MINUTES SENATE FINANCE COMMITTEE 2 May, 1998 1:10 p.m. TAPES SFC 98 # 151, Side A (000-590) Side B (590-000) CALL TO ORDER Senator Bert Sharp, Co-Chair, convened the meeting at approximately 1:10 p.m. PRESENT In addition to Co-Chair Sharp, Senators Donley, Adams and Parnell were present when the meeting was convened. Senators Pearce, Phillips and Torgerson arrived shortly thereafter. Also Attending: Senator LYDA GREEN; Senator JERRY MACKIE; ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor; DAN SPENCER, Chief Budget Analyst, OMB; LAURA BAKER, Budget Analyst, OMB; BARBARA RITCHIE, Deputy Attorney General, Civil Division, Department of Law; JIM BALDWIN, Assistant Attorney General, Governmental Affairs Section, CD, DOL; TRACY MAHR, Accounting Supervisor, Division of Administrative Services, DOL; JOE PERKINS, Commissioner, Department of Transportation and Public Facilities; NANCY SLAGLE, Director, Division of Administrative Services, DOT&PF; DEBORAH VOGT, Deputy Commissioner, Department of Revenue; NANCI JONES, Director, Division of Permanent Fund Dividend, DOR;JOHN BITTNEY, Alaska Housing Finance Corporation, DOR; SHARON BARTON, Director, Division of Administrative Services, Department of Administration; DUGAN PETTY, Director, Division of General Services, DOA; BARBARA FRANK, Director, Division of Administrative Services, Department of Commerce and Economic Development; DWAYNE PEEPLES, Director, Division of Administrative Services, Department of Corrections; KAREN REHFELD, Director, Division of Education Support Services, Department of Education; KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game; JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services; DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Military and Veterans Affairs and Department of Natural Resources; KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety; MARY LOU BURTON, Director, Budget Development, University of Alaska; CHRIS CHRISTENSEN, Staff Council, Alaska Court System; MIKE GREANY, Director, Division of Legislative Finance; JIM HAUCH, Fiscal Analyst, DLF; GRETCHEN MANNIX, Fiscal Analyst, DLF; and aides to committee members and other members of the Legislature. SUMMARY INFORMATION CS FOR SENATE BILL NO. 231(FIN) "An Act making and amending capital, supplemental, and other appropriations; making appropriations to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." Co-Chair Sharp announced that the committee would try to hear testimony from each agency relating to the committee substitute for the FY99 Capital Budget. He spoke to some of the changes. The committee would begin considerations of amendments the next day. He addressed the CS and began with the front section. He requested his staff member, TOM WILLIAMS to explain the changes. Mr. Williams came to the table and shared with the committee some of the following: Section 1 was an appropriation to the Clean Water fund in the Department of Environmental Conservation as was Section 2 for the Alaska Drinking Water Fund. These were routine annual appropriations to the loan programs, Mr. Williams explained. Section 3 was a $250,000 grant similar to past grants for the Arctic National Wildlife Refuge. Section 4 would appropriate $1.85 million to the Unincorporated Community Capital Matching Project Grant Fund and $13.15 million to the Municipal Capital Project Matching Grant Fund. This was initially proposed last year, he told the committee. Section 5 was a reappropriation of a $1.4 million appropriation made last year that the Administration proposed to appropriate for the Sitka Police Academy. According to Mr. Williams, this had been reappropriated instead to a variety of requested Department of Public Safety and Department of Corrections information-type systems. Section 6 was an appropriation to the Rural Education Revolving Loan Fund. The balance was routinely appropriated on an annual basis, he explained. Section 7 mirrored the Constitutional Budget Reserve Fund language that also appeared in the operating budget. Section 8 was a lapse date extension for an American Red Cross Grant. Mr. Williams told the committee that this had occurred routinely over the last several years. He added there was also lapse extension of FY98 American Red Cross Grant in Section 9. Section 10 indicated which of the sections were for capitalizing funds and Alaska visions. Sections 11 and 12 were effective date provisions. The bulk of the back section started with Section 13 and went through the departments in alphabetical order followed by the University, the Legislature, etc. Senator Parnell asked if the appropriations for the Municipal Capital Matching Grants did not always lapse. Mr. Williams explained the appropriation was to capitalize the fund, which itself did not lapse. Withdrawals were made on an annual basis from the fund and were normal capital appropriations and would lapse. Co-Chair Sharp began going through the department capital projects, starting with the DEPARTMENT OF ADMINISTRATION. He detailed some of the planned appropriations. These included: $300,000 for Digital Photo Identification; $385,000 for the DMV License Plates and Manuals Purchase annual appropriation and minimal equipment; $175,000 for DMV Microfilming and Indexing; $195,000 for Electronic Commerce and Purchasing System; $175,000 for the Lease Database System. He invited SHARON BARTON, Director of Division of Administrative Services to comment on the proposal. She had a couple of questions. First, the DMV License Plates and Manuals were listed as receiving one hundred percent funding. The