MINUTES SENATE FINANCE COMMITTEE April 4, 1998 9:10 a.m. [Due to poor audio recording, some material was undecipherable] CALL TO ORDER Senator Sharp called the Senate Finance Committee meeting to order at 9:10 a.m. MEMBERS PRESENT Co-Chair: Senator Pearce Co-Chair: Senator Sharp Senator Parnell Senator Torgerson Senator Donley MEMBERS ABSENT Senator Phillips Senator Adams ALSO PRESENT Nico Bus, Budget Coordinator, Department of Military and Veterans Affairs; Laurie Perkins, Administrative Services Director, Department of Revenue; Nancy Jones, Director of the Division of Permanent fund Dividend, Department of Revenue; Peter Bushry, Chief Financial Officer, Permanent Fund Corporation; Joe Perkins, Commissioner, Department of Transportation and Public Facilities; Bo Brownfield, Deputy Commissioner Department of Transportation and Public Facilities; Tom Brigham, Director, Division of Statewide Planning; Mary Lou Burton, Budget Director, University of Alaska; Chris Christianson, General Council, Judicial Branch; Ken Bischoff, Director of Administrative Services, Department of Public Safety; Pam Varney, Executive Director, Legislative Affairs Agency; Dwayne Peeples, Administrative Services, Department of Corrections; Karen Rehfeld, Director of Education Support Services, Department of Education and Early Development; Joan Brown, Office of Management and Budget; Janet Clark, Department of Health and Social Services; Loren Jones, Director, Division of Alcoholism and Drug Abuse. PRESENT VIA TELECONFERENCE Pat Ladner, President and CEO, Alaska Aerospace Development Corporation; Yvonne Chase, Division of Community and Regional Affairs; George Buhite, McLaughlin Youth Center Superintendent. SUMMARY SB 231 APPROPS: CAPITAL/REAPPROP/FUNDS/OPERATING SB 231 was HEARD and HELD in committee for further consideration. SB 230 APPROPRIATION: MENTAL HEALTH PROGRAM (CAPITAL) SB 230 was HEARD and HELD in committee for further consideration. SB 292 APPROPS: CAPITAL/REAPPROP/FUNDS OPERATING SB 292 was HEARD and HELD in committee for further consideration. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS NICO BUS, BUDGET COORDINATOR, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS, testified that the department had two capital budget items in SB 292, the supplemental bill. The items were found in section 11 and section 12. Section 11 included $100 thousand in federal funds, which allowed the department to participate in the counterdrug program. The program allowed the department to work with the troopers, the United States Marshal, and other agencies to support drug enforcement actions. The primary purpose of the project was to deter crime. Forfeited proceeds were sold profits distributed to agencies through the Department of Justice. The money was used to buy equipment to support drug enforcement activities. The item was in the capital budget because most profits were utilized for capital equipment. Senator Parnell noted that the state received federal funds for narcotics enforcement in the Department of Public Safety (DPS). He asked if the funds augmented the counterdrug program. Mr. Bus responded that DPS received similar funding, and would receive a share of the profits if they chose to participate. He reiterated that the Department of Military and Veterans Affairs (DMVA) was participating with the troopers. Mr. Bus discussed section 12 of SB 292, which included deferred maintenance for the youth corps facilities $230 thousand in general funds. He explained that the youth corps, after serving as a pilot program for three years was a permanent program. He stated that the youth corps building was old and leaky with poorly functioning furnaces. The request would allow for replacement of the furnaces and roofs. Senator Pearce restated that the funding for repairs and upgrades would be used in lieu of rent. She asked how long the rent would be credited. Mr. Bus stated that $230 thousand would probably allow for multiple years of credit against rent. He offered to provide specific details. Co-Chair Pearce asked what the state paid in rent for the youth corps facilities. Mr. Bus replied $16 thousand per month. He noted that the final terms were negotiated on the rent. Co-Chair Pearce asked if the state could expect a dollar per dollar credit. Co-Chair Sharp asked if utilities were included in the rental payments. Mr. Bus stated that utilities were paid separately. The rental payment covered the use of the buildings only. Co-Chair Sharp stated that the item was listed as "phase one." He asked if the purpose was to semi-obligate for "phase two." Mr. Bus responded that the total cost identified for all of the repairs was $450 thousand, so the $230 thousand request covered the first installment. He added that the kitchen facility and the ventilation system required additional remodel and repair. Mr. Bus pointed out one amendment to the Department of Natural Resources (DNR) capital budget of a $15 thousand general fund request for a municipal assessment. He offered to answer questions about the request. Co-Chair Sharp noted that committee members had an individual document in their committee packet describing the $15 thousand request. Mr. Bus explained that the state paid the assessment for local improvement districts. The request for $15 thousand allowed the state another 15 years of payment for the local improvement district assessments. DEPARTMENT OF REVENUE LAURIE PERKINS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF REVENUE, discussed two capital budget items. She stated that the first was the Permanent Fund Dividend System Design, phase two. She explained that the item was the second phase of a system update. The system required an update to meet user requirements. Senator Parnell requested additional information about the system. Ms. Perkins responded that the second phase would allow for implementation of recommendations from the most recent study on the system design. NANCY JONES, DIRECTOR OF THE DIVISION OF PERMANENT FUND DIVIDEND, DEPARTMENT OF REVENUE, referred to page 8 of the handout. She informed the committee about the application period for the 1998 Permanent Fund Dividend. She stated that applications were first received and information was then assembled. Each application was microfilmed and sent for data entry. She explained that the data entry system was antiquated and overloaded. She had serious doubts about the system lasting through the 1999 processing season. Applications were occasionally rejected by the system. The vision of an improved process included automated emails the applicants prompting the application. Senator Parnell asked about pages 10 and 11. He asked if the $1 million request would cover all of the recommendations. Ms. Jones replied that the recommendation was for a three- tiered system. She stated that the division was at the first tier of the system. Senator Parnell asked what the $1 million would provide. Ms. Jones responded that a dependable new data entry system would be in effect by the next year for the $1 million request. The second phase would cover the cost of a server and the third phase would allow for data. Senator Parnell requested further information about the $1 million request. Ms. Jones replied yes. Senator Parnell asked if the FY 99 request would guarantee that the system was FY 00 compliant. Ms. Jones responded yes. Ms. Perkins stated that the second item was intended for the Permanent Fund Corporation Telecommunications Disaster Recovery system with a request of $492,800. PETER BUSHRY, CHIEF FINANCIAL OFFICER, PERMANENT FUND CORPORATION, explained that the item's purpose was to create a disaster recovery system in the event that Juneau was hit by a natural disaster or suffered a