[Federal Register Volume 73, Number 235 (Friday, December 5, 2008)]
[Notices]
[Pages 74152-74159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28810]


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DENALI COMMISSION


Fiscal Year 2009 Draft Work Plan

AGENCY: Denali Commission.

ACTION: Denali Commission Fiscal Year 2009 Draft Work Plan request for 
comments.

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SUMMARY: The Denali Commission (Commission) is an independent Federal 
agency based on an innovative federal-state partnership designed to 
provide critical utilities, infrastructure and support for economic 
development and training in Alaska by delivering federal services in 
the most cost-effective manner possible. The Commission was created in 
1998 with passage of the October 21, 1998 Denali Commission Act (Act) 
(Title III of Pub. L. 105-277, 42 U.S.C. 3121). The Denali Commission 
Act requires that the Commission develop proposed work plans for future 
spending and that the annual Work Plan be published in the Federal 
Register, providing an opportunity for a 30-day period of public review 
and written comment. This Federal Register notice serves to announce 
the 30-day opportunity for public comment on the Denali Commission 
Draft Work Plan for Federal Fiscal Year 2009.

DATES: Comments and related material must be received by January 15, 
2009.

ADDRESSES: Submit comments to the Denali Commission, Attention: Tessa 
Rinner, 510 L Street, Suite 410, Anchorage, AK 99501.

FOR FURTHER INFORMATION CONTACT: Ms. Tessa Rinner, Denali Commission, 
510 L Street, Suite 410, Anchorage, AK 99501. Telephone: (907) 271-
1414. E-mail: [email protected].
    Introduction: Rural Alaska is an American treasure. Scattered 
across vast tundra, tucked away along rugged coastlines and forests and 
deep within Alaska's Interior, people living in over 300 communities 
raise families, educate their children, and work to provide 
opportunities for all. Alaska Native people rely heavily on subsistence 
hunting, fishing and gathering as a central part of both culture and 
economic sustenance. Values of sharing, love of family and country and 
traditional cultures run deep.
    Rural Alaska still resembles the United States at the time of Lewis 
& Clark. Major rivers are undammed, unbridged and lack even basic 
navigational aids. Many health and social indicators still resemble 
those in developing countries.
    No where else in our country can people live amidst wilderness, 
largely disconnected from highway and road connections and from 
regional power grids. Here, resilience and innovation are required both 
to survive and thrive. Reliance on air and river transportation is 
essential for everyday living. And where else in the country would 
women, in their third trimester of pregnancy, be required to fly into a 
regional center and wait to have their babies safely delivered, given 
the lack of local medical facilities?
    The Denali Commission has now invested nearly a billion dollars in 
ten years on basic infrastructure projects at the local level. We know 
lives have been improved through greater access to primary health care, 
through safe and reliable energy projects, through job training 
programs, sanitation and landfill improvements and basic surface and 
water transportation improvements. We know the taxpayer benefits from 
an emphasis on coordinating the planning, construction and delivery of 
capital projects and through a focus on sustainability.
    We see innovation everywhere. The regional corporations formed by 
the Alaska Native Claims Settlement Act, for example, are becoming 
economic powerhouses in their own rights. Major investments in private-
sector anchors in each region complement the Commission's work in basic 
community infrastructure. Many regional non-profit corporations provide 
an array of effective health and social services. The Alaska 
Marketplace competition, now in its fourth year, proves again that 
local people have great ideas and with a small infusion of capital and 
technical assistance, have real potential for making positive and 
lasting change. The Community Development Quota program, for example, 
offers opportunities for residents in over 60 coastal communities to 
benefit directly from offshore fishing revenues.
    We are buoyed by the sense of progress over the last ten years, at 
the resurgence of traditional culture, by the progress in celebrating 
diversity at all levels and by the awareness among leaders to reduce 
dependency on government and eliminate social ills that seem to come 
with long winters and isolation found in northern countries. We take 
delight in working with many progressive and innovative partners, grant 
recipients and local champions whose leadership and inspiration is 
critical for village survivability.
    We are alarmed, however, at the recent convergence of several 
issues which threaten the survival of many Alaskan communities and 
provide urgent impetus for the Commission to improve our investment 
strategies. These issues include the impacts of climate change, 
unpredictable and unaffordable energy costs at the village level, the 
expectation of declining federal revenues to support rural investment 
in Alaska, evidence of out-migration from many small communities into 
larger regional centers and urban areas such as Anchorage, and the 
urgent need to find regional and systemic solutions to bolster long-
term community viability. The global financial crisis will also strain 
an already thin social service delivery system and bring other 
consequences yet unseen.
    The following are some of the critical issues which frame the 
debate over the Denali Commission's FY09 Work Plan:

Climate Change

    Evidence is now overwhelming that climate change is impacting 
Alaska and the north faster than elsewhere in the nation. Temperatures 
have been rising, plant and animal species have been moving north, and 
permafrost is melting, resulting in major challenges for all 
infrastructure programs. Denali Commission funded wind turbines for 
example, are major engineering challenges for successfully placing a 
vertical wind tower in a permafrost setting. The Denali Commission is 
committed to participating fully with the State of Alaska, the U.S. 
Corps of Engineers and other partners in a coordinated approach to 
policy formulation and the execution of adaptation measures for climate 
change.
    The most immediate challenge is the urgent need to protect and 
relocate many coastal communities impacted by the lack of sea ice, the 
repetition of major storm events, flooding and erosion of coastlines. 
While Congress provides no funds to the Commission to support 
relocation efforts, we coordinate closely with other agencies and 
tribes.