Governor's request was for $485,000 and she wondered whether it was the intention of the committee to fund at $485,000 or if it was the intention of the committee to reduce that. Co-Chair Sharp answered it was the intention of the committee to fund the amount stated in the CS. According to their information, that amount was enough to pay for the license plates, the manuals and some of the equipment. He admitted the entire equipment portion of the request was not granted. Ms. Barton said her confusion was with the listing of the Governor's request as $385, when it was really $485. Co-Chair Sharp explained that the Governor's request was in the operating budget and therefore was shown as zero on the capital budget. The Senate version was $385,000. Her next question regarded the non-general fund Retirements and Benefits Space Consolidation Furniture project. She wanted to know why it was not funded with general funds. She stressed the need for the division to either secure more space or crowd more staff into existing space. The department felt it was a more cost-effective approach to purchase modular furniture to enable the use of the amount of space they had now. Co-Chair Sharp requested committee members meet with Ms. Barton for more information if they were interested in reinserting the component in the budget packet. He said the request was one that was squeezed out of the budget in attempt to reach the funding goals. Senator Phillips expressed an interest in following up on the matter and looking for a possible accommodation of the project. Ms. Barton continued by speaking to the other unfunded items. She felt the biggest difficulty would be with the lack of additional money for the Public Defender Agency for computers. She explained they were operating with very old equipment and that it increased operating expenses of the division. She offered the project as an investment in decreasing operating costs, which she said the Legislature expressed intent of reducing. Co-Chair Sharp noted that the $700,000 reduction would appear in the bonding proposal as a deferred maintenance item. He linked it to the Pioneers Home. Ms. Barton's final comment addressed the Juneau Subport Relocation Planning component. She said that while it may not appear urgent since the facility didn't have to be vacated until 1999, planning for the move was urgent and would at some point be necessary. Co-Chair Sharp asked what was the extra expense of $100,000. Ms. Barton replied the department intended to hire a consultant to research the options and find the most cost- effective options for relocation. The committee next discussed capital projects for the DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT. Co-Chair Sharp noted the two items in the capital budget, the Four Dam Pool Project Repairs, and Kodiak Launch Complex. Neither of those were funded with general funds. Senator Adams asked about funding for the Kodiak Launch Complex. He was told $4.5 million US Air Force funds and $500,000 from the launch complex fund itself, which originated as Alaska Science and Technology funding. Senator Adams also wanted to know about the $250,000 Economic Development Matching Grant project. He asked if the project would show up elsewhere or was it eliminated. Co-Chair Sharp answered he didn't think it was included in any of the budget proposals. He expanded that the budget just couldn't accommodate all of the AIDEA funded projects and this was one that was cut. The next agency's capital budget addressed by the committee was the DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS. TRACI CARPENTER, Budget Analyst in the Division of Administrative Services was invited to speak to the CS. She didn't believe the department had concerns with the budget. She did have a question regarding the Rural Electrification Revolving Loan Fund listed in the front section. She noted the reduction and was unsure where the committee got the numbers, or what the intent was for the decreased project. Co-Chair Sharp requested Senator Adams work with the department and committee staff to determine the reasons. Senator Adams pointed out that the Alaska Native Heritage Center project was missing. He again asked if this project would be included elsewhere in the full budget package. Co- Chair Sharp didn't think it would be included. The DEPARTMENT OF CORRECTIONS was next to be addressed. DWAYNE PEEPLES, Director of the Division of Administrative Services, came to the table to speak to the capital budget items. Senator Adams had a question for the chair about the deferred maintenance items and if they would be included. Co-Chair Sharp replied that they would be added to the AHFC deferred maintenance budget. Mr. Peeples said the department shared the deferred maintenance concerns and was satisfied if the projects would be included elsewhere. He spoke further to the critical need of the projects. The only item left unfunded was the Community Jails Security and Expansion project. The committee then discussed the DEPARTMENT OF EDUCATION capital projects. KAREN REHFELD, Director of Education Services came to the table. Senator Adams voiced his concern about the $100,000 for Library Material that was not included. Co-Chair Sharp said that item was deleted. Ms. Rehfeld told the committee that request had not been funded for the last two years. She talked about the costs to purchase magazine subscriptions and other periodicals. The committee then heard from BARBARA FRANK, Director of the Division of Administrative Services, on capital projects for the DEPARTMENT