[Federal Register: May 21, 2004 (Volume 69, Number 99)]
[Notices]
[Page 29275-29284]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my04-60]
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DENALI COMMISSION
5-Year Strategic Plan
Introduction
The Denali Commission Act of 1998 (Title III, Pub. L. 105-277, 42
U.S.C. 3121) created a State-Federal partnership to address crucial
needs of rural Alaskan communities, particularly isolated Native
villages and other communities lacking access to the national highway
system, affordable power, adequate health facilities and
[[Page 29276]]
other impediments to economic self sufficiency. Guided by five
Commissioners representing statewide non-governmental organizations,
the unprecedented results to date testify to the efficacy of inter-
agency teamwork, effective training, and the setting of high
sustainability standards by those closest to the problems at hand. The
Commission is a highly effective catalyst for enhanced collaboration
among Federal, State, tribal and local governments as well as private
sector, non-profit and other interests. The over arching goal of
enabling economic self sufficiency is based on effective community
comprehensive planning, and regional support.
This document will guide the reader through:
An introduction of the Denali Commission's purposes and
mission.
The Denali Commission's Work Plan for Fiscal Year 2005.
The 5-year strategic plan.
Purpose of the Commission
The Denali Commission Act of 1998, as amended (Division C, Title
III, Pub. L. 105-277) states that the purposes of the Denali Commission
are:
To deliver the services of the Federal Government in the most cost-
effective manner practicable by reducing administrative and overhead
costs.
To provide job training and other economic development services in
rural communities, particularly distressed communities (many of which
have a rate of unemployment that exceeds 50 percent).
To promote rural development, provide power generation and
transmission facilities, modern communication systems, bulk fuel
storage tanks, water and sewer systems and other infrastructure needs.
Vision
Alaska will have a healthy well-trained labor force working in a
diversified and sustainable economy that is supported by a fully
developed and well-maintained infrastructure.
Mission
The Denali Commission will partner with tribal, Federal, State, and
local governments and collaborate with all Alaskans to improve the
effectiveness and efficiency of government services, to develop a well-
trained labor force employed in a diversified and sustainable economy,
and to build and ensure the operation and maintenance of Alaska's basic
infrastructure.
Values
Catalyst For Positive Change--The Commission will be an
organization through which agencies of government, including Tribal
governments, may collaborate, guided by the people of Alaska, to
aggressively do the right things in the right ways.
Respect For People and Cultures--The Commission will be guided by
the people of Alaska in seeking to preserve the principles of self-
determination, respect for diversity, and consideration of the rights
of individuals.
Inclusive--The Commission will provide the opportunity for all
interested parties to participate in decision-making and carefully
reflect their input in the design, selection, and implementation of
programs and projects.
Sustainability--The Commission will promote programs and projects
that meet the current needs of communities and provide for the
anticipated needs of future generations.
Accountability--The Commission will set measurable standards of
effectiveness and efficiency for both internal and external activities.
Goals
The goals generated by the strategic planning process define
conditions that must be created to realize the Denali Commission
Vision.
1. All Alaska, no matter how isolated, will have the physical
infrastructure necessary to protect health and safety and to support
self-sustaining economic development.
2. Local residents in Alaskan communities will be provided the
opportunity to acquire the skills and knowledge necessary to be
employed on the construction, operation and management jobs created by
publicly funded physical infrastructure in their communities.
3. Alaskans will have access to financial and technical resources
necessary to build a cash economy to supplement the existing
subsistence economy.
4. Federal and State agencies will simplify procedures, share
information, and improve coordination to ensure equitable delivery of
services to all Alaskan communities.
Implementation Guiding Principles
Projects must be sustainable. To assist with the
implementation of this principle, an Investment Strategy has been
drafted to ensure that the level of funding provided by the Denali
Commission to infrastructure projects in small, declining and/or
environmentally threatened communities serves a public purpose and is
invested in the most conscientious and sustainable manner possible.
(The Investment Strategy is available on the Denali Commission Web
site: http://www.denali.gov)
The Denali Commission will generally not select individual
projects for funding nor manage individual projects, but will work
through existing State, Federal or other appropriate organizations to
accomplish its mission.
Projects in economically distressed communities will have
priority for Denali Commission assistance.
Projects should be compatible with local cultures and
values.
Projects that provide substantial health and safety
benefit, and/or enhance traditional community values, will generally
receive priority over those that provide more narrow benefits.
Projects should be community-based and regionally
supported.
Projects should have broad public involvement and support.
Evidence of support might include endorsement by affected local
government councils (municipal, Tribal, IRA, etc.), participation by
local governments in planning and overseeing work, and local cost
sharing on an ``ability to pay'' basis.
Priority will generally be given to projects with
substantial cost sharing.
Priority will generally be given to projects with a
demonstrated commitment to local hire.
Denali Commission funds may supplement existing funding,
but will not replace existing Federal, State, local government, or
private funding.
The Denali Commission will give priority to funding needs
that are most clearly a Federal responsibility.
Denali Commission funds will not be used to create unfair
competition with private enterprise.
Additional Guiding Principles for Infrastructure:
A project should be consistent with a comprehensive
community or regional plan.
Any organization seeking funding assistance must have a
demonstrated commitment to operation and maintenance of the facility
for its design life. This commitment would normally include an
institutional structure to levy and collect user fees if necessary, to
account for and manage financial resources, and having trained and
certified personnel necessary to operate and maintain the facility.
Additional Guiding Principles for Economic Development:
Priority will be given to projects that enhance employment
in high unemployment areas of the State (economically distressed), with
emphasis on sustainable, long-term local jobs or career opportunities.
Projects should be consistent with statewide or regional
plans.
[[Page 29277]]
The Denali Commission may fund demonstration projects that
are not a part of a regional or statewide economic development plan if
such projects have significant potential to contribute to economic
development.
Additional Guiding Principles for Training:
Training should increase the skills and knowledge of local
residents to become employed on jobs created by the Government's
investment in public facilities in a community.
Intergovernmental Coordination--The Memorandum of Understanding:
The Denali Commission Act recognizes that our mission can be
accomplished only through a collaborative, coordinated effort by the
State of Alaska and key Federal agencies. The State of Alaska also
recognizes benefits can be furthered if State agencies work in a
collaborative and coordinated effort. With this in mind, Denali
Commission has drawn up a Memorandum of Understanding (MOU), which more
than 20 agencies have agreed to, that outlines some points of agreement
that will facilitate the collaboration and coordination necessary for
achievement of the purposes of the Denali Commission and related
missions of agencies who are parties to the MOU.