[[Page 74153]]

Our interagency Planning Work Group, for example, oversees relocation 
efforts in several communities, and the Commission funded a relocation 
community plan last year.

Unaffordable Energy at the Local Level

    We recognize the urgent need to find breakthrough solutions to the 
widespread unaffordable energy costs in Alaska's rural communities. One 
study reveals that rural residents earning the lowest 20% of income 
spend almost half that income on home heating and electricity.
    While the Commission's energy strategy remains a combination of 
completing bulk fuel and power system upgrades, an emphasis on 
conservation and energy efficiency projects and renewable energy, we 
continue to look for breakthrough solutions that can be replicated. 
We'll also focus on pursuing regional grids that can reduce the need 
for stand-alone generation in Alaska's small villages. We remain a 
strong partner as the State of Alaska prepares an overall Energy Plan 
for submission to the Alaska State Legislature this session.

Green Building Design and Construction Cost Containment

    High construction costs in rural Alaska result from a combination 
of vast distances, harsh climates and the rising cost of construction 
materials. We are committed to carrying out innovative, cost-effective 
and creative design and construction solutions. This year we anticipate 
engaging in more diverse and experimental partnerships, and we'll be 
seeking more innovative design, construction and program and project 
management practices. We may enhance our normal project scopes to allow 
for greater energy efficiencies. We anticipate undertaking several 
pilot projects focusing on green design, cost containment and the 
combined use of facility activities.

A Focus on Community, Regional Planning and Government Coordination

    The Commission is committed to a greater emphasis on community and 
regional planning to ensure long-term viability of our infrastructure 
investments. Last year, we worked with the State of Alaska, for example 
to help reopen a tribal clinic that had closed its doors for lack of 
capacity. This may be the first instance of a Denali Commission project 
which had suspended service. Through our efforts in government 
coordination, we work to ensure our projects fit within a framework of 
a local and regional plan, and are designed, sized and placed in the 
most optimum locations and setting for long-term success.
    Background: The Commission's mission is to 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.
    By creating the Commission, Congress mandated that all parties 
involved partner together to find new and innovative solutions to the 
unique infrastructure and economic development challenges in America's 
most remote communities.
    Pursuant to the Denali Commission Act, as amended, the Commission 
determines its own basic operating principles and funding criteria on 
an annual federal fiscal year (October 1 to September 30) basis. The 
Commission outlines these priorities and funding recommendations in an 
annual Work Plan.
    Pursuant to the Act, the Work Plan is first provided in draft by 
the Commission for publication in the Federal Register providing an 
opportunity for a 30-day period of public review and written comment. 
The Work Plan is also disseminated widely to Commission program 
partners including, but not limited to the Bureau of Indian Affairs 
(BIA), the Economic Development Administration (EDA), and the United 
States Department of Agriculture--Rural Development (USDA-RD). 
Commission staff are responsible for compiling written public comment 
and forwarding it to the Commission's Federal Co-Chair (Mr. George J. 
Cannelos).
    The Federal Co-Chair then adopts a final version of the Work Plan, 
which includes, to the degree the Federal Co-Chair deems appropriate, 
modifications, additions and deletions based on the policy and program 
recommendations of the full Commission and public comment. The final 
version of the Work Plan is forwarded to the Secretary of Commerce for 
approval on behalf of the Federal Co-Chair.
    The Work Plan authorizes the Federal Co-Chair to enter into grant 
agreements, award grants and contracts and obligate the federal funds 
identified by appropriation below.

