[Federal Register Volume 65, Number 145 (Thursday, July 27, 2000)]
[Notices]
[Pages 46154-46161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18973]


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DENALI COMMISSION


Denali Commission Work Plan for Federal Fiscal Year 2002; Request 
for Comments

SUMMARY: The Denali Commission was established by The Denali Commission 
Act of 1998 to deliver the services of Federal Government in the most 
cost-effective manner practicable to communities throughout rural 
Alaska, many of which suffer from unemployment rates in excess of 50%. 
Its purposes include, but are not limited to, providing necessary rural 
utilities and other infrastructure that promote health, safety and 
economic self-sufficiency.
    The Denali Commission Act requires that the Commission develop 
proposed work plans for future spending and that the annual work plans 
be published in the Federal Register for a 30-day period, providing an 
opportunity for public review and comment.
    This Federal Register Notice serves to announce the 30-day 
opportunity for public comment on the Denali Commission Work Plan for 
Federal Fiscal Year 2002.

FOR FURTHER INFORMATION CONTACT: Jeffrey Staser, Federal Co-Chairman, 
Denali Commission, 510 `L' Street, Suite 410, Anchorage, Alaska 99501, 
Phone: (907) 271-1414, Fax: (907) 271-1415, Email: [email protected], 
http://www.denali.gov.

SUPPLEMENTARY INFORMATION: Copies of the Denali Commission Work Plan 
can be obtained by contacting the Denali Commission as provided in the 
FOR FURTHER INFORMATION CONTACT section above.

2002 Work Plan

October 1, 2000.

Vision

    Alaska will have a healthy well-trained labor force working in a 
diversified and sustainable economy that is supported by a fully 
developed and well-maintained infrastructure.

Mission

    The Denali Commission will partner with tribal, federal, state, and 
local governments and collaborate with all Alaskans to improve the 
effectiveness and efficiency of government services, to develop a well-
trained labor force employed in a diversified and sustainable economy, 
and to build and ensure the operation and maintenance of Alaska's basic 
infrastructure.

Values

    Catalyst For Positive Change--The Commission will be an 
organization through which agencies of government, including tribal 
governments, may collaborate, guided by the people of Alaska, to 
aggressively do the right things in the right ways.
    Respect For People and Cultures--The Commission will be guided by 
the people of Alaska in seeking to preserve the principles of self-
determination, respect for diversity, and consideration of the rights 
of individuals.
    Inclusiveness--Provide the opportunity for all interested parties 
to participate in decision-making and carefully reflect their input in 
the design, selection, and implementation of programs and projects.
    Sustainability--The Commission will promote programs and projects 
that meet the current needs of communities and provide for the 
anticipated needs of future generations.
    Accountability--The Commission will set measurable standards of 
effectiveness and efficiency for both internal and external activities.

Part One: Denali Commission Purposes and Approach

Purposes of Commission

    The Denali Commission Act of 1998, as amended (Division C, Title 
III, PL 105-277) states that the purposes of the Denali Commission are:
    To deliver the services of the Federal Government in the most cost-
effective manner practicable by reducing administrative and overhead 
costs.
    To provide job training and other economic development services in 
rural communities, particularly distressed communities (many of which 
have a rate of unemployment that exceeds 50 percent).
    To promote rural development, provide power generation and 
transmission facilities, modern communication systems, bulk fuel 
storage tanks, water and sewer systems and other infrastructure needs.

Challenges to Development and Economic Self-Sufficiency

    Geography--The State of Alaska encompasses twenty percent of the 
landmass of the United States, encompassing five (5) climatic zones 
from the arctic to moderate rain forests in the south.
    Isolation--Approximately 220 Alaskan communities are accessible 
only by air or small boat. Some village communities are separated by 
hundreds of miles from the nearest regional hub community or urban 
center.
    Unemployment--The economy of rural Alaska is a mix of government or 
government-funded jobs, natural resource extraction and traditional 
Native subsistence activities. Many rural Alaskans depend on 
subsistence hunting, fishing and gathering for a significant proportion 
of their foods, but also depend on cash income to provide the means to 
pursue subsistence

[[Page 46155]]

activities. Cash paying employment opportunities in much of rural 
Alaska are scarce and are highly seasonal in many areas; unemployment 
rates exceed 50% in 147 communities.
    High Cost and Low Standard of Living--Over 180 communities suffer 
from inadequate sanitation or a lack of safe drinking water. Residents 
face high electric costs: 61 cents per kilowatt-hour for electricity in 
a few communities (average in rural Alaska is approximately 40 cents 
per kilowatt-hour) even with State subsidies for rural power.

Commission Relationship With Other Organizations

    The Commission intends to act as a catalyst to encourage local, 
regional, and statewide comprehensive assessment, planning and ranking 
of needed infrastructure improvements, economic development 
opportunities and training needs.
    The Commission, working with existing agencies or other 
organizations whenever feasible, intends to improve coordination and to 
streamline and expedite the development of needed infrastructure, 
economic development and training.
    The Commission may build on the work of both Federal and State of 
Alaska agencies to identify statewide needs, to establish priorities 
and to develop comprehensive work plans.
    The Commission will seek the support and involvement of affected 
local communities, governing bodies, businesses and other 
organizations.
    The Commission will encourage partnerships between government, non-
profit organizations, and businesses to expedite sustainable economic 
and infrastructure development.

