Legislature(2015 - 2016)HOUSE FINANCE 519

02/09/2016 01:30 PM House FINANCE

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01:31:56 PM Start
01:32:48 PM HB256 || HB257 || HB255
01:32:48 PM Fy 17 Budget Overview: University of Alaska
02:47:16 PM Fy 17 Budget Overview: Department of Fish and Game
03:38:42 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Scheduled but Not Heard
Scheduled but Not Heard
Scheduled but Not Heard
+ FY17 Budget Overview: TELECONFERENCED
- Dept. of Fish & Game
- University of Alaska - Rescheduled from 2/8/16
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 256                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs,    capitalizing   funds,    making                                                                    
     reappropriations,  making supplemental  appropriations,                                                                    
     and 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."                                                                                                        
HOUSE BILL NO. 257                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
HOUSE BILL NO. 255                                                                                                            
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making  appropriations  to  capitalize                                                                    
     funds; and providing for an effective date."                                                                               
FY 17 BUDGET OVERVIEW: UNIVERSITY OF ALASKA                                                                                     
Co-Chair Neuman reviewed the agenda for the day. The                                                                            
current meeting would be the last of the department                                                                             
1:32:48 PM                                                                                                                    
^FY 17 BUDGET OVERVIEW: UNIVERSITY OF ALASKA                                                                                  
1:32:48 PM                                                                                                                    
DAN  WHITE, VICE-PRESIDENT,  ACADEMIC AFFAIRS  AND RESEARCH,                                                                    
UNIVERSITY OF ALASKA, introduced himself.                                                                                       
MICHELLE RIZK, ASSOCIATE  VICE PRESIDENT, STATEWIDE PLANNING                                                                    
AND BUDGET,  UNIVERSITY OF ALASKA, indicated  that President                                                                    
Johnson had  some medical  conditions to  deal with  and was                                                                    
trying to limit his travel.                                                                                                     
Mr.  White introduced  the PowerPoint  Presentation: "FY  17                                                                    
Budget overview: University of  Alaska." He began with slide                                                                    
2: "Our Mission":                                                                                                               
     "The  University  of   Alaska  inspires  learning,  and                                                                    
     advances and  disseminates knowledge  through teaching,                                                                    
     research,  and public  service,  emphasizing the  North                                                                    
     and its diverse peoples."                                                                                                  
     Regents' Policy 01.01.01                                                                                                   
Representative  Gattis   wanted  to  look  at   the  mission                                                                    
statement.  It  appeared  to  her that  each  of  the  three                                                                    
universities within  the system had different  missions. The                                                                    
University  of   Alaska  Fairbanks  (UAF)  was   focused  on                                                                    
research while the University of  Alaska Anchorage (UAA) and                                                                    
the  University  of  Alaska Southeast  (UAS)  had  different                                                                    
focuses. In  the past she  had wondered why credits  did not                                                                    
transfer and why many things  had not merged. She noted that                                                                    
in  looking at  the mission  statements for  the three  main                                                                    
campuses,   it   appeared   there   were   three   different                                                                    
Mr. White explained the key  positions for the university in                                                                    
slide 3: "UA Organization Chart."  He explained that Dr. Jim                                                                    
Johnson  was  the  president of  the  University  of  Alaska                                                                    
system. He reported to the  Board of Regents which consisted                                                                    
of  11  members appointed  by  the  governor. Board  members                                                                    
governed the University.                                                                                                        
Mr. White  explained that  he and Ms.  Rizk were  members of                                                                    
the  president's  core  leadership  team. He  was  the  Vice                                                                    
President for  Academic Affairs and  Research, and  Ms. Rizk                                                                    
was the  Vice President of University  Relations. Other team                                                                    
members included the vice president  of finance, the general                                                                    
counsel, the  chief information technology officer,  and the                                                                    
human  resources  (HR) officer.  He  explained  that the  HR                                                                    
officer  position and  the vice  president  of finance  post                                                                    
were currently  filled with interim  employees. There  was a                                                                    
chancellor  for  each  of  the   three  main  campuses.  The                                                                    
chancellors  for the  UA system  included: Mr.  Tom Case  at                                                                    
UAA, Mr.  Michael Powers at  UAF, and Mr.  Richard Caulfield                                                                    
at UAS.                                                                                                                         
Mr. White informed  the committee the fiscal  crisis in 1986                                                                    
influenced the model of the  University in slide 4: "Serving                                                                    
All   Alaskans."   He   explained    that   prior   to   the                                                                    
reorganization in the 80s there  were 11 community campuses.                                                                    
The  reorganization  resulted   in  the  current  university                                                                    
system   comprised  of   three  main   campuses:  Fairbanks,                                                                    
Anchorage, and Juneau. Prior to  that time the campuses were                                                                    
separate universities.  He relayed  that the  University was                                                                    
consolidating  many of  their  universities  similar to  the                                                                    
University  of Georgia's  system. He  noted that  Alaska had                                                                    
gone through  a consolidation in  1986 which included  the 3                                                                    
universities and  11 community  campuses. He added  that the                                                                    
campus  in Prince  William  Sound was  not  included in  the                                                                    
reorganization.   The  campus   no  longer   held  its   own                                                                    
accreditation; as  of the  previous July  they were  part of                                                                    
UAA and their accreditation.                                                                                                    
1:37:43 PM                                                                                                                    
Mr. White looked  at the options presented in  slide 5: "One                                                                    
University or  Three? Yes." He  pointed out that  there were                                                                    
advantages to all  of the models including  the hybrid model                                                                    
currently  in place.  Some  of the  advantages  of a  single                                                                    
university model  included: A  common look  and feel  and an                                                                    
ability to  make decisions that provided  central uniformity                                                                    
across  the system.  One of  the disadvantages  of a  single                                                                    
system was a loss of local  control and a loss of ability to                                                                    
be able  to work  with constituents.  He added  that another                                                                    
disadvantage was that  decision making was no  longer at the                                                                    
local level.                                                                                                                    
Representative Wilson  asked for the accreditation  costs of                                                                    
each of the  3 universities. Mr. White  stated that although                                                                    
he  could not  currently provide  a number  he informed  the                                                                    
committee that a significant amount  of the costs associated                                                                    
with  accreditation had  to do  with developing  performance                                                                    
measures  and  reporting  performance outcomes.  He  relayed                                                                    
that  even   with  a  single   university  having   its  own                                                                    
accreditation   work  would   be  required   at  each   site                                                                    
delivering  curriculum.  In  essence, it  would  potentially                                                                    
reduce one visit of the  accreditors. However, the work that                                                                    
went  into accreditation  was the  same whether  it was  one                                                                    
accreditation  or three  because the  performance monitoring                                                                    
was done either way. He could work up some numbers.                                                                             
Representative  Wilson  wanted  more information  about  the                                                                    
loss of local control over  course offerings. She spoke of a                                                                    
constituent  calling  about  not   being  able  to  transfer                                                                    
credits  from one  campus to  another.  Mr. White  responded                                                                    
that  he  had some  information  in  a  slide later  in  the                                                                    
presentation. He noted  that a common catalog  could be used                                                                    
in a  single system. He  suggested that South Dakota  used a                                                                    
common catalog.                                                                                                                 
Co-Chair Neuman  asked if all  credits could  be transferred                                                                    
from  one university  to another.  Mr. White  explained that                                                                    
any  credits could  be transferred  that  had an  equivalent                                                                    
across the system.                                                                                                              
Co-Chair Neuman  asked if Mr.  White's response was  no. Mr.                                                                    
White  attempted to  explain  that any  credit  that had  an                                                                    
equivalent across  the system  could likely  be transferred.                                                                    
If a class did not have  an equivalent, then it could not be                                                                    
Co-Chair Neuman  asked if they  would be  recognized equally                                                                    
by all three Universities.                                                                                                      
Representative  Gattis  spoke  to   her  experience  as  the                                                                    
previous  chairman of  the  House  Education Committee.  The                                                                    
question regarding  the transfer of credits  had been raised                                                                    
several times.  Students paid  formidable tuition  costs and                                                                    
it  seemed  to  her   that  bureaucracy  within  the  system                                                                    
perpetuated itself.  She suggested that, with  the financial                                                                    
crunch the state  was in, things would  be more transparent.                                                                    
She thought it had been  possible for the University to hide                                                                    
money because the  state did not drill down  far enough. She                                                                    
felt that injustice  had fallen on students.  She hoped that                                                                    
with a  laser focus on  the budget something could  be done.                                                                    
She supposed people  in Alaska did not  understand that from                                                                    
place-to-place  the University  differed.  She thought  that                                                                    
the system was failing Alaska's children.                                                                                       
Co-Chair  Neuman  instructed Mr.  White  to  get the  answer                                                                    
cleared up about  how the transfer of  credits worked within                                                                    
Alaska's university system.                                                                                                     
1:43:34 PM                                                                                                                    
Representative  Guttenberg noted  that Mr.  White's response                                                                    
to the  question of transferable  credits was that  they had                                                                    
to  be comparable.  He provided  a hypothetical  scenario in                                                                    
which  a community  college offered  a Basic  English course                                                                    
dissimilar to  a basic  undergraduate course  at UAF  or UAS                                                                    
with  a  different  curriculum   designed  for  a  different                                                                    
Mr. White responded  that English was an  example of credits                                                                    
that  would  transfer  easily. He  provided  an  example  of                                                                    
English  (111), a  class that  was the  same throughout  the                                                                    
system. He suggested the  confusion rested with equivalency.                                                                    
For  example, there  might be  a math  class for  a business                                                                    
degree  which  would  be  a  different  math  class  than  a                                                                    
calculus  math class  for engineering.  The transferring  of                                                                    
credits became an issue when  a student attempted to satisfy                                                                    
an engineering  math class requirement with  a business math                                                                    
class they had already taken.  The curriculum for each class                                                                    
was fundamentally  different from  each other and  would not                                                                    
transfer.  English classes  were  easily transferred  across                                                                    
the system.                                                                                                                     
Co-Chair  Neuman wanted  to  make sure  to  get through  the                                                                    
budget presentation.                                                                                                            
Representative Guttenberg  just wanted to have  the question                                                                    
Co-Chair Neuman  indicated that the committee  would follow-                                                                    
up on the question.                                                                                                             
Mr.  White advanced  to slide  6: "Building  on the  Best of                                                                    
   · Benefitting from the individuality of each university                                                                      
     and campus, meeting unique needs and maintaining                                                                           
     strong ties to local communities                                                                                           
   · Improving access and ease for students while reducing                                                                      
     costs through enhanced coordination, consistency and                                                                       
   · Promoting unique areas of excellence to build a                                                                            
     university that is greater than the sum of its parts                                                                       
Mr.  White   explained  that  the  University   enjoyed  the                                                                    
benefits of being  3 universities under 1 system  - a result                                                                    
of  the  1986  reorganization. Each  university  was  unique                                                                    
which  allowed for  the  development  of relationships  with                                                                    
constituents and  provided an avenue  for meeting  the needs                                                                    
distinctive  to local  communities.  He  mentioned that  the                                                                    
Ketchikan campus  developed a  robust welding  program which                                                                    
produced a needed workforce in the community.                                                                                   
Mr. White turned  to slide 7: "Strategic  Pathways: Guide to                                                                    
restructuring the UA system":                                                                                                   
   · The university needs to become more adept at meeting                                                                       
     state needs.                                                                                                               
   · Regents fully support a hybrid system where the three                                                                      
     universities   remain   distinct,    but   are   better                                                                    
     coordinated, have less duplication and play on the                                                                         
     unique strengths of the individual universities.                                                                           
   · Areas where there is obvious regional or local                                                                             
     responsibility will not be affected, nor will general                                                                      
     education courses, support disciplines, developmental                                                                      
     or workforce programs.                                                                                                     
   · The impact on students will be minimized. Streamlining                                                                     
     systems and operations will ultimately benefit them                                                                        
     and allow more flexibility and opportunities across                                                                        
     the system.                                                                                                                
Mr. White indicated  that President Johnson had  a vision of                                                                    
how  to  organize the  University:  a  framework that  would                                                                    
build upon its strengths,  reduce duplication, and allow the                                                                    
universities to meet local needs.  He furthered that part of                                                                    