FY 09 Appropriations Summary

    Public Law 110-329, Consolidated Security, Disaster Assistance, and 
Continuing Appropriations Act, 2009, was signed by President Bush on 
September 30, 2008. The Continuing Resolution section of that law 
provides for Fiscal Year (FY) 2009 funding for named agencies at the 
same levels utilized in the first two quarters of FY 2008 (October 1, 
2007 to March 31, 2008), through to March 6, 2009.
    Since a new Administration will take office in January 2009, it is 
unknown at this time if there will be a new budget presented to 
Congress, or if this Continuing Resolution will be extended to 
September 2009 or modified in some other way. For the Commission, this 
may result in budgetary resources as high as $113,879,591 for FY 2009. 
If FY 2009 congressional appropriations are significantly different 
from the amounts in this Work Plan the Commission will develop an 
alternate Work Plan for FY 2009.
    The Denali Commission has historically received several federal 
funding sources. These fund sources are governed by the following 
general principles:
     In FY 2008 no project specific earmarks were defined.
     Energy and Water Appropriations (commonly referred to as 
Commission ``Base'' funding) is eligible for use in all programs, but 
has historically been used substantively to fund the Energy Program.
     The Energy Policy Act of 2005 established new authorities 
for the Commission's Energy Program, with an emphasis on renewable and 
alternative energy projects. No new funding accompanied the Energy 
Policy Act, and prior fiscal year Congressional direction has indicated 
that the Commission should fund renewable and alternative Energy 
Program activities from the available ``Base'' appropriation.
     All other funds outlined below may be used only for the 
specific program area and may not be used across programs. For 
instance, Health Resources and Services Administration (HRSA) funding, 
which is appropriated for the Health Facilities Program, may not fund 
the Economic Development Program.
    Final transportation funds received are typically slightly reduced 
due to agency modifications, reductions and fees determined by the U.S. 
Department of Transportation.
    The figures appearing in the table below include an administrative 
deduction of 5%, which constitutes the Commission's 5% overhead. In 
instances where the overhead differs from the 5% it is due to the 
requirements related to that appropriation. For example, USDA-Rural 
Utilities Services (RUS) funding is limited to 4% overhead.

[[Page 74154]]

    The table below provides the following information, by 
appropriation:
     Total FY 09 Budgetary Resources provided in the Continuing 
Resolution:
    These are the figures that appear in the rows entitled ``FY 09 
Appropriation'' and are the original appropriation amounts which do not 
include Commission overhead deductions. These appropriations are 
identified by their source name (i.e., ``Energy and Water 
Appropriation; USDA, Rural Utilities Service, etc.)
     Total FY 09 Program Available Funding:
    These are the figures that appear in the rows entitled ``FY 09 
Appropriations--Program Available'' and are the amounts of funding 
available for program(s) activities after Commission overhead has been 
deducted.
     Program Funding:
    These are the figures that appear in the rows entitled with the 
specific Program and Sub-Program area, and are the amounts of funding 
the Draft FY09 Work Plan recommends, within each appropriation.
     Subtotal of Program Funding:
    These are the figures that appear in the rows entitled ``subtotal'' 
and are the subtotals of all program funding within a given 
appropriation. The subtotal must always equal the Total FY 09 Program 
Available Funding.

          Denali Commission FY 09 Appropriations Funding Table
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FY 09 Energy & Water Appropriation................           $21,800,000
FY 09 Energy & Water Appropriations (``Base'')--              20,511,620
 Program Available (less 5% Commission overhead)..
Energy Program: bulk fuel, RPSU, etc..............            10,750,000
Energy Program: alternative & renewable energy....     (up to) 4,261,620
Teacher Housing Program: design & construction....             4,750,000
Economic Development Program: various.............               500,000
Recruitment and Retention of Health Workers.......       (up to) 250,000
                                                   ---------------------
    sub-total.....................................            20,511,620
------------------------------------------------------------------------
FY 09 USDA--Rural Utilities Service (RUS).........            10,000,000
FY 09 USDA--Rural Utilities Service (RUS)--Program             9,600,000
 Available (less 4% overhead).....................
Energy Program: high energy cost communities......             9,600,000
                                                   ---------------------
    sub-total $...................................             9,600,000
------------------------------------------------------------------------
FY 09 Trans Alaska Pipeline Liability (TAPL) Trust             5,830,940
FY 09 Trans Alaska Pipeline Liability (TAPL)--                 5,539,393
 Program Available (less 5% overhead)--Estimate...
Energy Program: bulk fuel.........................             5,539,393
                                                   ---------------------
    sub-total $...................................             5,539,393
------------------------------------------------------------------------
FY 09 DHHS--Health Resources & Services                       38,596,726
 Administration (HRSA)............................
FY 09 DHHS--Health Resources & Services                       36,666,889
 Administration (HRSA)--Program Available (less 5%
 Commission overhead).............................
Health Program: Primary Care Clinic Design,                   29,000,000
 Planning, and Construction.......................
Health Program: Behavioral Health.................             2,000,000
Health Program: Primary Care in Hospitals.........             3,000,000
Health Program: Elder Housing/Assisted Living                  2,666,889
 Facilities--Construction.........................
                                                   ---------------------
    sub-total $...................................            36,666,889
------------------------------------------------------------------------
FY 09 Department of Labor (DOL)...................             6,754,894
FY 09 Department of Labor (DOL)--Program Available             6,417,149
 (less 5% Commission overhead)....................
Training Program: Various.........................             6,417,149
                                                   ---------------------
    sub-total $...................................             6,417,149
------------------------------------------------------------------------
FY 09 Federal Transportation Administration (FTA)--            5,000,000
 Estimate.........................................
FY 09 Federal Highway Administration (FHWA)--                 25,463,091
 Estimate.........................................
FY 09 Transportation (less 5% Commission                      28,939,936
 overhead)--Estimate..............................
Transportation Program: Docks & Harbors...........             8,804,686
Transportation Program: Roads.....................            20,135,250
                                                   ---------------------
    sub-total $...................................            28,939,936
------------------------------------------------------------------------
FY 09 USDA--Solid Waste...........................               433,940
FY 09 USDA--Solid Waste--Program Available (less                 412,243
 5% Commission overhead)..........................
Solid Waste Program: planning, design and                        412,243
 construction.....................................
                                                   ---------------------
    sub-total $...................................               412,243
                                                   ---------------------
        Total FY 09 Appropriations--Estimate......           113,879,591
                                                   ---------------------
        Total FY 09 Program Available--Estimate...           107,987,230
------------------------------------------------------------------------