Commission Schedule

    The Commission will hold public meetings quarterly and make every 
reasonable effort to maximize public participation in annual work plan 
development. With completion of this work plan the Commission schedule 
will be consistent with the federal budget cycle. The work plan will be 
updated at least annually.

Guiding Principles

    The following principles are intended to foster careful and 
systematic planning and coordination on a local, regional and statewide 
basis for infrastructure and economic development, and to strongly 
support local involvement in project planning and implementation.
     Projects in economically distressed communities will have 
top priority for Denali Commission funding.
     Projects should be compatible with local cultures and 
values.
     Projects that provide substantial health and safety 
benefit, and/or enhance traditional community values, will generally 
receive priority over those that provide more narrow benefits.
     Projects should be sustainable.
     Projects should have broad public involvement and support. 
Evidence of support might include endorsement by affected local 
government councils (Municipal, Tribal, IRA, etc.), participation by 
local governments in planning and overseeing work, and local cost 
sharing on an `ability to pay' basis.
     Priority will generally be given to projects with 
substantial cost sharing.
     Priority will generally be given to projects with a 
demonstrated commitment to local hire.
     Commission funds may supplement existing funding, but will 
not replace existing federal, state, local government, or private 
funding.
     The Commission will give priority to funding needs that 
are most clearly a federal responsibility.

Additional Guiding Principles for Infrastructure Projects

     A project should be consistent with a comprehensive plan.
     Any organization seeking funding assistance must have a 
demonstrated commitment to operation and maintenance of the facility 
for its design life. This would normally include an institutional 
structure to: levy and collect user fees if necessary, account for and 
manage financial resources, and have trained and certified personnel 
necessary to operate and maintain the facility.

Additional Guiding Principles for Economic Development Projects

     Priority will be given to projects that enhance employment 
in high unemployment areas of the State, with emphasis on sustainable, 
long-term local jobs or career opportunities.
     Projects should be consistent with statewide or regional 
plans.
     The Commission may fund demonstration projects that are 
not a part of a regional or statewide economic development plan if such 
projects have significant potential to contribute to economic 
development.

Economically Distressed Communities

    The following criteria is to be used in designating economically 
distressed communities or regions included in Section 5.3 of the Denali 
Commission Code:
    1. Per capita market income no greater than 67% of the U.S. 
average; and
    2. Poverty rate at 150% of the U.S. average or greater; and
    3. Three-year unemployment rate at 150% of the U.S. average or 
greater; or
    4. Twice U.S. poverty rate and either (1) or (3) above.
    As required by the Denali Commission Code, distressed community 
and/or region designations for a given fiscal year will be based upon 
data available March 31st of the preceding fiscal year. In as much as 
the primary purpose of the Denali Commission is to provide assistance 
to distressed communities or regions of Alaska, a minimum of 75% of 
funds available to the Commission in FY02 will be allocated to 
communities or regions so designated.

Part Two: Work Plan for FY 2002

    The Commission determined that the scope and scale of 
infrastructure issues facing rural Alaska are staggering. Assessment of 
needs and refinement of estimates will be an ongoing process. The total 
of known infrastructure needs is estimated to be over $12 billion. 
Training and economic development needs have not been quantified, but 
the unmet needs in these areas are also believed to be quite large. The 
following table summarizes identified needs for infrastructure 
categories.

                                          Preliminary Needs Assessment
----------------------------------------------------------------------------------------------------------------
              Funding category                        Category class               Dollars           Dollars
----------------------------------------------------------------------------------------------------------------
Infrastructure..............................  Housing Construction/              1,800,000,000
                                               Development.
                                              School Construction and Major        530,000,000
                                               Maintenance.
                                              Power Utilities...............       168,000,000
                                              Fuel Storage..................       450,000,000
                                              Drinking Water Facilities.....
                                              Waste Water Utilities.........     1,058,000,000

[[Page 46156]]

 
                                              Waste Management Facilities...
                                              Health Care Facilities........       235,000,000
                                              Airport Facilities............       926,000,000
                                              Road Construction.............     7,500,000,000
                                              Port Facilities...............       214,000,000
                                              Telecommunications............             (\1\)
                                              Community Facilities..........             (\1\)
                                              Other.........................             (\1\)
                                              Subtotal......................  ................    12,881,000,000
Economic Development........................  Comprehensive Planning........             (\1\)
                                              Other.........................             (\1\)
Job Training, Education, Capacity Building..  Comprehensive Planning........             (\1\)
                                              Other.........................             (\1\)
                                              Total.........................  ................   12,881,000,000
----------------------------------------------------------------------------------------------------------------
 See Appendix A for Background Information on this table.
\1\ Unknown.

