[Federal Register Volume 68, Number 125 (Monday, June 30, 2003)]
[Notices]
[Pages 38693-38703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16416]


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DENALI COMMISSION


5-Year Strategic Plan

Introduction

    The Denali Commission Act of 1998 (Title III, Pub.L. 105-277, 42 
U.S.C. 3121) created a State-Federal partnership to address crucial 
needs of rural Alaskan communities, particularly isolated Native 
villages and other communities lacking access to the national highway 
system, affordable power, adequate health facilities and other 
impediments to economic self sufficiency. Guided by five Commissioners 
representing statewide non-governmental organizations, the 
unprecedented results to date testify to the efficacy of inter-agency 
teamwork, effective training, and the setting of high sustainability 
standards by those closest to the problems at hand. The Commission is a 
highly effective catalyst for enhanced collaboration among federal, 
State, tribal and local governments as well as private sector, non-
profit and other interests. The over arching goal of enabling economic 
self sufficiency is based on effective community comprehensive 
planning, and regional support.
    This document will guide the reader through:

An introduction of the Denali Commission's mission
The workplan for fiscal year 2004 and
The 5-year strategic plan

    Contact: Jeffrey Staser, Denali Commission, 510 L Street, Suite 
410, Anchorage AK 99501, (907) 271-1414, (907) 271.1415 fax, http://www.denali.gov.

Purpose of the Commission

    The Denali Commission Act of 1998, as amended (Division C, Title 
III, Pub. L. 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.

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.
    Inclusive--The Commission will 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.

[[Page 38694]]

    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.

Goals

    The goals generated by the strategic planning process define 
conditions that must be created to realize the Denali Commission 
Vision.
    1. All Alaska, no matter how isolated, will have the physical 
infrastructure necessary to protect health and safety and to support 
self-sustaining economic development.
    2. Local residents in Alaskan communities will be provided the 
opportunity to acquire the skills and knowledge necessary to be 
employed on the construction, operation and management jobs created by 
publicly funded physical infrastructure in their communities.
    3. Alaskans will have access to financial and technical resources 
necessary to build a cash economy to supplement the existing 
subsistence economy.
    4. Federal and state agencies will simplify procedures, share 
information, and improve coordination to ensure equitable delivery of 
services to all Alaskan communities.

Implementation Guiding Principles

    [sbull] Projects must be sustainable. To assist with the 
implementation of this principle, an Investment Strategy has been 
drafted to ensure that the level of funding provided by the Denali 
Commission to infrastructure projects in small, declining and/or 
environmentally threatened communities serves a public purpose and is 
invested in the most conscientious and sustainable manner possible. 
(The Investment Strategy is now available on the Denali Commission 
website for public review and comment.)
    [sbull] The Denali Commission will generally not select individual 
projects for funding nor manage individual projects, but will work 
through existing state, federal or other appropriate organizations to 
accomplish its mission.
    [sbull] Projects in economically distressed communities will have 
priority for Denali Commission assistance.
    [sbull] Projects should be compatible with local cultures and 
values.
    [sbull] 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.
    [sbull] Projects should be community-based and regionally 
supported.
    [sbull] 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.
    [sbull] Priority will generally be given to projects with 
substantial cost sharing.
    [sbull] Priority will generally be given to projects with a 
demonstrated commitment to local hire.
    [sbull] Denali Commission funds may supplement existing funding, 
but will not replace existing federal, state, local government, or 
private funding.
    [sbull] The Denali Commission will give priority to funding needs 
that are most clearly a federal responsibility.
    [sbull] Denali Commission funds will not be used to create unfair 
competition with private enterprise.

Additional Guiding Principles for Infrastructure:

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

Additional Guiding Principles for Economic Development

    [sbull] Priority will be given to projects that enhance employment 
in high unemployment areas of the State (economically distressed), with 
emphasis on sustainable, long-term local jobs or career opportunities.
    [sbull] Projects should be consistent with statewide or regional 
plans.
    [sbull] The Denali 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.

Additional Guiding Principles for Training

    [sbull] Training should increase the skills and knowledge of local 
residents to become employed on jobs created by the Denali Commission's 
investment in public facilities in a community.

Intergovernmental Coordination--The Memorandum of Understanding:

    The Denali Commission Act recognizes that our mission can only be 
accomplished through a collaborative, coordinated effort by the State 
of Alaska and key federal agencies. The State of Alaska also recognizes 
benefits can be furthered if State agencies work in a collaborative and 
coordinated effort. With this in mind, Denali Commission has drawn up a 
Memorandum of Understanding (MOU), which more than 20 agencies have 
agreed to, that outlines some points of agreement that will facilitate 
the collaboration and coordination necessary for achievement of the 
purposes of the Denali Commission and related missions of agencies who 
are parties to the MOU.
The Points of the MOU Are--
    [sbull] Sustainability. Federal and State agencies recognize the 
importance of utilizing sustainability principles when investing in 
public infrastructure projects
    [sbull] Regional Strategies. Systematic planning and coordination 
on a local, regional and statewide basis are necessary to achieve the 
most effective results from investment in infrastructure, economic 
development, and training.
    [sbull] Community Plans. A single community strategic plan should 
be sufficient to identify and establish the priorities of each rural 
community.
    [sbull] Sharing Information. Sharing information increases 
efficiencies and decreases duplication of services by State and Federal 
agencies.
    [sbull] Economic Development. Economic development facilitates and 
supports the growth of self-sufficient communities.
    [sbull] Non-Profit Organizations and Other Community Organizations. 
Non-profit and other organizations in Alaska are a valuable resource 
for State and Federal Agencies. They provide regional planning, program 
support and partnering opportunities
    [sbull] Workforce Development (Vocational and Career Training). 
Workforce development is a critical component to building sustainable 
public infrastructure and self-sufficient communities in Alaska.

