[Federal Register Volume 74, Number 62 (Thursday, April 2, 2009)]
[Notices]
[Pages 14968-14974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7382]



[[Page 14968]]

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DENALI COMMISSION


Fiscal Year 2009 Revised Draft Work Plan

AGENCY: Denali Commission.

ACTION: Denali Commission fiscal year 2009 revised 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 in 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 revised draft 
Work Plan for Federal fiscal year 2009.

DATES: Comments and related material must be received by May 3, 2009.

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

FOR FURTHER INFORMATION CONTACT: Adison Smith, 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 over 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.
    However, for the first time in nearly ten years the Commission's 
annual appropriations have been significantly reduced. As a result the 
Commission will be able to fund fewer critical infrastructure projects 
in the most remote communities, have limited resources to fund economic 
and workforce development initiatives, and be forced to make 
challenging program and policy decisions regarding the prioritization 
of projects that are critical foundations of community viability and 
sustainability.
    At the same time 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 round, 
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 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 pressing 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 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. Our interagency Planning Work Group, for example, oversees 
relocation efforts in several communities, and the Commission funded a 
relocation community plan last year.

[[Page 14969]]

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 alter or 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.
    The Work Plan is adopted on an annual basis in the following 
manner, which occurs sequentially as listed:
     Commissioners first provide a draft version of the Work 
Plan to the Federal Co-Chair.
     The Federal Co-Chair approves the draft Work Plan for 
publication in the Federal Register providing an opportunity for a 30-
day period of public review and written comment. During this time the 
draft 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).
     Public comment concludes and Commission staff provides the 
Federal Co-Chair with a summary of public comment and recommendations, 
if any, associated with the draft Work Plan.
     If no revisions are made to the draft the Federal Co-Chair 
provides notice of approval of the Work Plan to the Commissioners, and 
forwards the Work Plan to the Secretary of Commerce for approval; or, 
if there are revisions the Federal Co-Chair provides notices of 
modifications to the Commissioners for their consideration and 
approval, and upon receipt of approval from Commissioners, forwards the 
Work Plan to the Secretary of Commerce for approval.
     The Secretary of Commerce approves the Work Plan.
    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.
    Written public comments regarding the FY09 Revised Draft Work Plan 
may be submitted via e-mail, fax or hard copy to the following by Close 
of Business (COB) May 3, 2009: Ms. Adison Smith, Denali Commission, 510 
L Street, Suite 410, Anchorage, AK 99501. [email protected]. Phone: 
907.271.1640. Fax: 907.271.1415.

FY 09 Appropriations Summary

    The Omnibus Bill was approved by Congress on March 10, 2009, and 
was signed by President Obama on March 11, 2009. The Omnibus Bill 
provides significantly different appropriations to the Commission then 
the FY09 Continuing Resolution, which the first draft of the FY09 Work 
Plan was based on.
    The Denali Commission has historically received several Federal 
funding sources. These fund sources are governed by the following 
general principles:
     In FY 2009 no project specific earmarks were defined.
     Energy and Water Appropriations (commonly referred to as 
Commission ``Base'' funding) are eligible for use in all programs, but 
have 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 be 
moved to the Economic Development Program.
    Final transportation funds received may be reduced due to agency 
modifications, reductions and fees determined by the U.S. Department of 
Transportation. Final program available figures will not be provided 
until later this spring.
    Final USDA-Rural Utility Services (RUS) funds received may be 
reduced based on the amount made available to the Commission. 
Historically, the Commission has received ~50% of the total RUS funds 
available nationally. This year RUS is receiving $17.5 MM for the 
national program, and the Commission is using historic funding

[[Page 14970]]

percentages to provide the appropriations and program available 
estimate for RUS in the FY09 Work Plan and funding chart below. Final 
RUS figures will not be provided until later this spring.
    All Energy and Water Appropriation (Base) funds, including 
operational funds, designated as ``up to'' may be reassigned to the 
Legacy Energy program (Bulk Fuel and Rural Power System Upgrades 
(RPSU)) if they are not fully expended in a program component area.
    All U.S. Department of Health and Human Services--Health Resources 
and Services Administration (HRSA) funds designated as ``up to'' may be 
reassigned to the primary care clinic program if they are not fully 
expended in a program component area.
    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.
    The table below provides the following information, by fund source:
     Total FY 09 Budgetary Resources provided in the Omnibus 
Bill:
    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 funds are identified by 
their source name (i.e., ``Energy and Water Appropriation; USDA, Rural 
Utilities Service, etc.). The grand total, for all appropriations 
appears at the end of the chart.
     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. Traditionally, the Commission's overhead rate has been 
limited to 5%, except in the case of RUS funds, where it is limited to 
4%. The following appropriations language for the Base funds in FY09 
allows the Commission to retain more than 5% of the Base for 
operational activities as it deems appropriate and prudent: ``* * * not 
withstanding the limitations contained in section 306(g) of the Denali 
Commission Act of 1998.'' The grand total, for all program available 
funds appears at the end of the chart.
     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 Revised Draft FY09 Work Plan recommends, within each program fund 
source for program components.
     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 fund 
source. The subtotal must always equal the Total FY 09 Program 
Available Funding.