[[Page 74155]]

FY 09 Program Details and General Information

    The following section provides narrative discussion, by each of the 
Commission Programs identified for FY 08 funding in the table above, in 
the following categories:
     Program History and Approach
     Applicant/Grant Process
     Program Project Selection Process
     Program Policy Issues (as applicable)
    In addition to the FY 09 funded program activities; the first 
section of the narrative provides an update on the Commission's 
Government Coordination Program. The Program is not funded by 
Commission appropriations, but is an integral component of the 
Commission's mission, the success of other programs, and the legacy of 
the Commission's work in Alaska.
    The final section includes a general summary of other issues facing 
the Commission, statements of support by the Commission for the funding 
requests and activities of other program partners which the Commission 
works in partnership with, and detail regarding the Commission's 
evaluation and reporting efforts.

Government Coordination

    The Commission is charged with the special role of increasing the 
effectiveness of government programs by acting as a catalyst to 
coordinate the many federal and state programs that serve Alaska. In 
FY09 the Commission will continue its role of coordinating State and 
Federal agencies and other partner organizations to accomplish its 
overall mission of developing Alaska's communities. Particular focus 
will be given to the collaborative efforts of the Commission's Federal 
and State Memorandum of Understanding (MOU) and the various workgroups 
and planning sessions and forums that occur as a result of the MOU 
meetings. The Commission intends to engage, along with MOU members, in 
at least two regional forums in FY09. These sessions will be regionally 
focused, and will provide regional partners and community members with 
an opportunity to discuss projects successes, failures and 
opportunities, and provide direct feedback to the Commission and other 
funding organizations regarding their policies and funding processes.
    Additionally, the Commission continues to recognize the issues 
related to erosion, relocation and climate change which are effecting 
Alaskan communities and policy decisions. The Commission plays an 
active role in the Immediate Action Working Group and has also worked 
to build relationships with the Innovative Readiness Training (IRT) 
program which includes the various military branches.

Energy Program

    The Energy Program is the Commission's oldest program and is often 
identified, along with the Health Program, as a ``legacy'' program. The 
Program focuses on bulk fuel facilities (BFU) and rural power system 
upgrades/power generation (RPSU) across Alaska. The purpose of this 
program is to provide code-compliant bulk fuel storage and 
electrification throughout rural Alaska, especially for communities 
``off the grid'' and not accessible by road or rail.
    The needs in the bulk fuel and power generation projects are 
presently estimated at $250 million and $135 million, respectively. The 
Commission has also funded a very successful program of competitively 
selected energy cost reduction and alternative energy projects. In 
three completed rounds of funding, approximately $6 million in grant 
funds have leveraged $8.1 million in participant funding, with 
estimated life-cycle cost savings (generally diesel fuel avoided over 
the life of the project) of $29 million.
    The Energy Policy Act of 2005 established new authorities for the 
Commissions Energy Program, with an emphasis on alternative and 
renewable energy projects, energy transmission, including interties, 
and fuel transportation systems. Although the 2005 Energy Policy Act 
did not include specific appropriations, the Commission is expected to 
carry out the intent of the Act through a portion of its ``Base'' 
funding. To date, the Commission has co-funded a number of renewable 
projects, including hydroelectric facilities, a geothermal power plant, 
a biomass boiler, and a number of diesel-wind power generation systems. 
The FY09 Work Plan outlines a strategy to balance the Energy Program in 
both legacy and renewable systems, providing up to $4,261,620 for 
alternative and renewable projects. About 94% of electricity in rural 
communities which receive Power Cost Equalization (PCE) payments is 
produced by diesel and about half the fuel storage in most villages is 
used for the power plants. Any alternative means of generating power 
can reduce the capacity needed for fuel storage. This reduces capital 
costs and operations and maintenance (O&M) and repair and renovation 
(R&R) costs for fuel storage facilities and may reduce the cost of 
power to the community.
    The Energy Program has historically used a ``universe of need'' 
model to determine project and program funding. Specifically, the 
Program is focused on using the existing statewide deficiency lists of 
bulk fuel facilities and power generation/distribution systems to 
prioritize project funding decisions. A program partnership model is 
utilized for project management and partners are actively involved in 
the design and construction of projects. Partners coordinate project 
funding requests with the Commission to balance the relative priority 
or urgency of bulk fuel and power generation needs against available 
funding, readiness of individual communities and project participants 
for the project(s), and capacity of the partners to carry out the work. 
Communities are identified by partners and through the deficiency list 
process. Legacy program (RPSU, bulk fuel and intertie) projects are 
selected and reviewed by Commission staff and program partners. Thus, a 
renewable project sometimes is proposed in conjunction with a 
deficiency list project to reduce the dependence on diesel fuel, and 
the concomitant fuel storage requirements. So too, an intertie, can 
remove the need for a new power plant, and reduce fuel storage 
requirements in the intertied communities. Therefore, the legacy 
program may also include these types of energy infrastructure. Each 
community and project must be evaluated holistically. Program partners 
also perform initial due diligence and Denali Commission's Investment 
Guidance screenings, as well as assisting in development of the 
business plans for the participants as the designs are underway. The 
Program is dynamic: Priorities fluctuate throughout the year based on 
design decisions, due diligence and investment guidance considerations, 
site availability, the timing of funding decisions, etc.
    In 2008 the Commission completed a study on intertie/transmission 
lines between communities, regions and statewide. The study summarized 
the vast amount of research, planning and studies that have occurred to 
date and identified the policy and economic considerations for 
investment in intertie infrastructure. The program will continue to 
support projects where connections via intertie are feasible. The 
program will also be further defining the role of the Denali Commission 
in intertie planning, development and execution statewide as 
recommended in the study.