    The Denali Commission will collaborate with other funding agencies 
and with all impacted and interested parties to address identified 
needs on a priority basis. Allocation of Denali Commission funds to 
various funding categories and classes within those categories will be 
based on a formula agreed to by the Commission at the beginning of each 
fiscal year. For FY02 the formula allocates 75% of appropriated funds 
to infrastructure, 10% to economic development and 10% to job training 
and capacity building. The Commission has a statutory limit of 5% for 
administrative expenses. In addition to appropriated funds, the 
Commission receives $7-$10 million annually in interest from the Trans 
Alaska Pipeline Liability (TAPL) fund, which is earmarked for bulk fuel 
facility upgrade and maintenance.
    Of necessity, the Commission's work must be phased over a number of 
years based on the urgency of competing needs and availability of 
funding. The theme of rural energy, as one important prerequisite to 
all other utilities and economic development, was selected as the top 
priority for infrastructure funds. Primary health care facilities were 
identified as the second infrastructure theme for the Commission 
beginning in FY00. These two themes will continue to be the primary 
areas of focus for infrastructure funds through FY02.
    For planning purposes, the Commission has budgeted $53,000,000 
using the Commission's approved formula for FY02.

--------------------------------------------------------------------------------------------------------------------------------------------------------
 FY02 budget request and TAPL interest funding--combined        FY02 budget request             TAPL interest funds            TAPL & FY02 combined
                         budget                          -----------------------------------------------------------------------------------------------
---------------------------------------------------------
                    Funding category                       Funding level    Percentage     Funding level    Percentage     Funding level    Percentage
--------------------------------------------------------------------------------------------------------------------------------------------------------
Infrastructure:
    Bulk Fuel...........................................      $7,750,000  ..............      $7,600,000              95     $15,350,000  ..............
    Power...............................................      10,000,000  ..............  ..............  ..............      10,000,000  ..............
    Health Clinics......................................      16,000,000  ..............  ..............  ..............      16,000,000  ..............
                                                         -----------------------------------------------------------------------------------------------
      Subtotal..........................................      33,750,000              75  ..............  ..............      41,350,000              78
Economic Development:
                                                         -----------------------------------------------------------------------------------------------
      Subtotal..........................................       4,500,000              10  ..............  ..............       4,500,000             8.5
Training:
                                                         -----------------------------------------------------------------------------------------------
      Subtotal..........................................       4,500,000              10  ..............  ..............       4,500,000             8.5
Administration:
                                                         -----------------------------------------------------------------------------------------------
      Subtotal..........................................       2,250,000               5         400,000               5       2,650,000               5
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................     $45,000,000             100      $8,000,000             100     $53,000,000             100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
1. The percentages shown under the FY02 Budget Request column were selected by the Commissioners.
2. TAPL interest funds by statute are for bulk fuel projects only.

    Development and execution of the Administrative Budget is solely 
the responsibility of the Federal Co-Chair. Allocation of funds within 
the balance of the budget will be made by the full Denali Commission, 
utilizing the guiding principles outlined in Part I of this document, 
and priority systems designed specifically for each budget category.
    Project implementation will generally be accomplished through 
state, local or federal government entities or non-profit 
organizations. It shall be the responsibility of all such implementing 
organizations to comply with all applicable laws. Any special 
requirements will be articulated in the funding agreement between the 
Denali Commission and the funding recipient.
    As indicated above, 75% of Denali Commission funds are designated 
for priority infrastructure themes and those funds are distributed 
using priority systems designed for each theme. Concurrently the 
Commission

[[Page 46157]]

encourages communities and regional entities to complete comprehensive 
community and economic development plans. Priority systems for themes 
selected for funding by the Commission give credit to communities with 
current comprehensive plans.
    Projects resulting from funding of infrastructure themes generally 
are consistent with high priorities identified in community plans. The 
existence of community plans greatly facilitates the location, design, 
and completion of infrastructure projects within a community. The 
Denali Commission also reserves approximately 10% of its funding for 
economic development projects, which commonly are identified in local, 
or regional economic development plans.
    The Commission also participates in the organization and execution 
of regional ``economic summits.'' These summits, which are generally 
held on an annual basis throughout the State, bring key state and 
federal agencies together with communities and regional organizations 
for the purpose of matching needs identified in community and regional 
comprehensive plans with federal, state and other available funding.

Appendix A--Housing Construction/Development

    Need: $1.8 billion.
    Annual Funding: $58-87 million.
    Source: Housing and Urban Development (HUD) FY 1999 Report.
    Background: According to the FY99 report published by HUD, 
Alaska has a need for 12,519 new units. At an average cost of 
$145,000 per unit, the total need for new housing is approximately 
$1.8 billion. This estimate does not include repairs and renovation 
projects. The number of units needed has increased from the 1990 
census, which showed over 11,000 units needed.
    At the current rate, 400 to 600 units are constructed in Alaska 
each year.
    Projects are prioritized and funded in a variety of ways 
including grants to local housing authorities, regional housing 
authorities, low interest loans, and transfers to other agencies.
    Entities providing funding for housing include, but may not be 
limited to, HUD, Alaska Housing Finance Corporation, and the U.S. 
Department of Agriculture.