long term disruption of electronic communications with the Lower 48. He explained that the Permanent Fund managed $9 million in investments internally from the Juneau location. The system relied on real-time data feed, market prices and analytics to enable the investment officers to accurately track the investments and to remain competitive with the rest of the institutional market. If the stream of information was interrupted, the Permanent Fund Corporation could suffer serious financial consequences. The request would counter the threat and take advantage of new fiber optic cables installed by GCI, which would reduce the cost of the existing data feeds to Juneau. Senator Parnell asked if the improvements would benefit other agencies. Mr. Bushry responded that the capital project would benefit the Permanent Fund Corporation and the Treasury Division. Other state agencies would assume the cost of the upgrades. Senator Parnell asked if the division was collaborating with the Department of Administration (DOA) for a coordinated state effort. Mr. Bushry responded that the Permanent Fund Corporation would benefit from the request. Senator Parnell asked if Mr. Bushry was coordinating with DOA. Mr. Bushry responded that coordination was in place, but the lease for fiber optics was for the Permanent Fund Division only. He stated that the information obtained would only be of interest to the Department of Revenue (DOR). Senator Parnell understood that the fiber length could be used by other state agencies. Mr. Bushry agreed with Senator Parnell. Co-Chair Pearce asked if Juneau was connected to the one undersea cable that linked Alaska to the transpacific cable. Mr. Bushry affirmed that Juneau was connected to the undersea cable. He stated that the city suffered an interruption of information feeds when the cable was cut one year ago by a fishing trawler. Co-Chair Pearce asked if a satellite back-up was an option. Mr. Bushry replied that the quality of data provided by satellite was not optimal. He stated that a land-line feed was best. Co-Chair Pearce asked if anyone in Alaska had back-up capability. Mr. Bushry stated that he could not answer the question. He noted that the requested funding would fund the first fiber-optic cable, to his knowledge. Co-Chair Sharp understood that additional data feed traffic would be directed through the fiber length. He asked if all of the data would be directed through the fiber length. Mr. Bushry replied in the affirmative. Senator Donley stated that he did not understand the project's emergency capability. Mr. Bushry responded that a small site would be established in Seattle where historic financial information could be retained and updated daily. The disaster recovery center would allow for information recovery in the event of a long-term natural disaster. Co-Chair Sharp noted that most large financial institutions had a similar mechanism. Senator Donley asked if the funding would allow for the construction of the disaster recovery center. Mr. Bushry concurred. Senator Donley asked about the staffing level for the disaster recovery center. Mr. Bushry responded that staff would not be necessary unless an emergency occurred. The space would be leased to house the computers responsible for retaining the information for possible recovery. Senator Donley noted that the project was listed as "one- time" although it contained a lease. He asked about the term of the lease and when it expired. Mr. Bushry stated that the lease would continue as long as funds were made available by the legislature. An ongoing operating budget cost for maintaining the site would be incurred if funds were made available by the legislature. The ongoing cost was estimated at $46 thousand once the initial set-up costs were incurred. Senator Donley opined that the site was redundant to the existing program. Mr. Bushry agreed. Senator Donley suggested that the fiber optic cable could be severed in the same way that the transpacific cable was severed by the trawler. Mr. Bushry acknowledged that the line could be severed; the ability to access the disaster recovery center could help retrieve the lost information. Senator Donley expressed confusion about the need for the second cable if the emergency response was to access the disaster recovery center. Mr. Bushry explained that there were several purposes to the capital project request. He stated that the use of the fiber optic cable would reduce the present costs of obtaining information in Juneau. Co-Chair Sharp understood that disaster relief potential and operational savings were two important components of the request. Mr. Bushry concurred. Senator Donley asked how much of the request was allocated to the cost of the site in Seattle and how much for the establishment of the fiber optic cable. Mr. Bushry explained that the majority of the request was to establish the disaster recovery site in Seattle. The equipment and telecommunication circuits cost $150 thousand to establish the data links. The remaining amount of $342,800 would be used for the disaster recovery site. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES JOE PERKINS, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated that he had one Statewide Transportation Improvement Program (STIP) related amendment. He understood that STIP would not be addressed in the meeting. Commissioner Perkins introduced the first request for Airport Deferred Maintenance for $900 thousand. He stated that the list of deferred maintenance projects included the rural airport needs. He stated that the funding was divided into many small increments for multiple airports. Co-Chair Sharp requested a list of the proposed maintenance projects. Co-Chair Pearce asked the status of the federal requirement regarding fencing upgrades around the facilities. BO BROWNFIELD, DEPUTY COMMISSIONER DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, discussed the ongoing federal program and the upgrade of fencing for security purposes in certificated airports. He noted that there were approximately 27 certificated airports throughout Alaska. Co-Chair Pearce asked if the funding covered the cost of the fencing requirements. Deputy Commissioner Brownfield explained that fencing repairs were included in the item. He added that 25 percent of the funding would be used for fence repair in Sitka. Co-Chair Sharp clarified that all new fencing was funded by Federal Rural Airport Capital. Deputy Commissioner Brownfield concurred and noted that the certificated airports were the department's responsibility. Co-Chair Sharp requested an itemized break-down of the projects listed in the request. Commissioner Perkins continued with the second item for the Alaska Marine Highway System Overhaul and Rehabilitation for $4 million. The item was requested annually. He stated that the item allowed for retention of the vessel's Coast Guard licenses. He offered to provide details about the vessels and their proposed upgrades. Co-Chair Sharp expressed interest in the details by vessel. Senator Torgerson asked how much of the funding was allocated for the Malaspina. Commissioner Perkins responded $225 thousand. Co-Chair Sharp asked how much funding was allocated for highway maintenance. He wanted to compare the deferred maintenance cost of the Alaska Marine Highway System to that of the road system. Commissioner Perkins replied $1.5 million. Commissioner Perkins continued with the next request for Emergency and Non-Routine Repairs for $1 million. He stated that the funding was employed for system emergencies. The request was consistent with that of previous years. He provided examples such as roof repair for an aviation facility. He mentioned extensive flooding on the