the  strategic pathways  discussion was  the common  catalog                                                                    
which  meant that  all  of  the courses  would  be the  same                                                                    
across the system.                                                                                                              
Co-Chair  Neuman  asked Mr.  White  not  to read  the  slide                                                                    
verbatim.   He   wanted   Mr.   White   to   summarize   the                                                                    
1:47:49 PM                                                                                                                    
Representative   Wilson   asked   where   she   could   find                                                                    
remediation in  the strategic  pathways. Mr.  White answered                                                                    
that developmental  education would  continue to  be offered                                                                    
at each of the 3 universities.                                                                                                  
Representative Wilson  had heard that it  might be possible,                                                                    
as an example, to take a  computer lab rather than an entire                                                                    
class to fulfill part of  a math curriculum. She wondered if                                                                    
it  was  being  considered.  Mr. White  responded  that  the                                                                    
University  was looking  at  several  different models.  The                                                                    
model Representative Wilson was  referring to was called the                                                                    
Math Emporium  which was being  piloted at UAA.  He provided                                                                    
examples of  scenarios in which developmental  education was                                                                    
needed:  1. Students  who had  not  taken a  course such  as                                                                    
Algebra, and  returning students  who had taken  courses but                                                                    
several years  prior. The Math  Emporium model  was designed                                                                    
to  offer  brush  up  curriculum   for  students  needing  a                                                                    
refresher and to offer  developmental education for students                                                                    
needing courses to qualify for college.                                                                                         
Representative   Gara   mentioned    economizing   and   the                                                                    
compromises that had to be  made. He wondered if the smaller                                                                    
road system  campuses caused extra administrative  costs. He                                                                    
noted  that the  University  had a  number  of smaller  road                                                                    
system campuses in addition to the 2 larger campuses.                                                                           
Mr.   White   responded   that  the   idea   of   the   1986                                                                    
reorganization  was  to  combine  the  smaller  road  system                                                                    
campuses  with  to   UAF  and  UAA  in   order  to  minimize                                                                    
administrative costs.  Costs associated with  the facilities                                                                    
and  the  faculty  were still  incurred.  He  remarked  that                                                                    
having road system campuses and  other remote rural campuses                                                                    
was designed  to provide access. It  provided opportunity to                                                                    
those students that were place  bound. He commented that the                                                                    
University  was  rapidly developing  e-learning.  Currently,                                                                    
students with access to a  computer and the internet had the                                                                    
ability to take courses anywhere in the system.                                                                                 
Co-Chair Neuman  directed members  to stay  on the  topic of                                                                    
the budget.                                                                                                                     
Representative Gara asked if the  additional campuses on the                                                                    
road system  were worth the  cost. Mr. White  responded that                                                                    
any  facility outside  of the  main  campuses costed  money.                                                                    
However,  they added  value  and all  had  students. He  was                                                                    
unsure if  students would travel  to the main  campuses. The                                                                    
median  student traveled  50 miles.  Many students  chose to                                                                    
attend college close to home.                                                                                                   
1:52:41 PM                                                                                                                    
Mr.  White  scrolled  to  slide  8: "UA  Met  FY  16  Budget                                                                    
Reductions."   He    talked   about   the    reductions   to                                                                    
administrative   costs.  All   senior  administrators   were                                                                    
furloughed. The  University reduced contracts and  left many                                                                    
vacancies unfiled. He reported that  in FY 15 there were 500                                                                    
fewer people  across the  system than there  were in  FY 14.                                                                    
About 5 percent to 10  percent of the workforce was reduced.                                                                    
He   noted  that   academic  and   occupational  certificate                                                                    
programs  were  eliminated.  He  reported  that  there  were                                                                    
roughly 478  programs targeted for elimination,  50 of which                                                                    
had  already  been  removed. There  were  cuts  in  research                                                                    
support   including  the   reduction   of  animal   handling                                                                    
Representative Gara  clarified that the University  had lost                                                                    
500 employees from FY 14 to  FY 15. He wondered about FY 16.                                                                    
Mr. White responded  that the numbers were as  of October FY                                                                    
Ms. Rizk clarified that October 2015  was part of FY 16. The                                                                    
timeline was from October 2014 to October 2015.                                                                                 
Co-Chair  Neuman  wanted to  know  why  the Regent's  budget                                                                    
cycle  WAS not  in sync  with the  State of  Alaska's budget                                                                    
cycle.  Ms.  Rizk was  unclear  what  Co-Chair Neuman  meant                                                                    
about the University not being in cycle.                                                                                        
Co-Chair Neuman  asked at  what point  the Board  of Regents                                                                    
suggested its funding.                                                                                                          
Ms.  Rizk  stated  that  in   June  they  would  accept  the                                                                    
appropriation  for   FY  17  that   it  received   from  the                                                                    
legislature. In  November they approved the  budget that was                                                                    
submitted to the governor's office for FY 17.                                                                                   
Representative  Wilson  asked  for clarification  about  the                                                                    
University's budget cycle. She wondered  if it ran from July                                                                    
1st   through  June   30th.  Ms.   Rizk  responded   in  the                                                                    
Representative  Wilson asked  when the  University's funding                                                                    
commenced and  ended. She  wondered if  it was  from January                                                                    
1st  through December  31st. Mr.  White  explained that  the                                                                    
University had the same fiscal  year as the State of Alaska.                                                                    
He  believed the  confusion was  created based  on a  single                                                                    
data point.  At the end of  the fiscal year, June  30th, the                                                                    
University evaluated numbers through  October, a data freeze                                                                    
timeline,  at  which  time personnel  numbers  were  counted                                                                    
relating to the year.                                                                                                           
Co-Chair  Neuman asked  when the  Board of  Regents approved                                                                    
the University's budget. Ms. Risk responded, "November."                                                                        
Co-Chair  Neuman  asked if  it  was  before the  legislature                                                                    
released its budget for the  department. Ms. Risk responded,                                                                    
Co-Chair Neuman asked,  "So they are not in  sync?" Ms. Rizk                                                                    
responded that  she was speaking  of the budget  request for                                                                    
the governor.  The Regents approved  the budget  in November                                                                    
of  each  year.  The  University then  released  it  to  the                                                                    
governor  so that  he,  in  turn, could  do  his budget  and                                                                    
release it on December 15th  of each year. She thought where                                                                    
it might not have been clear  was that in October all of the                                                                    
University's  faculty was  hired providing  the best  number                                                                    
sample. A count  of faculty taken in July  might not provide                                                                    
accurate data because many faculty  were off contract in the                                                                    
summer.  The intent  was to  make a  comparison at  the same                                                                    
time each year. The  University tracked personnel in October                                                                    
but it could be done from any point in time.                                                                                    
1:57:23 PM                                                                                                                    
Representative Wilson  asked about  when the  Regents looked                                                                    
at the numbers from the  legislature. Ms. Risk asked whether                                                                    
she was  talking about what  year Representative  Wilson was                                                                    
referring to.                                                                                                                   
Representative  Wilson responded  that once  the legislature                                                                    
approved the  budget she wondered  when the  University made                                                                    
its decisions about reductions.  Ms. Rizk relayed that there                                                                    
was a  Board of Regents meeting  in June of each  year which                                                                    
was when the Board  accepted the legislature's appropriation                                                                    
and approved the distribution of funds.                                                                                         
Mr.  White  continued  with slide  9:  "Revenue  Enhancement                                                                    
   · Tuition increase                                                                                                           
   · Tuition surcharge                                                                                                          
   · Increased fees                                                                                                             
   · Fundraising                                                                                                                
   · Commercialization of intellectual property                                                                                 
   · Public-Private Partnerships                                                                                                
Mr.  White  mentioned  that  many  universities  across  the                                                                    
country  had  different  tuition  surcharges  for  different                                                                    
types of degrees such as  engineering degrees. He also noted                                                                    
that  UAF's School  of Management  had  a tuition  surcharge                                                                    
resulting  in increased  revenues. The  University increased                                                                    
fees   including  the   facility   fee.   There  were   also                                                                    
fundraising  efforts  for  the  University  centennial.  The                                                                    
University had  spent the  previous 5  years ramping  up its                                                                    
intellectual property  office to provide opportunity  to get                                                                    
technologies out  of the  University and  into the  hands of                                                                    
people  who  knew  how to  make  money  generating  economic                                                                    
diversity   and   additional   revenue.  He   reported   the                                                                    
University  was  looking  at  opportunities  of  public  and                                                                    
private  partnerships  such  as   the  wood  center  at  the                                                                    
Co-Chair Neuman  asked how  much money  was brought  in from                                                                    
fundraising  efforts. Ms.  Risk responded  that $16  million                                                                    
was raised in FY 15 and $8 million through December.                                                                            
Co-Chair Neuman  asked how it  compared to prior  years. Ms.                                                                    
Risk could  provide the information  to the  committee after                                                                    
the meeting.                                                                                                                    
Co-Chair Neuman  asked if the  amount was about  $16 million                                                                    
per year. Ms. Rizk thought that  for the last 2 years it had                                                                    
been about $16 million.                                                                                                         
Co-Chair  Neuman clarified  that his  question came  down to                                                                    
whether  the   University  had  increased  its   efforts  in                                                                    
fundraising  for the  previous 5  years. Ms.  Rizk responded                                                                    
affirmatively and added  that it was one  of the president's                                                                    
performance metrics - to increase engagement of alumni.                                                                         
Co-Chair Neuman  asked for the  information to  be provided.                                                                    
Ms. Rizk answered, "Sure."                                                                                                      
Representative  Guttenberg asked  where fundraising  dollars                                                                    
went. Mr. White responded that  many of the donations to the                                                                    
University  were for  scholarships.  A  number of  donations                                                                    
were  given to  specific  research.  For example,  companies                                                                    
gave money  to research foundations promoting  research in a                                                                    
specific area and did not displace GF numbers.                                                                                  
Ms. Risk  indicated that  when she  provided the  history of                                                                    
giving  she could  also provide  a list  of categories.  The                                                                    
majority of donations went to  academic programs and student                                                                    
Representative   Kawasaki  referred   to  the   prior  slide                                                                    
regarding  revenue enhancement  efforts.  He  asked how  the                                                                    
surcharge  worked. Mr.  White explained  that the  surcharge                                                                    
was  a mechanism  to  add courses  for  specific degrees  or                                                                    
programs. For  instance, if  a student  was pursuing  an MBA                                                                    
degree, English  courses would be  the same costs  but upper                                                                    
level  management  courses  would  have an  added  cost.  He                                                                    
relayed   that  at   the   University   of  Illinois   every                                                                    
engineering  course costed  40  percent  more than  standard                                                                    
tuition.  The  engineering  programs  at UAF  and  UAA  were                                                                    
looking at an increase for related courses.                                                                                     
2:02:31 PM                                                                                                                    
Mr. White advance to slide 10: "Challenges":                                                                                    
   · Reduced federal funding for research; continued high                                                                       
     energy costs; state population loss; and rise of on-                                                                       
     line, high quality alternatives to UA.                                                                                     
   · To continue with reductions in and beyond FY2017 will                                                                      
     challenge  UA   to  recast  the  entire   portfolio  of                                                                    
     education  and workforce  development programs  without                                                                    
     compromising  the   high  standard  of   education  and                                                                    
     workforce  training  that   is  currently  afforded  UA                                                                    
   · Must explore longer-term strategic cuts and revenue                                                                        
     opportunities that will help UA preserve and                                                                               
     strengthen its capacity.                                                                                                   
Mr. White  explained that  the strategic  pathways framework                                                                    
proposed by  President Johnson  was designed  to restructure                                                                    
the  University such  that  it would  continue  to meet  the                                                                    
needs  of  the  students  while doing  so  in  an  efficient                                                                    
Representative Edgmon  mentioned that there were  folks from                                                                    
the  Unalaska School  District in  the  audience. He  opined                                                                    
from  a  rural  perspective   the  satellite  campuses  were                                                                    
critical to what was happening in  a number of places in his                                                                    
district. He wanted to hear  discussion about the challenges                                                                    
of  keeping   the  satellite  campuses  intact.   Mr.  White                                                                    
responded that  the president had expressed  his interest in                                                                    
keeping the  satellite campuses intact  and finding  ways of                                                                    