The points of the MOU are
Sustainability. Federal and State agencies recognize the
importance of utilizing sustainability principles when investing in
public infrastructure projects
Regional Strategies. Systematic planning and coordination
on a local, regional and statewide basis are necessary to achieve the
most effective results from investment in infrastructure, economic
development, and training.
Community Plans. A single community strategic plan should
be sufficient to identify and establish the priorities of each rural
community.
Sharing Information. Sharing information increases
efficiencies and decreases duplication of services by State and Federal
agencies.
Economic Development. Economic development facilitates and
supports the growth of self-sufficient communities.
Non-Profit Organizations and Other Community
Organizations. Non-profit and other organizations in Alaska are a
valuable resource for State and Federal Agencies. They provide regional
planning, program support and partnering opportunities
Workforce Development (Vocational and Career Training).
Workforce development is a critical component to building sustainable
public infrastructure and self-sufficient communities in Alaska.
Fiscal Year 2005 Work Plan
The Commission has determined that the scope and scale of
infrastructure issues facing rural Alaska are staggering. The total of
known basic infrastructure needs for Alaskan communities is estimated
to be over $13 billion. These infrastructure needs include:
Infrastructure
Housing Construction/Development
--Multi-use Facilities
--Power Utilities
--Fuel Storage
--Drinking Water and Waste Water Facilities
--Solid Waste Management Facilities
--Health Care Facilities
--Airport Facilities
--Road and Trail Construction
--Port, Dock and Other Marine Facilities
--Telecommunications
--Community Facilities
Economic Development
--Comprehensive Planning
Job Training, Education, Capacity Building
--Comprehensive Planning
In Fiscal Year 2005, the Denali Commission will continue to
collaborate with other funding agencies and with all impacted and
interested parties to address identified needs on a priority basis. In
addition to FY05 appropriated funds of $2.5 million the Commission
expects to receive approximately $3.8 million in interest from the
Trans Alaska Pipeline Liability (TAPL) fund and $22 million from the
Department of Health & Human Services.
Prioritization of Projects for FY 2005
Of necessity, the Commission's work must be phased over a number of
years based on the urgency of competing needs and availability of
funding. The theme of rural energy, as one important prerequisite to
all other utilities and economic development, was selected as the
Commission's top priority for infrastructure funding. Primary health
care facilities were identified as the second infrastructure theme for
the Commission beginning in FY00. These two themes will continue to be
the top priorities for infrastructure funds through FY05, and the
Commission, consistent with Congressional intent, may add one or more
additional themes.
For planning purposes, the Commission has allocated a total of
$28,300,000 using the Commission's approved formula for FY05:
----------------------------------------------------------------------------------------------------------------
FY05 projected TAPL interest TAPL & FY05
funding funds combined
----------------------------------------------------------------------------------------------------------------
Bulk Fuel.............................................. ................. $3,610,000 $3,610,000
Health Clinics......................................... $20,900,000 ................. 20,900,000
Operations............................................. 3,600,000 190,000 3,790,000
--------------------
Total.............................................. 24,500,000 3,800,000 28,300,000
----------------------------------------------------------------------------------------------------------------
In accordance with the Denali Commission Code, Administrative funds
(5%) are solely the responsibility of the Federal Co-Chair. Allocation
of the balance of funds (95%) will be made by the full Denali
Commission, utilizing the guiding principles previously outlined in
this document, and priority systems designed specifically for each
budget category.
Project implementation will generally be accomplished through
State, local or Federal government entities, regulated utilities, or
non-profit organizations. It shall be the responsibility of all such
implementing organizations to comply with all applicable laws. Any
special requirements will be articulated in the funding agreement
between the Denali Commission and the funding recipient. The MOU will
serve to guide intergovernmental coordination and collaboration among
agencies.
Projects resulting from funding of infrastructure themes generally
are consistent with high priorities identified in community plans. The
existence of community plans greatly facilitates the location, design,
and completion of infrastructure projects within a community.
Performance Indicators for FY 2005
Energy:
Reduce the backlog of non-compliant bulk fuel storage
facilities in
[[Page 29278]]
rural Alaska by renovating or building a bulk fuel storage facility in
2 communities.
Health Care:
Complete construction or renovation of primary health care
facilities in 12 communities.
Financial and Technical Resources:
Produce reliable and timely performance and other
financial information from the financial management system for managing
current operations.
Prepare accurate and timely financial reports on Budget
Execution in accordance with generally accepted accounting principles
and meeting the requirements of the Office of Management and Budget and
U.S. Treasury.
Government Coordination:
Maintain administrative expenses of Denali Commission at
5% or less of appropriated funds.
Hold Denali Commission partners to the lowest reasonable
overhead costs needed to complete projects.
Work Toward the President's Management Agenda
President George W. Bush has set forth a strategy to improve
management of the Federal government through government-wide goals in
five mutually reinforcing areas:
--Human Capital
--Competitive Sourcing
--Improved Financial Management
--Expanded e-Government
--Budget and Performance Integration
The Denali Commission is making progress in these strategic areas
in the following ways.
Human Capital
The Denali Commission attempts to be innovative in its recruitment
and retention of staff. With a small permanent staff and ``on-loan''
staff from partner agencies and organizations, the Denali Commission
has a flat organization chart, making it simple for customers to reach
the staff they need to and get the answers they require, through
electronic messaging, telephone, or in-person.
An additional advantage of a small organization is the ease of
managing the accurate measurement and appropriate rewarding of staff
for performance. Denali Commission utilizes many human capital
investment-oriented strategies for retaining qualified and effective
staff, such as preventive health programs, and appropriate training.
Competitive Sourcing
As a very small agency headquarters, Denali Commission is highly
motivated, by necessity, to comply with this initiative. Although
formal assessments have not been carried out on the competitive
sourcing opportunities, Denali Commission regularly utilizes
contractors and private enterprise for many of our tasks. Examples
include development of innovative database and accounting systems,
computer maintenance, and document scanning services.
Improved Financial Management
Five of the Denali Commission permanent staff are responsible for
all operations and finance. Limited to 5% overhead, the agency has, and
will continue to, enthusiastically participate and pursue automation
and forward-thinking technology whenever possible. Through advances in
technology, we will continue to realize internal efficiencies and
increases in effectiveness.