Nome council road, which led to spending $90 thousand on repairs. He stated that the funding could be used for aviation, buildings or roads. Commissioner Perkins continued with the next request for Facilities Deferred Maintenance and Critical Repairs of $750 thousand. The most important projects were prioritized. He stated that DPS trooper's building required repair of the climate control system costing $105 thousand. He added that the Sitka court/office building required roof membrane and insulation replacement costing $155 thousand. He considered these repairs emergencies. Co-Chair Sharp asked if the repair of the Unalaska Airport Hangar Roof was another part of the request. Commissioner Perkins replied no. He stated that the request for Unalaska was met in the previous fiscal year and that it could be deleted from the list. Commissioner Perkins continued with the request for Federal Transit Administration Grants for $930 thousand. TOM BRIGHAM, DIRECTOR, DIVISION OF STATEWIDE PLANNING, stated that the transit grants included funding from the Federal Transit Administration, which was distributed to transit operations throughout the state. The small percentage of match was due to the fact that the majority of the match was provided by the operators themselves. Co-Chair Sharp asked who the operators were. Mr. Brigham replied transit operators in Barrow, Fairbanks, Kodiak, Ketchikan, Juneau and Anchorage. Commissioner Perkins continued with the Highway Deferred Maintenance request for $1,550,000. He stated that the request appeared in the capital budget annually. He reported to the committee that figures might fluctuate according to maintenance needs. He added that guard rail replacement, dust control and pothole repairs were some of the uses of the highway deferred maintenance funds. He added that the division had programed the appropriate state match to cover the increased program costs. Co-Chair Sharp noted that the imminent Cordova project was not in the capital budget's rural airport project. Commissioner Perkins concurred. He stated that the project was not included because the department was unaware that the federal government would not authorize the repair in the discretionary project. Deputy Commissioner Brownfield added that the project was reviewed by the division; however, the Federal Aviation Administration (FAA) performed a yearly inspection of the certificated airports. The most recent inspection resulted in the discovery of a deteriorating surface that could lead to an accident. He informed the committee that FAA pushed to accomplish the repairs as opposed to waiting for the program. The project must be completed quickly as a major safety requirement. Co-Chair Sharp added that the type of aircraft could be modified for safety purposes. Deputy Brownfield agreed. Co-Chair totaled the capital budget requests at $7,650,000 including supplemental requests and amendments. Senator Donley revisited the FAA issue. He noted two components of the statewide appropriation for the federal aviation program. He wondered if there was a matching amount from the Alaska Industrial Development and Export Authority, (AIDEA). Commissioner Perkins commented that the required match for FAA was between 7 and 8 percent. The match was a requirement of the $80 million program. Senator Donley suggested that the figure was imprecise. He asked for the exact amount of the AIDEA match. Commissioner Perkins explained that the match depended on discretionary funding. He was not sure about the FY 98 FAA total funding because the approval process was ongoing. He stated that the projected amount was an estimate and he would have accurate information in August when the approval process was completed. The normal process was to appropriate a lump sum and then distribute it appropriately among projects. Senator Donley asked if the item was designated in the budget to be spent without a match. Commissioner Perkins replied that the funding was only spent with a match. Senator Donley recalled reading a newspaper article stating that the Department of Transportation and Public Facilities (DOT/PF) representatives would vote on a formula change regarding the percentage allocated to amenities versus roads. He wondered where the decision was made. Commissioner Perkins replied that he made the decision about the allocated percentage. Senator Donley requested further information about the process. He asked if public comments were reviewed regarding the percentages used in the match process. Commissioner Perkins answered in the affirmative. Senator Donley pointed out that the public comments advocated overwhelmingly for a 10 percent match. He asked why the commissioner recommended 15 percent, when the public comments advocated for 10 percent. Commissioner Perkins disagreed with the adjective "overwhelmingly." He opined that each municipality could make a decision regarding their preferred percentage. Senator Donley maintained that the public comments overwhelmingly supported a match of 10 percent, without question. He stated that the comments were public record and he offered to provide them to the commissioner. He added that the assembly took the position to support the 10 percent match. He asked why the commissioner chose to have his representative vote with the mayor as opposed to the public. Commissioner Perkins replied that he reviewed the project list and he advocated for "enhancement" money. He added that the funding was spent on enhancements rather than only bike trails. He stated that a responsible project example was the coastal trail in Anchorage. If his recommendation was a problem, the municipality could change it. Senator Donley wished to understand the basis of the commissioner's decision, when the public overwhelmingly commented against the decision. Commissioner Perkins stated that the decisions in DOT/PF were based on many different recommendations. He added that the Anchorage DOT/PF supported his decision. Senator Donley expressed disappointment regarding the lack of communication with DOT/PF and the legislators. He realized that the situation of the match was amiss after reading the newspaper. Commissioner Perkins countered that the department had one of five votes on the issue of the Anchorage Metropolitan Area Transportation Study (AMATS). UNIVERSITY OF ALASKA MARY LOU BURTON, BUDGET DIRECTOR, UNIVERSITY OF ALASKA, announced three capital budget requests. She introduced the first request for Systemwide Deferred Maintenance and Code Compliance for $7 million. She stated that the university would devote $16.5 million from its operating budget to maintenance, repair, renewal and replacement costs. She explained that a backlog of projects equaling approximately $90 million remained. She stated that the projects continued to be the regent's highest capital request priority. Ms. Burton addressed the next request for Small Business Development Programs for $450 thousand in matching funds. The funding represented continuation funding which generated over $4 for every $1 invested by the state. She noted that the governor's budget proposed that the funding be derived from AIDEA. She urged the committee to consider the program on its merits regardless of the funding source. Co-Chair Sharp asked about the source of the match. Ms. Burton responded that $1 million was 50 percent federal funding and 50 percent private funding. Co-Chair Sharp asked if the federal funding was received directly by the university. Ms. Burton replied that the federal funding was incorporated into the university's operating budget. She stated that the program was historically funded in the capital budget. Co-Chair Sharp asked about the prior fiscal year's request. Ms. Burton