cost estimates of various projects. He is trying to shift to the private sector for rural Alaska projects. TAPE 97-3, SIDE A Number 000 MR. FRISBY responded to a scenario set up by Representative Dyson regarding non-conformity of some tank farms with leakages and the department being under pressure to avoid these facilities from being shut down. Mr. Frisby noted that they serve 210 communities and on the average there are three tank farm owners in a community, in some communities there are as many as seven tank farms. This increases the sites of liability. He would like to consolidate these facilities into one unit for compliance purposes. At the same time they'd be able to increase the volume of fuel this community buys. Mr. Frisby said he would supply Representative Dyson with the data related to communities which are under threat of noncompliance. He said his division has put together the most comprehensive database on bulk fuel needs in rural Alaska, as well as electrical power upgrade needs. Number 416 REPRESENTATIVE JOULE said he would like to see how much money awarded to a particular project gets spent in a community when they obtain bulk storage fuel facilities. He asked to meet with Mr. Frisby later on this issue. MR. FRISBY said when he first came to the department he instituted a policy to hire as many of the local people of a community to work on a particular project. The only types of work the department will do is design, professional engineering drawings, construction, etc. He said he would provide additional information on this issue. Number 543 MR. HENDERSON followed up on information regarding a general fund question posed earlier in relation to JTPA programs. He noted that in relation to the $20.7 million associated with the job training partnership programs and the STEP program that there was a little less than $600,000 in general funds. Number 600 LAMAR COTTON, Deputy Commissioner, Department of Community & Regional Affairs, made himself available for questions regarding Boards and Commissions. He stated that the department works with two entities, the Americorps Board and the Local Boundary Commission. The Local Boundary Commission is slated to make a presentation in front of this committee on February 14, 1997. ADJOURNMENT REPRESENTATIVE IVAN adjourned the meeting at 9:49 a.m.