------------------------------------------------------------------------
      Denali Commission FY09 Funding Table                Totals
------------------------------------------------------------------------
FY 09 Energy & Water Appropriation.............              $11,800,000
For expenses of the Denali Commission including
 the purchase, construction, and acquisition of
 plant and capital equipment as necessary and
 other expenses, $11,800,000, to remain
 available until expended, notwithstanding the
 limitations contained in section 306(g) of the
 Denali Commission Act of 1998.
FY 09 Energy & Water Appropriations (``Base'')--               8,800,000
 Program Available (less Commission overhead--
 not limited to 5% in FY09 and designated as
 ``up to'')....................................
    Energy Program: bulk fuel, RPSU, etc.......                5,800,000
    Energy Program: alternative & renewable              850,000 (up to)
     energy....................................
    Pre-Development Program....................                  150,000
    Teacher Housing & Health Professional                      1,500,000
     Housing Program: design & construction....
    Economic Development Program: various......          250,000 (up to)
    Healthcare Infrastructure Initiatives......          250,000 (up to)
                                                ------------------------
        sub-total $............................                8,800,000
FY 09 USDA, Rural Utilities Service (RUS)--                    8,925,000
 Estimate......................................
FY 09 USDA--Rural Utilities Service (RUS)--                    8,568,000
 Program Available (less 4% overhead)--Estimate
    Energy Program: high cost energy                           8,568,000
     communities...............................
                                                ------------------------
        sub-total $............................                8,568,000
FY 09 Trans Alaska Pipeline Liability (TAPL)                   5,830,940
 Trust.........................................
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                       19,642,000
 Administration (HRSA).........................
Provided further, that of the funds provided,
 $19,642,000 shall be provided to the Denali
 Commission as a direct lump payment pursuant
 to Public Law 106-113.
FY 09 DHHS--Health Resources & Services                       18,659,900
 Administration (HRSA)--Program Available (less
 5% Commission overhead).......................
    Health Program: Primary Care Clinics--                    14,758,102
     Design, Planning, and Construction........
    Health Program: Behavioral Health..........        1,017,831 (up to)
    Health Program: Primary Care in Hospitals..        1,526,746 (up to)
    Health Program: Elder Housing/Assisted             1,357,221 (up to)
     Living Facilities--Construction...........
                                                ------------------------
        sub-total $............................               18,659,900
FY 09 US Department of Labor (DOL).............                3,378,000
There is authorized to be appropriated such
 sums as may be necessary to the Denali
 Commission through the Department of Labor to
 conduct job training of the local workforce
 where Denali Commission projects will be
 constructed. $3,378,000 for the Denali
 Commission, which shall be available for the
 period July 1, 2009 through June 30, 2010.
FY 09 US Department of Labor (DOL)--Program                    3,209,100
 Available (less 5% Commission overhead).......

[[Page 14971]]

 
    Training Program: Various..................                3,209,100
                                                ------------------------
        sub-total $............................                3,209,100
FY 09 Federal Transit Administration (FTA)--                  $5,000,000
 Estimate......................................
$5,000,000 from section 3011 (FTA) for docks
 and harbors;
FY 09 Federal Highway Administration (FHWA)--                 21,900,000
 Estimate......................................
For necessary, expenses for the Denali Access
 System Program as authorized under Section
 1960 of Public Law 109-59, $5,700,000, to
 remain available until expended and $4,800,000
 from section 1934 (FHWA) for docks and
 harbors; and $11,400,000 from section 1960
 (FHWA) for Denali Access System Program.
FY 09 Transportation--Program Available (less                 25,555,000
 5% Commission overhead)--Estimate.............
    Transportation Program: Docks & Harbors....                5,000,000
    Transportation Program: Roads..............               20,555,000
                                                ------------------------
        sub-total $............................               25,555,000
FY 09 USDA, Solid Waste........................                  434,000
There is hereby appropriated $434,000 to remain
 available until expended for the Denali
 Commission to address deficiencies in solid
 waste disposal sites which threaten to
 contaminate rural drinking water supplies.
FY 09 USDA--Solid Waste--Program Available                       412,300
 (less 5% Commission overhead).................
    Solid Waste Program: planning, design and                    412,300
     construction..............................
                                                ------------------------
        sub-total $............................                  412,300
                                                ------------------------
            TOTAL FY 09 Appropriations--                      76,909,940
             Estimate..........................
                                                ========================
            TOTAL FY 09 Program Available--                   70,743,693
             Estimate..........................
------------------------------------------------------------------------