delivering  courses  in a  more  efficient  manner than  the                                                                    
University   did   currently.    Generally   speaking,   the                                                                    
technology    for    distance   education    had    improved                                                                    
significantly.  More of  the courses  offered  in the  rural                                                                    
communities  were being  offered  by  distance delivery.  He                                                                    
added  that distance  delivery would  not solve  all of  the                                                                    
challenges but would certainly allow  the University to gain                                                                    
some efficiencies.                                                                                                              
Representative Gattis asked  about broadband technology. She                                                                    
asked if the  University had broadband and if  it was shared                                                                    
with the local schools and clinics.  One of her goals was to                                                                    
figure out  how to  consolidate all  of the  pipelines going                                                                    
into communities.  She asked if  the University  received an                                                                    
e-rate  with  its broadband.  Mr.  White  responded that  he                                                                    
would  have   to  get  the  numbers   from  the  information                                                                    
technology  folks   on  how  the  University's   rates  were                                                                    
Representative Gattis  asked for  Mr. White  to get  back to                                                                    
her directly. She  was looking at how the  state could share                                                                    
or consolidate in the funding with different communities.                                                                       
Co-Chair Neuman  asked that the  information be  provided to                                                                    
his office for distribution.                                                                                                    
Representative  Gara  asked  about  broadband  and  adequate                                                                    
service in  communities. He  used Naknek  as an  example. He                                                                    
was  aware  that  the  highest level  of  GCI  internet  was                                                                    
limited.  He  wondered  if   the  University  was  providing                                                                    
Broadband  in  communities  without   a  campus.  Mr.  White                                                                    
answered  that the  University delivered  distance education                                                                    
which was not  all online. The University  continued to have                                                                    
opportunities for  students that  did not have  broadband in                                                                    
their  communities. There  were other  alternatives such  as                                                                    
courses  taught by  videos  with  telephone follow-ups,  for                                                                    
2:07:19 PM                                                                                                                    
Mr. White discussed slide 11: "Investments for our Future":                                                                     
   · Discovery: Alaska/Arctic research                                                                                          
   · Access and equity: Low-income, first generation, rural                                                                     
   · Workforce: Voc-tech, teachers, health care, arts and                                                                       
   · Economic development: Commercialization of research                                                                        
   · Culture of education: Connect with K-12                                                                                    
Mr. White  relayed that he  had just attended  an innovation                                                                    
summit  in  Juneau. The  gist  of  the  event was  that  the                                                                    
University  was critical  in diversifying  the economy.  The                                                                    
University  saw key  investments in  research and  discovery                                                                    
for the Alaska  Arctic. The University's job  was looking at                                                                    
how to commercialize the research  and to diversify Alaska's                                                                    
economy. He continued to read  the contents of the slide. He                                                                    
informed the committee that  President Johnson had indicated                                                                    
that the  University's greatest competitor was  students not                                                                    
going to college at all.                                                                                                        
Co-Chair Neuman asked  if the University was  starting a new                                                                    
maritime program.  Mr. White replied  that it  was something                                                                    
the University was looking at.                                                                                                  
Co-Chair Neuman  wondered why  the University  would compete                                                                    
with Alaska  Vocational Technical Center (AVTEC).  Mr. White                                                                    
explained  that  there  were differences  between  what  was                                                                    
being offered in Ketchikan and Seward at AVTEC.                                                                                 
Co-Chair Neuman  offered that there  would be  an assumption                                                                    
to  try  to consolidate  in  order  to maximize  efforts  in                                                                    
vocational education.  He thought consulting with  AVTEC was                                                                    
a better  approach than  starting a  new program  within the                                                                    
University. Mr.  White indicated there were  differences and                                                                    
he would provide the chairman with additional information.                                                                      
Co-Chair  Neuman requested  that Representative  Wilson look                                                                    
further into the issue at the subcommittee level.                                                                               
Representative  Wilson  responded affirmatively.  She  asked                                                                    
Mr. White if  the University had been in  contact with AVTEC                                                                    
first to see about enhancing  their program. She wondered if                                                                    
the University had  notified AVTEC. Mr. White  would have to                                                                    
check  with  the Ketchikan  campus  to  find out  about  any                                                                    
coordination. The University had a  list of all of the AVTEC                                                                    
programs to look at the similarities and differences.                                                                           
Representative Wilson  stated that the commissioner  was not                                                                    
notified at all.                                                                                                                
Co-Chair   Neuman  mentioned   the  redundancy   of  certain                                                                    
programs.  He thought  consolidating  efforts was  necessary                                                                    
and a better  product would result. Mr. White  agreed it was                                                                    
something to look at.                                                                                                           
Co-Chair Neuman added, "I think they certainly are."                                                                            
Ms. Rizk  commented that  with the  time that  was available                                                                    
and the 30 minute presentation  limit she would flip through                                                                    
the slides and would address questions from the committee.                                                                      
Co-Chair Neuman  instructed Ms. Rizk  to highlight  the most                                                                    
important points as well as any changes. Ms. Risk agreed.                                                                       
Ms.  Risk  advanced  to  slide  12:  "FY  17  Adjusted  Base                                                                    
Operating."  She  pointed  out that  the  governor's  budget                                                                    
included a reduction of $15.5  million equal to 4.5 percent.                                                                    
She also highlighted the current position count.                                                                                
Ms. Risk  scrolled to slide  13: "FY 17 Operating  Budget by                                                                    
Fund  Source." She  noted that  the  University's source  of                                                                    
funding came  from the federal funds,  other funds including                                                                    
UA  interagency  receipts  and state  interagency  receipts,                                                                    
designated general  funds (DGF)  (student tuitions  and fees                                                                    
were included),  and unrestricted general funds  (UGF) equal                                                                    
to $335 million in the FY 17 budget.                                                                                            
2:12:59 PM                                                                                                                    
Ms. Risk  discussed slide  14: "Base Reductions  FY 15  - FY                                                                    
17."  She reported  that  the slide  showed  a history  over                                                                    
time.    The general  fund  reduction  in  FY 16  was  $19.8                                                                    
million, and in FY 17 it  was $15.8 million. She pointed out                                                                    
that  with  UA's fixed  costs  of  $31.6 million  the  total                                                                    
budget reduction  the University planned for  was around $57                                                                    
Co-Chair Neuman  thought there was  a $25  million reduction                                                                    
in the  University's budget. Ms. Rizk  responded by pointing                                                                    
to the  slide where it  showed the reduction but  noted that                                                                    
when  it  was  netted  with the  increment  for  contractual                                                                    
salary  increases of  $9.8  million the  net  cut was  $15.8                                                                    
million  which matched  with Legislative  Finance Division's                                                                    
Co-Chair  Neuman remarked,  "Something does  not feel  right                                                                    
Ms. Risk turned to slide  15: "University of Alaska Share of                                                                    
Total Agency  Operations (GF Only)." She  explained that the                                                                    
Legislative   Finance   Division's  graphs   followed.   She                                                                    
wondered if Co-Chair Neuman wanted her to review them.                                                                          
Co-Chair  Neuman   asked  Ms.  Rizk  to   note  anything  of                                                                    
Ms.  Risk  advanced  to  slide  17:  "University  of  Alaska                                                                    
Appropriations (GF  Only)." She remarked that  over time the                                                                    
percent of GF for the  University as the Total Agency budget                                                                    
had declined from 15 percent to 13 percent.                                                                                     
Ms. Risk advanced to slide  16: "University of Alaska Salary                                                                    
Adjustment  Increases  and   Personal  Services  Costs  (All                                                                    
Funds)."  She   noted  that   the  slide   reflected  salary                                                                    
Representative Gattis  referred to slide 15.  She pointed to                                                                    
the  box  on the  left-hand  side.  She wondered  about  the                                                                    
figure  of  $2018  per  resident  worker  referring  to  the                                                                    
University's total FY  17 budget. Ms. Risk  replied that she                                                                    
was correct.                                                                                                                    
Representative  Gattis clarified  that it  was approximately                                                                    
$2  thousand  for every  worker.  She  thought it  would  be                                                                    
cheaper to  get rid of  many of the  costs and offer  a free                                                                    
education  to  all  Alaskan  kids.  She  was  talking  about                                                                    
eliminating costs  having to do  with the  Alaska Commission                                                                    
on Postsecondary  Education (ACPE)  and the  state's program                                                                    
for administering loans.   She thought it  was a significant                                                                    
amount of  money per  person. She  wondered about  the "give                                                                    
back"  to  the state.  Ms.  Risk  relayed for  every  dollar                                                                    
invested  over  $4  or  $5  was  leveraged  in  return.  The                                                                    
University had a  set of performance metrics  to review with                                                                    
the subcommittee. As the state  looked to the future over 60                                                                    
percent of Alaska would require  some form of post-secondary                                                                    
education from  its workforce. Currently,  the state  was at                                                                    
30 percent. The University provided an educated workforce.                                                                      
2:17:05 PM                                                                                                                    
Representative Munoz  referred to page 12.  She wondered how                                                                    
to reduce  $15 million  while retaining  the same  number of                                                                    
employees   from  FY   16  to   FY  17.   Ms.  Rizk   needed                                                                    
clarification about the number of employees.                                                                                    
Representative  Munoz responded  that she  was referring  to                                                                    
4,518.  Ms.  Risk  responded  that  4,518  was  the  current                                                                    
University  position count.  As  was  mentioned earlier  the                                                                    
University had reduced its regular  positions by over 200 in                                                                    
the  previous  year.  If   taking  into  consideration  both                                                                    
regular positions as well as  temporary positions the number                                                                    
was  close  to  500.  At present,  the  University  had  not                                                                    
decided on position reductions for FY 17.                                                                                       
Ms.  Risk  scrolled past  slide  18:  "University of  Alaska                                                                    
Appropriations (All Funds)."                                                                                                    
Ms. Risk  turned to slide  19: "FY 17 Capital  Request." She                                                                    
conveyed  that  the  final  slide  related  to  the  capital                                                                    
budget. She reported  that the Board of  Regents' number one                                                                    
priority was  the remaining funding for  the UAF engineering                                                                    
facility. The second priority  was deferred maintenance. She                                                                    
reported  that the  governor's budget  included $10  million                                                                    
for deferred  maintenance. The Board had  requested that the                                                                    
University  continue to  look for  innovative  ways to  fund                                                                    
deferred  maintenance  recognizing the  financial  situation                                                                    
the  state was  in. A  few years  previously the  University                                                                    
bonded for deferred  maintenance to help offset  some of the                                                                    
funding requirements.  The University  was also  looking for                                                                    
private  giving opportunities  and  prioritizing space  more                                                                    
efficiently.  She  reported  that the  University  was  also                                                                    
looking  at partnering  with communities,  school districts,                                                                    
and technical facilities as well  as looking at out-sourcing                                                                    
opportunities including  in the rural areas.  The university                                                                    
was  focusing on  finding  a different  way  to do  business                                                                    
regarding its  facilities. She relayed  that looking  to the                                                                    
future the  University was  evaluating what  role e-learning                                                                    
would  play  in  delivery  and  the  corresponding  facility                                                                    
needs.  The  University's   facilities  and  land-management                                                                    
committee was a topic of  discussion at every board meeting.                                                                    
She mentioned  looking at what  type of user fees  should be                                                                    
assessed when different groups used UA facilities.                                                                              
Co-Chair Neuman asked about a  way to measure performance of                                                                    
each of  the programs  offered at  the University.  Ms. Risk                                                                    
responded that there  was a report card  on the University's                                                                    
key metrics.                                                                                                                    
Co-Chair  Neuman asked  if the  University  worked with  the                                                                    
Department  of  Labor  and Workforce  Development  (DOL)  to                                                                    
provide needed  skill sets  at the right  time to  people in                                                                    
industry.   He  directed  Ms. Rizk  to  get the  performance                                                                    
measures to  Representative Wilson. He also  asked about the                                                                    
University's approach to  downsizing. He emphasized Alaska's                                                                    
huge  deficit and  the fact  that University  system funding                                                                    
had declined at  a dramatic pace. The  legislature had other                                                                    
considerations  such  as  public  safety  and  Medicaid.  He                                                                    
requested  that  the  University  provide  a  picture  of  a                                                                    
consolidated downsized system. Mr.  White responded that the                                                                    
strategic  pathway was  a framework  that President  Johnson                                                                    
presented to the  Board of Regents at a  retreat in January.                                                                    
It was  approved by the  Board at that time  and distributed                                                                    
in  a  more detailed  way  to  the University  community  on                                                                    