Workplan for 2004

    The Commission has determined that the scope and scale of 
infrastructure issues facing rural Alaska are staggering. The total of 
known basic infrastructure needs for Alaskan communities is estimated 
to be over $13 billion. These infrastructure needs include:

[[Page 38695]]

    [sbull] Infrastructure:

--Housing Construction/Development
--Multi-use Facilities
--Power Utilities
--Fuel Storage
--Drinking Water and Waste Water Facilities
--Solid Waste Management Facilities
--Health Care Facilities
--Airport Facilities
--Road and Trail Construction
--Port, Dock and other Marine Facilities
--Telecommunications
--Community Facilities

    [sbull] Economic Development:

--Comprehensive Planning

    [sbull] Job Training, Education, Capacity Building:

--Comprehensive Planning

    In Fiscal Year 2004, the Denali Commission will continue to 
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 FY04 the formula allocates 85% of general appropriated funds to 
Power, Health and related infrastructure and up to 10% to job training. 
The Commission has a statutory limit of 5% for administrative expenses.
    In addition to FY04 appropriated funds, the Commission expects to 
receive approximately $3 million in interest from the Trans Alaska 
Pipeline Liability (TAPL) fund in FY04, which is earmarked for bulk 
fuel facility upgrade and maintenance.
    The Commission may receive other special purpose funding from 
Congressional appropriations such as dedicated training funding from 
the U.S. Department of Labor pursuant to authorization received in 
FY03.

Prioritization of Projects for FY 2004

    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 
Commission's top priority for infrastructure funding. 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 top priorities for infrastructure funds through FY04, and the 
Commission, consistent with Congressional intent, may add one or more 
additional themes.
    For planning purposes, the Commission has allocated $12,500,000 
using the Commission's approved formula for FY04.

----------------------------------------------------------------------------------------------------------------
                                                             FY04  projected   TAPL  interest    TAPL and  FY04
                FY04 work  plan projection                       funding            funds           combined
----------------------------------------------------------------------------------------------------------------
Bulk Fuel.................................................        $2,375,000        $2,700,000        $5,075,000
Power Generation..........................................         1,979,167  ................         1,979,167
Health Clinics............................................         2,770,833  ................         2,770,833
Other Infrastructure......................................           950,000  ................           950,000
Training..................................................           950,000  ................           950,000
                                                           -------------------
    Subtotal..............................................         9,025,000         2,700,000        11,725,000
Administration[hairsp]*...................................           475,000           300,000           775,000
                                                           -------------------
    Total.................................................         9,500,000         3,000,000       12,500,000
----------------------------------------------------------------------------------------------------------------
* Administration: Figure used reflects 5% ceiling, not actual overhead cost. This includes future salary
  obligations, directed studies, independent audits, and project support.

    In accordance with the Denali Commission Code, Administrative funds 
(5%) are solely the responsibility of the Federal Co-Chair. Allocation 
of the balance of funds (95%) will be made by the full Denali 
Commission, utilizing the guiding principles previously outlined in 
this document, and priority systems designed specifically for each 
budget category.
    Project implementation will generally be accomplished through 
state, local or federal government entities, regulated utilities, 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. The MOU will 
serve to guide intergovernmental coordination and collaboration among 
agencies.
    As indicated above, 85% of Denali Commission base funds are 
designated for priority infrastructure focus areas and those funds are 
distributed using priority systems designed for each area and following 
the Denali Commission Investment Strategy guidance. Concurrently the 
Commission encourages communities and regional entities to complete 
comprehensive community and economic development plans. Priority 
systems for focus areas 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 
Commission also participates in the organization and execution of 
regional ``funding summits.'' These summits, which are held 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.

Performance Indicators for FY 2004

Energy
    [sbull] Reduce the backlog of non-compliant bulk fuel storage 
facilities in rural Alaska by renovating or building a bulk fuel 
storage facility in 1 community.
    [sbull] Increase the reliability, efficiency and sustainability of 
power generation and/or transmission by renovating or building a power 
facility in 1 community.
Health Care
    [sbull] Complete construction or renovation of primary health care 
facilities in 2 communities.
Training
    [sbull] Increase the number of local area residents trained on 
construction, operations and maintenance of Denali Commission-funded 
physical infrastructure in Alaska by 5%.

[[Page 38696]]

    [sbull] Increase the local resident payroll on Denali Commission-
funded projects by 2%.
    [sbull] Increase the annual earnings of each local resident that 
completes Denali Commission-funded training by 5%.
Financial and Technical Resources
    [sbull] Produce reliable and timely performance and other financial 
(proprietary and budgetary) information from the financial management 
system for managing current operations.
    [sbull] Safeguard assets (including performance and financial 
information) from waste, loss, misappropriation or destruction.
    [sbull] Prepare accurate and timely financial reports on Budget 
Execution in accordance with generally accepted accounting principles 
and meeting the requirements of the Office of Management and Budget and 
U.S. Treasury.
Government Coordination
    [sbull] Maintain administrative expenses of Denali Commission at 5% 
or less of appropriated funds.
    [sbull] Hold Denali Commission partners to the lowest reasonable 
overhead costs needed to complete projects.