OF ENVIRONMENTAL CONSERVATION. She spoke of four items of concern to the department. First, she was unsure about the change of the funding source mix for the Municipal Matching Capital Grants portion. Co-Chair Sharp explained it was just a change to AHFC funds from general funds. The second item of concern was the reduction for Village Safe Water Projects Administration. Co-Chair Sharp responded it was a straight reduction and was funded at the same level as the previous year. Mr. Williams further detailed the changes and referred to intent language. Ms. Frank said the department would need to confirm the figures and that the intent language was important to them. She then spoke of three projects that were deleted. First was a request to create an electronic database of the Domestic Wastewater Files to allow public access to records for property transfers. Second was a request for federal funds to comply with the EPA requirement for Fine Particulate Monitoring. The third request was for Natural Resources Damage Assessment funds from the Exxon Valdez Oil Spill Settlement. Co-Chair Sharp responded to the particulate monitoring project stating that while it would use federal funds for construction, testimony told the committee it would be a continual program, which the municipalities would be expected to finance. Ms. Frank agreed that the program was a new federal requirement and said the director of the Division of Air and Water Quality would attend the meeting tomorrow to speak to that project. Co-Chair Sharp then addressed the request for $325,000 for assessment protocol stating it was determined to not be the best use of the EVOS money. The Domestic Safe Wastewater Files project was deleted because the committee ran out of AHFC receipts to fund it, according to Co-Chair Sharp. Senator Adams spoke of difficulties for the agency to treat all communities the same. He noted the Cordova Water System and the reduction to that project and compared it to the increase for the Anchorage Wastewater project. He hoped that the committee was not playing games and taking from one community to give to another. If so, he speculated the Senate would be unable to get a two-thirds vote from the House to draw from the CBR. Co-Chair Sharp replied the comments were well taken. The DEPARTMENT OF FISH AND GAME capital projects were addressed next. KEVIN BROOKS, Director of Administrative Services, spoke to these items. He referred to the deferred maintenance requests for facilities and vessels, and wanted to know if they would appear somewhere else in the budget. Co-Chair Sharp answered that they were both included in the draft bond budget proposal. Mr. Brooks then spoke of the Juneau Subport facility and the efforts the department had already made to relocate and streamline activities. The Vessel Repair Facility request was a critical project and he detailed the advantages and the preliminary work done to build the new facility on NOAA property. He also talked about the DOA's request for relocation funds and the need for that project also. He then commented on the AIDEA funded projects requested, one of which was for the Hardrock Mining Project. He wanted to know if they would be included elsewhere. Co-Chair Sharp said they did not appear in any other budget packet. The last item Mr. Brooks asked about was the splitting of projects under Sport Fishing Access. He admitted he hadn't had time to go study the changes, but noted that the amount appeared slightly higher than originally requested. He also noticed EVOS funds allocated to some of the projects and warned that they might not be allocated. Co-Chair Sharp pointed out that the EVOS funds were slated for projects in the Prince William Sound area and should qualify for the EVOS funds. He speculated that because the ADF&G commissioner sat on the EVOS board, he would push for their approval. Most of the projects proposed by the Division of Sports Fish were left in tact or had little changes, according to Co-Chair Sharp. Mr. Brooks said that while the commissioner would support and encourage the Whittier projects, he didn't know if the EVOS trustees would approve of the funds use in that manner. Senator Pearce suggested there might be an easier way using the criminal settlement money from the Exxon Valdez oil spill. The settlement accounts were still generating interest, some of which had been allocated to special projects. Now that Shepherd Point road was finally complete, she guessed there might be an opportunity for the Whittier projects to utilize those funds. Senator Adams inquired about the Americans with Disabilities Act project requested by the OFFICE OF THE GOVERNOR. Co- Chair Sharp informed him that the items were included in the deferred maintenance bill. The next capital budget projects discussed were for the DEPARTMENT OF HEALTH AND SOCIAL SERVICES. JANET CLARKE, Director of the Division of Administrative Services testified to the changes. She assumed that the deferred maintenance items would be included in the AHFC bill, which Co-Chair Sharp affirmed. The second item she addressed was the Public Health Laboratory reduction. She told the committee that some of the cuts were to services provided by the Department of Transportation and Public Facilities and that DHS&S could not charge the public for reimbursement. She detailed the reasons for the restrictions. The only other change was the inclusion of the Ketchikan Youth Facility, which had been requested by the Governor in the supplemental bill. Co-Chair Sharp told Ms. Clarke that the capital projects listed