School Construction and Major Maintenance

    Need: $530,183,470 million.
    Annual Funding: Annual funding varies from year to year.
    Source: Final Agency Decision: 4/5/99, Project Priority List 
published by the State of Alaska Department of Education and Early 
Development (DEED).
    Background: Based on requests from individual school districts, 
the State of Alaska DEED has compiled a listing of school 
construction and major maintenance projects. DEED has reviewed the 
project requests and distilled the eligible projects to a list that 
totals $530,183,470.
    The State of Alaska recently passed a bond package for State 
FY01 that addresses numerous school construction and major 
maintenance needs from the DEED list. This program is the primary 
responsibility of the State of Alaska and will remain such. However, 
there may be opportunities for the Denali Commission to partner with 
the state in areas that are a federal responsibility or that are 
related to the efforts of the Denali Commission. Examples of this 
partnership are the bulk fuel storage needs of a school or the 
school's role in developing job training in a community.
    The Denali Commission will continue to work with DEED to 
determine if there is an opportunity for the Commission to assist 
with some federally mandated component of the program.

Power Utilities

    Need: $168 million.
    Annual Funding: No program of annual funding.
    Source: Alaska Energy Authority.
    Background: According to the Alaska Energy Authority (formerly 
the State of Alaska Division of Energy), they have needs in the 
following categories for the following amounts.
    $68,000,000--Power Plant Construction and Rehabilitation.
    $100,000,000--Power distribution system construction, expansion 
and rehabilitation.
    The Alaska Energy Authority (AEA) is a state agency commissioned 
with oversight of energy related infrastructure in rural Alaska. The 
agency functions predominantly in areas that are typically not 
covered by a utility cooperative. These power plants and 
distribution systems are typically in areas where the economic base 
is insufficient to bond or self-fund construction of the power 
facilities, and other sources of funding are required. At the 
current time, the AEA is the only source of funding for these 
projects, and there is no defined funding stream to take care of the 
above stated needs.
    Another interest of the Denali Commission is to work towards 
conserving energy usage in rural communities. Generator 
efficiencies, structural insulation, waste heat recovery, 
transmission efficiencies, and alternative power generation are all 
possible topics of consideration for the Commission.

Fuel Storage

    Need: $450 million.
    Annual Funding: $15-18 million ($8-10 million of which is Denali 
Commission funds).
    Source: AEA briefing report dated September 24, 1999.
    Background: The AEA initiated an assessment of bulk fuel tank 
farms in rural Alaska communities in 1996. This assessment should be 
completed by Fall 2000. The project assessed the condition of the 
tank farms, including the total fuel capacity of each in terms of 
gallons.
    Approximately 180 communities have been surveyed to date. Total 
storage capacity of the surveyed communities is 75,221,754 gallons. 
A more complete cost and assessment for community bulk fuel 
consolidation will be developed by AEA.

Water and Wastewater

    Need: Current need: $850 million
    (Funded fiscal years 1960--2001: $1,140,800,000 billion)
    Annual Funding: There are six existing primary funding sources 
for developing and improving water and wastewater facilities in 
rural Alaska. Those sources and the amounts contributed in fiscal 
year 2001 are shown below.
     U.S. Public Health Service--Indian Health Service $17 
million
     U.S. Environmental Protection Agency Drinking Water 
Tribal Set-Aside $4,098,800
     U.S. Environmental Protection Agency Clean Water Tribal 
Set-Aside $2,295,000
     U.S. Environmental Protection Agency Infrastructure 
Grant $26,649,450
     U.S. Department of Agriculture-Rural Development 
$19,464,400
     State of Alaska, Village Safe Water $15,371,250
    Total: $84,878,900.
    While these amounts vary from year to year, the annual average 
for fiscal years 1997 through 2001 is $78 million. The trend has 
been towards increased funding levels. Secondary funding sources 
include federal transportation funds and housing funds that 
contribute in a less direct way to water and sewer system 
improvements.
    Background: Assistance in developing water and wastewater 
facilities in rural Alaska is provided to communities through two 
programs. The Alaska Native Tribal Health Consortium (ANTHC) is the 
organization responsible for administering Indian Health Service, 
and EPA Indian Set-Aside sanitation construction funds in Alaska. 
The Alaska Department of Environmental Conservation's Village Safe 
Water (VSW) program is the organization responsible for 
administering sanitation construction funds provided by the State, 
EPA (non-Tribal Set-Aside), and the USDA-Rural Development.
    Both ANTHC and VSW work with rural communities to plan design 
and construct sanitation systems. ANTHC and VSW have developed a 
close working relationship despite the relative recent transfer of 
the sanitation program from IHS to ANTHC in October 1998. The 
priority funding lists of both organizations are coordinated and 
generally compliment each other. ANTHC predominately works in Alaska 
communities with Native-owned homes, whereas VSW works in all rural 
communities (Native and non-Native). A lead agency is designated for 
each community receiving assistance. Lead agencies typically have 
responsibility for administering all state and federal funding in 
the community.
    Existing funding streams and programs are making progress 
towards satisfying the overall need for sanitation facilities in 
rural Alaska. An estimated remaining need of $850 million and a 
current funding level of $85 million combine to suggest a 10-year 
timeframe for meeting the need. The Governor's Council on Rural 
Sanitation set a target funding level of $110 million per year.

[[Page 46158]]

Increased federal funding is being sought through existing funding 
streams to reach that target.
    The Denali Commission has not targeted water and wastewater 
improvements for infrastructure funding due to funding and effort 
already underway in this sector or critical infrastructure. However, 
the Commission is involved in improving planning and interagency 
coordination.