Work Toward the President's Management Agenda

    President George W. Bush has set forth a strategy to improve 
management of the federal government through government-wide goals in 
five mutually reinforcing areas:

--Human Capital
--Competitive Sourcing
--Improved Financial Management
--Expanded e-Government
--Budget and Performance Integration

    The Denali Commission is making progress in these strategic areas 
in the following ways.

Human Capital

    The Denali Commission attempts to be innovative in its recruitment 
and retention of staff. With a small permanent staff of eight and an 
on-loan staff of eight, the Denali Commission has a flat organization 
chart, making it simple for customers to reach the staff they need to 
and get the answers they require, through electronic messaging, 
telephone, or in-person.
    An additional advantage of a small organization is the ease of 
managing the accurate measurement and appropriate rewarding of staff 
for performance. Denali Commission utilizes many human capital 
investment-oriented strategies for retaining qualified and effective 
staff, such as preventive health programs, a student loan repayment 
program, and appropriate training.
    A project now underway is tying each position's roles and 
responsibilities with the organizational mission. This matrix, once 
completed, will be used to enhance efficiency and effectiveness by 
realigning duties where they do not reflect the mission, and ensuring 
that all mission-critical work is being addressed adequately.

Competitive Sourcing

    As a very small agency headquarters, Denali Commission is highly 
motivated, by necessity, to comply with this initiative. Although 
formal assessments have not been carried out on the competitive 
sourcing opportunities, Denali Commission regularly utilizes 
contractors and private enterprise for many of our tasks. Examples 
include graphic design, computer maintenance, and document scanning 
services.

Improved Financial Management

    Five of the Denali Commission permanent staff are responsible for 
all operations and finance. Limited to 5% overhead, the agency has, and 
will continue to, enthusiastically participate and pursue automation 
and forward-thinking technology whenever possible. Through advances in 
technology, we will continue to realize internal efficiencies and 
increases in effectiveness.
    To keep pace with the Government-Wide-Accounting (GWA) initiative, 
a new accounting system is being developed, with an anticipated 
implementation date of October 1, 2003. We are utilizing the Veterans 
Affairs (VA) Financial Services Enterprise Center as consultants on 
this project. We expect this accounting system to maintain the highest 
quality of accuracy in reporting to OMB, Congress and the public.
    Staff are working in conjunction with other federal agencies to 
accomplish automation to the extent feasible, with Federal Treasury 
payment and collection systems (IPAC, ASAP and SPS). We anticipate 
being a pilot test site for the Internet Payment Platform (IPP) which 
is being developed by Treasury for the efficient and timely payment of 
vendors.

Expanded e-Government

    Denali Commission is committed to managing our projects more 
effectively and more transparently to our partners, customers and the 
public. The Project Database is a significant step in this direction. 
The Denali Commission Project Database, now operational on our website, 
is an initiative that permeates several of the five strategic areas of 
the President's Management Agenda. To enhance project management and 
information sharing with our partners and the public, Denali Commission 
has developed an Internet-based database of all Commission projects. 
This tool is for tracking and managing Denali Commission and partner 
project data. The database is built to provide information that is easy 
to use, has the highest degree of integrity and maintainability, and is 
accessible for all interested parties. In keeping with the Denali 
Commission mission, the system allows for collaboration to improve the 
effectiveness and efficiency of government services. Within the 
database, managers and grantees place reports, project financials, 
photos and status information on each funded project. Also available 
within the database are priority lists of projects yet to be funded in 
communities across Alaska. Across the state of Alaska, Federal, State 
and local entities (including regional non-profits, health 
corporations, and tribal governments) share a vision for developing a 
shared, central database (or portal) to further improve the 
transparency of government. This database would be a part of that 
larger effort.
    Denali Commission now has an active link to our agency website 
located on www.FirstGov.gov to help citizens find information and 
obtain services from that central location. We are working to place 
Denali Commission grant opportunities on the www.Grants.gov website as 
well. Additional e-Government projects that Denali Commission is 
monitoring and will participate in include e-Travel and e-
Authentication. To maximize IT partnerships (and coordination) with 
other federal agencies, Denali Commission works with the Federal 
Aviation Administration (FAA) and Department of the Interior (DOI) to 
support our local computer network.
    Our commitment to internet and electronic payment and collection 
systems is hailed by our vendors and customers, especially in this 
large state with sometimes slow and unpredictable mail and telephone 
(internet) services. These systems assist with streamlining and 
ensuring timely and accurate transactions.
    As we build and develop strong IT infrastructure at Denali 
Commission, we maintain a high level of vigilance that proper and 
adequate security is set in place. Our plan for IT development always 
includes an assessment of value to the public, avoidance of duplication

[[Page 38697]]

and the goal of transparency and accountability.

Budget and Performance Integration

    The Denali Commission, by legislation, is limited to 5% overhead/
administrative rate. So, 95% of our funds go into making progress 
toward our 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.
    Denali Commission has set in motion the tools to assist the staff 
in measuring performance--the Project Database and a new accounting 
system (under development).
    We require our grantees to establish and meet milestones, and we 
publish those on the Project Database. We set goals at an agency level 
for construction projects reaching completion each year. That is the 
bottom line that will improve the lives of the residents of Alaska. And 
we set internal benchmarks for the quality and efficiency of services 
provided to our customers. That keeps the Denali Commission staff on 
track in prioritizing individuals' work time. We measure ourselves 
against these standards constantly and check on them as a team once a 
month.