responded that the prior fiscal year's request was $450 thousand. Ms. Burton continued with the request for the Physical Education Facility Design and Construction- Juneau Campus for $4 million. The request would allow the university to seek non-state funding or loans to finance a basic physical education facility. One source of funding was the potential sale of the Bill Ray Center in Juneau. Co-Chair Sharp wondered if the university could sell property and then spend receipts without legislative approval. Ms. Burton responded that the funding must be authorized by the legislature. She stated that the university receipt authority and user fees would cover the sale proceeds. Senator Torgerson asked if the funds could be reappropriated to university operations. Co-Chair Sharp understood that the university receipt authority could be derived from varied sources. He asked if the tuition fees might be used for a physical education facility. Ms. Burton replied absolutely not. Ms. Burton stated that the university had a capital item in the supplemental budget. The item requested authority to receive and expend up to $1.7 million in university receipts for planning and design of a multi-agency fishing facility in Juneau. She mentioned that the National Oceanic and Atmospheric Administration (NOAA) was in the process of building a new fishing facility in Juneau. The university requested the option of being a co-tenant in the facility. She noted that Senator Ted Stevens proposed the notion that the federal and the state governments would combine research efforts to gain the benefits of collaboration. The fisheries unit at the university was occupying space needed by instructional programs, making the move advantageous for multiple reasons. She added that the request was included in the supplemental bill because NOAA was proceeding and hoped for commitment by May. ALASKA COURT SYSTEM CHRIS CHRISTIANSON, GENERAL COUNCIL, JUDICIAL BRANCH, began with a $2,734,000 request for Emergency Replacement of Courtroom Recording Equipment. He mentioned that Alaska was the only state to utilize tape recorders instead of stenographers in the court system. Stenographers would be paid at range 17 based on what they were compensated in other states, leading to more than $1 million in personnel costs. He explained that the court system's current equipment was over 15 years old and that the manufacturer of that equipment went out of business six years ago. He noted that the equipment had a 10 year life span when purchased. After realizing that a complete record was not generated, criminal trials were repeated. The request for the equipment was 10 percent lower than expected. Next year's request would fund rural courts, estimated at $1 million. Mr. Christianson stated the second request for renovation of the Boney Courthouse in Anchorage for $1,460,000. He stated that the Alaska Court System was facing a number of citations for the courthouse built in 1974. An inventory was completed in 1993 and a total of 101 deficiencies were identified with a projected construction cost of over $5 million. Two prior appropriations allowed the system to address many of the deficiencies and the final stage will allow for completion of the project and ultimately compliance with Americans with Disabilities Act requirements and energy codes for lighting and power adequacy. He provided a copy of project details for the committee members. Mr. Christianson continued with the third priority for replacement of hardware equipment for the new Computerized Case Management System. The cost of the initial phase was $900 thousand. Benefits to the public included faster processing of documents and information requests. Mr. Christianson continued with the system's fourth priority of the Palmer Courthouse Expansion for $1,914,000. The courthouse was built to originally serve a population of 31 thousand people. In 1996 the Supreme Court authorized the relocation of a superior court judge from Valdez to Palmer, in response to significant population and caseload increases in Palmer. The building expansion would increase efficiency while benefiting the jurors and the public. Mr. Christianson concluded with the last request of $850 thousand for the Statewide Court Facility Code and Energy Conservation Upgrades. The project would span three years, FY 99 through FY 01. Senator Parnell asked about the request for completion of the computerized case management system. He reported to the committee his experience of sitting with a district court judge to observe an arraignment. He recalled that the judge worked with between 40 and 80 files per day and was required to hand write each order. He found the process to be a waste of time and resources. He believed that the computerized case management system would improve productivity. He wondered if the item was tied into the clerk's office and how it might implement efficiency of the judge's time in the courtroom. Mr. Christianson responded that the goal was to allow terminals to be connected to the mainframe in the courtrooms. He mentioned another project with the goal of improving case management in a district court in Anchorage. He believed that changes in hardware and procedures would improve the process and make it more efficient. He expected to report improvement next year. Senator Parnell recalled that district court judges did not have terminals. He stated that Alaska was behind in the technology aspect of court proceedings. Senator Torgerson asked about the Palmer courthouse expansion. He recalled the approval of a maximum security prison in Anchorage as well as authorization of a project in Big Delta. He understood that the goal of the process was to minimize the prisoners in Palmer. He asked about the potential impact. Mr. Christianson responded that the majority of the caseload was civil. DEPARTMENT OF PUBLIC SAFETY Co-Chair Sharp continued with the Department of Public Safety (DPS). KEN BISCHOFF, DIRECTOR OF ADMINISTRATIVE SERVICES, DEPARTMENT OF PUBLIC SAFETY, began with a reappropriation request of $1.4 million from the fingerprint system to the Sitka Academy Project. The funds were available due to outsourcing to a service bureau that would combine fingerprint records with those of six other western states. The reappropriation combined with another $700,000 would allow the completion of a twenty person women's dormitory at the Sitka Academy along with relocation of the firing range. This item was found in the capital budget language section 7. Co-Chair Sharp asked Mr. Bischoff to begin with the regular capital budget requests. Mr. Bischoff stated that the item was an annual request for fish and wildlife protection aircraft and vessel repair for $1,221,500. He stated that the department operated approximately 40 aircraft and 20 vessels, which required annual maintenance. Mr. Bischoff explained the next item for Fish and Wildlife Protection Equipment for $375 thousand. These maintenance projects included those for skiffs, outboard motors, snow machines, all-terrain vehicles and other equipment required for the enforcement activity of the division. Co-Chair Sharp opined that the requests appeared to be potential operating budget items. Mr. Bischoff continued with the trooper law enforcement equipment request for $353,500. The equipment included vehicle radios, batteries, vehicle disabling devices, handguns, tape recorders, cameras and computers. Senator Parnell understood that the legislature appropriated funds that may have been used for equipment. He asked if the amount requested was adequate for law enforcement equipment purchases. He preferred to refrain from using personal services funds to purchase equipment. He requested clarification