Primary Health Care Facilities

    Need: $235 million
    Annual Funding: Unknown
    Source: Alaska Rural Primary Care Facility Needs Assessment--
Interim Report dated June 26, 2000. Background: The Denali 
Commission in partnership with the Alaska Native Tribal Health 
Consortium, the Indian Health Service, and the Alaska Department of 
Health and Social Services embarked on a survey in FY00 to quantify 
the cost of rural primary care facility improvements. It is the 
intent of all parties to build on this initial survey and to 
identify additional health related infrastructure needs in rural 
Alaska (beyond primary care) including mental health, dental care, 
itinerant health service providers' quarters, etc.

Airport Facilities

    Need: $1 billion
    Annual Funding: $58-120 million
    Source: 1999 Transportation Needs and Priorities in Alaska; 
Published by the State of Alaska Department of Transportation and 
Public Facilities, and the current FAA Aviation Improvement Program 
(AIP).
    Background: The Federal Aviation Administration currently 
provides most of the funding for airport projects throughout the 
state. The state or local sponsor will contribute roughly 10% in the 
form of match. There are 1,112 designated airports, seaplane bases, 
and aircraft landing areas in the state of Alaska. The Alaska 
Department of Transportation & Public Facilities (ADOT&PF) owns and 
operates 261 public airports, the majority of Alaska's public 
airports. Additionally, 23 public airports are owned and operated by 
local governments.
    Backlog of airport projects in the state amounts to 
approximately $1 billion.
    Historically, funding that the state receives for airports from 
the FAA--AIP has ranged from $58 million in 1990, to $81 million in 
1998. As a result of the recent passage of AIR-21 legislation, a 
funding increase is expected and scheduled for beginning Oct 2000 up 
to a potential amount of $120 million for Alaska.

Road Construction and Major Maintenance

    Need: $6 billion
    Annual Funding: $350 million
    Source: Transportation Needs and Priorities in Alaska published 
by the State of Alaska Department of Transportation and Public 
Facilities.
    Background: The State of Alaska administers most of the Federal 
Highway Administration (FHWA) funding allocated to Alaska with the 
exception of money specifically designated for the Bureau of Indian 
Affairs (BIA), which currently amounts to approximately $14 million 
per year. Although overall funding levels are up for roads, the BIA 
share has recently slipped from $16 million annually under ISTEA 
(1991-1997). The BIA funding does not go far considering it must 
provide for approximately 200 tribes within Alaska. BIA officials 
have recently announced that any given village can expect one 
project every 20 years, on average.
    Of note, the BIA is currently conducting a rule-making process 
to revamp the national formula that distributes BIA funding among 
the states. The legislative language directing this new formula is 
more Alaska-friendly, but the past distribution formulas have not 
been favorable to Alaska and it remains to be seen if the new 
formula will redress this situation.
    One important distinction between FHWA and BIA funding for roads 
is the long-term maintenance obligation. Under FHWA, the recipient 
is responsible for maintenance in perpetuity, with no federal 
support for this activity. Under the BIA funding system, such roads 
are then added to the IRR (or Indian Reservation Road system) and 
are eligible for a share of a national pot of money allocated to 
maintenance of IRR roads.
    Overall needs for highway and road projects were estimated at $6 
billion in 1999. In the current TEA-21 era, average funding levels 
are estimated at approximately $350 million not including possible 
discretionary grants the state may receive. While this is up 
substantially from approximately $220 million under ISTEA, the list 
of unmet needs has been growing even faster as villages and all 
communities become more aware of this potential funding source.
    Most FHWA funding received by the state stays in larger auto-
dependent communities, with some funding going to rural communities 
largely for sanitation roads and trail markings. Funding for 
projects off the road system goes primarily to larger hub 
communities.
    Improved surface transportation can have many positive effects 
including lowering costs for goods and services, improving village 
to village interaction, and allowing for state and federal 
investments in schools, clinics, airports, harbors, and tank farms 
to serve more communities per project.

Port Facilities

    Need: $247 million approximately
    Annual Funding: Varies year by year, typically between $0-5 
million
    Source: Transportation Needs and Priorities in Alaska published 
by the State of Alaska Department of Transportation and Public 
Facilities.
    Background: Port and harbor facilities are necessary investments 
to support maritime commerce, commercial fishing, subsistence, water 
recreation and general economic development. Wholesale, retail, 
transportation, and services industries supporting marine activities 
create jobs and other opportunities. Coastal and riverside 
communities with good facilities will have safer access, greater 
mobility, more opportunity and a better quality of life than those 
without. Port and harbor facilities must offer access to waterways, 
protection from waves, and water deep enough for navigation. Few 
communities have perfect harbor conditions naturally. Many 
communities have spurred economic growth and given vitality to their 
communities through making improvements by dredging channels and 
basins, and constructing breakwaters and docking facilities. These 
improvements open the transportation corridor for maritime commerce.
    Port and harbor development in the State has been a close 
partnership between local government, the state, and the federal 
government. The federal government has always limited investment and 
interest to those navigation improvements that satisfy national 
economic development criteria. State assistance has ranged from 
complete financial support to little or no financial support. While 
State assistance expanded and expectations grew during the lucrative 
days of high oil production, the State has retreated to the basic 
premise that port and harbor projects require a substantial local 
funding commitment to be eligible for State assistance. Though not a 
dedicated funding source, the marine users fuel tax is the 
traditional foundation of small boat harbor improvements in the 
State. General obligation bonds have been the foundation of State 
assisted port development.
    The threshold for federal involvement, an assessment of national 
benefits and costs, is very high. For most of Western Alaska, the 
geography, climate and low population density weigh heavy against 
projects as they meet this test. The federal navigation improvement 
program is helpful in making an existing improvement more productive 
but it is not useful in creating an opportunity for improvement that 
does not already exist.
    Port and harbor projects can reduce the delivery cost of goods 
and services, increase the frequency of delivery, reduce damage loss 
during transport, reduce environmental risk, improve the value of 
regionally exported resources and products, and improve the 
productivity, safety and quality of life for people in a region. 
There may be opportunities for port and harbor development that are 
consistent with the goals and objectives of the Denali Commission.