Strategic Plan--2005-2009

Challenges to Development and Economic Self-Sufficiency in Alaska

    Geography/Climate--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. The average community is over 1,000 miles from the state 
capital.
    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 portion of 
their foods, but also depend on cash income to provide the means to 
pursue subsistence activities. Cash paying employment opportunities in 
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 which is over 6 times the National average of 6.75 
cents) even with State subsidies.
    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 $13 billion. 
Training and economic development needs have not been quantified, but 
the unmet needs in these areas are also believed to be quite large. 
Consequently, it is imperative that efforts to address the most 
essential needs be both focused and strategic.

----------------------------------------------------------------------------------------------------------------
             Funding category                        Category/Class               Needs ($)         Total ($)
----------------------------------------------------------------------------------------------------------------
Infrastructure...........................  Housing Construction/Development.     1,800,000,000  ................
                                           Power Utilities..................       300,800,000  ................
                                           Fuel Storage.....................       362,500,000  ................
                                           Drinking Water and Waste Water          650,000,000  ................
                                            Facilities.
                                           Solid Waste Management Facilities               \1\  ................
                                           Health Care Facilities...........       481,000,000  ................
                                           Airport Facilities...............     1,300,000,000  ................
                                           Road Construction................     8,600,000,000  ................
                                           Port Facilities..................       300,000,000  ................
                                           Telecommunications...............             (\1\)  ................
                                           Community Facilities.............             (\1\)  ................
                                           Other............................             (\1\)  ................
                                                                                               -----------------
                                           Subtotal.........................  ................    13,794,300,000
Economic Development.....................  Comprehensive Planning...........             (\1\)  ................
                                           Other............................             (\1\)  ................
Job Training, Education, Capacity          Comprehensive Planning...........             (\1\)  ................
 Building.
                                           Other............................             (\1\)  ................
                                                                                               -----------------
                                           Total............................  ................    13,794,300,000
----------------------------------------------------------------------------------------------------------------
\1\ Unknown.

Goals, Objectives and Key Activities

Goal  1
    All Alaska, no matter how isolated, will have the physical 
infrastructure necessary to protect health and safety and to support 
self-sustaining economic development.

Objectives

    1. Energy facilities (bulk fuel storage, power generation and 
transmission) will be constructed and upgraded at a significantly 
accelerated pace.
    2. All Alaskans will have reasonable access to primary health care 
services.
    3. All Alaskans will have safe drinking water and sanitary waste 
disposal systems.
    4. All Alaskans will have reasonable access to telecommunication 
services comparable to those available in major urban centers at 
comparable costs.
    5. Construction of other basic physical infrastructure including 
but not limited to roads, ports, airports, and community facilities 
will be accelerated on a priority basis.

Key Activities to Achieve Goals and Objectives

    [sbull] Complete a statewide energy strategy to clearly identify 
needs and set priorities for completion of bulk fuel storage 
facilities, power generation facilities including innovative and 
alternative facilities and power transmission facilities. The strategy 
will

[[Page 38698]]

identify institutional structures and measures to achieve sustainable 
operation and maintenance of completed physical systems.
    [sbull] Complete a statewide needs assessment for primary health 
care facilities and develop a system to establish priorities for 
completion of needed facilities.
    [sbull] Collaborate with federal agencies and assist the State of 
Alaska as necessary in identifying gaps in funding for physical 
infrastructure that can be filled first by existing federal programs 
or, if necessary, by Denali Commission funding.
    [sbull] Utilize the annual work plan development process to 
allocate funds to physical infrastructure categories. Allocation of 
funds to specific projects will generally be guided by statewide 
priority systems and comprehensive plans developed at the community and 
regional levels.

Performance Indicators

    [sbull] Reduce the backlog of non-compliant bulk fuel storage 
facilities in rural Alaska in 6 communities annually.
    [sbull] Increase the reliability, efficiency and sustainability of 
power generation and/or transmission in 6 communities annually.
    [sbull] Complete construction or renovation of primary health care 
facilities for at least 5 communities is anticipated annually.
    [sbull] Enter into formal agreements with State and Federal 
agencies and others as appropriate to ensure accomplishment of 
objectives 3-5.
Goal  2
    Local residents in Alaskan communities will have the opportunity to 
acquire skills and knowledge necessary to be employed on the 
construction, operation and management jobs created by publicly funded 
physical infrastructure in their communities.

Objectives

    1. Local residents will have access to skills and knowledge 
training that is necessary for employment on publicly funded physical 
infrastructure in their communities.
    2. The Denali Commission's investment in physical infrastructure 
will be protected by local residents trained to operate and maintain 
facilities.
    3. Workers from outside a community will not need to be imported to 
fill construction, operations and maintenance jobs necessary for 
publicly funded physical infrastructure.
    4. Communities will benefit from the increase in earnings from 
local residents employed on publicly funded physical infrastructure.

Key Activities To Achieve Goals and Objectives

    [sbull] Provide funding to a coordinated training system including, 
regional and local coordination, career pathway information, specific 
training courses, union apprenticeship-based training and non-union 
based training.
    [sbull] Partner with the State of Alaska, Native Non-Profit 
Corporations, private sector, union-based training organizations, non-
union based training organizations and other federal agencies to create 
a coordinated system to meet the training needs of local residents.
    [sbull] Provide financial assistance to communities and 
organizations that will provide specific training to local residents to 
become employed on construction, operations and maintenance jobs 
created by publicly funded physical infrastructure projects.