To keep pace with the Government-Wide-Accounting (GWA) initiative,
a new accounting system was developed in FY 04. The Commission utilizes
the Veterans Affairs (VA) Financial Services Enterprise Center as
consultants on this project. This accounting system maintains the
highest quality of accuracy in reporting to OMB, Congress and the
public.
Staff are working in conjunction with other Federal agencies to
accomplish automation to the extent feasible, with Federal Treasury
payment and collection systems (IPAC, ASAP and SPS). We are currently a
pilot test site for the Internet Payment Platform (IPP) which is being
developed by Treasury for the efficient and timely payment of vendors.
Expanded E-Government
Denali Commission is committed to managing our projects more
effectively and more transparently to partners, customers and the
public. The Denali Commission Project Database is a significant step in
this direction. The Denali Commission Project Database, now operational
on our Web site, is an initiative that permeates several of the five
strategic areas of the President's Management Agenda. To enhance
project management and information sharing with our partners and the
public, Denali Commission has developed an Internet-based database of
all Commission projects. This tool is for tracking and managing Denali
Commission and partner project data. The database is built to provide
information that is easy to use, has the highest degree of integrity
and maintainability, and is accessible for all interested parties. In
keeping with the Denali Commission mission, the system allows for
collaboration to improve the effectiveness and efficiency of government
services. Within the database, managers and grantees perform on-line
reporting; provide project financial information, project photos and
other information on all Commission funded projects. Also available
within the database are priority lists of projects yet to be funded in
communities across Alaska. Across the State of Alaska, Federal, State
and local entities (including regional non-profits, health
corporations, and tribal governments) share a vision for developing a
shared, central database (or portal) to further improve the
transparency of government.
Denali Commission now has an active link to our agency Web site
located on http://www.FirstGov.gov to help citizens find information
and obtain services from that central location. We are working to place
Denali Commission grant opportunities on the http://www.Grants.gov Web
site as well. Additional e-Government projects that Denali Commission
is monitoring and will participate in include e-Travel and e-
Authentication. To maximize IT partnerships (and coordination) with
other federal agencies, Denali Commission works with the Federal
Aviation Administration (FAA) and Department of the Interior (DOI) to
support our local computer network.
Our commitment to internet and electronic payment and collection
systems is hailed by our vendors and customers, especially in this
large state with sometimes slow and unpredictable mail and telephone
(Internet) services. These systems assist with streamlining and
ensuring timely and accurate transactions.
As we build and develop strong IT infrastructure at Denali
Commission, we maintain a high level of vigilance that proper and
adequate security is set in place. Our plan for IT development always
includes an assessment of value to the public, avoidance of duplication
and the goal of transparency and accountability.
Budget and Performance Integration
The Denali Commission, by legislation, is limited to 5% overhead/
administrative rate. So, 95% of our funds go directly into making
progress toward our vision:
Alaska will have a healthy, well-trained labor force working in
a diversified and sustainable economy that is supported by a fully
developed and well-maintained infrastructure.
Denali Commission has set in motion the tools to assist the staff
in measuring
[[Page 29279]]
performance--the Project Database and the new accounting system. We
require our grantees to establish and meet milestones, and we publish
those on the Project Database. We set goals at an agency level for
construction projects reaching completion each year. That is the bottom
line that will improve the lives of the residents of Alaska. And we set
internal benchmarks for the quality and efficiency of services provided
to our customers. That keeps the Denali Commission staff on track in
prioritizing individuals' work time. We measure ourselves against these
standards constantly and check on them as a team monthly.
Strategic Plan--2005-2009
Challenges to Development and Economic Self-Sufficiency in Alaska
Geography/Climate--The State of Alaska encompasses twenty percent
of the landmass of the United States, encompassing five (5) climatic
zones from the arctic desert to moderate rain forests in the south.
Isolation--Approximately 220 Alaskan communities are accessible
only by air or small boat. Some village communities are separated by
hundreds of miles from the nearest regional hub community or urban
center. The average community is over 1,000 miles from the state
capital.
Unemployment--The economy of rural Alaska is a mix of government or
government-funded jobs, natural resource extraction and traditional
Native subsistence activities. Many rural Alaskans depend on
subsistence hunting, fishing and gathering for a significant portion of
their foods, but also depend on cash income to provide the means to
pursue subsistence activities. Cash-paying employment opportunities in
rural Alaska are scarce and are highly seasonal in many areas;
unemployment rates exceed 50% in 147 communities.
High Cost and Low Standard of Living--Over 180 communities suffer
from inadequate sanitation or a lack of safe drinking water. Residents
face high electric costs: 61 cents per kilowatt-hour for electricity in
a few communities (average in rural Alaska is approximately 40 cents
per kilowatt-hour which is over 6 times the National average of 6.75
cents) even with State subsidies.
The Commission determined that the scope and scale of
infrastructure issues facing rural Alaska are staggering. Assessment of
needs and refinement of estimates will be an ongoing process. The total
of known infrastructure needs is estimated to be over $13 billion.
Training and economic development needs have not been quantified, but
the unmet needs in these areas are also believed to be quite large.
Consequently, it is imperative that efforts to address the most
essential needs be both focused and strategic.
----------------------------------------------------------------------------------------------------------------
Funding category Category / class Needs ($) Total ($)
----------------------------------------------------------------------------------------------------------------
Infrastructure.......................... Housing Construction/Development 1,800,000,000
Power Utilities................. 300,800,000
Fuel Storage.................... 362,500,000
Drinking Water and Waste Water 650,000,000
Facilities.
Solid Waste Management (\1\)
Facilities.
Primary Health Care Facilities.. 481,000,000
Other Health Facilities......... 514,000,000
Airport Facilities.............. 1,300,000,000
Road Construction............... 8,600,000,000
Port Facilities................. 300,000,000
Telecommunications.............. (\1\)
Community Facilities............ (\1\)
Other........................... (\1\)
Subtotal........................ ................. 13,794,300,000
Economic Development.................... Comprehensive Planning.......... (\1\)
Other........................... (\1\)
Job Training, Education, Capacity Comprehensive Planning.......... (\1\)
Building.
Other........................... (\1\)
Total........................... ................. 13,794,300,000
----------------------------------------------------------------------------------------------------------------
* Supporting information for the assessed need by category is provided in Appendix A
\1\ Unknown.