in the supplemental budget were either included here or would not be funded. The committee then addressed The DEPARTMENT OF MILITARY AND VETERAN'S AFFAIRS capital budget projects. NICO BUS, Budget Coordinator for both this department and the Department of Natural Resources, spoke to the DMVA items. He told the committee that the number one priority was funding for the Juneau Armory. Co-Chair Sharp assured him this project and also the Nome Armory project would be included in the bond bill in addition to deferred maintenance. Senator Adams pointed out that to obtain federal funding, the projects didn't necessarily need a general fund allocation so long as the state somehow provided the matching funds. Co-Chair Sharp added that projects proposed in multiple phases were going to be allocated the total amount in this year's AHFC budget instead of divided between years. Mr. Bus asked about the Emergency Wireless request. He spoke of the amount granted last year and the funding required for completion of the project. He then addressed capital projects for the DEPARTMENT OF NATURAL RESOURCES. He first spoke of the Rural Coalbed Methane project. Tape #151 Side B This project was in it's third of five steps and funds would be combined with last year's allocation to execute site specific service and drilling sites. Co-Chair Sharp responded that the Senate did not fund the project last year and was added by the other body. Mr. Bus continued with the two requests for the State Recorder's Office for equipment upgrades and repair of disintegrated microfilmed data. He spoke of the deterioration of the current systems and the importance of the operations. He stressed that the customers did pay for the services and generated almost $1 million excess income beyond operating expenses. The next item was the State Oil and Gas Electronic Interface With Industry. Mr. Bus told the committee the Division of Oil and Gas received all the production data manually and they were working with industry to automate. This request would allow them to speed up the process and deposit the money into the permanent fund sooner. He asked if the Fairbanks Maintenance and Repairs project would be included in the deferred maintenance budget. Co- Chair Sharp said it was shifted over. The final request was for the Oil and Gas Royalty Accounting System that had been funded in the past and would standardize all reporting. The committee then addressed capital projects for the DEPARTMENT OF PUBLIC SAFETY. KEN BISCHOFF, Director of the Division of Administrative Services, came to the table. In looking at the budget package, he noted that the proposal would fund five of eight projects requested at essentially the requested level. The three unfunded projects included the Alaska Public Safety Information Network - National Crime Information Center Upgrade. He told the committee the FBI would have their system on-line in about two years and it was conceivable that the project could be deferred for a year, but eventually it needed to be completed. The second project excluded, was the Sitka Academy Dorm Expansion to add a women's wing to provide space for 20 female recruits. The third project not included and was of a more immediate concern, was the Fish and Wildlife Aircraft and Vessel Maintenance. He handed out material to the committee to use as an example. Co-Chair Sharp interrupted to tell Mr. Bischoff the project was included in the deferred maintenance budget. Senator Parnell spoke of concerns over the AFSIN computer system. He noted the requests related to AFSIN and asked if the components not funded were critical. Mr. Bischoff said the allocated amount would be adequate, although they could not do one hundred percent of the work but this would get them started. The DEPARTMENT OF REVENUE capital budget projects were discussed next. The committee invited DEBORAH VOGHT, Deputy Commissioner, to come to the table. She voiced the department's main concern with the deleted Permanent Fund Dividend Capital project. She explained the request for systems improvements. Senator Parnell asked how much of the Year 2000 Compliance request was for the Division of the Permanent Fund. She said none and that she assumed the Legislature would want to pay for the projects out of the dividend fund. She spoke further of the department's Y2K progress. The remaining DOR items were for the ALASKA HOUSING FINANCE CORPORATION. Senator Adams spoke of two concerns, one related to $5 million reduction to the Supplemental Housing component. He wanted to know if the remainder would be covered in the AHFC bond bill. Co-Chair Sharp said it was not, because the information was that no match was required. Senator Adams other concern was with the Weatherization project. JOHN BITTNEY came to the table and explained how federal changes to the Supplemental Housing program moved away from the traditional matching program. Senator Adams asked about the status of the need for the weatherization program's services. Co-Chair Sharp commented that the program was funded close to the level from the year before. Mr. Bittney said the people served by the program were the elderly, disabled and working poor. The division had identified the need, he said. He further detailed the statewide scope of the services and its benefits. Senator Torgerson wanted to know if the funding was at the same level as the year before. Mr. Bittney said it was. Co-Chair Sharp noted there was a funding shift. Senator Adams then asked about the Homeless Assistance Programs and the different amount proposed in the House