FY 09 Program Details & General Information

    The following section provides narrative discussion, by each of the 
Commission Programs identified for FY09 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 last 
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 also includes a general summary of other program 
and policy 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 
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.

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 reliable and 
efficient 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 $850,000 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

[[Page 14972]]

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) 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 Investment Policy 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 policy 
considerations, site availability, the timing of funding decisions, 
etc.
    The Energy Program anticipates the revised Commission policy 
document, which was adopted in November of 2008, will impact the 
current project prioritization and development process. Specifically 
the Investment Guidance section that promotes regional planning and 
prioritizes regional or multi-community connectivity versus stand alone 
projects, evaluates similar infrastructure projects in communities with 
populations less than 100 residents, and prioritization of projects 
that include a cost share match. The policies will change the 
development and design of several communities on the Bulk Fuel Upgrade 
and Rural Power System Upgrade needs lists which meet the definition of 
having ``stand alone facilities'' and/or ``under 100 residents''. 
Projects that meet these definitions will require communities and 
partner organizations to develop multi-community solutions (i.e. 
Interties, cooperative management or regional management) before 
construction can proceed. This may lead to delays in projects on the 
needs list or projects not being constructed in several communities. 
Historically, the Bulk Fuel and Rural Power System Upgrade programs 
have had no cost share match requirements, under the new policy 
projects with cost share will be prioritized over projects without.
    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.

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.
    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, the Rasmuson Foundation 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.
    The Health Facilities Program anticipates the Commission policy 
document, which was adopted in November 2008, will impact the clinic 
prioritization process, specifically for those communities located on 
the road system, and within proximity to one another, and for 
communities with populations less than 100. In 2008 the program 
identified small communities as an area for improvement in terms of 
cost containment and sustainability.
    Consequently, for communities with populations of less than 100, 
only projects already in the pipeline have been proceeding while the 
Commission has funded pilot projects to design a more cost effective, 
potentially re-locatable clinic prototype to serve small communities. 
Finally, an emphasis on renovation over new construction has emerged as 
a means for overcoming high construction costs.
    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 FY09 Work Plan.

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

[[Page 14973]]

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 communities 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.

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 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 Transportation Program anticipates the adopted Commission 
policy document will impact the project selection process, specifically 
for those communities located within proximity to one another, and for 
communities with populations less than 100.
    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.
    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 
Corp of Engineers have prepared a barge landing analysis that is 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.

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 underserved 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

[[Page 14974]]

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 the 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.

Other Program and Policy Issues

    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.
    Pre-Development has historically been funded out of the 
Commission's operational budget; however, given its direct correlation 
and benefit to program functions, it has been moved to the program 
funding section of the Work Plan. The amount of $150,000 will provide 
funding for the pre-development program for the last quarter of FY09, 
and FY10.

Strategic Planning & 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, 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 FY 2009-2015 
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.

Healthcare Infrastructure Initiatives

    Recognizing the significant need for electronic health records 
(EHRs) and health technology infrastructure in Alaska, and the funding 
that has been made available for this initiative nationally through the 
American Recovery and Reinvestment Act (ARRA) and the Obama 
administration the Commission will provide up to $250,000 to the Alaska 
Health Information Network (AHIN). These funds shall be used in 
conjunction with program funds already secured by AHIN to carry out EHR 
and health information technology activities in Alaska. Additionally, 
the funds provided by the Commission shall be used to support 
operational and administrative activities undertaken by AHIN in 
coordinating, implementing and developing a state-wide EHR and 
technology infrastructure system for Alaska.

    Dated: March 27, 2009.
George J. Cannelos,
Federal Co-Chair.
[FR Doc. E9-7382 Filed 4-1-09; 8:45 am]
BILLING CODE 3300-01-P