Goals, Objectives and Key Activities
Goal #1:
All Alaska, no matter how isolated, will have the physical
infrastructure necessary to protect health and safety and to support
self-sustaining economic development.
Objectives:
1. Energy facilities (bulk fuel storage, power generation and
transmission) will be constructed and upgraded at a significantly
accelerated pace.
2. All Alaskans will have reasonable access to primary health care
services.
3. All Alaskans will have safe drinking water and sanitary waste
disposal systems.
4. All Alaskans will have reasonable access to telecommunication
services comparable to those available in major urban centers at
comparable costs.
5. Construction of other basic physical infrastructure including
but not limited to roads, ports, airports, and community facilities
will be accelerated on a priority basis.
Key Activities to Achieve Goals and Objectives:
Complete a statewide energy strategy to clearly identify
needs and set priorities for completion of bulk fuel storage
facilities, power generation facilities including innovative and
alternative facilities and power transmission facilities. The strategy
will identify institutional structures and measures to achieve
sustainable operation and maintenance of completed physical systems.
Complete a statewide needs assessment for primary health
care facilities and develop a system to establish priorities for
completion of needed facilities.
Collaborate with federal agencies and assist the State of
Alaska as necessary in identifying gaps in funding for physical
infrastructure that can be filled first by existing federal programs
or, if necessary, by Denali Commission funding.
[[Page 29280]]
Utilize the annual work plan development process to
allocate funds to physical infrastructure categories. Allocation of
funds to specific projects will generally be guided by statewide
priority systems and comprehensive plans developed at the community and
regional levels.
Performance Indicators:
Reduce the backlog of non-compliant bulk fuel storage
facilities in rural Alaska in 6 communities annually.
Increase the reliability, efficiency and sustainability of
power generation and/or transmission in 6 communities annually.
Complete construction or renovation of primary health care
facilities for at least 5 communities is anticipated annually.
Enter into formal agreements with State and Federal
agencies and others as appropriate to ensure accomplishment of
objectives 3-5.
Goal # 2:
Local residents in Alaskan communities will have the opportunity to
acquire skills and knowledge necessary to be employed on the
construction, operation and management jobs created by publicly funded
physical infrastructure in their communities.
Objectives:
1. Local residents will have access to skills and knowledge
training that is necessary for employment on publicly funded physical
infrastructure in their communities.
2. The Denali Commission's investment in physical infrastructure
will be protected by local residents trained to operate and maintain
facilities.
3. Workers from outside a community will not need to be imported to
fill construction, operations and maintenance jobs necessary for
publicly funded physical infrastructure.
4. Communities will benefit from the increase in earnings from
local residents employed on publicly funded physical infrastructure.
Key Activities to Achieve Goals and Objectives:
Provide funding to a coordinated training system
including, regional and local coordination, career pathway information,
specific training courses, union apprenticeship-based training and non-
union based training.
Partner with the State of Alaska, Native Non-Profit
Corporations, private sector, union-based training organizations, non-
union based training organizations and other federal agencies to create
a coordinated system to meet the training needs of local residents.
Provide financial assistance to communities and
organizations that will provide specific training to local residents to
become employed on construction, operations and maintenance jobs
created by publicly funded physical infrastructure projects.
Performance Indicators:
Increase the number of local area residents trained on
construction, operations and maintenance of Denali Commission-funded
physical infrastructure in Alaska by 5% annually.
Increase the local resident payroll on Denali Commission
funded projects by 2% annually.
Increase the annual earnings of each local resident that
completes Denali Commission funded training by 5%.
Goal # 3:
Rural Alaskans will have access to financial and technical
resources necessary to build a cash economy to supplement the existing
subsistence economy.
Objectives:
1. All Alaskans will have access to programs that provide
entrepreneurial education. Technical assistance and business services
will be available to entrepreneurs and business owners.
2. Entrepreneurs will have access to capital resources appropriate
for their circumstances including bank loans, micro loans, BIDCO loans,
venture capital, SBA loans, USDA Rural Development loans, U.S.
Department of Commerce EDA loans or grants.
3. Support access to partnership funding for community based
utilities, infrastructure and health delivery projects.
Key Activities to Achieve Goals and Objectives:
Financial assistance will be provided through the State
Department of Community and Economic Development and the First Alaskans
Foundation to assist entrepreneurs, communities and regional entities
to develop economic capacity.
Financial assistance will be provided to Alaska Growth
Capital to enable that company to make loans and provide hands on
technical assistance to entrepreneurs in economically distressed areas
of Alaska.
The Denali Commission will work with financial
institutions, foundations and other entities as appropriate to create a
revolving loan fund expressly for funding feasibility studies.
A minimum of two partnerships will be facilitated annually
leading to completed projects within 5 years.
Performance Indicators:
Minimum annual disbursement of financing by Alaska Growth
Capital to business in communities defined as distressed by the Denali
Commission will be $275,000.
Annual payroll of projects financed through Alaska Growth
Capital will be at least $90,000 and will increase annually by at least
$30,000.
A minimum of 5 feasibility studies for new business
startups in economically distressed areas of Alaska will be funded
annually from the revolving loan fund.
Goal # 4:
Federal and State agencies will simplify procedures, share
information, and improve coordination to enhance and improve the
efficiency of the delivery of services to Alaskans and the communities
in which they reside.
Objectives:
1. The Denali Commission will limit its own administrative expenses
to no more than 5% of its total budget and will ensure that all Denali
Commission partners are kept to the lowest possible overhead needed to
complete a project.
2. The Denali Commission will work to gain acceptance of a single
community developed comprehensive plan as the basis for all Federal and
State agency funding.
3. The Denali Commission will work to gain acceptance and
utilization of a single comprehensive database for information (plans
and project information) for rural Alaskan communities.
Key Activities to Achieve Goals and Objectives:
The Denali Commission will work with key State and Federal
agencies to complete and periodically update a memorandum of agreement
that outlines key actions necessary to achieve this goal.
The Denali Commission will actively engage the Alaska
Federal Executives Association, consistent with its charter, as a means
to achieve this goal.
The Denali Commission will seek the guidance and
assistance of the State Co-Chair as he/she works with the Governor's
cabinet to assist in meeting these goals and objectives.
Agreements with Denali Commission program implementation
partners will be negotiated to achieve the minimum practicable overhead
rates.