[[Page 74156]]

Health Facilities Program

    The Denali Commission Act was amended in 1999 to provide for the, 
``planning, constructing and equipping of health facilities.'' Since 
1999, the Health Facilities Program has been methodically investing in 
the planning, design and construction of primary care clinics across 
Alaska.
    Primary care clinics have remained the ``legacy'' priority for the 
Program. However, in 2003 the ``Other Than'' primary care component of 
the Program was adopted in response to Congressional direction to fund 
a mix of other health and social service related facility needs. Over 
time, the Program has developed Program sub-areas such as Behavioral 
Health Facilities, Domestic Violence Facilities, Elder Housing, Primary 
Care in Hospitals, Emergency Medical Services Equipment and Hospital 
Designs. The FY09 Draft Work Plan emphasizes the priority of the 
Primary Care Clinic Program as the legacy program area, with the 
majority of funding dedicated to clinics. Under the scenario in which 
the Commission receives apportioned funds in advance of appropriations 
under a Continuing Resolution, staff recommends these funds be 
dedicated solely to the clinic program.
    The Program utilizes a ``universe of need'' model for primary care 
and a competitive selection process for other sub-program areas. In 
1999 the Program created a deficiency list for primary care clinics, 
which totaled 288 communities statewide in need of clinic replacement, 
expansion and/or renovation. Currently, 110 clinics have been completed 
or are in construction and approximately 40 are in design.
    The Program is guided by the Health Steering Committee, an advisory 
body comprised of the following membership organizations: The State of 
Alaska, Alaska Primary Care Association, the Alaska Native Tribal 
Health Consortium, the Alaska Mental Health Trust Authority, the Alaska 
Native Health Board, the Indian Health Service, the Alaska State 
Hospital and Nursing Home Association, and the University of Alaska.
    Projects are recommended for funding by Commission staff if they 
demonstrate project readiness, which includes the completion of all due 
diligence requirements. This includes an approved business plan, 
community plan, site plan checklist, completed 100% design, 
documentation of cost share match, and realistic ability to move the 
project forward in a given construction season.
    In addition to construction challenges, the health program has 
indicated that a major sustainability risk to health projects is 
workforce recruitment and retention. Recommendations on this challenge 
are made in the ``Other Issues'' section of the Work Plan.
    Additionally, the Health Program is committed to assisting in the 
discussion regarding access to primary care facilities and services for 
veterans. The Health Steering Committee will engage in discussions 
about this issue during FY 09.