Monday of the present week.                                                                                                     
2:21:57 PM                                                                                                                    
Representative Wilson  asked about statistics  regarding the                                                                    
students. There  was nothing included about  the performance                                                                    
of students in the  University's presentation. She had heard                                                                    
that  student population  was shrinking  but  no detail  had                                                                    
been  provided.  She  wanted  information  about  graduation                                                                    
rates and degree information. She  commented that the slides                                                                    
were  missing such  data. She  suggested that  the following                                                                    
University  presentation should  contain  such numbers.  Her                                                                    
office had produced some numbers  which she would share with                                                                    
committee members.                                                                                                              
Co-Chair   Neuman  asked   Representative   Wilson  if   the                                                                    
subcommittee  was getting  the  performance measure  numbers                                                                    
needed for it to evaluate the programs effectively.                                                                             
Representative  Wilson responded  that her  office had  done                                                                    
most  of the  research using  the University's  website. The                                                                    
measures  in place  showed Alaska's  graduation rates  to be                                                                    
some of  the lowest in the  country and was where  the state                                                                    
spent  the most  money. She  added that  Alaska's University                                                                    
used to be  an affordable university but  that was changing.                                                                    
She  relayed that  it  had become  more  affordable to  send                                                                    
Alaskan  kids out  of state  through the  Western Interstate                                                                    
Commission  for  Higher  Education  (WICHE)  program  versus                                                                    
staying  in the  state. She  thought it  should be  of great                                                                    
concern to the University of Alaska.                                                                                            
Co-Chair   Neuman  asked   Representative   Wilson  if   the                                                                    
University had adequate performance measures.                                                                                   
Representative Wilson responded, "No,  and we are working on                                                                    
Representative  Kawasaki had  a copy  of UA's  Institutional                                                                    
Research, Planning,  and Analysis  key indicators  guide. He                                                                    
suggested committee  members should be  able to look  at the                                                                    
guide.   He   reported   that  the   numbers   of   degrees,                                                                    
certificates, and endorsements awarded  had risen 30 percent                                                                    
in 5  years from 3,700  to 4,700. He  thought it was  a good                                                                    
indicator of the  kind of performance he wanted  to see from                                                                    
the University. The high demand  job area growth had grown 8                                                                    
percent in  5 years  from 2,731 to  3,146. He  reported that                                                                    
the 150  percent bachelor graduation  rate had  increased 16                                                                    
percent  over   the  same  time   period.  He   thought  the                                                                    
statistics  were  consistent,  looked good,  and  should  be                                                                    
something the University  could be proud of.  He referred to                                                                    
slide 18.  He noted that  the slide showed a  large increase                                                                    
in the  total amount -  in all  funds - appropriated  to the                                                                    
University  of   Alaska's  single  appropriation.   He  then                                                                    
referred back  to slide  15 to  the total  UGF spend  of the                                                                    
legislature it  looked flat. He  asked about  the difference                                                                    
between slide  15 and slide  18. Ms. Risk referred  to slide                                                                    
13 which  showed UGF and  DGF and the sources  of designated                                                                    
general funds (DGF).  The slide also showed  other funds and                                                                    
federal funds;  the two  other categories  that made  up the                                                                    
other funding sources to reach the total funds.                                                                                 
2:26:28 PM                                                                                                                    
Representative  Kawasaki  concluded  that  even  though  the                                                                    
state had not  put in more money over the  previous 5 years,                                                                    
it looked  as if  private contributions,  tuition increases,                                                                    
tuition  surcharges, and  federal monies  had increased.  He                                                                    
wondered if  one source was  larger than another.  Mr. White                                                                    
responded that the University could  provide a breakdown for                                                                    
the representative.  At each Regents  meeting he  provided a                                                                    
report  on accountability  to the  state regarding  students                                                                    
and   research   and   he   could   easily   provide   those                                                                    
presentations to the committee.                                                                                                 
Co-Chair Neuman  asked that the  information be  provided to                                                                    
his office.                                                                                                                     
Vice-Chair  Saddler   mentioned  he  had   frequently  heard                                                                    
concerns and  criticisms about  the lack  of transferability                                                                    
of  credits.    He   wondered  whether  having  3  different                                                                    
accreditations  for the  3 different  main campuses  was the                                                                    
best way to  organize the UA system. He asked  if it was the                                                                    
University's    intention    to    move    towards    single                                                                    
accreditation. Mr. White replied  that the accrediting body,                                                                    
the Northwest  Commission on Colleges and  Universities, did                                                                    
not have  the authority to  accredit systems. There  were no                                                                    
university systems  in country that were  accredited. The UA                                                                    
system  could become  one university  and be  accredited, or                                                                    
the  UA   sys0tem  could  remain  a   system  with  separate                                                                    
accreditations  for   UAA,  UAF,   and  UAS.   The  existing                                                                    
structure could not have just  one accreditation. He relayed                                                                    
that the  president felt the  system currently in  place was                                                                    
the best  for the  State of  Alaska. However,  the framework                                                                    
would be  changing the way the  universities operated within                                                                    
the  system.  He mentioned  the  consideration  of a  common                                                                    
catalog, where courses were delivered.  He surmised that the                                                                    
issue  of  transferring credits  did  not  have to  do  with                                                                    
accreditation, but more to do with equivalencies.                                                                               
Vice-Chair Saddler  wondered if  it was  possible to  have 3                                                                    
universities  with  identical  accreditations  in  order  to                                                                    
facilitate the  transference of credits. He  was looking for                                                                    
a   simple   answer.   Mr.    White   responded   that   the                                                                    
accreditations were basically the same already.                                                                                 
Co-Chair  Neuman  asked  for   a  copy  of  the  president's                                                                    
reorganization  plan.  Mr.  White   indicated  that  he  had                                                                    
brought some with him.                                                                                                          
Co-Chair Neuman asked if it  contained budget estimates. Mr.                                                                    
White answered in the negative. It was a 1 page framework.                                                                      
Co-Chair  Neuman asked  for some  budget  estimates for  the                                                                    
reorganization  plan.  He expected  and  was  waiting for  a                                                                    
budget plan  accompanying a  reorganization plan.  Mr. White                                                                    
responded, "Okay. Thank you."                                                                                                   
2:30:52 PM                                                                                                                    
Representative Gara  commented that he had  a difficult time                                                                    
blaming the  University for Student Achievement  when it had                                                                    
offered  ideas on  increasing  student  achievement and  the                                                                    
legislature had not  funded them. He recalled  that over the                                                                    
prior 2 years the University  came forward with proposals to                                                                    
increase  student achievement  and graduation  rates through                                                                    
student advisors  and student support staff.  He wondered if                                                                    
the  University   had  been  denied  funding   or  was  only                                                                    
partially  funded. Ms.  Risk relayed  that student  advising                                                                    
had  been a  focus of  the University  and some  funding had                                                                    
been provided by  the legislature prior to  the previous two                                                                    
Representative  Gara  asked if  there  was  a potential  for                                                                    
increased  student  achievement  through  increased  student                                                                    
advising. He asked if student  advising was being adequately                                                                    
funded.  Ms.  Risk  stated  that  it  had  been  shown  that                                                                    
advising  had   resulted  in   positive  outcomes.   As  the                                                                    
University  went  through  the   budget  reductions  it  was                                                                    
looking  to  vertical versus  horizontal  cuts  in order  to                                                                    
protect areas that were known  for helping students complete                                                                    
their  degree  programs.  Advising  was very  helpful  to  a                                                                    
student's academic achievement.                                                                                                 
Representative Gara encouraged  advocating those things that                                                                    
increased  outcomes. He  asked  about  the Kodiak  Fisheries                                                                    
Tech Center  [Kodiak Seafood and Marine  Science Center]. He                                                                    
had heard  that the  money had been  diverted to  the marine                                                                    
program in Fairbanks. He asked  her to comment or respond in                                                                    
writing and  include the  reasons for  the change.  He would                                                                    
like to be able to provide  an explanation to those who have                                                                    
asked about  it. Mr. White  was aware that funding  was used                                                                    
to hire a faculty member.  The faculty member had since left                                                                    
the University  and the position  remained open. He  did not                                                                    
have the  answer as  to where  the money  went but  he would                                                                    
find out and provide the information to the committee.                                                                          
Representative Gara  understood that  many of  the positions                                                                    
at the Kodiak fisheries tech  center had not been filled. He                                                                    
wondered if  a dedicated appropriation had  been transferred                                                                    
over to the  marine center in Fairbanks.  He speculated that                                                                    
there  could be  good reason  for  such a  diversion but  he                                                                    
wanted to have  the answer to his question.  Mr. White would                                                                    
get the answer for Representative Gara.                                                                                         
2:34:56 PM                                                                                                                    
Representative Munoz  asked for  more information  about the                                                                    
reformation of the university system  and what it would mean                                                                    
for each of the campuses.  Mr. White relayed that within the                                                                    
framework the University  could not do everything  at all of                                                                    
the campuses. Efficiencies were  looked at and lead campuses                                                                    
were identified.  He cited  examples such  as UAF  being the                                                                    
lead campus  in science  and engineering. The  University of                                                                    
Alaska  Anchorage  was  the lead  in  economics  and  social                                                                    
sciences.   He   relayed   that   UAS  was   the   lead   in                                                                    
interdisciplinary  degrees and  the  arts.  He also  defined                                                                    
"lead campus."  The University of  Alaska Anchorage  ran the                                                                    
statewide nursing  program, a  sole provider  model. Nursing                                                                    
students  in Fairbanks  were  UAA  students. Everything  was                                                                    
centralized  by  UAA  for nursing  which  increases  program                                                                    
efficiency. The University needed  to look at budget numbers                                                                    
and  how  broadly  certain   individual  programs  would  be                                                                    
offered  and  at  what  level.   The  expectation  would  be                                                                    
increased efficiencies  because of reducing  the replication                                                                    
of programs across the system.                                                                                                  
Representative  Munoz asked  when  the  University would  be                                                                    
implementing  the  changes.  Mr. White  explained  that  the                                                                    
president would be meeting with  the Board of Regents in the                                                                    
following  week  to  discuss   potential  changes.  The  due                                                                    
diligence would take place between  the present day and June                                                                    
30th, the end  of the fiscal year, to look  at which changes                                                                    
made the  most sense. There  would be certain things  all of                                                                    
the campuses  would need to  offer. The University  would be                                                                    
look  at  where  to  economize.   The  University  would  be                                                                    
receiving input from  students and faculty prior  to the end                                                                    
of  the  fiscal  year  and would  be  implemented  over  the                                                                    
following year.                                                                                                                 
Representative Munoz asked for an  update on the power plant                                                                    
at UAF.  She wondered if  the University would see  a saving                                                                    
with  the new  plant. Ms.  Risk  offered to  send a  written                                                                    
update and added that there  were anticipated energy savings                                                                    
from the  power plant  which would  be redirected  to offset                                                                    
the  bond  payment  that  UAF  was paying  as  part  of  the                                                                    
Co-Chair  Neuman  asked if  the  project  was completed  and                                                                    
funded. Ms.  Risk responded that  the project was  on target                                                                    
with  the funding  that  was available  and  looked like  it                                                                    
would be completed on schedule.                                                                                                 
Representative  Munoz appreciated  that  the University  was                                                                    
getting closer  to the one-to-one  between UGF and  DGF. She                                                                    
knew  it  had  been  a  long  time  goal.  She  thanked  the                                                                    
testifiers for their presentation.                                                                                              
Co-Chair Neuman commented, "We started that 6 years ago."                                                                       
2:39:03 PM                                                                                                                    
Representative    Guttenberg   explained    that   in    the                                                                    
University's history it used to  be the University of Alaska                                                                    
"At   Anchorage"  and   "At  Fairbanks."   He  thought   the                                                                    
University had gone through  several reorganizations for the                                                                    
purpose  of  being  more  efficient  or  because  of  budget                                                                    
crunches. Each time there was  a restructuring programs were                                                                    
fractured.  He  thought  reorganization  was  expensive.  He                                                                    
wondered what  results the University expected  from another                                                                    
reorganization. He did not believe  it was an efficient move                                                                    
although it  was necessary.  He wondered how  it would  be a                                                                    