Performance Indicators:
Administrative expenses of Denali Commission will be 5% or
less.
Denali Commission partners will be held to the lowest
reasonable overhead costs needed to complete projects.
An MOU will be reviewed annually, and updated as necessary
to memorialize the commitment of Federal and State agencies to this
goal.
Progress in meeting these goals and objectives will be
documented annually.
[[Page 29281]]
Implementation Guiding Principles
Projects must be sustainable. To assist with the
implementation of this principle, an Investment Strategy has been
drafted to ensure that the level of funding provided by the Denali
Commission to infrastructure projects in small, declining and/or
environmentally threatened communities serves a public purpose and is
invested in the most conscientious and sustainable manner possible.
(The Investment Strategy is now available on the Denali Commission
website for public review and comment.)
The Denali Commission will generally not select individual
projects for funding nor manage individual projects, but will work
through existing State, Federal or other appropriate organizations to
accomplish its mission.
Projects in economically distressed communities will have
priority for Denali Commission assistance.
Projects should be compatible with local cultures and
values.
Projects that provide substantial health and safety
benefit, and/or enhance traditional community values, will generally
receive priority over those that provide more narrow benefits.
Projects should be community-based and regionally
supported.
Projects should have broad public involvement and support.
Evidence of support might include endorsement by affected local
government councils (municipal, Tribal, IRA, etc.), participation by
local governments in planning and overseeing work, and local cost
sharing on an ``ability to pay'' basis.
Priority will generally be given to projects with
substantial cost sharing.
Priority will generally be given to projects with a
demonstrated commitment to local hire.
Denali Commission funds may supplement existing funding,
but will not replace existing Federal, State, local government, or
private funding.
The Denali Commission will give priority to funding needs
that are most clearly a federal responsibility.
Denali Commission funds will not be used to create unfair
competition with private enterprise.
Additional Guiding Principles for Infrastructure:
A project should be consistent with a comprehensive
community or regional plan.
Any organization seeking funding assistance must have a
demonstrated commitment to operation and maintenance of the facility
for its design life. This commitment would normally include an
institutional structure to levy and collect user fees if necessary, to
account for and manage financial resources, and having trained and
certified personnel necessary to operate and maintain the facility.
Additional Guiding Principles for Economic Development:
Priority will be given to projects that enhance employment
in high unemployment areas of the State (economically distressed), with
emphasis on sustainable, long-term local jobs or career opportunities.
Projects should be consistent with statewide or regional
plans.
The Denali Commission may fund demonstration projects that
are not a part of a regional or statewide economic development plan if
such projects have significant potential to contribute to economic
development.
Additional Guiding Principles for Training:
Training should increase the skills and knowledge of local
residents to become employed on jobs created by the Denali Commission's
investment in public facilities in a community.
In order to protect the federal investment, training
should increase the local capacity to operate and maintain Denali
Commission funded public infrastructure.
Intergovernmental Coordination--The Memorandum of Understanding:
The Denali Commission Act recognizes that our mission can only be
accomplished through a collaborative, coordinated effort by the State
of Alaska and key federal agencies. The State of Alaska also recognizes
benefits can be furthered if State agencies work in a collaborative and
coordinated effort. With this in mind, Denali Commission has drawn up a
Memorandum of Understanding (MOU), which more than 20 agencies have
agreed to, that outlines some points of agreement that will facilitate
the collaboration and coordination necessary for achievement of the
purposes of the Denali Commission and related missions of agencies who
are parties to the MOU.
The points of the MOU are:
Sustainability. Federal and State agencies recognize the
importance of utilizing sustainability principles when investing in
public infrastructure projects
Regional Strategies. Systematic planning and coordination
on a local, regional and statewide basis are necessary to achieve the
most effective results from investment in infrastructure, economic
development, and training.
Community Plans. A single community strategic plan should
be sufficient to identify and establish the priorities of each rural
community.
Sharing Information. Sharing information increases
efficiencies and decreases duplication of services by State and Federal
agencies.
Economic Development. Economic development facilitates and
supports the growth of self-sufficient communities.
Non-Profit Organizations and Other Community
Organizations. Non-profit and other organizations in Alaska are a
valuable resource for State and Federal Agencies. They provide regional
planning, program support and partnering opportunities
Workforce Development (Vocational and Career Training).
Workforce development is a critical component to building sustainable
public infrastructure and self-sufficient communities in Alaska.
Appendix A: Needs Assessment Supporting Information
Power Utilities
Need: $300.8 million.
Annual Funding: Denali Commission to establish.
Source: AEA Assessment, 2000.
Background: 178 communities were surveyed by the Alaska Energy
Authority (AEA) which was completed in 2000. The total need for
power utilities which includes power plant construction,
rehabilitation, distribution, and cost reduction projects totals
$300.8 million. The information presented below is separated by
needs of communities that are part of the Alaska Village Electric
Cooperative (AVEC) and all other remote communities.
AVEC
$76,000,000--Power Plant Construction and Rehabilitation
$18,000,000--Wind Power Generation Projects
$1,800,000--Other Power Distribution
Total AVEC: $93,800,000
Other Communities
$131,000,000--Power Plant Construction and Rehabilitation
$20,000,000--Power Distribution Construction and Rehabilitation
$56,000,000--Energy Cost Reduction Projects *
Total for other communities: $207,000,000
Based upon current and projected funding, AEA anticipates
completing the program of upgrading projects for communities outside
of AVEC by 2015.
* Energy Cost Reduction Projects include: Alternative Energy
Projects (Wind $30 million and Hydro $20 million) and Energy
Efficiency Upgrades $6 million.
Bulk Fuel Storage
Need: $362.5 million.
Annual Funding: $55 to 65 million Denali Commission Funding.
Source: AEA Assessment, 2000.