bill. Co-Chair Sharp said this proponent was also funded at the same level as last year. Mr. Bittney expressed a desire to research and provide a response to the Supplemental Housing program and the Senior and Statewide Housing Deferred Maintenance program allocations. He referred to a ten-year schedule the corporation had been working on for the past four years. Although the funding level remained on schedule, the deferred maintenance projects were falling behind, he told the committee. The committee then discussed capital projects for the DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES. Senator Adams suggested it would be faster to first list which projects would be covered under the AHFC bond bill. Co-Chair Sharp couldn't remember if any ADA projects were included. He listed deferred maintenance for airports, critical facilities, harbors, and harbor construction as included in the other bill. He detailed further the harbor programs. He said the complete list would be available later in the afternoon. Commissioner JOE PERKINS came to the table. He told the committee he would reserve his questions about harbors until the bond budget was released. He pointed out a $500,000 reduction for Emergency Non- Routine Maintenance, which had been funded at $1 million for years. He stressed that every year the department had used that million and warned that the $500,000 would be short. He referred to flooding in Nebesna last year for which the federal government denied reimbursement for repairs. He asked if the balance of the request for Deferred Maintenance for Highways was going to be added elsewhere. Co-Chair Sharp said it would be a reduction. Mr. Perkins told the committee that with the size of the DOT&PF portion of the budget and the limited time they had to review it, they did not have an opportunity to understand it all. He next pointed out that the Anchorage Airport Terminal Project, which the department asked for a $2 million federal authorization was not in the budget packet. Without the authorization, the department could not use the bond funds. Co-Chair Sharp said the item was removed from the bill to see how the entire budget and the airport bond bill fared and that it could be added back later. Mr. Perkins commented on the method of appropriation of match. He had concerns about the expiration of the federal budget match deadlines and the need to expend funds before then. He said it would not be a problem if the department could use 1999 funds, but the way he read the bill, they couldn't. If not, the state would have insufficient match. He requested flexibility. Co-Chair Sharp asked for clarification that the funds were potential increases to the federal 1998 grants. Mr. Perkins detailed the STIP process and talked about the 1998 and 1998 allocations. He didn't believe this was a good year to tighten control over the match since the fund amount was still unknown. Senator Pearce questioned the October deadline and asked if the needed match couldn't be appropriated in a supplemental budget. Mr. Perkins said the department had been given the authority to spend $100 million in FY98. The federal government would give them the rest of the money when the bill passed, he explained. He estimated they would be given another $200 million. The department was preparing projects to begin at that time. He explained the need to spend the money by October first or else lose it to be divided among other states. Co-Chair Sharp commented, "You mean, we don't know what we're getting yet, but we got to have it obligated by the first of October?" Mr. Perkins confirmed that statement. Senator Donley made undecipherable comments to further explain the situation. The committee continued to discuss and clarify the current STIP funding situation. Senator Pearce stated that the stated owed itself to take advantage of the STIP increase opportunity. Mr. Perkins spoke of the potential increase and how it related to the 1998 or 1999 budgets. He estimated a need of an additional $7 or 8 million before October. He offered solutions of using 98 funds. Senator Pearce asked what happened in situations before where inadequate funds were allocated to meet the federal match. Mr. Perkins replied that there had never been such a case. Senator Pearce argued that there was a project in her district that the department hadn't completed citing the state had not provided adequate match. The committee continued the discussion with Mr. Perkins. Senator Donley requested a list of the projects the department would do with the extra funds. Mr. Perkins said the projects were contained in the STIP. Senator Pearce therefore wanted to know which projects would not be done. The two senators and the commissioner debated the contents and the requirements of the STIP. Senator Donley also asked what STIP projects would not be done. Mr. Perkins said the items from the bottom of the priority list would be eliminated. He stated that was a decision the department would make. He didn't feel it would be necessary because Congress would probably award all the needed funds. Senator Donley requested the list. Senator Torgerson referred to information provided by DOT&PF stating the match was not required this year. He requested an overview of why the information was not given until this date. Mr. Perkins explained the use of the '98 and the '99 match. He spoke in length of the different fiscal year matches and supplemental budgets. Senator Torgerson commented that he liked the budget as it was. Senator Donley asked with the escalated amount, did the