better   university   for   Alaskans.  He   understood   the                                                                    
difficulty  of  having  smaller campuses  off  of  the  road                                                                    
system. At the  end of the day he  thought the restructuring                                                                    
was another exercise  that would have to be  done in another                                                                    
10 years.  He wondered if  he expected a better  outcome and                                                                    
whether the University expected a larger appropriation.                                                                         
Mr. White  hoped that  as the  universities had  grown there                                                                    
had been misalignments. The strategic  pathways was meant to                                                                    
look  at all  of  the programs,  consider  a common  catalog                                                                    
concept,  get  the  programs aligned,  and  to  save  money.                                                                    
President Johnson had stated numerous  times that he was not                                                                    
interested in  continuing to cut  every single program  on a                                                                    
pro  rata  basis. It  would  reduce  all of  the  University                                                                    
programs to mediocrity. He suggested  that was needed was to                                                                    
allow the  campuses to  emphasize in  areas of  strength and                                                                    
deemphasize  in   other  areas.   The  only  way   to  build                                                                    
excellence   at  individual   universities  was   to  reduce                                                                    
somewhere else within the construct  of the system. The hope                                                                    
was to  build excellence at  each of the  universities while                                                                    
at the same time living with the budget.                                                                                        
Representative Guttenberg  spoke about the issue  of climate                                                                    
change  and the  changing Arctic.  The University  of Alaska                                                                    
Fairbanks had  been at the  center of the changes  being one                                                                    
of  the  foremost  Arctic  universities  in  the  world.  He                                                                    
wondered if  the University would  be hampered  in advancing                                                                    
the effort. Mr. White relayed  that the expectation was that                                                                    
the  University  would  grow  areas  of  excellence.  Arctic                                                                    
Research  was  an  area  of  excellence  at  UAF.  It  would                                                                    
continue to  be an area  of strength. President  Johnson has                                                                    
stated that he saw it as a halo program of UA overall.                                                                          
Co-Chair  Neuman  remarked  that  the  University  obviously                                                                    
faced  some  challenges. He  hoped  a  better project  would                                                                    
2:45:03 PM                                                                                                                    
AT EASE                                                                                                                         
2:46:16 PM                                                                                                                    
^FY 17 BUDGET OVERVIEW: DEPARTMENT OF FISH AND GAME                                                                           
2:47:16 PM                                                                                                                    
KEVIN BROOKS,  DEPUTY COMMISSIONER,  DEPARTMENT OF  FISH AND                                                                    
GAME, introduced the PowerPoint  Presentation: "FY 17 Budget                                                                    
Overview:  Department of  Fish  and Game."  He relayed  that                                                                    
Commissioner Cotton was  weathered in in Seattle  on his way                                                                    
home from a meeting and was sorry to miss the meeting.                                                                          
Co-Chair Neuman noted that questions would be held until                                                                        
the end of the presentation.                                                                                                    
Mr. Brooks addressed slide 2: "The Constitution of the                                                                          
State of Alaska, The Alaska Statues, Mission Statement":                                                                        
· The Constitution of the State of Alaska                                                                                       
     Article 8 - Natural Resources                                                                                              
     4. Sustained Yield                                                                                                         
     Fish,  forests,  wildlife,  grasslands, and  all  other                                                                    
     replenishable  resources belonging  to the  State shall                                                                    
     be   utilized,  developed,   and   maintained  on   the                                                                    
     sustained  yield  principle,   subject  to  preferences                                                                    
     among beneficial uses.                                                                                                     
· The Alaska Statutes                                                                                                           
     Title 16. FISH AND GAME                                                                                                    
     Sec. 16.05.020. Functions of commissioner.                                                                                 
     (2) manage, protect, maintain,  improve, and extend the                                                                    
     fish, game and aquatic plant  resources of the state in                                                                    
     the interest  of the economy and  general well-being of                                                                    
     the state.                                                                                                                 
· Mission Statement                                                                                                             
     To protect,  maintain, and improve the  fish, game, and                                                                    
     aquatic plant resources of the  state, and manage their                                                                    
     uses  and  development  in the  best  interest  of  the                                                                    
     economy and the well-being of the people of the state,                                                                     
     consistent with the sustained yield principle.                                                                             
Mr. Brooks explained that the  mission statement was derived                                                                    
via  Article  8,   Section  4  of  the   State  of  Alaska's                                                                    
constitution.  The sustained  yield  was  the primary  focus                                                                    
when  it  came to  the  management  of state  resources.  He                                                                    
pointed  to  Title  16,  Section  15.05.020  of  the  Alaska                                                                    
statutes which  directed the department to  manage, protect,                                                                    
maintain, improve  and enhance  the fish, game,  and aquatic                                                                    
plant resources of the state  in the interest of the economy                                                                    
and general  well-being of the  state. By combining  the two                                                                    
things the  Department of Fish  and Game (DFG) came  up with                                                                    
its mission statement.                                                                                                          
Mr.  Brooks moved  to  slide 3:  "ADF&G  Core Services."  He                                                                    
relayed that  there were three  core services  to accomplish                                                                    
the  department's   mission.  The  department   managed  the                                                                    
resources  to  provide  a  harvestable  surplus  for  sport,                                                                    
sustainable use,  or commercial  interests. It also  met its                                                                    
mission  through  stack  assessment and  research.  Counting                                                                    
fish, counting populations of animals  on the landscape, and                                                                    
similar  activities  were  conducted by  the  department  to                                                                    
ensure  a sustainable  yield.  Customer  service and  public                                                                    
involvement  were key  to  making  improvements through  the                                                                    
board process  and the advisory  committees - there  were 83                                                                    
statewide.  Interactions with  the public  through licensing                                                                    
and permitting were key to the department's mission.                                                                            
Co-Chair Neuman recognized  Representative Louise Stutes and                                                                    
former Representative Bill Thomas in the audience.                                                                              
Mr. Brooks moved to slide  4: "Alaska Department of Fish and                                                                    
Game  Department Leadership."  He noted  that the  structure                                                                    
was  represented on  the  slide.  The department  leadership                                                                    
consisted  of  the  commissioner, two  deputy  commissioners                                                                    
including  Mr. Brooks  and Mr.  Charles Swanton  responsible                                                                    
for the  Pacific salmon  treaty. The  department also  had a                                                                    
special assistant and 6 division  directors. He noted that 5                                                                    
of 6 directors  were new to their positions  in the previous                                                                    
year. There were two executive  directors; one for the Board                                                                    
of Fish and  one for the Board of Game.  There were also two                                                                    
related  entities   within  the  department   for  budgeting                                                                    
purposes  only; the  Exon-Valdez Oil  Spill Trustee  Council                                                                    
and  the Limited  Entry Commission.  These entities  did not                                                                    
report to the commissioner.                                                                                                     
Mr. Brooks turned  to a color coded map on  slide 5: "Alaska                                                                    
Department  of Fish  and Game  Department Regional  and Area                                                                    
Offices."  He   reported  that  core  to   the  department's                                                                    
services  was a  statewide presence.  The department  was in                                                                    
over  40  locations  around the  state.  The  chart  clearly                                                                    
showed  the distribution  of DFG  offices around  the state.                                                                    
The department  added to  its presence  with 100's  of field                                                                    
camps during the summer camps,  most of which were in remote                                                                    
Mr.  Brooks  briefly  addressed  each  of  the  department's                                                                    
divisions  beginning on  slide  6:  "Division of  Commercial                                                                    
        · 296 permanent full-time positions                                                                                     
       · 426 permanent part-time/seasonal positions                                                                             
        · $65,109.8 FY2017 Operating Request                                                                                    
        · $35,707.9 UGF Request                                                                                                 
        · 32% of ADF&G's Operating Budget                                                                                       
          Protect,   maintain,   and   improve   the   fish,                                                                    
          shellfish,  and  aquatic  plant resources  of  the                                                                    
          state,   consistent  with   the  sustained   yield                                                                    
          principle, for the maximum  benefit of the economy                                                                    
          and the people of Alaska                                                                                              
Mr. Brooks  noted that the Division  of Commercial Fisheries                                                                    
was one of the department's  largest divisions. The division                                                                    
more than  doubled its workforce  in the summer  months. The                                                                    
division made up 62 percent of the department's UGF.                                                                            
2:52:10 PM                                                                                                                    
Mr.   Brooks  addressed   slide  7:   "Ex-vessel  Value   of                                                                    
Commercial Harvests and Mari  culture Production in Alaska."                                                                    
There were a couple of  things the division measured, one of                                                                    
which was the ex-vessel value  of harvests in Alaska. In the                                                                    
previous several years the division  had exceeded $2 billion                                                                    
in ex-vessel value. The division  contributed to the success                                                                    
of the  seafood industry  through the  scientific management                                                                    
of the  various fisheries resources.  Ex vessel value  was a                                                                    
reflection of  volume and prices  but was also  an indicator                                                                    
of  participation and  contribution in  the economy.  It was                                                                    
something the division monitored closely.                                                                                       
Co-Chair Neuman  asked Mr. Brooks  how many salmon  had been                                                                    
harvested  and  whether  harvest  rates  were  declining  or                                                                    
increasing.   He referred to  the price of fish.  Mr. Brooks                                                                    
noted that  the information was  broken out by  species. The                                                                    
state's  salmon harvests  had been  very large  the prior  2                                                                    
years.  The  previous  year  had been  one  of  the  largest                                                                    
harvests on record. The commercial  fisheries were driven by                                                                    
pink and chum  salmon - species with the  largest numbers of                                                                    
fish harvested. Sockeye salmon was third on the list.                                                                           
Co-Chair Neuman  indicated that questions would  be heard at                                                                    
the end of the presentation.                                                                                                    
Representative Gattis  asked for a definition  of ex vessel.                                                                    
Mr.  Brooks replied  that ex  vessel values  were calculated                                                                    
using a  combination of aggregated  price point  per species                                                                    
derived  from  the   commercial  operators'  annual  report,                                                                    
referred to the  core report. The numbers  were derived from                                                                    
fish tickets provided by fishermen.                                                                                             
Mr. Brooks  slide 8: "Escapement Goals  Achieved." He shared                                                                    
that the department had 295  escapement goals statewide. The                                                                    
goals  were set  by the  Board of  Fish to  reach a  minimum                                                                    
escapement to provide for a  sustained yield. It was usually                                                                    
described in a  range.  He reported that of  the stocks with                                                                    
goals 256 were adequately assessed  in the past year and 225                                                                    
met or exceeded their escapement  goal. There were years the                                                                    
department could  not get out  to innumerate the  counts. He                                                                    
mentioned  the  challenges  of   doing  aerial  surveys  and                                                                    
potential other events such as  a flood that might knock out                                                                    
a weir.  There were things from  year-to-year that prevented                                                                    
the division from doing counts at a rate of 100 percent.                                                                        
Co-Chair  Neuman  asked  for a  statewide  map  on  regional                                                                    
escapement  goal achievements.  Mr.  Brooks  replied in  the                                                                    
2:56:08 PM                                                                                                                    
Mr. Brooks addressed slide 9: "Division of Sport Fish":                                                                         
        · 186 permanent full-time positions                                                                                     
       · 163 permanent part-time/seasonal positions                                                                             
        · $47,776.0 FY2017 Operating Request                                                                                    
        · $4,061.5 UGF Request                                                                                                  
        · 23% of ADF&G's Operating Budget                                                                                       
        · Protect and improve the state's recreational                                                                          
          fisheries resources                                                                                                   
Mr. Brooks  reported that  the Sport  Fish division  was the                                                                    
second  largest management  division within  the department.                                                                    
He  noted  that  the  staff nearly  doubled  in  the  summer                                                                    
months.  He  mentioned that  less  than  10 percent  of  the                                                                    
division's  total  funding  came  from  GF.  The  division's                                                                    
primary  funding source  came  from federal  Dingell-Johnson                                                                    
funds matched  by DFG licensing  revenue that  was deposited                                                                    
in the Fish and Game Fund.                                                                                                      
Co-Chair Neuman  asked Mr.  Brooks to  explain the  Fish and                                                                    
Game Fund.  Mr. Brooks  answered that  the fund  was license                                                                    
revenue  derived  from  the  sale  of  hunting  and  fishing                                                                    
Co-Chair Neuman  wanted to make  sure the  public understood                                                                    
where the  money came  from. Mr.  Brooks explained  that the                                                                    
Division of Sport  Fish worked closely with  the Division of                                                                    
Commercial Fisheries.  They had similar mission  but focused                                                                    