Background: The Alaska Energy Authority (AEA) initiated an
assessment of bulk fuel
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tank farms in rural Alaska communities in 1996. This assessment was
completed in 2000. In September 2003, staff was requested to
undertake an analysis of what it would take to complete the bulk
fuel program in four more years of funding for the remaining
communities in the AEA assessment. For Federal Fiscal Years 1999
through 2003, the Commission allocated $97.5 million to bulk fuel
projects. Thirty three bulk fuel facilities have been completed with
at least partial Commission funding. Another 13 fuel facilities are
in construction, and 53 projects have received some level of design
funding. AEA is responsible for 141 projects while the Alaska
Village Electric Cooperative (AVEC) has assumed responsibility for
51 communities under construction agreements between the Commission
and AVEC. To date (including the 2003 construction season), AEA has
upgraded 9,500,000 gallons of capacity and has projected that
11,000,000 of capacity remain to be upgraded. AVEC has completed 2.5
million gallons of fuel facility upgrades and has projected another
15.9 million gallons remain to be upgraded. The average project size
AEA has undertaken is decreasing in size from an average of
$2,100,000 in 2001 to a projected cost of $1,700,000 in 2004. The
average cost of upgrading since 2001 (including the 2003
Construction Season) is approximately $15.00 per gallon. It was not
anticipated that this cost would increase over the next few years,
however there has recently been a 50% increase in the cost of steel,
so material costs are rising. AVEC projects tend to be larger, more
expensive projects than AEA projects. , since they are generally in
larger communities.
The four year funding plan for bulk fuel indicates a need for
$50 to $55 million for bulk fuel in FY04, and $55 to $65 million a
year for the following three years, if projects are completed under
our current standards and practices. This aggressive funding plan
would result in completion of the known bulk fuel upgrade needs by
the end of 2010
Water and Wastewater
Need: Current need: $650 million (FY 02 estimate for Alaska
Natives only). (Funded Fiscal years 1960-2002: $1.33 billion)
Annual Funding: There are six existing primary funding sources
for developing and improving water and wastewater facilities in
rural Alaska. Those sources and the amounts contributed in federal
fiscal year 2002 are shown below.
U.S. Public Health Service--Indian Health Service....... $17,863,000
U.S. Environmental Protection Agency Drinking Water 3,958,200
Tribal Set-Aside.......................................
U.S. Environmental Protection Agency Clean Water Tribal 7,053,100
Set-Aside..............................................
U.S. Environmental Protection Agency Infrastructure 36,494,500
Grant..................................................
U.S. Department of Agriculture--Rural Development....... 23,120,000
State of Alaska, Village Safe Water..................... 19,873,370
Total............................................... 108,362,170
While these amounts vary from year to year, the annual average
for fiscal years 1997 through 2002 is $85.7 million. The trend has
been towards increased funding levels.
Background: Assistance in developing water and wastewater
facilities in rural Alaska is provided to communities through two
programs. The Alaska Native Tribal Health Consortium (ANTHC) is the
organization responsible for administering Indian Health Service,
and EPA Indian Set-Aside sanitation construction funds in Alaska.
The Alaska Department of Environmental Conservation's Village Safe
Water (VSW) program is the organization responsible for
administering sanitation construction funds provided by the State,
EPA (non-Tribal Set-Aside), and the USDA-Rural Development.
Both ANTHC and VSW work with rural communities to plan design
and construct sanitation systems. ANTHC and VSW have developed a
close working relationship despite the relative recent transfer of
the sanitation program from IHS to ANTHC in October 1998. The
priority funding lists of both organizations are coordinated and
generally complement each other. ANTHC predominately works in Alaska
communities with Native-owned homes, whereas VSW works in all rural
communities (Native and non-Native). A lead agency is designated for
each community receiving assistance. Lead agencies typically have
responsibility for administering all State and Federal funding in
the community.
Existing funding streams and programs are making progress
towards satisfying the overall need for sanitation facilities in
rural Alaska. An estimated remaining need of $650 million and a
current funding level of $108 million combine to suggest a 6-year
timeframe for meeting the need.
The Denali Commission has not targeted water and wastewater
improvements as a major initiative for infrastructure funding due to
the level of funding and effort already underway in this sector of
critical infrastructure. However, the Commission is involved in
improving planning and interagency coordination.
Primary Health Care Facilities
Identified Need: $145 Million from the Commission to fully
address clinic needs.
Annual Funding: Typically $25 to 30 million.
Source: Annual funding is a mixture of Health Resources Services
Administration (HRSA) funding and Denali Commission funding.
Background: It is estimated that funding of $220 million will be
needed in order to address the expected demand for primary care
clinics after the FY2004 funding cycle. At current match
requirements, the Denali Commission estimated funding requirement
will be $145 million.
The Commission has adopted a 7-Year plan for development of
primary care clinics based upon annual funding cycles of $25 to $30
million. With this sustained funding level the Commission and its
partners should be able to build or renovate a primary care clinic
in every community in Alaska that wants such a facility and can
demonstrate that clinic and the services are sustainable for 30
years. The Commission is beginning Year 3 of the plan with a goal to
discontinue funding in FY2009 for primary care clinics except for
expansions due to medical equipment upgrades and some renovations.
``Other Than'' Primary Health Care Facilities
Identified Need: New Hospitals--$322,000,000 Expansion of
existing Hospitals--$130,000,000 Expansion of Behavioral Health
Facilities--$62,000,000
Annual Funding: Typically $6 million.
Source: Annual funding is a mixture of Health Resources Services
Administration (HRSA) funding and Denali Commission Base funding.
Background: The estimated need for ``Other Than'' Primary Health
Facilities which includes Hospitals, and Behavioral Health
Facilities comes from the Denali Commission's April 16, 2003 White
Paper on Expanding the Commission's Primary Care Program which can
be found at the following link: http://www.denali.gov/Health Care/
Program--Documents/White Paper--Potential for Expanding the Denali
Commission Primary Care Program to Other Types of Health Care
Facilities.pdf
Airport Facilities
Need: $1.3 billion.
Annual Funding: $65-90 million.
Source: Transportation Needs and Priorities in Alaska (November
2002) and Transportation Investment Analysis (Spring 2002),
published by the State of Alaska Department of Transportation and
Public Facilities (ADOT&PF).
Background: Alaska's extensive aviation system plays a crucial
role in the movement of people and goods throughout the state. In
many parts of rural Alaska, aviation serves as the principal link
between communities. There are 1,112 designated airports, seaplane
bases, and aircraft landing areas in the State of Alaska. The
ADOT&PF owns and operates 261 public airports, the majority of
Alaska's public airports. 23 public airports are owned and operated
by local governments.
Nearly all of Alaska's airport capital improvements rely on
funding from the Federal Aviation Trust Fund. This fund, supported
by Federal taxes on airline tickets, cargo, and fuel, supplies
monies for capital improvements through the Airport Improvement
Program (AIP), which is authorized for funding on an annual basis.