about the request. Mr. Bischoff recalled significant discussion regarding the department's work plan. He acknowledged that the department's operating budget required the movement of funds from personal services to other line items. One line item would cover a shortfall in prisoner transportation for $200 thousand. The other line item transfer included approximately $490 thousand for trooper recruitment replacement training, related travel costs, employee moves and academy tuition to obtain trooper replacement. The request mentioned earlier in the meeting was made annually by the department. Senator Parnell asked if personal services funds were expended on the computer related equipment or radios. Mr. Bischoff responded no, not to his knowledge. Mr. Bischoff continued with trooper dispatch console replacement for Fairbanks. The request for $250 thousand would fund a project consisting of redesign, upgrade, purchase and replacement of Very High Frequency (VHF) communications and telephone interfacing equipment located in the Public Safety building in Fairbanks. The equipment was over 16 years old. Mr. Bischoff addressed the statewide academy expansion request for $700 thousand. He mentioned the reappropriation for the Sitka academy, which was tied in to the request. The project combined with the reappropriation in section 7 would provide $2.1 million for the construction of a women's dormitory and the relocation of a firing range. Encroaching development makes use of the firing range an increasing public liability. Co-Chair Pearce opined that if the city allowed the zoning for development near the firing range the developer ought to pay for the relocation. Mr. Bischoff responded that the project was considered a capital match because the city of Sitka contributed $300 thousand in terms of road enhancements and access to relocate the firing range and as such is participating in the project. Co-Chair Pearce asked about the state's cost. Mr. Bischoff responded $2.1 million. Senator Parnell asked if the current shooting range was on state land or leased land. Mr. Bischoff did not know the answer, but offered to report back to the committee. Senator Torgerson asked about guarantees that another subdivision would not be built near the new firing range location. Mr. Bischoff understood that the firing range would be accessible to the public during times that the troopers were not using it making the likelihood remote that the problem would emerge again. Senator Parnell stated that he was driven to the firing range's new location which was a great distance from town. Senator Donley asked if the cost of the firing range was $700 thousand. Mr. Bischoff replied that Sitka contributed $300 thousand and estimating the 100 yard shooting range cost at $360 thousand. Co-Chair Sharp understood that the total cost of the project was $2.1 million. He asked if the cost of the shooting range was included in the request. Mr. Bischoff replied that the state's total outlay for the project was $2.1 million. The city of Sitka would provide $300 thousand for a total of $2.4 million project, which would accomplish both the woman's dormitory addition and a shooting range. Co-Chair Sharp asked if the proposal was from the prior year's appropriation of $1.4 million. He asked where the cost of the joint effort for the fingerprinting program would be covered. Mr. Bischoff responded that the department requested that the $116 thousand operating budget increment be placed in the criminal records and identification component. Co-Chair Sharp asked if the funding source was the general fund. Mr. Bischoff concurred. Mr. Bischoff continued with the Alaska Public Safety Information Network (APSIN) statewide data communications request for $150 thousand. He explained that the project would continue the conversion from older technologies. The department was transitioning to an internet based system. He noted that there were 200 thousand users of the systems including the department plus all of the law enforcement agencies around the state. Co-Chair Sharp noted that there were three various APSIN requests. The first request was for $150 thousand, the second for $600 thousand and the third for $150 thousand. He asked if each project was a stand-alone project. Mr. Bischoff responded that each item involved components of the same overall application and networks, but the projects themselves were separate. The APSIN redesign and implementation would be similar to other department's systems. He stated that changes in state and federal legislation created the need to implement more current technology. The department was able to attract some federal grant funds so that the general fund would not provide the only source. He stated that some general fund participation was required to implement the project. Mr. Bischoff continued that the APSIN data communication would begin to integrate the telecommunications portion of the application. The APSIN redesign included the application itself along with trooper histories and trooper reports. He added that the APSIN NCIC-2000 analysis and design was a national system that over 60 thousand agencies participated in. The system allowed all 50 states and Canada to perform criminal history checks and establish hot file entries for missing and wanted persons. The system was developed in 1965 and used very old technology. The Federal Bureau of Investigation spent hundreds of millions of dollars to upgrade the network. Co-Chair Sharp understood that the current APSIN system had interconnection capability with the nationwide system. Mr. Bischoff agreed. He stated that the compatibility would change as the nationwide system was upgraded. Senator Parnell asked about [undecipherable]. Mr. Bischoff responded that DNA samples were indexed in the system when identified at the crime lab. He added that flagging for sexual offenders in the registry was also present. Co-Chair Sharp continued with the department's only supplemental request. He stated that the Council of Domestic Violence and Sexual Assault had an ongoing project to automate statistics and data captured at each shelter. The supplemental request would allow this capability in every shelter to allow the standard data collection to be implemented in each shelter to allow for more effective reporting of incidents. The request would complete phase three, the last phase of the project. LEGISLATURE PAM VARNEY, EXECUTIVE DIRECTOR, LEGISLATIVE AFFAIRS AGENCY, explained the capital budget request for FY 99 including six projects. She noted that the legislature appropriated capital budget funds to improve the data processing section resulting in fewer calls to the help desk and maintenance departments. She began with the first item, the Capitol School renovation to office space. The legislative council intended to convert the school to office space. The offices would relocate from the Goldstein Building, whose lease exceeds $335 thousand per year. She stated the lease expense by $230 thousand per year. The operating cost of the Capital School would include janitorial services, electricity and oil expenses. The lease savings would be recovered over approximately nine years. Ms. Varney mentioned a study by the budget and audit committee concluding that the Capital School represented a valuable asset and cost effective office space. She stated that the building would be brought up to code with elevators and converting the classrooms to office space. She stated that Legislative Legal and Research would occupy the third floor. The second floor would house the executive director's office, accounting, personnel and house and senate records. The first floor would house the data processing section, the legislative