Telecommunications

    Need: Unknown
    Annual Funding: Unknown
    Background: Telecommunications and Internet technologies, which 
are revolutionizing daily life in the United States, are not 
reaching most Alaskan communities. The positive impact Internet 
connections will have on education, training, healthcare and 
economic development in rural communities cannot be overemphasized. 
The negative impact of leaving rural communities behind in 
technological advances will only further compound the challenges of 
self-sustainability for rural Alaska.
    The remoteness and sparse populations that so uniquely identify 
rural Alaska are also the primary reason private telecommunications 
find it difficult to justify connections in most rural communities.
    Typically, small communities have access only through the local 
public school or library, and tribes may have access through a 
program being implemented by the

[[Page 46159]]

Department of Interior. However, private users are prohibited from 
accessing these federally subsidized services. Thus, an individual 
who wishes to access vital information, obtain distance education or 
training, open a web-site for commerce, or have an e-mail account 
from home, must use ``1800 dial-up access.'' The cost of such 
service in rural Alaska is between $200-$400 per month for basic e-
mail and minimal web browsing.
    The Denali Commission is in the process of evaluating the 
availability of basic telecommunications, Internet technologies and 
other advanced telecommunications through a statewide survey that 
will be completed in August 2000. The Commission is interested in 
the availability of telecommunications infrastructure in relation to 
the future of economic development, education, training and 
healthcare in rural Alaska.

Community Facilities

    Need: Unknown
    Annual Funding: Unknown
    Background: Communities have a need for community assembly 
facilities for various purposes, including planning, meetings, 
traditional functions, and recreation for youth. These facilities, 
when available, are heavily used in rural communities. No assessment 
mechanism is in place for determining statewide needs for community 
facilities.

Appendix B--Infrastructure

    In the evolution of the Denali Commission and its approach to 
infrastructure development some principles have been established. 
These include the following:
     Selection of infrastructure themes for allocating 
funds. In FY99 rural energy was selected as the primary 
infrastructure theme and that priority was continued in FY00 and is 
expected to continue in FY01 and beyond. In FY00 rural health care 
facilities were selected as the second infrastructure theme.
     Selection of program/project partners to carry out 
infrastructure development. The Alaska Energy Authority (AEA) was 
selected as a Denali Commission partner for rural energy projects. 
AEA was selected because of its demonstrated capability to 
prioritize and implement rural energy projects. The overriding point 
in selection of a program/project partner is that the Commission 
wishes to utilize existing capabilities provided by state or federal 
agencies or other organizations. More than one partner may be 
identified to participate in carrying out Commission sponsored 
programs/projects for a particular theme.
     Project selection by the Commission and/or the program/
project partner must be defendable and credible. In the case of AEA, 
two separate comprehensive statewide project priority lists had been 
developed--one for bulk fuel storage facilities, and a second for 
power generation/distribution projects. As in the case of AEA the 
Commission will utilize existing credible priority systems. Where a 
credible statewide priority methodology for a selected theme does 
not exist, the Commission in cooperation with appropriate 
organizations will foster the development of a system. This is 
illustrated by the Commission's efforts in partnership with the 
Alaska Department of Health and Social Services, the Indian Health 
Service, and the Alaska Native Tribal Health Consortium to develop a 
prioritization methodology for primary health care facilities.
     Theme selection is a methodical process. The Commission 
has stressed the importance of comprehensive investigation and 
exploration of infrastructure themes so that Commission resources 
are strategically funneled to ``gaps'' in state and federal funding 
streams. Carrying out needs assessments on various infrastructure 
themes is central to the development of a theme. Energy, 
telecommunications, and rural primary health care facilities are 
examples of assessments that were initiated in conjunction with 
interested state and federal agencies in the Commission's first 
year.
     Commission partners are responsible for compliance with 
procedural and substantive legal requirements. It is the expectation 
of the Denali Commission that partners will comply with all 
applicable local, state and federal laws in carrying out Commission 
funded programs/projects. For example the partner must address NEPA 
and OSHA regulations, federal auditing requirements, competitive 
procurement issues and so forth. As a result, the Commission will 
look to partners who have demonstrated both administrative and 
program/project management success.
     Adherence to the successful project management elements 
of time, budget and quality. Each of these factors is central to 
Denali Commission agreements with partners. The Commission wants to 
put our partners in a position of success in meeting the triple 
constraint of project management: deliver the project on time, on 
budget and completion of the full project scope. The challenge to 
the Commission is to allow sufficient flexibility for each partner 
to carry out the programs/projects within their own established 
methods while assuring confident project completion and meeting all 
requirements of applicable laws and regulations. For example, the 
AEA employs a project methodology that relies heavily on force 
account construction (locally sponsored government crews). AEA also 
uses construction contracting to a lesser degree. In light of the 
Commission's mandate to address economic development in rural 
Alaska, force account construction is a good fit. However, for other 
partners, undertaking other infrastructure themes, construction 
contracting may be more appropriate. In short, each agreement with a 
partner organization must be tailored to fit their approach to 
program/project management.