Performance Indicators

    [sbull] Increase the number of local area residents trained on 
construction, operations and maintenance of Denali Commission funded 
physical infrastructure in Alaska by 5% annually.
    [sbull] Increase the local resident payroll on Denali Commission 
funded projects by 2% annually.
    [sbull] Increase the annual earnings of each local resident that 
completes Denali Commission funded training by 5%.
Goal  3
    Rural Alaskans will have access to financial and technical 
resources necessary to build a cash economy to supplement the existing 
subsistence economy.

Objectives

    1. All Alaskans will have access to programs that provide 
entrepreneurial education. Technical assistance and business services 
will be available to entrepreneurs and business owners.
    2. Entrepreneurs will have access to capital resources appropriate 
for their circumstances including bank loans, micro loans, BIDCO loans, 
venture capital, SBA loans, USDA Rural Development loans, U.S. 
Department of Commerce EDA loans or grants.
    3. Support access to partnership funding for community based 
utilities, infrastructure and health delivery projects.

Key Activities To Achieve Goals and Objectives

    [sbull] Financial assistance will be provided through the State 
Department of Community and Economic Development and the First Alaskans 
Foundation to assist entrepreneurs, communities and regional entities 
to develop economic capacity.
    [sbull] Financial assistance will be provided to Alaska Growth 
Capital to enable that company to make loans and provide hands on 
technical assistance to entrepreneurs in economically distressed areas 
of Alaska.
    [sbull] The Denali Commission will work with financial 
institutions, foundations and other entities as appropriate to create a 
revolving loan fund expressly for funding feasibility studies.
    [sbull] A minimum of two partnerships will be facilitated annually 
leading to completed projects within 5 years.

Performance Indicators

    [sbull] Minimum annual disbursement of financing by Alaska Growth 
Capital to business in communities defined as distressed by the Denali 
Commission will be $275,000.
    [sbull] Annual payroll of projects financed through Alaska Growth 
Capital will be at least $90,000 and will increase annually by at least 
$30,000.
    [sbull] A minimum of 5 feasibility studies for new business 
startups in economically distressed areas of Alaska will be funded 
annually from the revolving loan fund.
Goal  4
    Federal and state agencies will simplify procedures, share 
information, and improve coordination to enhance and improve the 
efficiency of the delivery of services to Alaskans and the communities 
in which they reside.

Objectives

    1. The Denali Commission will limit its own administrative expenses 
to no more than 5% of its total budget and will ensure that all Denali 
Commission partners are kept to the lowest possible overhead needed to 
complete a project.
    2. The Denali Commission will work to gain acceptance of a single 
community developed comprehensive plan as the basis for all federal and 
state agency funding.
    3. The Denali Commission will work to gain acceptance and 
utilization of a single comprehensive database for information (plans 
and project information) for rural Alaskan communities.

Key Activities To Achieve Goals and Objectives

    [sbull] The Denali Commission will work with key state and federal 
agencies to complete and periodically update a memorandum of agreement 
that outlines

[[Page 38699]]

key actions necessary to achieve this goal.
    [sbull] The Denali Commission will actively engage the Alaska 
Federal Executives Association, consistent with its charter, as a means 
to achieve this goal.
    [sbull] The Denali Commission will seek the guidance and assistance 
of the State Co-Chair as he/she works with the Governor's cabinet to 
assist in meeting these goals and objectives.
    [sbull] Agreements with Denali Commission program implementation 
partners will be negotiated to achieve the minimum practicable overhead 
rates.

Performance Indicators

    [sbull] Administrative expenses of Denali Commission will be 5% or 
less.
    [sbull] Denali Commission partners will be held to the lowest 
reasonable overhead costs needed to complete projects.
    [sbull] An MOU will be reviewed annually, and updated as necessary 
to memorialize the commitment of federal and state agencies to this 
goal.
    [sbull] Progress in meeting these goals and objectives will be 
documented annually.

Implementation Guiding Principles

    [sbull] Projects must be sustainable. To assist with the 
implementation of this principle, an Investment Strategy has been 
drafted to ensure that the level of funding provided by the Denali 
Commission to infrastructure projects in small, declining and/or 
environmentally threatened communities serves a public purpose and is 
invested in the most conscientious and sustainable manner possible. 
(The Investment Strategy is now available on the Denali Commission 
website for public review and comment.)
    [sbull] The Denali Commission will generally not select individual 
projects for funding nor manage individual projects, but will work 
through existing state, federal or other appropriate organizations to 
accomplish its mission.
    [sbull] Projects in economically distressed communities will have 
priority for Denali Commission assistance.
    [sbull] Projects should be compatible with local cultures and 
values.
    [sbull] 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.
    [sbull] Projects should be community-based and regionally 
supported.
    [sbull] 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.
    [sbull] Priority will generally be given to projects with 
substantial cost sharing.
    [sbull] Priority will generally be given to projects with a 
demonstrated commitment to local hire.
    [sbull] Denali Commission funds may supplement existing funding, 
but will not replace existing federal, state, local government, or 
private funding.
    [sbull] The Denali Commission will give priority to funding needs 
that are most clearly a federal responsibility.
    [sbull] Denali Commission funds will not be used to create unfair 
competition with private enterprise.

Additional Guiding Principles for Infrastructure

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

Additional Guiding Principles for Economic Development

    [sbull] Priority will be given to projects that enhance employment 
in high unemployment areas of the State (economically distressed), with 
emphasis on sustainable, long-term local jobs or career opportunities.
    [sbull] Projects should be consistent with statewide or regional 
plans.
    [sbull] The Denali 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.