commissioner anticipate it would be an annual reoccurring higher amount? Mr. Perkins thought it would go up a little each year and that the current amount was low. Senator Donley then asked if the money was for the demonstration projects, which Mr. Perkins said, was not. Co-Chair Sharp asked if the committee understood the non- flexibility of the match in case the department was awarded the additional $100 million. He said he would have his staff work with the department to explain the concept in writing. He thought he understood the complexities. The concern was with knowing which projects would be undertaken. Commissioner Perkins requested the committee appropriate the '99 match in a lump sum with the '98 match. He stated that the state could save $8 or 9 million by doing this. He detailed the reasoning. Senator Pearce had problems giving the department a lump sum. She complained that when that was done in the past, the department didn't do the projects on the priority list and instead moved the money around. Co-Chair Sharp spoke further about his intention to have a list drafted to show the different projects included in this program. Senator Donley commented that the money could be appropriated after the federal determination was made. Commissioner Perkins responded that the only advantage was the Legislature would know what the number was. Tape #152 Side A, 2:50 p.m. Commissioner Perkins continued stressing that the goal was to make sure to not loose any money. He offered the department would work closely with the committee. He voiced another concern with the appropriation detailed all the way down to the engineering element, which he felt could be explained later. He thought that doing the appropriations so detailed would create an accounting nightmare and would also hurt any flexibility. He speculated it would stop projects with the money tied up. Co-Chair Sharp requested the department talk with staff and committee members regarding the concerns voiced during the meeting. Senator Pearce gave a specific example of a project in the Anchorage area. At this point, there was unstructured discussion between the committee members and the commissioner regarding different projects and concerns. The committee moved ahead and discussed capital projects for the UNIVERSITY OF ALASKA. MARY LOU BURTON, Director of Budget Development, came to the table. According to Ms. Barton, the only area of concern was the $4 million requested for the UAS Physical Education Facility that was dropped from the bill. She noted that the funds would not come from general funds and that the Chancellor was looking into options. These included an outright grant; obtaining a loan from the City and Borough of Juneau or using proceeds from the sale of the Bill Ray Center. She told the committee that the students had voted to repay any loans received for construction of the facility. Co-Chair Sharp said the project had been dropped out. Senator Adams suggested that the city could purchase the Bill Ray Center for use as a police department and the money could be used for the physical education facility. He felt the committee should keep their options open. Co-Chair Sharp responded that the project was still open for discussion and that other committee members had some concerns. Senator Torgerson made comments regarding deferred maintenance. The next capital projects discussed were for the ALASKA COURT SYSTEM. The committee invited CHRIS CHRISTENSEN, Staff Council, to speak to the projects. He spoke to deferred maintenance items to be considered in the bond bill. The number one priority, according to Mr. Christensen, was Emergency Replacement of Recording Equipment. This was only funded at about 70 percent of the request, which should get the agency well on its way at replacing the recording equipment in many of the courtrooms, he stated. The only item not funded was the number three priority - $900,000 for Completion of Computerized Case Management System. The Legislature had funded the purchase of the software several years ago and Mr. Christensen said the project was near completion. This funding request was for hardware needed to make the system run efficiently. He noted that ten percent of the request was needed to complete the Year 2000 Compliance project. Senator Adams asked if the Court System was requesting that at least $90,000 reinstated for the Y2K project. Mr. Christensen replied that in order to complete the project, they would need those funds. LEGISLATIVE AFFAIRS AGENCY capital projects were not discussed, as there was no one present to represent the agency. There were no questions by committee members. Capital projects for the MUNICIPAL CAPITAL MATCHING GRANTS were then discussed. Senator Adams referred to the earlier DOT&PF conversation of a saving potential of up to $9 million. He suggested doubling Municipal Matching Grants with the difference. Co- Chair Sharp said he didn't know how long-term the savings would be. Co-Chair Sharp announced that amendments needed to be turned into the Senate Finance Secretary by 10:00 a.m. the next day. He wanted an opportunity to review the amendments and possibly discuss them with the submitting committee member. He continued adding that Senator Pearce was working on operating budget supplemental requests to determine what would be added into this budget. At Senator Adams' request, the co-chair said he would provide a draft of the projects included in the AHFC bonding bill within the hour. ADJOURNMENT Co-Chair Sharp adjourned the meeting at approximately 3:00 p.m. SFC-98 (16) 5/2/98 pm