legal library combined with the research library and the Legislative Information Office (LIO). She noted that the building would house a large Juneau Information Conference room combined with the data processing training room. She hoped to have video teleconferencing equipment to be utilized by House and Senate members. She expected to move into the building July 1999. Ms. Varney continued with the next item, for computer system conversion. She stated that the computer system required Y2K compliance. She pointed out that the bidding process and part of the analysis was complete. She offered to provide the executive summary. The projected cost was $2.5 million for the project. The request was for a total of $1.8 million because the hope was to hire experienced programmers to save money. The cost for the project included design work, server licensing, technical training for agency technicians and purchasing software development tools. Ms. Varney discussed the next item, the second year computer software replacement project for legislator's office, which was an ongoing four-year project to replace the Senate and House computer equipment. She explained that the plan was to replace 69 Power Mac 60100 with PCs and purchasing software and printers. The total cost of the project was $240,500. Ms. Varney continued with the next project, replacing the Legislative Affairs Agency's (LAA) computer equipment and software. She stated that the information offices would convert to PCs and state standard hardware and software that were approved by legislative council. The request was for $60 thousand. Ms. Varney discussed the replacement of Macintosh SE30 computers and old printers that were used as teleconference terminals in the Capitol with laptops and quiet printers for a total of $17,800 thousand. She mentioned the need to upgrade 16 legal services computers and software to allow for compatibility with legislative platforms. The replacement of more advanced PCs would cost $32 thousand. Ms. Varney continued with the next item, the statewide legislative telephone system replacement. The phone systems in the legislator's interim offices along with those in the LIO offices would be replaced. Conversion to the new phone system would save the state $14,400 annually. The telephone upgrade proposal was approximately $49 thousand for Anchorage, $8 thousand for Fairbanks, $5 thousand for Homer, $12 thousand for Kenai, $5 thousand for Kodiak, $13 thousand for MatSu and $5 thousand for Sitka for a total of $100 thousand. Ms. Varney discussed the final request for a teleconference bridge. She noted that the state paid approximately $27 thousand per year to lease a bridge. The bridge was old and encountered frequent breakdowns. Purchasing a new bridge would eliminate the annual lease costs and provide better service. The total request was $156 thousand. Senator Parnell asked about the average life of a bridge if purchased. Ms. Varney replied that the leased bridge was considered "state-of-the-art" when purchased by Alaska Communications six years prior. She anticipated that a new bridge, with software updates would function longer than five years. Senator Parnell wondered if the option of bidding for a new lease every few years had been explored. Ms. Varney replied that Alaska Communications was the only provider of the bridge service six years ago when the lease was signed. Senator Parnell supposed that instead of embarking on the telecommunications business, bidding for the best option might provide the best service. Senator Parnell asked about the Capitol School renovation. He wondered what the useful life of the building was anticipated. Ms. Varney replied that the useful life of the Capitol School following renovation would be the same as the Capitol as both buildings were built in the 1920s. She imagined that the improvements would work to extend the life of the Capitol School building. Senator Parnell asked about BASIS and the request of $1.8 million for upgrades. He asked if BASIS would be year 2000 compliant. [Undecipherable] replied yes, the proposal would redesign and implement the BASIS system, which would be year 2000 compliant. Senator Parnell asked if the system would run under the new [undecipherable]. [Undecipherable] replied that the goal was to exit the mainframe and utilize the internet environment instead. Senator Parnell asked if the system would be operable in the internet environment. Co-Chair Sharp asked about the lease for the teleconferencing bridge. He asked if a lease would tie the state to one communication supplier. Ms. Varney explained that the current agreement included a five year lease with AT&T/Alaska Communications. The bridge had not been upgraded in six years. She believed that if the choice was made to go out to bid, newer technology would be the best choice. Co-Chair Sharp asked if the bid would tie the user to a single source supplier for the communication link. He asked who provided maintenance and the cost. Ms. Varney responded that the purchase price included a year of maintenance. Currently the state paid $36 hundred to AT&T Alaska Communications for the maintenance service. Co-Chair Sharp asked if the maintenance of a purchased bridge could be contracted out. Senator Parnell asked if the cost of putting the project out to bid had been compared to the purchasing price of a new system combined with maintenance costs. Ms. Varney explained that past methods of teleconferencing for the legislature were different than those of standard industries. If the legislature wished to change the method, the bidding process would be simpler. The legislature leased the bridge and hired the operator. Most bridge services provide an operator. She added that there were not instate service providers for the necessary teleconferencing service. Bids would go to an out-of-state provider. SENATE BILL 292 "An Act making supplemental appropriations; making, amending, and repealing capital or other appropriations; making appropriations to capitalize funds; and providing for an effective date." Co-Chair Sharp informed the committee that the supplemental items would be discussed by department. DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT Co-Chair Sharp began with the Kodiak launch complex project. PAT LADNER, PRESIDENT AND CEO, ALASKA AEROSPACE DEVELOPMENT CORPORATION (via teleconference), explained that statutes allow authority to receive funds, but legislative approval was required in order to spend the funds. He mentioned the negotiation of contracts for the first three launches. He requested approval to spend the funding received from the three launch contracts. Co-Chair Sharp stated that the total funding for the three launch sites was $5 million. He asked if the first three launches would be performed by the Air Force. Mr. Ladner concurred that the first three launches were Air Force. YVONNE CHASE, DIVISION OF COMMUNITY AND REGIONAL AFFAIRS (via teleconference), discussed the $500 thousand request for the Head Start center. She stated that the capital funds would be used throughout the state to improve the centers and consequently their programs. The funds were targeted for securing compliance with health, safety and sanitation standards. She stated that the reason for the division's submission of the request was due to joint work with the state Head Start association to assist multiple communities. She pointed out that the items listed totaled more than $500 thousand, so needs would be prioritized if the request was approved. Co-Chair Sharp asked if the projects were listed in priority. Ms. Chase replied that the list represented a total of projects with the amounts for each community. If the request was