Additional Guiding Principles for Training

    [sbull] Training should increase the skills and knowledge of local 
residents to become employed on jobs created by the Denali Commission's 
investment in public facilities in a community.
    [sbull] In order to protect the federal investment, training should 
increase the local capacity to operate and maintain Denali Commission 
funded public infrastructure.

Intergovernmental Coordination--The Memorandum of Understanding

    The Denali Commission Act recognizes that our mission can only be 
accomplished through a collaborative, coordinated effort by the State 
of Alaska and key federal agencies. The State of Alaska also recognizes 
benefits can be furthered if State agencies work in a collaborative and 
coordinated effort. With this in mind, Denali Commission has drawn up a 
Memorandum of Understanding (MOU), which more than 20 agencies have 
agreed to, that outlines some points of agreement that will facilitate 
the collaboration and coordination necessary for achievement of the 
purposes of the Denali Commission and related missions of agencies who 
are parties to the MOU.
The points of the MOU Are--
    [sbull] Sustainability. Federal and State agencies recognize the 
importance of utilizing sustainability principles when investing in 
public infrastructure projects.
    [sbull] Regional Strategies. Systematic planning and coordination 
on a local, regional and statewide basis are necessary to achieve the 
most effective results from investment in infrastructure, economic 
development, and training.
    [sbull] Community Plans. A single community strategic plan should 
be sufficient to identify and establish the priorities of each rural 
community.
    [sbull] Sharing Information. Sharing information increases 
efficiencies and decreases duplication of services by State and Federal 
agencies.
    [sbull] Economic Development. Economic development facilitates and 
supports the growth of self-sufficient communities.
    [sbull] Non-Profit Organizations and Other Community Organizations. 
Non-profit and other organizations in Alaska are a valuable resource 
for State and Federal Agencies. They provide regional planning, program 
support and partnering opportunities.
    [sbull] Workforce Development (Vocational and Career Training). 
Workforce development is a critical component to building sustainable 
public infrastructure and self-sufficient communities in Alaska.

Appendix A: Needs Assessment Supporting Information

Power Utilities

    Need: $300.8 million
    Annual Funding: Denali Commission to establish.
    Source: AEA Assessment, 2000.
    Background: 178 communities were surveyed by the Alaska Energy 
Authority (AEA) which was completed in 2000. The total need for power 
utilities which includes power plant

[[Page 38700]]

construction, rehabilitation, distribution, and cost reduction projects 
totals $300.8 million. The information presented below is separated by 
needs of communities that are part of the Alaska Village Electric 
Cooperative (AVEC) and all other remote communities.

AVEC

$76,000,000--Power Plant Construction and Rehabilitation.
$18,000,000--Wind Power Generation Projects.
$1,800,000--Other Power Distribution.
Total AVEC: $93,800,000.

Other Communities

$131,000,000--Power Plant Construction and Rehabilitation.
$20,000,000--Power Distribution Construction and Rehabilitation.
$56,000,000--Energy Cost Reduction Projects*.
Total for other communities: $207,000,000.

    In terms of facility upgrades, AEA is approximately 10% complete 
with the initial scope of projects. Based upon current and projected 
funding, AEA anticipates completing the program of upgrading projects 
for communities outside of AVEC by 2015.
    * Energy Cost Reduction Projects include: Alternative Energy 
Projects (Wind $30 million and Hydro $20 million) and Energy Efficiency 
Upgrades $6 million.

Bulk Fuel Storage

    Need: $362.5 million.
    Annual Funding: $20 to $40 million Denali Commission Funding.
    Source: AEA Assessment, 2000.
    Background: The Alaska Energy Authority (AEA) initiated an 
assessment of bulk fuel tank farms in rural Alaska communities in 1996. 
This assessment was completed in 2000.
    AEA is responsible for 141 projects while the Alaska Village 
Electric Cooperative (AVEC) has assumed responsibility for 51 
communities under construction agreements between the Commission and 
AVEC.
    Of AEA's 141 projects, 9 have been completed by others. The balance 
of 132 AEA projects has a bulk capacity upgrade need of approximately 
26,000,000 gallons. This average is anticipated to decline as AEA 
undertakes projects that are lower on the deficiency list and thus 
require less effort to upgrade. To date (including the 2003 
construction season), AEA has upgraded 9,500,000 gallons of capacity 
and has projected that 11,000,000 of capacity remain to be upgraded.
    The average project size AEA has undertaken is decreasing in size 
from an average of $2,100,000 in 2001 to a projected cost of $1,700,000 
in 2004. The average cost of upgrading since 2001 (including the 2003 
Construction Season) is approximately $15.00 per gallon. It is not 
anticipated that this cost will increase over the next few years.
    In terms of storage capacity, AEA is approximately 48% complete 
with the initial scope of projects. Based upon current and projected 
funding, AEA anticipates completing the program of upgrading their 
respective project communities by 2010.
    Of AVEC's 52 projects a total of 9 have been completed. Of the 42 
remaining communities, a total of 9,800,000 gallons remains to be 
completed for AVEC communities.

Water and Wastewater

    Need: Current need: $650 million (FY 02 estimate for Alaska Natives 
only).