In recent years, AIP entitlement funds for Alaska's airports varied
from approximately $65 million to $90 million annually. The State or
local sponsor is required to contribute 6.25% in the form of match.
The current AIP authorizing legislation expires on
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September 30, 2003, and at this time, it is unknown what changes
Congress may incorporate into the AIP legislation.
Road Construction and Major Maintenance
Need: $8.6 billion.
Annual Funding: $260-350 million.
Source: Transportation Needs and Priorities in Alaska (November
2002) and Transportation Investment Analysis (Spring 2002),
published by the State of Alaska Department of Transportation and
Public Facilities (ADOT&PF).
Background: Improved surface transportation can have many
positive effects including lowering costs for goods and services,
improving village to village interaction, and allowing for State and
Federal investments in schools, clinics, airports, harbors, and tank
farms to serve more communities per project. Because of its vast
geographic expanse and young age as a state, Alaska continues to
require significant resources for transportation improvements.
The list of unmet surface transportation needs in Alaska is
about 1,950 projects with a total estimated cost approximating $8.6
billion. The primary funding source for surface transportation
projects in Alaska is federal-aid highway funding, which flows
through the Federal Highway Administration (FHWA) and the Federal
Transit Administration (FTA). State funds are required to match
these Federal funds; for most highway projects, the Federal ratio is
91 percent.
The State of Alaska administers most of the FHWA funding
allocated to Alaska with the exception of money specifically
designated for the Bureau of Indian Affairs (BIA), which currently
amounts to approximately $17 million per year. One important
distinction between FHWA and BIA funding for roads is the long-term
maintenance obligation. Under FHWA, the recipient is responsible for
maintenance in perpetuity, with no Federal support for this
activity. Under the BIA funding system, such roads are then added to
the Indian Reservation Road system (IRR) and are eligible for a
share of a national pot of money allocated to maintenance of IRR
roads.
Through the recent TEA-21 era, average funding levels have been
approximately $350 million per year, up substantially from the
approximately $220 million under ISTEA (1991-1997). Most FHWA
funding received by the State stays in larger auto-dependent
communities, with some funding going to rural communities largely
for sanitation roads and trail markings. Funding for projects off
the road system goes primarily to the larger hub communities.
Port Facilities
Need: $300 million.
Annual Funding: $7 to 15 million.
Source: Transportation Needs and Priorities in Alaska (November
2002) and Transportation Investment Analysis (Spring 2002),
published by the State of Alaska Department of Transportation and
Public Facilities (ADOT&PF).
Background: With over 30,000 miles of shoreline, relatively few
roads, and 90 percent of the state's population living within ten
miles of the coast or along a major river, Alaska's marine
facilities are integral to the local, statewide, and international
transportation of goods and people.
Ports and harbors have no federal capital assistance program
comparably to the highway and airport funding programs. Federal
funds for ports and harbors come through the U.S. Army Corps of
Engineers. The Corps distributes funding on a nationally
competitive, project-by-project basis. State and local communities
in Alaska have been awarded between $7 and 15 million annually in
federal funding for all Corps of Engineers programs in recent years.
For construction, the Corps requires between 20 and 35 percent match
for projects such as dredging basins, docks, floats, grids, and
upland facilities. Though not a dedicated funding source, the Marine
Users Fuel Tax is the traditional foundation of small boat harbor
improvements in the State, and general obligation bonds have been
the foundation of State assisted port development.
Telecommunications
Need: Unknown.
Annual Funding: $15m in FY03 and FY 04 funding for Regulatory
Commission of Alaska's Rural Broadband Internet Grant Program.
Several other funding support mechanisms including Universal Service
Fund also exist.
Background: In January 2001, the Denali Commission, in
partnership with the State of Alaska, completed an inventory of
available telecommunication services in rural Alaska. Among other
findings, the inventory found that 61% of all Alaskan communities do
not have access to local dial-up Internet service. This identified
need is being addressed through the Regulatory Commission of
Alaska's Rural Broadband Internet Grant Program, Telecommunications
Industry investment resulting in expansion of Internet offerings in
most rural communities in the next 1-3 years.
Solid Waste Disposal Facilities
Need: Unknown.
Annual Funding: Generally less than $1,000,000.
Background: Solid waste disposal is a necessity for all rural
Alaska communities as it is for every community in the country.
Observation would indicate that the majority of rural Alaska
communities do not have facilities that meet basic legal
requirements for solid waste disposal. The Denali Commission
received $1 million in FY 04 funding from USDA for the development
of solid waste facilities in rural Alaska. Development of this
innovative program and identification of projects is ongoing.
Community Facilities
Need: Unknown.
Annual Funding: Unknown.
Background: Communities have a need for community assembly
facilities for various purposes, including planning, meetings,
traditional functions, and recreation for youth. These facilities,
when available, are heavily used in rural communities.
Appendix B: Program Principles Supporting Information
Rural Infrastructure Development
In the evolution of the Denali Commission and its approach to
infrastructure development some principles have been established.
These include the following:
Selection of infrastructure themes for allocating
funds. In FY99 rural energy was selected as the primary
infrastructure theme. That priority was continued in FY00, and is
expected to continue in FY01 and beyond. In FY00 rural health care
facilities were selected as the second infrastructure theme. Other
themes may be selected in future years.
Selection of program/project partners to carry out
infrastructure development. The Alaska Energy Authority (AEA) was
selected as the Denali Commission's first partner for rural energy
projects. AEA was selected because of its demonstrated capability to
prioritize and implement rural energy projects. The Alaska Village
Electric Cooperative was selected as the second energy partner and
Alaska Native Tribal Health Consortium was selected as the
Commission's primary partner for clinic design and construction. The
overriding point in selection of a program/project partner is that
the Commission wishes to utilize existing capabilities provided by
State or Federal agencies or other organizations. More than one
partner may be identified to participate in carrying out Commission
sponsored programs/projects for a particular theme.
Project selection by the Commission and/or the program/
project partner must be defendable and credible. In the case of AEA,
two separate comprehensive statewide project priority lists had been
developed--one for bulk fuel storage facilities, and a second for
power generation/distribution projects. As in the case of AEA the
Commission will utilize existing credible priority systems. Where a
credible statewide priority methodology for a selected theme does
not exist, the Commission in cooperation with appropriate
organizations will foster the development of a system. This is
illustrated by the Commission's efforts in partnership with the
Alaska Department of Health and Social Services, the Indian Health
Service, and the Alaska Native Tribal Health Consortium to develop a
prioritization methodology for primary health care facilities.