approved, the division planned to work with the Head Start Association to help the communities prioritize based on the amount of funding available. Senator Torgerson asked if the funding was matched with local money. Ms. Chase replied yes. She stated that individual communities contributed to the Head Start centers. She indicated that the contributions were not an exact match. She offered to provide details to the committee. Senator Torgerson asked if the Head Start projects involving new buildings were for the purpose of new programs. Ms. Chase replied that new programs arose in the state along with existing buildings requiring extensive repairs. Senator Torgerson imagined that the requested funding might fund one or two projects. He felt that a priority list was important in his decision making about appropriating the funds. Ms. Chase stated that the department would not prioritize the projects. The Head Start Association and the communities would work together to determine the greatest needs. She agreed that two of the larger projects would utilize the funds in their entirety. She supposed that the Head Start Association would select many of the smaller items first and use additional funding to initiate the new projects. DEPARTMENT OF CORRECTIONS DWAYNE PEEPLES, ADMINISTRATIVE SERVICES, DEPARTMENT OF CORRECTIONS, discussed the $100 thousand supplemental capital request. The intention was to purchase new equipment and two vehicles in Bethel. The office equipment and computers were for the Smart Start Initiative in the FY 99 operating budget. The governor was implementing increased probation and parole supervision of sex predators. He stated that Alaska had 700 sex predators on probation with an anticipated 150 more over the next year. The intention was to focus on monitoring and surveillance of those considered high-risk for repeat offence. One probation officer was transferred to Bethel. He added that a request was made in the FY 99 operating budget for four probation officers. The remaining balance of the funds would go toward purchasing office equipment, personal protection equipment and creating operations for two probation officers in Anchorage, one in Fairbanks and one in Palmer. Senator Parnell asked if the sex predators were the highest priority for parole supervision. Mr. Peeples replied yes. Senator Parnell clarified that the funds were to provide supervision capabilities to increase the supervision of the high-risk individuals. Mr. Peeples concurred. Co-Chair Sharp asked if two vehicles in Bethel would help increase the supervision. Mr. Peeples responded that the additional vehicles were a part of the overall plan for the department. Senator Parnell asked how the need in Bethel had been identified. He thought that larger urban centers would house more predators. Mr. Peeples responded that Anchorage would obtain two additional parole officers. The intention was to enhance Bethel's coverage as it had a fairly high percentage of sexual predators on parole. Co-Chair Sharp asked how many people would be tracked by two vehicles in Bethel. Mr. Peeples offered to report back to the committee with an answer. Senator Parnell asked if the parole officers had vehicles in Bethel. Mr. Peeples responded that the number of vehicles was insufficient to fully implement the monitoring program. He added that two people do not have vehicles. DEPARTMENT OF EDUCATION KAREN REHFELD, DIRECTOR OF EDUCATION SUPPORT SERVICES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, began with the first request to provide funding to Mount Edgecombe High School for the removal of hazardous chemicals in the powerhouse facility. She spoke about the various chemicals and compounds existing in the facility in addition to the long range plan to demolish the building. She explained the goal of securing the building to keep the students safe. Co-Chair Sharp asked if the department was requesting $40 thousand of the $158,250. Ms. Rehfeld responded that the original request was for $158,300, which included the removal of the friable asbestos. She stated that prior to the asbestos removal, the chemicals must be disposed of and the building secured. Senator Torgerson asked if the building was locked. Ms. Rehfeld responded that plywood was nailed over the windows, but some students have displaced the wood to enter the building. She stated that the request would provide funding to place galvanized steel over the windows and remove some of the stairs and platform access to further secure the building. Co-Chair Sharp asked if the building had signage communicating the contaminated materials. OFFICE OF THE GOVERNOR JOAN BROWN, OFFICE OF MANAGEMENT AND BUDGET, stated the request was an additional $1 million in general funds to continue to work down the list of state facilities with physical barriers for compliance with the American with Disabilities Act (ADA). DEPARTMENT OF HEALTH AND SOCIAL SERVICES JANET CLARK, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, highlighted the first project for the ADA competitive grant for the mental health beneficiaries for $200 thousand. She pointed out that $100 thousand was Mental Health Trust Authority receipts and $100 thousand general fund mental health. The project would provide grants for mental health beneficiaries to upgrade their facilities. Ms. Clark addressed the next project for the Division of Family and Youth Services (DFYS) technology improvements with a request of $450 thousand [undecipherable]. She stated that the project would continue the development of the main computer system that DFYS used called Online Resources for the Children of Alaska (ORCA). The federal funds are available only with the available match. Ms. Clark continued with the Alcohol and Drug Abuse Management Information System upgrade with a request of $392 thousand in general funds. The project was itemized for committee members. She noted that the Division of Alcoholism and Drug Abuse managed a $20 million grant program annually. The division secured support to the grantees that provided management information. The funding was divided by $60 thousand for current support and training, $210 thousand for hardware and software upgrades for the grantees, and $122 thousand for computerized grants management performed annually. Senator Parnell recalled a provider testifying about the carry forward of grants to replace computers and buy software. LOREN JONES, DIRECTOR, DIVISION OF ALCOHOLISM AND DRUG ABUSE, responded that some programs had resources to purchase computer equipment. He stated that compatibility and standards for software and hardware were established within the division. Hardware purchased specifically for the required software allowed the division to maintain the standard. Ms. Clark continued with a request for the department wide client integration project. The request for the project was $800 thousand, with $400 thousand of general funds, $200 thousand of federal funds and $200 thousand from the Mental Health Trust Authority. She explained that the system was not new, but simply provided a new use of data. Co-Chair Sharp assumed that the federal government did not require more than a 100 percent match. Ms. Clark concurred. She stated that the federal funds would be applied by federal agencies for direct federal funds. Matching funds would be received by some federal agencies depending on which programs were in the data warehouse. Co-Chair Sharp observed that the item's details showed $200 thousand in federal match. Ms. Clark explained that the department applied to the federal government for $200 thousand. The amount of general funds received were an important component to the equation. Co-Chair Sharp asked about a preference