(Funded Fiscal years 1960--2002: $1.33 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 federal fiscal 
year 2002 are shown below.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
U.S. Public Health Service--Indian Health Service.......     $17,863,000
U.S. Environmental Protection Agency Drinking Water            3,958,200
 Tribal Set-Aside.......................................
U.S. Environmental Protection Agency Clean Water Tribal        7,053,100
 Set-Aside..............................................
U.S. Environmental Protection Agency Infrastructure           36,494,500
 Grant..................................................
U.S. Department of Agriculture--Rural Development.......      23,120,000
State of Alaska, Village Safe Water.....................      19,873,370
                                                         ---------------
    Total...............................................     108,362,170
------------------------------------------------------------------------

    While these amounts vary from year to year, the annual average for 
fiscal years 1997 through 2002 is $85.7 million. The trend has been 
towards increased funding levels.
    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 
complement each other. ANTHC predominantly 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 $650 million and a current funding level 
of $108 million combine to suggest a 6-year timeframe for meeting the 
need.
    The Denali Commission has not targeted water and wastewater 
improvements as a major initiative for infrastructure funding due to 
the level of funding and effort already underway in this sector of 
critical infrastructure. However, the Commission is involved in 
improving, planning and interagency coordination.

Primary Health Care Facilities

    Identified Need: $253 Million as of October 1, 2000.
    $481 Million as of April 17, 2003 for the total unmet need.
    $165 Million from the Commission to fully address clinic needs.
    Annual Funding: Typically $30 Million/Year.
    Source: Annual funding is a mixture of Health Resources Services 
Administration (HRSA) funding and Denali Commission Base funding.
    Background: In October 2000 the Commission published the ``Alaska 
Rural Primary Care Facility Needs Assessment--Final Report''. The 
report looked at primary care clinic improvements in 288 Alaskan 
communities with a minimum population size of 20 year-round residents, 
and lacking in-patient services (hospital). The report identified an 
unmet primary care need of $253 Million.
    Not long after the report was published the Commission recognized 
that the unmet primary care need for ``hospital'' communities was 
extremely

[[Page 38701]]

high and was not reflected in the Final Report. Within two years, the 
Commission also recognized that the clinic space guidelines developed 
for the Final Report did not correspond to the needed square footage 
necessary to provide behavioral health and dental services most health 
organizations felt were minimally necessary. The Commission has 
increased their space guidelines approximately 20%. In addition, there 
are normal inflationary construction cost increases. Listed in the 
table below is the revised estimate to fully address expected local and 
regional interests in improved primary care facilities.

                                 April 2003 Estimate for Primary Care Facilities
----------------------------------------------------------------------------------------------------------------
                                                                                Denali funds     Match required
                                                            Total (millions)   (millions) 65%          35%
----------------------------------------------------------------------------------------------------------------
Total Unmet Need..........................................              $481              $313              $168
Demand Adjustment--20% reduction..........................             ($96)             ($63)             ($34)
Funded in FY2001 and FY2002...............................             ($77)             ($50)             ($27)
Estimated Funding For FY2003..............................             ($54)             ($35)             ($19)
                                                           -------------------
Total Remaining Unmet Need................................              $254              $165               $89
----------------------------------------------------------------------------------------------------------------

    Total costs to fund the expected demand for primary care 
infrastructure development after the FY2003 funding cycle are estimated 
at $254 million dollars. At current match requirements, the match will 
be $89 million dollars of that total, and the Denali Commission 
requirement will be $165 million. The Commission has noticed a trend 
that about 1 in 5 communities surveyed (from the Final Report) are not 
interested in improvements to primary care facilities due to 
sustainability and health service operational concerns.

Airport Facilities

    Need: $1.3 billion.
    Annual Funding: $65-90 million.
    Source: Transportation Needs and Priorities in Alaska (November 
2002) and Transportation Investment Analysis (Spring 2002), published 
by the State of Alaska Department of Transportation and Public 
Facilities (ADOT&PF).
    Background: Alaska's extensive aviation system plays a crucial role 
in the movement of people and goods throughout the state. In many parts 
of rural Alaska, aviation serves as the principal link between 
communities. There are 1,112 designated airports, seaplane bases, and 
aircraft landing areas in the State of Alaska. The ADOT&PF owns and 
operates 261 public airports, the majority of Alaska's public airports. 
23 public airports are owned and operated by local governments.
    Nearly all of Alaska's airport capital improvements rely on funding 
from the Federal Aviation Trust Fund. This fund, supported by federal 
taxes on airline tickets, cargo, and fuel, supplies monies for capital 
improvements through the Airport Improvement Program (AIP), which is 
authorized for funding on an annual basis. In recent years, AIP 
entitlement funds for Alaska's airports varied from approximately $65 
million to $90 million annually. The state or local sponsor is required 
to contribute 6.25% in the form of match. The current AIP authorizing 
legislation expires on September 30, 2003, and at this time, it is 
unknown what changes Congress may incorporate into the AIP legislation.

Road Construction and Major Maintenance

    Need: $8.6 billion.
    Annual Funding: $260-350 million.
    Source: Transportation Needs and Priorities in Alaska (November 
2002) and Transportation Investment Analysis (Spring 2002), published 
by the State of Alaska Department of Transportation and Public 
Facilities (ADOT&PF).
    Background: 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. Because of its vast geographic 
expanse and young age as a state, Alaska continues to require 
significant resources for transportation improvements.
    The list of unmet surface transportation needs in Alaska is about 
1,950 projects with a total estimated cost approximating $8.6 billion. 
The primary funding source for surface transportation projects in 
Alaska is federal-aid highway funding, which flows through the Federal 
Highway Administration (FHWA) and the Federal Transit Administration 
(FTA). State funds are required to match these federal funds; for most 
highway projects, the federal ratio is 91 percent.
    The State of Alaska administers most of the FHWA funding allocated 
to Alaska with the exception of money specifically designated for the 
Bureau of Indian Affairs (BIA), which currently amounts to 
approximately $17 million per year. 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 Indian Reservation Road system 
(IRR) and are eligible for a share of a national pot of money allocated 
to maintenance of IRR roads.
    Through the recent TEA-21 era, average funding levels have been 
approximately $350 million per year, up substantially from the 
approximately $220 million under ISTEA (1991-1997). 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 the larger hub communities.
    The existing authorizing legislation, TEA-21, expires on September 
30, 2003. Congressional changes to the reauthorization are unknown at 
this time. However, given the current economic climate, estimates of 
future federal funding are not as optimistic as those made one year 
ago.