Training Program

    In a majority of rural communities unemployment rates exceed 50% 
and personal capita income rates are over 50% below the national 
average. When job opportunities in rural Alaska do become available, 
rural residents often lack the skills, licensing and certifications 
necessary to compete and often lose those jobs to people from outside 
the community, region or even state. With the limited number of jobs 
available, the Commission believes it is imperative to ensure that 
local residents have the skills and essential certifications necessary 
to work on the construction of projects funded by the Denali 
Commission. Through the Training Program, the Commission builds 
sustainability into their investments by providing training for the 
long term management, operations and maintenance of these facilities 
and thus increasing local capacity and employment.
    The Training Program's mission is to build a community's capacity 
through training and increase the employment and wages of unemployed or 
underemployed Alaskans. The Training Program's primary purpose is to 
support the Commission's investment by providing training for the 
careers related to the Commission infrastructure programs (such as 
Energy and Health Facilities).
    The Training Program is also guided by the following principles:
     Priority on training for Denali Commission infrastructure, 
projects and priorities
     Training will be tied to a job
     Training for construction, operations and maintenance for 
other public infrastructure
     Training will encourage careers not short term employment
    Each year, the Commission dedicates training funds to careers 
associated with infrastructure development and long-term sustainability 
in rural Alaska. The Commission has funded construction, operations and 
maintenance training in communities statewide with large success.
    The Commission anticipates that the general priority areas of 
construction, operations and maintenance of Commission Projects; 
management training for Commission Projects; youth initiatives that 
support employability skills; and construction, operations and 
maintenance training of ``other public infrastructure'' will continue 
to be funded in FY09. These projects are selected through a competitive 
Request for Grant Application (RGA) process with partners, and at the 
recommendation of Commission staff, and policy guidance and priority 
areas for funding are set by the Training Advisory Committee (TrAC).
    In 2008, the TrAC recommended several new initiatives for the FY09 
Work Plan. These new initiatives are explained in the following 
paragraphs.
    The Commission and the TrAC recognize the threat of out migration 
due to high costs of living and joblessness in Alaska communities. For 
this reason, the Training Program recommends expanding its priorities 
to include ``Funding `other' training that contributes to the 
survivability of a community''. However, funding for these projects 
will be facilitated through the RGA competitive process and funding 
will be substantially less than the other priority areas.
    The Commission and TrAC support regional employment and training 
entities and recommend a shift of workforce development ownership and 
responsibility in that direction. These local training entities know 
first-hand the workforce needs and challenges and resources available. 
The TrAC recommended that funding be directed to Regional Training 
Centers/Campuses, Community Development Groups (CDQ), Regional Health 
Corporations and rural Job Centers for training related to Denali 
Commission investments.
    Historically the Commission has provided funding directly to 
organizations that are able to deliver results in the priority areas as 
described above. These organizations have typically been selected by 
the Commission directly or through competitive requests for proposals 
managed by partner organizations. This process is recommended to 
continue in the FY09 Work Plan.

Transportation

    Section 309 of the Denali Commission Act 1998 (amended), created 
the Commission's Transportation Program, including the Transportation 
Advisory Committee. The advisory committee is composed of nine members 
appointed

[[Page 74157]]

by the Governor of the State of Alaska including the Chairman of the 
Denali Commission; four members who represent existing regional native 
corporations, native nonprofit entities, or tribal governments, 
including one member who is a civil engineer; and four members who 
represent rural Alaska regions or villages, including one member who is 
a civil engineer.
    The Transportation Program addresses two areas of rural Alaska 
transportation infrastructure, roads and waterfront development. There 
is a solid base of 114 projects underway, with the FY09 project 
nomination and selection process likely to add another 15 to 20 
projects. Up to 10 projects currently in the design phase in the 
Commission program will also move to construction in FY09.
    There is a consensus amongst agencies and communities that the 
Transportation Program is successfully addressing improvements to local 
and regional transportation systems. This is largely a function of the 
Transportation Advisory Committee's success at project selection and 
monitoring, and the success of the program's project development 
agencies.
    The program is generally a competitively-bid contractor or 
materials-based system grounded in Title 23 CFR. These strict project 
development and construction rules have presented some challenges to 
the Denali Commission's ability to respond quickly to targets of 
opportunity, but they have also had the positive effect of ensuring 
project design and construction is executed at a professional level. 
The program operates under a reimbursable payment system that requires 
local and state sponsors pay close attention to accounting procedures 
prior to their payments to contractors and vendors. This system helps 
ensure project payments are eligible when submitted to the Commission.
    Four important trends are emerging as the program enters its fourth 
year of operations:
     Fewer project partners, with fully developed project 
development capabilities
     Narrowing focus on core project types
     Commission's use of State of Alaska General Funds to match 
Title 23 CFR funds
     Preparation for federal highway reauthorization 
legislation

Project Partners

    As the transportation program began its work in FY 2006, the 
Commission, responding to local and regional interests sought to 
encourage local sponsor project development through tribal governments 
and regional non profits, cities and boroughs, as well as traditional 
state and federal transportation agencies.
    Through experience, the level of project management oversight 
needed for small cities and tribes to succeed in the Title 23 CFR 
environment is not sustainable under the limited personnel resources 
available to the Commission. Therefore, partnerships with state and 
federal transportation agencies will increasingly become the 
Commission's primary project development partners; they have the level 
of expertise and resources needed to successfully execute project 
development.

Core Project Types

    As the transportation program got underway in FY06, a wide array of 
rural transportation projects was undertaken. As the road program has 
evolved under the guidance of the Transportation Advisory Committee, 
the original emphasis on local street improvements has been confirmed. 
Local street improvements in villages, including board roads in tundra 
communities are a necessary focus area. While a mix of projects is 
still likely, it is clear that local roads, sometimes including access 
between communities and/or access to local resources, including gravel 
and rock, will increasingly become the focus of the road program.
    In the waterfront development program, there will continue to be 
limited contributions to major small boat harbor projects and regional 
port developments. In these cases, the Commission is often providing 
needed funds in the range of $500,000-1,000,000 for projects with other 
fund sources in the range of $4,000,000-12,000,000. There is currently 
an array of these successful projects underway and it is expected that 
there will continue to be a mix of these projects in the program.
    However, the program will specifically increase its focus on barge 
landings at rural communities. These projects range from a couple of 
mooring piling to secure a barge, to small dock structures, depending 
on community size and barge operation characteristics. The value of 
these structures lies in improved fuel/freight transfer operations and 
improved worker and environmental safety. The Commission and U.S. Army 
Corps of Engineers have prepared a barge landing analysis that under 
review at this time, with the final report due in December 2008. This 
work has turned out to be an excellent analysis of barge operation 
needs and it is forming the basis of a design and construction program. 
The universe of need for the first generation of projects is in the 
range of $40,000,000.
    For both road and waterfront development projects, a continuing 
planning effort, especially through regional tribal non-profits like 
Kawerak, Inc. and the Alaska Village Council Presidents, will provide 
valuable information on future program needs.