on  different  publics.  The  Division  of  Sport  Fish  was                                                                    
responsible for  managing Alaska's  sport fisheries  as well                                                                    
as  many   personal  use  fisheries  and   some  subsistence                                                                    
fisheries.  The division  also  operated  the 2  state-owned                                                                    
fish  hatcheries;  The  William Jack  Hernandez  Sport  Fish                                                                    
Hatchery  in  Anchorage  and the  Ruth  Burnett  Sport  Fish                                                                    
Hatchery in Fairbanks.                                                                                                          
Mr. Brooks turned to slide  10: "Sales of Fishing Licenses."                                                                    
He noted  that one  of the metrics  the department  used for                                                                    
tracking   sport  fishing   was   the   license  sales.   He                                                                    
highlighted  non-resident  sales were  significantly  higher                                                                    
than  resident sales  as shown  on the  graph. Non-residents                                                                    
were paying a  larger portion of the revenue  that went into                                                                    
the Fish and Game Fund.  Resident and non-resident sales had                                                                    
been flat for  a few years but over the  prior 3 years there                                                                    
had been a  slow but steady uptick in sales.  He thought the                                                                    
numbers  reflected opportunity  and an  improved economy  in                                                                    
the Lower-48.  He also thought  the numbers  correlated with                                                                    
visitor numbers in the tourism industry.                                                                                        
Mr.  Brooks  highlighted  slide 11:  "Division  of  Wildlife                                                                    
        · 216 permanent full-time positions                                                                                     
        · 54 permanent part-time/seasonal positions                                                                             
        · $47,784.7 FY2017 Operating Request                                                                                    
        · $4,259.2 UGF Request                                                                                                  
        · 23% of ADF&G's Operating Budget                                                                                       
        · Conserve and enhance Alaska's wildlife and                                                                            
          habitats and provide for a wide range of public                                                                       
          uses and benefits                                                                                                     
Mr.  Brooks reported  that  the  department's third  largest                                                                    
management   division   was   the   Division   of   Wildlife                                                                    
Conservation.  He  highlighted  that the  division  received                                                                    
less than 10 percent of its  funding from UGF. The source of                                                                    
funds  for  the  division  were  Pittman-Robertson  funds  -                                                                    
federal  funds   derived  from  excess   tax  on   guns  and                                                                    
ammunition and Fish and Game  licensing revenue derived from                                                                    
the sale of hunting licenses.                                                                                                   
Mr.  Brooks  turned  to  slide 12:  "Sales  of  Hunting  and                                                                    
Trapping  Licenses."  The  division   tracked  the  sale  of                                                                    
hunting  and trapping  licenses.  There  were more  resident                                                                    
hunters,  about  100 thousand,  compared  to  just under  20                                                                    
thousand non-resident hunters. He  furthered that because of                                                                    
the  state's  pricing  schedule, non-resident  hunters  paid                                                                    
more in total  revenue. There had been a  slow steady growth                                                                    
in the  previous 3 years.  Prior to that sales  had remained                                                                    
Mr. Brooks addressed slide 13: "Division of Subsistence":                                                                       
        · 26 permanent full-time positions                                                                                      
        · 23 permanent part-time/seasonal positions                                                                             
        · $7,213.2 FY2017 Operating Request                                                                                     
        · $2,591.4 UGF Request                                                                                                  
        · 4% ADF&G's Operating Budget                                                                                           
        · Scientifically quantify, evaluate and report                                                                          
          information about customary and traditional uses                                                                      
          of Alaska's fish and wildlife resources                                                                               
Mr.  Brooks   elaborated  that   the  department   used  the                                                                    
division's information  in a number  of venues,  the biggest                                                                    
was providing  the amounts necessary for  subsistence to the                                                                    
Board of Fish and Game for their allocation deliberations.                                                                      
3:01:21 PM                                                                                                                    
Mr.   Brooks   moved   to  slide   14:   "Management   Plans                                                                    
Incorporating Subsistence Information."  He relayed that the                                                                    
department    was   currently    incorporating   subsistence                                                                    
information into  50 of  the department's  management plans.                                                                    
He  noted  the increasing  trend  of  using the  subsistence                                                                    
information in management plans.                                                                                                
Mr. Brooks addressed slide 15: "Division of Habitat":                                                                           
   · 43 permanent full-time positions                                                                                           
   · 2 permanent part-time/seasonal positions                                                                                   
   · $6,172.1 FY2017 Operating Request                                                                                          
   · $3,567.1 UGF Request                                                                                                       
   · 3% of ADF&G's Operating Budget                                                                                             
   · Protect Alaska's valuable fish and wildlife resources                                                                      
     and their habitats as Alaska's population and economy                                                                      
     continue to expand                                                                                                         
Mr.  Brooks  explained  that the  primary  function  of  the                                                                    
division  was to  issue permits  under Alaska  Statute Title                                                                    
Mr.  Brooks discussed  the  chart on  slide  16: "Number  of                                                                    
Permits Issued."  He highlighted that the  number of permits                                                                    
issued had been reduced by about  1000 in the prior year. He                                                                    
had requested  that the division  look into the  reasons for                                                                    
the drop.  He reported  that the  decline was  attributed to                                                                    
the  state  issuing  longer  term   permits  and  a  general                                                                    
slowdown in the economy.                                                                                                        
Mr. Brooks turned  to the last division listed  on slide 17:                                                                    
"Division of Administrative Services":                                                                                          
   · 68 permanent full-time positions                                                                                           
   · 11 permanent part-time/seasonal positions                                                                                  
   · $12,015.9 FY2017 Operating Request                                                                                         
   · $2,484.3 UGF Request                                                                                                       
   · 6% of ADF&G's Operating Budget                                                                                             
   · Provides administrative support for the department;                                                                        
     coordinates development of the annual operating and                                                                        
     capital budget; and manages the fish and game                                                                              
     licensing program                                                                                                          
Mr.  Brooks  explained  that  the  11  permanent  part-time,                                                                    
seasonal  positions   primarily  did  data  entry   for  the                                                                    
licensing program.                                                                                                              
Mr. Brooks turned to slide 18: "Boards Support Section":                                                                        
   · 6 permanent full-time positions                                                                                            
   · 5 permanent part-time/seasonal positions                                                                                   
   · $1,836.3 FY2017 Operating Request                                                                                          
   · $1,685.5 UGF Request                                                                                                       
   · 1% of ADF&G's Operating Budget                                                                                             
   · Ensures that the public process for the state's fish                                                                       
     and wildlife regulatory system operates efficiently                                                                        
     and effectively                                                                                                            
Mr. Brooks noted  that the Board Support Section  was a very                                                                    
small  but  important  piece  of  the  department's  overall                                                                    
structure.  The section  supported  the Boards  of Fish  and                                                                    
Game to meet  in the joint boards. He  reported having about                                                                    
40 regulatory days of board  meetings over the previous year                                                                    
considering nearly 500 proposals.                                                                                               
Mr. Brooks advanced to slide 19: "Commissioner's Office":                                                                       
   · 8 permanent full-time positions                                                                                            
   · $1,628.8 FY2017 Operating Request                                                                                          
   · $753.6 UGF Request                                                                                                         
   · 1% of ADF&G's Operating Budget                                                                                             
   · Provide support and policy direction to departmental                                                                       
Mr. Brooks turned to slide 20: "Independent Agencies":                                                                          
   Commercial Fisheries Entry Commission                                                                                        
   · 26 permanent full-time positions                                                                                           
   · 2 permanent part-time/seasonal positions                                                                                   
   · $4,310.2 FY2017 Operating Request                                                                                          
   · $0 UGF Request                                                                                                             
   · 2% of ADF&G's Operating Budget                                                                                             
   · Controls entry into Alaska's commercial fisheries to                                                                       
     promote conservation of Alaska's fishery resources and                                                                     
     economic health of commercial fishing                                                                                      
   Exxon Valdez Oil Spill Trustee Council                                                                                       
   · 4 permanent full-time positions                                                                                            
   · $2,503.5 FY2017 Operating Request                                                                                          
   · $0 UGF Request                                                                                                             
   · 1% of ADF&G's Operating Budget                                                                                             
   · Works toward restoring the environment injured by the                                                                      
     Exxon  Valdez oil  spill to  a  healthy and  productive                                                                    
     ecosystem,  while taking  into  account the  importance                                                                    
     and   quality  of   life  and   the  need   for  viable                                                                    
     opportunities  to establish  and  sustain a  reasonable                                                                    
     standard of living                                                                                                         
Mr.  Brooks  informed  the committee  that  the  independent                                                                    
agencies  did not  report to  the commissioner  and did  not                                                                    
have any UGF in their  budgets. He concluded the overview of                                                                    
the structure  of the department  and indicated he  would be                                                                    
providing highlights from the budget in the next slides.                                                                        
3:05:12 PM                                                                                                                    
Mr.  Brooks  advanced  to  slide   21:  "FY2016  Budget  Cut                                                                    
   · $14.7 million UGF reduction from FY2015 Management                                                                         
     Plan, 29 positions                                                                                                         
        · $7.3 million cut in Governor's Budget                                                                                 
        · $7.4 million cut through legislative process                                                                          
   · Revenue Offsets                                                                                                            
        · $3,500.0 in Commercial Fisheries Entry Commission                                                                     
          (CFEC) Receipts                                                                                                       
        · $500.0 Commercial Crew Receipts (DGF)                                                                                 
        · $1,200.0 in federal Pittman-Robertson funds in                                                                        
          Division of Wildlife Conservation                                                                                     
   · Cuts to Division Programs - $9.1 million                                                                                   
Mr. Brooks  reported that  the department's  budget starting                                                                    
point was about  $80 million. The department  found about $5                                                                    
million  in revenue  offsets. The  department shifted  about                                                                    
$3.5 million of limited entry  receipts into the Division of                                                                    
Commercial  Fisheries  and  had  an  even  cut  of  UGF.  He                                                                    
furthered  that with  the revenue  offsets the  net cuts  to                                                                    
division  programs equaled  about $9.1  million. The  lion's                                                                    
share  of   $5.6  million  consisted  of   projects  in  the                                                                    
department's Division  of Commercial  Fisheries. All  of the                                                                    
other divisions  within the department cut  their budgets as                                                                    
Mr. Brooks  explained that as the  department approached its                                                                    
reductions it  first looked at  administrative efficiencies.                                                                    
There was  an effort within the  department of consolidating                                                                    
and  centralizing administrative  functions. The  department                                                                    
reduced  staff   from  20  to  12   positions  with  savings                                                                    
throughout the  smaller divisions.  In the  following summer                                                                    
the department  would initiate a  similar effort with  its 3                                                                    
large management divisions.                                                                                                     
Mr.  Brooks discussed  slide  22:  "Highlights in  Operating                                                                    
Budget for FY2017":                                                                                                             
   · $7.5 million UGF reduction from FY2016 Management                                                                          
     Plan, 36 positions                                                                                                         
   · Revenue Offsets                                                                                                            
        · $1,300.0 in Test Fish and Commercial Crew                                                                             
          Receipts   (DGF)   in   Division   of   Commercial                                                                    
        · $1,500.0 in Fish and Game Funds and Statutory                                                                         
          Designated Receipts in Sport Fisheries                                                                                
        · $641.8 in federal Pittman-Robertson funds in                                                                          
          Division of Wildlife Conservation                                                                                     
   · Cuts to Divisions      - $4.0 million                                                                                      
   · Restructure and Rename Budget Components for Habitat                                                                       
     and Statewide Support Services                                                                                             
        · Transfer Habitat to Statewide Support Services                                                                        
        · Rename Administration and Support to Statewide                                                                        
          Support Services                                                                                                      
Mr. Brooks reported that in  the budget before the committee                                                                    
the department  had cut an additional  $7.5 million proposed                                                                    
in the  governor's request which included  36 positions. The                                                                    
Department of Fish and Game's  strategy was to identify some                                                                    
revenue offsets where possible.  The offsets were identified                                                                    
in the Division of Commercial  Fisheries for a total of $1.3                                                                    
million  - $800  thousand  in test  fish  receipts and  $500                                                                    