for general funds or mental health trust funds. Ms. Clark responded that there was no preference. She continued with the next project for nursing communications. She noted that the section of public health nurses was the last set of employees who lacked personal computers and were therefore separated from the rest of the state government. She stated that the nurses used a computer system to track client information in the public health nursing center. The computer upgrade would allow nurses access to email and the internet and to transmit collected data. Ms. Clark introduced the next item for family and youth services field safety and transportation equipment. She explained the need to replace vehicles and safety equipment for the division of family and youth services. She stated that employees in the division requested additional cell phones, alarms and newer vehicles. Ms. Clark introduced the McLaughlin Youth Center heat and ventilation control system. The project would replace obsolete and nonfunctioning mechanical controls. She stated that the existing manual controls were approximately 30 years old and in poor condition. The plan was to replace obsolete controls with a direct digital control system to allow central monitoring of system. The upgrade would reduce energy and operating costs by 12 -17 percent. Co-Chair Sharp asked if another capital project request existed for the McLaughlin Youth Center. Ms. Clark responded that the department had another, much larger request for the youth center. Ms. Clark continued with a request for the Kenai Health Center project. She explained that in 1967 the department entered an agreement for the exchange of land, which allowed for the location of the health center in the City Hall building. She added that staff increased from four to nine, which led to a crowded work environment. She stated that the waiting room and city council meeting room were shared. She mentioned the plan for a joint facility where the city provided land with city and state government sharing a facility. Ms. Clark examined the funding of planning and design appropriations for youth correctional facilities throughout the state. She stated that the request was for $1,500,000 for a new facility in the Ketchikan area to serve the southern southeast. She noted that FY 95 saw 20 percent of admissions to the Johnson Youth Center in Juneau from Ketchikan. She explained that Ketchikan was without a youth center, which made work difficult for local law enforcement. The initial plan budgeted for four beds and the local community decided to supplement with beds for emotionally disturbed youth and those with substance abuse issues. The community was seeking the funds from private foundations and the Mental Health Trust Authority. Co-Chair Sharp understood that the facility might cost more than $3 million. Ms. Clark responded that the addition of the beds for substance abuse and mental health would increase the cost to approximately $2.7 million. Co-Chair Sharp asked if the proposed amount of beds was ten. Ms. Clark concurred. She noted that the department wished to minimize the use of beds, but was supportive of the need for mental health services. Co-Chair Sharp asked about the efficiencies associated with a four bed facility. Ms. Clark responded that a four bed facility was not particularly efficient. She stated that an eight bed facility and a four bed facility incurred similar operating costs. Ms. Clark continued by providing photographs and history of past legislative appropriation for the McLaughlin Youth Center detention. She noted last year's appropriation for replacement of an abandoned cottage and planning funds to upgrade the detention facility at McLaughlin. The $5.2 million request for McLaughlin would fund the remaining portion of the project. The project would provide detention facilities and additional detention beds. GEORGE BUHITE, MCLAUGHLIN YOUTH CENTER SUPERINTENDENT (via teleconference), stated that the youth center housed 300 children in their 220 bed capacity with the rate of new entrants increasing each year. Co-Chair Sharp referred to an aerial photograph of the layout provided to the committee members. Ms. Clark helped to explain the photograph's location. She mentioned that McLaughlin Youth Center was situated on Mental Health Trust Authority land, which was provided in a settlement. Ms. Clark continued with the next item. She stated that the legislature funded planning and design for the initial stages of the Matanuska Susitna Detention and Support Facilities. The current request was for $4.1 million. She stated that the Matanuska Susitna valley lacked a facility. The department recognized the need to serve the population, since 9 percent of the detention admissions were from the Matanuska Susitna area. She explained that the planning funds allowed for a 15 bed facility with the opportunity to expand. She stated that the issue of finding land was large. Senator Parnell understood that the cost would be approximately $410 thousand per bed. Ms. Clark agreed and stated that the project was "starting from scratch." Co-Chair Clark asked if the facility required kitchen and laundry facilities. Ms. Clark stated that the department preferred to contract the kitchen and laundry services. Mr. Buhite contributed that probation offices and educational space was incorporated into the plan for the sake of efficiency. Ms. Clark introduced the last item for competitive grants for statewide family inhalant treatment program for the cost of $800 thousand. She noted that Alaska lacked a treatment facility for inhalants. She stated that the problem in rural areas was increasing with surveys showing as many as 20 percent of high school students trying inhalants. Inhalant abuse led to permanent brain damage, which incurred long-term costs. Senator Parnell asked if the Mental Health Trust Authority had shown interest in the issue. Ms. Clark responded yes. She stated that the project had not gone through the Mental Health Trust Authority's process although they were interested in the problem. Senator Parnell understood that the item was intended for substance abuse treatment. Co-Chair Sharp asked if Ms. Clark envisioned a competitive grant. He asked about the term competitive. Ms. Clark explained that the proposal would be competitive by seeking interest in the facility. Senator Parnell asked if other forms of substance abuse used separate facilities for separate addition issues. He wondered if the item might be included in operating grants. Ms. Clark responded that the department sought specific types of grant programs. Some facilities competed for a variety of programs. She added that the request was not for operating dollars but instead for capital dollars to purchase or renovate a facility to create a treatment facility. The competitive grant proposal would allow the department to ascertain interest in the project. Co-Chair Sharp asked if the request was similar to a designated grant. Ms. Clark chose not to designate it. She preferred to evaluate the interested entities. Co-Chair Sharp requested further information about operating funds. He asked if the project would fall under substance and alcohol abuse for operating budget purposes. Ms. Clark concurred and noted that requests to the federal government would be submitted as well. Senator Parnell wondered why a grant to purchase a facility was preferable to purchasing the treatment service. Ms. Clark stated that she had finished discussing her list of items. SB 231 was HEARD and HELD in committee for further consideration. SB 230 was HEARD and HELD in committee for further consideration. SB 292 was HEARD and HELD in committee for further consideration. ADJOURNMENT