Rural Energy

    AEA has employed a two-step approach to bulk fuel project 
funding that is strongly supported by the Commission. Starting at 
the top of the AEA priority list, projects are provided 35% design 
funds one or more years before being eligible for capital funding. 
This allows for more accurate project cost estimates, resolution of 
easement and land issues, development of agreements between various 
local parties in site selection and tank farm ownership/maintenance. 
This step also serves to filter projects that are not ready for 
construction, for one reason or another, from advancing to the 
second step of project funding. This two-step approach ensures that 
funding does not sit unused by projects that are not ready for 
construction. Once a project has resolved any obstacles at the 35% 
design stage, then they are eligible for capital funding.
    It is expected that AEA will reevaluate its priority list from 
time to time in order to factor in new information, particularly 
information from the statewide energy strategy. This reevaluation 
may result in some modification of the list. Funding priorities will 
also be subject to `readiness to proceed' considerations as 
described in part above.

Rural Primary Care Facilities

    In past, communities have constructed clinics based upon 
available grant funds (typically community development block grants 
of $200,000 to $500,000). Consequently clinic square footage was 
based upon available funding and not necessarily upon health care 
delivery service appropriate for the population and demographics of 
the community.
    Many clinics are therefore undersized. In FY99 the Commission 
allocated $300,000 to undertake a needs assessment for rural primary 
care facilities. This needs assessment is scheduled for completion 
by October 2000. The assessment will develop a database of primary 
health care facility needs statewide. This effort also includes 
development of a project prioritization methodology.
    In FY00, the Commission allocated $1,000,000 for clinic 
completion projects. At least five communities have previously 
received CDBG funding for clinics and were not able to complete the 
facilities due to a number of reasons. This clinic funding should 
allow the Commission to develop technical and administrative skills 
in the event FY01 and FY02 Commission appropriations include health 
care facilities.
    The Commission has yet to identify partners for carrying out the 
rural primary care facilities projects.

Denali Commission's Training Strategy

Background

    The Commission realizes that proper and prudent investment in 
public infrastructure must include a component for training local 
residents to maintain and operate publicly funded infrastructure. 
The Commission further realizes that through its' investment in 
public infrastructure, such as bulk fuel storage facilities, it is 
creating numerous jobs related to the construction of these 
facilities and must develop a strategy to ensure local residents are 
properly trained to receive these jobs.
    Therefore, the Denali Commission created a training subcommittee 
to develop a strategy that would address the job training needs of 
Alaskan communities. The initial training subcommittee was comprised 
of Commissioner Mano Frey, Commissioner Mark Hamilton, and the 
Alaska Human Resource Investment Council Executive Director Mike 
Andrews. The subcommittee

[[Page 46160]]

worked with industry, state, non-profit, and federal organizations 
developed the Denali Commission's Training Strategy.
    The Denali Commission's Training Strategy creates a statewide 
system to increase the local employment rates in Alaskan communities 
through the development of skills necessary to construct, maintain, 
and operate public infrastructure, while also leveraging the ongoing 
efforts of the State of Alaska in job training for rural Alaskans.
    Subsequently, the Commission approved 10% of the FY00 budget for 
implementation of the developed Training Strategy. Through this 
funding the Commission ensures local residents are employed on 
public facility construction projects in their communities, while 
also protecting the Denali Commission's investment in infrastructure 
by ensuring local residents are properly trained in the operations 
and maintenance of completed facilities.
    The Denali Commission's Training Strategy involves several 
components that create a statewide system for job training outreach, 
coordination and delivery in rural Alaska. The Commission has 
partnered with several statewide organizations that will perform the 
necessary functions that make up the Denali Commission's Training 
Strategy. These organizations and their respective roles are as 
follows:

Partners

Organization: Alaska Works Partnership

    Alaska Works Partnership represents a statewide coalition of 
Alaska's twenty jointly administered building and construction 
trades apprenticeship programs.

Role: Apprenticeship Outreach Initiative

    A program that provides outreach to rural residents to present 
the opportunity to participate in the numerous Bureau of 
Apprenticeship and Training's approved construction apprenticeship 
programs.

Organization: Alaska Native Coalition on Employment and Training 
(ANCET)

    ANCET is a statewide organization comprised of 13 Alaska native 
regional non-profits to act from a statewide perspective on 
education, employment, training, and economic development issues and 
concerns specific to Native people.

Role: Regional Coordination Initiative

    A program that is responsible for developing a system capable of 
coordinating the employment and training needs of the villages and 
regional ANCET offices with the workforce demands of Denali 
Commission projects, and other state and federal public 
infrastructure projects.