State General Fund Match

    Federal Highway Authority (FHWA) and Federal Transit Administration 
(FTA) funds require a match of 9-20%. As the program got underway in FY 
2006, it became apparent that the need to provide match funds severely 
limited the types of projects the Commission could undertake.
    In FY 2007, the state legislature, with information from the 
Commission and guidance from Alaska Department of Transportation and 
Public Facilities (DOT&PF) leadership at that time, appropriated 
$4,500,000 to DOT&PF for the purpose of providing match funds to 
Commission projects. This appropriation has been critical to the 
success of the Commission's effort to address local street and barge 
landing projects where the need is great, but the community resources 
to provide sometimes substantial match is often limited.
    Using a quarterly report/request method, the Commission provides a 
list of projects underway to DOT&PF. Upon approval, DOT&PF transfers 
funds to an account at the Commission, which is subsequently assigned 
to selected projects. Again, this single action by the State of Alaska 
has been critical to being able to provide transportation improvements 
to smaller communities.
    There are currently informal discussions with DOT&PF regarding the 
potential for a separate appropriation to provide for joint funding 
between the Commission and DOT&PF for state-owned rural roads. This may 
be an opportunity to expand what has been a successful program of 
upgrading and surfacing DOT&PF roads in small communities like 
Cantwell, Eagle, Circle and Tanana.

Highway Legislation Reauthorization

    The Safe, Accountable, Flexible, Efficient Transportation Act: A 
Legacy for Users (SAFETEA-LU) expires at the end of FY 2009. Due to 
significant transportation policy and program discussions underway in 
Congress, it is likely that continuing resolutions will fund existing 
programs at FY08 or FY09 levels for at least FY10 and likely FY11.

[[Page 74158]]

    In the meantime, the Commission is working with FHWA and FTA to 
provide information regarding the emerging focus on local roads and 
barge landing projects. Both agencies recognize that the Commission's 
transportation program is addressing these categories of projects in a 
systematic and statewide manner. There also appears to be a consensus 
that it is appropriate to try to address these program elements 
directly in new highway funding legislation. Other efforts to address 
more efficient funding transfers between the Commission and Western 
Federal Lands Highway Division (WFLHD) are also underway.

Solid Waste

    The goal of the solid waste program at the Denali Commission is to 
provide funding to address deficiencies in solid waste disposal sites 
which threaten to contaminate rural drinking water supplies. Solid 
waste handling and disposal is one of the most under-served arenas in 
the context of rural Alaska's environmental and public health.
    The program employs a competitive RFP process to select and 
identify projects, and has utilized a multidisciplinary review panel to 
ensure that projects meet all Denali Commission due diligence and 
policy requirements. The Commission intends to utilize this same 
process for selection of FY09 projects.
    The Rural Alaska Community Action Program is a program partner with 
the Denali Commission Solid Waste Program. The program also coordinates 
with USDA Rural Development's Water and Environmental Program and the 
U.S. Environmental Protection Agency.

Teacher Housing

    Teaching in rural Alaska can be one of the most rewarding and 
challenging professions. A critical issue for rural teachers is finding 
safe, affordable housing during the school year. Housing availability 
varies by community from newer adequate homes, to old housing units 
with multiple safety and structural problems, to a lack of enough 
available housing, requiring teachers to double-up or even live in the 
school.
    Teacher turnover rates are high in rural Alaska, with many teachers 
citing unavailable or inadequate housing as a factor in their decision 
to move. The quality of education received by students is impacted by 
teacher retention. By improving the availability and quality of housing 
for teachers, the Commission strives to also increase the quality of 
education received by the next generation of Alaskans.
    In FY04, Congress directed the Commission to address the teacher 
housing needs in rural Alaska. The Commission launched a statewide 
survey of 51 school districts and rural education attendance areas to 
identify and prioritize the teacher housing needs throughout the state. 
Urban districts in Anchorage, Fairbanks, Mat-Su and Juneau were not 
included in the survey.
    The Commission utilizes a program partnership model to implement 
the teacher housing program. An annual RFP process identifies eligible 
projects and other funding sources, such as debt service, available to 
fill the gap between the project's capacity to carry debt and the total 
development cost of the project. Acquisition, rehabilitation, new 
construction, and multi-site rehabilitation are eligible development 
activities under this program.
    In FY09 the Commission will expand its teacher housing program to 
include housing for health care professionals. This change will be 
administered through the Commission's program partner, the Alaska 
Housing Finance Corporation (AHFC), and its Greater Opportunity for 
Affordable Living (GOAL) process. This expansion shall include the 
following provider types: mid-level providers, nurses, mental and 
dental health specialists and health aides.