Port Facilities

    Need: $300 million.
    Annual Funding: $7 to 15 million.
    Source: Transportation Needs and Priorities in Alaska (November 
2002) and Transportation Investment Analysis (Spring 2002), published 
by the State of Alaska Department of Transportation and Public 
Facilities (ADOT&PF).
    Background: With over 30,000 miles of shoreline, relatively few 
roads, and 90 percent of the state's population living within ten miles 
of the coast or along a major river, Alaska's marine facilities are 
integral to the local, statewide, and international transportation of 
goods and people.

[[Page 38702]]

    Ports and harbors have no federal capital assistance program 
comparably to the highway and airport funding programs. Federal funds 
for ports and harbors come through the U.S. Army Corps of Engineers. 
The Corps distributes funding on a nationally competitive, project-by-
project basis. State and local communities in Alaska have been awarded 
between $7 and 15 million annually in federal funding for all Corps of 
Engineers programs in recent years. For construction, the Corps 
requires between 20 and 35 percent match for projects such as dredging 
basins, docks, floats, grids, and upland facilities. Though not a 
dedicated funding source, the Marine Users Fuel Tax is the traditional 
foundation of small boat harbor improvements in the State, and general 
obligation bonds have been the foundation of State assisted port 
development.

Telecommunications

    Need: Unknown.
    Annual Funding: $7.5m in FY03 funding for Regulatory Commission of 
Alaska's Rural Broadband Internet Grant Program. Several other funding 
support mechanisms including Universal Service Fund also exist.
    Background: In January 2001, the Denali Commission, in partnership 
with the State of Alaska, completed an inventory of available 
telecommunication services in rural Alaska. Among other findings, the 
inventory found that 61% of all Alaskan communities do not have access 
to local dial-up Internet service. This identified need is being 
addressed through the Regulatory Commission of Alaska's Rural Broadband 
Internet Grant Program and Telecommunications Industry investment and 
expansion of Internet offerings in most rural communities in the next 
1-3 years.

Solid Waste Disposal Facilities

    Need: Unknown.
    Annual Funding: Generally less than $1,000,000.
    Background: Solid waste disposal is a necessity for all rural 
Alaska communities as it is for every community in the country. 
Observation would indicate that the majority of rural Alaska 
communities do not have facilities that meet basic legal requirements 
for solid waste disposal. The State of Alaska is preparing a state 
solid waste/regionalization plan. That plan will be available in the 
fall of 2003 and will include recommendations for managing solid wastes 
in the different regions of the State.

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: Program Principles Supporting Information

Rural Infrastructure Development

    In the evolution of the Denali Commission and its approach to 
infrastructure development some principles have been established. These 
include the following:
    [sbull] Selection of infrastructure themes for allocating funds. In 
FY99 rural energy was selected as the primary infrastructure theme. 
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. Other themes may be selected in future 
years.
    [sbull] Selection of program/project partners to carry out 
infrastructure development. The Alaska Energy Authority (AEA) was 
selected as the Denali Commission's first partner for rural energy 
projects. AEA was selected because of its demonstrated capability to 
prioritize and implement rural energy projects. The Alaska Village 
Electric Cooperative was selected as the second energy partner and 
Alaska Native Tribal Health Consortium was selected as the Commission's 
primary partner for clinic design and construction. 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.
    [sbull] 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.
    [sbull] 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.
    [sbull] 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.
    [sbull] 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 in a cost effective manner. 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 short, each agreement 
with a partner organization must be tailored to

[[Page 38703]]

fit their approach to program/project management.

Rural Energy Approach

    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.
    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 Approach

    In the past, communities 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. The needs assessment was completed in October 2000 and 
included a database of primary health care facility needs statewide as 
well as a project prioritization methodology. The Commission's 
investments in rural health facilities is based on this needs 
assessment.

Job Training Strategy

    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.
    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.
    The Commission has approved 10% of the FY00-FY 02 funding for 
implementation of the 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.
    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 and health 
related projects. In the future, the Training Strategy will focus its 
efforts on other areas where the Commission is investing.

Economic Development Strategy

    The Denali Commission in not a funding agency for traditional 
economic development activities. The Commission has a strategy that 
outlines the appropriate role of the Commission in the area of economic 
development. The strategy includes the following components:
    [sbull] The Commission, where appropriate will play the role of 
convener, bringing potential economic development participants together 
to support projects that meet Commission Standards outlined in 
paragraph IV below.
    [sbull] The Commission will act as a facilitator to assist in 
matching high priority, high potential public or private investment 
opportunities with available funding sources.
    [sbull] The Commission will serve as a catalyst for identification 
and removal of unnecessary economic development barriers by government.

Regional 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 
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.

Jeffrey B. Staser,
Federal Co-Chair.
[FR Doc. 03-16416 Filed 6-27-03; 8:45 am]
BILLING CODE 3300-01-P