thousand in crew member license  revenue. The department cut                                                                    
$1.5 million  in UGF  and replaced them  with $1  million in                                                                    
Fish and Game  funds and $500 thousand  in statutory program                                                                    
receipts.  He  relayed  that in  the  Division  of  Wildlife                                                                    
Conservation the  department replace $641.8 thousand  of UGF                                                                    
with  federal funds.  After the  offsets the  department had                                                                    
another $4  million in programmatic  cuts to  the divisions.                                                                    
The   department   had   undertaken    a   review   of   all                                                                    
administrative functions to  try to limit the  impact on its                                                                    
programs in  the field.  The department  had also  done some                                                                    
restructuring within the  appropriation structure moving the                                                                    
Division of Habitat into the  Statewide Support Services. It                                                                    
was  reflective of  administrative  efficiencies and  common                                                                    
staffing to forward that function.                                                                                              
Mr. Brooks  advanced to slide  23: "FY2017  Operating Budget                                                                    
by  RDU Department  of  Fish and  Game."  He explained  that                                                                    
there  were  4  appropriations  within  the  department.  He                                                                    
pointed  to  the  upper  left   of  the  slide  from  FY  16                                                                    
management plan to the department's  FY 17 request moving to                                                                    
the right.  He highlighted the 4  appropriations, Commercial                                                                    
Fisheries, Sport Fish,  Wildlife Conservation, and Statewide                                                                    
Support  Services. The  relative  share of  UGF, DGF,  other                                                                    
funds, fish and  game funds, and federal  funds provided the                                                                    
total. He pointed to the  right of that the same information                                                                    
was  provided in  the FY  17 governor's  request budget.  He                                                                    
noted that on  the far right in red the  changes were listed                                                                    
by  appropriation.  There  was  some netting  that  went  on                                                                    
because it was  "All Funds". The changes  were summarized in                                                                    
the lower  right corner.  There was a  GF reduction  of $2.7                                                                    
million. There were unallocated  cuts equal to $1.3 million.                                                                    
There  were also  fund source  changes  equaling about  $3.4                                                                    
million.  At the  bottom of  the  page the  UGF reflected  a                                                                    
total  of  $7.5 million  with  the  offsets of  the  revenue                                                                    
sources discussed earlier in the meeting.                                                                                       
3:10:56 PM                                                                                                                    
Mr.  Brooks discussed  the pie  chart on  slide 24:  "FY2017                                                                    
Budget  by  Division  ($203,981.3)."   He  noted  the  total                                                                    
overall   budget   was   just  under   $204   million.   The                                                                    
department's GF  equaled $57.6 million. He  relayed that the                                                                    
Division  of  Commercial Fisheries  had  a  budget of  $65.1                                                                    
million and the  Division of Sport Fish and  the Division of                                                                    
Wildlife  Conservation  were  just  under  $48  million.  He                                                                    
commented that  80 percent of  the department's  funding was                                                                    
tied  up  in  the  three  large  management  divisions.  The                                                                    
smaller divisions made up the final piece of the pie.                                                                           
Mr.  Brooks scrolled  to slide  25: "FY2017  Budget By  Fund                                                                    
Source ($203,981.3)."  He explained that the  department had                                                                    
3 large sources  it relied on. General  funds represented 28                                                                    
percent  of  the  department's funding.  Designated  general                                                                    
funds  equaled  about 7  percent  and  consisted of  limited                                                                    
entry, test  fishery, and crew member  license receipts. The                                                                    
department also  received federal funds which  accounted for                                                                    
about one-third of  the budget. Fish and  Game funds equaled                                                                    
about $25 million and represented  12 percent of the budget.                                                                    
The remaining balance of funding was  made up of a series of                                                                    
much smaller sources.                                                                                                           
Mr. Brooks  reviewed slide 26: "FY2017  Budgeted Positions."                                                                    
He reported that the department  had 879 full-time positions                                                                    
and 739  seasonal positions.  The department  nearly doubled                                                                    
its  workforce in  the months  of  summer. Approximately  80                                                                    
percent of the seasonal positions  were within the 3 largest                                                                    
management divisions.                                                                                                           
Mr. Brooks  moved on  to slide 28:  "Department of  Fish and                                                                    
Game's Budget  Compared to All Agencies'  Budget (GF Only)."                                                                    
He  explained that  the Legislative  Finance Division  slide                                                                    
reflected GF  only with a  10 year lookback. He  pointed out                                                                    
that growth was  fairly steady for about ten  years. For the                                                                    
prior  3 years  there  had been  a  significant decline.  He                                                                    
noted that there  was a decrease of about $14  million in FY                                                                    
16 and about $7.5 million in FY 17.                                                                                             
Mr. Brooks scrolled  to slide 29: "FY2017  Governor Budget -                                                                    
Budget  Growth   Analysis:  Department  of  Fish   and  Game                                                                    
Budgeted  Positions." He  reported that  the department  had                                                                    
reduced its positions  by 100 over the prior  3 years. There                                                                    
had  been talk  in  the committee  about  whether they  were                                                                    
filled or  vacant positions. He relayed  that the department                                                                    
had succeeded  in making  reductions by  attrition in  FY 15                                                                    
and FY 16. The department did  not lay anyone off but rather                                                                    
brought on fewer seasonal  people reassigning them different                                                                    
projects.  He  highlighted that  in  the  FY 17  budget  the                                                                    
department had  notified over 30  employees since  the first                                                                    
of   the  year   that  their   positions  were   slated  for                                                                    
elimination by  June 30th. The  department was  spending the                                                                    
following  5  months  trying  to  place  them  in  different                                                                    
positions. Some  people were choosing  to retire. It  was an                                                                    
important step,  as the  department had  to work  with human                                                                    
resources to  establish seniority  pools. He  explained that                                                                    
each of the labor unions  had seniority clauses within their                                                                    
contracts. There  were bumping  rights and other  factors to                                                                    
be  considered. The  department's goal  was to  avoid anyone                                                                    
being laid off.  He reiterated that the  department had been                                                                    
proactive  in   notifying  employees  of   pending  position                                                                    
3:14:45 PM                                                                                                                    
Mr.  Brooks continued  to slide  30: "Appropriations  within                                                                    
the Department of  Fish and Game (GF Only)."  The line graph                                                                    
showed  the department's  general  funds by  appropriations.                                                                    
The  Division  of  Commercial  Fisheries  took  the  largest                                                                    
portion  of  total GF.  He  noted  that  the lower  2  lines                                                                    
represented the Division  of Sport Fish and  the Division of                                                                    
Wildlife  Conservation. They  equaled around  $4 million  in                                                                    
the  FY  17 budget  at  the  far  right  of the  graph.  The                                                                    
department's  Statewide  Support  Services (comprised  of  3                                                                    
divisions, boards,  and other  sections) was  represented by                                                                    
the middle  line. He highlighted  that the lines  trended up                                                                    
for  about 10  years followed  by a  steep decline  over the                                                                    
last few years of budgeting cycles.                                                                                             
Mr. Brooks advanced to slide  31: "Appropriations within the                                                                    
Department of  Fish and  Game (All  Funds)." He  pointed out                                                                    
that the chart showed all  funds. The Division of Commercial                                                                    
Fisheries was  the largest division.  The Division  of Sport                                                                    
Fish  and the  Division  of Wildlife  Conservation were  the                                                                    
second  largest  divisions  when  factoring in  all  of  the                                                                    
federal funds  and fish  and game funds  equal to  about $50                                                                    
million. The bottom line represented  the compilation of all                                                                    
of the other divisions.                                                                                                         
Mr.  Brooks turned  to slide  32:  "FY2017 Capital  Projects                                                                    
     Projects and Initiatives                                                                                                   
        · Fairbanks Regional Office Electrical, Telephone                                                                       
          System, and Repairs: $350.0 GF                                                                                        
     Recurring Capital Projects                                                                                                 
        · Sport Fish Recreational Boating and Angler                                                                            
          Access: $2,250.0 Federal, $750.0 GF                                                                                   
        · Facilities, Vessels and Aircraft Maintenance,                                                                         
          Repair and Upgrades: $1,000.0 GF                                                                                      
Mr. Brooks  was aware  that he  was presenting  an operating                                                                    
budget  overview but  mentioned  that the  department had  3                                                                    
capital  projects.  Two  of  the  three  projects  were  for                                                                    
deferred  maintenance.  The  third request  was  for  boater                                                                    
access  and had  been an  annual request  seen by  committee                                                                    
members in  the past. It was  a $3 million request  that was                                                                    
three  quarters federal  funds and  one  quarter of  GF -  a                                                                    
state match. He  also pointed out that there  were two bills                                                                    
that were before the legislature.  The first was HB 137 that                                                                    
would  raise fees  on fishing  and hunting  licenses on  the                                                                    
sport side.  It was a  bill that would  potentially generate                                                                    
additional revenue  that could be  used for the  Division of                                                                    
Sport Fish  and the Division of  Wildlife Conservation where                                                                    
there was a  remaining $4 million of UGF.  He also mentioned                                                                    
HB  251 which  was a  fisheries  tax bill  that assessed  an                                                                    
additional  one percent  of tax  on  the commercial  fishing                                                                    
industry.  The   fiscal  note  on  the   bill  reflected  an                                                                    
additional $18 million  in revenues which would  go into the                                                                    
UGF. He made himself  available for questions from committee                                                                    
Co-Chair  Neuman  referred to  slide  21.  He expressed  his                                                                    
concern about the revenue offset  of $1.2 million in federal                                                                    
Pittman-Robertson. He  asked if the department  had returned                                                                    
any  available federal  funds. Mr.  Brooks replied  that the                                                                    
department had not  returned any of the  funding to-date. He                                                                    
relayed  that   coupled  with   its  operating   budget  the                                                                    
legislature  had  given  the department  a  capital  project                                                                    
request in the  previous year for $11  million of additional                                                                    
Pittman-Robertson  funds. At  a national  level the  program                                                                    
had seen  a steady  growth. He reported  that 2  years prior                                                                    
the  department's allocation  went from  $21 million  to $31                                                                    
million in  a single year.  He elaborated that  the Pittman-                                                                    
Robertson  program  was  tied  to excise  tax  on  guns  and                                                                    
ammunition.  The department's  challenge  was  to match  the                                                                    
funding.  The  department's  challenge   was  to  match  the                                                                    
funding.  The  department  was  also keeping  an  eye  on  a                                                                    
sustained revenue  level which  was anticipated  to plateau.                                                                    
It might be  at a higher level  than in the past  but not at                                                                    
the same  rate of growth  as the exceptional single  year of                                                                    
Co-Chair  Neuman asked  about  any unused  Pittman-Robertson                                                                    
funds. Mr.  Brooks reported  that the state  had 2  years to                                                                    
use   the  funds,   to  obligate   them  with   the  federal                                                                    
government. It was not the  same as having an encumbrance or                                                                    
order, but rather having an  approved project with them. The                                                                    
department had been doing its  best to find partners to help                                                                    
the  state   match  the  federal  funding.   Currently,  the                                                                    
department estimated  that at the  end of September  2016 it                                                                    
could be  in a  position to  revert back  $2 million  to the                                                                    
federal government.                                                                                                             
Co-Chair  Neuman  wanted  additional information  about  how                                                                    
Pittman-Robertson  funds were  used.  He  thought they  were                                                                    
primarily used for access. Mr.  Brooks responded that access                                                                    
was one of  the uses. The funds had  to benefit recreational                                                                    
Co-Chair  Neuman  asked  Mr.  Brooks  to  explain  how  $1.2                                                                    
million  of   federal  Pittman-Robertson  funds   to  offset                                                                    
revenue. Mr. Brooks answered that  it was one of the primary                                                                    
finding  sources  for  all of  the  department's  management                                                                    
program  activities such  as aerial  surveys of  caribou and                                                                    
other  undertakings  having to  do  with  hunted species  in                                                                    
Alaska.  The department  was using  Fish and  Game Funds  to                                                                    
match federal dollars. He furthered  that the department was                                                                    
experiencing increasing difficulty matching federal funds.                                                                      
Co-Chair Neuman wanted an additional  explanation of why the                                                                    
department  was  using  Federal Pittman-Robertson  funds  to                                                                    
offset  revenue  in  the department's  budget.  He  did  not                                                                    
understand how  it worked.  Mr. Brooks  was happy  to review                                                                    
the subject later.                                                                                                              
3:20:16 PM                                                                                                                    
Representative  Gara  mentioned  a  historically  struggling                                                                    
King Salmon run  on the Kenai. Both the early  and late runs                                                                    
had been  some of  the best. However,  in current  years the                                                                    
runs were  terrible. After a  year of  a good late  run, the                                                                    
department  opened it  up  to  bait fishermen  substantially                                                                    
increasing  the  take of  a  nearly  endangered fishery.  He                                                                    
asked  why and  wondered about  the department's  management                                                                    
direction  for the  fishery  in the  upcoming  year. It  was                                                                    