Economic Development

    Since its earliest days as a territory of the United States, Alaska 
has contributed to the economy of America, largely through supply of 
raw materials or partially processed products. Now Alaska's abundant 
natural resources, from fossil fuel and mineral products to timber and 
fish, must compete in the global marketplace. Innovation and 
entrepreneurship have become critical to business success.
    One of the purposes of the Commission is economic development. The 
Commission firmly believes that sustainable economic development for 
Alaska's rural communities, like that of the rest of America, will be 
generated in the private, commercial sector, not within government. To 
that end, the Commission supports the development of public 
infrastructure upon which the private sector creates jobs and wealth, 
and helps ensure that good businesses and business ideas have a chance 
to become long-term, self-sustaining enterprises.
    Over the history of the Program, the Commission has supported and 
advanced a wide-array of economic development program activities 
ranging from community profile mapping to supporting innovative models 
for lending, and equity investment in Alaska.
    The Program is guided by Commission staff and the Economic 
Development Advisory Committee, which provides general policy guidance 
and funding recommendations in broad categories.

Other Policy Issues

Multi-Use Facilities

    At this time the Commission is not undertaking a stand-alone 
program for multi-use facilities. However, as opportunities arise in 
FY09 for the Commission to leverage federal funds for combined use 
facilities or to take advantage of placing community infrastructure, 
such as clinical facilities, within the confines of existing community 
buildings the Commission may utilize program funds for such efforts. 
Projects will be selected based on the opportunity for cost savings, 
construction readiness and correlation to existing Commission program 
activities. Funds will not be used to identify stand-alone multi use 
projects.

Pre-Development

    The Commission intends to continue to engage in the Pre-Development 
program in FY09. Pre-Development is a joint collaboration between the 
Alaska Mental Health Trust Authority, the Denali Commission, The 
Foraker Group, and the Rasmuson Foundation to assist organizations with 
development of plans for successful capital projects.
    The funding agencies are concerned that inadequate planning during 
the initial project development phase can result in projects that are 
not sustainable in the long term. The Pre-Development Program was 
created to provide guidance and technical assistance to ensure that 
proposed projects: meet documented need, are consistent with strategic 
and community plans, consider opportunities for collaboration, have 
appropriate facility and site plans and realistic project budgets, are 
financially sustainable and will not negatively impact the 
sustainability of the proposing organization. Through this partnership 
an agency's capital project is better equipped to proceed.

Strategic Planning and Agency Evaluation

    In FY09 the Commission will be creating an on-going, agency-wide 
evaluation system to measure the outcomes of Commission programs. It is 
anticipated that this work will begin January of 2009, and would be 
designed to provide by empirical and qualitative data regarding 
Commission programs,

[[Page 74159]]

projects and overall goal accomplishments in a broad set of evaluation 
criteria. It is the Commission's intent to maintain high-level measures 
that are correlated to the Commission's goals related to improving 
access, reducing cost and improving the quality of services and 
facilities across Alaska. Program Advisory Committees, staff and 
Commissioners will play a critical role in shaping this evaluation 
methodology.
    Specific evaluation and strategic planning undertakings include the 
following:
     Adoption and implementation of program missions and 2-3 
key output and outcome measures for each program.
     Development, draft, and application of strategic plan in 
accordance with GPRA provisions and Denali Commission needs.
     Production of annual performance plan per OMB 
requirements.
     Establishment of processes to support performance 
measurement improvements.
    Such processes include:
     Compilation and maintenance of projects by community,
     Mechanism to obtain feedback about impact of projects,
     Semi-annual assessment by key staff and management of 
long- and short-term performance by program, and
     In-depth and comprehensive evaluation of dedicated program 
annually.

Recruitment and Retention of Health Workers

    Alaska Rural Human Resources Collaborative (ARHRC) provided 
presentations to both the Health Steering Committee and the Training 
Subcommittee in 2008. Both advisory committees support the concept 
which develops a system for recruitment and temporary staffing of 
health professionals. Seed funding in the amount of $250,000 is needed 
at this time, with startup funds in the amount of $1.2m over the next 
year. This Work Plan includes a challenge grant of up to $250,000 for 
this collaborative project. This funding will be provided to the 
project from the Energy and Water Appropriations (Base) and will 
include an incentive for Regional Health Corporation and other 
financial contributors to provide funding (challenge grant). In 
conclusion, this initiative cannot be funded through either the 
Training Program or the Health Program due to restricted funding 
requirements.

    Dated: November 25, 2008.
George J. Cannelos,
Federal Co-Chair.
[FR Doc. E8-28810 Filed 12-4-08; 8:45 am]
BILLING CODE 3300-01-P