Theme selection is a methodical process. The Commission
has stressed the importance of comprehensive investigation and
exploration of infrastructure themes so that Commission resources
are strategically funneled to ``gaps'' in State and Federal funding
streams. Carrying out needs assessments on various infrastructure
themes is central to the development of a theme. Energy,
telecommunications, and rural primary health care facilities are
examples of assessments that were initiated in conjunction with
interested State and Federal agencies in the Commission's first
year.
Commission partners are responsible for compliance with
procedural and substantive legal requirements. It is the expectation
of the Denali Commission that partners will comply
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with all applicable local, State and Federal laws in carrying out
Commission funded programs/projects. For example, the partner must
address NEPA and OSHA regulations, Federal auditing requirements,
competitive procurement issues and so forth. As a result, the
Commission will look to partners who have demonstrated both
administrative and program/project management success.
Adherence to the successful project management elements
of time, budget and quality. Each of these factors is central to
Denali Commission agreements with partners. The Commission wants to
put our partners in a position of success in meeting the triple
constraint of project management: deliver the project on time, on
budget and completion of the full project scope in a cost effective
manner. The challenge to the Commission is to allow sufficient
flexibility for each partner to carry out the programs/projects
within their own established methods while assuring confident
project completion and meeting all requirements of applicable laws
and regulations. For example, the AEA employs a project methodology
that relies heavily on force account construction (locally sponsored
government crews). AEA also uses construction contracting to a
lesser degree. In short, each agreement with a partner organization
must be tailored to fit their approach to program/project
management.
Rural Energy Approach
AEA has employed a two-step approach to bulk fuel project
funding that is strongly supported by the Commission. Starting at
the top of the AEA priority list, projects are provided 35% design
funds one or more years before being eligible for capital funding.
This allows for more accurate project cost estimates, resolution of
easement and land issues, development of agreements between various
local parties in site selection and tank farm ownership/maintenance.
This step also serves to filter projects that are not ready for
construction, for one reason or another, from advancing to the
second step of project funding. This two-step approach ensures that
funding does not sit unused by projects that are not ready for
construction. Once a project has resolved any obstacles at the 35%
design stage, then they are eligible for capital funding.
AEA will reevaluate its priority list from time to time in order
to factor in new information, particularly information from the
statewide energy strategy. This reevaluation may result in some
modification of the list. Funding priorities will also be subject to
``readiness to proceed'' considerations as described in part above.
Rural Primary Care Facilities Approach
In the past, communities constructed clinics based upon
available grant funds (typically community development block grants
of $200,000 to $500,000). Consequently clinic square footage was
based upon available funding and not necessarily upon health care
delivery service appropriate for the population and demographics of
the community. Many clinics are therefore undersized. In FY99 the
Commission allocated $300,000 to undertake a needs assessment for
rural primary care facilities. The needs assessment was completed in
October 2000 and included a database of primary health care facility
needs statewide as well as a project prioritization methodology. The
Commission's investments in rural health facilities is based on this
needs assessment.
Job Training Strategy
The Commission realizes that proper and prudent investment in
public infrastructure must include a component for training local
residents to maintain and operate publicly funded infrastructure.
The Commission further realizes that through its investment in
public infrastructure, such as bulk fuel storage facilities, it is
creating numerous jobs related to the construction of these
facilities and must develop a strategy to ensure local residents are
properly trained to receive these jobs.
The Denali Commission's Training Strategy creates a statewide
system to increase the local employment rates in Alaskan communities
through the development of skills necessary to construct, maintain,
and operate public infrastructure.
The Commission has approved 10% of the FY00-FY03 funding for
implementation of the Training Strategy. In FY04 the Commission
received appropriation direction for funding from the U.S.
Department of Labor. Through this funding the Commission ensures
local residents are employed on public facility construction
projects in their communities, while also protecting the Denali
Commission's investment in infrastructure by ensuring local
residents are properly trained in the operations and maintenance of
completed facilities.
The Denali Commission's Training Strategy involves several
components that create a statewide system for job training outreach,
coordination and delivery in rural Alaska. The Commission has
partnered with several statewide organizations that will perform the
necessary functions that make up the Denali Commission's Training
Strategy.
The Training Strategy provides the Denali Commission the
flexibility for future investment in job training needs statewide.
Currently the Commission's partners and the Denali Training Fund are
focusing on jobs created by the construction of energy and health
related projects. In the future, the Training Strategy will focus
its efforts on other areas where the Commission is investing.
Economic Development Strategy
The Denali Commission in not a funding agency for traditional
economic development activities. The Commission has a strategy that
outlines the appropriate role of the Commission in the area of
economic development. The strategy includes the following
components:
The Commission, where appropriate will play the role of
convener, bringing potential economic development participants
together to support projects that meet Commission Standards outlined
in paragraph IV below.
The Commission will act as a facilitator to assist in
matching high priority, high potential public or private investment
opportunities with available funding sources.
The Commission will serve as a catalyst for
identification and removal of unnecessary economic development
barriers by government.
In Fiscal Year 2004, a statewide Economic Development Committee
was established under the authority of the Denali Commission.
Regional Development Strategy
The Denali Commission encourages communities/tribes to build a
local comprehensive plan and strategy, a component of which will be
economic development. A comprehensive plan may also be referred to
as a Development Strategy.
Communities are encouraged to work with regional organizations
such as ARDOR's, Regional Non-Profit Corporations, Borough
Governments and Regional for-profit organizations to develop
comprehensive strategies of which economic development will be a
component. Regional strategies should take into consideration
existing regional planning and strategy efforts including, but not
limited to, the efforts of the FAA, HUD, Alaska DOT, ANTHC, Alaska
VSW, State Division of Public Health, Alaska Department of Public
Safety, regional non-profits and others.
The Denali Commission encourages the State to assist with
technical support and funding at the local and regional level to
build local and regional development strategies. The Denali
Commission also encourages State and Federal governments to utilize
the local and regional development strategies when prioritizing
projects in the state or in a region.
Jeffrey Staser,
Federal Co-Chair.
[FR Doc. 04-11540 Filed 5-20-04; 8:45 am]
BILLING CODE 3300-01-P