unknown  whether the  state would  have sustainable  runs of                                                                    
the fishery  in the future.  He relayed that many  people on                                                                    
the  Kenai  Peninsula  were   angered  by  the  department's                                                                    
management  decision.  Mr.  Brooks   would  provide  a  more                                                                    
detailed answer  at a  later time. He  was aware  that there                                                                    
were good numbers  from the late run. He  indicated that the                                                                    
Division of  Sport Fish  was trying  to balance  raising the                                                                    
return  beyond  the low  end  of  the escapement  range  and                                                                    
providing  opportunities late  in  the  season. He  surmised                                                                    
that  any  action taken  by  the  division would  likely  be                                                                    
controversial.  He  was happy  to  provide  a more  thorough                                                                    
Representative Gara  did not  expect Mr.  Brooks to  have an                                                                    
immediate answer. He  emphasized that it had  been the first                                                                    
decent  return  in years.  He  claimed  that the  department                                                                    
seized the opportunity  to open up bait  fishing right away.                                                                    
He  conveyed that  the fishermen  in South  Central did  not                                                                    
want that  to happen. He  wondered if the same  action would                                                                    
be taken before  the run was stabilized. He  did not believe                                                                    
that one  decent run  in several years  did not  justify the                                                                    
division taking such an action.  Mr. Brooks relayed that the                                                                    
department would get back to the committee with a response.                                                                     
Co-Chair Thompson  referred to  the Division of  Habitat. He                                                                    
wondered about the invasive species,  Loche, in the Northern                                                                    
and Central regions of Alaska.  He wondered if the state was                                                                    
getting  financially involved  in fighting  the epidemic  of                                                                    
invasive species. Mr. Brooks responded  that the Division of                                                                    
Habitat and the  Division of Sport Fish were  working on the                                                                    
issue. The  Department collaborated  with the  Department of                                                                    
Natural Resources. He could  provide specific information on                                                                    
related projects.                                                                                                               
Co-Chair Thompson was just curious  and indicated he did not                                                                    
require an additional response. He  asked about how the CFEC                                                                    
determined permit prices. He asked  if boat size and tonnage                                                                    
were factors  in permit pricing.  Mr. Brooks  responded that                                                                    
there was a range of fees  set in statute from $30 to $3000.                                                                    
There was also a formula  the commission employed to set the                                                                    
rates.  Size and  other factors  were considered.  The range                                                                    
was established by the legislature  and the fees were set by                                                                    
Co-Chair Thompson  asked if  the cap  was $3000.  Mr. Brooks                                                                    
responded affirmatively.                                                                                                        
Co-Chair  Thompson  understood  that there  were  about  260                                                                    
permits very  few of which  were Alaskan owned.  Most permit                                                                    
holders were  from Seattle,  took hundreds  of tons  of fish                                                                    
out of Alaska,  and brought their catch back  to Seattle. He                                                                    
added that  the majority  of their  fishing crews  were from                                                                    
out of  state. He  thought that the  cap was  something that                                                                    
needed to  be addressed  because of  "out-of-staters" taking                                                                    
Alaskan jobs  and Alaskan fish.  He considered it  a problem                                                                    
that he hoped would be addressed during the session.                                                                            
3:25:50 PM                                                                                                                    
Co-Chair  Neuman remarked  that  the  conversation had  been                                                                    
started.  Mr.  Brooks  responded   that  the  Limited  Entry                                                                    
Commission had done  some analysis on the  fee structure and                                                                    
the cap. He would provide the information to the committee.                                                                     
Co-Chair Neuman  remarked that the  larger vessels  would be                                                                    
the focus.  He would  distribute the information  to members                                                                    
of  the  committee  and  would  address  the  issue  at  the                                                                    
subcommittee level.                                                                                                             
Vice-Chair Saddler referred to slide  20. He asked about the                                                                    
Exxon  Valdez Spill  Trustee Council.  He  wondered why  the                                                                    
state was  spending $2.5  million on  a spill  disaster that                                                                    
happened 27  years ago. He asked  about the responsibilities                                                                    
of the council,  how long it would last, and  when the state                                                                    
could divest  itself from it.  Mr. Brooks remarked  that DFG                                                                    
was chosen to house the council.  The council was made up of                                                                    
3 federal  and 3 state  representatives. There was  a couple                                                                    
of staff as well. The  council was responsible for a science                                                                    
panel that  continued to meet  and some  ongoing monitoring.                                                                    
He believed  the $2.5 million was  a "not-to-exceed" amount.                                                                    
He did  not believe that the  council had come close  to the                                                                    
budgeted amount in  recent years. He did not  have an answer                                                                    
about an end date but noted  it was a minimal ongoing effort                                                                    
that existed.                                                                                                                   
Vice-Chair  Saddler  thought  the   council  might  find  an                                                                    
administrative  home within  the  university  system or  the                                                                    
marine science  facilities in Juneau  or Valdez.  He thought                                                                    
it  was   a  holdover  from   a  previous  crisis   and  was                                                                    
Co-Chair Neuman asked about CFEC's  budget for research. Mr.                                                                    
Brooks reported  that CFEC generated  about $7.8  million in                                                                    
funds. There was about $4.2  million in the CFEC budget. The                                                                    
Division of  Commercial Fisheries had about  $3.5 million in                                                                    
its  budget. Out  of the  $4.2  million budget  there was  a                                                                    
section with 3 positions:  an economist, a fisheries analyst                                                                    
(responsible  for  doing  economic  research  and  different                                                                    
types of analysis), and an empty position.                                                                                      
Co-Chair Neuman  asked about the  yearly budget.  Mr. Brooks                                                                    
would have  to look at  the positions. He guessed  that with                                                                    
salary and benefits it could be about $300 thousand.                                                                            
Co-Chair Neuman  thought the cost  of their research  was in                                                                    
the millions. Mr. Brooks responded, "No."                                                                                       
3:29:40 PM                                                                                                                    
Representative   Edgmon  referenced   HB  112   [Legislation                                                                    
introduced  in 2015  - Short  Title:  Repeal CFEC;  Transfer                                                                    
Functions to  ADFG], Representative Stutes' bill  that would                                                                    
essentially  reorganize  and   downsize  CFEC.  He  reported                                                                    
receiving  conflicting  stories  from  fishermen  along  the                                                                    
coast.  It  was a  very  important  issue for  fishermen  in                                                                    
Bristol Bay  who recommended the department  move slowly and                                                                    
judiciously  around the  downsizing  of  the commission.  He                                                                    
invited Mr.  Brooks to comment.  He also wondered,  in light                                                                    
of the review  and audit that took place,  if the department                                                                    
had plans to transition CFEC  into DFG while the legislation                                                                    
was making its way through the process.                                                                                         
Mr. Brooks  had personally testified  on HB 112.  He thought                                                                    
there were efficiencies that would  result from the bill. He                                                                    
remarked that the  legislative audit pointed to  some of the                                                                    
changes in the  workload over time. He added  that the types                                                                    
of things the commission did  currently compared to 20 years                                                                    
prior were significantly different.  It did not diminish the                                                                    
commission's excellent  work and  advocacy for  the industry                                                                    
over  the  years.  He  believed  there  were  administrative                                                                    
functions  within the  commission  that  DFG also  performed                                                                    
such as  computer support and accounting  functions that the                                                                    
department could  do for  CFEC. He  reported that  there had                                                                    
been   discussions  about   the   licensing  function.   The                                                                    
department  licensed individuals,  crew  members, and  sport                                                                    
hunters  and  fishermen.   The  Commercial  Fisheries  Entry                                                                    
Commission  licensed skippers  and vessels.  In the  end, it                                                                    
amounted to doing  a transaction with the  public charging a                                                                    
fee, and  collecting money.  He estimated  that some  of the                                                                    
business functions of CFEC could  be done regardless of what                                                                    
division or department  they were under. He  did not believe                                                                    
the  commission's adjudication  role  would be  compromised.                                                                    
The  commission was  responsible  for  making decisions  and                                                                    
conducting hearings  on transfers  and different  issues. He                                                                    
asserted that the challenge was  finding the balance between                                                                    
the administrative  functions that could be  done outside of                                                                    
CFEC  and  the adjudication  functions  and  legal types  of                                                                    
issues  needing  care  and attention  within  CFEC  that  he                                                                    
thought  could  be  done  with   a  smaller  footprint.  The                                                                    
Commercial   Fisheries   Entry  Commission   had   statutory                                                                    
authorities that  they did not  report to the  Department or                                                                    
the Commissioner of Fish and Game.                                                                                              
Representative   Munoz   commented   that  the   audit   had                                                                    
recommended maintaining the autonomy  of the commission. She                                                                    
asked if  DFG had assigned any  DFG staff to CFEC  duties in                                                                    
the  current or  previous year.  Mr. Brooks  replied in  the                                                                    
negative.  He  stated   that  the  department's  Information                                                                    
Technology (IT) staff collaborated  and interacted with CFEC                                                                    
but there had not been an assignment of duties.                                                                                 
Representative Munoz  asked if  he was  aware of  the intent                                                                    
language  included in  the FY  16 budget  recognizing CFEC's                                                                    
autonomy.  Mr. Brooks  was absolutely  aware  of the  intent                                                                    
language. The department was operated accordingly.                                                                              
3:34:29 PM                                                                                                                    
Representative  Munoz  referred   to  Attorney  General  Tom                                                                    
Katter's   opinion   regarding    the   autonomy   and   the                                                                    
continuation of that autonomy. She  asked if he was familiar                                                                    
with Attorney  General Katter's opinion. Mr.  Brooks had not                                                                    
seen the opinion but would like review it.                                                                                      
Representative Munoz  would make sure to  provide Mr. Brooks                                                                    
with a copy.   She wondered about  the Dingle-Johnson funds.                                                                    
She asked if  he could provide an estimate  of the projected                                                                    
federal and  state funds anticipated  to be received  by the                                                                    
department.  Mr. Brooks  responded  that the  Dingle-Johnson                                                                    
funds were associated  with the Division of  Sport Fish. The                                                                    
department had some  history of projects. He  added that the                                                                    
Pittman-Robertson funds  matched with license  revenue would                                                                    
affected  by HB  137  [Legislation passed  in  2016 -  Short                                                                    
Title:     Hunt/Fish/Trap:Fees;Licenses;Exemptions].     The                                                                    
department  used  license  revenues to  match  both  federal                                                                    
allocations.  He  would  provide   the  information  to  the                                                                    
Representative Wilson referred to  slide 18. She asked about                                                                    
a  sheep working  group, how  it was  being funded,  and how                                                                    
much had been  spent to date. Mr. Brooks  replied that there                                                                    
was an allocation set aside  for the sheep working group. He                                                                    
referred  to  an  $11  million   capital  project  from  the                                                                    
previous year. There  was a portion of that  money set aside                                                                    
for sheep  management. He thought  the funding for  the work                                                                    
group  was  included.  He  would  follow-up  with  the  cost                                                                    
Representative Wilson understood that  there was a moderator                                                                    
for the working group. She asked  for the name of the person                                                                    
and where  they were from.  Mr. Brooks could not  recall the                                                                    
name  or  location  but  would   be  happy  to  provide  the                                                                    
representative   with  the   information.  He   thought  the                                                                    
moderator was from Canada.                                                                                                      
Representative  Wilson clarified  that the  person was  from                                                                    
Canada.  Mr.  Brooks  was  unsure.   He  would  provide  the                                                                    
information before the end of the current day.                                                                                  
Representative  Wilson confirmed  that the  person was  from                                                                    
Canada and  that she  already had  their name.  She wondered                                                                    
why  the department  was not  using  advisory councils  from                                                                    
within.  She was  more concerned  as  to why  the state  was                                                                    
using  someone from  Canada  to help  the  state manage  its                                                                    
resources. She thought the subcommittee  chair for DFG would                                                                    
clear up the issue.                                                                                                             
Co-Chair Neuman  spoke to Representative Wilson's  point. He                                                                    
thought that  there had been  intent in the  previous year's                                                                    
budget  directing  all  departments to  use  the  university                                                                    
system first for any research.                                                                                                  
Representative  Wilson  remarked  that they  were  not  from                                                                    
Co-Chair  Neuman  would  check  on  the  issue.  Mr.  Brooks                                                                    
relayed he would have an  opportunity to discuss it with the                                                                    
division soon.                                                                                                                  
Co-Chair   Neuman  thanked   committee  members   for  their                                                                    
attendance. He reviewed the agenda for the following day.                                                                       

Document Name Date/Time Subjects
DFG House Finance Committee Overview FY2017.pdf HFIN 2/9/2016 1:30:00 PM
UA FY17 HFIN Overview - 2.5.16.pdf HFIN 2/9/2016 1:30:00 PM
UofA Strategic Pathways HFIN Overview.pdf HFIN 2/9/2016 1:30:00 PM
DFG Response HFIN Overview.pdf HFIN 2/9/2016 1:30:00 PM