Organization: Alaska Vocational Technical Center (AVTEC)

    AVTEC provides accessible technical and related training to a 
statewide multi-cultural population for employment in the dynamic 
Alaskan community.

Role: Building Maintenance and Repairer Apprenticeship Delivery Program

    A program that provides technical assistance to housing 
authorities and other community employers to enhance the 
availability of the Building Maintenance Repairer Apprenticeships 
(BMR) in rural Alaska. This program will provide and adapt the BMR 
curriculum to the needs of rural Alaskans.

Organization: Associated General contractors (AGC) of Alaska

    The AGC of Alaska is a non-profit construction trade association 
consisting of general contractors, subcontractors and industry 
professionals dedicated to improving the professional standards of 
the construction industry.

Role: Construction Career Pathways Initiative

    A program that will help increase the involvement of industry 
and local employers in schools, provide more school-to-work 
experience for students, develop direct connection with 
apprenticeship and post-secondary training programs and ultimately 
prepare a new workforce.

Organization: State of Alaska Dept. of Labor and Workforce Development

    The Department of Labor and Workforce Development fosters and 
promotes the welfare of the wage earners of the state, improves 
their working conditions and advances their opportunities for 
profitable employment.

Role: Denali Training Fund

    The Denali Training Fund Program provides financial assistance 
for specific training needed by local residents to become employed 
on Denali Commission projects and other state and federally funded 
infrastructure projects. The Denali Training Fund also provides 
financial assistance for training needed by local residents to 
properly operate and maintain completed Denali infrastructure and 
other state and federally funded infrastructure. The Department of 
Labor and Workforce Development administers the Denali Training Fund 
by receiving applications for job training needs in rural 
communities and leverages these funds with other state funded 
programs.

Summary

    The Training Strategy provides the Denali Commission the 
flexibility for future investment in job training needs statewide. 
Currently the Commission's partners and the Denali Training Fund are 
focusing on jobs created by the construction of energy related 
projects, such as bulk fuel storage tanks and rural power system 
upgrades. In the future, the Training Strategy will focus its 
efforts on other areas where the Commission is investing, such as 
the job training needs related to the construction and operations of 
health clinics.
    With this strategy in place, the Denali Commission is confident 
it will provide the necessary component of job training that is 
imperative to the success of infrastructure construction in Alaska.

Economic Development

    In an effort to promote economic development in rural and 
distressed communities, a number of actions have been initiated.
    The Denali Commission believes that a primary key to successful 
economic development in small communities is adequate public 
infrastructure. The larger a venture, the more basic infrastructure 
is necessary. Ultimately it is expected that industry will begin 
paying for infrastructure improvements that benefit their business. 
State and federal governments can contribute to development of local 
economies by assisting in funding local infrastructure projects.

Mini-Grant Support

    This program provides grants not to exceed $30,000 for 
communities to use on projects such as:
     Comprehensive Community Strategy development;
     Project specific feasibility study, business plan, or 
engineering study;
     A project that supports economic or community 
development; or
     A capital project.
    Communities apply directly to their regional Alaska Regional 
Development Organization (ARDOR). If an ARDOR does not exist in a 
region, applications will be submitted directly to the Department of 
Community and Economic Development (DCED). Projects will be funded 
throughout the state using a combination of Denali Commission, USDA-
Forest Service, and other available funding.
    The goal of this initiative is to encourage communities to 
develop and utilize locally based planning strategies to foster 
community and economic development opportunities.

Entrepreneurship Initiative

    For projects that may have merit, but are private sector 
economic development initiatives, the Denali Commission encourages 
entrepreneurs to utilize the following assistance strategy.
     Prepare Business Plan and loan request.
     Submit to Alaska Regional Development Organization 
(ARDOR) or Economic Development Council (EDC) for your area for 
technical assistance.
     Projects will be reviewed with consideration of the 
Denali Commission published guiding principles.
     Projects that meet Denali Commission principles will be 
forwarded from the regional support organizations to the State of 
Alaska Funding Forum for review.
     Projects determined to be economically viable may be 
forwarded to the Denali Commission for assistance in developing a 
funding plan.

Development Strategy

    The Denali Commission encourages communities/tribes to build a 
local comprehensive plan and strategy, a component of which will be 
economic development. A comprehensive plan may also be referred to 
as a Development Strategy. Communities are encouraged to work with 
regional organizations such as ARDOR's, Regional Non-Profit 
Corporations, Borough Governments and Regional for-profit 
organizations to develop comprehensive strategies of which, economic 
development will be a component. Regional strategies

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should take into consideration, existing regional planning and 
strategy efforts including, but not limited to the efforts of the 
FAA, HUD, Alaska DOT, ANTHC, Alaska VSW, State Division of Public 
Health, Alaska Department of Public Safety, regional non-profits and 
others.
    The Denali Commission encourages the state to assist with 
technical support and funding at the local and regional level to 
build local and regional development strategies. The Denali 
Commission also encourages state and federal governments to utilize 
the local and regional development strategies when prioritizing 
projects in the state or in a region.

Alvin L. Ewing,
Chief Of Staff.

[FR Doc. 00-18973 Filed 7-26-00; 8:45 am]
BILLING CODE 3300-$$-P